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NERA Swings to Q3 Loss Despite a Boost in Revenues From Acquisitions
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Shares of New England Realty Associates Limited Partnership (NEN - Free Report) have declined 0.8% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 index’s 1.9% growth over the same time frame. Over the past month, the stock has declined 1.5% compared with the S&P 500’s 3.6% growth.
For the third quarter ended Sept. 30, 2025, NERA incurred a net loss of $4.48 per unit against a net income of $33.44 per unit in the same period last year. The downturn was driven by a sharp rise in expenses, especially interest expense and depreciation.
Total revenues rose 17.2% year over year to $23.7 million, led by a 17.3% increase in rental income. However, total expenses jumped 37.9% to $18.9 million. Interest expense also surged 42.3% to $5.5 million, largely offsetting the revenue gains. Consequently, the company swung to a quarterly loss, marking a significant change from its prior-year profitability.
NERA incurred a net loss of $0.5 million, reversing a net income of $3.9 million in the same period last year.
New England Realty Associates Limited Partnership Price, Consensus and EPS Surprise
Business Metrics Reflect Growth Through Acquisitions
NERA’s top-line growth was primarily driven by acquisitions completed earlier in 2025. The newly acquired Hill Estates, along with 26 Brighton Avenue and 90 Concord, contributed approximately $2.9 million to rental income during the quarter. Excluding these, revenues grew just 2.6% year over year. On the expense side, depreciation and amortization surged 74.6% to $7.4 million, a direct outcome of these recent purchases. Without the newly acquired properties, operating expenses rose by a modest 5.1%.
Vacancy rates deteriorated modestly. As of Nov. 1, 2025, residential vacancy stood at 3.2% compared with 1.7% a year earlier. Commercial vacancy rose more sharply to 6.8% from 1.2%. Rental income from residential units continued to account for 94% of total rental income, while commercial properties contributed the remaining 6%.
Management Commentary: Slower Rent Growth Ahead
NERA noted a deceleration in rent growth, especially for new leases. For the third quarter, average rents rose 5.7% on renewals but declined slightly (0.1%) on new leases, signaling weakening pricing power. Management acknowledged this trend and indicated expectations for continued slowing in rent growth for the remainder of 2025.
Despite the softening rental environment, occupancy levels across the joint ventures remained solid, with a vacancy rate of just 0.7% as of Nov. 1, 2025, down from 2.8% the year before. However, the main portfolio’s vacancy trend suggests more competitive leasing conditions in the core market.
Drivers Behind Headline Figures
NERA’s earnings deterioration stemmed from a combination of higher operating and financing costs. The company’s acquisition-driven strategy increased its asset base but also brought along a larger debt burden. Total mortgage notes payable rose to $511.2 million from $406.2 million at year-end 2024, contributing to the 42.3% increase in interest expense.
In addition, cash and cash equivalents fell to $13.4 million from $17.6 million, as the company utilized treasury bill proceeds and borrowings to fund the Hill Estates acquisition. Treasury bill investments were fully liquidated by quarter-end, down from $83.6 million at the close of 2024. With the liquidity position tightening and interest rates remaining elevated, further margin pressure is likely unless rental income grows meaningfully.
Other Developments
During the third quarter, NERA continued to repurchase its Depositary Receipts under its stock repurchase program. In the nine months ended Sept. 30, 2025, the partnership bought back 4,343 Depositary Receipts at an average price of $75.61 per receipt, amounting to a total cost of approximately $0.3 million. The partnership also repurchased proportionate Class B and General Partner units, as required under its capital structure.
On the development front, the Mill Street Development — a 72-unit affordable housing project — remained on track for completion in the fourth quarter of 2025. As of Sept. 30, 2025, total investment in the project stood at $31.8 million, with total costs expected to reach $33 million. In October 2025, the company signed a term sheet with Brookline Bank for a $17.5 million bridge loan to support the project’s financing upon completion.
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NERA Swings to Q3 Loss Despite a Boost in Revenues From Acquisitions
Shares of New England Realty Associates Limited Partnership (NEN - Free Report) have declined 0.8% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 index’s 1.9% growth over the same time frame. Over the past month, the stock has declined 1.5% compared with the S&P 500’s 3.6% growth.
For the third quarter ended Sept. 30, 2025, NERA incurred a net loss of $4.48 per unit against a net income of $33.44 per unit in the same period last year. The downturn was driven by a sharp rise in expenses, especially interest expense and depreciation.
Total revenues rose 17.2% year over year to $23.7 million, led by a 17.3% increase in rental income. However, total expenses jumped 37.9% to $18.9 million. Interest expense also surged 42.3% to $5.5 million, largely offsetting the revenue gains. Consequently, the company swung to a quarterly loss, marking a significant change from its prior-year profitability.
NERA incurred a net loss of $0.5 million, reversing a net income of $3.9 million in the same period last year.
New England Realty Associates Limited Partnership Price, Consensus and EPS Surprise
New England Realty Associates Limited Partnership price-consensus-eps-surprise-chart | New England Realty Associates Limited Partnership Quote
Business Metrics Reflect Growth Through Acquisitions
NERA’s top-line growth was primarily driven by acquisitions completed earlier in 2025. The newly acquired Hill Estates, along with 26 Brighton Avenue and 90 Concord, contributed approximately $2.9 million to rental income during the quarter. Excluding these, revenues grew just 2.6% year over year. On the expense side, depreciation and amortization surged 74.6% to $7.4 million, a direct outcome of these recent purchases. Without the newly acquired properties, operating expenses rose by a modest 5.1%.
Vacancy rates deteriorated modestly. As of Nov. 1, 2025, residential vacancy stood at 3.2% compared with 1.7% a year earlier. Commercial vacancy rose more sharply to 6.8% from 1.2%. Rental income from residential units continued to account for 94% of total rental income, while commercial properties contributed the remaining 6%.
Management Commentary: Slower Rent Growth Ahead
NERA noted a deceleration in rent growth, especially for new leases. For the third quarter, average rents rose 5.7% on renewals but declined slightly (0.1%) on new leases, signaling weakening pricing power. Management acknowledged this trend and indicated expectations for continued slowing in rent growth for the remainder of 2025.
Despite the softening rental environment, occupancy levels across the joint ventures remained solid, with a vacancy rate of just 0.7% as of Nov. 1, 2025, down from 2.8% the year before. However, the main portfolio’s vacancy trend suggests more competitive leasing conditions in the core market.
Drivers Behind Headline Figures
NERA’s earnings deterioration stemmed from a combination of higher operating and financing costs. The company’s acquisition-driven strategy increased its asset base but also brought along a larger debt burden. Total mortgage notes payable rose to $511.2 million from $406.2 million at year-end 2024, contributing to the 42.3% increase in interest expense.
In addition, cash and cash equivalents fell to $13.4 million from $17.6 million, as the company utilized treasury bill proceeds and borrowings to fund the Hill Estates acquisition. Treasury bill investments were fully liquidated by quarter-end, down from $83.6 million at the close of 2024. With the liquidity position tightening and interest rates remaining elevated, further margin pressure is likely unless rental income grows meaningfully.
Other Developments
During the third quarter, NERA continued to repurchase its Depositary Receipts under its stock repurchase program. In the nine months ended Sept. 30, 2025, the partnership bought back 4,343 Depositary Receipts at an average price of $75.61 per receipt, amounting to a total cost of approximately $0.3 million. The partnership also repurchased proportionate Class B and General Partner units, as required under its capital structure.
On the development front, the Mill Street Development — a 72-unit affordable housing project — remained on track for completion in the fourth quarter of 2025. As of Sept. 30, 2025, total investment in the project stood at $31.8 million, with total costs expected to reach $33 million. In October 2025, the company signed a term sheet with Brookline Bank for a $17.5 million bridge loan to support the project’s financing upon completion.