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) January 30, 1998
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.)
470 Atlantic Avenue, Boston, Massachusetts
02210
(Address of principal executive offices)
(Zip Code)
(617) 423-2233
(Registrant's telephone number, including
area code)
Item 2. Acquisition or Disposition of Assets
Disposition of Nora Corners Shopping
Center
On December 2, 1997, Berkshire Realty
Enterprise Limited Partnership, an
affiliate of the General Partners, as
agent for Krupp Realty Limited
Partnership-VII (the "Partnership"),
entered into an Agreement of Sale to
sell Nora Corners, a shopping center
containing 89,432 leasable square
feet, located in Indianapolis,
Indiana, to Kejack, Inc. and its
permitted assigns, which are
unaffiliated third parties. The
property was included in a package
with thirteen other properties owned
by affiliates of the General
Partners. The total selling price of
the fourteen properties was
$138,000,000, of which the
Partnership received $6,604,300, less
the assumption of the first mortgage
note payable of $4,084,037 and its
share of the closing costs. The
transaction was consummated on
January 30, 1998.
Item 7. Financial Statements, Proforma
Financial Information and Exhibits
(a) Financial Statements of Business
Acquired
Response: Not applicable
(b) Pro Forma Financial Information
On January 30, 1998, Krupp Realty
Limited Partnership-VII (the
"Partnership") sold Nora Corners
Shopping Center ("Nora") to Kejack,
Inc. and its permitted assigns, which
are unaffiliated third parties. Nora
was included in a package with
thirteen other properties owned by
affiliates of the General Partners.
The total selling price of the
fourteen properties was $138,000,000,
of which the Partnership received
$6,604,300 for the sale of Nora, less
the assumption of the first mortgage
note payable of $4,084,037 and its
share of its closing costs.
The Partnership has presented in this
Form 8-K, a Pro Forma Consolidated
Balance Sheet at September 30, 1997
and Pro Forma Consolidated Statements
of Operations for the nine months
ended September 30, 1997 and for the
year ended December 31, 1996. See
Note 1 to the Pro Forma Consolidated
Financial Statements for further
discussion of this matter.
KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1997
(unaudited)
ASSETS
Actual at Pro Forma
September 30, Pro Forma September 30,
1997 Adjustments 1997
(Note 1) (Note 1) (Note 1)
Real estate assets:
Multi-family apartment complex,
less accumulated depreciation
of $11,142,891 $ 8,655,516 $ 8,655,516
Retail centers, less accumulated
depreciation of $3,970,537 5,748,589 (5,748,589) -
Total real estate assets 14,404,105 (5,748,589) 8,655,516
Cash and cash equivalents 2,707,271 (18,919) 2,688,352
Cash restricted for tenant security
deposits 28,857 28,857
Prepaid expenses and other assets 588,951 (236,685) 352,266
Deferred expenses, net of accumulated
amortization of $120,533 301,992 (86,947) 215,045
Total assets $ 18,031,176$ (6,091,140)11,940,036
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage notes payable $ 14,539,741$ (4,098,920)$10,440,821
Accrued expenses and other
liabilities 713,939 (141,207) 572,732
Total liabilities 15,253,680 (4,240,127) 11,013,553
Partners' equity 2,777,496 (1,851,013) 926,483
Total liabilities and
Partners' equity $ 18,031,176$ (6,091,140)$11,940,036
See accompanying note to
pro forma consolidated financial statements.
KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1997
(unaudited)
As Reported
for the Nine
Months Ended Pro Forma for the
September 30, Pro FormaNine
Months Ended
1997 Adjustments September 30, 1997
(Note 1) (Note 1) (Note 1)
Revenue:
Rental $ 3,518,036 $ (775,248) $ 2,742,788
Interest income 51,359 (4,198) 47,161
Total revenue 3,569,395 (779,446) 2,789,949
Expenses:
Operating 857,714 (52,492) 805,222
Maintenance 269,575 (50,441) 219,134
Real estate taxes 346,431 (85,811) 260,620
General and administrative 104,726 104,726
Management fees 153,972 (31,947) 122,025
Depreciation and
amortization 1,045,461 (303,501) 741,960
Interest 849,510 (278,294) 571,216
Total expenses 3,627,389 (802,486) 2,824,903
Net income (loss) $ (57,994) $ 23,040 $ (34,954)
See accompanying note to
pro forma consolidated financial statements.
KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(unaudited)
As Reported for Pro Forma for
the Year Ended Pro Forma the Year Ended
December 31, 1996 Adjustments
December 31, 1996
(Note 1) (Note 1)
(Note 1)
Revenue:
Rental $ 4,614,568 $ (1,055,361)$ 3,559,207
Interest income 73,947 (4,392) 69,555
Total revenue 4,688,515 (1,059,753) 3,628,762
Expenses:
Operating 1,123,377 (64,434) 1,058,943
Maintenance 366,051 (78,224) 287,827
Real estate taxes 466,876 (126,787) 340,089
General and
administrative 98,84 78,847
Management fees 193,484 (42,716) 150,768
Depreciation and
amortization 1,325,765 (403,153) 922,612
Interest 1,103,602 (375,347) 728,255
Total expenses 4,678,002 1,090,661) 3,587,341
Net income $ 10,513 $ 30,908 $ 41,421
See accompanying note to
pro forma consolidated financial statements.
KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES
NOTE TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(1)Basis of Presentation
The Pro Forma Consolidated Balance Sheet at
September 30, 1997 is based on the historical
Consolidated Balance Sheet of the Partnership
as reported on Form 10-Q for the quarter ended
September 30, 1997. 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 September 30, 1997 reflects the
balance sheet as if the sale had occurred
prior to September 30, 1997.
The Pro Forma Consolidated Statement of
Operations for the nine months ended September
30, 1997 is based on the historical
Consolidated Statement of Operations of the
Partnership as reported on Form 10-Q for the
nine months ended September 30, 1997. The Pro
Forma Consolidated Statement of Operations for
the year ended December 31, 1996 is based on
the historical Consolidated Statement of
Operations for the Partnership as presented in
the annual report on Form 10-K for the year
ended December 31, 1996. The Pro Forma
adjustments represent Nora's net income for
the respective period presented. The Pro
Forma Consolidated Statements of Operations
for the nine months ended September 30, 1997
and for the year ended December 31, 1996
reflect the results of operations of the
Partnership as if the Partnership had sold
Nora prior to January 1, 1996. 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.
(c)Exhibits
1.Agreement of Sale dated December 2, 1997
between Berkshire Realty Enterprise Limited
Partnership, agent for Krupp Realty Limited
Partnership-VII, and Kejack, Inc. and its
permitted assigns [Exhibit 1 to Registrant's
Report on Form 8-K dated February 2, 1998
(File No. 0-14377)].*
2.First Amendment to Agreement of Sale dated
December 12, 1997 between Berkshire Realty
Enterprise Limited Partnership, agent for
Krupp Realty Limited Partnership-VII, and
Kejack Inc. and its permitted assigns [Exhibit
2 to Registrant's Report on Form 8-K dated
February 2, 1998 (File No. 0-14377)].*
3.Second Amendment to Agreement of Sale dated
December 14, 1997 between Berkshire Realty
Enterprise Limited Partnership, agent for
Krupp Realty Limited Partnership-VII, and
Kejack, Inc. and its permitted assigns
[Exhibit 3 to Registrant's Report on Form 8-K
dated February 2, 1998 (File No. 0-14377)].*
4.Side letter dated December 17, 1997 from
William S. Gee on behalf of Kejack, Inc. and
its permitted assigns to Eli Rubenstein, Esq.
on behalf of Berkshire Realty Enterprises
Limited Partnership, agent for Krupp Realty
Limited Partnership-VII [Exhibit 4 to
Registrant's Report on Form 8-K dated February
2, 1998 (File No. 0-14377)].*
5.Side letter dated January 6, 1998 from
William S. Gee on behalf of Kejack, Inc. and
its permitted assigns to Eli Rubenstein, Esq.
on behalf of Berkshire Realty Enterprise
Limited Partnership, agent for Krupp Realty
Limited Partnership-VII [Exhibit 5 to
Registrant's Report on Form 8-K dated February
2, 1998 (File No. 0-14377)].*
*
Incorporated by reference.
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/Wayne H. Zarozny
Wayne H. Zarozny
Treasurer and Chief
Accounting Officer of the
Krupp Corporation, a General
Partner.
DATE: March 31, 1998