-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fCvSfyUniEZ6U0jVRXOjygVHKx63j5BPCNrD5hYRMFibpecDNYbI2q4yBv7JhnSw zFSjE5h9OcynQd/si8pl8Q== 0000751570-95-000011.txt : 19950508 0000751570-95-000011.hdr.sgml : 19950508 ACCESSION NUMBER: 0000751570-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950505 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP REALTY LTD PARTNERSHIP VII CENTRAL INDEX KEY: 0000751570 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042842924 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14377 FILM NUMBER: 95534992 BUSINESS ADDRESS: STREET 1: 470 ATLANTIC AVE CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 6174232233 MAIL ADDRESS: STREET 1: C/O BERKSHIRE REALTY AFFILIATES STREET 2: 470 ATLANTIC AVE CITY: BOSTON STATE: MA ZIP: 02210 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 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 0-14377 Krupp Realty Limited Partnership-VII Massachusetts 04-2842924 (State or other jurisdiction of (IRS employer incorporation or organization) identification no.) 470 Atlantic Avenue, Boston, Massachusetts 02210 (Address of principal executive offices) (Zip Code) (617) 423-2233 (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 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS KRUPP REALTY LIMITED PARTNERSHIP-VII BALANCE SHEETS
ASSETS March 31, December 31, 1995 1994 Multi-family apartment complexes, net of accumulated depreciation of $8,873,331 and $8,664,936, respectively $ 9,489,144 $ 9,665,226 Retail center, net of accumulated depreciation of $2,993,100 and $2,896,863, respectively 6,629,406 6,724,369 Total real estate assets 16,118,550 16,389,595 Cash and cash equivalents 935,363 1,021,464 Cash restricted for tenant security deposits 40,831 55,084 Cash restricted for capital improvements 52,784 54,189 Prepaid expenses and other assets 547,530 555,508 Deferred expenses, net of accumulated amortization of $28,567 and $19,538, respectively 257,589 261,143 Total assets $17,952,647 $18,336,983 LIABILITIES AND PARTNERS' EQUITY Mortgage notes payable $12,871,418 $12,912,152 Accrued expenses and other liabilities 683,589 762,988 Total liabilities 13,555,007 13,675,140 Partners' equity (Note 2) 4,397,640 4,661,843 Total liabilities and partners' equity $17,952,647 $18,336,983
The accompanying notes are an integral part of the financial statements. KRUPP REALTY LIMITED PARTNERSHIP-VII
STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 1995 1994 Revenue: Rental $1,099,574 $1,029,443 Interest income 13,547 5,616 Total revenue 1,113,121 1,035,059 Expenses: Operating (including reimbursements to affiliates of $25,080 and $41,070, respectively) 244,532 287,141 Maintenance 60,434 50,756 Real estate taxes 113,571 106,724 Management fees to an affiliate 47,435 40,937 Depreciation and amortization 313,661 313,669 Interest 281,315 300,386 General and administrative (including reimbursements to affiliates of $7,727 and $12,933, respectively) 14,332 20,612 Total expenses 1,075,280 1,120,225 Net income (loss) $ 37,841 $ (85,166) Allocation of net income (loss) (Note 2): Per Unit of Investor Limited Partnership Interest (27,184 Units outstanding) $ 1.25 $ (3.10) Original Limited Partner $ 3,027 $ - General Partners $ 757 $ (852)
The accompanying notes are an integral part of the financial statements. KRUPP REALTY LIMITED PARTNERSHIP-VII
STATEMENTS OF CASH FLOWS For the Three Months Ended March 31 1995 1994 Operating activities: Net income (loss) $ 37,841 $ (85,166) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 313,661 313,669 Decrease (increase) in cash restricted for tenant security deposits 14,253 (270) Decrease (increase) in prepaid expenses and other assets 7,978 (94,978) Decrease in accrued expenses and other liabilities (79,399) (94,178) Net cash provided by operating activities 294,334 39,077 Investing activities: Additions to fixed assets (33,587) (23,970) Decrease in cash restricted for capital improvements 1,405 3,713 Net cash used in investing activities (32,182) (20,257) Financing activities: Principal payments on mortgage notes payable (40,734) (41,683) Increase in deferred expenses (5,475) - Distributions (302,044) - Net cash used in financing activities (348,253) (41,683) Net decrease in cash and cash equivalents (86,101) (22,863) Cash and cash equivalents, beginning of period 1,021,464 840,798 Cash and cash equivalents, end of period $ 935,363 $ 817,935
The accompanying notes are an integral part of the financial statements. KRUPP REALTY LIMITED PARTNERSHIP-VII NOTES TO FINANCIAL STATEMENTS 1. Significant 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. In the opinion of The Krupp Corporation and The Krupp Company Limited Partnership-II, the General Partners of Krupp Realty Limited Partnership-VII (the "Partnership"), the disclosures contained in this report are adequate to make the information presented not misleading. See Notes to Financial Statements included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994 for additional information relevant to significant accounting policies followed by the Partnership. In the opinion of the General Partners of the Partnership, the accompanying unaudited financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Partnership's financial position as of March 31, 1995, its results of operations and cash flows for the three months ended March 31, 1995 and 1994. The results of operations for the three months ended March 31, 1995 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. Changes in Partners' Equity A summary of changes in partners' equity (deficit) for the three months ended March 31, 1995 is as follows:
Investor Original Total Limited Limited General Partners' Partners Partner Partners Equity Balance at December 31, 1994 $5,174,914 $(289,135) $(223,936) $4,661,843 Cash Distributions (271,840) (24,163) (6,041) (302,044) Net income 34,057 3,027 757 37,841 Balance at March 31, 1995 $4,937,131 $(310,271) $(229,220) $4,397,640
KRUPP REALTY LIMITED PARTNERSHIP-VII Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Partnership's ability to generate cash adequate to meet its needs is dependent primarily upon the successful operations of its real estate investments. Such ability is also dependent upon the future availability of bank borrowings and the future refinancing and sale of the Partnership's remaining real estate investments. These sources of liquidity will be used by the Partnership for payment of expenses related to real estate operations, capital expenditures, debt service and expenses. Cash Flow, if any, as calculated under Section 8.2(a) of the partnership agreement, will then be available for distribution to the Partners. In 1994, the General Partners determined that there was sufficient Cash Flow to reinstate semi- annual distributions. These distributions commenced in August 1994 at a rate of 1% of invested capital and increased in 1995 to a rate of 2% of invested capital. The Partnership's properties (Courtyards Village, Nora Corners and Windsor Apartments) have generated increased liquidity due to increased occupancy and higher rental rates in 1995, as compared to 1994. Furthermore, the Partnership has increased availability of funds due to reduced mortgage payments resulting from the 1994 refinancings of mortgage notes payable at Nora Corners and Windsor Apartments. In 1995, Courtyards and Windsor have scheduled capital improvement expenditures totaling $140,000 and $92,000, respectively. As of March 31, 1995, capital improvement expenditures totaling $16,000 have been completed at each property. Management believes these improvements will improve the appearance of the properties and allow the properties to remain competitive in their respective real estate markets. The General Partners are in the process of reviewing liquidity options for the limited partners in the Partnership. After falling precipitously during the recession, real estate values have recently begun to recover. Typically, the only option available to a limited partner to liquidate his or her partnership interest has been to sell partnership units in the thinly-traded secondary market or directly to a small number of "vulture funds" seeking to purchase units at very low prices. While the Partnership may not be a target, some speculators have made offers to partnerships to acquire all or a significant portion of the outstanding partnership units at prices substantially below net asset value. The General Partners are exploring other options in an effort to provide the Partnership's limited partners with an opportunity to liquidate their partnership interests on reasonable terms giving due regard to property values and tax consequences. Continued KRUPP REALTY LIMITED PARTNERSHIP-VII Cash Flow Shown below, as required by the Partnership Agreement, is the calculation of Cash Flow for the three months ended March 31, 1995:
Rounded to $1,000 Net income for tax purposes $ 19,000 Items not requiring (requiring) the use of operating funds: Tax basis depreciation and amortization 334,000 Principal payments on mortgage notes payable (41,000) Capital improvement expenditures (34,000) Cash Flow $278,000
Operations During the first quarter of 1995, as compared to the first quarter of 1994, rental revenues increased primarily due to steady rental rate increases implemented at Courtyards and Windsor in 1994. Occupancy at Windsor also improved due to the stabilization of the Dallas economy, with home purchasing leveling off. The Partnership's commercial property, Nora Corners, is also maintaining its high level of occupancy with the signing of two new tenants in the first quarter of 1994, D.L. Lowry Salon, a hair salon, and Food King, a chinese food restaurant. Interest income has increased due to additional investments in commercial paper yielding higher rates of return. During the first quarter of 1995, as compared to the first quarter of 1994, total expenses of the Partnership have remained relatively stable, with the exception of operating and interest expense. The decrease in operating expense is primarily due to management's efforts to reduce reimbursable operating costs. Certain of these cost savings are anticipated to continue throughout 1995. Interest expense for the first quarter of 1995, as compared to the first quarter of 1994, decreased due to the refinancing of the mortgage notes payable at Windsor Apartments and Nora Corners in April and October of 1994, respectively. The new mortgage note at Windsor has a reduced interest rate of 9.25% per annum from the previous rate of 10.3% per annum. At Nora Corners, the new mortgage note has an interest rate of 9% per annum from the previous rate of 10.5% per annum. Overall, operations at all of the Partnership's properties have improved, as compared to the first three months of 1994. The General Partners believe that this improvement will be sustained at least through the end of 1995. KRUPP REALTY LIMITED PARTNERSHIP-VII 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 Response: None SIGNATURES 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 Realty Limited Partnership-VII (Registrant) BY: /s/Marianne Pritchard Marianne Pritchard Treasurer and Chief Accounting Officer of The Krupp Corporation, a General Partner. DATE: May 4, 1995 EX-27 2
5 This FDS schedule for Krupp Realty Fund-VII contains summary financial information extracted from the financial statements for the quarter ended March 31, 1995 and is qualified in its entirety by reference to such financials statements. 3-MOS DEC-31-1995 MAR-31-1995 1,028,978 0 140,441 0 0 407,089 28,271,137 (11,894,998) 17,952,647 683,589 12,871,418 4,397,640 0 0 0 17,952,647 1,113,121 1,113,121 0 0 793,965 0 281,315 37,841 0 37,841 0 0 0 37,841 0 0 Net income allocated $757 to g.p.'s and $37,084 to L.P.'s for the quarter ended 3/31/95. Average net income is $1.25 per unit for 27,184 units outstanding. Includes operating expenses of $366,733, real estate tax expense of $113,571 & depreciation and amortization of $313,661. Represents total equity of general partners (229,220) and limited partners 4,626,860. Represents mortgage notes payable. Includes depreciation of $11,866,431 and amortization of deferred expenses of $28,567. Includes apartment complexes of $18,362,475, retail center of $9,622,506 and deferred expenses of $286,156.
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