New England Realty Associates Reports 9.6% Increase in Net Income for Q1 2025

New England Realty Associates Limited Partnership (NERA) reported its financial results for the first quarter of 2025, revealing a net income of $3.8 million, a 9.6% increase from $3.5 million in the same period last year. The partnership's revenue for the three months ended March 31, 2025, reached $20.7 million, up 4.0% from $19.9 million in the prior year. This growth was primarily driven by a 4.0% increase in rental income, which amounted to $20.5 million, compared to $19.7 million in the first quarter of 2024. The partnership also reported a net income per unit of $32.53, up from $29.51 a year earlier.

In terms of expenses, NERA's total costs rose to $14.5 million, a 2.2% increase from $14.1 million in the previous year. Notably, operating expenses surged by 23.9% to $3.3 million, largely due to increased costs for snow removal and heating. Conversely, depreciation and amortization expenses decreased by 7.6% to $3.9 million. The partnership's interest expense also saw a slight decline, totaling $3.8 million, down from $3.9 million in the prior year.

Operationally, NERA continues to manage a portfolio of 31 properties, including 2,943 residential units and approximately 130,000 square feet of commercial space, primarily located in Eastern Massachusetts and Southern New Hampshire. The partnership's vacancy rate for residential properties was reported at 1.6% as of May 1, 2025, slightly up from 1.2% a year prior. The partnership has also initiated a significant development project, the Mill Street Development, which is expected to cost approximately $30 million and is anticipated to be completed in the fourth quarter of 2025.

Looking ahead, NERA has entered into a Purchase and Sale Agreement to acquire the Hill Estates Properties for $175 million, which includes 396 residential condominium units and several commercial properties. The partnership plans to finance this acquisition through cash reserves and proceeds from U.S. Treasury bills. Additionally, NERA has established a new $25 million revolving line of credit to support its operational and acquisition strategies. The partnership remains optimistic about its growth prospects, although it acknowledges potential challenges related to market conditions and rising interest rates.