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 September 30, 1997
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 juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
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
<PAGE>
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 7-11
Part II
Other Information 12
<PAGE>
CNL INCOME FUND VII, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
September 30, December 31,
ASSETS 1997 1996
------------- --------
Land and buildings on operating
leases, less accumulated
depreciation of $2,093,481
and $1,865,214 $15,458,952 $15,930,547
Net investment in direct financing
leases 4,040,314 4,098,192
Investment in joint ventures 2,364,796 1,789,238
Mortgage notes receivable, less
deferred gain of $126,544 and
$127,229 1,252,907 1,259,495
Cash and cash equivalents 979,674 1,305,429
Receivables, less allowance for
doubtful accounts of $27,959
and $43,234 15,674 63,386
Prepaid expenses 8,046 4,654
Accrued rental income, less
allowance for doubtful accounts
of $9,845 and $10,786 1,088,359 1,012,490
Other assets 60,422 60,422
----------- -----------
$25,269,144 $25,523,853
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 3,287 $ 6,502
Escrowed real estate
taxes payable 6,886 4,192
Distributions payable 675,000 675,000
Due to related parties 26,871 9,067
Rents paid in advance 50,180 38,705
----------- -----------
Total liabilities 762,224 733,466
Commitment (Note 4)
Minority interest 147,834 148,617
Partners' capital 24,359,086 24,641,770
----------- -----------
$25,269,144 $25,523,853
=========== ===========
See accompanying notes to condensed financial statements.
1
<PAGE>
CNL INCOME FUND VII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C>
Revenues:
Rental income from
operating leases $ 493,318 $ 478,874 $1,473,347 $1,471,463
Earned income from direct
financing leases 122,508 124,752 369,268 380,844
Contingent rental income 2,602 1,361 5,685 2,070
Interest and other income 46,474 65,855 131,517 188,418
---------- ---------- ---------- ----------
664,902 670,842 1,979,817 2,042,795
---------- ---------- ---------- ----------
Expenses:
General operating and
administrative 31,784 38,737 101,277 120,734
Bad debt expense - - 4,613 -
Professional services 4,277 5,122 14,683 19,094
Real estate taxes - 9,010 2,979 9,010
State and other taxes - - 4,560 2,449
Depreciation and
amortization 76,089 78,320 228,267 242,408
---------- ---------- ---------- ----------
112,150 131,189 356,379 393,695
---------- ---------- ---------- ----------
Income Before Minority
Interest in Income of
Consolidated Joint Venture,
Equity in Earnings of
Unconsolidated Joint
Ventures, Gain (Loss) on
Sale of Land and Buildings,
and Provision for Loss on
Land and Building 552,752 539,653 1,623,438 1,649,100
Minority Interest in Income
of Consolidated Joint
Venture (4,698) (4,690) (13,998) (14,000)
Equity in Earnings of Uncon-
solidated Joint Ventures 55,939 38,833 151,930 115,957
Gain (Loss) on Sale of Land
and Buildings 234 195,051 (19,054) 195,458
Provision for Loss on Land
and Building - (235,465) - (235,465)
---------- ---------- ---------- ----------
Net Income $ 604,227 $ 533,382 $1,742,316 $1,711,050
========== ========== ========== ==========
Allocation of Net Income:
General partners $ 6,036 $ 5,647 $ 17,495 $ 17,424
Limited partners 598,191 527,735 1,724,821 1,693,626
---------- ---------- ---------- ----------
$ 604,227 $ 533,382 $1,742,316 $1,711,050
========== ========== ========== ==========
Net Income Per Limited
Partner Unit $ 0.020 $ 0.018 $ 0.057 $ 0.056
========== ========== ========== ==========
Weighted Average Number
of Limited Partner
Units Outstanding 30,000,000 30,000,000 30,000,000 30,000,000
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CNL INCOME FUND VII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Nine Months Ended Year Ended
September 30, December 31,
1997 1996
----------------- -----------
General partners:
Beginning balance $ 156,785 $ 133,199
Net income 17,495 23,586
----------- -----------
174,280 156,785
----------- -----------
Limited partners:
Beginning balance 24,484,985 24,881,708
Net income 1,724,821 2,303,277
Distributions ($0.068 and
$0.090 per limited partner
unit, respectively) (2,025,000) (2,700,000)
----------- -----------
24,184,806 24,484,985
----------- -----------
Total partners' capital $24,359,086 $24,641,770
=========== ===========
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND VII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
1997 1996
----------- ----------
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 2,099,452 $ 2,006,079
----------- -----------
Cash Flows from Investing Activities:
Proceeds from sale of land 223,589 1,044,909
Investment in joint venture (616,245) -
Collections on mortgage notes
receivable 7,230 6,531
Increase in restricted cash - (1,044,909)
----------- -----------
Net cash provided by (used in)
investing activities (385,426) 6,531
----------- -----------
Cash Flows from Financing Activities:
Distributions to limited partners (2,025,000) (2,025,000)
Distributions to holder of minority
interest (14,781) (14,776)
----------- -----------
Net cash used in financing
activities (2,039,781) (2,039,776)
----------- -----------
Net Decrease in Cash and Cash
Equivalents (325,755) (27,166)
Cash and Cash Equivalents at Beginning of
Period 1,305,429 725,074
----------- -----------
Cash and Cash Equivalents at End of
Period $ 979,674 $ 697,908
=========== ===========
Supplemental Schedule of Non-Cash
Financing Activities:
Distributions declared and unpaid
at end of period $ 675,000 $ 675,000
=========== ===========
See accompanying notes to condensed financial statements.
4
<PAGE>
CNL INCOME FUND VII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1997 and 1996
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 nine months ended September 30, 1997, may not be
indicative of the results that may be expected for the year ending
December 31, 1997. Amounts as of December 31, 1996, 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, 1996.
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.
2. Land and Buildings on Operating Leases:
In May 1997, the Partnership sold its property in Columbus, Indiana,
for $240,000 and received net sales proceeds of $223,589, resulting in
a loss of $19,739 for financial reporting purposes.
3. Investment in Joint Ventures:
In February 1997, the Partnership entered into a joint venture
arrangement, CNL Mansfield Joint Venture, with an affiliate of the
Partnership which has the same general partners, to hold one restaurant
property in Mansfield, Texas. As of September 30, 1997, the Partnership
and its co-venture partner had contributed $616,245 and $163,964,
respectively, to the joint venture to acquire the restaurant property.
As of September 30, 1997, the Partnership and its co-venture partner
owned a 79 percent and 21 percent interest, respectively, in the
profits and losses of the joint venture. The Partnership accounts for
its investment in this joint venture under the equity method since the
Partnership shares control with the affiliate.
5
<PAGE>
CNL INCOME FUND VII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS -CONTINUED
Quarters and Nine Months Ended September 30, 1997 and 1996
3. Investment in Joint Ventures - Continued:
The following presents the combined, condensed financial information
for all of the Partnership's investments in joint ventures at:
September 30, December 31,
1997 1996
Land and buildings on
operating leases,
less accumulated
depreciation $8,389,883 $7,778,815
Cash 23,611 1,106
Receivables - 14,495
Accrued rental income 181,652 154,782
Other assets 1,035 1,115
Liabilities 32,117 1,216
Partners' capital 8,564,064 7,949,097
Revenues 749,270 911,833
Net income 571,232 689,075
The Partnership recognized income totalling $151,930 and $115,957 for
the nine months ended September 30, 1997 and 1996, respectively, from
these joint ventures, $55,939 and $38,833 of which was earned for the
quarters ended September 30, 1997 and 1996, respectively.
4. Commitment:
In September 1997, CNL Income Fund VI, Ltd. and CNL Income Fund VII,
Ltd., as tenants-in-common, entered into a sales contract with an
unrelated third party to sell the Jack in the Box property in Yuma,
Arizona, in which the Partnership owns a 48.33% interest. The general
partners believe that the anticipated sales price on this property
exceeds the carrying costs associated with the property. The sale of
this property had not occurred as of October 29, 1997.
5. Subsequent Event:
In October 1997, the Partnership sold its property in Dunnellon,
Florida, for $800,000 and received net sales proceeds (net of $5,055
which represents amounts due to the former tenant for prepaid rent) of
$752,745, resulting in a gain of approximately $183,700 for financial
reporting purposes. The Partnership intends to reinvest the net sales
proceeds in an additional property.
6
<PAGE>
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 arrangements, 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 September 30,
1997, the Partnership owned 40 Properties, including ten 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 nine months ended
September 30, 1997 and 1996, 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
$2,099,452 and $2,006,079 for the nine months ended September 30, 1997 and 1996,
respectively. The increase in cash from operations for the nine months ended
September 30, 1997, as compared to the nine months ended September 30, 1996, is
primarily a result of changes in the Partnership's working capital.
Other sources and uses of capital included the following during the
nine months ended September 30, 1997.
In February 1997, the Partnership entered into a joint venture
arrangement, CNL Mansfield Joint Venture, with an affiliate of the Partnership
which has the same general partners to hold one restaurant Property in
Mansfield, Texas. As of September 30, 1997, the Partnership and its co-venture
partner had contributed $616,245 and $163,964, respectively, to the joint
venture to acquire the restaurant Property. As of September 30, 1997, the
Partnership and its co-venture partner owned a 79 percent and 21 percent
interest, respectively, in the profits and losses of the joint venture.
In May 1997, the Partnership sold its Property in Columbus, Indiana,
for $240,000 and received net sales proceeds of $223,589, resulting in a loss of
$19,739 for financial reporting purposes. The net sales proceeds are expected to
be invested in an additional Property or used for other Partnership purposes.
In October 1997, the Partnership sold its Property in Dunnellon,
Florida, for $800,000 and received net sales proceeds (net of $5,055 which
represents amounts due to the former tenant for prepaid rent) of $752,745,
resulting in a gain of approximately $183,700 for financial reporting purposes.
The Partnership intends to reinvest the net sales proceeds in an additional
Property.
7
<PAGE>
Liquidity and Capital Resources - Continued
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 September 30, 1997, the Partnership had
$979,674 invested in such short-term investments, as compared to $1,305,429 at
December 31, 1996. The decrease in cash and cash equivalents for the quarter and
nine months ended September 30, 1997, is primarily attributable to the fact that
in February 1997, the Partnership invested in CNL Mansfield Joint Venture, as
discussed above. The decrease in cash and cash equivalents was partially offset
by an increase in cash and cash equivalents due to the receipt of sales proceeds
from the sale of the Property in Columbus, Indiana in May 1997. The funds
remaining at September 30, 1997, 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 rents paid in advance
and distributions payable, increased to $762,224 at September 30, 1997, from
$733,466 at December 31, 1996, primarily as a result of an increase in rents
paid in advance during the nine months ended September 30, 1997. The general
partners believe that the Partnership has sufficient cash on hand to meet its
current working capital needs.
In September 1997, CNL Income Fund VI, Ltd. and CNL Income Fund VII,
Ltd., as tenants-in-common, entered into a sales contract with an unrelated
third party to sell the Jack in the Box Property in Yuma, Arizona, in which the
Partnership owns a 48.33% interest. The general partners believe that the
anticipated sales price on this Property exceeds the carrying costs associated
with the Property. The sale of this Property had not occurred as of October 29,
1997.
Based primarily on cash from operations, the Partnership declared
distributions to the limited partners of $2,025,000 for each of the nine months
ended September 30, 1997 and 1996 ($675,000 for each of the quarters ended
September 30, 1997 and 1996). This represents distributions for each applicable
nine months of $0.068 per unit ($0.023 per unit for each applicable quarter). No
distributions were made to the general partners for the quarters and nine months
ended September 30, 1997 and 1996. No amounts distributed to the limited
partners for the nine months ended September 30, 1997 and 1996, 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.
8
<PAGE>
Liquidity and Capital Resources - Continued
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 Partnership'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 appropriate in connection with
the operations of the Partnership.
Results of Operations
During the nine months ended September 30, 1996, the Partnership and
its consolidated joint venture, San Antonio #849 Joint Venture, owned and leased
32 wholly owned Properties (including two Properties in Colorado Springs,
Colorado, and Hartland, Michigan, which were sold in July and October 1996,
respectively) and during the nine months ended September 30, 1997, the
Partnership and its consolidated joint venture owned and leased 31 wholly owned
Properties (including one Property in Columbus, Indiana, which was sold in May
1997) to operators of fast-food and family-style restaurant chains. In
connection therewith, during the nine months ended September 30, 1997 and 1996,
the Partnership and San Antonio #849 Joint Venture earned $1,842,615 and
$1,852,307, respectively, in rental income from operating leases and earned
income from direct financing leases, $615,826 and $603,626 of which was earned
during the quarters ended September 30, 1997 and 1996, respectively. Rental and
earned income decreased during the nine months ended September 30, 1997, as
compared to the nine months ended September 30, 1996, as a result of the sales
of the Properties in Colorado Springs, Colorado; Hartland, Michigan and
Columbus, Ohio, in July 1996, October 1996 and May 1997, respectively. The
decrease in rental income for the nine months ended September 30, 1997 was
partially offset by an increase in rental income attributable to the
reinvestment of the net sales proceeds from the sale of the Property in Colorado
Springs, Colorado, in a Property in Marietta, Georgia, in October 1996.
During the nine months ended September 30, 1996, the Partnership owned
and leased eight Properties indirectly through other joint venture arrangements
and one Property indirectly with an affiliate as tenants-in-common. During the
nine months ended September 30, 1997, the Partnership owned and leased nine
Properties indirectly through other joint venture arrangements and one Property
indirectly with an affiliate as tenants-in-common. In connection therewith,
during the nine months ended September 30, 1997 and 1996, the Partnership earned
$151,930 and $115,957, respectively, attributable to net income earned by these
unconsolidated joint ventures, $55,939 and $38,833 of which was earned during
the quarters ended September 30, 1997 and 1996, respectively. The increase in
net income earned by joint ventures
9
<PAGE>
Results of Operations - Continued
during the quarter and nine months ended September 30, 1997, is primarily due to
the fact that in February 1997, the Partnership reinvested the net sales
proceeds it received from the sale, in October 1996, of the Property in
Hartland, Michigan, in CNL Mansfield Joint Venture, with an affiliate of the
Partnership which has the same general partners.
In addition, during the nine months ended September 30, 1997 and 1996,
the Partnership earned $131,517 and $188,418, respectively, in interest and
other income, $46,474 and $65,855 of which was earned during the quarters ended
September 30, 1997 and 1996, respectively. The decrease in interest and other
income during the nine months ended September 30, 1997, as compared to the nine
months ended September 30, 1996, was primarily attributable to the fact that
during the nine months ended September 30, 1996, the Partnership recognized
approximately $46,500 in other income due to the fact that the corporate
franchisor of the Properties in Pueblo and Colorado Springs, Colorado, paid the
past due real estate taxes relating to these Properties, and the Partnership
reversed such amounts during 1996 that it had previously accrued as payable
during 1995. In addition, the decrease in interest and other income for the
quarter and nine months ended September 30, 1997 was due to the fact that during
the quarter and nine months ended September 30, 1996, the Partnership earned
approximately $7,000 in interest income on the net sales proceeds held in escrow
relating to the Property in Colorado Springs, Colorado. These proceeds were
reinvested in a Property in Marietta, Georgia, in October 1996.
Operating expenses, including depreciation and amortization expense,
were $356,379 and $393,695 for the nine months ended September 30, 1997 and
1996, respectively, of which $112,150 and $131,189 were incurred for the
quarters ended September 30, 1997 and 1996, respectively. The decrease in
operating expenses during the quarter and nine months ended September 30, 1997,
as compared to the quarter and nine months ended September 30, 1996, is
partially a result of a decrease in accounting and administrative expenses
associated with operating the Partnership and its Properties. Operating expenses
also decreased during the quarter and nine months ended September 30, 1997 due
to the fact that in connection with the sale of the Property in Colorado
Springs, Colorado, in July 1996, the Partnership paid approximately $9,000 in
1996 real estate taxes which were due upon the sale of the Property. In
addition, operating expenses decreased during the quarter and nine months ended
September 30, 1997 as a result of a decrease in depreciation expense due to the
sale of the Property in Colorado Springs, Colorado, and the sale of the Property
in Hartland, Michigan, during 1996. The decrease in depreciation expense was
partially offset by the purchase of the Property in Marietta, Georgia, in
October 1996.
10
<PAGE>
Results of Operations - Continued
The decrease in operating expenses for the nine months ended September
30, 1997 was partially offset by the fact that the Partnership recorded bad debt
expense of $4,613 during the nine months ended September 30, 1997, relating to
the Property in Columbus, Indiana, relating to past due rental amounts. No such
amounts were recorded during the nine months ended September 30, 1996. This
Property was sold in May 1997, as discussed above in "Liquidity and Capital
Resources".
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 $685 and $618
for the nine months ended September 30, 1997 and 1996, respectively, $234 and
$211 of which was earned during the quarters ended September 30, 1997 and 1996,
respectively. As a result of the sale of the Property in Colorado Springs,
Colorado in July 1996, the Partnership recognized a gain for financial reporting
purposes of $194,840 during the quarter and nine months ended September 30,
1996. As a result of the sale of the Property in Columbus, Indiana, in May 1997,
as described above in "Liquidity and Capital Resources," the Partnership
recognized a loss for financial reporting purposes of $19,739 during the nine
months ended September 30, 1997.
In addition, during the quarter and nine months ended September 30,
1996, the Partnership recorded a provision for loss on land and building of
$235,465, for financial reporting purposes, relating to the Property in
Hartland, Michigan. This provision represented the difference between (i) the
Property's carrying value at September 30, 1996, and (ii) the net realizable
value of the Property based on the net sales proceeds of $617,035 received from
the sale of this Property in October 1996.
11
<PAGE>
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 September 30, 1997.
12
<PAGE>
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 29th day of October, 1997.
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 September 30, 1997, and its statement of
income for the nine months then ended and is qualified in its entirety by
reference to the Form 10Q of CNL Income Fund VII, Ltd. for the nine months ended
September 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 979,674
<SECURITIES> 0
<RECEIVABLES> 43,633
<ALLOWANCES> 27,959
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 17,552,433
<DEPRECIATION> 2,093,481
<TOTAL-ASSETS> 25,269,144
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 24,359,086
<TOTAL-LIABILITY-AND-EQUITY> 25,269,144
<SALES> 0
<TOTAL-REVENUES> 1,979,817
<CGS> 0
<TOTAL-COSTS> 351,766
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,613
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,742,316
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,742,316
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,742,316
<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>
