NEW ENGLAND REALTY ASSOCIATES PARTNERSHIP: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-K)

Forward-looking statements

Certain information contained herein includes forward looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Liquidation Reform Act of 1995 (the "Act"). Forward looking statements in this
report, or which management may make orally or in written form from time to
time, reflect management's good faith belief when those statements are made, and
are based on information currently available to management. Caution should be
exercised in interpreting and relying on such forward looking statements, the
realization of which may be impacted by known and unknown risks and
uncertainties, events that may occur subsequent to the forward looking
statements, and other factors which may be beyond the Partnership's control and
which can materially affect the Partnership's actual results, performance or
achievements for 2021 and beyond. Should one or more of the risks or
uncertainties mentioned below materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or projected. We expressly disclaim any responsibility to update our
forward looking statements, whether as a result of new information, future
events or otherwise. Accordingly, investors should use caution in relying on
past forward looking statements, which are based on results and trends at the
time they are made, to anticipate future results or trends.

Along with risks detailed in Item 1A and from time to time in the Partnership's
filings with the Securities and Exchange Commission, some factors that could
cause the Partnership's actual results, performance or achievements to differ
materially from those expressed or implied by forward looking statements include
but are not limited to the following:

The limited partnership depends on the real estate markets where its properties are

? located, mainly in Eastern Massachusetts, and these markets may be unfavorably

   affected by local economic market conditions, which are beyond the
   Partnership's control.

The limited partnership is subject to general economic risks affecting the

? the real estate industry, such as dependence on the financial situation of tenants, the need

enter into new leases or renew leases on terms favorable to tenants in order to

generate rental income and our ability to collect rent from our tenants.

The limited partnership is also affected by changing economic conditions, which

alternative housing methods that are more or less attractive to the Partnership

? tenants, such as mortgage interest rates on single-family homes and

availability and purchase price of single-family homes in the Greater Boston

Metropolitan area.

The Partnership is subject to significant expenses associated with each

? investments, such as debt service payments, property taxes, insurance and

maintenance costs, which are generally not reduced when the circumstances

reduction in income from a property.

The Partnership is subject to increases in heating and utility costs which may

? arise due to economic and market conditions and fluctuations in

seasonal weather conditions.

? Civil unrest, earthquakes and other natural disasters can lead to

uninsured or underinsured losses.

? Actual or threatened terrorist attacks can affect our ability to

generate income and the value of our properties.

? Financing or refinancing of Partnership properties may not be available for the

necessary or desirable, or may not be available on favorable terms.

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Partnership properties face competition from similar properties in the same

? market. This competition may affect the ability of the limited partnership to attract and

retain tenants and may reduce the rents that may be charged.

Given the nature of the real estate activity, the limited partnership is subject to

potential environmental liabilities. These include environmental contamination

in the soil of the limited partnership or neighboring real estate, whether caused by

? the limited partnership, the former owners of the property in question or the neighbors of the

subject property, and the presence of hazardous materials in the limited partnership

such as asbestos, lead, mold and radon. Management is not aware

of any significant environmental liabilities at present.

Insurance coverage for and relating to commercial properties is increasingly

expensive and difficult to obtain. In addition, insurance companies have excluded

some specific elements of standard insurance policies, which have resulted in

? increased risk exposure to the Partnership. These include insurance coverage

for acts of terrorism and war, and cover for mold and other

conditions. Coverage for these items is not available or is prohibitively expensive

expensive.

? Market interest rates could adversely affect market prices for Class A

Limited partnership units and certificates of deposit as well as yield and cash flow.

Changes in income tax laws and regulations may affect taxable income to

? owners of the limited partnership. These changes may affect the after-tax value of

future allocations.

The limited partnership may not identify, acquire, construct or develop other

Properties; may develop or acquire properties that do not produce a

? expected return on invested capital; may be unable to sell underperforming products or

otherwise undesirable properties quickly; or may fail to integrate effectively

acquisitions of buildings or portfolios of buildings.

? Risk associated with the use of debt to finance acquisitions and developments.

? Competition for acquisitions can cause property prices to increase.

Any weakness identified in the Company’s internal controls within the framework of the

? the current assessment could have a negative effect on

business.

? Continued compliance with the Sarbanes-Oxley Act of 2002 may require

personnel or system changes.

The foregoing factors should not be construed as exhaustive or as an admission
regarding the adequacy of disclosures made by the Partnership prior to the date
hereof or the effectiveness of said Act. The Partnership expressly disclaims any
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.

Since the Partnership's long-term goals include the acquisition of additional
properties, a portion of the proceeds from the refinancing and sale of
properties is reserved for this purpose. If available acquisitions do not meet
the Partnership's investment criteria, the Partnership may purchase additional
depositary receipts. The Partnership will consider refinancing existing
properties if the Partnership's cash reserves are insufficient to repay existing
mortgages or if the Partnership needs additional funds for future acquisitions.

On February 24, 2019, Harold Brown, the owner of 75% of the outstanding voting
securities of NewReal Inc., the general partner, of New England Realty
Associates Limited Partnership passed away. As a result, Brown family related
entities currently hold voting control over the NewReal shares.

Effective from February 24, 2019, the board of directors of the general partner of the Company, NewReal Inc.,

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elected Jameson Brown as the Director, Treasurer and Chief Financial Officer of
New Real to fill the vacancy created by the death of Harold Brown, who served as
both the Treasurer and a director of NewReal.



Effective as of May 3, 2019, the Board of Directors of the Partnership's general
partner, New Real, Inc. elected Andrew Bloch as a member of the Board. Mr. Bloch
is the Co-CEO and CFO of the Hamilton Company, Inc. the Manager of the
Partnership's properties.

Effective from Aug 5, 2019, the board of directors of the general partner of the Company, New Real, Inc. elected Sally Michel and Robert Somma as members of the Council. Mrs. Michael and Mr. Somma are trustees of the estate of Harold Brown.

Approximately one year has passed since we became aware of the current outbreak
of the COVID- 19, a novel strain of coronavirus. The World Health Organization
declaring a global pandemic on March 11, 2020. On March 10, the governor of
Massachusetts, Charlie Baker, had declared a state of emergency and ordered all
non-essential businesses closed and prohibited the gathering of 10 or more
people. Over time, the Governor's order has been modified, but restrictions are
currently in place for the foreseeable future. Additionally, March of 2020 saw
the closure of local colleges and universities for the balance of the academic
year. Colleges in the City of Boston and the surrounding communities are
conducting classes for the 2020/2021 academic year remotely, or using a hybrid
model of remote and limited in class learning. These educational models caused a
large decrease in the student population in need of local housing and have
resulted in significant vacancies in the Partnership's apartment portfolio.



The government's measures put into place to combat the spread of the virus have
caused significant disruptions to life and business operations in Massachusetts,
the Country, and the World. The length and severity of the effects on the
Partnership's business are unknown at this time.



Rental collections for the fourth quarter for the Partnership's wholly owned
properties were approximately 94% of rents due. Residential tenants paid
approximately 95% of their rent and commercial tenants paid approximately 87% of
theirs. Historically, commercial rents represent 5% of the Partnership's
revenue. The rent collections for the Joint Ventures were approximately 95%. The
fourth quarter's collections are not necessarily an indicator of future cash
receipts. As of December 31, 2020, gross rents receivable was approximately
$2,866,000, 4.6% of rental income, an increase of approximately $647,000 over
the September 30, 2020 balance and $2,141,000 over the December 31, 2019
balance.



The vacancy rate for the Partnership's residential properties as of February 1,
2021 was 6.2% as compared with a vacancy rate of 3.0% as of February 1, 2020.
The vacancy rate for the Joint Venture properties as of February 1, 2021 was
15.6%, as compared to 1.2% for the same period last year. Most of the vacancies
for the Partnership's wholly owned properties are at 62 Boylston Street which
has 91 vacant units with a vacancy rate of 33.8%. At the Joint Venture
properties Dexter Park has 64 vacant units, or a vacancy rate of 15.6%, and 81
Essex has 24 vacant units, or a vacancy rate of 49%. Both 62 Boylston Street and
Dexter Park have historically had a high percentage of students. With the
uncertainties with the economy and the timing of the re-opening of Colleges and
Universities in the fall, the strength of the 2021 rental season is unknown.
Inventory of unrented units remains higher than in past years and it is likely
that the Partnership will have a high number of vacancies during the first half
of 2021. In order to rent as many of these units as possible, management has
reduced rent significantly and is offering up to two months free rent.



Residential tenants generally have lease terms of 12 months. The majority of
these leases will mature during the second and third quarters of the year. Given
the current economic environment, it is not possible to estimate the amount of
lease turnover we will experience, or the amount of increases or decreases from
the current rental rates we will realize with lease renewals or new leases.
However, we are currently offering reduced rental rates and significant rent
concessions at certain properties.



During the current state of emergency, The Hamilton Company, the Partnership's
property manager, has taken steps to maintain the safety of its employees and
tenants. Hamilton is providing essential services to ensure all properties are
kept open, fully functioning, and safe. Hamilton has implemented a work from
home policy with a skeleton staff present at all site offices to provide for
property management, maintenance, leasing and construction services. Leasing is

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limited to unoccupied units unless permission is granted by the current tenant
and a web-based video technology is being used to remotely show apartments.
Hamilton and the Partnership will continue to adjust their business practices to
comply with Federal and State mandates for workplace and rental property
operations.



During the fourth quarter of 2020, rents increased on average 1.6% for renewals
and decreased on average 12.3% for new leases. For all of 2020, renewal rents
increased approximately 2.5% and decreased approximately 5.3% for new leases. As
we enter 2021, due to the ongoing global coronavirus pandemic, management
expects the local real estate market to remain soft and is expecting decreases
in rent and more rental concessions.



For the year ending December 31, 2020, including the purchase of Mill Street,
consolidated revenue increased by 2.7%, operating expenses increased by 9.1% and
Income before Other Income (Expense) decreased by 13.3%. Excluding the Mill
Street acquisition, same store revenue decreased by 3.5%, operating expenses
decreased by 3.1% and Income before Other Income (Expense) decreased by 4.7%.
For the same reporting period, residential vacancy was 6.2% vs 3.0%. For 2020,
excluding Depreciation and Amortization, same store revenues (excluding Mill
Street) decreased by 3.5%, operating expenses decreased by 3.3% and Net
Operating Income decreased by 3.7%.



The Joint Ventures of 1025 Hancock and Hamilton Bay in 2019 sold out all
remaining residential condominium units. 1025 Hancock sold 2 remaining units for
a gain of approximately $306,000, and Hamilton Bay sold its 3 remaining units at
a gain of approximately $429,000. The estimated profit to the Partnership for
the sale of these units from 2014 through 2019 is approximately $7,168,000.



On March 31, 2020, Nera Brookside Associates, LLC ("Brookside Apartments"),
entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the
principal amount of $6,175,000. Interest only payments on the Note are payable
on a monthly basis at a fixed interest rate of 3.53% per annum, and the
principal amount of the Note is due and payable on April 1, 2035. The Note is
secured by a mortgage on the Brookside apartment complex located at 5-12 Totman
Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and
Rents and Security Agreement dated March 31, 2020. The Note is guaranteed by the
Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside
Apartments used the proceeds of the loan to pay off an outstanding loan of
approximately $2,390,000, with the remaining portion of the proceeds added to
cash reserves. In connection with this refinancing, there were closing costs of
approximately $136,000.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000
revolving line of credit. The term of the line is three years with a floating
interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the
Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate
for a period of one month plus 1% per annum, plus an applicable margin of 2.5%.
The agreement originally expired on July 31, 2017, and was subsequently extended
until October 31, 2020.The costs associated with the line of credit extension
were approximately $128,000. Management continues to discuss with the lender the
renewal of the line of credit for an additional three years. The Partnership
paid an extension fee of approximately $37,500 in association with the
extension. As of December 31, 2020, the credit line had an outstanding balance
of $17,000,000. See Note 5 for a description of the ongoing discussions with
lender regarding renewal of the line of credit.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC,
collectively referred to as Mill Street, wholly-owned subsidiaries of New
England Realty Associates Limited Partnership (the "Partnership") closed on a
Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty
Limited Partnership (the "Purchase Agreement") pursuant to which Mill Street
acquired Country Club Garden Apartments, a 181 unit apartment complex located at
57 Mill Street, Woburn, Massachusetts (the "Property") for an aggregate purchase
price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out
of an existing line of credit, $10,550,000 of the cash portion of the purchase
price out of cash reserves and the remaining $31,000,000 from the proceeds of
the Loan. The closing costs were approximately $237,000. From the purchase
price, the Partnership allocated approximately $1,282,000 for in- place leases,
and approximately $136,000 to the value of tenant relationships. These amounts
are being amortized over 12 and 36 months respectively.

At December 20, 2019, Mill Street has entered into a loan agreement (the “Agreement”) with Insurance Strategy Funding Corp. LLC providing for a loan (the “Loan”) of a maximum principal amount of $ 35,000,000, composed of a

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initial advance of $31,000,000 and a subsequent advance of up to $4,000,000 if
certain conditions are met. Interest on the Note is payable on a monthly basis
at a fixed interest rate of: (i) 3.586% per annum with respect to the initial
advance and (ii) the greater of (A) the sum of the market spread rate and the
interpolated (based on the remaining term of the Loan) US Treasury rate at the
time of the advance and (B) 3.500% with respect to any subsequent advance. The
principal amount of the Note is due and payable on January 1, 2035. The Note is
secured by a mortgage on the Property and is guaranteed by the Partnership
pursuant to a Guaranty Agreement dated December 20, 2019.



On May 31, 2019, Residences at Captain Parker, LLC ("Captain Parker"), entered
into a Mortgage Note with Strategy Funding Corp., LLC in the principal amount of
$20,750,000. Interest only payments on the Note are payable on a monthly basis
at a fixed interest rate of 4.05% per annum, and the principal amount of the
Note is due and payable on June 1, 2029. The Note is secured by a mortgage on
the Captain Parker apartment complex located at 125 Worthen Road and Ryder Lane,
Lexington, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents
and Security Agreement dated May 31, 2019. The Note is guaranteed by the
Partnership pursuant to a Guaranty Agreement dated May 31, 2019. Captain Parker
used the proceeds of the loan to pay off an outstanding loan of approximately
$20,071,000. In connection with this refinancing, the property incurred a
prepayment penalty of approximately $202,000. This expense is included in other
expense on the consolidated statement of income.

On March 29, 2018, the Partnership, through a wholly-owned subsidiary, Hamilton
Highlands, LLC, purchased Webster Green Apartments, a 79 unit apartment complex
located at 755-757 Highland Avenue, Needham, Massachusetts. The purchase price
of $34,500,000 was funded with $5,000,000 of cash, $8,000,000 drawn on the line
of credit and the assumption of a $21,500,000 mortgage. Since acquiring the
property, the Partnership has renovated the common areas, added energy efficient
lighting to the hallways and parking areas and renovated two apartments. As part
of the purchase contract, the seller was required to complete the construction
of three new apartments and resurface the parking lot.



On May 31, 2018, the Investment Property, Hamilton Park Towers (Hamilton Park)
was refinanced for $125,000,000 with a 10 year term, interest only at a 3.99%
fixed interest rate. Hamilton Park used the proceeds from the refinancing to pay
off the existing mortgage of approximately $82,000,000 and distributed
approximately $41,200,000 to its member owners. The Partnership's share of the
distribution was approximately $16,500,000.



The proceeds from the refinancing of Hamilton Park were used to pay down the
Partnership's existing Line of Credit from $25,000,000 to $5,000,000. In
October, the Partnership used excess cash reserves to pay down the balance by
and additional $3,000,000. As of December 31, 2018, the balance on the line

of
credit was $2,000,000.



In association with this refinancing, there was a defeasance cost of
approximately $3,830,000. Based on its 40% ownership in the property, the
Partnership incurred an expense of approximately $1,532,000, which is accounted
for in income from investments in unconsolidated joint ventures. The cash flow
requirements of the new loan is approximately the same as that of the prior
loan.

The share buyback program launched in 2007 made it possible to purchase 1,428,437 certificates of deposit through December 31, 2020, or approximately 33% of Class A certificates of deposit in circulation. The limited partnership purchased 5,328 certificates of deposit in 2020.

In March of 2020, the Board of Advisors and Board of Directors unanimously
approved an extension of the Repurchase Program until March 31, 2025. Management
believes that the $25,000,000 line of credit, net cash flow from operations and
cash on hand have put the Partnership in position to capitalize on investment
opportunities should they reveal themselves in the near future. As always,
Management continues to weigh investment alternatives of stock repurchase, new
property acquisitions and dispositions when considering its cash balances and
performance of the portfolio. Given the economic uncertainty caused by the
coronavirus issue, as of April 15, 2020, the Partnership has elected to
temporarily suspend the repurchase program.

The limited partnership retained the Hamilton Company (“Hamilton”) to manage and administer the Properties of partnerships and joint ventures. Hamilton is a full-service property management company, which includes legal, construction, maintenance, architectural, accounting and administrative services. The properties of the Partnership

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represent approximately 41% of the total properties and 48% of the residential
properties managed by Hamilton. Substantially all of the other properties
managed by Hamilton are owned, wholly or partially, directly or indirectly, by
the Brown Family related entities. The Partnership's Second Amended and Restated
Contract of Limited Partnership (the "Partnership Agreement") expressly provides
that the general partner may employ a management company to manage the
properties, and that such management company may be paid a fee of up to 4% of
rental receipts for administrative and management services (the "Management
Fee"). The Partnership pays Hamilton the full annual Management Fee, in monthly
installments.

In addition to the Management Fee, the Partnership Agreement further provides
for the employment of outside professionals to provide services to the
Partnership and allows NewReal to charge the Partnership for the cost of
employing professionals to assist with the administration of the Partnership's
properties. Additionally, from time to time, the Partnership pays Hamilton for
repairs and maintenance services, legal services, construction services and
accounting services. The costs charged by Hamilton for these services are at the
same hourly rate charged to all entities managed by Hamilton, and management
believes such rates are competitive in the marketplace.

Residential tenants generally sign a one year lease. In 2020, tenant renewals
were approximately 71% with an average rental increase of approximately 2.5 %,
new leases accounted for approximately 29% with rental rate decreases of
approximately 5.3%. In 2020, leasing commissions were approximately $497,000
compared to approximately $578,000 in 2019, a decrease of approximately $81,000
(14.0%) from 2019. Tenant concessions were approximately $32,000 in 2020
compared to approximately $57,000 in 2019, a decrease of approximately 25,000
(43.9%). Tenant improvements were approximately $2,062,000 in 2020 compared to
approximately $2,636,000 in 2019, a decrease of approximately $574,000 (21.8%).

Hamilton accounted for approximately 2.2% of the repair and maintenance expense
paid for by the Partnership in the year ended December 31, 2020 and 4.3% in the
year ended December 31, 2019. Of the funds paid to Hamilton for this purpose,
the great majority was to cover the cost of services provided by the Hamilton
maintenance department, including plumbing, electrical, carpentry services, and
snow removal for those properties close to Hamilton's headquarters. Several of
the larger Partnership properties have their own maintenance staff. Those
properties that do not have their own maintenance staff and are located more
than a reasonable distance from Hamilton's headquarters in Allston,
Massachusetts are generally serviced by local, independent companies.

Hamilton's legal department handles most of the Partnership's eviction and
collection matters. Additionally, it prepares most long-term commercial lease
agreements and represents the Partnership in selected purchase and sale
transactions. Overall, Hamilton provided approximately 59.1% and 65.2% of the
legal services paid for by the Partnership during the years ended December 31,
2020 and 2019, respectively.

In addition, as described in note 3 to the consolidated financial statements, the Hamilton Company receives similar commissions from investment properties.

The Partnership requires that three bids be obtained for construction contracts
in excess of $15,000. Hamilton may be one of the three bidders on a particular
project and may be awarded the contract if its bid and its ability to
successfully complete the project are deemed appropriate. For contracts that are
not awarded to Hamilton, Hamilton charges the Partnership a construction
supervision fee equal to 5% of the contract amount. Hamilton's architectural
department also provides services to the Partnership on an as-needed basis. In
2020, Hamilton provided the Partnership approximately $668,000 in construction
and architectural services, compared to $924,000 for the year ended December 31,
2019.

Bookkeeping and accounting functions have been provided by Hamilton's accounting
staff, which consists of approximately 14 people. In 2020, Hamilton charged the
Partnership $125,000 per year ($31,250 per quarter) for bookkeeping and
accounting services. For more information on related party transactions, see
Note 3 to the Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of consolidated financial statements, in accordance with generally accepted accounting principles in United States of America, requires the Partnership to make estimates and judgments that affect the reported amounts of assets, liabilities, income and expenses and related information on contingent assets and liabilities.

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The Partnership regularly and continually evaluates its estimates, including
those related to acquiring, developing and assessing the carrying values of its
real estate properties and its investments in and advances to joint ventures.
The Partnership bases its estimates on historical experience, current market
conditions, and on various other assumptions that are believed to be reasonable
under the circumstances. However, because future events and their effects cannot
be determined with certainty, the determination of estimates requires the
exercise of judgment. The Partnership's critical accounting policies are those
which require assumptions to be made about such matters that are highly
uncertain. Different estimates could have a material effect on the Partnership's
financial results. Judgments and uncertainties affecting the application of
these policies and estimates may result in materially different amounts being
reported under different conditions and circumstances. See Note 1 to the
Consolidated Financial Statements, Principles of Consolidation.

Revenue Recognition: Rental income from residential and commercial properties is
recognized over the term of the related lease. For residential tenants, amounts
60 days in arrears are charged against income. The commercial tenants are
evaluated on a case by case basis. Certain leases of the commercial properties
provide for increasing stepped minimum rents, which are accounted for on a
straight-line basis over the term of the lease. Concessions made on residential
leases are also accounted for on the straight-line basis.

Above-market and below-market lease values for acquired properties are initially
recorded based on the present value (using a discount rate which reflects the
risks associated with the leases acquired) of the differences between (i) the
contractual amounts to be paid pursuant to each in-place lease and
(ii) management's estimate of fair market lease rates for each corresponding
in-place lease, measured over a period equal to the remaining term of the lease
for above-market leases and the initial term plus the term of any below-market
fixed-rate renewal options for below-market leases. The capitalized above-market
lease amounts are accounted for as a reduction of base rental revenue over the
remaining term of the respective leases, and the capitalized below-market lease
values are amortized as an increase to base rental revenue over the remaining
initial terms plus the terms of any below-market fixed-rate renewal options of
the respective leases.

In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU
2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the
recognition, measurement, presentation, and disclosure of leases for both
parties to a contract: the lessee and the lessor. ASU 2016-02 provides new
guidelines that change the accounting for leasing arrangements for lessees,
whereby their rights and obligations under substantially all leases, existing
and new, are capitalized and recorded on the balance sheet. For lessors,
however, the new standard remains generally consistent with existing guidance,
but has been updated to align with certain changes to the lessee model and ASU
2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09").

Under this standard, the Partnership evaluates the non-lease components (lease
arrangements that include common area maintenance services) with related lease
components (lease revenues). If both the timing and pattern of transfer are the
same for the non-lease component and related lease component, the lease
component is the predominant component. The Partnership elected an allowed
practical expedient. For (i) operating lease arrangements involving real estate
that include common area maintenance services and (ii) all real estate
arrangements that include real estate taxes and insurance costs, we present
these amounts within lease revenues in our consolidated statements of income. We
record amounts reimbursed by the lessee in the period in which the applicable
expenses are incurred.

We adopted this guidance for our interim and annual periods beginning January 1,
2019 using the modified retrospective method, applying the transition provisions
at the beginning of the period of adoption rather than at the beginning of the
earliest comparative period presented. We elected the allowable practical
expedients as permitted under the transition guidance, which allowed us to not
reassess whether arrangements contain leases, lease classification, and initial
direct costs. The adoption of the lease standard did not result in a cumulative
effect adjustment recognized in the opening balance of retained earnings as of
January 1, 2019. The adoption of this standard does not have a material impact
to the Partnership's financial statements.

Rental Property Held for sale: When assets are identified by management as held
for sale, the Partnership discontinues depreciating the assets and estimates the
sales price, net of selling costs, of such assets. The Partnership generally
considers assets to be held for sale when the transaction has received
appropriate corporate authority, and there are no significant contingencies
relating to the sale. If, in management's opinion, the estimated net sales

price, net of

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selling costs, of assets that have been identified as held for sale is lower than the book value of the assets, a valuation allowance is made.

If circumstances arise that previously were considered unlikely and, as a
result, the Partnership decides not to sell a property previously classified as
held for sale, the property is reclassified as held and used. A property that is
reclassified is measured and recorded individually at the lower of (a) its
carrying value before the property was classified as held for sale, adjusted for
any depreciation (amortization) expense that would have been recognized had the
property been continuously classified as held and used, or (b) the fair value at
the date of the subsequent decision not to sell.

Rental Properties: Rental properties are stated at cost less accumulated
depreciation. Maintenance and repairs are charged to expense as incurred;
improvements and additions are capitalized. When assets are retired or otherwise
disposed of, the cost of the asset and related accumulated depreciation is
eliminated from the accounts, and any gain or loss on such disposition is
included in income. Fully depreciated assets are removed from the accounts.
Rental properties are depreciated by both straight-line and accelerated methods
over their estimated useful lives. Upon acquisition of rental property, the
Partnership estimates the fair value of acquired tangible assets, consisting of
land, building and improvements, and identified intangible assets and
liabilities assumed, generally consisting of the fair value of (i) above and
below market leases, (ii) in-place leases and (iii) tenant relationships. The
Partnership allocated the purchase price to the assets acquired and liabilities
assumed based on their fair values. The Partnership records goodwill or a gain
on bargain purchase (if any) if the net assets acquired/liabilities assumed
exceed the purchase consideration of a transaction. In estimating the fair value
of the tangible and intangible assets acquired, the Partnership considers
information obtained about each property as a result of its due diligence and
marketing and leasing activities, and utilizes various valuation methods, such
as estimated cash flow projections utilizing appropriate discount and
capitalization rates, estimates of replacement costs net of depreciation, and
available market information. The fair value of the tangible assets of an
acquired property considers the value of the property as if it were vacant.

Intangible assets acquired include amounts for in-place lease values above and
below market leases and tenant relationship values, which are based on
management's evaluation of the specific characteristics of each tenant's lease
and the Partnership's overall relationship with the respective tenant. Factors
to be considered by management in its analysis of in-place lease values include
an estimate of carrying costs during hypothetical expected lease-up periods
considering current market conditions, and costs to execute similar leases at
market rates during the expected lease-up periods, depending on local market
conditions. In estimating costs to execute similar leases, management considers
leasing commissions, legal and other related expenses. Characteristics
considered by management in valuing tenant relationships include the nature and
extent of the Partnership's existing business relationships with the tenant,
growth prospects for developing new business with the tenant, the tenant's
credit quality and expectations of lease renewals. The value of in- place leases
are amortized to expense over the remaining initial terms of the respective
leases. The value of tenant relationship intangibles are amortized to expense
over the anticipated life of the relationships.

In the event that facts and circumstances indicate that the carrying value of a
rental property may be impaired, an analysis of the value is prepared. The
estimated future undiscounted cash flows are compared to the asset's carrying
value to determine if a write-down to fair value is required.

Impairment: On an annual basis management assesses whether there are any
indicators that the value of the Partnership's rental properties may be
impaired. A property's value is impaired only if management's estimate of the
aggregate future cash flows (undiscounted and without interest charges) to be
generated by the property is less than the carrying value of the property. To
the extent impairment has occurred, the loss shall be measured as the excess of
the carrying amount of the property over the fair value of the property. The
Partnership's estimates of aggregate future cash flows expected to be generated
by each property are based on a number of assumptions that are subject to
economic and market uncertainties including, among others, demand for space,
competition for tenants, changes in market rental rates, and costs to operate
each property. As these factors are difficult to predict and are subject to
future events that may alter management's assumptions, the future cash flows
estimated by management in its impairment analysis may not be achieved.

Investments in joint ventures: the limited partnership represents its 40% to 50% interest in investment properties using the equity method, because it exercises significant influence over them, but does not control them.

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entities. These investments are recorded initially at cost, as Investments in
Joint Ventures, and subsequently adjusted for the Partnership's share in
earnings, cash contributions and distributions. Under the equity method of
accounting, our net equity is reflected on the consolidated balance sheets, and
our share of net income or loss from the Partnership is included on the
consolidated statements of income. Generally, the Partnership would discontinue
applying the equity method when the investment (and any advances) is reduced to
zero and would not provide for additional losses unless the Partnership has
guaranteed obligations of the venture or is otherwise committed to providing
further financial support for the investee. If the venture subsequently
generates income, the Partnership only recognizes its share of such income to
the extent it exceeds its share of previously unrecognized losses.

The authoritative guidance on consolidation provides guidance on the
identification of entities for which control is achieved through means other
than voting rights ("variable interest entities" or "VIEs") and the
determination of which business enterprise, if any, should consolidate the VIE
(the "primary beneficiary"). Generally, the consideration of whether an entity
is a VIE applies when either (1) the equity investors (if any) lack one or more
of the essential characteristics of a controlling financial interest, (2) the
equity investment at risk is insufficient to finance that equity's activities
without additional subordinated financial support or (3) the equity investors
have voting rights that are not proportionate to their economic interests and
the activities of the entity involve or are conducted on behalf of an investor
with a disproportionately small voting interest. The primary beneficiary is
defined by the entity having both of the following characteristics: (1) the
power to direct the activities that, when taken together, most significantly
impact the variable interest entity's performance; and (2) the obligation to
absorb losses and rights to receive the returns from VIE that would be
significant to the VIE.



With respect to investments in and advances to the Investment Properties, the
Partnership looks to the underlying properties to assess performance and the
recoverability of carrying amounts for those investments in a manner similar to
direct investments in real estate properties. An impairment charge is recorded
if management's estimate of the aggregate future cash flows (undiscounted and
without interest charges) to be generated by the property is less than the
carrying value of the property.

Legal Proceedings: The Partnership is subject to various legal proceedings and
claims that arise, from time to time, in the ordinary course of business. These
matters are frequently covered by insurance. If it is determined that a loss is
likely to occur, the estimated amount of the loss is recorded in the financial
statements. Both the amount of the loss and the point at which its occurrence is
considered likely can be difficult to determine.

RESULTS OF OPERATIONS

Years completed December 31, 2020 and December 31, 2019

The Partnership and its Subsidiary Partnerships earned income before interest
expense, income from investments in unconsolidated joint ventures and other
income and loss of approximately $14,969,000 during the year ended December 31,
2020, compared to approximately $17,272,000 for the year ended December 31,
2019, a decrease of approximately $2,303,000 (13.3%).

The rental activity is summarized as follows:

                                Occupancy Date
                     February 1, 2021    February 1, 2020
Residential
Units                           2,911               2,911
Vacancies                         181                  87
Vacancy rate                      6.2 %               3.0 %
Commercial
Total square feet             108,043             108,043
Vacancy                         9,376               1,950
Vacancy rate                      8.7 %               1.8 %




                                       36

  Table of Contents


                                          Rental Income (in thousands)
                                            Year Ended December 31,
                                      2020                            2019
                             Total         Continuing        Total         Continuing
                           Operations      Operations      Operations      Operations
Total rents               $     61,662    $     61,662    $     60,012    $     60,012
Residential percentage              95 %            95 %            94 %            94 %
Commercial percentage                5 %             5 %             6 %             6 %
Contingent rentals        $        512    $        512    $        629    $        629

Year ended December 31, 2020 Compared to the closed financial year December 31, 2019:

                                                Year Ended December 31,            Dollar        Percent
                                                 2020              2019            Change        Change
Revenues
Rental income                               $   61,661,551    $   60,012,174    $   1,649,377       2.7%
Laundry and sundry income                          441,159          

465,140         (23,981)     (5.2)%
                                                62,102,710        60,477,314        1,625,396       2.7%
Expenses
Administrative                                   2,209,780         2,495,272        (285,492)    (11.4)%
Depreciation and amortization                   18,410,811        14,684,248        3,726,563      25.4%
Management fee                                   2,452,814         2,409,151           43,663       1.8%
Operating                                        5,766,160         5,682,264           83,896       1.5%
Renting                                            864,542           953,043         (88,501)     (9.3)%
Repairs and maintenance                          8,781,789         9,191,561        (409,772)     (4.5)%
Taxes and insurance                              8,647,781         7,790,008          857,773      11.0%
                                                47,133,677        43,205,547        3,928,130       9.1%
Income Before Other Income (Expense)            14,969,033        17,271,767      (2,302,734)    (13.3)%
Other Income (Expense)
Interest income                                        195               607            (412)    (67.9)%
Interest expense                              (13,705,415)      (12,201,966)      (1,503,449)      12.3%
Income from investments in
unconsolidated joint ventures                      160,715         1,678,554      (1,517,839)    (90.4)%
Other Income (Expense)                                   -         

(201,710) 201,710 100.0%

                                              (13,544,505)      (10,724,515)      (2,819,990)      26.3%
Net Income                                  $    1,424,528    $    

6,547,252 $ (5,122,724) (78.2)%

Rental income from continuing operations for the year ended December 31, 2020
was approximately $61,661,000, compared to approximately $60,012,000 for the
year ended December 31, 2019, an increase of approximately $1,649,000 (2.7%).
The major factor that can be attributed to this increase is the acquisition of
Mill Street, which resulted in an increase in rental income of approximately
$3,723,000. Excluding he increase in rental income attributable to the
acquisition of Mill Street of approximately $3,723,000, rental income decreased
by approximately $2,074,000, (3.5%). Although rental income has increased at
other properties, due to the effect of the Covid pandemic there have been a
number of properties incurring a decrease in their rental income. The
Partnership Properties with the largest increases in rental income include
Hamilton Oaks, Westside Colonial, and Redwood Hills, with increases of
approximately $179,000, $150,000, and $127,000, respectively. These are offset
by certain properties with the largest decreases in rental income which include
62 Boylston, Hamilton Linewt, and 1131 Commonwealth, with decreases of
approximately $1,168,000, $186,000, and $130,000, respectively. Included in
rental income is contingent rentals collected on commercial properties.
Contingent rentals include such charges as bill backs of common area maintenance
charges, real estate taxes, and utility charges.

Total expenses from continuing operations for the year ended December 31, 2020
were approximately $47,134,000 compared to approximately $43,206,000 for the
year ended December 31, 2019, an increase of approximately $3,928,000 (9.1%).
Excluding the increase in operating expenses attributable to the acquisition of
Mill Street of approximately $5,259,000, operating expenses decreased
approximately $1,331,000 (3.1%). Excluding Mill

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Street, factors which contributed to the decrease were a decrease in Repairs and
Maintenance expense of approximately $708,000, (7.7%), primarily due to a
decrease in appliance and pool repairs, a decrease in Depreciation and
Amortization expense of approximately $378,000 (2.6%), due to fully depreciated
assets, and a decrease in Administrative expense of approximately $318,000
(12.8%), primarily due to a decrease in Legal fees, partially offset by an
increase in Taxes and Insurance of approximately of $510,000 (6.6%).

Interest expense for the year ended December 31, 2020 was approximately
$13,705,000 compared to approximately $12,202,000 for the year ended
December 31, 2019, an increase of approximately $1,503,000 (12.3%). Excluding
the increase in interest expense attributable to Mill Street of approximately
$1,089,000, there was an increase in interest expense of approximately $415,000,
(3.4%), primarily due to an increase in interest expense on the line of credit
of approximately $678,000, partially offset by a decrease in interest expense
for Captain Parker of approximately $144,000, and Hamilton Highland of
approximately $116,000.



At December 31, 2020, the Partnership has between a 40% and 50% ownership
interests in seven different Investment Properties. See a description of these
properties included in the section titled Investment Properties as well as
Note 14 to the Consolidated Financial Statements for a detail of the financial
information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the
Partnership's share of the net income from the Investment Properties was
approximately $160,000 for the year ended December 31, 2020, compared to a net
income of approximately $1,678,000 for the year ended December 31, 2019, a
decrease in income of approximately $1,518,000 (90.4%). This decrease is
primarily due to the reduction in the gain realized from the sales of
condominium units of approximately $735,000 with the Partnership's share
amounting to 50%, on the sale of 3 units at Hamilton Bay Apartments LLC, and the
sale of 2 units at Hamilton 1025 Apartments LLC for the year ended December 31,
2019, compared to no units sold for the year ended December 31, 2020, and a
decrease in Net Income at Dexter Park from approximately $918,000 for the year
ended December 31,2019 to approximately $105,000 for the year ended December 31,
2020, a decrease of $813,000 (88.6%). Included in the income for the year ended
December 31, 2020 is depreciation and amortization expense of approximately
$2,609,000. The proportional income for the year ended December 31, 2020 from
the investment in Dexter Park is approximately $105,000.

Interest income for the year ended December 31, 2020 was approximately $ 200
compared to approximately $ 600 for the year ended December 31, 2019, an increase of about $ 400.

Due to the changes described above, net income for the year ended
December 31, 2020 was approximately $ 1,424,000 compared to an income of about $ 6,547,000 for the year ended December 31, 2019, a drop in income of about $ 5,123,000 (78.2%).

Years completed December 31, 2019 and December 31, 2018

The Partnership and its Subsidiary Partnerships earned income before interest
expense, income from investments in unconsolidated joint ventures and other
income and loss of approximately $17,272,000 during the year ended December 31,
2019, compared to approximately $14,918,000 for the year ended December 31,
2018, an increase of approximately $2,353,000 (15.8%).

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Contents

The rental activity is summarized as follows:

                                Occupancy Date
                     February 1, 2020    February 1, 2019
Residential
Units                           2,911               2,730
Vacancies                          87                  57
Vacancy rate                      3.0 %               2.1 %
Commercial
Total square feet             108,043             108,043
Vacancy                         1,950               1,360
Vacancy rate                      1.8 %               1.3 %





                                         Rental Income (in thousands)
                                           Year Ended December 31,
                                     2019                            2018
                            Total         Continuing        Total         Continuing
                          Operations      Operations      Operations      Operations
Total rents              $     60,012    $     60,012    $     57,536    $     57,536

Residential percentage             94 %            94 %            94 %            94 %
Commercial percentage               6 %             6 %             6 %             6 %
Contingent rentals       $        629    $        629    $        784    $        784

Year ended December 31, 2019 Compared to the closed financial year December 31, 2018:

                                                Year Ended December 31,           Dollar       Percent
                                                 2019              2018           Change       Change
Revenues
Rental income                               $   60,012,174    $   57,535,734    $ 2,476,440       4.3%
Laundry and sundry income                          465,140          

478,330 (13,190) (2.8)%

                                                60,477,314        58,014,064      2,463,250       4.2%
Expenses
Administrative                                   2,495,272         2,204,923        290,349      13.2%
Depreciation and amortization                   14,684,248        15,568,973      (884,725)     (5.7)%
Management fee                                   2,409,151         2,326,225         82,926       3.6%
Operating                                        5,682,264         5,542,605        139,659       2.5%
Renting                                            953,043           779,503        173,540      22.3%

Repairs and maintenance                          9,191,561         9,187,714          3,847       0.0%
Taxes and insurance                              7,790,008         7,485,749        304,259       4.1%
                                                43,205,547        43,095,692        109,855       0.3%
Income Before Other Income ( Expense)           17,271,767        14,918,372      2,353,395      15.8%
Other Income (Expense)
Interest income                                        607               344            263      76.5%
Interest (expense)                            (12,201,966)      (12,389,680)        187,714     (1.5)%
Income from investments in
unconsolidated joint ventures                    1,678,554         1,640,054         38,500       2.3%
Other (Expense) Income                           (201,710)                 -      (201,710)     100.0%
                                              (10,724,515)      (10,749,282)         24,767     (0.2)%
Net Income                                  $    6,547,252    $    4,169,090    $ 2,378,162      57.0%


Rental income from continuing operations for the year ended December 31, 2019
was approximately $60,012,000, compared to approximately $57,536,000 for the
year ended December 31, 2018, an increase of approximately $2,476,000 (4.3%).
The factors that can be attributed to this increase are as follows: the
acquisition of Mill Street in 2019 and Hamilton Highland in 2018 resulted in an
increase in rental income of approximately $810,000. In addition, rental income
has increased at a number of properties due to increased demand and increases in
rental rates of approximately 3.4%. The Partnership Properties with the most
significant increases in rental income include

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62 Boylston Street , Hamilton Oaks, Redwood Hills, Westside Colonial, Westgate
Apartments, and 9 School Street Associates, with increases of approximately
$344,000, $163,000, $153,000, $139,000, $136,000 and $135,000 respectively.
Included in rental income is contingent rentals collected on commercial
properties. Contingent rentals include such charges as bill backs of common area
maintenance charges, real estate taxes, and utility charges.

Total expenses from continuing operations for the year ended December 31, 2019
were approximately $43,206,000 compared to approximately $43,096,000 for the
year ended December 31, 2018, an increase of approximately $110,000 (0.3%).
Excluding the increase in operating expenses attributable to the acquisition of
Mill Street and Hamilton Highland of approximately $2,918,000, operating
expenses decreased approximately $442,000 (1.1%). Excluding Mill Street and
Hamilton Highland, factors which contributed to the decrease were a decrease in
Depreciation and Amortization expense of approximately $1,226,000 (8.8%), due to
fully depreciated assets, partially offset by an increase in Administrative
expense of approximately $288,000 (13.7%), primarily due to the installation of
new property management software, an increase in Taxes and Insurance of
approximately $202,000 (2.8%) and an increase in Renting expense of
approximately $150,000 (20.5%).

Interest expense for the year ended December 31, 2019 was approximately
$12,202,000 compared to approximately $12,390,000 for the year ended
December 31, 2018, a decrease of approximately $188,000 (1.5%). Excluding the
increase in interest expense attributable to Mill Street and Hamilton Highland
of approximately $297,000, there was a decrease in interest expense of
approximately $485,000, (4.1%), primarily due to the paydown of the line of
credit.

At December 31, 2019, the Partnership has between a 40% and 50% ownership
interests in seven different Investment Properties. See a description of these
properties included in the section titled Investment Properties as well as
Note 14 to the Consolidated Financial Statements for a detail of the financial
information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the
Partnership's share of the net income from the Investment Properties was
approximately $1,679,000 for the year ended December 31, 2019, compared to a net
income of approximately $1,640,000 for the year ended December 31, 2018, an
increase in income of approximately $39,000 (2.3%). This increase is primarily
due to a gain on the sale of real estate of approximately $735,000 in 2019
versus a gain of $4,411,000, offset by a defeasance charge of $3,830,000 in
2018. Included in the income for the year ended December 31, 2019 is
depreciation and amortization expense of approximately $2,587,000. The
proportional income for the year ended December 31, 2019 from the investment in
Dexter Park is approximately $918,000.

Interest income for the year ended December 31, 2019 was approximately $ 600
compared to approximately $ 300 for the year ended December 31, 2018, an increase of about $ 300.

Due to the changes described above, net income for the year ended
December 31, 2019 was approximately $ 6,547,000 compared to an income of about $ 4,169,000 for the year ended December 31, 2018, an increase in income of about $ 2,378,000 (57.0%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership's principal sources of cash during 2020 were the collection of
rents and the proceeds from the refinancing of Brookside Apartments. In 2019,
the principal sources of cash were the collection of rents and the proceeds from
a mortgage for the purchase of Mill Street. The majority of cash and cash
equivalents of $18,646,972 at December 31, 2020 and $7,546,324 at December 31,
2019 were held in interest bearing accounts at creditworthy financial
institutions.

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  Table of Contents

The increase in cash of $11,100,648 at December 31, 2020 is summarized as
follows:


                                                                 Year Ended December 31,
                                                                 2020              2019

Cash provided by operating activities                        $  17,452,309    $   22,448,895
Cash (used in) investing activities                            (1,715,408) 

(29,277,643)

Cash provided by (used in) financing activities                    433,532 

14 062 201

Repurchase of Depositary Receipts, Class B and General
Partner Units                                                    (394,031) 

(4,050,137)

Distributions paid                                             (4,675,754) 

(4,696,893)

Net increase (decrease) in cash and cash equivalents $ 11,100,648

  $  (1,513,577)




The change in cash provided by operating activities is due to various factors,
including recent acquisitions, a change in income and distribution from joint
ventures, and other factors. The decrease in cash used in investing activities
is primarily due to improvements in rental properties, partially offset by
distributions from unconsolidated joint ventures. The change in cash used in
financing activities is primarily due to the refinancing of the mortgage at
Brookside Apartments, partially offset by the paydown of mortgages, and the pay
down of the line of credit originally used for the purchase of Mill Street.



During 2020, the Partnership and its Subsidiary Partnerships completed
improvements to certain of the Properties at a total cost of approximately
$3,240,000. These improvements were funded from cash reserves and, to some
extent, escrow accounts established in connection with the financing or
refinancing of the applicable Properties. These sources have been adequate to
fully fund improvements. The most significant improvements were made at, 62
Boylston Street, 1144 Commonwealth, Hamilton Oaks, Captain Parker, Hamilton
Green, and Redwood Hills , at a cost of $697,000, $343,000, $331,000, $307,000,
$257,000, and $250,000 respectively. The Partnership plans to invest
approximately $4,200,000 in capital improvements in 2021.

On March 31, 2020, Nera Brookside Associates, LLC ("Brookside Apartments"),
entered into a Mortgage Note with KeyBank National Associates ( KeyBank) in the
principal amount of $6,175,000. Interest only payments on the Note are payable
on a monthly basis at a fixed interest rate of 3.53% per annum, and the
principal amount of the Note is due and payable on April 1, 2035. The Note is
secured by a mortgage on the Brookside apartment complex located at 5-12 Totman
Drive, Woburn, Massachusetts pursuant to a Mortgage, Assignment of Leases and
Rents and Security Agreement dated March 31, 2020. The Note is guaranteed by the
Partnership pursuant to a Guaranty Agreement dated March 31, 2020. Brookside
Apartments used the proceeds of the loan to pay off an outstanding loan of
approximately $2,390,000, with the remaining portion of the proceeds added to
cash reserves. In connection with this refinancing, there were closing costs of
approximately $136,000.

On December 20, 2019, Mill Street Gardens, LLC and Mill Street Development, LLC,
collectively referred to as Mill Street, wholly-owned subsidiaries of New
England Realty Associates Limited Partnership (the "Partnership") closed on a
Purchase Agreement dated as of September 27, 2019 with Ninety-Three Realty
Limited Partnership (the "Purchase Agreement") pursuant to which Mill Street
acquired Country Club Garden Apartments, a 181 unit apartment complex located at
57 Mill Street, Woburn, Massachusetts (the "Property") for an aggregate purchase
price of $59,550,000 . Mill Street funded $18,000,000 of the purchase price out
of an existing line of credit, $10,550,000 of the cash portion of the purchase
price out of cash reserves and the remaining $31,000,000 from the proceeds of
the Loan. The closing costs were approximately $237,000. From the purchase
price, the Partnership allocated approximately $1,282,000 for in- place leases,
and approximately $136,000 to the value of tenant relationships. These amounts
are being amortized over 12 and 36 months respectively.

On December 20, 2019, Mill Street Gardens entered into a Loan Agreement (the
"Agreement") with Insurance Strategy Funding Corp. LLC providing for a loan (the
"Loan") in the maximum principal amount of $35,000,000, consisting of an initial
advance of $31,000,000 and a subsequent advance of up to $4,000,000 if certain
conditions are met. Interest on the Note is payable on a monthly basis at a
fixed interest rate of: (i) 3.586% per annum with respect to the initial advance
and (ii) the greater of (A) the sum of the market spread rate and the
interpolated (based on the remaining term of the Loan) US Treasury rate at the
time of the advance and (B) 3.500% with respect to any subsequent advance. The
principal amount of the Note is due and payable on January 1, 2035. The Note is
secured by a mortgage

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  Table of Contents

on the property and is guaranteed by the limited partnership under a guarantee agreement dated December 20,

On May 31, 2019, Residences at Captain Parker, LLC ("Captain Parker"), entered
into a Mortgage Note with Strategy Funding Corp., LLC in the principal amount of
$20,750,000. Interest only payments on the Note are payable on a monthly basis
at a fixed interest rate of 4.05% per annum, and the principal amount of the
Note is due and payable on June 1, 2029. The Note is secured by a mortgage on
the Captain Parker apartment complex located at 125 Worthen Road and Ryder Lane,
Lexington, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents
and Security Agreement dated May 31, 2019. The Note is guaranteed by the
Partnership pursuant to a Guaranty Agreement dated May 31, 2019. Captain Parker
used the proceeds of the loan to pay off an outstanding loan of approximately
$20,071,000. In connection with this refinancing, the property incurred a
prepayment penalty of approximately $202,000. This expense is included in other
expense on the consolidated statement of income.



On March 29, 2018, Hamilton Highlands, LLC, a wholly-owned subsidiary of New
England Realty Associates Limited Partnership, purchased Webster Green
Apartments, a 79 unit apartment complex located at 755-757 Highland Avenue,
Needham, Massachusetts. The sale was consummated pursuant to the terms of a
Purchase and Sale Contract by and between Webster Green Apartments, LLC, the
prior owner of the Property, and The Hamilton Companies, Inc., an affiliate of
the Partnership, which agreement was subsequently assigned by Hamilton to the
Purchaser. In connection with the purchase, Hamilton Highlands entered into an
Assumption and Modification Agreement dated as of March 29, 2018 with Brookline
Bank pursuant to which Hamilton Highlands assumed a note dated as of January 14,
2016 in the principal amount of $21,500,000 and various agreements relating to
the note including a Mortgage, Assignment of Leases and Rents, Security
Agreement, Fixture Filing dated as of January 14, 2016. The purchase price was
$34,500,000, consisting of a payment of approximately $13,000,000 in cash and
the assumption of the note and mortgage. Hamilton Highlands funded $5,000,000 of
the cash portion of the purchase price out of cash reserves and the remaining
$8,000,000 by drawing on an existing line of credit.



On March 12, 2018, the loan for 659 Worcester Road was refinanced with Brookline
Bank in the amount of $6,083,683. The loan is due on March 12, 2023. Interest
only until March 12, 2021. Commencing in April, 2021, monthly payments of
principal and interest in the amount of $32,427 are being made based on an
assumed amortization period of thirty (30) years. The loan bears a fixed annual
rate equal to 4.87%. The proceeds of the new loan were used to pay off the
existing loan. The closing costs were approximately $69,000.



During the year ended December 31, 2020, the Partnership received distributions
of approximately $1,562,000 from the investment properties of which $900,000 was
from Dexter Park.

In 2020 the Partnership paid a total distribution of an aggregate $ 38.40 per
Unit ($1.28 per Receipt) for a total payment of $4,675,754 in 2020. In 2019 the
Partnership paid a total distribution of an aggregate $38.40 per Unit ($1.28 per
Receipt) for a total payment of $4,696,893 in 2019. In January 2021, the
Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per
Receipt), payable on March 31, 2021.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000
revolving line of credit. The term of the line was for three years with a
floating interest rate equal to a base rate of the greater of (a) the Prime Rate
(b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the
LIBOR Rate for a period of one month plus 1% per annum, plus the applicable
margin of 2.5%. The agreement originally expired on July 31, 2017 and was
extended until October 31, 2020. The costs associated with the line of credit
extension were approximately $128,000. Management is currently working with the
lender on a three year renewal of the line of credit. As of December 31, 2020,
the Partnership had not completed the renewal and exercised a one year
extension. The Partnership paid an extension fee of approximately $37,500 in
association with the extension. See Note 5 for a description of the ongoing
discussions with lender regarding renewal of the line of credit.

At December 19, 2019, the Company drew on the line of credit an amount of $ 20,000,000, used in conjunction with the purchase of Mill Street Apartments. At December 20, 2019, the limited partnership paid $ 2,000,000. At
January 22, 2020, the limited partnership repaid the line in $ 1,000,000. From
December 31, 2020, the line of credit had an outstanding balance of $ 17,000,000.

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The Partnership anticipates that cash from operations and interest bearing
accounts will be sufficient to fund its current operations, pay distributions,
make required debt payments and to finance current improvements to its
properties. The Partnership may also sell or refinance properties. The
Partnership's net income and cash flow may fluctuate dramatically from year to
year as a result of the sale or refinancing of properties, increases or
decreases in rental income or expenses, or the loss of significant tenants.

Off-Balance Sheet Arrangements – Joint Venture Debt

As of December 31, 2020, the Partnership had a 40%-50% ownership interest in
seven Joint Ventures, which all have mortgage indebtedness except Hancock 1025,
and Hamilton Essex Development. We do not have control of these partnerships and
therefore we account for them using the equity method of consolidation. At
December 31, 2020, our proportionate share of the non-recourse debt before
unamortized deferred financing costs related to these investments was
approximately $71,025,000. See Note 14 to the Consolidated Financial Statements.

Contractual obligations

As of December 31, 2020, we are subject to contractual payment obligations as
described in the table below.


                                           Payments due by period

                               2021          2022           2023            2024          2025        Thereafter         Total

Contractual
Obligations

Long -term debt
Mortgage debt             $  2,530,630   $ 2,697,120   $ 102,569,039   $

10 965 011 $ 3,438,550 $ 162,589,363 $ 284,789,713

Line of Credit              17,000,000             -               -              -             -               -      17,000,000
Total Contractual
Obligations               $ 19,530,630   $ 2,697,120   $ 102,569,039   $ 

10 965 011 $ 3,438,550 $ 162,589,363 $ 301,789,713

We have various standing or renewable service contracts with vendors related to
our property management. In addition, we have certain other contracts we enter
into in the ordinary course of business that may extend beyond one year. These
contracts are not included as part of our contractual obligations because they
include terms that provide for cancellation with insignificant or no
cancellation penalties.

See Notes 5 and 14 to the Consolidated Financial Statements for a description of the mortgage notes payable. The Partnership has no other material contractual obligations to disclose.

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