<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                   FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended September 30, 1999              Commission File Number 0-20126



                        COPLEY PENSION PROPERTIES VII;
                       A REAL ESTATE LIMITED PARTNERSHIP
            (Exact name of registrant as specified in its charter)


         Massachusetts                                    04-3035851
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   225 Franklin Street, 25th Fl.
       Boston, Massachusetts                               02110
(Address of principal executive offices)                 (Zip Code)

              Registrant's telephone number, including area code:
                                (617) 261-9000


--------------------------------------------------------------------------------
Former name, former address and former fiscal year if changed since last report


     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 twelve (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>

                         COPLEY PENSION PROPERTIES VII;

                       A REAL ESTATE LIMITED PARTNERSHIP


                                   FORM 10-Q


                      FOR QUARTER ENDED SEPTEMBER 30, 1999


                                     PART I


                             FINANCIAL INFORMATION
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

BALANCE SHEETS

<TABLE>
<CAPTION>

                                                   September 30, 1999  December 31, 1998
                                                      (Unaudited)        (Audited)
                                                   ------------------  -----------------

<S>                                            <C>                 <C>
ASSETS

Real estate investments:
 Joint ventures                                       $ 8,847,120        $ 9,003,008
 Property, net                                          1,852,899          1,871,598
 Property held for disposition,
  net                                                           -          8,825,905
                                                      -----------        -----------
                                                       10,700,019         19,700,511

Cash and cash equivalents                               4,326,268          3,985,403
                                                      -----------        -----------
                                                      $15,026,287        $23,685,914
                                                      ===========        ===========


LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                      $   107,036        $    91,233
Accrued management fee                                     33,543             54,897
Deferred disposition fees                               1,033,108            641,608
                                                      -----------        -----------
TOTAL LIABILITIES                                       1,173,687            787,738
                                                      -----------        -----------


Partners' capital (deficit):
    Limited partners ($456.12 and $742.12 per
        unit, respectively; 160,000 units
        authorized, 42,076 units issued
        and outstanding)                               13,848,388         22,923,845
    General partners                                        4,212            (25,669)
                                                      -----------        -----------
Total partners' capital                                13,852,600         22,898,176
                                                      -----------        -----------
                                                      $15,026,287        $23,685,914
                                                      ===========        ===========
</TABLE>




           (See accompanying notes to unaudited financial statements)
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

STATEMENTS OF OPERATIONS
(Unaudited)

<TABLE>
<CAPTION>
                                     Three Months Ended   Nine Months Ended    Three Months Ended   Nine Months Ended
                                     September 30, 1999   September 30, 1999   September 30, 1998   September 30, 1998
                                     ------------------   ------------------   ------------------   ------------------

<S>                                  <C>                  <C>                  <C>                  <C>
Investment Activity

Property rentals                           $ 75,371           $  636,162           $  520,972           $1,492,123
Property operating expenses                  (3,425)            (245,095)            (197,941)            (569,956)
Depreciation and amortization               (21,506)             (64,516)             (87,249)            (263,553)
                                           --------           ----------           ----------           ----------
                                             50,440              326,551              235,782              658,614

Joint venture earnings                      182,449              733,955              257,074              972,719
                                           --------           ----------           ----------           ----------

 Total real estate operations               232,889            1,060,506              492,856            1,631,333


Gain on sale of property                          -            3,302,085                    -                    -
Gain on sale of joint venture                     -                    -            2,076,945            2,076,945
                                           --------           ----------           ----------           ----------
 Total real estate activity                 232,889            4,362,591            2,569,801            3,708,278

Interest on cash equivalents
 and short-term investments                  54,018              204,521               73,779              189,484
                                           --------           ----------           ----------           ----------

 Total investment activity                  286,907            4,567,112            2,643,580            3,897,762
                                           --------           ----------           ----------           ----------

Portfolio Expenses


Management fees                              33,543              110,381               61,328              191,381
General and administrative                   47,459              136,589               47,476              136,741
                                           --------           ----------           ----------           ----------
                                             81,002              246,970              108,804              328,122
                                           --------           ----------           ----------           ----------

Net Income                                 $205,905           $4,320,142           $2,534,776           $3,569,640
                                           ========           ==========           ==========           ==========

Net income per limited partnership
 unit                                      $   4.85           $   101.65           $    59.64           $    83.99
                                           ========           ==========           ==========           ==========

Cash distributions per limited
 partnership unit                          $   7.15           $   317.34           $   144.47           $   175.41
                                           ========           ==========           ==========           ==========

Number of limited partnership units
 outstanding during the period               42,076               42,076               42,076               42,076
                                           ========           ==========           ==========           ==========

</TABLE>
           (See accompanying notes to unaudited financial statements)
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
(UNAUDITED)

<TABLE>
<CAPTION>


                       Three Months Ended         Nine Months Ended        Three Months Ended        Nine Months Ended
                       September 30, 1999         September 30, 1999       September 30, 1998       September 30, 1998
                      --------------------     -----------------------   ----------------------   ----------------------
                      General      Limited     General      Limited      General      Limited     General      Limited
                      Partners    Partners     Partners     Partners     Partners    Partners     Partners    Partners
                      --------   ---------     --------   ------------   --------   -----------   --------   -----------
<S>                   <C>        <C>           <C>        <C>            <C>        <C>           <C>        <C>


Balance at
  beginning
  of period            $ 5,192   $13,945,385   $(25,669)  $ 22,923,845   $(42,151)  $27,261,836   $(39,350)  $27,539,153

Cash distributions      (3,039)     (300,843)   (13,320)   (13,352,398)    (6,575)   (6,078,720)   (19,725)   (7,380,552)

Net income               2,059       203,846     43,201      4,276,941     25,347     2,509,429     35,696     3,533,944
                      --------   -----------   --------   ------------   --------   -----------   --------   -----------

Balance at end
  of period            $ 4,212   $13,848,388   $  4,212   $ 13,848,388   $(23,379)  $23,692,545   $(23,379)  $23,692,545
                      ========   ===========   ========   ============   ========   ===========   ========   ===========

</TABLE>



          (See accompanying notes to unaudited financial statements)
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>


                                                       Nine Months Ended September 30,
                                                       -------------------------------
                                                            1999           1998
                                                       --------------  ---------------
<S>                                                     <C>               <C>

Net cash provided by operating activities               $  1,205,183      $ 2,003,737
                                                        ------------      -----------

Cash flows from investing activities:
  Net proceeds from sale of joint venture                 12,109,900        5,282,750
  Deferred disposition fee                                   391,500          163,500
  Decrease in short-term
   investments, net                                                -        1,302,726
                                                        ------------      -----------
     Net cash provided by
      investing activities                                12,501,400        6,748,976
                                                        ------------      -----------

Cash flows from financing activity:
  Distributions to partners                              (13,365,718)      (7,400,277)
                                                        ------------      -----------

Net increase in cash
  and cash equivalents                                       340,865        1,352,436

Cash and cash equivalents:
  Beginning of period                                      3,985,403        3,154,152
                                                        ------------      -----------

  End of period                                         $  4,326,268      $ 4,506,588
                                                        ============      ===========
</TABLE>





           (See accompanying notes to unaudited financial statements)
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

In the opinion of management, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the Partnership's financial
position as of September 30, 1999 and December 31, 1998 and the results of its
operations, its cash flows and partners' capital (deficit) for the three and
nine months ended September 30, 1999 and 1998.  These adjustments are of a
normal recurring nature.

See notes to financial statements included in the Partnership's 1998 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements.

Note 1 - Organization and Business
----------------------------------

Copley Pension Properties VII; A Real Estate Limited Partnership (the
"Partnership") is a Massachusetts limited partnership organized for the purpose
of investing primarily in newly constructed and existing income producing real
properties.  It primarily serves as an investment for qualified pension and
profit sharing plans and other entities intended to be exempt from federal
income tax.  The Partnership commenced operations in March 1989.  It acquired
the three real estate investments it currently owns prior to 1991.  It intends
to dispose of its investments within eight to twelve years of their acquisition,
and then liquidate.  The Partnership has engaged AEW Real Estate Advisors, Inc.
(the "Advisor") to provide asset management services.

Note 2 - Real Estate Joint Ventures
-----------------------------------

     The following summarized financial information is presented in the
aggregate for the Partnership's joint ventures:

                            Assets and Liabilities
                            ----------------------
<TABLE>
<CAPTION>

                                    September 30, 1999  December 31, 1998
                                    ------------------  -----------------
<S>                                 <C>                 <C>
Assets
  Real property, at cost less
     accumulated depreciation of
     $3,296,308 and $3,043,811,
     respectively                          $ 9,060,422        $ 9,213,192
     Other                                   1,133,312          1,011,628
                                           -----------        -----------
                                            10,193,734         10,224,820
Liabilities                                    279,803            142,195
                                           -----------        -----------


Net assets                                 $ 9,913,931        $10,082,625
                                           ===========        ===========
</TABLE>
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP



                             Results of Operations
<TABLE>
<CAPTION>


                                Nine Months Ended September 30,
                                      1999        1998
                                   ----------  ----------
<S>                                <C>         <C>

Revenue

  Rental income                    $1,586,773  $3,346,874
  Other                                     -       5,714
                                   ----------  ----------
                                    1,586,773   3,352,588
                                   ----------  ----------
Expenses

  Operating expenses                  355,986   1,039,807
  Depreciation and amortization       271,156     586,907
                                   ----------  ----------
                                      627,142   1,626,714
                                   ----------  ----------

Net income                         $  959,631  $1,725,874
                                   ==========  ==========
</TABLE>

     Liabilities and expenses exclude amounts owed and attributable to the
Partnership and (with respect to one joint venture) its affiliates on behalf of
their various financing arrangements with the joint ventures.

     The Waterford Apartments joint venture sold its real property in August
1998.  The 1998 amounts above include results of operations through that date.

Note 3  Property
----------------

     On April 14, 1995, the Partnership acquired, through a limited partnership
it controls, a 174-unit apartment complex in Sherman Oaks, California, known as
Regency Court Apartments, for a total price of $9,605,021.  The purchase and
sale agreement required the seller to supplement the monthly rental income
generated from the property to the extent such income was less than $125,000 per
month during the one-year period ended April 13, 1996, with such supplement not
to exceed $300,000 in total.  The supplemental rental was $115,323, which has
been applied to reduce the purchase price in 1995 and 1996.

   The buildings and improvements were being depreciated over 30 years using the
straight-line method.
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP



Note 3  Property  (continued)
------------------------------


  On March 25, 1999, the Partnership sold the Regency Court Apartments to an
unaffiliated third party (the "Buyer") for a gross sale price of $13,050,000.
The Partnership received net proceeds of $12,501,400 and recognized a gain of
$3,302,085 ($77.69 per limited partnership unit).  On April 29, 1999, the
Partnership made a capital distribution of $12,033,736 ($286 per limited
partnership unit) from the proceeds of the sale.

 The following is a summary of the Partnership's investment in property
(one at September 30, 1999 and two at December 31, 1998):
<TABLE>
<CAPTION>

                                 September 30, 1999  December 31, 1998
                                 ------------------  -----------------
<S>                              <C>                 <C>

Land                                 $  244,346         $   244,346
Buildings and improvements            1,976,977           1,976,977
Accumulated depreciation               (475,146)           (415,836)
Other net assets                        106,722              66,111
Property held for disposition                --           8,825,905
                                     ----------         -----------
                                     $1,852,899         $10,697,503
                                     ==========         ===========
</TABLE>



Note 4 - Subsequent Event
-------------------------

Distributions of cash from operations relating to the quarter ended September
30, 1999 were made on October 28, 1999 in the aggregate amount of $339,158
($7.98 per limited partnership unit).  In addition, a capital distribution of
$79,944 ($1.90 per limited partnership unit) from original working capital was
also made at this time.
<PAGE>

COPLEY PENSION PROPERTIES VII;

A REAL ESTATE LIMITED PARTNERSHIP


Management's Discussion and Analysis of Financial Condition
-----------------------------------------------------------
and Results of Operations
-------------------------

Liquidity and Capital Resources

  The Partnership's offering of units of limited partnership interest was
completed as of September 30, 1990.  A total of 42,076 units were sold.  The
Partnership received proceeds of $36,522,542, net of selling commissions and
other offering costs, which have been used for investment in real estate and the
payment of related acquisition costs, or retained as working capital reserves.
The Partnership made seven real estate investments, one of which was sold in
each of 1991, 1994, 1998 and 1999.  Through September 30, 1999, capital of
$22,884,295 ($543.88 per limited partnership unit) has been returned to the
limited partners as a result of sales and the reduction of cash reserves.

  At September 30, 1999, the Partnership had $4,326,268 in cash and cash
equivalents, of which $339,158 was used for operating cash distributions and
$79,944 was used for capital distributions to partners on October 28, 1999; the
remainder is being retained as working capital reserves. The source of future
liquidity and cash distributions to partners will primarily be cash generated by
the Partnership's invested cash and cash equivalents and real estate
investments, and proceeds from the sale of such investments. Distributions of
cash from operations relating to the first quarter of 1999 were made at an
annualized rate of 6% on the adjusted capital contribution of $742.12.  Cash
distributions relating to the second quarter of 1999 were made at an annualized
rate of 5.25% on the weighted average adjusted capital contribution of $545.10.
Cash distributions relating to the third quarter of 1999 were made at an
annualized rate of 7.00% on the weighted average adjusted capital contribution
of $456.12. Distributions of cash from operations relating to the first two
quarters of 1998 were made at an annualized rate of 7% on the adjusted capital
contribution of $884. Cash distributions relating to the third quarter of 1998
were made at an annualized rate of 7.00% on the weighted average adjusted
capital contribution of $833.83.  The fluctuation in distribution rates are a
result of both the sales of the Partnership's real estate investments and the
timing of cash flow from the Partnership's real estate investments held at the
time of the distributions.

  The carrying value of real estate investments in the financial statements is
at depreciated cost, or if the investment's carrying value is determined not to
be recoverable through expected undiscounted future cash flows, the carrying
value is reduced to estimated fair market value.  The fair market value of such
investments is further reduced by estimated cost of sale for properties held for
sale.  Carrying value may be greater or less than current appraised value.  At
September 30, 1999, the appraised value of each real estate investment exceeded
its carrying value; the aggregate excess was approximately $4,500,000.  The
current appraised value of real estate investments has been estimated by the
managing general partner and is generally based on a correlation of traditional
appraisal approaches performed by the Advisor and independent appraisers.
Because of the subjectivity inherent in the valuation process, the estimated
current appraised value may differ significantly from that which could be
realized if the real estate were actually offered for sale in the marketplace.
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

Year 2000 Readiness Disclosure
------------------------------

  The Year 2000 Issue is a result of computer programs being written using two
digits rather than four to define the applicable year.  Computer programs that
have date-sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions or engage in normal
business operations.

     The Partnership relies on AEW Capital Management L.P. ("AEW Capital
Management"), the parent of AEW Real Estate Advisors, Inc., to generate
financial information and to provide other services, which are dependent on the
use of computers.  The Partnership has obtained assurances from AEW Capital
Management that:

     . AEW Capital Management has developed a Year 2000 Plan (the "Plan")
       consisting of five phases: inventory, assessment, testing,
       remediation/repair and certification.

     . As of September 30, 1998, AEW Capital Management had completed the
       inventory and assessment phases of this Plan and had commenced the
       testing and remediation/repair of internal systems.

     . AEW Capital Management concluded the internal testing, remediation/repair
       and certifications of its Plan in June 1999.

     . AEW Capital Management successfully participated in industry-wide testing
       in August 1999.

     . AEW Capital Management believes it is ready for Year 2000.  AEW Capital
       Management has advised the Partnership that being ready means that AEW
       Capital Management has tested its internal mission critical systems and
       software applications, and based upon testing conducted, AEW Capital
       Management believes that such systems and applications are prepared to
       process dates correctly through the Year 2000.

     Based upon these assurances, the Partnership has determined that it is not
necessary for it to develop a Year 2000 contingency plan.

  The Partnership also relies on joint venture partners and/or property managers
to supply financial and other data with respect to its real properties.  The
Partnership is in the process of surveying these third party providers and
assessing their compliance with Year 2000 requirements.  To date, the
Partnership is not aware of any problems that would materially impact its
results of operations, liquidity or capital resources.  However, the Partnership
has not yet obtained written assurances that these providers would be Year 2000
compliant.

     The inability of one of these providers to complete its Year 2000
resolution process could materially impact the Partnership.  In addition, the
Partnership is also subject to external forces that might generally affect
industry and commerce, such as utility or transportation company Year 2000
compliance failures and related service interruptions. Given the nature of its
operations, the Partnership will not incur any costs associated with Year 2000
compliance.  All such costs are borne by AEW Capital Management and the property
managers.
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP


Results of Operations

     Form of Real Estate Investment

     The Drilex is a wholly-owned property.  The remaining real estate
investments, Parkmoor Plaza and Prentiss Copystar, are structured as joint
ventures.

     Operating Factors

     The Drilex property was 100% leased to a single tenant at September 30,
1999 and 1998.  The Prentiss Copystar property was 100% leased through September
30, 1999 as it had been at September 30, 1998.  However, due to the sole
tenant's lease expiration and vacancy on this date, the property was unoccupied
at September 30, 1999.

     Parkmoor Plaza was 100% occupied at September 30, 1999, as it has been
since the second quarter of 1995.

     In addition, the Regency Court Apartments investment was sold on March 25,
1999.  The Partnership recognized a gain $3,302,085. Regency Court was 97%
leased at the time of sale.

     Investment Results

     For the three and nine months ended September 30, 1999, operating results
from real estate operations were $232,889 and $1,060,506, respectively, compared
to $492,856 and $1,631,333 for the comparable periods in 1998.  The decreases of
$259,967 and $570,827 for the comparative three and nine month periods are
primarily due to decreases in joint venture earnings and property operations as
a result of the sales of Waterford Apartments in August 1998 and Regency Court
Apartments in March 1999.

     Interest on cash equivalents and short-term investments for the three and
nine months ended September 30, 1999, was $54,018 and $204,521, respectively,
compared to $73,779 and $189,484 for the same periods in 1998. The three month
decrease of $19,761 is primarily due to lower average investment balances due to
the sale of Waterford Apartments in August 1998.  The overall nine month
increase of $15,037 is primarily due to higher average investment balances in
1999 as a result of the temporary investment of proceeds from the sale of
Regency Court Apartments in March 1999, which were subsequently distributed in
April 1999.

     Operating cash flow decreased $798,554 between the nine months ended
September 30, 1998 and September 30, 1999.  The decrease is primarily due to a
decrease in distributions from joint ventures and the decrease in operations,
discussed above.

Portfolio Expenses

     The Partnership management fee is 9% of distributable cash flow from
operations after any increase or decrease in working capital reserves as
determined by the managing general partner.  General and administrative expenses
primarily consist of real estate appraisal, printing, legal, accounting and
investor servicing fees.
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

    For the three and nine months ended September 30, 1999, management fees were
$33,543 and $110,381, respectively, compared to $61,328 and $191,381 for the
comparable periods in 1998.  The decreases in management fees for the respective
three and nine month periods are due to lower operational distributions as a
result of the sales of Waterford Apartments in 1998 and Regency Court Apartments
in 1999.  General and administrative expenses for the respective three and nine
month periods ended September 30, 1999 and 1998 were stable.




<PAGE>

                         COPLEY PENSION PROPERTIES VII;

                       A REAL ESTATE LIMITED PARTNERSHIP


                                   FORM 10-Q


                      FOR QUARTER ENDED SEPTEMBER 30, 1999


                                    PART II


                               OTHER INFORMATION



Item 6.   Exhibits and Reports on Form 8-K

          a.  Exhibits:   None.

          b.  Reports on Form 8-K:  No Current Reports on Form 8-K
              were filed during the quarter ended September 30, 1999.
<PAGE>

                                   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.



                             COPLEY PENSION PROPERTIES VII;
                             A REAL ESTATE LIMITED PARTNERSHIP
                             (Registrant)



November 12, 1999
                              /s/ Alison Husid Cutler
                              ------------------------------------
                                Alison Husid Cutler
                                President, Chief Executive Officer
                                And Director of Managing General
                                Partner, Seventh Copley Corp.



November 12, 1999
                             /s/ Karin J. Lagerlund
                             --------------------------------------
                               Karin J. Lagerlund
                               Principal Financial and Accounting
                               Officer of Managing General Partner,
                               Seventh Copley Corp.