8-K 1 fund7_8k082901.txt FUND 7 8-K 08-29-01 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) August 29, 2001 ------------------------------ Krupp Realty Limited Partnership-VII ------------------------------------------------------------------------------- Massachusetts 0-14377 04-2842924 -------------------------------------- -------------- ------------------------- (State or other jurisdiction of (Commission (IRS employer incorporation or organization file number) identification no.) One Beacon Street, Boston, Massachusetts 02108 ----------------------------------------------------------- ------------------- (Address of principal executive offices) (Zip code) (617) 523-7722 ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 1 Item 2. Acquisition or Disposition of Assets Disposition of Courtyard Village Apartments On June 12, 2001, Krupp Realty Courtyard Limited Partnership, an entity owned by Krupp Realty Limited Partnership-VII (the "Partnership"), entered into a Purchase and Sale Agreement to sell its interest in Courtyard Village Apartments, a 224-unit multi-family apartment community located in Naperville, Illinois, to Home Properties of NY, LP, an unaffiliated party. The transaction was consummated August 29, 2001 for consideration of $12,768,000, less the assumption of the existing mortgage note and closing costs. 2 Item 7. Financial Statements, Pro forma Financial Information and Exhibits The following documents are filed as part of this Form 8-K. (a) Financial Statements of Business Acquired Not applicable (b) Pro Forma Financial Information See "Pro Forma Financial Statements" attached to this Form 8-K. (c) Exhibits Exhibit 2.1 Purchase and Sale Agreement dated June 12, 2001 by and among Krupp Realty Courtyards Limited Partnership and Home Properties of New York, L.P. 3 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 Realty Limited Partnership-VII ------------------------------------- (Registrant) BY: /s/ David C. Quade ------------------------------------- David C. Quade Treasurer (Principal Financial and Accounting Officer) of The Krupp Corporation, a General Partner September 13, 2001 4 PRO FORMA FINANCIAL INFORMATION On August 29, 2001, Krupp Realty Limited Partnership-VII (the "Partnership") sold its entire interest in Courtyard Village Apartments ("Courtyard"), to Home Properties of New York, L.P., an unaffiliated party, for consideration of $12,768,000. The Partnership has presented in this Form 8-K, a Pro Forma Consolidated Balance Sheet at December 31, 2000 and Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2001 and the year ended December 31, 2000 to give effect to the sale. See Note 1 to the Pro Forma Consolidated Financial Statements for further discussion of this matter. In management's opinion, all adjustments necessary to reflect the above discussed transactions have been made. The unaudited Pro Forma Consolidated Balance Sheet and Statements of Operations are not necessarily indicative of what actual results of operations of the Partnership would have been for the periods, nor does it purport to represent the Partnership's results of operations for future periods. 5 KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEET June 30, 2001 (Unaudited) ASSETS As Reported on Form 10-Q Courtyard at Pro Forma Pro Forma June 30, 2001 Adjustments June 30, 2001 (Note 1) (Note 1) (Note 1) ------------- ----------- ------------- Multi-family apartment communities, net of accumulated depreciation $ 3,737,374 $ - $ 3,737,374 Multi-family apartment communities available for sale 3,650,276 (3,650,276) - Cash and cash equivalents 246,635 7,586,651 7,833,286 Cash restricted for tenant security deposits 28,022 (28,022) - Replacement reserve escrow 77,043 (77,043) - Due from affiliates 45,234 (17,395) 27,839 Prepaid expenses and other assets 327,235 (154,350) 172,885 Investment in securities 65,340 - 65,340 Deferred expense, net of accumulated amortization 92,185 (92,185) - ------------- ----------- ------------- Total assets $ 8,269,344 $ 3,567,380 $ 11,836,724 ============= =========== ============= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Liabilities: Mortgage notes payable $ 10,047,550 $(5,081,015) $ 4,966,535 Accrued expenses and other liabilities 621,134 (287,512) 333,622 ------------- ----------- ------------- Total liabilities 10,668,684 (5,368,527) 5,300,157 Partners' capital (deficit) (2,399,340) 8,935,907 6,536,567 ------------- ----------- ------------- Total liabilities and partners' capital (deficit) $ 8,269,344 $ 3,567,380 $ 11,836,724 ============= =========== ============= See accompanying note to pro forma consolidated financial statements. 6 KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS For the Six Months Ended June 30, 2001 (Unaudited) As Reported Pro Forma for on Form 10-Q the for the Six Courtyard Sixth Months Months Ended Pro Forma Ended June 30, 2001 Adjustments June 30, 2001 (Note 1) (Note 1) (Note 1) ------------- ----------- ------------- Revenue: Rental $ 2,109,834 $(1,040,213) $ 1,069,621 Other income 5,594 (292) 5,302 ------------- ----------- ------------- Total revenue 2,115,428 (1,040,505) 1,074,923 ------------- ----------- ------------- Expenses: Operating 587,155 (295,847) 291,308 Maintenance 190,022 (110,112) 79,910 Real estate taxes 226,954 (95,631) 131,323 Management fees 92,301 (45,092) 47,209 General and administrative 158,578 - 158,578 Depreciation and amortization 684,810 (461,998) 222,812 Interest 459,119 (200,980) 258,139 ------------- ----------- ------------- Total expenses 2,398,939 (1,209,660) 1,189,279 ------------- ----------- ------------- Net income (loss) $ (283,511) $ 169,155 $ (114,356) ============= =========== ============= See accompanying note to pro forma consolidated financial statements. 7 KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31, 2000 (Unaudited) As Reported on Form 10-K Pro Forma for the Year for the Year Ended Courtyard Ended December 31, Pro Forma December 31, 2000 Adjustments 2000 (Note 1) (Note 1) (Note 1) ------------- ----------- ------------- Revenue: Rental $ 4,184,217 $(2,069,308) $ 2,114,909 Other income 18,534 (1,346) 17,188 ------------- ----------- ------------- Total revenue 4,202,751 (2,070,654) 2,132,097 ------------- ----------- ------------- Expenses: Operating 1,045,932 (510,751) 535,181 Maintenance 321,259 (185,538) 135,721 Real estate taxes 418,345 (155,910) 262,435 Management fees 185,038 (91,333) 93,705 General and administrative 197,064 - 197,064 Depreciation and amortization 1,444,361 (985,013) 459,348 Interest 870,240 (405,015) 465,225 ------------- ----------- ------------- Total expenses 4,482,239 (2,333,560) 2,148,679 ------------- ----------- ------------- Net income (loss) $ (279,488) $ 262,906 $ (16,582) ============= =========== ============= See accompanying note to pro forma consolidated financial statements. 8 KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES NOTE TO PRO FORMA FINANCIAL STATEMENTS (1) Basis of Presentation The Pro Forma Balance Sheet at June 30, 2001 is based on the historical consolidated Balance Sheet of the Partnership as reported on Form 10-Q for the quarter ended June 30, 2001. The Pro Forma adjustment represents an adjustment to the Partnership's financial statements to show the effect of the sale. The Pro Forma Consolidated Balance Sheet at June 30, 2001 reflects the balance sheet as if the sale had occurred prior to June 30, 2001. The Pro Forma consolidated Statement of Operations for the six months ended June 30, 2001 is based on the historical Consolidated Statement of Operations of the Partnership as reported on Form 10-Q for the six months ended June 30, 2001. The Pro Forma Consolidated Statement of Operations for the year ended December 31, 2000 is based on the historical Consolidated Statement of Operations for the Partnership as presented in the annual report of Form 10-K for the year ended December 31, 2000. The Pro Forma adjustments represent Courtyard's net income for the respective period presented. The Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2001 and for the year ended December 31, 2000 reflect the results of operations of the Partnership as if the Partnership had sold Courtyard prior to January 1, 2000. The Pro Forma Consolidated Statements of Operations do not reflect any gain or loss which may be recognized by the Partnership as a result of the sale. 9 EXHIBIT INDEX Exhibit No. Description 2.1 Purchase and Sale Agreement dated June 12, 2001 by and among Krupp Realty Courtyard Limited Partnership and Home Properties of New York, L.P.