New England Realty Associates Reports Q2 2025 Net Income Increase to $4.15 Million

New England Realty Associates Limited Partnership (NERA) reported its financial results for the second quarter and first half of 2025, revealing a net income of approximately $4.15 million for the three months ended June 30, 2025, a 1.9% increase from $4.07 million in the same period last year. For the six months ended June 30, 2025, net income rose to $7.95 million, up 5.4% from $7.54 million in the prior year. The partnership's rental income for the second quarter was approximately $21.04 million, reflecting a 6.0% increase from $19.84 million in the previous year, while total revenues for the first half of 2025 reached $41.93 million, a 5.0% increase from $39.94 million.

The partnership's total assets increased significantly to $494.78 million as of June 30, 2025, compared to $393.51 million at the end of 2024. This growth was primarily driven by the acquisition of rental properties, which rose to $456.34 million from $278.52 million. The partnership also reported a substantial increase in mortgage notes payable, which rose to $511.18 million from $406.21 million, reflecting financing activities related to property acquisitions. The increase in liabilities resulted in a partners' capital deficit of $68.97 million, compared to a deficit of $62.43 million at the end of 2024.

Strategically, NERA completed the acquisition of a mixed-use property in Belmont, Massachusetts, for $172 million, which included 396 residential units and three commercial units. This acquisition was financed through proceeds from the sale of U.S. Treasury bills and additional borrowings. The partnership also initiated construction on a 72-unit apartment building in Woburn, Massachusetts, with total expected costs of approximately $30 million, anticipated to be completed in the fourth quarter of 2025.

Operationally, the partnership reported a vacancy rate of 2.4% for its residential properties as of August 1, 2025, compared to 1.5% a year earlier. The average rental increase for renewals was 4.6%, while new leases saw a modest increase of 1.4%. The partnership's management expects a slowing rental market for the remainder of 2025, with operating expenses increasing by 0.3% in the second quarter compared to the previous year. The partnership's cash flow from operating activities was $18.01 million for the first half of 2025, a significant increase from $11.49 million in the same period of 2024.

Looking ahead, NERA anticipates that cash from operations will be sufficient to fund its ongoing operations, pay distributions, and meet debt obligations. The partnership plans to continue its strategy of acquiring additional properties while managing its existing portfolio effectively. However, it remains cautious about potential market fluctuations and economic conditions that could impact its performance.