Financial Performance - Rental income for the three months ended September 30, 2024, was $20,021,133, an increase of 6.5% from $18,804,320 in the same period of 2023[12]. - Net income for the nine months ended September 30, 2024, was $11,445,720, representing an increase of 86.9% compared to $6,154,568 for the same period in 2023[14]. - The company reported comprehensive income of $3,641,118 for the three months ended September 30, 2024, compared to $2,438,458 for the same period in 2023, indicating a growth of 49.0%[14]. - Net income for the three months ended September 30, 2024, was approximately $3,909,000, an increase of approximately $1,734,000 (79.7%) compared to $2,175,000 for the same period in 2023[164]. - Net income for the nine months ended September 30, 2024, was approximately $11,446,000, an increase of $5,291,000 (86.0%) compared to the same period in 2023[173]. Assets and Liabilities - Total assets as of September 30, 2024, were $387,356,540, up from $385,730,690 at the end of 2023, reflecting a growth of 0.4%[8]. - Total liabilities increased to $452,817,146 as of September 30, 2024, compared to $451,085,074 at the end of 2023, marking a rise of 0.4%[8]. - The Partnership's total fixed assets amounted to approximately $455,866,125 as of September 30, 2024, compared to $440,496,897 at December 31, 2023[54]. - The total liabilities as of September 30, 2024, were $579,166,028, with a fair value of $531,112,016[90]. - The total assets of the Partnership as of September 30, 2024, amount to $111,057,366, with rental properties valued at $101,018,798[109]. Cash Flow and Investments - Net cash provided by operating activities increased to $19,965,878 for the nine months ended September 30, 2024, from $13,231,030 in 2023, reflecting a growth of 51.3%[20]. - Cash and cash equivalents decreased to $15,069,693 as of September 30, 2024, from $18,230,463 at the end of 2023, a decline of 17.8%[8]. - The Partnership received distributions of approximately $3,972,500 from investment properties for the nine months ended September 30, 2024, compared to $3,033,500 for the same period in 2023[177]. - The Partnership has cash reserves of $86,134,000 invested in short-term US Treasury bills with interest rates between 4.48% and 5.27%[122]. - The Partnership's cash and cash equivalents decreased by $3,160,770 for the nine months ended September 30, 2024[175]. Debt and Financing - As of September 30, 2024, the total mortgage notes payable amounted to $406,847,000 after deducting unamortized deferred financing costs[66]. - The Partnership's line of credit was modified to extend until October 29, 2024, with a commitment amount of $25 million, restricted to $17 million during the modification period[68]. - The Partnership has approximately $582,234,000 in long-term debt, with most requiring fixed interest payments[193]. - The Partnership has variable rate debt of $10,000,000, with interest rates ranging from SOFR plus 170 basis points to SOFR plus 310 basis points[193]. - A 100 basis point change in market interest rates would result in an annual interest cost change of approximately $50,000 for the variable rate debt and a fair value change of approximately $21,970,000 for the fixed rate debt[193]. Property and Operations - The partnership owns 31 properties, including 22 residential buildings and 4 commercial buildings, totaling 2,943 apartment units and approximately 130,000 square feet of commercial space[22]. - The Partnership has a 40-50% interest in 7 additional residential and mixed-use properties, consisting of 688 apartment units and 12,500 square feet of commercial space[22]. - Approximately 94% of rental income during the nine months ended September 30, 2024, was derived from residential apartments and condominium units[80]. - The total minimum future rental income from commercial properties at September 30, 2024, was $22,272,894[80]. - The largest increases in rental income were from properties including 659 Worcester Road and Shawmut Place, with increases of $156,000 and $120,000 respectively[158]. Expenses and Cost Management - The company’s management fee expenses for the three months ended September 30, 2024, were $802,908, a slight decrease from $810,436 in the same period of 2023[12]. - Operating expenses for the three months ended September 30, 2024, were approximately $13,738,000, a decrease of approximately $324,000 (2.3%) compared to $14,062,000 for the same period in 2023[159]. - Administrative expenses for the nine months ended September 30, 2024, were $102,561, reflecting a strategic focus on cost management[111]. - Total expenses for the nine months ended September 30, 2024, were approximately $41,392,000, an increase of $727,000 (1.8%) compared to the same period in 2023[168]. - Interest expense for the three months ended September 30, 2024, was approximately $3,831,000, a decrease of approximately $125,000 (3.2%) compared to $3,956,000 for the same period in 2023[160]. Market and Risk Factors - The Partnership is exposed to market risks, particularly interest rate risk, which may affect its ability to make distributions to investors[192]. - The Partnership faces competition from similar properties, which may impact its ability to attract and retain tenants and could reduce rental income[1]. - Changes in income tax laws may affect the after-tax value of future distributions to owners of the Partnership[187]. - The Partnership's properties are subject to significant expenditures, including debt service payments, real estate taxes, insurance, and maintenance costs, which do not decrease with revenue reductions[1]. Management and Governance - The Partnership's management has evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[194]. - There were no material changes in the Management Company's internal control over financial reporting during the quarter ended September 30, 2024[195]. - The Partnership is not currently involved in any material legal proceedings beyond ordinary routine litigation[197].
New England Realty Associates Partnership(NEN) - 2024 Q3 - Quarterly Report