<Page>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                 --------------


                                    FORM 10-Q

(Mark One)


/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934

For the quarterly period ended      March 31, 2002    OR

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

For the transition period from _____________________ to ________________________

                         Commission file number 0-12138

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)

<Table>

<S>                                                                             <C>
MASSACHUSETTS                                                                              04-2619298
(State or Other Jurisdiction of Incorporation or Organization)                  (I.R.S. Employer Identification No.)

39 BRIGHTON AVENUE, ALLSTON, MASSACHUSETTS                                                   02134
(Address of Principal Executive Offices)                                                   (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE                                       (617) 783-0039
</Table>

NOT APPLICABLE
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)


         Indicate by check / / whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/   No
                                              ---     ---

<Page>

                                      INDEX

                         PART I - FINANCIAL INFORMATION

<Table>
<Caption>
                                                                        Page No.

<S>               <C>                                                       <C>
Item 1.           Financial Statements.

                  Consolidated Balance Sheets as of March 31, 2002
                  and December 31, 2001                                       1


                  Consolidated Statements of Income for the
                  Three Months Ended March 31, 2002
                  and March 31, 2001                                          2

                  Consolidated Statement of Changes in Partners'
                  Capital                                                     3

                  Consolidated Statements of Cash Flows for the
                  Three Months Ended March 31, 2002 and
                  March 31, 2001                                              4

                  Notes to Financial Statements                               5

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of
                  Operations                                                 13

Item 3.           Quantitative and Qualitative Disclosures
                  About Market Risk                                          17


                          PART II - OTHER INFORMATION

SIGNATURES                                                                   18
</Table>
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                        MARCH 31,
                                                                           2002             DECEMBER 31,
                                                                       (UNAUDITED)              2001
                                                                       -----------          -----------

<S>                                                                    <C>                  <C>
ASSETS
Rental Properties                                                      $73,262,667          $73,941,098
Cash and Cash Equivalents                                               18,298,886           16,690,943
Rents Receivable                                                           554,122              513,181
Real Estate Tax Escrows                                                    287,473              332,282
Prepaid Expenses and Other Assets                                        2,183,581            2,190,978
Investment in Partnership                                                1,558,749            1,944,060
Financing and Leasing Fees                                                 789,845              816,414
                                                                       -----------          -----------
     TOTAL ASSETS                                                      $96,935,323          $96,428,956
                                                                       ===========          ===========

LIABILITIES AND PARTNERS' CAPITAL
Mortgages Payable                                                      $79,410,799          $79,613,051
Accounts Payable and Accrued Expenses                                    1,036,522            1,163,606
Advance Rental Payments and Security Deposits                            3,211,214            3,171,127
                                                                       -----------          -----------
     Total Liabilities                                                  83,658,535           83,947,784

Commitments and Contingent Liabilities (Note 9)

Partners'  Capital
   173,252 units outstanding in 2002 and 2001                           13,276,788          12,481,172
                                                                       -----------         -----------
    TOTAL LIABILITIES AND PARTNERS' CAPITAL                            $96,935,323         $96,428,956
                                                                       ===========         ===========
</Table>

See notes to consolidated financial statements.

                                        1
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

<Table>
<Caption>
                                                                     Three Months Ended
                                                                          March 31,
                                                                        (Unaudited)
                                                                    2002            2001
                                                                 ----------      ----------
<S>                                                              <C>             <C>
Revenue
  Rental income                                                  $7,355,909      $6,651,487
  Laundry and sundry income                                          57,639          62,566
                                                                 ----------      ----------
                                                                  7,413,548       6,714,053
                                                                 ----------      ----------
Expense
 Administrative                                                     369,656         300,832
 Depreciation and amortization                                    1,065,050       1,033,607
 Interest                                                         1,611,746       1,616,955
 Management fees                                                    300,454         273,151
 Operating                                                          726,598         882,561
 Renting                                                             64,965          26,310
 Repairs and maintenance                                            681,094         629,794
 Taxes and insurance                                                751,076         608,942
                                                                 ----------      ----------
                                                                  5,570,639       5,372,152
                                                                 ----------      ----------
Income from Operations                                            1,842,909       1,341,901
                                                                 ----------      ----------

Other Income (Loss)
  Interest income                                                    66,304         212,028
  (Loss) from investment in partnership                              (5,808)              0
                                                                 ----------      ----------
                                                                     60,496         212,028
                                                                 ----------      ----------
Net Income                                                        1,903,405       1,553,929
                                                                 ==========      ==========

Net Income per Unit                                                 $ 10.98         $  8.97
                                                                    =======         =======
Weighted Average Number
   of Units Outstanding                                             173,252         173,252
                                                                    =======         =======
</Table>

See notes to consolidated financial statements.

                                        2
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                   (UNAUDITED)

<Table>
<Caption>
                                            Limited
                               ---------------------------------           General
                                 Class A               Class B             Partnership              Total
                               -----------           -----------           -----------           -----------
<S>                            <C>                   <C>                   <C>                   <C>
Balance, January 1, 2001       $ 7,113,724           $ 1,692,964           $    89,132           $ 8,895,820

Distribution to Partners        (1,535,991)             (364,798)              (19,200)           (1,919,989)

Net Income                       1,243,143               295,247                15,539             1,553,929
                               -----------           -----------           -----------           -----------
Balance, March 31, 2001        $ 6,820,876           $ 1,623,413           $    85,471           $ 8,529,760
                               ===========           ===========           ===========           ===========

Units authorized and
  Issued, net of 6,973
  Treasury Units at
  March 31, 2001                   138,602                32,918                 1,732               173,252
                               ===========           ===========           ===========           ===========

Balance, January 1, 2002       $ 9,982,006           $ 2,374,180           $   124,986           $12,481,172

Distribution to Partners          (886,231)             (210,480)              (11,078)           (1,107,789)

Net Income                       1,522,723               361,647                19,035             1,903,405
                               -----------           -----------           -----------           -----------
Balance, March 31, 2002        $10,618,498           $ 2,525,347           $   132,943           $13,276,788
                               ===========           ===========           ===========           ===========

Units authorized and
  Issued, net of
  6,973 Treasury Units at
  March 31, 2002                   138,602               32,918                  1,732               173,252
                               ===========           ===========           ===========           ===========
</Table>

See notes to consolidated financial statements

                                        3
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                          Three Months Ended
                                                                               March 31,
                                                                             (Unaudited)
                                                                        2002              2001
                                                                     ------------      -----------
<S>                                                                  <C>               <C>
Cash Flows from Operating Activities
   Net income                                                        $  1,903,405      $ 1,553,929
                                                                     ------------      -----------
Adjustments to reconcile net income to net cash provided by
operating activities
   Depreciation and amortization                                        1,065,050         1,033,607
   Loss from investment in joint venture                                    5,808                 0
Change in assets and liabilities
  (Increase) in rents receivable                                          (40,941)          (21,390)
  (Increase) in financing and leasing fees                                (15,867)          (60,337)
  (Decrease) in accounts payable                                         (127,084)         (127,341)
  (Increase) decrease in real estate tax escrow                            44,809            (5,209)
   Decrease in prepaid expenses and other assets                            7,397            53,610
  Increase in advance rental payments and security deposits                40,087            24,989
                                                                     ------------      ------------
  Total Adjustments                                                       979,259           897,929
                                                                     ------------      ------------
Net cash provided by operating activities                               2,882,664         2,451,858
                                                                     ------------      ------------
Cash Flows from Investing Activities
  Distribution from Partnership                                           379,503                 0
  Purchase and improvement of rental properties                          (344,183)         (303,285)
                                                                     ------------      ------------
Net cash  provided by (used in) investing activities                       35,320          (303,285)
                                                                     ------------      ------------
Cash Flows from Financing Activities
  Principal payments of mortgages payable                                (202,252)         (187,638)
  Distributions to partners                                            (1,107,789)       (1,919,989)
                                                                     ------------      ------------
Net cash (used in) financing activities                                (1,310,041)       (2,107,627)
                                                                     ------------      ------------
Net Increase in Cash and Cash Equivalents                               1,607,943            40,946

Cash and Cash Equivalents, at beginning of year                        16,690,943        14,478,972
                                                                     ------------      ------------
Cash and Cash Equivalents, at end of year                             $18,298,886      $ 14,519,918
                                                                      ===========      ============
</Table>

See notes to consolidated financial statements.

                                        4
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

LINE OF BUSINESS: New England Realty Associates Limited Partnership ("NERA" or
the "Partnership") was organized in Massachusetts during 1977. NERA and its
subsidiaries own and operate various residential apartment buildings,
condominium units and commercial properties located in Massachusetts,
Connecticut and New Hampshire. NERA has also made investments in other real
estate partnerships and has participated in other real estate-related
activities, primarily located in Massachusetts. In connection with the mortgages
referred to in Note 5, a substantial number of NERA's properties are owned by
separate subsidiaries without any change in the historical cost basis.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100%
ownership interest in each subsidiary except for the limited liability
company formed in November 2001, in which the Partnership has a 50% interest.
The consolidated group is referred to as the "Partnerships." Minority
interests are not recorded, since they are insignificant. All significant
intercompany accounts and transactions are eliminated in consolidation. The
Partnership accounts for its investment in its fifty-percent owned investment
Partnership using the equity method.

ACCOUNTING ESTIMATES: The preparation of the financial statements, in
conformity with accounting principles generally accepted in the United States
of America, requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reported period.
Accordingly, actual results could differ from those estimates.

REVENUE RECOGNITION: Rental income from residential and commercial properties is
recognized over the term of the related lease. Amounts 60 days in arrears are
charged against income. Certain leases of the commercial properties provide for
increasing stepped minimum rents, which are accounted for on a straight-line
basis over the term of the lease.

RENTAL PROPERTIES: Rental properties are stated at cost less accumulated
depreciation. Maintenance and repairs are charged to expense as incurred;
improvements and additions are capitalized. When assets are retired or otherwise
disposed of, the cost of the asset and related accumulated depreciation is
eliminated from the accounts, and any gain or loss on such disposition is
included in income. Rental properties are depreciated on the straight-line
method over their estimated useful lives. In the event that facts and
circumstances indicate that the carrying value of rental properties may be
impaired, an analysis of recoverability is performed. The estimated future
undiscounted cash flows are compared to the asset's carrying value to determine
if a write-down to fair value or discounted cash flow value is required.

FINANCING AND LEASING FEES: Financing fees are capitalized and amortized, using
the interest method, over the life of the related mortgages. Leasing fees are
capitalized and amortized on a straight-line basis over the life of the related
lease.

INCOME TAXES: The financial statements have been prepared under the basis that
NERA and its subsidiaries are entitled to tax treatment as partnerships.
Accordingly, no provision for income taxes on income has been recorded.

CASH EQUIVALENTS: The Partnerships consider cash equivalents to be all highly
liquid instruments purchased with a maturity of three months or less.

SEGMENT REPORTING: Operating segments are revenue-producing components of the
Partnership for which separate financial information is produced internally for
management. Under the definition, NERA operated, for all periods presented, as a
single segment.

                                        5
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

COMPREHENSIVE INCOME: Comprehensive income is defined as changes in partners'
equity exclusive of transactions with owners (such as capital contributions and
dividends). NERA did not have any comprehensive income items in 2002 and 2001,
other than net income as reported.

INCOME PER UNIT: Net income per unit has been calculated based upon the
weighted average number of units outstanding during each year presented. The
Partnership has no dilutive units and, therefore, basic net income per unit
is the same as diluted net income per unit.

CONCENTRATION OF CREDIT RISKS AND FINANCIAL INSTRUMENTS: The Partnerships'
properties are located in New England, and the Partnerships are subject to the
general economic risks related thereto. No single tenant accounted for more than
5% of the Partnerships' revenues in 2002 or 2001. The Partnerships make their
temporary cash investments with high-credit-quality financial institutions or
purchase money market accounts invested in U.S. Government securities or mutual
funds invested in government bonds. At March 31, 2002, substantially all of the
Partnerships' cash and cash equivalents were held in interest-bearing accounts
at financial institutions, earning interest at rates from 1.18% to 1.44%. At
March 31, 2002 and 2001, approximately $17,997,000 and $14,320,000 of cash and
cash equivalents exceeded federally insured amounts.

ADVERTISING EXPENSE: Advertising is expensed as incurred. Advertising expense
was $17,399 and $15,729 for the three months ended March 31, 2002 and 2001,
respectively.

NOTE 2--RENTAL PROPERTIES

As of March 31, 2002, the Partnership and its Subsidiary Partnerships owned
2,123 residential apartment units in 20 residential and mixed-use complexes
(collectively, the "Apartment Complexes"). The Partnership also owns 19
condominium units in a residential condominium complex and one condominium unit
in a separate residential condominium complex, all of which are leased to
residential tenants (collectively referred to as the "Condominium Units"). The
Condominium Units are located primarily in the greater metropolitan Boston,
Massachusetts area.

Additionally, as of March 31, 2002, the Subsidiary Partnerships owned commercial
shopping centers in East Hampton, Connecticut and Framingham, Massachusetts.
These properties are referred to collectively as the "Commercial Properties."

                                        6
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2--RENTAL PROPERTIES (CONTINUED)

Rental properties consist of the following:

<Table>
<Caption>
                                                        MARCH 31,            DECEMBER 31,             USEFUL
                                                          2002                   2001                  LIFE
                                                       -----------            -----------           -----------
<S>                                                    <C>                    <C>                   <C>
Land, improvements, and parking lots                   $16,186,985            $16,185,485           10-31 years
Buildings and improvements                              78,792,939             78,671,755           15-31 years
Kitchen cabinets                                         1,692,391              1,646,814            5-10 years
Carpets                                                  1,629,557              1,578,655            5-10 years
Air conditioning                                           184,735                184,735            7-10 years
Laundry equipment                                           44,588                 43,802             5-7 years
Elevators                                                  177,972                175,557              20 years
Swimming pools                                              84,048                 80,198              10 years
Equipment                                                1,162,150              1,082,807             5-7 years
Motor vehicles                                              90,543                 90,543               5 years
Fences                                                      55,254                 39,654            5-10 years
Furniture and fixtures                                     607,072                584,046             5-7 years
Smoke alarms                                                54,338                 54,338             5-7 years
                                                       -----------            -----------
                                                       100,762,572            100,418,389
Less accumulated depreciation                           27,499,905             26,477,291
                                                       -----------            -----------
                                                       $73,262,667            $73,941,098
                                                       ===========            ===========
</Table>

In March 2002, the Partnership signed a purchase and sale agreement to acquire a
69-unit residential apartment complex located in Norwood, Massachusetts for
$7,200,000. The Partnership will assume a first mortgage of approximately
$3,800,000 with an interest rate of 7.08%, amortizing over 25 years and maturing
in 2007. The seller is financing $1,750,000 at an interest rate of 6%, interest
only, for 5 years. The balance of $1,650,000 will be funded from cash reserves.
The completion of this transaction is dependent on the assumption of the first
mortgage and receipt of acceptable inspections and other due diligence reports.

NOTE 3--RELATED PARTY TRANSACTIONS

The Partnerships' properties are managed by an entity which is owned by the
majority shareholder of the General Partner. The management fee is equal to 4%
of rental revenue and laundry income. Total fees paid were $300,454 and $273,151
for the three months ended March 31, 2002 and 2001, respectively. Security
deposits are held in escrow by the management company (see Note 6). The
management company also receives a mortgage servicing fee equal to an annual
rate of 1/2% of the monthly outstanding balance of mortgages receivable
resulting from the sale of property. There was no mortgage servicing fee paid in
the year ended December 31, 2001 or the three months ended March 31, 2002.

The Partnership Agreement also permits the General Partner or management company
to charge the costs of professional services (such as counsel, accountants and
contractors) to NERA. During the three months ended March 31, 2002 and 2001
approximately $162,000 and $172,000 was charged to NERA for legal, construction,
maintenance, rental and architectural services and supervision of capital
improvements. Approximately $44,000 and $30,000 was capitalized during the three
months ended March 31, 2002 and 2001 in rental properties. Included in the 2002
expenses referred to above, approximately $71,000 is recorded in repairs and
maintenance and $47,000 in administrative expense. Included in the 2001 expenses
referred to above, approximately $58,000 is recorded in

                                        7
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 3--RELATED PARTY TRANSACTIONS (CONTINUED)

repairs and maintenance, $43,000 in administrative expense, and $41,000 in
renting expense. Additionally in each of the quarters ended March 31, 2002 and
2001 the Partnership paid to the management company $20,000, for in-house
accounting services, which were previously provided by an outside company.
Included in accounts payable and accrued expenses at March 31, 2002 and December
31, 2001 is $157,035 and $155,206 due to the management company. The Partnership
Agreement entitles the General Partner or the management company to receive
certain commissions upon the sale of Partnership property, only to the extent
that total commissions do not exceed 3%. No commissions were paid during the
three months ended March 31, 2002 or during the year ended December 31, 2001.

In 1996, prior to becoming an employee and President of the management company,
the current President performed asset management consulting services to the
Partnership. This individual continues to perform this service and to receive an
asset management fee from the Partnership, receiving $12,500 for the three
months ended March 31, 2002 and $50,000 for the year ended December 31, 2001.

Included in prepaid expenses and other assets were amounts due from related
parties of $1,042,490 at March 31, 2002 and $1,038,081 at December 31, 2001,
respectively, representing Massachusetts tenant security deposits which are held
for the Partnerships by another entity also owned by one of the shareholders of
the General Partner (see Note 6).

On November 8, 2001, the Partnership, the majority shareholder of the General
Partner and the President of the management company formed a Limited Liability
Company to purchase a 40-unit apartment building in Cambridge, Massachusetts.
The ownership percentages are 50%, 47 1/2% and 2 1/2%, respectively. As part of
this transaction, the Partnership advanced funds in excess of its 50% percent
interest and received interest income on this excess, at 8%. A mortgage of
approximately $8,000,000 was taken out on this property on December 27, 2001,
and the funds in excess of the required equity were returned to the members in
proportion to their ownership interest so their respective capital contributions
are currently proportionate to their ownership interest. The interest income
paid to the Partnership in 2001 was $30,003.

NOTE 4--OTHER ASSETS

Included in prepaid expenses and other assets at March 31, 2002 and December 31,
2001 is approximately $602,000 and $552,000, respectively, held in escrow to pay
future capital improvements.

Financing and leasing fees of $789,845 and $816,414 are net of accumulated
amortization of $1,200,000 and $1,157,600 at March 31, 2002 and December 31,
2001, respectively.

                                        8
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5--MORTGAGES PAYABLE

At March 31, 2002 and December 31, 2001, the mortgages payable consisted of
various loans, all of which were secured by first mortgages on properties
referred to in Note 2. At March 31, 2002, the interest rate on these loans
ranged from 6.52% to 8.78 %, payable in monthly installments aggregating
approximately $600,000, including interest, to various dates through 2016.
Although the majority of loans mature within ten years, they are being amortized
on a basis between 25 and 27.5 years. The majority of the mortgages are subject
to prepayment penalties. See Note 12 for fair value information.

The Partnerships have pledged tenant leases as additional collateral for certain
of these mortgages.

Approximate annual maturities are as follows:

<Table>
                  <S>                                <C>
                  2003-current maturities            $   832,000
                  2004                                   895,000
                  2005                                   971,000
                  2006                                13,004,000
                  2007                                   784,000
                  Thereafter                          62,925,000
                                                     -----------
                                                     $79,411,000
                                                     ===========
</Table>

In April 2001, the Partnership obtained a one year line of credit in the
amount of $12,000,000, secured by the Property located at 62 Boylston Street.
At March 31, 2002, the Partnership had not drawn on the line. The Partnership
informed the lender that a renewal of this line of credit, effective for
April 2002, will not be requested.

NOTE 6--ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The lease agreements for certain properties require tenants to maintain a
one-month advance rental payment plus security deposits. Security deposits are
held by another entity owned by the majority shareholder of the General Partner
(see Note 3).

                                        9
<Page>

       NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7--PARTNERS' CAPITAL

The Partnership has two categories of Limited Partners (Class A and B) and one
category of General Partner (General Partner). Under the terms of the
Partnership Agreement, 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 February 2002, the Partnership voted to change its dividend policy from
semi-annual to quarterly and declared a quarterly dividend of $6.40 per unit,
payable on March 31, 2002. On May 6, 2002, the Partnership declared a dividend
of $6.40 per unit payable on June 30, 2002. The Partnership declared
distributions of $17.70 per unit in 2001.

The Partnership has entered into a deposit agreement with an agent to facilitate
public trading of limited partners' interests in Class A units. Under the terms
of this agreement, the holders of Class A units have the right to exchange each
Class A unit for 10 Depositary Receipts. The following is information on the net
income per Depositary Receipt:

<Table>
<Caption>
                                                           THREE MONTHS ENDED
                                                              MARCH 31,
                                                          2002           2001
                                                         -----           -----
  <S>                                                    <C>             <C>
  Net income per Depository Receipt                      $1.10           $0.90
                                                         =====           =====
</Table>

NOTE 8--TREASURY UNITS

Treasury units at March 31, 2002 are as follows:

<Table>
<S>                                 <C>
Class A                             5,681
Class B                             1,228
General Partnership                    64
                                    -----
                                    6,973
                                    =====
</Table>

NOTE 9--COMMITMENTS AND CONTINGENCIES

From time to time, the Partnerships are involved in various ordinary routine
litigation incidental to their business. The Partnerships are not involved in
any material pending legal proceedings.

The Partnership has committed, subject to final approvals, to construct 20
additional residential units at the Westgate Apartments in Woburn,
Massachusetts. The total cost of these units will be approximately $3,500,000,
to be funded from cash reserves.

The Partnership has signed a purchase and sale agreement for the sale of a
condominium in Brockton, Massachusetts. The sale price is $115,000 and the
gain on the sale will be approximately $99,000. The sale should be complete
in the second quarter of 2002.

                                        10

<Page>

         NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10--RENTAL INCOME

During the three months ended March 31, 2002, approximately 91% of rental income
was related to residential apartments and condominium units with leases of one
year or less. The remaining 9% was related to commercial properties which have
minimum future rental income on noncancellable operating leases as follows:

<Table>
<Caption>
                                                   Commercial
                                                     Property
                                                       Leases
                                                  -----------
               <S>                                <C>
               2003                               $ 2,081,000
               2004                                 2,071,000
               2005                                 1,826,000
               2006                                 1,453,000
               2007                                 1,313,000
               Thereafter                           8,231,000
                                                  -----------
                                                  $16,975,000
                                                  ===========
</Table>

The aggregate minimum future rental income does not include contingent
rentals which may be received under various leases in connection with
percentage rents, common area charges and real estate taxes. Aggregate
contingent rentals were approximately $122,000 for the three months ended
March 31, 2002 and $461,000 for the year ended December 31, 2001,
respectively.

Rents receivable are net of allowances for doubtful accounts of $131,146 and
$77,752 at March 31, 2002 and December 31, 2001, respectively.

NOTE 11--CASH FLOW INFORMATION

During the three months ended March 31, 2002 and 2001, cash paid for interest
was $1,589,271 and $1,603,886 respectively.

                                       11
<Page>

         NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Partnership in estimating
the fair value of its financial instruments:

Cash and cash equivalents, other assets, investment in partnerships, accounts
payable, and advance rents and security deposits: Fair value approximates the
carrying value of such assets and liabilities.

Mortgage notes payable: Fair value is generally based on estimated future cash
flows discounted using the quoted market rate for an independent source of
similar obligations. Refer to the table below for the carrying amount and
estimated fair value of such instruments.

<Table>
<Caption>
                                     At March 31, 2002                    At December 31, 2001
                              ------------------------------         ------------------------------
                                Carrying         Estimated             Carrying         Estimated
                                Amount           Fair Value            Amount           Fair Value
                              -----------        ------------        -----------       ------------
<S>                           <C>                <C>                 <C>               <C>
Mortgage notes payable        $79,410,799        $83,661,801         $79,613,051       $83,864,053
</Table>


NOTE 13--TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership is different than financial
statement income because of accelerated depreciation, different tax lives, and
timing differences related to prepaid rents and allowances. Taxable income is
approximately $122,000 greater than statement income for the quarter ended March
31, 2002 and approximately $500,000 greater than statement income for the year
ended December 31, 2001 because of depreciation differences, non-deductible
allowances and an increase in tenants' prepaid rental deposits. The cumulative
tax basis of the Partnership's real estate at March 31, 2002 is approximately
$2,000,000 greater than the statement basis.


                                       12
<Page>

ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION

The following discussion should be read in conjunction with the financial
statements and notes thereof appearing elsewhere in this report. This Report on
Form 10-Q contains forward-looking statements within the meaning of the
securities laws. Actual results or developments could differ materially from
those projected in such statements as a result of certain factors set forth in
the section below entitled "Factors That May Affect Future Results" and
elsewhere in this Report.

RESULTS OF OPERATIONS

Comparison of the three months ended March 31, 2002 to the three months ended
March 31, 2001.

The Partnership and its Subsidiary Partnerships earned income from operations of
$1,842,909 during the three months ended March 31, 2002, compared to $1,341,901
for the three months ended March 31, 2001, an increase of $501,008. The primary
factor contributing to the increase was the continued strength in the
Partnership's residential real estate in the first quarter of 2002 compared to
the prior year and an increase in rental rates at certain of the Partnership's
properties.

The rental activity is summarized as follows:

<Table>
<Caption>
                                       Occupancy Date
                       May 1, 2002                      May 4, 2001
--------------------------------------------------------------------------------
<S>                    <C>                              <C>
RESIDENTIAL
Units                     2,143                            2,143
Vacancies                    45                               29
Vacancy rate                2.1%                             1.4%
COMMERCIAL
Total square feet       137,775                          137,775
Vacancy                       0                            3,850
Vacancy rate                  0                              2.8%
--------------------------------------------------------------------------------
<Caption>
                              Rental Income (in thousands)
                          2002                              2001
--------------------------------------------------------------------------------
<S>                     <C>                              <C>
Total rents             $ 7,356                          $ 6,651
Residential percentage       91%                              91%
Commercial percentage         9%                               9%
Contingent rentals      $   122                          $   146
</Table>

Rental income for the three months ended March 31, 2002 was $7,355,909 compared
to $6,651,487 for the three months ended March 31, 2001, an increase of $704,422
(10%). This increase is primarily from the residential properties. Rental rates
increased during 2001 offset by a slight increase in vacancy rates in 2002.
During 2001, the Partnership completed significant

                                       13
<Page>

improvements to 62 Boylston Street, 1144 Commonwealth Avenue Apartments and
Westgate Apartments in Woburn which resulted in rental revenue increases at each
of these properties of approximately 10-15%. Rental income from the
Partnership's residential properties represent approximately 91% of total rental
income at both March 31, 2001 and 2002.

Expenses for the three months ended March 31, 2002 were $5,570,639 compared to
$5,372,152 for the three months ended March 31, 2001, an increase of $198,487
(4%). Administrative expenses increased $68,824 (23%) due to an increase in
salaries and wages. Repairs and maintenance expenses increased $51,300 (8%) due
to an increase in salaries for the maintenance staff as well as continued
refurbishing of Partnership properties. Renting expenses increased $38,655
(146%) consisting entirely of real estate commissions paid by the Partnership.
During the first quarter of 2001, the rental market was fairly strong and there
was very little turnover of tenants. As a result, the tenant generally paid the
rental commission. The rental market changed in 2002 resulting in higher tenant
turnover and a slight increase in vacancies. In an effort to sustain occupancy
levels, the Partnership began paying the rental commission in 2002. This has
resulted in a significant increase in renting expenses in 2002. Taxes and
insurance increased $142,134 (23%) due to increased real estate taxes and
insurance premiums. Operating expenses decreased $155,963 (18%) due to decreased
heating costs and snow removal costs due to a milder winter in 2002 compared to
2001.

Interest income decreased $145,724 (69%) due to a decline in the interest rates.
Although the average cash balance available for investment has increased, the
interest rates have dropped from 4-5% to 1-1.9%

As a result of the changes discussed above, net income for the three months
ended March 31, 2002, was $1,903,405 compared to $1,553,929 for the three months
ended March 31, 2001, an increase of $349,476 (22%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership's principal source of cash during 2002 and 2001 was the
collection of rents.

The majority of cash and cash equivalents of $18,298,886 at March 31, 2002 and
$16,690,943 at December 31, 2001 was held in interest-bearing accounts at
creditworthy financial institutions. This increase of $1,607,943 at March 31,
2002 is summarized as follows:

<Table>
<Caption>
                                                         Three months March 30,
                                                        2002                 2001
                                                     -----------         -----------

<S>                                                  <C>                 <C>
Cash provided by operating activities                $ 2,882,664         $ 2,451,858
Cash provided by (used in) investing activities           35,320            (303,285)
Cash (used in) financing activities                   (1,310,041)         (2,107,627)
                                                     -----------         -----------
Net increase in cash and cash equivalents            $ 1,607,943         $    40,946
                                                     ===========         ===========
</Table>

                                        14
<Page>

The increase in cash provided by operating activities is primarily due to the
increase in operating income before depreciation expense. The increase in cash
from investing activities in 2002 is due to distributions relating to the
Partnership's 50% investment in an LLC as described below. The net cash used in
financing activities is due to dividend distributions to the Partners as well as
mortgage debt payments.

In February 2002, the Partnership voted to change its dividend policy from a
semi-annual to a quarterly distribution and declared a quarterly dividend of
$6.40 per Unit, payable on March 31, 2002. On May 6, 2002, the Partnership
declared a dividend of $6.40 per Unit payable on June 30, 2002. Total dividends
paid in 2001 were $17.70 per Unit.

On November 8, 2001, a newly formed limited liability company in which the
Partnership has a 50% ownership interest acquired a 40 unit residential
property in Cambridge, Massachusetts. The remaining 50% ownership interest in
this limited liability company is owned by Harold Brown and the President of
The Hamilton Company, the entity which manages the Partnership's properties.
The total purchase price was $11,265,000. At closing, the Partnership paid
$8,265,000 which was more than its 50% ownership interest. However, upon the
subsequent financing of the property, the Partnership received greater than
50% of the resulting funds so that the partner's capital contributions are
now proportionate to their respective ownership interests.

During the three months ended March 31, 2002, the Partnership completed certain
improvements to its properties at a total cost of $344,182. The most significant
improvements were made at the following properties: $104,385 at 62 Boylston
Street in Boston, Massachusetts; $69,907 at the Westgate Apartments in Woburn,
Massachusetts; $21,963 at the Hamilton Oaks Apartments in Brockton,
Massachusetts and $20,096 at the Clovelly Apartments in Nashua, New Hampshire.

In addition to the improvements made in the first quarter of 2002, the
Partnership plans to invest approximately $3,249,000 in capital improvements in
2002. Approximately $1,717,000 is designated for 62 Boylston Street;
approximately $271,000 is designated for Redwood Hills; approximately $250,000
is designated for 1144 Commonwealth Avenue; approximately $184,000 is designated
for Hamilton Oaks and the balance is designated for various other residential
properties. These improvements will be funded from escrow accounts established
in connection with the refinancing of the applicable properties, as well as from
the Partnership's cash reserves.

The Partnership intends to construct 20 additional residential units at the
Westgate Apartments in Woburn, Massachusetts. Presently, the Partnership has
received approval from the conservation commission and is awaiting planning
board approvals. The cost is estimated to be $3,500,000, which will be funded
from cash reserves.

In March 2002, the Partnership signed a purchase and sale agreement to acquire a
69-unit residential apartment complex located in Norwood, Massachusetts for
$7,200,000. The Partnership will assume a first mortgage of $3,800,000 with an
interest rate of 7.08%; the

                                       15
<Page>

mortgage will be amortized over 25 years and will mature in 2007, with a final
"balloon" payment of approximately $3,468,000 required. The seller will lend the
Partnership $1,750,000 at a rate of 6%, interest only, for a term of 5 years or
a shorter period if the first mortgage is refinanced. The balance of $1,650,000
will be funded from the Partnership's cash reserves. The completion of this
transaction is dependent on the assumption of the first mortgage and receipt of
acceptable inspections and other due diligence reports.

Factors That May Affect Future Results

Certain information contained herein includes forward-looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Liquidation Reform Act of 1995 (the "Act"). While forward looking statements
reflect management's good-faith beliefs when those statements are made, caution
should be exercised in interpreting and relying on such forward looking
statements, the realization of which may be impacted by known and unknown risks
and uncertainties, events that may occur subsequent to the forward-looking
statements, and other factors which may be beyond the Partnership's control and
which can materially affect the Partnership's actual results, performance or
achievements for 2002 and beyond.

Along with risks detailed from time to time in the Partnership's filings with
the Securities and Exchange Commission, some factors that could cause the
Partnership's actual results, performance or achievements to differ materially
from those expressed or implied by forward-looking statements include but are
not limited to the following:

     -    The Partnership depends on the real estate markets where its
          properties are located, and these markets may be adversely affected by
          local economic and market conditions, which are beyond the
          Partnership's control.

     -    The Partnership is subject to general economic risks affecting the
          real estate industry, such as dependence on tenants' financial
          condition and the need to enter into new leases or renew leases on
          terms favorable to tenants in order to generate rental revenues.

     -    The Partnership is subject to increases in heating and utility costs
          that may arise as a result of economic and market conditions.

     -    The Partnership may fail to identify, acquire, construct or develop
          additional properties; may develop properties that do not produce a
          desired yield on invested capital; or may fail to effectively
          integrate acquisitions of properties or portfolios of properties.

     -    Financing or refinancing of Partnership properties may not be
          available to the extent necessary or desirable, or may not be
          available on favorable terms.

     -    Given the nature of the real estate business, the Partnership is
          subject to potential environmental liabilities, although management is
          not aware of any material environmental liabilities at this time.

     -    Market interest rates could adversely affect the market prices for
          Class A Partnership Units and Depositary Receipts as well as
          performance and cash flow.

                                        16
<Page>

The foregoing factors should not be construed as exhaustive or as an admission
regarding the adequacy of disclosures made by the Partnership prior to the date
hereof or the effectiveness of said Act. The Partnership expressly disclaims any
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.

The residential real estate market in the Greater Boston area softened during
the fourth quarter of 2001 and the first quarter of 2002, and the Partnership
anticipates the climate will remain the same in 2002. This may result in
increases in vacancy rates and/or a reduction in some rents. Despite this change
in the market, the Partnership does not foresee a significant effect on its cash
flow. The Partnership believes its present cash reserves as well as anticipated
rental revenue will be sufficient to fund its current operations and to finance
current and planned improvements to its properties.

Since the Partnership's long-term goals include the acquisition of additional
properties, a portion of the proceeds from the refinancing and sale of
properties is reserved for this purpose. The Partnership will consider
refinancing existing properties if the Partnership's cash reserves are
insufficient to repay existing mortgages or if the Partnership needs additional
funds for future acquisitions.

ITEM 3--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2002, the Partnership and its Subsidiary Partnerships
collectively have approximately $79,410,000 in long-term debt, all of which
earns interest at fixed rates. Accordingly, the fair value of these debt
instruments is affected by changes in market interest rates. For information
regarding the fair values and maturity dates of these debt obligations, see
Notes 5 and 12 to the Consolidated Financial Statements.

For additional disclosures about market risk, see "Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations
-Factors that May Affect Future Results."



                                        17
<Page>

                                   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 thereunto duly authorized.

Date:         May 15, 2002

                                    NEW ENGLAND REALTY ASSOCIATES
                                    LIMITED PARTNERSHIP

                                    By:   NEW REAL, INC.,
                                          its General Partner*

                                    By:  /s/ Ronald Brown
                                       ------------------
                                       Ronald Brown, President

                                       * Functional equivalent of Chief
                                         Executive Officer, Principal
                                         Financial Officer and Principal
                                         Accounting Officer.


                                        18