Ownership and Investments - As of February 1, 2024, the Partnership owned a 40-50% interest in 7 residential and mixed-use complexes, totaling 688 residential units and one commercial unit[19]. - The Partnership purchased a 52-unit mixed-use property for approximately 10,067,000 for this project in 2024[32]. - In 2023, the Partnership completed property improvements at a total cost of approximately 22,284,000 in capital improvements in 2024[32]. Financial Performance and Distributions - In March 2024, the Partnership approved a quarterly distribution of 48.00 per Class A unit, totaling 31.72 per receipt, totaling approximately 156,000,000 at a fixed interest rate of 2.97%[24]. - The Partnership's line of credit was modified to extend until October 29, 2024, with a commitment amount of 17 million during the modification period[35]. - The Partnership's debt yield fell below the minimum requirement to 8.6% as of December 31, 2023, restricting access to the line of credit until compliance is met[35]. - As of December 31, 2023, the Partnership has approximately 10,000,000, with rates ranging from SOFR plus 170 to SOFR plus 310 basis points[222]. - A 100 basis point change in market interest rates would result in an annual interest cost change of approximately 25,644,000 with a 100 basis point change in market interest rates[222]. - The long-term debt matures through 2035, indicating a long-term financial commitment[222]. Market and Competitive Environment - The Partnership's leasing of real estate in the Boston area is highly competitive, impacting tenant acquisition and rental rates[19]. - The company relies heavily on rental income from multifamily apartment complexes and commercial properties, which could adversely affect financial conditions if tenant attraction and retention fail[44]. - The company is subject to competition from various rental alternatives, which may impact its ability to attract tenants and maintain rental rates[46]. - Properties are concentrated in Eastern Massachusetts and Southern New Hampshire, linking performance to local economic conditions and rental market dynamics[47]. Regulatory and Risk Factors - The company faces significant cybersecurity risks, with potential legal claims and increased insurance premiums if data breaches occur, despite ongoing investments in security measures[45]. - Recent proposals in Boston could limit future rent increases to the lower of 10% or the Consumer Price Index plus six percentage points, adversely affecting revenue from residential properties[70]. - New energy performance standards in Boston may increase utility and administrative costs, impacting financial conditions and cash flows[71]. - The company is exposed to market risks, particularly interest rate risk, which could affect the spread between yield on invested assets and cost of funds[221]. - Compliance with various laws and regulations may incur significant costs, potentially affecting cash flow and distributions to shareholders[56]. - Debt financing poses risks, as the majority of assets are encumbered by non-recourse mortgage debt, potentially leading to cash flow issues for required payments[49]. - The company’s ability to sell properties and execute its strategic plan is crucial for debt reduction and financial performance[55].
New England Realty Associates Partnership(NEN) - 2023 Q4 - Annual Report