UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported) March 4, 2008 (February 27, 2008)

 

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Charter)

 

Massachusetts

 

0-12138

 

04-2619298

(State or Other Jurisdiction

 

(Commission

 

(IRS Employer

of Incorporation)

 

File Number)

 

Identification Number)

 

39 Brighton Avenue, Allston, Massachusetts

 

02134

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code (617) 783-0039

 

N/A

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 


 

Item 1.01 Entry Into a Material Definitive Agreement.

 

On January 11, 2008, New England Realty Associates Limited Partnership (the “Partnership”) and The Hamilton Company (“Hamilton”), a full service real estate management company that performs management services for the Partnership, entered into a commitment letter (the “Commitment Letter”) with Wachovia Multifamily Capital, Inc. (“Wachovia”) for an aggregate of $90,975,000 in mortgage financing (each, a “Loan” and collectively, the “Loans”) for three properties owned by Hamilton and ten properties owned by the Partnership (the “Partnership Properties”).  Each Loan provides for a 0.5% financing fee for Wachovia, will bear interest at 5.60% per annum, will mature 15 years from the date of closing of the Loan and will be interest only for the entire 15 year term of the Loan.  None of the Loans are cross collateralized.

 

On February 27, 2008, the Partnership, Hamilton and Wachovia entered into an amendment to the Commitment Letter (the “Amendment”) to provide for an additional $7,735,000 in mortgage financing for five of the Partnership Properties on the same terms and conditions of the Loans under the Commitment Letter.

 

In connection with the execution of Amendment, the Partnership paid an additional, non-refundable deposit of $100,000 to Wachovia.

 

A copy of the Amendment entered into by and between the Partnership, Hamilton and Wachovia is filed herewith as Exhibit 10.1.

 

Item 2.03          Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

 

(a)  Creation of a Direct Financial Obligation

 

On February 27, 2008, the Partnership and Hamilton completed the mortgage financing with Wachovia with respect to $91,506,000.  Approximately $58,539,000 of the proceeds from these completed Loans has been allocated to, and will be secured individually by 10 Partnership Properties, and the loan-to-value ratio for each such Partnership Property shall not exceed 55%. Simultaneous with the funding of the Loans, the Partnership paid off approximately $37,834,000 in existing mortgage indebtedness of these Partnership Properties. The Partnership has retained the balance of the proceeds to pay related closing costs and to fund the Partnership’s general working capital needs. The Partnership expects that annual debt service for the completed Loans will be approximately $3,250,000, an annual increase of $124,261.  Further in the year, the Partnership expects to close on another Wachovia related Loan for $7 million that will be secured by one of the Partnership Properties, Westside Colonial, and simultaneously retire approximately $4.5 million in existing mortgage indebtedness.

 

Item 9.01  Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.

 

Description

 

 

 

10.1*

 

Amendment dated February 27, 2008 to Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008.

 

 

 

10.2

 

Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008 (filed as exhibit 10.1 to the Partnership’s current report on Form 8-K as filed with the Securities and Exchange Commission on February 6, 2008 and incorporated herein by reference).

 

* Filed herewith.

 

2


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

NEW ENGLAND REALTY ASSOCIATES

 

 

 

LIMITED PARTNERSHIP

 

 

 

 

 

By:

NewReal, Inc., its General Partner

 

 

 

 

 

 

By

/s/ Ronald Brown

 

 

 

 

Ronald Brown, its President

Date March 4, 2008

 

3


 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

10.1*

 

Amendment dated February 27, 2008 to Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008.

 

 

 

10.2

 

Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008 (filed as exhibit 10.1 to the Partnership’s current report on Form 8-K as filed with the Securities and Exchange Commission on February 6, 2008 and incorporated herein by reference).

 

* Filed herewith.

 

4

Exhibit 10.1

 

WACHOVIA

 

February 27, 2008

 

Mr. Carl Valeri

The Hamilton Company

39 Brighton Avenue

Boston, Massachusetts 02134

 

 

Re:

Project Name:

 

Hamilton Portfolio

 

 

Location:

 

See Attached Exhibit A

 

 

Number of Units

 

See Attached Exhibit A

 

 

 

 

 

Dear Mr. Valeri:

 

Reference is hereby made to the commitment letter issued by Wachovia Multifamily Capital, Inc. (“Lender) in your favor and dated January 11, 2008 (the “Commitment”).

 

The Commitment is hereby amended to add the following:

 

Borrower has requested an increase in the loan proceeds for the Properties listed in Exhibit A attached hereto (the “Increased Loan Proceeds”), which is in excess of the 5% tolerance permitted under the existing early rate lock, which occurred on January 11, 2008 (the “Original Interest Rate Lock”). Therefore, a subsequent rate lock must occur (the “Dual Interest Rate Lock”). The interest rate determined at the time of the Dual Interest Rate Lock will be combined on a weighted average basis with the Original Interest Rate Lock to determine the final interest rate (the “Final Blended Interest Rate”) for these Properties. Borrower will be required to execute a Dual Rate Setting Form for the Dual Interest Rate Lock.

 

Except as expressly modified by this letter, the existing terms, conditions, obligations and requirements of the Commitment hereby do and shall remain in full force and effect. All terms not defined herein shall have the meanings ascribed to them in the Commitment, the Prior Rate Setting Form and the Borrower Certification.

 


 

Mr. Carl Valeri

February 27, 2008

Re: Hamilton Portfolio

 

Please sign and return a copy of this letter so that it is received in this office no later than February 27, 2008.

 

 

Very truly yours,

 

 

 

WACHOVIA MULTIFAMILY CAPITAL, INC.

 

 

 

By:

/s/ Marie Carolo

 

 

Name: Marie Carolo

 

 

Title:   Director

 

 

 

 

 

Accepted and Agreed to this

27 day of February, 2008

 

Olde English Apts., L.P.

 

 

By:

/s/ Ronald Brown

 

 

Name:

 

Title:

 

Commonwealth 1137, LP

 

 

By:

/s/ Ronald Brown

 

 

Name:

 

Title:

 

Commonwealth 1144, LP

 

 

By:

/s/ Ronald Brown

 

 

Name:

 

Title:

 

 

Clovelly Apartments, LP

 

 

By:

/s/ Ronald Brown

 

 

Name:

 

Title:

 

2


 

Mr. Carl Valeri

February 27, 2008

Re: Hamilton Portfolio

 

 

River Drive, LP

 

By:

/s/ Ronald Brown

 

 

Name:

 

Title:

 

3


 

Mr. Carl Valeri

February 27, 2008

Re: Hamilton Portfolio

 

EXHIBIT A

 

 

 

 

 

Increased Loan

 

 

 

 

 

Original Rate Locked

 

Proceeds at Dual

 

 

 

Property & Address

 

Amount

 

Interest Rate Lock

 

Final Loan Amount

 

Olde English Village, 704-

 

 

 

 

 

 

 

718 Chelmsford Street,

 

 

 

 

 

 

 

Lowell, MA

 

$

2,000,000

 

$

1,080,000

 

$

3,080,000

 

Commonwealth Gardens,

 

 

 

 

 

 

 

1131-1137 Commonwealth

 

 

 

 

 

 

 

Ave, Boston, MA

 

$

2,000,000

 

$

1,750,000

 

$

3,750,000

 

Commonwealth Apts.,

 

 

 

 

 

 

 

1144-1160 Commonwealth

 

 

 

 

 

 

 

Ave, Boston, MA

 

$

12,000,000

 

$

2,780,000

 

$

14,780,000

 

Clovelly Apts., 160-170

 

 

 

 

 

 

 

Concord Street, Nashua,

 

 

 

 

 

 

 

NH

 

$

3,000,000

 

$

1,160,000

 

$

4,160,000

 

River Drive Apts., 3-17

 

 

 

 

 

 

 

River Drive, Danvers, MA

 

$

2,500,000

 

$

965,000

 

$

3,465,000

 

 

4