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SUBSEQUENT EVENTS | 12 Months Ended
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Dec. 31, 2012
SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS | NOTE 18. SUBSEQUENT EVENTS From January 1, 2013 through March 14, 2013, the Partnership purchased a total of 9,709 Depositary Receipts. The average price was $32.24 per receipt or $967.20 per unit. The total cost was $321,240. The Partnership is required to repurchase 76.86 Class B Units and 4.05 General Partnership units at a cost of $74,335 and $3,912, respectively. On February 4, 2013, the Partnership announced the approval of a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2013 and payable on March 31, 2013 of $7.50 per unit and $0.25 per receipt. Discontinued Operations At the February 4, 2013 meeting of the Advisory Committee, the Committee approved managements plan to seek a sale of the 32 unit Nashoba Apartments LP in Acton, Massachusetts. This complex will be accounted for as a discontinued operation in 2013. There is no assurance that the complex can be sold at an acceptable price. The selling price is expected to be well in excess of its book value and outstanding mortgage. Summary historical information is presented below: Financial Statements for Nashoba Apartments LP is as follows: Nashoba Apartments LP Balance Sheets (In Thousands)
|  | December 31, |
--- | --- | --- | ---
|  | 2012 |  | 2011 |
Assets: |  |  |  |  |  |  |
Rental property |  | $ | 1,283 |  | $ | 1,210 |
Accumulated depreciation |  |  | 821 |  |  | 743 |
Rental property (net) |  |  | 462 |  |  | 467 |
Other current assets |  |  | 123 |  |  | 80 |
Other assets |  |  | 2 |  |  | 6 |
Total assets |  | $ | 587 |  | $ | 553 |
Liabilities: |  |  |  |  |  |  |
Mortgage note payable |  | $ | 2,000 |  | $ | 2,000 |
Other liabilities |  |  | 71 |  |  | 70 |
Total liabilities |  |  | 2,071 |  |  | 2,070 |
Partner's equity |  |  | (1,484 | ) |  | (1,517 | )
Total liabilities & partner's equity |  | $ | 587 |  | $ | 553 |
Nashoba Apartments LP Statements of Income (In Thousands)
|  | Years ended December 31, |
--- | --- | --- | ---
|  | 2012 |  | 2011 |  | 2010 |
Rental and other Income |  | $ | 462 |  | $ | 451 |  | $ | 450 |
Operating Expenses |  |  | 241 |  |  | 260 |  |  | 261 |
Interest Expense |  |  | 108 |  |  | 108 |  |  | 108 |
Depreciation |  |  | 80 |  |  | 72 |  |  | 63 |
Total Expenses |  |  | 429 |  |  | 440 |  |  | 432 |
Net Income |  | $ | 33 |  | $ | 11 |  | $ | 18 |
Nashoba Apartments LP Cash Flow Information (In Thousands)
|  | Years ended December 31, |
--- | --- | --- | ---
|  | 2012 |  | 2011 |  | 2010 |
Distributions from (to) Nashoba |  | $ | 1 |  | $ | (72 | ) | $ | 45 |
Mortgage Notes Payable—Refinancing On February 25, 2013, the Partnership paid off the mortgage of approximately $3,697,000 on Hamilton Cypress LLC. There was no penalty on the early payoff. The funds used to pay off the mortgage were from the Partnerships cash reserves. On March 11, 2013, the Partnership refinanced the property located at School Street. The new loan is $15,000,000 with an interest rate of 3.7% due in 2023. The loan calls for interest only for three years followed by principal and interest payments over the remainder of the loan term. The costs associated with this refinancing were approximately $159,000. Additionally, the Partnership is anticipating refinancing debt of approximately $28,000,000 in maturing debt for Boylston Downtown LP and Westgate Apartments LLC. In connection with this refinancing, the Partnership may borrow additional debt of approximately $29,000,000. These funds will be used for future acquisitions, repurchase of additional Depositary Receipts, improvements to its properties or other operating items. Unaudited Pro Forma Financial Information Four of the Partnerships mortgaged properties have or will have changes to their mortgage debt during 2013. On February 25, 2013, the Partnership paid off the mortgage of approximately $3,697,000 on Hamilton Cypress LLC. On March 11, 2013, the Partnership refinanced the property held by School Street 9, LLC with a new mortgage loan in the amount of $15,000,000. For the balance of 2013, the Partnership is working towards refinancing the properties held by Boylston Downtown L.P. and Westgate Apartments, LLC. As of March 22, 2013 no firm commitment had been executed with a lender. However, the Partnership anticipates refinancing the existing Boylston Downtown loan of $19,500,000 with a new loan of $40,000,000 and refinancing the existing Westgate Apartments loan of approximately $7,932,000 with a new loan of $17,000,000. The cumulative effects of these financing activities are presented in the following unaudited pro forma financial statements. The following unaudited pro forma consolidated balance sheet as of December 31, 2012 has been prepared to give effect to the payoff and refinancing of mortgage debt occurring in the first quarter of 2013 and additional refinancing expected to occur during the balance of the year. The following unaudited pro forma balance sheet does not purport to reflect the actual transactions as the majority have yet to occur. The following unaudited pro forma consolidated statement of income for the twelve months ended December 31, 2012 has been prepared to give effect of the payoff and refinancing of mortgage debt occurring in the first quarter of 2013 and additional refinancing expected to occur during the balance of the year. The following unaudited pro forma financial statements have been prepared for informational purposes only and are not necessarily indicative of future results or actual results that would have been achieved had the Partnership structured its debt refinancing as presented. New England Realty Associates Limited Partnership Pro Forma Consolidated Balance Sheet As of December 31, 2012 (Unaudited)
|  |  |  | Pro Forma |
--- | --- | --- | --- | --- | ---
|  | Historical NERA |  | Adjustments Refinancings |  | Consolidated Totals |
ASSETS |  |  |  |  |  |  |  |  |  |
Rental Properties |  | $ | 95,435,850 |  | $ | — |  | $ | 95,435,850 |
Cash and Cash Equivalents |  |  | 6,981,906 | (a) |  | 21,465,693 |  |  | 28,447,599 |
Rents Receivable |  |  | 475,083 |  |  | — |  |  | 475,083 |
Real Estate Tax Escrows |  |  | 449,652 |  |  | — |  |  | 449,652 |
Prepaid Expenses and Other Assets |  |  | 3,073,890 | (b) |  | 2,028,400 |  |  | 5,102,290 |
Investments in Unconsolidated Joint Ventures |  |  | 13,986,173 |  |  | — |  |  | 13,986,173 |
Financing and Leasing Fees |  |  | 1,135,936 | (c) |  | 1,445,795 |  |  | 2,581,731 |
Total Assets |  | $ | 121,538,490 |  | $ | 24,939,888 |  | $ | 146,478,378 |
LIABILITIES AND PARTNERS' CAPITAL |  |  |  |  |  |  |  |  |  |
Mortgage Notes Payable |  | $ | 138,055,522 | (d) | $ | 24,980,014 |  | $ | 163,035,536 |
Accounts Payable and Accrued Expenses |  |  | 2,361,942 |  |  | — |  |  | 2,361,942 |
Advance Rental Payments and Security Deposits |  |  | 3,636,704 |  |  | — |  |  | 3,636,704 |
Total Liabilities |  | $ | 144,054,168 |  | $ | 24,980,014 |  | $ | 169,034,182 |
Partners' Capital 130,444 units outstanding in 2012 |  |  | (22,515,678 | ) |  | (40,126 | ) |  | (22,555,804 | )
Total Liabilities and Partners' Capital |  | $ | 121,538,490 |  | $ | 24,939,888 |  | $ | 146,478,378 |
New England Realty Associates Limited Partnership Pro Forma Consolidated Statement of Income For the Twelve Months Ended December 31, 2012 (Unaudited)
|  |  |  | Pro Forma |
--- | --- | --- | --- | --- | ---
|  | Historic NERA |  | Adjustments Refinancing |  | Consolidated Totals |
Revenues |  |  |  |  |  |  |  |  |  |
Rental income |  | $ | 35,244,008 |  | $ | — |  | $ | 35,244,008 |
Laundry and sundry income |  |  | 388,401 |  |  | — |  |  | 388,401 |
|  |  | 35,632,409 |  |  | — |  |  | 35,632,409 |
Expenses |  |  |  |  |  |  |  |  |  |
Administrative |  |  | 1,825,951 |  |  | — |  |  | 1,825,951 |
Depreciation and amortization |  |  | 6,092,725 | (e) |  | 112,948 |  |  | 6,205,673 |
Management fee |  |  | 1,446,620 |  |  | — |  |  | 1,446,620 |
Operating |  |  | 3,633,619 |  |  | — |  |  | 3,633,619 |
Renting |  |  | 183,529 |  |  | — |  |  | 183,529 |
Repairs and maintenance |  |  | 5,179,408 |  |  | — |  |  | 5,179,408 |
Taxes and insurance |  |  | 4,348,492 |  |  | — |  |  | 4,348,492 |
|  |  | 22,710,344 |  |  | 112,948 |  |  | 22,823,292 |
Income Before Other Income and Discontinued Operations |  |  | 12,922,065 |  |  | (112,948 | ) |  | 12,809,117 |
Other Income (Loss) |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 2,216 |  |  | — |  |  | 2,216 |
Interest expense |  |  | (7,802,999 | )(f) |  | 72,822 |  |  | (7,730,177 | )
(Loss) from investments in unconsolidated joint ventures |  |  | (1,487,484 | ) |  | — |  |  | (1,487,484 | )
Other |  |  | — |  |  | — |  |  | — |
|  |  | (9,288,267 | ) |  | 72,822 |  |  | (9,215,445 | )
Income From Continuing Operations |  |  | 3,633,798 |  |  | (40,126 | ) |  | 3,593,672 |
Discontinued Operations |  |  |  |  |  |  |  |  |  |
Income from discontinued operations |  |  | — |  |  | — |  |  | — |
Gain on the sale of real estate from discontinued operations |  |  | — |  |  | — |  |  | — |
|  |  | — |  |  | — |  |  | — |
Net Income |  | $ | 3,633,798 |  | $ | (40,126 | ) | $ | 3,593,672 |
Income per Unit |  |  |  |  |  |  |  |  |  |
Income before discontinued operations |  | $ | 27.69 |  | $ | (0.31 | ) | $ | 27.38 |
Income from discontinued operations |  |  | — |  |  | — |  |  | — |
Net Income per Unit |  | $ | 27.69 |  | $ | (0.30 | ) | $ | 27.38 |
Weighted Average Number of Units Outstanding |  |  | 131,230 |  |  | 131,230 |  |  | 131,230 |
Notes to unaudited pro forma consolidated balance sheet and consolidated statement of income: (a) Cash adjusted for new loan proceeds, existing loan payoff, financing fees, replacement reserves and changes to mortgage debt service. (b) Replacement reserves required by new debt agreement (c) Change in prepaid financing fees between existing debt and refinanced debt (d) Difference between existing debt balance and refinanced debt balance (e) Increase in the amortization of the balance of prepaid finance costs for the existing debt and the proportionate share of prepaid finance costs for the refinanced debt (f) Decrease in mortgage interest expense between existing mortgage debt and refinanced debt

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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