New England Realty Associates Limited Partnership (NEN): Business Model Canvas [11-2024 Updated]
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New England Realty Associates Limited Partnership (NEN) Bundle
Discover how New England Realty Associates Limited Partnership (NEN) strategically navigates the real estate landscape with its robust Business Model Canvas. From key partnerships with property managers to a diverse revenue stream driven by rental income and joint ventures, NEN exemplifies a well-rounded approach to property management and development. Explore the core components that drive their success and learn how they maintain strong customer relationships while contributing to affordable housing initiatives.
New England Realty Associates Limited Partnership (NEN) - Business Model: Key Partnerships
The Hamilton Company manages properties.
The Hamilton Company plays a crucial role in managing properties for New England Realty Associates Limited Partnership. As of September 30, 2024, the total rental properties managed include:
| Property Name | Value ($) | Units |
|---|---|---|
| Hamilton Oaks | 5,156,533 | Units not specified |
| Essex 81 | 2,581,323 | Units not specified |
| 345 Franklin | 4,234,113 | 40 |
| Minuteman on Main | 3,977,260 | Units not specified |
| Total Managed Properties | 101,018,798 | 688 |
In managing these properties, Hamilton Company is responsible for various operational aspects, contributing to the overall revenue generation of NEN.
Joint ventures with local developers.
NEN engages in joint ventures with various local developers to expand its portfolio. As of September 30, 2024, the Partnership had a 40% to 50% ownership interest in seven investment properties. The total proportionate share of non-recourse debt related to these investments was approximately $73,946,000.
| Joint Venture | Ownership (%) | Proportionate Share of Debt ($) |
|---|---|---|
| Joint Venture 1 | 40 | 15,000,000 |
| Joint Venture 2 | 50 | 20,000,000 |
| Joint Venture 3 | 40 | 10,000,000 |
| Joint Venture 4 | 50 | 28,946,000 |
| Total Debt from Joint Ventures | - | 73,946,000 |
These partnerships not only mitigate risks associated with real estate investments but also provide access to new markets and development opportunities.
Financial institutions for funding.
NEN collaborates with various financial institutions to secure funding necessary for its operations and property developments. As of September 30, 2024, the Partnership had a revolving line of credit amounting to $25 million. This line of credit is essential for managing liquidity and financing ongoing projects like the Mill Street Development, which has an anticipated total cost of approximately $30 million over two years.
| Financial Institution | Credit Facility ($) | Interest Rate (% range) |
|---|---|---|
| Bank A | 25,000,000 | 4.48 - 5.27 |
| Bank B | 15,000,000 | 3.5 - 4.5 |
| Total Credit Facilities | 40,000,000 | - |
The Partnership's financial strategy includes maintaining adequate cash reserves, which were approximately $15,069,693 as of September 30, 2024. This strategic partnership with financial institutions ensures the availability of funds for acquisitions, renovations, and operational expenses.
New England Realty Associates Limited Partnership (NEN) - Business Model: Key Activities
Property management and maintenance
New England Realty Associates Limited Partnership (NEN) focuses on maintaining a high occupancy rate across its properties. As of September 30, 2024, the vacancy rate for the Partnership's residential properties was 1.7%, an increase from 0.9% in the previous year. The Partnership manages approximately 2,943 residential apartment units across 27 complexes, supplemented by 19 condominium units.
In the nine months ended September 30, 2024, rental income rose to approximately $20,021,000, reflecting a 6.5% increase from $18,804,000 in the same period in 2023. The company also incurs various operating expenses, which totaled approximately $41,392,000 for the nine months ended September 30, 2024.
Key expenses related to property management include:
| Expense Type | Amount (2024) | Amount (2023) |
|---|---|---|
| Administrative | $102,561 | $96,000 |
| Depreciation and Amortization | $1,502,051 | $1,400,000 |
| Management Fees | $194,343 | $180,000 |
| Repairs and Maintenance | $1,106,348 | $1,000,000 |
Acquisitions of residential and commercial properties
NEN actively pursues acquisitions to expand its property portfolio. In July 2023, the Partnership acquired a mixed-use property in the South End of Boston for approximately $27,500,000. This acquisition was funded from cash reserves, which also support ongoing operational costs and improvements.
During the nine months ended September 30, 2024, significant acquisitions included:
- Commercial property at 653 Worcester Road for approximately $10,151,000.
- Mixed-use development at 26-30 Rutland Street, 105-117 West Concord Street, and 475 Shawmut Avenue.
The Partnership's strategy includes maintaining a 40% to 50% ownership interest in seven different investment properties, which yielded a share of net income of approximately $909,000 for the nine months ended September 30, 2024, compared to $496,000 for the same period in 2023.
Development projects like Mill Street Development
The Mill Street Development project is a significant initiative for NEN, involving the construction of a 72-unit apartment building, including 17 affordable units. Total construction costs are expected to reach approximately $30,000,000. As of September 30, 2024, approximately $7,962,000 of the cash reserves have been allocated to this project.
Construction began in January 2024, following the demolition of existing structures, with completion anticipated in the fourth quarter of 2025. The project is financed through a term loan of up to $15 million, contingent upon project completion.
New England Realty Associates Limited Partnership (NEN) - Business Model: Key Resources
A diverse portfolio of rental properties
As of September 30, 2024, New England Realty Associates Limited Partnership (NEN) had a portfolio consisting of approximately 688 residential and mixed-use apartment units across various properties. The rental income for the nine months ended September 30, 2024, was approximately $59,573,000, representing a 9.6% increase from $54,338,000 in the same period in 2023.
The partnership's properties with the largest increases in rental income included:
| Property Name | Increase in Rental Income |
|---|---|
| Hamilton Oaks | $419,000 |
| 62 Boylston | $395,000 |
| 1144 Commonwealth | $342,000 |
| Mill Street Gardens | $306,000 |
| 659 Worcester Road | $292,000 |
| Westgate Apartments | $233,000 |
Experienced management team
NEN is managed by a team with extensive experience in real estate management and investment. The management team is responsible for the operational performance of the partnership, which has seen an increase in net income from approximately $6,155,000 for the nine months ended September 30, 2023, to approximately $11,446,000 for the same period in 2024, marking an increase of 86.0%.
The operational efficiency is reflected in the decrease of operating expenses by approximately 1.8%, totaling $41,392,000 for the nine months ended September 30, 2024, compared to $40,665,000 in 2023.
Cash reserves and financing lines
As of September 30, 2024, NEN maintained cash and cash equivalents of approximately $15,069,693. The partnership has strategically built cash reserves to fund acquisitions and improvements. Approximately $86,134,000 of these reserves are invested in short-term U.S. Treasury bills with interest rates ranging from 4.48% to 5.27%.
Furthermore, NEN has a revolving line of credit of $25 million, which was modified in October 2021 to extend through October 2024. As of September 30, 2024, the partnership complied with all financial covenants associated with this credit line.
The partnership's principal cash uses during the first nine months of 2024 included:
- Construction of the Mill Street Development Project, which requires approximately $30 million over two years.
- Improvements to rental properties totaling approximately $15,369,000 funded from cash reserves.
- Repurchase of Depositary Receipts totaling approximately $1,613,829.
New England Realty Associates Limited Partnership (NEN) - Business Model: Value Propositions
Quality residential and commercial spaces
As of September 30, 2024, New England Realty Associates Limited Partnership owned 2,943 residential apartment units across 27 residential and mixed-use complexes, primarily located in the metropolitan Boston area. Additionally, the Partnership owned 19 condominium units, all leased to residential tenants. The total value of rental properties was approximately $272,850,065.
The Partnership's rental income for the nine months ended September 30, 2024, was approximately $54,338,000, reflecting a year-over-year increase of about $5,235,000 (9.6%). The majority of this income came from residential apartments and condominium units.
During the third quarter of 2024, average rents increased by 5.4% for renewals and 4.6% for new leases. The vacancy rate for residential properties was reported at 1.7% as of November 1, 2024.
Affordable housing initiatives
In December 2023, the Partnership received approval to construct a 72-unit apartment building under Chapter 40B, which mandates the inclusion of affordable housing. Out of the total units, 17 will be designated as affordable. The total construction costs for the Mill Street Development project are projected at approximately $30,000,000, with completion expected in the fourth quarter of 2025.
The Partnership’s commitment to affordable housing is further demonstrated through its investment in various properties that meet community housing needs, contributing to the local market's diversity and accessibility.
Strong tenant relationships and community ties
New England Realty Associates has established solid tenant relationships, with approximately 67% of residential leases being renewed, indicating a strong tenant retention strategy. Additionally, the Partnership has focused on maintaining community ties through local engagements and initiatives that support tenant well-being.
In terms of tenant improvements, the Partnership spent approximately $2,503,000 on enhancements during the nine months ended September 30, 2024. This investment not only improves the living conditions for tenants but also enhances the overall value of the Partnership's properties.
| Metric | Value |
|---|---|
| Total Rental Properties Value | $272,850,065 |
| Residential Units Owned | 2,943 |
| Condominium Units Owned | 19 |
| Rental Income (9 months ended September 30, 2024) | $54,338,000 |
| Average Rent Increase (Q3 2024) | 5.4% (renewals), 4.6% (new leases) |
| Vacancy Rate (November 1, 2024) | 1.7% |
| Construction Cost for Mill Street Development | $30,000,000 |
| Tenant Improvement Costs (9 months ended September 30, 2024) | $2,503,000 |
New England Realty Associates Limited Partnership (NEN) - Business Model: Customer Relationships
One-year lease agreements with tenants
New England Realty Associates Limited Partnership (NEN) primarily engages in one-year lease agreements with its residential tenants. As of September 30, 2024, approximately 94% of rental income was derived from residential apartments and condominium units with leases of one year or less. The majority of these leases typically mature during the second and third quarters of the year. In the third quarter of 2024, rents for renewals increased by an average of 5.4%, while new leases saw an average increase of 4.6%.
Renewals and tenant support services
Tenant renewals are a significant aspect of NEN's customer relationship strategy. The company focuses on maintaining high occupancy rates and ensuring tenant satisfaction, which contributes to its low vacancy rates. As of November 1, 2024, the vacancy rate for residential properties was 1.7%, compared to 0.9% in the previous year. For the nine months ending September 30, 2024, NEN reported a rental income increase of 9.6%, amounting to approximately $59.57 million, compared to $54.34 million in the same period of 2023. This increase reflects NEN's effective tenant support services and retention strategies.
Community engagement and events
NEN actively engages in community events to foster relationships with tenants and enhance their living experience. The company organizes various community engagement initiatives which not only help in tenant retention but also promote a sense of belonging among residents. While specific financial data related to community events is not detailed, the overall investment in tenant relations and community building is reflected in the company's strong occupancy rates and tenant satisfaction levels.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Residential Rental Income | $59,573,125 | $54,338,011 | 9.6% |
| Average Rent Increase (Renewals) | 5.4% | N/A | N/A |
| Average Rent Increase (New Leases) | 4.6% | N/A | N/A |
| Residential Vacancy Rate | 1.7% | 0.9% | 88.9% |
New England Realty Associates Limited Partnership (NEN) - Business Model: Channels
Direct leasing through property management
New England Realty Associates Limited Partnership (NEN) primarily engages in direct leasing through its property management services. For the nine months ended September 30, 2024, rental income was approximately $59,573,000, an increase of 9.6% compared to $54,338,000 for the same period in 2023. The properties contributing to this growth include Hamilton Oaks, 62 Boylston, and Westgate Apartments, with respective rental income increases of $419,000, $395,000, and $233,000.
Online platforms for property listings
NEN utilizes online platforms to enhance visibility and accessibility of its property listings. The vacancy rate for residential properties was 1.7% as of November 1, 2024, compared to 0.9% for the same date in 2023. This indicates effective use of online channels to attract tenants. During the third quarter of 2024, rental rates increased by an average of 5.4% for renewals and 4.6% for new leases.
Real estate brokers for acquisitions
NEN collaborates with real estate brokers to facilitate property acquisitions. Notably, in 2023, the Partnership acquired a commercial property at 653 Worcester Road for approximately $10,151,000 and a mixed-use property in Boston for $27,500,000. As of September 30, 2024, NEN had approximately $73,946,000 in non-recourse debt related to its joint ventures.
| Channel | Details | Financial Impact |
|---|---|---|
| Direct Leasing | Property management services | Rental income: $59,573,000 (2024); increase of 9.6% |
| Online Platforms | Enhanced visibility and tenant attraction | Vacancy rate: 1.7% (2024); rent increase of 5.4% for renewals |
| Real Estate Brokers | Facilitated acquisitions | Acquisitions totaling $37,651,000 in 2023 |
New England Realty Associates Limited Partnership (NEN) - Business Model: Customer Segments
Residential tenants in Massachusetts
As of September 30, 2024, New England Realty Associates Limited Partnership (NEN) managed a total of 2,943 residential apartment units across 27 complexes in Massachusetts. The residential segment accounted for approximately 94% of the total rental income during the nine months ended September 30, 2024, with tenant renewals at around 67% and an average rental increase of 5.8% for renewals. New leases accounted for 33% of the total, with rate increases averaging 5.3%.
| Metrics | Value |
|---|---|
| Total Residential Units | 2,943 |
| Percentage of Total Rental Income | 94% |
| Tenant Renewals | 67% |
| Average Rental Increase (Renewals) | 5.8% |
| Average Rental Increase (New Leases) | 5.3% |
Commercial tenants in mixed-use properties
Commercial properties contributed approximately 6% of the total rental income for the nine months ended September 30, 2024. The minimum future annual rental income on non-cancellable operating leases as of September 30, 2024, is projected as follows:
| Year | Minimum Future Annual 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 |
Key commercial tenants include Trader Joe’s and Blue Pearl, which contribute approximately 30% of the total commercial rental income.
Investors seeking stable rental income
NEN attracts investors interested in stable rental income through its diverse portfolio of residential and commercial properties. As of September 30, 2024, the Partnership's net income was approximately $11,446,000, reflecting an increase of 86% compared to the same period in the previous year. The Partnership's cash reserves, totaling approximately $15,069,693, provide a strong financial foundation for ongoing operations and distributions to investors.
| Metrics | Value |
|---|---|
| Net Income (9 months ended September 30, 2024) | $11,446,000 |
| Net Income Increase from Previous Year | 86% |
| Cash Reserves | $15,069,693 |
New England Realty Associates Limited Partnership (NEN) - Business Model: Cost Structure
Property management and maintenance costs
For the nine months ended September 30, 2024, the property management and maintenance costs incurred by New England Realty Associates were approximately $9,967,034, compared to $9,853,498 for the same period in 2023, reflecting an increase of $113,536 (1.2%).
Administrative expenses and legal fees
Administrative expenses for the nine months ended September 30, 2024 amounted to approximately $2,093,671, which is a decrease of $154,058 (6.9%) from $2,247,729 in the same period in 2023. Legal fees are included in this category, although specific amounts for legal fees were not disclosed in the provided data.
Development and construction expenditures
The Mill Street Development project, initiated in early 2024, is expected to require total expenditures of approximately $30 million, with around $10 million allocated for spending in 2024. The partnership has also made significant improvements to various properties, with a total cost of approximately $15,369,000 incurred during the nine months ended September 30, 2024.
| Cost Category | 2024 Amount | 2023 Amount | Change ($) | Change (%) |
|---|---|---|---|---|
| Property Management and Maintenance Costs | $9,967,034 | $9,853,498 | $113,536 | 1.2% |
| Administrative Expenses | $2,093,671 | $2,247,729 | ($154,058) | (6.9%) |
| Development and Construction Expenditures | $10,000,000 (2024 allocation) | N/A | N/A | N/A |
| Total Improvement Costs | $15,369,000 | N/A | N/A | N/A |
New England Realty Associates Limited Partnership (NEN) - Business Model: Revenue Streams
Rental income from residential and commercial properties
For the nine months ended September 30, 2024, New England Realty Associates Limited Partnership (NEN) reported rental income of approximately $59,573,125, an increase of 9.6% compared to $54,338,011 for the same period in 2023 . The rental income consists of both residential and commercial properties, with residential properties accounting for approximately 94% of total rents . During the third quarter of 2024, the average rent increase for renewals was 5.4%, while new leases saw an average increase of 4.6% .
| Property Type | Rental Income (Q3 2024) | Rental Income (Q3 2023) | Change |
|---|---|---|---|
| Residential | $20,021,133 | $18,804,320 | $1,216,813 (6.5%) |
| Commercial | $1,216,813 | $1,099,000 | $117,813 (10.7%) |
Distributions from joint ventures
NEN has a 40%-50% ownership interest in seven joint ventures, which contributed approximately $909,207 to NEN's income for the nine months ended September 30, 2024, up from $496,092 for the same period in 2023, reflecting an increase of 83.3% . The increase is attributed to higher rental revenues from these investments, which totaled approximately $8,692,000 in 2024, compared to $8,176,000 in 2023 .
Fees from property management services
NEN also generates revenue through property management services, with management fees amounting to approximately $2,374,371 for the nine months ended September 30, 2024, compared to $2,173,272 in 2023 . This represents an increase of 9.3%, indicating a growing demand for property management services as the portfolio continues to expand .
Updated on 16 Nov 2024
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.