<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 June 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 JUNE 30, 1999


                                     PART I


                             FINANCIAL INFORMATION


                                       2
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP


BALANCE SHEETS

<TABLE>
<CAPTION>
                                              June 30, 1999      December 31, 1998
                                               (Unaudited)           (Audited)
                                               ------------         ------------

<S>                                            <C>                  <C>
Assets

Real estate investments:
    Joint ventures                             $  8,938,535         $  9,003,008
    Property, net                                 1,876,313            1,871,598
    Property held for disposition, net                 --              8,825,905
                                               ------------         ------------
                                                 10,814,848           19,700,511


Cash and cash equivalents                         4,270,452            3,985,403
                                               ------------         ------------
                                               $ 15,085,300         $ 23,685,914
                                               ============         ============


Liabilities and Partners' Capital

Accounts payable                               $     71,560         $     91,233
Accrued management fee                               30,055               54,897
Deferred disposition fees                         1,033,108              641,608
                                               ------------         ------------
Total liabilities                                 1,134,723              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)                13,945,385           22,923,845
    General partners                                  5,192              (25,669)
                                               ------------         ------------
Total partners' capital                          13,950,577           22,898,176
                                               ------------         ------------
                                               $ 15,085,300         $ 23,685,914
                                               ============         ============
</TABLE>

           (See accompanying notes to unaudited financial statements)

                                       3
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP


STATEMENTS OF OPERATIONS
(Unaudited)

<TABLE>
<CAPTION>
                                    Three Months Ended     Six Months Ended   Three Months Ended   Six Months Ended
                                       June 30, 1999         June 30, 1999       June 30, 1998       June 30, 1998
                                       -------------         -------------       -------------       -------------
<S>                                     <C>                  <C>                  <C>                  <C>
Investment Activity

Property rentals                        $    72,555          $   560,791          $   487,966          $   971,151
Property operating expenses                 (51,844)            (241,670)            (204,285)            (372,015)
Depreciation and amortization               (21,505)             (43,010)             (88,152)            (176,304)
                                        -----------          -----------          -----------          -----------
                                               (794)             276,111              195,529              422,832

Joint venture earnings                      276,491              551,506              358,842              715,645
                                        -----------          -----------          -----------          -----------

   Total real estate operations             275,697              827,617              554,371            1,138,477

   Gain on sale of property                    --              3,302,085                 --                   --
                                        -----------          -----------          -----------          -----------
  Total real estate activity                275,697            4,129,702              554,371            1,138,477


Interest on cash equivalents
   and short-term investments                95,009              150,503               58,227              115,705
                                        -----------          -----------          -----------          -----------

   Total investment activity                370,706            4,280,205              612,598            1,254,182
                                        -----------          -----------          -----------          -----------
</TABLE>

                                       4
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

<TABLE>
<CAPTION>
                                        Three Months Ended  Six Months Ended   Three Months Ended  Six Months Ended
                                          June 30, 1999       June 30, 1999       June 30, 1998      June 30, 1998
                                           -------------     -------------       -------------      -------------
<S>                                         <C>                <C>                <C>                <C>
Portfolio Expenses

Management fees                                 30,055             76,838             65,026            130,053
General and administrative                      34,602             89,130             37,540             89,265
                                            ----------         ----------         ----------         ----------
                                                64,657            165,968            102,566            219,318
                                            ----------         ----------         ----------         ----------


Net Income                                  $  306,049         $4,114,237         $  510,032         $1,034,864
                                            ==========         ==========         ==========         ==========

Net income per limited partnership
   unit                                     $     7.20         $    96.80         $    12.00         $    24.35
                                            ==========         ==========         ==========         ==========

Cash distributions per limited
   partnership unit                         $   297.13         $   310.19         $    15.47         $    30.94
                                            ==========         ==========         ==========         ==========

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)

                                       5
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP


STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)


<TABLE>
<CAPTION>
                                          Three Months Ended                                Six Months Ended
                                             June 30, 1999                                    June 30, 1999
                                -------------------------------------             -------------------------------------
                                   General                 Limited                  General                   Limited
                                  Partners                 Partners                 Partners                 Partners
                                ------------             ------------             ------------             ------------
<S>                             <C>                      <C>                      <C>                      <C>
Balance at beginning            $      6,862             $ 26,144,438             $    (25,669)            $ 22,923,845
     of period

Cash distributions                    (4,730)             (12,502,042)                 (10,281)             (13,051,555)

Net income                             3,060                  302,989                   41,142                4,073,095
                                ------------             ------------             ------------             ------------

Balance at end
     of period                  $      5,192             $ 13,945,385             $      5,192             $ 13,945,385
                                ============             ============             ============             ============

<CAPTION>
                                           Three Months Ended                              Six Months Ended
                                             June 30, 1998                                   June 30, 1998
                                -------------------------------------             -------------------------------------
                                  General                   Limited                  General                  Limited
                                  Partners                 Partners                 Partners                 Partners
                                ------------             ------------             ------------             ------------
<S>                             <C>                      <C>                      <C>                      <C>
Balance at beginning            $    (40,677)            $ 27,407,821             $    (39,350)            $ 27,539,153
     of period

Cash distributions                    (6,575)                (650,916)                 (13,150)              (1,301,832)

Net income                             5,101                  504,931                   10,349                1,024,515
                                ------------             ------------             ------------             ------------

Balance at end
     of period                  $    (42,151)            $ 27,261,836             $    (42,151)            $ 27,261,836
                                ============             ============             ============             ============
</TABLE>



           (See accompanying notes to unaudited financial statements)

                                       6
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE>
<CAPTION>
                                                      Six Months Ended June 30,
                                                  ----------------------------------
                                                      1999                  1998
                                                  ------------          ------------
<S>                                               <C>                   <C>
Net cash provided by operating activities         $    845,485          $  1,429,965
                                                  ------------          ------------
Cash flows from investing activities:
    Net proceeds from sale of investment            12,109,900                  --
    Deferred disposition fees                          391,500                  --
    Increase in short-term
       investments, net                                   --               1,302,726
                                                  ------------          ------------
          Net cash provided by
          investing activities                      12,501,400             1,302,726
                                                  ------------          ------------

Cash flows from financing activity:
    Distributions to partners                      (13,061,836)           (1,314,982)
                                                  ------------          ------------

Net increase in cash
    and cash equivalents                               285,049             1,417,709

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

    End of period                                 $  4,270,452          $  4,571,861
                                                  ============          ============
</TABLE>




           (See accompanying notes to unaudited financial statements)


                                       7
<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 June 30, 1999 and December 31, 1998 and the results of
its operations, its cash flows and partners' capital (deficit) for the three and
six month periods ended June 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. The Partnership
intends to dispose of its investments within eight to twelve years of their
acquisition, and then liquidate; however, the Managing General partner could
extend the investment period if it is considered to be in the best interest of
the limited partners. The Partnership has engaged AEW Real Estate Advisors, Inc.
(the "Advisor") to provide asset management advisory services.

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

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

<TABLE>
<CAPTION>
                                                 Assets and Liabilities
                                            ----------------------------------
                                            June 30, 1999    December 31, 1998
                                            -------------    -----------------
<S>                                          <C>                 <C>
Assets
     Real property, at cost less
         accumulated depreciation of
         $3,211,737 and $3,043,811
         respectively                        $ 9,045,266         $ 9,213,192
     Other                                     1,072,808           1,011,628
                                             -----------         -----------
                                              10,118,074          10,224,820

Liabilities                                      179,460             142,195
                                             -----------         -----------

Net assets                                   $ 9,938,614         $10,082,625
                                             ===========         ===========
</TABLE>

                                       8
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

                              Results of Operations
                              ---------------------

<TABLE>
<CAPTION>
                                             Six Months Ended June 30,
                                              1999               1998
                                           ----------         ----------
<S>                                        <C>                <C>
Revenue

     Rental income                         $1,061,482         $2,545,519
     Other                                       --                4,873
                                           ----------         ----------
                                            1,061,482          2,550,392
                                           ----------         ----------

Expenses

     Operating expenses                       230,339            749,188
     Depreciation and amortization            180,365            451,428
                                           ----------         ----------
                                              410,704          1,200,616
                                           ----------         ----------

Net income                                 $  650,778         $1,349,776
                                           ==========         ==========
</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.

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.

        On March 25, 1999, the Partnership sold the Regency Court Apartments to
an unaffiliated third party (the "Buyer") for sale price of $13,050,000. The
terms of the sale were determined by arm's length negotiation between the Buyer
and the Partnership. 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.

                                       9
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

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

<TABLE>
<CAPTION>
                                     June 30, 1999        December 31, 1998
                                     -------------        -----------------

<S>                                   <C>                   <C>
Land                                  $    244,346          $    244,346
Buildings and improvements               1,976,977             1,976,977
Accumulated depreciation                  (455,376)             (415,836)
Other net liabilities                      110,366                66,111
Property held for disposition                 --               8,825,905
                                      ------------          ------------
                                      $  1,876,313          $ 10,697,503
                                      ============          ============
</TABLE>


Note 4 - Subsequent Events
-------------------------

Distributions of cash from operations relating to the quarter ended June 30,
1999 were made on July 29, 1999 in the aggregate amount of $303,882 ($7.15 per
limited partnership unit).

                                      10
<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 1991, 1994, 1998 and 1999. Through June 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 June 30, 1999, the Partnership had $4,270,452 in cash and cash
equivalents, of which $303,882 was used for operating cash distributions to
partners on July 29, 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. 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. The distribution rate was lower in 1999
due to sales in 1998 and 1999.

         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 June 30, 1999, the appraised value of each real estate
investment exceeded its carrying value; the aggregate excess was approximately
$4,400,000. 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.

                                      11
<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.

        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 Partnership is developing a contingency plan in the event of a
particular provider or system not being 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.

                                      12
<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 Partnership's two industrial properties, Drilex and Prentiss
Copystar, were 100% leased, each by a single tenant, at June 30, 1999, as they
were at June 30, 1998.

         Occupancy at Parkmoor Plaza was 100% at June 30, 1999, where it has
remained since the second quarter of 1995.

         In addition, the Regency Court Apartments investment was sold on March
25, 1999. The Partnership recognized a gain of approximately $3,302,000. Regency
Court was 97% leased at the time of sale. At December 31, 1998 it was 96%
leased.

         Investment Results

         For the three and six months ended June 30, 1999, operating results
from real estate operations were $275,697 and $827,617, respectively, compared
to $554,371 and $1,138,477 for the comparable periods in 1998. The decreases of
$278,674 and $310,860 for the comparative three and six month periods are
primarily due to a decrease in joint venture earnings and property operations as
a result of the sales of Waterford Apartments on August 7, 1998 and Regency
Court Apartments on March 25, 1999.

         Interest on cash equivalents and short-term investments for the three
and six months ended June 30, 1999, was $95,009 and $150,503, respectively,
compared to $58,227 and $115,705 for the same periods in 1998. The increases of
approximately $36,800 and $35,000 for the comparative three and six month
periods are primarily due to higher average investment balances in 1999, as a
result of the receipt of sale proceeds from Regency Court Apartments.

         Operating cash flow decreased $584,480 between the six months ended
June 30, 1998 and June 30, 1999. The decrease is primarily due to the decrease
in distributions from joint ventures and a decrease in property working capital.

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.

                                      13
<PAGE>

COPLEY PENSION PROPERTIES VII;
A REAL ESTATE LIMITED PARTNERSHIP

        For the three and six months ended June 30, 1999, management fees were
$30,055 and $76,838, respectively, compared to $65,026 and $130,053 for the
comparable periods in 1998. The decreases in management fees for the respective
three and six 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 three and six months ended
June 30, 1999 were $34,602 and $89,130, respectively, compared to $37,540 and
$89,265 for the same periods in 1998. General and administrative expenses
remained relatively unchanged between the respective periods.

                                      14
<PAGE>

                         COPLEY PENSION PROPERTIES VII;

                        A REAL ESTATE LIMITED PARTNERSHIP


                                    FORM 10-Q


                         FOR QUARTER ENDED JUNE 30, 1999


                                     PART II


                                OTHER INFORMATION





Item 6.  Exhibits and Reports on Form 8-K

         a.   Exhibits:   None.

         b.   Reports on Form 8-K: During the quarter ended June
              30, 1999, one Current Report on Form 8-K was filed on
              April 8, 1999 reporting on Item No. 2 (Acquisition or
              Disposition of Assets) and Item No. 7 (Financial
              statements and Exhibits), relating in both cases to
              the March 25, 1999 sale of Regency Court Apartments.

                                      15
<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)



August 13, 1999
                                     /s/ Alison Husid Cutler
                                     -------------------------------
                                        Alison Husid Cutler
                                        President, Chief Executive Officer
                                        And Director of Managing General
                                        Partner, Seventh Copley Corp.



August 13, 1999
                                    /s/ Karin J. Lagerlund
                                    --------------------------------
                                       Karin J. Lagerlund
                                       Principal Financial and Accounting
                                       Officer of Managing General Partner,
                                       Seventh Copley Corp.

                                      16