New England Realty Associates LP (NEN, Financial) filed Quarterly Report for the period ended 2012-09-30.
New England Realty Associates Lp has a market cap of $89.5 million; its shares were traded at around $28.39 with a P/E ratio of 1.6 and P/S ratio of 2.6. The dividend yield of New England Realty Associates Lp stocks is 3.5%.
The Partnerships 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 gross receipts of rental revenue and laundry income on the majority of the Partnerships properties and 3% on Linewt. Total fees paid were approximately $1,078,000 and $1,047,000 during the nine months ended September 30, 2012 and 2011 respectively.
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 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. 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
As anticipated, the third quarter results reflect both last years leasing gains as well as the current strong demand for rental units yielding revenue increases at the majority of the properties. These increases will be reflected over the next four quarters. Pending an early winter, we expect the 2012 results to continue to exceed 2011. Similar to the second quarter, the portfolio experienced higher tenant retention in the third quarter than it did for the same period in 2011. In addition to revenue growth, the portfolio continues to experience flat to lower operating expenses. External factors include, the rental housing supply/demand imbalance, limited additions to supply, national and local growth in the renter population, a historic shift in homebuyer sentiment and a local employment base stronger than the national average. These factors combined to produce an overall growth in rental income of 5.2% as compared to 2011. Management expects these increases to continue through the remainder of the 2012 calendar year. The Partnership properties and Joint Ventures have experienced a vacancy rate of 3% or less, with many properties 100% occupied as of November 1, 2012. Management believes that increasing student applications and a continued decline in the local unemployment rate will keep occupancy high for the next 18-24 months and revenue growth will continue to be positive during this time frame.
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New England Realty Associates Lp has a market cap of $89.5 million; its shares were traded at around $28.39 with a P/E ratio of 1.6 and P/S ratio of 2.6. The dividend yield of New England Realty Associates Lp stocks is 3.5%.
Highlight of Business Operations:
Concentration of Credit Risks and Financial Instruments: The Partnerships 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 Partnerships revenues in 2012 or 2011. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At September 30, 2012, substantially all of the Partnerships cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.45%. At September 30, 2012 and December 31, 2011, respectively approximately $6,243,000 and $5,051,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.The Partnerships 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 gross receipts of rental revenue and laundry income on the majority of the Partnerships properties and 3% on Linewt. Total fees paid were approximately $1,078,000 and $1,047,000 during the nine months ended September 30, 2012 and 2011 respectively.
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 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. 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
As anticipated, the third quarter results reflect both last years leasing gains as well as the current strong demand for rental units yielding revenue increases at the majority of the properties. These increases will be reflected over the next four quarters. Pending an early winter, we expect the 2012 results to continue to exceed 2011. Similar to the second quarter, the portfolio experienced higher tenant retention in the third quarter than it did for the same period in 2011. In addition to revenue growth, the portfolio continues to experience flat to lower operating expenses. External factors include, the rental housing supply/demand imbalance, limited additions to supply, national and local growth in the renter population, a historic shift in homebuyer sentiment and a local employment base stronger than the national average. These factors combined to produce an overall growth in rental income of 5.2% as compared to 2011. Management expects these increases to continue through the remainder of the 2012 calendar year. The Partnership properties and Joint Ventures have experienced a vacancy rate of 3% or less, with many properties 100% occupied as of November 1, 2012. Management believes that increasing student applications and a continued decline in the local unemployment rate will keep occupancy high for the next 18-24 months and revenue growth will continue to be positive during this time frame.
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