UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-14377
Krupp Realty Limited Partnership-VII
(Exact name of registrant as specified in its charter)
Massachusetts 04-2842924
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
470 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (617) 423-2233
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Investor Limited Partner Interest
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ].
Aggregate market value of voting securities held by non-affiliates: Not
applicable, since securities are non-voting.
Documents incorporated by reference: None
The exhibit index is located on pages 8-11
<PAGE>
PART I
ITEM 1. BUSINESS
Krupp Realty Limited Partnership-VII (the "Partnership") was formed on
August 21, 1984 by filing a Certificate of Limited Partnership in The
Commonwealth of Massachusetts. The Partnership has issued all of the
General Partner Interests to two General Partners, The Krupp Corporation, a
Massachusetts corporation, and The Krupp Company Limited Partnership-II, a
Massachusetts limited partnership. The Partnership has also issued all of
the Original Limited Partner Interests to The Krupp Company Limited
Partnership-II. On November 2, 1984, the Partnership commenced an offering
of up to 40,000 units of Investor Limited Partner Interest (the "Units")
for $1,000 per Unit. The public offering was closed on April 25, 1986, at
which time 27,184 Units had been sold. For additional details, see Note A
to Financial Statements included in Appendix A of this report. The primary
business of the Partnership is to invest in, operate, refinance and
ultimately dispose of a diversified portfolio of residential and commercial
real estate. The Partnership considers itself to be engaged only in the
industry segment of investment in real estate.
The Partnership's real estate investments are not subject to material
seasonal fluctuations, although net income may vary somewhat from quarter
to quarter based upon changes in utility consumption, seasonal maintenance
expenditures and changes in rental income which are based upon a percentage
of gross receipts of retail tenants. However, the future performance of
the Partnership will depend upon factors which cannot be predicted. Such
factors include general economic and real estate market conditions, both on
a national basis and in those areas where the Partnership's real estate
investments are located, the availability and cost of borrowed funds, real
estate tax rates, operating expenses, energy costs, government regulations
and federal and state income tax laws. The requirements for compliance
with federal, state and local regulations to date have not had an adverse
affect on the Partnership's operations, and no adverse affect therefrom is
now anticipated in the future.
The Partnership's investments in real estate are also subject to such
risks as (i) competition from existing and future projects held by other
owners in the locations of the Partnership's properties, (ii) possible
reduction in rental income due to an inability to maintain high occupancy
levels, to the financial failure of a tenant or the inability of retail
tenants to achieve gross sales at a level sufficient to provide for
additional rental income based on a percentage of sales, (iii) possible
adverse changes in mortgage interest rates, (iv) possible adverse changes
in general economic and local conditions, such as competitive
over-building, increases in unemployment, or adverse changes in real estate
zoning laws, (v) the possible future adoption of rent control legislation
which would not permit the full amount of increased costs to be passed on
to tenants in the form of rent increases, and (vi) other circumstances over
which the Partnership may have little or no control.
As of December 31, 1994, there were approximately 30 full and part-time
on-site personnel employed by the Partnership.
<PAGE>
ITEM 2. PROPERTIES
As of December 31, 1994, the Partnership has leveraged investments
in two apartment complexes having an aggregate of 524 units and one
commercial shopping center with 89,432 square feet of leasable space.
A summary of the Partnership's real estate investments is
presented below.
<TABLE>
<CAPTION>
Total Units/ Average Occupancy
Year Current Leasable December 31,
Description Acquired Square Footage 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Multi-Family Residential
Courtyards Village East
Apartments
Naperville, Illinois 1985 224 97% 96% 93%
Windsor Apartments
Garland, Texas 1984 300 94% 92% 93%
Shopping Center - Commercial
Nora Corners Shopping
Center
Indianapolis, Indiana 1986 89,432 93% 93% 95%
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Partnership is
a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The transfer of Units is subject to certain limitations
contained in the Partnership Agreement. There is no public market for the
Units and it is not anticipated that any such public market will develop.
The number of Investor Limited Partners as of December 31, 1994
was approximately 1,500.
One of the objectives of the Partnership is to generate cash
available for distribution, all or a portion of which will be treated as a
return of capital and therefore not currently taxable. The Partnership
discontinued distributions during 1989 due to insufficient operating cash
flow. In 1994, however, the General Partners determined that there was
sufficient Distributable Cash Flow to reinstate distributions. These
distributions commenced in August 1994 and thereafter are to be paid
semiannually. A distribution was paid in February 1995.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial information
regarding the Partnership's financial position and operating results. This
information should be used in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations and the Financial
Statements and Notes thereto, which are included in Items 7 and 8 of this
report, respectively.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Total revenue $4,286,787 $ 4,799,332 $ 5,396,406 $ 5,681,346 $ 6,112,643
Income (loss) before
loss on foreclosure (409,938) 53,862 (994,525) (893,791) (1,922,917)
Loss on foreclosure - - - (1,668,385) -
Net income (loss) (409,938) 53,862 (994,525) (2,562,176) (1,922,917)
Net income (loss)
allocated to:
Investor Limited
Partners:
Income (loss) before
loss on foreclosure (405,839) 53,323 (984,580) (884,853) (1,903,688)
Per Unit (14.93) 1.96 (36.22) (32.55) (70.03)
Loss on foreclosure - - - (1,651,701) -
Per Unit - - - (60.76)
Net income (loss) (405,839) 53,323 (984,580) (2,536,554) (1,903,688)
Per Unit (14.93) 1.96 (36.22) (93.31) (70.03)
General Partners:
Income (loss) before
loss on foreclosure (4,099) 539 (9,945) (8,938) (19,229)
Loss on foreclosure - - - (16,684) -
Net income (loss) (4,099) 539 (9,945) (25,622) (19,229)
Total assets $18,336,983 $18,729,696 $24,239,479 $25,444,546 $35,992,422
Long-term obligations $12,745,312 $ 8,364,761 $17,226,999 $17,484,896 $17,684,937
Distributions to:
Investor Limited
Partners 135,920 - - - -
Per Unit 5.00 - - - -
Original Limited
Partner 12,082 - - - -
General Partners 3,020 - - - -
</TABLE>
Operations results for the periods presented are not comparable due to the
following events:
(1) Westbrook Place and Willow Cove Apartments were sold July 1, 1993.
(2) Richland Mall was foreclosed upon on June 4, 1991.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's ability to generate cash adequate to meet its needs is
dependent primarily upon the successful operations of its real estate
investments. Such ability is also dependent upon the future availability
of bank borrowings and the future refinancing and sale of the Partnership's
remaining real estate investments. These sources of liquidity will be used
by the Partnership for payment of expenses related to real estate
operations, capital expenditures, debt service and expenses. Cash Flow, if
any, as calculated under Section 8.2(a) of the partnership agreement, will
then be available for distribution to the Partners. In 1994, the General
Partners determined that there was sufficient Distributable Cash Flow to
reinstate distributions. These distributions commenced in August 1994 and
are expected to continue in 1995.
On April 13, 1994, the Partnership successfully completed the
refinancing of Windsor Apartments mortgage note payable. The new
$5,300,000 note requires decreased debt service payments due to a lower
interest rate of 9.25% per annum from the previous rate of 10.3% per annum.
The Partnership also refinanced the Nora Corners mortgage note payable on
October 6, 1994. The new $4,250,000 note requires decreased debt service
payments due to a lower interest rate of 9% per annum from the previous
rate of 10.5% per annum. The reduced mortgage payments will provide
additional liquidity to the Partnership that may be used to fund capital
improvements at its properties or for distributions.
In 1995, Courtyards and Windsor are scheduled to have capital
improvement expenditures totaling $140,000 and $92,000, respectively.
These are routine improvements to maintain the appearance of the properties
in an effort to remain competitive in the real estate market.
Cash Flow
Shown below, as required by the Partnership Agreement, is the
calculation of Cash Flow for the year ended December 31, 1994:
<TABLE>
<CAPTION>
Rounded to $1,000
<S> <C>
Net loss for tax purposes $ (480,000)
Items not requiring (requiring) the use of operating
funds:
Tax basis depreciation and amortization 1,367,000
Principal payments on mortgage notes payable (145,000)
Capital improvement expenditures (222,000)
Replacement reserves for capital improvement
expenditures (4,000)
Working capital reserves (214,000)
Cash Flow $ 302,000
</TABLE>
<PAGE>
Operations
The following discussion relates to the operations of the Partnership
and its properties (Courtyards Village, Nora Corners, Westbrook and Windsor
Apartments) for the years ended December 31, 1994, 1993, and 1992 or
portion thereof. The sale of Westbrook, effective July 1, 1993,
significantly impacted the comparability of the Partnership's operations.
1994 versus 1993
During 1994, as compared to 1993, rental revenues increased by $198,000,
excluding $714,000 of revenue generated by Westbrook in 1993. This was
primarily due to improved occupancy as well as increased rental rates at
Courtyards and Windsor. Interior and exterior painting improvements and
carpentry renovations, started in 1993 at Courtyards and Windsor, were
completed in the first quarter of 1994. Landscaping and parking lot
upgrades were also implemented at Courtyards in 1993. These improvements
allowed the Partnership to obtain the rental increases at both properties.
Occupancy at Windsor increased due to the stabilization of the Dallas
economy, with home purchasing leveling off. As a result, all rental
concessions at Windsor were eliminated in the first quarter of 1994. At
Courtyards, rental concessions were reduced as a result of the improved
occupancy. The Partnership's commercial property, Nora Corners, is
maintaining its high occupancy with the signing of two new tenants in the
first quarter of 1994, D.L. Lowry Salon, a hair salon and Food King, a
chinese food restaurant.
Property expenses for 1994, as compared to 1993 (excluding Westbrook),
increased by $30,000. The increase was primarily due to higher operating
expenses for the snow removal costs incurred at Courtyards and Nora Corners
as a result of the heavy snow storms last winter.
1993 versus 1992
Rental revenues between the years ending 1993 and 1992, excluding
Westbrook's revenues earned in the third and fourth quarters of 1992, of
$686,000, increased by $92,000. The primary reasons for the increase in
revenue were stronger occupancy and increased rental rates at Courtyards
Village. Windsor Apartments had encountered competition from the
affordable first-time home buyers' market in the Dallas/Fort Worth area in
1993. This property's potential was being maximized, however, by increased
rental rates on one-bedroom unit types, which had a strong market demand.
For the years ended December 31, 1993 and 1992, property expenses,
excluding Westbrook's expenses during the third and fourth quarters of
1992, remained stable with the exception of maintenance and repairs. These
expenses increased in 1993 as a result of extensive interior and extensive
painting at Courtyards and Windsor.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Appendix A to this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no directors or executive officers. Information as to
the directors and executive officers of The Krupp Corporation which is a
General Partner of the Partnership and is a general partner of The Krupp
Company Limited Partnership-II, the other General Partner of the
Partnership, is as follows:
Position with
Name and Age The Krupp Corporation
Douglas Krupp (48) Co-Chairman of the Board
George Krupp (50) Co-Chairman of the Board
Laurence Gerber (38) President
Marianne Pritchard (45) Treasurer
Ross V. Keeler (46) Executive Vice President
Frank Apeseche (37) Executive Vice President
Douglas Krupp has been Co-Chairman of The Berkshire Group
(formally The Krupp Companies) since its formation in 1969. He has been
primarily responsible for overseeing the acquisition, disposition and
financing of properties by the entities sponsored by The Berkshire Group
and their affiliates. In addition, since 1987 Mr. Krupp has been
responsible for founding and overseeing through the start-up phase certain
new business ventures including the healthcare and construction businesses
of The Berkshire Group. He is a graduate of Bryant College in Rhode
Island. In 1989, he received an honorary Doctor of Science in Business
Administration degree from Bryant College and he also serves as a Trustee
of Bryant College. Douglas Krupp is the brother of George Krupp.
George Krupp has been Co-Chairman of The Berkshire Group since
its formation in 1969. His efforts over the years have encompassed the
broad spectrum of The Berkshire Group's activities including responsibility
for the real estate operations of The Berkshire Group through mid-1991, and
he continues to be involved in strategic planning. He attended the
University of Pennsylvania prior to joining his brother, Douglas Krupp, in
the real estate business in 1966. Mr. Krupp currently serves as Chairman
of the Board and a Trustee of Krupp Government Income Trust and Krupp
Government Income Trust II, and Chairman of the Board and a director of
Berkshire Realty Company, Inc.
Laurence Gerber has been President and Chief Executive Officer of
The Berkshire Group since 1991. He previously served from 1987 to 1991 as
President of Berkshire Financial Company with overall responsibility for
marketing, mortgage banking, product development and corporate financing,
and also worked on strategic planning. Prior to that, he served as
Executive Vice President, Acquisitions and, prior to that, as Senior Vice
President and Chief Planning Officer since joining the firm in January
1984. Before joining the firm, Mr. Gerber was a management consultant with
Bain & Co. headquartered in Boston, since July 1982. Prior to that, he was
a Senior Tax Accountant with Arthur Andersen & Co., an international
accounting and consulting firm, in New York. He has a B.S. degree in
economics with high honors from the University of Pennsylvania Wharton
School and an M.B.A. degree with High Distinction from Harvard Business
School. He is a Certified Public Accountant. Mr. Gerber serves as
President and a Trustee of Krupp Government Income Trust and Krupp
Government Income Trust II, and as President and a director of Berkshire
Realty Company, Inc.
<PAGE>
Marianne Pritchard, Treasurer of The Krupp Corporation and Senior
Vice-President, has been Chief Financial and Accounting Officer of
Berkshire Realty Affiliates since rejoining The Berkshire Group in August,
1991. Prior to rejoining The Berkshire Group, she was Vice President and
Controller for Liberty Real Estate Group, a subsidiary of Liberty Mutual
Insurance Company from July 1989 to August 1991. Prior to Liberty, Ms.
Pritchard held the position of Controller/Treasurer of Berkshire Mortgage
Finance from April 1987 to July 1989. Prior to that, Ms. Pritchard was
Senior Audit Manager with Deloitte and Touche, an international accounting
and consulting firm. She is a Certified Public Accountant and received her
B.B.A. degree in Accounting from the University of Texas.
Ross V. Keeler is President of Berkshire Investment Advisors and
an Executive Vice-President of The Berkshire Group. Prior to joining The
Berkshire Group in November 1984, he served as Executive Vice President of
Marketing and a member of the Board of Directors at First Capital
Companies, a national syndicator of real estate investments. Prior to
that, Mr. Keeler served as President of State Financial Corporation, a
company which originated specialized leases on major equipment for
municipalities. He received a B.S. degree in finance with honors from the
University of Florida and received an M.B.A. degree with scholastic honors
from the University of Southern California.
Frank Apeseche was appointed Executive Vice President and Chief
Financial Officer of The Berkshire Group on January 1, 1993. He oversees
strategic planning, tax planning, corporate finance and product development
for The Berkshire Group. Before joining the firm in 1986, Mr. Apeseche was
a manager at Arthur Andersen & Co., an international accounting and
consulting firm. Mr. Apeseche holds a B.A. degree with High Distinction
from Cornell University and an M.B.A. degree with honors from the
University of Michigan.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no directors or executive officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 1994, no person owned of record or was known
by the General Partners to own beneficially more than 5% of the
Partnership's 27,184 outstanding Units. The only interests held by
management or its affiliates consist of its General Partner and Original
Limited Partner interests.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required under this Item is contained in Note I to
Financial Statements included in Appendix A to this report.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements - see Index to Financial Statements and
Financial Statement Schedule included under Item 8, Appendix
A, on page F-2 to this report.
2. Financial Statement Schedules - see Index to Financial Statements
and Financial Statement Schedule included under Item 8, Appendix
A, on page F-2 to this report. All other schedules are omitted as
they are not applicable or not required or the information is
provided in the Financial Statements or the Notes thereto.
<PAGE>
(b) Exhibits:
Number and Description
Under Regulation S-K
The following reflects all applicable exhibits required under
Item 601 of Regulation S-K:
(4) Instruments defining the rights of security holders
including indentures:
(4.1) Amended Agreement of Limited Partnership dated as of
October 23, 1984 [Exhibit A to Prospectus included in
Registrant's Registration Statement on Form S-11 (File
2-92889)].*
(4.2) Thirty-Second Amendment and Restatement of Certificate
of Limited Partnership filed with the Massachusetts
Secretary of State on June 4, 1986 [Exhibit 4.2 to
Registrant's Report on Form 10-K dated October 31,
1986 (File No. 0-14377)].*
(10) Material Contracts
Windsor Apartments
(10.1) Purchase and Sale Agreement dated June 3, 1983
between Douglas Krupp, on behalf of himself and
others, and Garland Land Joint Venture [Exhibit 1
to Registrant's Report on Form 8-K dated December
27, 1984 (File No. 2-92889)].*
(10.2) Management Agreement dated December 27, 1984
between Krupp Realty Limited Partnership-VII, as
Owner and Krupp Asset Management Company, now
known as Berkshire Property Management ("BPM"), as
Agent. [Exhibit 10.4 to Registrant's Report on
Form 10-K for the fiscal year ended October 31,
1984 (File No. 2-92889)].*
(10.3) Promissory Note dated April 13, 1994 by and
between Windsor Partners Limited Partnership and
Sun Life Insurance Company of America [Exhibit
10.1 to Registrant's Report on Form 10-Q dated
June 30, 1994 (File No. 0-14377)].*
(10.4) Deed of Trust, Security Agreement, Fixture Filing,
Financing Statement and Assignment of Leases and
Rents dated April 13, 1994 from the grantor,
Windsor Partners Limited Partnership, to the
Trustee, Brian C. Rider [Exhibit 10.2 to
Registrant's Report on Form 10-Q dated June 30,
1994 (File No. 0-14377)].*
Courtyards Village East Apartments
(10.5) Purchase and Sale Agreement dated October 12, 1984
between Douglas Krupp on behalf of himself and
others, and The Courtyards Village and The
Courtyards Village Inn-East Apartments Partnership
[Exhibit 1 to Registrant's Report on Form 8-K
dated April 1, 1985 (File 2-92889)].*
(10.6) Amended Trust Agreement dated May 6, 1976
between The Courtyards Village and The
Courtyards Village Inn-East Apartments
Partnership and American National Bank and
Trust Company of Chicago [Exhibit 2 to
Registrant's Report on Form 8-K dated April
1, 1985 (File No. 2-92889)].*
<PAGE>
(10.7) Assignment of Trust of American National Bank
and Trust Company of Chicago dated April 1,
1985 [Exhibit 3 to Registrant's Report on
Form 8-K dated April 1, 1985 (File No.
2-92889)].*
(10.8) Mortgage Note dated January 1, 1973 between
American National Bank and Trust Company of
Chicago and Republic Realty Mortgage Company
[Exhibit 4 to Registrant's Report on Form 8-K
dated April 1, 1985 (File No. 2-92889)].*
(10.9) Modification Agreement dated May 1, 1975
between American National Bank and Trust
Company of Chicago and Republic Realty
Mortgage Corporation. [Exhibit 5 to
Registrant's Report on Form 8-K dated April
1, 1985 (File No. 2-92889)].*
(10.10) Mortgage Note dated May 18, 1976 between
American National Bank and Trust Company of
Chicago and Republic Realty Mortgage Company
[Exhibit 6 to Registrant's Report on Form 8-K
dated April 1, 1985 (File No. 2-92889)].*
(10.11) Mortgage Agreement dated May 18, 1976 between
American National Bank and Trust Company of
Chicago and Republic Realty Mortgage
Corporation [Exhibit 7 to Registrant's Report
on Form 8-K dated April 1, 1985 (File No.
2-92889)].*
(10.12) Amended HUD Regulatory Agreement dated May
18, 1976 between American National Bank and
Trust Company of Chicago and Republic Realty
Mortgage Corporation [Exhibit 8 to
Registrant's Report on Form 8-K dated April
1, 1985 (File No. 2-92889)].*
(10.13) Consolidation Agreement dated June 14, 1976
between American Bank and Trust Company of
Chicago, as Trustee, and Republic Realty
Mortgage Corporation [Exhibit 9 to
Registrant's Report on Form 8-K dated April
1, 1985 (File No. 2-92889)].*
(10.14) Management Agreement dated April 1, 1985
between Krupp Realty Limited Partnership-VII,
as Owner and Krupp Asset Management Company,
now known as Berkshire Property Management
("BPM"), as Agent. {Exhibit 10.20 to
Registrant's Report on Form 10-K for the year
ended October 31, 1985 (File No. 2-92889)].*
Nora Corners Shopping Center
(10.15) Purchase and Sale Agreement dated June 16,
1986 between Douglas Krupp, on behalf of
himself and others and Nora Corners Building
Associates, Ltd., an Illinois limited
partnership [Exhibit 1 to Registrant's Report
on Form 8-K dated September 24, 1986 (File
No. 0-14377)].*
(10.16) Amendment to Purchase and Sale Agreement
dated August 29, 1986 between Douglas Krupp,
on behalf of himself and others (assigned to
Krupp Realty Limited Partnership-VII), and
Nora Corners Building Associates, Ltd., and
Illinois limited partnership [Exhibit 2 to
Registrant's Report on Form 8-K dated
September 24, 1986 (File No. 0-14377)].*
<PAGE>
(10.17) Property Management Agreement dated September
24, 1986 between Krupp Realty Limited
Partnership-VII, as Owner and Krupp Asset
Management Company, now known as Berkshire
Property Management ("BPM") Berkshire
Property Management Company, as Agent
[Exhibit 10.36 to Registrant's Report on Form
10-K dated October 31, 1987 (File No. 0-
14377)].*
(10.18) Special Warranty Deed dated September 24,
1986 between Krupp Realty Limited
Partnership-VII and Nora Corners Building
Associates, Ltd., an Illinois limited
partnership [Exhibit 8 to Registrant's Report
on Form 8-K dated September 24, 1986 (File
No. 0-14377)].*
(10.19) Land Lease dated October 11, 1962 between
Cornelius M. and Wilma Brown (lessor) and
Burger Chef Systems, Inc., an Indiana
corporation (lessee) [Exhibit 9 to
Registrant's Report on Form 8-K dated
September 24, 1986 (File No. 0-14377)].*
(10.20) Notice of Lease dated September 23, 1963
between Cornelius M. and Wilma Brown (lessor)
and Burger Chef Systems, Inc., an Indiana
corporation (lessee) [Exhibit 10 to
Registrant's Report on Form 8-K dated
September 24, 1986 (File No. 0-14377)].*
(10.21) Assignment of Lease dated September 24, 1986
between Krupp Realty Limited Partnership-VII
and Nora Corners Building Associates, Ltd.,
an Illinois limited partnership [Exhibit 11
to Registrant's Report on Form 8-K dated
September 24, 1986 (File No. 0-14377)].*
(10.22) Promissory Note dated September 27, 1994,
effective October 6, 1994, by and between
Krupp Realty Limited Partnership-VII and John
Hancock Mutual Life Insurance Company. (File
No. 0-14377).+
(10.23) Mortgage, Security Agreement, Assignment of
Leases and Fixture Filing dated September 27,
1994, effective October 6, 1994, by and
between Krupp Realty Limited Partnership-VII
and John Hancock Mutual Life Insurance
Company. (File No. 0-14377).+
+ Filed herein
* Incorporated by reference
(c) Reports on Form 8-K
During the last quarter of the year ended December 31, 1994, the
Partnership filed no reports on Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on the
27th day of March, 1995.
KRUPP REALTY LIMITED PARTNERSHIP-VII
By: The Krupp Corporation, a General
Partner
By: /s/George Krupp
George Krupp, Co-Chairman
(Principal Executive Officer)
and Director of The Krupp
Corporation
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated, on the 27th day of March, 1995.
Signatures Title(s)
/s/Douglas Krupp Co-Chairman (Principal Executive Officer)
Douglas Krupp and Director of The Krupp Corporation, a General Partner.
/s/George Krupp Co-Chairman (Principal Executive Officer)
George Krupp and Director of The Krupp Corporation, a General Partner.
/s/Laurence Gerber President of The Krupp Corporation, a
Laurence Gerber General Partner.
/s/Marianne PritchardTreasurer and Chief Accounting Officer of
Marianne Pritchard The Krupp Corporation, a General Partner.
<PAGE>
APPENDIX A
KRUPP REALTY LIMITED PARTNERSHIP-VII
FINANCIAL STATEMENTS AND SCHEDULE
ITEM 8 OF FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
For the Year Ended December 31, 1994
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Report of Independent Accountants F-3
Balance Sheets at December 31, 1994 and 1993 F-4
Statements of Operations for the years ended December 31, 1994, 1993
and 1992 F-5
Statements of Changes in Partners' Equity for the years ended
December 31, 1994, 1993 and 1992 F-6
Statements of Cash Flows for the years ended December 31, 1994,
1993 and 1992 F-7
Notes to Financial Statements F-8 - F-13
Schedule III - Real Estate and Accumulated Depreciation F-14 - F-15
All other schedules are omitted as they are not applicable, not required,
or the information is provided in the financial statements or the notes
thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Krupp Realty Limited Partnership-VII:
We have audited the financial statements and financial
statement schedule of Krupp Realty Limited Partnership-VII (the
"Partnership") listed in the index on page F-2 of this Form 10-K. These
financial statements and financial statement schedule are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Krupp
Realty Limited Partnership-VII as of December 31, 1994 and 1993 and the
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1994 in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial
statement schedule referred to above, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all
material respects, the information required to be included therein.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
January 31, 1995
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
BALANCE SHEETS
December 31, 1994 and 1993
<TABLE>
<CAPTION>
ASSETS
1994 1993
<C> <C> <C>
Multi-family apartment complexes, net of
accumulated depreciation of $8,664,936 and
$7,820,288, respectively (Note D) $ 9,665,226 $10,349,433
Retail center, net of accumulated
depreciation of $2,896,863 and $2,513,207,
respectively (Notes D and H) 6,724,369 7,046,517
Total real estate assets 16,389,595 17,395,950
Cash and cash equivalents 1,021,464 840,798
Cash restricted for tenant security deposits 55,084 61,363
Cash restricted for capital improvements (Note D) 54,189 57,748
Prepaid expenses and other assets (Note I) 555,508 327,862
Deferred expenses, net of accumulated
amortization of $19,538 and $259,055,
respectively (Note I) 261,143 45,975
Total assets $18,336,983 $18,729,696
LIABILITIES AND PARTNERS' EQUITY
Mortgage notes payable (Notes C and D) $12,912,152 $12,682,032
Accrued expenses and other liabilities (Note E) 762,988 824,861
Total liabilities 13,675,140 13,506,893
Commitment (Note F)
Partners' equity (Note F) 4,661,843 5,222,803
Total liabilities and partners' equity $18,336,983 $18,729,696
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Revenue:
Rental (Note G) $4,258,043 $4,774,332 $5,368,654
Interest income 28,744 25,144 27,752
Total revenue 4,286,787 4,799,476 5,396,406
Expenses:
Operating (including reimbursements
to affiliates of $163,679, $202,702
and $241,617, respectively)
(Notes H and I) 1,180,879 1,496,981 1,828,472
Maintenance 331,826 497,049 571,960
Real estate taxes 404,887 464,734 514,263
Management fees to an affiliate 176,861 208,563 240,254
Depreciation and amortization 1,293,815 1,387,232 1,481,594
Interest (Note D) 1,230,723 1,446,343 1,663,136
General and administrative (including
reimbursements to affiliates of $46,315
$51,519 and $41,005, respectively)
(Note I) 77,734 88,080 91,252
Total expenses 4,696,725 5,588,982 6,390,931
Net loss before gain on sale of
Westbrook (409,938) (789,506) (994,525)
Gain on sale of Westbrook (Note C) - 843,368 -
Net income (loss) (Note J): $ (409,938) $ 53,862 $ (994,525)
Allocation of net income (loss) (Note F):
Per Unit of Investor Limited Partner
Interest (27,184 Units outstanding):
Loss before gain on sale
of Westbrook $ (14.93) $ (28.75) $ (36.22)
Gain on sale of Westbrook - 30.71 -
Net income (loss) $ (14.93) $ 1.96 $ (36.22)
General Partners:
Loss before gain on sale of
Westbrook $ (4,099) $ (7,895) $ (9,945)
Gain on sale of Westbrook - 8,434 -
Net income (loss) $ (4,099) $ 539 $ (9,945)
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Investor Original Total
Limited Limited General Partners'
Partners Partner Partners Equity
<S> <C> <C> <C> <C>
Balance at December 31, 1991 $6,647,930 $(277,053) $(207,411) $6,163,466
Net loss (984,580) - (9,945) (994,525)
Balance at December 31, 1992 5,663,350 (277,053) (217,356) 5,168,941
Net income 53,323 - 539 53,862
Balance at December 31, 1993 5,716,673 (277,053) (216,817) 5,222,803
Distribution (135,920) (12,082) (3,020) (151,022)
Net loss (405,839) - (4,099) (409,938)
Balance at December 31, 1994 $5,174,914 $(289,135) $(223,936) $4,661,843
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1993 1992 1994
<S> <C> <C> <C>
Operating activities:
Net income (loss) $ (409,938) $ 53,862 $ (994,525)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Gain on sale of Westbrook - (843,368) -
Depreciation and amortization 1,293,815 1,387,232 1,485,409
Decrease in restricted cash - - 100,000
Decrease (increase) in tenant security
deposits 6,279 21,472 (2,466)
Decrease (increase) in prepaid expenses
and other assets (227,646) 67,570 4,675
Increase (decrease) in accrued expenses
and other liabilities (61,873) 91,295 34,084
Net cash provided by operating
activities 600,637 778,063 627,177
Investing activities:
Additions to fixed assets (221,949) (333,793) (351,412)
Decrease in cash restricted for capital
improvements 3,559 91,925 2,547
Proceeds from sale of Westbrook - 75,000 -
Net cash used in investing activities (218,390) (166,868) (348,865)
Financing activities:
Principal payments on mortgage notes
payable (145,050) (157,909) (244,626)
Proceeds from mortgage notes payable 9,550,000 - -
Repayment of mortgage notes payable (9,174,830) - -
Increase in deferred expenses (280,679) - -
Distributions (151,022) - -
Net cash used in financing activities (201,581) (157,909) (244,626)
Net increase in cash and cash equivalents 180,666 453,286 33,686
Cash beginning of year 840,798 387,512 353,826
Cash and cash equivalents, end of year $ 1,021,464 $ 840,798 $ 387,512
Supplemental schedule of noncash investing and financing activities:
The Partnership sold Westbrook on July 1, 1993 for net proceeds of $75,000 and
retirement of all related debt as shown below:
First mortgage and accrued interest payable $3,799,398
Second mortgage payable 1,600,000
Cash proceeds 75,000
Net book value of property sold (4,631,030)
Gain on sale of Westbrook $ 843,368
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
NOTES TO FINANCIAL STATEMENTS
______________
A. Organization
Krupp Realty Limited Partnership-VII (the "Partnership") was formed on
August 21, 1984 by filing a Certificate of Limited Partnership in The
Commonwealth of Massachusetts. The Partnership terminates on December
31, 2025 unless earlier terminated upon the occurrence of certain events
as set forth in the Partnership Agreement. The Partnership has issued
all of the General Partner Interests to two General Partners, The Krupp
Corporation, a Massachusetts corporation, and The Krupp Company Limited
Partnership-II, a Massachusetts limited partnership, in exchange for
capital contributions aggregating $1,000. In addition, the General
Partners were required to make additional capital contributions of
$135,891 which were used to pay organization and offering costs in
excess of 5% of the gross proceeds of the offering. Except under
certain limited circumstances upon termination of the Partnership, the
General Partners are not required to make any other additional capital
contributions.
The Partnership has also issued all of the Original Limited Partner
Interests to The Krupp Company Limited Partnership-II in exchange for a
capital contribution of $4,000.
On November 2, 1984, the Partnership commenced an offering of up to
40,000 units of Investor Limited Partner Interest (the "Units") for
$1,000 per Unit. The public offering was closed on April 25, 1986, at
which time 27,184 Units had been sold for $27,184,000.
B. Significant Accounting Policies
The Partnership uses the following accounting policies for financial
reporting purposes, which may differ in certain respects from those used
for federal income tax purposes (Note J):
Cash Equivalents
The Partnership includes all short-term investments with
original maturities of three months or less at the date of
acquisition in cash and cash equivalents. The cash investments
are recorded at cost, which approximates market values.
Rental Revenues
Residential and commercial leases require the payment of base
rent monthly in advance. Rental revenues are recorded on the
accrual basis. Commercial leases generally contain provisions
for additional rent based on a percentage of tenant sales and
other provisions which are also recorded on the accrual basis,
but are billed in arrears.
Depreciation
Depreciation is provided for by the use of the straight-line
method over estimated useful lives of the related assets as
follows:
Buildings and improvements 3 to 39 years
Equipment, furnishings and fixtures 3 to 5 years
The Partnership recorded depreciation expense of $1,228,304,
$1,336,628 and $1,428,711, respectively, during the years ended
December 31, 1994, 1993 and 1992.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
NOTES TO FINANCIAL STATEMENTS, Continued
B. Significant Accounting Policies, Continued
Leasing Commissions
Leasing commissions on commercial properties are deferred and
amortized over the life of the related lease.
Deferred Expenses
Costs incurred to obtain the mortgages on the properties are
being amortized over the term of the mortgage notes using the
straight line method.
Income Taxes
The Partnership is not liable for federal or state income taxes
as the Partnership income or loss is allocated to the Partners
for income tax purposes. In the event that the Partnership's
tax returns are examined by the Internal Revenue Service or
state taxing authority and the examination results in a change
in the Partnership taxable income or loss, such change will be
reported to the Partners.
Reclassifications
Certain prior year balances have been reclassified to conform
with current year financial statement presentation.
C. Sale of Westbrook Place/Willow Cove Apartments
On July 13, 1993 and effective July 1, 1993, the Partnership sold
Westbrook to the holder of the non-recourse first mortgage note on
Westbrook, MXM Mortgage Corporation ("MXM"), subject to all mortgage
debt collateralized by these properties. This sale was coincident with
the sales to MXM of five additional properties in partnerships
affiliated with the General Partners of the Partnership for which MXM
was also the mortgage note holder.
The sale was the ultimate resolution to two years of continued
negotiations with MXM on potential refinancing options on the
properties. MXM was unwilling to accept any proposals or negotiate any
favorable terms. MXM alleged that a default existed regarding the
mortgage note and threatened litigation. The General Partners felt it
was in the best interest of the Partnership to negotiate a sale given
the expense of litigation and, more significantly, that the total debt
on Westbrook exceeded the value of the property. This situation was not
expected to improve by 1995 when the MXM mortgage note was due. Willow
Cove adjoins Westbrook and the Partnership operated these properties as
one, therefore, the Partnership included Willow Cove in the negotiations
as Willow Cove would no longer benefit from the savings allowed by
shared amenities.
The net book value of the properties was $4,631,030 at the date of the
sale which resulted in a gain of $843,368 for financial reporting
purposes.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
NOTES TO FINANCIAL STATEMENTS, Continued
D. Mortgage Notes Payable
Substantially, all of the property owned by the Partnership is pledged
as collateral for the mortgage notes payable outstanding at December 31,
1994 and 1993. Mortgage notes payable consist of the following:
<TABLE>
<CAPTION>
Annual
Interest
Principal Rate
Property 1994 1993 1994 1993 Maturity Date
<S> <C> <C> <C> <C> <S>
Courtyards Village
East Apartments $ 3,392,345 $ 3,469,969 7% 7% September, 2014
Nora Corners
Shopping Center 4,242,390 4,179,672 9% 10.5% October, 2004
Windsor Apartments 5,277,417 5,032,391 9.25% 10.3% May, 2001
$12,912,152 $12,682,032
</TABLE>
Courtyards Village East Apartments
The non-recourse mortgage note payable requires equal
monthly installments of $26,506, consisting of principal and
interest. In addition, the Partnership is required to pay a
monthly deposit of $2,000 to an escrow account to be used
for future property replacements and improvements, and a
mortgage insurance premium equal to .5% per annum of the
outstanding principal balance. As of December 31, 1994, the
mortgage provides for prepayment subject to a penalty equal
to 1/4 of 1% of the excess prepaid above 15% of the original
principal amount. The prepayment percentage shall decrease
by 1/8 of 1% annually each year on December 1st. After
December 1, 1996, the mortgage may be prepaid without
penalty.
Nora Corners Shopping Center
On October 6, 1994, the Partnership refinanced Nora Corners
mortgage note for $4,250,000. The new non-recourse mortgage
note is payable, based on a 25-year amortization, in equal
monthly installments of $35,666, consisting of principal and
interest. At maturity, all unpaid principal (approximately
$3,526,000) and any accrued interest is due. After October
1, 1998, the note may be prepaid subject to a prepayment
penalty. The Partnership paid refinancing costs of
$116,645.
The original non-recourse mortgage note had a balance of
$4,156,857 that was repaid from the proceeds of the
refinancing. The original note had an interest rate of
10.5% per annum and was payable in equal monthly
installments of $39,338, consisting of principal and
interest.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
NOTES TO FINANCIAL STATEMENTS, Continued
D. Mortgage Notes Payable - Continued
Windsor Apartments
On April 13, 1994, the Partnership
refinanced Windsor Apartments mortgage note
for $5,300,000. The new non-recourse
mortgage note is payable, based on a 30-year
amortization, in equal monthly installments
of $43,602, consisting of principal and
interest. At maturity, all unpaid principal
(approximately $5,021,000) and any accrued
interest is due. After October 13, 1997,
the note may be prepaid subject to a
prepayment penalty. The Partnership paid
refinancing costs of $164,033.
The original non-recourse mortgage note had a balance of
$5,017,973 that was repaid from the proceeds of the
refinancing. The original note had an interest rate of
10.3% per annum and was payable in equal monthly
installments of $47,960, consisting of principal and
interest.
The aggregate principal amounts of borrowings due during the
five years ending December 31, 1999 are $166,840, $180,809,
$195,968, $212,423, and $230,284.
The Partnership paid interest on its borrowings in the amounts
of $1,210,975, $1,366,046 and $1,516,315 during the years ended
December 31, 1994, 1993 and 1992, respectively.
E. Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following
at December 31, 1994 and 1993:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Accrued real estate taxes $392,338 $376,605
Other liabilities 257,155 346,564
Tenant security deposits 88,303 101,580
Accounts payable 25,192 112
$762,988 $824,861
</TABLE>
F. Partners' Equity
Under the terms of the Partnership Agreement, losses from operations are
allocated 99% to the Investor Limited Partners and 1% to the General
Partners and profits from operations are allocated 90% to the Investor
Limited Partners, 8% to the Original Limited Partner and 2% to the
General Partners until such time that the Investor Limited Partners have
received a return of their total invested capital plus a 9% per annum
cumulative return thereon and thereafter, 69% to the Investor Limited
Partners, 25% to the Original Limited Partner and 6% to the General
Partners.
Under the terms of the Partnership Agreement, cash distributions are
generally made on the same basis as the allocations of profits described
above. Distributions from a sale, exchange, refinancing, or other
disposition of a property or upon the termination of the Partnership are
to be allocated differently than that described above and will be made
in part after payment by the Partnership of a certain subordinated
financial consulting fee as described below.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
NOTES TO FINANCIAL STATEMENTS, Continued
F. Partners' Equity - Continued
The Partnership entered into a sales agent agreement for the public
offering of Units. Under that Agreement, the Partnership was required
to pay to the sales agent underwriting commissions and related financial
consulting fees equal to 9% of the gross proceeds from the offering. In
addition, the sales agent will be entitled to receive, over the life of
the Partnership, a subordinated financial consulting fee based upon the
net cash proceeds received by the Partnership as a result of sales and
refinancings of Partnership properties, which fee shall be in an amount
not exceeding 1.5% of the gross proceeds of the offering of Units. No
such fees will, however, be payable unless and until all Partners have
received their Invested Capital and the Investor Limited Partners have
received a 9% per annum cumulative return.
As of December 31, 1994, the following cumulative partner contributions
and allocations have been made since the inception of the Partnership:
<TABLE>
<CAPTION>
Investor Original Total
Limited Limited General Partners'
Partners Partner Partners Equity
<S> <C> <C> <C> <C>
Capital contributions $ 27,184,000 $ 4,000 $ 136,891 $ 27,324,891
Syndication costs (3,697,375) - (135,891) (3,833,266)
Cash distributions (3,297,777) (293,135) (73,281) (3,664,193)
Net loss from Capital
Transactions (816,767) - (8,250) (825,017)
Net loss from
operations (14,197,167) - (143,405) (14,340,572)
Total $ 5,174,914 $(289,135) $(223,936) $ 4,661,843
</TABLE>
G. Future Base Rents Due Under Commercial Operating Leases
Future base rents due under non-cancelable commercial operating leases
in the five years 1995 through 1999 are as follows:
1995 $879,800
1996 822,500
1997 754,500
1998 673,600
1999 576,500
H. Leases
Nora Corners is situated on 11.21 acres. Seven acres are owned by
certain parties having no affiliation with the Partnership and are
leased to the Partnership subject to a 99-year land lease which expires
in 2061. The land lease requires annual rental payments of $17,280 from
1987 through 2012, $20,180 from 2012 through 2037, and $23,040 from 2037
through 2061. Under the terms of the land lease, the lessee may assign
its rights to a subsequent purchaser of the property. Total rental
expense related to the land lease charged to operations for each of the
years ended December 31, 1994, 1993 and 1992 was $17,280.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
NOTES TO FINANCIAL STATEMENTS, Continued
I. Related Party Transactions
The Partnership has entered into agreements under which property
management fees are paid to an affiliate for services as management
agent for the properties. Such agreements provide for management fees
payable monthly at the rate of up to 5% of the gross receipts from
residential properties under management and up to 4% of the gross
receipts from commercial properties under management. The Partnership
also reimburses affiliates of the General Partners for certain expenses
incurred in connection with the operation of the properties including
accounting, computer, insurance, travel, legal and payroll, as well as
the preparation and mailing of reports and other communications to the
Limited Partners. Any such amounts relating to the foregoing are
presented on the face of the Statement of Operations.
For the years ended December 31, 1994, 1993 and 1992 amounts accrued or
paid to affiliates of the General Partners relating to refinancing and
disposition activities were $45,814, $7,568 and $5,668, respectively.
J. Federal Income Taxes
For federal income tax purposes, the Partnership is depreciating
property using the Accelerated Cost Recovery System ("ACRS") and the
modified accelerated cost recovery system ("MACRS") depending on which
is applicable.
The reconciliation of the net loss reported in the accompanying
statement of operations with the net loss to be reported in the
Partnership's 1994 federal income tax return follows:
<TABLE>
<CAPTION>
<S> <C>
Net loss per statement of operations $(409,938)
Less: Difference in book to tax depreciation and
amortization (73,351)
Rental adjustment required by Generally
Accepted Accounting Principles 3,344
Net loss for federal income tax purposes $(479,945)
</TABLE>
The allocation of the net loss for federal income tax purposes for the
year ended December 31, 1994 is as follows:
<TABLE>
<CAPTION>
Portfolio Passive
Income Loss Total
<S> <C> <C> <C>
General Partners $ 288 $ (5,087) $ (4,799)
Original Limited Partner - - -
Investor Limited Partners 28,455 (503,601) (475,146)
$28,743 $(508,688) $(479,945)
</TABLE>
For the years ended December 31, 1994, 1993 and 1992, the per Unit net
loss to the Investor Limited Partners for federal income tax purposes
was $17.48, $6.82 and $43.16, respectively.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1994
<TABLE>
<CAPTION>
Costs
Capitalized
Subsequent to
Initial Cost to Partnership Acquisition
Buildings & Buildings & Depreciable
Description Encumbrances Land Improvements Improvements Life
<S> <C> <C> <C> <C> <C> <C>
Courtyards
East
Apartments
Naperville,
Illinois $ 3,392,345 $ 487,529 $ 6,486,198 $1,037,449 3 to 25 Years
Nora Corners
Shopping Center
Indianapolis,
Indiana 4,242,390 775,345 8,240,342 605,545 2 to 39 Years
Windsor
Apartments
Garland,
Texas 5,277,417 696,362 9,251,669 370,955 3 to 25 Years
Total: $12,912,152 $1,959,236 $23,978,209 $2,013,949
Gross Amounts Carried at
End of Year
Buildings Year
and Accumulated Construction Date
Description Land Improvements Total Deprecation Completed Acquired
Courtyards
Village East
Apartments
Naperville,
Illinois $ 487,529 $ 7,523,647 $ 8,011,176 $ 3,793,159 1973 4/1/85
Nora Corners
Shopping Center
Indianapolis,
Indiana 775,345 8,845,887 9,621,232 2,896,863 1985 9/24/86
Windsor
Apartments
Garland,
Texas 696,362 9,622,624 10,318,986 4,871,777 1984 12/27/84
Total: $1,959,236 $25,992,158 $27,951,394 $11,561,799
</TABLE>
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-VII
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
(Continued)
December 31, 1994
Reconciliation of Real Estate and Accumulated Depreciation for each of
the three years in the period ended December 31, 1994:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Real Estate
Balance at beginning of year $27,729,445 $35,690,227 $35,338,815
Acquisition and improvements 221,949 333,791 351,412
Sales, foreclosure and
retirements - (8,294,573) -
Balance at end of year $27,951,394 $27,729,445 $35,690,227
Accumulated Depreciation
Balance at beginning of year $10,333,495 $12,646,631 $11,217,920
Depreciation expense 1,228,304 1,336,628 1,428,711
Sales, foreclosure and
retirements - (3,649,764) -
Balance at end of year $11,561,799 $10,333,495 $12,646,631
</TABLE>
Note: The aggregate cost of the Partnership's real estate for
federal income tax purposes is $27,922,587, and the
aggregate accumulated depreciation for federal income tax
purposes is $15,637,727.
[ARTICLE] 5
[LEGEND]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANICAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[/LEGEND]
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1994
[PERIOD-END] DEC-31-1994
[CASH] 1,130,737
[SECURITIES] 0
[RECEIVABLES] 144,533
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 410,975
[PP&E] 28,232,075<F1>
[DEPRECIATION] (11,581,337)<F2>
[TOTAL-ASSETS] 18,336,983
[CURRENT-LIABILITIES] 762,988
[BONDS] 12,912,152<F3>
[COMMON] 4,661,843<F4>
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 18,336,983
[SALES] 4,286,787
[TOTAL-REVENUES] 4,286,787
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 3,466,002<F5>
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 1,230,723
[INCOME-PRETAX] (409,938)
[INCOME-TAX] 0
[INCOME-CONTINUING] (409,938)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (409,938)
[EPS-PRIMARY] 0<F6>
[EPS-DILUTED] 0<F6>
<FN>
<F1>Includes apartment complexes of $18,330,162, retail center of $9,621,232 &
deferred expenses of $280,681.
<F2>Includes depreciation of $11,561,799 & amortization of deferred expenses of
$19,538.
<F3>Represents mortgage notes payable
<F4>Represents total equity of general partners and limited partners of ($223,936)
& $4,885,779, respectively.
<F5>Includes operating expenses of $1,767,300, real estate tax expense $404,887 &
depreciation & amortization $1,293,815.
<F6>Net loss allocated ($4,099) to G.P.'s & ($405,839) to L.P.'s for the year
ended 12/31/94. Average net income per unit of L.P. interest is ($14.93)
on 27,184 units outstanding.
</FN>
</TABLE>
