UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED December 31, 1998
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: 0-15037
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2870345
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
- ------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and September 30, 1998 (Unaudited)
(In thousands)
ASSETS
December 31 September 30
----------- ------------
Operating investment property:
Land $ - $ 391
Buildings and improvements - 2,421
Equipment and fixtures - 61
------- -------
- 2,873
Less accumulated depreciation - (1,104)
------- -------
- 1,769
Investments in unconsolidated ventures,
at equity 478 1,239
Cash and cash equivalents 1,258 1,530
Escrowed funds - 76
Accounts receivable, net 8 8
Other assets - 34
------- -------
$ 1,744 $ 4,656
======= =======
LIABILITIES AND PARTNERS' CAPITAL
Mortgage note payable $ - $ 1,550
Accounts payable and accrued expenses 52 90
Accounts payable - affiliates 6 7
Accrued interest payable - 14
Accrued real estate taxes - 62
Other liabilities - 4
Partners' capital 1,686 2,929
------- -------
$ 1,744 $ 4,656
======= =======
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended December 31, 1998 and 1997 (Unaudited)
(In thousands, except per Unit data)
1998 1997
---- ----
Revenues:
Rental income and expense recoveries $ 43 $ 125
Interest and other income 24 62
-------- -------
67 187
Expenses:
Mortgage interest 18 46
Property operating expenses 13 36
Depreciation and amortization - 21
Real estate taxes 11 21
Management fees 14 17
General and administrative 79 74
-------- -------
135 215
-------- -------
Operating loss (68) (28)
Partnership's share of unconsolidated
ventures' income 330 251
Partnership's share of gain (loss)
on sale of operating investment
property (60) 4,474
Venture partner's share of consolidated
venture's operations 4 -
-------- -------
Net income $ 206 $ 4,697
======== =======
Per Limited Partnership Unit:
Net income $ 5.36 $122.39
======== =======
Cash distributions $ 38.12 $ 6.03
======== =======
The above per Limited Partnership Unit information is based upon the 37,969
Limited Partnership Units outstanding during each period.
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the three months ended December 31, 1998 and 1997 (Unaudited)
(In thousands)
General Limited
Partners Partners
-------- --------
Balance at September 30, 1997 $ (653) $ 5,655
Cash distributions (2) (229)
Net income 49 4,648
-------- --------
Balance at December 31, 1997 $ (606) $ 10,074
======== ========
Balance at September 30, 1998 $ (609) $ 3,538
Cash distributions (2) (1,447)
Net income 2 204
-------- --------
Balance at December 31, 1998 $ (609) $ 2,295
======== ========
See accompanying notes.
<PAGE>
<TABLE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended December 31, 1998 and 1997 (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 206 $4,697
Adjustments to reconcile net income to
net cash (used in) provided by operating activities:
Depreciation and amortization - 21
Amortization of deferred financing costs - 2
Partnership's share of unconsolidated ventures' income (330) (251)
Partnership's share of gain (loss) on sale of
unconsolidated operating investment property 60 (4,474)
Venture partner's share of consolidated venture's
operations (4) -
Changes in assets and liabilities:
Escrow deposits 76 59
Accounts receivable - (15)
Accounts receivable - affiliates - 3
Other assets 34 9
Accounts payable and accrued expenses (38) 264
Accounts payable - affiliates (1) (58)
Accrued interest payable (14) -
Accrued real estate taxes (62) -
------- ------
Total adjustments (279) (4,440)
------- ------
Net cash (used in) provided by operating activities (73) 257
------- ------
Cash flows from investing activities:
Net proceeds from sale of operating investment property 230 -
Distributions from unconsolidated joint ventures 1,031 4,902
------- ------
Net cash provided by investing activities 1,261 4,902
------- ------
Cash flows from financing activities:
Distributions to partners (1,449) (231)
Principal payments on long-term debt (11) (15)
------- ------
Net cash used in financing activities (1,460) (246)
------- ------
Net (decrease) increase in cash and cash equivalents (272) 4,913
Cash and cash equivalents, beginning of period 1,530 2,856
------- ------
Cash and cash equivalents, end of period $ 1,258 $7,769
======= ======
Cash paid during the period for interest $ 32 $ 44
======= ======
</TABLE>
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES
SEVEN LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
(Unaudited)
1. General
-------
The accompanying financial statements, footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in the
Partnership's Annual Report for the year ended September 30, 1998. In the
opinion of management, the accompanying consolidated financial statements, which
have not been audited, reflect all adjustments necessary to present fairly the
results for the interim period. All of the accounting adjustments reflected in
the accompanying interim financial statements are of a normal recurring nature.
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles
which require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities as of December 31, 1998 and September 30, 1998 and revenues and
expenses for the three months ended December 31, 1998 and 1997. Actual results
could differ from the estimates and assumptions used.
The Partnership originally invested the net proceeds of the public
offering, through five joint venture partnerships, in seven operating
properties, comprised of five multi-family apartment complexes, one mixed-use
office and retail property and one shopping center. During fiscal 1997, three of
the multi-family properties were sold. A fourth multi-family property was sold
on December 18, 1997. In addition, during the first quarter of fiscal 1999, the
retail portion of the Concourse property was sold. The office portion of this
mixed-use property had been lost through foreclosure proceedings on December 17,
1992. The shopping center property was also sold during the first quarter of
fiscal 1999. Subsequent to these transactions, the Partnership has only one
remaining real estate investment, the Colony Apartments. See Notes 3 and 4 for a
description of these transactions and of the remaining real estate investment.
The Partnership is currently focusing on potential disposition strategies for
the remaining investment in its portfolio. Although no assurances can be given,
it is currently contemplated that the sale of the Partnership's Colony
Apartments investment could be completed during calendar year 1999. The sale of
the remaining property would be followed by an orderly liquidation of the
Partnership.
2. Related Party Transactions
--------------------------
The Adviser earned total management fees of $14,000 and $17,000 for the
three-month periods ended December 31, 1998 and 1997, respectively. Accounts
payable - affiliates at December 31, 1998 and September 30, 1998 consist of
management fees of $6,000 and $7,000, respectively, payable to the Adviser.
Included in general and administrative expenses for the three months ended
December 31, 1998 and 1997 is $23,000 and $22,000, respectively, representing
reimbursements to an affiliate of the Managing General Partner for providing
certain financial, accounting and investor communication services to the
Partnership.
Also included in general and administrative expenses for each of the
three-month periods ended December 31, 1998 and 1997 is $1,000, representing
fees earned by an affiliate, Mitchell Hutchins Institutional Investors, Inc.,
for managing the Partnership's cash assets.
3. Investments in Unconsolidated Joint Venture Partnerships
--------------------------------------------------------
As of December 31, 1998, the Partnership's only remaining investment in
unconsolidated joint venture partnerships is its investment in Chicago Colony
Apartments Associates which owns the Colony Apartments, located in Mount
Prospect, Illinois, as more fully described in the Partnership's Annual Report.
On November 17, 1998, Chicago Colony Square Associates sold the Colony
Square Shopping Center to an unrelated third party for $2.3 million. The sale
generated net proceeds of approximately $1,014,000, after the repayment of the
outstanding first mortgage loan of approximately $864,000, accrued interest of
approximately $13,000 (including a prepayment penalty of $9,000), closing
proration adjustments of approximately $221,000 and closing costs of
approximately $188,000. The Partnership received 100% of the net proceeds in
accordance with the terms of the joint venture agreement. As a result of the
sales of The Concourse Retail Plaza (see Note 4) and Colony Square Shopping
Center, a special distribution of approximately $1,253,000, or $33 per original
$1,000 investment, was made on December 15, 1998. Of this total, $5.92
represented net proceeds from the sale of The Concourse Retail Plaza, $26.69
represented net proceeds from the sale of Colony Square Shopping Center and
$0.39 represented Partnership reserves that exceeded future requirements.
On December 18, 1997, Daniel Meadows Partnership, a joint venture in which
the Partnership had an interest, sold its operating investment property, The
Meadows on the Lake Apartments, located in Birmingham, Alabama, to an unrelated
third party for $9.525 million. The sale generated net proceeds of approximately
$4.4 million, after repayment of the outstanding first mortgage loan of
approximately $4.7 million and closing costs of approximately $400,000. The
Partnership received 100% of the net proceeds in accordance with the terms of
the joint venture agreement.
The unconsolidated joint venture investments are accounted for using the
equity method because the Partnership does not have a voting control interest in
the ventures. Under the equity method, the assets, liabilities, revenues and
expenses of the joint ventures do not appear in the Partnership's financial
statements. Instead, the investments are carried at cost adjusted for the
Partnership's share of the ventures' earnings and losses and distributions.
Summarized operations of the unconsolidated joint ventures for the three months
ended December 31, 1998 and 1997 are as follows:
Condensed Combined Summary of Operations
For the three months ended December 31, 1998 and 1997
(in thousands)
1998 1997
---- ----
Rental revenues and expense recoveries $1,767 $1,999
Interest and other income 80 95
------ ------
1,847 2,094
Property operating expenses 485 660
Interest expense 343 439
Real estate taxes 343 424
Depreciation and amortization 245 318
------ ------
1,416 1,841
------ ------
Operating income 431 253
Gain (loss) on sale of operating
investment property (109) 4,869
------ ------
Net income $ 322 $5,122
====== ======
Net income:
Partnership's share of combined income $ 277 $4,854
Co-venturers' share of combined income 45 268
------ ------
$ 322 $5,122
====== ======
<PAGE>
Reconciliation of Partnership's Share of Operations
For the three months ended December 31, 1998 and 1997
(in thousands)
1998 1997
---- ----
Partnership's share of combined income,
as shown above $ 277 $ 4,854
Amortization of excess basis (7) (129)
------- -------
Partnership's share of unconsolidated
ventures' net income $ 270 $ 4,725
======= =======
The Partnership's share of unconsolidated ventures' net income is
presented as follows in the consolidated statements of operations (in
thousands):
1998 1997
---- ----
Partnership's share of unconsolidated
ventures' income $ 330 $ 251
Partnership's share of gain (loss) on
sale of operating investment property (60) 4,474
------- -------
Partnership's share of unconsolidated
ventures' net income $ 270 $ 4,725
======= =======
4. Operating Investment Property
-----------------------------
The Partnership had a controlling interest in one joint venture, West Palm
Beach Concourse Associates, which owned the Concourse Retail Plaza. On November
10, 1998, West Palm Beach Concourse Associates sold The Concourse Retail Plaza
property to an unrelated party for $2 million. The sale generated net proceeds
of approximately $225,000, after the assumption of the outstanding first
mortgage loan of approximately $1,539,000, accrued interest of approximately
$4,000, net closing proration adjustments of approximately $2,000 and closing
costs of approximately $231,000. The Partnership received 100% of the net
proceeds in accordance with the terms of the joint venture agreement. The
Partnership distributed the net proceeds of approximately $225,000, or $5.92 per
original $1,000 investment, from the sale of The Concourse Retail Plaza as part
of a Special Distribution made to the limited partners on December 15, 1998 (see
Note 3).
The following is a summary of property operating expenses for the
three-month periods ended December 31, 1998 and 1997 (in thousands):
1998 1997
---- ----
Repairs and maintenance $ 1 $ 4
Utilities 1 1
Insurance 2 2
Administrative and other 5 25
Management fees 4 4
----- ------
$ 13 $ 36
===== ======
5. Mortgage Note Payable
---------------------
Mortgage note payable on the consolidated balance sheet at September 30,
1998 related to the Partnership's consolidated joint venture, West Palm Beach
Concourse Associates, and was secured by the venture's operating investment
property. At September 30, 1998, mortgage note payable consisted of the
following (in thousands):
September 30
------------
11.12% first mortgage, payable in
installments of $20 per month,
including interest, through January
1, 2005. All outstanding principal
and accrued interest was due on
January 10, 2005. The fair value of
this note payable approximated its
carrying value as of September 30,
1998. $ 1,550
=======
<PAGE>
In accordance with the Concourse mortgage loan agreements, certain
insurance premiums and real estate taxes were required to be held in escrow. The
balance of escrow deposits on the accompanying balance sheet at September 30,
1998 consisted of such escrowed insurance premiums and real estate taxes in the
aggregate amounts of $76,000.
On November 10, 1998, in conjunction with the sale of the Concourse Retail
Plaza described in Note 4, the unrelated purchaser of the property assumed the
mortgage note payable. Therefore, the Partnership no longer has any liability
associated with this debt.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information Relating to Forward-Looking Statements
- --------------------------------------------------
The following discussion of financial condition includes forward-looking
statements which reflect management's current views with respect to future
events and financial performance of the Partnership. These forward-looking
statements are subject to certain risks and uncertainties, including those
identified in Item 7 of the Partnership's Annual Report on Form 10-K for the
year ended September 30, 1998 under the heading "Certain Factors Affecting
Future Operating Results", which could cause actual results to differ materially
from historical results or those anticipated. The words "believe," "expect,"
"anticipate," and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which were made based on facts and conditions as they existed as of
the date of this report. The Partnership undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Liquidity and Capital Resources
- -------------------------------
As previously reported, the Partnership had reviewed its options for The
Concourse Retail Plaza at the beginning of fiscal 1998 and determined that it
was the appropriate time to market the property for sale. During the second
quarter of fiscal 1998, the Partnership initiated discussions with area real
estate firms concerning potential marketing strategies for selling The Concourse
and solicited marketing proposals from several of these firms. After reviewing
their respective proposals and conducting interviews to determine their
expertise and track record in selling properties similar to The Concourse, the
Partnership selected a Florida-based firm. During the third quarter of fiscal
1998, a marketing package was finalized and comprehensive sale efforts began in
early May. On August 14, 1998, a purchase and sale agreement was signed with an
unrelated third party. On November 10, 1998, West Palm Beach Concourse
Associates sold The Concourse Retail Plaza property to this unrelated party for
$2 million. The sale generated net proceeds of approximately $225,000, after the
assumption of the outstanding first mortgage loan of approximately $1,539,000,
accrued interest of approximately $4,000, net closing proration adjustments of
approximately $2,000 and closing costs of approximately $231,000. The
Partnership received 100% of the net proceeds in accordance with the terms of
the joint venture agreement. The mortgage loan, which was assumable, contains a
prohibition on prepayment through January 10, 2000. As a result, any sale
transaction completed prior to such date had to involve an assumption of this
mortgage loan which carries an interest rate of 11.12% per annum. The sale price
was discounted to reflect this above-market interest rate. Nonetheless, the
Managing General Partner believed that a current sale was in the best interests
of the Limited Partners. As discussed further below, the Partnership recorded an
impairment writedown of $418,000 in fiscal 1998 to reflect the net proceeds
received from the sale during the first quarter of fiscal 1999.
As previously reported, the Partnership and its co-venture partner had
begun exploring potential opportunities for the sale of the Colony Square
property in early fiscal 1998. As part of that plan, discussions were held with
real estate brokerage firms with a specialty in small retail centers like Colony
Square. During the third quarter of fiscal 1998, the Partnership and its
co-venture partner selected a real estate brokerage firm to begin marketing this
asset for sale. Subsequently, an offer was received to purchase the Colony
Square Shopping Center from a prospective third-party buyer that met the
Partnership's and co-venture partner's sale criteria. A purchase and sale
agreement was signed on July 9, 1998 with this prospective buyer. On November
17, 1998, Chicago Colony Square Associates sold the Colony Square Shopping
Center to this unrelated party for $2.3 million. The sale generated net proceeds
of approximately $1,014,000, after the repayment of the outstanding first
mortgage loan of approximately $864,000, accrued interest of approximately
$13,000 (including a prepayment penalty of $9,000), closing proration
adjustments of approximately $221,000 and closing costs of approximately
$188,000. The Partnership received 100% of the net proceeds in accordance with
the terms of the joint venture agreement. As a result of the sales of The
Concourse Retail Plaza and Colony Square Shopping Center, a Special Distribution
of approximately $1,253,000, or $33 per original $1,000 investment, was made on
December 15, 1998. Of this total, $5.92 represented net proceeds from the sale
of The Concourse Retail Plaza, $26.69 represented net proceeds from the sale of
Colony Square Shopping Center and $0.39 represented Partnership reserves that
exceeded future requirements.
With the sales of The Concourse and Colony Square, the Partnership now has
one remaining real estate investment, the Colony Apartments, a 783-unit complex
located in Mount Prospect, Illinois. The occupancy level at Colony Apartments
averaged 97% for the quarter, unchanged from the prior quarter and the same
period in the prior year. In addition, the average monthly rental rate per
apartment unit is budgeted to increase by approximately 3% over the next twelve
months. With the improvements in the apartment segment of the real estate market
and the strong local job market in this northwest Chicago suburb, the
Partnership and its co-venture partner decided to market the Colony Apartments
for sale during the third quarter of fiscal 1998. A national real estate firm
was selected to market the property and comprehensive sale efforts began in late
June. As a result of these sale efforts, ten offers were received. These
prospective purchasers were then requested to submit best and final offers. To
reduce the prospective buyers' due diligence work and the time required to
complete it, updated operating reports as well as building evaluation and
environmental information on the property were provided to the top six
prospective buyers, who were asked to submit best and final offers and did so.
After completing an evaluation of the best and final offers, the Partnership and
its co-venture partner selected an offer. However, after protracted
negotiations, the Partnership and its co-venture partner were unable to finalize
a purchase and sale agreement with this prospective buyer. In November 1998, the
Partnership and its co-venture partner re-opened discussions with the other
prospective buyers who had previously submitted best and final offers. Two of
these prospective buyers expressed interest. Again, however, after extensive
discussions with them, neither prospect would agree to acquire the property on
terms acceptable to the Partnership. Subsequent to quarter-end, the Partnership
and its co-venture partner decided to re-market the property for sale. The
Partnership and its co-venture partner are actively pursuing these marketing
efforts and expect to complete a sale of the property and a liquidation of the
Partnership before the end of calendar year 1999. However, there are no
assurances that the sale of the final asset and the liquidation of the
Partnership will be completed within this time frame.
At December 31, 1998, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $1,258,000. Such cash and cash
equivalents will be utilized as needed for Partnership requirements such as the
payment of operating expenses, distributions to partners, and the funding of
operating deficits or capital improvements of the remaining joint venture, in
accordance with the terms of the joint venture agreement. The source of future
liquidity and distributions to the partners is expected to be from available net
cash flow generated by the operations of the Partnership's remaining investment
property and from the net proceeds from the sale or refinancing of such
property. Such sources of liquidity are expected to be sufficient to meet the
Partnership's needs on both a short-term and long-term basis.
As noted above, the Partnership expects to be liquidated by the end of
calendar year 1999. Notwithstanding this, the Partnership believes that it has
made all necessary modifications to its existing systems to make them year 2000
compliant and does not expect that additional costs associated with year 2000
compliance, if any, will be material to the Partnership's results of operations
or financial position.
Results of Operations
Three Months Ended December 31, 1998
- ------------------------------------
The Partnership reported net income of $206,000 for the three months ended
December 31, 1998, as compared to $4,697,000 for the same period in the prior
year. This decrease in the Partnership's net income is mainly attributable to a
$4,474,000 gain recognized during the three-month period ended December 31, 1997
on the sale of the Meadows property as well as a $60,000 loss recorded on the
sale of the Colony Square property during the current three-month period. Also
contributing to the unfavorable change in net income was an increase in the
Partnership's operating loss of $40,000. The Partnership's operating loss
increased mainly due to an unfavorable change in the operating results of the
consolidated Concourse Retail Plaza prior to its sale on November 10, 1998 and a
decrease in interest income. The unfavorable change in the operating results of
the Concourse Retail Plaza was mainly attributable to a decline in rental
revenues as a result of a lower average occupancy level. Interest income
decreased mainly due to a lower average invested cash balance in the current
period as a result of the temporary investment of the Meadows sale proceeds in
the prior year pending the distribution to the Limited Partners which occurred
in February of 1998. An increase of $79,000 in the Partnership's share of
unconsolidated ventures' income partially offset the unfavorable changes in net
income for the current three-month period. The increase in Partnership's share
of unconsolidated ventures' income resulted from an increase in the operating
income at the Colony Apartments joint venture and the absence in the current
period of operating results from The Meadows on the Lake Apartments which
reported an operating loss of $72,000 for the first quarter of fiscal 1998 prior
to its sale on December 18, 1997. The increase in the operating income at Colony
Apartments resulted mainly due to increases in rental revenues stemming from the
increases in rental rates achieved at the property over the past twelve to
fifteen months. These favorable changes in the Partnership's share of
unconsolidated ventures' income were partially offset by a decrease in the net
income of the Colony Square joint venture for the current period as a result of
the sale of the property on November 17, 1998.
<PAGE>
PART II
Other Information
Item 1. Legal Proceedings NONE
- -------------------------
Item 2. through 5. NONE
- ------------------
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits: NONE
(b) A Current Report on Form 8-K was filed during the first quarter of fiscal
1999 to report the sale of The Concourse Retail Plaza and is hereby
incorporated herein by reference. A second Current Report on Form 8-K
dated November 17, 1998 was filed during the current quarter to report the
sale of the Colony Square Shopping Center and is hereby incorporated
herein by reference.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PAINE WEBBER INCOME PROPERTIES SEVEN
LIMITED PARTNERSHIP
By: SEVENTH INCOME PROPERTIES FUND, INC.
------------------------------------
Managing General Partner
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Dated: February 22, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's unaudited financial statements for the quarter ended December 31,
1998 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Sep-30-1999
<PERIOD-END> Dec-31-1998
<CASH> 1,258
<SECURITIES> 0
<RECEIVABLES> 8
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,266
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,744
<CURRENT-LIABILITIES> 58
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,686
<TOTAL-LIABILITY-AND-EQUITY> 1,744
<SALES> 0
<TOTAL-REVENUES> 397
<CGS> 0
<TOTAL-COSTS> 113
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 60
<INTEREST-EXPENSE> 18
<INCOME-PRETAX> 206
<INCOME-TAX> 0
<INCOME-CONTINUING> 206
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 206
<EPS-BASIC> 5.36
<EPS-DILUTED> 5.36
</TABLE>
