CNL INCOME FUND VII LTD
10-Q, 1996-08-14
REAL ESTATE
Previous: ICF KAISER INTERNATIONAL INC, 10-Q, 1996-08-14
Next: GENZYME DEVELOPMENT PARTNERS L P, 10-Q, 1996-08-14





                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549


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

For the quarterly period ended June 30, 1996

                                      OR

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

For the transition period from -------------- to ---------------                


                            Commission file number
                                    0-19140
                            ----------------------

                    CNL Income Fund VII, Ltd.
 -----------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


          Florida                             59-2963871
- -----------------------------         --------------------------
 (State or other jurisdiction            (I.R.S. Employer
of incorporation or organiza-           Identification No.)
            tion)


400 E. South Street, #500
Orlando, Florida                                32801
- ----------------------------           --------------------------
 (Address of principal                       (Zip Code)
   executive offices)


Registrant's telephone number
(including area code)                       (407) 422-1574
                                        --------------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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




                                   CONTENTS
                                   --------



Part I                                                            Page
                                                                  ----
  Item 1.  Financial Statements:

    Condensed Balance Sheets                                      1

    Condensed Statements of Income                                2

    Condensed Statements of Partners' Capital                     3

    Condensed Statements of Cash Flows                            4

    Notes to Condensed Financial Statements                       5-6

  Item 2.  Management's Discussion and Analysis
             of Financial Condition and
             Results of Operations                                7-12

Part II

  Other Information                                               13


                           CNL INCOME FUND VII, LTD.
                        (A Florida Limited Partnership)
                           CONDENSED BALANCE SHEETS


                                                   June 30,      December 31,
            ASSETS                                  1996             1995
                                                -----------     -------------
Land and buildings on operating
  leases, less accumulated
  depreciation of $1,850,207
  and $1,686,119                                 $16,745,429      $16,401,919
Net investment in direct financing
  leases                                           4,133,987        4,676,119
Investment in joint ventures                       1,804,854        1,823,158
Mortgage notes receivable, less
  deferred gain of $127,658 and
  $128,065                                         1,263,616        1,267,849
Cash and cash equivalents                            715,653          725,074
Receivables, less allowance for
  doubtful accounts of $183,158
  and $461,143                                         3,002           48,191
Prepaid expenses                                       9,516            5,033
Accrued rental income, less
  allowance for doubtful accounts
  of $9,845 and $9,155                               958,287          907,851
Other assets                                          60,422           60,422
                                                 -----------      -----------

                                                 $25,694,766      $25,915,616
                                                 ===========      ===========


LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                 $     2,526      $     3,655
Accrued and escrowed real estate
  taxes payable                                       10,350           47,111
Distributions payable                                675,000          675,000
Due to related parties                                 9,988           13,311
Rents paid in advance                                  5,191           11,983
                                                 -----------      -----------
    Total liabilities                                703,055          751,060

Minority interest                                    149,136          149,649

Partners' capital                                 24,842,575       25,014,907
                                                 -----------      -----------

                                                 $25,694,766      $25,915,616
                                                 ===========      ===========





           See accompanying notes to condensed financial statements.



                           CNL INCOME FUND VII, LTD.
                        (A Florida Limited Partnership)
                        CONDENSED STATEMENTS OF INCOME



                                 Quarter Ended           Six Months Ended   
                                     June 30,                  June 30,       
                                 1996        1995         1996        1995   
                               ----------- ---------    ---------   ---------
Revenues:
  Rental income from
    operating leases          $  493,479  $  458,794   $  992,589  $  972,995
  Earned income from 
    direct financing leases      130,317     135,488      256,092     271,488
  Contingent rental income           481       2,582          709       6,507
  Interest and other 
    income                        34,433       6,735      122,563      16,185
                              ----------  ----------   ----------  ----------
                                 658,710     603,599    1,371,953   1,267,175
                              ----------  ----------   ----------  ----------
Expenses:
  General operating and 
    administrative                41,943      35,989       81,997      62,748
  Professional services            3,780      11,131       13,972      16,972
  Real estate taxes                   -       33,967           -       33,967
  State and other taxes               32         157        2,449       2,562
  Depreciation and 
    amortization                  82,036      84,259      164,088     170,355
                              ----------  ----------   ----------  ----------
                                 127,791     165,503      262,506     286,604
                              ----------  ----------   ----------  ----------

Income Before Minority
  Interest in Income of 
  Consolidated Joint 
  Venture, Equity in 
  Earnings of Unconsoli-
  dated Joint Ventures,
  Gain on Sale of Land
  and Building and Loss 
  on Demolition of Building      530,919     438,096    1,109,447     980,571

Minority Interest in
  Income of Consoli-
  dated Joint Venture             (4,679)     (4,700)      (9,310)     (9,335)

Equity in Earnings of 
  Unconsolidated Joint 
  Ventures                        38,695      38,810       77,124      77,306

Gain on Sale of Land and 
  Building                           206          -           407          - 

Loss on Demolition of
  Building                            -     (174,466)          -     (174,466)
                              ----------  ----------   ----------  ----------

Net Income                    $  565,141  $  297,740   $1,177,668  $  874,076
                              ========== ===========   ========== ===========

Allocation of Net Income:
  General partners            $    5,652  $    2,977   $   11,777  $    8,741
  Limited partners               559,489     294,763    1,165,891     865,335
                              ----------  ----------   ----------  ----------

                              $  565,141  $  297,740   $1,177,668  $  874,076
                              ==========  ==========   ==========  ==========

Net Income Per Limited 
  Partner Unit                $    0.019  $    0.010   $    0.039  $    0.029
                              =========== ==========   ==========  ==========

Weighted Average Number
  of Limited Partner Units
  Outstanding                 30,000,000  30,000,000   30,000,000  30,000,000
                              ==========  ==========  =========== ===========


           See accompanying notes to condensed financial statements.


                           CNL INCOME FUND VII, LTD.
                        (A Florida Limited Partnership)
                   CONDENSED STATEMENTS OF PARTNERS' CAPITAL


                                            Six Months Ended     Year Ended    
                                                 June 30,        December 31,
                                                  1996               1995    
                                            ----------------     -----------
General partners:
  Beginning balance                            $   133,199       $   112,415
  Net income                                        11,777            20,784
                                               -----------       -----------
                                                   144,976           133,199
                                               -----------       -----------

Limited partners:
  Beginning balance                             24,881,708        25,620,346
  Net income                                     1,165,891         1,961,364
  Distributions ($0.045 and
    $0.090 per limited partner
    unit, respectively)                         (1,350,000)       (2,700,002)
                                               -----------       -----------
                                                24,697,599        24,881,708
                                               -----------       -----------

Total partners' capital                        $24,842,575       $25,014,907
                                               ===========       ===========



           See accompanying notes to condensed financial statements.



                           CNL INCOME FUND VII, LTD.
                        (A Florida Limited Partnership)
                      CONDENSED STATEMENTS OF CASH FLOWS

                                                       Six Months Ended
                                                            June 30,        
                                                      1996          1995    
                                                   -----------    -----------   
 Increase (Decrease) in Cash and Cash
  Equivalents:

    Net Cash Provided by Operating
      Activities                                  $ 1,346,104    $ 1,274,376
                                                   -----------    -----------

    Cash Flows from Investing 
      Activities:
        Collections on mortgage
          notes receivable                              4,298             -
                                                   -----------    -----------
            Net cash provided by
              investing activities                      4,298             -
                                                   -----------    -----------

    Cash Flows from Financing
      Activities:
        Distributions to limited
          partners                                 (1,350,000)   (1,410,000)
        Distributions to holder
          of minority interest                         (9,823)       (7,804)
                                                   -----------    -----------
            Net cash used in financing
              activities                           (1,359,823)   (1,417,804)
                                                   -----------    -----------

Net Decrease in Cash and Cash
  Equivalents                                          (9,421)     (143,428)

Cash and Cash Equivalents at
  Beginning of Period                                 725,074     1,005,053
                                                   -----------    -----------

Cash and Cash Equivalents at 
  End of Period                                   $   715,653    $   861,625
                                                   ===========    ===========

Supplemental Schedule of Non-Cash
  Investing and Financing Activities:

    Net investment in direct 
      financing lease reclassified 
      as building under operating 
      lease as a result of lease 
      amendment                                   $   507,598    $        -
                                                   ===========    ===========

    Distributions declared and 
      unpaid at end of period                     $   675,000    $   675,000
                                                   ===========    ===========



           See accompanying notes to condensed financial statements.


                           CNL INCOME FUND VII, LTD.
                        (A Florida Limited Partnership)
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
             Quarters and Six Months Ended June 30, 1996 and 1995


1.    Basis of Presentation:

      The accompanying unaudited condensed financial statements have been
      prepared in accordance with the instructions to Form 10-Q and do not
      include all of the information and note disclosures required by
      generally accepted accounting principles.  The financial statements
      reflect all adjustments, consisting of normal recurring adjustments,
      which are, in the opinion of management, necessary to a fair statement
      of the results for the interim periods presented.  Operating results for
      the quarter and six months ended June 30, 1996, may not be indicative of
      the results that may be expected for the year ending December 31, 1996. 
      Amounts as of December 31, 1995, included in the financial statements,
      have been derived from audited financial statements as of that date.

      These unaudited financial statements should be read in conjunction with
      the financial statements and notes thereto included in Form 10-K of CNL
      Income Fund VII, Ltd. (the "Partnership) for the year ended December 31,
      1995.

      The Partnership accounts for its 83 percent interest in San Antonio #849
      Joint Venture using the consolidation method.  Minority interest
      represents the minority joint venture partner's proportionate share of
      the equity in the Partnership's consolidated joint venture.  All
      significant intercompany accounts and transactions have been eliminated.

      Effective January 1, 1996, the Partnership adopted Statement of
      Financial Accounting Standards No. 121. "Accounting for the Impairment
      of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."  The
      Statement requires that an entity review long-lived assets and certain
      identifiable intangibles, to be held and used, for impairment whenever
      events or changes in circumstances indicate that the carrying amount of
      the asset may not be recoverable.  Adoption of this standard had no
      material effect on the Partnership's financial position or results of
      operations.

2.    Subsequent Event:

      In July 1996, the Partnership sold its property in Colorado Springs,
      Colorado, for $1,075,000 and received net sales proceeds of $1,044,909,
      resulting in a gain of approximately $194,800 for financial reporting
      purposes.  This property was originally acquired by the Partnership in
      July 1990 and had a cost of approximately $900,900, excluding
      acquisition fees and miscellaneous acquisition expenses; therefore, the
      Partnership sold the property for approximately $144,000 in excess of
      its original purchase price.  The Partnership intends to reinvest the
      proceeds in an additional property.



ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

      CNL Income Fund VII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on August 18, 1989, to acquire for cash, either
directly or through joint venture arrange-ments, both newly constructed and
existing restaurants, as well as land upon which restaurants were to be
constructed (the "Properties"), which are leased primarily to operators of
national and regional fast-food and family-style restaurant chains.  The
leases are triple-net leases, with the lessees generally responsible for all
repairs and maintenance, property taxes, insurance and utilities.  As of June
30, 1996, the Partnership owned 41 Properties, including nine Properties owned
by joint ventures in which the Partnership is a co-venturer and one Property
owned with an affiliate as tenants-in-common.

Liquidity and Capital Resources
- -------------------------------

      The Partnership's primary source of capital for the six months ended
June 30, 1996 and 1995, was cash from operations (which includes cash received
from tenants, distributions from joint ventures, and interest and other income
received, less cash paid for expenses).  Cash from operations was $1,346,104
and $1,274,376 for the six months ended June 30, 1996 and 1995, respectively. 
The increase in cash from operations is primarily a result of the changes in
income and expenses as discussed in "Results of Operations" and changes in the
Partnership's working capital.

      In March 1996, the Partnership entered into an agreement with the tenant
of the Property in Daytona Beach, Florida, for payment of certain rental
payment deferrals the Partnership had granted to the tenant.  Under the
agreement, the Partnership agreed to abate approximately $13,200 of the rental
payment deferral amounts.  The tenant made the first payment of approximately
$5,700 in April 1996 in accordance with the terms of the agreement, and has
agreed to pay the Partnership the remaining balance due of approximately
$33,700 in six remaining annual installments through 2002.

      In July 1996, the Partnership sold its Property in Colorado Springs,
Colorado, for $1,075,000, and received net sales proceeds of $1,044,909,
resulting in a gain of approximately $194,800 for financial reporting
purposes.  This Property was originally acquired by the Partnership in July
1990 and had a cost of approximately $900,900, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Partnership sold the
Property for approximately $144,000 in excess of its original purchase price.  
The remaining net sales proceeds are expected to be invested in an additional
Property or used for other Partnership purposes.  The general partners believe
that the transaction, or a portion thereof, relating to the sale of the
Property in Colorado Springs, Colorado, and the reinvestment of the proceeds
will qualify as a like-kind exchange transaction for federal income tax
purposes.  However, the Partnership will distribute amounts sufficient  to
enable the limited partners to pay federal and state (at a level reasonably
assumed by the general partners) income taxes, if any, resulting from the
sale.

      Currently, rental income from the Partnership's Properties is invested
in money market accounts or other short-term, highly liquid investments
pending the Partnership's use of such funds to pay Partnership expenses or to
make distributions to the partners.  At June 30, 1996,  the  Partnership  had
$715,653  invested in such short-term investments as compared to $725,074 at
December 31, 1995.  The funds remaining at June 30, 1996, after payment of
distributions and other liabilities, will be used to meet the Partnership's
working capital and other needs.

      Total liabilities of the Partnership, including distributions payable,
decreased to $703,055 at June 30, 1996, from $751,060 at December 31, 1995,
primarily as the result of the reversal of real estate taxes that the
Partnership had accrued at December 31, 1995, for the Properties in Pueblo and
Colorado Springs, Colorado. The accrual for real estate taxes was reversed due
to the fact that the corporate  franchisor  paid  the  amounts due as
described below in "Results of Operations."  The general partners believe that
the Partnership has sufficient cash on hand to meet its current working
capital needs.

      Based primarily on cash from operations, the Partnership declared
distributions to the limited partners of $1,350,000 for each of the six months
ended June 30, 1996 and 1995 ($675,000 for each of the quarters ended June 30,
1996 and 1995).  This represents distributions for each applicable six months
of $0.045 per unit ($0.023 per unit for each applicable quarter).  No
distributions were made to the general partners for the quarters and six
months ended June 30, 1996 and 1995.  No amounts distributed to the limited
partners for the six months ended June 30, 1996 and 1995, are required to be
or have been treated by the Partnership as a return of capital for purposes of
calculating the limited partners' return on their adjusted capital
contributions.  The Partnership intends to continue to make distributions of
cash available for distribution to the limited partners on a quarterly basis.

      The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who generally meet
specified financial standards minimizes the Partner-ship's operating expenses.
The general partners believe that the leases will continue to generate cash
flow in excess of operating expenses.

      The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appro-priate in connection
with the operations of the Partnership.

Results of Operations
 ---------------------

      During the six months ended June 30, 1995, the Partnership and its
consolidated joint venture, San Antonio #849 Joint Venture, owned and leased
34 wholly owned Properties (including two Properties in Florence,  South
Carolina, and Jacksonville, Florida, which were sold in August and December
1995, respectively) and during the six months ended June 30, 1996, the
Partnership and its consolidated joint venture owned and leased 32 wholly
owned Properties to operators of fast-food and family-style restaurant chains.
 In connection therewith, during the six months ended June 30, 1996  and 
1995,  the  Partnership  and  San Antonio #849 Joint Venture earned $1,248,681
and $1,244,483, respectively, in  rental income from operating leases and
earned income from direct financing leases for these Properties, $623,796 and
$594,282 of which  was earned during the quarters ended June 30, 1996 and
1995, respectively.  Rental and earned income increased during the quarter and
six months ended June 30, 1996, by approximately $48,500 and $35,400,
respectively, due to the fact that in January 1996, the Partnership negotiated
an assignment and amendment of the lease for its Property in Pueblo, Colorado.
During the quarter and six months ended June 30, 1995, the Partnership did not
recognize any income from this Property as a result of establishing an
allowance for doubtful accounts for rent receivable amounts.  As a result of
the assignment and amendment, the Partnership wrote off amounts due from the
former tenant totalling approximately $119,100, approximately $110,600 of
which had been previously reserved by the Partnership and approximately $8,500
of which had been recorded as income during the six months ended June 30,
1996. 
      
      In addition, rental and earned income increased during the quarter and
six months ended June 30, 1996, by approximately $15,000 and $25,500,
respectively, due to the fact that in January 1996, the Partnership agreed to
accept reduced monthly rents from the tenant of the Property in Colorado
Springs, Colorado, beginning January 29, 1996, for a six month period.  During
the quarter and six months ended June 30, 1995, the Partnership did not
recognize any income from this Property as a result of establishing an 
allowance for doubtful accounts for rent receivable amounts.  In July 1996,
the Partnership sold this Property as described above in "Liquidity and
Capital Resources."  

      Rental and earned income also increased during the six months ended June
30, 1996, as compared to the six months ended June 30, 1995, as a result of
the fact that the Partnership recorded as income approximately $20,300 in
rental payment deferrals for the Property in Daytona Beach, Florida. 
Previously, the Partnership had established an allowance for doubtful accounts
for these amounts.  These amounts were collected in accordance with the
agreement entered into in March 1996, with the tenant to collect the remaining
balance of the rental payment deferral amounts as discussed above in
"Liquidity and Capital Resources."  If such amounts are collected, the
Partnership will reverse the remaining allowance for doubtful accounts and
record such amounts as income.  Rental and earned income also increased during
the quarter and six months ended June 30, 1996, as a result of the fact that
during the quarter and six months ended June 30, 1995, the Partnership
established an allowance for doubtful accounts of approximately $5,100 for 
rental  payment  deferral amounts deemed uncollectible.

      No such allowance was established during the quarter and six months
ended June 30, 1996.

      Rental and earned income also increased during the quarter and six
months ended June 30, 1996, due to the fact that the Partnership increased its
allowance for doubtful accounts relating to its Property in Hartland,
Michigan, during the quarter and six months ended June 30, 1995,and no such
adjustments were made during the quarter and six months ended June 30, 1996.
This increase was partially offset by a decrease during the quarter and six
months ended June 30, 1996, as a result of the Partnership amending the lease
for this Property to provide for reduced base rental payments for a one-year
period, beginning in January 1996.  During the six months ended June 30, 1996,
the building portion of the lease was reclassified from a direct financing
lease to an operating lease as a result of the lease amendment.

      The increase in rental and earned income during the quarter and six
months ended June 30, 1996, was partially offset by a decrease of
approximately $41,100 and $82,600, respectively, as a result  of  the  sale 
of the Partnership Properties in Florence, South Carolina, and Jacksonville,
Florida, in August and December 1995, respectively.

      During the six months ended June 30, 1996 and 1995, the Partnership
earned $709 and $6,507, respectively, in contingent rental income, $481 and
$2,582 of which was earned during the quarters ended June 30, 1996 and 1995,
respectively.  The decrease in contingent rental income during the six months
ended June 30, 1996, is primarily attributable to downward adjustments to
contingent rental income during the six months ended June 30, 1996.  These
adjustments were due to the fact that the amounts reported at December 31,
1995, included certain estimated amounts and were adjusted to actual amounts
during the six months ended June 30, 1996.

      During the six months ended June 30, 1996 and 1995, the Partnership also
owned and leased eight Properties indirectly through other joint venture
arrangements and one Property indirectly with an affiliate as tenants-in-
common.  In connection therewith, during the six months ended June 30, 1996
and 1995, the Partnership earned $77,124 and $77,306, respectively,
attributable to net income earned by these unconsolidated joint ventures,
$38,695 and $38,810 of which was earned during the quarters ended June 30,
1996 and 1995, respectively.

      In addition, during the six months ended June 30, 1996 and 1995, the
Partnership earned $122,563 and $16,185, respectively, in interest and other
income, $34,433 and $6,735 of which was earned during the quarters ended June
30, 1996 and 1995, respectively.  The increase in interest and other income
during the quarter and six months ended June 30, 1996, was primarily
attributable to an increase of approximately $35,100 and $70,300,
respectively, relating  to  interest  earned  on  the  mortgage  notes
receivable accepted in connection with the sales of the Properties in
Florence, South Carolina, and Jacksonville, Florida, in August and December
1995, respectively.  In addition, the increase in interest and other income
during the six months ended June 30, 1996, was attributable to the Partnership
recognizing approximately $38,600 in other income, which was net of
approximately $8,000 of 1996 real estate tax expense, as discussed below, due
to the fact that the corporate franchisor paid past due real estate taxes,
which the Partnership had previously accrued, relating to the Properties in
Pueblo and Colorado Springs, Colorado, during the six months ended June 30,
1996.  Due to financial  difficulties  the  former tenant of these Properties
had been experiencing, the Partnership had previously accrued the past due
real estate taxes relating to these Properties.

      Operating expenses, including depreciation and amortization expense,
were $262,506 and $286,604 for the six months ended June 30, 1996 and 1995,
respectively, of which $127,791 and $165,503 were incurred for the quarters
ended June 30, 1996 and 1995, respectively.  The decrease in operating
expenses during the quarter and six months ended June 30, 1996, is primarily
due to the fact that the Partnership accrued real estate taxes for the
Properties in Pueblo and Colorado Springs, Colorado, during the quarter and
six months ended June 30, 1995, as discussed above.  During the quarter and
six months ended June 30, 1996, no real estate taxes were recorded for the
Property in Pueblo, Colorado, due to the fact that the new tenant of this
Property is responsible for the real estate taxes under the terms of the
assigned lease.  The Partnership accrued real estate taxes for the quarter and
six months ended June 30, 1996, relating to the Property in Colorado Springs,
Colorado, due to financial difficulties the tenant is experiencing.  Due to
the fact that the corporate franchisor paid approximatley $46,600 of 1995 real
estate taxes relating to the Properties in Pueblo and Colorado Springs,
Colorado, during 1996, as discussed above, the Partnership reversed
approximately $8,000 of amounts previously accrued by the Partnership as a
reduction to 1996 real estate tax expense and recorded the remaining $38,600
as other income.

      The decrease in operating expenses during the quarter and six months
ended June 30, 1996, was partially offset by an increase in accounting and
administrative expenses associated with operating the Partnership and its
Properties and insurance expense as a result of the general partners'
obtaining contingent liability and property coverage for the Partnership,
effective May 1995.  This insurance policy is intended to reduce the
Partnership's exposure in the unlikely event a tenant's insurance policy
lapses or is insufficient to cover a claim relating to the Property. 

      As a result of the sale of the Property in Florence, South Carolina, in
August 1995, and recording the gain using the installment method, the
Partnership recognized a gain for financial reporting purposes of $206 and
$407 during the quarter and six months ended June 30, 1996, respectively.   In
addition, during the six months ended June 30, 1995, the building located on
the Partnership's Property in Daytona Beach, Florida, was demolished in
accordance with a condemnation agreement.  As a result, the undepreciated cost
of the building of $174,466 was charged to income for financial reporting
purposes during the six months ended June 30, 1995.  No Properties were sold
during the six months ended June 30, 1996 or 1995.


                          PART II.  OTHER INFORMATION


Item 1.     Legal Proceedings.  Inapplicable.

Item 2.     Changes in Securities.  Inapplicable.

Item 3.     Defaults upon Senior Securities.  Inapplicable.

Item 4.     Submission of Matters to a Vote of Security Holders.

            Inapplicable.

Item 5.     Other Information.  Inapplicable.

Item 6.     Exhibits and Reports on Form 8-K.

            (a)   Exhibits - None.

            (b)   No reports on Form 8-K were filed during the quarter ended
                  June 30, 1996.



                                  SIGNATURES
                                  ----------

      Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

      DATED this 8th day of August, 1996.

                              CNL INCOME FUND VII, LTD.

                              By:   CNL REALTY CORPORATION
                                    General Partner

                                    By:  /s/ James M. Seneff, Jr.
                                          ------------------------
                                         JAMES M. SENEFF, JR.
                                         Chief Executive Officer
                                         (Principal Executive Officer)

                                    By:  /s/ Robert A. Bourne
                                           --------------------
                                         ROBERT A. BOURNE
                                         President and Treasurer
                                         (Principal Financial and
                                         Accounting Officer)




<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet of CNL Income Fund VII, Ltd. at June 30, 1996, and its
statement of income for the six months then ended and is qualified
in its entirety by reference to the Form 10-Q of CNL Income Fund
VII, Ltd. for the six months ended June 30, 1996
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               JUN-30-1996
<CASH>                                         715,653
<SECURITIES>                                         0
<RECEIVABLES>                                  186,160
<ALLOWANCES>                                   183,158
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0<F1>
<PP&E>                                      18,595,636
<DEPRECIATION>                               1,850,207
<TOTAL-ASSETS>                              25,694,766
<CURRENT-LIABILITIES>                                0<F1>
<BONDS>                                              0
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                                  24,842,575
<TOTAL-LIABILITY-AND-EQUITY>                25,694,766
<SALES>                                              0
<TOTAL-REVENUES>                             1,371,953
<CGS>                                                0
<TOTAL-COSTS>                                  262,506
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                              1,177,668
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                          1,177,668
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 1,177,668
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund VII, Ltd.
has an unclassified balance sheet; therefore, no values are shown
above for current assets and current liabilities.
</FN>
        

</TABLE>


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission