New England Realty Associates Limited Partnership (NEN) Bundle
A Brief History of New England Realty Associates Limited Partnership
New England Realty Associates Limited Partnership (NERA) has a storied history characterized by strategic investments in residential and commercial real estate. Founded in 1994, the Partnership has grown its portfolio significantly over the years, focusing primarily on multi-family properties and commercial spaces across the New England region.
Financial Performance Overview as of 2024
As of September 30, 2024, NERA reported a net income of approximately $11,445,720, reflecting an increase of 86.0% compared to $6,154,568 for the same period in 2023. This impressive growth is attributed to an increase in rental income and effective cost management strategies.
| Metric | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Income | $11,445,720 | $6,154,568 | $5,291,152 | 86.0% |
| Rental Income | $59,573,125 | $54,338,011 | $5,235,114 | 9.6% |
| Operating Expenses | $41,392,388 | $40,665,027 | $727,361 | 1.8% |
Investment Properties and Joint Ventures
NERA has maintained a diverse portfolio with interests in several investment properties. As of September 30, 2024, the Partnership holds a 40%-50% ownership interest in seven different investment properties, contributing to its overall income.
For the nine months ended September 30, 2024, the Partnership's share of net income from these investments was approximately $909,207, an increase of 83.3% from $496,092 in 2023.
Rental and Vacancy Trends
The rental market has shown resilience, with average rents increasing by 5.4% for renewals and 4.6% for new leases in the third quarter of 2024. The Partnership's residential properties reported a vacancy rate of 1.7% as of November 1, 2024, compared to 0.9% the previous year.
Debt Obligations and Cash Flow
As of September 30, 2024, NERA's total debt obligations amounted to approximately $409,341,288, which includes various long-term mortgage debts. The principal sources of cash flow for the Partnership remain the collection of rents, with notable cash reserves held in interest-bearing accounts totaling approximately $15,069,693.
Future Outlook
Looking ahead, the Partnership plans to continue its investment strategy, with anticipated spending of approximately $30 million on the Mill Street Development project over the next two years. The management expects the rental market to maintain a steady growth trajectory, albeit with moderating rates as the market stabilizes.
A Who Owns New England Realty Associates Limited Partnership (NEN)
Ownership Structure
As of January 2, 2024, the ownership of New England Realty Associates Limited Partnership (NEN) is primarily controlled by the Brown family. Jameson Brown and Harley Brown each own 37.5% of NewReal, Inc., which is the general partner of NEN. The Brown family entities collectively own approximately 32.4% of the Depositary Receipts representing the Partnership Class A Units, along with controlling 75% of the Partnership's Class B Units and 75% of the capital stock of NewReal.
Ownership Breakdown
| Owner | Ownership Percentage | Type of Units |
|---|---|---|
| Jameson Brown | 37.5% | NewReal Capital Stock |
| Harley Brown | 37.5% | NewReal Capital Stock |
| Brown Family Entities | 32.4% | Depositary Receipts (Class A Units) |
| Ronald Brown | 25% | Partnership Class B Units |
| HBC Holdings LLC | 75% | Partnership Class B Units |
Voting Control
Following the passing of Harold Brown in 2019, voting control over NewReal's capital stock was held by his estate. This estate was settled in January 2024, leading to the current ownership structure where Jameson and Harley Brown assumed significant control over the general partnership.
Financial Data
As of September 30, 2024, the Partnership reported a net income of approximately $11,446,000 compared to $6,155,000 for the same period in 2023, reflecting an increase of 86% year-over-year.
Investment Properties
The Partnership has between 40% and 50% ownership interests in seven different investment properties, which are accounted for using the equity method.
Rental Income and Expenses
Rental income for the nine months ended September 30, 2024, was approximately $59,573,125, an increase from $54,338,011 in the previous year. Operating expenses for the same period were approximately $41,392,000.
Cash Reserves
The cash and cash equivalents held by the Partnership were approximately $15,069,693 as of September 30, 2024.
Debt Obligations
As of September 30, 2024, the Partnership's mortgage notes payable totaled approximately $406,846,877. Future annual mortgage maturities are outlined as follows:
| Year | Amount |
|---|---|
| 2025 | $10,000,000 |
| 2026 | $256,664 |
| 2027 | $266,775 |
| 2028 | $132,533,359 |
| 2029 | $0 |
| Thereafter | $29,589,000 |
Cash Flow Overview
During the nine months ended September 30, 2024, the Partnership experienced a net decrease in cash of approximately $3,160,770.
New England Realty Associates Limited Partnership (NEN) Mission Statement
Mission Overview
The mission of New England Realty Associates Limited Partnership (NEN) is to enhance shareholder value through the strategic management and development of real estate properties. The Partnership focuses on delivering high-quality residential and commercial properties, ensuring sustainable growth and profitability.
Strategic Goals
- Maximize rental income through effective property management and tenant relations.
- Invest in property improvements and developments to enhance tenant satisfaction and asset value.
- Maintain financial stability and liquidity to support ongoing operations and growth initiatives.
- Commit to responsible environmental practices in property management and development.
Financial Performance Metrics (as of September 30, 2024)
| Metric | Value |
|---|---|
| Net Income | $11,445,720 |
| Consolidated Revenue Growth | 6.6% |
| Operating Expenses | $41,392,000 |
| Rental Income Increase | $8,692,000 |
| Average Rental Increase (Renewals) | 5.4% |
| Average Rental Increase (New Leases) | 4.6% |
| Vacancy Rate (Residential) | 1.7% |
Investment Properties
NEN holds significant interests in various investment properties, contributing to its overall financial health and operational success. As of September 30, 2024, the Partnership has between 40% and 50% ownership interests in seven different investment properties.
| Property Name | Ownership Interest | Net Income Contribution |
|---|---|---|
| Hamilton Oaks | 40%-50% | $909,000 |
| Essex 81 | 40%-50% | $496,000 |
| 345 Franklin | 40%-50% | $217,578 |
| Hamilton on Main | 40%-50% | $470,313 |
| Minuteman Apts | 40%-50% | $138,583 |
Capital Expenditures
The Partnership has allocated significant capital for property improvements and new developments. The projected spending for the Mill Street Development project is approximately $30 million, with $10 million expected to be spent in 2024 and $20 million in 2025.
Recent Developments
- Completed improvements to various properties totaling approximately $15,369,000.
- Secured a loan of up to $15 million for the Mill Street Development project.
- Maintained a strong liquidity position with cash and cash equivalents of $15,069,693 as of September 30, 2024.
Distributions to Partners
In 2024, NEN has approved multiple distributions to its partners:
| Distribution Type | Amount per Unit | Payment Date |
|---|---|---|
| Quarterly Distribution | $12.00 | March 28, 2024 |
| Special Distribution | $48.00 (Class A) | March 28, 2024 |
| Quarterly Distribution | $12.00 | June 28, 2024 |
| Quarterly Distribution | $12.00 | September 28, 2024 |
Stock Repurchase Program
As of September 30, 2024, the Partnership has repurchased a total of 1,549,824 Depositary Receipts since the inception of the Stock Repurchase Program in 2007. During the nine months ended September 30, 2024, 17,590 Depositary Receipts were repurchased at an average price of $73.28 per receipt.
Liquidity and Financial Stability
NEN's liquidity is supported by its cash reserves and short-term investments, amounting to approximately $86,134,000 in U.S. Treasury bills with interest rates between 4.48% and 5.27% as of September 30, 2024.
How New England Realty Associates Limited Partnership (NEN) Works
Overview of Operations
As of September 30, 2024, New England Realty Associates Limited Partnership (NEN) operates a diverse portfolio of residential and commercial properties primarily in the metropolitan Boston area, Massachusetts. The Partnership owns 2,943 residential apartment units and 19 condominium units across 27 complexes. Additionally, it holds interests in commercial properties including shopping centers and mixed-use developments.
Financial Performance
For the nine months ended September 30, 2024, NEN reported the following financial data:
| Financial Metric | 2024 Amount | 2023 Amount | Change ($) | Change (%) |
|---|---|---|---|---|
| Rental Income | $59,573,125 | $54,338,011 | $5,235,114 | 9.6% |
| Operating Expenses | $41,392,388 | $40,665,027 | $727,361 | 1.8% |
| Net Income | $11,445,720 | $6,154,568 | $5,291,152 | 86.0% |
| Interest Income | $3,413,620 | $3,350,423 | $63,197 | 1.9% |
| Interest Expense | ($11,637,720) | ($11,781,285) | $143,565 | (1.2%) |
Investment Properties
NEN holds a 40% to 50% ownership interest in seven investment properties, which contributed significantly to its income. The Partnership's share of net income from these properties for the nine months ended September 30, 2024, was approximately $909,207, an increase from $496,092 in the same period of 2023.
Rental Income Breakdown
As of September 30, 2024, approximately 94% of rental income was derived from residential apartments and condominium units, while 6% came from commercial properties. The following table outlines the minimum future rental income from commercial leases:
| Year | Minimum Future Rental Income |
|---|---|
| 2025 | $3,324,692 |
| 2026 | $3,043,129 |
| 2027 | $2,646,809 |
| 2028 | $2,332,876 |
| 2029 | $1,852,297 |
| Thereafter | $9,073,091 |
| Total | $22,272,894 |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled approximately $41,392,000, reflecting a slight increase from the previous year. The largest components of operating expenses included repairs and maintenance, taxes and insurance, and administrative costs. The breakdown is as follows:
| Expense Type | 2024 Amount | 2023 Amount | Change ($) |
|---|---|---|---|
| Repairs and Maintenance | $9,967,034 | $9,853,498 | $113,536 |
| Taxes and Insurance | $7,487,535 | $7,463,651 | $23,884 |
| Administrative | $2,093,671 | $2,247,729 | ($154,058) |
Debt and Liquidity
As of September 30, 2024, the total liabilities of NEN stood at approximately $452,817,146, with mortgage notes payable of $406,846,877. The Partnership's cash and cash equivalents were reported at $15,069,693, down from $18,230,463 at the end of 2023. The Partnership maintains a revolving line of credit of $25 million, which was modified to restrict the commitment amount to $17 million during the modification period.
Future Commitments
NEN anticipates spending approximately $30 million on its Mill Street Development project over the next two years, with $10 million allocated for 2024 and the remainder for 2025. The project is expected to be completed in the fourth quarter of 2025.
Stock Repurchase Program
Since the inception of the stock repurchase program in 2007 through September 30, 2024, the Partnership has repurchased a total of 1,549,824 Depositary Receipts at an average price of $31.80 per receipt. During the nine months ended September 30, 2024, a total of 17,590 Depositary Receipts were repurchased at an average price of $73.28 per receipt.
Market Environment
As of November 1, 2024, the vacancy rate for NEN's residential properties was 1.7%, compared to 0.9% a year prior. The commercial properties had a vacancy rate of 2.8%. Rental rates have shown an average increase of 5.4% for renewals and 4.6% for new leases during the third quarter of 2024, indicating a continued but moderating rental market.
How New England Realty Associates Limited Partnership (NEN) Makes Money
Revenue Generation from Rental Income
For the nine months ended September 30, 2024, New England Realty Associates Limited Partnership (NEN) reported total rental income of approximately $59,573,125, reflecting an increase of 9.6% from $54,338,011 in the same period of 2023. This increase represents a dollar change of $5,235,114.
The largest contributions to rental income came from properties such as Hamilton Oaks, 62 Boylston, and Mill Street Gardens, with increases of $419,000, $395,000, and $306,000, respectively.
Additional Income Streams
NEN also generates revenue through laundry and sundry income, which increased to $579,876 in 2024 from $416,354 in 2023, marking a 39.3% increase.
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled approximately $41,392,000, an increase of 1.8% compared to $40,665,000 in the prior year. The breakdown of major expenses includes:
| Expense Type | 2024 Amount | 2023 Amount | Change |
|---|---|---|---|
| Administrative | $2,093,671 | $2,247,729 | $(154,058) (-6.9%) |
| Depreciation and Amortization | $12,729,275 | $12,234,394 | $494,881 (4.0%) |
| Management Fees | $2,374,371 | $2,173,272 | $201,099 (9.3%) |
| Operating | $5,794,220 | $5,865,371 | $(71,151) (-1.2%) |
| Repairs and Maintenance | $9,967,034 | $9,853,498 | $113,536 (1.2%) |
| Taxes and Insurance | $7,487,535 | $7,463,651 | $23,884 (0.3%) |
Investment Properties
NEN holds interests in seven different investment properties, with a reported share of net income of approximately $909,000 for the nine months ended September 30, 2024, compared to $496,000 in 2023, an increase of 83.3%.
The increase in income from these properties was primarily due to a rise in rental revenue, which reached approximately $8,692,000 in 2024, up from $8,176,000 in 2023.
Financing and Cash Flow
NEN’s principal source of cash is the collection of rents. For the nine months ending September 30, 2024, cash provided by operating activities was approximately $19,965,878, compared to $13,231,030 in 2023.
As of September 30, 2024, NEN reported cash and cash equivalents of $15,069,693, down from $18,230,463 at the end of 2023.
Interest and Debt Management
Interest income for the nine months ended September 30, 2024, was approximately $3,414,000, compared to $3,350,000 in the previous year. Interest expense decreased to $11,638,000 from $11,781,000, a reduction of 1.2%.
Future Projections
Management anticipates a rental market with continued but moderating rent growth for the remainder of 2024, following average rent increases of 5.4% for renewals and 4.6% for new leases.
The vacancy rate for residential properties as of November 2024 was 1.7%, compared to 0.9% in the previous year.
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Resources:
- New England Realty Associates Limited Partnership (NEN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of New England Realty Associates Limited Partnership (NEN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View New England Realty Associates Limited Partnership (NEN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.