Rule 424(b)(3)
No. 333-9943
CNL HOSPITALITY PROPERTIES, INC.
(formerly known as CNL American Realty Fund, Inc.)
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 21, 1998. Capitalized terms used in this Supplement have
the same meaning as in the Prospectus unless otherwise stated herein.
Information as to proposed properties for which the Company has
received initial commitments is presented as of May 27, 1998, and all references
to commitments should be read in that context. Proposed properties for which the
Company receives initial commitments, as well as property acquisitions that
occur after May 27, 1998, will be reported in a subsequent Supplement.
THE OFFERING
As of October 15, 1997, the Company had received aggregate subscription
proceeds of $2,774,580, which exceeded the minimum offering amount of
$2,500,000, and $2,652,330 of the funds, excluding funds from Pennsylvania
investors, were released from escrow. As of December 4, 1997, the Company had
received aggregate subscription proceeds of $8,253,530, and funds from
Pennsylvania investors were released from escrow. As of May 27, 1998, the
Company had received total subscription proceeds of $22,189,886 (2,218,989
Shares), including $4,521 (452 Shares) issued pursuant to the Reinvestment Plan,
from 1,113 stockholders in connection with this offering. As of May 27, 1998,
the Company had approximately $18,000,000 available to invest in Properties
following deduction of Selling Commissions, marketing support and due diligence
expense reimbursement fees, Organizational and Offering Expenses and Acquisition
Fees.
BUSINESS
GENERAL
Effective June 3, 1998, the Company changed its name to CNL Hospitality
Properties, Inc. The Board of Directors has taken this action in order to
provide better name recognition of the Company in the context of its business.
PROPERTY ACQUISITIONS
As of May 27, 1998, the Company had not acquired any Properties.
PENDING INVESTMENTS
As of May 27, 1998, the Company had initial commitments to acquire two
hotel properties. The acquisition of each of these properties is subject to the
fulfillment of certain conditions, including, but not limited to, a satisfactory
environmental survey and property appraisal. In order to acquire these
properties, the Company must obtain additional funds through the receipt of
additional offering proceeds and/or debt financing. There can be no assurance
that any or all of the conditions will be satisfied or, if satisfied, that one
or both of these properties will be acquired by the Company. If acquired, the
leases of both properties are expected to be entered into on substantially the
same terms described in the section of the Prospectus entitled "Business -
Description of Property Leases."
Set forth below are summarized terms expected to apply to the leases
for each of the properties. More detailed information relating to a property and
its related lease will be provided at such time, if any, as the property is
acquired.
June 3, 1998 Prospectus Dated April 21, 1998
<PAGE>
<TABLE>
<CAPTION>
Estimated Purchase Lease Term and Minimum Annual
Property Price Renewal Options Rent Percentage Rent Option to Purchase
- -------- ------------------ --------------- -------------- --------------- ------------------
<S> <C>
Residence Inn $15.6 million 15 years; four five- 10.50% of the Company's (1) None
Buckhead year renewal options total cost to purchase the
Atlanta, GA property; increases to 10.75%
Existing hotel after the first lease year and
(the "Buckhead after every year thereafter
Property") during the lease term
Residence Inn $11.4 million 15 years; four five- 10.50% of the Company's (1) None
Gwinnett year renewal options total cost to purchase the
Duluth, GA property; increases to 10.75%
Existing hotel after the first lease year and
(the "Gwinnett after every year thereafter
Property") during the lease term
</TABLE>
- --------------------------
FOOTNOTES:
(1) Percentage rent for the Buckhead and Gwinnett Properties shall equal
15% of the aggregate amount of all revenues exceeding a to be agreed
upon threshold.
-2-
<PAGE>
