UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 2000
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 0-20164
Krupp Government Income Trust II
Massachusetts 04-3073045
(State or other jurisdiction of
incorporation or organization) (IRS employer identification no.)
One Beacon Street, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
(617) 523-0066
(Registrant's telephone number, including area code)
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>
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.
<TABLE>
<CAPTION>
KRUPP GOVERNMENT INCOME TRUST II
BALANCE SHEETS
ASSETS
June 30, December 31,
2000 1999
Participating Insured Mortgage Investments
("PIMIs")(Note 2)
<S> <C> <C>
Insured mortgages $ 121,906,335 $131,750,452
Additional Loans, net of impairment provision of $2,994,000 21,298,351 21,298,351
Participating Insured Mortgages ("PIMs")(Note 2) 37,816,291 37,994,412
Mortgage-Backed Securities ("MBS")(Note 3) 19,794,948 21,127,474
Total mortgage investments 200,815,925 212,170,689
Cash and cash equivalents 7,318,276 8,653,673
Prepaid acquisition fees and expenses, net of
accumulated amortization of $8,298,097 and
$8,093,170, respectively 5,497,740 6,522,092
Prepaid participation servicing fees, net of
accumulated amortization of $2,486,872 and
$2,262,659 respectively 2,008,847 2,233,060
Interest receivable and other assets 1,171,334 1,629,549
Total assets $ 216,812,122 $231,209,063
LIABILITIES AND SHAREHOLDERS' EQUITY
Deferred income on Additional Loans $ 2,774,963 $ 2,692,976
Other liabilities 162,527 150,025
Total liabilities 2,937,490 2,843,001
Shareholders' equity (Note 4)
Common stock, no par value; 25,000,000
Shares authorized; 18,371,477 Shares
issued and outstanding 214,456,666 228,920,012
Accumulated comprehensive loss (582,034) (553,950)
Total Shareholders' equity 213,874,632 228,366,062
Total liabilities and Shareholders' equity $ 216,812,122 $231,209,063
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
<TABLE>
KRUPP GOVERNMENT INCOME TRUST II
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
Revenues:
Interest income - PIMs and
PIMIs:
<S> <C> <C> <C> <C>
Basic interest $ 2,818,726 $ 3,003,293 $ 5,644,844 $ 6,013,882
Additional loan interest 381,175 446,566 840,783 974,594
Participation interest 275,667 254,482 1,380,902 254,482
Interest income - MBS 374,253 611,225 751,306 1,253,332
Interest income - cash and
cash equivalents 105,035 236,990 245,086 466,486
Total revenues 3,954,856 4,552,556 8,862,921 8,962,776
Expenses:
Asset management fee to an
affiliate 381,352 435,676 764,523 871,899
Expense reimbursements to
affiliates 78,825 79,161 142,703 118,584
Amortization of prepaid
fees and expenses 441,591 490,328 1,248,565 980,656
General and administrative 158,193 146,501 226,992 209,706
Total expenses 1,059,961 1,151,666 2,382,783 2,180,845
Net income 2,894,895 3,400,890 6,480,138 6,781,931
Other comprehensive income:
Net change in unrealized loss
on MBS 7,133 (528,174) (28,084) (564,279)
Total comprehensive income $ 2,902,028 $ 2,872,716 $ 6,452,054 $ 6,217,652
Basic earnings per share $ .15 $ .19 $ .35 $ .37
Weighted average shares
outstanding 18,371,477 18,371,477
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
<TABLE>
KRUPP GOVERNMENT INCOME TRUST II
STATEMENTS OF CASH FLOWS
<CAPTION>
For the Six Months
Ended June 30,
2000 1999
Operating activities:
<S> <C> <C>
Net income $ 6,480,138 $ 6,781,931
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of net premium 29,612 110,680
Amortization of prepaid fees and expenses 1,248,565 980,656
Changes in assets and liabilities:
Decrease (increase) in interest receivable
and other assets 458,215 (118,840)
Increase in deferred income on
Additional Loans 81,987 17,669
Increase in other liabilities 12,502 137,556
Net cash provided by operating activities 8,311,019 7,909,652
Investing activities:
Principal collections on MBS 1,274,714 5,441,966
Principal collections on PIMs and Insured Mortgages 10,022,354 842,661
Net cash provided by investing activities 11,297,068 6,284,627
Financing activity:
Dividends (20,943,484) (11,482,198)
Net (decrease) increase in cash and cash equivalents (1,335,397) 2,712,081
Cash and cash equivalents, beginning of period 8,653,673 18,010,578
Cash and cash equivalents, end of period $ 7,318,276 $ 20,722,659
Non Cash Activities:
Decrease in Fair Value of MBS $ (28,084) $ (564,279)
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP GOVERNMENT INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this report on Form 10-Q pursuant to the Rules
and Regulations of the Securities and Exchange Commission. However, in the
opinion of Berkshire Mortgage Advisors Limited Partnership (the "Advisor"), the
Advisor to Krupp Government Income Trust II (the "Trust"), the disclosures
contained in this report are adequate to make the information presented not
misleading. See Notes to Financial Statements in the Trust's Form 10-K for the
year ended December 31, 1999 for additional information relevant to significant
accounting policies followed by the Trust.
In the opinion of the Advisor of the Trust, the accompanying unaudited financial
statements reflect all adjustments (consisting primarily of normal recurring
accruals) necessary to present fairly the Trust's financial position as of June
30, 2000, the results of its operations for the three and six months ended June
30, 2000 and 1999, and its cash flows for the six months ended June 30, 2000 and
1999. The results of operations for the three and six months ended June 30, 2000
are not necessarily indicative of the results which may be expected for the full
year. See Management's Discussion and Analysis of Financial Condition and
Results of Operations included in this report.
2. PIMs and PIMIs
At June 30, 2000, the Trust's PIMs and PIMIs have a fair value of $176,761,100
and gross unrealized losses of $4,259,877. The PIMs and PIMIs have maturities
ranging from 2006 to 2036. At June 30, 2000, there are no insured mortgage loans
within the Trust's portfolio that are delinquent of principal or interest.
Oasis at Springtree and Windmill Lakes both have been adversely affected by the
competitive South Florida rental housing market. The Advisor recorded an
impairment provision of $2,994,000 in total against the two Additional Loans
during the fourth quarter of 1998. Based on its analyses of the property
operations underlying the PIMIs, it continues to maintain that allowance.
In March 2000, the Trust received $175,489 of participation interest based on
1997 operating results for Falls at Hunters Pointe from borrower escrows
controlled by the Trust. On July 11, 2000, the Advisor, on behalf of the Trust,
filed a complaint against the partners of the borrowing entity. The Trust is
seeking collection of delinquent participation interest relating to 1998 and
1999 along with late payment penalties and legal fees.
During the first quarter of 2000, the Trust received the prepayment of the
Windsor Lake PIMI consisting of a first mortgage with a remaining balance of
$9,172,642. The Trust had previously received the balance of $2,000,000 on the
Additional Loan, $40,000 of base interest on the Additional Loan and $792,907 of
participation interest in December 1999. On February 2, 2000, the Advisor
declared a special dividend of $.66 per Share that was paid on February 18, 2000
from the payoff of the mortgage on the Windsor Lake PIMI.
During the first half the Trust received participation interest of $686,165 from
The Lakes PIMI, $346,514 from the Martin's Landing PIMI, $175,968 from the
Seasons PIMI, $50,000 from the Crossings Village PIMI, $49,699 from The
Fountains PIM and $72,556 from the Mequon Trails PIM. The Lakes and Martin's
Landing payments related to 1998 and 1999 property operations, Mequon Trails and
The Fountains payments related to 1998 property operations and the Crossings
Village and Seasons payments related to 1999 property operations.
Continued
<PAGE>
<TABLE>
KRUPP GOVERNMENT INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS, Continued
3. MBS
At June 30, 2000, the Trust's MBS portfolio has an amortized cost of $20,376,982
and gross unrealized gains and losses of $16,857 and $598,891, respectively. The
MBS portfolio has maturities ranging from 2009 to 2031.
4. Changes in Shareholder's Equity
<CAPTION>
A summary of changes in Shareholders' equity for the six months ended
June 30, 2000 is as follows:
Accumulated Total
Common Retained Comprehensive Shareholders'
Stock Earnings Loss Equity
Balance at
<S> <C> <C> <C> <C>
December 31, 1999 $ 228,920,012 $ - $ (553,950) $ 228,366,062
Net income - 6,480,138 - 6,480,138
Dividends (14,463,346) (6,480,138) - (20,943,484)
Change in
unrealized loss
on MBS - (28,084) (28,084)
Balance at $ 214,456,666 $ - $ (582,034) $ 213,874,632
June 30, 2000
</TABLE>
5. Related Party Transactions
The Trust received $221,641 and $221,641 of Additional Loan Interest from an
affiliate of the Advisor during the three months ended June 30, 2000 and 1999,
respectively. The Trust also received participation interest of $175,968 and
$191,982 from an affiliate of the Advisor during the three months ended June 30,
2000 and 1999, respectively.
The Trust received $221,641 and $221,641 of Additional Loan Interest from an
affiliate of the Advisor during the six months ended June 30, 2000 and 1999,
respectively. The Trust also received participation interest of $175,968 and
$191,982 from an affiliate of the Advisor during the six months ended June 30,
2000 and 1999, respectively.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
At June 30, 2000 the Trust had liquidity consisting of cash and cash
equivalents, of approximately $7.3 million as well as the cash inflows provided
by PIMs, PIMIs, MBS, cash and cash equivalents. The Trust may also receive
additional cash flow from the participation features of its PIMs and PIMIs. The
Trust anticipates that these sources will be adequate to provide the Trust with
sufficient liquidity to meet its obligations, including providing dividends to
its investors.
The most significant demand on the Trust's liquidity is quarterly dividends paid
to investors of approximately $4.4 million, and special distributions. Funds for
dividends come from interest income received on PIMs, PIMIs, MBS and cash and
cash equivalents net of operating expenses, and the principal collections
received on PIMs, PIMIs and MBS. The portion of dividends funded from principal
collections reduces the capital resources of the Trust. As the capital resources
of the Trust decrease, the total cash flows to the Trust will also decrease
which may result in periodic adjustments to the dividends paid to the investors.
The Advisor periodically reviews the dividend rate to determine whether an
adjustment is necessary based on projected future cash flows. The current
dividend rate is $.24 per Share per quarter. In general, the Advisor tries to
set a dividend rate that provides for level quarterly distributions. To the
extent quarterly dividends do not fully utilize the cash available for
distribution and cash balances increase, the Advisor may adjust the dividend
rate or distribute such funds through a special distribution.
In addition to providing guaranteed or insured monthly principal and interest
payments, the Trust's investments in the PIMs and PIMIs also may provide
additional income through the interest on the Additional Loan portion of the
PIMIs as well as participation income based on operating cash flow and increase
in the value realized upon the sale or refinance of the underlying properties.
However, these payments are neither guaranteed nor insured and depend on the
successful operations of the underlying properties.
The Trust received the first installment of Additional Loan interest from seven
of the PIMI investments during the six months ended June 30, 2000. The Trust
also received a payment from the borrower on the Windmill Lakes PIMI, which was
applied to delinquent Additional Loan interest. The Advisor determined that the
borrower on the Norumbega PIMI had paid Additional Loan interest from funds
other than surplus cash, which resulted in overpayments during the previous
three years; consequently, the Trust will not receive any Additional Loan
interest until the overpayment has been reversed.
The Trust received participation interest totaling $1,380,902 during the first
half of 2000. The Trust collected $72,556 of participation interest based on
1998 operating results for Mequon Trails, $346,514 of participation interest
based on both 1998 and 1999 operating results for Martins Landing, $686,165 of
participation interest based on both 1998 and 1999 operating results for The
Lakes at Vinings, $175,968 of participation interest based on the second half of
1999 operations for The Seasons, $50,000 of participation interest from
Crossings Village based on 1999 operating results and $49,699 of participation
interest from The Fountains based on 1998 operations. The Trust expects to
collect participation interest based on successful 1999 operating results from
Mequon Trails, Sunset Summit, and Mill Pond II during 2000.
The Advisor is closely monitoring four other properties due to market conditions
or payment issues relating to the Additional Loans. Competitive market
conditions in the south Florida market have adversely affected the ability of
both Windmill Lakes and Oasis at Springtree to generate sufficient cash flow
from operations to service the interest payments due on the Additional Loans.
Operating results at Mill Pond II weakened during its most recent fiscal year;
consequently the Advisor does not expect to receive any participation interest
during 2000. The Borrower on the Falls at Hunters Pointe PIMI was declared in
default under the terms of the participation and Additional Loan documents for
non-payment of participation interest due on 1997 and 1998 operating results.
The strength of the South Florida economy, bolstered by an expanding business
environment and in-migration coupled with low interest rates and available
building sites, has fostered aggressive development of both single family homes
and new apartments. Oasis at Springtree is located in the Sunrise submarket, an
established market that has seen some major rehab activity as well as new infill
construction in the multifamily sector. Occupancy at Oasis has remained stable
over the past three years in the low 90% range; however, occupancy has become
increasingly more expensive to achieve. Because Oasis must compete with newer or
rehabilitated properties, maintenance costs have risen as the standards that
apartment communities are judged by continue to rise. However, as an older
property, Oasis has not been able to command the commensurate rental rate
increases it needs to be able to pay for improvements that will enhance its
appeal in the market. Consequently, the Advisor agreed to defer Additional Loan
interest payments for 1999 to free up funds for some major capital projects. As
a result of the factors described above, the Advisor determined that the
Additional Loan collateralized by the Oasis at Springtree asset was impaired,
and the Trust recorded a valuation allowance of $994,000 in the fourth quarter
of 1998 and continues to maintain that allowance.
<PAGE>
Windmill Lakes is located in the Pembroke Pines submarket, a market that had
vast tracts of vacant land three years ago and has seen explosive construction
activity since then in single family, multifamily and retail sectors. Windmill
Lakes is a ten-year old, basic apartment community that has not been able to
compete against the influx of new apartment communities that have extensive
amenity packages. Builders use deep marketing concessions to fill the new
properties, lowering the cost of renting a new apartment and making it more
difficult for older properties like Windmill Lakes to attract residents.
Occupancy has dropped as low as 80%, although there has been a slight recovery
to the mid to high 80% range during the first half of 2000. The property's curb
appeal, a critical element in a competitive market, has suffered as well because
there has not been enough cash flow for adequate maintenance. Consequently, the
borrower has been delinquent in his obligation to pay Additional Loan interest
since March 1998. Although he has tried to sell the property, the borrower has
been unable to secure a purchase price that will cover the property's
outstanding liabilities. The Advisor has agreed to defer the delinquent
Additional Loan payments pending a sale of the property. In the mean time, the
borrower paid $25,000 towards the delinquent Additional Loan interest during the
first quarter. If it becomes apparent that a sale of the property at a mutually
acceptable price to both the Trust and the borrower will not be possible, the
Advisor will reassess the feasibility of extending long-term debt service relief
rather than risk the consequences of a default. As a result of the factors
described above, the Advisor determined that the Additional Loan collateralized
by the Windmill Lakes asset was impaired, and the Trust recorded a valuation
allowance of $2,000,000 in the fourth quarter of 1998 and continues to maintain
that allowance.
In November 1999, the Trust notified the borrower on the Falls at Hunters Pointe
PIMI that he was in default for non payment of participating interest due to the
Trust based on 1997 and 1998 operating results. The borrower has failed to cure
the default. Consequently, the Trust elected to use a portion of the borrower's
funds held in escrow to cure the 1997 portion of the default. The borrower
remains in default for 1998 operating results and is now in default for 1999
operating results. The Trust has filed a complaint against the partners of the
Borrowing entity. The Trust is seeking collection of the delinquent
participation interest related to 1998 and 1999 along with late payment
penalties and legal fees.
Whether the operating performance of any of the properties mentioned above
provide sufficient cash flow from operations to pay either the Additional Loan
interest or participation income will depend on factors that the Trust has
little or no control over. Should the properties be unable to generate
sufficient cash flow to pay the Additional Loan interest, it would reduce the
Trust's distributable cash flow and could affect the value of the Additional
Loan collateral.
On December 16, 1999, the Trust received $2,832,907 from Windsor Lake;
consisting of $2,000,000 from the payoff of the Additional Loan, $40,000 of
Additional Loan interest, and $792,907 of Participation income. The payoff of
the balance on the insured mortgage, $9,172,642 was received on January 26,
2000. The Trust paid a special dividend of $.66 per Share from the prepayment
proceeds.
There are contractual restrictions on the prepayment of the PIMs and PIMIs.
During the first five years of the investment, borrowers are generally
prohibited from repayment. During the second five years, the PIM borrowers can
prepay the insured first mortgage by paying the greater of a prepayment premium
or the participation income due at the time of the prepayment. Similarly, the
PIMI borrowers can prepay the insured first mortgage and the Additional Loan by
satisfying the Preferred Return obligation. The participation features and the
Additional Loans are neither insured nor guaranteed. If the prepayment of the
PIM or PIMI results from the foreclosure on the underlying property or an
insurance claim, the Trust generally would not receive any participation income
or any amounts due under the Additional Loan.
The Trust has the option to call certain PIMs and all the PIMIs by accelerating
their maturity if the loans are not prepaid by the tenth year after permanent
funding. The Advisor will determine the merits of exercising the call option for
each PIM and PIMI as economic conditions warrant. Such factors as the condition
of the asset, local market conditions, the interest rate environment and
available financing will have an impact on these decisions.
<PAGE>
Results of Operations
The Trust's net income for the six months ended June 30, 2000 decreased by
approximately $302,000 as compared to the six months ended June 30, 1999 due
primarily to decreases in basic interest on PIMs and PIMIs, interest income on
MBS and cash and cash equivalents and an increase in amortization of prepaid
fees and expenses net of an increase in participation interest. Participation
interest increased due to the Trust receiving payments from six mortgage
investments compared to two in 1999. Interest income on MBS decreased primarily
due to the Estates payoff in 1999. Amortization expense increased due to writing
off the remaining unamortized fees and expenses related to Windsor Lake. Basic
interest decreased due to the Windsor Lake payoff. Interest income on cash and
cash equivalents decreased due to lower average invested balances.
Net income decreased by approximately $506,000 for the three months ended June
30, 2000 as compared to the three months ended June 30, 1999 due primarily to
lower basic interest income on PIMs and PIMIs and interest income on MBS. Basic
interest on PIM and PIMIs and interest income on MBS decreased due to the issues
mentioned above.
The Trust generally funds a portion of its dividends with principal collections,
which will continue to reduce the assets of the Trust thereby reducing the
income, generated by the Trust in the future. Additionally, asset management
fees will decrease as the Trust's investments in MBS, PIMS, and insured
mortgages continue to decline as a result of principal collections.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Assessment of Credit Risk
The Trust's investments in mortgages, with the exception of the Additional
Loans, are guaranteed or insured by Fannie Mae, the Federal Home Loan Mortgage
Corporation (FHLMC), the Government National Mortgage Association (GNMA) or the
Department of Housing and Urban Development (HUD), and therefore, the risk of a
material loss of amounts invested is remote. The certainty of principal on the
Trust's investments primarily depends upon the creditworthiness of these
entities.
Fannie Mae is a federally chartered private corporation that guarantees
obligations originated under its programs. However, obligations of FNMA are not
backed by the U.S. Government. Fannie Mae is one of the largest corporations in
the United States and the Secretary of the Treasury of the United States has
discretionary authority to lend up to $2.25 billion to Fannie Mae at any time.
FHLMC is a federally chartered corporation that guarantees obligations
originated under its programs and is wholly-owned by the twelve Federal Home
Loan Banks. These obligations are not guaranteed by the U.S. Government or the
Federal Home Loan Bank Board. GNMA guarantees the full and timely payment of
principal and basic interest on the securities it issues, which represent
interests in pooled mortgages insured by HUD. HUD, an agency of the U.S.
Government, insures the obligations originated under its programs, which are
backed by the full faith and credit of the U.S. Government.
The Trust's Additional Loans have similar risks as those associated with higher
risk debt instruments, including: reliance on the owner's operating skills,
ability to maintain occupancy levels, control operating expenses, ability to
maintain the properties and obtain adequate insurance coverage. Operations also
may be effected by adverse changes in general economic conditions, adverse local
conditions, and changes in governmental regulations, real estate zoning laws, or
tax laws; and other circumstances over which the Trust may have little or no
control.
The Trust includes in cash and cash equivalents approximately $6.6 million of
Agency paper.
Interest Rate Risk
The Trust's primary market risk exposure is to interest rate risk, which can be
defined as the exposure of the Trust's net income, comprehensive income or
financial condition to adverse movements in interest rates. At June 30, 2000,
the Trust's PIMs, PIMIs and MBS comprise the majority of the Trust's assets. As
such, decreases in interest rates may accelerate the prepayment of the Trust's
investments. The Trust does not utilize any derivatives or other instruments to
manage this risk as the Trust plans to hold all of its investments to expected
maturity.
The Trust monitors prepayments and considers prepayment trends, as well as
dividend requirements of the Trust, when setting regular dividend policy. For
MBS, the fund forecasts prepayments based on trends in similar securities as
reported by statistical reporting entities such as Bloomberg. For PIMs and
PIMIs, the Trust incorporates prepayment assumptions into planning as individual
properties notify the Trust of the intent to prepay or as they mature.
<PAGE>
KRUPP GOVERNMENT INCOME TRUST II
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Response: None
Item 2. Changes in Securities
Response: None
Item 3. Defaults upon Senior Securities
Response: None
Item 4. Submission of Matters to a Vote of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10.1) Assignment and Assumption Agreement, dated August 5, 1993, between
Krupp Government Income Trust ("Assignor") and
Krupp Government Income Trust II ("Assignee").
(10.2) Assignment of Additional Loan Agreement, dated August 5, 1993, between
Krupp Government Income Trust ("Assignor") and
Krupp Government Income Trust II ("Assignee").
(10.3) Assignment of Subordinated Deed of Trust, dated August 6, 1993, between
Krupp Government Income Trust and
Krupp Government Income Trust II.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Krupp Government Income Trust II
(Registrant)
BY: / s / Robert A. Barrows
Robert A. Barrows
Treasurer and Chief Accounting Officer of
Krupp Government Income Trust II.
DATE: August 6, 2000
