SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended
September 30, 1998 Commission file number 0-8915
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(Exact name of registrant as specified in its charter)
Illinois 36-2875192
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
Indicate by check mark 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>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . 11
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 15
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 1,906,227 4,078,008
Rents and other receivables . . . . . . . . . . . . . . . . . . . . 7,360 773,584
Escrow deposits and other assets. . . . . . . . . . . . . . . . . . -- 304,079
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . . . . . 1,913,587 5,155,671
------------ -----------
Property held for sale or disposition . . . . . . . . . . . . . . . . -- 16,148,745
------------ -----------
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500 1,222,059
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . -- 1,211,580
Venture partner's deficit in venture. . . . . . . . . . . . . . . . . -- 1,473,172
------------ -----------
$ 1,921,087 25,211,227
============ ===========
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ -- 23,002,015
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 33,581 1,087,454
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . -- 176,157
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . . 33,581 24,265,626
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . -- 54,562
------------ -----------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 33,581 24,320,188
Venture partner's subordinated equity in venture. . . . . . . . . . . 105,529 105,529
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . 2,564,682 (631,646)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (3,891,107) (676,244)
------------ -----------
(1,325,425) (1,306,890)
------------ -----------
Limited partners (18,005 interests):
Capital contributions, net of offering costs. . . . . . . . . . . 16,269,038 16,269,038
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . 35,235,135 15,314,883
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (48,396,771) (29,491,521)
------------ -----------
3,107,402 2,092,400
------------ -----------
Total partners' capital accounts (deficits) . . . . . . . . . 1,781,977 785,510
------------ -----------
$ 1,921,087 25,211,227
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . $ -- 2,655,587 2,325,964 6,996,350
Interest income . . . . . . . . . . . . . . . 22,666 59,521 275,441 184,678
----------- ----------- ---------- ----------
22,666 2,715,108 2,601,405 7,181,028
----------- ----------- ---------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . -- 540,546 564,917 1,650,411
Property operating expenses . . . . . . . . . -- 1,007,642 932,265 2,702,050
Professional services . . . . . . . . . . . . 185 4,375 46,435 47,352
Amortization of deferred expenses . . . . . . -- 59,385 58,886 180,091
Management fees to corporate
general partner . . . . . . . . . . . . . . -- -- 40,775 --
General and administrative. . . . . . . . . . 30,354 29,158 81,060 84,984
----------- ---------- ---------- ----------
30,539 1,641,106 1,724,338 4,664,888
----------- ---------- ---------- ----------
(7,873) 1,074,002 877,067 2,516,140
Venture partner's share of
venture's operations. . . . . . . . . . . . . -- (538,019) (402,695) (1,278,733)
----------- ---------- ---------- ----------
Earnings (loss) before gain on
sale of interest in investment
property . . . . . . . . . . . . . . . (7,873) 535,983 474,372 1,237,407
Gain from sale of interest in
investment property . . . . . . . . . . . . . -- -- 22,642,208 --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . . . . $ (7,873) 535,983 23,116,580 1,237,407
=========== ========== ========== ==========
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
Net earnings (loss) per limited
partnership interest:
Earnings before gain on
sale of interest in
investment property . . . . . . . . $ (.42) 28.58 25.29 65.98
Gain from sale of interest
in investment property. . . . . . . -- -- 1,081.08 --
----------- ---------- ---------- ----------
$ (.42) 28.58 1,106.37 65.98
=========== ========== ========== ==========
Cash distributions per limited
partnership interest . . . . . . . . . $ -- -- 1,050.00 --
=========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $23,116,580 1,237,407
Items not requiring (providing) cash or cash equivalents:
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 58,886 180,091
Venture partner's share of venture's operations . . . . . . . . . . . . 402,695 1,278,733
Gain from sale of interest in investment property . . . . . . . . . . . (22,642,208) --
Changes in:
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . . 126,515 (240,426)
Escrow deposits and other assets. . . . . . . . . . . . . . . . . . . . (97,434) (117,957)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 74,823 (415,314)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,700) 232,416
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,102) (8,692)
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . (2,953) 3,652
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . 1,013,102 2,149,910
------------ -----------
Cash flows from investing activities:
Additions to investment property. . . . . . . . . . . . . . . . . . . . . -- (290,861)
Payments of deferred expenses . . . . . . . . . . . . . . . . . . . . . . (23,859) (140,302)
Proceeds from sale of interest in investment property . . . . . . . . . . 20,383,752 --
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . 20,359,893 (431,163)
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (405,109) (1,134,879)
Distributions to venture partner. . . . . . . . . . . . . . . . . . . . . (1,019,554) (175,000)
Distribution to limited partners. . . . . . . . . . . . . . . . . . . . . (18,905,250) --
Distribution to general partners. . . . . . . . . . . . . . . . . . . . . (3,214,863) --
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . (23,544,776) (1,309,879)
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . (2,171,781) 408,868
Cash and cash equivalents, beginning of year. . . . . . . . . . . 4,078,008 3,840,380
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . $ 1,906,227 4,249,248
============ ===========
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)
1998 1997
------------ -----------
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 527,884 1,659,103
============ ===========
Non-cash investing and financing activities:
Distribution of net assets to venture partner
upon liquidation of joint venture . . . . . . . . . . . . . . . . . . $ 2,090,031 --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1997 which are
included in the Partnership's 1997 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. SFAS 121 requires that the Partnership record an
impairment loss on its property to be held for investment whenever its
carrying value cannot be fully recovered through estimated undiscounted
future cash flows from its operations and sale. The amount of the
impairment loss to be recognized would be the difference between the
property's carrying value and the property's estimated fair value. The
Partnership's policy is to consider a property to be held for sale or
disposition when the Partnership has committed to a plan to sell such
property and active marketing activity has commenced or is expected to
commence in the near term. In accordance with SFAS 121, any property
identified as "held for sale or disposition" is no longer depreciated.
Adjustments for impairment loss for such property (subsequent to the date
of adoption of SFAS 121) are made in each period as necessary to report
these properties at the lower of carrying value or fair value less costs to
sell. The adoption of SFAS 121 did not have any effect on the
Partnership's financial position, results of operations or liquidity.
As the venture had committed to a plan to sell the Partnership's
Oakridge Mall investment property, the property was classified as held for
sale as of December 31, 1996, and therefore, was not subject to continued
depreciation beginning January 1, 1997. The results of operations, net of
venture partner's share, of the Partnership's Oakridge Mall investment
property (which was sold in April 1998) included in the accompanying
consolidated financial statements was $402,695 and $1,278,733,
respectively, for the nine months ended September 30, 1998 and 1997.
<PAGE>
TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of
September 30, 1998 and for the nine months ended September 30, 1998 and
1997 are as follows:
Unpaid at
September 30,
1998 1997 1998
------- ------ -------------
Management fees to corporate
general partner . . . . . . $40,775 -- --
Reimbursement (at cost) for
out-of-pocket expenses. . . 30 -- --
------- ------ ----
$40,805 -- --
======= ====== ====
OAKRIDGE VENTURE
As discussed below, the Partnership sold its interest in the venture
to the venture partner in April 1998.
The Partnership had been in discussions with potential buyers for the
Oakridge Shopping Mall (on behalf of the venture) or the Partnership's
interest in the property. Per the venture agreement, the venture partner
held the right of first opportunity to purchase the Partnership's interest
in the venture had the Partnership pursued a sale of the property.
Pursuant to the venture agreement, if the venture partner elected to
exercise its right of first opportunity, the venture partner would then
have 90 days after making such an election to close such sale. The
purchase price of the Partnership's interest would be such as would produce
for the Partnership the same consideration as the sale of the property to
an unaffiliated third party.
On April 8, 1998, the Partnership sold its interest to the venture
partner for a cash payment of $20,700,000 plus the assumption of the
Partnership's share of the mortgage loan of approximately $11,250,000. The
Partnership received approximately $20,900,000 in cash at closing including
a distribution of previously undistributed cash flow from operations of
approximately $494,000 and adjustments for prorations and closing costs,
but before consideration of certain costs of sale incurred by the
Partnership. Pursuant to the sale agreement, a cash reserve of $250,000
was established to pay for certain costs that may be incurred related to
certain maintenance items at the property. Any funds remaining in the cash
reserve at December 1, 1998 will be distributed one-half to the Partnership
and one-half to the venture partner. As a result of this transaction, the
Partnership recognized a gain of approximately $22,642,000 for financial
reporting purposes and expects to realize a gain of approximately
$24,000,000 for Federal income tax purposes in 1998.
In addition, in connection with the sale of the Partnership's interest
in the venture and as is customary in such transactions, the Partnership
agreed to certain representations, warranties and covenants with a
stipulated survival period which expires December 1, 1998. Although it is
not expected, the Partnership may ultimately have some liability under such
representations, warranties and covenants which are limited to actual
damages and shall in no event exceed $1,000,000. Additionally, the
Partnership provided a representation regarding its title relating to its
Partnership interest in the venture. Such representation is for the full
proceeds from sale of the interest and also expires December 1, 1998. The
Partnership's interest in the venture was its only remaining property
investment and due to its sale, the Partnership intends to wind up its
affairs and liquidate by year end 1998.
<PAGE>
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1998 and for the three and nine months ended September 30, 1998 and 1997.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investments.
The board of directors of JMB Realty Corporation ("JMB"), the
corporate general partner of the Partnership, has established a special
committee (the "Special Committee") consisting of certain directors of JMB
to deal with all matters relating to tender offers for Interests in the
Partnership, including any and all responses to such tender offers. The
Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests.
During 1997, some of the Holders of Interests in the Partnership
received from unaffiliated third parties unsolicited tender offers to
purchase up to 4.9% of the Interests in the Partnership at amounts between
$350 and $485 per Interest. The Partnership recommended against acceptance
of these offers on the basis that, among other things, the offer prices
were inadequate. Such offers have expired. The Partnership had also
received requests from other unaffiliated third parties for the list of
Holders of Interests.
In April 1998, an unaffiliated third party made an unsolicited tender
offer to some of the Holders of Interests to purchase up to 4.9% of the
Interests in the Partnership at $375 per Interest. Such offer expired in
May 1998. The Special Committee recommended against acceptance of this
offer on the basis that, among other things, the offer price was
inadequate.
In May 1998, a group that includes affiliates of MacKenzie Patterson,
Inc. (collectively, the "Purchasers") commenced a tender offer (the "Prior
Offer") for up to 2,700 Interests (approximately 15% of the outstanding
Interests) at a purchase price of $800 per Interest. The Special Committee
determined that the Purchasers' Prior Offer was inadequate and not in the
best interests of the Holders of Interests. Accordingly, the Partnership
recommended that the Holders of Interests reject the Purchasers' Prior
Offer and not tender their Interests. As more fully discussed below, at
the end of May 1998, the Partnership made a distribution to the Holders of
Interests of $1,050 per Interest. In June 1998, the Purchasers amended
their Prior Offer (the "Amended Prior Offer") to (i) increase the number of
Interests sought to include all of the outstanding Interests, (ii) reduce
the purchase price to $20 per Interest, and (iii) extend the expiration
date under the Purchasers' Amended Prior Offer to June 30, 1998. The
Special Committee determined that the Purchasers' Amended Prior Offer was
inadequate and not in the best interests of the Holders of Interests.
Accordingly, the Partnership recommended that the Holders of Interests
reject the Purchasers' Amended Prior Offer and not tender their Interests
pursuant to such Amended Prior Offer. The Partnership believes that the
Purchasers did not acquire any Interests pursuant to their Prior Offer or
Amended Prior Offer. In July 1998, the Purchasers commenced another tender
<PAGE>
offer (the "Offer") for Interests on substantially the same terms as the
Purchasers' Amended Prior Offer except that the purchase price was $30 per
Interest and the scheduled expiration date was August 31, 1998. The
Special Committee had determined that the Purchasers' Offer was inadequate
and not in the best interests of the Holders of Interests. Accordingly,
the Partnership recommended that the Holders of Interests reject the
Purchasers' Offer and not tender their Interests pursuant to such Offer.
The Partnership expects to make a final liquidating distribution to the
Holders of Interests in December 1998 of between approximately $40 and $80
per Interest based upon the likely expense of winding down the
Partnership's affairs. The higher end of the range for this final
liquidating distribution assumes that there are no claims made for breach
of the representations, warranties and covenants made by the Partnership in
connection with the sale of its interest in the Oakridge Mall investment
property in April 1998. Reference is made to the Notes for a further
description of the Partnership's representations, warranties and covenants
related to the sale of its interest in the Oakridge Mall.
As of the date of this report, the Partnership is aware that 3.90% of
the outstanding Interests have been purchased by all such unaffiliated
third parties either pursuant to such tender offers or through negotiated
purchases. It is possible that other offers for Interests may be made by
unaffiliated third parties in the future, although there is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn.
At September 30, 1998, the Partnership had cash and cash equivalents
of approximately $1,906,000. Such funds will be utilized for working
capital requirements and distributions to partners.
Oakridge Mall had been considered held for sale or disposition as of
December 31, 1996. On April 8, 1998, the Partnership sold its interest to
the venture partner for $31,950,000 ($20,700,000 plus the assumption of the
Partnership's share of the mortgage loan of approximately $11,250,000).
Reference is made to the Notes for a further description of such sale. Net
proceeds from the sale of the Partnership's interest ($1,000 per Interest)
and cash from operations ($50 per Interest) were distributed to the
partners in May 1998. The Partnership's interest in the venture was its
only remaining property investment and due to its sale, the Partnership
intends to wind up its affairs and liquidate by year end 1998. As
discussed above, the Partnership will distribute its remaining cash after
payment of expenses and liabilities.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at September 30, 1998 as
compared to December 31, 1997 is due primarily to the sale of the
Partnership's interest in Oakridge Mall in April 1998 and the distribution
of $1,050 per Interest of operating and net sale proceeds in May 1998 as
discussed above.
Various decreases in the consolidated financial statements at
September 30, 1998 as compared to December 31, 1997 and for the three and
nine months ended September 30, 1998 as compared to the three and nine
months ended September 30, 1997 are primarily due to the sale of the
Partnership's interest in the Oakridge Mall in April 1998.
The increase in interest income for the nine months ended September
30, 1998 as compared to the nine months ended September 30, 1997 is
primarily due to the temporary investment of approximately $20,900,000 of
net proceeds related to the April 1998 sale of the Partnership's interest
in the Oakridge Mall until distribution of such proceeds in May 1998. The
decrease in interest income for the three months ended September 30, 1998
as compared to the three months ended September 30, 1997 is primarily due
to the sale of the Partnership's interest in the Oakridge Mall in April
1998.
<PAGE>
The management fees to corporate general partner for the nine months
ended September 30, 1998 are due to the May 1998 sale and operating
distributions paid to the partners, a portion of which is a management fee
paid to the Corporate General Partner.
The gain from sale of interest in investment property for the nine
months ended September 30, 1998 is due to the sale in April 1998 of the
Partnership's interest in the Oakridge Mall.
<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate physical occupancy levels by quarter for the Partnership's Oakridge
Mall investment property.
<CAPTION>
1997 1998
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Oakridge Mall
San Jose, California. . . 91% 90% 90% 94% 94% N/A N/A
<FN>
An "N/A" indicates that the Partnership's interest in the property was sold and was not owned by the
Partnership at the end of the period.
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-A. The Prospectus of the Partnership dated October 17,
1977, as supplemented on December 5, 1977, January 16, 1978 and March 28,
1978, as filed with the Commission pursuant to Rules 424(b) and 424(c), is
hereby incorporated herein by reference to Exhibit 3-A to the Partnership's
Report for December 31, 1993 on Form 10-K of the Securities Exchange Act of
1934 (File No. 0-8915) filed on March 25, 1994.
3-B. Amended and Restated Agreement of Limited Partnership
set forth as Exhibit A to the Prospectus, and which agreement is hereby
incorporated herein by reference to Exhibit 3-B to the Partnership's Report
for December 31, 1993 on Form 10-K of the Securities Exchange Act of 1934
(File No. 0-8915) filed on March 25, 1994.
3-C. Acknowledgement of rights and duties of the General
Partners of the Partnership between AGPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is hereby incorporated herein by reference to
Exhibit 3-C to the Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-8915) dated November 8, 1996.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last quarter
of the period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - VII
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: November 11, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 11, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,906,227
<SECURITIES> 0
<RECEIVABLES> 7,360
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,913,587
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,921,087
<CURRENT-LIABILITIES> 33,581
<BONDS> 0
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0
0
<OTHER-SE> 1,781,977
<TOTAL-LIABILITY-AND-EQUITY> 1,921,087
<SALES> 2,325,964
<TOTAL-REVENUES> 2,601,405
<CGS> 0
<TOTAL-COSTS> 991,151
<OTHER-EXPENSES> 168,270
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<INTEREST-EXPENSE> 564,917
<INCOME-PRETAX> 877,067
<INCOME-TAX> 0
<INCOME-CONTINUING> 474,372
<DISCONTINUED> 22,642,208
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,116,580
<EPS-PRIMARY> 1,106.37
<EPS-DILUTED> 1,106.37
</TABLE>
