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 2022 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 24
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on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.
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. More than two years has passed since we became aware of the current outbreak of COVID- 19, a novel strain of coronavirus. TheWorld Health Organization declared a global pandemic onMarch 11, 2020 . OnMarch 10, 2020 the governor ofMassachusetts ,Charlie Baker , declared a state of emergency and ordered all non-essential businesses closed and prohibited the gathering of 10 or more people. Additionally, March of 2020 saw the closure of local colleges and universities for the balance of the academic year. Colleges in theCity of Boston and the surrounding communities conducted classes in 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 and resulted in significant vacancies in the Partnership's apartment portfolio. With the introduction and roll out of Covid vaccines in the spring of 2021, the economy is opening back up. The Governor ofMassachusetts rescinded the State's Covid-19 restrictions onMay 29, 2021 and terminated the State of Emergency onJune 15, 2021 . The local colleges and universities returned to campus inSeptember 2021 and the rental market improved significantly as students returned to the area. OnFebruary 24, 2022 ,Russia began an invasion intoUkraine . In response, nations from around the world have placed sanctions onRussia in an attempt to cripple its economy. There is no way to predict how this conflict and the Russian sanctions will affect both the global and local economies. If there is a downturn in the economy and significant inflation to the cost of energy, goods and service, there may be material adverse effects to our business, results of operations, cash flows, and financial condition. Vacancy rates for the Partnership's residential properties as ofMay 1, 2022 were 2.0% as compared with a vacancy rate of 6.2% as ofMay 1, 2021 . The vacancy rate for the Joint Venture properties as ofMay 1, 2022 was 0.6%, as compared to 9.2% for the same period last year. The current vacancy rates are in line with those experienced prior to the Pandemic.
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. Rental activity has been strong as we moved from spring to summer and all indications are that we will have low vacancy rates for the balance of the year.
During the first quarter of 2022, rents increased on average of 4.9% for renewals and increased on average of 11.2% for new leases. For the balance of 2022, management expects a strong rental market with continued rent growth.
For the first quarter of 2022, consolidated revenue increased by 9.9%, operating expenses increased by 9.5% and Income before Other Income (Expense) increased by 11.3%, as compared to the first quarter of 2021. OnJuly 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 onJuly 31, 2017 , and was extended untilOctober 31, 2020 . The costs associated with the line of credit extension were approximately$128,000 . Prior to the line's expiration in 2020, the Partnership exercised its option for a one-year extension untilOctober 31, 2021 . The Partnership paid an extension fee of approximately$37,500 in association with the extension OnOctober 29, 2021 , the Partnership closed on the modification of its existing line of credit. The agreement extends the credit line for three years untilOctober 29, 2024 . The commitment amount is for$25 million but is restricted to$17 million during the modification period. The modification period covers the current period and phases out byDecember 31, 2022 . During this period, the loan covenants are modified from a minimum consolidated debt service ratio of 1.60 to a ratio of 1.35 untilSeptember 30, 2022 ; from a minimum tangible net worth
requirement of$200 million 25 Table of Contents to a net worth of$175 million untilSeptember 30, 2022 ; from a maximum consolidated leverage ratio of 65% to a ratio of 70% untilSeptember 30, 2022 and from a minimum debt yield of 9.5% to a yield of 8.5% untilSeptember 30, 2022 and a yield of 9.0% untilDecember 31, 2022 . Once the financial performance of the Partnership meets the original covenant tests for the trailing 12-month period, the commitment amount will return to$25 million . The portfolio's debt yield fell below the minimum of 8.5% to 8.04%. As ofMarch 31, 2022 , the Partnership did not comply with the debt yield financial covenant. As such, the Partnership is unable to draw down any amount from the line of credit until the Partnership meets the required financial covenants. From the start of the Stock Repurchase Program in 2007 throughMarch 31, 2022 , the Partnership has purchased 1,448,321 Depositary Receipts. During the three months endedMarch 31, 2022 , the Partnership purchased a total of 14,132 Depositary Receipts. AtMay 1, 2022 , the Harold Brown related entities andRonald Brown collectively own approximately 31.3% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons' family members).Harold Brown related entities also control 75% of the Partnership's ClassB Units , and 75% of the capital stock ofNewReal, Inc. ("NewReal"), the Partnership's sole general partner.Ronald Brown also owns 25% of the Partnership's ClassB Units and 25% of NewReal's capital stock. In addition,Ronald Brown is the President and director of NewReal andJameson Brown is NewReal's Treasurer and a director. The 75% of the issued and outstanding Class B units of the Partnership, controlled by the Estate ofHarold Brown , are owned byHBC Holdings LLC , an entity of whichJameson Brown is the manager. The outstanding stock ofThe Hamilton Company, Inc. is controlled byJameson Brown andHarley Brown . The 75% of the issued and outstanding capital stock of NewReal, is owned by the Harold Brown 2013Revocable Trust (the "2013 Trust"), an entity of whichSally Michaels andDavid Reier are the trustees. 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 sign a one year lease. During the three months endedMarch 31, 2022 , tenant renewals were approximately 64% with an average rental increase of approximately 4.9%, new leases accounted for approximately 36% with rental rate increases of approximately 11.2%. During the three months endedMarch 31, 2022 , leasing commissions were approximately$81,000 compared to approximately$168,000 for the three months endedMarch 31, 2021 , a decrease of approximately$87,000 (51.8%). Tenant concessions were approximately$11,000 for the three months endedMarch 31, 2022 , compared to approximately$5,000 for the three months endedMarch 31, 2021 , an increase of approximately$6,000 (120.0%). Tenant improvements were approximately$475,000 for the three months endedMarch 31, 2022 , compared to approximately$320,000 for the three months endedMarch 31, 2021 , a decrease of approximately$155,000 (48.4%). Hamilton accounted for approximately 3.2% of the repair and maintenance expenses paid for by the Partnership during the three months endedMarch 31, 2022 and 2.3 % during the three months endedMarch 31, 2021 . 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 inAllston, 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$54,000 (84.1%) and approximately$24,000 (52.9%) of the legal services paid for by the Partnership during the three months endedMarch 31, 2022 and 2021 respectively.
Additionally, as described in Note 3 to the consolidated financial statements,
The
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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. During the three months endedMarch 31, 2022 , Hamilton provided the Partnership approximately$37,000 in construction and architectural services, compared to approximately$155,000 for the three months endedMarch 31, 2021 . Hamilton's accounting staff perform bookkeeping and accounting functions for the Partnership. During the three months endedMarch 31, 2022 and 2021, Hamilton charged the Partnership$31,250 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 the consolidated financial statements, in accordance with accounting principles generally accepted inthe United States of America , requires the Partnership to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. 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. Revenue from commercial leases also include reimbursements and recoveries received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions 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. 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. 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 27
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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 selling costs, of the assets which have been identified as held for sale is less than the carrying value of the assets, a valuation allowance is established. 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 analyses may not be achieved. Investments in Joint Ventures: The Partnership accounts for its 40%-50% ownership in the Investment Properties under the equity method of accounting, as it exercises significant influence over, but does not control these 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 28 Table of Contents 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. We intend to fund our share of the investments' future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. 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. 29 Table of Contents RESULTS OF OPERATIONS
Three Months Ended
The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately$3,777,000 during the three months endedMarch 31, 2022 , compared to approximately$3,395,000 for the three months endedMarch 31, 2021 , an increase of approximately$382,000 (11.2%).
The rental activity is summarized as follows:
Occupancy Date May 1, 2022 May 1, 2021 Residential Units 2,911 2,911 Vacancies 57 180 Vacancy rate 2.0 % 6.2 % Commercial Total square feet 108,043 108,154 Vacancy - 4,844 Vacancy rate 0.0 % 4.5 % Rental Income (in thousands) Three Months Ended March 31, 2022 2021 Total Continuing Total Continuing Operations Operations Operations Operations Total rents$ 16,460 $ 16,460 $ 14,980 $ 14,980 Residential percentage 95 % 95 % 94 % 94 % Commercial percentage 5 % 5 % 6 % 6 % Contingent rentals$ 175 $ 175 $ 150 $ 150 30 Table of Contents Three Months EndedMarch 31, 2022 Compared to Three Months EndedMarch 31, 2021 : Three Months Ended March 31, Dollar Percent 2022 2021 Change Change Revenues Rental income$ 16,460,006 $ 14,980,116 $ 1,479,890 9.9% Laundry and sundry income 120,403 108,673 11,730 10.8% 16,580,409 15,088,789 1,491,620 9.9% Expenses Administrative 707,786 652,186 55,600 8.5% Depreciation and amortization 4,020,768 3,905,918 114,850 2.9% Management fee 673,084 605,391 67,693 11.2% Operating 2,676,208 2,045,968 630,240 30.8% Renting 169,389 261,966 (92,577) (35.3%) Repairs and maintenance 2,279,651 1,970,087 309,564 15.7% Taxes and insurance 2,276,573 2,252,134 24,439 1.1% 12,803,459 11,693,650 1,109,809 9.5% Income Before Other Income (Expense) 3,776,950 3,395,139 381,811 11.2% Other Income (Expense) Interest income 34 21 13 61.9% Interest expense (3,454,635) (3,364,170) (90,465) 2.7% Income from investments in unconsolidated joint ventures 20,069
(325,170) 345,239 (106.2%)
(3,434,532) (3,689,319) 254,787 (6.9%) Net Income (Loss)$ 342,418 $
(294,180)
Rental income for the three months endedMarch 31, 2022 was approximately$16,460,000 , compared to approximately$14,980,000 for the three months endedMarch 31, 2021 , an increase of approximately$1,480,000 (9.9%). The Partnership properties with the largest increases in rental income include 62 Boylston, 1144 Commonwealth,Mill Street Gardens ,Hamilton Green , andLincoln Street with increases of$450,000 ,$97,000 ,$72,000 ,$71,000 and$69,000 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. Operating expenses for the three months endedMarch 31, 2022 were approximately$12,803,000 compared to approximately$11,694,000 for the three months endedMarch 31, 2021 , an increase of approximately$1,110,000 (9.5%), primarily due to an increase in snow removal expense. The factors contributing to the increase are an increase in operating expenses of approximately$630,000 (30.8%), an increase in repairs and maintenance of approximately$310,000 (15.7%), and an increase in depreciation and amortization of approximately$115,000 (2.9%).
Interest expense for the three months ended
AtMarch 31, 2022 , 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$20,000 for the three months endedMarch 31, 2022 , compared to a net loss of approximately$325,000 for the three months endedMarch 31, 2021 , an increase in income of approximately$345,000 (106.2%). This increase is primarily due to an increase in rental revenue to approximately$2,430,000 from$2,073,000 , an increase of approximately$357,000 (17.2 %) for the three months endedMarch 31, 2022 compared to the three months endedMarch 31, 2021 . Included in the income for the three months endedMarch 31, 2022 is depreciation and amortization expense of approximately$653,000 . 31
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As a result of the changes discussed above, net income for the three months
ended
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's principal source of cash during the first three months of 2022 and 2021 was the collection of rents. The majority of cash and cash equivalents of$92,265,466 atMarch 31, 2022 and$96,083,508 atDecember 31, 2021 were held in interest bearing accounts at creditworthy financial institutions. The decrease in cash of$3,818,042 for the three months endedMarch 31, 2022 is summarized as follows: Three Months Ended March 31, 2022 2021 Cash provided by operating activities$ 4,581,407 $ 4,343,410 Cash (used in) investing activities (640,311) (446,603) Cash (used in) financing activities
(600,190) (552,575) Repurchase of Depositary Receipts, Class B and General Partner Units
(1,337,814) - Distributions paid
(5,821,134) (1,168,860)
Net (decrease) increase in cash and cash equivalents
The change in cash provided by operating activities is due to various factors, including a change in depreciation expense, a change in income and distribution from joint ventures, and other factors. The increase in cash used in investing activities is primarily due to improvements to rental properties. The change in cash used in financing activities is due to the pay down of mortgages, the repurchase of depositary receipts, and distributions paid. During 2022, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately$1,045,000 . These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. The most significant improvements were made at Westside Colonial,Old English Village ,Hamilton Oaks ,Mill Street Gardens , 62 Boylston, andHamilton Green at a cost of approximately$175,000 ,$160,000 ,$95,000 ,$90,000 ,$84,000 and$70,000 respectively. During the three months endedMarch 31, 2022 , the Partnership received distributions of approximately$440,000 from the investment properties. For the three months endedMarch 31, 2021 , the Partnership received$196,000 in distributions from the investment properties. Included in these net distributions is the amount fromDexter Park of approximately$240,000 and$0 for the three months endedMarch 31, 2022 and 2021, respectively. InJanuary 2022 , the Partnership approved a quarterly distribution of$9.60 per Unit ($0.32 per Receipt), which was paid onMarch 31, 2022 . In addition to the quarterly distribution, there was a special distribution of$38.40 per Class A unit ($1.28 per Receipt) payable onMarch 31, 2022 . OnJuly 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 onJuly 31, 2017 and was extended untilOctober 31, 2020 . The costs associated with the line of credit extension in 2017 were approximately$128,000 . Prior to the line's expiration in 2020, the Partnership exercised its option for a one-year extension untilOctober 31, 2021 . The Partnership paid an extension fee of approximately$37,500 in association with the extension. The Partnership agreed to terms with the lender onOctober 29, 2021 , to extend the line of credit untilOctober 29, 2024 . OnDecember 3 ,
2021, the Partnership paid off the line.
The Partnership anticipates that cash from operations will be sufficient to fund its current operations, pay distributions, make required debt payments and 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, property improvements, increases or decreases in rental income or expenses, or the loss of significant tenants. 32
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Off-Balance Sheet Arrangements-Joint Venture Indebtedness
As ofMarch 31, 2022 , the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. AtMarch 31, 2022 , our proportionate share of the non-recourse debt related to these investments was approximately$70,890,000 . See Note 14 to the Consolidated Financial Statements. 33 Table of Contents Contractual Obligations
As of
Payments due by period 2023 2024 2025 2026 2027 Thereafter Total Contractual Obligations Long -term debt Mortgage debt$ 8,719,140 31,306,301 11,093,452 21,904,169 6,507,098 293,059,974$ 372,590,134 Total Contractual Obligations$ 8,719,140 $ 31,306,301 $ 11,093,452 $ 21,904,169 $ 6,507,098 $ 293,059,974 $ 372,590,134
*Excluding unamortized deferred financing costs
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 mortgage notes payable. The Partnerships has no other material contractual obligations to be disclosed.
Factors That May Affect Future Results
Along with risks detailed in Item 1A of the Partnership's Form 10-K for the fiscal year endedDecember 31, 2021 filed with theSecurities and Exchange Commission onMarch 11, 2022 and from time to time in the Partnership's other filings with theSecurities 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 Partnership depends on the real estate markets where its properties are
? located, primarily in
affected by local economic market conditions, which are beyond the Partnership's control.
The Partnership is subject to the general economic risks affecting the real
? estate industry, such as dependence on tenants' financial condition, the need
to enter into new leases or renew leases on terms favorable to tenants in order
to generate rental revenues and our ability to collect rents from our tenants.
The Partnership is also impacted by changing economic conditions making
alternative housing arrangements more or less attractive to the Partnership's
? tenants, such as the interest rates on single family home mortgages and the
availability and purchase price of single family homes in the
metropolitan area.
The Partnership is subject to significant expenditures associated with each
? investment, such as debt service payments, real estate taxes, insurance and
maintenance costs, which are generally not reduced when circumstances cause a
reduction in revenues from a property.
The Partnership is subject to increases in heating and utility costs that may
? arise as a result of economic and market conditions and fluctuations in
seasonal weather conditions.
? Civil disturbances, earthquakes and other natural disasters may result in
uninsured or underinsured losses.
? Actual or threatened terrorist attacks may adversely affect our ability to
generate revenues and the value of our properties.
34 Table of Contents
? Financing or refinancing of Partnership properties may not be available to the
extent necessary or desirable, or may not be available on favorable terms.
The Partnership properties face competition from similar properties in the same
? market. This competition may affect the Partnership's ability to attract and
retain tenants and may reduce the rents that can be charged.
Given the nature of the real estate business, the Partnership is subject to
potential environmental liabilities. These include environmental contamination
in the soil at the Partnership's or neighboring real estate, whether caused by
? the Partnership, previous owners of the subject property or neighbors of the
subject property, and the presence of hazardous materials in the Partnership's
buildings, such as asbestos, lead, mold and radon gas. Management is not aware
of any material environmental liabilities at this time.
Insurance coverage for and relating to commercial properties is increasingly
costly and difficult to obtain. In addition, insurance carriers have excluded
certain specific items from standard insurance policies, which have resulted in
? increased risk exposure for the Partnership. These include insurance coverage
for acts of terrorism and war, and coverage for mold and other environmental
conditions. Coverage for these items is either unavailable or prohibitively
expensive.
? Market interest rates could adversely affect market prices for Class A
Partnership Units and Depositary Receipts as well as performance and cash flow.
Changes in income tax laws and regulations may affect the income taxable to
? owners of the Partnership. These changes may affect the after-tax value of
future distributions.
The Partnership may fail to identify, acquire, construct or develop additional
properties; may develop or acquire properties that do not produce a desired or
? expected yield on invested capital; may be unable to sell poorly- performing or
otherwise undesirable properties quickly; or may fail to effectively integrate
acquisitions of properties or portfolios of properties.
? Risk associated with the use of debt to fund acquisitions and developments.
? Competition for acquisitions may result in increased prices for properties.
Any weakness identified in the Partnership's internal controls as part of the
? evaluation being undertaken could have an adverse effect on the Partnership's
business.
? Ongoing compliance with Sarbanes-Oxley Act of 2002 may require additional
personnel or systems 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.
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