NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP (Form: 10-K, Received: 03/07/2011 12:55:16)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K


(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2010
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number 0-12138

New England Realty Associates Limited Partnership
(Exact name of registrant as specified in its charter)


Massachusetts (State or other jurisdiction of incorporation or organization)		04-2619298 (I.R.S. employer identification no.)
39 Brighton Avenue, Allston, Massachusetts (Address of principal executive offices)		02134 (Zip Code)
Registrant's telephone number, including area code: (617) 783-0039
Securities registered pursuant to Section 12(b) of the Act:
Depositary Receipts (Title of each Class)		NYSE AMEX (Name of each Exchange on which Registered)
Securities registered pursuant to Section 12(g) of the Act:
Class A Limited Partnership Units (Title of class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o (the Registrant is not yet required to submit Interactive Data)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

At June 30, 2010, the aggregate market value of the registrant's securities held by non-affiliates of the registrant was $42,160,920 based on the closing price of the registrant's traded securities on the NYSE Amex.Exchange on such date. For this computation, the Registrant has excluded the market value of all Depositary Receipts reported as beneficially owned by executive officers and directors of the General Partner of the Registrant; such exclusion shall not be deemed to constitute an admission that any such person is an affiliate of the Registrant.

As of March 1, 2011, there were 105,188 of the registrant's Class A units (1,051,876 Depositary Receipts) of limited partnership issued and outstanding and 24,982 Class B units issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

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		PAGE

PART I
Item 1.	Business	1
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	18
Item 4.	(Removed and Reserved)	18
PART II
Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	Selected Financial Data	20
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 8.	Consolidated Financial Statements and Supplementary Data	34
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	34
Item 9A.	Controls and Procedures	34
Item 9B.	Other Information	34
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	36
Item 11.	Executive Compensation	38
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	40
Item 13.	Certain Relationships and Related Transactions, and Director Independence	42
Item 14.	Principal Accounting Fees and Services	43
PART IV
Item 15.	Exhibits and Financial Statement Schedules	43
SIGNATURES		S-1
Exhibit Index		S-2

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

PART I

ITEM 1. BUSINESS

General

New England Realty Associates Limited Partnership ("NERA" or the "Partnership"), a Massachusetts Limited Partnership, was formed on August 12, 1977 as the successor to five real estate limited partnerships (collectively, the "Colonial Partnerships"), which filed for protection under Chapter XII of the Federal Bankruptcy Act in September 1974. The bankruptcy proceedings were terminated in late 1984. In July 2004, the General Partner extended the termination date of the Partnership until 2057, as allowed in the Partnership Agreement.

The authorized capital of the Partnership is represented by three classes of partnership units ("Units"). There are two categories of limited partnership interests ("Class A Units" and "Class B Units") and one category of general partnership interests (the "General Partnership Units"). The Class A Units were initially issued to creditors and limited partners of the Colonial Partnerships and have been registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Each Class A Unit is exchangeable for ten publicly traded depositary receipts ("Receipts"), which are currently listed on the NYSE Amex Exchange and are registered under Section 12(b) of the Exchange Act. The Class B Units were issued to the original general partners of the Partnership. The General Partnership Units are held by the current general partner of the Partnership, NewReal, Inc. (the "General Partner"). The Class A Units represent an 80% ownership interest, the Class B Units represent a 19% ownership interest, and the General Partnership Units represent a 1% ownership interest.

The Partnership is engaged in the business of acquiring, developing, holding for investment, operating and selling real estate. The Partnership, directly or through 24 subsidiary limited partnerships or limited liability companies, owns and operates various residential apartment buildings, condominium units and commercial properties located in Massachusetts and New Hampshire. As used herein, the Partnership's subsidiary limited partnerships and limited liabilities companies are each referred to as a "Subsidiary Partnership" and are collectively referred to as the "Subsidiary Partnerships."

The Partnership owns between a 99.67% and 100% interest in each of the Subsidiary Partnerships, except in nine limited liability companies (the "Investment Properties" or "Joint Ventures") in which the Partnership has between a 40% and 50% ownership interest. The majority shareholder of the General Partner indirectly owns between 43.2% and 60%, the President of Hamilton owns between 0% and 4.5%, and five other management employees of Hamilton own collectively between 0% and 2.3%, respectively. The Partnership's interest in the Investment Properties is accounted for on the equity method in the Consolidated Financial Statements. See Note 1 to the Consolidated Financial Statements—"Principles of Consolidation." See Note 14 to the Consolidated Financial Statements—"Investment in Unconsolidated Joint Ventures" for a description of the properties and their operations. Of those Subsidiary Partnerships not wholly owned by the Partnership, except for the Investment Properties, the remaining ownership interest is held by an unaffiliated third party. In each such case, the third party has entered into a lease agreement with the Partnership, pursuant to which any benefit derived from its ownership interest in the applicable Subsidiary Partnerships will be returned to the Partnership.

The long-term goals of the Partnership are to manage, rent and improve its properties and to acquire additional properties with income and capital appreciation potential as suitable opportunities arise. When appropriate, the Partnership may sell or refinance selected properties. Proceeds from any such sales or refinancing will be used to reduce debt, reinvested in acquisitions of other properties,

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distributed to the partners, repurchase equity interests, or used for operating expenses or reserves, as determined by the General Partner.

Operations of the Partnership

The Partnership is managed by the General Partner, NewReal, Inc., a Massachusetts corporation wholly owned by Harold Brown and Ronald Brown. The General Partner has engaged The Hamilton Company, Inc. (the "Hamilton Company" or "Hamilton") to perform general management functions for the Partnership's properties in exchange for management fees. The Hamilton Company is wholly owned by Harold Brown and employs Ronald Brown and Harold Brown. The Partnership, Subsidiary Partnerships, and the Investment Properties currently contract with the management company for 52 individuals at the Properties and 11 individuals at the Joint Ventures who are primarily involved in the supervision and maintenance of specific properties. The General Partner has no employees.

As of February 1, 2011, the Partnership and its Subsidiary Partnerships owned 2,269 residential apartment units in 20 residential and mixed-use complexes (collectively, the "Apartment Complexes"). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the "Condominium Units"). The Apartment Complexes, the Condominium Units and the Investment Properties are located primarily in the metropolitan Boston area of Massachusetts.

As of February 1, 2011, the Subsidiary Partnerships also owned a commercial shopping center in Framingham, Massachusetts, one commercial building in Newton and one in Brookline, Massachusetts and commercial space in mixed-use buildings in Boston, Brockton and Newton, Massachusetts. These properties are referred to collectively as the "Commercial Properties." See Note 2 to the Consolidated Financial Statements, included as a part of this Form 10-K.

Additionally, as of February 1, 2011, the Partnership owned between a 40-50% interest in nine residential and mixed use complexes, the Investment Properties, with a total of 799 residential units, one commercial unit, and a parking lot. See Note 14 to the Consolidated Financial Statements for additional information on these investments.

The Apartment Complexes, Investment Properties, Condominium Units and Commercial Properties are referred to collectively as the "Properties."

Harold Brown and, in certain cases, Ronald Brown, and officers and employees of the Hamilton Company own or have owned interests in certain of the Properties, Subsidiary Partnerships and Joint Ventures. See "Item 13. Certain Relationships, Related Transactions and Director Independence."

The leasing of real estate in the metropolitan Boston area of Massachusetts is highly competitive. The Apartment Complexes, Condominium Units and the Investment Properties must compete for tenants with other residential apartments and condominium units in the areas in which they are located. The Commercial Properties must compete for commercial tenants with other shopping malls and office buildings in the areas in which they are located. Thus, the level of competition at each Property depends on how many other similarly situated properties are in its vicinity. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors that May Affect Future Results."

The Second Amended and Restated Contract of Limited Partnership of the Partnership (the "Partnership Agreement") authorizes the General Partner to acquire real estate and real estate related investments from or in participation with either or both of Harold Brown and Ronald Brown, or their affiliates, upon the satisfaction of certain terms and conditions, including the approval of the Partnership's Advisory Committee and limitations on the price paid by the Partnership for such investments. The Partnership Agreement also permits the Partnership's limited partners and the General Partner to make loans to the Partnership, subject to certain limitations on the rate of interest

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that may be charged to the Partnership. Except for the foregoing, the Partnership does not have any policies prohibiting any limited partner, General Partner or any other person from having any direct or indirect pecuniary interest in any investment to be acquired or disposed of by the Partnership or in any transaction to which the Partnership is a party or has an interest in or from engaging, for their own account, in business activities of the types conducted or to be conducted by the Partnership. The General Partner is not limited in the number or amount of mortgages which may be placed on any Property, nor is there a policy limiting the percentage of Partnership assets which may be invested in any specific Property.

Industry Segments

The Partnership operates in only one industry segment—real estate. The Partnership does not have any foreign operations, and its business is not seasonal. See the Consolidated Financial Statements attached hereto and incorporated by reference herein for financial information relating to our industry segment.

Unit Distributions

In 2010 and 2009, the Partnership paid four quarterly distributions of an aggregate of $28.00 per Unit ($2.80 per Receipt) for a total payment of $3,687,600 in 2010 and $3,713,840 in 2009. In February 2011, the Partnership approved a quarterly distribution of $7.00 per Unit ($0.70 per Receipt), payable on March 31, 2011.

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program ("Repurchase Program") under which the Partnership was permitted to purchase, over a period of twelve months, up to 100,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 100,000 to 200,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 200,000 to 300,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 300,000 to 500,000. On August 8, 2008, the General Partner re-authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership's Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through December 31, 2010, the Partnership has repurchased 398,320 Depositary Receipts at an average price of $73.86 per receipt (or $738.60 per underlying Class A Unit), 1,724 Class B Units and 91 General Partnership Units, both at an average price of $585.05 per Unit, totaling approximately $30,481,000 including brokerage fees paid by the Partnership.

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reference. Harold Brown, the treasurer of the General Partner, owns 75% of the issued and outstanding Class B Units of the Partnership and 75% of the issued and outstanding equity of the General Partner, Ronald Brown, the brother of Harold Brown and the president of the General Partner, owns 25% of the issued and outstanding Class B Units of the Partnership and 25% of the issued and outstanding equity of the General Partner.

Property Transactions

On January 3, 2008, the Partnership sold the Oak Ridge Apartments, a 61-unit residential apartment complex located in Foxboro, Massachusetts. The sale price was $7,150,000, which resulted in a gain of approximately $6,000,000. In November 2007, the Partnership purchased a fully occupied commercial building located in Newton, Massachusetts, known as Linewt LLC. The purchase price was $3,475,000 and the building consists of 5,850 square feet of commercial space. The Partnership utilized Section 1031 of the IRS code to affect a tax free exchange on the gain of Oak Ridge up to the purchase price of the Newton property. Most of the taxable gain of approximately $3,000,000 will be taxed at the capital gain rates. In accordance with Section 1031, the Newton property was owned by a Qualified Intermediary for the period from the purchase date of the Newton property and the sale date of the Foxboro property. The Qualified Intermediary borrowed approximately $3,225,000 from Harold Brown, Treasurer of the General Partner, to purchase the Newton property. This loan was paid in full, with interest at 6% of $34,401, from the proceeds of the Oak Ridge sale on January 3, 2008. On January 22, 2008, the Partnership financed the Newton property with a first mortgage of $1,700,000 at 5.75% interest only until maturity in January 2018.

In February 2008, the Partnership refinanced ten properties with outstanding 8.44% mortgages of approximately $37,800,000 with new mortgages totaling $60,000,000. The new mortgages which mature in February 2023 require interest only payments at interest rates from 5.6% to 5.7%. Deferred costs associated with these mortgages totaled approximately $710,000 and, accordingly, the effective interest rates are 5.7% to 5.8%. Prepayment penalties of approximately $3,700,000 were incurred in these transactions. After payment of existing mortgages, prepayment penalties and other costs of the transactions, approximately $16,000,000 was received by the Partnership.

In April 2008, the Partnership sold the Coach Apartments, a 48-unit residential apartment complex located in Acton, Massachusetts. The sale price was $4,600,000, which resulted in a gain of approximately $3,800,000. In October 2008, the Partnership purchased a fully occupied medical office building located in Brookline, Massachusetts, referred to as "the Barn." The purchase price of the Barn was $7,000,000 and it consists 20,000 square feet of commercial space. The Partnership utilized Section 1031 of the IRS code to affect a tax free exchange on the gain of Coach up to the purchase price of the Barn. This acquisition was funded from the assumption of the existing mortgage of approximately $4,000,000, the cash from the sale of Coach of approximately $2,600,000, and the balance of $400,000 was funded from cash reserves.

In April 2008, the Partnership refinanced the property located at 659 Worcester Road with a mortgage balance of approximately $3,500,000 at 7.84% with a new $6,000,000 mortgage at 5.97% interest only mortgage which matures in March 2018. Deferred financing costs associated with this mortgage totaled approximately $86,000 and accordingly the effective interest rate is 6.1%. Prepayment penalties of approximately $783,000 were incurred in this transaction. After payment of the existing mortgage and prepayment penalties, approximately $1,700,000 was received by the Partnership.

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approximately $100,000. There were no prepayment penalties. After payment of the existing mortgage and closing costs, approximately $2,377,000 was received by the Partnership.

In December 2009, the Partnership refinanced Linhart, LLP, located in Newton, Massachusetts. The new loan is $2,000,000, with a rate of 3.75% over the Libor rate or 4.25% whichever is greater and matures five years from the date of closing. The interest rate as of December 31, 2010 was 4.25%. The loan agreement calls for interest only payments for twenty four months and principal and interest payments for the remainder of the five year period based on a thirty year amortization. The loan proceeds were used to pay off the prior loan of approximately $1,700,000, and closing costs of approximately $38,000. There were no prepayment penalties.

On March 25, 2010, the Partnership refinanced the Brookside Apartments. The new loan is $2,820,000, matures in 2020 and has an interest rate of 5.81%. The loan is a ten year note however it is being amortized over 30 years. The proceeds of the loan were used to pay off the old mortgage of approximately $1,900,000. There were no prepayment penalties.

During 2010, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $2,268,000. These improvements were funded from cash reserves and, to some extent, escrow accounts established in connection with the financing or refinancing of the applicable Properties. These sources have been adequate to fully fund improvements. The most significant improvements were made at Westgate Woburn, 62 Boylston Street, Hamilton Oaks, Westside Colonial, Olde English Village, North Beacon Street and 1144 Commonwealth Avenue, at a cost of approximately $381,000, $241,000, $196,000, $165,000, $129,000, $127,000, and $123,000 respectively. The Partnership plans to invest approximately $1,761,000 in capital improvements in 2011.

On March 1, 2011, the Partnership entered into a purchase and sale agreement to sell the Avon Street Apartments. For additional information, see item 9B.

Advisory Committee

On October 29, 2007, Gregory Dube, Robert Nahigian, and Thomas Raffoul were elected to the Advisory Committee. These Advisory Committee members are not affiliated with the General Partner. The Advisory Committee meets with the General Partner to review the progress of the Partnership, assist the General Partner with policy formation, review the appropriateness, timing and amount of proposed distributions, approve or reject proposed acquisitions and investments with affiliates, and advise the General Partner on various other Partnership affairs. Per the Partnership Agreement, the Advisory Committee has no binding power except that it must approve certain investments and acquisitions or sales by the Partnership from or with affiliates of the Partnership.

Available Information

The Partnership's website is www.thehamiltoncompany.com. On its website, the Partnership makes available, free of charge, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended. These forms are made available as soon as reasonably practical after the Partnership electronically files or furnishes such materials to the Securities and Exchange Commission. In addition, the Partnership's website includes other items related to corporate governance matters, including, among other things, the Partnership's corporate governance guidelines, charters of various committees of the Board of Directors, and the Partnership's code of business conduct and ethics applicable to all employees, officers and directors. Copies of these documents may be obtained, free of charge, from the website. Any shareholder may obtain copies of these documents, free of charge, by sending a request in writing to: Director of Investor Relations, New England Realty Associates Limited Partnership, 39 Brighton Avenue, Allston, MA 02134.

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ITEM 1A. RISK FACTORS

We are subject to certain risks and uncertainties as described below. These risks and uncertainties may not be the only ones we face; there may be additional risks that we do not presently know of or that we currently consider immaterial. All of these risks could adversely affect our business, financial condition, results of operations and cash flows. Our ability to pay distributions on, and the market price of, our equity securities may be adversely affected if any of such risks are realized. All investors should consider the following risk factors before deciding to purchase or sell securities of the Partnership.

We are subject to risks inherent in the ownership of real estate. We own and manage multifamily apartment complexes and commercial properties that are subject to varying degrees of risk generally incident to the ownership of real estate. Our financial condition, the value of our properties and our ability to make distributions to our shareholders will be dependent upon our ability to operate our properties in a manner sufficient to generate income in excess of operating expenses and debt service charges, which may be affected by the following risks, some of which are discussed in more detail below:

•: changes in the economic climate in the markets in which we own and manage properties, including interest rates, the overall level of economic activity, the availability of consumer credit and mortgage financing, unemployment rates and other factors;
•: a lessening of demand for the multifamily units that we own;
•: competition from other available multifamily units and changes in market rental rates;
•: increases in property and liability insurance costs;
•: changes in real estate taxes and other operating expenses (e.g., cleaning, utilities, repair and maintenance costs, insurance and administrative costs, security, landscaping, pest control, staffing and other general costs);
•: changes in laws and regulations affecting properties (including tax, environmental, zoning and building codes, and housing laws and regulations);
•: weather and other conditions that might adversely affect operating expenses;
•: expenditures that cannot be anticipated, such as utility rate and usage increases, unanticipated repairs and real estate tax valuation reassessments or mileage rate increases;
•: our inability to control operating expenses or achieve increases in revenues;
•: the results of litigation filed or to be filed against us;
•: risks related to our joint ventures;
•: risks of personal injury claims and property damage related to mold claims because of diminished insurance coverage;
•: catastrophic property damage losses that are not covered by our insurance;
•: risks associated with property acquisitions such as environmental liabilities, among others;
•: changes in market conditions that may limit or prevent us from acquiring or selling properties;
•: the perception of residents and prospective residents as to the attractiveness, convenience and safety of our properties or the neighborhoods in which they are located; and
•: the Partnership does not carry directors and officers insurance.

We are dependent on rental income from our multifamily apartment complexes and commercial properties. If we are unable to attract and retain residents or if our residents are unable to pay their

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rental obligations, our financial condition and funds available for distribution to our shareholders will be adversely affected.

Our multifamily apartment complexes and commercial properties are subject to competition. Our properties and joint venture investments are located in developed areas that include other properties. The properties also compete with other rental alternatives, such as condominiums, single and multifamily rental homes and owner occupied single and multifamily homes, in attracting residents. This competition may affect our ability to attract and retain residents and to increase or maintain rental rates.

The properties we own are concentrated in Eastern Massachusetts and Southern New Hampshire. Our performance, therefore, is linked to economic conditions and the market for available rental housing in these states. A decline in the market for apartment housing and/or commercial properties may adversely affect our financial condition, results of operations and ability to make distributions to our shareholders.

Our insurance may not be adequate to cover certain risks. There are certain types of risks, generally of a catastrophic nature, such as earthquakes, floods, windstorms, act of war and terrorist attacks that may be uninsurable, or are not economically insurable, or are not fully covered by insurance. Moreover, certain risks, such as mold and environmental exposures, generally are not covered by our insurance. Should an uninsured loss or a loss in excess of insured limits occur, we could lose our equity in the affected property as well as the anticipated future cash flow from that property. Any such loss could have a material adverse effect on our business, financial condition and results of operations.

Debt financing could adversely affect our performance. The vast majority of our assets are encumbered by project specific, non-recourse, non-cross-collateralized mortgage debt. There is a risk that these properties will not have sufficient cash flow from operations for payments of required principal and interest. We may not be able to refinance these loans at an amount equal to the loan balance and the terms of any refinancing may not be as favorable as the terms of existing indebtedness. If we are unable to make required payments on indebtedness that is secured by a mortgage, the Partnership will either invest additional money in the property or the property securing the mortgage may be foreclosed with a consequent loss of income and value to us.

Real estate investments are generally illiquid, and we may not be able to sell our properties when it is economically or strategically advantageous to do so. Real estate investments generally cannot be sold quickly, and our ability to sell properties may be affected by market conditions. We may not be able to diversify or vary our portfolio promptly in accordance with our strategies or in response to economic or other conditions.

Our access to public debt markets is limited. Substantially all of our debt financings are secured by mortgages on our properties because of our limited access to public debt markets.

We face possible adverse changes in tax laws. From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. A shortfall in tax revenues for the states and municipalities in which we operate may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for the payment of dividends.

Litigation may result in unfavorable outcomes. Like many real estate operators, we may be involved in lawsuits involving premises liability claims, housing discrimination claims and alleged violations of landlord-tenant laws, which may give rise to class action litigation or governmental investigations. Any material litigation not covered by insurance, such as a class action, could result in substantial costs being incurred. The Partnership does not carry directors and officers liability insurance.

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Our financial results may be adversely impacted if we are unable to sell properties and employ the proceeds in accordance with our strategic plan. Our ability to pay down debt, reduce our interest costs, repurchase Depositary Receipts and acquire properties is dependent upon our ability to sell the properties we have selected for disposition at the prices and within the deadlines we have established for each respective property.

The costs of complying with laws and regulations could adversely affect our cash flow and ability to make distributions to our shareholders. Our properties must comply with Title III of the Americans with Disabilities Act (the "ADA") to the extent that they are "public accommodations" or "commercial facilities" as defined in the ADA. The ADA does not consider apartment complexes to be public accommodations or commercial facilities, except for portions of such properties that are open to the public. In addition, the Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment complexes first occupied after March 13, 1990, to be accessible to the handicapped. Other laws also require apartment communities to be handicap accessible. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants. We may be subject to lawsuits alleging violations of handicap design laws in connection with certain of our developments. If compliance with these laws involves substantial expenditures or must be made on an accelerated basis, our ability to make distributions to our shareholders could be adversely affected.

Under various federal, state and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on, under or in the property. This liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of the substances. Other law imposes on owners and operators certain requirements regarding conditions and activities that may affect human health or the environment. Failure to comply with applicable requirements could complicate our ability to lease or sell an affected property and could subject us to monetary penalties, costs required to achieve compliance and potential liability to third parties. We are not aware of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our properties. Nonetheless, it is possible that material environmental contamination or conditions exist, or could arise in the future, in the apartment communities or on the land upon which they are located.

Compliance with changing regulation applicable to corporate governance and public disclosure may result in additional expenses, affect our operations and affect our reputation. Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act and new SEC regulations and NYSE Amex rules, can create uncertainty for public companies. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with evolving laws, regulations and standards may result in significant general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act that will occur over the next two years will continue to require the commitment of significant resources.

We are subject to the risks associated with investments through joint ventures. Nine of our properties are owned by joint ventures in which we do not have a controlling interest. We may enter into joint ventures, including joint ventures that we do not control, in the future. Any joint venture investment involves risks such as the possibility that the co-venturer may seek relief under federal or state

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insolvency laws, or have economic or business interests or goals that are inconsistent with our business interests or goals. While the bankruptcy or insolvency of our co-venturer generally should not disrupt the operations of the joint venture, we could be forced to purchase the co-venturer's interest in the joint venture or the interest could be sold to a third party. We also may guarantee the indebtedness of our joint ventures. If we do not have control over a joint venture, the value of our investment may be affected adversely by a third party that may have different goals and capabilities than ours.

We are subject to risks associated with development, acquisition and expansion of multifamily apartment complexes. Development projects and acquisitions and expansions of apartment complexes are subject to a number of risks, including:

•: availability of acceptable financing;
•: competition with other entities for investment opportunities;
•: failure by our properties to achieve anticipated operating results;
•: construction costs of a property exceeding original estimates;
•: delays in construction; and
•: expenditure of funds on, and the devotion of management time to, transactions that may not come to fruition.

We are subject to control by our directors and officers. The directors and executive officers of the General Partner and members of their families owned approximately 33% of our depositary receipts as of December 31, 2010. Additionally, management decisions rest with our General Partner without limited partner approval.

Competition for skilled personnel could increase our labor costs. We and our management company compete with various other companies in attracting and retaining qualified and skilled personnel who are responsible for the day-to-day operations of our properties. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our tenants. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be harmed.

We depend on our key personnel. Our success depends to a significant degree upon the continued contribution of key members of the management company, who may be difficult to replace. The loss of services of these executives could have a material adverse effect on us. There can be no assurance that the services of such personnel will continue to be available to us. We do not hold key-man life insurance on any of our key personnel.

Changes in market conditions could adversely affect the market price of our Depositary Receipts. As with other publicly traded equity securities, the value of our depositary receipts depends on various market conditions, which may change from time to time. Among the market conditions that may affect the value of our depositary receipts are the following:

•: the extent of investor interest in us;
•: the general reputation of real estate companies and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate companies;
•: our financial performance; and
•: general stock and bond market conditions.

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The market value of our depositary is based primarily upon the market's perception of our growth potential and our current and potential future earnings and cash distributions. Consequently, our depositary receipts may trade at prices that are higher or lower than our net asset value per depositary receipt.

We face possible risks associated with the physical effects of climate change. We cannot predict with certainty whether climate change is occurring and, if so, at what rate. However, the physical effects of climate change could have a material adverse effect on our properties, operations and business. To the extent climate change causes changes in weather patterns, our markets could experience increases in storm intensity and rising sea-levels. Over time, these conditions could result in declining demand for our buildings or the inability of us to operate the buildings at all. Climate change may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy and increasing the cost of snow removal at our properties. Proposed federal legislation to address climate change could increase utility and other costs of operating our properties which, if not offset by rising rental income, would reduce our net income. There can be no assurance that climate change will not have a material adverse effect on our properties, operations or business.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Partnership and its Subsidiary Partnerships own the Apartment Complexes, the Condominium Units, the Commercial Properties and a 40-50% interest in nine Investment Properties.

See also "Item 13. Certain Relationships and Related Transactions and Director Independence" for information concerning affiliated transactions.

Apartment Complexes

The table below lists the location of the 2,269 Apartment Units, the number and type of units in each complex, the range of rents and vacancies as of February 1, 2011, the principal amount outstanding under any mortgages as of December 31, 2010, the fixed interest rates applicable to such mortgages, and the maturity dates of such mortgages.

Apartment Complex	Number and Type of Units	Rent Range	Vacancies	Mortgage Balance and Interest Rate As of December 31, 2010

Avon Street Apartments L.P.*	66 units		0	$	2,550,000	2013
130 Avon Street	0 three-bedroom	N/A			4.99%
Malden, MA	30 two-bedroom	$1,150–1,325
	33 one-bedroom	$925–1,150
	3 studios	$925–960
Boylston Downtown L.P.	269 units		3	$	19,500,000	2013
62 Boylston Street	0 three-bedroom	N/A			4.84%
Boston, MA	0 two-bedroom	N/A
	53 one-bedroom	$1,550–2,100
	216 studios	$1,125–1,700
Brookside Associates, LLC	44 units		2	$	2,795,595	2020
5-7–10-12 Totman Road	0 three-bedroom	N/A			5.81%
Woburn, MA	34 two-bedroom	$1,100–1,250
	10 one-bedroom	$900–1,150
	0 studios	N/A
Clovelly Apartments L.P.	103 units		3	$	4,160,000	2023
160–170 Concord Street	0 three-bedroom	N/A			5.62%
Nashua, NH	53 two-bedroom	$850–1,200
	50 one-bedroom	$725–925
	0 studios	N/A
Commonwealth 1137 L.P.	35 units		0	$	3,750,000	2023
1131–1137 Commonwealth Ave.	29 three-bedroom	$1,650–2,350			5.65%
Allston, MA	4 two-bedroom	$1,525–1,700
	1 one-bedroom	$725
	1 studio	$850
Commonwealth 1144 L.P.	261 units		0	$	14,780,000	2023
1144–1160 Commonwealth Ave.	0 three-bedroom	N/A			5.61%
Allston, MA	11 two bedroom	$1,000–1,400
	109 one-bedroom	$950–1,350
	141 studios	$600–1,050

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Apartment Complex	Number and Type of Units	Rent Range	Vacancies	Mortgage Balance and Interest Rate As of December 31, 2010

Courtyard at Westgate, LLC	20 units		1	$	2,000,000	2015
105–107 Westgate Drive	0 three-bedroom	N/A			5.25%
Burlington, MA	12 two bedroom	$1,450–1,820
	8 one-bedroom	$1,200–1,365
	0 studios	N/A
Dean Street Associates, LLC	69 units		4	$	5,399,435	2014
38–48 Dean Street	0 three-bedroom	N/A			5.13%
Norwood, MA	66 two-bedroom	$1,150–1,250
	3 one-bedroom	$995
	0 studios	N/A
Executive Apartments L.P.	72 units		2	$	2,415,000	2023
545–561 Worcester Road	1 three-bedroom	$1,225			5.59%
Framingham, MA	47 two-bedroom	$900–1,110
	24 one-bedroom	$700–1,075
	0 studios	N/A
Hamilton Oaks Associates, LLC	268 units		16	$	11,925,000	2023
30–50 Oak Street Extension	0 three-bedroom	N/A			5.59%
40–60 Reservoir Street	96 two-bedroom	$1,090–1,250
Brockton, MA	159 one-bedroom	$800–1,000
	13 studios	$720-850
Highland Street Apartments L.P.	36 units		2	$	1,050,000	2023
38–40 Highland Street	0 three-bedroom	N/A			5.59%
Lowell, MA	24 two-bedroom	$800–950
	10 one-bedroom	$750–850
	2 studios	$700–775
Linhart L.P.	9 units		0	$	2,000,000	2014
4–34 Lincoln Street	0 three-bedroom	N/A			4.25%
Newton, MA	0 two-bedroom	N/A
	5 one-bedroom	$750–1,000
	4 studios	$925
Nashoba Apartments L.P.	32 units		3	$	2,000,000	2013
284 Great Road	0 three-bedroom	N/A			5.30%
Acton, MA	32 two-bedroom	$1,090–1,325
	0 one-bedroom	N/A
	0 studios	N/A
North Beacon 140 L.P.	65 units		0	$	6,937,000	2023
140–154 North Beacon Street	10 three-bedroom	$1,900–2,125			5.59%
Brighton, MA	54 two-bedroom	$1,550–1,820
	1 one-bedroom	$800
	0 studios	N/A
Olde English Apartments L.P.	84 units		5	$	3,080,000	2023
703-718 Chelmsford Street	0 three-bedroom	N/A			5.63%
Lowell, MA	47 two-bedroom	$920–1,125
	30 one-bedroom	$850–950
	7 studios	$750–860
Redwood Hills L.P.	180 units		3	$	6,743,000	2023
376–384 Sunderland Road	0 three-bedroom	N/A			5.59%
Worcester, MA	89 two-bedroom	$900–1,175
	91 one-bedroom	$775–975
	0 studios	N/A

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Apartment Complex	Number and Type of Units	Rent Range	Vacancies	Mortgage Balance and Interest Rate As of December 31, 2010

River Drive L.P.	72 units		0	$	3,465,000	2023
3–17 River Drive	0 three-bedroom	N/A			5.62%
Danvers, MA	60 two-bedroom	$875–1,125
	5 one-bedroom	$800–950
	7 studios	$800–850
School Street 9, LLC	184 units		7	$	15,883,496	2013
9 School Street	0 three-bedroom	N/A			5.47%
Framingham, MA	96 two-bedroom	$1,065–1,275
	88 one-bedroom	$875–1,105
	0 studios	N/A
WCB Associates, LLC	180 units		15	$	7,000,000	2023
10–70 Westland Street	1 three-bedroom	$1,100			5.66%
985–997 Pleasant Street	94 two-bedroom	$820–1,050
Brockton, MA	85 one-bedroom	$815–930
	0 studios	N/A
Westgate Apartments, LLC	220 units		13	$	8,793,813	2014
2–20 Westgate Drive	0 three-bedroom	N/A			7.07%
Woburn, MA	110 two-bedroom	$1,075–1,350
	110 one-bedroom	$870–1,250
	0 studios	N/A

See Note 5 to the Consolidated Financial Statements, included as part of this Form 10-K, for information relating to the mortgages payable of the Partnership and its Subsidiary Partnerships.

*: On March 1, 2011, the Partnership entered into a purchase and sale agreement to sell the Avon Street Apartments. For additional information, see Item 9B.

Condominium Units

The Partnership owns and leases to residential tenants 19 Condominium Units in the metropolitan Boston area of Massachusetts.

The table below lists the location of the 19 Condominium Units, the type of units, the range of rents received by the Partnership for such units, and the number of vacancies as of February 1, 2011.

Condominiums	Number and Type of Units Owned by Partnership	Rent Range

Riverside Apartments	19 units		0	—	—
8–20 Riverside Street	0 three-bedroom	N/A
Watertown, MA	12 two-bedroom	$1,200–1,325
	5 one-bedroom	$1,150–1,270
	2 studios	$950–1,000

Commercial Properties

BOYLSTON DOWNTOWN LP. In 1995, this Subsidiary Partnership acquired the Boylston Downtown property in Boston, Massachusetts ("Boylston"). This mixed-use property includes 17,218 square feet of rentable commercial space. As of February 1, 2011, the commercial space had a 0% vacancy rate, and the average rent per square foot was $22.69. The Partnership also rents roof space for a cellular phone antenna at an average rent of approximately $25,620 per year through June 30,

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2011. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

HAMILTON OAKS ASSOCIATES, LLC. The Hamilton Oaks Apartment complex, acquired by the Partnership in December 1999 through Hamilton Oaks Associates, LLC, includes 6,075 square feet of rentable commercial space, occupied by a daycare center. As of February 1, 2011, the commercial space was fully occupied, and the average rent per square foot was $12.00. The Partnership also rents roof space for a cellular phone antenna at an average rent of approximately $34,018 per year through November 2015. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

LINHART LP. In 1995, the Partnership acquired the Linhart property in Newton, Massachusetts ("Linhart"). This mixed-use property includes 21,555 square feet of rentable commercial space. As of February 1, 2011, the commercial space was fully occupied, and the average rent per square foot was $23.98. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

NORTH BEACON 140 LP. In 1995, this Subsidiary Partnership acquired the North Beacon property in Boston, Massachusetts ("North Beacon"). This mixed-use property includes 1,050 square feet of rentable commercial space. The property was fully rented as of February 1, 2011, and the average rent per square foot as of that date was $30.32. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

STAPLES PLAZA. In 1999, the Partnership acquired the Staples Plaza shopping center in Framingham, Massachusetts ("Staples Plaza"). The shopping center consists of 39,600 square feet of rentable commercial space. As of December 31, 2010, the mortgage had an outstanding balance $6,000,000 with interest rate of 5.97%, matures in 2018. As of February 1, 2011, Staples Plaza was fully occupied, and the average net rent per square foot was $23.83.

HAMILTON LINEWT ASSOCIATES, LLC. In 2007, the Partnership acquired a retail block in Newton, Massachusetts. The property consists of approximately 6,000 square feet of rentable commercial space. The property was fully rented at an average rent of $37.92 per square foot. The Partnership obtained a mortgage in January 2008 of $1,700,000 on this property. The mortgage balance at December 31, 2010 is $1,604,089 the interest rate is 5.75% and matures in January 2018.

HAMILTON CYPRESS LLC. In 2008, the Partnership acquired a medical office building in Brookline, Massachusetts. The property consists of approximately 20,000 square feet of rentable commercial space. The property was fully rented at an average rent of $36.94 per square foot. The Partnership assumed a mortgage of approximately $4,011,000. The mortgage balance at December 31, 2010 is $3,849,232; the interest rate is 5.92% and matures in May 2013.

Investment Properties

See Note 14 to the Financial Statements and Exhibit 99.1 for additional information regarding the Investment Properties.

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The Partnership has a 50% ownership interest in the properties summarized below:

Investment Properties	Number and Type of Units	Range		Mortgage Balance and Interest Rate As of December 31, 2010

345 Franklin, LLC	40 Units		0	$	7,176,827	2014
345 Franklin Street	0 three-bedroom	N/A			6.90%
Cambridge, MA	39 two-bedroom	$2,000–2,450
	1 one-bedroom	$1,850
	0 studios	N/A
Hamilton on Main Apartments, LLC	148 Units		1	$	16,151,526	2015
223 Main Street	0 three-bedroom	N/A			5.18%
Watertown, MA	93 two-bedroom	$1,225–1,625
	31 one-bedroom	$1,100–1,425
	24 studios	$925–1,125
Hamilton Minuteman, LLC	42 Units		3	$	5,500,000	2017
1 April Lane	0 three-bedroom	N/A			5.67%
Lexington, MA	40 two-bedroom	$1,400–1,625
	2 one-bedroom	$1,375
	0 studios	N/A
Hamilton Essex 81 LLC			0	$	8,566,871	2015
Residential	49 Units				5.79%
81–83 Essex Street	0 three-bedroom	N/A
Boston, Massachusetts	11 two-bedroom	$1,335–2,000
	38 one-bedroom	$1,175–1,400
	0 studios	N/A
Hamilton Essex Development LLC			0	$	2,162,000	2011
Commercial	Parking Lot				2.85%
81–83 Essex Street
Boston, Massachusetts
Hamilton 1025, LLC	48 Units		0	$	5,000,000	2016
Units to be retained	0 three-bedroom	N/A			5.67%
1025 Hancock Street	32 two-bedroom	$1,350–1,475
Quincy, Massachusetts	16 one-bedroom	$1,100–1,300
	0 studios	N/A
Hamilton Bay, LLC(A)	15 Units		0	$	1,668,000	2013
Units held for sale	0 three-bedroom	N/A			5.75%
165–185 Quincy Shore Drive	0 two-bedroom	N/A
Quincy, Massachusetts	15 one-bedroom	$1,150-1,400
	0 studios	N/A
Hamilton Bay Apartments, LLC	48 Units		0	$	4,750,000	2017
165–185 Quincy Shore Drive	0 three-bedroom	N/A			5.57%
Quincy, Massachusetts	24 two-bedroom	$1,250–1,700
	24 one-bedroom	$1,200–1,680
The Partnership has a 40% ownership interest in the property summarized below:
Hamilton Park Towers, LLC	409 Units		6	$	89,914,000	2019
175–185 Freeman Street,	71 three-bedroom	$2,050–3,995			5.57%
Brookline, Massachusetts	227 two-bedroom	$1,895–3,400
	111 one-bedroom	$1,450–2,450
	0 studios

(A): Represents unsold units at February 1, 2011.

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345 FRANKLIN, LLC. In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. This property has a 12-year mortgage, with a remaining balance at September 30, 2010 of approximately $7,215,000 at 6.9% which is amortized on a 30-year schedule, with a final payment of approximately $6,000,000 in 2014. This investment is referred to as 345 Franklin, LLC.

HAMILTON ON MAIN, LLC. In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. As of May 2008, the Partnership sold 137 units as condominiums. Gains from these sales were taxed as ordinary income (approximately $50,000 per unit). The majority of the sales proceeds were applied to reduce the mortgage with the final payment made during the second quarter of 2007. With the sale of the units and the payments of the liabilities, the assets were combined with Hamilton on Main Apartments, LLC. An entity partially owned by the majority shareholder of the General Partner and the President of the management company, 31% and 5%, respectively, was the sales agent and received a variable commission on each sale of 3% to 5%. Hamilton on Main, LLC is known as Hamilton Place.

In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained. The mortgage is $16,825,000, with interest only of 5.18% for three years and amortizing on a 30 year schedule for the remaining seven years when the balance is due. The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. Hamilton on Main LLC paid a fee of approximately $400,000 in connection with this early extinguishment of debt. At December 31, 2010, the remaining balance on the mortgage is approximately $16,152,000.

HAMILTON MINUTEMAN, LLC. In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10-year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. This investment is referred to as Hamilton Minuteman, LLC.

HAMILTON ESSEX 81, LLC. On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 49 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage on Hamilton Essex 81, LLC is $8,600,000 with interest only at 5.79% due in August 2015. The mortgage on Essex Development, LLC, or the parking lot is $2,162,000 with a variable interest rate of 2.25% over the daily Libor rate (0.26% at December 31, 2010) and is due in August 2011. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

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HAMILTON 1025, LLC. On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. This investment is referred to as Hamilton 1025, LLC.

HAMILTON BAY, LLC. On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership plans to sell the majority of units as condominium and retain 48 units for long-term investment. Gains from the sales of units will be taxed at ordinary income rates (approximately $47,000 per unit). In February 2007, the Partnership refinanced the 48 units which will be retained with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. This investment is referred to as Hamilton Bay Apartments, LLC. The loan will be amortized over 30 years thereafter and matures in March 2017. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matures in 2013. As of February 1, 2011, the Partnership sold 105 units, the proceeds of which went to pay down the mortgage on the property. The balance on the new mortgage is approximately $1,668,000 at December 31, 2010. This investment is referred to as Hamilton Bay, LLC.

HAMILTON PARK TOWERS, LLC On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage is $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. In order to fund this investment, the Partnership used approximately $8,757,000 of its cash reserves and borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan is four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. The balance of the loan, $4,668,600, will remain subject to the original terms of the Note, including HBC's right to demand payment of the balance of the loan in whole or in part upon six months notice. The Partnership has pledged its 99% ownership in 62 Boylston Street as security for this note. This investment is referred to as Dexter Park. See Form 8-K filed on January 13, 2010 for more information regarding this acquisition.

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ITEM 3. LEGAL PROCEEDINGS

The Partnership, the Subsidiary Partnerships, and the Investment Properties and their properties are not presently subject to any material litigation, and, to management's knowledge, there is not any material litigation presently threatened against them. The properties are occasionally subject to ordinary routine legal and administrative proceedings incident to the ownership of residential and commercial real estate. Some of the legal and other expenses related to these proceedings are covered by insurance and none of these costs and expenses are expected to have a material adverse effect on the Consolidated Financial Statements of the Partnership.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Each Class A Unit is exchangeable, through Computershare Trust Company ("Computershare") (formerly Equiserve LP), the Partnership's Depositary Agent, for ten Depositary Receipts ("Receipts"). The Receipts are listed and publicly traded on the NYSE Amex Exchange under the symbol "NEN." There has never been an established trading market for the Class B Units or General Partnership Units.

In 2010, the high and low bid quotations for the Receipts were $70.00 and $52.75 respectively. The table below sets forth the high and low bids for each quarter of 2010 and 2009 and the distributions paid on the Partnership's Depositary Receipts:

	2010								2009

	Low Bid		High Bid		Close		Distributions		Low Bid		High Bid		Close		Distributions
First Quarter	$	52.75	$	67.99	$	67.99	$	0.70	$	45.00	$	56.75	$	53.51	$	0.70
Second Quarter	$	55.19	$	70.00	$	60.00	$	0.70	$	46.83	$	60.50	$	51.50	$	0.70
Third Quarter	$	58.50	$	65.57	$	65.00	$	0.70	$	47.00	$	57.50	$	56.50	$	0.70
Fourth Quarter	$	62.00	$	70.00	$	66.00	$	0.70	$	49.00	$	56.00	$	52.50	$	0.70

Distribution to Limited & General Partners were:

	2010		2009

Class A—Limited Partners (80%)	$	2,950,080	$	2,971,072
Class B—Limited Partners (19%)		700,644		705,630
Class C—General Partner (1%)		36,876		37,138

Total	$	3,687,600	$	3,713,840

On March 1, 2011, the closing price on the NYSE Amex Exchange for a Depositary Receipt was $66.80. There were 1,004,886 Depositary Receipts outstanding held by 931 record holders and 4,699 Class A Units (representing 46,990 receipts) held by 241 record holders.

Any portion of the Partnership's cash, which the General Partner deems not necessary for cash reserves, is distributed to the Partners, and distributions are made on a quarterly basis. The Partnership has made annual distributions to its Partners since 1978. In each of 2010 and 2009, the Partnership made total distributions of $28.00 per Unit, ($2.80 per Receipt). The total value of the distribution in 2010 was $3,687,600 and $3,713,840 in 2009. In February 2011, the Partnership declared a quarterly distribution of $7.00 per Unit ($0.70 per Receipt) payable on March 31, 2011.

See "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" for certain information relating to the number of holders of each class of Units.

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The Partnership does not have any securities authorized for issuance pursuant to any equity compensation plans.

On September 17, 2008, the Partnership completed the issuance of an aggregate of 6,642 Class A Units held in treasury to current holders of Class B and General Partner Units upon the simultaneous retirement to treasury of 6,309 Class B Units and 333 General Partner Units pursuant to an equity distribution plan authorized by the Board of Directors of the General Partner on August 8, 2008 and as further described under Item 3.02 of the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 18, 2008, which is incorporated herein by reference. Harold Brown, the treasurer of the General Partner, owns 75% of the issued and outstanding Class B Units of the Partnership and 75% of the issued and outstanding equity of the General Partner, Ronald Brown, the brother of Harold Brown and the president of the General Partner, owns 25% of the issued and outstanding Class B Units of the Partnership and 25% of the issued and outstanding equity of the General Partner.

See Note 8 to the Consolidated Financial Statements for information concerning this repurchase program.

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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among New England Realty Assoc. L.P., The NYSE Amex Composite Index
And The FTSE NAREIT All REITs Index

*$100 invested on 12/31/05 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

The Partnership does not have any securities authorized for issuance under any equity compensation plans that are subject to disclosure under Item 201(d) of Regulation S-K.

ITEM 6. SELECTED FINANCIAL DATA

The information required by this Item is included on page 42 of this Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 2011 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. Accordingly, investors should use caution in relying on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

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Along with risks detailed in Item 1A and from time to time in the Partnership's filings with the Securities 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 Eastern Massachusetts, and these markets may be adversely 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 Greater Boston 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.
•: 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.

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•: 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 by the Partnership 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.

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 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.

The general real estate market in the Greater Boston area is beginning to reach a supportable level. The commercial market vacancy has peaked and will plateau for the foreseeable future and will likely reflect the trends of the national unemployment rate. The multifamily sector has experienced improving occupancy and modest revenue increases. Management believes that limited new multi-family housing and greater demand will result in low single digit vacancy and higher rents upon turnover during the next 18 to 24 months. The Partnership believes its present cash reserves as well as anticipated rental revenue will be sufficient to fund its current operations, finance current planned improvements to its properties, and continue distribution payments in the foreseeable future.

Management continues to believe that the financial crisis that was set in motion by the subprime lending debacle in 2007 will take longer to be worked through than previous recessions. We continue to believe that the recession and conservative lending standards at the national level continue to moderate the recovery as evidenced by the tepid growth in GNP and employment. Management believes that the improvement in local unemployment, small job gains, and general stabilization of housing prices and stability of the major industries in Massachusetts will provide support to a stronger multifamily market for 2011.

For 2010, the Partnership's revenues were essentially flat. However, if the free rent concessions granted in 2009 were not expensed over the past 12 months, rental income would demonstrate an overall increase from the previous year. In fact, trends for the 4 ^th quarter of 2010 and the 1 ^st quarter of 2011 already demonstrate increasing rental revenue compared with the previous year. Occupancy continues to remain above the competition. As detailed below, overall operating expenses increased by 1.9%. Management is satisfied with the onsite efforts of the staff balancing tenant retention, curb appeal and the profitability of the properties while mitigating growth in the other expense categories. Management believes that bottom line growth, excluding depreciation, will surpass 2010 operating performance in its core holdings as well as the joint ventures.

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Management anticipates that the purchasing power of the Management Company will continue to buffer large increases in operating expenses. In 2008, the Partnership financed approximately $65,000,000 of mortgage debt for 15 years at rates less than 6%. The Partnership has accordingly mitigated financing concerns and locked in interest rates to the benefit of the shareholders. The next significant round of refinancing of approximately $45,000,000 will not occur until 2013. Management anticipates that stability will return to the marketplace at that time.

As Management reviews property performance, it takes into consideration opportunities for property dispositions. On February 2, 2011, the Partnership was presented an unsolicited offer to sell the Avon Street apartments. The possible disposition of the Avon Street Apartments is one such opportunity where Management believes is an optimum time to dispose of an asset in light of demand for such product, the current interest rate environment and the property's position in the marketplace. On March 1, 2011, the Partnership entered into a purchase and sale agreement. For additional information, see Item 9B. The potential sale will also allow the Partnership to rebuild its cash position or pay down its debt.

The Stock Repurchase Program that was initiated in 2007 has purchased 398,320 Depositary Receipts through February 2011 or 29% of the outstanding class A Depositary Receipts. The Partnership has retained The Hamilton Company ("Hamilton") to manage and administer the Partnership's and Joint Ventures' Properties. Hamilton is a full-service real estate management company, which has legal, construction, maintenance, architectural, accounting and administrative departments. The Partnership's properties represent approximately 40% of the total properties and 70% of the residential properties managed by Hamilton. Substantially all of the other properties managed by Hamilton are owned, wholly or partially, directly or indirectly, by Harold Brown. The Partnership's Second Amended and Restated Contract of Limited Partnership (the "Partnership Agreement") expressly provides that the general partner may employ a management company to manage the properties, and that such management company may be paid a fee of up to 4% of rental receipts for administrative and management services (the "Management Fee"). The Partnership pays Hamilton the full annual Management Fee, in monthly installments.

At March 1, 2011, Harold Brown, his brother Ronald Brown and the President of Hamilton, Carl Valeri, collectively own approximately 39.50% 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 also owns 75% of the Partnership's Class B Units, 75% of the capital stock of NewReal, Inc. ("NewReal"), the Partnership's sole general partner, and all of the outstanding stock of Hamilton. Ronald Brown also owns 25% of the Partnership's Class B Units and 25% of NewReal's capital stock. In addition, Ronald Brown is the President and director of NewReal and Harold Brown is NewReal's Treasurer and a director. One of NewReal's directors, Roberta Ornstein also owns immaterial amounts of the Partnership's Class A receipts.

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.

Hamilton accounted for approximately 6.5% of the repair and maintenance expense paid for by the Partnership in the year ended December 31, 2010 and 3% in the year ended December 31, 2009. 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. However, several of the larger

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Partnership properties have their own maintenance staff. Further, those properties that do not have their own maintenance staff and are located more than a reasonable distance from Hamilton's headquarters in Allston, 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 76% of the legal services paid for by the Partnership during the years ended December 31, 2010 and 2009.

Additionally, as described in Note 3 to the consolidated financial statements, The Hamilton Company receives similar fees from the Investment Properties.

R. Brown Partners, which is owned by Ronald Brown, managed the condominium association containing five condominium units which were sold in 2008 located in Brookline, Massachusetts. That entity received annual management fees from the five units of approximately $1,500, and Hamilton reduced its management fees to approximately 2%, so that the total management fee will not exceed the 4% allowed by the Partnership's Partnership Agreement.

The Partnership requires that three bids be obtained for construction contracts in excess of $5,000. 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. In 2010, Hamilton provided the Partnership approximately $32,000 in construction and architectural services. In 2009, Hamilton provided construction and architectural services paid for by the Partnership totaling $53,000.

Prior to 1991, the Partnership employed an outside, unaffiliated company to perform its bookkeeping and accounting functions. Since that time, such services have been provided by Hamilton's accounting staff, which consists of approximately 14 people. In 2010, Hamilton charged the Partnership $125,000 per year ($31,250 per quarter) for bookkeeping and accounting services. In 2011, Hamilton will charge the Partnership $125,000 for bookkeeping and accounting services ($31,250 per quarter).

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 in the 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.

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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. Concessions made on residential leases are also accounted for on the straight-line basis.

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.

Other intangible assets acquired include amounts for in-place lease values 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

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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. The Partnership has not recognized an impairment loss since 1995.

Rental Property Held for Sale and Discontinued Operations: 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. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

Investments in Partnerships: 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 Partnerships, and subsequently adjusted for the Partnership's share in earnings, cash contributions and distributions. Under the equity method of accounting, our net 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.

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.

RESULTS OF OPERATIONS

Years Ended December 31, 2010 and December 31, 2009

The Partnership and its Subsidiary Partnerships earned income before interest expense, loss from investments in unconsolidated joint ventures and other income and loss of approximately $10,688,000 during the year ended December 31, 2010, compared to approximately $11,170,000 for the year ended December 31, 2009, a decrease of approximately $482,000.

The rental activity is summarized as follows:

		Occupancy Date

		February 1, 2011			February 2, 2010
Residential
	Units		2,269			2,269
	Vacancies		79			63
	Vacancy rate		3.5	%		2.8.	%
Commercial
	Total square feet		114,395			114,395
	Vacancy		0			2,384
	Vacancy rate		0	%		2.0	%

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	Rental Income (in thousands) Year Ended December 31,

	2010						2009
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	32,712		$	32,712		$	32,812		$	32,812
Residential percentage		90	%		90	%		91	%		91	%
Commercial percentage		10	%		10	%		9	%		9	%
Contingent rentals	$	653		$	653		$	583		$	583

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009:

		Year Ended December 31,

		Year Ended December 31,						Dollar Change			Percent Change
		2010			2009			Dollar Change			Percent Change
Revenues:
	Rental income	$	32,711,907		$	32,812,022		$	(100,115	)		(0.3	)%
	Laundry and sundry income		454,203			422,463			31,740			7.5	%

			33,166,110			33,234,485			(68,375	)		(0.2	)%

Expenses
	Administrative		1,828,214			1,800,798			27,416			1.5	%
	Depreciation and amortization		5,622,395			5,838,246			(215,851	)		(3.7	)%
	Management fees		1,367,190			1,339,252			27,938			2.1	%
	Operating		3,923,424			4,061,342			(137,918	)		(3.4	)%
	Renting		546,665			528,154			18,511			3.5	%
	Repairs and maintenance		5,008,992			4,813,105			195,887			4.1	%
	Taxes and insurance		4,181,037			3,683,612			497,425			13.5	%

			22,477,917			22,064,509			413,408			1.9	%

Income Before Other Income and Discontinued Operations			10,688,193			11,169,976			(481,783	)		(4.3	)%

Other Income (Loss)
	Interest expense		(8,182,661	)		(7,940,002	)		(242,659	)		3.1	%
	Interest income		5,932			48,948			(43,016	)		(87.9	)%
	Casualty income		—			15,696			(15,696	)		(100.0	)%
	(Loss) from investment in unconsolidated joint ventures		(3,869,996	)		(1,687,258	)		(2,182,738	)		129.4	%
	Other income (loss)		(700	)		5,178			(5,878	)		(113.5	)%

			(12,047,425	)		(9,557,438	)		(2,489,987	)		(26.1	)%

Income (loss) from Continuing Operations			(1,359,232	)		1,612,538			(2,971,770	)		(184.3	)%

Net Income (loss)		$	(1,359,232	)	$	1,612,538		$	(2,971,770	)		(184.3	)%

Rental income from operations for the year ended December 31, 2010 was approximately $32,712,000, compared to approximately $32,812,000 for the year ended December 31, 2009, a decrease of approximately $100,000. This decrease is due to the amortization of approximately $404,000 in connection with the free rent granted to tenants. The majority of Partnership Properties had increases in rental revenue, the ones with the most significant increases include Westgate Woburn, 62 Boylston Street, Redwood Hills, North Beacon Street, and 1131 Commonwealth Avenue with increases of approximately $104,000, $92,000, $91,000, $75,000 and $70,000.

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Operating expenses from continuing operations for the year ended December 31, 2010 were approximately $22,478,000 compared to approximately $22,065,000 for the year ended December 31, 2009, an increase of approximately $413,000 (1.9%). The most significant factors contributing to this decrease were an increase in real estate taxes of approximately $339,000 and an increase in insurance of approximately $156,000 and an increase in repairs and maintenance expenses of approximately $196,000 due to repairs at many properties to maintain occupancy.

These increases are offset by a decrease in depreciation and amortization expense of approximately $216,000 (3.7%) due to the significant amount of 5-10 year property becoming fully depreciated: and a decrease in operating expenses of approximately $138,000 (3.4%) due to lower snow removal costs due a milder winter in 2010 and lower utility costs due in part to the installation of new more efficient heating systems.

Interest expense for the year ended December 31, 2010 was approximately $8,183,000 compared to approximately $7,940,000 for the year ended December 31, 2009, an increase of approximately $243,000. This increase is due to a higher average level of debt in 2010 compared to 2009.

At December 31, 2010, the Partnership has between a 40% and 50% ownership interests in nine 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 loss from the Investment Properties was approximately $3,870,000. Included in this loss is depreciation and amortization expense of approximately $5,222,000. The allocable loss associated with the October 2009 investment in Dexter Park is approximately $2,956,000 of which approximately $3,771,000 is depreciation and amortization. The allocable amortization expense at Dexter Park will be approximately $1,600,000 less in 2011 and in future years as deferred charges were fully amortized in 2010. In 2009, the Partnership's share of loss was approximately $1,687,000.

Interest income for the year ended December 31, 2010 was approximately $5,900 compared to approximately $49,000 for the year ended December 31, 2009, a decrease of approximately $43,000. This decrease is due to a drop in interest rates as well as a decrease in cash available for investment.

On March 25, 2010, the Partnership refinanced the Brookside Apartments. The new loan is $2,820,000, matures in 2020 and has an interest rate of 5.81%. The loan is a ten year note amortized over 30 years. The proceeds of the loan were used to pay off the old mortgage of approximately $1,900,000. There were no prepayment penalties.

As a result of the changes discussed above, net loss for the year ended December 31, 2010 was approximately $1,359,000 compared to net income of approximately $1,612,000 for the year ended December 31, 2009, a decrease of approximately $2,971,000.

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Years Ended December 31, 2009 and December 31, 2008 (as adjusted for discontinued operations)

The Partnership and its Subsidiary Partnerships earned income before other income and loss and discontinued operations of approximately $11,170,000 during the year ended December 31, 2009, compared to approximately $9,784,000 for the year ended December 31, 2008, an increase of approximately $1,386,000.

The rental activity is summarized as follows:

		Occupancy Date

		February 2, 2010			February 1, 2009
Residential
	Units—exclusive of available for sale units		2,269			2,269
	Vacancies		63			67
	Vacancy rate		2.8	%		3.0.	%
Commercial
	Total square feet		114,395			114,395
	Vacancy		2,384			0
	Vacancy rate		2.0	%		0	%

	Rental Income (in thousands) Year Ended December 31,

	2009						2008
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	32,812		$	32,812		$	34,140		$	31,898
Residential percentage		91	%		91	%		92	%		92	%
Commercial percentage		9	%		9	%		8	%		8	%
Contingent rentals	$	583		$	583		$	477		$	477

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Year Ended December 31, 2009 Compared to Year Ended December 31, 2008:

		Year Ended December 31,

		Year Ended December 31,						Dollar Change			Percent Change
		2009			2008			Dollar Change			Percent Change
Revenues:
	Rental income	$	32,812,022		$	31,898,117		$	913,905			2.9	%
	Laundry and sundry income		422,463			399,028			23,435			5.9	%

			33,234,485			32,297,145			937,340			2.9	%

Expenses
	Administrative		1,800,798			1,726,610			74,188			4.3	%
	Depreciation and amortization		5,838,246			6,367,596			(529,350	)		(8.3	)%
	Management fees		1,339,252			1,316,594			22,658			1.7	%
	Operating		4,061,342			4,250,345			(189,003	)		(4.4	)%
	Renting		528,154			495,822			32,332			6.5	%
	Repairs and maintenance		4,813,105			4,883,987			(70,882	)		(1.5	)%
	Taxes and insurance		3,683,612			3,472,518			211,094			6.1	%

			22,064,509			22,513,472			(448,963	)		(2.0	)%

Income Before Other Income and Discontinued Operations			11,169,976			9,783,673			1,386,303			14.3	%

Other Income (Loss)
	Interest expense		(7,940,002	)		(7,704,843	)		(235,159	)		3.1	%
	Interest income		48,948			172,133			(123,185	)		(71.6	)%
	Casualty income (loss)		15,696			(7,439	)		23,135			(310.0	)%
	Mortgage prepayment penalties		—			(4,487,706	)		4,487,706			(100.0	)%
	(Loss) from investment in unconsolidated joint ventures		(1,687,258	)		(1,075,675	)		(611,583	)		56.9	%
	Other income (losses)		5,178			(86,693	)		91,871			(106.0	)%

			(9,557,438	)		(13,190,223	)		3,632,785			(27.4	)%

Income from Continuing Operations			1,612,538			(3,406,550	)		5,019,088			(147.3	)%

Discontinued Operations:
	Income from discontinued operations		—			(110,886	)		110,886			(100.0	)%
	Gain (loss) on sale of real estate from discontinued operations		—			10,099,127			(10,099,127	)		(100.0	)%

			—			9,988,261			(9,988,261	)		(100.0	)%

Net Income		$	1,612,538		$	6,581,711		$	(4,969,173	)		(75.5	)%

Rental income from continuing operations for the year ended December 31, 2009 was approximately $32,812,000, compared to approximately $31,898,000 for the year ended December 31, 2008, an increase of approximately $914,000. Approximately $644,000 of this increase represents rental income from the Partnerships new acquisition of Cypress Street in October 2008. Other properties with significant rental income increases include 1144 Commonwealth Avenue, River Drive, Linewt, and 659 Worcester Road with increases of approximately $68,000, $36,000, $32,000, and $29,000 respectively. Other properties with decreases in rental income include; 140 North Beacon Street, Redwood Hills, School Street, and Westgate Woburn with decreases of approximately $106,000, $60,000, $33,000, and $28,000 respectively.

Operating expenses from continuing operations for the year ended December 31, 2009 were approximately $22,065,000 compared to approximately $22,513,000 for the year ended December 31,

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2008, a decrease of approximately $449,000 (2.0%). The most significant factors contributing to this decrease were a decrease in depreciation and amortization expense of approximately $529,000 (8.3%) due to the significant amount of 5-10 year property becoming fully depreciated: a decrease in operating expenses of approximately $189,000 (4.4%) due to lower heating costs as the result of the installation of new more efficient heating systems as well as lower fuel costs; and a decrease in repairs and maintenance expenses of approximately $71,000(1.5%) due to improvements done in 2008 which has resulted in the need for fewer repairs in 2009.

These decreases are offset by an increase in administrative expenses of approximately $74,000 (4.3%) due to an increase in the fees related to employee benefits as well as payroll service fees; an increase in taxes and insurance of approximately 211,000 (6.1%) due to an increase in the real estate taxes; and an increase in the management fee of approximately $23,000 (1.7%) due to an increase in rental income.

At December 31, 2009, the Partnership has between a 40% and 50% ownership interests in nine 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 loss from the Investment Properties was approximately $1,687,000. Included in this loss is depreciation and amortization expense of approximately $2,492, 000. The loss associated with the 2009 investment in Dexter Park is approximately $500,000 of which approximately $675,000 is depreciation and amortization. In 2008, the Partnership's share of loss was approximately $1,076,000. Included in the Partnership's share of loss was a gain on the sale of units of approximately $438,000 and depreciation expense of $1,913,000. There were 21 units sold in 2008.

Interest income for the year ended December 31, 2009 was approximately $49,000 compared to approximately $172,000 for the year ended December 31, 2008, a decrease of approximately $123,000. This decrease is due to a drop in interest rates as well as a decrease in cash available for investment.

In 2008, the Partnership refinanced a number of mortgages with outstanding 8.44% mortgages of approximately $37,800,000 with new mortgages totaling approximately $60,000,000. Non-recurring prepayment penalties of approximately $4,488,000 were incurred in these transactions and are included in other expenses.

During 2008, the Partnership sold the Oak Ridge Apartments in Foxboro, Massachusetts, the Coach Apartments in Acton, Massachusetts and five condominiums located in Brookline, Massachusetts. The net loss from operations from these properties is approximately $111,000 and the gain on the sale of the properties is approximately $10,000,000. This resulted in a net income from discontinued operations in 2008 of approximately $9,988,000.

As a result of the changes discussed above, net income for the year ended December 31, 2009 was approximately $1,612,000 compared to approximately $6,582,000 for the year ended December 31, 2008, a decrease of approximately $4,969,000.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership's principal source of cash during 2010 and 2009 was the collection of rents and refinancing of Partnership properties. The majority of cash and cash equivalents of $3,245,361 at December 31, 2010 and $2,879,663 at December 31, 2009 were held in interest bearing accounts at creditworthy financial institutions.

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This increase of $365,698 at December 31, 2010 is summarized as follows:

	Year Ended December 31,

	2010			2009
Cash provided by operating activities	$	8,313,602		$	9,572,340
Cash (used in) investing activities		(1,250,539	)		(18,743,746	)
Cash (used in) provided by financing activities		(2,468,854	)		6,526,318
Repurchase of Depositary Receipts, Class B and General Partner Units		(540,911	)		(1,514,340	)
Distributions paid		(3,687,600	)		(3,713,840	)

Net increase (decrease) in cash and cash equivalents	$	365,698		$	(7,873,268	)

The cash provided by operating activities is primarily due to the collection of rents less cash operating expenses. The change in cash used in investing activities is due to a significant investment in a joint venture in 2009. The decrease in cash provided by financing activities is due to the payment in 2010 of a portion of the debt.

During 2010, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $2,268,000. These improvements were funded from cash reserves and, to some extent, escrow accounts established in connection with the financing or refinancing of the applicable Properties. These sources have been adequate to fully fund improvements. The most significant improvements were made at Westgate Woburn, 62 Boylston Street, Hamilton Oaks, Westside Colonial, Olde English Village, North Beacon Street and 1144 Commonwealth Avenue, at a cost of approximately $381,000, $241,000, $196,000, $165,000,$129,000, $127,000, and $123,000 respectively. The Partnership plans to invest approximately $1,761,000 in capital improvements in 2011.

In 2010 the Partnership repurchased 6,896 Class A Depositary Receipts, 164 Class B Units and 9 General Partnership Units for a total cost of $540,911 ($432,920, $102,591 and $5,400 respectively). The purchase was funded from cash received from the refinancing of Partnership properties in 2010 and 2009.

On March 25, 2010, the Partnership refinanced the NERA Brookside Associates, LLC. The new loan is $2,820,000, matures in 2020 and has an interest rate of 5.81%. The loan is a ten year note amortized over 30 years. The proceeds of the loan were used to pay off the old mortgage of approximately $1,900,000. There were no prepayment penalties.

In December 2009, the Partnership refinanced Linhart, LLP, located in Newton, Massachusetts. The new loan is $2,000,000, with a rate of 3.75% over the Libor rate or 4.25% whichever is greater and matures five years from the date of closing. The interest rate as of September 30, 2010 was 4.25%. The loan agreement calls for interest only payments for twenty four months and principal and interest payments for the remainder of the five year period based on a thirty year amortization. The loan proceeds were used to pay off the prior loan of approximately $1,700,000, and closing costs of approximately $38,000.

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage is $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. In order to fund this investment, the Partnership used approximately $8,757,000 of its cash reserves and borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan is four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. On August 17,

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2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. The balance of the loan, $4,668,600, will remain subject to the original terms of the Note, including HBC's right to demand payment of the balance of the loan in whole or in part upon six months notice. The interest paid during the years ended December 31, 2010 and 2009 was approximately $415,000 and $78,000 respectively. This loan is collateralized by the Partnership's 99% ownership interest in 62 Boylston Street. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

The Partnership paid quarterly distributions of $7.00 per Unit ($0.70 per Receipt) on March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010. The total distributions paid during the year ended December 31, 2010 were $3,687,600 and $3,713,840 during the year ended December 31, 2009.

In February 2011, the Partnership approved a distribution of $7.00 per Unit ($0.70 per Receipt) payable March 31, 2011.

The Partnership anticipates that cash from operations and interest bearing accounts will be sufficient to fund its current operations pay distributions, make required debt payments and to 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, increases or decreases in rental income or expenses, or the loss of significant tenants.

As more fully described in Item 9B, the Partnership entered into a purchase and sales agreement to sell the Avon Street Apartments, which will result in cash proceeds to the Partnership of approximately $5,700,000. These funds may be used to purchase additional properties, depositary receipts or pay down debt.

Off-Balance Sheet Arrangements-Joint Venture Indebtedness

As of December 31, 2010, the Partnership had between a 40%-50% ownership interest in nine Joint Ventures, all 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. At December 31, 2010, our proportionate share of the non-recourse debt related to these investments was equal to approximately $61,453,000. See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

See Notes 5 and 14 to the Consolidated Financial Statements for a description of mortgage notes payable. The Partnerships have no other material contractual obligations to be disclosed.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2010, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $283,238,000 in long-term debt, substantially all of which pays interest at fixed rates. Accordingly, the fair value of these debt instruments is affected by changes in market interest rates. These mortgages and note payable mature through 2023. For information regarding the fair value and maturity dates of these debt obligations, see Item 2. Properties and Note 5 to the Consolidated Financial Statements—"Mortgage Notes Payable," Note 12 to the Consolidated Financial Statements—"Fair Value Measurements" and Note 14 to the Consolidated Financial Statements—"Investment in Unconsolidated Joint Ventures."

For additional disclosure about market risk, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Results".

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ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements of the Partnership appear on pages F-1 through F-34 of this Form 10-K and are indexed herein under Item 15(a)(1). The combined financial statements of Hamilton Park Towers LLC, Hamilton on Main Apartments LLC and Hamilton on Main LLC required pursuant to Rule 3-09 of Regulation S-X appear in exhibit 99.1 filed with this Form 10-K and are indexed under Item 15(c).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. We have evaluated the design and operation of our disclosure controls and procedures to determine whether they are effective in ensuring that the disclosure of required information is timely made in accordance with the Securities Exchange Act of 1934 ("Exchange Act") and the rules and forms of the Securities and Exchange Commission. This evaluation was made under the supervision and with the participation of management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") of our General Partner as of the end of the period covered by this annual report on Form 10-K. The CEO and CFO have concluded, based on their reviews, that our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), are effective to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Management's Report on Internal Control over Financial Reporting. We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. We assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in "Internal Control—Integrated Framework". Based on that assessment and those criteria, our management, with the participation of the CEO and CFO of the General Partner, concluded that our internal control over financial reporting is effective as of December 31, 2010.

We believe that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the fourth quarter of 2010 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On March 1, 2011, the Partnership entered into a purchase and sale agreement with 503-509 Pleasant Street LLC to sell the Avon Street Apartments in Malden, Massachusetts. The total sales price is $8,750,000 in cash. The closing date is expected to be on or before May 16, 2011. The buyer is entitled to terminate the agreement by March 15, 2011 if the results of the environmental and general building inspections are unsatisfactory. Additionally, the buyer may terminate the agreement by March 31, 2011 if it is unable to obtain mortgage financing in the amount of $6,125,000 at the

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prevailing rates, terms and conditions. The Partnership's net proceeds from the sale of Avon Street Apartments will be approximately $5,700,000 and the gain on the sale will be approximately $7,800,000.

The information relating to the sale of the Avon Apartments is being disclosed under Item 9B of this Annual Report on Form 10-K for the year ended December 31, 2010 in lieu of disclosure under Item 1.01 of Form 8-K.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND COPORATE GOVERNANCE

Our General Partner, New Real, Inc. is a Massachusetts corporation wholly owned by Harold Brown and Ronald Brown, who are brothers. Harold Brown and Ronald Brown were individual general partners of the Partnership until May 1984, when NewReal, Inc. replaced them as the sole General Partner of the Partnership. The General Partner is responsible for making all decisions and taking all action deemed by it necessary or appropriate to conduct the business of the Partnership.

The General Partner engages The Hamilton Company, Inc. to manage the properties of the Partnership and its Subsidiary Partnerships. The Hamilton Company, Inc. is wholly owned by Harold Brown. See "Item 11. Executive Compensation" for information concerning fees paid by the Partnership to The Hamilton Company during 2010.

Because the General Partner has engaged The Hamilton Company as the manager for the Properties, the General Partner has no employees.

The directors of the General Partner are Ronald Brown, Harold Brown, Guilliaem Aertsen, Conrad DiGregorio, Roberta Ornstein and David Aloise. The directors of the General Partner hold office until their successors are duly elected and qualified.

Ronald Brown and Harold Brown hold all of the executive officer positions of the General Partner. The executive officers of the General Partner serve at the pleasure of the Board of Directors.

On June 14, 2001, the Board of Directors of the General Partner created an Audit Committee, in accordance with Section 3(a)(58)(A) of the Exchange Act, consisting of three members, and approved the charter of the Audit Committee. As of November 6, 2007, the Audit Committee consisted of Guilliaem Aertsen, David Aloise, and Roberta Ornstein. The Board of Directors of the General Partner has determined that Guilliaem Aertsen is an audit committee financial expert, as that term is defined in Item 407 of Securities and Exchange Commission Regulation S-K.

The following table sets forth the name and age of each director and officer of the General Partner and each such person's principal occupation and affiliation during the preceding five years.

Revised paragraph (f) of Item 401 of Regulation S-K that became effective on February 28 now requires the Partnership to briefly discuss the specific experience, qualifications, attributes or skills that led to the conclusion that each director should serve as a director for the General Partner.

Name and Position		Age			Other Position

Ronald Brown, President and Director (since 1984)			75		Associate, Hamilton Realty Company (since 1967); President, Treasurer, Clerk and Director of R. Brown Partners Inc. (since 1985); Member, Greater Boston Real Estate Board (since 1981); Director, Brookline Chamber of Commerce (since 1978); Trustee of Reservations (since 1988); Director, Brookline Music School (since 1993); President, Brookline Chamber of Commerce (1990-1992); Director, Coolidge Corner Theater Foundation (1990-1993); President, Brookline Property Owner's Association (1981-1990); Trustee, Brookline Hospital (1982-1989); Director, Brookline Symphony Orchestra (since 1996); Treasurer, Brookline Greenspace Alliance (since 1999).

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Name and Position		Other Position

Harold Brown, Treasurer and Director (since 1984)	86	Sole proprietor, The Hamilton Company, Inc. (since 1955); Trustee, Treasurer and Director of Wedgestone Realty Investors Trust (1982-1985); Chairman of the Board and principal stockholder of the Wedgestone Advisory Corporation (1980-1985); Director of AFC Financial Corp. (1983-1985); Director, Coolidge Bank and Trust (1980-1983).
Guilliaem Aertsen, IV, Director (since 2002)	63	Chief Executive Officer, Aertsen Ventures LLC (since 1999); Co-Chairman of AGS Realty Advisors (since 1999); Director and CFO of CineCast LLC (since 1999); Member of Premier Capital LLC (since 2000); Chairman of the Board of Directors of the Massachusetts Housing Investment Corporation (since 1997); Chairman of the Board of Trustees of the Old South Church (1992-2002); Executive Vice President of BankBoston (1996-1998).
Conrad DiGregorio, Director (since 2002)	85	Member of Advisory Committee of the Partnership (1984) (see "Item 1. Business—Advisory Committee"); retired from past employment.
Roberta Ornstein, Director (since 2007)	61	Senior Vice President and Managing Director, Scudder Investments/Deutsche Asset Management (1998-2005); Director and Chief Financial Officer, Summit Partners (1997-1998); Vice President, Liberty Financial (1996-1997); Senior Vice President, Shearson Lehman Brothers (1993-1994); Senior Vice President—Treasury Group, The Boston Company (1983-1993).
David Aloise, Director (since 2007)	56	Founder and principal of Aloise & Associates, LLC (since 2000); executive positions in the areas of C&I loan workout, real estate workout, corporate banking and small business banking at Bank Boston Corporation (1979-2000); Advisory Board Member—Wells Fargo Capital Corp; Senior Advisor to Eaton Vance Bank Loan Mutual Fund Group; Member of the Turnaround Management Association.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Partnership's directors, executive officers, and persons who own more than 10% of a registered class of the Partnership's equity securities to file with the Securities and Exchange Commission reports of ownership changes and changes in ownership of the Partnership. Officers, directors and greater-than-10% shareholders are required by SEC regulations to furnish the Partnership with copies of all Section 16(a) forms they file.

Based solely upon a review of Forms 3 and 4 furnished to the company under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal year, Forms 5 furnished to the company with respect to its most recent fiscal year and any written representations received by the company from persons required to file such forms, the following persons—either officers, directors or beneficial owners of more than ten percent of any class of equity of the company registered pursuant to Section 12 of the Securities Exchange Act—failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year:

The NERA 1994 Irrevocable Trust transferred 30,000 Depositary Receipts to the Harold Brown 1999 Revocable Trust in June 2010, which were reported on Form 4 on January 14, 2011.

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CODE OF ETHICS

The Partnership, its General Partner and Hamilton, the Partnership's management company, have adopted a Code of Business Conduct and Ethics, which constitutes a "Code of Ethics" as defined by the SEC and applies to executive officers as well as to all other employees. A copy of the Code of Business Conduct and Ethics is available in the "NERA" section of the management company's website at www.thehamiltoncompany.com. To the extent required by the rules of the SEC, the Partnership and its related entities will disclose amendments to and waivers from the Code of Business Conduct and Ethics in the same place on the aforementioned website.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee of NewReal Inc. (NewReal), which is the General Partner of New England Realty Associates Limited Partnership ("NERA" or the "Partnership"), is currently comprised of Guilliaem Aertsen, IV, David Aloise, and Roberta Ornstein, each of whom is an independent director of NewReal. The Audit Committee operates under a written charter.

The Partnership's management, which consists of NERA's General Partner, is responsible for the preparation of the Partnership's financial statements and for maintaining an adequate system of internal controls and processes for that purpose. Miller Wachman LLP ("Miller Wachman") acts as the Partnership's independent auditor and is responsible for conducting an independent audit of the Partnership's annual financial statements, in accordance with generally accepted auditing standards, and issuing a report on the results of their audit. The Audit Committee is responsible for providing independent, objective oversight of both of these processes.

The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2010 with management of the Partnership and with representatives of Miller Wachman. As a result of these discussions, the Audit Committee believes that NERA maintains an effective system of accounting controls that allow it to prepare financial statements that fairly present the Partnership's financial position and results of its operations. Discussions with Miller Wachman also included the matters required by Statement on Auditing Standard No. 61 (Communications with Audit Committee).

In addition, the Audit Committee reviewed the independence of Miller Wachman. We received written disclosures and a letter from Miller Wachman regarding its independence as required by Independent Standards Board Standards No. 1 and discussed this information with Miller Wachman.

Based on the foregoing, the Audit Committee has recommended that the audited financial statements of the Partnership for the year ended December 31, 2010 be included in the Partnership's annual report on form 10-K to be filed with the Securities and Exchange Commission.

Guilliaem Aertsen, IV
David Aloise
Roberta Ornstein

ITEM 11. EXECUTIVE COMPENSATION

The Partnership does not have "Executive Compensation." As more fully described below, the Partnership employs a management company to which it pays management fees and administrative fees.

The Partnership is not required to and did not pay any compensation to its officers or the officers and directors of the General Partner in 2010. As more fully described below, the Partnership employs a management company which is solely responsible for performing all management and policy making functions for the Partnership. The only compensation paid by the Partnership to any person or entity is

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in the form of management fees and administrative fees paid to the General Partner, or any management entity employed by the General Partner, in accordance with the Partnership Agreement.

Specifically, the Partnership Agreement provides that the General Partner, or any management entity employed by the General Partner, is entitled to a management fee equal to 4% (2% at Dexter Park and 3% at Linewt) of the rental and other operating income from the Partnership Properties and a mortgage servicing fee equal to 0.5% of the unpaid principal balance of any debt instruments received, held and serviced by the Partnership (the "Management Fee"). The Partnership Agreement also authorizes the General Partner to charge to the Partnership its cost for employing professionals to assist with the administration of the Partnership Properties (the "Administrative Fees"). The Administrative Fee is not charged against the Management Fee. In addition, upon the sale or disposition of any Partnership Properties, the General Partner, or any management entity which is the effective cause of such sale, is entitled to a commission equal to 3% of the gross sale price (the "Commission"), provided that should any other broker be entitled to a commission in connection with the sale, the commission shall be the difference between 3% of the gross sale price and the amount to be paid to such broker.

The General Partner has engaged The Hamilton Company ("Hamilton") to operate and manage the Partnership, and in accordance with the Partnership Agreement, the Management Fee, the Administrative Fees and the Commission are paid to Hamilton. See "Item 10. Directors and Executive Officers of the Registrant." The total Management Fee paid to Hamilton during 2010 was approximately $1,367,000. The management services provided by Hamilton include but are not limited to: collecting rents and other income; approving, ordering and supervising all repairs and other decorations; terminating leases, evicting tenants, purchasing supplies and equipment, financing and refinancing properties, settling insurance claims, maintaining administrative offices and employing personnel. In addition, the Partnership engages the president of Hamilton as a consultant to provide asset management services to the Partnership, for which the Partnership paid $93,750 in 2010.

In 2010, the Partnership and its Subsidiary Partnerships paid administrative fees to Hamilton of approximately $571,000 inclusive of construction supervision and architectural fees of approximately $32,000, repairs and maintenance service fees of approximately $342,000, and legal fees of approximately $197,000. The Partnership also paid Hamilton $125,000 for accounting services. The administrative fees included $24,000 that was paid by the Partnership to Ronald Brown for construction supervision services.

Additionally, the Hamilton Company received approximately $640,000 from the 40-50% owned Investment Properties of which approximately $522,000 was the management fee, approximately $6,000 was for construction supervision and architectural fees, approximately $81,000 was for maintenance services, $25,000 for legal services, and $3,000 for construction costs. The Advisory Committee held 6 meetings during 2010, and a total of $15,000 was paid for attendance and participation in such meetings. Additionally, the Audit Committee held 4 meetings in 2010 and a total of $12,000 was paid for attendance and participation in such meetings.

Board of Directors Interlocks and Insider Participation

There are no interlocking relationships involving the board of directors of the General Partner and the board of directors or compensation committee of any other company, which would require disclosure under the rules of the SEC.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As of March 1, 2011, except as listed below, the General Partner was not aware of any beneficial owner of more than 5% of the outstanding Class A Units or the Depositary Receipts, other than Computershare, which, under the Deposit Agreement, as Depositary, is the record holder of the Class A Units exchanged for Depositary Receipts. As of March 1, 2011, pursuant to the Deposit Agreement, Computershare was serving as the record holder of the Class A Units with respect to which 1,004,886 Depositary Receipts had been issued to 931 holders. As of March , 2011, there were issued and outstanding 4,699 Class A Units (not including the Depositary Receipts) held by 241 limited partners, 24,982 Class B Units and 1,315 General Partnership Units held by the persons listed below. During 2010, 529 Class A Units were exchanged for 5,290 Depositary Receipts.

The following table sets forth certain information regarding each class of Partnership Units beneficially owned as of December 31, 2010 by (i) each person known by the Company to beneficially own more than 5% of any class of Partnership Units, (ii) each director and officer of the General Partner and (iii) all directors and officers of the General Partner as a group. For purposes of this table, all Depositary Receipts are included as if they were converted back into Class A Units. The inclusion in the table below of any Units deemed beneficially owned does not constitute an admission that the named persons are direct or indirect beneficial owners of such Units. Unless otherwise indicated, each person listed below has sole voting and investment power with respect to the Units listed.

	Class A						Class B						General Partnership

Directors and Officers	Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned			Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned			Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned
Harold Brown			(1)(2)			(1)(2)		18,737			75	%(3)			(4)		100	%(4)
c/o New England Realty Associates Limited Partnership 39 Brighton Avenue Allston, MA 02134
Harold Brown 1999 Revocable Trust			(2)			(2)
c/o Dionne and Gass LLP 131 Dartmouth Street Boston, MA 02116
HBC Holdings, LLC			(1)			(1)			(3)			(3)		0			0
39 Brighton Avenue Allston, MA 02134
Ronald Brown		2,530	(5)		2.41	%(5)		6,246			25	%			(4)		100	%(4)
c/o New England Realty Associates Limited Partnership 39 Brighton Avenue Allston, MA 02134
Guilliaem Aertsen		0			0			0			0			0			0
160 Boylston Street #2149 Chestnut Hill, MA 02467
Conrad DiGregorio		0			0			0			0			0			0
34 Gladstone Street East Boston, MA 02128
David Aloise		0			0			0			0			0			0
241 Cottage Park Road Winthrop, MA 02152

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	Class A						Class B						General Partnership

Directors and Officers	Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned			Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned			Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned
Roberta Ornstein		178			0.17	%		0			0			0			0
160 Boylston Street #2149 Chestnut Hill, MA 02467
NewReal, Inc.		333			0.32	%		0			0			1,315			100	%
39 Brighton Avenue Allston, MA 02134
All directors and officers as a group		34,969	(6)		33.24	%3(6)		24,982	(7)		100	%(7)			(4)		100	%(4)
5% Owners that are not Directors and Officers
Carl Valeri		6,356	(8)		6.04	%(8)		0			0			0			0
50 Udine Street Arlington, MA 02476

(1): As of March 1, 2010, 169,283 Depositary Receipts are held of record by HBC Holdings, LLC (HBC). Harold Brown is the sole manager of HBC with sole voting and dispositive control over the Depositary Receipts. Accordingly, Mr. Brown may be deemed to beneficially own the Depositary Receipts held by HBC. Because a Depositary Receipt represents beneficial ownership of one-tenth of a Class A Unit, Harold Brown may be deemed to beneficially own approximately 16,928 Class A Units (approximately 16.09% of the outstanding Class A Units). On January 12, 2011, the NERA 1994 Irrevocable Trust transferred 69,283 Depositary Receipts to HBC as partial consideration for additional economic interests in HBC. Also on January 12, 2011, the Harold Brown 1999 Revocable Trust transferred 100,000 Depositary Receipts to HBC as partial consideration for additional economic interest in HBC.
(2): On October 15, 2009, the Harold Brown 1999 Revocable Trust (1999 Trust) effected an equity exchange with the NERA 1994 Irrevocable Trust (1994 Trust) pursuant to which the 1994 Trust transferred 220,000 Depositary Receipts to the 1999 Trust in exchange for property ownership interests held by the 1999 Trust. On June 4, 2010, the 1994 Trust transferred 30,000 Depositary Receipts to the 1999 Trust as consideration for a 2.18% economic interest in HBC Holdings, LLC (HBC Holdings). On January 12, 2011, the 1999 Trust transferred 100,000 Depositary Receipts to HBC as partial consideration for additional economic interest in HBC. As of March 1, 2011, 150,000 Depositary Receipts are held of record by the Harold Brown 1999 Revocable Trust. Harold Brown is the sole beneficiary of the 1999 Trust during his lifetime and is a co-trustee of the 1999 Trust and exercises voting and dispositive control over the Depositary Receipts beneficially owned by the Trust. Accordingly, Mr. Brown may be deemed to beneficially own the Depositary Receipts held by the Trust. Because a Depositary Receipt represents beneficial ownership of one-tenth of a Class A Unit, Harold Brown may be deemed to beneficially own approximately 15,000 Class A Units (approximately 14.26% of the outstanding Class A Units) and the Trust may be deemed to beneficially own approximately 15,000 Class A Units (approximately 14.26% of the outstanding Class A Units).
(3): Consists of Class B Units held by HBC Holdings, LLC. See Note (1) above. Harold Brown, as Manager, has voting and investment power over the Class B Units held by the LLC, subject to the provisions of the LLC, and thus may be deemed to beneficially own the 18,737 Class B Units held by the LLC. On January 12, 2011, the NERA 1994 Irrevocable Trust transferred to HBC, 18,737 Class B Units for additional economic interest in HBC.
(4): Since Harold Brown and Ronald Brown are the controlling stockholders, executive officers and directors of NewReal, Inc., they may be deemed to beneficially own all 1,315 of the General Partnership Units held of record by NewReal, Inc.
(5): Consists of 25,301 Depositary Receipts held of record jointly by Ronald Brown and his wife. Because a Depositary Receipt represents beneficial ownership of one-tenth of a Class A Unit, Ronald Brown may be deemed to beneficially own approximately 2,530 Class A Units.
(6): Consists of the Class A Units described in Notes (1) and (4) above, plus New Real, Inc. and Ms. Ornstein, as indicated in the table.
(7): Includes the Class B Units described in Note (2) above.
(8): Consists of 63,564 Depositary Receipts held by Carl Valeri and his immediate family members. Because a Depositary Receipt represents beneficial ownership of one-tenth of a Class A Unit, Carl Valeri may be deemed to beneficially own approximately 6,356 Class A Units.

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On November 13, 2000, the Partnership adopted a Policy for Establishment of Rule 10b5-1 Trading Plans. Pursuant to this Policy, the Partnership authorized its officers, directors and certain employees, shareholders and affiliates who are deemed "insiders" of the Partnership to adopt individual plans for trading the Partnership's securities ("Trading Plans"), and established certain procedural requirements relating to the establishment, modification and termination of such Trading Plans. On May 14, 2001, the Partnership approved a Trading Plan of Harold Brown, providing for the purchase of up to 20,000 Depositary Receipts of the Partnership as such become available during the period from May 14, 2001 through May 13, 2002. Mr. Brown amended and restated this Trading Plan on November 19, 2001 to increase the number of Depositary Receipts which were to be purchased pursuant thereto from 20,000 to 50,000, expanding the date through which purchases could be made to September 30, 2002, and to provide that purchases under his Trading Plan were to be made only if the price per Depositary Receipt was $45.00 or less. On November 7, 2007, Mr. Brown amended and restated the Trading Plan expanding the date through which Depositary Receipts may be purchased through September 30, 2009 for up to 50,000 Depositary Receipts at prices up to $100 each. On November 4, 2009 Mr. Brown amended and restated the Trading Plan expanding the date through which Depositary Receipts may be purchase through September 30, 2012 for up to 50,000 Depositary Receipts at price up to $85.00 each.

The Partnership does not have any securities authorized for issuance pursuant to any equity compensation plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Harold Brown and Ronald Brown are brothers.

Guilliaem Aertsen and Roberta Ornstein are married.

There are no other family relationships among any of our directors. Messrs. Aertsen, DiGregorio, Aloise and Ms. Ornstein representing a majority of our directors, are determined to be independent under the rules of the NYSE AmexExchange and the SEC. The board holds regularly scheduled meetings.

The Partnership invested approximately $34,049,000 in nine limited liability companies formed to acquire Investment Properties. The Partnership has between a 40%-50% ownership interest in each of these limited liability companies accounted for on the equity method of consolidation. The majority stockholder of the General Partner owns between 43.2% and 60% and the President and five employees of the management company own between 0% and 6.8% in each of the Investment Properties. See Note 14 of the consolidated financial statements for a description of the Investment Properties.

See also "Item 2. Properties," "Item 10. Directors and Executive Officers of the Registrant" and "Item 11. Executive Compensation" for information regarding the fees paid to The Hamilton Company, an affiliate of the General Partner.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Miller Wachman LLP served as the Partnership's independent accountants for the fiscal year ended December 31, 2010 and has reported on the 2010 Consolidated Financial Statements. Aggregate fees rendered to Miller Wachman LLP for the years ended December 31, 2010 and 2009 were as follows:

	2010		2009

Audit Fees
Recurring annual audits, audit of internal control and quarterly reviews	$	262,500	$	242,000

Subtotal		262,500		242,000

Other Audit Related Fees		—		—

Tax Fees
Recurring tax compliance for the Partnership, 25 subsidiary Partnerships and 20 General Partnerships		80,000		80,000
Tax Planning and research		—		—

Subtotal		80,000		80,000

Other Fees		—		—

Total Fees	$	342,500	$	322,000

The Audit Committee's charter provides that it has the sole authority to review in advance and grant any pre-approvals of (i) all auditing services to be provided by the independent auditor, (ii) all significant non-audit services to be provided by the independent auditors as permitted by Section 10A of the Securities Exchange Act of 1934, and (iii) all fees and the terms of engagement with respect to such services. All audit and non-audit services performed by Miller Wachman during fiscal 2010 and 2009 were pre-approved pursuant to the procedures outlined above.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a): 1. Financial Statements:

The following Financial Statements are included in this Form 10-K:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at December 31, 2010 and 2009

Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008

Consolidated Statements of Changes in Partners' Capital for the years ended December 31, 2010, 2009 and 2008

Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008

Notes to Consolidated Financial Statements

2. Consolidated Financial Statement Schedules:

Valuation and Qualifying Accounts

Other financial statement schedules are omitted because they are not applicable or not required, or because the required information is included in the financial statements or notes thereto.

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(b): Exhibits:

The exhibits filed as part of this Annual Report on Form 10-K are listed in the Exhibit Index included herewith.

(c): The following combined financial statements of Hamilton Park Towers LLC, Hamilton on Main Apartments LLC and Hamilton on Main LLC are included in Exhibit 99.1 to this Form 10-K:

Report of Independent Registered Public Accounting Firm

Combined Balance Sheets at December 31, 2010 and 2009

Combined Statements of Income for the years ended December 31, 2010, 2009 and 2008

Combined Statements of Changes in Members' Capital for the years ended December 31, 2010, 2009 and 2008

Combined Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008

Notes to Combined Financial Statements

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SELECTED FINANCIAL DATA

	Year Ended December 31,

	2010			2009			2008			2007			2006
INCOME STATEMENT INFORMATION
Revenues	$	33,166,110		$	33,234,485		$	32,297,145		$	30,942,626		$	30,704,638
Expenses		22,477,917			22,064,509			22,513,472			22,274,584			21,952,771
Income before other income and discontinued operations		10,688,193			11,169,976			9,783,673			8,668,042			8,751,867
Other (Loss)		(12,047,425	)		(9,557,438	)		(13,190,223	)		(7,474,451	)		(7,398,264	)
Income (loss) before discontinued operations		(1,359,232	)		1,612,538			(3,406,550	)		1,193,591			1,353,603
Discontinued operations		—			—			9,988,261			(6,859	)		49,597
Net (Loss) Income		(1,359,232	)		1,612,538			6,581,711			1,186,732			1,403,200
Income (loss) before discontinued operations per Unit		(10.32	)		12.13			(24.73	)		6.95			7.81
Discontinued operations per Unit		—			—			72.50			(0.04	)		0.29
Net income (loss) per Unit		(10.32	)		12.13			47.77			6.91			8.10
Distributions to Partners per Unit		28.00			28.00			28.00			28.00			28.00
Net income (loss) per Depositary Receipt		(1.03	)		1.21			4.78			0.69			0.81
Distributions to Partners per Depositary Receipt		2.80			2.80			2.80			2.80			2.80
BALANCE SHEET INFORMATION
Real Estate, gross		150,818,648			150,411,555			150,344,799			147,125,551			144,801,927
Real Estate, net		92,744,257			95,971,937			98,560,454			96,730,044			98,283,838
Total Assets		121,276,735			129,089,736			125,243,457			124,391,770			130,483,310
Total Debt Outstanding		142,349,260			144,809,354			138,160,262			113,579,904			114,659,052
Partners' Capital		(26,920,567	)		(21,332,824	)		(17,717,182	)		2,664,859			11,642,003

The Partnership may purchase and/or sell properties at any time.

The table below reflects the totals of property available for rental at each December 31,

		Year Ended December 31,

		2010			2009			2008			2007			2006
Residential
	Units		2,269			2,269			2,269			2,377			2,377
	Vacancies		79			63			67			46			32
	Vacancy rate		3.5	%		2.8	%		3.0	%		1.3	%		1.3	%
Commercial
	Total square feet		114,395			114,395			114,395			90,848			84,998
	Vacancy (in square feet)		0			2,384			0			0			0
	Vacancy rate		0	%		2.0	%		0	%		0	%		0	%

See Items 1A and 7 for factors that may affect future operations. The above tables may not be indicative of future results.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners
New England Realty Associates Limited Partnership:

We have audited the accompanying consolidated balance sheets of New England Realty Associates Limited Partnership ("the Partnership") as of December 31, 2010 and 2009, and the related consolidated statements of income, changes in partners' capital and cash flows for each of the years in the three-year period ended December 31, 2010. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of New England Realty Associates Limited Partnership at December 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.


/s/ MILLER WACHMAN LLP
Boston, Massachusetts March 7, 2011

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		December 31,

		2010			2009
ASSETS
Rental Properties		$	92,744,257		$	95,971,937
Cash and Cash Equivalents			3,245,361			2,879,663
Rents Receivable			622,944			1,038,820
Real Estate Tax Escrows			301,853			311,582
Prepaid Expenses and Other Assets			3,337,886			2,857,288
Investments in Unconsolidated Joint Ventures			20,076,957			24,964,453
Financing and Leasing Fees			947,477			1,065,993

	Total Assets	$	121,276,735		$	129,089,736

LIABILITIES AND PARTNERS' CAPITAL
Note Payable		$	4,668,600		$	7,168,600
Mortgage Notes Payable			137,680,660			137,641,354
Accounts Payable and Accrued Expenses			2,440,141			2,195,245
Advance Rental Payments and Security Deposits			3,407,901			3,417,361

	Total Liabilities	$	148,197,302		$	150,422,560
Commitments and Contingent Liabilities (Notes 3 and 9)
Partners' Capital 131,484 and 132,346 units outstanding in 2010 and 2009, respectively			(26,920,567	)		(21,332,824	)

	Total Liabilities and Partners' Capital	$	121,276,735		$	129,089,736

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

		Year Ended December 31,

		2010			2009			2008
Revenues
	Rental income	$	32,711,907		$	32,812,022		$	31,898,117
	Laundry and sundry income		454,203			422,463			399,028

			33,166,110			33,234,485			32,297,145

Expenses
	Administrative		1,828,214			1,800,798			1,726,610
	Depreciation and amortization		5,622,395			5,838,246			6,367,596
	Management fees		1,367,190			1,339,252			1,316,594
	Operating		3,923,424			4,061,342			4,250,345
	Renting		546,665			528,154			495,822
	Repairs and maintenance		5,008,992			4,813,105			4,883,987
	Taxes and insurance		4,181,037			3,683,612			3,472,518

			22,477,917			22,064,509			22,513,472

Income Before Other Income (Loss) and Discontinued Operations			10,688,193			11,169,976			9,783,673

Other Income (Loss)
	Interest expense		(8,182,661	)		(7,940,002	)		(7,704,843	)
	Interest income		5,932			48,948			172,133
	Casualty income (loss)		—			15,696			(7,439	)
	Mortgage prepayment penalties		—			—			(4,487,706	)
	(Loss) from investments in unconsolidated joint ventures		(3,869,996	)		(1,687,258	)		(1,075,675	)
	Other		(700	)		5,178			(86,693	)

			(12,047,425	)		(9,557,438	)		(13,190,223	)

Income (loss) From Continuing Operations			(1,359,232	)		1,612,538			(3,406,550	)

Discontinued Operations
	(Loss) from discontinued operations		—			—			(110,866	)
	Gain on sale of real estate from discontinued operations		—			—			10,099,127

			—			—			9,988,261

Net income (loss)		$	(1,359,232	)	$	1,612,538		$	6,581,711

Income per Unit
	Income (loss) before discontinued operations	$	(10.32	)	$	12.13		$	(24.73	)
	Income from discontinued operations		—			—			72.50

Net income (loss) per Unit		$	(10.32	)	$	12.13		$	47.77

Weighted Average Number of Units Outstanding			131,696			132,966			137,772

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

														Partner's Capital

					Units									Partner's Capital
	Limited				Units									Limited
	Limited				General Partnership				Treasury Units					Limited						General Partnership
	Class A		Class B		General Partnership		Subtotal		Treasury Units		Total			Class A			Class B			General Partnership			Total
Balance, January 1, 2008		144,180		34,243		1,802		180,225		14,109		166,116		$	1,052,816		$	1,531,414		$	80,629		$	2,664,859
Distribution to Partners		—		—		—		—		—		—			(3,134,326	)		(744,403	)		(39,177	)		(3,917,907	)
Stock Buyback		—		—		—		—		30,865		(30,865	)		(22,391,934	)		(569,552	)		(84,358	)		(23,045,844	)
Stock Transfer															5,034,331			(4,834,249	)		(200,083	)		—
Net Income		—		—		—		—		—		—			5,265,369			1,250,525			65,817			6,581,711

Balance, December 31, 2008		144,180		34,243		1,802		180,225		44,974		135,251		$	(14,173,745	)	$	(3,366,265	)	$	(177,172	)	$	(17,717,182	)
Distribution to Partners		—		—		—		—		—		—			(2,971,072	)		(705,630	)		(37,138	)		(3,713,840	)
Stock Buyback										2,905		(2,905	)		(1,214,734	)		(284,262	)		(14,980	)		(1,514,340	)
Net Income		—		—		—		—		—		—			1,290,030			306,382			16,125			1,612,538

Balance December 31, 2009		144,180		34,243		1,802		180,225		47,879		132,346		$	(17,069,520	)	$	(4,050,138	)	$	(213,165	)	$	(21,332,824	)
Distribution to Partners		—		—		—		—		—		—			(2,950,080	)		(700,644	)		(36,876	)		(3,687,600	)
Stock Buyback		—		—		—		—		862		(862	)		(432,920	)		(102,591	)		(5,400	)		(540,911	)
Net (Loss)		—		—		—		—		—		—			(1,087,386	)		(258,254	)		(13,592	)		(1,359,232	)

Balance, December 31, 2010		144,180		34,243		1,802		180,225		48,741		131,484		$	(21,539,906	)	$	(5,111,628	)	$	(269,033	)	$	(26,920,567	)

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Year Ended December 31,

		2010			2009			2008
Cash Flows from Operating Activities
	Net income	$	(1,359,232	)	$	1,612,538		$	6,581,711

Adjustments to reconcile net income to net cash provided by operating activities
	Depreciation and amortization		5,622,395			5,838,246			6,465,057
	Loss from investments in joint ventures		3,869,996			1,687,258			1,075,675
	(Gain) on sale of real estate from discontinued operations		—			—			(10,064,717	)
	(Gain) on the sale of equipment		—			(8,157	)		—
Changes in operating assets and liabilities
	(Increase) Decrease in rents receivable		415,876			(485,428	)		(47,523	)
	Increase (Decrease) in accounts payable and accrued expense		244,896			602,635			(153,656	)
	(Increase) Decrease in real estate tax escrow		9,729			(35,963	)		207,391
	Decrease (Increase) in prepaid expenses and other assets		(480,598	)		151,617			316,717
	Increase in advance rental payments and security deposits		(9,460	)		209,594			31,445

	Total Adjustments		9,672,834			7,959,802			(2,169,611	)

	Net cash provided by operating activities		8,313,602			9,572,340			4,412,100

Cash Flows From Investing Activities
	(Investment in) unconsolidated joint ventures		(123,301	)		(15,953,100	)		—
	Proceeds from unconsolidated joint ventures		1,140,801			325,000			2,912,500
	Purchase and improvement of rental properties		(2,268,039	)		(3,136,296	)		(10,127,289	)
	Net proceeds from the sale of rental property		—			20,650			7,398,205

	Net cash (used in)provided by investing activities		(1,250,539	)		(18,743,746	)		183,416

Cash Flows From Financing Activities
	Proceeds (payment) of notes payable		(2,500,000	)		7,168,600			(3,224,419	)
	Payment of financing costs		(8,161	)		(123,374	)		(896,962	)
	Proceeds of mortgage notes payable		904,122			300,000			31,048,556
	Principal payments of mortgage notes payable		(864,815	)		(818,908	)		(696,533	)
	Stock buyback		(540,911	)		(1,514,340	)		(23,045,844	)
	Distributions to partners		(3,687,600	)		(3,713,840	)		(3,917,908	)

	Net cash provided by (used in) financing activities		(6,697,365	)		1,298,138			(733,110	)

Net Increase (Decrease) in Cash and Cash Equivalents			365,698			(7,873,268	)		3,862,406
Cash and Cash Equivalents, at beginning of year			2,879,663			10,752,931			6,890,525

Cash and Cash Equivalents, at end of year		$	3,245,361		$	2,879,663		$	10,752,931

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business: New England Realty Associates Limited Partnership ("NERA" or the "Partnership") was organized in Massachusetts in 1977. NERA and its subsidiaries own and operate various residential apartment buildings, condominium units and commercial properties located in Massachusetts and New Hampshire. NERA has also made investments in other real estate partnerships and has participated in other real estate-related activities, primarily located in Massachusetts.

Accounting Standards: On July 1, 2009, the Financial Accounting Standards Board ("FASB") issued the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, also known as FASB Accounting Standards Codification ("ASC 105-10"), General Accepted Accounting Principles ("ASC 105-10"). ASC 105-10 established the FASB Accounting Standards Codification ("Codification") as the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. GAAP was not intended to be changed as a result of the FASB's Codification project, but it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Partnership has implemented the Codification in this report by providing references to the Codification topics, as appropriate.

Principles of Consolidation: The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the nine limited liability companies (the "Investment Properties" or "Joint Ventures") in which the Partnership has between a 40-50% ownership interest. The consolidated group is referred to as the "Partnerships." Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investments in Unconsolidated Joint Ventures).

The Partnership accounts for its investments in joint ventures using the equity method of accounting. These investments are recorded initially at cost, as Investments in Unconsolidated Joint Ventures, and subsequently adjusted for equity in earnings and cash contributions and distributions. 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 entity's activities without additional subordinated financial support or (3) the equity investors have voting rights that are

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

On January 1, 2010, the Partnership adopted the updated provisions of ASC 810, pursuant to FASB No. 167, which amends FIN 46® to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. Additionally, FASB No. 167 amends FIN 46® to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity, which was based on determining which enterprise absorbs the majority of the entity's expected losses, receives a majority of the entity's expected residual returns, or both. FASB No. 167 amends certain guidance in Interpretation 46® for determining whether an entity is a variable interest entity. Also, FASB No. 167 amends FIN 46® to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The enhanced disclosures are required for any enterprise that holds a variable interest in a variable interest entity. The adoption of this guidance did not have a material impact to these financial statements.

Impairment: On an annual basis management assesses whether there are any indicators that the value of the Partnership's rental properties or investments in unconsolidated subsidiaries 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. The Partnership has not recognized an impairment loss since 1995.

Accounting Estimates: The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 values for acquired properties are amortized 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financing and Leasing Fees: Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

Income Taxes: The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes has been recorded.

Cash Equivalents: The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

Segment Reporting: Operating segments are revenue-producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as one segment.

Comprehensive Income: Comprehensive income is defined as changes in partners' equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2010, 2009, or 2008 other than net income as reported.

Income Per Unit: Net income per unit has been calculated based upon the weighted average number of units outstanding during each period presented. The Partnership has no dilutive units and, therefore, basic net income is the same as diluted net income per unit (see Note 7).

Concentration of Credit Risks and Financial Instruments: The Partnership's properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership's revenues in 2010, 2009, or 2008. The Partnership makes its temporary cash investments with high-credit-quality financial institutions. At December 31, 2010, substantially all of the Partnership's cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.05% to 1.0%. At December 31, 2010 and December 31, 2009, respectively approximately $4,349,000, and $4,026,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

Advertising Expense: Advertising is expensed as incurred. Advertising expense was $70,074, $78,829 and $102,068 in 2010, 2009 and 2008, respectively.

Discontinued Operations and 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. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

carrying amount 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.

Interest Capitalized: The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the years ended December 31, 2010, 2009 and 2008 there was no capitalized interest.

Extinguishment of Debt: When existing mortgages are refinanced with the same lender and it is determined that the refinancing is substantially different then they are recorded as an extinguishment of debt. However if it is determined that the refinancing is substantially the same then they are recorded as an exchange of debt. All refinancings qualify as extinguishment of debt.

Reclassifications: Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

Subsequent Events: The Partnership has evaluated subsequent events through March 4, 2011, the date the financial statements were issued.

NOTE 2. RENTAL PROPERTIES

As of December 31, 2010, the Partnership and its Subsidiary Partnerships owned 2,269 residential apartment units in 20 residential and mixed-use complexes (collectively, the "Apartment Complexes"). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the "Condominium Units"). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of December 31, 2010, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the "Commercial Properties."

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the "Investment Properties") at December 31, 2010 with a total of 799 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 2. RENTAL PROPERTIES (Continued)

Rental properties consist of the following:

	December 31, 2010			December 31, 2009

Land, improvements and parking lots	$	26,185,007		$	26,072,100		15–40 years
Buildings and improvements		111,272,595			111,016,179		15–40 years
Kitchen cabinets		4,024,726			3,977,528		5–10 years
Carpets		3,504,983			3,506,481		5–10 years
Air conditioning		879,893			882,354		7–10 years
Laundry equipment		348,966			367,209		5–7 years
Elevators		1,181,145			984,506		20 years
Swimming pools		155,442			157,489		10 years
Equipment		2,075,427			2,087,287		5–7 years
Motor vehicles		107,792			142,520		5 years
Fences		33,970			51,882		5–10 years
Furniture and fixtures		949,763			1,063,897		5–7 years
Smoke alarms		98,939			102,123		5–7 years

Total fixed assets		150,818,648			150,411,555
Less: Accumulated depreciation		(58,074,391	)		(54,439,618	)

	$	92,744,257		$	95,971,937

Real estate and accumulated depreciation as of December 31, 2010 is:

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)		Gross Amount at Which Carried at Close of Period

	Encumbrances (First Mortgages)		Land		Building Improvements		Improvements		Land		Building Improvements		Totals		Accumulated Depreciation(3)		Date Acquired
Avon Street Apartments L.P. Residential Apartments Malden, Massachusetts	$	2,550,000	$	62,700	$	837,318	$	790,394	$	62,700	$	1,627,712	$	1,690,412	$	1,097,395		Sept. 1977
Boylston Downtown L.P. Residential Apartments Boston, Massachusetts	$	19,500,000	$	2,112,000	$	8,593,111	$	6,866,829	$	2,112,000	$	15,459,940	$	17,571,940	$	8,133,823		July 1995
Brookside Associates LLC Residential Apartments Woburn, Massachusetts	$	2,795,595	$	684,000	$	3,116,000	$	560,083	$	684,000	$	3,676,083	$	4,360,083	$	1,441,124		Oct. 2000
Courtyard @ Westgate Residential Units Burlington, Massachusetts	$	2,000,000	$	44,965	$	4,478,687	$	252,954	$	44,965	$	4,731,641	$	4,776,606	$	1,117,698		Sept. 2004
Clovelly Apartments L.P. Residential Apartments Nashua, New Hampshire	$	4,160,000	$	177,610	$	1,478,359	$	1,014,009	$	177,610	$	2,492,368	$	2,669,978	$	1,863,343		Sept. 1977
Commonwealth 1137 L.P. Residential Apartments Boston, Massachusetts	$	3,750,000	$	342,000	$	1,367,669	$	837,667	$	342,000	$	2,205,336	$	2,547,336	$	1,080,693		July 1995
Commonwealth 1144 L.P. Residential Apartments Boston, Massachusetts	$	14,780,000	$	1,410,000	$	5,664,816	$	1,487,753	$	1,410,000	$	7,152,569	$	8,562,569	$	3,882,517		July 1995

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 2. RENTAL PROPERTIES (Continued)

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)			Gross Amount at Which Carried at Close of Period

	Encumbrances (First Mortgages)		Land		Building Improvements		Improvements			Land		Building Improvements		Totals		Accumulated Depreciation(3)		Date Acquired
Condominium Units—Riverside Residential Units Massachusetts	$	—	$	23,346	$	190,807	$	39,516		$	23,346	$	230,323	$	253,669	$	217,452		Sept. 1977
Executive Apartments L.P. Residential Apartments Framingham, Massachusetts	$	2,415,000	$	91,400	$	740,360	$	973,384		$	91,400	$	1,713,744	$	1,805,144	$	1,234,346		Sept. 1977
Hamilton Cypress LLC Commercial—1031 Exchange Brookline, Massachusetts	$	3,849,232	$	2,362,596	$	4,613,985	$	797		$	2,362,596	$	4,614,782	$	6,977,378	$	368,025		Oct. 2008
Hamilton Linewt LLC Commercial—1031 Exchange Newton, Massachusetts	$	1,604,089	$	884,042	$	2,652,127	$	42,820		$	884,042	$	2,694,947	$	3,578,989	$	215,480		Nov. 2007
Hamilton Oaks Associates LLC Residential Apartments Brockton, Massachusetts	$	11,925,000	$	2,175,000	$	12,325,000	$	1,713,809		$	2,175,000	$	14,038,809	$	16,213,809	$	6,474,182		Dec. 1999
Highland Street Apartments, L.P. Residential Apartments Lowell, Massachusetts	$	1,050,000	$	156,000	$	634,085	$	388,947		$	156,000	$	1,023,032	$	1,179,032	$	497,633		Dec. 1996
Linhart L.P. Residential/Commercial Newton, Massachusetts	$	2,000,000	$	385,000	$	1,540,000	$	1,154,587		$	385,000	$	2,694,587	$	3,079,587	$	1,631,036		Jan. 1995
Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts	$	2,000,000	$	79,650	$	284,548	$	766,306		$	79,650	$	1,050,854	$	1,130,504	$	727,563		Sept. 1977
NERA Dean St. Associates LLC Residential Apartments Norwood, Massachusetts	$	5,399,435	$	1,512,000	$	5,701,480	$	455,221		$	1,512,000	$	6,156,701	$	7,668,701	$	2,084,183		Jun. 2002
North Beacon 140 L.P. Residential Units Boston, Massachusetts	$	6,937,000	$	936,000	$	3,762,013	$	1,476,104		$	936,000	$	5,238,117	$	6,174,117	$	2,831,330		July 1995
Olde English Apartments L.P. Residential Apartments Lowell, Massachusetts	$	3,080,000	$	46,181	$	878,323	$	809,399		$	46,181	$	1,687,722	$	1,733,903	$	1,269,091		Sept. 1977
River Drive L.P. Residential Apartments Danvers, Massachusetts	$	3,465,000	$	72,525	$	587,777	$	1,377,282		$	72,525	$	1,965,059	$	2,037,584	$	1,496,135		Sept. 1977
Redwood Hills L.P. Residential Units Worcester, Massachusetts	$	6,743,000	$	1,200,000	$	4,810,604	$	2,113,197		$	1,200,000	$	6,923,801	$	8,123,801	$	3,667,556		July 1995
School St Assoc LLC Residential Apartments Framingham, Massachusetts	$	15,883,496	$	4,686,728	$	18,746,911	$	(1,749,320	)	$	4,686,728	$	16,997,591	$	21,684,319	$	5,084,138		Apr. 2003
Staples Plaza Strip Mall Framingham, Massachusetts	$	6,000,000	$	3,280,000	$	4,920,000	$	25,252		$	3,280,000	$	4,945,252	$	8,225,252	$	1,904,126		May 1999

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 2. RENTAL PROPERTIES (Continued)

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)		Gross Amount at Which Carried at Close of Period

	Encumbrances (First Mortgages)		Land		Building Improvements		Improvements		Land		Building Improvements		Totals		Accumulated Depreciation(3)		Date Acquired
WCB Associates LLC Residential Apartments Brockton, Massachusetts	$	7,000,000	$	1,335,000	$	7,565,501	$	1,354,593	$	1,335,000	$	8,920,094	$	10,255,094	$	4,212,197		Dec. 1999
Westgate Apartments LLC Residential Apartments Woburn, Massachusetts	$	8,793,813	$	461,300	$	2,424,636	$	5,677,096	$	417,107	$	8,101,732	$	8,518,839	$	5,543,326		Sept. 1977

	$	137,680,660	$	24,520,043	$	97,914,116	$	28,428,679	$	24,475,851	$	126,342,795	$	150,818,646	$	58,074,392

(1): The initial cost to the Partnerships represents both the balance of mortgages assumed in September 1977, including subsequent adjustments to such amounts, and subsequent acquisitions at cost.
(2): Net of retirements
(3): In 2009, rental properties were depreciated over the following estimated useful lives:

Assets		Life

Buildings and Improvements			15–40 years
Other Categories of Assets			5–20 years

A reconciliation of rental properties and accumulated depreciation is as follows:

			December 31,

			2010		2009		2008
Rental Properties
	Balance, Beginning		$	150,411,555	$	150,344,799	$	148,294,233
	Additions:
		Buildings, improvements and other assets		2,268,039		3,136,296		10,074,551

				152,679,594		153,481,095		158,368,784
Deduct:
	Write-off of retired or disposed assets			1,860,946		3,016,297		4,429,287
	Rental properties held for sale and/or sold			—		53,243		3,594,698

	Balance, Ending		$	150,818,648	$	150,411,555	$	150,344,799

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 2. RENTAL PROPERTIES (Continued)

			December 31,

			2010		2009		2008
Accumulated Depreciation
	Balance, Beginning		$	54,439,618	$	51,784,346	$	51,118,331
	Add:
		Depreciation for the year		5,495,719		5,711,778		6,230,720

				59,935,337		57,496,124		57,349,051
Deduct:
	Accumulated depreciation of retired or disposed assets			1,860,946		3,016,297		4,429,235
	Accumulated depreciation of rental properties held for sale and/or sold			—		40,209		1,135,470

	Balance, Ending		$	58,074,391	$	54,439,618	$	51,784,346

On January 3, 2008, the Partnership sold the Oak Ridge Apartments, a 61-unit residential apartment complex located in Foxboro, Massachusetts. The sale price was $7,150,000, which resulted in a gain of approximately $6,000,000. In November 2007, the Partnership purchased a fully occupied commercial building located in Newton, Massachusetts, known as Linewt LLC. The purchase price was $3,475,000 and the building consists of 5,850 square feet of commercial space. The Partnership utilized Section 1031 of the IRS code to affect a tax free exchange on the gain of Oak Ridge up to the purchase price of the Newton property. In accordance with Section 1031, the Newton property was owned by a Qualified Intermediary for the period from the purchase date of the Newton property and the sale date of the Foxboro property. The Qualified Intermediary borrowed $3,225,112 from Harold Brown, Treasurer of the General Partner, to purchase the Newton property. This loan was paid in full, with interest at 6% of $34,401, from the proceeds of the Oak Ridge sale on January 3, 2008. On January 22, 2008, the Partnership financed the Newton property with a first mortgage of $1,700,000 at 5.75% interest only until maturity in January 2018.

In April 2008, the Partnership sold the Coach Apartments, a 48-unit residential apartment complex located in Acton, Massachusetts. The sale price was $4,600,000, which resulted in a gain of approximately $3,800,000 and recorded in the second quarter of 2008. In October 2008, the Partnership purchased a fully occupied medical office building located in Brookline, Massachusetts, referred to as "the Barn." The purchase price of the Barn was $7,000,000 and it consists 20,000 square feet of commercial space. The Partnership utilized Section 1031 of the IRS code to affect a tax free exchange on the gain of Coach up to the purchase price of the Barn. This acquisition was funded from the assumption of the existing mortgage of approximately $4,000,000, the cash from the sale of Coach of approximately $2,600,000, and the balance of $400,000 was funded from cash reserves.

As more fully described in Note 3, the Partnership sold the five condominiums located in Brookline, Massachusetts in 2008. The net proceeds from the sale of the five units were approximately $740,000 which resulted in a gain of approximately $240,000, which is included in gain from the sale of rental properties in 2008.

On March 1, 2011, the Partnership entered into a purchase and sale agreement to sell the Avon Street Apartments. For additional information, see Item 9B.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership's properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of rental revenue and laundry income on the majority of the Partnership's properties and 3% on Linewt. Total fees paid were approximately $1,367,000, $1,339,000 and $1,327,000 in 2010, 2009, and 2008, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. In 2010, 2009 and 2008, approximately $705,000 and $788,000, and $582,000 was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2010 expenses referred to above, approximately $342,000 consisted of repairs and maintenance and $331,000 of administrative expense. Approximately $32,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2010, the Hamilton Company received approximately $640,000 from the Investment Properties of which approximately $522,000 was the management fee, approximately $9,000 was for construction supervision and architectural fees, approximately $81,000 was for maintenance services and approximately $28,000 was for administrative services. The management fee is equal to 4% of rental income on the majority of investment properties and 2% on Dexter Park.

On January 1, 2004, all employees were transferred to the Management Company's payroll. The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $2,599,000, $2,539,000 and $2,270,000 for the years ended December 31, 2010, 2009 and 2008, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. There were no employer contributions in 2010, 2009 or 2008.

Prior to 1991, the Partnership employed an outside, unaffiliated company to perform its bookkeeping and accounting functions. Since that time, such services have been provided by the Management Company's accounting staff, which consists of approximately 14 people. During the year ended December 31, 2010, the Management Company charged the Partnership $125,000 for bookkeeping and accounting services included in administrative expenses of $247,000 previously discussed.

In 1996, prior to becoming an employee of the Management Company, the President of the Management Company performed asset management consulting services for the Partnership. This individual continues to perform this service and receives an asset management fee from the Partnership. During the year ended December 31, 2010, this individual received $93,750 which includes a bonus of $25,000, a quarterly fee of $12,500 for the first quarter of 2010, and quarterly fees of $18,750 in the second quarter, third quarter, and fourth quarter of 2010. Going forward, the quarterly fee payable to this individual will be $18,750.

The Partnership has invested in nine limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has between a 40% and 50% ownership interest in each investment. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown's ownership interest is between 43.2% and 60%. See Note 14 for a description of the properties and their operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 3. RELATED PARTY TRANSACTIONS (Continued)

See Note 8 for information regarding the repurchase of Class B and General Partnership Units.

In 2008, the Partnership borrowed a total of approximately $8,510,000 from Harold Brown. Approximately $5,285,000 was used to repurchase depositary receipts and approximately $3,225,000 was used to facilitate the purchase of Linewt. These loans were repaid in 2008 with interest of approximately $72,300.

On October 28, 2009, the Partnership borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan is four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. The partnership may also prepay the note without penalty. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. The balance of the loan, $4,668,600, will remain subject to the original terms of the Note, including HBC's right to demand payment of the balance of the loan in whole or in part upon six months notice. The interest paid during the years ended December 31, 2010 and 2009 was approximately $415,000 and $78,000 respectively. This loan is collateralized by the Partnership's 99% ownership interest in 62 Boylston Street.

NOTE 4. OTHER ASSETS

Approximately $1,729,000and $1,499,000 of security deposits and prepaid rent deposits are included in prepaid expenses and other assets at December 31, 2010 and December 31, 2009, respectively.

Included in prepaid expenses and other assets at December 31, 2010 and December 31, 2009 is approximately $896,000 and $829,000, respectively, held in escrow to fund future capital improvements. The security deposits and escrow accounts are restricted cash.

Financing and leasing fees of approximately $947,000 and $1,066,000 are net of accumulated amortization of approximately $541,000 and $450,000 at December 31, 2010 and December 31, 2009, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 5. MORTGAGE NOTES PAYABLE

At December 31, 2010 and December 31, 2009, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At December 31, 2010, the fixed interest rates on these loans ranged from 4.84% to 7.07%, payable in monthly installments aggregating approximately $726,000, including principal, to various dates through 2023. The majority of the mortgages are subject to prepayment penalties. At December 31, 2010, the weighted average interest rate on the above mortgages was 5.55%. The effective rate of 5.64% includes the amortization expense of deferred financing costs. See Note 12 for fair value information.

The Partnerships have pledged tenant leases as additional collateral for certain of these loans.

Approximate annual maturities at December 31, 2010 are as follows:


2011—current maturities	$	942,000
2012		1,033,000
2013		43,745,000
2014		14,588,000
2015		2,096,000
Thereafter		75,276,000

	$	137,680,000

In January 2008, the Partnership obtained a $1,700,000 mortgage on an unencumbered commercial property in Newton, Massachusetts known as Linewt LLC. The mortgage which matures in January 2018 requires interest only payments at 5.75% for the term of the mortgage.

In February 2008, the Partnership refinanced ten properties with outstanding 8.44% mortgages of approximately $37,800,000 with new mortgages totaling $58,000,000. The new mortgages which mature in February 2023 require interest only payments at interest rates from 5.6% to 5.7%. Deferred costs associated with these mortgages totaled approximately $710,000 and, accordingly, the effective interest rates are 5.7% to 5.8%. Prepayment penalties of approximately $3,700,000 were incurred in these transactions. After payment of existing mortgages, prepayment penalties and other costs of the transactions, approximately $16,000,000 was received by the Partnership.

In June 2008, the Partnership refinanced the Westside Colonial Apartments with a balance of approximately $4,600,000 maturing in 2008 with interest at a rate of 6.52% with $7,000,000 at 5.66% interest only mortgage maturing in June 2023. Deferred financing costs associated with this mortgage totaled approximately $62,000 and accordingly the effective interest rate is 5.8%. Closing costs were approximately $100,000. There were no prepayment penalties. After payment of the existing mortgage and closing costs, approximately $2,377,000 was received by the Partnership.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 5. MORTGAGE NOTES PAYABLE (Continued)

In December 2009, the Partnership refinanced Linhart, LLP, located in Newton, Massachusetts. The new loan is $2,000,000, with a rate of 3.75% over the Libor rate or 4.25% whichever is greater and matures five years from the date of closing. The interest rate as of December 31, 2009 was 4.25%. The loan agreement calls for interest only payments for twenty four months and principal and interest payments for the remainder of the five year period based on a thirty year amortization. The loan proceeds were used to pay off the prior loan of approximately $1,700,000, and closing costs of approximately $38,000.

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Partnership's residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At December 31, 2010, amounts received for prepaid rents of approximately $1,319,000 are included in cash and cash equivalents, and security deposits of approximately $1,729, 000 are included in other assets and are restricted cash.

NOTE 7. PARTNERS' CAPITAL

The Partnership has two classes of Limited Partners (Class A and B) and one category of General Partner. Under the terms of the Partnership Agreement, distributions to holders of Class B Units and General Partnership Units must represent 19% and 1%, respectively, of the total units outstanding. All classes have equal profit sharing and distribution rights, in proportion to their ownership interests.

In 2010, 2009 and 2008 the Partnership paid quarterly distributions of $7.00 per unit ($0.70 per receipt) in March, June, September, and December for a total distribution of $28.00 per unit ($2.80 per receipt) each year.

The Partnership has entered into a deposit agreement with an agent to facilitate public trading of limited partners' interests in Class A Units. Under the terms of this agreement, the holders of Class A Units have the right to exchange each Class A Unit for 10 Depositary Receipts. The following is information per Depositary Receipt:

	Year Ended December 31,

	2010			2009
Income (loss) per Depositary Receipt before Discontinued Operations	$	(1.03	)	$	1.21
Income from Discontinued Operations		—			—

Net Income (loss) per Depositary Receipt after Discontinued Operations	$	(1.03	)	$	1.21

Distributions per Depositary Receipt	$	2.80		$	2.80

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 8. TREASURY UNITS

Treasury Units at December 31, 2010 are as follows:


Class A			38,993
Class B			9,260
General Partnership			488

			48,741

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 8. TREASURY UNITS (Continued)

On January 18, 2008, 113,518 Depositary Receipts included above became available to purchase at a price of $75.50 per receipt. In order for the Partnership to take advantage of this opportunity, the Partnership borrowed $5,285,000 from Harold Brown, the Treasurer of the General Partner. This loan was paid in full, with interest at 6% of $37,899, on February 29, 2008.

During the year ended December 31, 2010, the Partnership purchased 6,896 receipts for $432,920, 164 Class B Units for $102,591 and 9 General Partnership units for $5,400.

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Partnerships are involved in various ordinary routine litigation incidental to their business. The Partnership either has insurance coverage or provides for any uninsured claims when appropriate. The Partnerships are not involved in any material pending legal proceedings.

NOTE 10. RENTAL INCOME

During the year ended December 31, 2010, approximately 90% of rental income was related to residential apartments and condominium units with leases of one year or less. Approximately 10% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at December 31, 2010 as follows:

	Commercial Property Leases

2011	$	2,859,000
2012		2,276,000
2013		1,843,000
2014		1,493,000
2015		1,085,000
Thereafter		951,000

	$	10,507,000

The aggregate minimum future rental income does not include contingent rentals that may be received under various leases in connection with percentage rents, common area charges and real estate taxes. Aggregate contingent rentals from continuing operations were approximately $653,000, $583,000 and $477,000 for the years ended December 31, 2010, 2009 and 2008 respectively.

Rents receivable are net of an allowance for doubtful accounts of approximately $483,000, $476,000 and $460,000 at December 31, 2010, 2009 and 2008 respectively. Included in rents receivable at December 31, 2010 is approximately $332,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases with Staples and Trader Joe's at Staples Plaza in Framingham, Massachusetts.

Rents receivable also includes approximately $157,000 representing the straight-line of rental concession primarily related to the residential properties in the latter half of 2010.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 10. RENTAL INCOME (Continued)

In 2010, rent at the commercial properties includes approximately $11,000 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

NOTE 11. CASH FLOW INFORMATION

During the years ended December 31, 2010, 2009 and 2008, cash paid for interest was approximately $8,182,000, $7,941,000 and $7,755,000 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At December 31, 2010 and 2009, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

At December 31, 2010 and 2009 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

At December 31, 2010 and 2009, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at December 31, 2010 and 2009, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

The following methods and assumptions were used by the Partnership in estimating the fair value of its financial instruments:

•: For cash and cash equivalents, other assets, investment in partnerships, accounts payable, advance rents and security deposits: fair value approximates the carrying value of such assets and liabilities.
•: For mortgage notes payable: fair value is generally based on estimated future cash flows, which are discounted using the quoted market rate from an independent source for similar obligations. Refer to the table below for the carrying amount and estimated fair value of such instruments.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 12. FAIR VALUE MEASUREMENTS (Continued)

The following table reflects the carrying amounts and estimated fair value of our debt.

	Carrying Amount		Estimated Fair Value

Mortgage Notes Payable
Partnership Properties
At December 31, 2010	$	137,680,660	$	142,896,706
At December 31, 2009	$	137,641,354	$	139,997,718
Investment Properties
At December 31, 2010	$	140,889,224	$	144,247,509

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2010 and December 31, 2009. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2010 and current estimates of fair value may differ significantly from the amounts presented herein.

NOTE 13. TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership and includable in its partners' tax returns is different than financial statement income because of a tax free exchanges, accelerated depreciation, different tax lives, and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Taxable loss was approximately $450,000 greater than statement loss for the year ended December 31, 2010 and taxable income was approximately $300,000 greater than statement income for the year ended December 31, 2009. The cumulative tax basis of the Partnership's real estate at December 31, 2010 is approximately $5,300,000 than the statement basis. The primary reason for the lower tax basis is the acquisition of Linewt and Cypress Street utilizing tax free exchanges in 2008. The Partnership's tax basis in its joint venture investments is approximately $1,500,000 greater than statement basis. The tax free exchanges and mortgage prepayment penalties in 2008 generated substantial tax deductions in 2008, accordingly taxable income in future years may exceed statement income. Accelerated tax deductions allowable under the 2010 tax act will also be allowed in 2011. These accelerated deductions will result in reduced tax depreciation expense in future years.

Certain entities included in the Partnership's consolidated financial statements are subject to certain state taxes. These taxes are not significant and are recorded as operating expenses in the accompanying consolidates financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. TAXABLE INCOME AND TAX BASIS (Continued)

The following reconciles GAAP net income to taxable income:

	For the year ended December 31,

	2010			2009			2008
	(in thousands)
GAAP net income (loss)	$	(1,359	)	$	1,613		$	6,582
Book/Tax differences from depreciation and amortization		(643	)		(477	)		(431	)
Book/Tax differences on tax free exchanges		—			—			(6,808	)
Book/Tax differences from Investment Properties		403			646			(75	)
Increase (Decrease) in prepaid rent and allowances		(204	)		153			(135	)
Other		—			(9	)		(81	)

Taxable income (loss)	$	(1,803	)	$	1,926		$	(948	)

The Partnership adopted the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes. As a result of the implementation of the guidance, the Partnership recognized no material adjustments regarding its tax accounting treatment. The Partnership expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expense.

In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of December 31, 2010, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2003 forward.

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Since November 2001, the Partnership has invested in nine limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three partnerships investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown's ownership interest is between 43.2% and 60%, with the balance owned by the others. A description of each investment is as follows:

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

balance of the loan, $4,668,600, will remain subject to the original terms of the Note, including HBC's right to demand payment of the balance of the loan in whole or in part upon six months notice. The interest paid during the years ended December 31, 2010 and 2009 was approximately $415,000 and $78,000, respectively. This loan is collateralized by the Partnership's 99% ownership interest in 62 Boylston Street. A majority of the apartments were leased at the time of the acquisition. As a result, the Partnership is amortizing the intangible assets associated with the "in place" leases over a 12 month period which began in November 2009. The total monthly amortization is approximately $407,000 which at 40% reduces the Partnership's income by approximately $163,000 per month. For the year ended December 31, 2010 the total amortization in connection with these leases is approximately $4,073,000, of which the Partnership's share is approximately $1,629,000. The intangible asset is fully amortized effective November 2010 which will result in lower amortization expense. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership plans to sell the majority of units as condominium and retain 48 units for long-term investment. Gains from the sales of units will be taxed at ordinary income rates (approximately $47,000 per unit). In February 2007, the Partnership refinanced the 48 units which will be retained with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. This investment is referred to as Hamilton Bay Apartments, LLC. The loan will be amortized over 30 years thereafter and matures in March 2017. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matures in 2013. As of February 1, 2011, 105 units have been sold, the proceeds of which went to pay down the mortgage on the property. The balance on the new mortgage is approximately $1,668,000 at December 31, 2010. This investment is referred to as Hamilton Bay, LLC.

On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 49 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage on Hamilton Essex 81, LLC is $8,600,000 with interest only at 5.79% due in August 2015. The mortgage on Essex Development, LLC, or the parking lot is $2,162,000 with a variable interest rate of 2.25% over the daily Libor rate (0.26% at December 31, 2010) and is due in August 2011. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10-year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. This investment is referred to as Hamilton Minuteman, LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. As of May 2008, the Partnership sold 137 units as condominiums. Gains from these sales were taxed as ordinary income (approximately $50,000 per unit). The majority of the sales proceeds were applied to reduce the mortgage with the final payment made during the second quarter of 2007. With the sale of the units and the payments of the liabilities, the assets were combined with Hamilton on Main Apartments, LLC. An entity partially owned by the majority shareholder of the General Partner and the President of the management company, 31% and 5%, respectively, was the sales agent and received a variable commission on each sale of 3% to 5%. Hamilton on Main, LLC is known as Hamilton Place.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. This property has a 12-year mortgage, with a remaining balance at December 31, 2010 of approximately $7,177,000 at 6.9% which is amortized on a 30-year schedule, with a final payment of approximately $6,000,000 in 2014. This investment is referred to as 345 Franklin, LLC.

As required by the lender, the Treasurer of the General Partner has provided a limited repayment guaranty equal to fifty percent (50%) of the outstanding balance for the loan on the for sale units at Hamilton Bay and a limited guaranty of $1,000,000 for the loan on Hamilton Essex Development. In the event that he is obligated to make payments to the lenders as a result of these guaranties, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Summary financial information for the year ended December 31, 2010



ASSETS
Rental Properties		9,827,917	2,595,266	8,648,591	6,078,526	2,006,989	7,569,060	7,582,687	22,822,785	118,468,247	185,600,068
Cash & Cash Equivalents		2,833	29,596	25,617	736	48,053	57,956	51,637	19,325	754,066	989,818
Rent Receivable		24,062	—	8,887	10,088	2,224	2,295	683	10,686	125,475	184,400
Real Estate Tax Escrow		85,348	—	18,649	58,089	—	82,370	34,331	98,036	484,566	861,390
Prepaid Expenses & Other Assets		49,518	480	50,720	76,810	209,610	94,181	43,655	418,289	1,089,897	2,033,161
Financing & Leasing Fees		96,105	4,175	24,496	29,698	11,634	38,966	23,887	28,304	518,395	775,660

	Total Assets	10,085,783	2,629,517	8,776,960	6,253,948	2,278,510	7,844,829	7,736,879	23,397,425	121,440,647	190,444,498

LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,566,871	2,162,000	7,176,827	5,000,000	1,668,000	4,750,000	5,500,000	16,151,526	89,914,000	140,889,224
Accounts Payable & Accrued Expense		33,190	6,239	36,027	43,541	6,346	5,693	65,588	206,997	787,584	1,191,205
Advance Rental Pmts & Security Dep		132,044	—	129,188	63,965	20,044	80,772	61,762	226,689	1,684,843	2,399,308

	Total Liabilities	8,732,105	2,168,239	7,342,042	5,107,506	1,694,390	4,836,465	5,627,350	16,585,212	92,386,428	144,479,737

Partners' Capital		1,353,679	461,278	1,434,918	1,146,442	584,119	3,008,364	2,109,529	6,812,213	29,054,219	45,964,761

Total Liabilities & Capital		10,085,783	2,629,517	8,776,960	6,253,948	2,278,510	7,844,829	7,736,879	23,397,425	121,440,647	190,444,498

Partners' Capital—NERA 50%		676,839	230,639	717,459	573,221	292,060	1,504,182	1,054,765	3,406,107	—	8,455,271

NERA 40%										11,621,688	11,621,688

											20,076,959

Total units/ condominiums
	Apartments	48	—	40	175	120	48	42	148	409	1,030
	Commercial	1	1	—	1	—	—	—	—	—	3

Total		49	1	40	176	120	48	42	148	409	1,033
Units to be retained		49	1	40	49	—	48	42	148	409	786

Units to be sold		—	—	—	127	120	—	—	—	—	247

Units sold through January 25, 2010		—	—	—	127	105	—	—	—	409	641

Unsold units		—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of February 1, 2011		—	—	—	—	0	—	—	—	—	—

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Year ended December 31, 2010



Revenues
	Rental Income	1,122,915		275,950		1,097,957		794,993		221,191		839,361		765,509		2,455,222		11,019,862		18,592,960
	Laundry and Sundry Income	16,184		—		2,436		—		—		—		762		19,780		97,902		137,063

		1,139,099		275,950		1,100,393		794,993		221,191		839,361		766,271		2,475,002		11,117,764		18,730,023

Expenses
	Administrative	13,709				30,904		13,038		7,073		17,324		10,288		39,289		148,097		279,724
	Depreciation and Amortization	425,450		6,254		439,666		269,475		98,678		359,727		320,553		981,881		9,428,284		12,329,966
	Management Fees	46,734		11,040		45,559		31,795		9,245		33,345		31,563		97,239		244,178		550,698
	Operating	134,016				62,994		1,777				411		63,841		358,827		960,328		1,582,193
	Renting	24,785		—		49,517		8,576		375		6,213		3,770		15,361		281,545		390,142
	Repairs and Maintenance	134,941		—		80,190		376,560		76,510		344,852		99,553		342,310		859,088		2,314,005
	Taxes and Insurance	179,939		46,658		98,151		127,637		42,465		132,188		96,213		318,150		1,451,017		2,492,417

		959,574		63,952		806,981		828,857		234,346		894,061		625,780		2,153,057		13,372,537		19,939,145

Income Before Other Income		179,525		211,998		293,412		(33,864	)	(13,155	)	(54,700	)	140,491		321,945		(2,254,773	)	(1,209,122	)

Other Income (Loss)
	Interest Expense	(507,425	)	(62,694	)	(504,667	)	(289,042	)	(97,909	)	(271,389	)	(317,360	)	(860,500	)	(5,116,598	)	(8,027,583	)
	Interest Income	3		2		47		90		569		2		1,780		8		5		2,505
	Interest Income from Note	—		—		—		—		11,445		—		—		—		—		11,445
	Gain on Sale of Real Estate	—		—		—		—						—		—		—
	Other Income (Expenses)	—		—		—		—		11,021		9,478		—		2,168		(17,720	)	4,947

		(507,422	)	(62,692	)	(504,619	)	(288,952	)	(74,874	)	(261,909	)	(315,581	)	(858,323	)	(5,134,313	)	(8,008,686	)

Net Income (loss)		(327,897	)	149,305		(211,208	)	(322,816	)	(88,029	)	(316,608	)	(175,090	)	(536,379	)	(7,389,086	)	(9,217,808	)

Net Income (loss)—NERA 50%		(163,948	)	74,653		(105,604	)	(161,408	)	(44,015	)	(158,304	)	(87,545	)	(268,189	)	—		(914,361	)

NERA 40%																		(2,955,635	)	(2,955,635	)

																				(3,869,995	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Future annual mortgage maturities at December 31, 2010 are as follows:

	Hamilton Essex 81		Hamilton Essex Development		Franklin Street		1025 Hamilton		Hamilton Bay		Hamilton Bay Apts		Hamilton Minuteman		Hamilton Place		Hamilton Park Towers

Period End	March 2005		March 2005		November 2001		March 2005		October 2005		October 2005		August 2004		August 2004		October 2009		Total
December 31, 2011		111,951		2,162,000		157,708		4,513								261,897		194,705		2,892,774
December 31, 2012		118,608				168,941		60,747				52,396		66,528		278,413		1,206,869		1,952,502
December 31, 2013		125,660				6,850,178		65,157		1,668,000		66,163		71,363		293,392		1,275,835		10,415,748
December 31, 2014		133,132						69,003				69,944		75,575		309,178		1,348,741		2,005,573
December 31, 2015		8,077,520						73,077				73,941		80,036		15,008,646		1,425,814		24,739,034
Thereafter								4,727,503				4,487,556		5,206,498				84,462,036		98,883,593

		8,566,871		2,162,000		7,176,827		5,000,000		1,668,000		4,750,000		5,500,000		16,151,526		89,914,000		140,889,224

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Summary financial information for the year ended December 31, 2009



ASSETS
Rental Properties		10,212,642	2,576,552	9,040,679	6,332,291	2,093,861	7,919,853	7,855,176	23,769,324	123,702,389	193,502,767
Cash & Cash Equivalents		17,655	21,217	14,685	20,740	11,113	12,803	38,601	138,342	985,842	1,260,998
Rent Receivable		25,059	—		9,224	1,747	632	860	5,517	82,950	125,989
Real Estate Tax Escrow		62,514	—	18,454	35,288	—	70,180	44,939	97,584	338,390	667,349
Due From Investment Properties		—	—	—	—	—	—	—	—	—	—
Prepaid Expenses & Other Assets		73,086	498	79,872	80,528	270,224	62,699	66,049	329,472	5,081,245	6,043,672
Financing & Leasing Fees		119,298	10,429	32,661	34,724	16,699	45,328	27,856	35,165	572,795	894,955

	Total Assets	10,510,254	2,608,696	9,186,351	6,512,795	2,393,644	8,111,495	8,033,480	24,375,403	130,763,610	202,495,730

LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,600,000	2,162,000	7,324,049	5,000,000	1,668,000	4,750,000	5,500,000	16,402,353	89,914,000	141,320,402
Due to Investment Properties		—	—	—	—	—	—	—	—	—	—
Accounts Payable & Accrued Expense		47,581	10,415	69,064	45,925	19,108	6,726	74,835	236,076	753,668	1,263,399
Advance Rental Pmts & Security Dep		132,405	—	127,113	64,612	17,386	79,797	54,026	226,381	1,577,637	2,279,358

	Total Liabilities	8,779,986	2,172,415	7,520,226	5,110,537	1,704,494	4,836,523	5,628,861	16,864,810	92,245,305	144,863,159

Partners' Capital		1,730,268	436,281	1,666,125	1,402,258	689,150	3,274,972	2,404,619	7,510,593	38,518,305	57,632,571

Total Liabilities & Capital		10,510,254	2,608,696	9,186,351	6,512,795	2,393,644	8,111,495	8,033,480	24,375,403	130,763,610	202,495,730

Partners' Capital—NERA 50%		865,134	218,140	833,063	701,129	344,575	1,637,486	1,202,309	3,755,297	—	9,557,133

NERA 40%										15,407,322	15,407,322

											24,964,455

Total units/ condominiums
	Apartments	48	—	40	175	120	48	42	148	409	1,030
	Commercial	1	1	—	1	—	—	—	—	—	3

Total		49	1	40	176	120	48	42	148	409	1,033
Units to be retained		49	1	40	49	—	48	42	148	409	786

Units to be sold		—	—	—	127	120	—	—	—	—	247

Units sold through January 25, 2010		—	—	—	127	105	—	—	—	409	641

Unsold units		—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of January 25, 2010		—	—	—	—	0	—	—	—	—	—

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Year ended December 31, 2009



Revenues
	Rental Income	1,134,884		280,104		1,082,077		793,714		227,568		810,958		757,707		2,415,312		1,912,267		9,414,590
	Laundry and Sundry Income	8,036		—		1,785		—		—		—		567		21,818		15,846		48,052

		1,142,920		280,104		1,083,862		793,714		227,568		810,958		758,275		2,437,130		1,928,113		9,462,642

Expenses
	Administrative	16,822		15,445		26,372		23,363		10,182		15,722		8,889		37,605		122,516		276,917
	Depreciation and Amortization	427,173		5,046		428,975		312,679		106,626		393,421		457,624		1,499,119		1,690,998		5,321,660
	Management Fees	45,914		11,183		43,832		31,443		8,959		31,961		29,566		99,298		54,257		356,412
	Operating	127,210		—		60,067		3,870		604		3,987		75,303		351,567		173,464		796,073
	Renting	32,766		—		49,469		7,153		869		2,037		4,230		14,104		13,458		124,085
	Repairs and Maintenance	106,835		4,430		97,170		264,235		57,586		255,744		78,526		309,454		81,615		1,255,595
	Taxes and Insurance	142,235		66,638		81,055		131,072		44,410		138,582		102,373		302,142		192,386		1,200,893

		898,955		102,742		786,940		773,815		229,235		841,454		756,510		2,613,290		2,328,694		9,331,635

Income Before Other Income		243,965		177,362		296,922		19,899		(1,668	)	(30,496	)	1,764		(176,160	)	(400,582	)	131,007

Other Income (Loss)
	Interest Expense	(508,100	)	(63,839	)	(514,585	)	(288,926	)	(100,188	)	(271,333	)	(317,266	)	(873,855	)	(904,260	)	(3,842,352	)
	Interest Income	2		0		56		76		695		0		1		3		9,455		10,289
	Interest Income from Note	—		—		—		—		13,720		—		—		—		—		13,720
	Gain on Sale of Real Estate	—		—		—		—		53,989		—		—		—		—		53,989
	Other Income (Expenses)	—		—		—		—		—		—		—		—		(309	)	(309	)

		(508,098	)	(63,839	)	(514,529	)	(288,850	)	(31,784	)	(271,333	)	(317,265	)	(873,852	)	(895,113	)	(3,764,663	)

Net Income (loss)		(264,132	)	113,523		(217,607	)	(268,951	)	(33,452	)	(301,829	)	(315,500	)	(1,050,012	)	(1,295,695	)	(3,633,656	)

Net Income (loss)—NERA 50%		(132,066	)	56,762		(108,803	)	(134,476	)	(16,726	)	(150,915	)	(157,750	)	(525,006	)	—		(1,168,980	)

NERA 40%																		(518,278	)	(518,278	)

																				(1,687,258	)

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Summary financial information for the year ended December 31, 2008



ASSETS
Rental Properties		10,589,378	2,576,552	9,336,147	6,628,614	2,332,236	8,222,978	8,282,900	25,212,271		73,181,077
Cash & Cash Equivalents		34,463	280	844	164,181	743	7,352	19,119	5,972		232,955
Rent Receivable		3,743	—	8,500		127			1,524		13,894
Real Estate Tax Escrow		57,503	—	22,057	41,079	—	47,879	32,075	94,937		295,530
Due From Investment Properties		50,000	—	—	90,000	100,960	40,000	—	230,000		510,960
Prepaid Expenses & Other Assets		71,984	1,423	73,973	63,537	223,923	50,641	60,445	352,429		898,355
Financing & Leasing Fees		50,147	109,015	40,828	39,751	21,763	51,690	33,233	43,250		389,676

	Total Assets	10,857,218	2,687,271	9,482,349	7,027,162	2,679,752	8,420,541	8,427,772	25,940,382	—	75,522,446

LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,600,000	2,162,000	7,461,483	5,000,000	1,808,000	4,750,000	5,500,000	16,640,374		51,921,857
Due to Investment Properties		—	—	425,000	—	40,000	960	45,000	—		510,960
Accounts Payable & Accrued Expense		55,151	8,744	64,525	7,827	18,617	17,891	39,716	171,783		384,255
Advance Rental Pmts & Security Dep		136,435		119,609	58,125	18,533	76,888	57,937	190,620		658,147

	Total Liabilities	8,791,586	2,170,744	8,070,616	5,065,952	1,885,150	4,845,740	5,642,653	17,002,777	—	53,475,219

Partners' Capital		2,065,632	516,527	1,411,732	1,961,209	794,602	3,574,801	2,785,119	8,937,605	—	22,047,226

Total Liabilities and Capital		10,857,218	2,687,271	9,482,349	7,027,162	2,679,752	8,420,541	8,427,772	25,940,382	—	75,522,446

Partners' Capital—NERA 50%		1,032,816	258,264	705,866	980,605	397,301	1,787,400	1,392,560	4,468,803	—	11,023,611

Total units/ condominiums
	Apartments	48	—	40	175	120	48	42	148	137	758
	Commercial	1	1	—	1	—	—	—	—	—	3

Total		49	1	40	176	120	48	42	148	137	761
Units to be retained		49	1	40	49	—	48	42	148	—	377

Units to be sold		—	—	—	127	120	—	—	—	137	384

Units sold through February 2, 2009		—	—	—	127	105	—	—	—	137	369

Balance of unsold units					—	15				—	15
Unsold units with deposits for future sale as of February 2, 2009		—	—	—	—	1	—	—	—	—	1

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Year Ended December 31, 2008



Revenues
	Rental Income	678,687		795,075		1,042,386		795,927		224,595		816,009		753,993		2,353,792		1,747		7,462,210
	Laundry and Sundry Income	1,433		1,200		1,736		—		—		—		2,808		19,505		—		26,683

		680,120		796,275		1,044,123		795,927		224,595		816,009		756,801		2,373,297		1,747		7,488,893

Expenses
	Administrative	11,083		5,382		37,463		18,376		9,944		12,032		4,597		56,078		3,839		158,794
	Depreciation and Amortization	431,753		20,226		385,168		363,898		158,574		390,865		517,958		1,549,671		7,019		3,825,132
	Management Fees	34,981		32,413		42,539		31,868		9,799		32,308		29,309		97,527		51		310,793
	Operating	88,850		62,246		62,660		1,461		1,717		1,085		64,790		362,065		214		645,088
	Renting	8,898		15,700		54,014		5,416		1,755		2,521		3,786		30,794		—		122,884
	Repairs and Maintenance	42,527		72,451		80,362		325,415		146,157		264,104		97,316		408,826		5,828		1,442,987
	Taxes and Insurance	123,694		76,160		93,576		125,898		54,094		115,782		121,866		316,355		4,861		1,032,284

		741,786		284,578		755,782		872,332		382,040		818,698		839,621		2,821,316		21,811		7,537,963

Income Before Other Income		(61,666	)	511,697		288,341		(76,404	)	(157,445	)	(2,689	)	(82,820	)	(448,019	)	(20,064	)	(49,070	)

Other Income (Loss)
	Interest Expense	(481,505	)	(130,336	)	(523,400	)	(289,626	)	(86,675	)	(271,992	)	(318,108	)	(887,633	)	(7	)	(2,989,281	)
	Interest Income	1,456		101		261		705		4,156		480		263		1,484		2,640		11,546
	Gain on Sale of Real Estate	—		—		—		172,993		354,415		—		—		12,925		335,124		875,456
		(480,049	)	(130,235	)	(523,139	)	(115,928	)	271,896		(271,512	)	(317,845	)	(873,224	)	337,757		(2,102,278	)

Net Income (Loss)		(541,714	)	381,461		(234,798	)	(192,332	)	114,450		(274,201	)	(400,665	)	(1,321,242	)	317,693		(2,151,348	)

Net Income (loss)—NERA 50%		(270,857	)	190,731		(117,399	)	(96,166	)	57,225		(137,101	)	(200,333	)	(660,621	)	158,846		(1,075,674	)

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In the fourth quarter of 2010, the Financial Accounting Standards Board ("FASB") issued an update to the guidance contained in Accounting Standards Codification ("ASC") 310, Receivables . The new guidance requires companies to provide more information about the credit quality of their financing receivables in the disclosures to financial statements including, but not limited to, significant purchases and sales of financing receivables, aging information and credit quality indicators. The adoption of this accounting guidance did not have a significant impact on our consolidated financial statements.

On January 21, 2010, the FASB issued an update to ASC 820, Fair Value Measurements and Disclosures, adding new requirements for disclosures about transfers into and out of Levels 1 and 2 fair value measurements and additional disclosures about the activity within Level 3 fair value measurements. The adoption of this guidance on January 1, 2010 did not have a material effect on our consolidated financial statements.

NOTE 16. DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

The following tables summarize income from discontinued operations and the related realized gain and loss on sale of rental property for the years ended December 31, 2010, 2009 and 2008:

	Year Ended December 31,

	2010		2009		2008
Total Revenues		—		—	$	243,470

Operating and other expenses		—				(256,875	)
Depreciation and amortization		—		—		(97,461	)

		—		—		(354,336	)

Loss from discontinued operations		—		—	$	(110,866	)

	Year Ended December 31,

	2010		2009		2008
Gain on sale of rental property	$	—	$	—	$	10,099,127

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 17. QUARTERLY FINANCIAL DATA (UNAUDITED)

	Three Months Ended

	March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			Total
Revenue	$	8,317,816		$	8,230,730		$	8,226,728		$	8,390,836		$	33,166,110
Expenses		5,632,869			5,420,350			5,793,966			5,630,732			22,477,917

Income Before Other Income		2,684,947			2,810,380			2,432,762			2,760,104			10,688,193
Other Income (loss)		(3,027,898	)		(3,064,832	)		(3,214,253	)		(2,740,442	)		(12,047,425	)

Net Income (loss)	$	(342,951	)	$	(254,452	)	$	(781,491	)	$	19,662		$	(1,359,232	)

Net Income (loss) per Unit	$	(2.59	)	$	(1.93	)	$	(5.94	)	$	0.15		$	(10.32	)
Net Income (loss) per Depositary Receipt	$	(0.26	)	$	(0.19	)	$	(0.59	)	$	0.01		$	(1.03	)

	Three Months Ended

	March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009			Total
Revenue	$	8,460,695		$	8,276,347		$	8,209,566		$	8,287,877		$	33,234,485
Expenses		5,735,286			5,270,939			5,621,419			5,436,885			22,064,509

Income Before Other Income		2,725,409			3,005,408			2,588,147			2,851,012			11,169,976
Other Income (Loss)		(2,205,324	)		(2,227,433	)		(2,288,842	)		(2,835,839	)		(9,557,438	)

Net Income (Loss)	$	520,085		$	777,975		$	299,305			15,173			1,612,538

Net Income per Unit	$	3.87		$	5.86		$	2.26		$	0.11		$	12.13
Net Income per Depositary Receipt	$	0.39		$	0.59		$	0.23		$	0.01		$	1.21

New England Realty Associates Limited Partnership

Valuation and Qualifying Accounts

				Additions

Description		Balance at Beginning of Period		Charged to Costs and Expenses		Charged to other account describe		Deductions Describe (a)		Balance at end of Period
Year ended December 31, 2010:
Deducted from asset accounts:
	Allowance for doubtful accounts		475,684		374,597		—		367,763		482,518
Year ended December 31, 2009:
Deducted from asset accounts:
	Allowance for doubtful accounts		460,327		356,686		—		341,329		475,684
Year ended December 31, 2008:
Deducted from asset accounts:
	Allowance for doubtful accounts		557,836		201,600		—		299,109		460,327

(a): Uncollectible accounts written off

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 18. SUBSEQUENT EVENT

On March 1, 2011, the Partnership entered into a purchase and sale agreement with 503-509 Pleasant Street, LLC to sell the Avon Street Apartments in Malden, Massachusetts. The total sales price is $8,750,000 in cash. The closing date is expected to be on or before May 16, 2011. The buyer is entitled to terminate the agreement by March 15, 2011 if the results of the environmental and general building inspections are unsatisfactory. Additionally, the buyer may terminate the agreement by March 31, 2011 if they are unable to obtain mortgage financing in the amount of $6,125,000 at the prevailing rates, terms and conditions. The Partnership's net proceeds from the sale of Avon Street Apartments will be approximately $5,700,000 and the gain on the sale will be approximately $7,800,000.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
		By:		/s/ NEWREAL, INC. Its General Partner
		By:		/s/ RONALD BROWN Ronald Brown, President
		Dated: March 7, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date


/s/ RONALD BROWN Ronald Brown	President and Director of the General Partner (Principal Executive Officer)	March 7, 2011
/s/ HAROLD BROWN Harold Brown	Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	March 7, 2011
/s/ GUILLIAEM AERTSEN Guilliaem Aertsen	Director of the General Partner	March 7, 2011
/s/ CONRAD DIGREGORIO Conrad DiGregorio	Director of the General Partner	March 7, 2011
/s/ DAVID ALOISE David Aloise	Director of the General Partner	March 7, 2011
/s/ ROBERTA ORNSTEIN Roberta Ornstein	Director of the General Partner	March 7, 2011

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Table of Contents

EXHIBIT INDEX

Exhibit No.	Description of Exhibit

(3)	Second Amended and Restated Contract of Limited Partnership.(1)
(4)	(a)	Specimen certificate representing Depositary Receipts.(2)
	(b)	Description of rights of holders of Partnership securities.(2)
	(c)	Deposit Agreement, dated August 12, 1987, between the General Partner and the First National Bank of Boston.(3)
(10.1)	Purchase and Sale Agreement by and between Sally A. Starr and Lisa Brown, Trustees of Omnibus Realty Trust, a nominee trust.(5)
(10.2)	Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008.(6)
(10.3)	Amendment dated February 27, 2008 to Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008.(7)
(10.4)	Purchase and Sale and Escrow Agreement dated September 1, 2009 by and between 175 Free Street Investors LLC, as Seller, The Hamilton Company, as Purchaser, and First American Title Insurance Company, as Escrow Agent.(8)
(10.5)	Limited Liability Company Operating Agreement of HBC Holdings, LLC.(9)
(10.6)	Limited Liability Company Agreement of Hamilton Park Towers, LLC.(10)
(10.7)	Pledge Agreement dated October 28, 2009 by and between New England Realty Associates Limited Partnership and HBC Holdings, LLC.(11)
(10.8)	Promissory Note dated October 28, 2009 of New England Realty Associates Limited Partnership in favor of HBC Holdings, LLC.(12)
(10.9)	MultiFamily Note—CME of Hamilton Park Towers, LLC, as Borrower, in favor of Wachovia Multifamily Capital, Inc., as Lender, in the principal amount of $89,914,000 dated October 28, 2009.(13)
(10.10)	Purchase and sale agreement by and between Avon Street Apartments and 503-509 Pleasant Street, LLC.
(21)	Subsidiaries of the Partnership.(4)
(31.1)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership)
(31.2)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership)
(32.1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership) and Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(99.1)	Combined Financial Statements of Significant Subsidiaries

(1): Incorporated by reference to Exhibit A to the Partnership's Statement Furnished in Connection with the Solicitation of Consents filed under the Securities Exchange Act of 1934 on October 14, 1986.

S-2

Table of Contents

(2): Incorporated herein by reference to Exhibit A to Exhibit 2(b) to the Partnership's Registration Statement on Form 8-A, filed under the Securities Exchange Act of 1934 on August 17, 1987.
(3): Incorporated herein by reference to Exhibit 2(b) to the Partnership's Registration Statement on Form 8-A, filed under the Securities Exchange Act of 1934 on August 17, 1987.
(4): Incorporated by reference to Notes 2 and 14 to Financial Statements included as part of this Form 10-K.
(5): Incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K dated June 30, 1995.
(6): Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K dated January 11, 2008 and filed with the Securities and Exchange Commission on February 6, 2008.
(7): Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008.
(8): Incorporated herein by reference to Exhibit 10.1 to the Partnership's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009.
(9): Incorporated herein by reference to Exhibit 10.2 to the Partnership's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009.
(10): Incorporated herein by reference to Exhibit 10.3 to the Partnership's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009.
(11): Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 3, 2009.
(12): Incorporated herein by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 3, 2009.
(13): Incorporated herein by reference to Exhibit 10.3 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 3, 2009.

S-3

Exhibit 10.10

PURCHASE AND SALE AGREEMENT

This 1 st day of March, 2011

1. PARTIES

Avon Street Apartments Limited Partnership, a Massachusetts limited partnership with an address of 39 Brighton Ave., Allston, MA 02134, hereinafter called the SELLER, agrees to SELL and 503-509 Pleasant Street, LLC and/or Francis D. Privitera with an address of 59 Union Square, Somerville, MA 02143, hereinafter called the BUYER, agrees to BUY, upon the terms hereinafter set forth, the following described premises:

2. DESCRIPTION

Land and buildings (the “Premises” or “Property”) located at 130 Avon Street, Malden, Massachusetts.

For title see Deed filed at the Middlesex South District of the Land Court, Document No.: 973883; with Certificate of Title No. 202152 in Book 01141, Page 2.

3. BUILDINGS, STRUCTURES, IMPROVEMENTS, FIXTURES

Included in the sale as a part of said premises are the buildings, structures, and improvements now thereon, and all equipment and supplies belonging to the SELLER and used in connection therewith and the fixtures belonging to the SELLER and used in connection therewith, doors, furnaces, heaters, heating equipment, oil and gas burners and fixtures appurtenant thereto, hot water heaters, plumbing and bathroom fixtures, electric and other lighting fixtures, mantels, and, only if built in, air conditioning equipment, and ventilators, six (6) Washing Machines and six (6) Dryers located in basement..

4. TITLE DEED

Said premises are to be conveyed by a good and sufficient quitclaim deed running to the BUYER, or to the nominee designated by the BUYER by written notice to the SELLER at least seven (7) days before the deed is to be delivered as herein provided, and said deed shall convey a good and clear record and marketable title thereto, free from encumbrances, except

(a)		Provisions of existing building and zoning laws;
(b)		Existing rights and obligations in party walls which are not the subject of written agreement;
(c)		Such taxes for the then current year as are not due and payable on the date of the delivery of such deed;
(d)		Any liens for municipal betterments assessed after the date of this agreement;
(e)		Easements, restrictions and reservations of record, if any, so long as the same do not prohibit or materially interfere with the current use of said premises;

5. PLANS

If said deed refers to a plan necessary to be recorded therewith the SELLER shall deliver such plan with the deed in form adequate for recording or registration.

6. PURCHASE PRICE

The agreed purchase price for said premises is One Million Two Hundred Thousand dollars ($8,750,000.00), of which

$	200,000	have been paid as a deposit this day; and
$	8,550,000	are to be paid at the time of delivery of the deed in cash, or by certified, cashier’s, treasurer’s or bank check. *
$	8,750,000	TOTAL

*If for any reason, Buyer desires to extend the closing date by up to an additional 15 days, Seller agrees that Buyer my so extend the closing date, subject to the payment of an additional $100,000 deposit, in which event the amount due at closing shall be adjusted accordingly.

7. TIME FOR PERFORMANCE; DELIVERY OF DEED

Such deed is to be delivered at 1:00 o’clock P.M. on May 16, 2011, at the Middlesex County Registry of Deeds or the offices of Buyer’s counsel, unless otherwise agreed upon in writing. It is agreed that time is of the essence of this agreement.

8A. POSSESSION AND CONDITION OF PREMISES

The Premises shall be delivered at the Date of Closing subject to existing tenants and occupants as of the date hereof, in substantially the same condition as they are now, reasonable wear and tear excepted and except for conditions caused or created by Buyer’s Inspections or otherwise permitted by this Agreement. Buyer shall be entitled to inspect the Premises on the day prior to the Date of Closing to ensure that the provisions of the preceding sentence have been complied with, and until closing Seller shall grant Buyer such access in the presence of Seller’s representatives to the Premises as is reasonably necessary (subject to the rights of tenants of the property) to facilitate such inspection and Buyer’s financing efforts.

8B. BUYER’S DUE DILIGENCE

Buyer shall have reasonable access to the Premises as contemplated below and the right to conduct such inspections of the Premises as it deems necessary as set forth below. Buyer and its agents, servants and employees shall maintain as confidential and not disclose any information obtained as a result of or pursuant to the Site Investigations and Inspections (both herein below defined) except to the extent that any law or regulation shall require such disclosure and except to Buyer’s attorneys, consultants and lenders. Buyer shall contractually require any agent performing the Site Investigation on its behalf to maintain all such information as confidential and not to disclose such information to any person other than Buyer except as may be required by law. This obligation with respect to confidentiality and non-disclosure shall survive the delivery of the Deed or any earlier termination of this Agreement.

(a) Environmental Inspection. Buyer may conduct, at its sole cost and expense by consultants selected by it, an environmental site analysis (“Site Investigation”) to determine the existence of hazardous wastes and materials at the Property (the “Hazardous Materials”). In the event that the results of the Site Investigation indicates that there has been a release of Hazardous Materials that would impose any further investigation, monitoring, or remediation costs on Buyer if Buyer were to own the Premises, Buyer shall be entitled to terminate this Agreement by delivering written notice thereof, together with a copy of all reports, if any, of the results of the Site Investigation, to Seller and Escrow Agent no later than 5:00 p.m. on the date which is fourteen (14) days following the date of this Agreement. In such event, the Deposit shall be returned to Buyer

and this Agreement shall terminate and be null and void and without recourse to either party. If Buyer fails to timely give such notice, Buyer’s right to terminate this Agreement shall be deemed to be waived. Buyer acknowledges that Seller has no obligation whatsoever to undertake any corrective or remedial work as a result of matters disclosed by the Site Investigation.

In order to permit Buyer to conduct the Site Investigation, Seller shall permit Buyer, its agents, servants or employees, a license to enter upon the Premises to conduct the Site Investigation, in accordance with the terms and conditions set forth herein below:

(i) Buyer will not unreasonably interfere with Seller’s, tenants’ or other occupants’ use of the Premises.

(ii) Buyer shall at the conclusion of the Site Investigation restore the Premises to the condition existing prior to the Site Investigation, and this obligation shall survive any termination of this Agreement.

(iii) Before commencing any aspect of the Site Investigation that involves physical inspection or invasive testing of the Premises, Buyer shall give Seller prior written notice of the scope of testing, methodologies to be used and identities of the consultants/contractors retained by Buyer, all of which shall be subject to Seller’s prior written approval, which shall not be unreasonably withheld or delayed. In addition, prior to such testing, Buyer shall submit to Seller evidence of Buyer’s and its environmental site analyst’s public liability and workers’ compensation insurance, which shall be reasonably acceptable to Seller and shall name Seller as an additional insured on such policies.

(iv) Buyer agrees to indemnify and hold Seller harmless from and against any and all claims for personal injury or property damage resulting from the conduct by Buyer or its agents of the Site Investigation. The provisions of this paragraph (v) shall survive the delivery of the Deed or earlier termination of this Agreement.

(vi) Seller shall have the right to terminate this license upon twenty four (24) hours written notice to Buyer if the foregoing conditions are not met, or if Buyer is in default under this Agreement, or if this Agreement terminates for any other reason.

(b) General Building and Other Inspections. Buyer may conduct, at its sole cost and expense by consultants selected by it, structural, mechanical, and any other inspections reasonably required by Buyer (“Inspections”). In the event that the results of any of such Inspections, in Buyer’s sole discretion disclose any defects or unacceptable conditions in the Premises, Buyer shall be entitled to terminate this Agreement by delivering written notice thereof, together with a copy of all reports, if any, of the results of such Inspections to Seller no later than 5:00 p.m. on the date which is fourteen (14) days following the date of this Agreement. However, if such date were to fall on a Saturday, Sunday or legal holiday then such date would be extended to the next business day thereafter. In such event, the Deposit shall be returned to the Buyer and this Agreement shall terminate and be null and void and without recourse to either party. If Buyer fails to timely give such notice, Buyer’s right to terminate this Agreement shall be deemed to be waived.

In order to permit Buyer to conduct the Inspections, Seller shall permit Buyer reasonable access to the Premises, such access to be exercised in the presence of Seller and or Seller’s representatives, and provided such access does not interfere with rights of tenants under leases. Buyer shall, at the conclusion of the Inspections restore the Premises to the condition existing prior to the Inspections. Buyer agrees to indemnify and hold Seller harmless from and against any and all claims for personal injury or property damage resulting from the conduct by Buyer or its agents of the Inspections. The provisions of this paragraph with respect to Buyer’s restoration obligations and indemnity of Seller shall survive the delivery of the Deed or earlier termination of this Agreement.

(c) Permits, Zoning, Leases, Litigation; etc. Buyer shall be entitled to conduct such other investigations and reviews, and make other due diligence inquiries with respect to the Premises including without limitation any and all permits; governmental approvals; zoning status; leases, occupancies and other tenancies; and litigation pertaining thereto (the “Legal Investigations”). In the event that the results of any of such Legal Investigations, in Buyer’s sole discretion disclose any defects or unacceptable conditions in the Premises, Buyer shall be entitled to terminate this Agreement by delivering written notice thereof, together with a copy of all reports, if any, of the results of such Legal Investigations to Seller no later than 5:00 p.m. on the date which is fourteen (14) days following the date of this Agreement. However, if such date were to fall on a Saturday, Sunday or legal holiday then such date would be extended to the next business day thereafter. In such event, the Deposit shall be returned to the Buyer and this Agreement shall terminate and be null and void and without recourse to either party. If Buyer fails to timely give such notice, Buyer’s right to terminate this Agreement under this paragraph 8 shall be deemed to be waived.

9. EXTENSION TO PERFECT TITLE OR MAKE PREMISES CONFORM

If the SELLER shall be unable to give title or to make conveyance, or to deliver possession of the premises, all as herein stipulated, or if at the time of the delivery of the deed the premises do not conform with the provisions hereof, however, the SELLER shall use reasonable efforts to remove any defects in title, or to deliver possession as provided herein, or to make said premises conform to the provisions hereof, as the case may be, in which event the SELLER shall give written notice thereof to the BUYER at or before the time for performance hereunder, and thereupon the time for performance hereof shall be extended for a period of thirty (30) days.. Should SELLER need the additional thirty (30) days to remove any defects in title or to deliver possession as provided herein, or to make the Premises conform to the provisions of this Purchase and Sale Agreement, the extension shall only be in force for as long as BUYER’S mortgage commitment is in full force and effect under the original terms granted to the BUYER or as extended so long as BUYER notifies Seller on or before April 1, 2011 of Buyer’s mortgage rate commitment expiration date. Moreover, Buyer agrees to use diligent efforts to extend the mortgage commitment. In the event that Buyer cannot extend said commitment without a fee and Seller does not agree to pay same, then it shall be at Buyer’s option whether or not to proceed beyond the original commitment date. Further, the SELLER shall not be required to expend more than $10,000.00, exclusive of liens or encumbrances on the Premises, to make the Premises conform to the provisions of this paragraph.

10. FAILURE TO PERFECT TITLE OR MAKE PREMISES CONFORM

If at the expiration of the extended time the SELLER shall have failed so to remove any defects in title, deliver possession, or make the premises conform, as the case may be, all as herein agreed, or if at any time during the period of this agreement or any extension thereof, the holder of a mortgage on said premises shall refuse to permit the insurance proceeds, if any, to be used for such purposes, then any payments made under this agreement shall be forthwith refunded and all other obligations of all parties hereto shall cease and this agreement shall be void without recourse to the parties hereto.

11. BUYER’S ELECTION TO ACCEPT TITLE

The BUYER shall have the election, at either the original or any extended time for performance, to accept such title as the SELLER can deliver to said premises in their then condition and to pay therefor the purchase price without deduction, in which case the SELLER shall convey such title, except that in the event of such conveyance in accord with the provisions of this clause, if said premises shall have been damaged by fire or casualty insured against, then the SELLER shall, unless the SELLER has previously restored the premises to their former condition, either

(a) pay over or assign to the BUYER, on delivery of the deed, all amounts recovered or recoverable on account of such insurance, less any amounts reasonably expended by the SELLER for any partial restoration, or

(b) if a holder of a mortgage on said premises shall not permit the insurance proceeds or a part thereof to be used to restore said premises to their former condition or to be so paid over or assigned, give to the BUYER a credit against the purchase price, on delivery of the deed, equal to said amount so recovered or recoverable and retained by the holder of said mortgage less any amount reasonably expended by the SELLER for any partial restoration.

12. ACCEPTANCE OF DEED

The acceptance of a deed by the BUYER or his nominee as the case may be, shall be deemed to be a full performance and discharge of every agreement and obligation herein contained or expressed, except such as are, by the terms hereof, to be performed after the delivery of said deed.

13. USE OF MONEY TO CLEAR TITLE

To enable the SELLER to make conveyance as herein provided, the SELLER may, at the time of delivery of the deed, use the purchase money or any portion thereof to clear the title of any or all encumbrances or interests.

14. INSURANCE

Until the delivery of the deed, the SELLER shall maintain insurance on said premises as follows:

Type of Insurance		Amount of Coverage

(a) Fire		$ As is presently insured
(b) Extended coverage		$

15. ADJUSTMENTS

Water and sewer use charges, collected rents, security deposits, if any, real estate taxes for the current tax year and any other additional rents, operating expenses and prepaid amounts or charges, including, but not limited to fuel oil and any service contracts, shall be apportioned as of the Date of Closing.

16. ADJUSTMENT OF UNASSESSED AND ABATED TAXES

If the amount of said taxes is not known at the time of the delivery of the deed, they shall be apportioned on the basis of the taxes assessed for the preceding year, with a reapportionment as soon as the new tax rate and valuation can be ascertained; and, if the taxes which are to be apportioned shall thereafter be reduced by abatement, the amount of such abatement, less the reasonable cost of obtaining the same, shall be apportioned between the parties, provided that neither party shall be obligated to institute or prosecute proceedings for an abatement unless herein otherwise agreed.

17. BROKER’S FEE

A broker’s fee of $200,000 for professional services, to be split equally between SELLER and BUYER to NAI Hunneman, the Broker(s) herein, payable if and when title passes as herein provided and the Deed is recorded and not otherwise.

18. BROKER(S) WARRANTY

The Broker(s) named herein warrant(s) that the Broker(s) is (are) duly licensed as such by the Commonwealth of Massachusetts.

19. DEPOSIT

All deposits made hereunder shall be held in escrow by NAI Hunneman in an interest bearing FDIC insured bank account in Massachusetts, as escrow agent subject to the terms of this agreement and shall be duly accounted for at the time for performance of this agreement.

20. BUYER’S DEFAULT; DAMAGES

If the BUYER shall fail to fulfill the BUYER’S agreements herein, all deposits made hereunder by the BUYER shall be retained by the SELLER as liquidated damages unless within thirty (30) days after the time for performance of this agreement or any extension hereof, the SELLER otherwise notifies the BUYER in writing.

21. BROKER AS PARTY

The Broker(s) named herein, join(s) in this agreement and become(s) a party hereto, insofar as any provisions of this agreement expressly apply to the Broker(s), and to any amendments or modifications of such provision to which the Broker(s) agree(s) in writing.

22. SMOKE DETECTOR and CO The SELLER shall, at the time of the delivery of the deed, deliver a certificate from the fire department of the city or town in which said premises are located stating that said premises have been equipped with approved smoke and carbon monoxide detectors in conformity with applicable law.

23. LEAD PAINT The parties acknowledge that under Massachusetts law, whenever a child or children under six (6) years of age resides in any residential premises in which any paint, plaster, or other accessible material contains dangerous levels of lead, the owner of said premises must remove or cover said paint, plaster or other material so as to make it inaccessible to children under six years of age. Buyer hereby acknowledges receipt of a Lead Paint Disclosure.

24. CORRECTIONS - If any errors or omissions are found to have occurred in any calculations or figures used in the settlement statement signed by the parties and notice thereof is given to a party within one year of the Closing Date, then such party agrees to execute any document reasonably required by BUYER’S attorney to correct such errors or omissions including re-execution of applicable documents.

25. PARTIES REPRESENTED BY COUNSEL . Each party hereto acknowledges to the other that such party has been represented by separate legal counsel of such party’s own choosing and at such party’s own expense prior to the signing of this Agreement.

26. FINANCING . In order to help finance the acquisition of said Property, the Buyer shall apply for a conventional bank or other institutional commercial mortgage loan of $6.125.000.00 at prevailing rates, terms and conditions. If despite the Buyer’s diligent efforts, a commitment for such loan cannot be obtained on or before_thirty (30) days following the date of this agreement (The “Financing Date”), the Buyer may terminate this agreement by written notice to the Seller prior to the expiration of such time, whereupon this Agreement shall automatically terminate and become null and void and without recourse to any party hereunder, and all deposits shall be forthwith refunded to BUYER. Where the Financing Date falls on a Saturday, Sunday or legal holiday then such date shall be automatically extended to the next business day thereafter. In the event that BUYER does not notify SELLER’s attorney before 3:00 p.m. on the Financing Date of BUYER’s inability to obtain such a mortgage commitment, it shall be conclusively presumed that BUYER has obtained such mortgage commitment and the contingency contained in this clause shall be thereby waived. If for any reason, Buyer desires to extend the Financing Date by up to an additional thirty (30) days, Seller agrees that Buyer may so extend the Financing Date, subject to the payment of an additional $100,000 deposit, in which event the amount due at closing shall be adjusted accordingly.

27. NOTICES . All notices required to be given herein may be given by (a) certified mail, postage prepaid, return receipt requested, (b) by service in hand with receipt, or (c) by recognized overnight delivery service for which proof of delivery is available, to the following addresses:

If to Seller:	Linda M. Vaccaro, Esq.
	The Hamilton Company, Inc.
	39 Brighton Ave.
	Allston, MA 02134
	Tel: (617) 850-7236
	Fax: (617) 783-0568
	Ivaccaro@thehamiltoncompany.com

If to Buyer:	Frank D. Privitera, Jr.
	Attorney-At-Law
	531 Medford Street
	Somerville, MA 02145
	Tel: (617) 666-1116
	Fax: (617) 666-1117
	frankiep@gis.net

If to Escrow Agent:	NAI Huneman Commercial
	David Ross
	303 Congress Street
	Boston, MA 02210
	617-457-3400 x.2610 office
	617-457-3268 fax
	617-875-6222 cell
	dlross@naihunneman.com

or to such other address as any party may direct by notice given in the manner herein provided. All notices shall be deemed to have been received, if given by hand or overnight delivery service, when delivered; if by mail, on the third (3rd) day following its deposit to the mails.

28 LIABILITY OF TRUSTEE, SHAREHOLDER, BENEFICIARY, ETC.

If the SELLER or BUYER executes this agreement in a representative or fiduciary capacity, only the principal or the estate represented shall be bound, and neither the SELLER or BUYER so executing, nor any shareholder or beneficiary of any trust, shall be personally liable for any obligation, express or implied, hereunder.

29. WARRANTIES AND REPRESENTATIONS

The BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing, except for the following additional warranties and representations, if any, made by either the SELLER or the Broker(s): None. Buyer has had the opportunity to perform its due diligence inspections of the Property.

30. CONSTRUCTION OF AGREEMENT

This instrument, executed in multiple counterparts, is to be construed as a Massachusetts contract, is to take effect as a sealed instrument, sets forth the entire contract between the parties, is binding upon and enures to the benefit of the parties hereto and their respective heirs, devisees, executors, administrators, successors and assigns, and may be

canceled, modified or amended only by a written instrument executed by both the SELLER and the BUYER. If two or more persons are named herein as BUYER their obligations hereunder shall be joint and several. The captions are used only as a matter of convenience and are not to be considered a part of this agreement or to be used in determining the intent of the parties to it.

31. ASSIGNMENT OF LEASES . At the Date of Closing, Buyer and Seller shall each execute and deliver an Assignment of Rents and Leases in the form provided herein as Exhibit A . A list of all current tenants and a rent roll is attached hereto as Exhibit B .

32. SELLER’S REPRESENTATIONS. Seller represents to the best of its information and belief, as follows:

(a) Seller has the authority to enter into this Agreement and perform without the need for approval from any other person, entity, court or government. Seller or any general partner or owner of Seller has not filed for, and is not contemplating filing for bankruptcy protection, and is not affected by any action, agreement, court, order or other matter that would hinder or delay, the closing or adversely affect Seller’s ability to perform hereunder;

(b) Seller has no knowledge of any pending or threatened litigation regarding the Premises or any part thereof, except as disclosed in writing to Buyer

(c) Seller has not received any written notices of which Seller has knowledge, for violations of any applicable law, not since rectified with respect to the Premises;

(d) Seller has provided the Buyer with accurate and complete copies of any environmental reports or studies with respect to the Premises, if any, that are in Seller’s possession;

(e) to Seller’s best knowledge and belief there do not exist underground storage tanks at the Premises and Seller is not aware of any violations of environmental laws with respect to the Premises;

(f) the only tenancies, leases or occupancy agreements affecting the Premises are those described in that Rent Roll attached hereto as Exhibit “B.” Rent due for each tenants is all current through the date hereof and not in arrears, except as shown on the Rent Roll. Each tenant(s) is responsible for the payment of electricity for each of the respective units. Seller shall deliver to Buyer an updated rent roll inclusive of the above information (other than utilities) at closing.

(g) Seller has provided Buyer with materially true and accurate copies of Seller’s Income and Expense statements for the Premises for the two years beginning January 1, 2009 and January 1, 2010. January 1, 2011 year to date shall be provided if ready prior to closing.

(h) Seller has provided Buyer with true and accurate copies of any written notices, orders, declarations or the like, received by Seller from any government entity regarding the presence of lead paint in any of the units or common areas of the Premises;

33. Service Agreements. As of the date hereof, except for a contract with Constellation Energy (a copy of which has been provided to the Buyer), which contract shall be assumed by Buyer, there are no service agreements or contracts, in effect and affecting the Premises that cannot be terminated on 30 days notice and at closing, there shall be no additional service agreements or contracts other than those in effect as of the date hereof. Seller shall be responsible for all balances due for any goods, services, and/or labor supplied to or for the benefit of the Premises up until the time of Closing and shall hold Buyer harmless from the same. Buyer shall hold Seller harmless from the same from and after the closing.

34. Delivery of Premises . Between the date hereof and Closing, Seller shall continue to manage, maintain and

service the Premises at the same level of effort and expense as Seller has managed, maintained and serviced the Premises for Seller’s own account. At closing, Seller shall deliver the Premises (except for tenant spaces) in broom clean condition, removing all trash, debris and personal property, not included in the within sale.

35. Cooperation With Buyer’s Lender . Seller shall reasonably cooperate with Buyer’s lender and its counsel in executing and delivering those document reasonably needed to close the subject transaction, in accordance with customary practices. Seller shall also reasonably cooperate with Buyer and its prospective lender(s) so as to facilitate Buyer obtaining mortgage financing and shall promptly provide Buyer, Buyer’s lender and their counsel with information and documentation reasonably requested or necessarily incidental to Buyer’s aforedescribed financing efforts, including but not limited to rent rolls, income/expense information, third party contracts/information.

36. No Brokers. Both Buyer and Seller warrant and represent to one another that neither party has dealt with any broker or other person entitled to a broker’s commission in connection with the negotiation or execution of this Agreement or the consummation of the transaction contemplated hereby, except that Broker identified in Paragraph No. 17 hereof. Each party shall hold the other harmless from, and indemnify the other against all damages, including legal fees and court costs, incurred by the other and arising out of or resulting from the failure of such representation and warranty.

37. Title and Deed. Title standards of the Massachusetts Real Estate Bar Association shall be determinative of any matter which is the subject of any such standard. Seller shall not deliver a Deed in accordance with ¶ 4 hereof or any recorded document which is signed under Power of Attorney and Buyer shall not be required to accept a Deed or such recorded documents from Seller signed under Power of Attorney.

38. Miscellaneous. This Agreement may be executed in counterparts, and facsimile signatures shall have the effect of original signatures.

39. Seller acknowledges that Buyer intends the purchase of the within subject Premises to be a “replacement purchase” of real property for that loss of property suffered by Buyer at 503-509 Pleasant Street, Malden, MA. In this regard, Seller agrees to cooperate with Buyer, at no cost to Seller, in executing and delivering information and documents to Buyer and Buyer’s insurer (and their counsel) and providing access to the Premises as reasonably requested by Buyer (or its insurer) so to complete the aforementioned purchase by Buyer of the Premises as a “replacement purchase” of property within the manner prescribed by Buyer’s insurer, Norfolk & Dedham Group.

AVON STREET APARTMENTS LIMITED PARTNERSHIP

	BY:	AVON STREET APARTMENTS, INC., Its General Partner

	By:	/s/ Ronald Brown
		Ronald Brown, Its President

BUYER: 503-509 PLEASANT STREET, LLC				BUYER: FRANCIS D. PRIVITERA

	By:	/s/ Philip J. Privitera		By:	/s/ Francis D. Privitera
		Name: Philip J. Privitera			Name: Francis D. Privitera

BROKER: NAI HUNNEMAN

	BY:	/s/ David N. Ross
		Name:	David N. Ross
		Title:	EVP

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Exhibit 31.1

New England Realty Associates Limited Partnership

CERTIFICATION

I, Ronald Brown, certify that:

1. I have reviewed this Annual Report on Form 10-K of New England Realty Associates Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


		/s/ RONALD BROWN Principal Executive Officer (President and Director of the Partnership's General Partner, NewReal, Inc.)

Date: March 7, 2011

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Exhibit 31.1

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Exhibit 31.2

CERTIFICATIONS

I, Harold Brown, certify that:

1. I have reviewed this Annual Report on Form 10-K of New England Realty Associates Limited Partnership;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


		/s/ HAROLD BROWN Principal Financial Officer (Treasurer and Director of the Partnership's General Partner, NewReal, Inc.)

Date: March 7, 2011

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Exhibit 31.2

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of New England Realty Associates Limited Partnership for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Ronald Brown, as President and Director of the Partnership's General Partner, NewReal, Inc., and Harold Brown, the President and a Director of the Partnership's General Partner, NewReal, Inc., each hereby certifies, pursuant to 18.U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1): The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2): The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.


		/s/ RONALD BROWN Ronald Brown Principal Executive Officer (President and Director of the Partnership's General Partner, NewReal, Inc.)

Date: March 7, 2011


		/s/ HAROLD BROWN Harold Brown Principal Financial Officer (Treasurer and Director of the Partnership's General Partner, NewReal, Inc.)

Date: March 7, 2011

This certification accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of §18 of the Security Exchange Act of 1934, as amended.

A signed original of this written statement required by §906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 99.1

HAMILTON PARK TOWERS LLC
HAMILTON ON MAIN APARTMENTS LLC
HAMILTON ON MAIN LLC
Combined Financial Statements—Significant Joint Ventures
As of December 31, 2010 and 2009
and for the years ended December 31, 2010, 2009 and 2008
Together With Report of Independent
Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Joint Venture Members
Hamilton Park Towers LLC, Hamilton on Main Apartments LLC, Hamilton on Main LLC.

We have audited the accompanying combined balance sheets of Hamilton Park Towers LLC, Hamilton on Main Apartments LLC and Hamilton on Main LLC (the "Joint Ventures") as of December 31, 2010 and 2009, and the related combined statements of income, changes in members' capital and cash flows for each of the years in the three-year period ended December 31, 2010. The combined financial statements are the responsibility of the Joint Ventures' management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of Hamilton Park Towers LLC, Hamilton on Main Apartments LLC and Hamilton on Main LLC at December 31, 2010 and 2009 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.


/s/ MILLER WACHMAN LLP Boston, Massachusetts March 7, 2011

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

COMBINED BALANCE SHEETS

		December 31,

		2010		2009
ASSETS
Rental Properties		$	141,291,032	$	147,471,713
Cash and Cash Equivalents			773,390		1,124,183
Rents Receivable			136,162		88,467
Real Estate Tax Escrows			582,603		435,974
Intangible Assets			—		4,085,000
Prepaid Expenses and Other Assets			1,508,187		1,325,717
Financing and Leasing Fees			546,699		607,960

	Total Assets	$	144,838,072	$	155,139,014

LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable		$	106,065,526	$	106,316,353
Accounts Payable and Accrued Expenses			994,582		989,744
Advance Rental Payments and Security Deposits			1,911,533		1,804,019

	Total Liabilities		108,971,640		109,110,115
Commitments (Note 7)
Members' Capital			35,866,432		46,028,898

	Total Liabilities and Members' Capital	$	144,838,072	$	155,139,014

See notes for combined financial statements.

HAMILTON PARK TOWERS, LLC
HAMILTON ON MAIN APARTMENTS, LLC
HAMILTON ON MAIN, LLC

(Unconsolidated Significant Joint Ventures)

COMBINED STATEMENTS OF INCOME

Years Ended December 31, 2010, 2009 and 2008

		Year Ended December 31,

		2010			2009			2008
Revenues
	Rental Income	$	13,475,084		$	4,327,579		$	2,355,539
	Laundry and Sundry Income		117,681			37,664			19,505

			13,592,765			4,365,243			2,375,044

Expenses
	Administrative		187,387			160,121			59,917
	Depreciation and Amortization		10,410,164			3,190,117			1,556,690
	Management Fees		341,417			153,555			97,578
	Operating		1,319,155			525,032			362,279
	Renting		296,906			27,562			30,794
	Repairs and Maintenance		1,201,399			391,069			414,654
	Taxes and Insurance		1,769,166			494,529			321,216

			15,525,593			4,941,984			2,843,128

(Loss) Before Other Income			(1,932,829	)		(576,741	)		(468,084	)

Other Income (Loss)
	Interest Income		13			9,459			4,124
	Interest Expense		(5,977,098	)		(1,778,115	)		(887,640	)
	Gain on sale of real estate		—			—			348,039
	Other Income (Expenses)		(15,552	)		(309	)		—

			(5,992,636	)		(1,768,965	)		(535,467	)

Net (Loss)		$	(7,925,465	)	$	(2,345,707	)	$	(1,003,551	)

See notes to accompany the combined financial statements.

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

COMBINED STATEMENTS OF CHANGES IN MEMBERS' CAPITAL

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Hamilton on Main LLC			Total

Balance, January 1, 2008	$	—		$	8,765,854		$	3,600,298		$	12,366,152
Transfer of equity		—			1,797,991			(1,797,991	)		—
Distribution to members		—			(305,000	)		(2,120,000	)		(2,425,000	)
Net Income (loss)		—			(1,321,242	)		317,693			(1,003,549	)

Balance, December 31, 2008		—			8,937,603			—			8,937,603
Investment by members		39,814,000			—			—			39,814,000
Distribution to members		—			(377,000	)		—			(377,000	)
Net Loss		(1,295,695	)		(1,050,010	)		—			(2,345,705	)

Balance, December 31, 2009		38,518,305			7,510,593			—		$	46,028,898
Investment by members		—			—			—			—
Distribution to members		(2,075,000	)		(162,000	)		—			(2,237,000	)
Net Loss		(7,389,086	)		(536,379	)		—			(7,925,465	)

Balance, December 31, 2010	$	29,054,219		$	6,812,214		$	—		$	35,866,433

Allocation to New England Realty Associates Limited Partnership for 2010:
Percentage Ownership:		40	%		50	%		—			Total

Distributions Received	$	830,000		$	81,000			—		$	911,000

Net Loss	$	(2,955,634	)	$	(268,189	)		—		$	(3,223,823	)

Member Capital	$	11,621,688		$	3,406,107					$	15,027,795

See notes for combined financial statements.

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN LLC, AND
HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

COMBINED STATEMENTS OF CASH FLOWS

		Year Ended December 31,

		2010			2009			2008
Cash Flows from Operating Activities
	Net Loss	$	(7,925,465	)	$	(2,345,707	)	$	(1,003,549	)

Adjustments to reconcile net income to net cash provided by (used in) by operating activities:
	Gain on sale of condominiums		—			—			(348,049	)
	Depreciation and amortization		10,410,165			3,190,117			1,556,690
	Amortization of above market lease		301,729			60,346			—
Changes in operating assets and liabilities:
	(Increase) Decrease in rents receivable		(47,694	)		(86,943	)		8,526
	(Decrease) Increase in accounts payable and accrued expenses		4,837			817,961			34,148
	(Increase) Decrease in real estate tax escrow		(146,628	)		(341,037	)		321,776
	(Increase) Decrease in due from joint venture		—			230,000			470,000
	(Increase) decrease in financing and leasing fees		—			—			3,690
	(Increase) decrease in prepaid expenses and other assets		(170,680	)		(1,045,424	)		(31,918	)
	(Decrease) increase in advance rental payments and security deposits		107,511			1,613,399			36,353

	Total adjustments		10,459,240			4,438,419			2,051,216

	Net cash provided by operating activities		2,533,775			2,092,712			1,047,667

Cash flows provided by (used in) investing activities
	Proceeds from sales of condominiums		—			—			2,413,148
	Purchase and improvement of rental properties		(391,741	)		(129,504,313	)		(1,258,490	)

	Net cash provided by (used in) investing activities		(391,741	)		(129,504,313	)		1,154,658
Cash flows provided by (used in) financing activities
	Payment of financing cost		(5,000	)		(583,166	)		0
	Proceeds of mortgage payable		—			89,914,000			0
	Principal payments of mortgage payable		(250,827	)		(238,022	)		(184,626	)
	(Distributions to) investment by investors		(2,237,000	)		39,437,000			(2,425,000	)

	Net cash provided by (used in) financing activities		(2,492,827	)		128,529,812			(2,609,626	)

Net increase (decrease) in cash and cash equivalents			(350,793	)		1,118,211			(407,301	)
Cash and cash equivalents, at beginning of year			1,124,184			5,972			413,273

Cash and cash equivalents, at end of year		$	773,391		$	1,124,183		$	5,972

Supplementary cash flow statement info:
Cash paid for interest		$	5,933,103		$	1,772,400		$	882,432

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination: The combined financial statements include the accounts of Hamilton Park Towers LLC ("Dexter Park" or "Hamilton Park"), Hamilton on Main LLC ("Hamilton Place") and Hamilton on Main Apartments LLC ("Hamilton Place Apartments") collectively (the "Joint Ventures"). Hamilton Place and Hamilton Place Apartments are owned 50% and Hamilton Park is owned 40% by New England Realty Associates, Limited Partnership ("NERA") and are "significant subsidiaries" under Rule 3-09 of Regulation S-X requiring separate financial statements. All significant intercompany accounts and transactions are eliminated in the combined statements between these three entities. Hamilton 1025 LLC, previously included, is no longer a significant subsidiary and it has been eliminated in the 2008 statements.

Line of Business: The Joint Ventures own and operate various residential apartment buildings located in Greater Boston.

Revenue Recognition: Rental income from residential properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. Concessions made on residential leases are accounted for on the straight-line basis.

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 values for acquired properties are amortized 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.

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.

Other intangible assets acquired include amounts for in-place lease values 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. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals 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

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

Income Taxes: The financial statements have been prepared on the basis that the joint ventures are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes has been recorded.

Cash Equivalents: The Joint Ventures considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

Segment Reporting: Operating segments are revenue-producing components of the joint venture for which separate financial information is produced internally for management. Under the definition, The Joint Ventures operated, for all periods presented, as one segment. Comprehensive Income: Comprehensive income is defined as changes in members' equity, exclusive of transactions with owners (such as capital contributions and dividends). The Joint Ventures did not have any comprehensive income items in 2010, 2009, or 2008 other than net income as reported.

Concentration of Credit Risks and Financial Instruments: The Joint Venture's properties are located in Greater Boston, and are subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the revenues in 2010, 2009 or 2008. The Joint Ventures make their temporary cash investments with high-credit-quality financial institutions.

Advertising Expense: Advertising is expensed as incurred. Advertising expense was $59,000 in 2010 and was insignificant in 2009 and 2008.

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount 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.

Extinguishment of Debt: When existing mortgages are refinanced with the same lender and it is determined that the refinancing is substantially different then they will be recorded as an extinguishment of debt. However if it is determined that the refinancing is substantially the same then they will be recorded as an exchange of debt. All refinancing qualify as extinguishment of debt.

Reclassifications: Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

NOTE 2. RENTAL PROPERTIES

Properties consist of the following:

	Year Ended December 31,

	2010			2009			Useful Life
Land, improvements and parking lots	$	35,235,809		$	35,235,224		15–40 years
Buildings and improvements		95,814,901			95,797,503		15–40 years
Kitchen cabinets		295,473			408,241		5–10 years
Carpets		1,663,422			1,592,972		5–10 years
Air conditioning		24,089			49,294		7–10 years
Elevator		1,705,708			1,705,708		20 years
Equipment		7,205,351			7,223,284		5–7 years
Fences		—			990		5–10 years
Furniture and fixtures		11,750,244			14,291,755		5–7 years
Smoke alarms		2,423			2,943		5–7 years

		153,697,421			156,307,913
Less accumulated depreciation		(12,406,389	)		(8,836,200	)

	$	141,291,032		$	147,471,713

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 2. RENTAL PROPERTIES (Continued)

A reconciliation of rental properties and accumulated depreciation is as follows:

		Hamilton Park Towers LLC		Hamilton on Main Apts LLC			Hamilton on Main LLC			Total

Balance, January 1, 2008		$	—	$	30,310,807		$	2,278,843		$	32,589,650
	Purchase of and addition to Property		—		1,348,889			—			1,348,889
	Condominium sale		—		(28,588	)		(2,278,843	)		(2,307,431	)

Balance, December 31, 2008			—		31,631,108			—			31,631,108
	Purchase of and addition to Property		124,628,719		48,086			—			124,676,805

Balance, December 31, 2009			124,628,719		31,679,194			—			156,307,913
	Purchase of and addition to Property		363,261		28,480			—			391,741
	Fully Depreciated Properties		—		(3,002,233	)		—			(3,002,233	)

Balance, December 31, 2010			124,991,980		28,705,441			—			153,697,421

Accumulated Depreciation:
Balance, January 1, 2008			—		4,812,691			209,464			5,022,155
	Depreciation for year		—		1,632,658			—			1,632,658
	Depreciation of disposition		—		(26,513	)		(209,464	)		(235,977	)

Balance, December 31, 2008			—		6,418,836			—			6,418,836
	Depreciation for year		926,330		1,491,034			—			2,417,364

Balance, December 31, 2009			926,330		7,909,870			—			8,836,200
	Depreciation for year		5,597,403		975,019			—			6,572,422
	Fully Depreciation w/o		—		(3,002,233	)		—			(3,002,233	)

Balance, December 31, 2010			6,523,733		5,882,656			—			12,406,389

Book Value		$	118,468,247	$	22,822,785		$	—		$	141,291,032

NOTE 3. RELATED PARTY TRANSACTIONS

The Joint Ventures' properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% at Hamilton Place Apartments and 2% at Hamilton Park Towers of rental revenue and laundry income. Total fees paid were approximately $341,000, $154,000 and $98,000 in 2010, 2009 and 2008, respectively.

In 2010, the Management Company also received approximately $4,000 for construction supervision and architectural fees, $28,000 for maintenance services and $16,000 for administrative services.

In 2009, the Management Company also received approximately $10,000 for maintenance services and $8,000 for administrative services.

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 3. RELATED PARTY TRANSACTIONS (Continued)

In 2008, the Management Company also received approximately $6,000 for construction costs, $6,000 for construction supervision and architectural fees, $10,000 for maintenance services and $12,000 for administrative services. The Hamilton Company legal department acts as closing attorney on certain condo sales receiving approximately $5,950 during the year ended December 31, 2008. An entity partially owned by the majority shareholder of the General Partner is the sales agent for certain condominium sales receiving approximately $43,000 of commissions in 2008.

NOTE 4. OTHER ASSETS

Financing and leasing fees of approximately $547,000 and $608,000 are net of accumulated amortization of approximately $110,000 and $44,000 at December 31, 2010 and 2009, respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

At December 31, 2010 and 2009, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At December 31, 2010, the interest rates on these loans ranged from 5.18% to5.57%, payable in monthly installments aggregating approximately $523,000, including interest, to various dates through 2019. The majority of the mortgages are subject to prepayment penalties. At December 31, 2010, the weighted average interest rate on the above mortgages was 5.51%.

The Joint Ventures have pledged tenant leases as additional collateral for certain of these loans.

Approximate annual maturities at December 31, 2010 are as follows:

	Hamilton Park Towers LLC		Hamilton On Main Apartments		Hamilton On Main LLC		Total

2011—Current Maturities	$	194,705	$	261,897	$	—	$	456,602
2012		1,206,869		278,413		—		1,485,282
2013		1,275,835		293,392		—		1,569,227
2014		1,348,741		309,178		—		1,657,919
2015		1,425,814		15,008,646		—		16,434,460
Thereafter		84,462,036				—		84,462,036

	$	89,914,000	$	16,151,526	$	—	$	106,065,526

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Joint Ventures' residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At December 31, 2010, amounts received for prepaid rents of approximately $953,000 are included in cash and cash equivalents; security deposits of approximately $874,000 are included with other assets and are restricted cash.

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 7. COMMITMENTS AND CONTINGENCIES

From time to time, the Joint Ventures may be involved in various ordinary routine litigation incidental to their business. The Joint Ventures either have insurance coverage or provide for any uninsured claims when appropriate. The Joint Ventures are not involved in any material pending legal proceedings.

NOTE 8. RENTAL INCOME

Substantially all rental income was related to residential apartments and condominium units with leases of one year of less.

Rents receivable are approximately $136,000, $88,000 and $1,500 net of allowances for doubtful accounts at December 31, 2010, 2009 and 2008, respectively.

NOTE 9. CASH FLOW INFORMATION

During the years ended December 31, 2010, 2009 and 2008, cash paid for interest was approximately $5,933,000, $1,722,000 and $882,000 respectively.

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value Measurements on a Recurring Basis

At December 31, 2010 and 2009, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not measured at Fair Value

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

The following table reflects the carrying amounts and estimated fair value of our debt.

	Carrying Amount		Estimated Fair Value

Mortgage Notes Payable
At December 31, 2010	$	106,065,526	$	107,107,052
At December 31, 2009	$	106,316,353	$	104,882,698

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2010 and 2009. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2010 and current estimates of fair value may differ significantly from the amounts presented herein.

NOTE 11. TAXABLE INCOME AND TAX BASIS

The Joint Ventures are not subject to income taxes as they file partnership tax returns whereby their income or loss is reportable by the owners.

Taxable income or loss is different than financial statement income because of intangible assets, accelerated depreciation, different tax lives, and timing differences related to prepaid rents and allowances. The partnerships share of the taxable loss is approximately $1,300,000 less than statement loss for the year ended December 31, 2010 substantially due to the amortization of deferred charges at Park Towers which is not deductible for income taxes. The cumulative tax basis of the Joint Ventures real estate allocated to the partnership at December 31, 2010 is approximately $1,500,000 less than the statement basis primarily due to the purchase price allocation to intangible assets at Hamilton Park Towers.

NOTE 12. INTANGIBLE ASSETS

The Partnership estimates the fair value of intangible assets acquired at significant acquisitions as described in Note 1 including above market leases, in place leases and tenant relationships as though the acquisition is acquired "as if vacant". Hamilton Park Towers, a 409 unit residential complex, was acquired on October 28, 2009. Substantially all of the property's leases are for one year and there is substantial "turnover" of the existing tenants each year. The analysis of the above mentioned factors

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 12. INTANGIBLE ASSETS (Continued)

resulted in approximately $4,900,000 of the $129,500,000 purchase price allocated to intangible assets amortizable over a twelve month period as follows:

	Fair Value at Acquisition		Monthly Amortization

In-place leases	$	4,100,000	$	340,000
Tenant relationships		450,000		37,500

		4,550,000		377,500
Over-market leases		350,000		30,000

	$	4,900,000	$	407,500

Approximate in-place leases and tenant relationships are amortized in operating expenses and amortization of over-market leases are a reduction of rental income as follows:

	At Acquisition October 28, 2009		2009 Amortization		2010 Amortization		Book Value December 31, 2010

In-place leases and tenant relationships	$	4,550,000	$	755,000	$	3,795,000	$	—
Over-market leases		350,000		60,000		290,000		—

	$	4,900,000	$	815,000	$	4,085,000	$	—

These deferred charges were fully amortized in 2010.

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES

Combining Balance Sheet

December 31, 2010

		Hamilton Park Towers LLC		Hamilton on Main Apartments LLC			Total

ASSETS
Rental Properties		$	118,468,247	$	22,822,785	—	$	141,291,032
Cash and Cash Equivalents			754,066		19,325	—		773,390
Rent Receivable			125,475		10,686	—		136,162
Real Estate Tax Escrow			484,566		98,036	—		582,603
Prepaid Expenses and Other Assets			1,089,897		418,289	—		1,508,187
Financing and Leasing Fees			518,395		28,304	—		546,699

	Total Assets	$	121,440,647	$	23,397,425	—	$	144,838,072

LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable		$	89,914,000	$	16,151,526	—	$	106.065,526
Accounts Payable and Accrued Expense			787,584		206,997	—		994,582
Advance Rental Payments and Security Deposits			1,684,843		226,689	—		1,911,533

	Total Liabilities		92,386,428		16,585,212	—		108,971,640
Members' Capital			29,054,219		6,812,213	—		35,866,432

	Total Liabilities and Members' Capital	$	121,440,647	$	23,397,425	—	$	144,838,072

Members' Capital—NERA 50%			—		3,406,107	—		3,406,107
Members' Capital—NERA 40%			11,621,688		—	—		11,621,688

		$	11,621,688	$	3,406,107	—	$	15,027,794

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Income
Year Ended December 31, 2010

		Hamilton Park Towers LLC			Hamilton on Main Apartments LLC				Total

Revenues
	Rental Income	$	11,019,862		$	2,455,222		—	$	13,475,084
	Laundry and Sundry Income		97,902			19,780		—		117,681

			11,117,763			2,475,001		—		13,592,765

Expenses
	Administrative		148,097			39,289		—		187,387
	Depreciation and Amortization		9,428,284			981,881		—		10,410,164
	Management Fees		244,178			97,239		—		341,417
	Operating		960,328			358,827		—		1,319,155
	Renting		281,545			15,361		—		296,906
	Repairs and Maintenance		859,088			342,310		—		1,201,399
	Taxes and Insurance		1,451,016			318,150		—		1,769,166

			13,372,537			2,153,057		—		15,525,593

Income Before Other Income			(2,254,773	)		321,944		—		(1,932,829	)

Other Income (Loss)
	Interest Income		5			8		—		13
	Interest Expense		(5,116,598	)		(860,500	)	—		(5,977,098	)
	Other Income (Expenses)		(17,720	)		2,168		—		(15,552	)

			(5,134,313	)		(858,323	)	—		(5,992,636	)

Net Income (Loss)		$	(7,389,086	)	$	(536,379	)	—	$	(7,925,465	)

NERA 50%			—			(268,189	)	—		(268,189	)
NERA 40%			(2,955,635	)		—		—		(2,955,635	)

		$	(2,955,635	)	$	(268,189	)	—	$	(3,223,824	)

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Cash Flow
Year Ended December 31, 2010

		Hamilton Park Towers LLC			Hamilton on Main Apartments LLC				Total

Cash Flows from Operating Activities
	Net Income (loss)	$	(7,389,086	)	$	(536,379	)	—	$	(7,925,465	)

Adjustments to reconcile net income to net cash provided (used) by operating activities:
	Depreciation and amortization		9,428,284			981,881		—		10,410,165
	Amortization of above market lease		301,729			—		—		301,729
Changes in operating assets and liabilities:
	(Increase) Decrease in rents receivable		(42,525	)		(5,169	)	—		(47,694	)
	(Decrease) Increase in accounts payable and accrued exp		33,916			(29,079	)	—		4,837
	(Increase) Decrease in real estate tax escrow		(146,176	)		(452	)	—		(146,628	)
	(Increase) decrease in prepaid expenses and other assets		(81,863	)		(88,817	)	—		(170,680	)
	(Decrease) increase in advance rental payments and security deposits		107,206			305		—		107,511

	Total adjustments		9,600,571			858,669		—		10,459,240

	Net cash provided by (used in)operating activities		2,211,485			322,290		—		2,533,775

Cash flows provided by (used in) investing activities
	Purchase and improvement of rental properties		(363,261	)		(28,480	)	—		(391,741	)

	Net cash provided by (used in) investing activities		(363,261	)		(28,480	)	—		(391,741	)

Cash flows provided by (used in) investing activities
	Payment of financing cost		(5,000	)		—		—		(5,000	)
	Proceeds of mortgage payable		—			—		—		—
	Principal payments of mortgage payable		—			(250,827	)	—		(250,827	)
	(Distributions) to/investment by members		(2,075,000	)		(162,000	)	—		(2,237,000	)

	Net cash provided by (used in) financing activities		(2,080,000	)		(412,827	)	—		(2,492,827	)

Net increase (decrease) in cash and cash equivalents			(231,776	)		(119,017	)	—		(350,793	)
Cash and cash equivalents, at beginning of year			985,842			138,342		—		1,124,184

Cash and cash equivalents, at end of year		$	754,066		$	19,325		—	$	773,391

Supplementary cash flow statement information:
Cash paid for interest		$	5,077,768		$	855,334		—	$	5,933,103

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Balance Sheet

December 31, 2009

		Hamilton Park Towers LLC		Hamilton on Main Apartments LLC			Total

ASSETS
Rental Properties		$	123,702,389	$	23,769,324	—	$	147,471,713
Cash and Cash Equivalents			985,842		138,342	—		1,124,183
Rent Receivable			82,950		5,517	—		88,467
Real Estate Tax Escrow			338,390		97,584	—		435,974
Intangible Assets			4,085,000		—			4,085,000
Prepaid Expenses and Other Assets			996,245		329,472	—		1,325,717
Financing and Leasing Fees			572,795		35,165	—		607,960

	Total Assets	$	130,763,610	$	24,375,403	—	$	155,139,014

LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable		$	89,914,000	$	16,402,353	—	$	106,316,353
Accounts Payable and Accrued Expense			753,668		236,076	—		989,744
Advance Rental Payments and Security Deposits			1,577,637		226,382	—		1,804,019

	Total Liabilities		92,245,305		16,864,810	—		109,110,115
Members' Capital			38,518,305		7,510,593	—		46,028,898

	Total Liabilities and Members' Capital	$	130,763,610	$	24,375,403	—	$	155,139,014

Members' Capital—NERA 50%			—		3,755,297	—		3,755,297
Members' Capital—NERA 40%			15,407,322		—	—		15,407,322

		$	15,407,322	$	3,755,297	—	$	19,162,619

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Income
Year Ended December 31, 2009

		Hamilton Park Towers LLC			Hamilton on Main Apartments LLC				Total

Revenues
	Rental Income	$	1,912,267		$	2,415,312		—	$	4,327,579
	Laundry and Sundry Income		15,846			21,818		—		37,664

			1,928,113			2,437,130		—		4,365,243

Expenses
	Administrative		122,516			37,605		—		160,121
	Depreciation and Amortization		1,690,998			1,499,119		—		3,190,117
	Management Fees		54,257			99,298		—		153,555
	Operating		173,464			351,567		—		525,032
	Renting		13,458			14,104		—		27,562
	Repairs and Maintenance		81,615			309,454		—		391,069
	Taxes and Insurance		192,386			302,142		—		494,529

			2,328,694			2,613,290		—		4,941,984

Income Before Other Income			(400,582	)		(176,160	)	—		(576,741	)

Other Income (Loss)
	Interest Income		9,455			3		—		9,459
	Interest Expense		(904,260	)		(873,855	)	—		(1,778,115	)
	Other Income (Expenses)		(309	)		—		—		(309	)

			(895,113	)		(873,852	)	—		(1,768,965	)

Net (Loss)		$	(1,295,695	)	$	(1,050,012	)	—	$	(2,345,707	)

NERA 50%			—			(525,006	)	—		(525,006	)
NERA 40%			(518,278	)		—		—		(518,278	)

		$	(518,278	)	$	(525,006	)	—	$	(1,043,284	)

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Cash Flow
Year Ended December 31, 2009

		Hamilton Park Towers LLC			Hamilton on Main Apartments LLC				Total

Cash Flows from Operating Activities
	Net Income (loss)	$	(1,295,695	)	$	(1,050,012	)	—	$	(2,345,707	)

Adjustments to reconcile net income to net cash provided (used) by operating activities:
	Depreciation and amortization		1,690,998			1,499,119		—		3,190,117
	Amortization of above market lease		60,346			—		—		60,346
Changes in operating assets and liabilities:										0
	(Increase) Decrease in rents receivable		(82,950	)		(3,993	)	—		(86,943	)
	(Decrease) Increase in accounts payable and accrued exp		753,668			64,293		—		817,961
	(Increase) Decrease in real estate tax escrow		(338,390	)		(2,647	)	—		(341,037	)
	(Increase) Decrease in due from joint venture		—			230,000		—		230,000
	(Increase) decrease in prepaid expenses and other assets		(1,068,381	)		22,957		—		(1,045,424	)
	(Decrease) increase in advance rental payments and security deposits		1,577,637			35,762		—		1,613,399

	Total adjustments		2,592,928			1,845,491		—		4,438,419

	Net cash provided by (used in) operating activities		1,297,233			795,479		—		2,092,712

Cash flows provided by (used in) investing activities
	Purchase and improvement of rental properties*		(129,456,226	)		(48,087	)	—		(129,504,313	)

	Net cash provided by (used in) investing activities		(129,456,226	)		(48,087	)	—		(129,504,313	)

Cash flows provided by (used in) investing activities
	Payment of financing cost		(583,166	)		—		—		(583,166	)
	Proceeds of mortgage payable		89,914,000			—		—		89,914,000
	Principal payments of mortgage payable		—			(238,022	)	—		(238,022	)
	(Distributions) to/investment by members		39,814,000			(377,000	)	—		39,437,000

	Net cash provided by (used in) financing activities		129,144,834			(615,022	)	—		128,529,812

Net increase (decrease) in cash and cash equivalents			985,841			132,370		—		1,118,211
Cash and cash equivalents, at beginning of year			—			5,972		—		5,972

Cash and cash equivalents, at end of year		$	985,841		$	138,342		—	$	1,124,183

Supplementary cash flow statement information:
Cash paid for interest		$	904,260		$	868,140		—	$	1,772,400

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Balance Sheet

December 31, 2008

			Hamilton on Main Apartments LLC			Total

ASSETS
Rental Properties		—	$	25,212,271	—	$	25,212,271
Cash and Cash Equivalents		—		5,972	—		5,972
Rent Receivable		—		1,524	—		1,524
Real Estate Tax Escrow		—		94,937	—		94,937
Due From Joint Venture				230,000			230,000
Prepaid Expenses and Other Assets		—		352,429	—		352,429
Financing & Leasing Fees		—		43,250	—		43,250

	Total Assets	—	$	25,940,383	—	$	25,940,383

LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable		—	$	16,640,374	—	$	16,640,374
Accounts Payable and Accrued Expense		—		171,783	—		171,783
Advance Rental Payments and Security Deposits		—		190,620	—		190,620

	Total Liabilities	—		17,002,777	—		17,002,777
Members' Capital		—		8,937,606	—		8,937,606

	Total Liabilities and Members' Capital	—	$	25,940,383	—	$	25,940,383

Members' Capital—NERA 50%		—		4,468,803	—		4,468,803
Members' Capital—NERA 40%		—		—	—		—

		—	$	4,468,803	—	$	4,468,803

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Income
Year Ended December 31, 2008

			Hamilton on Main Apartments LLC			Hamilton on Main LLC			Total

Revenues
	Rental Income	—	$	2,353,792		$	1,747		$	2,355,539
	Laundry and Sundry Income	—		19,505			—			19,505

		—		2,373,297			1,747			2,375,044

Expenses
	Administrative	—		56,078			3,839			59,917
	Depreciation and Amortization	—		1,549,671			7,019			1,556,690
	Management Fees	—		97,527			51			97,578
	Operating	—		362,065			214			362,279
	Renting	—		30,794			—			30,794
	Repairs and Maintenance	—		408,826			5,828			414,654
	Taxes and Insurance	—		316,355			4,861			321,216

		—		2,821,316			21,812			2,843,128

Income Before Other Income		—		(448,019	)		(20,065	)		(468,084	)

Other Income (Loss)
	Interest Income	—		1,484			2,640			4,124
	Interest Expense	—		(887,633	)		(7	)		(887,640	)
	Other Income (Expenses)	—		12,925			335,124			348,049

		—		(873,224	)		337,757			(535,467	)

Net Income (Loss)		—	$	(1,321,243	)	$	317,692		$	(1,003,551	)

NERA 50%		—		(660,622	)		158,846			(501,776	)
NERA 40%		—		—			—			—

		—	$	(660,622	)	$	158,846		$	(501,776	)

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Cash Flow
Year Ended December 31, 2008

			Hamilton on Main Apartments LLC			Hamilton on Main LLC			Total

Cash Flows from Operating Activities
	Net Income (loss)	—	$	(1,321,242	)	$	317,693		$	(1,003,549	)

Adjustments to reconcile net income to net cash provided (used) by operating activities:
	Gain on sale of condominiums	—		(12,925	)		(335,124	)		(348,049	)
	Depreciation and amortization	—		1,549,671			7,019			1,556,690
Changes in operating assets and liabilities:										—
	(Increase) Decrease in rents receivable	—		8,424			102			8,526
	(Decrease) Increase in accounts payable and accrued exp	—		45,962			(11,814	)		34,148
	(Increase) Decrease in real estate tax escrow	—		321,776			—			321,776
	(Increase) Decrease in due from joint venture	—		(660,591	)		1,130,591			470,000
	(Increase) decrease in financing and leasing fees	—		—			3,690			3,690
	(Increase) decrease in prepaid expenses and other assets	—		(32,624	)		706			(31,918	)
	(Decrease) increase in advance rental payments and security deposits	—		37,671			(1,318	)		36,353

	Total adjustments	—		1,257,364			793,852			2,051,216

	Net cash provided by (used in) operating activities	—		(63,878	)		1,111,545			1,047,667

Cash flows provided by (used in) investing activities Proceeds from sales of condominiums		—		15,000			2,398,148			2,413,148
	Purchase and improvement of rental properties	—		(1,258,490	)		—			(1,258,490	)

	Net cash provided by (used in) investing activities	—		(1,243,490	)		2,398,148			1,154,658
Cash flows provided by (used in) investing activities Proceeds of mortgage and notes payable		—					—			—
	Principal payments of mortgage and notes payable	—		(184,626	)		—			(184,626	)
	(Distributions to) investment by members	—		1,494,276			(3,919,276	)		(2,425,000	)

	Net cash provided by (used in) financing activities	—		1,309,650			(3,919,276	)		(2,609,626	)

Net increase (decrease) in cash and cash equivalents		—		2,282			(409,583	)		(407,301	)
Cash and cash equivalents, at beginning of year		—		3,690			409,583			413,273

Cash and cash equivalents, at end of year		—	$	5,972		$	—		$	5,972

Supplementary cash flow statement information:
Cash paid for interest		—	$	882,432		$	—		$	882,432

HAMILTON PARK TOWERS LLC, HAMILTON ON MAIN APARTMENTS LLC, AND
HAMILTON ON MAIN LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010

NOTE 14. NEW ACCOUNTING PRONOUNCEMENT

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Exhibit 99.1