Shares of New England Realty Associates Limited Partnership NEN have dipped 0.7% since the company reported its earnings for the quarter ended June 30, 2025. This compares to the S&P 500 index’s 1.7% growth over the same time frame. Over the past month, the stock has declined 1.5% compared with the S&P 500’s 3.7% growth.
For the second quarter of 2025, NERA reported earnings per share of $35.59 compared with $34.77 in the prior-year period.
The company’s revenues of $21.2 million improved 5.9% from $20.1 million in the year-ago quarter. Rental income rose 6% to $21 million, while laundry and sundry income declined 3.3% to $0.2 million.
Net income came in at $4.2 million, up 1.9% from $4.1 million a year earlier. The company’s share of income from unconsolidated joint ventures increased 51% to $0.5 million.
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Other Key Business Metrics
Occupancy at the company’s residential properties was 2.4% as of Aug. 1, 2025, compared with 1.5% a year earlier. Commercial property vacancy rose to 4.6% from 1% in the prior-year period. During the quarter, average rent increases were 4.6% for renewals and 1.4% for new leases.
Management Commentary
Management highlighted steady rental growth and disciplined cost control in core operations, noting that income before other income and expense rose 8% year over year. The decline in interest income — down 33.7% to $0.7 million — was attributed to the liquidation of U.S. Treasury bill investments to finance property acquisitions. Interest expense increased 6.1% to $4.1 million, partly due to new borrowings tied to these purchases.
Factors Influencing the Headline Numbers
The revenue uptick was driven largely by higher rental rates across several properties, with notable gains from Westgate Apartments, Hamilton Green Apartments, WCB Associates, Hamilton Oaks, Redwood Hills and School Street. Expense trends reflected increased taxes and insurance costs and higher renting expenses, offset by lower depreciation and maintenance costs for comparable properties. Contributions from joint ventures also provided a meaningful boost to earnings.
Guidance
The company expects a moderating rental market for the remainder of 2025, with slower rent growth anticipated. Completion of the 72-unit Mill Street Development project in Woburn, MA, is on track for the fourth quarter, which management sees as an important addition to the portfolio.
Other Developments
On June 18, 2025, NERA acquired Hill Estates in Belmont, MA, a mixed-use property with 396 residential units and three commercial units, for $172 million, along with two nearby commercial properties for $3 million. These acquisitions were funded through the sale of U.S. Treasury bills, a $40 million draw on the Master Credit Facility, and a $67.5 million interim mortgage loan. In addition, the company continued construction on the Mill Street Development, with total investment to date at $28.1 million. Subsequent to quarter-end, NERA approved a quarterly distribution of $12.00 per unit and initiated refinancing of the 81 Essex Street loan maturing in October 2025. The company also repurchased 533 Depositary Receipts between July 1 and Aug. 8, 2025, under its active buyback program.
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This article originally published on Zacks Investment Research (zacks.com).