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, 1995
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 0-14378
Krupp Institutional Mortgage Fund Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts 04-2860302
(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
Limited Partner Interests
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: See Part IV, Item 14(b) on pages 8-
9.
The exhibit index is located on pages 8-9.
<PAGE>
PART I
ITEM 1. BUSINESS
The primary business of Krupp Institutional Mortgage Fund Limited
Partnership (the "Partnership") is making loans evidenced by non-recourse
participating promissory notes ("Participating Notes"), collateralized by
mortgages on improved, income producing real properties and a Collateral
Pledge Agreement dated February 20, 1985. See Note C to Financial
Statements included in Appendix A of this report. The loans have been
made to Krupp Equity Limited Partnership ("KELP"), which has the same
general partners as the Partnership, under a master loan agreement (the
"Master Loan Agreement"). The Partnership considers itself to be engaged
in only one industry segment, namely real estate mortgage lending to KELP.
KELP's properties began experiencing cash flow difficulties and,
beginning with the payment due April 1, 1991, KELP has not been able to
fully pay the required quarterly interest payments. The terms of the
Master Loan Agreement, which is currently in default, require KELP to pay
the Partnership basic interest at a rate of 10% per annum on the
Participating Notes.
The General Partners determined in 1991 not to exercise the
Partnership's foreclosure remedies under the Master Loan Agreement as a
result of KELP's default because the severely depressed state of the real
estate market in much of the U.S. made it unlikely that KELP would be able
to dispose of its properties at other than very unattractive prices at
that time. Thus, the General Partners believed that it was in the
Partnership's best interest to continue to permit KELP to hold the
properties and attempt to increase cash flows.
As a result of KELP's difficulties: 1) KELP has remitted to the
Partnership all cash flow generated by the properties after operating and
administrative expenses and senior mortgage obligations ("KELP Cash Flow")
and the Partnership has not exercised its foreclosure rights under the
Master Loan Agreements with respect to KELP's defaults; 2) interest and
late charges on the Partnership's Participating Notes have continued to
accrue although reserved against; 3) since 1991, as a consequence of the
default, the management agent of KELP's properties (an affiliate of its
general partners) has continued to serve even though it is not receiving
any payment of property management fees.
As a result of management's annual assessment of the carrying value of
the Participating Notes, which is based on the fair value of underlying
properties considering such factors as tenant turnover, current and
prospective occupancy levels, the current market competition and
assumptions on potential proceeds that might be received upon sale, the
General Partner of KELP determined that the carrying value of its
investments exceeded its net realizable value. As of December 31, 1995,
KELP has reduced the carrying value of its real estate by $5,986,000.
Accordingly, the Partnership has recorded a cumulative provision for
credit losses of $16,524,000, against the outstanding mortgage note
receivable balance of $28,319,943, on its related mortgage loans.
Since 1991, many segments of the U.S. real estate market have begun to
<PAGE>
recover. However, in the General Partners' judgment, the properties held
by KELP have not materially increased in value over this period. The
General Partners' current plan is to continue not to exercise the
Partnership's foreclosure rights under the Master Loan Agreement, although
they intend to carefully monitor the operations of each property and the
state of the market in which each property is located. At such time as
the Partnership believes the disposition of a property by KELP would
produce an attractive level of proceeds to the Partnership under the
Master Loan Agreement, the General Partners will take appropriate steps on
behalf of the Partnership to require a sale by KELP or commence
foreclosure proceedings with respect to such property. By proceeding in
this fashion the General Partners are seeking to avoid a disposition of
the portfolio at "forced liquidation" prices.
The General Partners estimate that this disposition process, which has
been ongoing through 1995 and earlier, could take several years. Limited
Partners should note that the deferral of property dispositions defers
significant tax liabilities of all Partners. It also defers the due date
on certain notes totalling $2,790,388 issued by the partners of KELP,
which have been pledged to the Partnership under a Collateral Pledge
Agreement. See Note D to the Financial Statements included in Appendix A
of this report.
As a result of the above mentioned disposition activities, subsequent to
year end KELP sold Village Green Apartments to an unaffiliated third party
for $5,200,000. As a result of the Village Green sale, the Partnership
will receive all available net cash proceeds from KELP. Additionally,
KELP has entered into a purchase and sale agreement with an unaffiliated
buyer for the purchase of North Salado Village Shopping Center at a
contracted sale price of $7,350,000. For details of each transaction see
Note D to the Financial Statements included in Appendix A of this report.
As of December 31, 1995, the Partnership did not employ any personnel.
Item 2. PROPERTIES
None.
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 SECURITY
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 Limited Partners as of December 31, 1995 was approximately
<PAGE>
3,300.
The Partnership made the following distributions to its Partners during
the fiscal year ended December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
$ Per Unit $ Per Unit
<S> <C> <C> <C> <C>
Limited Partners (30,059 Units) $676,327 $22.50 $676,327 $22.50
General Partners 6,832 6,832
$683,159 $683,159
</TABLE>
One of the objectives of the Partnership is to generate cash available
for quarterly distribution. However, there is no assurance that future
cash flows from KELP will be available for quarterly distributions.
As a result of the financial condition of the KELP properties and the
reduction in the debt service payments made by KELP to the Partnership,
the Partnership has made quarterly distributions at rates that fluctuate
from .25% to .625% of the invested proceeds.
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 read 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 (Appendix A) of this report, respectively.
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Total revenues $ 868,620 $ 1,060,150 $ 776,804 $ 608,365 $ 683,095
Net income before
provision for
credit losses 765,125 899,420 606,894 414,812 513,807
Provision for
credit losses - (4,500,000) - (3,274,000) -
Net income
(loss) $ 765,125 $(3,600,580) $ 606,894 $(2,859,188) $ 513,807
Allocation of
net income (loss):
Limited
Partners
(30,059 Units
outstanding) $ 757,474 $(3,564,574) $ 600,825 $(2,830,596) $ 508,669
Per Unit $ 25.20 $ (118.59) $ 19.99 $ (94.17) $ 16.92
<PAGE>
General
Partners $ 7,651 $ (36,006) $ 6,069 $ (28,592) $ 5,138
Total assets at
end of year $13,172,780 $13,092,186 $17,367,488 $17,378,398 $20,720,516
Distributions:
Limited
Partners $ 676,327 $ 676,327 $ 601,180 $ 488,459 $ 1,427,802
Per Unit $ 22.50 $ 22.50 $ 20.00 $ 16.25 $ 47.50
General
Partners $ 6,832 $ 6,832 $ 6,073 $ 4,934 $ 14,422
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
Currently, the Partnership has sufficient liquidity to meet its
operating needs. The most significant capital need is distributions to
investors. However, distributions are currently dependent on cash flow
received from KELP's interest payments on the Participating Notes based
upon the cash flow of the underlying properties.
KELP's properties have not generated cash flow sufficient to meet the
terms of their existing obligations. The retail centers have historically
suffered from an economic downturn in retail sales beginning in the late
1980s. Recently, the properties have maintained a consistent level of
operating cash flow. The partners of KELP have made cumulative capital
contributions of approximately $4,673,000 to cover prior operating
deficits and have arranged for certain short-term borrowings.
Additionally, the affiliated management agent has not received
payment of management fees since 1991. The General Partners of the
Partnership have not commenced foreclosure proceedings because, as
described in Item 1 above, they have determined that there are advantages
to allowing KELP to continue to own the properties.
On October 20, 1995, the partners of KELP refinanced the first mortgage
note payable of North Salado Shopping Center for $2,972,130. The terms of
the new mortgage require monthly principal and interest payments of $31,612
at a rate of 9.25% per annum. The new mortgage note matures November 15,
2009. The new mortgage may be prepaid without penalty until November 15,
1996, if the property is sold to an unaffiliated third party. Previously,
the mortgage note payable for North Salado required monthly payments of
$32,241, consisting of principal and interest at the rate of 10.625% per
annum.
On March 5, 1996, KELP sold Village Green Apartments to an unaffiliated
third party for $5,200,000. The buyer assumed the principal outstanding on
the first mortgage note payable on the property of $4,633,989, as of the
date of sale, which was netted against sales proceeds. KELP will remit to
KIMF available sale proceeds, net of closing costs, of approximately
$400,000.
<PAGE>
The partners of KELP have entered into a purchase and sale agreement
with an unaffiliated buyer for North Salado Village Shopping Center. The
contracted price for the property is $7,350,000 and the sale is expected to
take place during the second quarter of 1996. At December 31, 1995, the
property is subject to first and second mortgages of $2,954,660 and
$7,513,000, respectably.
Operations
1995 Compared to 1994
Total revenues decreased approximately $192,000 primarily from a
decrease in cash flow from the underlying KELP mortgages. The decrease in
cash flows was impacted by the sale of NOC Mall in 1994. The decrease in
interest income on mortgage notes receivable was partly offset by an
increase in interest income earned on cash and cash equivalents.
Total expenses, net of a provision for credit losses in 1994 of
$4,500,000, decreased $57,000. The decrease is due to management's efforts
to control all operating costs.
1994 Compared to 1993
Total revenues increased as a result of additional income earned from
the Partnership's first mortgage interest investment as a first lien holder
of Northeast Plaza, as well as cash flows generated by KELP's properties.
Upon KELP's sale of NOC Mall, the Partnership recorded interest income of
approximately $83,000 for the release of the property as collateral for the
additional Participating Notes. Expenses include a provision for losses
recorded in 1994 of $4,500,000 on the Participating Notes based on the
current estimated value of the collateral.
Distributable Cash from Operations
Distributable Cash from Operations of $765,000, $899,000 and $607,000,
as defined by Section 5.01 of the Partnership Agreement, is equivalent to
the net income before the provision for credit losses on the Participating
Notes for the fiscal years ended December 31, 1995, 1994 and 1993,
respectively.
KELP's Results of Operations
The average occupancy percentages for KELP's properties for the fiscal
years ended 1995, 1994, 1993, 1992 and 1991 for residential and commercial
properties are as follows:
<TABLE>
<CAPTION>
Average
Occupancy for the
Property Description Years Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Northeast Plaza Commercial 94% 87% 88% 89% 81%
North Salado Commercial 93% 92% 92% 93% 95%
Village Green Residential 91% 94% 94% 94% 94%
Bell Plaza Commercial 100% 90% 90% 89% 66%
</TABLE>
<PAGE>
The following table presents an analysis of KELP Cash Flow for purposes
of determining required cash flow payments on the participating notes for
the years ended December 31, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Cash flow from properties
before mortgage debt
service and capital
improvement expenditures
and reserves $ 1,951,000 $ 2,270,000 $ 2,432,000
Mortgage debt service
exclusive of amounts
due to Partnership (941,000) (1,317,000) (1,582,000)
Capital improvement
expenditures (300,000) (109,000) (262,000)
Capital improvement
reserve (contribution) release (6,000) (4,000) 34,000
Cash flow from properties
before mortgage debt
service to the Partnership 704,000 840,000 622,000
Mortgage debt service
to the Partnership (704,000) (840,000) (622,000)
KELP general and administrative
expenses (38,000) (48,000) (51,000)
Cash Deficit $ (38,000) $ (48,000) $ (51,000)
</TABLE>
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.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no directors or executive officers. Information as
to directors and executive officers of The Krupp Corporation, which is a
General Partner of both the Partnership and The Krupp Company Limited
Partnership-III, the other General Partner of the Partnership, is as
follows:
<PAGE>
Name and Age The Krupp Corporation
Douglas Krupp (49) Co-Chairman of the Board
George Krupp (51) Co-Chairman of the Board
Laurence Gerber (39) President
Robert A. Barrows (38) Senior Vice President and Corporate
Controller
Douglas Krupp is Co-Chairman and Co-Founder of The Berkshire Group.
Established in 1969 as the Krupp Companies, this real estate-based firm
expanded over the years within its areas of expertise including investment
program sponsorship, property and asset management, mortgage banking,
healthcare facility ownership and the management of the Company. Today,
The Berkshire Group is an integrated real estate, mortgage and healthcare
company which is headquartered in Boston with regional offices throughout
the country. A staff of approximately 3,400 are responsible for the more
than $4 billion under management for institutional and individual clients.
Mr. Krupp is a graduate of Bryant College. In 1989 he received an honorary
Doctor of Science in Business Administration from this institution and was
elected trustee in 1990. Mr. Krupp is Chairman of the Board and a Director
of Berkshire Realty Company, Inc. (NYSE-BRI). George Krupp is Douglas
Krupp's brother.
George Krupp is the Co-Chairman and Co-Founder of The Berkshire Group.
Established in 1969 as the Krupp Companies, this real estate-based firm
expanded over the years within its areas of expertise including investment
program sponsorship, property and asset management, mortgage banking and
healthcare facility ownership. Today, The Berkshire Group is an integrated
real estate, mortgage and healthcare company which is headquartered in
Boston with regional offices throughout the country. A staff of
approximately 3,400 are responsible for more than $4 billion under
management for institutional and individual clients. Mr. Krupp attended
the University of Pennsylvania and Harvard University. Mr. Krupp also
serves as Chairman of the Board and Trustee of Krupp Government Income
Trust and as Chairman of the Board and Trustee of Krupp Government Income
Trust II.
Laurence Gerber is the President and Chief Executive Officer of The
Berkshire Group. Prior to becoming President and Chief Executive Officer
in 1991, Mr. Gerber held various positions with The Berkshire Group which
included overall responsibility at various times for: strategic planning
and product development, real estate acquisitions, corporate finance,
mortgage banking, syndication and marketing. Before joining The Berkshire
Group in 1984, he was a management consultant with Bain & Company, a
national consulting firm headquartered in Boston. Prior to that, he was a
senior tax accountant with Arthur Andersen & Co., an international
accounting and consulting firm. Mr. Gerber has a B.S. degree in Economics
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 also serves Chief Executive Officer of
Berkshire Realty Company, Inc. (NYSE-BRI) and President and Trustee of
Krupp Government Income Trust and President and Trustee of Krupp Government
Income Trust II.
<PAGE>
Robert A. Barrows is Senior Vice President and Chief Financial Officer
of Berkshire Mortgage Finance and Corporate Controller of The Berkshire
Group. Mr. Barrows has held several positions within The Berkshire Group
since joining the company in 1983 and is currently responsible for
accounting and financial reporting, treasury, tax, payroll and office
administrative activities. Prior to joining The Berkshire Group, he was an
audit supervisor for Coopers & Lybrand L.L.P. in Boston. He received a
B.S. degree from Boston College and is a Certified Public Accountant.
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, 1995, no person of record owned, or was known by the
General Partners to own, beneficially more than 5% of the Partnership's
30,059 outstanding Units. On that date the General Partners and their
affiliates owned 10 Units (.03% of the total outstanding) of the
Partnership in addition to their General Partner Interests.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership does not have any directors, executive officers or
nominees for election as director. Additionally, as of December 31, 1995
no person of record owned, or was known by the General Partners to own,
beneficially more than 5% of the Partnership s outstanding Units.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements - see Index to Financial Statements
included under Item 8, Appendix A on page F-2 of this
report.
2. Financial Statement Schedules - All schedules are
omitted as they are not applicable, not required or the
information is provided in the financial statements or
the notes thereto.
(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 Limited Partnership Agreement dated
as of February 14, 1985 [Exhibit A to
Prospectus included in Registrant's
Registration Statement on Form S-11 dated
<PAGE>
February 15, 1985 (File No. 2-94392)].*
(4.2) Amended Certificate of Limited Partnership
filed with the Massachusetts Secretary of
State on December 13, 1985. [Exhibit 4.2 to
Registrant's Report on Form 10-K for the
year ended October 31, 1985 (File No. 2-
94392)].*
(10) Material contracts:
(10.1) The form of Master Loan Agreement (including
the form of Participating Note and
Collateral Pledge Agreement) between the
Partnership and Krupp Equity Limited
Partnership ("KELP") [Exhibit C to
Prospectus included in Registrant's
Registration Statement on Form S-11 dated
February 15, 1985 (File No. 2-94392)].*
(10.2) Revised basic form of Mortgage to secure
payment of the Loans under the Master Loan
Agreement [Exhibit 10.3(a) included in
Registrant's Registration Statement on Form
S-11 dated February 15, 1985 (File No.
2-94392)].*
(10.3) Revised form of Promissory Note as executed
by the partners of KELP and pledged under
the Collateral Pledge Agreement to secure
payment of Loans under the Master Loan
Agreement. [Exhibit 10.4(b) included in
Registrant's Registration Statement on Form
S-11 dated February 15, 1985 (File No.
2-94392)].*
North Salado Village Shopping Center II
(10.4) Promissory Note of KELP dated September 12,
1985, payable to the Partnership. [Exhibit 1
to Registrant's Report on Form 8-K dated
September 12, 1985 (File No. 2-94392)].*
(10.5) Deed of Trust, Security Agreement and
Financing Statement, dated September 12,
1985, from KELP to the Partnership. [Exhibit
2 to Registrant's Report on Form 8-K dated
September 12, 1985 (File No. 2-94392)].*
North Salado Village Shopping Center I
(10.6) Promissory Note of KELP, dated September 12,
1985, payable to the Partnership and Related
Allonge dated September 24, 1985. [Exhibit 3
to Registrant's Report dated September 12,
1985 (File No. 2-94392)].*
<PAGE>
(10.7) Deed of Trust, Security Agreement and
Financing Statement, dated September 12,
1985, from KELP to the Partnership. [Exhibit
4 to Registrant's Report on Form 8-K dated
September 12, 1985 (File No. 2-94392)].*
Northeast Plaza Shopping Center
(10.8) Promissory Note of KELP, dated September 12,
1985, payable to the Partnership. [Exhibit 5
to Registrant's Report on Form 8-K dated
September 12, 1985 (File No. 2-94392)].*
(10.9) Collateral Mortgage and Collateral Chattel
Mortgage Note from KELP dated September 12,
1985. [Exhibit 6 to Registrant's Report on
Form 8-K dated September 12, 1985 (File No.
2-94392)].*
(10.10) Act of Collateral Mortgage and Collateral
Chattel Mortgage by KELP in favor of the
Partnership dated September 12, 1985.
[Exhibit 7 to Registrant's Report on Form
8-K dated September 12, 1985 (File No.
2-94392)].*
(10.11) Act of Pledge and Pawn of Collateral
Mortgage and Collateral Chattel Mortgage
Note dated September 12, 1985 between KELP
and the Partnership. [Exhibit 8 to
Registrant's Report on Form 8-K dated
September 12, 1985 (File No. 2-94392)].*
(10.12) Modification of promissory note dated August
31, 1993 by and between the Partnership and
KELP.*
Village Green Apartments
(10.13) Promissory Note of KELP dated December 18,
1985, payable to the Partnership. [Exhibit 1
to Registrant's Report on Form 8-K dated
December 19, 1985 (File No. 2-94392)].*
(10.14) Mortgage, Security Agreement and Financing
Statement dated December 18, 1985 between
KELP and the Partnership. [Exhibit 2 to
Registrant's Report on Form 8-K dated
December 19, 1985 (File No. 2-94392)].*
Bell Plaza Shopping Center
(10.15) Promissory Note of KELP, dated June 2, 1987,
payable to the Partnership [Exhibit 1 to
Registrant's Report on Form 8-K dated June
2, 1987 (File No. 0-14378)].*
<PAGE>
(10.16) Mortgage dated June 2, 1987, from KELP to
the Partnership. [Exhibit 2 to Registrant's
Report on Form 8-K dated June 2, 1987 (File
No. 0-14378)].*
*Incorporated by reference.
(c) Reports on Form 8-K
None.
<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 21st
day of March, 1996.
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED
PARTNERSHIP
By: The Krupp Corporation, a General Partner
By: /s/Douglas Krupp
Douglas 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 21st day of March, 1995.
Signatures Titles
/s/Douglas Krupp Co-Chairman (Principal Executive Officer) and
Douglas Krupp Director of The Krupp Corporation, a General
Partner.
/s/George Krupp Co-Chairman (Principal Executive Officer) and
George Krupp Director of The Krupp Corporation, a General
Partner.
/s/Laurence Gerber President of The Krupp Corporation, a General
Laurence Gerber Partner.
/s/Robert A. Barrows Sr. Vice President and Corporate Controller of
Robert A. Barrows The Krupp Corporation (a General Partner of the
Registrant)
<PAGE>
APPENDIX A
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
ITEM 8 OF FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
For the Year Ended December 31, 1995
<PAGE>
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants F-3
Balance Sheets at December 31, 1995 and 1994 F-4
Statements of Operations for the years ended December 31, 1995,
1994 and 1993 F-5
Statements of Changes in Partners' Equity for the
years ended December 31, 1995, 1994 and 1993 F-6
Statements of Cash Flows for the years ended December 31, 1995,
1994 and 1993 F-7
Notes to Financial Statements F-8 - F-15
All 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>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Krupp Institutional Mortgage Fund Limited Partnership:
We have audited the financial statements of Krupp Institutional
Mortgage Fund Limited Partnership (the "Partnership") listed in the index
on page F-2 of this Form 10-K. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements 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.
As discussed in Note E, the Partnership has recorded a loan loss
reserve of $16,524,000 and a reserve for uncollectible interest of
$9,755,416, based on management's estimate of the value of the properties
which serve as collateral for the mortgage notes receivable. As is the
case with all real estate, the ultimate value of such properties can only
be determined in a negotiation between buyer and seller.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Krupp
Institutional Mortgage Fund Limited Partnership as of December 31, 1995 and
1994, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND, L.L.P.
March 26, 1996
<PAGE>
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
BALANCE SHEETS
December 31, 1995 and 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Mortgage notes receivable, net of loan loss
reserve of $16,524,000 for 1995 and 1994,
(Notes C, D and E) $11,795,943 $11,822,403
Cash and cash equivalents (Note F) 1,260,798 1,026,664
Accrued interest receivable - mortgage notes,
net of reserve for uncollectible interest of
$9,755,416 and $7,584,144, respectively
(Notes C and E) 112,304 231,116
Other assets 3,735 12,003
Total assets $13,172,780 $13,092,186
LIABILITIES AND PARTNERS' EQUITY
Liabilities $ 12,952 $ 14,324
Partners' equity (Note G)
Limited Partners (30,059 Units outstanding) 13,327,834 13,246,687
General Partners (168,006) (168,825)
Total Partners' equity 13,159,828 13,077,862
Total liabilities and Partners' equity $13,172,780 $13,092,186
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Interest income:
Mortgage notes receivable
(Notes C, D and E) $799,092 $ 1,020,409 $ 730,568
Cash equivalents (Note F) 69,528 39,741 46,236
Total revenue 868,620 1,060,150 776,804
Expenses:
Expense reimbursements to
affiliates (Note H) 49,689 96,608 106,630
General and administrative 53,806 64,122 63,280
Provision for credit losses
(Notes C, D and E) - 4,500,000 -
Total expenses 103,495 4,660,730 169,910
Net income (loss) (Note I) $765,125 $(3,600,580) $ 606,894
Allocation of net income
(loss)(Note G):
Per Unit of Limited Partner
Interest (30,059 Units
outstanding) $ 25.20 $ (118.59) $ 19.99
General Partners $ 7,651 $ (36,006) $ 6,069
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
For the Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
Total
Limited General Partners'
Partners Partners Equity
<S> <C> <C> <C>
Balance at December 31, 1992 $17,487,943 $(125,983) $17,361,960
Cash distributions (601,180) (6,073) (607,253)
Net income 600,825 6,069 606,894
Balance at December 31, 1993 17,487,588 (125,987) 17,361,601
Cash distributions (676,327) (6,832) (683,159)
Net loss (3,564,574) (36,006) (3,600,580)
Balance at December 31, 1994 13,246,687 (168,825) 13,077,862
Cash distributions (676,327) (6,832) (683,159)
Net income 757,474 7,651 765,125
Balance at December 31, 1995 $13,327,834 $(168,006) $13,159,828
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Operating activities:
Net income (loss) $ 765,125 $(3,600,580) $ 606,894
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Provision for credit losses - 4,500,000 -
Decrease (increase) in
accrued interest receivable
- mortgage notes 118,812 (205,236) 38,448
Decrease (increase) in other
assets 8,268 (9,390) 6,678
Increase (decrease) in
liabilities (1,372) 8,437 (10,551)
Net cash provided by
operating activities 890,833 693,231 641,469
Investing activities:
Investment in mortgage
notes receivable - - (994,873)
Principal collection from
mortgage notes receivable 26,460 23,952 7,468
Net cash provided by
(used for) investing
activities 26,460 23,952 (987,405)
Financing activity:
Distributions (683,159) (683,159) (607,253)
Net increase (decrease) in cash
and cash equivalents 234,134 34,024 (953,189)
Cash and cash equivalents,
beginning of year 1,026,664 992,640 1,945,829
Cash and cash equivalents,
end of year $1,260,798 $ 1,026,664 $ 992,640
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
A. Organization
Krupp Institutional Mortgage Fund Limited Partnership (the
"Partnership") was formed on November 15, 1984 by filing a
Certificate of Limited Partnership in The Commonwealth of
Massachusetts. The Partnership was formed for the purpose of making
participating mortgage loans ("the Participating Notes") to Krupp
Equity Limited Partnership ("KELP"), in the amount of up to 95% of
the proceeds of the offering of units of limited partner interest
(the "Units") (see Note D). The Partnership terminates on December
31, 2013 unless earlier terminated upon the occurrence of certain
events as set forth in the Partnership Agreement.
The Partnership issued all of the General Partner Interests to The
Krupp Corporation ("Krupp Corp.") and The Krupp Company Limited
Partnership-III ("Krupp Co.-III"), in exchange for capital
contributions aggregating $1,000. The General Partners made
additional capital contributions of $4,207,560 which equals fourteen
percent of the capital contributions of the Investor Limited
Partners. The Partnership used these capital contributions to pay
costs incurred in connection with its organization and the public
offering of Units.
On February 21, 1985 the Partnership, commenced the marketing and
sale of the Units for $1,000 per Unit. The public offering was
closed on December 5, 1985, at which time 30,059 Units had been sold.
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 (see Note I).
Risks and Uncertainties
The Partnership invests its cash primarily in deposits and
money market funds with commercial banks. The Partnership has
not experienced any losses to date on its invested cash.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Cash Equivalents
<PAGE>
The Partnership includes all short-term investments with
maturities of three months or less from the date of acquisition
in cash and cash equivalents. Cash equivalents are recorded at
cost, which approximates current market value.
Provisions for Credit Losses and Accrued Interest Reserves
In accordance with Statement of Financial Accounting Standards
No. 114, "Accounting by Creditors for Impairment of a Loan",
and Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures", the Partnership has implemented
polices and practices for assessing impairment of its mortgage
loans and the recognition of income on impaired loans.
Mortgage notes receivable are recorded at the lower of cost or
estimated net realizable value. The estimated net realizable
value of the mortgage loans is based on current market
estimates of the underlying properties held as collateral
considering such factors as tenant turnover, current and
prospective occupancy levels, the current market competition
and assumptions on potential proceeds that might be received
upon sale. Given the uncertainty of real estate valuation in
the current market, these market estimates could differ from
the ultimate value obtained from a sale of such properties (see
Note E).
The Partnership recognizes interest income on its impaired
loans based on the expected cash flow payments to be received
from KELP. Cash flow payments are determined to be all cash
flow generated by the properties after operating and
administrative expenses and senior mortgage obligations.
Unpaid interest and late charges are being accrued and reserved
against.
Income Taxes
The Partnership is not liable for federal or state income taxes
as 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 such examination results in a change in
the Partnership's taxable income or loss, the change will be
reported to the partners.
C. Mortgage Notes Receivable
The Partnership made loans to KELP, an affiliate of the Partnership,
as provided under the Master Loan Agreement and Collateral Pledge
Agreement (the "Agreements"). Under the terms of the Master Loan
Agreement, basic interest accrued at a rate of 7.6% per annum and was
payable quarterly, in arrears, on the unpaid principal balance of the
Participating Notes which were due on December 31, 1992, however, the
Partnership had the option to extend the maturity date to December
29, 1995.
<PAGE>
KELP's properties began experiencing cash flow deficiencies and,
beginning with the payment due April 1, 1991, KELP has not been able
to fully pay the required quarterly interest payments.
The terms of the Master Loan Agreement required KELP to pay the
Partnership adjusted basic interest at a rate of 10% per annum, which
accrued and was payable quarterly, in arrears, on the unpaid
principal balance of the Participating Notes. The Participating
Notes have matured.
Mortgage Notes Receivable consist of the following as of December 31,
1995 and 1994:
<TABLE>
<CAPTION>
Principal
Property 1995 1994
<S> <C> <C>
Northeast Plaza Shopping Center $ 6,936,993 $ 6,963,453
North Salado Village Shopping Center I 1,513,000 1,513,000
North Salado Village Shopping Center II 6,000,000 6,000,000
Village Green Apartments 1,902,750 1,902,750
Bell Plaza Shopping Center 5,300,000 5,300,000
Mortgage notes receivable
collateralized by properties 21,652,743 21,679,203
Remaining indebtedness from previously
owned KELP properties 6,667,200 6,667,200
Mortgage notes receivable before
reserve 28,319,943 28,346,403
Less: Loan loss reserve (16,524,000) (16,524,000)
Total mortgage notes receivable $ 11,795,943 $ 11,822,403
</TABLE>
Northeast Plaza Shopping Center ("Northeast Plaza")
Northeast Plaza is an 89,115 square foot shopping plaza located
in Baton Rouge, Louisiana. On September 12, 1985, the
Partnership loaned KELP $6,000,000 collateralized by a second
mortgage on the Northeast Plaza and the Collateral Pledge
Agreement.
The non-recourse first mortgage of $994,873, collateralized by
Northeast Plaza, matured in 1993. KELP had been unable to
resolve refinancing issues with the original lender, and was
also unable to find other financing sources even though its debt
service payments were current. Therefore, in 1994, the General
Partners used a portion of working capital reserves to purchase
the first mortgage note in order to preserve the Partnership's
<PAGE>
equity in the underlying property. By its action, the
Partnership became the first lien holder of the property. In
addition, the Partnership earns 10% from its first mortgage
interest investment versus 4% to 6% earned on the working
capital reserve balance.
The maturity date of the note was extended to December 29, 1995
as evidenced by the modification of the promissory note dated
August 31, 1993. The note requires monthly payments of $10,135
consisting of principal and interest at the rate of 10% per
annum based on a 25 year amortization schedule. The non-
recourse first mortgage note had a balance of $936,993 and
$963,453 at December 31, 1995 and 1994, respectively.
North Salado Village Shopping Center I ("North Salado I")
North Salado I is an 84,108 square foot shopping center located in
San Antonio, Texas. In 1985, the Partnership loaned KELP $1,453,000
and in 1990 the Partnership loaned to KELP an additional $60,000.
These loans are collateralized by a second mortgage evidenced by a
deed of trust and security agreement on North Salado I and the
Collateral Pledge Agreement.
North Salado Village Shopping Center II ("North Salado II")
North Salado II is a 74,470 square foot shopping center adjacent to
North Salado I located in San Antonio, Texas. On September 12, 1985,
the Partnership loaned KELP $6,000,000 collateralized by a first
mortgage evidenced by a deed of trust and security agreement on North
Salado II and the Collateral Pledge Agreement.
Village Green Apartments ("Village Green")
Village Green is a 200-unit garden apartments complex located in
Baldwinsville, New York. On December 19, 1985 and July 9, 1986, the
Partnership loaned KELP $1,800,000 and $102,750, respectively,
collateralized by a second mortgage and security agreement on Village
Green and the Collateral Pledge Agreement.
Bell Plaza Shopping Center ("Bell")
Bell is a 43,400 square foot shopping center located in Oak Lawn,
Illinois, a suburb of Chicago. On June 2, 1987, the Partnership
loaned KELP $5,300,000 collateralized by a first mortgage evidenced
by a deed of trust on Bell and the Collateral Pledge Agreement.
The average outstanding balance of the mortgage notes receivable was
$28,333,173, $28,358,379 and $28,374,089 at December 31, 1995, 1994
and 1993, respectively.
The carrying value of the above mentioned mortgage notes receivable
approximates fair value.
Subsequent to year end KELP sold Village Green Apartments to an
unaffiliated third party for $5,200,000. Additionally, KELP has
entered into a purchase and sale agreement with an unaffiliated buyer
<PAGE>
for the purchase of North Salado Village Shopping Center at a
contracted sale price of $7,350,000 (see Note D).
D. Krupp Equity Limited Partnership
KELP was formed on January 3, 1985 by filing a Certificate of Limited
Partnership in The Commonwealth of Massachusetts. KELP terminates on
December 31, 2005, unless earlier terminated upon the occurrence of
certain events as set forth in its partnership agreement. KELP
issued all of the General Partner Interests to two General Partners,
Krupp Corp. and Krupp Co.-III, and issued all of the Limited Partner
Interests to Krupp Co.-III. KELP received capital contributions from
the two General Partners, Krupp Corp. and Krupp Co-III, totalling
$480,000 which consisted of $204,000 in cash and $276,000 in
promissory notes. KELP also received $6,984,086 of Limited Partner
capital contributions from Krupp Co.-III consisting of cash, the
assumption of a notepayable to an affiliate in the amount of
$1,550,013, and promissory notes in the amount of $2,514,388. These
promissory notes, totalling $2,790,388, are pledged as additional
collateral for the Participating Notes under the Master Loan
Agreement and the Collateral Pledge Agreement.
The purpose of KELP is to acquire, manage, operate and sell real
estate and personal property; and to borrow funds from the
Partnership and other sources to finance the acquisition, management
and operation of real estate and personal property related thereto.
Condensed financial statements of KELP are as follows:
<TABLE>
<CAPTION>
KRUPP EQUITY LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
December 31, 1995 and 1994
ASSETS
1995 1994
<S> <C> <C>
Property, at cost (2) $ 30,960,353 $ 30,660,597
Property valuation provision (3) (5,986,000) (5,400,000)
Accumulated depreciation (10,206,689) (9,380,069)
14,767,664 15,880,528
Other assets 1,012,929 1,047,545
Total assets $ 15,780,593 $ 16,928,073
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable to KIMF $ 28,319,943 $ 28,346,403
Mortgage notes payable (1) & (2) 7,599,279 7,676,531
Notes payable to an affiliate 300,000 300,000
Accrued interest payable to an affiliates 10,171,783 8,089,139
Due to affiliates 767,737 669,473
Other liabilities 560,388 605,065
Total liabilities 47,719,130 45,686,611
Partners' deficit (31,938,537) (28,758,538)
Total liabilities and partners' deficit $ 15,780,593 $ 16,928,073
</TABLE>
(1) On October 31, 1995, the Partnership refinanced the first
<PAGE>
mortgage note payable of North Salado Shopping Center for
$2,972,130. The terms of the new mortgage require monthly
principal and interest payments of $31,612 at a rate of 9.25%
per annum. The new mortgage note matures on November 15, 2009.
The new mortgage may be prepaid without penalty until November
15, 1996 if the property is sold to an unaffiliated third
party. However, if the property is not sold, the mortgage note
will be subject to a prepayment penalty at the greater of 1)
one percent of the outstanding principal balance at the time of
prepayment, or 2) the sum of the present value of the amount of
principal and interest payments due on the note from the date
of prepayment to the maturity date based on U.S. Treasury Note
or Bond yields as reported in the Wall Street Journal and, the
present value of the amount of principal and interest of the
note due on the maturity date, less the outstanding principal
balance of the note at the day of prepayment. The Partnership
incurred closing costs related to the refinancing of $97,281.
(2) On March 5, 1996, KELP sold Village Green Apartments to an
unaffiliated third party for $5,200,000. The sales agreement
required the buyer to assume the first mortgage note payable on
the property of $4,633,989. KELP will remit available sale
proceeds to KIMF.
The partners of KELP have entered into a purchase and sale
agreement with an unaffiliated buyer for the purchase of North
Salado Village Shopping Center. The contracted price of the
property is $7,350,000. The sale is expected to be consummated
during the second quarter of 1996.
(3) During the fourth quarter of 1995, the General Partners of KELP
determined that the carrying value of its retail properties
exceeded its net realizable value which resulted in an
additional valuation adjustment of $586,000 which was charged
against earnings. To date the General Partners have recorded a
cumulative property valuation provision of $5,986,000.
<TABLE>
<CAPTION>
CONDENSED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
<S> <C> <C> <C>
Revenues $ 3,479,262 $ 4,320,747 $ 4,948,305
Property operating expenses (1,535,994) (2,074,159) (2,517,167)
Operating income 1,943,268 2,246,588 2,431,138
Depreciation and amortization (844,628) (1,218,383) (1,491,975)
Interest (3,692,639) (4,038,180) (4,329,468)
Net loss before gain(loss)on
sale of properties, property
valuation provision, and
extraordinary gain (2,593,999) (3,009,975) (3,390,305)
Gain (loss) on sale of
<PAGE>
properties - (3,592,179) 2,297,192
Property valuation provision (586,000) (5,400,000) -
Net loss before extraordinary
gain (3,179,999) (12,002,154) (1,093,113)
Extraordinary gain - debt
forgiveness - 1,176,738 -
Net loss $(3,179,999) $(10,825,416) $(1,093,113)
</TABLE>
It is expected that KELP will continue to be unable to pay its stated debt
service obligation to KIMF. The general partners of KELP have attempted to
mitigate the cash flow issues in the following ways: 1) the general
partners or the limited partner of KELP have funded certain prior deficits
through capital Contributions; 2) the general partners of KELP have
arranged for borrowings to cover certain prior deficits; 3) KELP has
remitted to the Partnership all available cash flow from the properties;
and 4) the management agent for the properties (an affiliate of the general
partners of KELP) has continued to serve even though it is not receiving
payment of property management fees. KELP will continue to monitor
expenses and implement rent increases as market conditions permit in order
to increase cash flow from the properties.
E. Provision for Credit Losses and Accrued Interest Reserves
The General Partners of the Partnership have recorded a cumulative
provision for credit losses of $16,524,000 on its mortgage notes
receivable. Additionally, the Partnership has recorded cumulative
provisions for uncollectible interest of $9,755,416 and $7,584,144 as
of December 31, 1995 and 1994, respectively. These cumulative
provisions are booked against the carrying value of the assets in
order to reflect management's current estimates of the underlying
property values which, given the inherent uncertainty of real estate
valuation in the current market, could differ from the ultimate value
obtained upon sale of such properties.
F. Cash and Cash Equivalents
Cash and cash equivalents at December 31, 1995 and 1994 consisted of
the following:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash and money market accounts $465,788 $ 130,297
Commercial paper and certificates
of deposit 795,010 896,367
$1,260,798 $1,026,664
</TABLE>
Commercial paper and certificates of deposit at December 31, 1995
represents corporate issues complying with Section 3.04 of the
Partnership Agreement maturing in the first quarter of 1996 with
yields of 5.79% to 5.88% per annum.
G. Partners' Equity
Net<PAGE>
profits or net losses from Partnership operations, excluding
Additional Interest on the Participating Notes, shall be determined
as of the end of each fiscal year, and are allocated ninety-nine
percent (99%) to the class of Limited Partners and one percent (1%)
to the class of General Partners.
Net profits, net losses and Distributable Cash from Operations, as
defined by Section 5.01 of the Partnerships Agreement, allocated to
the Limited Partners have been apportioned among the Limited Partners
in the ratio to which the number of Units owned by each of them bears
to the total number of Units owned by all of them. The interest of
the class of General Partners in net profits, net losses and
distributions of Distributable Cash from Operations and Surplus
Funds, as defined, has been allocated proportionately among the
General Partners according to their respective invested capital.
Distributable Cash from Operations shall be distributed ninety-nine
percent (99%) to the class of Limited Partners and one percent (1%)
to the class of General Partners. Surplus Funds received by the
Partnership, as defined in the Partnership Agreement, are to be
allocated differently than that described above.
As of December 31, 1995, the following cumulative Partner
contributions and allocations were made since inception of the
Partnership:
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C> <C>
Capital contributions $ 30,059,000 $ 4,208,560 $ 34,267,560
Syndication costs - (4,157,560) (4,157,560)
Cash distributions (14,916,224) (150,671) (15,066,895)
Net loss (1,814,942) (68,335) (1,883,277)
$ 13,327,834 $ (168,006) $ 13,159,828
</TABLE>
H. Related Party Transactions
The Partnership reimburses affiliates of the General Partners for
certain expenses incurred in connection with the activities of the
Partnership, including; communications, bookkeeping and clerical work
necessary in maintaining relations with Limited Partners, and
accounting, tax and computer services necessary for the maintenance
of the books and records of the Partnership.
I. Federal Income Taxes
The reconciliations of the net income(loss) reported in the
accompanying Statement of Operations with the net income(loss)
reported in the Partnership's federal income tax return for the years
ended December 31, 1995, 1994 and 1993 are as follows:
<PAGE>
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net income(loss) per Statement
of Operations $765,125 $(3,600,580) $606,894
Book to tax difference due to
provision for credit loss - 4,500,000 -
Income(expense) recognized
for tax not book (3,998) 3,998 -
Net income(loss) for federal
income tax purposes $761,127 $ 903,418 $606,894
</TABLE>
The allocation of net income for federal income tax purposes for 1995
is as follows:
<TABLE>
<CAPTION>
Portfolio Portfolio
Income Expense Total
<S> <C> <C> <C>
Limited Partners $855,976 $102,460 $753,516
General Partners 8,646 1,035 7,611
$864,622 $103,495 $761,127
</TABLE>
At December 31, 1995, the carrying values of the Partnership's assets and
liabilities for federal income tax purposes were $37,150,659 and $12,952,
respectively.<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Krupp
Institutional Mortgage Fund L.P. Financial Statements for the year ended
December 31, 1995 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,260,798
<SECURITIES> 0
<RECEIVABLES> 28,432,247
<ALLOWANCES> 16,524,000
<INVENTORY> 0
<CURRENT-ASSETS> 13,169,045
<PP&E> 3,735<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,172,780
<CURRENT-LIABILITIES> 12,952
<BONDS> 0
<COMMON> 13,159,828<F2>
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,172,780
<SALES> 0
<TOTAL-REVENUES> 868,620
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 103,495
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 765,125
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Other Assets.
<F2>Includes Limited Partner equity of $13,327,834 and General Partner equity of
($168,006).
</FN>
</TABLE>
