CORPORATE PROPERTY ASSOCIATES 14 INC, S-11/A, 1999-11-16

CORPORATE PROPERTY ASSOCIATES 14 INC
S-11/A, 1999-11-16
REAL ESTATE INVESTMENT TRUSTS

Previous: T&W FINANCIAL CORP, 10-Q, 1999-11-16

Next: FRENCH HOLDINGS INC, 424B3, 1999-11-16

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 16, 1999

REGISTRATION NO. 333-76761

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 1

------------------------
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN GOVERNING INSTRUMENT)

50 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

------------------------

H. AUGUSTUS CAREY
CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
50 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
(NAME AND ADDRESS OF AGENT FOR SERVICE)

------------------------

COPY TO:

MICHAEL B. POLLACK, ESQUIRE
REED SMITH SHAW & MCCLAY LLP
2500 ONE LIBERTY PLACE
PHILADELPHIA, PENNSYLVANIA 19103
------------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to rule 415 under the Securities Act of
1933 check the following box: [X]
------------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF SECURITIES AMOUNT BEING OPENING PRICE AGGREGATE AMOUNT OF
BEING REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock..................... 40,000,000 $10.00 $400,000,000 Previously Paid
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

CPA LOGO WPCAREY LOGO

CORPORATE PROPERTY ASSOCIATES 14
INCORPORATED
40,000,000 shares
$10.00 per share
Minimum Investment:

250 Shares, 200 shares for IRAs and Keogh Plans

(Minimum Investment may be higher in certain states)

Corporate Property Associates 14 Incorporated is a real estate investment
trust. We own 20 properties located in 14 states leased to 16 tenants. We are
focused on investing in and owning net leased industrial and commercial real
property. This prospectus describes an investment in the shares of CPA(R):14.
Carey Property Advisors L.P. manages our business.

We are offering and selling 40,000,000 shares of common stock with this
prospectus for $10 each. You must purchase at least 250 shares for $2,500,
except in special circumstances described in this prospectus.

SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR A DISCUSSION OF CERTAIN FACTORS
THAT YOU SHOULD CONSIDER BEFORE YOU INVEST IN THE COMMON STOCK BEING SOLD WITH
THIS PROSPECTUS.

In particular, you should consider the following risks:

-- The value of the properties we own may go down, sometimes due to a
bankruptcy of one or more of our tenants or for other reasons.

-- The amount of any distributions we make may be reduced.

-- It is likely that if you have to sell your shares soon after you buy
them, you will have to sell them for less than $10 per share.

-- Carey Property Advisors may be subject to some conflicts of interest
in managing our business which could affect the distributions you
receive and the fees received by Carey Property Advisors.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
PER SHARE TOTAL
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Public Price................................... $10.00 $400,000,000
Selling Commissions............................ $ 0.60 $ 24,000,000
Proceeds to CPA(R):14.......................... $ 9.40 $376,000,000
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

-- The sales agent, Carey Financial Corporation, is our affiliate. Carey
Financial will receive selling commissions of up to 6% on the sale of
shares. The other broker-dealers it selects to participate in this
offering will be paid selling commissions of up to 6% on their sale of
shares out of the 6% received by Carey Financial.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

PROJECTIONS AND FORECASTS CANNOT BE USED IN THIS OFFERING. NO ONE IS
PERMITTED TO MAKE ANY WRITTEN OR ORAL PREDICTIONS ABOUT HOW MUCH CASH YOU WILL
RECEIVE FROM YOUR INVESTMENT OR THE TAX BENEFITS THAT YOU MAY RECEIVE.

The money from the sale of shares will be promptly deposited into an
interest bearing escrow account at The United States Trust Company of New York.
The interest earned in this account will be paid to investors. Money will be
transferred from the escrow account to us from time to time, generally
quarterly. Investors who have purchased shares will become shareholders when
their funds are transferred from the escrow account to our account. We may sell
our shares until they have all been sold, unless we decide to stop selling them
sooner.

CAREY FINANCIAL CORPORATION
This prospectus is dated November 16, 1999
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................................... 8
Risk Factors................................................ 13
We are subject to general real estate ownership
risks................................................. 13
We may have difficulty selling or re-leasing our
properties............................................ 13
We are dependent on tenants for our revenue............ 13
The bankruptcy of tenants would cause of reduction in
revenue............................................... 13
Our tenants that are highly leveraged may be unable to
pay rent.............................................. 14
It will be difficult to sell shares.................... 14
Our success will be dependent on the performance of
Carey Property Advisors............................... 14
Carey Property Advisors may be subject to conflicts of
interest.............................................. 14
Liability for uninsured losses could adversely affect
our financial conditions.............................. 15
Potential liability for environmental matters could
adversely affect our financial
condition............................................ 15
Our use of debt to finance acquisitions could adversely
affect our cash flow.................................. 15
Failure to qualify as a REIT could adversely affect our
operations and ability to make distributions.......... 16
A limit on the number of shares a person may own may
discourage a takeover................................. 16
Maryland law could restrict change in control.......... 16
Our participation in joint ventures creates additional
risk.................................................. 17
Special considerations for pension or profit-sharing
trusts, Keoghs or IRAs................................ 17
Our systems and our tenant's systems may not be Year
2000 Compliant........................................ 17
International investments involve additional risks..... 18
Suitability Standards....................................... 18
Estimated Use of Proceeds................................... 20
Management Compensation..................................... 22
Conflicts of Interest....................................... 31
Prior Offerings by Affiliates............................... 35
Management.................................................. 39
Directors and Executive Officers of CPA(R):14. ........ 41
Carey Property Advisors................................ 44
Directors and Principal Officers of Carey Fiduciary
Advisors.............................................. 44
Shareholdings.......................................... 47
Management Decisions................................... 47
Limited Liability and Indemnification of Directors,
Officers, Employees and Other Agents.................. 47
Advisory Agreement..................................... 48
Investment Procedures, Objectives and Policies.............. 51
Investment Procedures.................................. 51
Investment Objectives.................................. 53
Types of Investments................................... 54
Investments in Loans.............................. 55
Joint Ventures and Wholly-Owned Subsidiaries...... 55
Other Investments................................. 56
Use of Borrowing....................................... 58
Other Investment Policies.............................. 59
Investment Limitations................................. 61
Change in Investment Objectives and Limitations........ 62
Holders of Shares of the Company............................ 62
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 62
Inception Period & Year ended December 31, 1998.............
Overview............................................... 62
Financial Condition.................................... 63
Results of Operations.................................. 64
Nine Months ended September 30, 1998 and September 30,
1999......................................................
Financial Conditions...................................
Results of Operation...................................
Year 2000 Issue........................................ 66
Distributions............................................... 67
</TABLE>

2
<PAGE> 4

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of the Properties............................... 67
Advanced Micro Devices, Inc. .......................... 68
Contraves Brashear Systems, L.P. ...................... 68
Best Buys Co. Inc. .................................... 69
Etec Systems, Inc. .................................... 69
Metagenics Incorporated................................ 70
Burlington Motor Carriers Inc. ........................ 70
The Benjamin Ansehl Co. ............................... 71
Intesys Technologies, Inc. ............................ 71
CompuCom Systems, Inc. ................................ 72
Production Resources Group, L.L.P. .................... 73
CheckFree Corporation.................................. 73
Builders' Supply and Lumber Co......................... 74
The Scott Company of California, Inc................... 74
AmeriServe Food Distribution, Inc...................... 74
Condolidated Theatres Holdings, G.P.................... 75
Amerix Corporation..................................... 75
Warrants............................................... 76
Acquisition Fees....................................... 76
United States Federal Income Tax Considerations............. 76
Opinion of Counsel..................................... 77
Requirements for Qualification......................... 78
Election to Retain Our Long-Term Capital Gains......... 81
Deficiency Distributions............................... 82
Failure to Qualify as a REIT........................... 82
Sale-Leaseback Transactions............................ 82
Taxation of Domestic Shareholders...................... 83
Treatment of Tax-Exempt Shareholders................... 84
Special Tax Considerations for Foreign Shareholders.... 84
Information Reporting Requirements and Backup
Withholding Tax For Domestic Shareholders............. 86
Backup Withholding Tax for Foreign Shareholders........ 86
Statement of Stock Ownership........................... 86
State and Local Tax.................................... 87
ERISA Considerations........................................ 87
Plan Assets............................................ 88
Other Prohibited Transactions.......................... 89
Investment in Escrow Account........................... 89
Annual Valuation....................................... 89
Description of Shares....................................... 90
General Description of Shares.......................... 90
Meetings and Special Voting Requirements............... 91
Restriction on Ownership of Shares..................... 92
Distributions.......................................... 93
Repurchase of Excess Shares............................ 93
Redemption of Shares................................... 93
Restrictions on Roll-up Transaction.................... 95
Transfer Agent......................................... 96
The Offering................................................ 96
Escrow Arrangements.................................... 99
Reports to Shareholders..................................... 99
Legal Matters............................................... 100
Experts..................................................... 100
Sales Literature............................................ 100
Further Information......................................... 100
</TABLE>

3
<PAGE> 5

QUESTIONS AND ANSWERS ABOUT
CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED'S
PUBLIC OFFERING

Q: WHAT IS CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED?

A. CPA(R):14 is a real estate investment trust, or a REIT, that was formed in
1997 to acquire commercial and industrial properties and lease them on a
long-term, triple-net basis.

Q: WHAT IS A REIT?

A: In general, a REIT is a company that:

-- combines the capital of many investors to acquire or provide financing
for real estate;

-- offers benefits of a diversified real estate portfolio under
professional management;

-- must pay distributions to investors of at least 95% of its taxable
income; and

-- typically is not subject to federal corporate income taxes on its net
income that it distributes, provided certain income taxes requirements
are satisfied. This treatment substantially eliminates the "double
taxation" (at both the corporate and shareholder levels) that
generally results from investments in a corporation.

Q: WHAT KIND OF OFFERING IS THIS?

A: We are offering up to 40,000,000 shares of common stock on a "best efforts"
basis.

Q: HOW DOES A "BEST EFFORTS" OFFERING WORK?

A: When shares are offered to the public on a "best efforts" basis, we are not
guaranteeing that any minimum number of shares will be sold. If you choose
to purchase stock in this offering, you will fill out a Subscription
Agreement, like the one attached to this prospectus as Exhibit B, for a
specific number of shares and pay for the shares at the time you subscribe.
The purchase price will be placed into escrow with United States Trust
Company of New York. United States Trust Company will hold your funds, along
with those of other subscribers, in an interest-bearing account until the
time you are admitted by us as a shareholder. Interest earned on your money
held in escrow will be distributed to you soon after you become a
shareholder. Generally, we admit shareholders on a quarterly basis.

Q: HOW LONG WILL THE OFFERING LAST?

A: The offering will not last beyond November 16, 2001.

Q: WHO CAN BUY SHARES?

A: Anyone who receives this prospectus can buy shares provided that they have a
net worth of at least $45,000 and an annual gross income of at least
$45,000; or, a net worth of at least $150,000. For this purpose, net worth
does not include your home, your home furnishings and personal automobiles.
The purchaser of shares given as a gift must satisfy the suitability
requirements but the gift recipient is not required to satisfy the
suitability standards. These minimum levels may vary from state to state, so
you should carefully read the more detailed description in the "Suitability
Standards" section of this prospectus.

Q: IS THERE ANY MINIMUM INVESTMENT REQUIRED?

A: Yes. Generally, individuals must invest at least $2,500 and IRA, Keogh or
other qualified plans must invest at least $2,000. Investors who already own
shares can make additional purchases for less than the minimum investment.
These minimum investment levels may vary from state to state, so you should
carefully read the more detailed description of the minimum investment
requirements appearing later in the "Suitability Standards" section of this
prospectus.

4
<PAGE> 6

Q: AFTER I SUBSCRIBE FOR SHARES, CAN I CHANGE MY MIND AND WITHDRAW MY MONEY?

A: Once you have subscribed for shares and your money has been deposited with
The United States Trust Company of New York, your subscription may not be
withdrawn, unless we permit you to revoke your subscription. You may,
however, revoke your subscription for five days following your receipt of
the prospectus.

Q: IF I BUY SHARES IN THE OFFERING, HOW CAN I SELL THEM?

A: At the time you purchase them, the shares will not be listed for trading on
any national securities exchange or over-the-counter market. In fact, we
expect that there will not be any public market for the shares when you
purchase them, and we cannot be sure if one will ever develop. As a result,
you may find that it is difficult to sell your shares and realize a return
on your investment.

If we have not listed the shares on a national securities exchange or
over-the-counter market within eight years after the proceeds from this
offering are fully invested, market conditions permitting, we plan to sell
the properties and other assets and return the proceeds from these sales to
our shareholders through distributions.

Beginning one year after you purchase your shares, provided we have
sufficient funds available, you may request that we redeem your shares. The
redemption procedures are described in the "Description of
Shares -- Redemption of Shares" section of this prospectus. The redemption
will be subject to a surrender charge.

Q: WHAT WILL YOU DO WITH THE PROCEEDS FROM THIS OFFERING?

A: We plan to use approximately 86% of the proceeds from this offering to
purchase properties and approximately 14% for working capital, to pay fees
and expenses of this offering and for acquisition-related expenses. The
payment of these fees will not reduce your invested capital. Your initial
invested capital amount will be $10 per share.

Until we invest the proceeds of this offering in real estate, we will invest
them in short-term, highly liquid investments. These short-term investments
will not earn as high a return as we expect to earn on our real estate
investments, and we cannot know how long it will be before we will be able
to fully invest the proceeds in real estate. We intend to invest or commit
to investment substantially all of the money raised in this offering within
two years of the close of the offering, subject to market conditions.

We commenced our initial public offering of common stock in an offering very
similar to this one on November 21, 1997. We received approximately
$160,382,000 in gross offering proceeds from the initial public offering, of
which approximately $137,842,000 was or is expected to be invested in
properties. Our initial public offering was completed on November 10, 1999.

Q: WHAT ARE THE TERMS OF YOUR LEASES?

A: Generally, the leases we have entered into to date, and the leases we expect
to enter into in the future, are long-term (meaning generally 10 to 20
years, plus renewal options for an additional 10 to 20 years), "triple-net"
leases. "Triple-net" means that the tenant, not CPA(R):14, is responsible
for repairs, maintenance, property taxes, utilities and insurance. Under our
leases, the tenant must pay us minimum rent on a regular basis. In addition,
our leases usually require the tenant to pay rent increases tied to an index
like the Consumer Price Index at specified times during the term of the
lease or some percentage of sales at the property over an agreed-upon base.
We may enter into leases where we have responsibility for replacement of
specific parts of a property like a roof or parking lot. We do not expect
that these leases will make up a significant portion of the portfolio.

Q: HOW WELL HAVE CPA(R):14'S INVESTMENTS DONE SO FAR?

A: As of the date of this prospectus, we have purchased 20 properties. These
purchases were made between June 1998 and November 1999. To date, all
scheduled rent payments have been received.

5
<PAGE> 7

Carey Property Advisors, our manager, and its affiliates have been managing
entities like CPA(R):14 since 1979. The performance of these entities is
fully described in this prospectus and its appendices.

Q: WHAT IS THE EXPERIENCE OF CPA(R):14'S OFFICERS AND DIRECTORS?

A: Our management team has extensive previous experience investing in real
estate and triple net leases. Our directors and investment committee members
are listed below.

Directors

-- William P. Carey -- founded W. P. Carey & Co., Inc. in 1973 and has
been involved in net leasing since 1959.

-- George E. Stoddard -- formerly responsible for direct corporate
investment at The Equitable Life Assurance Society.

-- William Ruder -- principal in a public relations firm since 1948.

-- Charles C. Townsend -- former Chairman of Morgan Stanley Realty
Corporation

-- Warren G. Wintrub -- former partner at Coopers & Lybrand L.L.P., now
PricewaterhouseCoopers LLP

-- Thomas E. Zacharias -- a Senior Vice President with Lend Lease
Development U.S.

Investment Committee

In addition to Mr. Stoddard, who serves as Chairman, the following
individuals serve on the investment committee of Carey Property Advisors:

-- Frank J. Hoenemeyer -- formerly Vice Chairman, Director and Chief
Investment Officer of Prudential Insurance Company of America

-- Nathaniel S. Coolidge -- formerly Senior Vice President -- Head of
Bond Corporate Finance Department of the John Hancock Mutual Life
Insurance Company.

-- Dr. Lawrence R. Klein -- an alternate member, won the Nobel Prize in
Economics in 1980.

Q: HOW WILL YOU CHOOSE WHICH INVESTMENTS TO MAKE?

A: Carey Property Advisors is our advisor and generally has the authority to
make all of our investment decisions. Carey Property Advisors' investment
committee must approve all acquisitions. Members of the investment committee
have over 150 years of combined experience in evaluating credit, an
important element in a long-term net lease transaction.

Q: IS CAREY PROPERTY ADVISORS INDEPENDENT OF CPA(R):14?

A: No. Some of our officers and directors are officers and directors of Carey
Property Advisors. The conflicts of interest CPA(R):14 and Carey Property
Advisors face are discussed under the heading "Conflicts of Interest" later
in this prospectus.

Q: IF I BUY SHARES, WILL I RECEIVE DISTRIBUTIONS AND HOW OFTEN?

A: We have made and intend to continue to make quarterly distributions to our
shareholders. The amount of each distribution is determined by the board of
directors and typically depends on the amount of distributable funds,
current and projected cash requirements, tax considerations and other
factors. However, in order to remain qualified as a REIT, we must make
distributions of at least 95% of our REIT taxable income each year.

Historically, we have paid cash distributions every quarter since our
operations commenced. Our quarterly distribution in September, 1999 was
$0.1629 per share.

6
<PAGE> 8

Q: ARE DISTRIBUTIONS I RECEIVE TAXABLE?

A: Yes. Generally, distributions that you receive will be considered ordinary
income to the extent they are from current and accumulated earnings and
profits. In addition, because depreciation expense reduces taxable income
but does not reduce cash available for distribution, we expect a portion of
your distributions will be considered a return of capital for tax purposes.
These amounts will not be subject to tax immediately but will instead reduce
the tax basis of your investment. This in effect defers a portion of your
tax until your investment is sold or CPA(R):14 is liquidated, at which time
you will be taxed at the capital gains rate. However, because each
investor's tax considerations are different, we suggest you consult with
your tax advisor. You should also review the section of the prospectus
entitled "United States Federal Income Tax Considerations."

Q: WILL I BE NOTIFIED ABOUT HOW MY INVESTMENT IS DOING?

A: You will receive periodic updates on the performance of your investment in
CPA(R):14, including:

-- Four quarterly distribution reports

-- Three quarterly financial reports

-- An annual report

-- A Form 1099 report

Q: WHEN WILL I GET MY TAX INFORMATION?

A: Your 1099 tax information will be mailed by January 31 of each year.

Q: WHO IS THE TRANSFER AGENT FOR CPA(R):14?

A: Resource/Phoenix(R)

2401 Kerner Boulevard
San Rafael, CA 94901-5529
1-888-241-3737

To ensure that any account changes are made promptly and accurately, all
changes including shareholder address, ownership type and distribution mailing
address should be directed to the transfer agent.

WHO CAN HELP ANSWER YOUR QUESTIONS?
If you have more questions about the offering or
if you would like additional copies of this prospectus,
you should contact your registered representative or:

CPA(R):14 ANSWER LINE
Carey Financial Corporation
50 Rockefeller Plaza
New York, NY 10020

(800) WP CAREY

CPA:[email protected]

7
<PAGE> 9

PROSPECTUS SUMMARY

This summary highlights some information from this prospectus. It may not
include all of the information that is important to you. To understand this
offering fully, you should read the entire prospectus carefully, including the
risk factors and the financial statements.

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

Corporate Property Associates 14 Incorporated is a REIT that owns net
leased industrial and commercial property. We own 20 properties in 14 states
leased to 16 tenants. Our office is at 50 Rockefeller Plaza, New York, NY. Our
phone number is (212) 492-1100. We refer to Corporate Property Associates 14
Incorporated as CPA(R):14 in this prospectus.

THE ADVISOR

Carey Property Advisors L.P. is our advisor. They are responsible for
managing CPA(R):14 on a day-to-day basis. They are also responsible for
identifying and making acquisitions on our behalf. Carey Property Advisors L.P.
is referred to as Carey Property Advisors in this prospectus.

OUR REIT STATUS

As a REIT, we generally are not subject to federal income tax on income
that we distribute to our shareholders. Under the Internal Revenue Code, REITs
are subject to numerous organizational and operational requirements, including a
requirement that they distribute at least 95% of their taxable income, as
calculated on an annual basis. If we fail to qualify for taxation as a REIT in
any year, our income will be taxed at regular corporate rates, and we may not be
able to qualify for treatment as a REIT for that year and the next four years.
Even if we qualify as a REIT for federal income tax purposes, we may be subject
to federal, state and local taxes on our income and property and to federal
income and excise taxes on our undistributed income.

OUR MANAGEMENT

We have retained Carey Property Advisors to provide us with management,
acquisition, advisory and administrative services. The six members of our board
of directors oversee the management of CPA(R):14. Four of the directors are
independent of Carey Property Advisors and have responsibility for reviewing its
performance. The directors are elected annually by the shareholders.

All investment decisions made by Carey Property Advisors must be approved
unanimously by Carey Property Advisors' investment committee. The following
people serve on the investment committee:

-- George E. Stoddard, Chairman, was formerly responsible for the $33
billion in direct corporate investments of The Equitable Life
Assurance Society of the United States;

-- Frank J. Hoenemeyer, Vice Chairman, was formerly Vice-Chairman,
Director and Chief Investment Officer of the Prudential Insurance
Company of America and had responsibility for Prudential's $100
billion investment portfolio;

-- Nathaniel S. Coolidge was Senior Vice President -- head of Bond and
Corporate Finance Department of the John Hancock Mutual Life Insurance
Company where his responsibilities included overseeing $21 billion of
fixed income investments;

-- Dr. Lawrence R. Klein, an alternate member of the committee, won the
Nobel Prize in economics in 1980 and is Benjamin Franklin Professor
Emeritus at the University of Pennsylvania.

8
<PAGE> 10

All of the officers and directors of Carey Property Advisors also are
officers or directors of CPA(R):14. Carey Property Advisors has responsibility
for all aspects of the operations of CPA(R):14 including:

-- selecting the properties that we will acquire, formulating and
evaluating the terms of each proposed acquisition, and arranging for
the acquisition of the property by CPA(R):14, subject to the approval
of the investment committee;

-- negotiating the terms of any borrowing by CPA(R):14, including lines
of credit and any long-term, permanent financing;

-- managing the day-to-day operations of CPA(R):14 including accounting,
property management and investor relations; and

-- arranging for and negotiating the sale of assets.

See the "Management" section of this prospectus for a description of the
business background of the individuals responsible for the management of
CPA(R):14 and Carey Property Advisors, as well as for a description of the
services Carey Property Advisors will provide.

RISK FACTORS

AN INVESTMENT IN CPA(R):14 HAS MANY RISKS. THE "RISK FACTORS" SECTION OF
THIS PROSPECTUS CONTAINS A DETAILED DISCUSSION OF THE MOST IMPORTANT RISKS.
PLEASE REFER TO THE "RISK FACTORS" SECTION FOR A MORE DETAILED DISCUSSION OF THE
RISKS SUMMARIZED BELOW:

-- There is currently no public trading market for the shares, and there
is no assurance that one will develop.

-- You will not have the opportunity to evaluate all of the properties
that will be in our portfolio.

-- We rely on Carey Property Advisors with respect to all investment
decisions.

-- Carey Property Advisors and its affiliates are or will be engaged in
other activities that will result in potential conflicts of interest
with the services that Carey Property Advisors and affiliates will
provide to us.

-- Market and economic conditions that we cannot control will affect the
value of our investments.

-- We may make investments that will not appreciate in value over time.

-- If our tenants default, we will have less income with which to make
distributions.

-- If the shares are not listed or intended to be listed on a national
securities exchange or over-the-counter market within eight years of
the investment of all of the money raised in this offering, we will
sell our assets and distribute the proceeds, market conditions
permitting.

-- In connection with any borrowing, we will likely mortgage or pledge a
specific asset, which would put us at risk of losing that asset if we
are unable to pay that debt.

-- In order to maintain our status as a REIT, we may incur debt to make
distributions to shareholders.

-- The vote of shareholders owning at least a majority but less than all
of the shares of common stock will bind all of the shareholders as to
matters like the election of directors and amendment of CPA(R):14's
governing documents.

-- Restrictions on ownership of more than 9.8% of the shares of common
stock by any single shareholder or some related shareholders may have
the effect of inhibiting a change in control of CPA(R):14, even if a
change in control is in the interest of a majority of the
shareholders.

9
<PAGE> 11

-- We may not remain qualified as a REIT for federal income tax purposes,
which would subject us to federal income tax on our taxable income at
regular corporate rates, thereby reducing the amount of funds
available for paying distributions to shareholders.

-- Our inability to find suitable investments may impact our ability to
achieve our investment objectives and may effect the amount of
distributions to shareholders.

OUR INVESTMENT OBJECTIVES

Our primary investment objectives are:

-- to pay quarterly distributions at an increasing rate that, for taxable
shareholders, may be partially free from current taxation;

-- to invest in a portfolio of real estate that will increase in value;

-- to increase our equity in real estate by making regular mortgage
principal payments;

-- to provide you with liquidity for your investment, within eight years
after the proceeds of this offering are fully invested, either through
listing our shares on a national securities exchange or
over-the-counter market or if listing does not occur within eight
years after the proceeds of this offering are fully invested, selling
our assets and distributing the proceeds, market conditions
permitting.

See the "Investment Procedures, Objectives and Policies" sections of this
prospectus for a more complete description of our business and objectives.

CONFLICTS OF INTEREST

Some of our officers and directors, who are also officers or directors of
Carey Property Advisors, may experience conflicts of interest in their
management of CPA(R):14. These arise principally from their involvement in other
activities that may conflict with our business and interests, including matters
related to

-- allocation of new investments and management time and services between
us and various other clients of Carey Property Advisors;

-- the timing and terms of the investment in or sale of an asset;

-- investments with affiliates of Carey Property Advisors;

-- compensation to Carey Property Advisors;

-- our relationship with the managing dealer, Carey Financial
Corporation, which is an affiliate of CPA(R):14 and Carey Property
Advisors; and

-- the fact that our securities and tax counsel also serves as securities
and tax counsel for some of our affiliates, which means neither
CPA(R):14 nor the shareholders will have separate counsel.

The "Conflicts of Interest" section discusses in more detail the more
significant of these potential conflicts of interest, as well as the procedures
that have been established to resolve a number of these potential conflicts.

OUR AFFILIATES

The "Prior Offerings by Affiliates" section of this prospectus contains a
narrative discussion of the public and private real estate programs sponsored by
our affiliates and affiliates of Carey Property Advisors in the past, including
nine public limited partnerships and three unlisted public REITs. As of December
31, 1998, these entities, which invest in industrial and commercial properties
that are leased on a "triple-net" basis had purchased 443 properties.
Statistical data relating to the public limited partnerships and the unlisted
REITs are contained in Appendix A -- Prior Performance Tables.

10
<PAGE> 12

THE OFFERING

Offering Size..................$400,000,000

Minimum Investments............Individuals -- $2,500.

IRA, Keogh and other Qualified Plans -- $2,000.

Suitability Standards..........Net worth of at least $45,000 and annual gross
income of at least $45,000;
OR
Net worth of at least $150,000.
(For this purpose, net worth excludes home,
furnishings and personal automobiles)

Suitability standards may vary from state to
state. Please see the "Suitability Standards"
section, which begins on page 18.

Holding Period of Properties...If we have not listed the shares on a national
securities exchange or over-the-counter market
within eight years after the proceeds from this
offering are fully invested, market conditions
permitting, we plan to sell the properties and
other assets and return the proceeds from these
sales to our shareholders through distributions.

Distribution Policy............Consistent with our objective of qualifying as a
REIT, we expect to pay quarterly distributions
and distribute at least 95% of our REIT taxable
income.

Our Advisor....................Carey Property Advisors will administer our
day-to-day operations and select our real estate
investments.

Estimated Use of Proceeds......
86% -- to acquire properties
14% -- for working capital and to pay fees and
expenses

MANAGEMENT COMPENSATION

CPA(R):14 will pay Carey Property Advisors and its affiliated companies
fees for its services and will reimburse Carey Property Advisors for some
expenses. Outlined below are the most significant items of compensation.

-- For identifying, structuring and arranging the financing for real
estate acquisitions, Carey Property Advisors will be paid acquisition
fees not to exceed 2.5% of the total purchase price of all properties
purchased by us. Carey Property Advisors will also be paid a
subordinated acquisition fee which, when aggregated with all other
subordinated acquisition fees, will not exceed 2.0% of the total
purchase price of all properties purchased by us. This subordinated
acquisition fee will accrue but will be withheld for any quarter
through which the return paid to shareholders is less than 6%.

-- Carey Property Advisors will be paid a monthly asset management fee at
the annual rate of 0.5% of the total amount invested by us in real
estate. Carey Property Advisors will also be paid quarterly a
subordinated fee at the annual rate of 0.5% of the total amount we
invest in real estate. This fee will accrue but will not be paid in
any quarter through which we have not achieved a cumulative rate of
cash flow from operations (as determined in accordance with generally
accepted accounting principles) of at least 7% per year through that
quarter. Carey Property Advisors has the option to be paid this
performance fee in cash or restricted stock of CPA(R):14.

11
<PAGE> 13

-- Carey Property Advisors will be paid 15% of any appreciation in the
value of the real estate when we sell a property. This fee will be
paid only after we have returned all of the money invested by
shareholders plus a cumulative non-compounded return of 6% per year.

There are many additional conditions and restrictions on the payment of
fees to Carey Property Advisors. There are also a number of other smaller items
of compensation and expense reimbursement that Carey Property Advisors and its
affiliates may receive during the life of CPA(R):14. For a more complete
explanation of the fees and expenses and an estimate of the dollar amount of
these payments, please see the "Management Compensation" section of this
prospectus.

DESCRIPTION OF PROPERTIES

Please refer to the "Description of Properties" section of this prospectus
for a description of the properties we have purchased as of the date of this
prospectus. Carey Property Advisors is evaluating additional potential property
acquisitions. When it appears likely that we will purchase one or more
additional properties, a description of those properties will be made available
to all potential investors in a document called a supplement. Investors should
not assume that transactions described in a supplement will necessarily be
completed. It is possible that after the supplement is distributed, we or the
seller will decide not to complete the sale.

ERISA CONSIDERATIONS

The section of this prospectus entitled "ERISA Considerations" describes
the effect the purchase of shares will have on retirement plans and individual
retirement accounts ("IRAs") subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and/or the Internal Revenue Code. ERISA is a
federal law that regulates the operation of certain tax-advantaged retirement
plans. Any retirement plan trustee or individual considering purchasing shares
for a retirement plan or IRA should read this section very carefully.

DESCRIPTION OF SHARES

General

We will not issue stock certificates. A shareholder's investment will be
recorded on our books. If you wish to sell your shares, you will be required to
send only an executed transfer form to us. We will provide the required form
upon request.

Shareholder Voting Rights and Limitations

Shareholders will meet each year for the election of directors. Other
business matters may be presented at the annual meeting or at special
shareholder meetings. You are entitled to one vote for each share you own. All
shareholders will be bound by the decision of the majority of shareholders on
each question voted upon.

Limitation on Share Ownership

The articles of incorporation of CPA(R):14 restrict ownership by one person
of more than 9.8% of the outstanding shares. See "Description of
Shares -- Restriction on Ownership of Shares." These restrictions are designed
to enable us to comply with share accumulation restrictions imposed on REITs by
the Internal Revenue Code.

For a more complete description of the shares, including limitations on the
ownership of shares, please refer to the "Description of Shares" section of this
prospectus.

12
<PAGE> 14

RISK FACTORS

BEFORE YOU INVEST IN OUR SECURITIES, YOU SHOULD BE AWARE THAT THERE ARE
VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW. YOU SHOULD CONSIDER CAREFULLY
THESE RISK FACTORS TOGETHER WITH ALL OF THE OTHER INFORMATION INCLUDED IN THIS
PROSPECTUS BEFORE YOU DECIDE TO PURCHASE OUR SECURITIES.

WE ARE SUBJECT TO GENERAL REAL ESTATE OWNERSHIP RISKS.

Our properties consist predominantly of net leased industrial and
commercial properties located in the United States. An investment in CPA(R):14
is subject to risks incident to the ownership and operation of these types of
properties, including:

-- changes in the general economic climate;

-- changes in local conditions such as an oversupply of space or
reduction in demand for real estate;

-- changes in interest rates and the availability of financing;

-- competition from other available space; and

-- changes in laws and governmental regulations, including those
governing real estate usage, zoning and taxes.

WE MAY HAVE DIFFICULTY SELLING OR RE-LEASING OUR PROPERTIES.

Real estate investments are relatively illiquid compared to most financial
assets and this illiquidity will limit our ability to quickly change our
portfolio in response to changes in economic or other conditions. Many of the
net leases we enter into or acquire are for properties that are specially suited
to the particular needs of our tenant. With these properties, if the current
lease is terminated or not renewed, we may be required to renovate the property
or to make rent concessions in order to lease the property to another tenant. In
addition, in the event we are forced to sell the property, we may have
difficulty selling it to a party other than the tenant due to the special
purpose for which the property may have been designed. In addition, provisions
of the Internal Revenue Code relating to REITs limit our ability to sell
properties held for fewer than four years. These and other limitations may
affect our ability to sell properties without adversely affecting returns to our
shareholders.

WE ARE DEPENDENT ON TENANTS FOR OUR REVENUE.

Most of our properties are occupied by a single tenant and, therefore, the
success of our investments are materially dependant on the financial stability
of our tenants. Lease payment defaults by tenants could cause us to reduce the
amount of distributions to shareholders. A default of a tenant on its lease
payments to us would cause us to lose the revenue from the property and cause us
to have to find an alternative source of revenue to meet the mortgage payment
and prevent a foreclosure if the property is subject to a mortgage. In the event
of a default, we may experience delays in enforcing our rights as landlord and
may incur substantial costs in protecting our investment and reletting our
property. If a lease is terminated, there is no assurance that we will be able
to lease the property for the rent previously received or sell the property
without incurring a loss.

THE BANKRUPTCY OF TENANTS WOULD CAUSE A REDUCTION IN REVENUE.

A tenant in bankruptcy could cause

-- the loss of lease payments;

-- an increase in the costs incurred to carry the property;

-- a reduction in the value of shares; and

-- a decrease in distributions to shareholders.
13
<PAGE> 15

Under bankruptcy law, a tenant who is the subject of bankruptcy proceedings has
the option of continuing or terminating any unexpired lease. If the tenant
terminates the lease, any claim we have for breach of the lease (excluding
collateral securing the claim) will be treated as a general unsecured claim. The
maximum claim will be capped at the amount owed for unpaid rent prior to the
bankruptcy unrelated to the termination, plus the greater of one year's lease
payments or 15% of the remaining lease payments payable under the lease (but no
more than three years' lease payments). In addition, due to the long-term nature
of our leases and terms providing for the repurchase of a property by the
tenant, a bankruptcy court could recharacterize a net lease transaction as a
secured lending transaction. If that were to occur, we would not be treated as
the owner of the property, but might have additional rights as a secured
creditor.

Some of the programs managed by Carey Property Advisors or its affiliates
have had tenants file for bankruptcy protection and are involved in litigation.
Four CPA(R) programs had to reduce the rate of distributions to their partners
as a result of adverse developments involving tenants. See "Prior Offerings by
Affiliates."

OUR TENANTS THAT ARE HIGHLY LEVERAGED MAY BE UNABLE TO PAY RENT.

A tenant that has been recently restructured may be unable to pay its rent
if there are adverse changes to their business or economic conditions. We
anticipate providing financing to companies involved in acquisitions,
recapitalizations or other financial restructurings through the use of a sale
leaseback transaction. Often the tenant in this type of transaction will have
substantially greater debt and substantially lower net worth than it had prior
to the transaction. In addition, the payment of rent and debt service may reduce
the working capital available to it and prevent it from devoting the resources
necessary to keep itself competitive in its industry. Furthermore, in situations
where management of the tenant will change after the transaction, it may be
difficult for Carey Property Advisors to determine the likelihood of the
tenant's business success and of it being able to pay rents throughout the term
of a lease with us. These companies are more vulnerable to adverse conditions in
their business or industry, economic conditions generally and increases in
interest rates.

IT WILL BE DIFFICULT TO SELL SHARES.

There is no current public market for the shares and, therefore, it will be
difficult for shareholders to sell their shares promptly. In addition, the price
received for any shares sold is likely to be less than the proportionate value
of the real estate we own. The shares should be purchased as a long-term
investment only. See "Redemption of Shares" for a description of our share
redemption program.

OUR SUCCESS WILL BE DEPENDENT ON THE PERFORMANCE OF CAREY PROPERTY ADVISORS.

Our ability to achieve our investment objectives and to pay distributions
is dependent upon the performance of Carey Property Advisors in the acquisition
of investments, the selection of tenants and the determination of any financing
arrangements. Except for the investments described in this prospectus, you will
have no opportunity to evaluate the terms of transactions or other economic or
financial data concerning our investments. You must rely entirely on the
management ability of Carey Property Advisors and the oversight of the board of
directors.

CAREY PROPERTY ADVISORS MAY BE SUBJECT TO CONFLICTS OF INTEREST.

Carey Property Advisors manages our business and selects our real estate
investments. Carey Property Advisors has some conflicts of interest in its
management of CPA(R):14 which arise primarily from the involvement of Carey
Property Advisors and its affiliates in other activities that may conflict with
CPA(R):14. The activities in which a conflict could arise between CPA(R):14 and
Carey Property Advisors are:

-- the receipt of commissions, fees and other compensation by Carey
Property Advisors and its affiliates for property purchases, leases,
sales and financing for CPA(R):14,

14
<PAGE> 16

-- non-arms length agreements between CPA(R):14 and Carey Property
Advisors or any of its affiliates, and

-- purchases and loans from affiliates, subject to CPA(R):14's investment
procedures, objectives and policies.

Inherent in these transactions is the conflict of interest that arises due to
the potential impact of the transaction on the amount of fees received by Carey
Property Advisors and/or its affiliates and the distributions to shareholders.

LIABILITY FOR UNINSURED LOSSES COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

We generally require our tenants to carry comprehensive liability, fire,
flood and extended coverage insurance with respect to our properties with policy
specifications and insured limits customarily carried for similar properties.
There are, however, types of losses from disaster-type occurrences (such as wars
or earthquakes) that may be either uninsurable or not insurable on economically
viable terms. Should an uninsured loss occur, we could lose our capital
investment and/or anticipated profits and cash flow from one or more properties.

POTENTIAL LIABILITY FOR ENVIRONMENTAL MATTERS COULD ADVERSELY AFFECT OUR
FINANCIAL CONDITION.

We own industrial and commercial properties and are subject to the risk of
liabilities under federal, state and local environmental laws. Some of these
laws could impose the following on CPA(R):14:

-- Responsibility and liability for the cost of removal or remediation of
hazardous substances released on our property, generally without
regard to our knowledge or responsibility of the presence of the
contaminants.

-- Liability for the costs of removal or remediation of hazardous
substances at disposal facilities for persons who arrange for the
disposal or treatment of these substances.

-- Potential liability for common law clams by third parties based on
damages and costs of environmental contaminants.

We generally include provisions in our leases that provide that the tenant
is responsible for all environmental liabilities and for compliance with
environmental regulation, and must reimburse us for damages or costs for which
we have been found liable. However, these provisions do not eliminate our
statutory liability or preclude third party claims against us and, even if a we
had a cause of action against the tenant to enable us to recover any amounts we
pay, there are no assurances that we would be able to collect any money from the
tenant. Our costs of investigation, remediation or removal of hazardous
substances may be substantial. In addition, the presence of hazardous substances
on one of our properties, or the failure to properly remediate a contaminated
property, could adversely affect our ability to sell or lease the property or to
borrow using the property as collateral.

OUR USE OF DEBT TO FINANCE ACQUISITIONS COULD ADVERSELY AFFECT OUR CASH FLOW.

Increased Risk Of Insufficient Cash Flow

Most of our property acquisitions will be made by borrowing a portion of
the purchase price and securing the loan with a mortgage on the property. If we
are unable to make our debt payments as required, a lender could foreclose on
the property or properties securing its debt. This could cause us to lose part
or all of our investment which in turn could cause the value of the shares and
distributions to shareholders to be reduced. In addition, payments of principal
and interest made to service our debts may leave us with insufficient cash to
pay the distributions that we are required to pay to maintain our qualification
as a REIT.

15
<PAGE> 17

Financial Covenants Could Place Restrictions On Operations

In connection with the making of a mortgage loan with respect to a
property, a lender could impose restrictions on us which affect our ability to
incur additional debt and our distribution and operating policies. The mortgages
on our properties contain customary negative covenants which may limit our
ability to further mortgage the property, to discontinue insurance coverage,
replace Carey Property Advisors as our advisor or impose other limitations.

Balloon Payment Obligations May Adversely Affect our Financial Condition

Some of our financing requires us to make a lump-sum or "balloon" payment
at maturity. We intend to finance more properties in this manner. Our ability to
make a balloon payment at maturity is uncertain and may depend upon our ability
to obtain additional financing or our ability to sell the property. At the time
the balloon payment is due, we may or may not be able to refinance the balloon
payment on terms as favorable as the original loan or sell the property at a
price sufficient to make the balloon payment. The effect of a refinancing or
sale could affect the rate of return to shareholders and the projected time of
disposition of our assets.

FAILURE TO QUALIFY AS A REIT COULD ADVERSELY AFFECT OUR OPERATIONS AND ABILITY
TO MAKE DISTRIBUTIONS.

If we fail to qualify as a REIT for any taxable year, we would be subject
to federal income tax on our taxable income at corporate rates. In addition, we
would generally be disqualified from treatment as a REIT for the four taxable
years following the year of losing our REIT status. Losing our REIT status would
reduce our net earnings available for investment or distribution to shareholders
because of the additional tax liability. In addition, distributions to
shareholders would no longer qualify for the distributions paid deduction and we
would no longer be required to make distributions. We might be required to
borrow funds or liquidate some investments in order to pay the applicable tax.

Qualification as a REIT is subject to the satisfaction of tax requirements
and various factual matters and circumstances which are not entirely within our
control. New legislation, regulations, administrative interpretations or court
decisions could change the tax laws with respect to qualification as a REIT or
the federal income tax consequences of being a REIT.

A LIMIT ON THE NUMBER OF SHARES A PERSON MAY OWN MAY DISCOURAGE A TAKEOVER.

Our articles of incorporation restrict ownership of more than 9.8% of the
outstanding shares by one person. These restrictions may discourage a change of
control of CPA(R):14 and may deter individuals or entities from making tender
offers for shares, which offers might be financially attractive to shareholders
or which may cause a change in the management of CPA(R):14. See "Description of
Shares -- Restriction on Ownership of Shares."

MARYLAND LAW COULD RESTRICT CHANGE IN CONTROL.

Provisions of Maryland law applicable to us prohibit business combinations
with:

-- any person who beneficially owns 10% or more of the voting power of
outstanding shares;

-- an affiliate of us who, at any time within the two-year period prior
to the date in question, was the beneficial owner of 10% or more of
the voting power of our outstanding shares ("an interested
shareholder"); or

-- an affiliate of an interested shareholder.

These prohibitions last for five years after the most recent date on which
the interested shareholder became an interested shareholder. Thereafter, any
business combination must be recommended by our board of directors and approved
by the affirmative vote of at least 80% of the votes entitled to be cast by
holders of our outstanding shares and two-thirds of the votes entitled to be
cast by holders of our
16
<PAGE> 18

shares other than shares held by the interested shareholder. These requirements
could have the effect of inhibiting a change in control even if a change in
control were in shareholders' interest. These provisions of Maryland law do not
apply, however, to business combinations that are approved or exempted by our
board of directors prior to the time that someone becomes an interested
shareholder.

OUR PARTICIPATION IN JOINT VENTURES CREATES ADDITIONAL RISK.

We participate in joint ventures with other entities, some of which may be
unaffiliated with us. There are additional risks involved in these types of
transactions. These risks include the potential of our joint venture partner
becoming bankrupt and the possibility of diverging or inconsistent economic or
business interests of us and our partner which could result in, among other
things, subjecting us to liabilities in excess of those contemplated under the
joint venture agreement and/or exposing us to liabilities of the joint venture
in excess of our proportionate share of these liabilities.

In some of our joint venture relationships with publicly registered
investment programs or other entities sponsored by Carey Property Advisors or
one of its affiliate, we enter into investments as tenants-in-common. This poses
risks in addition to those mentioned above. The partition rights of each
co-tenant in a tenancy-in-common could reduce the value of each portion of the
divided property. In addition, the fiduciary obligation that Carey Property
Advisors or our board may owe to our partner in an affiliated transaction may
make it more difficult for us to enforce our rights.

SPECIAL CONSIDERATIONS FOR PENSION OR PROFIT-SHARING TRUSTS, KEOGHS OR IRAS.

If you are investing the assets of a pension, profit sharing, 401(k), Keogh
or other retirement plan, IRA or benefit plan in CPA(R):14, you should consider:

-- whether your investment is consistent with the applicable provisions
of ERISA or the Internal Revenue Code;

-- whether your investment will produce unrelated business taxable income
to the benefit plan; and

-- your need to value the assets of the benefit plan annually.

We have obtained an opinion of Reed Smith Shaw & McClay LLP that, under
current ERISA law and regulations, our assets should not be treated as "plan
assets" of a benefit plan subject to ERISA and/or Section 4975 of the Internal
Revenue Code which purchases shares. However, the opinion of Reed Smith is based
on the facts and assumptions described in this prospectus, on our articles of
incorporation and on our representations to them, and is not binding on the
Internal Revenue Service or the Department of Labor. If our assets were
considered to be plan assets, our assets would be subject to ERISA and/or
Section 4975 of the Internal Revenue Code, and some of the transactions we have
entered into with Carey Property Advisors and its affiliates could be considered
"prohibited transactions" which could cause us, Carey Property Advisors and its
affiliates to be subject to liabilities and excise taxes. In addition, Carey
Property Advisors could be deemed to be a fiduciary under ERISA and subject to
other conditions, restrictions and prohibitions under ERISA. Even if our assets
are not considered to be plan assets, a prohibited transaction could occur if
we, Carey Financial, any selected dealer, the escrow agent or any of their
affiliates is a fiduciary (within the meaning of ERISA) with respect to a
purchase by a benefit plan and, therefore, unless an administrative or statutory
exemption applies in the event such persons are fiduciaries (within the meaning
of ERISA) with respect to your purchase, shares should not be purchased.

OUR SYSTEMS AND OUR TENANT'S SYSTEMS MAY NOT BE YEAR 2000 COMPLIANT.

The Year 2000 issue exists because many software systems, which use only
two digits to identify a year in a date field, were designed without considering
the impact of the upcoming change in the century. There is significant
uncertainty concerning the scope and magnitude of problems associated with the
century change. Some of systems critical to our operations could fail or
function improperly if not made Year 2000 compliant.
17
<PAGE> 19

Our books and records are maintained by Carey Property Advisors. An
affiliate of Carey Property Advisors services the computer system used for
maintaining these books and records. The affiliate has completed an assessment
of Year 2000 issues. Based on the results of that assessment, the affiliate
believes that Year 2000 issues will not materially affect our operations. The
assessment is not complete and there can be no assurance that the affiliate will
identify and remedy all potential Year 2000 issues in a timely fashion. Computer
problems could interfere with our operations.

It is also possible that our tenants' computer systems may not be Year 2000
compliant. If their systems fail, our tenant's financial condition and their
ability to pay rent and other property expenses could be adversely affected if
their computer systems fail. This failure could adversely affect our business.

We also face risks that any third parties with which we transact business
may not be Year 2000 compliant. We rely on our bank and transfer agent for
certain computer-related services and we have entered into discussions regarding
their Year 2000 readiness. If the Year 2000 issue prevents these or any other
third parties from delivering the products or services we require, our
operations could be adversely affected.

INTERNATIONAL INVESTMENTS INVOLVE ADDITIONAL RISKS.

We may purchase property located outside the United States. These
investments may be affected by factors peculiar to the laws of the jurisdiction
in which the property is located. These laws may include

-- land use and zoning laws;

-- environmental laws; and

-- laws relating to the foreign ownership of property and laws relating
to the ability of foreign persons or corporations to remove profits
earned from activities within the country to the person's or
corporation's country of origin.

These laws may expose us to risks that are different from and in addition to
those commonly found in the United States. In addition, these foreign
investments could be subject to the risks of adverse market conditions caused by
changes in national or local economic conditions, changes in interest rates and
in the availability, cost and terms of mortgage funds resulting from varying
national economic policies, changes in real estate and other tax rates and other
operating expenses in particular countries and changing governmental rules and
policies.

SUITABILITY STANDARDS

The shares we are offering are suitable only as a long-term investment for
persons of adequate financial means. Initially, there is not expected to be any
public market for the shares, which means that it may be difficult to sell them.
You should not buy these shares if you need to sell them immediately or will
need to sell them quickly in the future.

In consideration of these factors, we have established suitability
standards for initial shareholders and subsequent transferees. These suitability
standards require that a purchaser of shares have either

-- a net worth of at least $150,000; or

-- a gross annual income of at least $45,000 and a net worth of at least
$45,000.

For this purpose, net worth excludes the value of a purchaser's home,
furnishings and automobile.

Arizona, North Carolina, Maine, Michigan, Pennsylvania, Ohio and Missouri
have established suitability standards different from those we have established.
Shares will be sold only to investors in those states who meet the special
suitability standards set forth below.

MAINE -- Investors must have either (i) a net worth of at least $200,000 or
(ii) gross annual income of $50,000 and a net worth of at least $50,000.

18
<PAGE> 20

MISSOURI -- Investors must have either (i) a net worth of at least $250,000
or (ii) gross annual income of $75,000 and a net worth of at least $75,000.

ARIZONA AND NORTH CAROLINA -- Investors must have either (i) a minimum net
worth of at least $225,000 or (ii) gross annual income of $60,000 and a net
worth of at least $60,000.

MICHIGAN, PENNSYLVANIA AND OHIO -- In addition to our suitability
requirements, investors must have a net worth of at least ten times their
investment in CPA(R):14.

In the case of sales to fiduciary accounts, these suitability standards
must be met by the fiduciary account, by the person who directly or indirectly
supplied the funds for the purchase of the shares or by the beneficiary of the
account. These suitability standards are intended to help ensure that, given the
long-term nature of an investment in CPA(R):14, our investment objectives and
the relative illiquidity of the shares, a purchase of shares is an appropriate
investment for certain investors. Each selected dealer must make every
reasonable effort to determine that the purchase of shares is a suitable and
appropriate investment for each shareholder based on information provided by the
shareholder. Each selected dealer is required to maintain for six years records
of the information used to determine that an investment in the shares is
suitable and appropriate for a shareholder.

19
<PAGE> 21

ESTIMATED USE OF PROCEEDS

The following table presents information about how the money raised in this
offering will be used. Information is provided assuming the maximum number of
shares are sold. Many of the numbers in the table are estimates because all
expenses cannot be determined precisely at this time. The actual use of the
capital we raise is likely to be different than the figures presented in the
table. We expect that approximately 86% of the money invested by shareholders
will be used to buy real estate, while the remaining 14% will be used for
working capital and to pay expenses and fees, including the payment of fees to
Carey Advisors and its affiliates.

<TABLE>
<CAPTION>
MAXIMUM OFFERING
SALE OF 40,000,000 SHARES
---------------------------------
PERCENT OF PUBLIC
AMOUNT OFFERING PROCEEDS
------------ -----------------
<S> <C> <C>
Public Offering Proceeds.................................... $400,000,000 100.00%
------------ ------
Less Offering Expenses
Selling Commissions(1).................................... 24,000,000 6.00%
Other Organization and Offering Expenses(2)............... 16,000,000 4.00%
------------ ------
Total Offering Expenses........................... 40,000,000 10.00%
------------ ------
Amount of Public Offering Proceeds Available for
Investment................................................ $360,000,000 90.00%
============ ======
Acquisition Fees(3)(4)...................................... $ 8,850,000 2.21%
Acquisition Expenses(5)..................................... 2,000,000 0.50%
Working Capital Reserve..................................... 4,000,000 1.00%
------------ ------
Total Proceeds to be Invested in Real Estate................ $345,150,000 86.29%
============ ======
</TABLE>

- ---------------
(1) We will generally pay a selling commission of $0.60 per share sold. See "The
Offering" for a description of volume discounts.

(2) "Other Organization and Offering Expenses" represent all expenses incurred
in connection with our formation, qualification and registration of our
shares and in marketing and distributing the shares under applicable federal
and state law, and any other expenses actually incurred and directly related
to the offering and sale of the shares, except selling commissions. The
total underwriting compensation to be paid to Carey Financial and the
selected dealers in connection with this offering, including selling
commissions and expense reimbursements, cannot exceed 10% of the gross
amount raised in the offering. However, an additional 0.5% of gross proceeds
from sales made by Carey Financial and each selected dealer may be paid for
bona fide due diligence expenses. To the extent all organization and
offering expenses (excluding selling commissions, and any fees paid and
expenses reimbursed to the selected dealers or paid on behalf of the
selected dealers) exceed 4.0% of the amount raised in this offering, the
excess will be paid by Carey Property Advisors with no recourse by
CPA(R):14. See "Management Compensation." See "The Offering" for a complete
description of the fees and expense reimbursements payable to Carey
Financial and the selected dealers.

(3) Acquisition fees include all fees and commissions paid in connection with
the purchase, development or construction of properties. Acquisition fees
exclude any development fee or construction fee paid to a person who is not
our affiliate in connection with the actual development and construction of
a project after our acquisition of the land. For purposes of the table only,
subordinated acquisition fees have not been included as part of "Acquisition
Fees" because these fees will be paid from funds from operations of
CPA(R):14 and not from the proceeds of the offering. The presentation in the
table is based on the assumption that we will not borrow any money to
purchase properties. Although it is assumed that all the foregoing fees will
be paid by the sellers of property, sellers generally fix the selling price
at a level sufficient to cover the cost of any acquisition fee so that, in
effect, we, as purchaser, will bear such fee as part of the purchase price.

20
<PAGE> 22

We will not purchase any property that has a total property cost (generally,
the sum of the costs of purchasing, developing, constructing and improving
the property plus the acquisition fees paid in connection with the purchase)
in excess of the property's appraised value. See "Management Compensation"
for a complete description of the terms, conditions and limitations of the
payment of fees to Carey Property Advisors and its affiliates.

(4) Subordinated acquisition fees, which are intended to be paid from our funds
from operations and not from proceeds of this offering, have not been
included in the table. Subordinated acquisition fees (excluding interest
thereon), will not exceed 2% of the aggregate purchase price of the
properties. Assuming we do not borrow money to purchase properties, the
subordinated acquisition fees will not exceed $7,080,000 (1.77% of the
offering proceeds), in the event 40,000,000 shares are sold. These fees with
respect to any property are payable in equal amounts over an eight year
period following the acquisition of a property, assuming a cumulative return
of 6% has been paid. Other terms of the subordinated acquisition fees are
described in the "Management Compensation" section of this prospectus.

(5) "Acquisition Expenses" represent an estimate of all expenses related to our
selection and acquisition of properties, whether or not the properties are
acquired. These fees include but are not limited to legal fees and expenses,
travel and communications expenses, costs of appraisals, non-refundable
option payments on property not acquired, accounting fees and expenses,
title insurance and miscellaneous expenses. "Acquisition Expenses" do not
include acquisition fees.

21
<PAGE> 23

MANAGEMENT COMPENSATION

The following table sets forth the type and, to the extent possible,
estimates of the amounts of all fees, compensation, income, distributions and
other payments that Carey Property Advisors and its affiliates will or may
receive in connection with this offering and our operation. These payments
initially will result from non-arm's-length bargaining. See "Conflicts of
Interest." References to Carey Property Advisors also include affiliates of
Carey Property Advisors.

Carey Property Advisors Reimbursement for organization and The actual amounts to be paid will
offering expenses, including depend upon the actual amount of
identified wholesaling expenses organization and offering expenses
incurred on our behalf; provided, incurred by Carey Property Advisors
however, that if the aggregate of all and its affiliates in connection with
organization and offering expenses this offering which is not de-
and the wholesaling fee referred to terminable at this time. These
below (excluding selling com- expenses are estimated to be
missions, and any fees paid or $16,000,000 if 40,000,000 shares are
expenses reimbursed to the selected sold.
dealers) that are paid on behalf of
the selected dealers exceeds 4.0% of
the gross offering proceeds, Carey
Property Advisors will be responsible
for the excess.

Carey Financial Selling commissions equal to $0.60 The estimated amount payable to Carey
per share sold. Carey Financial may, Financial is $24,000,000 if
in turn, reallow up to $0.60 per 40,000,000 shares are sold in this
share of the commissions to selected offering, a portion of which will be
dealers. reallowed to the selected dealers.

Carey Financial 0.5% Wholesaling Fee The estimated amount payable to Carey
Financial is $2,000,000 if 40,000,000
shares are sold in this offering.
</TABLE>

22
<PAGE> 24

Carey Property Advisors Interest on loans made to CPA(R):14. The actual amount of loans made to us
On short-term loans, the interest by Carey Property Advisors or its
rate will be the lesser of (i) 1% affiliates is not determinable at
above the prime rate of interest pub- this time. Accordingly, the actual
lished in The Wall Street Journal and amount of interest payable to Carey
(ii) the rate that we would be Property Advisors, if any, is not
charged by unrelated lending determinable at this time.
institutions on comparable loans for
the same purpose in the locality of
the property. See "Conflicts of In-
terest" and "Investment Procedures,
Objectives and Policies."

Carey Property Advisors Acquisition Fees. Total Acquisition The actual amount to be paid to Carey
Fees (which include real estate Property Advisors will depend upon
brokerage fees, mortgage placement the aggregate total property cost of
fees, lease-up fees and transaction the properties, which in turn is
structuring fees), other than dependent upon the gross offering
subordinated acquisition fees, proceeds and the amount of mortgage
payable by either sellers of property financing we used in acquiring the
or us may not exceed 2.5% of the properties, and accordingly is not
aggregate purchase price of the determinable at this time. If the
properties.(1)(2) properties acquired from the proceeds
of this offering are 60% leveraged,
the acquisition fees payable to Carey
Property Advisors are estimated to be
approximately $22,125,000 if
40,000,000 shares are sold. See
"Conflicts of Interest."
</TABLE>

23
<PAGE> 25

<TABLE>
<CAPTION>
Entity Receiving Form and Method
Compensation of Compensation Estimated Amount
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Carey Property Advisors Subordinated Acquisition Fees. Total The actual amount to be paid to Carey
subordinated acquisition fees payable Property Advisors will depend upon
by either the sellers of properties the aggregate cost of the properties
or us may not exceed 2.0% of the acquired with the proceeds of this
aggregate purchase price of the offering, which in turn is dependent
properties. This fee is payable in upon the gross offering proceeds of
equal annual installments on January this offering and the amount of
1 of each of the eight calendar years mortgage financing we used in
commencing with January 1 following acquiring the properties, and
the first anniversary of the date a accordingly is not determinable at
property was purchased. The unpaid this time. If the properties acquired
portion of the subordinated with the proceeds of this offering
acquisition fee with respect to any are 60% leveraged, subordinated
property will bear interest at the acquisition fees payable to Carey
rate of 6% per annum from the date of Property Advisors are estimated to be
acquisition of the property until the approximately $17,700,000 if
portion of the fee is paid. The 40,000,000 shares are sold. See
accrued interest is payable on the "Conflicts of Interest."
date of each annual installment of
the fees. Our portion of the
subordinated acquisition fee payable
in any year, and accrued interest
thereon, will be subordinated to a
cumulative return to shareholders of
6%. All subordinated acquisition
fees, and accrued interest thereon,
shall become due and payable at the
time the shares become listed for
trading on a national securities
exchange or included for quotation on
Nasdaq.(1)(2)
</TABLE>

24
<PAGE> 26

Carey Property Advisors Reimbursement for expenses incurred Not determinable at this time.
in connection with the administration
of CPA(R):14. The amounts of any
reimbursement will not exceed amounts
which would be paid to non-affiliated
third parties in the same locality
for similar products. Our operating
expenses may not exceed the greater
of two percent of our average
invested assets or 25% of our net
income in any 12-month period. To the
extent that we incur operating ex-
penses in excess of this amount and
the independent directors find that
the excess expenses were the result
of unusual and nonrecurring fac-
tors, Carey Property Advisors may be
reimbursed in future years for the
full amount of these excess expenses,
or any portion thereof, but only to
the extent the reimbursement would
not cause our operating expenses to
exceed the limitation in the year
they are paid.

Carey Property Advisors Asset management fee, payable monthly If the maximum number of shares is
in an amount equal to one-twelfth of sold and CPA(R):14 achieves its
0.5% of our average invested assets borrowing goal of 60%, average
for the preceding month. Payment of invested assets as a result of this
the asset management fee will be offering would be approximately
deferred if our operating expenses, $885,000,000 and the annual asset
including the asset management fee, management fee on these assets would
exceeds the greater of two percent of be approximately $4,425,000.
our average invested assets or 25% of
our net income.(2)(3)(4)(5)
</TABLE>

25
<PAGE> 27

Carey Property Advisors Loan Refinancing Fee. Fees payable by The actual amount to be paid to Carey
either the tenant of a Property or Property Advisors will depend upon
CPA(R):14 may not exceed 1% of the the aggregate amount of the
principal amount of any refinancing refinancing we obtain.
obtained by CPA(R):14 for which Carey
Property Advisors renders substantial
services and for which no fees are
paid to a third party. The loan
refinancing fee will be payable only
if (i) the new loan is approved by a
majority of the independent directors
and found to be in the best interests
of CPA(R):14, and (ii) the terms of
the new loan represent an improvement
over the terms of the refinanced
loan, the new loan materially
increases the total debt secured by a
particular property, or the maturity
date of the refinanced loan (which
must have had an initial term of five
years or more) is less than one year
from the date of the refinancing. See
"Conflicts of Interest."
</TABLE>

26
<PAGE> 28

Carey Property Advisors Subordinated disposition fee shall be Not determinable at this time.
payable in an amount equal to the
lesser of (i) 50% of the competitive
real estate commission and (ii) 3% of
the contract sales price of a prop-
erty (if Carey Property Advisors
provides a substantial amount of
services in the sale of a property).
The subordinated disposition fee
shall be deferred until shareholders
have received total distributions
equal to 100% of their initial
investment plus a 6% cumulative
return, commencing with the initial
closing date. To the extent that we
do not pay the subordinated
disposition fee because of the
foregoing limitation, the unpaid
commissions will be accrued and paid
at the time the limitation has been
satisfied. The total real estate
commissions we pay shall not exceed
an amount equal to the lesser of (i)
6% of the contract sales price of a
property or (ii) the commission paid
in a competitive market for the
purchase or sale of a property that
is reasonable and competitive in
light of the size, type and location
of the property.

Carey Property Advisors Subordinated incentive fee shall be The actual amount to be received will
payable in an amount equal to 15% of depend upon the results of our
the balance from cash we receive from operations and the amounts received
the sale and refinancing of proper- upon the sale or other disposition of
ties remaining after the share- the properties and are not determi-
holders have received distributions nable at this time.
totaling 100% of their initial
investment plus a 6% cumulative
return. (7)
</TABLE>

27
<PAGE> 29

- ---------------
(1) The total acquisition fees (not including subordinated acquisition fees)
payable to Carey Property Advisors or paid by us may not exceed 2.5% of the
aggregate property cost of all properties we purchase with the proceeds of
this offering. The total of all acquisition fees (including subordinated
acquisition fees and interest thereon) and acquisition expenses we pay must
be reasonable and may not exceed 6% of the aggregate contract purchase price
of all properties we purchase with the proceeds of this offering. A majority
of the directors (including a majority of the independent directors) not
otherwise interested in any transaction may approve fees in excess of these
limits if they find the excess commercially competitive, fair and reasonable
to us.
(2) Our objective is to achieve total borrowings of approximately 60% of the
purchase price of all properties. The CPA(R) programs have had similar
leverage goals but have achieved leverage of only approximately 55%. The
actual leverage percentage we achieve will impact the amount of acquisition
fees earned by Carey Property Advisors because these fees are based
primarily on the total dollars invested in properties and the amount
available for investment will be affected by the amount we borrow (i.e., the
more that is borrowed, the more funds available for investment in
properties). If 40,000,000 shares are sold and the properties are 75%
leveraged, acquisition fees (not including subordinated acquisition fees)
payable to Carey Property Advisors as a result of this offering (assuming an
aggregate total property cost of all properties of approximately
$1,416,000,000) are estimated to be approximately $35,400,000 and
subordinated acquisition fees are estimated to be approximately $28,320,000.
We do not expect our properties to be 75% leveraged. The advisory agreement
between us and Carey Property Advisors provides that Carey Property Advisors
will not earn acquisition fees or subordinated acquisition fees on the
reinvestment of proceeds from the sale or refinancing of properties, unless
the shares are listed or are expected to be listed.
(3) There are currently no specific arrangements for the provision of property
management services to us by Carey Property Advisors. These services will be
provided by Carey Property Advisors only if a property becomes vacant or
requires more active management than contemplated at the time the property
is acquired. However, if Carey Property Advisors deems these services to be
necessary in order to preserve the value of the property, Carey Property
Advisors with the approval of the board (including a majority of the
independent directors), may provide these services. The maximum property
management fee which may be paid to Carey Property Advisors is 6% of gross
revenues from commercial properties (plus reimbursed expenses), where Carey
Property Advisors performs property management and leasing, re-leasing and
leasing related services, or 3% of gross revenues, where the entity provides
only property management services. In the case of industrial and commercial
properties which are leased for ten or more years on a triple net lease
basis, the maximum property management fee is 1% of our gross revenues over
the term of each lease plus a one-time leasing fee of 3% of the total base
rents payable for the first five years of the lease term, payable in five
equal annual installments. The property management fees paid to Carey
Property
28
<PAGE> 30

Advisors may not exceed the usual and customary amounts charged for similar
services in the same geographic region.

(4) If at any time the shares become listed on a national securities exchange or
included for quotation on Nasdaq, we will negotiate in good faith with Carey
Property Advisors a fee structure appropriate for an entity with a perpetual
life. A majority of the independent directors must approve the new fee
structure negotiated with Carey Property Advisors. In negotiating a new fee
structure, the independent directors shall consider all of the factors they
deem relevant, including but not limited to:

-- the size of the advisory fee in relation to the size, composition
and profitability of our portfolio;

-- the success of Carey Property Advisors in generating
opportunities that meet our investment objectives;

-- the rates charged to other REITs and to investors other than
REITs by advisors performing similar services;

-- additional revenues realized by Carey Property Advisors through
their relationship with us;

-- the quality and extent of service and advice furnished by Carey
Property Advisors;

-- the performance of our investment portfolio, including income,
conservation or appreciation of capital, frequency of problem
investments and competence in dealing with distress situations;
and

-- the quality of our portfolio in relationship to the investments
generated by Carey Property Advisors for the account of other
clients.

The board, including a majority of the independent directors, may not
approve a new fee structure that is, in its judgment, more favorable to
Carey Property Advisors than the current fee structure.

(5) Following our termination of the advisory agreement, Carey Property Advisors
will be entitled to receive payment of any earned but unpaid compensation
and expense reimbursements accrued as of the date of termination. If the
advisory agreement is terminated

-- in connection with our change of control,

-- by us for any reason other than cause as defined in the advisory
agreement, or

-- by Carey Property Advisors for good reason as defined in the
advisory agreement,

Carey Property Advisors also shall be entitled to the payment of the
termination fee and any subordinated acquisition fees that have not
accrued. Carey Property Advisors shall be entitled to receive all accrued
but unpaid compensation and expense reimbursements in cash within 30 days
of the effective date of the termination. All other amounts payable to
Carey Property Advisors in the event of a termination shall be evidenced by
a promissory note. The termination fee shall be paid in 12 equal quarterly
installments with interest on the unpaid balance. Notwithstanding the
preceding sentence, any amounts which may be deemed payable at the date the
obligation to pay the termination fee is incurred which relate to the
appreciation of the properties

-- shall be an amount which provides compensation to the terminated
advisor only for that portion of the holding period for the
respective properties during which the terminated advisor
provided services to us,

-- shall not be due and payable until the property to which the fees
relate is sold or refinanced, and

-- shall not bear interest until the property to which the fees
relate is sold or refinanced.

Carey Property Advisors shall not be entitled to payment of the termination
fee in the event the advisory agreement is terminated because of the
failure of us and Carey Property Advisors to establish a fee structure
appropriate for a perpetual-life entity in the event the shares are listed
on a national securities exchange or are included for quotation on Nasdaq.
The termination fee is an

29
<PAGE> 31

amount equal to 15% of the amount, if any, by which (i) the appraised value
of the properties on the date of termination of the advisory agreement,
less the amount of all indebtedness secured by the properties, exceeds (ii)
the total of the total capital invested in CPA(R):14 plus an amount equal
to a cumulative return of 6% through the termination date reduced by the
total distributions paid by us from our inception through the termination
date.

(6) Carey Property Advisors may choose to take the performance fee in cash or
restricted shares. For purposes of calculating the value per share of
restricted stock given for payment of the performance fee, the price per
share shall be (i) the net asset value per share as determined by the most
recent appraisal performed by an independent third party or, if an appraisal
has not yet been performed, (ii) $10 per share. The restricted stock will
vest ratably over a period of five years and is non-transferable during this
vesting period.

(7) In the event the shares are listed on a national securities exchange or
included for quotation on Nasdaq, Carey Property Advisors shall be paid the
subordinated incentive fee. The fee will vary based on the return received
by shareholders. The return will be calculated by adding the total
distributions paid by CPA(R):14 and the market value of CPA(R):14,
calculated on the basis of the average market value of the shares over the
30 trading days beginning 180 days after the shares are first listed on a
stock exchange. This total will be divided by the sum of the total amount of
capital raised by CPA(R):14 and the total cash flow necessary to generate a
6% cumulative return as of the date the return is calculated. This return is
referred to as the "Hypothetical Return" in the following table. The fee is
paid on the excess of the actual return over the Hypothetical Return. The
subordinated incentive fee will be paid as follows:

<TABLE>
<CAPTION>
HYPOTHETICAL RETURN
-----------------------------------
FEE (PERCENTAGE OF GREATER THAN OR
EXCESS RETURN) EQUAL TO LESS THAN
- ------------------ --------------- AND ---------
<S> <C> <C> <C>
12%................................... 6% 7%
13%.............................. 7% 8%
14%.............................. 8% 9%
15%.............................. 9% --
</TABLE>

CPA(R):14 has the option to pay the fee in the form of stock, cash, a
promissory note or any combination thereof. In the event the subordinated
incentive fee is paid to Carey Property Advisors as a result of the listing
of the shares, no termination fee will be paid to Carey Property Advisors
if the advisory agreement is terminated after the listing.

30
<PAGE> 32

CONFLICTS OF INTEREST

There will be various conflicts of interest in the operation of our
business. The independent directors will have an obligation to function on our
behalf in all situations in which a conflict of interest may arise and will have
a fiduciary obligation to act on behalf of the shareholders. Possible conflicts
of interest include the following:

RECEIPT OF COMMISSIONS, FEES AND OTHER COMPENSATION BY CAREY PROPERTY ADVISORS
AND ITS AFFILIATES.

A transaction involving the purchase, financing, lease and sale of any
property by CPA(R):14 may result in the immediate realization by Carey Property
Advisors and its affiliates of substantial commissions, fees, compensation and
other income. In most cases, Carey Property Advisors has discretion with respect
to all decisions relating to any such transaction. Potential conflicts may arise
in connection with a decision by Carey Property Advisors (on our behalf) of
whether to hold or sell a property. This decision could impact the timing and
amount of fees payable to Carey Property Advisors. We may purchase, sell or
finance properties through affiliates of Carey Property Advisors engaged in the
real estate brokerage business or through our other affiliates.

NON-ARM'S-LENGTH AGREEMENTS.

Except as otherwise provided below, all agreements and arrangements,
including those relating to compensation, between us and Carey Property Advisors
or any of its affiliates will not be the result of arm's-length negotiations.
Certain provisions of our bylaws require that compensation to Carey Property
Advisors and its affiliates be approved by a majority of the independent
directors and that terms of future transactions with affiliates be no less
favorable to us than terms which could be obtained from unaffiliated entities
providing similar services as an ongoing activity in the same geographical
location. The initial independent directors were selected by the sponsor and
have subsequently been reelected by the shareholders.

PURCHASES AND LOANS FROM AFFILIATES.

We may purchase properties from affiliates of Carey Property Advisors if
the purchase is consistent with the investment procedures, our objectives and
policies and if other conditions are met. See "Investment Procedures, Objectives
and Policies." We also may borrow funds from Carey Property Advisors or its
affiliates

-- if, at any time when proceeds of this offering are being held by the
escrow agent, we do not have sufficient funds to provide the equity
portion of a particular investment, or

-- to provide the debt portion of a particular investment if we are
unable to obtain a permanent loan at that time or, in the judgment of
the board, it is not in our best interest to obtain a permanent loan
at the interest rates then prevailing and the board has reason to
believe that we will be able to obtain a permanent loan on or prior to
the end of the loan term provided by Carey Property Advisors or the
affiliate.

See "Investment Procedures, Objectives and Policies." We may borrow funds
on a short-term basis from Carey Property Advisors or its affiliates.

We may not invest in other REITs advised or managed, directly or through
affiliates, by the sponsor, its subsidiaries or William P. Carey and with
respect to which the sponsor, its subsidiaries or William P. Carey receive
separate fees. Additionally, we will not sell properties to the sponsor, Carey
Property Advisors or any director or any of their respective affiliates, except
in the case of an exercise of a right of first refusal by an affiliated joint
venture partner.

Every transaction entered into between us and Carey Property Advisors or
its affiliates is subject to an inherent conflict of interest. The board may
encounter conflicts of interest in enforcing our rights

31
<PAGE> 33

against any affiliate in the event of a default by or disagreement with an
affiliate or in invoking powers, rights or options pursuant to any agreement
between us and any affiliates. Each transaction between us and Carey Property
Advisors or any of its affiliates must be approved by a majority of the
independent directors who are otherwise disinterested in the transaction as
being fair and reasonable to us and on terms and conditions no less favorable to
us than those available from unaffiliated third parties.

COMPETITION WITH CPA(R):14 FROM AFFILIATES OF CAREY PROPERTY ADVISORS IN THE
PURCHASE, SALE, LEASE AND OPERATION OF PROPERTIES.

W.P. Carey & Co., Inc. specializes in providing lease financing services to
major corporations and, therefore, may be in competition with us with respect to
properties, potential purchasers, sellers and lessees of properties, and
mortgage financing for properties. W.P. Carey & Co., Inc., its subsidiaries and
William P. Carey currently manage or advise private real estate investment
partnerships, REITs and limited liability companies whose investment and rate of
return objectives are substantially similar to ours. In addition, they expect to
manage or advise, directly or through affiliates, additional REITs, public and
private investment partnerships and other investment entities.

The CPA(R) programs have investment policies similar to ours and,
therefore, may be in competition with us for properties, potential purchasers,
sellers and lessees of properties, and mortgage financing for properties.
Affiliates of Carey Property Advisors intend to offer interests in other REITs,
partnerships or public or private investment entities, some of which may have
similar investment objectives as ours and may be in a position to acquire
properties at the same time as us. Affiliates of Carey Property Advisors may
have an ownership interest in the other REIT.

Carey Property Advisors will use its best efforts to present suitable
investments to us consistent with our investment procedures, objectives and
policies. If Carey Property Advisors or any of its affiliates is presented with
a potential investment in a property which might be made by more than one
investment entity which it advises or manages, the decision as to the
suitability of the property for investment by a particular entity will be based
upon a review of the investment portfolio of each entity and upon factors such
as:

-- cash flow from the property;

-- the effect of the acquisition of the property on the diversification
of each entity's portfolio;

-- rental payments during any renewal period;

-- the estimated income tax effects of the purchase on each entity;

-- the amount of equity required to make the investment;

-- the policies of each entity relating to leverage;

-- the funds of each entity available for investment; and

-- the length of time the funds have been available for investment and
the manner in which the potential investment can be structured by each
entity.

Consideration will be given to joint ownership (e.g., tenancy-in-common or
joint venture arrangement) of a particular property determined to be suitable
for more than one investment entity in order to achieve diversification of each
entity's portfolio and efficient completion of an entity's portfolio. In joint
ownership, the investment of each entity will be on substantially similar terms
and conditions, compensation to the organizer of each investment entity will be
similar and each investment entity will have a right of first refusal to
purchase the interest of the other if a sale of that interest is contemplated.
See "Risk Factors -- Our Participation in Joint Ventures Creates Additional
Risks." To the extent that a particular property might be determined to be
suitable for more than one investment entity, priority generally will be given
to the investment entity having uninvested funds for the longest period of time.
It is the responsibility of the directors (including the independent directors)
to insure that the method used to allocate transactions is applied fairly to us.
32
<PAGE> 34

ADJACENT PROPERTIES.

If Carey Property Advisors or any of its affiliates acquires properties
that are adjacent to one of our properties, the value of such properties may be
enhanced by our interests. It also is possible that these properties could be in
competition with our properties for prospective tenants.

COMPETITION FROM AFFILIATES OF CAREY PROPERTY ADVISORS FOR THE TIME AND SERVICES
OF OFFICERS AND DIRECTORS.

We depend on the board and Carey Property Advisors for our operations and
for the acquisition, operation and disposition of our investments. Carey
Property Advisors has entered into the advisory agreement with us pursuant to
which it will perform certain functions relating to the investment of our funds
and our day-to-day management. See "Management -- Advisory Agreement." Most
officers of Carey Fiduciary Advisors, Inc., the general partner of Carey
Property Advisors, are also officers, directors and/or employees of W.P. Carey &
Co., Inc. Some officers of affiliates of Carey Property Advisors will be
performing similar services for the CPA(R) programs and may perform these
services for REITs, partnerships or other investment entities offered or managed
in the future by affiliates of Carey Property Advisors. The manager of Carey
Diversified LLC is an affiliate of Carey Property Advisors. Carey Property
Advisors serves in the same advisory capacity for Corporate Property Associates
10 Incorporated (or "CPA(R):10"), Corporate Property Associates 12 Incorporated
(or "CPA(R):12") Carey Institutional Properties Incorporated (or "CIP(R)") as it
does for CPA(R):14. Carey Fiduciary Advisors, Carey Property Advisors and their
affiliates will devote the time to our affairs as they, within their sole
discretion, exercised in good faith, determine to be necessary for our benefit
and the shareholders. See "Management." Neither Carey Financial, Carey Property
Advisors nor any of their affiliates are restricted from acting as general
partner, advisor, underwriter, selling agent or broker-dealer in public or
private offerings of securities in REITs, real estate partnerships or other
entities which may have objectives similar to ours and which are sponsored by
affiliated or non-affiliated persons.

AFFILIATED SALES AGENT.

Carey Financial, a subsidiary of W.P. Carey & Co. and an affiliate of Carey
Property Advisors, will receive a selling commission for each share sold by it
(except for sales made to Carey Property Advisors, its employees or its
affiliates) and annual servicing fees with respect to shares held by its
clients, and will receive reimbursement for specified expenses. See "The
Offering."

COMMON COUNSEL.

Reed Smith Shaw & McClay LLP, our counsel in connection with this offering,
is also counsel to Carey Property Advisors, Carey Financial and various
affiliates, including the CPA(R) programs and W.P. Carey & Co. In the event any
legal controversy arises in which our interests appear to be in conflict with
those of Carey Property Advisors, Carey Financial or their affiliates, other
counsel will be retained for one or more parties.

33
<PAGE> 35

The following chart shows the relationship among Carey Property Advisors,
its general partner, its affiliates and CPA(R):14. See "Management."

[WILLIAM P. CAREY ORGANIZATIONAL CHART]

34
<PAGE> 36

PRIOR OFFERINGS BY AFFILIATES

THE INFORMATION IN THIS SECTION AND THE TABLES REFERENCED HEREIN SHOULD NOT
BE CONSIDERED AS INDICATIVE OF HOW WE WILL PERFORM. IN ADDITION, THE TABLES
INCLUDED AS EXHIBITS TO THIS PROSPECTUS DO NOT MEAN THAT WE WILL MAKE
INVESTMENTS COMPARABLE TO THOSE REFLECTED IN SUCH TABLES. IF YOU PURCHASE SHARES
IN CPA(R):14, YOU WILL NOT HAVE ANY OWNERSHIP INTEREST IN ANY OF THE REAL ESTATE
PROGRAMS DESCRIBED IN THE TABLES (UNLESS YOU ARE ALSO AN INVESTOR IN THOSE REAL
ESTATE PROGRAMS).

Affiliates of Carey Property Advisors have organized the limited
partnerships listed below:

-- Corporate Property Associates

-- Corporate Property Associates 2

-- Corporate Property Associates 3

-- Corporate Property Associates 4, a California limited partnership

-- Corporate Property Associates 5

-- Corporate Property Associates 6 -- a California limited partnership

-- Corporate Property Associates 7 -- a California limited partnership

-- Corporate Property Associates 8, L.P., a Delaware limited partnership

-- Corporate Property Associates 9, L.P.

On January 1, 1998, these nine partnerships were combined to form Carey
Diversified LLC, a New York Stock Exchange listed limited liability company. The
partnerships no longer operate as independent entities. The trading symbol of
Carey Diversified is "CDC."

Affiliates of Carey Property Advisors have also organized the REITs listed
below (in addition to CPA(R):14):

-- Corporate Property Associates 10 Incorporated

-- Carey Institutional Properties Incorporated

-- Corporate Property Associates 12 Incorporated

These REITs and the CPA(R) limited partnerships are referred to as the
CPA(R) Programs. The primary investment objectives of the CPA(R) programs are
similar to ours.

The following is information relating to the CPA(R) Programs as of December
31, 1998:

<TABLE>
<S> <C>
Total equity raised: $1,090,639,000
Total investors: 54,421
Number of Properties Purchased: 443
Aggregate Purchase Price of Properties: $1,896,365,000
Total Equity Investment in Properties: $ 954,130,000
Total Mortgage Financing: $ 942,235,000
</TABLE>

35
<PAGE> 37

The CPA(R) programs have invested in the following types of properties:

[Property Type Diversification Chart]

36
<PAGE> 38

The properties owned by the CPA(R) programs as of December 31, 1998 are
located throughout the United States as shown on the map below.

REGIONAL DIVERSIFICATION

[MAP OF THE UNITED STATES]

When acquired by the CPA(R) programs, approximately 21.62% of the
properties had newly constructed buildings or buildings being constructed and
approximately 78.38% had previously constructed buildings (based on the purchase
price). When purchased by the CPA(R) programs, all of the properties were
single-tenant commercial, industrial and governmental real property (or
interests therein). The CPA(R) programs have made no loans or participating
loans and have entered into 30 joint ventures with affiliated programs (23% of
all transactions entered into by the CPA(R) programs). More detailed information
with respect to investments by the CPA(R) programs is separately presented in
tabular form for the CPA(R) programs in Exhibit 99 to Part II of the
registration statement. Upon written request to the Director of Investor
Relations, 50 Rockefeller Plaza, NY, NY 10020, (800) 972-2739, CPA(R):14 will
provide, at no fee, copies of Exhibit 99.

The leveraged percentage achieved by the CPA(R) REITs are as follows:

The CPA(R) programs, including Carey Diversified, have sold all or a
portion of 71 properties as of December 31, 1998.

<TABLE>
<S> <C>
Total properties sold...................................... 71
Original purchase price of properties sold................. $227,566,000
Equity investment in properties sold....................... $ 98,794,000
Amount received from sale of properties.................... $236,335,000
Net proceeds from sales (after expenses and payment of
mortgage debt)........................................... $143,142,000
</TABLE>

37
<PAGE> 39

More detailed information with respect to the properties sold by the CPA(R)
programs between January 1, 1994 and December 31, 1998 is presented in tabular
form in Table V (Sales or Dispositions of Properties) in Exhibit A to this
prospectus.

Some CPA(R) programs have experienced adverse business developments which
have included the filing by some tenants for protection from creditors under the
bankruptcy code, the vacating of facilities by a tenant at the end of an initial
lease term, and litigation with tenants involving lease defaults and sales of
properties. These developments have caused a reduction in cash flow and/or an
increase in administrative expenses of the affected CPA(R) program for certain
periods of time, but, with four exceptions, have not caused the affected CPA(R)
program to reduce their rate of distributions to partners. See Table III
(Operating Results of Prior Programs) in Exhibit A to this prospectus for
overall results of operations of the affected CPA(R) programs.

The management of the affected CPA(R) program has undertaken a number of
measures to mitigate the adverse effects of some adverse business developments,
such as re-leasing properties vacated by initial tenants; refinancing mortgage
loans and restructuring terms of existing mortgage loans; restructuring lease
terms; selling properties; and, in the case of litigation, vigorously defending
the interests of affected CPA(R) programs and, where appropriate, settling
litigation. Of the approximately 150 tenants with which the CPA(R) programs have
entered into leases, 15 have subsequently sought protection from creditors in
bankruptcy. Properties formerly leased to nine of these tenants have been
re-leased or sold. Four other tenants have affirmed their leases and the leases
of the remaining two tenants are currently the subject of negotiations described
below.

Most CPA(R) programs in which adverse developments have occurred have been
able to meet their obligations and maintain distributions to their investors,
primarily as a result of the efforts of management described above and below and
the existence of a working capital reserve established at the inception of each
CPA(R) program. Although several CPA(R) programs have experienced the types of
adverse business developments described above, only four CPA(R) Programs,
CPA(R):1, CPA(R):5, CPA(R):7 and CPA(R):10 have had to reduce the rate of
distributions to their partners or shareholders as a result of adverse
developments. The adverse developments which were primarily responsible for
causing these reductions in the rate of distributions are, in the case of
CPA(R):1, the bankruptcy filing by Storage Technology, in the case of CPA(R):5,
the sale of two properties, in the case of CPA(R):7, the bankruptcy filings of
Yellow Front Stores, Inc. and NV Ryan L.P. and in the case of CPA(R):10, the
expiration of one lease and the bankruptcy of Harvest Foods. The reductions in
distribution rates in each of CPA(R):1, CPA(R):5, CPA(R):7 and CPA(R):10 were
followed by increases in the distribution rates. The distribution rate of
CPA(R):7 exceeded the rate in effect before the reductions when it was merged
with Carey Diversified while the distribution rate of CPA(R):1 and CPA(R):5 had
not reached the rate in effect before the reduction at the time of the merger.

Most of the adverse developments which have occurred have been resolved.
These include the filings for protection from creditors under the bankruptcy
code by approximately 15 tenants of the CPA(R) program.

The management of these programs has addressed these bankruptcies primarily
by re-leasing the properties to new tenants or by restructuring the original
leases at a reduced rental. Certain of the properties have been sold at a loss
or transferred in exchange for a release of the related mortgage debt.

Additional information concerning the CPA(R) Programs is set forth in
tabular form in Exhibit A to this prospectus. See "Experience in Raising and
Investing Funds" in Table I; "Compensation to W. P. Carey & Co." in Table II;
"Operating Results of Prior Programs" in Table III; "Results of Completed
Programs" in Table IV and "Sales or Dispositions of Properties" in Table V. In
addition, upon written request to the Director of Investor Relations, 50
Rockefeller Plaza, New York, NY 10020, (800) 972-2739, CPA(R):14 will provide,
at no fee, the most recent annual report (on Form 10-K) filed by any of the
CPA(R) Programs and, at a reasonable fee, the exhibits to the annual report.

38
<PAGE> 40

MANAGEMENT

We operate under the direction of the board, the members of which are
accountable to us and our shareholders as fiduciaries. A majority of the
independent directors and a majority of the directors have reviewed and ratified
the articles of incorporation and have adopted the bylaws. The board is
responsible for the management and control of our affairs. The board has
retained Carey Property Advisors to manage our day-to-day affairs and the
acquisition and disposition of investments, subject to the board's supervision.
We currently have seven directors; we must have at least three and may have no
more than nine directors.

A majority of the board must be comprised of independent directors, except
for a period of 90 days after the death, removal or resignation of an
independent director. An independent director may not, directly or indirectly
(including through a member of his immediate family), own any interest in, be
employed by, have any material business or professional relationship with, or
serve as an officer or director of, W. P. Carey & Co., Carey Property Advisors
or any of their affiliates, except that an independent director may serve as a
director, officer or trustee for not more than two other REITs organized by W.
P. Carey & Co. or advised by Carey Property Advisors. An independent director
may not perform material services for CPA(R):14, except to carry out the
responsibilities of director. Three of the directors are affiliates of Carey
Property Advisors and four are independent directors. An independent director is
a director who is not and has not for the last two years been associated with W.
P. Carey & Co., Carey Property Advisors or any of its affiliates other than up
to two other public REITs sponsored by W. P. Carey & Co. All of the initial
directors were recommended by W. P. Carey & Co.

Proposed transactions brought to the board for approval are often discussed
before being brought to a final board vote. During these discussions,
independent directors often offer ideas for ways in which deals can be changed
to make them acceptable and these suggestions are taken into consideration when
structuring transactions. No independent director of any prior CPA(R) program
has ever voted against a property acquisition recommendation on a final vote.
Each director will hold office until the next annual meeting of shareholders or
until his successor has been duly elected and qualified. Although the number of
directors may be increased or decreased, a decrease shall not have the effect of
shortening the term of any incumbent director.

Any director may resign at any time and may be removed with or without
cause by the shareholders upon the affirmative vote of at least a majority of
all the votes entitled to be cast at a meeting called for the purpose of the
proposed removal. The notice of the meeting shall indicate that the purpose, or
one of the purposes, of the meeting is to determine if the director shall be
removed. The term "cause" as used in this context is a term used in the Maryland
Corporation and Association Code. This code does not include a definition of
this term and Maryland case law suggests that the term be defined on a case-
by-case basis. The effect of the Maryland Code's lack of a definition of cause
is that we cannot provide investors with a definition for "cause." As a result
of this uncertainty, investors may not know what actions by a director may be
grounds for removal.

Unless filled by a vote of the shareholders as permitted by Maryland law, a
vacancy created by an increase in the number of directors or the death,
resignation, removal, adjudicated incompetence or other incapacity of a director
shall be filled by a vote of a majority of the remaining directors and,

-- in the case of a director who is not an independent director (an
"affiliated director"), by a vote of a majority of the remaining
affiliated directors, or

-- in the case of an independent director, by a vote of a majority of the
remaining independent directors

unless there are no remaining affiliated directors or independent directors, as
the case may be, to so fill a vacancy, in which case a majority vote of the
remaining directors shall be sufficient. If at any time there are no independent
or affiliated directors in office, successor directors shall be elected by the
shareholders. Each director will be bound by the articles of incorporation and
the bylaws.
39
<PAGE> 41

The directors are not required to devote all of their time to us and are
only required to devote the time to our affairs as their duties require. The
directors will meet quarterly or more frequently if necessary. It is not
expected that the directors will be required to devote a substantial portion of
their time to discharge their duties as directors. Consequently, in the exercise
of their fiduciary responsibilities, the directors will be relying heavily on
Carey Property Advisors. The board is empowered to fix the compensation of all
officers that it selects and may pay remuneration to directors for services
rendered to us in any other capacity. We pay to each independent director a
quarterly fee of $2,750 and a meeting fee of $1,000 per meeting. It is estimated
that the aggregate compensation payable to the independent directors as a group
for a full fiscal year will be approximately $60,000. We will not pay any
compensation to our officers or directors who also serve as officers or
directors of Carey Property Advisors. The board may change the compensation of
directors.

Our general investment and borrowing policies are set forth in this
prospectus. The directors may establish further written policies on investments
and borrowings and shall monitor our administrative procedures, investment
operations and performance as well as that of Carey Property Advisors to assure
that the policies are in the best interest of the shareholders and are
fulfilled. We will follow the policies on investments and borrowings set forth
in this prospectus unless and until they are modified by the directors.

The board is also responsible for reviewing our fees and expenses on at
least an annual basis and with sufficient frequency to determine that the
expenses incurred are in the best interests of the shareholders. In addition, a
majority of the independent directors and a majority of directors not otherwise
interested in the transaction must approve all transactions with Carey Property
Advisors or its affiliates (other than other publicly-registered entities, in
which case only the allocation of interests in the transaction must be approved
by the independent directors). The independent directors also will be
responsible for reviewing the performance of Carey Property Advisors and
determining that the compensation to be paid to Carey Property Advisors is
reasonable in relation to the nature and quality of services to be performed and
that the provisions of the advisory agreement are being carried out.
Specifically, the independent directors will consider factors such as

-- the amount of the fee paid to Carey Property Advisors in relation to
the size, composition and performance of CPA(R):14's investments;

-- the success of Carey Property Advisors in generating appropriate
investment opportunities;

-- rates charged to other REITs and other investors by advisers
performing similar services;

-- additional revenues realized by Carey Property Advisors and its
affiliates through their relationship with us, whether we pay them or
they are paid by others with whom we do business;

-- the quality and extent of service and advice furnished by Carey
Property Advisors, the performance of our investment portfolio; and

-- the quality of our portfolio relative to the investments generated by
Carey Property Advisors for its other clients.

Neither the directors nor their affiliates will vote or consent to the
voting of shares they now own or hereafter acquire on matters submitted to the
shareholders regarding either (i) the removal of Carey Property Advisors, any
director or any affiliate; or (ii) any transaction between us and Carey Property
Advisors, any director or any affiliate.

40
<PAGE> 42

DIRECTORS AND EXECUTIVE OFFICERS OF CPA(R):14

Our directors and executive officers are as follows:

<TABLE>
<CAPTION>
NAME OFFICE
---- ------
<S> <C>
William P. Carey........................... Chairman of the Board and Director
H. Augustus Carey.......................... President
George E. Stoddard......................... Director
William Ruder.............................. Director*
Charles C. Townsend........................ Director*
Warren G. Wintrub.......................... Director*
Thomas E. Zacharias........................ Director*
Gordon F. DuGan............................ Executive Vice President
Claude Fernandez........................... Executive Vice President and Chief
Administration Officer
John J. Park............................... Executive Vice President -- Finance and
Treasurer
Gordon J. Whiting.......................... Executive Vice President and Portfolio
Manager
Debra E. Bigler............................ Senior Vice President and Regional
Marketing Director
Ted G. Lagreid............................. Senior Vice President and Regional
Marketing Director
Anthony S. Mohl............................ Senior Vice President -- Acquisitions
Michael D. Roberts......................... Senior Vice President and Controller
Susan C. Hyde.............................. First Vice President and Secretary
Frank S. Owens............................. First Vice President
</TABLE>

- ---------------
* Independent Director

The following is a biographical summary of the experience of our directors
and executive officers:

William P. Carey, age 69, elected Chairman in June 1997, has been active in
lease financing since 1959 and a specialist in net leasing of corporate real
estate property since 1964. Before founding W.P. Carey & Co., Inc. in 1973, he
served as Chairman of the Executive Committee of Hubbard, Westervelt & Mottelay
(now Merrill Lynch Hubbard), head of Real Estate and Equipment Financing at
Loeb, Rhoades & Co. (now Lehman Brothers) and head of Real Estate and Private
Placements, Director of Corporate Finance and Vice Chairman of the Investment
Banking Board of duPont Glore Forgan Inc. A graduate of the University of
Pennsylvania's Wharton School, Mr. Carey served as a Governor of the National
Association of Real Estate Investment Trusts ("NAREIT"). He currently serves on
the boards of The Johns Hopkins University and its School of Advanced
International Studies and as Chairman of the Boards of Trustees of the St. Elmo
Foundation and the W.P. Carey Foundation. He founded the Visiting Committee to
the Economics Department of the University of Pennsylvania and co-founded with
Dr. Lawrence Klein the Economics Research Institute at that university. With Sir
John Templeton, he helped to establish the program in management education at
Oxford University. Mr. Carey also serves as Chairman of the Board and Chief
Executive Officer of CPA(R):10, CIP(R) and CPA(R):12 and as a director of Carey
Diversified. Mr. Carey is an uncle of H. Augustus Carey.

H. Augustus Carey, age 42, elected President in October 1998, returned to
W.P. Carey & Co. as a Vice President in August 1988 and was elected First Vice
President in April 1992, Senior Vice President in October 1995 and Managing
Director in January 1996. Mr. Carey previously worked for W.P. Carey & Co. from
1979 to 1981 as Assistant to the President. From 1984 to 1987, Mr. Carey served
as a loan officer in the North American Department of Kleinwort Benson Limited
in London, England. He received his A.B. in Asian Studies from Amherst College
in 1979 and a M.Phil. in Management Studies from Oxford University in 1984. Mr.
Carey is Chairman of the Corporate Advisory

41
<PAGE> 43

Council for the International Association for Investment Planners and a Trustee
for the Oxford Management Center Advisory Council. He is the nephew of William
P. Carey.

George E. Stoddard, age 82, elected director in June 1997, was until 1979
officer-in-charge of the Direct Placement Department of The Equitable Life
Assurance Society of the United States ("Equitable"), with responsibility for
all activities related to Equitable's portfolio of corporate investments
acquired through direct negotiation. Mr. Stoddard was associated with Equitable
for over 30 years. He holds an A.B. degree from Brigham Young University, an
M.B.A. from Harvard Business School and an LL.B. from Fordham University Law
School. Mr. Stoddard also serves as a Managing Director of W.P. Carey & Co. Mr.
Stoddard is a director of CPA(R):10, CIP(R) and CPA(R):12.

William Ruder, age 78, elected director in June 1997, is Chairman of the
Board of William Ruder Incorporated, a consulting firm founded in 1981. From
1948 to 1981, Mr. Ruder was in partnership with David Finn at the firm of Ruder
& Finn, an international public relations company. He is a former Assistant
Secretary of Commerce of the United States and is on the board of directors of
the United Nations Association of the United States of America, Junior
Achievement and the Council of Economic Priorities. He is a member of the Board
of Overseers of the Wharton School of the University of Pennsylvania and has
also served as a consultant to the Communications Advisory Board to the White
House Press Secretary, the Committee for Economic Development and the Office of
Overseas Schools for the U.S. State Department. Mr. Ruder is a Tobe Lecturer at
Harvard Graduate School of Business and is associated with several other
businesses, civic and cultural organizations. He received a B.S.S. degree from
the City College of New York. Mr. Ruder served as a director of W.P. Carey & Co.
from 1987 to 1990. Mr. Ruder is a director of CPA(R):10 and CPA(R):12.

Charles C. Townsend, Jr., age 72, elected director in June 1997, currently
is an Advisory Director of Morgan Stanley & Co., having held such position since
1979. Mr. Townsend was a Partner and a Managing Director of Morgan Stanley & Co.
from 1963 to 1978 and served as Chairman of Morgan Stanley Realty Corporation
from 1977 to 1982. Mr. Townsend holds a B.S.E.E. from Princeton University and
an M.B.A. from Harvard University. Mr. Townsend is a director of CIP(R) and
Carey Diversified.

Warren G. Wintrub, age 65, elected director in June 1997, retired in 1992
from Coopers & Lybrand L.L.P. after 35 years. Mr. Wintrub was elected a partner
in Coopers & Lybrand L.L.P. in 1963 and specialized in tax matters and served on
that firm's Executive Committee from 1976 to 1988 and as a Chairman of its
Retirement Committee from 1979 to 1992. Mr. Wintrub holds a B.S. degree from
Ohio State University and an LL.B. from Harvard Law School. He currently serves
as a director of Chromcraft Revington, Inc. and Getty Petroleum Co. Mr. Wintrub
is a director of CPA(R):10 and CIP(R).

Thomas E. Zacharias, age 45, elected director in June 1997, is currently a
Senior Vice President of Lend Lease Development U.S., Inc., a subsidiary of Lend
Lease Corporation, a global financial services, property and management company.
Mr. Zacharias was Vice President of Corporate Property Investors from 1986 to
1998. Corporate Property Investors, a party which is unaffiliated with
CPA(R):14, is one of the largest equity-oriented REITS in the U.S. with
approximately $4.4 billion under management. Prior to joining Corporate Property
Investors in 1981, Mr. Zacharias was Project Director for the New York State
Urban Development Corporation from 1980-1981, and served as the Assistant to the
Chief Operating Officer from 1979-1980. Mr. Zacharias received his undergraduate
degree, magna cum laude, from Princeton University in 1976 and a Master of
Public and Private Management from the Yale School of Management in 1979. Mr.
Zacharias is a director of CIP(R) and CPA(R):12.

Gordon F. DuGan, age 33, elected Executive Vice President in June 1997, was
elected President of W.P. Carey & Co. in September 1999. Having originally
joined W.P. Carey & Co. in 1988 and until September 1995 a Senior Vice President
in the Acquisitions Department of W.P. Carey & Co., Mr. DuGan rejoined W.P.
Carey as Deputy Head of Acquisitions in February 1997 and was elected president
of W.P. Carey & Co. in September 1999. Prior to rejoining W.P. Carey & Co., he
served as Chief Financial Officer of Superconducting Core Technologies, a
Colorado wireless communications

42
<PAGE> 44

equipment manufacturer from October 1995 until February 1997. Mr. DuGan received
his B.S. degree in Finance from the University of Pennsylvania. Mr. DuGan is a
director of Carey Diversified.

Claude Fernandez, age 47, elected Executive Vice President and Chief
Administrative Officer in June 1997, joined W.P. Carey & Co. as Assistant
Controller in March 1983, was elected Controller in July 1983, Vice President in
April 1986 and is now a Managing Director, Executive Vice President and Chief
Administrative Officer. Prior to joining W.P. Carey & Co., Mr. Fernandez was
associated with Coldwell Banker, Inc. in New York for two years and with Arthur
Andersen & Co. in New York for over three years. Mr. Fernandez, a Certified
Public Accountant, received his B.S. degree in Accounting from New York
University in 1975 and his M.B.A. in Finance from Columbia University Graduate
School of Business in 1981.

John J. Park, age 35, elected Executive Vice President in April 1999, was
elected Senior Vice President in June 1997, a First Vice President of W.P. Carey
& Co. in April 1993 and Senior Vice President in October 1995. Mr. Park joined
W.P. Carey & Co. as an Investment Analyst in December 1987 and became a Vice
President in July 1991. Mr. Park received his undergraduate degree from the
Massachusetts Institute of Technology in 1986 and an M.B.A. from New York
University in 1991.

Gordon J. Whiting, age 33, elected Senior Vice President of W.P. Carey &
Co., Inc. in April, 1998. Mr. Whiting joined W.P. Carey & Co., Inc. in September
1994, as a Second Vice President after receiving an M.B.A. from the Columbia
University Graduate School of Business, where he concentrated in Finance. Mr.
Whiting was elected a Vice President of W.P. Carey & Co., Inc. in October 1995
and a First Vice President in April 1997. Mr. Whiting founded an import/export
company based in Hong Kong after receiving a B.S. in Business Management and
Marketing from Cornell University.

Debra E. Bigler, age 46, elected Senior Vice President in June 1997, became
Vice President and Marketing Director of W.P. Carey & Co. in July 1991 and a
First Vice President in October 1995. A regional marketing director responsible
for investor services in the south and south central United States, Ms. Bigler
joined W.P. Carey & Co. in March 1989 as Assistant Marketing Director. Ms.
Bigler was employed as a Marketing Associate with E.F. Hutton & Company Inc.
from July 1980 to January 1989.

Ted G. Lagreid, age 47, elected Senior Vice President in June 1997, joined
W.P. Carey & Co. in 1994 and became a First Vice President in October 1995. Mr.
Lagreid is a regional marketing director responsible for investor services in
the western United States. Prior to joining the firm, from July 1993 through
October 1994, he was employed by the Shurgard Capital Group then from January
1991 to July 1993, for SunAmerica where he was an executive in its mutual funds
group. He earned an A.B. from the University of Washington, received an M.P.A.
from the University of Puget Sound and then spent eight years in the City of
Seattle's Department of Community Development. Mr. Lagreid was a commissioner of
the City of Oakland, California, having served on its Community and Economic
Development Advisory Commission.

Anthony S. Mohl, age 37, became a Senior Vice President in June 1997. Mr.
Mohl joined W.P. Carey & Co. as Assistant to the President in September 1987
after receiving an M.B.A. from the Columbia University Graduate School of
Business and became a Second Vice President in January 1990 and a Vice President
in April 1992. Mr. Mohl was employed as an analyst in the strategic planning
group of Kurt Salmon Associates after receiving an undergraduate degree from
Wesleyan University.

Michael D. Roberts, age 47, elected Senior Vice President in June 1997,
joined W.P. Carey & Co. in April 1989 as a Second Vice President and Assistant
Controller and was named Vice President and Controller in October 1989 and First
Vice President in July 1990. From August 1980 to February 1983 and from
September 1983 to April 1989, he was employed by Coopers & Lybrand L.L.P. and
held the position of Audit Manager at the time of his departure. A Certified
Public Accountant, Mr. Roberts received his undergraduate degree from Brandeis
University and his M.B.A. from Northeastern University.

43
<PAGE> 45

Susan C. Hyde, age 31, is a First Vice President and a Director of Investor
Relations of W.P. Carey & Co. Ms. Hyde joined W.P. Carey & Co. in 1990, became a
Second Vice President in April 1995 and a Vice President in April 1997. Ms. Hyde
graduated from Villanova University in 1990 where she received a B.S. degree in
Business Administration with a concentration in marketing and a B.A. degree in
English.

Frank S. Owens, age 40, joined W. P. Carey and Co. as a First Vice
President and Director of Asset Management in July 1998. From January 1997 to
January 1998, Mr. Owens was Vice President, Asset Management for Devon
Properties, Inc. And from October 1992 to December 1996 he was Vice President,
Real Estate Group, UBS Asset Management, Inc. Mr. Owens previously held asset
management and development positions at Jones Lang Wootton Realty Advisors and
The Prudential Realty Group. Mr. Owens received a B.S. in Mathematics from St.
Lawrence University, a B.S. in Civil and Environmental Engineering from Clarkson
University, and an M.B.A. from Cornell University.

Some of our directors and officers act as directors or officers of the
general partners of other CPA(R) programs and may own interests in those CPA(R)
programs.

CAREY PROPERTY ADVISORS

The general partner of Carey Property Advisors is Carey Fiduciary Advisors,
Inc., a corporation wholly-owned by William P. Carey. Mr. Carey also owns 100%
of W.P. Carey & Co., Inc. W.P. Carey & Co. is a private company that specializes
in arranging private financing for major corporations, principally net lease
financings of real property, and the officers of W.P. Carey & Co. have an
extensive background in this area. Properties financed with the assistance of
W.P. Carey & Co. have included office buildings, manufacturing plants,
distribution and retail facilities, warehouses, movie theaters and hotels.

DIRECTORS AND PRINCIPAL OFFICERS OF CAREY FIDUCIARY ADVISORS

The directors and principal officers of Carey Fiduciary Advisors are as
follows:

<TABLE>
<CAPTION>
NAME OFFICE
---- ------
<S> <C>
William P. Carey........................... Chairman of the Board and Director
George E. Stoddard......................... Chairman of the Investment Committee and
Director
Frank J. Hoenemeyer........................ Vice Chairman of the Investment Committee
and Director
Lawrence R. Klein.......................... Chairman of the Economic Policy Committee
and Director
Nathaniel S. Coolidge...................... Director
Claude Fernandez........................... Executive Vice President and Chief
Administrative Officer
Gordon F. DuGan............................ President
John J. Park............................... Executive Vice President and Treasurer
H. Augustus Carey.......................... Senior Vice President and Secretary
Debra E. Bigler............................ Senior Vice President and Regional Director
Ted G. Lagreid............................. Senior Vice President and Regional Director
Anthony S. Mohl............................ Senior Vice President
Michael D. Roberts......................... Senior Vice President and Controller
Gordon J. Whiting.......................... Senior Vice President
Anne R. Coolidge........................... First Vice President
Susan C. Hyde.............................. First Vice President
</TABLE>

44
<PAGE> 46

<TABLE>
<CAPTION>
NAME OFFICE
---- ------
<S> <C>
Edward V. LaPuma........................... First Vice President
David W. Marvin............................ First Vice President and Regional Director
Frank S. Owens............................. First Vice President
W. Sean Sovak.............................. First Vice President
Robert C. Kehoe............................ Vice President
Mary Ann Kelly............................. Vice President and Regional Director
David G. Termine........................... Vice President
Matthew B. Walley.......................... Vice President
</TABLE>

The following is a biographical summary of the experience of the directors
and executive officers of Carey Fiduciary Advisors:

Information regarding Messrs. W. P. Carey, Stoddard, DuGan, Fernandez, H.A.
Carey, Park, Mohl, Lagreid, Roberts, Whiting, Owens, Ms. Bigler and Ms. Hyde is
set forth under "Management -- Directors and Principal Officers of CPA(R):14."

Frank J. Hoenemeyer, age 79, elected Vice Chairman of the Investment
Committee and director in May 1992, was Vice Chairman, Director and Chief
Investment Officer of The Prudential Insurance Company of America until his
retirement in November 1984. As Chief Investment Officer he was responsible for
all of Prudential's investments in stocks, bonds, private placements, leveraged
buyouts, venture capital, real estate ownership and mortgages. Mr. Hoenemeyer
was graduated with a B.S. in Economics from Xavier University, Cincinnati, Ohio
and an M.B.A. from the Wharton School of the University of Pennsylvania, and
joined Prudential in 1947. Under his direction as Chief Investment Officer,
Prudential built the world's largest real estate and securities investment
portfolio (valued at over $200 billion in 1989) and became a leader in
investments including the purchase and development of real estate, leveraged
buyouts and venture capital. Mr. Hoenemeyer serves on the Boards of American
International Group and Mitsui Trust Bank (U.S.A.) and is formerly a director of
Corporate Property Investors, a $4.4 billion private real estate investment
trust. He has also been active in community affairs and at present is Chairman
of the Turrell Fund and a Trustee and Chairman of the Finance Committee of the
Robert Wood Johnson Foundation.

Dr. Lawrence R. Klein, age 79, is the Benjamin Franklin Professor Emeritus
of Economics and Finance at the University of Pennsylvania and its Wharton
School, having joined the faculty of the University in 1958. He is a holder of
earned degrees from the University of California at Berkeley and the
Massachusetts Institute of Technology and has been awarded the Alfred Nobel
Memorial Prize in Economic Sciences as well as a number of honorary degrees.
Founder of Wharton Econometric Forecasting Associates, Inc., Dr. Klein has been
counselor to various corporations, governments and government agencies,
including the Federal Reserve Board and the President's Council of Economic
Advisers. Dr. Klein joined W.P. Carey & Co. in 1984 as Chairman of the Economic
Policy Committee and as a director. Dr. Klein is a director of Carey
Diversified.

Nathaniel S. Coolidge, age 60, former Senior Vice President of John Hancock
Mutual Life Insurance retired in 1995 after 20 years of service. From 1986 to
1995, Mr. Coolidge headed the Bond and Corporate Finance Department which was
responsible for managing $21 billion of fixed income investments. Prior to 1986,
Mr. Coolidge served as Second Vice President and Senior Investment Officer. Mr.
Coolidge holds a B.A. from Harvard University.

Anne R. Coolidge, age 30, a First Vice President, joined W.P. Carey & Co.
in 1993 as Assistant to the Chairman and was elected a Vice President in April
1998 and First Vice President in March 1999. Ms. Coolidge received an A.B. from
Harvard College magna cum laude and an M.B.A. from Columbia University's
Graduate School of Business.

45
<PAGE> 47

Edward V. LaPuma, age 26, became a First Vice President of W.P. Carey & Co.
in April, 1998. Mr. LaPuma joined W.P. Carey & Co. as an Assistant to the
Chairman in July 1995, became a Second Vice President in July 1996 and a Vice
President and Research Officer in April 1997. A graduate of the University of
Pennsylvania, Mr. LaPuma received a B.A. in Global Economic Strategies from The
College of Arts and Sciences and a B.S. in Economics with a concentration in
Finance from the Wharton School.

David W. Marvin, age 47, became a First Vice President of W.P. Carey & Co.
in April, 1998. Mr. Marvin joined W.P. Carey & Co. in 1995 as a Vice President
regional marketing director for the northeastern United States. Previously he
spent 15 years at Prudential-Bache and Kidder-Peabody, as well as was a national
director of sales with Cigna Corporation. Mr. Marvin received his B.A. from the
University of Massachusetts at Amherst.

W. Sean Sovak, age 27, a First Vice President, joined W.P. Carey & Co. as
Assistant to the Chairman in 1994. He was appointed to First Vice President in
April 1998. Mr. Sovak was graduated summa cum laude from the University of
Pennsylvania's Wharton School, where he concentrated in Finance.

Robert Kehoe, age 39, a Vice President of W.P. Carey & Co., joined W.P.
Carey & Co. as a Senior Accountant in 1987. Mr. Kehoe became a Second Vice
President of W.P. Carey & Co. in April 1992 and a Vice President in July 1997.
Prior to joining W.P. Carey & Co., Mr. Kehoe was associated with Deloitte
Haskins & Sells for three years and was Manager of Financial Controls at CBS
Educational and Professional Publishing for two years. Mr. Kehoe received his
B.S. degree in Accounting from Manhattan College in 1982 and his M.B.A. from
Pace University in 1993.

Mary Ann Kelly, age 39, joined W.P. Carey & Co. in 1995 as a Vice President
and regional marketing director for the mountain states area. From March 1993
through October 1994 Ms. Kelly was employed by Related Capital Company as a
regional director in the southeastern United States. From December 1989 through
February 1993 Ms. Kelly was a Regional Marketing Representative, Northeast, for
Phoenix Leasing. Ms. Kelly received her B.B.A. from Hofstra University where she
concentrated in International Business.

David G. Termine, age 40, a Vice President, joined W.P. Carey & Co. in
1991. Earlier, he held a similar position at Lepereq Capital Partners (The LCP
Group) and was Assistant Controller for Lazard Realty Corp., a subsidiary of
Lazard Freres & Co. After receiving a B.S. in Accounting from Brooklyn College,
Mr. Termine started his career in public accounting, working for diverse real
estate clients, notably Rudin Management Co.

Matthew B. Walley, age 34, Vice President and Director of Corporate
Communications, worked for W.P. Carey & Co. at the beginning of his career and
returned to the firm in 1996. He was elected a Vice President in April 1998.
Prior to rejoining, he served as a member of the institutional fixed income
department of Paine Webber in London, where he had responsibility for
Institutional clients and European central banks. In addition, he worked at
Unilever, implementing strategic marketing in London, Amsterdam, Toronto and New
York. He holds an M.A. from Oxford University and an M.B.A. from New York
University's Stern School of Business.

The principal officers of Carey Fiduciary Advisors and the offices to which
they have been elected substantially are the same as those for CPA(R):14. All of
the officers and directors of Carey Fiduciary Advisors have been elected to
serve until the next annual meeting of Carey Fiduciary Advisors to be held in
1999.

46
<PAGE> 48

SHAREHOLDINGS

Carey Property Advisors currently owns 20,000 shares, which constitutes
0.17% of the outstanding shares as of December 31, 1998. Carey Property Advisors
may not sell any of these shares during the period it serves as our advisor.
Furthermore, any resale of the 20,000 shares that Carey Property Advisors
currently owns and the resale of any shares which may be acquired by our
affiliates are subject to the provisions of Rule 144 promulgated under the
Securities Act of 1933, which rule limits the number of shares that may be sold
at any one time and the manner of such resale. Although Carey Property Advisors
is not prohibited from acquiring additional shares, Carey Property Advisors has
no options or warrants to acquire any additional shares and has no current plans
to acquire additional shares. There is no limitation on the ability of Carey
Property Advisors or its affiliates to resell any shares they may acquire in the
future. If 40,000,000 shares are sold, Carey Property Advisors will own less
than 0.07% of the shares. Carey Property Advisors has agreed to abstain from
voting any shares it now owns or hereafter acquires in any vote for the election
of directors or any vote regarding the approval or termination of any contract
with Carey Property Advisors or any of its affiliates.

MANAGEMENT DECISIONS

All of the activities of Carey Property Advisors will be managed by Carey
Fiduciary Advisors. The primary responsibility for the selection our investments
and the negotiation for these investments will reside in William P. Carey,
George E. Stoddard, Gordon F. DuGan, Gordon J. Whiting, W. Sean Sovak, Edward V.
LaPuma and Anne R. Coolidge, all of whom are officers or directors of Carey
Fiduciary Advisors. Each potential investment will be submitted for review to
the investment committee. George E. Stoddard, Chairman, Frank J. Hoenemeyer and
Nathaniel S. Coolidge currently serve as members of the investment committee.
The board of directors of Carey Fiduciary Advisors has empowered the investment
committee to authorize and approve our investments on behalf of Carey Fiduciary
Advisors, provided that the members of the committee agree unanimously on the
action to be taken. However, the board of Carey Fiduciary Advisors retains
ultimate authority to authorize and approve our investments on behalf of Carey
Property Advisors and may make these investments on our behalf without the
approval of, and irrespective of any adverse recommendation by, the investment
committee or any other person, except our board.

LIMITED LIABILITY AND INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND
OTHER AGENTS

We maintain a directors and officers liability insurance policy. The
organizational documents limit the personal liability of our directors and
officers for monetary damages to the fullest extent permitted under current
Maryland law and provide that a director or officer may be indemnified to the
fullest extent required or permitted by Maryland law. Maryland law allows
directors and officers to be indemnified against judgments, penalties, fines,
settlements, and expenses actually incurred in a proceeding unless the following
can be established:

-- the act or omission of the director or officer was material to the
cause of action adjudicated in the proceeding, and was committed in
bad faith or was the result of active and deliberate dishonesty;

-- the director or officer actually received an improper personal benefit
in money, property or services; or

-- with respect to any criminal proceeding, the director or officer had
reasonable cause to believe his act or omission was unlawful.

Any indemnification or any agreement to hold harmless is recoverable only out of
our assets and not from the shareholders. Indemnification could reduce the legal
remedies available to us and the shareholders against the indemnified
individuals.

This provision does not reduce the exposure of directors and officers to
liability under federal or state securities laws, nor does it limit the
shareholder's ability to obtain injunctive relief or other

47
<PAGE> 49

equitable remedies for a violation of a director's or an officer's duties to us
or our shareholders, although the equitable remedies may not be an effective
remedy in some circumstances.

Notwithstanding the foregoing, the directors, Carey Property Advisors and
their affiliates will be indemnified by us for losses arising from our operation
only if all of the following conditions are met:

-- the directors, Carey Property Advisors or their affiliates have
determined, in good faith, that the course of conduct which caused the
loss or liability was in our best interests;

-- the directors, Carey Property Advisors or their affiliates were acting
on our behalf or performing services for us;

-- the liability or loss was not the result of negligence or misconduct
by the directors, Carey Property Advisors or their affiliates; and

-- the indemnification or agreement to hold harmless is recoverable only
out of our net assets and not from its shareholders.

In addition to any indemnification to which directors and officers shall be
entitled pursuant to the General Corporation Law of Maryland, the organizational
documents provide that we shall indemnify other employees and agents to the
extent authorized by the directors, whether they are serving us or, at our
request, any other entity. We have agreed to indemnify and hold harmless Carey
Property Advisors and its affiliates performing services for us from specific
claims and liabilities arising out of the performance of its obligations under
the advisory agreement. As a result, we and our shareholders may be entitled to
a more limited right of action than they would otherwise have if these
indemnification rights were not included in the advisory agreement.

The general effect to investors of any arrangement under which any
controlling person, director or officer of CPA(R):14 is insured or indemnified
against liability is a potential reduction in distributions resulting from our
payment of premiums associated with insurance. In addition, indemnification
could reduce the legal remedies available to CPA(R):14 and the shareholders
against the officers and directors.

The Securities and Exchange Commission takes the position that
indemnification against liabilities arising under the Securities Act of 1933 is
against public policy and unenforceable. Indemnification of the directors,
officers, Carey Property Advisors or their affiliates will not be allowed for
liabilities arising from or out of a violation of state or federal securities
laws. Indemnification will be allowed for settlements and related expenses of
lawsuits alleging securities laws violations and for expenses incurred in
successfully defending any lawsuits, provided that a court either

-- approves the settlement and finds that indemnification of the
settlement and related costs should be made; or

-- there has been a dismissal with prejudice or a successful adjudication
on the merits of each count involving alleged securities law
violations as to the particular indemnitee and a court approves the
indemnification.

ADVISORY AGREEMENT

Many of the services to be performed by Carey Property Advisors and its
affiliates in managing our day-to-day activities are summarized below. This
summary is provided to illustrate the material functions which Carey Property
Advisors and its affiliates will perform for us and it is not intended to
include all of the services which may be provided to us by third parties.

Under the terms of the advisory agreement, Carey Property Advisors
undertakes to use its best efforts to present to us investment opportunities
consistent with our investment policies and objectives

48
<PAGE> 50

as adopted by the board. In its performance of this undertaking, Carey Property
Advisors, either directly or indirectly by engaging an affiliate, shall (subject
to the authority of the board):

-- find, present and recommend to us a continuing series of real estate
investment opportunities consistent with our investment policies and
objectives;

-- provide advice to us, and act on our behalf with respect to the
acquisition, financing, refinancing, holding, leasing and disposition
of real estate investments;

-- make investments on our behalf in compliance with our investment
procedures, objectives and policies;

-- take the actions and obtain the services necessary to effectuate the
acquisition, financing, refinancing, holding, leasing and disposition
of real estate investments; and

-- provide day-to-day management of our business activities and the other
administrative services for us as requested by the board.

The board has authorized Carey Property Advisors to make investments in any
property on our behalf without the approval of the board if the following
conditions are satisfied:

-- Carey Property Advisors must obtain an appraisal for the property
indicating that the total cost of the property including fees does not
exceed the appraised value of the property; and

-- Carey Property Advisors must provide us with a representation that the
property, in conjunction with our other investments and proposed
investments, is reasonably expected to fulfill our investment
procedures, objectives and policies as established by the board and
then in effect.

The term of the advisory agreement ends on December 31, 2000 and thereafter
will be automatically renewed for successive one-year periods unless either
party shall give the other party written notice of non-renewal not less than 60
days before the end of any one-year period. Additionally, the advisory agreement
may be terminated

-- immediately by us for "cause" or upon the bankruptcy of Carey Property
Advisors or a material breach of the advisory agreement by Carey
Property Advisors,

-- without cause by a majority of the independent directors or
shareholders upon 60 days' notice, or

-- immediately with good reason by Carey Property Advisors.

"Good reason" is defined in the advisory agreement to mean either

-- any failure to obtain a satisfactory agreement from any successor to
us to assume and agree to perform our obligations under the advisory
agreement or

-- any material breach of the advisory agreement of any nature whatsoever
by us.

"Cause" is defined in the advisory agreement to mean fraud, criminal conduct,
willful misconduct or willful or negligent breach of fiduciary duty by Carey
Property Advisors or a breach of the advisory agreement by Carey Property
Advisors.

Carey Property Advisors and its affiliates expect to engage in other
business ventures and, as a result, their resources will not be dedicated
exclusively to our business. However, pursuant to the advisory agreement, Carey
Property Advisors must devote sufficient resources to the administration of
CPA(R):14 to discharge its obligations. The advisory agreement is not assignable
or transferable by either party without the consent of the other party, except
that Carey Property Advisors may assign the advisory agreement to an affiliate
that has a net worth of $5,000,000 or more or for whom W. P. Carey & Co. agrees
to guarantee its obligations to us. Either we or Carey Property Advisors may
assign or transfer the advisory agreement to a successor entity.

Carey Property Advisors may not make any loans on our behalf without the
prior approval of a majority of the independent directors. The actual terms and
conditions of transactions involving
49
<PAGE> 51

investments in properties shall be determined in the sole discretion of Carey
Property Advisors, subject at all times to compliance with the foregoing
requirements.

Some types of transactions require the prior approval of the board,
including a majority of the independent directors, including the following:

-- investments in properties in respect of which the requirements
specified above have not been satisfied;

-- investments made through joint venture arrangements with affiliates of
Carey Property Advisors;

-- investments which are not contemplated by the terms of this
prospectus;

-- transactions that present issues which involve conflicts of interest
for Carey Property Advisors (other than conflicts involving the
payment of fees or the reimbursement of expenses);

-- investments in equity securities (other than warrants acquired in
connection with net lease transactions); and

-- the lease of assets to W. P. Carey & Co., any director or Carey
Property Advisors.

We will reimburse Carey Property Advisors for all of the costs it incurs in
connection with the services it provides to us, including, but not limited to:

-- organization and offering expenses, which include expenses
attributable to preparing the registration statement, formation and
organization of CPA(R):14, qualification of the shares for sale in the
states, escrow arrangements, filing fees and expenses attributable to
selling the shares (including, but not limited to, selling
commissions, advertising expenses, expense reimbursement, counsel and
accounting fees);

-- the annual cost of goods and materials used by us and obtained from
entities not affiliated with W. P. Carey & Co., including brokerage
fees paid in connection with the purchase and sale of securities;

-- administrative services (including personnel costs, provided, however,
that no reimbursement shall be made for costs of personnel to the
extent that personnel are used in transactions for which Carey
Property Advisors receives a separate fee);

-- rent, depreciation, leasehold improvement costs, utilities or other
administrative items generally constituting Carey Property Advisors'
overhead; and

-- acquisition expenses, which are defined to include expenses related to
the selection and acquisition of properties.

Carey Property Advisors must reimburse us at least annually for the amount
by which our operating expenses exceed the greater of 2% of our average invested
assets or 25% of our net income. To the extent that operating expenses payable
or reimbursable by us exceed this limit and the independent directors determine
that the excess expenses were justified based on unusual and nonrecurring
factors which they deem sufficient, Carey Property Advisors may be reimbursed in
future years for the full amount of the excess expenses, or any portion thereof,
but only to the extent the reimbursement would not cause our operating expenses
to exceed the limitation in any year. Within 60 days after the end of any of our
fiscal quarters for which total operating expenses for the 12 months then ended
exceed the limitation, there shall be sent to the shareholders a written
disclosure, together with an explanation of the factors the independent
directors considered in arriving at the conclusion that the excess expenses were
justified.

Carey Property Advisors or its affiliates will be paid fees in connection
with services provided to us. See "Management Compensation." In the event the
advisory agreement is not renewed by us or is terminated by us without cause or
with good reason by Carey Property Advisors, Carey Property Advisors will be
paid all accrued and unpaid fees and expense reimbursements, any unaccrued

50
<PAGE> 52

subordinated acquisition fees and in some circumstances will also be paid a
termination fee. See "Management Compensation." We will not reimburse Carey
Property Advisors or its affiliates for services for which Carey Property
Advisors or its affiliates are entitled to compensation in the form of a
separate fee.

INVESTMENT PROCEDURES, OBJECTIVES AND POLICIES

INVESTMENT PROCEDURES

We invest primarily in single-tenant commercial, industrial and
governmental real property, either existing or under construction, sometimes
including the attached property. Generally, our properties will be net leased to
entities Carey Property Advisors deems creditworthy under leases which will be
full recourse obligations of our tenants or their affiliates. In most cases,
each lease will require the tenant to pay all of the costs of maintenance,
insurance and real estate taxes.

In analyzing potential acquisitions, Carey Property Advisors reviews and
structures many aspects of a transaction, including the tenant, the real estate
and the lease to determine whether a potential acquisition can be structured to
satisfy our acquisition criteria. Carey Property Advisors considers the
following aspects of each transaction:

Tenant Evaluation. Carey Property Advisors evaluates each potential tenant
for its credit, management, position within its industry, operating history
and profitability. Carey Property Advisors seeks tenants it believes will
have stable or improving credit. By leasing properties to these tenants, we
can generally charge rent that is higher than the rent charged to tenants
with recognized credit and thereby enhance its current return from these
properties as compared with properties leased to companies whose credit
potential has already been recognized by the market. Furthermore, if a
tenant's credit does improve, the value of our property will likely increase
(if all other factors affecting value remain unchanged). Carey Property
Advisors may also seek to enhance the likelihood of a tenant's lease
obligations being satisfied, such as through a letter of credit or a
guaranty of lease obligations from the tenant's corporate parent. This
credit enhancement provides us with additional financial security. In
evaluating a possible investment, the creditworthiness of a tenant generally
will be a more significant factor than the value of the property absent the
lease with such tenant. While Carey Property Advisors will select tenants it
believes are creditworthy, tenants will not be required to meet any minimum
rating established by an independent credit rating agency. Carey Property
Advisors' and the investment committee's standards for determining whether a
particular tenant is creditworthy vary in accordance with a variety of
factors relating to specific prospective tenants. The creditworthiness of a
tenant is determined on a tenant by tenant, case by case basis. Therefore,
general standards for creditworthiness cannot be applied.

Leases with Increasing Rent. Carey Property Advisors seeks to include a
clause in each lease that provides for increases in rent over the term of
the lease. These increases are generally tied to increases in indices such
as the consumer price index. In the case of retail stores, the lease may
provide for participation in gross sales above a stated level. The lease may
also provide for mandated rental increases on specific dates or other
methods that may not have been in existence or contemplated by us as of the
date of this prospectus. Carey Property Advisors seeks to avoid entering
into leases that provide for contractual reductions in rents during their
primary term.

Properties Important to Tenant Operations. Carey Property Advisors
generally seeks to acquire properties with operations that are essential or
important to the ongoing operations of the tenant. Carey Property Advisors
believes that these properties provide better protection in the event a
tenant files for bankruptcy, since leases on properties essential or
important to the operations of a bankrupt tenant are less likely to be
terminated by a bankrupt tenant. Carey Property Advisors also seeks to
assess the income, cash flow and profitability of the business conducted at
the property so that, if the tenant is unable to operate its business, we
can either continue operating the business

51
<PAGE> 53

conducted at the property or re-lease the property to another entity in the
industry which can operate the property profitably.

Lease Provisions that Enhance and Protect Value. When appropriate, Carey
Property Advisors attempts to include provisions in its leases that require
its consent to specified tenant activity or require the tenant to satisfy
specific operating tests. These provisions include, for example, operational
and financial covenants of the tenant, prohibitions on a change in control
of the tenant and indemnification from the tenant against environmental and
other contingent liabilities. These provisions protect our investment from
changes in the operating and financial characteristics of a tenant that may
impact its ability to satisfy its obligations to us or could reduce the
value of our properties.

Diversification. Carey Property Advisors will attempt to diversify our
portfolio to avoid dependence on any one particular tenant, type of
facility, geographic location or tenant industry. By diversifying our
portfolio, Carey Property Advisors reduces the adverse effect of a single
under-performing investment or a downturn in any particular industry or
geographic region.

Carey Property Advisors uses a variety of other strategies in connection
with its acquisitions. These strategies include attempting to obtain equity
enhancements in connection with transactions. Typically, these equity
enhancements involve warrants to purchase stock of the tenant or the stock of
the parent of the tenant. If the value of the stock exceeds the exercise price
of the warrant, equity enhancements helps us to achieve our goal of increasing
funds available for the payment of distributions.

As a transaction is structured, it is evaluated by the chairman of Carey
Property Advisors' investment committee. Before a property is acquired, the
transaction is reviewed by the investment committee to ensure that it satisfies
our investment criteria. The investment committee is not directly involved in
originating or negotiating potential acquisitions, but instead functions as a
separate and final step in the acquisition process. Carey Property Advisors
places special emphasis on having experienced individuals serve on its
investment committee and does not invest in a transaction unless it is approved
by the investment committee.

We believe that the investment committee review process gives us a unique
competitive advantage over other net lease companies because of the substantial
experience and perspective that the investment committee has in evaluating the
blend of corporate credit, real estate and lease terms that combine to make an
acceptable risk.

The following people serve on the investment committee:

-- George E. Stoddard, Chairman, was formerly responsible for the direct
corporate investments of The Equitable Life Assurance Society of the
United States and has been involved with the CPA(R) programs for over
19 years.

-- Frank J. Hoenemeyer, Vice Chairman, was formerly Vice Chairman,
Director and Chief Investment Officer of The Prudential Insurance
Company of America. As Chief Investment Officer, Mr. Hoenemeyer was
responsible for all of Prudential's investments, including stocks,
bonds, private placements, real estate and mortgages.

-- Nathaniel S. Coolidge previously served as Senior Vice
President -- Head of Bond & Corporate Finance Department of the John
Hancock Mutual Life Insurance Company. His responsibility included
overseeing fixed income investments for Hancock, its affiliates and
outside clients.

-- Lawrence R. Klein is the Benjamin Franklin Professor of Economics
Emeritus at the University of Pennsylvania and its Wharton School. Dr.
Klein has been awarded the Alfred Nobel Memorial Prize in Economic
Sciences and currently advises various governments and government
agencies. Dr. Klein is an alternate member of the investment
committee.

Each property purchased by us will be appraised by an independent
appraiser. We will not purchase any property that has a total property cost (the
purchase price of the property plus all acquisition fees)

52
<PAGE> 54

which is in excess of its appraised value. These appraisals may take into
consideration, among other things, the terms and conditions of the particular
lease transaction, the quality of the lessee's credit and the conditions of the
credit markets at the time the lease transaction is negotiated. The appraised
value may be greater than the construction cost or the replacement cost of a
property, and the actual sale price of a property if sold by us may be greater
or less than the appraised value.

Carey Property Advisors' practices include performing evaluations of the
physical condition of properties and performing environmental surveys in an
attempt to determine potential environmental liabilities associated with a
property prior to its acquisition. We intend to exercise due diligence to
discover potential environmental liabilities prior to the acquisition of any
property, although there can be no assurance that hazardous substances or wastes
(as defined by present or future Federal or state laws or regulations) will not
be discovered on the property. See "Risk Factors -- Potential liability for
environmental matters could adversely affect our financial condition." We will
also consider factors peculiar to the laws of foreign countries, in addition to
the risk normally associated with real property investments, when considering an
investment located outside the United States. See "Risk Factors -- International
investments involve additional risks."

INVESTMENT OBJECTIVES

Our objectives are:

-- TO PAY QUARTERLY DISTRIBUTIONS AT AN INCREASING RATE THAT FOR TAXABLE
SHAREHOLDERS MAY BE PARTIALLY FREE FROM CURRENT TAXATION. Our
distribution rate is calculated by dividing quarterly cash
distribution from operations by the amount of equity raised less
amounts distributed to investors from the sale of properties and
financings. Although the cash amount of a distribution may go down
during the life of CPA(R):14, the distribution rate may continue to
increase. If the total amount received by us from the sale of our
properties is less than the total amount we invested, a portion of the
distributions will represent a return of the money originally invested
and not a return on the investment. There can be no assurance that we
will pay regular distributions or that the distribution rate will
increase. While prior CPA(R)programs have occasionally used working
capital to pay a portion of some distributions, cash flows from
operating activities have generally exceeded distributions paid. See
"Distributions."

-- TO PURCHASE A PORTFOLIO OF REAL ESTATE THAT WILL INCREASE IN
VALUE. An individual investing directly in real estate would not have
to pay the organization and offering expenses we will pay. Therefore,
we must realize a greater level of operating income from, and/or
appreciation in the value of, our real estate in order for an investor
to realize the same return he would realize if an investor invested
directly in and operated the real estate purchased by us.

-- TO INCREASE THE EQUITY IN OUR REAL ESTATE BY MAKING REGULAR MORTGAGE
PRINCIPAL PAYMENTS. We will realize our objective of increasing our
equity in our properties by making regular mortgage principal payments
from income generated from the properties only if properties are sold
by us for an amount equal to or greater than the original equity
investment plus the remaining mortgage balance.

There can be no assurance that all or any of these objectives will be
achieved or that all of these objectives will be achieved with respect to each
property. See "Prior Offerings by Affiliates" for a description of the
experience of the CPA(R) programs in making investments similar to our
investment objectives. See "Risk Factors" for a description of risks associated
with our investments. We also may make loans on income-producing properties,
which loans may have some form of equity participation.

The primary investment objectives of the CPA(R) programs are similar to
ours. The first nine CPA(R) programs have been consolidated into Carey
Diversified LLC. Based on the trading price of the shares of Carey Diversified
at the time of the consolidation and distributions made before the
consolidation, the value of all but one of the portfolios of the first nine
CPA(R) programs exceeded the aggregate purchase price of the properties.

53
<PAGE> 55

TYPES OF INVESTMENTS

Substantially all of our investments will be income-producing property
which is, upon acquisition, improved or being developed or which is being or
will be developed within a reasonable period after its acquisition. Investments
will not be restricted as to geographical areas, but it is expected that most of
the investments will be made within the United States. See "Risk Factors --
International investments involve additional risks." With the exception of
proposed investments described in this prospectus or a supplement to this
prospectus, prospective investors will not be able to evaluate the merits of our
investments or the terms of any dispositions. See "Risk Factors -- Our success
will be dependent on the performance of Carey Property Advisors."

It is anticipated that many of the properties we purchase will be acquired
from entities that simultaneously lease the properties from us. These
sale-leaseback transactions provide the lessee company with a source of capital
as an alternative to other financing sources such as borrowing, mortgaging real
property, issuing bonds or selling shares of common stock. The prospects for the
seller/ lessee's enterprise and the financial strength of the seller/lessee will
be important aspects of the sale and leaseback of a property, particularly a
property specifically suited to the needs of the lessee. Carey Property Advisors
will examine the financial statements of the lessee, if available, to evaluate
the financial capability of the lessee and its ability to perform the terms of
the purchase and leaseback agreement and, where appropriate, will examine the
available operating results of properties to determine whether or not projected
rental levels are likely to be met. Whether a prospective tenant is creditworthy
will be determined by Carey Property Advisors or the board. Creditworthy does
not necessarily mean "investment grade."

We anticipate that some of our sale-leasebacks will be in conjunction with
acquisitions, recapitalizations and other financial restructurings. In some of
these transactions, the acquiring entities typically purchase all or
substantially all of the stock or assets of a company, and the acquired company
or its successor in interest becomes obligated on the substantial loans
necessary to finance the acquisition. We may act as one of several sources of
financing for these transactions by purchasing real property from the seller of
the subject company and net leasing it to the company or its successor in
interest (the lessee). See "Risk Factors -- Our tenants that are highly
leveraged may be unable to pay rent."

In selecting properties in which to make investments, Carey Property
Advisors will consider the extent to which a particular property may generate
depreciation. Depreciation deductions may reduce our taxable income which may
enable us to pay distributions which are partially free from current taxation.
We depreciate our real estate for tax purposes on a straight line basis over a
40-year period, except where the Internal Revenue Code requires a different
depreciation period, as it may with respect to property leased to governments
and to foreign lessees. See "United States Federal Income Tax Considerations."

Carey Property Advisors may structure some lease transactions so that the
leases will not be recognized as leases for federal income tax purposes. To the
extent a lease is not considered a lease for federal income tax purposes, we
would not be able to depreciate the property subject to the lease and may lose
some other tax benefits. See "United States Federal Income Tax
Considerations -- Sale-Leaseback Transactions." In structuring these lease
transactions, Carey Property Advisors will attempt to obtain additional
consideration from the tenant to compensate us for any lost tax benefits.
However, there can be no assurance that any additional consideration will be
received or, if received, that it will be sufficient to fully compensate us for
lost tax benefits.

In some circumstances, we grant tenants a right to purchase the property
leased by the tenant. The option purchase price is generally the greater of the
contract purchase price and the fair market value of the property at the time
the option is exercised.

54
<PAGE> 56

Investments in Loans

Carey Property Advisors may structure an investment as a loan in situations
in which a standard net lease transaction would have an adverse impact on the
seller of a property or otherwise would be inappropriate for us. Carey Property
Advisors would attempt to structure any loan in a manner that would provide us
with an economic return similar to that which we could expect to receive had the
investment been structured as a net lease transaction. Any transaction
structured as a loan must otherwise meet our investment criteria. The directors,
including a majority of the independent directors, must approve any transaction
structured as a loan.

Some of the loans made, purchased or otherwise acquired by us, in addition
to providing for base interest at a fixed or variable rate, may allow us to
participate in the economic benefits of any increase in the value of the
property securing repayment of the loan, as though we were an equity owner of a
portion of the property. In addition, it is possible that the participations may
take other forms where available or deemed appropriate. See "United States
Federal Income Tax Considerations -- Requirements for Qualification." The forms
and extent of the participations we receive will vary with each transaction
depending on factors such as the equity investment, if any, of the borrower,
credit support provided by the borrower, the interest rate on our loans and the
anticipated and actual cash flow from the underlying real property. Our loans
may include first mortgage loans, leasehold mortgage loans and conventional
mortgage loans without equity enhancements. Loans are not expected to comprise a
significant portion of our portfolio.

Any loans will be secured by various types of real property as well as
personal or mixed property connected with the real property. The loans generally
will be secured by property with a demonstrable income-producing potential. In
determining whether to make loans, Carey Property Advisors will analyze relevant
property and financial factors which may include the condition and use of the
subject property, its income-producing capacity and the quality, experience and
creditworthiness of the owner of the property.

We anticipate that our loans will either include provisions permitting us
to cause the entire unpaid principal amount to become due within 15 years or be
fully amortized within that period. Our lending activity may consist of the
origination of loans or the purchase of existing loans. We may make both
long-term and short-term loans. We will not make or invest in loans that are
subordinate to any mortgage held by W. P. Carey & Co., Carey Property Advisors,
the directors or their affiliates.

We will require that a mortgagee's title insurance policy or commitment as
to the lien priority of a mortgage or the condition of title be obtained. We
will obtain independent appraisals for underlying real property, which we will
maintain in our records for at least five years and will be available for
inspection and duplication by any shareholder at our offices. However, Carey
Property Advisors generally will rely on its own independent analysis and not
exclusively on appraisals in determining whether to make a particular loan. It
should be noted that appraisals are estimates of value and should not be relied
upon as measures of true worth or realizable value. We will not make a loan when
the amount we advance plus the amount of any existing loans that are equal or
senior to our loan exceeds 100% of the appraised value of the underlying real
property. In making loans that exceed 85% of the appraised value of any
underlying real property, Carey Property Advisors will consider additional
underwriting criteria such as the net worth of the borrower, the borrower's
credit rating, if any, the anticipated cash flow of the borrower, any additional
collateral provided by the borrower and other factors Carey Property Advisors
deems appropriate.

Joint Ventures and Wholly-Owned Subsidiaries

We may enter into joint ventures or general partnerships and other
participations with real estate developers, owners and others for the purpose of
obtaining an equity interest in a property or properties in accordance with our
investment policies. These investments permit us to own interests in large
properties without unduly restricting the diversity of our portfolio. We will
not enter into a joint venture to make an investment that we would not be
permitted to make on our own. In making equity
55
<PAGE> 57

investments with third parties, we are prohibited from participating with
non-affiliates unless we acquire a controlling interest in the investment. A
"controlling interest" means an equity interest possessing the power to direct
or cause the direction of the management and policies of the joint venture or
general partnership. In transactions in which both non-affiliated entities and
our affiliates are participants, a controlling interest is determined by
aggregating our equity interests with any affiliate participating in the
transaction, provided the affiliate has investment objectives substantially
similar to ours. See "Risk Factors -- Our participation in joint ventures
creates additional risks."

We may participate jointly with publicly registered investment programs or
other entities sponsored or managed by Carey Property Advisors in investments as
tenants-in-common or in some other joint venture arrangement. Joint ventures
with affiliated programs will be permitted only if:

-- a majority of the directors (including a majority of the independent
directors) not otherwise interested in the transaction approve the
transaction as being fair and reasonable to us;

-- the affiliated program or entity makes its investment on substantially
the same terms and conditions as us; and

-- we and the affiliated program or entity each have a right of first
refusal to purchase the investment if the other program wishes to sell
the investment.

It is not likely that we will have money available to exercise this right of
first refusal and we have made no determination as to whether it would borrow
funds or liquidate assets in order to exercise any option. We will not otherwise
participate in joint investments with Carey Property Advisors or its affiliates.
The cost of structuring joint investments will be shared ratably by us and
participating investors.

We have and will form wholly-owned subsidiary corporations to purchase
properties in some jurisdictions where the acquisition of properties through the
use of a separate entity would have a beneficial effect on our taxable income
for state tax purposes or for other reasons deemed to be beneficial. These
subsidiary corporations are usually formed for the sole purpose of acquiring a
specific property or properties located in one or more states and would have
organizational documents

-- that are substantially similar to our organizational documents;

-- that comply with all applicable state securities laws and regulations;
and

-- that comply with the applicable terms and conditions set forth in this
prospectus.

We have made and will make loans to our wholly-owned subsidiaries and we have
and will guaranty the obligations of these subsidiaries.

Other Investments

We may invest up to 10% of our net equity in unimproved or
non-income-producing real property and in "equity interests." Investment in
equity interests in the aggregate will not exceed 5% of our net equity. "Equity
interests" are defined generally to mean stock, warrants or other rights to
purchase the stock of, or other interests in, a tenant of a property, an entity
to which we lend money or a parent or controlling person of a borrower or
tenant. We will invest in unimproved or non-income-producing property which
Carey Property Advisors believes will appreciate in value or which will increase
the value of an adjoining or neighboring properties we own. There can be no
assurance that these expectations will be realized. We anticipate that most
equity interests will be "restricted securities" as defined in Rule 144
promulgated under the Securities Act of 1933. Under this rule, we may be
prohibited from reselling the equity securities without limitation until we have
fully paid for and held the securities for one year. The issuer of equity
interests in which we invest may never register the interests under the
Securities Act of 1933. Whether an issuer registers its securities under the
Securities Act of 1933 may depend on the success of its operations.

We will exercise warrants or other rights to purchase stock only if the
value of the stock at the time the rights are exercised exceeds the exercise
price. Payment of the exercise price shall not be deemed an
56
<PAGE> 58

investment subject to the above described limitations. We may borrow funds to
pay the exercise price on warrants or other rights or may pay the exercise price
from funds held for working capital and then repay the loan or replenish the
working capital upon the sale of the securities or interests purchased. We will
not pay distributions out of the proceeds of the sale of these interests until
any funds borrowed to purchase the interest have been fully repaid. We will
invest in equity interests which Carey Property Advisors believes will
appreciate in value. There can be no assurance, however, that this expectation
will be realized.

We will not invest in real estate contracts of sale unless the contracts of
sale are in recordable form and are appropriately recorded in the applicable
chain of title, provided, however, that in no event shall investments in these
contracts exceed 1% of total assets.

There can be no assurance as to when our capital may be fully invested in
properties. See "United States Federal Income Tax Considerations -- Requirements
for Qualification." Pending investment, the balance of the proceeds of this
offering will be invested in permitted temporary investments, which include
short-term U.S. Government securities, bank certificates of deposit and other
short-term liquid investments. To maintain its REIT status, we also may invest
in securities that qualify as "real estate assets" and produce qualifying income
under the REIT provisions of the Internal Revenue Code. Any investments in other
REITs in which W. P. Carey & Co., Carey Property Advisors or any director is an
affiliate must be approved as being fair and reasonable by a majority of the
directors (including a majority of the independent directors) who are not
otherwise interested in the transaction. If all the proceeds derived from this
offering are not invested or committed to be invested by us prior to the
expiration of the later of twenty-four months after the date of this prospectus
or one year after the termination of this offering, then the proceeds not so
invested or committed will, promptly after the expiration of such period, be
distributed pro rata to the shareholders as a return of capital, without any
deductions for organizational and offering expenses or acquisition expenses. For
the purpose of this provision, funds will be deemed to have been committed to
investment as required and will not be returned to shareholders if written
agreements in principle have been executed at any time prior to the expiration
of the period, regardless of whether the investments are made, and also to the
extent any funds have been reserved to make contingent payments in connection
with any property, regardless of whether the payments are made.

If at any time the character of our investments would cause us to be deemed
an "investment company" for purposes of the Investment Company Act of 1940, we
will take the necessary action to ensure that we are not deemed to be an
"investment company." Carey Property Advisors will continually review our
investment activity to attempt to ensure that we do not come within the
application of the Investment Company Act of 1940. Among other things, they will
attempt to monitor the proportion of our portfolio that is placed in various
investments so that we do not come within the definition of an investment
company under the act. We have been advised by counsel that if we operate in
accordance with the description of our proposed business in this prospectus, we
will not be deemed an "investment company" for purposes of the Investment
Company Act of 1940.

Our working capital and other reserves will be invested in permitted
temporary investments. Carey Property Advisors will evaluate the relative risks
and rate of return, our cash needs and other appropriate considerations when
making short-term investments on our behalf. The rate of return of permitted
temporary investments may be less than or greater than would be obtainable from
real estate investments.

We may purchase property from W. P. Carey & Co., Carey Property Advisors,
the directors or their affiliates only if:

-- a majority of the independent directors and a majority of the
directors who otherwise are not interested in the transaction approve
the transaction as being fair and reasonable to us;

57
<PAGE> 59

-- the property was acquired by W. P. Carey & Co., Carey Property
Advisors, director or affiliate for the purpose of facilitating its
purchase by us, facilitating the borrowing of money or the obtaining
of financing for us or any other purpose related to our business;

-- the property is purchased by us for a price no greater than the cost
to the affiliate (provided, however, that the price may be greater
than the cost to the affiliate, but in no event more than the
appraised value, if the affiliate has taken significant action or has
made an additional investment with regard to the property after its
purchase which action or investment has increased the value of the
property); and

-- there is no adverse difference in the interest rates of the loans
secured by the property at the time acquired by W. P. Carey & Co.,
Carey Property Advisors, director or affiliate and at the time
purchased by us nor any other detriment to us arising out of the
transaction.

We will receive all profits or losses from any property held on an interim basis
by W. P. Carey & Co., Carey Property Advisors, director or affiliate thereof
other than an affiliate that is a public program or entity.

We will not sell properties to W. P. Carey & Co., Carey Property Advisors,
a director or any affiliate of any of the foregoing except pursuant to the
exercise of a right of first refusal by an affiliated joint venture partner.

USE OF BORROWING

While one our investment objectives will be diversification, the number of
different properties we can acquire will be affected by the amount of funds
available to us. Our goal, subject to the availability of mortgage financing, is
to borrow approximately 60% of the purchase price of all properties, but there
is no limit on borrowings on individual properties.

Our ability to increase our diversification through borrowing could be
adversely impacted by the reduced availability of financing secured by
commercial real estate generally and specifically by single-tenant net-leased
real property, whether due to fewer financing sources, such as commercial banks
and insurance companies, or due to the reduced lending activity by those sources
continuing in that line of business. When interest rates on mortgage loans are
high or financing is otherwise unavailable on a timely basis, we may purchase
certain properties for cash with the intention of obtaining a mortgage loan for
a portion of the purchase price at a later time. While the number of lenders
making loans secured by commercial real estate has decreased in recent years,
the CPA(R) programs have not encountered significant difficulty in obtaining
mortgage financing from institutional lenders such as insurance companies to
replace financing which previously might have been obtained from commercial
banks or savings and loans. However, there can be no assurance that we will be
able to achieve our borrowing objective.

There is no limitation on the amount we may invest in any single improved
property or on the amount we can borrow for the purchase of any property.
Aggregate borrowings as of the time that the net proceeds of the offering have
been fully invested and at the time of each subsequent borrowing may not exceed
75% of the value of all properties unless the excess is approved by a majority
of the independent directors and disclosed to shareholders in our next quarterly
report, along with the reason for the excess. For purposes of determining the
maximum allowable amounts of indebtedness, "value" means the lesser of

-- the total appraised value of the properties as reflected in the most
recently obtained appraisal for each property, or

-- the total value of our assets as reflected in the most recently
completed valuation.

It is expected that, by operating on a leveraged basis, we will have more
funds available and, therefore, will make more investments than would otherwise
be possible, resulting in a more diversified portfolio. Although our liability
for the repayment of indebtedness is expected to be limited to the value
58
<PAGE> 60

of the property securing the liability and the rents or profits derived
therefrom, leveraging increases risks to us because mortgage principal and
interest payments as well as other fixed charges must be paid in order to
prevent foreclosure on leveraged properties by mortgagees regardless of the
generation of income by properties. See "Risk Factors -- Our use of debt to
finance acquisitions could adversely affect our cash flows." To the extent that
we do not obtain mortgage loans on our properties, our ability to acquire
additional properties will be restricted. Carey Property Advisors will use its
best efforts to obtain financing on the most favorable terms available to us.
Lenders may have recourse to our other assets in limited circumstances not
related to the repayment of the indebtedness.

Lenders may also seek to include in the terms of mortgage loans provisions
making the termination or replacement of Carey Property Advisors an event of
default or an event requiring the immediate repayment of the full outstanding
balance of the loan. We will not agree to the inclusion of these provisions and
will attempt to negotiate loan terms allowing us to replace or terminate Carey
Property Advisors if the action is ordered by the board. The replacement or
termination may, however, require the prior consent of the mortgage lenders.

Carey Property Advisors will refinance properties during the term of a loan
only in limited circumstances, such as when a decline in interest rates makes it
profitable to prepay an existing mortgage, when an existing mortgage matures or
if an attractive investment becomes available and the proceeds from the
refinancing can be used to purchase such investment. The benefits of the
refinancing may include an increased cash flow resulting from reduced debt
service requirements, an increase in distributions from proceeds of the
refinancing, if any, and/or an increase in property ownership if some
refinancing proceeds are reinvested in real estate.

OTHER INVESTMENT POLICIES

General

If at any time we do not have sufficient funds to provide that portion of
the total property cost of any property normally paid with our equity but would
have sufficient funds if we could use the offering proceeds being held in
escrow, funds may be borrowed from affiliates of Carey Property Advisors or from
third parties on a short-term basis. Any financing obtained from Carey Property
Advisors or its affiliates may not have terms less advantageous to us than those
available from independent third parties and may not require a prepayment charge
or penalty. The interest rate charged on any financing obtained from Carey
Property Advisors or its affiliates will be equal to the lesser of 1% above the
prime rate of interest published in the Wall Street Journal or the rate that
would be charged to us by unrelated lending institutions on comparable loans for
the same purpose. See "Conflicts of Interest -- Purchases and Loans from
Affiliates." We may assign, as security for borrowings made from third parties,
our right to receive up to 85% of the offering proceeds being held in escrow
(excluding interest and amounts held on behalf of qualified plans and IRAs). See
"The Offering -- Escrow Arrangements."

At any time, subject to the approval of a majority of the independent
directors, we may borrow funds from affiliates of either Carey Property Advisors
or third parties on a short-term basis sufficient to provide the portion of the
purchase price of any property not paid with net offering proceeds (i.e., the
debt portion) if

-- we are unable to obtain a permanent loan or, in our judgment or in the
judgment of Carey Property Advisors, it is not in our best interests
to obtain a permanent loan at the interest rates then prevailing, and

-- Carey Property Advisors has reason to believe that we will be able to
obtain a permanent loan on or prior to the end of the loan term.

These short-term loans may be fully or partially amortized, may provide for the
payment of interest only during the term of the loan or may provide for the
payment of principal and interest only upon maturity. In addition, these loans
may be secured by a first or junior mortgage on the property to be acquired or
by a pledge of or security interest in the offering proceeds that are being held
in escrow

59
<PAGE> 61

which are to be received from the sale of our shares. Any short-term loan from
affiliates of Carey Property Advisors will bear interest at a rate equal to the
lesser of 1% above the prime rate of interest published in the Wall Street
Journal or the rate that would be charged to us by unrelated lending
institutions on comparable loans for the same purpose in the locality of the
property. See "Conflicts of Interest -- Loans from Affiliates."

Holding Period for Investments and Application of Proceeds of Sales or
Refinancings

We intend to hold each property we acquire for an extended period. However,
circumstances might arise which could result in the early sale of some
properties. A property may be sold before the end of the expected holding period
if

-- the lessee has involuntarily liquidated;

-- in the judgment of Carey Property Advisors, the value of a property
might decline radically;

-- an opportunity has arisen to improve other properties;

-- we can increase cash flow through the disposition of the property;

-- the lessee is in default under the lease; or

-- in our judgment or in the judgment of Carey Property Advisors, the
sale of the property is in our best interests.

The determination of whether a particular property should be sold or
otherwise disposed of will be made after consideration of relevant factors,
including prevailing economic conditions, with a view to achieving maximum
capital appreciation. No assurance can be given that the foregoing objective
will be realized. The selling price of a property which is net leased will be
determined in large part by the amount of rent payable under the lease. If a
tenant has a repurchase option at a formula price, we may be limited in
realizing any appreciation. In connection with our sales of properties we may
lend the purchaser all or a portion of the purchase price. In these instances,
our taxable income may exceed the cash received in the sale. See "United States
Federal Income Tax Considerations -- Qualification as a REIT -- Distribution
Requirement." The terms of payment will be affected by custom in the area in
which the property being sold is located and the then prevailing economic
conditions. To the extent that we receive purchase money mortgages rather than
cash in connection with sales of properties, there may be a delay in making
distributions to shareholders. A decision to provide financing to such
purchasers would be made after an investigation into and consideration of the
same factors regarding the purchaser, such as creditworthiness and likelihood of
future financial stability, as are undertaken when we consider a net lease
transaction. See "United States Federal Income Tax Considerations."

If our shares are not listed for trading on a national securities exchange
or included for quotation on Nasdaq (which listing or inclusion for quotation
must be approved by the directors, a majority of the independent directors and
the Carey Fiduciary Advisors board), the properties generally will be liquidated
within eight years after the net proceeds of this offering are fully invested,
market conditions permitting. In making the decision to apply for listing of the
shares, the board will try to determine whether listing the shares or
liquidating will result in greater value for the shareholders. It cannot be
determined at this time the circumstances, if any, under which the directors
will agree to list the shares. CPA(R):10, CIP(R) and CPA(R):12 have listing
provisions similar to provisions for the listing of the shares and as of the
date of the prospectus, none of them have listed their shares. Even if the
shares are not listed or included for quotation, we are under no obligation to
liquidate our portfolio within this period since the precise timing will depend
on real estate and financial markets, economic conditions of the areas in which
the properties are located and federal income tax effects on shareholders which
may prevail in the future. Furthermore, there can be no assurance that we will
be able to liquidate our portfolio and it should be noted that we will continue
in existence until all properties are sold and our other assets are liquidated.

We continually may reinvest the proceeds of property sales in investments
that we or Carey Property Advisors believes will satisfy our investment
policies. If the shares are not listed for trading on

60
<PAGE> 62

a national securities exchange or included for quotation on Nasdaq, we will
cease reinvesting our capital beginning eight years after the proceeds from the
offering are fully invested unless the directors (including a majority of the
independent directors) determine that, in light of our expected life at any
given time, it is deemed to be in the best interest of the shareholders to
reinvest proceeds from property sales or refinancings. See "United States
Federal Income Tax Considerations."

INVESTMENT LIMITATIONS

Numerous limitations are placed on the manner in which we may invest its
funds. These limitations cannot be changed unless the bylaws are amended, which
requires the approval of the shareholders. Unless the bylaws are amended, we
will not:

-- invest in commodities or commodity futures contracts, with this
limitation not being applicable to futures contracts when used solely
for the purpose of hedging in connection with our ordinary business of
investing in real estate assets and mortgages;

-- invest in contracts for the sale of real estate unless the contract is
in recordable form and is appropriately recorded in the chain of
title;

-- engage in any short sale or borrow on an unsecured basis, if the
borrowing will result in asset coverage of less than 300%. "Asset
coverage," for the purpose of this clause means the ratio which the
value of our total assets, less all liabilities and indebtedness for
unsecured borrowings, bears to the aggregate amount of all of our
unsecured borrowings;

-- make investments in unimproved property or indebtedness secured by a
deed of trust or mortgage loans on unimproved property in excess of
10% of our total assets. "Unimproved real property" means property
which has the following three characteristics:

] an equity interest in property which was not acquired for the purpose
of producing rental or other operating income;

] no development or construction is in process on the property; and

] no development or construction on the property is planned in good
faith to commence on the property within one year of acquisition;

-- issue equity securities on a deferred payment basis or other similar
arrangement;

-- issue debt securities in the absence of adequate cash flow to cover
debt service;

-- issue equity securities which are non-voting or assessable;

-- issue "redeemable securities" as defined in Section 2(a)(32) of the
Investment Company Act of 1940;

-- grant warrants and/or options to purchase shares to Carey Property
Advisors, directors or affiliates thereof except on the same terms as
the options or warrants are sold to the general public and the amount
of the options or warrants does not exceed an amount equal to 10% of
the outstanding shares on the date of grant of the warrants and
options;

-- engage in trading, as compared with investment activities, or engage
in the business of underwriting or the agency distribution of
securities issued by other persons;

-- invest more than 5% of the value of our assets in the securities of
any one issuer if the investment would cause us to fail to qualify as
a REIT;

-- invest in securities representing more than 10% of the outstanding
voting securities of any one issuer if the investment would cause us
to fail to qualify as a REIT;

-- acquire securities in any company holding investments or engaging in
activities prohibited in the foregoing clauses;

61
<PAGE> 63

-- lend money to or lease property to or from Carey Property Advisors or
its affiliates;

-- sell property to W. P. Carey & Co., Carey Property Advisors, a
director or any affiliate of any of the foregoing;

-- offer shares in exchange for property;

-- make or invest in mortgage loans that are subordinate to any mortgage
or equity interest of Carey Property Advisors, directors, W. P. Carey
& Co. or our affiliates;

-- make loans where the amount advanced by us plus the amount of any
existing loans that are equal or senior to our loan exceeds 100% of
the appraised value of the property; or

-- invest more than 20% of the net proceeds from the offering for the
purchase of land separate from the improvements thereon or expected to
be constructed thereon.

CHANGE IN INVESTMENT OBJECTIVES AND LIMITATIONS

The bylaws require that the independent directors review our investment
policies at least annually to determine that the policies we are following are
in the best interest of the shareholders. Each determination and the basis
therefor shall be set forth in our minutes. The methods of implementing our
investment policies also may vary as new investment techniques are developed.
The methods of implementing our investment procedures, objectives and policies,
except as otherwise provided in the organizational documents, may be altered by
a majority of the directors (including a majority of the independent directors)
without the approval of the shareholders.

HOLDERS OF SHARES OF THE COMPANY

As of September 30, 1999, we had issued 26,514,803 shares, of which 20,000
shares were held by Carey Property Advisors.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INCEPTION PERIOD & YEAR ENDED DECEMBER 31, 1998

Overview

The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with the consolidated
financial statements and notes included in this prospectus. The following
discussion includes forward looking statements. Forward looking statements,
which are based on certain assumptions, describe our future plans, strategies
and expectations. These statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievement to be materially different from the results of operations or plan
expressed or implied by these forward looking statements. Accordingly, this
information should not be regarded as representations that the results or
condition described in these statements or objectives and plans will be
achieved.

Corporate Property Associates 14 Incorporated was formed in 1997 for the
purpose of engaging in the business of investing in and owning commercial and
industrial real estate. In December 1997, we commenced a public offering of
common stock at $10 per share on a "best efforts" basis for up to 30,000,000
shares ($300,000,000). As of December 31, 1998, we had issued 11,817,901 shares
($118,179,010) in the offering.

We are using the proceeds from the public offerings, and intend to use
limited recourse mortgage financing, to purchase properties and enter into
long-term net leases with corporate tenants. A net lease is structured to place
some of the economic burdens of ownership on these corporate tenants by

62
<PAGE> 64

requiring them to pay the costs of maintenance and repair, insurance and real
estate taxes. The leases have generally been structured to include periodic rent
increases that are stated or based on increases in the consumer price index or,
for retail properties, provide for additional rents based on sales in excess of
a specified base amount.

Our primary objectives are to provide rising cash flow and property values,
protecting our investors from the effects of inflation through rent escalation
provisions, property appreciation, tenant credit improvement and regular paydown
of limited recourse mortgage debt. In addition, we have successfully negotiated
grants of common stock warrants from selected tenants and expect to realize the
benefits of appreciation from those grants. We cannot guarantee that our
objectives will be ultimately achieved.

The Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosure about Segments of
an Enterprise and Related Information", which is effective for fiscal years
beginning after December 15, 1997. This statement requires that a public
business enterprise report financial and descriptive information about its
reportable operating segments. Operating segments are components of an
enterprise about which financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing performance. Management evaluates the performance of
our portfolio of properties as a whole, rather than by identifying discrete
operating segments. This evaluation includes assessing our ability to meet
distribution objectives, increase the dividend and increase value by evaluating
potential investments in single tenant net lease real estate and by seeking
favorable limited recourse mortgage financing opportunities.

Financial Condition

We are using the net proceeds from our offering (except for approximately
1% to establish a working capital reserve) along with limited recourse mortgage
financing to purchase a diversified portfolio of commercial and industrial real
estate and enter into long-term leases with corporate tenants on a net lease,
single tenant basis. Under a net lease, a tenant is generally required to pay
all expenses related to the leased property in order to limit our exposure to
the effects of increases in real estate taxes and property maintenance and
insurance costs. Our leases, which we expect to have initial lease terms of 15
to 25 years, typically include rent increase provisions which are fixed or based
upon increases in the Consumer Price Index. As of December 31, 1998, we have
raised over $105,700,000, net of costs, and had used approximately $79,189,000
to purchase real estate and interests in two single purpose entities formed with
affiliates that have purchased real estate and entered into net leases. The
affiliates have the same investment objectives as us. Since December 31, 1998,
the Company has issued an additional 4,190,272 shares of common stock
($41,902,720) and invested an additional $17,445,000 in real estate.

We have devoted a substantial portion of our resources to build-to-suit
projects because CPA(R):14's Advisor, Carey Property Advisors, has concluded
that they should provide a much better return on investment than many other
opportunities being evaluated by our Advisor. To date, we have has entered into
build-to-suit commitments in connection with our lease with Metagenics
Incorporated for a property in San Clemente, California and a building in
Hayward, California leased to Etec Systems, Inc. that we own with an affiliate
through an interest in a limited liability company. Remaining costs on the
Metagenics property are $7,152,000. The Etec project is expected to be completed
during the quarter ended June 30, 1999. We have funded $26,970,000 towards our
49.99% interest in the Etec project. Our equity contribution for the Etec
project, which is expected to be completed in May 1999, will be approximately
$11,178,000 after proceeds from a mortgage commitment on the property are
distributed. After completion of the Etec project, our share of annual cash flow
(rents less mortgage debt service) from this investment is expected to be
approximately $1,234,000. In addition, our share of the annual cash flow from
our investment with two affiliates in a property in Sunnyvale, California net
leased to Advanced Micro Devices, Inc. is $1,066,000. The Advanced Micro Devices
property was purchased in December 1998.

63
<PAGE> 65

We intend to use the cash flow from our net leases to fund quarterly
dividends at an increasing rate, and pay debt service installments on limited
recourse mortgage debt. For 1998, cash flow from operations of $1,706,000 was
sufficient to pay quarterly dividends of $1,324,000. We entered into our first
net lease in June 1998 and paid our first quarterly dividend in July 1998. We
did not obtain any mortgage financing in 1998.

In connection with the purchase of our properties, we require the sellers
to perform environmental reviews. Management believes, based on the results of
these reviews, that our properties were in substantial compliance with Federal
and state environmental statutes at the time the properties were acquired.
Tenants are generally subject to environmental statutes and regulations
regarding the discharge of hazardous materials and any related remediation
obligations. In addition, our leases generally require tenants to indemnify us
fully from all liabilities and losses related to the leased properties with
provisions of the indemnification specifically addressing environmental matters.
The leases generally include provisions that allow for periodic environmental
assessments, paid for by the tenant, and allow us to extend leases until a
tenant has satisfied its environmental obligations. We also attempt to negotiate
lease provisions to require financial assurances from tenants such as
performance bonds or letters of credit if the costs of remediating environmental
conditions are, in our estimation, in excess of specified amounts. Accordingly,
we believe that the ultimate resolution of any environmental matters would not
have a material adverse effect on our financial condition, liquidity or results
of operations.

Results of Operations

Our results of operations for 1998 are not comparable with the results for
1997. During 1997, we had no real estate operations and had no revenues. The
commencement of our public offering did not begin until December, 1997. During
1998, we issued our initial shares of common stock pursuant to the common stock
offering, and purchased our first property in June 1998. The trend of
acquisitions activity started to accelerate during the fourth quarter of 1998
and thereafter. The results for 1998, therefore, are not representative of
results for future periods. Results for future periods will reflect increases in
lease revenues, equity income, depreciation, and general and administrative and
property expenses as our portfolio of properties increases and the full year's
effect of 1998 transactions are reflected in the results of operations. When we
obtain limited recourse mortgage loans on our properties, mortgage interest will
also be a significant expense. Use of limited recourse mortgage financing is
intended to limit risk as the lender has recourse only to the property
collateralizing the debt and not to any of our other assets. We obtained our
first limited recourse mortgage loan in March 1999.

During the offering period, interest income is likely to increase as we
will invest funds in money market instruments while we are evaluating potential
real estate purchases. Interest income will eventually decrease and will not be
a significant component of revenues after the net offering proceeds are fully
invested in real estate.

Generally accepted accounting principles require that construction period
rents on build-to-suit projects be recorded as a reduction of cost rather than
rental income. As a result, rents on build-to-suit projects are not currently
being reflected in income or cash flow from operations even though we believe
that these projects provide an economic return on our investment during the
construction period. The results for 1998, therefore, did not reflect earnings
from our investments in the Metagenics or Etec projects. If the number of
build-to-suit projects represents a significant percentage of our investment
during our initial acquisitions stage, net income will accordingly be adversely
effected on a short-term basis. We believe that the return on investment on our
build-to-suit projects will produce long-term returns that are superior to those
of other opportunities that we have evaluated.

64
<PAGE> 66

statement of financial position and measure those instruments at fair value.
SFAS No. 133 is effective for all quarters of fiscal years beginning after June
15, 1999. We believe adoption of SFAS No. 133 will not have a material impact on
the consolidated financial statements.

NINE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999

Financial Condition

Cash flow from operations and distributions from equity investments
totalling $6,621,000 were sufficient to fund fully dividends of $6,019,000.
Because the funds currently invested in build-to-suit projects under
construction do not produce a return that is reflected in cash flow from
operations, operating cash flow from the current portfolio is lower than if the
funds used for these investments had been used to purchase completed projects.
CPA(R):14 believes that the build-to-suit projects in its portfolio, including
the commitments at the CheckFree, Builders Supply and Lumber Company,
Consolidated Theatres Holdings G.P., Ameriserve and Amerix properties, will
provide greater long-term results than other potential investments that it
evaluated. CPA(R):14's intention to fund fully dividends from its operating cash
flow and equity investment distributions. In order to meet this objective,
CPA(R):14 will need to invest in real estate. CPA(R):14 believes that to meet
long-term objectives, it is necessary to analyze proposed transactions prudently
and deliberately and to invest its funds with long-term diversification and
return considerations in mind.

Investing activities consisted of using approximately $100,000,000 for the
purchase of the equity interests in Intesys, Compucom and CheckFree, to fund the
build-to-suit projects on the Meragenics, Etec, Builders Supply, CheckFree and
Consolidated Theatres properties and to purchase the Scott, Ameriserve and
Production Resource Group properties. As of September 30, 1999, CPA(R):14 had
approximately $106,000,000 of cash available for investment. Since September 30,
1999, CPA(R):14 has used approximately $26,600,000 to purchase properties net
leased to Amerix Corporation and additional properties net leased to Production
Resource Group.

In addition to paying dividends, CPA(R):14's financing activities included
raising new equity capital of $133,745,000, net of costs, and obtaining limited
recourse mortgage loans of $48,411,000. CPA(R):14 also received $6,996,000 from
an affiliate to fund its 40% equity interest in the Ameriserve properties.
CPA(R):14 has also filed a registration statement with the U.S. Securities and
Exchange Commission for a public offering of up to 40,000,000 shares of common
stock on a "best efforts" basis at a price of $10 per share. The offering will
commence after the completion of the current offering which is scheduled to
conclude on November 22, 1999.

Results of Operations

CPA(R):14 was formed in June 1997 for the purpose of investing in net lease
commercial and industrial real estate. During the fourth quarter of 1997,
CPA(R):14 commenced an offering of up to 30,000,000 shares of common stock on a
"best efforts" basis at a price of $10 per share. CPA(R):14 first issued shares
on April 3, 1998, and the Company purchased its first property on June 29, 1998.
Because CPA(R):14 has a limited operating history and has significantly
increased its asset base since the initial property purchase, the results of
operations for the three-month and nine-month periods ended September 30, 1998
and 1999 are not comparable. CPA(R):14 is still raising capital and evaluating
potential investments and will continue to acquire new properties for its real
estate portfolio for the foreseeable future. Therefore, the operating results
for the current three-month and nine-month periods are not expected to be
indicative of future results. As the asset base continues to increase and the
portfolio becomes more diversified, revenues and expenses will increase
substantially. As new mortgage financing is obtained, interest expense will also
increase substantially. Earnings from the Company's current holdings will
increase because CPA(R):14 purchased investments in real estate leased to
Intesys Technologies, Inc., Compucom Systems, Inc., Production Resources Group
L.L.C., CheckFree Corporation, The Scott Companies, Inc., Ameriserve Food
Distribution, Inc. and Amerix Corporation and

65
<PAGE> 67

completed build-to-suit projects leased to Metagenics, Inc. and Etec Systems,
Inc. since December 31, 1998.

Since the inception of its offering, CPA(R):14 has issued shares for
$265,000,000. It is using this capital, net of offering costs, along with
limited recourse financing to purchase a diversified real estate portfolio and
to enter into long-term leases with corporate tenants on a net lease, single
tenant basis. Under a net lease, a tenant is generally required to pay all
operating expenses related to the leased property. The tenant's responsibility
for operating expenses limits CPA(R):14's exposure to the effects of increases
in real estate taxes, insurance and maintenance costs that are generally borne
by landlords. The leases are generally structured to include rent increase
provisions which have periodic, stated increases or are based upon increases in
the Consumer Price Index.

Year 2000 Issue

The "Year 2000 issue" refers to the series of problems that have resulted
or may result from the inability of certain computer software and embedded
processes to properly process dates. This shortcoming could result in the
failure of major systems or miscalculations causing major disruptions to
business operations. CPA(R):14 has no information technology systems of its own,
but is dependent upon systems maintained by an affiliate of its Advisor, and
certain other third parties including banks and its transfer agent.

CPA(R):14 and its affiliates have been evaluating their readiness relating
to Year 2000 issues since 1998. The affiliates' core information technology
systems used in administering CPA(R):14's business operations have been upgraded
or replaced, as needed, to become Year 2000 compliant. These systems include
desktop computers, network servers, operating systems and applications software.
A new, compliant, integrated accounting and asset management system is currently
being installed and the accounting component is currently functional. Compliance
of these systems with Year 2000 requirements has been determined through a
combination of internal testing, where feasible, and vendor representations.
Non-core information technology systems have been reviewed for compliance with
Year 2000 requirements. Such systems, although not critical to the Company's
business operations, are expected to be substantially upgraded or replaced
before the end of 1999. Management believes that substantially all costs related
to Year 2000 compliance and remediation have been incurred.

CPA(R):14 has contacted and is evaluating documentation from its critical
third party vendors and suppliers including banks, transfer agents and
telecommunications service providers regarding their Year 2000 compliance. The
responses received have generally been positive although CPA(R):14 cannot be
assured that these providers have adequately considered the impact of Year 2000
issues on their systems.

CPA(R):14 has contacted its tenants regarding Year 2000 readiness and
emphasized the need to address Year 2000 issues. Generally, tenants are
contractually required to maintain their leased properties in good working order
and to make necessary alterations, foreseen or unforeseen, to meet their
contractual obligations. Because of those obligations, CPA(R):14 believes that
the risks and costs of upgrading systems related to operations of the buildings
and that contain technology affected by Year 2000 issues will generally be
absorbed by tenants rather than CPA(R):14. The major risk is that Year 2000
issues have such an adverse effect on the financial condition of a tenant that
its ability to meet its lease obligations, including the timely payment of rent,
is impaired. In such an event, CPA(R):14 may ultimately incur the costs for Year
2000 readiness at the affected properties. The potential materiality of any
impact is not known at this time.

CPA(R):14 will continue to monitor critical third party vendors and
suppliers to determine its vulnerability to potential disruptions caused by Year
2000 issues. Limited scope contingency plans are currently being developed to
address potential disruptions of a temporary nature that may affect CPA(R):14.
Because it is not possible to anticipate all of the possible disruptions that
may be caused by Year 2000 events, there can be no assurance that CPA(R):14 will
not be adversely affected if such disruptions occur.

66
<PAGE> 68

DISTRIBUTIONS

Since July 1998, the Company has paid the following dividends to
shareholders who held their shares for the full quarter preceding the payment of
the dividend:

<TABLE>
<CAPTION>
DATE AMOUNT
- ---- -------
<S> <C>
July 1998................................................... $.1476
October 1998................................................ $.1595
January 1999................................................ $.1610
April 1999.................................................. $.1625
July 1999................................................... $.1627
October 1999................................................ $.1629
</TABLE>

Largely because of deductions for depreciation, on a GAAP basis, 20% of the
dividends paid in 1998 represented a return of capital.

DESCRIPTION OF THE PROPERTIES

We have purchased 20 properties located in 14 states leased to 16 tenants.
The cost of each of the properties will be depreciated for tax purposes over a
40-year period on a straight line basis. CPA(R):14 believes all of the
properties are adequately covered by insurance and are suitable for their
intended purposes. The following table provides certain additional information
about these properties:

<TABLE>
<CAPTION>
RENT
PURCHASE PROPERTY SQUARE INCREASE LEASE
LESSEE PROPERTY LOCATION PRICE TYPE* FOOTAGE ANNUAL RENT FACTOR EXPIRATION
- ------ ----------------- ----------- -------- --------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Advanced Micro Devices,
Inc.(1)....................... Sunnyvale, CA $95,287,958 3 362,000 $ 9,145,500 CPI 12/18
The Benjamin Ansehl Co......... Overland, MO $ 6,021,000 1 154,760 $ 649,750 CPI 11/13
Best Buys Co. Inc.............. Torrance, CA $19,582,000 4 102,470 1,741,990 Stated 1/05
Burlington Motor Carrier
Inc........................... Daleville, IN $ 7,539,267 3 106,372 $ 792,000 CPI 6/18
CompuCom Systems, Inc.(1)...... Dallas, TX $39,790,500 3 250,000 $ 3,914,000 CPI 3/19
Contraves Brashear Systems,
L.P........................... Pittsburgh, PA $ 6,806,283 1/3 146,103 $ 643,750 CPI 12/13
Etec Systems, Inc.(2).......... Hayward, CA $52,356,031 1 129,000 $ 5,746,531 CPI 5/14
Intesys Technologies,
Inc.(3)....................... Gilbert, AZ $23,560,000 3 243,370 $ 2,274,750 CPI 2/19
Metagenics Incorporated........ San Clemente, CA $11,500,000 3 133,600 9% of cost of(4) Stated 5/10
construction
Production Resources Group
L.L.P......................... Las Vegas, NV $ 8,380,000 1/3 105,000 $ 884,000 CPI 4/14
Los Angeles, CA $ 3,743,455 2 47,216 $ 393,250 CPI 10/14
CheckFree Corporation(5)....... Norcross, GA $29,400,000 3 220,675 $ 2,487,744 CPI 12/15
Builders' Supply and Lumber
Co., Inc...................... Harrisburg, NC $ 7,805,807 2 2,356,700 $ 760,000 CPI 2/20
The Scott Company of
California, Inc............... Gardenia, CA $ 6,282,723 1/2 89,924 $ 681,000 Stated 7/19
AmeriServe Food Distribution,
Inc.(6)....................... Burlington, NJ $55,779,445 2 860,000 $ 5,769,073 CPI 9/19
Manassas, VA
Grand Rapids, MI
Shawnee, KS
Consolidated Theatres Holdings,
G.P. ......................... Richmond, VA $114,700,000 4 88,000 $ 1,550,489 Stated 5/19
Amerix Corporation............. Columbus, MD $26,335,079 3 159,577 $ 2,197,475 Stated 11/16

MAXIMUM AMOUNT OF DATE OF
LESSEE TERM FINANCING ACQUISITION
- ------ ------- ----------- -----------
<S> <C> <C> <C>
Advanced Micro Devices,
Inc.(1)....................... 2/38 $68,250,000 12/22/98
The Benjamin Ansehl Co......... 11/13 3,100,000 11/24/98
Best Buys Co. Inc.............. 2/10 -- 7/27/98
Burlington Motor Carrier
Inc........................... 6/28 -- 6/30/98
CompuCom Systems, Inc.(1)...... 3/29 $23,000,000 3/31/99
Contraves Brashear Systems,
L.P........................... 2/23 $ 4,225,000 12/28/98
Etec Systems, Inc.(2).......... 5/34 $30,000,000 2/3/98
Intesys Technologies,
Inc.(3)....................... 2/39 -- 2/3/99
Metagenics Incorporated........ 5/20 -- 7/29/98
Production Resources Group
L.L.P......................... 4/24 $ 5,475,000 3/31/99
10/24 -- 10/15/99
CheckFree Corporation(5)....... 12/30 $23,300,000 6/3/99
Builders' Supply and Lumber
Co., Inc...................... 2/30 -- 6/29/99
The Scott Company of
California, Inc............... 7/34 $ 3,000,000 7/19/99
AmeriServe Food Distribution,
Inc.(6)....................... 9/39 $32,000,000 8/19/99
Consolidated Theatres Holdings,
G.P. ......................... 5/29 $ 9,400,000 9/22/99
Amerix Corporation............. 11/26 -- 11/1/99
</TABLE>

* Property types are coded as follows: 1 -- Industrial/Manufacturing;
2 -- Distribution/Warehouse; 3 -- Office/Research; 4 -- Retail

- ---------------
(1) CPA(R):14 owns a one-third interest in this property. CIP(R) and CPA(R):12
each own a one-third interest.

(2) CPA(R):14 owns a 49.99% interest in this property. This property is part of
a four building campus leased to Etec. CPA(R):12 owns the remaining 50.01%
of the building described in this chart and 100% of the remaining
properties.

(3) CPA(R):14 owns a 50% interest in this property. CPA(R):12 owns the remaining
50% interest.

(4) The company is building this property for Metagenics, and rent will based on
the cost of construction for the first term of the lease, 12 years. Annual
rent during this period will be nine percent (9%) per year on amounts
advanced to by CPA(R):14 or its subsidiary for the cost of construction.

(5) CPA(R):14 owns a 50% interest in this property. Carey Diversified LLC owns
the remaining 50% interest.

(6) CPA(R):14 owns a 60% interest in this property. CPA(R):12 owns the remaining
40% interest.

67
<PAGE> 69

The following is a description of our tenants' businesses and a summary of
their financial information.

ADVANCED MICRO DEVICES, INC.

AMD is a global supplier of integrated circuits for the personal and
networked computer and communications market. AMD produces processors, flash
memories, programmable logic devices and products for communications and
networking applications.

Financial statements for AMD are on file with the Securities and Exchange
Commission. The following is a summary of selected financial information for
AMD:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 28,
-----------------------------------------
1998 1997 1996
----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF INCOME
Net sales................................ $2,542,141 $2,356,375 $1,953,019
Expenses................................. 2,705,783 2,447,028 2,206,329
Operating income......................... (163,642) (90,653) (253,310)
Net income............................... (103,960) (21,090) (68,950)
Net income per common share (basic)...... (0.72) (0.15) (0.51)
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 28,
--------------------------------------
1998 1997 1996
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash and short-term investments.......... $ 697,025 $ 467,032 $ 586,198
Total current assets..................... 1,562,027 1,175,267 1,029,077
Property, plant and equipment, net....... 2,268,468 1,990,689 1,787,402
Total assets............................. 4,252,968 3,515,271 3,145,283
Total current liabilities................ 840,719 726,770 583,473
Total shareholders' equity............... 2,005,049 2,029,543 2,021,878
</TABLE>

CONTRAVES BRASHEAR SYSTEMS, L.P.

Contraves designs and manufactures electro-optical and electro-mechanical
systems and instruments for commercial and defense markets. The company operates
in four product areas: telescope systems, optical components, electro-optical
systems for fire control, tracking and surveillance and small arms fire control
systems.

Contraves was incorporated in September, 1997. The following is a summary
of selected financial data for Contraves as supplied by Contraves:

<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 26, 1999 SEPTEMBER 27, 1998
------------------ ------------------
(IN THOUSANDS)
<S> <C> <C>
STATEMENT OF OPERATIONS
Contract revenue........................... $17,237 $31,537
Cost of sales.............................. 13,730 28,156
Interest (income) expense.................. (66) 130
Net income................................. 838 552
</TABLE>

68
<PAGE> 70

<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 26, 1999 SEPTEMBER 27, 1998
------------------ ------------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA
Cash and investments....................... $ 4,556 $ 1,329
Total assets............................... 12,333 13,689
Total liabilities.......................... 7,986 9,130
Partners' capital.......................... 2,450 3,500
Total equity............................... 4,347 4,559
</TABLE>

BEST BUY CO. INC

Best Buy is the nation's largest volume specialty retailer of name brand
consumer electronics, home office equipment, entertainment software and
appliances.

Financial statements for Best Buy are on file with the Securities and
Exchange Commission. The following is a summary of selected financial data for
Best Buy:

<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
----------------------------------------
FEBRUARY 27, FEBRUARY 28, MARCH 1,
1999 1998 1997
------------ ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF EARNINGS
Revenues.................................. $10,077,906 $8,358,212 $7,770,683
Gross profit.............................. 1,827,783 1,332,138 1,058,881
Selling general and administrative
expenses................................ 1,463,281 1,145,280 1,005,675
Operating income.......................... 364,502 186,858 53,206
Net earnings.............................. 224,437 94,453 1,748
</TABLE>

<TABLE>
<CAPTION>
AS OF
----------------------------------------
FEBRUARY 27, FEBRUARY 28, MARCH 1,
1999 1998 1997
------------ ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents............... $ 785,777 $ 676,601 $ 567,456
Total assets............................ 2,512,493 2,056,346 1,734,307
Long-term debt.......................... 30,509 225,322 238,016
Convertible preferred securities........ -- 229,854 230,000
Total shareholders' equity.............. 1,064,134 557,746 438,315
</TABLE>

ETEC SYSTEMS, INC.

Etec is a leading producer of electron beam and laser lithography
equipment. These systems are used in the manufacturing of masks for
semiconductor manufacturing industry. Etec's shareholders include DuPont, IBM,
Perkin Elmer Grumman, and Micron Technology.

69
<PAGE> 71

Financial Statements of Etec System are on file with the Securities and
Exchange Commission. The following is a summary of selected financial data for
Etec System:

<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenue....................................... $237,166 $288,327 $240,914
Cost of revenue............................... 139,790 135,170 124,287
Gross profit.................................. 97,376 153,157 116,627
Operating expenses............................ 98,143 86,035 66,186
Net income.................................... 1,026 46,767 34,439
</TABLE>

<TABLE>
<CAPTION>
AS OF JULY 31,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Total assets.................................. $308,006 $358,514 $284,543
Total liabilities............................. 69,350 111,845 86,902
Total shareholders' equity.................... 238,656 246,667 197,641
</TABLE>

METAGENICS INCORPORATED

Metagenics produces and distributes nutritional supplements for resale by
licensed health care practitioners, health and natural product retailers, and
other specialty retailers.

The following is a summary of selected financial information for Metagenics
supplied by Metagenics:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
STATEMENT OF INCOME
Total revenue........................................ $25,258,789 $28,355,402
Cost of goods sold................................... 11,677,832 12,870,785
Total operating expenses............................. 13,169,512 14,441,681
Net income........................................... 273,361 1,008,192
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------------
1998 1997
---------- ----------
<S> <C> <C>
BALANCE SHEET DATA
Cash................................................... $ 25,463 $ 67,872
Accounts receivable.................................... 2,384,943 2,808,634
Total assets........................................... 7,678,250 8,667,446
Long term debt......................................... 229,329 3,401,963
Total shareholders equity.............................. 2,165,199 2,826,324
</TABLE>

BURLINGTON MOTOR CARRIERS INC.

Burlington Motor Carriers, Inc. was incorporated on November 7, 1997 and
operates as a common carrier providing truck load services throughout the
continental United States, to and from Mexico and certain provinces in Canada.

70
<PAGE> 72

The following is a summary of selected financial data for Burlington
supplied by Burlington:

<TABLE>
<CAPTION>
YEAR ENDED PERIOD
DECEMBER 31, NOVEMBER 7, 1996
-------------------- THROUGH
1998 1997 DECEMBER 31, 1996
-------- -------- -----------------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
Operating revenue..................... $224,931 $201,118 $ 4,908
Total operating expenses.............. 214,758 193,680 5,205
Operating income (loss)............... 10,173 7,438 (297)
Net loss.............................. 2,001 (547) (1,650)
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------------------
1998 1997 1996
------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash............................................ $ 2,142 $ 1,177 $ 1,378
Receivable...................................... 28,849 24,677 19,104
Total assets.................................... 38,475 29,978 27,878
Long term debt.................................. 74,687 68,438 68,186
Total shareholders' equity...................... 29,801 27,262 27,809
</TABLE>

THE BENJAMIN ANSEHL CO.

Ansehl is a diversified manufacturer/marketer of liquid filled health and
beauty care products. The following is a summary of selected financial data for
Ansehl supplied by Ansehl:

<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED
MARCH 31,
-----------------------------
1999 1998 1997
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF EARNINGS
Revenues......................................... $42,529 $50,543 $43,552
Gross profit..................................... 4,868 8,200 7,749
Operating income................................. 249 1,619 1,946
Net loss......................................... (1,577) (196) (206)
</TABLE>

<TABLE>
<CAPTION>
AS OF MARCH 31,
------------------
1999 1998
------- -------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA
Cash........................................................ $ 136 $ 7
Total assets................................................ 28,700 29,025
Accounts payable............................................ 6,741 6,709
Shareholders' equity........................................ 2,382 4,266
</TABLE>

INTESYS TECHNOLOGIES, INC.

Founded in 1972 as Pixlly-Richards West, Inc., Intesys designs, produces
and assembles plastic components for use in other companies' end products.

71
<PAGE> 73

The following is a summary of selected financial data for Intesys supplied
by Intesys:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF INCOME
Gross revenue................................. $142,757 $156,744 $122,332
Operating income.............................. 13,714 14,714 9,668
Income (loss) before extraordinary item....... 1,714 865 (2,457)
Net income (loss)............................. (496) 451 (3,306)
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------
1998 1997 1996
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash and equivalents.......................... $ 955 $ 43 $ 166
Accounts receivable........................... 14,200 23,738 18,739
Total assets.................................. 60,344 70,301 68,574
Accounts payable.............................. 8,814 16,231 10,888
Long term debt................................ 100,050 92,778 99,352
Total shareholder's deficit................... (57,044) (55,948) (56,400)
</TABLE>

COMPUCOM SYSTEMS, INC.

CompuCom provides network integration services and desktop products for
large corporate customers.

Financial statements for CompuCom are on file with the Securities and
Exchange Commission. The following is a summary of selected financial
information for CompuCom:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1998 1997 1996
----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF INCOME
Total revenue............................ $2,254,465 $1,949,802 $1,995,191
Gross margin............................. 283,960 267,545 240,963
Total operating expenses................. 264,550 199,564 184,321
Net earnings............................. 401 35 ,194 30,471
Earnings per common share (basic)........ $0.01 $0.75 $0.66
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1998 1997 1996
---------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash........................................ $ 4,526 $ 4,456 $ 4,320
Total current assets........................ 415,422 382,435 618,890
Property, plant and equipment, net.......... 72,004 63,359 54,308
Total assets................................ 545,489 462,590 692,985
Long term debt.............................. 81,929 97,400 236,450
Total stockholders' equity.................. 210,281 210,200 171,098
</TABLE>

72
<PAGE> 74

PRODUCTION RESOURCES GROUP, L.L.P.

PRG is a designer and producer of sets for themed events and Broadway shows
as well as a lessor of equipment for corporate themed events.

Financial Statements for PRG are on file with the Securities and Exchange
Commission. The following is a summary of selected financial information for
PRG:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1998 1997 1996
-------- ------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF INCOME
Revenues........................................ $174,603 $75,180 $ 49,439
Direct production costs......................... 107,857 46,131 29,565
Gross profit.................................... 55,489 22,868 (15,949)
Net income (loss)............................... (5,967) (7,771) (6,100)
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------------------
1998 1997 1996
-------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents........................ $ 6,014 $ 27,164 $ 719
Total current assets............................. 59,902 56,658 3,858
Property, plant and equipment, net............... 82,096 49,236 7,784
Total assets..................................... 196,106 128,252 11,969
Total current liabilities........................ 46,759 21,426 3,320
Total long-term debt............................. 149,195 103,743 1,113
</TABLE>

CHECKFREE CORPORATION

CheckFree is a leading provider of electronic commerce services,
institutional portfolio management services, and financial application software
for financial institutions and businesses.

Financial statements for CheckFree are on file with the Securities and
Exchange Commission. The following is a summary of selected financial
information for CheckFree:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------
1999 1998 1997
-------- -------- ---------
(IN THOUSANDS EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
Total revenue.................................. $250,131 $233,864 $ 176,445
Total expenses................................. 258,440 277,213 357,844
Net income (loss).............................. 10,457 (3,703) (161,813)
Diluted income (loss) per common share......... 0.20 (0.07) (3.44)
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30,
--------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C>
BALANCE SHEET DATA
Total assets.................................... $252,761 $250,112 $223,836
Long-term obligations, less current portion..... 3,882 6,467 8,401
Total shareholders' equity...................... 186,903 183,854 148,644
</TABLE>

73
<PAGE> 75

BUILDER'S SUPPLY AND LUMBER CO., INC.

Builder's Supply and Lumber Co. operates as a distributor and seller of
lumber and other building and construction supplies.

The following is a summary of selected financial data for Builder's Supply
supplied by Builder's Supply:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
Net sales............................................. $281,411 $255,676 $192,252
Cost of goods sold.................................... 226,513 216,026 161,043
Gross profit.......................................... 54,898 39,650 31,209
Net income............................................ 1,199 3,987 619
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------
1998 1997
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents.................................. $ 130 $ 925
Receivables................................................ 36,143 22,868
Total assets............................................... 94,524 82,788
Total stockholders' equity................................. 15,172 22,791
</TABLE>

THE SCOTT CO. OF CALIFORNIA, INC.

Scott specializes in the engineering of mechanical systems.

The following is a summary of selected financial data for Scott supplied by
Scott:

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED APRIL 30,
----------- ----------------------------
1999* 1998 1997
----------- ------------ ------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
Contract revenue............................ $83,094,792 $199,388,092 $171,388,454
Gross profit................................ 14,416,273 16,341,377 20,010,386
Other income (net).......................... (96,188) 1,786,644 869,553
Net earnings................................ 1,136,601 549,160 1,656,486
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30,
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
BALANCE SHEET DATA
Cash........................................................ $ 456,324 $ 895,483
Total current assets........................................ 67,971,572 69,004,563
Total assets................................................ 90,330,320 91,488,543
Current portion of long term debt........................... 4,438,296 5,459,434
Total stockholders' equity.................................. 14,157,995 13,091,639
</TABLE>

AMERISERVE FOOD DISTRIBUTION, INC.

AmeriServe is North America's largest systems foodservice distribution
specializing in food distribution to chain restaurants across the United States
and Canada.

- ---------------

* Beginning 1999, Scott changed their fiscal year end from April 30 to
December 31.

74
<PAGE> 76

Financial statements for AmeriServe are on file with the Securities and
Exchange Commission. The following is a summary of selected financial
information for AmeriServe:

<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------
DECEMBER 26, DECEMBER 27, DECEMBER 28,
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
INCOME STATEMENT
Net sales............................. $7,420,951 $3,446,191 $1,280,598
Cost of goods sold.................... 6,740,926 3,104,012 1,151,749
Distribution, selling and
administrative expense.............. 561,985 266,692 104,449
Net income (loss)..................... (146,973) (74,223) 2,518
</TABLE>

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 26, DECEMBER 27,
------------ ------------
1998 1997
------------ ------------
<S> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents................................... $ 4,667 $ 231,131
Total current assets........................................ 550,758 580,536
Total assets................................................ 1,887,323 1,462,321
Long-term debt.............................................. 8,649 5,019
Total shareholders' equity ................................. (1,082) 98,055
</TABLE>

CONSOLIDATED THEATRES, HOLDINGS G.P.

Consolidated Theatres is a movie exhibitor which operates and specializes
in megaplex theatres that feature stadium-tiered seating, digital sound systems
and state-of-the-art design features and amenities.

The following is a summary of selected financial data for Consolidated
Theatres supplied by Consolidated Theatres:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------
1998 1997
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
INCOME STATEMENT
Total revenue............................................... $ 14,056 $ 9,054
Gross profit................................................ 8,221 5,347
Net income.................................................. 2,367 1,874
</TABLE>

<TABLE>
<CAPTION>
AS OF AS OF
JULY 31, DECEMBER 31,
1999 1998
----------- ------------
<S> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents................................... $ 1,083,394 $ 1,001,508
Total current assets........................................ 2,663,390 2,678,304
Total assets................................................ 13,941,585 12,035,033
Total stockholders' equity.................................. 3,662,913 4,148,903
</TABLE>

AMERIX CORPORATION

Amerix provides outsourcing of accounting, advertising, processing and
related support to organizations which provide credit counseling services to the
public.

75
<PAGE> 77

The following is a summary of selected financial data for Amerix as
supplied by Amerix:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
INCOME STATEMENT
Revenue..................................................... $43,157,680 $14,947,084
Total operating expenses.................................... 40,353,030 11,834,892
Operating income............................................ 2,804,650 3,112,192
Net income.................................................. 920,308 3,041,830
</TABLE>

<TABLE>
<CAPTION>
AS OF JULY 31,
-------------------------
1999 1998
----------- ----------
<S> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents................................... $ 829,248 $ 26,296
Total current assets........................................ 5,209,452 3,226,434
Total assets................................................ 10,998,291 5,396,428
Total current liabilities................................... 2,785,523 1,727,243
Total equity................................................ 3,321,397 3,042,830
</TABLE>

WARRANTS

In connection with the purchase of some of the properties, CPA(R):14
received warrants to purchase shares of the tenant companies. The following
table describes the warrants received as of the date of this prospectus:

<TABLE>
<CAPTION>
PERCENTAGE
COMPANY NUMBER OF SHARES OWNERSHIP EXERCISE PRICE TERM
------- ---------------- ---------- -------------- ----
<S> <C> <C> <C> <C>
Benjamin Ansehl Co...... 2,064 1.5 $26.738 15
Burlington Motor
Carriers................ 4,667 -- $ 100 Length of Lease
Consolidated Theaters... 110 3.0 $ 1,000 20
</TABLE>

ACQUISITION FEES

In connection with the acquisition described in this prospectus, affiliates
of Carey Property Advisors received acquisition fees. The total fees received in
connection with these acquisitions was approximately $6,245,000. In addition,
these affiliates are entitled to receive approximately $4,995,000 over the next
eight years provided that shareholders receive a cumulative return of 6%.

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of the material federal income tax
considerations associated with an investment in the shares. In this section when
we refer to "the Code" we mean the Internal Revenue Code, as amended. This
summary is not exhaustive of all possible tax considerations and is not tax
advice. Moreover, this summary does not deal with all tax aspects that might be
relevant to you, as a particular prospective shareholder in light of your
personal circumstances; nor does it deal with particular types of shareholders
that are subject to special treatment under the Code, such as insurance
companies, financial institutions and broker-dealers. The Code provisions
governing the federal income tax treatment of REITs are highly technical and
complex. This summary is qualified in its entirety by the applicable Code
provisions, rules and regulations promulgated thereunder, and administrative and
judicial interpretations thereof. The following discussion is based on current
law.

WE URGE YOU, AS A PROSPECTIVE INVESTOR, TO CONSULT YOUR OWN TAX ADVISER
REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND
SALE OF THE SHARES AND OF OUR ELECTION TO BE TAXED AS A REIT, INCLUDING THE
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE,
OWNERSHIP AND SALE.

76
<PAGE> 78

OPINION OF COUNSEL

In the opinion of our counsel, Reed Smith Shaw & McClay LLP, commencing
with our taxable year ended December 31, 1998, we qualified to be taxed as a
REIT under the Code, provided that we operated and continue to operate in
accordance with various assumptions and factual representations we made
concerning our business, properties and operations. It must be emphasized that
Reed Smith Shaw & McClay LLP's opinion is based on various assumptions and is
conditioned upon the assumptions and representations we made concerning our
business and properties. Moreover, our qualification and taxation as a REIT
depends on our ability to meet the various qualification tests imposed under the
Code discussed below, the results of which will not be reviewed by Reed Smith
Shaw & McClay LLP. Accordingly, no assurance can be given that the actual
results of our operations for any one taxable year will satisfy these
requirements. See "Risk Factors -- Failure to qualify as a REIT could adversely
affect our operations and ability to make distributions."

The opinion of Reed Smith Shaw & McClay LLP is also based upon existing law
as currently applicable, Internal Revenue Service regulations, currently
published administrative positions of the Internal Revenue Service and judicial
decisions, which are subject to change either prospectively or retroactively. We
cannot assure you that any changes will not modify the conclusions expressed in
their opinion. Moreover, an opinion of counsel is not binding on the Internal
Revenue Service and we cannot assure you that the Internal Revenue Service will
not successfully challenge our status as a REIT.

If we qualify for taxation as a REIT, we generally will not be subject to
federal corporate income taxes on that portion of our ordinary income or capital
gain that we distribute currently to our shareholders. The REIT provisions of
the Code generally allow a REIT to deduct distributions paid to its
shareholders. This substantially eliminates the federal "double taxation" on
earnings (taxation at both the corporate level and shareholder level) that
usually results from investments in a corporation.

Even if we qualify for taxation as a REIT, we will be subject to federal
income tax, as follows:

-- we will be taxed at regular corporate rates on our undistributed REIT
taxable income, including undistributed net capital gains;

-- under some circumstances, we will be subject to "alternative minimum
tax";

-- if we have net income from the sale or other disposition of
"foreclosure property" that is held primarily for sale to customers in
the ordinary course of business or other non-qualifying income from
foreclosure property, we will be subject to tax at the highest
corporate rate on that income;

-- if we have net income from prohibited transactions (which are, in
general, sales or other dispositions of property other than
foreclosure property held primarily for sale to customers in the
ordinary course of business), the income will be subject to a 100%
tax;

-- if we fail to satisfy either the 75% or 95% gross income test
(discussed below) but have nonetheless maintained our qualification as
a REIT because certain other requirements have been met, we will be
subject to a 100% tax on the net income attributable to the greater of
the amount by which we fail the 75% or 95% test, multiplied by a
fraction intended to reflect our profitability;

-- if we fail to distribute during each year at least the sum of (i) 85%
of our REIT ordinary income for the year, (ii) 95% of our REIT capital
gain net income for such year (other than capital gain net income
which we elect to retain and pay tax on) and (iii) any undistributed
taxable income from prior periods, we will be subject to a 4% excise
tax on the excess of the required distribution over the amounts
actually distributed; and

-- if we acquire any asset from a C corporation (i.e., a corporation
generally subject to full corporate-level tax) in a carryover-basis
transaction and we subsequently recognize gain on the disposition of
the asset during the ten-year period beginning on the date on which we
acquired the asset, then a portion of the gains may be subject to tax
at the highest regular corporate rate, pursuant to guidelines issued
by the Internal Revenue Service (the "Built-In-Gain Rules").

77
<PAGE> 79

REQUIREMENTS FOR QUALIFICATION

We elected to be taxable as a REIT for our taxable year ended December 31,
1998. In order for us to have qualified as a REIT, we had to meet and we must
continue to meet the requirements discussed below relating to our organization,
source of income, nature of assets and distributions of income to our
shareholders.

Organizational Requirements

Definition of REIT under the Code

In order to qualify for taxation as a REIT under the Code, we

-- must be a domestic corporation;

-- must be managed by one or more trustees or directors;

-- must have transferable shares;

-- cannot be a financial institution or an insurance company;

-- must have at least 100 shareholders for at least 335 days of each
taxable year of 12 months; and

-- must not be closely held.

We will be closely held only if five or fewer individuals or certain tax-exempt
entities own, directly or indirectly, more than 50% (by value) of our shares at
any time during the last half of our taxable year. However, for purposes of the
closely-held test, the Code generally permits a look-through for pension funds
and certain other tax-exempt entities to the beneficiaries of the entity to
determine if the REIT is closely held. However, if a tax-exempt shareholder owns
more than 25% of our shares or one or more tax-exempt shareholders, each own at
least 10 percent of CPA(R):14, and in the aggregate own more than 50 percent of
our shares, those shareholder(s) may be required to treat all or a portion of
their distributions from us as unrelated business taxable income. See "Taxation
of Tax-Exempt Shareholders."

As a Maryland corporation, we satisfy the first requirement. In addition,
we are managed by a board of directors, we have transferable shares and we do
not intend to operate as a financial institution or insurance company.
Additionally, we have more than 100 shareholders. We may refuse to transfer our
shares to any person if the sale or transfer would jeopardize our ability to
satisfy the REIT ownership requirements. However, there can be no assurance that
a refusal to transfer will be effective. Based on the foregoing, we should
satisfy the organizational and structural requirements as well as the share
ownership tests.

Our Ownership of Interests in Partnerships and Qualified REIT Subsidiaries

In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT is deemed to own its proportionate share
(based on its interest in partnership capital) of the assets of the partnership
and is deemed to be entitled to the income of the partnership attributable to
its share. Also, if a REIT owns a qualified REIT subsidiary, it will be deemed
to own all of the subsidiary's assets and liabilities and it will be deemed to
be entitled to the income of that subsidiary. In addition, the character of the
assets and gross income of the partnership or qualified REIT subsidiary shall
retain the same character in the hands of the REIT for purposes of the Code,
including satisfying the gross income tests and asset tests.

Income Tests

Gross Income Requirements

To maintain our qualification as a REIT, we must satisfy annually two gross
income requirements.

-- At least 75% of our gross income (excluding gross income from
prohibited transactions) for each taxable year must be derived
directly or indirectly from investments relating to real property or
78
<PAGE> 80

mortgages on real property. Gross income includes "rents from real
property" and, in some circumstances, interest, but excludes gross
income from disposition or property held primarily for sale to
customers in the ordinary course of a trade or business ("prohibited
transactions"). This is the 75% Income Test.

-- At least 95% of our gross income (excluding gross income from
prohibited transactions) for each taxable year must be derived from
the real property investments described above and from distributions,
interest and gains from the sale or disposition of stock or securities
or from any combination of the foregoing. This is the 95% Income Test.

Rents from Real Property

The rents we receive or that we are deemed to receive qualify as "rents
from real property" in satisfying the gross income requirements for a REIT
described above only if the following conditions are met.

-- The amount of rent generally must not be based in whole or in part on
the income of profits of any person. An amount received or accrued
generally will not be excluded from the term "rents from real
property," solely by reason of being based on a fixed percentage or
percentages of gross receipts or sales.

-- The Code provides that rents received from a tenant will not qualify
as "rents from real property" in satisfying the gross income tests if
the REIT, or an owner of 10% or more of the REIT, directly or
constructively owns 10% or more of the tenant (a "Related Party
Tenant") or a subtenant of the tenant (in which case only rent
attributable to the subtenant is disqualified).

-- If rent attributable to personal property leased in connection with a
lease of real property is greater than 15% of the total rent received
under the lease, then the portion of rent attributable to the personal
property will not qualify as "rents from real property."

-- The REIT must not operate or manage the property or furnish or render
services to tenants, other than through an "independent contractor"
who is adequately compensated and from whom the REIT does not derive
any income. However, a REIT may provide services with respect to its
properties and the income will qualify as "rents from real property"
if the services are "usually or customarily rendered" in connection
with the rental of space only and are not otherwise considered
"rendered to the occupant." Even if the services with respect to a
property are impermissible tenant services the income will qualify as
"rent from real property" if the income from these services does not
exceed one percent of all amounts received or accrued with respect to
that property.

If we acquire ownership of property by reason of the default of a borrower
on a loan or possession of property by reason of a tenant default, if the
property qualifies and we elect to treat it as foreclosure property, the income
from the property will qualify under the 75% Income Test and the 95% Income Test
notwithstanding its failure to satisfy these requirements for two years, or if
extended for good cause, up to a total of five years. In that event, we must
satisfy a number of complex rules, one of which is a requirement that it operate
the property through an independent contractor. We will be subject to tax on
that portion of our net income from foreclosure property that does not otherwise
qualify under the 75% Income Test.

Prior to the making of investments in properties, we may satisfy the 75%
Income Test and the 95% Income Test by investing in liquid assets such as
government securities or certificates of deposit, but earnings from those types
of assets are qualifying income under the 75% Income Test only for one year from
the receipt of proceeds. Accordingly, to the extent that offering proceeds have
not been invested in properties prior to the expiration of this one-year period,
in order to satisfy the 75% Income Test, we may invest the offering proceeds in
less liquid investments such as mortgage-backed securities, maturing mortgage
loans purchased from mortgage lenders or shares in other REITs. We expect to
receive proceeds from the offering in a series of closings and to trace those
proceeds for purposes of determining
79
<PAGE> 81

the one-year period for "new capital investments." No rulings or regulations
have been issued under the provisions of the Code governing "new capital
investments," so that there can be no assurance that the Internal Revenue
Service will agree with this method of calculation.

Except for amounts received with respect to certain investments of cash
reserves, we anticipate that substantially all of our gross income will be from
sources that will allow us to satisfy the income tests described above; however,
no assurance can be given in this regard.

Eligibility for Relief Under the Code if We Fail to Qualify as a REIT

If we fail to satisfy one or both of the 75% Income Test or the 95% Income
Test for any taxable year, we may still qualify as a REIT for that year if we
are eligible for relief under specific provisions of the Code. These relief
provisions generally will be available if:

-- our failure to meet these tests was due to reasonable cause and not
due to willful neglect;

-- we attach a schedule of our income sources to our federal income tax
return; and

-- any incorrect information on the schedule is not due to fraud with
intent to evade tax.

It is not possible, however, to state whether, in all circumstances, we would be
entitled to the benefit of these relief provisions. For example, if we fail to
satisfy the gross income tests because nonqualifying income that we
intentionally earn exceeds the limits on this income, the Internal Revenue
Service could conclude that our failure to satisfy the tests was not due to
reasonable cause. As discussed above in "Opinion of Tax Counsel," even if these
relief provisions apply, a tax would be imposed with respect to the excess net
income.

Asset Tests

At the close of each quarter of our taxable year, we also must satisfy
three tests relating to the nature and diversification of our assets.

-- First, at least 75% of the value of our total assets must be
represented by real estate assets, cash, cash items and government
securities.

-- Second, no more than 25% of our total assets may be represented by
securities other than those in the 75% asset class.

-- Third, of the investments included in the 25% asset class, the value
of any one issuer's securities that we own may not exceed 5% of the
value of our total assets. Additionally, we may not own more than 10%
of any one issuer's outstanding voting securities.

The 5% test must generally be met for any quarter in which we acquire
securities of an issuer. After initially meeting the asset tests at the close of
any quarter, we will not lose our status as a REIT for failure to satisfy the
asset tests at the end of a later quarter solely by reason of changes in asset
values. If the failure to satisfy the asset tests results from an acquisition of
securities or other property during a quarter, we can cure the failure by
disposition of sufficient nonqualifying assets within 30 days after the close of
that quarter. We maintain, and will continue to maintain, adequate records of
the value of our assets to ensure compliance with the asset tests and will take
other action within 30 days after the close of any quarter as may be required to
cure any noncompliance.

Annual Distribution Requirements

In order to be taxed as a REIT, we are required to make distributions
(other than capital gain distributions) to our shareholders. The amount of these
distributions must be at least equal to:

-- the sum of 95% of our REIT Taxable Income (as defined by the Code and
computed without regard to the distributions-paid deduction and our
capital gain) and 95% of the net income, if

80
<PAGE> 82

any, from foreclosure property in excess of the special tax on income
from foreclosure property, minus

-- the sum of specific items of noncash income

This is known as the 95 Percent Test.

We must pay distributions in the taxable year to which they relate.
Alternatively, we may pay these distributions in the following taxable year if
declared before we timely file our federal income tax return for that year and
if paid on or before the first regular distribution payment after the
declaration.

Even if we satisfy the foregoing distribution requirements, to the extent
that we do not distribute all of our net capital gain or REIT Taxable Income as
adjusted, we will be subject to tax thereon at regular capital gains or ordinary
corporate tax rates. Furthermore, if we fail to distribute during each calendar
year at least the sum of

-- 85% of our ordinary income for that year,

-- 95% of our capital gain net income other than the capital gain net
income which we elect to retain and pay tax on for that year, and

-- any undistributed taxable income from prior periods,

we would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed.

ELECTION TO RETAIN OUR LONG-TERM CAPITAL GAINS

We may elect to retain, rather than distribute our net long-term capital
gains. The effect of this election is that:

-- we are required to pay the tax on these gains;

-- shareholders, while required to include their proportionate share of
the undistributed long-term capital gains in income, will receive a
credit or refund for their share of the tax paid by the REIT; and

-- the basis of the shareholder's shares would be increased by the amount
of the undistributed long-term capital gains (minus the amount of
capital gains tax we pay) included in the domestic shareholders'
long-term capital gains.

We believe we have made and we intend to continue to make timely
distributions sufficient to satisfy the annual distribution requirements. We
expect that our REIT taxable income will be less than our cash flow due to
depreciation and other non-cash charges. Accordingly, we anticipate that we will
generally have sufficient cash or liquid assets to enable us to satisfy the 95%
Distribution Test. It is possible, however, that we may not have sufficient cash
or other liquid assets to meet the 95% Distribution Test or to distribute a
greater amount as may be necessary to avoid income and excise taxation. This
could occur as a result of timing differences between

-- the actual receipt of income and actual payment of deductible
expenses, and

-- the inclusion of income and deduction of these expenses in arriving at
our taxable income, or as a result of nondeductible expenses such as
principal amortization or capital expenditures in excess of noncash
deductions.

In the event that timing differences occur, we may find it necessary to arrange
for borrowings or, if possible, pay taxable stock distributions in order to meet
the distribution requirement.

81
<PAGE> 83

DEFICIENCY DISTRIBUTIONS

In some circumstances, we may be able to rectify a failure to meet the
distribution requirement for a year by paying "deficiency distributions" to our
shareholders in a later year, which may be included in our deduction for
distributions paid for the earlier year. Thus, we may be able to avoid being
taxed on amounts distributed as deficiency distributions. We will, however, be
required to pay interest based upon the amount of any deduction taken for
deficiency distributions.

In computing our REIT taxable income, we will use the accrual method of
accounting and depreciate depreciable property under the alternative
depreciation system. We are required to file an annual federal income tax
return, which, like other corporate returns, is subject to Internal Revenue
Service examination. Because the tax law requires us to make many judgments
regarding the proper treatment of a transaction or an item of income or
deduction, it is possible that the Internal Revenue Service will challenge
positions we take in computing our REIT taxable income and its distributions.
Were the Internal Revenue Service to challenge successfully our characterization
of a transaction or determination of our REIT taxable income, we could be found
not to have satisfied a requirement for qualification as a REIT and mitigation
provisions might not apply. See "Sale-Leaseback Transactions." If, as a result
of a challenge, we are not able to satisfy the 95% Distribution Test, we would
be disqualified as a REIT (unless it were to pay a deficiency distribution and
pay interest and a penalty) as provided by the Code. A deficiency distribution
cannot be used to satisfy the 95% Distribution Test if the failure to meet the
test was not due to a later adjustment to our income by the Internal Revenue
Service.

FAILURE TO QUALIFY AS A REIT

If we fail to qualify as a REIT in any taxable year and the relief
provisions do not apply, we will be subject to tax (including any applicable
alternative minimum tax) on our taxable income at regular corporate rates. We
will not be able to deduct distributions to our shareholders in any year in
which we fail to qualify as a REIT. We also will be disqualified from taxation
as a REIT for the four taxable years following the year during which
qualification was lost unless we are entitled to relief under specific statutory
provisions. Furthermore, while we have no intention of doing so, we may revoke
its election voluntarily. See "Risk Factors -- Failure to qualify as a REIT
could adversely affect our operations and ability to make distributions."

SALE-LEASEBACK TRANSACTIONS

Many of our investments are and will be in the form of sale-leaseback
transactions. In most instances, depending on the economic terms of the
transaction, we will be treated for federal income tax purposes as either the
owner of the property or the holder of a debt secured by the property. We do not
expect to request an opinion of counsel concerning the status of any leases of
properties as true leases for federal income tax purposes.

The Internal Revenue Service may take the position that specific
sale-leaseback transactions we will treat as true leases are not true leases for
federal income tax purposes but are, instead, financing arrangements or loans.
We may also structure some sale-leaseback transactions as loans. In this event,
for purposes of the asset tests and the 75% Income Test, each such loan likely
would be viewed as secured by real property to the extent of the fair market
value of the underlying property. It is expected that, for this purpose, the
fair market value of the underlying property would be determined without taking
into account our lease. If a sale-leaseback transaction were so recharacterized,
we might fail to satisfy the Asset Tests or the Income Tests and consequently
lose our REIT status effective with the year of recharacterization.
Alternatively, the amount of our REIT Taxable Income could be recalculated which
could cause us to fail.

82
<PAGE> 84

TAXATION OF DOMESTIC SHAREHOLDERS

Definition

In this section, the phrase "domestic shareholder" means a holder of shares
that for federal income tax purposes:

-- is a citizen or resident of the United States;

-- is a corporation, partnership or other entity created or organized in
or under the laws of the United States or of any political subdivision
thereof;

-- is an estate or trust, the income of which is subject to United States
federal income taxation regardless of its source; or

-- a trust if a United States court is able to exercise primary
supervision over the administration of the trust and one or more
United States persons have the authority to control all substantial
decisions of the trust.

For any taxable year for which we qualify for taxation as a REIT, amounts
distributed to taxable domestic shareholders will be taxed as described below.

Distributions Generally

Distributions to domestic shareholders, other than capital gain
distributions discussed below, will constitute dividends up to the amount of our
current or accumulated earnings and profits and will be taxable to the
shareholders as ordinary income. These distributions are not eligible for the
distributions-received deduction for corporations. To the extent that we make a
distribution in excess of our current or accumulated earnings and profits, the
distribution will be treated first as a tax-free return of capital, reducing the
tax basis in each domestic shareholder's shares, and the amount of each
distribution in excess of a domestic shareholder's tax basis in its shares will
be taxable as gain realized from the sale of its shares. Distributions that we
declare in October, November or December of any year payable to a shareholder of
record on a specified date in any of these months will be treated as both paid
by us and received by the shareholder on December 31 of the year, provided that
we actually pay the distribution during January of the following calendar year.
Shareholders may not include any of our losses on their own federal income tax
returns.

We will be treated as having sufficient earnings and profits to treat as a
distribution any distribution by us up to the amount required to be distributed
in order to avoid imposition of the 4% excise tax, discussed in the section
titled "Opinion of Tax Counsel" above. Moreover, any "deficiency distribution"
will be treated as an ordinary or capital gain distribution, as the case may be,
regardless of our earnings and profits. As a result, shareholders may be
required to treat some distributions that would otherwise result in a tax-free
return of capital as taxable distributions.

Capital Gain Distributions

Distributions to domestic shareholders that we properly designate as
capital gain distributions will be treated as long-term capital gains (to the
extent they do not exceed our actual net capital gain) for the taxable year
without regard to the period for which the shareholder has held his stock.

Passive Activity Loss and Investment Interest Limitations

Our distributions and gain from the disposition of the shares will not be
treated as passive activity income, and therefore shareholders may not be able
to apply any "passive losses" against this income. Our distributions (to the
extent they do not constitute a return of capital) will generally be treated as
investment income for purposes of the investment income limitation. Net capital
gain from the disposition of shares and capital gain distributions generally
will be included in investment income for

83
<PAGE> 85

purposes of the investment interest deduction limitations only if and to the
extent you so elect, in which case these capital gains will be taxed as ordinary
income.

Certain Dispositions of the Shares

In general, any gain or loss realized upon a taxable disposition of shares
by a shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if the shares have been held for more than 12 months and as
short-term capital gain or loss if the shares have been held for 12 months or
less. If, however, a shareholder has received any capital gains distributions
with respect to his shares, any loss realized upon a taxable disposition of
shares held for six months or less, to the extent of the capital gains
distributions received with respect to his shares, will be treated as long-term
capital loss. Also, the Internal Revenue Service is authorized to issue
regulations that would subject a portion of the capital gain a shareholder
recognizes from selling his shares or from a capital gain distribution to a tax
at a 25% rate, to the extent the capital gain relates to depreciation we
deducted.

TREATMENT OF TAX-EXEMPT SHAREHOLDERS

Our distributions to a tax-exempt employee pension trust or other domestic
tax-exempt shareholder generally, will not constitute unrelated business taxable
income unless the shareholder has borrowed to acquire or carry its shares.
Qualified trusts that hold more than 10% (by value) of the shares of REITs held
predominantly by qualified trusts, may be required to treat a certain percentage
of the REIT's distributions as unrelated business taxable income. We do not
expect to be held predominantly by trusts and our articles of incorporation
prohibit the required concentration of ownership.

For social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts and qualified group legal services plans exempt from
federal income taxation under Code Sections 501(c)(7), (c)(9), (c)(17) and
(c)(20), respectively, income from an investment in CPA(R):14 will constitute
unrelated business taxable income unless the organization is able to deduct
amounts set aside or placed in reserve for certain purposes so as to offset the
unrelated business taxable income generated by its investment in CPA(R):14.
Prospective tax-exempt shareholders should consult their own tax advisors
concerning these "set aside" and reserve requirements.

SPECIAL TAX CONSIDERATIONS FOR FOREIGN SHAREHOLDERS

The rules governing United States income taxation of non-resident alien
individuals, foreign corporations, foreign partnerships and foreign trusts and
estates (collectively, "foreign shareholders") are complex. The following
discussion is intended only as a summary of these rules. Foreign investors
should consult with their own tax advisors to determine the impact of federal,
state and local income tax laws on an investment in CPA(R):14, including any
reporting requirements.

Taxation if Effectively Connected With a United States Trade or Business

In general, foreign shareholders will be subject to regular United States
federal income tax with respect to their investment in CPA(R):14 if the
investment is "effectively connected" with the foreign shareholder's conduct of
a trade or business in the United States. A corporate foreign shareholder that
receives income that is (or is treated as) effectively connected with a United
States trade or business also may be subject to the branch profits tax under
section 884 of the Code, which is payable in addition to regular United States
federal corporate income tax. The following discussion will apply to foreign
shareholders whose investment in CPA(R):14 is not so effectively connected.

Distributions Not Attributable to Gain From the Sale or Exchange of a
United States Real Property Interest

A distribution that is not attributable to our gain from the sale or
exchange of a United States real property interest and that we do not designate
as a capital gain distribution will be treated as an ordinary income
distribution to the extent that it is made out of current or accumulated
earnings and
84
<PAGE> 86

profits. Generally, any ordinary income distribution will be subject to a United
States federal income tax equal to 30% of the gross amount of the distribution
unless this tax is reduced by an applicable tax treaty. Such a distribution in
excess of our earnings and profits will be treated first as a return of capital
that will reduce each foreign shareholder's basis in its shares (but not below
zero) and then as gain from the disposition of those shares, the tax treatment
of which is described under the rules discussed below with respect to
dispositions of shares.

Distributions Attributable to Gain From the Sale or Exchange of a United
States Real Property Interest

Distributions that are attributable to gain from the sale or exchange of a
United States real property interest will be taxed to a foreign shareholder
under the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). Under
FIRPTA, these distributions are taxed to a foreign shareholder as if the
distributions were gains "effectively connected" with a United States trade or
business. Accordingly, a foreign shareholder will be taxed at the normal capital
gain rates applicable to a domestic shareholder (subject to any applicable
alternative minimum tax and a special alternative minimum tax in the case of
non-resident alien individuals). Distributions subject to FIRPTA also may be
subject to a 30% branch profits tax when made to a foreign corporate shareholder
that is not entitled to treaty exemptions.

Withholding Obligations From Distributions to Foreign Shareholders

Although tax treaties may reduce our withholding obligations, we generally
will be required to withhold from distributions to foreign shareholders, and
remit to the Internal Revenue Service,

-- 35% of designated capital gain distributions or, if greater, 35% of
the amount of any distributions that could be designated as capital
gain distributions, and

-- 30% of ordinary distributions paid out of earnings and profits.

In addition, if we designate prior distributions as capital gain distributions,
subsequent distributions, up to the amount of the prior distributions, will be
treated as capital gain distributions for purposes of withholding. A
distribution in excess of our earnings and profits will be subject to 30%
distribution withholding if at the time of the distribution it cannot be
determined whether the distribution will be in an amount in excess of our
current or accumulated earnings and profits. If the amount of tax we withheld
with respect to a distribution to a foreign shareholder exceeds the
shareholder's United States tax liability with respect to that distribution, the
foreign shareholder may file for a refund of the excess from the Internal
Revenue Service.

Sale of Our Shares by a Foreign Shareholder

A sale of our shares by a foreign shareholder generally will be subject to
United States federal income taxation unless our shares constitute a "United
States real property interest" within the meaning of FIRPTA. Our shares will not
constitute a United States real property interest if we are a "domestically
controlled REIT." A "domestically controlled REIT" is a REIT that at all times
during a specified testing period has less than 50% in value of its shares held
directly or indirectly by foreign shareholders. We currently anticipate that we
will be a domestically controlled REIT. Therefore, sales of our shares should
not be subject to taxation under FIRPTA. However, no assurance can be given that
we will continue to be a domestically controlled REIT. If we were not a
domestically controlled REIT, whether a foreign shareholder's sale of our shares
would be subject to tax under FIRPTA as a sale of a United States real property
interest would depend on whether our shares were "regularly traded" on an
established securities market and on the size of the selling shareholder's
interest in CPA(R):14. Our shares currently are not "regularly traded" on an
established securities market. If the gain on the sale of shares were subject to
taxation under FIRPTA, a foreign shareholder would be subject to the same
treatment as a domestic shareholder with respect to the gain (subject to any
applicable alternative minimum tax and a special alternative minimum tax in the
case of non-resident alien individuals). In addition, distributions that are
treated as gain from the disposition of shares and are subject to tax under
FIRPTA also may be subject to a 30% branch profit tax when made to a corporate
foreign shareholder

85
<PAGE> 87

that is not entitled to treaty exemptions. Under FIRPTA the purchaser of our
shares may be required to withhold 10% of the purchase price and remit this
amount to the Internal Revenue Service. Capital gains not subject to FIRPTA will
be taxable to a foreign shareholder if the foreign Shareholder is a non-
resident alien individual who is present in the United States for 183 days or
more during the taxable year and some other conditions apply, in which case the
non-resident alien individual will be subject to a 30% tax on his or her U.S.
source capital gains.

Recently promulgated Treasury regulations may alter the procedures for
claiming the benefits of an income tax treaty. Our foreign shareholders should
consult their tax advisors concerning the effect, if any, of the new Treasury
regulations on an investment in our shares.

INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX FOR DOMESTIC
SHAREHOLDERS

Under some circumstances, domestic shareholders may be subject to backup
withholding at a rate of 31% on payments made with respect to, or cash proceeds
of a sale or exchange of, shares. Backup withholding will apply only if the
shareholder:

-- fails to furnish his or her taxpayer identification number (which, for
an individual, would be his or her Social Security Number);

-- furnishes an incorrect tax identification number;

-- is notified by the Internal Revenue Service that he or she has failed
properly to report payments of interest and distributions or is
otherwise subject to backup withholding; or

-- under some circumstances, fails to certify, under penalties of
perjury, that he or she has furnished a correct tax identification
number and (a) that he or she has not been notified by the Internal
Revenue Service that he or she is subject to backup withholding for
failure to report interest and distribution payments or (b) that he or
she has been notified by the Internal Revenue Service that he or she
is no longer subject to backup withholding.

Backup withholding will not apply with respect to payments made to some
shareholders, such as corporations and tax-exempt organizations.

Domestic shareholders should consult their own tax advisors regarding their
qualifications for exemption from backup withholding and the procedure for
obtaining an exemption. Backup withholding is not an additional tax. Rather, the
amount of any backup withholding with respect to a payment to a domestic
shareholder will be allowed as a credit against the domestic shareholder's
United States federal income tax liability and may entitle the domestic
shareholder to a refund, provided that the required information is furnished to
the Internal Revenue Service.

BACKUP WITHHOLDING TAX FOR FOREIGN SHAREHOLDERS

Additional issues may arise for information reporting and backup
withholding for foreign shareholders. Foreign shareholders should consult their
tax advisors with regard to U.S. information reporting and backup withholding.

STATEMENT OF STOCK OWNERSHIP

We are required to demand annual written statements from the record holders
of designated percentages of our shares disclosing the actual owners of the
shares. Any record shareholder who, upon our request, does not provide us with
required information concerning actual ownership of the shares is required to
include specified information relating to his shares in his federal income tax
return. We also must maintain, within the Internal Revenue District in which we
are required to file our federal income tax return, permanent records showing
the information we have received about the actual ownership of shares and a list
of those persons failing or refusing to comply with our demand.

86
<PAGE> 88

STATE AND LOCAL TAX

We and our operating subsidiaries may be subject to state and local tax in
states and localities in which we or they do business or own property. The tax
treatment of CPA(R):14, our operating subsidiaries and the holders of our shares
in local jurisdictions may differ from the federal income tax treatment
described above.

ERISA CONSIDERATIONS

The following is a summary of some non-tax considerations associated with
an investment in CPA(R):14 by a qualified plan, Keogh Plan or an IRA. This
summary is based on provisions of ERISA and the Code, as amended through the
date of this prospectus, and relevant regulations and opinions issued by the
Department of Labor. No assurance can be given that legislative or
administrative changes or court decisions may not be forthcoming which would
significantly modify the statements expressed herein. Any changes may or may not
apply to transactions entered into prior to the date of their enactment.

In considering using the assets of an employee benefit plan subject to
ERISA to purchase shares, such as a profit-sharing, 401(k), or a pension plan,
or of any other retirement plan or account subject to Section 4975 of the Code
such as an IRA or Keogh Plan (collectively, "Benefit Plans"), a fiduciary,
taking into account the facts and circumstances of such Benefit Plan, should
consider, among other matters,

-- whether the investment is consistent with the applicable provisions of
ERISA and the Code,

-- whether the investment will produce unrelated business taxable income
to the Benefit Plan (see "United States Federal Income Tax
Considerations -- Taxation of Tax-Exempt Entities"), and

-- the need to value the assets of the Benefit Plan annually.

Under ERISA, a plan fiduciary's responsibilities include the duty

-- to act solely in the interest of plan participants and beneficiaries
and for the exclusive purpose of providing benefits to them, as well
as defraying reasonable expenses of plan administration;

-- to invest plan assets prudently;

-- to diversify the investments of the plan unless it is clearly prudent
not to do so; and

-- to comply with plan documents insofar as they are consistent with
ERISA.

ERISA also requires that the assets of an employee benefit plan be held in trust
and that the trustee (or a duly authorized named fiduciary or investment
manager) have exclusive authority and discretion to manage and control the
assets of the plan.

In addition, Section 406 of ERISA and Section 4975 of the Code prohibit
specified transactions involving assets of a Benefit Plan and any "party in
interest" or "disqualified person" with respect to that Benefit Plan. These
transactions are prohibited regardless of how beneficial they may be for the
Benefit Plan. The prohibited transactions include the sale, exchange or leasing
of property, the lending of money or the extension of credit between a Benefit
Plan and a party in interest or disqualified person, and the transfer to, or use
by, or for the benefit of, a party in interest, or disqualified person, of any
assets of a Benefit Plan. A fiduciary of a Benefit Plan also is prohibited from
engaging in self-dealing, acting for a person who has an interest adverse to the
plan (other than in the case of most IRAs and some Keogh Plans), or receiving
any consideration for its own account from a party dealing with the plan in a
transaction involving plan assets.

Furthermore, Section 408 of the Code states that assets of an IRA trust may
not be commingled with other property except in a common trust fund or common
investment fund.

87
<PAGE> 89

PLAN ASSETS

Neither ERISA nor the Code defines the term "plan assets." However, on
November 13, 1986, the Department of Labor published a final regulation
describing what constitutes the assets of a Benefit Plan when it invests in
specific kinds of entities (29 C.F.R. Section 2510.3-101, the "Regulation"). The
Regulation was generally effective as of March 13, 1987. As discussed below, we
have received an opinion of counsel that, under the final regulations issued by
the Department of Labor, our assets should not be deemed to be "plan assets" if
Benefit Plans invest in shares, assuming the conditions set forth in the opinion
are satisfied.

Under the Regulation, the assets of corporations, partnerships, or other
entities in which a Benefit Plan makes an equity investment will be deemed to be
assets of the Benefit Plan unless the entity satisfies at least one of the
exceptions to this general rule. The Regulation provides as one exception that
the underlying assets of entities such as CPA(R):14 will not be treated as
assets of a Benefit Plan if the interest the Benefit Plan acquires is a
"publicly-offered security." A publicly-offered security must be

-- "freely transferable,"

-- part of a class of securities that is owned by 100 or more persons who
are independent of the issuer and one another, and

-- sold as part of a public offering registered under the Securities Act
of 1933 and be part of a class of securities registered under the
Securities Exchange Act of 1934, as amended, within a specified time
period.

The shares are being sold as part of an offering exception of securities to
the public pursuant to an effective registration statement under the Securities
Exchange Act, and we have represented that the shares will be part of a class
registered under the Securities Exchange Act within the specified time frames.
Any shares purchased, therefore, should satisfy the third criterion of the
publicly offered exemption.

We have over 100 shareholders. Thus, the second criterion of the publicly
offered exception will be satisfied.

Whether a security is freely transferable depends upon the particular facts
and circumstances. The shares will be subject to restrictions intended to ensure
that we continue to qualify for federal income tax treatment as a REIT.
According to the Regulation, where the minimum investment in a public offering
of securities is $10,000 or less, the presence of a restriction on
transferability intended to prohibit transfers which would result in a
termination or reclassification of the entity for state or federal tax purposes
will not ordinarily affect a determination that such securities are freely
transferable. The minimum investment in shares is less than $10,000. Thus, the
restrictions imposed to maintain our status as a REIT should not cause the
shares to not be freely transferable.

We have obtained an opinion from counsel that the shares should constitute
"publicly-offered securities" and that our underlying assets should not be
considered plan assets under the Regulation assuming the offering takes place as
described in this prospectus.

In the event that our underlying assets were treated by the Department of
Labor as assets of a Benefit Plan, our management would be treated as
fiduciaries with respect to Benefit Plan shareholders and the prohibited
transaction restrictions of ERISA and the Code would apply to any transaction
involving our management and assets, unless an administrative or statutory
exemption under ERISA applies. These restrictions could, for example, require
that we avoid transactions with entities that are affiliated with us or our
affiliates or restructure our activities in order to obtain an exemption from
the prohibited transaction restrictions. Alternatively, we might provide Benefit
Plan shareholders with the opportunity to sell their shares to us or we might
dissolve or terminate.

If our underlying assets were treated as assets of a Benefit Plan, the
investment in CPA(R):14 also might constitute an ineffective delegation of
fiduciary responsibility to Carey Property Advisors and expose the fiduciary of
the plan to co-fiduciary liability under ERISA for any breach by Carey Property

88
<PAGE> 90

Advisors of its ERISA fiduciary duties. Finally, an investment by an IRA in
CPA(R):14 might result in an impermissible commingling of plan assets with other
property.

If a prohibited transaction were to occur, the Code imposes an excise tax
equal to 15 percent of the amount involved and authorizes the Internal Revenue
Service to impose an additional 100% excise tax if the prohibited transaction is
not "corrected." These taxes would be imposed on any disqualified person who
participates in the prohibited transaction. In addition, Carey Property Advisors
and possibly other fiduciaries of Benefit Plan shareholders subject to ERISA who
permitted the prohibited transaction to occur or who otherwise breached their
fiduciary responsibilities, or a non-fiduciary participating in a prohibited
transaction, could be required to restore to the plan any profits they realized
as a result of the transaction or breach, and to make good to the plan any
losses incurred by the plan as a result of the transaction or breach. With
respect to an IRA that invests in CPA(R):14, the occurrence of a prohibited
transaction involving the individual who established the IRA, or his or her
beneficiary, would cause the IRA to lose its tax-exempt status under Section
408(e)(2) of the Code.

In the opinion of counsel, as discussed above, our assets should not
constitute plan assets following an investment in shares by Benefit Plans.
Accordingly, the problems discussed in the preceding three paragraphs are not
expected to arise.

OTHER PROHIBITED TRANSACTIONS

Regardless of whether the shares qualify for the "publicly-offered
security" exception of the Regulation, a prohibited transaction could occur if
we, any selected dealer, the escrow agent or any of their affiliates is a
fiduciary (within the meaning of Section 3(21) of (ERISA) with respect to the
purchase of the shares. Accordingly, unless an administrative or statutory
exemption applies, shares should not be purchased by a Benefit Plan to which any
of the above persons is a fiduciary with respect to the purchase. A person is a
fiduciary to a plan under Section 3(21) of ERISA if, among other things, the
person has discretionary authority or control with respect to plan assets or
provides investment advice for a fee with respect to the assets. Under a
regulation issued by the Department of Labor, a person would be deemed to be
providing investment advice if that person renders advice as to the advisability
of investing in shares and that person regularly provides investment advice to
the plan pursuant to a mutual agreement or understanding (written or otherwise)
that (i) the advice will serve as the primary basis for investment decisions and
(ii) the advice will be individualized for the plan based on its particular
needs.

INVESTMENT IN ESCROW ACCOUNT

The escrow agent will establish two separate escrow accounts. Benefit Plan
funds will be deposited in one account while funds from all other investors will
be deposited in another account. Pending issuance of the shares to a Benefit
Plan, the escrow agent will invest Benefit Plan funds in a money market account
maintained by the escrow agent. On each closing date, the funds paid by each
Benefit Plan will be released from the Benefit Plan escrow account and exchanged
for the applicable number of shares. Any interest earned by that account prior
to any such closing date will be paid to the investing Benefit Plan.

In considering an investment in CPA(R):14, a plan fiduciary should consider
whether the escrow account arrangement as well as the ultimate investment in
CPA(R):14 would be consistent with fiduciary standards applicable to that
Benefit Plan.

ANNUAL VALUATION

A fiduciary of an employee benefit plan subject to ERISA is required to
determine annually the fair market value of each asset of the plan as of the end
of the plan's fiscal year and to file a report reflecting that value. When no
fair market value of a particular asset is available, the fiduciary is to make a
good faith determination of that asset's "fair market value" assuming an orderly
liquidation at the time the determination is made. In addition, a trustee or
custodian of an IRA must provide an IRA
89
<PAGE> 91

participant with a statement of the value of the IRA each year. In discharging
its obligation to value assets of a plan, a fiduciary subject to ERISA must act
consistently with the relevant provisions of the plan and the general fiduciary
standards of ERISA.

Unless and until the shares are listed on a national securities exchange or
are included for quotation on Nasdaq, it is not expected that a public market
for the shares will develop. To date, neither the Internal Revenue Service nor
the Department of Labor has promulgated regulations specifying how a plan
fiduciary should determine the "fair market value" of the shares under those
circumstances, namely when the fair market value of the shares is not determined
in the marketplace. Therefore, to assist fiduciaries in fulfilling their
valuation and annual reporting responsibilities with respect to ownership of
shares, we intend to provide reports of our annual determinations of the current
value of our net assets per outstanding share to those fiduciaries (including
IRA trustees and custodians) who identify themselves to us and request the
reports. Prior to and for the year ending December 31, 2002, we intend to use
the offering price of shares as the per share net asset value. Thereafter,
beginning with the year 2003, the value of the properties and our other assets
will be based on a valuation. Such valuation will be performed by a person
independent of us and of Carey Property Advisors.

We anticipate that we will provide annual reports of the determination (i)
to IRA trustees and custodians not later than January 15 of each year, and (ii)
to other qualified plan trustees and custodians within 75 days after the end of
each calendar year. Each determination may be based upon valuation information
available as of October 31 of the preceding year, updated for any material
changes occurring between October 31 and December 31.

We intend to revise these valuation procedures to conform with any relevant
guidelines that the Internal Revenue Service or the Department of Labor may
hereafter issue. Meanwhile, there can be no assurance

-- that the value could or will actually be realized by us or by
shareholders upon liquidation (in part because appraisal or estimated
value does not necessarily indicate the price at which assets could be
sold and because no attempt will be made to estimate the expenses of
selling any of our assets),

-- that shareholders could realize this value if they were to attempt to
sell their shares, or

-- that this value would comply with the ERISA or IRA requirements
described above.

DESCRIPTION OF SHARES

The following description of the shares does not purport to be complete but
contains a summary of portions of the articles of incorporation and is qualified
in its entirety by reference to the articles of incorporation.

GENERAL DESCRIPTION OF SHARES

We are authorized to issue 120,000,000 shares, each share having a par
value of $.001. Each share is entitled to participate equally in distributions
when and as declared by the directors and in the distribution of our assets upon
liquidation. Each share is entitled to one vote and will be fully paid and
non-assessable by CPA(R):14 upon issuance and payment therefor. Shares, other
than excess shares, which are defined in the organizational documents to mean
shares held by an investor in excess of 9.8% of the total number of shares
issued and outstanding at the time the shares are acquired, are not subject to
redemption. The shares have no preemptive rights which rights are intended to
insure that a shareholder maintains the same ownership interest (on a percentage
basis) before and after the issuance of additional securities or cumulative
voting rights (which are intended to increase the ability of smaller groups of
shareholders to elect directors). We currently do not intend to issue any
securities other than the shares discussed in this prospectus, although we may
do so upon a vote of the independent directors who do not have an interest in
the transaction and who have access to our counsel. Upon such a vote, we have
the authority to issue shares of any class or securities convertible into shares
of any class or

90
<PAGE> 92

classes, to classify or to reclassify any unissued stock by setting or changing
the preferences, conversion or other rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of
redemption of the stock, all as determined by the directors.

We may apply to list the shares for trading on a national securities
exchange or to include them for quotation on Nasdaq unless the board of
directors (including a majority of the independent directors) deems the listing
or quotation not to be in the best interest of the shareholders. There can be no
assurance that our application will be accepted if made. If the shares are not
listed or included for quotation, the properties generally will be liquidated
beginning within eight years after the net proceeds of this offering are
substantially invested. In making the decision to apply for listing of the
shares, the board will try to determine whether listing the shares or
liquidating CPA(R):14 will result in greater value for the shareholders. Even if
the shares are not so listed or included for quotation, we are under no
obligation to liquidate our portfolio within this period since the precise
timing will depend on real estate and financial markets, economic conditions of
the areas in which the properties are located and federal income tax effects on
shareholders which may prevail in the future. Furthermore, there can be no
assurance that we will be able to liquidate our portfolio and it should be noted
that we will continue our existence until all of our properties are sold and our
other assets are liquidated.

We will not issue certificates. Shares will be held in "uncertificated"
form which will eliminate the physical handling and safekeeping responsibilities
inherent in owning transferable stock certificates and eliminate the need to
return a duly executed stock certificate to the transfer agent to effect a
transfer. Transfers can be effected simply by mailing to us a duly executed
stock power. Upon the issuance of our shares, we will send to each shareholder a
written statement which will include all information that is required to be
written upon stock certificates under Maryland law.

MEETINGS AND SPECIAL VOTING REQUIREMENTS

An annual meeting of the shareholders will be held each year, not fewer
than 30 days after delivery of our annual report. Special meetings of
shareholders may be called only upon the request of a majority of the directors,
a majority of the independent directors, the chairman, the president or upon the
written request of shareholders entitled to cast at least 10% of all the votes
entitled to be cast at a meeting. In general, the presence in person or by proxy
of a majority of the outstanding shares, exclusive of excess shares, shall
constitute a quorum. Generally, the affirmative vote of a majority of the votes
entitled to be voted at a meeting at which a quorum is present is necessary to
take shareholder action, except that a plurality of all votes cast at such a
meeting is sufficient to elect a director.

Our articles of incorporation may be amended by a majority of the board of
directors (including a majority of the independent directors) and approval of
the shareholders at a duly held meeting at which a quorum is present. Amendments
affecting the provisions on indemnification of directors and officers,
limitation of personal liability of directors and officers, and limitation on
ownership of shares of CPA(R):14, must be approved by a vote of two-thirds of
the shareholders. In general, our bylaws may be amended by a majority vote of
the shareholders. The limitations on share ownership may only be amended by a
two-thirds majority vote of all outstanding shares. Any amendment to the bylaws
that would reduce the priority of payment or the amount payable to the
shareholders upon liquidation of CPA(R):14 or that would diminish or eliminate
any voting rights require the approval of a two-thirds majority of shares
entitled to vote. Shareholders may, by the affirmative vote of a majority of the
shareholders entitled to vote on such matter, elect to remove a director from
the board or dissolve CPA(R):14. Shareholders do not have the ability to vote to
replace Carey Property Advisors or to select a new advisor.

The affirmative vote of a majority of all shares entitled to be cast is
required to approve any merger or sale of substantially all of our assets other
than in the ordinary course of business. The term "substantially all" as used in
this context is a term used in the Maryland Corporation and Association Code.
This code does not include a definition of this term and Maryland case law
suggests that the term be defined on a case-by-case basis. The effect for
investors of the Maryland Code's lack of definition is

91
<PAGE> 93

that we cannot provide investors with a definition for "substantially all" and
therefore shareholders will not know whether a sale of assets will constitute a
sale of substantially all of the assets or whether or not they will have the
right to approve any particular sale. Shareholders objecting to the approval of
any merger or sale of assets are permitted under Maryland law to petition a
court for the appraisal and payment of the fair value of their shares. In an
appraisal proceeding, the court appoints appraisers who attempt to determine the
fair value of the stock as of the date of the shareholder vote on the merger or
sale of assets. The appraisers' report is considered by the court which makes
the final determination of the fair value to be paid to the shareholder and
which decides whether the award of interest from the date of the merger or sale
of assets and costs of the proceeding are to be awarded to the dissenting
shareholder.

Shareholders are entitled to receive a copy of our shareholder list upon
request provided that the requesting shareholder represents to us that the list
will not be used to pursue commercial interests. The list provided by us will
include the name, address and telephone number (if available) of, and number of
shares owned by, each shareholder and will be in alphabetical order, on white
paper and in easily readable type size and will be sent within ten days of the
receipt by us of the request (or five days if the shareholder first requests a
copy of the representation and returns it to us within 30 days). A shareholder
requesting a list will be required to pay our reasonable cost of postage and
duplication. We will pay the costs incurred and any actual damages suffered by a
shareholder who must compel the production of a list and is successful. Any
shareholder who breaches the terms of the representation provided to us will be
liable to us for any costs or damages resulting from such breach. The list will
be updated at least quarterly to reflect changes in the information contained
therein.

The rights of shareholders described above are in addition to and do not
adversely affect rights provided to investors under Rule 14a-7 promulgated under
the Securities Exchange Act, which provides that, upon request of investors and
the payment of the expenses of the distribution, we are required to distribute
specific materials to shareholders in the context of the solicitation of proxies
for voting on matters presented to shareholders, or, at our option, provide
requesting shareholders with a copy of the list of shareholders so that the
requesting shareholders may make the distribution themselves.

RESTRICTION ON OWNERSHIP OF SHARES

In order for us to qualify as a REIT, not more than 50% of our outstanding
shares may be owned by any five or fewer individuals (including some tax-exempt
entities) during the last half of each taxable year, and the outstanding shares
must be owned by 100 or more persons independent of us and each other during at
least 335 days of a 12-month taxable year or during a proportionate part of a
shorter taxable year for which an election to be treated as a REIT is made. We
may prohibit certain acquisitions and transfers of shares so as to facilitate
our continued qualification as a REIT under the Code. However, there can be no
assurance that this prohibition will be effective.

The articles of incorporation, in order to assist the board in preserving
our status as a REIT, contain an ownership limit which prohibits any person or
group of persons from acquiring, directly or indirectly, beneficial ownership of
more than 9.8% of the outstanding shares. Shares owned by a person or a group of
persons in excess of the ownership limit are deemed "excess shares." Shares
owned by a person who individually owns of record less than 9.8% of outstanding
shares may nevertheless be excess shares if the person is deemed part of a group
for purposes of this restriction.

The articles of incorporation stipulate that any purported issuance or
transfer of shares shall be valid only with respect to those shares that do not
result in the transferee-shareholder owning shares in excess of the ownership
limit. If the transferee-shareholder acquires excess shares, the person is
considered to have acted as our agent and holds the excess shares on behalf of
the ultimate shareholder.

The ownership limit does not apply to offerors which, in accordance with
applicable federal and state securities laws, make a cash tender offer, where at
least 85% of the outstanding shares (not including shares or subsequently issued
securities convertible into common stock which are held by the tender offeror
and/or any "affiliates" or "associates" thereof within the meaning of the
Securities
92
<PAGE> 94

Exchange Act) are duly tendered and accepted pursuant to the cash tender offer.
The ownership limit also does not apply to the underwriter in a public offering
of the shares. The ownership limit does not apply to a person or persons which
the directors so exempt from the ownership limit upon appropriate assurances
that our qualification as a REIT is not jeopardized.

All persons who own 5% or more of the outstanding shares during any taxable
year will be asked to deliver a statement or affidavit setting forth the number
of shares beneficially owned, directly or indirectly, by these persons. See
"United States Federal Income Tax Considerations -- Statement of Stock
Ownership."

DISTRIBUTIONS

We intend to declare distributions before each issuance of shares during
this offering and on a quarterly basis. Distributions will be paid to investors
who are shareholders as of the record date selected by the directors.
Distributions will be paid on a quarterly basis regardless of the frequency with
which such distributions are declared. We are required to make distributions
sufficient to satisfy the REIT requirements. Generally, income distributed as
distributions will not be taxable to us under federal income tax laws unless we
fail to comply with the REIT requirements.

Distributions will be paid at the discretion of the directors, in
accordance with our earnings, cash flow and general financial condition. The
directors' discretion will be directed, in substantial part, by their obligation
to cause us to comply with the REIT requirements. Because we may receive income
from interest or rents at various times during its fiscal year, distributions
may not reflect our income earned in that particular distribution period but may
be made in anticipation of cash flow which we expect to receive during a later
quarter and may be made in advance of actual receipt in an attempt to make
distributions relatively uniform. We can borrow to make distributions if the
borrowing is necessary to maintain our REIT status or if the borrowing is part
of a liquidation strategy to partially or completely liquidate investments in
properties by borrowing against those properties.

We are not prohibited from distributing our own securities in lieu of
making cash distributions to shareholders, provided that the securities
distributed to shareholders are readily marketable. Shareholders who receive
marketable securities in lieu of cash distributions may incur transaction
expenses in liquidating the securities.

REPURCHASE OF EXCESS SHARES

We have the authority to redeem excess shares immediately upon becoming
aware of existence of excess shares or after giving the person in whose hands
shares are excess shares 30 days to transfer the excess shares to a person whose
ownership of such shares would not exceed the ownership limit and, therefore,
would no longer be considered excess shares. The price paid upon redemption by
us shall be the lesser of the price paid for such excess shares by the
shareholder in whose possession the redeemed shares were formerly excess shares
or the fair market value of the excess shares. We may purchase excess shares or
otherwise repurchase shares if the repurchase does not impair our capital or
operations.

W.P. Carey & Co., Carey Property Advisors and their affiliates may not
receive a fee on the purchase of shares.

REDEMPTION OF SHARES

Prior to the time, if any, as the shares are listed on a national
securities market, any shareholder (other than Carey Property Advisors) that has
held his or her shares for at least one year may present all or any portion of
their shares to us for redemption at any time, in accordance with the procedures
outlined herein. At that time, we may, at our option, subject to the conditions
described below, redeem the shares presented for redemption for cash to the
extent we have sufficient funds available, as determined by the board of
directors in its sole discretion. There is no assurance that there will be
sufficient funds available for redemption and, accordingly, a shareholder's
shares may not be redeemed. In addition, Carey Property Advisors will assist
with the identification of prospective third-party buyers.

93
<PAGE> 95

The board of directors will determine on a quarterly basis whether we have
sufficient excess cash to repurchase shares. Shareholders may offer shares to us
for purchase and we will purchase the offered shares if it has sufficient cash.
We will impose a surrender charge on repurchased shares in accordance with the
following schedule:

<TABLE>
<CAPTION>
HOLDING PERIOD OF SHARES SURRENDER CHARGE
------------------------ ----------------
<S> <C>
1-3 years......................................... 12% of net asset value
4 years........................................... 11% of net asset value
5 years........................................... 10% of net asset value
6 years........................................... 9% of net asset value
7 years........................................... 8% of net asset value
8 years........................................... 7% of net asset value
9 years........................................... 6% of net asset value
10 years.......................................... 5% of net asset value
11 years or more.................................. 4% of net asset value
</TABLE>

The net asset value, for purposes of calculating the purchase price, shall
be $10 per share until we begin having appraisals performed by an independent
third party as of December 31, 2003, at which time the net asset value will be
as determined by the appraiser. The board of directors reserves the right to
adjust the net asset value on a quarterly basis to account for significant
capital transactions.

If we have sufficient funds to purchase some but not all of the shares
offered, the shareholders holding their shares for the longest amount of time
will be given priority. We will only be able to repurchase shares if it
maintains a currently effective registration statement. While we intend to
maintain an effective registration statement, there can be no assurance that it
will be able to do so. Furthermore, there can be no assurance that we will have
sufficient funds to repurchase any shares.

A shareholder who wishes to have his or her shares redeemed must mail or
deliver a written request on a form provided by us and executed by the
shareholder, our trustee or authorized agent. Within 30 days following our
receipt of the shareholder's request, we will forward to the shareholder the
documents necessary to effect the redemption, including any signature guarantee
we may require. Any redemption will be completed for a calendar quarter provided
that we receive the properly completed redemption documents from the shareholder
at least one calendar month prior to the last day of the current calendar
quarter and we have sufficient funds to redeem the shares. The effective date of
any redemption will be the last date during a quarter during which we receive
the properly completed redemption documents. As a result, we anticipate that,
assuming sufficient funds, the effective date of redemptions will be no later
than thirty days after the quarterly determination of the availability of funds.

A shareholder may present fewer than all his or her shares to us for
redemption, provided, however, that if the shareholder retains any shares, he or
she must retain at least 250 shares (200 shares for an IRA, Keogh Plan or
pension plan). Shares transferred by reason of death will be deemed to have been
held from the time the shares were first acquired.

The directors, in their sole discretion, may amend or suspend the
redemption plan at any time they determine any amendment or suspension is in our
best interest. The directors may suspend the redemption of shares if

-- they determine, in their sole discretion, that the redemption impairs
our capital or operations;

-- they determine, in their sole discretion, that an emergency makes the
redemption not reasonably practical;

-- any governmental or regulatory agency with jurisdiction over us so
demands for the protection of the shareholders;

-- they determine, in their sole discretion, that the redemption would be
unlawful; or

94
<PAGE> 96

-- they determine, in their sole discretion, that the redemption, when
considered with all other redemptions, sales, assignments, transfers
and exchanges of our shares, could cause direct or indirect ownership
of our shares to become concentrated to an extent which would prevent
us from qualifying as a REIT under the Code.

For a discussion of the tax treatment of redemptions, see "United States Federal
Income Tax Considerations -- Taxation of Shareholders."

RESTRICTIONS ON ROLL-UP TRANSACTIONS

In connection with any proposed transaction considered a "Roll-up
Transaction" involving us and the issuance of securities of an entity (a
"Roll-up Entity") that would be created or would survive after the successful
completion of the Roll-up Transaction, an appraisal of all properties shall be
obtained from a competent independent appraiser. The properties shall be
appraised on a consistent basis, and the appraisal shall be based on the
evaluation of all relevant information and shall indicate the value of the
properties as of a date immediately prior to the announcement of the proposed
Roll-up Transaction. The appraisal shall assume an orderly liquidation of
properties over a 12-month period. The terms of the engagement of the
independent appraiser shall clearly state that the engagement is for our benefit
and the shareholders. A summary of the appraisal, indicating all material
assumptions underlying the appraisal, shall be included in a report to
shareholders in connection with a proposed Roll-up Transaction. A "Roll-up
Transaction" is transaction involving the acquisition, merger, conversion or
consolidation, directly or indirectly, of CPA(R):14 and the issuance of
securities of a Roll-up Entity. This term does not include:

-- a transaction involving our securities that have been for at least 12
months listed on a national securities exchange or included for
quotation on Nasdaq National Market System; or

-- a transaction involving the conversion to corporate, trust, or
association form of only CPA(R):14 if, as a consequence of the
transaction there will be no significant adverse change in any of the
following: Shareholder voting rights; the term of our existence;
compensation to W. P. Carey & Co. or Carey Property Advisors; or our
investment objectives of CPA(R):14.

In connection with a proposed Roll-up Transaction, the person sponsoring
the Roll-up Transaction must offer to shareholders who vote "no" on the proposal
the choice of:

(i) accepting the securities of a Roll-up Entity offered in the
proposed Roll-up Transaction; or

(ii) one of the following:

(A) remaining as shareholders of CPA(R):14 and preserving their
interests therein on the same terms and conditions as existed
previously, or

(B) receiving cash in an amount equal to the shareholder's pro rata
share of the appraised value of our net assets.

We are prohibited from participating in any proposed Roll-up Transaction:

(a) which would result in the shareholders having democracy rights in
a Roll-up Entity that are less than those provided in the bylaws and
described elsewhere in this prospectus, including rights with respect to
the election and removal of directors, annual reports, annual and special
meetings, amendment of the articles of incorporation, and dissolution of
CPA(R):14. See "Management," "Reports to Shareholders" and "Description of
Shares;"

(b) which includes provisions that would operate to materially impede
or frustrate the accumulation of shares by any purchaser of the securities
of the Roll-up Entity (except to the minimum extent necessary to preserve
the tax status of the Roll-up Entity), or which would limit the ability of
an investor to exercise the voting rights of its securities of the Roll-up
Entity on the basis of the number of shares held by that investor;

95
<PAGE> 97

(c) in which investor's rights to access of records of the Roll-up
Entity will be less than those provided in the section of this prospectus
entitled "Description of Shares -- Meetings and Special Voting
Requirements;" or

(d) in which any of the costs of the Roll-up Transaction would be
borne by us if the Roll-up Transaction is not approved by the shareholders.

TRANSFER AGENT

The transfer agent and registrar for the shares will be
Resource/Phoenix(R). The transfer agent's address is 2401 Kerner Boulevard, San
Rafael, California 94901-5529, and its phone number is 888-241-3737.

THE OFFERING

Subject to the conditions set forth in this prospectus and in accordance
with the terms and conditions of the Sales Agency Agreement, we are offering to
the public through Carey Financial and selected dealers, on a best efforts
basis, a maximum of $400,000,000 of shares of common stock consisting of
40,000,000 shares priced at $10 per share. The minimum subscription is 250
shares or $2,500 (200 shares or $2,000 for an IRA or a Keogh Plan except for
Iowa tax exempt investors which must make a minimum investment of 250 shares or
$2,500). See "Terms of the Offering." Carey Financial and American Express
Financial Services, Inc. are expected to sell a significant number of shares.

Carey Financial will receive a selling commission in an amount equal to
$0.60 per share, whether sold directly by it or by one of the selected dealers,
all of whom must be members in good standing of the National Association of
Securities Dealers, Inc. Carey Financial may, in turn, reallow up to $0.60 per
share of the selling commissions to selected dealers for shares they sell. We
also will reimburse Carey Financial for the amount of any selected dealer fee
paid to selected dealers, which fee may not exceed 1% of the price of each share
sold by the selected dealer. Carey Financial has agreed to pay a selected dealer
fee of 1% to all selected dealers and Carey Financial will receive a selected
dealer fee of 1% for shares sold directly by Carey Financial. We will also pay
Carey Financial a management fee of $.05 per share for managing the offering. In
addition, Carey Financial or selected dealers, in their sole discretion, may
elect not to accept any selling commission we offer for shares that they sell.
In that event, these shares shall be sold to the investor net of all selling
commissions, at a price per share of $9.40. We have agreed to indemnify Carey
Financial and selected dealers against specified liabilities, including
liabilities under the Securities Act of 1933.

We will offer a reduced share purchase price to "single purchasers" on
orders of more than $250,000 and selling commissions paid to Carey Financial and
selected dealers will be reduced by the amount of the share purchase price
discount. The share purchase price will be reduced for each incremental share
purchased in the total volume ranges set forth in the table below. The reduced
purchase price will not affect the amount we receive for investment. The
following table sets forth the reduced share purchase price and selling
commissions payable to Carey Financial:

<TABLE>
<CAPTION>
SELLING COMMISSION
PURCHASE PRICE PER SHARE
PER SHARE FOR ON TOTAL SALE FOR
FOR A "SINGLE INCREMENTAL SHARE IN INCREMENTAL SHARE IN
PURCHASER" VOLUME DISCOUNT RANGE VOLUME DISCOUNT RANGE
------------- --------------------- ---------------------
<C> <S> <C> <C> <C>
$ 2,000 -- $250,000 $10.00 $0.60
250,001 -- 500,000 9.85 0.50
500,001 -- 750,000 9.70 0.35
750,001 -- 1,000,000 9.60 0.25
1,000,001 -- 5,000,000 9.50 0.15
</TABLE>

96
<PAGE> 98

Selling commissions for purchases of $5,000,000 or more will, in our sole
discretion, be reduced to $0.10 per share or less but in no event will the
proceeds to us be less than $9.35 per share. Selling commissions paid will in
all cases be the same for the same level of sales. In the event of a sale of
$5,000,000 or more, we will supplement this prospectus to include (i) the
aggregate amount of the sale, (ii) the price per share paid by the purchaser and
(iii) a statement that other investors wishing to purchase at least the amount
described in (i) will pay no more per share than the initial purchaser.

Orders may be combined for the purpose of determining the total commissions
payable with respect to applications made by a "single purchaser." The amount of
total commissions thus computed will be apportioned pro rata among the
individual orders on the basis of the respective amounts of the orders being
combined. As used herein, the term "single purchaser" will include

(1) any person or entity, or persons or entities, acquiring shares as joint
purchasers,

(2) all profit-sharing, pension and other retirement trusts maintained by a
given corporation, partnership or other entity,

(3) all funds and foundations maintained by a given corporation,
partnership or other entity,

(4) all profit-sharing, pension and other retirement trusts and all funds
or foundations over which a designated bank or other trustee, person or
entity (except an investment adviser registered under the Investment
Advisers Act of 1940) exercises discretionary authority with respect to
an investment in CPA(R):14, and

(5) all clients of an investment adviser registered under the Investment
Advisers Act of 1940 who have been advised by that adviser on an
ongoing basis regarding investments other than in CPA(R):14, and who
have been advised by such adviser regarding an investment in CPA(R):14.

In the event a single purchaser described in categories (2) through (5)
above wishes to have its orders so combined, that purchaser will be required to
request the treatment in writing, which request must set forth the basis for the
discount and identify the orders to be combined. Any request will be subject to
our verification that all of the orders were made by a single purchaser.

Orders also may be combined for the purpose of determining the commissions
payable in the case of orders by any purchaser described in category (1) through
(5) above who, subsequent to its initial purchase of shares, orders additional
shares. In this event, the commission payable with respect to the subsequent
purchase of shares will equal the commission per share which would have been
payable in accordance with the commission schedule set forth above if all
purchases had been made simultaneously. Any reduction of the 6% selling
commission otherwise payable to Carey Financial or a selected dealer will be
credited to the purchaser as additional whole shares. Unless investors indicate
that orders are to be combined and provide all other requested information, we
cannot be held responsible for failing to combine orders properly.

Carey Property Advisors, its affiliates and their employees and the
selected dealers and their employees may purchase shares net of selling
commissions and we will pay no selling commissions on these shares. Any
purchases by Carey Property Advisors, its affiliates and their employees and the
selected dealers and their employees will be for investment purposes only and
not with the intent to resell the shares. There is no limit on the number of
shares such persons may purchase. There is no limit on the number of shares
purchased by affiliates of Carey Property Advisors and their employees and the
selected dealers and their employees. Any resale of the 20,000 shares currently
owned by Carey Property Advisors or shares it or our affiliates may purchase are
subject to Rule 144 promulgated under the Securities Act of 1933, which limits
the number of shares which may be resold at any one time and the manner of the
resale.

We will reimburse Carey Financial for its identified expenses and for
identified expenses of selected dealers reimbursed by Carey Financial, including
the costs of any sales and information meetings of the employees of Carey
Financial and the selected dealers (to the extent Carey Financial reimburses the
selected dealers for the expenses) relating to this offering. Subject to the
satisfactory completion of any regulatory reviews and examinations which may be
required, the rules of the National Association of Securities Dealers, Inc. and
the prior review and approval by the National Association of Securities
97
<PAGE> 99

Dealers, Inc. and Carey Financial, the selected dealers (as appropriate),
CPA(R):14, Carey Property Advisors or any of their affiliates may establish
sales incentive programs for associated persons of Carey Financial or selected
dealers or may reimburse Carey Financial and selected dealers for sales
incentive programs established by them. Sales incentives will be deemed to be
additional underwriting compensation. Sales incentives will not be paid in cash
and the aggregate value of the non-cash incentives paid by us and Carey Property
Advisors directly to associated persons during this offering will not exceed
$100 per year.

Carey Financial or other entities will provide wholesaling services to us.
All entities performing wholesaling activities will be required to be properly
licensed to engage in the securities business. These services will include
developing and preparing sales material, conducting broker/dealer seminars,
holding informational meetings and providing information and answering any
questions concerning this offering. We will reimburse Carey Financial for its
identified expenses incurred in coordinating wholesaling activities, including,
but not limited to

-- travel and entertainment expenses;

-- compensation of employees of Carey Financial in connection with
wholesaling activities;

-- expenses incurred in coordinating broker-dealer seminars and meetings;
and

-- wholesaling fees and wholesaling expense reimbursements paid to Carey
Financial or other entities.

In no event shall the total underwriting compensation to be paid to Carey
Financial and selected dealers from any source in connection with this offering,
including selling commissions, specified expense reimbursements and payments to
Carey Financial and selected dealers for the wholesaling services referred to
above, exceed 10% of the gross offering proceeds of the offering (plus 0.5% for
bona fide due diligence expenses). The total wholesaling expenses will not
exceed 3% of the gross offering proceeds. Carey Financial and we will monitor
the payment of all fees and expense reimbursements, including the servicing
fees, to assure that this limit is not exceeded.

In the event all organization and offering expenses, other than selling
commissions, and fees paid and expenses reimbursed to or paid on behalf of the
selected dealers, exceed 4.0% of the gross offering proceeds, the excess will be
paid by Carey Property Advisors with no recourse by or reimbursement to Carey
Property Advisors.

Every prospective investor desiring to purchase shares will be required to
comply with the procedures for ordering shares we imposed, Carey Financial and
the selected dealer from whom the investor intends to purchase shares. Carey
Financial and certain selected dealers will require an order form, a specimen of
which is attached to this prospectus, to be completed and delivered together
with a check payable to the escrow agent for the aggregate purchase price of the
shares ordered. Residents of Iowa, Maine, Massachusetts, Minnesota, Michigan,
Missouri, Nebraska, and North Carolina must complete and execute an order form.
Selected dealers will submit the checks directly to the escrow agent by noon of
the business day following receipt. Investors will receive a copy of this
prospectus on or before the day the order form is completed. Investors may
revoke their subscription, for five days following the receipt of this
prospectus.

Some selected dealers may offer investors alternate procedures for
purchasing shares. Under the alternative procedures, the investor must maintain
an account with the selected dealers or open the account at no charge. An
investor may then purchase shares by contacting his or her broker and indicating
the amount of his or her desired investment in shares. If the investor has not
already received a copy of this prospectus, Carey Financial or a selected dealer
will forward a copy of this prospectus to the investor. Carey Financial or a
selected dealer will notify the investor that the full amount of the purchase
price payment must be in the investor's account by a specified settlement date,
which shall occur within five business days after the notice to the investor and
at least five days after the investor has received a copy of this prospectus. An
investor's account will be charged the amount of the investment on the
settlement date. For investors in all jurisdictions, by noon of the next
business day following the date funds are debited, the funds debited from the
investor's account will be sent to the

98
<PAGE> 100

escrow agent for deposit in the escrow account we established for this offering.
In addition, investors may be able to direct that any distributions we pay be
invested directly into a mutual fund. Prior to the settlement date, the investor
may withdraw his order by notifying his broker at Carey Financial or the
selected dealer.

On or after the settlement date, investors will have no right to withdraw
any funds submitted to the escrow agent during this offering period. We have the
unconditional right in our sole discretion to accept or reject any order or any
part thereof within 30 days of receipt of the order. If we reject any order or
any part thereof, we will notify the investor in writing thereof and arrange for
the escrow agent to promptly return to the investor the entire purchase price or
portion thereof which was rejected, along with any interest earned thereon. If
we accept an order, the investor will receive a notice of acceptance. Shares
will be evidenced on our books and records, which will include a list of
shareholders' names, addresses and number of shares owned. An investor will not
receive a share certificate or other evidence of his interest in CPA(R):14
unless the shares are listed on a national securities exchange or included for
quotation on Nasdaq.

ESCROW ARRANGEMENTS

All funds received by Carey Financial and the selected dealers from orders
will be placed promptly in an interest-bearing escrow account with the escrow
agent at our expense until these funds are released as described below. Separate
escrow accounts will be established for benefit plan funds and all other funds.
Payment for shares are to be sent to the escrow agent at The United States Trust
Company of New York, 114 West 47th Street, New York, New York 10036-1532,
Attention: Pat Stermer. These funds will be held in trust for the benefit of
investors to be used for the purposes set forth in this prospectus. The escrow
agent will be given the right to invest non-benefit plan funds in United States
government securities, certificates of deposit or other time or demand deposits
of commercial banks which have a net worth of at least $100,000,000 or in which
the certificates or deposits are fully insured by any Federal or state
government agency. Benefit plan funds will be invested in a money market account
maintained by the escrow agent. The interest, if any, earned on escrow funds
prior to the transmittal of the proceeds to us will not become part of our
capital. Instead, within 15 days following each issuance of shares, CPA(R):14
will cause the escrow agent to make distributions to shareholders of all
interest earned on their escrowed funds used to purchase the shares. We may, as
security for borrowings made from third parties, assign its right to receive up
to 85% of the funds then held in escrow (not including funds held on behalf of
benefit plans).

Funds received by us from prospective investors will continue to be placed
in escrow during this offering and we will issue additional shares periodically
(but not less often than quarterly) as agreed between us and Carey Financial.
This offering will terminate at the time all shares being offered are sold or
unsold shares are withdrawn from registration by order of the board, but in no
case later than November 16, 2001.

REPORTS TO SHAREHOLDERS

We provide periodic reports to shareholders regarding our operations over
the course of the year. Financial information contained in all reports to
shareholders will be prepared on the accrual basis of accounting in accordance
with generally accepted accounting principles. Tax information will be mailed to
the shareholders by January 31 of each year. Our annual report, which will
include financial statements audited and reported upon by independent public
accountants, will be furnished within 120 days following the close of each
fiscal year. The annual financial statements will contain or be accompanied by a
complete statement of any transactions with W. P. Carey & Co., Carey Property
Advisors or its affiliates and of compensation and fees paid or payable by us to
Carey Property Advisors and its affiliates. Summary information regarding our
quarterly financial results will be furnished to shareholders on a quarterly
basis.

Investors have the right under applicable Federal and Maryland laws to
obtain information about us and, at their expense, may obtain a list of names
and addresses of all of the shareholders. See "Description of Shares -- Meetings
and Special Voting Requirements." Shareholders also have the right

99
<PAGE> 101

to inspect and duplicate our appraisal records. In the event that the Securities
and Exchange Commission promulgates rules and/or in the event that the
applicable guidelines of the North American Securities Administrators
Association, Inc. are amended so that, taking these changes into account, our
reporting requirements are reduced, we may cease preparing and filing some of
the aforementioned reports if the directors determine this action to be in the
best interests of CPA(R):14 and if this cessation is in compliance with the
rules and regulations of the Securities and Exchange Commission and state
securities law and regulations, both as then amended.

LEGAL MATTERS

Certain legal matters will be passed upon for us by Reed Smith Shaw &
McClay LLP, 2500 One Liberty Place, Philadelphia, Pennsylvania 19103. Reed Smith
Shaw & McClay LLP will rely as to matters of Maryland law on an opinion of Piper
Marbury Rudnick & Wolfe LLP, Baltimore, Maryland.

EXPERTS

The (i) consolidated balance sheets as of December 31, 1997 and 1998 and
the consolidated statements of operations, shareholders' equity and cash flows
for the period from inception (June 4, 1997) to December 31, 1997 and the year
ended December 31, 1998, of Corporate Property Associates 14 Incorporated and
Subsidiaries and (ii) balance sheet as of December 31, 1998 and the statements
of income, members' equity and cash flows from inception (February 2, 1998) to
December 31, 1998, of ET LLP included in this prospectus, have been so included
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

SALES LITERATURE

In addition to and apart from this prospectus, we will use sales material
in connection with this offering. This material includes an investor sales
promotion brochure, prospecting letters or mailers and seminar invitations,
media advertising inviting seminar attendance, a brochure describing the
investment committee, a presentation using a computer, reprints of articles
about us or the net lease or sale-leaseback industry, fact sheets describing our
acquisitions, a slide presentation and studies of the prior performance of
entities managed by Carey Property Advisors and its affiliates as well as other
net lease investment programs. In some jurisdictions the sales material will not
be available. Other than as described herein, we have not authorized the use of
other sales material. This offering is made only by means of this prospectus.
Although the information contained in the material does not conflict with any of
the information contained in this prospectus, the material does not purport to
be complete and should not be considered as a part of this prospectus or the
registration statement of which this prospectus is a part, or as incorporated in
this prospectus or said registration statement by reference, or as forming the
basis of this offering.

FURTHER INFORMATION

This prospectus does not contain all the information set forth in the
registration statement and the exhibits relating thereto which we have filed
with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933, and to which reference is hereby made. Copies of the
Exhibits and all reports filed by the Registrant are on file at the offices of
the Commission in Washington, D.C. and its regional offices and may be obtained,
upon payment of the fee prescribed by the Commission, or may be examined without
charge at the Public Reference Section of the Commission, Washington, D.C.
20549, the Commission's Northwest Regional office, 7 World Trade Center, Suite
1300, New York, NY 10048, the Commission's Midwest Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, IL 60611-2511 or the
Commission's Web Site: http://www.sec.gov.

All summaries contained herein of documents which are filed as exhibits to
the registration statement are qualified in their entirety by this reference to
those exhibits. We have not knowingly made any untrue statement of a material
fact or omitted to state any fact required to be stated in the registration
statement, including this prospectus, or necessary to make the statements
therein not misleading.

100
<PAGE> 102

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Corporate Property Associates 14 Incorporated
Report of Independent Accountants...................... F-2
Consolidated Balance Sheets at December 31, 1997 and
1998, and September 30, 1999 (unaudited).............. F-3
Consolidated Statement of Operations for the period
from Inception (June 4, 1997) to December 31, 1997,
the year ended December 31, 1998, and the nine months
ended September 30, 1998 (unaudited) and 1999
(unaudited)........................................... F-4
Statements of Shareholders' Equity for period from
Inception (June 4, 1997) to December 31, 1997 and the
year ended December 31, 1998 and the nine months ended
September 30, 1999 (unaudited)........................ F-5
Consolidated Statement of Cash Flows for the period
from Inception (June 4, 1997) to December 31, 1997,
the year ended December 31, 1998, and the nine months
ended September 30, 1998 (unaudited) and 1999
(unaudited)........................................... F-6
Notes to Consolidated Financial Statements............. F-7
Report of Independent Accountants...................... F-19
Schedule III -- Real Estate and Accumulated
Depreciation.......................................... F-20
Notes to Schedule III -- Real Estate and Accumulated
Depreciation.......................................... F-21
ET LLC
Report of Independent Accountants...................... F-22
Balance Sheet as of December 31, 1998.................. F-23
Statement of Income for the period from inception
(February 2, 1998) the December 31, 1998.............. F-23
Statement of Members' Equity for the period from
inception (February 2, 1998) to December 31, 1998..... F-24
Statement of Cash Flows for the period from inception
(February 2, 1998) to December 31, 1998............... F-24
Notes to Financial Statements.......................... F-25
Schedule III -- Real Estate and Accumulated
Depreciation.......................................... F-27
</TABLE>

F-1
<PAGE> 103

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Corporate Property Associates 14 Incorporated and Subsidiaries:

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, shareholders' equity and cash
flows present fairly, in all material respects, the financial position of
Corporate Property Associates 14 Incorporated and Subsidiaries at December 31,
1997 and 1998, and the results of their operations and their cash flows for the
period from inception (June 4, 1997) to December 31, 1997 and the year ended
December 31, 1998, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of Carey Property Advisors, a
Pennsylvania limited partnership (the "Advisor"); our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by the Advisor, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP

New York, New York
March 5, 1999

F-2
<PAGE> 104

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1997 AND 1998 AND SEPTEMBER 30, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
------------------------ -------------
1997 1998 1999
-------- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS:
Land and building, net of accumulated depreciation of
$175,977 at December 31, 1998 and $757,591 at September
30, 1999............................................... 44,566,025 $117,379,066
Net investments in direct financing lease.............. 6,282,723
Equity investments..................................... 36,097,004 57,514,483
Cash and cash equivalents.............................. $200,000 26,747,058 115,681,953
Other assets........................................... 545,842 1,799,426
-------- ------------ ------------
Total assets...................................... $200,000 $107,955,929 $298,657,651
======== ============ ============
LIABILITIES:
Limited recourse mortgage note payable................. $ 48,376,697
Accrued interest....................................... 323,757
Accounts payable to affiliates......................... $ 4,255 $ 537,874 1,387,548
Accounts payable and accrued expenses.................. 8,000 169,735 137,571
Prepaid rental income and security deposits............ 343,767 1,078,532
Deferred acquisition fees payable to affiliate......... 1,628,828 3,545,775
Dividends payable...................................... 1,365,622 3,762,373
-------- ------------ ------------
Total liabilities................................. 12,255 4,045,826 58,612,253
-------- ------------ ------------
Minority interest...................................... 6,925,840
------------
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value; authorized, 120,000,000
shares; issued and outstanding, 20,000, 11,837,901
and 26,514,803 shares at December 31, 1997 and 1998
and September 30, 1999............................... 20 11,838 26,515
Additional paid-in capital............................. 199,980 105,705,582 239,436,372
Dividends in excess of accumulated earnings............ (12,255) (1,643,957) (5,983,704)
-------- ------------ ------------
187,745 104,073,463 233,479,183
Less, treasury stock at cost, 16,900 and 38,085 shares
at December 31, 1998 and September 30, 1999.......... (163,360) (359,625)
-------- ------------ ------------
Total shareholders' equity........................ 187,745 103,910,103 233,119,558
-------- ------------ ------------
Total liabilities and shareholders' equity........ $200,000 $107,955,929 $298,657,651
======== ============ ============
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-3
<PAGE> 105

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIOD FROM INCEPTION (JUNE 4, 1997) TO DECEMBER 31, 1997

THE YEAR ENDED DECEMBER 31, 1998,

AND NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) AND 1999 (UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
---------------------- -------------------------
1997 1998 1998 1999
-------- ---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
Rental income............................... $1,296,441 $ 547,572 $ 3,616,244
Interest income from direct financing
lease.................................. 132,158
Other interest income..................... 912,759 605,292 1,182,155
---------- ---------- -----------
2,209,200 1,152,864 4,930,557
---------- ---------- -----------
Expenses:
Interest expense.......................... 20,745 7,862 643,395
Depreciation and amortization............. 175,977 63,210 590,329
General and administrative................ $ 12,255 702,828 319,194 818,863
Property expense.......................... 272,582 111,086 1,006,674
-------- ---------- ---------- -----------
12,255 1,172,132 501,352 3,059,261
Income before income from minority interest
in loss and income from equity
investments............................... (12,255) 1,037,068 651,512 1,871,296
Minority interest in loss................... -- 70,414
-------- ---------- ---------- -----------
(Loss) income before income from equity
investments.......................... (12,255) 1,037,068 651,512 1,941,710
Income from equity investments.............. 21,200 -- 2,134,174
-------- ---------- ---------- -----------
Net (loss) income................. $(12,255) $1,058,268 $ 651,512 $ 4,075,884
======== ========== ========== ===========
Basic (loss) income per share............... $ (.61) $ .25 $ .23 $ .24
======== ========== ========== ===========
Weighted average shares
outstanding -- basic...................... 20,000 4,273,311 2,847,868 17,293,969
======== ========== ========== ===========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-4
<PAGE> 106

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE PERIOD FROM INCEPTION (JUNE 4, 1997) TO DECEMBER 31, 1997
AND THE YEAR ENDED DECEMBER 31, 1998

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
DIVIDENDS IN
ADDITIONAL EXCESS OF
COMMON PAID-IN ACCUMULATED TREASURY
STOCK CAPITAL EARNINGS STOCK TOTAL
------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C>
20,000 shares issued $.001
par, at $10 per share..... $ 20 $ 199,980 $ 200,000
Net loss.................... $ (12,255) (12,255)
------- ------------ ----------- --------- ------------
Balance at
December 31, 1997......... 20 199,980 (12,255) 187,745
11,817,901 shares issued
$.001 par, at $10 per
share, net of offering
costs..................... 11,818 105,505,602 105,517,420
Dividends declared.......... (2,689,970) (2,689,970)
Purchase of treasury stock,
16,900 shares............. $(163,360) (163,360)
Net income.................. 1,058,268 1,058,268
------- ------------ ----------- --------- ------------
Balance at
December 31, 1998......... 11,838 105,705,582 (1,643,957) (163,360) 103,910,103
14,676,902 shares issued
$.001 par, at $10 per
share, net of offering
costs..................... 14,677 133,730,790 133,745,467
Dividends declared.......... (8,415,631) (8,415,631)
Purchase of treasury stock,
21,185 shares............. (196,265) (196,265)
Net income.................. 4,075,884 4,075,884
------- ------------ ----------- --------- ------------
$26,515 $239,436,372 $(5,983,704) $(359,625) $233,119,558
======= ============ =========== ========= ============
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.
F-5
<PAGE> 107

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIOD FROM INCEPTION (JUNE 4, 1997) TO DECEMBER 31, 1997,

THE YEAR ENDED DECEMBER 31, 1998

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) AND 1999 (UNAUDITED)

<TABLE>
<CAPTION>
FOR YEARS ENDED FOR NINE MONTHS ENDED
----------------------- ---------------------------
1997 1998 1998 1999
-------- ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net (loss) income............................ $(12,255) $ 1,058,268 $ 651,512 $ 4,075,884
Adjustments to reconcile net (loss) income
to net cash provided by operating
activities:
Depreciation and amortization........... 175,977 63,210 590,329
Straight-line rent adjustments.......... (65,686) (32,359) (137,388)
Minority interest in loss............... -- (70,414)
Increase in other assets................ (370,393) (321,180) (368,532)
Increase in accrued interest............ -- 323,757
Increase (decrease) in accounts payable
and accrued expenses(a)............... 8,000 161,735 83,600 (32,164)
Increase in accounts payable to
affiliates(a)......................... 4,255 423,856 354,889 601,916
Increase in prepaid rental income and
security deposits..................... 343,767 74,600 734,765
Income from equity investments.......... (21,200)
-------- ------------ ------------ ------------
Net cash provided by operating
activities......................... -- 1,706,324 874,272 5,718,153
-------- ------------ ------------ ------------
Cash flows from investing activities:
Acquisitions of real estate and equity
investments and other capitalized
costs................................... (79,188,978) (40,876,616) (100,080,816)
Equity distributions received in excess of
equity income........................... 902,906
-------- ------------ ------------ ------------
Net cash used in investing
activities......................... -- (79,188,978) (40,876,616) (99,177,910)
-------- ------------ ------------ ------------
Cash flows from financing activities:
Proceeds from stock issuance, net of
costs................................... 200,000 105,517,420 49,273,018 133,745,467
Dividends paid............................. (1,324,348) (426,510) (6,018,880)
Contributions from minority partner........ 6,996,254
Proceeds from mortgages.................... 48,411,028
Payment of mortgage principal.............. (34,331)
Deferred financing costs and mortgage
deposits................................ (508,621)
Purchase of treasury stock................. (163,360) (28,200) (196,265)
-------- ------------ ------------ ------------
Net cash provided by financing
activities......................... 200,000 104,029,712 48,818,308 182,394,652
-------- ------------ ------------ ------------
Net increase in cash and cash
equivalents........................ 200,000 26,547,058 8,815,964 88,934,895
Cash and cash equivalents, beginning of
period..................................... -- 200,000 200,000 26,747,058
-------- ------------ ------------ ------------
Cash and cash equivalents, end of period..... $200,000 $ 26,747,058 $ 9,015,964 $115,681,953
======== ============ ============ ============
Interest paid................................ $ 319,638
============
</TABLE>

Supplemental Disclosure of noncash investing activities:

- ---------------

(a) Excludes changes in accounts payable and accrued expenses and accounts
payable to affiliates balances that relate to the raising of capital
(financing activities) rather than the Company's real estate operations.

(b) Deferred acquisition fee payable to
affiliate 1,698,828, $737,005, $1,916,947.

The accompanying notes are an integral part of the consolidated financial
statements.

F-6
<PAGE> 108

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Consolidation

The consolidated financial statements include the accounts of Corporate
Property Associates 14 Incorporated and its wholly-owned subsidiaries
(collectively, the "Company"). All material inter-entity transactions have been
eliminated.

Use of Estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. The most significant estimates will relate to the assessment
of recoverability of real estate assets and investments. Actual results could
differ from those estimates.

Real Estate Leased to Others:

Real estate is leased to others on a net lease basis, whereby the tenant is
generally responsible for all operating expenses relating to the property,
including property taxes, insurance, maintenance, repairs, renewals and
improvements.

The leases are accounted for under the operating and direct financing
methods as described below:

Operating method -- Real estate is recorded at cost, revenue is
recognized on a straight-line basis over the terms of the lease and
expenses (including depreciation) are charged to operations as incurred.

Direct financing method -- Leases accounted for under the direct
financing method are recorded at their net investment. Unearned income is
deferred and amortized to income over the lease terms so as to produce a
constant periodic rate of return on the Company's net investment in the
lease.

The Company assesses the recoverability of its real estate assets and
investments, including residual interests based on projections of undiscounted
cash flows over the life of such assets. In the event that such cash flows are
insufficient, the assets will be adjusted to their estimated fair value.

Depreciation is computed using the straight-line method over the estimated
useful lives of the properties -- generally 40 years.

Substantially all of the Company's leases for either scheduled rent
increases or periodic rent increases based on formulas indexed to increases in
the Consumer Price Index ("CPI").

For properties under construction, interest charges will be capitalized
rather than expensed and rentals received will be recorded as a reduction of
capitalized project (i.e., construction) costs.

Equity Investments:

The Company's interests in two limited liability companies in which its
ownership interests are 50% or less are accounted for under the equity method,
i.e. at cost, increased or decreased by the Company's share of earnings or
losses, less distributions.

F-7
<PAGE> 109

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

Cash Equivalents:

The Company considers all short-term, highly liquid investments that are
both readily convertible to cash and have a maturity of generally three months
or less at the time of purchase to be cash equivalents. Items classified as cash
equivalents include commercial paper and money market funds. At December 31,
1998, the Company's cash and cash equivalents were held in the custody of two
financial institutions, and which balances at times exceed federally insurable
limits. The Company mitigates this risk by depositing funds with major financial
institutions.

Offering Costs:

Costs incurred in connection with the raising of capital through the sale
of common stock will be charged to shareholders' equity upon the issuance of
shares.

Other Assets:

Included in other assets is deferred rental income which is the aggregate
difference for operating leases between scheduled rents which vary during the
lease term and rent recognized on a straight-line basis.

Treasury Stock:

Treasury stock is recorded at cost.

Deferred Acquisition Fees:

Fees are payable for services provided by Carey Property Advisors (the
"Advisor") to the Company relating to the identification, evaluation,
negotiation, financing and purchase of properties. A portion of such fees are
deferred and are payable in annual installments with each installment equal to
.25% of the purchase price of the properties over no less than eight years
following the first anniversary of the date a property was purchased. Payment of
such fees is subject to the 2%/25% Guidelines (see Note 3).

Earnings Per Share:

The Company has a simple equity capital structure with only common stock
outstanding. As a result, the Company has presented basic per-share amounts only
for all periods presented in the accompanying consolidated financial statements.

Federal Income Taxes:

The Company qualifies as a Real Estate Investment Trust ("REIT") for the
year ended December 31, 1998. The Company is not subject to Federal income
taxes, provided it distributes at least 95% of its REIT taxable income to its
shareholders and meets other conditions necessary to retain REIT status.

Operating Segments

The Financial Accounting Standards Board ("FASB") issued statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosure about Segments of
an Enterprise and Related Information". SFAS No. 131, effective for fiscal years
beginning after December 15, 1997, establishes accounting standards for the way
public business enterprises report selected information about operating segments
and guidelines for defining the operating segment of an enterprise. Based on the
definition of an

F-8
<PAGE> 110

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

operating segment in SFAS No. 131, the Company has concluded that it engages in
a single operating segment.

UNAUDITED INTERIM FINANCIAL INFORMATION

Basis of Presentation:

The accompanying unaudited condensed consolidated financial statements of
Corporate Property Associates 14 Incorporated and its wholly-owned subsidiaries
(the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Article 10 of Regulation S-X of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. All significant intercompany balances and transactions
have been eliminated. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
the results of the interim period presented have been included. The results of
operations for the interim period are not necessarily indicative of results for
the full year. For further information, refer to the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.

2. ORGANIZATION AND OFFERING:

The Company was formed on June 4, 1997 under the General Corporation Law of
Maryland for the purpose of engaging in the business of investing in and owning
industrial and commercial real estate. Subject to certain restrictions and
limitations, the business of the Company is managed by The Advisor. The Advisor
will be entitled to certain incentive fees in the event of the liquidation of
the Company, subject to certain conditions.

A maximum of 30,000,000 Shares are being offered to the public on a "best
efforts" basis by Carey Financial Corporation ("Carey Financial") and other
selected dealers at a price of $10 per Share. Sale of the Shares to the public
commenced on December 11, 1997. Through December 31, 1998, 11,817,901 Shares
were issued for $118,179,010.

On June 30, 1997, the Advisor purchased 20,000 shares of common stock
("Shares") for $200,000 and became the initial shareholder of the Company.

In connection with performing services relating to the Company's real
estate purchases, affiliates of the Company received acquisition fees of
$581,726 in 1998.

UNAUDITED INTERIM FINANCIAL INFORMATION

Organization and Offering:

The Company was formed on June 4, 1997 under the General Corporation Law of
Maryland for the purpose of engaging in the business of investing in and owning
industrial and commercial real estate. Subject to certain restrictions and
limitations, the business of the Company is managed by Carey Property Advisors,
a Pennsylvania limited partnership (the "Advisor").

A maximum of 30,000,000 shares are being offered to the public on a best
efforts basis by Carey Financial Corporation ("Carey Financial"), an affiliate
of the Advisor, and selected dealers at a price of $10 per share. The offering
commenced November 10, 1997 and will conclude on November 22, 1999. Since the
inception of the offering through September 30, 1999, 26,494,803 shares
($264,948,030) have been issued including 14,676,902 ($146,769,020) shares
issued since December 31, 1998. In April 1999,

F-9
<PAGE> 111

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

the Company filed an offering with the Securities and Exchange Commission to
sell up to an additional 40,000,000 shares on a best efforts basis. The new
offering is expected to commence in November 1999.

3. TRANSACTIONS WITH RELATED PARTIES:

The Company has entered into an advisory agreement with the Advisor
pursuant to which the Advisor performs certain services for the Company
including the identification, evaluation, negotiation, purchase and disposition
of property, the day-to-day management of the Company and the performance of
certain administrative services. The Advisor and certain affiliates will receive
fees and compensation in connection with the offering and the operation of the
Company as described in the Prospectus of the Company.

In 1998, an affiliate of the Company received structuring and development
fees of $1,454,315. Fees are only paid in connection with completed
transactions. The affiliate is also entitled to receive deferred acquisition
fees of $1,628,828 over a period of no less than eight years.

The Company's interests in properties jointly held with affiliates range
from 33 1/3% to 50%. Ownership interests in two limited liability companies
owned with affiliates, are accounted for under the equity method as such
ownership interest is 50% or less. The Company will account for any individual
interests in assets and liabilities relating to tenants-in-common interests on a
proportional basis.

The Company's asset management and performance fees payable to the Advisor
are each 1/2 of 1% per annum of Average Invested Assets, as defined in the
Prospectus of the Company. Until 7% cumulative rate of cash flow from
operations, as defined in the Prospectus, is achieved, the Advisor will not be
entitled to receive the performance fee. The Company, however, is recognizing
performance fee expense currently. At such time as the Advisor is entitled to
receive the performance fee, the Advisor will have the option of receiving such
fee in cash or restricted shares of the Company. As of December 31, 1998, the
cumulative return criterion had not been achieved. For the year ended December
31, 1998, the Company incurred asset management fees of $129,746. Performance
fees were in like amount. General and administrative expense reimbursement
consists primarily of the actual cost of personnel needed in providing
administrative services. For the year ended December 31, 1998 general and
administrative reimbursements were $370,000. No fees or reimbursements were
incurred in 1997.

The Advisor shall reimburse the Company at least annually for the amount by
which operating expenses of the Company exceed the 2%/25% Guidelines (2% of
Average Invested Assets or 25% of net income) as defined in the Prospectus. To
the extent that operating expenses payable or reimbursable by the Company exceed
the 2%/25% Guidelines and the independent directors find that such expenses were
justified based on such unusual and nonrecurring factors which they deem
sufficient, the Advisor may be reimbursed in future years for the full amount or
any portion of such excess expenses, but only to the extent such reimbursement
would not cause the Company's operating expenses to exceed the 2%/25% Guidelines
in any such year.

UNAUDITED INTERIM FINANCIAL INFORMATION

Transactions with Related Parties:

The Company's asset management and performance fees payable to the Advisor
are each 1/2 of 1% per annum of Average Invested Assets, as defined in the
Prospectus. Until the Company has achieved a 7% cumulative rate of cash flow
from operations, as defined in the Prospectus, the Advisor will not be entitled
to receive the performance fee. At such time as the Advisor is entitled to
receive the performance fee, the Advisor will have the option of receiving such
fee in cash or restricted shares of the Company. Asset management fees for the
three-month and nine month periods period ended

F-10
<PAGE> 112

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

September 30, 1999 were $199,098 and $475,907, respectively, with performance
fees in like amount, and general and administrative reimbursements were $170,845
and $301,368, respectively. For the three-month and nine-month periods ended
September 30, 1998, asset management fees were $99,529 and $105,086, with
performance fees in like amount, and general and administrative reimbursements
were $65,000 and $85,000, respectively.

4. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE OPERATING METHOD:

Scheduled future minimum rents, exclusive of renewals, under noncancellable
operating leases amount to approximately $3,827,000 in 1999; $4,015,000 in 2000;
$4,032,000 in each of the years 2001 through 2003 and aggregate approximately
$46,410,000 through 2018.

No contingent rents were realized in 1998.

5. DIVIDENDS PAYABLE:

A dividend of $.00175 per share per day ($1,365,622) in the period from
October 1, 1998 through December 31, 1998 was declared in December 1998 and was
paid in January 1999.

6. COMMITMENTS AND CONTINGENCIES:

The Company is liable for certain expenses of the offering described in the
Prospectus of the Company, including but not limited to filing, legal,
accounting, printing and escrow fees, which are being deducted from the gross
proceeds of the offering and are presently estimated to aggregate a maximum of
$10,500,000 assuming the sale of 30,000,000 shares. The Company will also be
liable for selling commissions of up to $0.65 (6.5%) per share sold except for
any shares sold to the Advisor, its Affiliates, the selected dealers or any of
their employees for their own accounts. The Company is reimbursing Carey
Financial for expenses (including fees and expenses of its counsel) and for the
costs of sales, wholesaling services and information meetings of Carey
Financial's employees relating to the offering. To the extent, if any, that all
offering expenses, excluding selling commissions, and any fees paid and expenses
reimbursed to the selected dealers or paid on behalf of the selected dealers,
exceed 3.5% of the gross proceeds of the offering, such excess will be
reimbursed to the Company by the Advisor.

UNAUDITED INTERIM FINANCIAL INFORMATION

Commitments and Contingencies:

The Company is liable for certain expenses of the offering which are being
deducted from the gross proceeds of the offering up to a maximum of $10,500,000
assuming the sale of 30,000,000 Shares. The Company is currently paying selling
commissions of $0.65 (6.5%) per share sold except for any shares sold to the
Advisor, its affiliates, the selected dealers or any of their employees for
their own accounts. The Company is paying a selected dealer fee not to exceed 1%
of the price of each share sold by the selected dealer. The Company is
reimbursing Carey Financial for expenses (including fees and expenses of its
counsel) and for the costs of sales and wholesaling services. To the extent, if
any, that all organization and offering expenses, excluding selling commissions,
and any fees paid and expenses reimbursed to the selected dealers or paid on
behalf of the selected dealers, exceed 3.5% of the gross proceeds of the
offering, such excess will be paid by the Advisor. The offering expected to
commence in November 1999 provides for substantially similar selling
commissions, selected dealer fees and reimbursements to Carey Financial.

F-11
<PAGE> 113

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

7. LEASE REVENUES:

The Company's operations consist of the investment in and the leasing of
industrial and commercial real estate. For the year ended December 31, 1998, the
financial reporting sources are as follows:

<TABLE>
<S> <C>
Per Statements of Income
Rental income............................................... $1,296,441
Adjustment:
Share of lease revenues from equity investment............ 84,672
----------
$1,381,113
==========
</TABLE>

In 1998, the Company earned its share of net lease revenues from its direct
and indirect ownership of real estate from the following lease obligations:

<TABLE>
<CAPTION>
%
---
<S> <C> <C>
Best Buy Co. Inc............................................ $ 824,582 60%
Burlington Motor Carriers, Inc. ............................ 398,200 29
Advanced Micro Devices, Inc................................. 84,672 6
The Benjamin Ansehl Company................................. 66,607 5
Contraves Brashear Systems, L.P............................. 7,052
---------- ---
$1,381,113 100%
========== ===
</TABLE>

UNAUDITED INTERIM FINANCIAL INFORMATION

Lease Revenues:

The Company's operations consist of the investment in and the leasing of
industrial and commercial real estate. The financial reporting sources of the
lease revenues for the nine month periods ended September 30, 1998 and 1999 are
as follows:

<TABLE>
<CAPTION>
1998 1999
-------- ----------
<S> <C> <C>
Per Statements of Income
Rental income............................................... $547,572 $3,616,244
Interest from direct financing lease................... 132,158
Adjustment:
Share of leasing revenues from equity investments...... 5,061,176
Share of lease revenue applicable to minority
interest............................................. (9,495)
-------- ----------
$547,572 $8,800,083
======== ==========
</TABLE>

F-12
<PAGE> 114

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

For the nine-month periods ended September 30, 1998 and 1999, the Company
earned its proportionate net lease revenues from its investments as follows:

<TABLE>
<CAPTION>
1998 % 1999 %
-------- --- ---------- ---
<S> <C> <C> <C> <C>
Advanced Micro Devices, Inc. (a).................. $2,286,375 26%
Best Buy Co., Inc................................. $347,372 63% 1,476,659 17
Etec Systems, Inc. (a)............................ 957,564 11
Intesys Technologies, Inc. (a).................... 744,488 8
Compucom Systems, Inc. (a)........................ 656,047 7
Burlington Motor Carrier, Inc. ................... 200,200 37 594,000 7
The Benjamin Ansehl Company....................... 487,312 6
Contraves Brashear Systems L.P. .................. 482,625 5
Production Resource Group L.L.C. ................. 444,422 5
CheckFree Holding Corporation (a)................. 416,702 5
Scott Companies, Inc. ............................ 132,158 2
Metagenics, Inc. ................................. 107,489 1
Ameriserve Food Distribution, Inc. (b)............ 14,242
-------- --- ---------- ---
$547,572 100% $8,800,083 100%
======== === ========== ===
</TABLE>

- ---------------

(a) Represents the Company's proportionate share of lease revenues from its
equity investments.

(b) Net of Corporate Property Associates 12 Incorporated's minority interest.

8. ACQUISITIONS OF REAL ESTATE:

The Benjamin Ansehl Company

On November 24, 1998, the Company purchased land and a building in St.
Louis, Missouri for $6,021,000 and entered into a net lease agreement with The
Benjamin Ansehl Company ("Benjamin"). The lease has a term of fifteen years
through November 30, 2013 with no renewal terms. The lease provides for annual
rent of $649,750, with rent increases every two years based on a formula indexed
to increases in the CPI.

In connection with the purchase of the property, the Company received
warrants to purchase 2,064 shares of common stock of Benjamin at an exercise
price of $26.738 per share. The warrant agreement also provides the Company the
right to make a cashless exercise for fewer shares. The exercise period for the
warrants is the entire term of the lease and the warrant agreement provides for
the Company to sell the warrants back to Benjamin under certain circumstances.

Contraves Brashear System L.P.

On December 28, 1998, the Company purchased land and building in
Pittsburgh, Pennsylvania for $6,806,000 and entered into a net lease agreement
with Contraves Brashear Systems L.P. ("Contraves").

The Contraves lease provides for an initial lease term of fifteen years
through December 31, 2013 followed by two five-year renewal terms. Annual rent
is initially $643,750 with rent increases every three years based on a formula
indexed to increases in the CPI, capped at 9.27% for each rent increase. The
lease also provides for a purchase option exercisable during the final six
months of the initial lease term

F-13
<PAGE> 115

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

at an exercise price the greater of (i) fair market value, as defined, and (ii)
the Company's acquisition cost for the property plus any prepayment premium that
would be due on a mortgage loan on the property.

On March 22, 1999, the Company obtained $4,225,000 of limited recourse
mortgage financing collateralized by the Contraves property and the assignment
of the Contraves lease. The mortgage loan provides for monthly payments of
interest and principal of $31,222 at an annual interest rate of 7.5% based on a
25-year amortization schedule. The loan matures on April 1, 2009 with a balloon
payment due of approximately $3,358,000.

UNAUDITED INTERIM FINANCIAL INFORMATION

ACQUISITIONS:

A. On July 19, 1999, the Company purchased land and building in Gardena,
California for $6,282,723 and entered into a net lease with Scott Co. of
California. The lease obligations of Scott are unconditionally guaranteed by its
parent company, The Scott Companies, Inc. The Scott lease has an initial term of
twenty years with three five-year renewal terms at Scott's option. Annual rent
is $681,000 with rent increases every three years based on a formula indexed to
increases in the Consumer Price Index ("CPI").

In connection with the purchase of the Scott property, the Company obtained
$3,000,000 of limited recourse financing collateralized by a deed of trust and a
lease assignment. The loan provides for monthly payments of interest and
principal of $22,709 at an annual interest rate of 8.21%. The loan matures in
August 2009 at which time a balloon payment will be due.

B. On August 18, 1999, the Company and CPA(R):12 formed two limited
liability companies which entered into net leases for four properties with
Ameriserve Food Distribution, Inc. ("Ameriserve") located in Burlington, New
Jersey; Shawnee, Kansas; Grand Rapids, Michigan and Manassas, Virginia. The
total cost of the transaction, including the funding of expansions and a
build-to-suit facility is expected to amount to $55,779,445. The Company holds a
60% interest in the limited liability companies.

A new facility will be built at the Shawnee property and existing
facilities will be expanded at the Burlington and Manassas properties.
Completion of the projects is scheduled to occur no later than December 1, 2000.
At the earlier of the completion of construction or December 1, 2000, a lease
term of 20 years will commence, followed by two ten-year renewal terms at
Ameriserve's option. The annual rent will be $5,769,073, subject to reduction if
total project costs are less than $55,779,445. The leases provide for increases
every three years based on a formula indexed to increases in the CPI. Ameriserve
has purchase options that may be exercised at the end of the lease.

In connection with the purchase of the Ameriserve properties, the Company
and CPA(R):12 obtained limited recourse mortgage financing of $32,000,000
collateralized by the Ameriserve properties and lease assignments. The loans
bear interest at an annual rate of 8.51% with combined monthly payments of
interest and principal of $246,279 and based on a 30-year amortization schedule.
The loans mature September 30, 2009 at which time balloon payments are
scheduled.

C. On September 22, 1999, the Company purchased land and a multiplex movie
theater under construction in Midlothian, Virginia for $6,029,580 and assumed a
lease with Richmond I Cinema L.L.C. ("Richmond I"). The lease obligations of
Richmond I are unconditionally guaranteed by Consolidated Theatres Holding, G.P.
Total project costs for the Richmond I multiplex are estimated to amount to
approximately $14,706,000. The target opening date for the multiplex is August
15, 2000.

F-14
<PAGE> 116

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

Upon completion of the project, an initial lease term of 20 years will
commence with two five-year renewal terms at Richmond I's option. Annual base
rent will initially be $1,550,489 with scheduled rent increases of ten percent
every five years during the initial lease term. Beginning with the third lease
year, Richmond I will pay as additional rent a stated percentage of sales in
excess of specific benchmark amounts. For the third through fifth lease year,
the Company will be entitled to receive five percent of sales in excess of
$8,500,000; for the sixth through tenth lease years five percent of sales in
excess of $8,755,000 and six percent of sales in excess of $9,193,000
thereafter.

The Company obtained a limited recourse mortgage loan for up to $9,391,159
collateralized by a deed of trust and a lease assignment. The loan provides for
annual interest at the sum of the monthly of the London Interbank Offered Rate
and two percent and will initially convert to payments of interest only.
Commencing on the earlier of the rent commencement date or September 30, 2000,
the loan will convert to payments of interest and principal based on a 25 year
amortization schedule. The loan is scheduled to fully amortize on October 1,
2025; however the lender, at its sole option, may call the loan on either
October 1, 2007, 2014 or 2021. The outstanding balance on the loan at September
30, 1999 was $611,028.

Consolidated Theatres L.L.C. ("Consolidated LLC"), an affiliate of Richmond
I, granted the Company warrants for 110 Class A-Z units at an exercise price of
$1,000 per unit and are exercisable at any time through September 20, 2019.
There are currently 3,650 units of Consolidated LLC issued and outstanding.

9. EQUITY INVESTMENTS:

Etec Systems, Inc.

In February 1995, Corporate Property Associates 12 Incorporated
("CPA(R):12"), an affiliate purchased land and buildings in Hayward, California
for $11,860,000 and entered into a net lease with Etec Systems, Inc. ("Etec").
In February 1998, CPA(R):12 entered into a series of transactions including
paying off the existing limited recourse mortgage loan of the Etec property,
purchasing additional improvements at the Etec property, entering into a
commitment and construction agency agreement to fund additional improvements
("Project II") of up to $52,356,000, amending the existing lease with Etec and
transferring ownership of the Etec property to a limited liability company in
which the Company acquired an ownership interest. Under the limited liability
agreement, the Company will have a 49.99% interest in the Project II
improvements only, and CPA(R):12 will not be obligated to share any of the
economic benefits from the existing buildings with the Company. The limited
liability company, has received a commitment of $30,000,000 of limited recourse
financing for the Project II improvements that will be made available upon the
completion of construction. The Company has funded approximately $26,970,000
towards its interest in the Project II improvements. The Company's equity
contribution, after proceeds from the mortgage are distributed, is expected to
be approximately $11,178,000.

The Etec lease, as amended, has an initial term through May 2014 with three
five-year renewal terms at Etec's option. After completion of the additional
improvements, assuming that the entire funding commitment is needed, annual rent
applicable to the Project II improvements will be $5,727,000 with increases
every three years based on increases in the CPI. The commitment for limited
recourse mortgage financing provides for monthly payments of principal and
interest of $271,495 at an interest rate of 7.11% based on a twenty-year
amortization schedule. The Company share of annual cash flow (rent less mortgage
debt service) is expected to approximate $1,234,000.

F-15
<PAGE> 117

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

Advanced Micro Devices, Inc.

On December 22, 1998, the Company and two of its affiliates, Carey
Institutional Properties Incorporated ("CIP") and CPA(R):12, through a
newly-formed limited liability company, Delaware Chip LLC ("Chip"), purchased
land and a building in Sunnyvale, California and entered into a net lease
agreement with Advanced Micro Devices, Inc. ("AMD"). The purchase price of the
property was $95,287,958 of which $68,250,000 was financed by limited recourse
debt. The Company, CIP and CPA(R):12 each own a 33 1/3% interest in Chip.

The AMD lease provides for an initial lease term of twenty years through
December 2018 with two ten-year renewal terms at AMD's option. Annual rent is
$9,145,500, with rent increases every three years based on a formula indexed to
increases in the Consumer Price Index ("CPI"). The $68,250,000 limited recourse
mortgage loan is collateralized by a deed of trust on the property and an
assignment of the lease. The loan bears interest at an annual interest rate of
7.78% with monthly principal and interest payments based on a 30-year
amortization schedule. The loan matures in January 2009, when a balloon payment
will be due.

Summarized financial information of the Company's equity investees is as
follows:

<TABLE>
<CAPTION>
1998
----
(IN THOUSANDS)
<S> <C>
ET LLC
Assets...................................................... $55,977
Liabilities..................................... 16,207
Capital......................................... 39,770
Revenues........................................ 2,723
Expenses........................................ 1,281
Net income...................................... 1,442
Chip
Assets.......................................... $91,350
Liabilities..................................... 68,251
Capital......................................... 23,099
Revenues........................................ 254
Expenses........................................ 185
Net income...................................... 69
</TABLE>

UNAUDITED INTERIM FINANCIAL INFORMATION

Equity Investments:

The Company holds interests in five entities at September 30, 1999 (and two
at December 31, 1998) in which its ownership interest is 50% or less. All of the
underlying investments were formed and are owned with affiliates that have
similar investment objectives as the Company. The Company owns a 33.33% interest
in an entity that in December 1998 purchased property and is net leased to
Advanced Micro Devices, Inc. The Company holds interests of 50%, 33.33% and 50%
in entities that entered into net leases with Intesys Technologies, Inc.,
Compucom Systems, Inc. and CheckFree Holdings Corporation, respectively, during
the nine-month period ended September 30, 1999 and an interest in a limited
liability company that net leases a property to Etec Systems, Inc. ("Etec"). The
interest in the Etec investment is a 49.99% interest in a building on the Etec
property for which construction was completed in July 1999. Corporate Property
Associates 12 Incorporated ("CPA(R):12"), an affiliate, owns

F-16
<PAGE> 118

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

all remaining interests in the Etec property. Summarized combined financial
information of the Company's equity investees is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 SEPTEMBER 30, 1999
----------------- ------------------
(IN THOUSANDS)
<S> <C> <C>
Assets (primarily real estate).................... $56,069 $258,010
Liabilities (primarily mortgage notes payable).... 16,276 167,551
Members' equity................................... 39,793 90,459
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1999
------------------
<S> <C>
Revenues (primarily rental revenues)........................ $15,306
Expenses (primarily interest on mortgage and
depreciation)............................................... 8,982
Net income.................................................. 6,324
</TABLE>

10. SUBSEQUENT EVENT:

On February 3, 1999, the Company and CPA(R):12, each acquired 50% ownership
interests in a newly formed limited liability company, and purchased land and
building in Gilbert, Arizona for $23,560,000 and entered into a with a net lease
with Intesys Technologies, Inc. ("Intesys").

The Intesys lease has an initial term of twenty years with two ten-year
renewal terms at the option of Intesys. The lease provides for annual rent
payments of $2,274,750 with rent increases every three years based on a formula
indexed to the increase in the CPI, with any single increase capped at 9%.

UNAUDITED INTERIM FINANCIAL INFORMATION

Subsequent Events:

A. On October 15, 1999, the Company purchased two properties in Burbank and
Los Angeles, California for $3,743,455 and entered into a net lease with
Production Resource Group L.L.C. ("PRG"). The PRG lease has an initial term of
15 years with two five-year renewal terms at PRG's option. Annual rent is
$393,250 with increases every two years based on a formula indexed to increases
in the CPI. The Company had previously entered into a net lease with PRG in
March 1999 for a property in Las Vegas, Nevada.

B. On November 1, 1999, the Company purchased a property in Columbia,
Maryland for $22,855,080 and entered into a net lease with Amerix Corporation
("Amerix"). In addition, the Company entered into a commitment to fund an
expansion of up to $3,500,000 of the existing office facility. The lease has an
initial term ending 15 years after the earlier of the completion of the
expansion or December 1, 2001 with two ten-year renewal terms at Amerix's
option. Annual rent will initially be $2,197,475 and will increase by $355,250
upon completion of the expansion, subject to a reduction if the project costs
for the expansion cost are less than $3,500,000. The lease provides for rent
increases on the sixth anniversary of the lease and every three years thereafter
based on a formula indexed to increases in the CPI, subject to a cap on the
increase of 1.04% per annum.

11. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

The carrying amounts of cash, receivables and accounts payable and accrued
expenses approximate fair value because of the short maturity of these items.

In conjunction with its leases with Burlington Motor Carriers, Inc. and the
Benjamin Ansehl Company, the Company was granted warrants that will allow the
company to purchase common stock of

F-17
<PAGE> 119

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(INFORMATION WITH RESPECT TO SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999 IS
UNAUDITED)

the tenant company at a stated price. Because the tenant companies are not
publicly traded companies, the warrants were judged at the time of issuance to
be speculative in nature and a nominal cost basis is attributed to them. The
Company believes that it is not practicable to estimate the fair value of its
stock warrants for closely-held companies.

12. ACCOUNTING PRONOUNCEMENT:

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
SFAS No. 133 is effective for all quarters of fiscal years beginning after June
15, 1999. The Company believes that SFAS No. 133 will not have a material impact
on the consolidated financial statements.

F-18
<PAGE> 120

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of

Corporate Property Associates 14 Incorporated

and Subsidiaries:

Our audits of the consolidated financial statements of Corporate Property
Associates 14 Incorporated and Subsidiaries referred to in our report dated
March 5, 1999 appearing on page F-2 of this Registration Statement also included
an audit of the financial statement schedule included on pages F-20 and F-21 of
this Registration Statement. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

New York, New York

March 5, 1999

F-19
<PAGE> 121

CORPORATE PROPERTY ASSOCIATES 14, INCORPORATED

SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1998

INITIAL COST TO COST GROSS AMOUNT AT WHICH CARRIED
COMPANY CAPITALIZED AT CLOSE OF PERIOD(B)
------------------------- SUBSEQUENT TO ---------------------------------------
DESCRIPTION ENCUMBRANCES LAND BUILDINGS ACQUISITION(A) LAND BUILDINGS TOTAL
- ----------- ------------ ----------- ----------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Method:
Trucking facility leased
to Burlington Motor
Carriers, Inc........... $ 2,100,000 $ 5,439,267 $ 2,100,000 $ 5,439,267 $ 7,539,267
Retail store leased to
Bestbuy Co............ 13,059,980 6,933,851 35,266 13,059,980 6,969,117 20,029,097
Research and development
facility leased to
Metagenics, Inc.
(under
construction)......... 2,390,000 1,956,355 2,390,000 1,956,355 4,346,355
Manufacturing facility
leased to Benjamin
Ansehl Co............. 849,000 5,172,000 849,000 5,172,000 6,021,000
Manufacturing facility
leased to Contraves
Systems, L.P.......... 620,000 6,186,283 620,000 6,186,283 6,806,283
----------- ----------- ---------- ----------- ----------- -----------
$19,018,980 $23,731,401 $1,991,621 $19,018,980 $25,723,022 $44,742,002
=========== =========== ========== =========== =========== ===========

<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF
ACCUMULATED INCOME
DESCRIPTION DEPRECIATION DATE ACQUIRED IS COMPUTED
- ----------- ------------ ----------------- -------------
<S> <C> <C> <C>
Operating Method:
Trucking facility leased
to Burlington Motor
Carriers, Inc........... $ 73,657 June 29, 1998 40 yrs.
Retail store leased to
Bestbuy Co............ 79,714 July 28, 1998 40 yrs.
Research and development
facility leased to
Metagenics, Inc.
(under
construction)......... July 29, 1998 40 yrs.
Manufacturing facility
leased to Benjamin
Ansehl Co............. 16,162 November 24, 1998 40 yrs.
Manufacturing facility
leased to Contraves
Systems, L.P.......... 6,444 December 28, 1998 40 yrs.
--------
$175,977
========
</TABLE>

F-20
<PAGE> 122

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED AND SUBSIDIARIES

NOTES TO SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION

(a) Consists of the costs of improvements subsequent to purchase and
acquisition costs including legal fees, appraisal fees, title costs and
other related professional fees.

(b) At December 31, 1998, the aggregate cost of real estate owned by
CPA(R):14 and its subsidiaries for Federal income tax purposes is
$44,742,002.

(c)

<TABLE>
<CAPTION>
RECONCILIATION OF
REAL ESTATE ACCOUNTED
FOR UNDER THE
OPERATING METHOD
DECEMBER 31, 1998
------------------------
<S> <C>
Balance at beginning of year
Additions.............................................. $44,742,002
-----------
Balance at close of year............................... $44,742,002
===========
</TABLE>

<TABLE>
<CAPTION>
RECONCILIATION OF
ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
------------------------
<S> <C>
Balance at beginning of year
Depreciation expense................................... $ 175,977
-----------
Balance at close of year............................... $ 175,977
===========
</TABLE>

F-21
<PAGE> 123

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
ET LLC:

In our opinion, the accompanying balance sheet and the related statements
of income, members' equity and cash flow present fairly, in all material
respects, the financial position of ET LLC at December 31, 1998, and the results
of its operations and its cash flows for the period from inception (February 2,
1998) to December 31, 1998, in conformity with generally accepted accounting
principles. In addition, in our opinion, the schedule of real estate and
accumulated depreciation presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
financial statements. These financial statements and financial statement
schedule are the responsibility of Carey Property Advisors, a Pennsylvania
limited partnership ("the Advisor"); our responsibility is to express an opinion
on these financial statements and financial statement schedule based on our
audit. We conducted our audit of these statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP

New York, New York
March 5, 1999

F-22
<PAGE> 124

ET LLC

BALANCE SHEET
DECEMBER 31, 1998

<TABLE>
<CAPTION>
1998
-----------
<S> <C>
ASSETS:
Land........................................................ $ 1,272,444
Buildings, net of accumulated depreciation as of $602,619... 53,948,529
Other assets................................................ 756,848
-----------
Total assets................................................ $55,977,821
===========
LIABILITIES:
Mortgage note payable....................................... $14,729,468
Deferred acquisition fee payable to affiliate............... 1,047,016
Other liabilities........................................... 431,108
-----------
Total liabilities........................................... 16,207,592
-----------
Members' equity............................................. 39,770,229
-----------
Total liabilities and members' equity....................... $55,977,821
===========
</TABLE>

ET LLC

STATEMENT OF INCOME
FOR THE PERIOD FROM INCEPTION (FEBRUARY 2, 1998) TO DECEMBER 31, 1998

<TABLE>
<CAPTION>
1998
----------
<S> <C>
Revenue:
Rental income............................................... $2,723,365
----------
Expenses:
Interest.................................................... 667,360
Depreciation................................................ 602,619
Amortization................................................ 10,982
State and local taxes....................................... 800
----------
1,281,761
----------
Net income................................................ $1,441,604
==========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-23
<PAGE> 125

ET LLC

STATEMENT OF MEMBERS' EQUITY
FOR THE PERIOD FROM INCEPTION (FEBRUARY 2, 1998) TO DECEMBER 31, 1998

<TABLE>
<S> <C>
Capital contribution of assets, net of liabilities.......... $13,339,439
Capital contributions -- cash............................... 26,407,070
Distributions............................................... (1,417,884)
Net income.................................................. 1,441,604
-----------
Balance, December 31, 1998.................................. $39,770,229
===========
</TABLE>

ET LLC

STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (FEBRUARY 2, 1998) TO DECEMBER 31, 1998

<TABLE>
<CAPTION>
1998
------------
<S> <C>
Cash flows from operating activities:
Net income.................................................. $ 1,441,604
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization............................. 613,601
Change in operating assets and liabilities, net........... (384,263)
------------
Net cash provided by operating activities............ 1,670,942
------------
Cash flows from investing activities:
Additional capitalized costs.............................. (41,104,348)
------------
Net cash used in investing activities................ (41,104,348)
------------
Cash flows from financing activities:
Distributions paid........................................ (1,417,884)
Payments of mortgage principal............................ (270,532)
Proceeds from issuance of mortgages....................... 15,000,000
Deferred financing costs.................................. (285,248)
Capital contributions from partners....................... 26,407,070
------------
Net cash provided by financing activities............ 39,433,406
------------
Net increase in cash and cash equivalents............ --
Cash and cash equivalents, beginning of period.............. --
------------
Cash and cash equivalents, end of period............... $ --
------------
Interest paid............................................... $ 579,633
============
Schedule of noncash investing and financing activity:
At the inception of the Company, Corporate Property
Associates 12 Incorporated contributed assets, net of
liabilities with a net carrying cost of $13,339,439.
Land and buildings contributed....................... $ 13,672,228
Liabilities, net of other assets..................... (332,789)
------------
$ 13,339,439
============
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-24
<PAGE> 126

ET LLC

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND BUSINESS:

ET LLC (the "Company") was formed on February 2, 1998 for the purpose of
engaging in the business of investing in and owning industrial and commercial
real estate. The Company's business consists of leasing land and buildings in
Hayward, California to Etec Systems, Inc. As amended on February 2, 1998, the
lease has an initial term through May 2014 with three five-year renewal options.
Annual rent on the property is currently $2,988,000.

In connection with the lease amendment, the Company and Etec entered into a
construction agency agreement to fund up to $52,356,000 of new improvements
including construction of a new building (the "Project II Improvements"). The
Project II Improvements are scheduled to be completed during the second quarter
of 1999. Assuming that the entire funding is used, annual rent applicable to the
Project II improvements will be $5,726,987.

The Company is owned by wholly-owned subsidiaries of Corporate Property
Associates 12 Incorporated ("CPA(R):12") and Corporate Property Associates 14
Incorporated ("CPA(R):14"). Upon formation, CPA(R):12, through its wholly-owned
subsidiary, made an initial contribution of the existing Etec properties and
certain other assets, net of liabilities, all valued at historical cost, and
CPA(R):14, through its wholly-owned subsidiary, made a commitment to fund 49.99%
of Project II Improvements subject to certain conditions which have been met as
of December 31, 1998. Pursuant to the Company's Membership Agreement, the
CPA(R):14 subsidiary will have a 49.99% interest in the Project II Improvements
only and CPA(R):12 will have all remaining interests.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Real Estate Leased to Others Under the Operating Method:

Real estate is recorded at cost, rental revenue is recognized on a
straight-line basis over the term of the lease, and expenses (including
depreciation) are charged to operations as incurred.

Real Estate Leased Under Construction:

For the property under construction, rentals received are recorded as a
reduction of capitalized project (i.e., construction) costs.

Depreciation:

Depreciation is computed using the straight-line method over the estimated
useful life of the properties -- 40 years.

Federal Income Taxes:

The Company is a partnership for Federal and state income tax purposes. A
partnership is not liable for federal income taxes as each partner recognizes
his proportional share of the Partnership income or loss in his tax return.
Accordingly, no provision for income taxes is recognized for financial statement
purposes.

F-25
<PAGE> 127
ET LLC

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE OPERATING METHOD:

The scheduled minimum future rentals exclusive of renewals under the
Company's noncancellable operating lease amount to approximately $5,851,000 in
1999 and $8,715,000 in each of the years 2000 through 2003 and aggregate
$124,766,000 through 2014.

4. MORTGAGE NOTE PAYABLE:

The Company's mortgage loan is a limited recourse obligation and is
collateralized by an assignment of the lease and by real property with a
carrying value of approximately $55,220,973 before accumulated depreciation. The
mortgage note payable bears interest at the rate of 7.11% and fully amortizes in
December 2013.

Scheduled principal payments during each of the next five years following
December 31, 1998 and thereafter are as follows:

<TABLE>
<S> <C>
1999...................................................... $ 570,695
2000...................................................... 612,621
2001...................................................... 657,626
2002...................................................... 705,938
2003...................................................... 757,797
Thereafter................................................ 11,424,791
-----------
Total................................................... $14,729,468
===========
</TABLE>

The Company has received a commitment for an additional $30,000,000 of
limited recourse mortgage financing which will be available upon completion of
the Project II Improvements.

6. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

The carrying amounts of cash and accounts payable and accrued expenses
approximate fair value because of the short maturity of these items.

The Partnership estimates that the fair value of its mortgage note payable
at December 31, 1998 approximates the carrying value of such mortgage. The fair
value of the mortgage notes payable was evaluated using a cash flow model with a
discount rate that takes into account the credit of the tenant and interest rate
risk.

F-26
<PAGE> 128

ET LLC

SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>

INITIAL COST TO COSTS GROSS AMOUNT AT WHICH CARRIED
COMPANY CAPITALIZED AT CLOSE OF PERIOD(B)(C)
------------------------ SUBSEQUENT TO --------------------------------------
DESCRIPTION ENCUMBRANCES LAND BUILDINGS ACQUISITION(A) LAND BUILDINGS TOTAL
- ----------- ------------ ---------- ----------- -------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Method:
Office and research
facility............. $14,729,468 $1,272,444 $12,399,784 $42,151,364 $1,272,444 $54,551,148 $55,823,592

<CAPTION>
LIFE ON
WHICH
DEPRECIATION
IN LATEST
INCOME
STATEMENT
ACCUMULATED DATE IS
DESCRIPTION DEPRECIATION ACQUIRED COMPUTED
- ----------- ------------ -------- ------------
<S> <C> <C> <C>
Operating Method:
Office and research
facility............. $602,619 February 16, 40 yrs.
1995
</TABLE>

- ---------------
(a) Consists of costs of completion of construction and acquisition costs
including legal fees, appraisal fees, title costs and other related
professional fees.

(b) At December 31, 1998, the aggregate cost of real estate owned by the
Partnership for Federal income tax purposes is $56,619,873.

<TABLE>
<CAPTION>
RECONCILIATION OF
REAL ESTATE ACCOUNTED
FOR UNDER THE
OPERATING METHOD
DECEMBER 31, 1998
---------------------
<S> <C>
Contributed property........................................ $13,672,228
Additions during period -- cash............................. 42,151,364
-----------
Balance at close of period.................................. $55,823,592
===========
</TABLE>

<TABLE>
<CAPTION>
RECONCILIATION OF
ACCUMULATED
DEPRECIATION
DECEMBER 31, 1998
-----------------
<S> <C>
Balance at beginning of period
Depreciation expense for the period......................... $602,619
--------
Balance at close of period.................................. $602,619
========
</TABLE>

F-27
<PAGE> 129

EXHIBIT A

PRIOR PERFORMANCE TABLES

The information presented in the following tables represents the historical
experience of the CPA(R) Programs for which the Affiliates of the Advisor of the
Company serve as general partners and the record of CPA(R) Programs in meeting
their investment objectives. These tables should be carefully reviewed by a
potential investor in considering an investment in the Company. These tables are
as follows:

Table I -- Experience in Raising and Investing Funds (on a percentage basis)
Table II -- Compensation to Sponsor
Table III -- Operating Results of Prior Programs
Table IV -- Results of Completed Programs
Table V -- Sales or Dispositions of Properties
PERSONS WHO PURCHASE SHARES IN THE COMPANY WILL NOT THEREBY ACQUIRE ANY
OWNERSHIP INTEREST IN ANY OF THE CPA(R) PROGRAMS TO WHICH THESE TABLES
RELATE. IT SHOULD NOT BE ASSUMED THAT INVESTORS IN THE COMPANY WILL EXPERIENCE
RESULTS COMPARABLE TO THOSE EXPERIENCED BY INVESTORS IN THE CPA(R) PROGRAMS. SEE
"PRIOR OFFERINGS BY AFFILIATES" ELSEWHERE IN THIS PROSPECTUS.

The investment objectives of the Company and CPA(R) Programs are similar.

Additional information regarding prior public CPA(R) Programs can be
obtained from the Advisor by written request to the Director of Investor
Relations, 5 Rockefeller Plaza, New York, NY 10020, (800) 972-2739, for a copy
of the most recent Annual Report filed on Form 10-K with the SEC or a copy of
Table VI -- Acquisition of Real Properties by Prior Public Programs included in
Part II of the Registration Statement to which this Prospectus relates, free of
charge.

The following terms used throughout the Prior Performance Tables are
defined below:

"Total acquisition cost" means the original mortgage financing at date
of purpose, cash payments (equity), and prepaid items and fees related to
purchase of property.

"GAAP" means generally accepted accounting principles.

"Cash generated from operations" means the excess or deficiency of
partnership operating cash receipts including interest on short-term
investments over partnership operating case expenditures.

A-1
<PAGE> 130

TABLE I

EXPERIENCE IN RAISING AND INVESTING FUNDS AS OF DECEMBER 31, 1998

ON A PERCENTAGE BASIS

Table I includes information showing how investors' funds have been dealt
with in Prior Programs, the offerings of which have closed since January 1,
1994, particularly focusing on the percentage of the amount raised available for
investment (or total acquisition cost), the percentage of leverage used in
purchasing properties and the time frame for raising and investing funds. THE
INFORMATION IN THIS TABLE SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE
PERFORMANCE OF THE COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS
WILL NOT HAVE ANY OWNERSHIP IN THE CPA(R) PROGRAMS. MORTGAGE FINANCING FOR THE
CPA(R) PROGRAMS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS
FOR INVESTMENT BY SUCH PROGRAMS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.

<TABLE>
<CAPTION>
CPA(R):10 CIP(R) CPA(R):12
--------- ------ ---------
<S> <C> <C> <C>
Dollar amount offered (net of discounts and
individual general partner contributions)....... $72,049,908 $141,590,601 $282,740,030
Dollar amount raised.............................. 100% 100% 100%
Less offering expenses:
Selling commissions............................. 6.82% 6.94% 5.79%
Organization expenses........................... 7.17% 5.31% 4.20%
Reserves (working capital)........................ 1.00% 1.00% 1.00%
Percent available for investment in real estate... 85.01% 86.75% 89.01%
Acquisition costs:
Cash down payments.............................. 71.12% 77.44% 69.81%
Other costs capitalized......................... 0.82% 0.24% 2.25%
Acquisition fees................................ 10.05% 9.03% 7.18%
Total acquisition costs (includes debt
financing)................................... 220.44% 195.99% 136.75%
Percent leverage (mortgage financing divided by
total acquisition costs)........................ 63% 56%(1) 42%(1)
Date offering began............................... 6/20/90(2) 8/19/91(3) 2/18/94(4)
Length of offering (in months).................... 12 mos. 24 mos. 43 mos.
Months to invest 90% of amount available for
investment (from beginning of offering)......... 30 mos. 31 mos. 58 mos.
</TABLE>

FOOTNOTES

(1) Does not represent fully invested portfolio. Leverage percentage is
applicable only to initial property acquisitions.

(2) Remaining shares withdrawn 8/14/91.

(3) Remaining shares withdrawn 11/4/93.

(4) Remainings shares withdrawn 3/14/96, includes a second offering which
commenced 2/2/96.

A-2
<PAGE> 131

TABLE II
COMPENSATION TO SPONSOR AS OF DECEMBER 31, 1998

Table II provides information as to Prior Programs that will enable an
investor to understand the significance of compensation paid to the sponsor and
its affiliates, as well as to understand how the compensation is spread over the
cycle of the programs. The information presented below is for compensation paid
since January 1, 1995. THE INFORMATION PRESENTED IN THIS TABLE SHOULD NOT BE
CONSIDERED AS INDICATIVE OF THE COMPENSATION WHICH WILL BE RECEIVED BY THE
ADVISOR AND AFFILIATES OF THE ADVISOR. THE COMPENSATION PAYABLE TO THE GENERAL
PARTNERS AND AFFILIATES OF THE CPA(R) PARTNERSHIPS DIFFERS FROM THE ENTITLEMENT
AND ALLOCATION OF COMPENSATION TO THE ADVISOR AND AFFILIATES OF THE ADVISOR. SEE
"MANAGEMENT COMPENSATION" AND "ESTIMATED USE OF PROCEEDS". PURCHASERS OF SHARES
OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY OWNERSHIP IN THE CPA(R) PROGRAMS.

<TABLE>
<CAPTION>
CPA(R):1-
CPA(R):9(1) CPA(R):10 CIP(R)(2) CPA(R):12
----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Date offering(s) commenced............ 1/16/79-3/29/89 6/20/90 8/19/91 2/18/94
Dollar amount raised (net of discounts
and individual general partner
contributions)...................... $400,713,613 $72,049,908 $141,590,601 $282,740,030
Amount paid to sponsor from proceeds
of offering:
Underwriting fees................... 0 0 0 0
Acquisition fees-real estate
commissions and mortgage
placement fees(3)................ 0 54,000 4,674,756 16,592,968
Other Fees
Dollar amount of cash generated from
operations before deducting payments
to sponsor.......................... 108,497,064 25,771,131 62,639,681 59,083,731
Amount paid to sponsor from
operations:
Property management, leasing and
asset management fees(3)......... 2,054,736 4,824,186 11,644,230 7,169,984
Reimbursements(3)................... 2,699,129 1,582,581 2,651,942 2,429,754
Other (cash distributions to General
Partners)(4)........................ 5,256,706 0 0 0
Dollar amount of property sales and
re-financing before deducting
payments to sponsor(4).............. 62,169,642 17,438,757 12,073,775 20,000,000
</TABLE>

FOOTNOTES

(1) These programs were completed on December 31, 1997.

(2) Dollar amount raised does not include $74,440,000 raised in private
placement offering that commenced after completion of the Offering.

(3) Represents acquisition fees paid to sponsor and its affiliates from January
1, 1996 through December 31, 1998

(4) Represents actual performance or payments for the period from January 1,
1996 through December 31, 1998.

A-3
<PAGE> 132

TABLE III (1 OF 10)
OPERATING RESULTS OF PRIOR PROGRAMS

Table III includes information showing the start-up and operational phase
of Prior Programs, the offerings of which have been closed since December 31,
1979. This Table is designed to provide the investor with information on the
financial operations of such Prior Programs. The results shown in this Table are
in all cases for years ended December 31. THE INFORMATION PRESENTED IN THIS
TABLE SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):1
------------------------------------------------------------------------------
1979 1980 1981 1982 1983 1984
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues..................................... $2,636,185 $3,843,588 $4,427,993 $4,376,655 $4,322,546 $4,331,105
Profit (loss) on sale of properties................ N/A N/A N/A N/A 22,180(1) N/A
Extraordinary charge on extinguishment of debt.....
Write-down of property............................. N/A N/A N/A N/A N/A N/A
Less:
Operating expenses................................ 160,387 252,758 238,058 181,922 169,613 145,516
Interest expense.................................. 1,415,410 1,895,624 2,409,242 2,386,388 2,328,716 2,300,677
Depreciation...................................... 821,484 1,275,778 1,275,792 1,275,792 1,275,792 1,272,999
Net income (loss) GAAP Basis....................... 238,904 419,428 504,901 532,553 570,605 611,913
Taxable income (Loss):
-- from operations................................ 392,689 219,214 (108,663) (158,919) (173,788) (72,288)
-- from gain (loss) on sale....................... 0 0 0 0 22,180(1) 0
Cash generated from operations(6).................. 985,982 1,512,434 1,504,769 1,500,263 1,438,191 1,481,113
Cash proceeds from sales........................... 0 0 0 0 60,335(1) 0
Cash generated from refinancing.................... 0 0 0 0 0 0
Cash generated from operations, sales and
refinancing....................................... 985,982 1,512,434 1,504,769 1,500,263 1,498,526 1,481,113
Less Cash distribution to investors................
-- from operating cash flow(7).................... 591,479 1,480,000 1,501,819 1,504,648 1,504,646 1,504,646
-- from sales and refinancing..................... 0 0 0 0 0 0
Cash generated (deficiency) after cash
distribution...................................... 394,503 32,434 2,950 (4,385) (6,120) (23,533)
Less special items................................. 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items................... 394,503 32,434 2,950 (4,385) (6,120) (23,533)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)............................ $23.65 $10.85 $(5.38) $(7.87) $(8.60) $(3.58)
Capital gain (loss)............................... 0 0 0 0 1.10 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................. 14.39 20.76 24.99 26.36 27.15 30.29
-- Return of capital.............................. 21.23 52.50 49.35 48.12 47.33 44.19
Source (on cash basis):
-- Sales.......................................... 0 0 0 0 0 0
-- Refinancing.................................... 0 0 0 0 0 0
-- Operations..................................... 35.62 73.26 74.34 74.48 74.48 74.48
Amount (in percentage terms) remaining invested in
program properties at the end of the last year
reported in the Table (original total acquisition
cost of properties retained divided by original
total acquisition cost of all properties in
program).......................................... N/A 100% 100% 100% 100% 100%

<CAPTION>
CPA(R):1
-----------------------------------------------------------------
1985 1986 1987 1988 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Gross Revenues..................................... $4,187,199 $3,513,411 $6,584,410 $4,487,838 $4,167,975
Profit (loss) on sale of properties................ N/A (38,915)(2) N/A N/A (231,288)(3)
Extraordinary charge on extinguishment of debt.....
Write-down of property............................. N/A N/A N/A N/A 300,000(4)
Less:
Operating expenses................................ 276,287 630,225 766,707 811,685 418,278
Interest expense.................................. 2,254,996 2,296,520 2,320,731 2,339,046 1,916,134
Depreciation...................................... 1,266,962 1,507,133 1,520,842 1,318,492 1,159,216
Net income (loss) GAAP Basis....................... 388,954 (959,382) 1,976,130 18,615 143,059
Taxable income (Loss):
-- from operations................................ (49,859) (1,135,524) (125,052) 482,093 1,175,040
-- from gain (loss) on sale....................... 0 (38,915)(2) 0 0 (538,771)(3)
Cash generated from operations(6).................. 1,221,045 736,214 1,078,838 1,908,203 1,964,408
Cash proceeds from sales........................... 0 500,000(2) 0 0 0
Cash generated from refinancing.................... 0 0 0 0 0
Cash generated from operations, sales and
refinancing....................................... 1,221,045 1,238,214 1,078,838 1,908,203 1,964,408
Less Cash distribution to investors................
-- from operating cash flow(7).................... 1,504,646 1,055,354 1,063,838 1,074,748 1,092,527
-- from sales and refinancing..................... 0 0 0 0 0
Cash generated (deficiency) after cash
distribution...................................... (283,601) 180,860 15,000 23,455 871,881
Less special items................................. 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items................... (283,601) 180,860 15,000 23,455 871,881
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)............................ $(2.47) $(56.21) $(6.19) $23.86 $58.16
Capital gain (loss)............................... 0 (1.92) 0 0 (26.67)
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................. 19.25 0 52.66 53.20 7.08
-- Return of capital.............................. 55.23 52.24 0 0 47.00
Source (on cash basis):
-- Sales.......................................... 0 0 0 0 0
-- Refinancing.................................... 0 0 0 0 0
-- Operations..................................... 74.48 52.24 52.66 53.20 54.08
Amount (in percentage terms) remaining invested in
program properties at the end of the last year
reported in the Table (original total acquisition
cost of properties retained divided by original
total acquisition cost of all properties in
program).......................................... 100% 98.75% 98.75% 98.75% 83.14%

<CAPTION>
CPA(R):1
------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues..................................... $4,162,465 $4,093,556 $4,102,112 $4,418,370 $4,480,460 $4,830,618
Profit (loss) on sale of properties................ N/A (13,296)(5) N/A N/A N/A N/A
Extraordinary charge on extinguishment of debt.....
Write-down of property............................. N/A N/A N/A N/A N/A N/A
Less:
Operating expenses................................ 411,712 298,435 302,200 465,548 666,955 374,238
Interest expense.................................. 1,840,553 1,750,596 1,682,798 1,672,658 1,598,614 1,524,837
Depreciation...................................... 1,044,720 1,041,634 1,059,255 1,120,162 1,106,712 1,089,758
Net income (loss) GAAP Basis....................... 865,480 989,595 1,057,059 1,160,002 1,108,179 1,841,695
Taxable income (Loss):
-- from operations................................ 1,199,289 852,971 812,956 1,098,352 930,049 1,841,051
-- from gain (loss) on sale....................... 0 52,204(5) 0 0 0 0
Cash generated from operations(6).................. 1,901,459 2,062,138 2,046,299 2,291,177 2,216,472 2,666,179
Cash proceeds from sales........................... 0 160,000(5) 0 0 0 0
Cash generated from refinancing.................... 0 0 0 0 0 0
Cash generated from operations, sales and
refinancing....................................... 1,901,459 2,222,138 2,046,299 2,291,177 2,216,472 2,666,179
Less Cash distribution to investors................
-- from operating cash flow(7).................... 1,162,424 1,226,667 1,242,828 1,258,990 1,269,699 1,313,535
-- from sales and refinancing..................... 0 0 0 0 0 0
Cash generated (deficiency) after cash
distribution...................................... 739,035 995,471 803,471 1,032,187 946,773 1,352,644
Less special items................................. 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items................... 739,035 995,471 803,471 1,032,187 946,773 1,352,644
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)............................ $59.36 $42.22 $40.24 $54.37 $46.04 $91.13
Capital gain (loss)............................... 0 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................. 42.84 48.98 52.36 57.42 54.85 65.02
-- Return of capital.............................. 14.70 11.74 9.16 4.90 8.00 0
Source (on cash basis):
-- Sales.......................................... 0 0 0 0 0 0
-- Refinancing.................................... 0 0 0 0 0 0
-- Operations..................................... 57.54 60.72 61.52 62.32 62.85 65.02
Amount (in percentage terms) remaining invested in
program properties at the end of the last year
reported in the Table (original total acquisition
cost of properties retained divided by original
total acquisition cost of all properties in
program).......................................... 83.14% 82.74% 82.74% 82.74% 82.74% 82.74%

<CAPTION>
CPA(R):1
--------------------------
1996 1997
---------- ----------
<S> <C> <C>
Gross Revenues..................................... $4,589,145 $4,825,055
Profit (loss) on sale of properties................ (22,871)(5) 607,861(7)
Extraordinary charge on extinguishment of debt..... (255,438)(6) --
Write-down of property............................. N/A
Less:
Operating expenses................................ 388,484 1,104,473
Interest expense.................................. 1,280,995 1,062,706
Depreciation...................................... 969,570 905,816
Net income (loss) GAAP Basis....................... 1,671,787 2,359,921
Taxable income (Loss):
-- from operations................................ 1,540,197 2,256,416
-- from gain (loss) on sale....................... 153,615 630,826
Cash generated from operations(6).................. 2,826,531 2,820,490
Cash proceeds from sales........................... 355,958 1,042,200
Cash generated from refinancing.................... 0 0
Cash generated from operations, sales and
refinancing....................................... 3,182,489 3,862,690
Less Cash distribution to investors................
-- from operating cash flow(7).................... 1,417,554 1,977,926
-- from sales and refinancing..................... 0
Cash generated (deficiency) after cash
distribution...................................... 1,764,935 1,884,764
Less special items................................. 0 0
Cash generated (deficiency) after cash
distributions and special items................... 1,764,935 1,884,764
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)............................ $76.24 111.69
Capital gain (loss)............................... 7.60 31.23
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............................. 70.17 97.91
-- Return of capital.............................. 0 0
Source (on cash basis):
-- Sales.......................................... 0 0
-- Refinancing.................................... 0 0
-- Operations..................................... 70.17 97.91
Amount (in percentage terms) remaining invested in
program properties at the end of the last year
reported in the Table (original total acquisition
cost of properties retained divided by original
total acquisition cost of all properties in
program).......................................... 82.46% 81.44%
</TABLE>

A-4
<PAGE> 133

TABLE III (2 OF 10)
OPERATING RESULTS OF PRIOR PROGRAMS

Ordinary income (loss)................... $ 48.95 $ 72.11 $ (.33) $ (42.08) $ (30.78) $ (19.19)
Capital gain (loss)...................... 0 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income..................... 36.70 80.25 87.86 90.90 91.70 95.68
-- Return of capital..................... 0 0 0 0 0 0
Source (on cash basis):
-- Sales................................. 0 0 0 0 0 0
-- Refinancing........................... 0 0 0 0 0 0
-- Operations............................ 36.70 80.25 87.86 90.90 91.70 95.68
Amount (in percentage terms) remaining
invested in program properties at the end
of the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties
in program)............................... N/A N/A 100% 100% 100% 100%

<CAPTION>
CPA(R):2
------------------------------------------------------------------------------
1986 1987 1988 1989 1990 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues............................. $9,954,236 $9,694,869 $9,754,664 $10,013,889 $9,732,269 $9,756,071
Profit on sale of properties............... 920,577(1) N/A N/A N/A N/A N/A
Extraordinary charge on extinguishment of
debt...................................... (894,945)(2) N/A N/A N/A N/A N/A
Write-down of property.....................
Less:
Operating expenses........................ 393,350 480,635 489,806 540,777 685,927 691,505
Interest expense.......................... 4,916,744 4,204,623 4,074,729 3,856,045 3,771,706 3,595,406
Depreciation.............................. 314,560 475,162 475,162 479,598 480,393 478,388
Net Income-GAAP Basis...................... 4,355,214 4,534,449 4,714,967 5,137,469 4,794,243 4,990,772
Taxable Income (Loss):
-- from operations........................ 260,572 1,604,613 1,997,924 2,600,538 2,461,101 2,874,398
-- from gain on sale...................... 2,035,116(1) 0 0 0 0 0
-- from extraordinary charge.............. (239,948)(2) 0 0 0 0 0
Cash generated from operations(3).......... 4,325,850 5,084,085 5,096,066 5,502,770 5,298,252 5,389,873
Cash generated from sales.................. 5,441,434(1) 0 0 0 0 0
Cash generated from refinancing............ 0 0 0 0 0 0
Cash generated from operations, sales and
refinancing............................... 9,767,234 5,084,085 5,096,066 5,502,770 5,298,252 5,389,873
Less: Cash distribution to investors:
-- from operating cash flow(4)............ 3,691,774 3,435,000 3,506,667 3,645,000 3,773,333 3,832,222
-- from sales and refinancing............. 4,950,000 0 0 0 0 0
Cash generated after cash distributions and
special items............................. 1,125,510 1,649,085 1,589,399 1,857,770 1,524,919 1,557,651
Less: Special items........................ 0 0 0 0 0 0
Cash generated after cash distributions and
special items............................. 1,125,510 1,649,085 1,589,399 1,857,770 1,524,919 1,557,651
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)................... $ .73 $ 57.77 $ 71.93 $ 93.62 $ 88.60 $ 103.48
Capital gain (loss)...................... 73.27 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income..................... 156.79 123.66 126.24 131.22 135.84 137.96
-- Return of capital..................... 156.11 0 0 0 0 0
Source (on cash basis):
-- Sales................................. 180.00 0 0 0 0 0
-- Refinancing........................... 0 0 0 0 0 0
-- Operations............................ 132.90 123.66 126.24 131.22 135.84 137.96
Amount (in percentage terms) remaining
invested in program properties at the end
of the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties
in program)............................... 93.24% 93.24% 93.24% 93.24% 93.24% 93.24%

<CAPTION>
CPA(R):2
--------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues............................. $9,763,695 $ 6,665,727 $5,161,447 $5,185,804 $4,590,963 $4,919,703
Profit on sale of properties............... N/A 8,377,679(5) 23,451(7) N/A N/A N/A
Extraordinary charge on extinguishment of
debt...................................... N/A (520,979)(6) N/A N/A N/A N/A
Write-down of property..................... (841,889)(8) (445,551)(9)
Less:
Operating expenses........................ 983,060 846,569 911,755 718,035 735,018 857,919
Interest expense.......................... 3,337,825 2,142,199 1,593,880 1,351,797 731,843 542,304
Depreciation.............................. 476,279 501,762 501,657 519,891 499,320 519,460
Net Income-GAAP Basis...................... 4,966,531 10,190,008 1,732,055 2,596,081 2,624,782 3,000,020
Taxable Income (Loss):
-- from operations........................ 3,574,899 1,924,220 1,368,123 5,114,606 1,967,557 2,683,925
-- from gain on sale...................... 0 21,777,693 40,237 0 0 0
-- from extraordinary charge.............. 0 0 0 0 0 0
Cash generated from operations(3).......... 5,513,940 3,977,769 2,770,535 6,164,009 2,791,872 3,365,082
Cash generated from sales.................. 0 15,972,862 124,615 0 0 0
Cash generated from refinancing............ 0 0 0 0 0 0
Cash generated from operations, sales and
refinancing............................... 5,513,940 19,950,631 2,895,150 6,164,009 2,791,872 3,365,082
Less: Cash distribution to investors:
-- from operating cash flow(4)............ 3,898,333 2,691,111 1,458,890 1,491,667 2,303,728 2,167,890
-- from sales and refinancing............. 0 14,300,312 0 0 0 0
Cash generated after cash distributions and
special items............................. 1,615,607 2,959,208 1,436,260 4,672,342 488,144 1,197,192
Less: Special items........................ 0 0 0 0 0 0
Cash generated after cash distributions and
special items............................. 1,615,607 2,959,208 1,436,260 4,672,342 488,144 1,197,192
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)................... $ 128.70 $ 69.27 $ 49.25 $ 184.46 $ 70.96 $ 96.80
Capital gain (loss)...................... 0 784.00 1.45 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income..................... 140.34 366.84 52.52 53.72 83.09 78.19
-- Return of capital..................... 0 250.04 0.00 0 0 0
Source (on cash basis):
-- Sales................................. 0 520.00 0 0 0 0
-- Refinancing........................... 0 0 0 0 0 0
-- Operations............................ 140.34 96.88 52.52 53.72 83.09 78.19
Amount (in percentage terms) remaining
invested in program properties at the end
of the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties
in program)............................... 93.24% 61.97% 61.65% 61.65% 61.65% 61.65%
</TABLE>

A-5
<PAGE> 134

TABLE III (3 OF 10)

OPERATING RESULTS OF PRIOR PROGRAMS

Table III includes information showing the start-up and operational phase or
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):3
--------------------------------------------------------------------------
1981 1982 1983 1984 1985 1986
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues.......................... $173,916 $7,746,826 $8,618,753 $8,798,595 $8,792,622 $ 8,720,462
Profit on sale of properties............ N/A N/A N/A N/A N/A 540,765(1)
Extraordinary charges on extinguishment
of debt................................ N/A N/A N/A N/A N/A (1,256,013)(2)
Write-down of property.................. N/A N/A N/A N/A N/A N/A
Other income............................
Less:
Operating expenses..................... 54,011 384,169 369,246 506,660 502,561 496,570
Interest expense....................... 60,855 4,224,538 4,341,435 3,921,936 3,845,445 3,296,710
Depreciation........................... 0 0 0 0 0 20,502
Net Income-GAAP Basis................... 59,050 3,138,119 3,908,072 4,369,999 4,444,615 4,191,432
Taxable Income (Loss):
-- from operations..................... (190,312) (516,798) (194,879) 277,458 375,653 708,829
-- from gain on sale................... 0 0 0 0 0 3,373,025(1)
-- from extraordinary charge........... 0 0 0 0 0 (852,511)(2)
Cash generated from operations(3)....... 41,249 2,698,796 3,523,610 3,979,272 3,995,421 5,009,304
Cash generated from sales............... 0 0 0 0 0 5,302,208(1)
Cash generated from refinancing......... 0 0 0 0 0 0
Cash generated from other............... 0 0 0 0 0 0
Cash generated from operations, sales,
refinancing and other.................. 41,249 2,698,796 3,523,610 3,979,272 3,995,421 10,311,512
Less: Cash distribution to investors:
-- from operating cash flow(4)......... 0 1,906,688 3,388,225 3,787,592 3,889,970 4,125,001
-- from sales and refinancing.......... 0 0 0 0 0 0
-- other............................... 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions.......................... 41,249 792,108 135,385 191,680 105,451 6,186,511
Less: Special items..................... 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........ 41,249 792,108 135,385 191,680 105,451 6,186,511
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income........................ $ (25.06) $ (19.36) $ (5.79) $ 8.24 $ 11.16 $ (3.21)
Capital gain........................... 0 0 0 0 0 101.19
Cash Distributions to Investors:
Source (on GAAP basis)
-- Investment income.................. 0 71.42 100.62 112.48 116.52 122.50
-- Return of capital.................. 0 0 0 0 0 0
Source (on cash basis):
-- Sales............................... 0 0 0 0 0 0
-- Refinancing......................... 0 0 0 0 0 0
-- Other............................... 0 0 0 0 0 0
-- Operations.......................... 0 71.42 100.62 112.48 116.52 122.50
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program)................. N/A N/A 100% 100% 100% 84.41%

<CAPTION>
CPA(R):3
----------------------------------------------------------------------------
1987 1988 1989 1990 1991 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues.......................... $ 8,394,566 $8,582,478 $8,774,232 $8,713,691 $8,699,175 $8,478,263
Profit on sale of properties............ N/A N/A N/A N/A N/A N/A
Extraordinary charges on extinguishment
of debt................................ N/A N/A N/A N/A N/A N/A
Write-down of property.................. N/A N/A N/A N/A N/A N/A
Other income............................
Less:
Operating expenses..................... 583,208 568,793 622,281 713,979 855,729 1,533,036
Interest expense....................... 2,459,640 2,376,215 2,332,100 2,184,359 2,073,632 1,936,878
Depreciation........................... 108,357 108,208 108,911 108,434 108,272 108,132
Net Income-GAAP Basis................... 5,243,361 5,529,262 5,710,940 5,706,919 5,631,542 4,900,217
Taxable Income (Loss):
-- from operations..................... 2,492,141 2,938,913 3,240,014 3,295,198 3,439,197 5,452,217
-- from gain on sale................... 0 0 0 0 0 0
-- from extraordinary charge........... 0 0 0 0 0 0
Cash generated from operations(3)....... 5,458,974 5,743,427 5,749,481 5,785,928 5,712,639 5,252,425
Cash generated from sales............... 0 0 0 0 0 0
Cash generated from refinancing......... 0 0 0 0 0 0
Cash generated from other............... 0 0 0 0 0 8,533,614(5)
Cash generated from operations, sales,
refinancing and other.................. 5,458,974 5,743,427 5,749,481 5,785,928 5,712,639 13,786,039
Less: Cash distribution to investors:
-- from operating cash flow(4)......... 4,073,945 3,830,020 4,131,061 4,469,143 4,649,632 4,925,081
-- from sales and refinancing.......... 5,280,000 0 0 0 0 0
-- other............................... 0 0 0 0 0 3,333,333(5)
Cash generated (deficiency) after cash
distributions.......................... (3,894,971) 1,913,407 1,618,420 1,316,785 1,063,007 5,527,625
Less: Special items..................... 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........ (3,894,971) 1,913,407 1,618,420 1,316,785 1,063,007 5,527,625
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income........................ $ 74.01 $ 87.28 $ 96.22 $ 97.86 $ 102.13 $ 161.91
Capital gain........................... 0 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis)
-- Investment income.................. 155.71 113.74 122.68 132.72 138.08 145.52
-- Return of capital.................. 123.68 0 0 0 0 100.74
Source (on cash basis):
-- Sales............................... 160.0 0 0 0 0 0
-- Refinancing......................... 0 0 0 0 0 0
-- Other............................... 0 0 0 0 0 100.00(5)
-- Operations.......................... 119.40 113.74 122.68 132.72 138.08 146.26
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program)................. 84.41% 84.41% 84.41% 84.41% 84.41% 84.41%

<CAPTION>
CPA(R):3
-----------------------------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross Revenues.......................... $ 7,554,227 $7,391,852 $7,249,265 $5,730,082 $8,104,707
Profit on sale of properties............ N/A N/A N/A N/A N/A
Extraordinary charges on extinguishment
of debt................................ N/A N/A N/A N/A N/A
Write-down of property.................. (1,302,318)(6) (697,325)(7) (146,184)(8) N/A N/A
Other income............................ 11,499,187(9) N/A N/A
Less:
Operating expenses..................... 1,441,186 1,719,172 1,173,053 1,031,997 1,227,688
Interest expense....................... 1,734,434 1,602,175 1,255,047 75,158 17,744
Depreciation........................... 147,229 158,367 198,590 188,893 215,272
Net Income-GAAP Basis................... 2,929,060 3,214,813 15,975,567 4,434,034 6,644,003
Taxable Income (Loss):
-- from operations..................... 5,504,655 4,461,854 23,951,874 2,988,189 5,502,953
-- from gain on sale................... 0 0 157,910 0
-- from extraordinary charge........... 0 0 0
Cash generated from operations(3)....... 4,387,721 4,647,375 12,917,577 3,906,606 4,587,044
Cash generated from sales............... 0 0 5,435,869(9) 1,853,816(10) 0
Cash generated from refinancing......... 0 0
Cash generated from other............... 2,260,792 2,286,195 0 0 0
Cash generated from operations, sales,
refinancing and other.................. 6,648,513 6,933,570 18,353,446 5,760,422 4,587,044
Less: Cash distribution to investors:
-- from operating cash flow(4)......... 4,606,531 4,656,367 4,722,367 3,319,280 4,214,958
-- from sales and refinancing.......... 0 0 0 0 0
-- other............................... 0 0 8,000,000 0 0
Cash generated (deficiency) after cash
distributions.......................... 2,041,982 2,277,203 5,631,079 2,441,142 372,086
Less: Special items..................... 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........ 2,041,982 2,277,203 5,361,079 2,441,142 372,086
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income........................ $ 163.47 $ 132.50 $ 711.33 $ 88.74 $ 163.42
Capital gain........................... 0 0 0 4.69 0
Cash Distributions to Investors:
Source (on GAAP basis)
-- Investment income.................. 86.98 95.47 376.83 98.57 125.17
-- Return of capital.................. 48.83 41.82 0 0 0
Source (on cash basis):
-- Sales............................... 0 0 0 0 0
-- Refinancing......................... 0 0 0 0 0
-- Other............................... 0 0 0 0 0
-- Operations.......................... 136.80 138.28 140.24 98.57 125.17
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program)................. 84.41% 84.41% 84.41% 68.83% 68.83%
</TABLE>

A-6
<PAGE> 135

TABLE III (4 OF 10)

OPERATING RESULTS OF PRIOR PROGRAMS

Operating expenses.......................... 9,137 274,260 245,150 278,838 529,941 566,780

Interest expense............................ 5,784 3,180,356 5,453,442 5,395,023 5,149,287 4,101,592

Depreciation................................ 1,302 346,155 808,870 828,303 1,059,071 1,628,118
Net Income (Loss)-GAAP Basis................. (10,307) 3,336,069 4,468,542 4,448,309 2,470,350 2,436,860
Taxable Income (Loss):
-- from operations.......................... (2,604) 781,413 (281,447) (98,623) (402,328) (433,637)
-- from gain on sale........................ 0 0 0 0 4,047,994(1) 0
-- from extraordinary charge................ 0 0 0 0 0 0
-- other.................................... 0 0 0 0 0 0
Cash generated from operations(6)............ (3,135) 3,471,621 4,787,836 4,728,701 4,857,156 4,115,421
Cash generated from sales.................... 0 0 0 0 4,483,969(1) 0
Cash generated from refinancing.............. 0 0 0 0 0 0
Cash generated from other.................... 0 0 0 0 0 0
Cash generated from operations, sales,
refinancing and other....................... (3,135) 3,471,621 4,787,836 4,728,701 9,341,125 4,115,421
Less: Cash distribution to investors:
-- from operating cash flow(8).............. 0 2,345,537 4,565,144 4,603,376 4,639,789 4,594,265
-- from sales and refinancing............... 0 0 0 0 0 1,711,359
Cash generated (deficiency) after cash
distributions............................... 0 1,126,084 222,692 125,325 4,701,336 (2,190,203)
Less: Special items.......................... 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items............. 0 1,126,084 222,692 125,325 4,701,336 (2,190,203)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)...................... $ 0 $ 21.01 $ (6.18) $ (2.17) $ (8.84) $ (9.52)
Other....................................... 0 0 0 0 0 0
Capital gain................................ 0 0 0 0 88.94 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income........................ 0 63.06 98.18 97.73 54.28 53.53
-- Return of capital........................ 0 0 2.12 3.41 47.66 87.02
Source (on cash basis):
-- Sales.................................... 0 0 0 0 0 40.00
-- Refinancing.............................. 0 0 0 0 0 0
-- Operations............................... 0 63.06 100.30 101.14 101.94 100.55
Amount (in percentage terms) remaining
invested in program properties at the end of
the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties in
program).................................... N/A N/A 100% 100% 85.20% 85.20%

<CAPTION>
CPA(R):4
---------------------------------------------------------------------
1988 1989 1990 1991 1992
---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Gross Revenues............................... $9,117,527 $9,393,587 $ 9,694,000 $9,653,180 $9,959,144
Profit on sale of properties................. N/A N/A N/A N/A N/A
Extraordinary gain........................... N/A N/A 2,080,304(3) N/A N/A
Write-down of property....................... N/A N/A (2,080,304)(2) N/A N/A
Extraordinary charge on extinguishment of
debt........................................ (160,000)(4) (70,266)(5) N/A N/A N/A
Other........................................ N/A N/A N/A N/A (44,308)(7)
Less:
Operating expenses.......................... 538,523 614,235 752,499 790,950 1,647,627
Interest expense............................ 3,805,805 3,552,960 3,504,016 3,441,293 3,309,359
Depreciation................................ 1,468,317 1,243,008 1,207,776 1,184,801 1,259,693
Net Income (Loss)-GAAP Basis................. 3,144,882 3,913,118 4,229,709 4,236,136 3,698,157
Taxable Income (Loss):
-- from operations.......................... 561,034 1,408,950 1,518,550 1,702,996 1,737,637
-- from gain on sale........................ 0 0 0 0 0
-- from extraordinary charge................ (160,000)(4) (70,266)(5) 0 0 0
-- other.................................... 0 0 0 0 (14,801)(7)
Cash generated from operations(6)............ 4,763,309 5,289,802 5,611,039 5,479,320 5,071,063
Cash generated from sales.................... 0 0 0 0 0
Cash generated from refinancing.............. 0 0 0 0 0
Cash generated from other.................... 0 0 0 0 14,195(7)
Cash generated from operations, sales,
refinancing and other....................... 4,763,309 5,289,802 5,611,039 5,479,320 5,085,258
Less: Cash distribution to investors:
-- from operating cash flow(8).............. 4,522,360 4,564,233 4,627,954 4,729,905 4,819,116
-- from sales and refinancing............... 0 0 0 0 0
Cash generated (deficiency) after cash
distributions............................... 240,949 725,569 983,085 749,415 266,142
Less: Special items.......................... 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items............. 240,949 725,569 983,085 749,415 266,142
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)...................... $ 12.33 $ 29.41 $ 33.36 $ 37.42 $ 38.18
Other....................................... 0 0 0 0 (0.33)
Capital gain................................ 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income........................ 69.10 85.97 92.93 93.07 81.25
-- Return of capital........................ 30.26 14.31 8.75 10.85 24.63
Source (on cash basis):
-- Sales.................................... 0 0 0 0 0
-- Refinancing.............................. 0 0 0 0 0
-- Operations............................... 99.36 100.28 101.68 103.92 105.88
Amount (in percentage terms) remaining
invested in program properties at the end of
the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties in
program).................................... 85.20% 85.20% 85.20% 85.20% 85.20%

<CAPTION>
CPA(R):4
-------------------------------------------------------------------------
1993 1994 1995 1996 1997
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Gross Revenues............................... $12,450,374 $11,570,621 $11,896,324 $ 9,322,373(12) $10,225,363
Profit on sale of properties................. N/A N/A 3,330,098(10) N/A N/A
Extraordinary gain........................... 345,000(9) N/A N/A N/A N/A
Write-down of property....................... N/A N/A N/A N/A (2,316,000)(13)
Extraordinary charge on extinguishment of
debt........................................ N/A N/A N/A N/A N/A
Other........................................ N/A N/A N/A 1,118,318(11) 681,316(14)
Less:
Operating expenses.......................... 3,375,359 3,590,081 3,299,454 1,090,215 1,299,302
Interest expense............................ 2,987,868 2,396,017 2,098,857 1,515,248 847,596
Depreciation................................ 1,346,641 1,141,143 1,149,525 921,702 835,836
Net Income (Loss)-GAAP Basis................. 5,085,506 4,443,380 8,678,586 6,913,526 5,607,945
Taxable Income (Loss):
-- from operations.......................... 3,540,526 2,462,537 7,224,511 5,049,765 5,998,404
-- from gain on sale........................ 957,340 0 9,318,375 0 0
-- from extraordinary charge................ 0 0 0 0 0
-- other.................................... 0 0 0 0 0
Cash generated from operations(6)............ 6,231,586 5,772,103 6,099,480 7,167,641 7,465,721
Cash generated from sales.................... 0 0 9,477,492 0 0
Cash generated from refinancing.............. 0 0 0 0 0
Cash generated from other.................... 0 0 0 0 0
Cash generated from operations, sales,
refinancing and other....................... 6,231,586 5,772,103 15,576,972 7,167,641 7,465,721
Less: Cash distribution to investors:
-- from operating cash flow(8).............. 4,854,619 4,878,286 4,780,885 4,452,597 6,727,737
-- from sales and refinancing............... 0 0 4,321,616 0 0
Cash generated (deficiency) after cash
distributions............................... 1,376,967 893,817 6,474,471 2,715,044 737,984
Less: Special items.......................... 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items............. 1,376,967 893,817 6,474,471 2,715,044 737,984
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)...................... $ 77.79 $ 54.10 $ 158.73 $ 110.95 $ 131.79
Other....................................... 0 0 0 0 0
Capital gain................................ 21.03 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income........................ 106.66 97.62 190.68 97.83 123.21
-- Return of capital........................ 0 9.56 9.31 0 24.60
Source (on cash basis):
-- Sales.................................... 0 0 0 0 0
-- Refinancing.............................. 0 0 0 0 0
-- Operations............................... 106.66 107.18 105.04 97.83 147.81
Amount (in percentage terms) remaining
invested in program properties at the end of
the last year reported in the Table
(original total acquisition cost of
properties retained divided by original
total acquisition cost of all properties in
program).................................... 85.20% 85.20% 70.68% 70.68% 70.68%
</TABLE>

A-7
<PAGE> 136

TABLE III (5 OF 10)
OPERATING RESULTS OF PRIOR PROGRAMS

Profit (loss) on sale or disposition of
properties............................. N/A N/A N/A N/A (457,484)(1) N/A

Extraordinary charge on extinguishment
of debt................................ N/A N/A N/A N/A N/A N/A

Write-down of property.................. N/A N/A N/A (860,000)(4) N/A N/A

Less:
Operating expenses..................... 81,016 195,585 363,490 493,702 1,327,685 758,159
Interest expenses...................... 1,041 1,828,708 3,557,103 6,447,584 7,050,466 6,926,712
Depreciation........................... 0 90,662 890,342 2,300,987 2,506,914 2,637,104
Minority Interest...................... N/A N/A N/A 80,834 165,810 197,354

Net Income-GAAP Basis................... 69,155 5,577,648 4,474,450 2,673,918 2,897,209 4,542,112

Taxable Income (Loss):
-- from operations..................... 83,341 4,180,317 2,173,368 277,783 (1,015,507) 406,029
-- from gain (loss) on sale or
disposition........................... 0 0 0 0 (1,065,808) 0
-- from other.......................... 0 0 0 0 0 0

Cash generated from operations(10)...... 77,254 5,612,247 5,157,259 6,550,334 5,622,209 6,571,710

Cash generated from sales............... 0 0 0 0 500,000(1) 0

Cash generated from refinancing......... 0 0 0 0 0 0

Cash generated from operations, sales
and refinancing........................ 77,254 5,612,247 5,157,259 6,550,334 6,122,209 6,571,710

Less: Cash distribution to investors:
-- from operating cash flow(11)........ 0 5,150,600 5,324,013 5,481,771 5,535,961 5,587,744
-- from sales and refinancing.......... 0 0 0 0 0 0

Cash generated (deficiency) after cash
distributions.......................... 77,254 461,647 (166,754) 1,068,563 586,248 983,966

Less: special items.....................

Cash generated (deficiency) after cash
distributions and special items........ 77,254 461,647 (166,754) 1,068,563 586,248 983,966

Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:

Ordinary income (loss)................. $ 1.38 $ 69.43 $ 36.09 $ 4.61 $ (16.87) $ 6.74
Capital gain (loss).................... 0 0 0 0 (17.69) 0
Other.................................. 0 0 0 0 0 0

Cash Distributions to Investors:
Source (on GAAP basis):

-- Investment income................... 0 85.54 74.31 44.41 48.12 75.43
-- Return of capital................... 0 0 14.11 46.63 43.82 17.37
Source (on cash basis):
-- Sales............................... 0 0 0 0 0 0
-- Refinancing......................... 0 0 0 0 0 0
-- Operations.......................... 0 85.54 88.42 91.04 91.94 92.80

Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program.................. N/A N/A N/A N/A N/A 98.51%

<CAPTION>
CPA(R):5
-------------------------------------------------------------------------
1989 1990 1991 1992 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Gross Revenues.......................... $15,324,326 $14,912,517 $15,167,339 $18,195,423(8) $18,260,614
Other................................... N/A N/A (103,595)(5) 1,872,534 214,978(12)
Profit (loss) on sale or disposition of
properties............................. 47,319(2) N/A (35,987)(6) (488,795)(9) N/A
Extraordinary charge on extinguishment
of debt................................ N/A (32,714)(3) N/A N/A N/A
Write-down of property.................. N/A N/A (300,000)(7) N/A (323,611)(13)
Less:
Operating expenses..................... 1,305,074 1,503,721 3,354,854 6,111,874 6,417,993
Interest expenses...................... 7,052,901 6,512,534 6,042,335 5,293,044 4,941,889
Depreciation........................... 2,632,299 2,620,793 2,622,033 2,317,013 2,295,887
Minority Interest...................... 17,714 114,721 (174,657) N/A N/A
Net Income-GAAP Basis................... 4,363,657 4,128,034 2,883,192 5,857,231 4,496,212
Taxable Income (Loss):
-- from operations..................... 799,445 857,331 1,077,650 1,530,150 2,039,288
-- from gain (loss) on sale or
disposition........................... 87,421(2) 488,066 (2,674)(6) 871,676 0
-- from other.......................... 0 0 (154,918)(5) 2,617,784(8) 0
Cash generated from operations(10)...... 6,911,989 5,895,617 5,278,070 6,202,200 6,241,041
Cash generated from sales............... 239,362(2) 0 120,000(6) 0 0
Cash generated from refinancing......... 0 0 0 0 0
Cash generated from operations, sales
and refinancing........................ 7,151,351 5,895,617 5,398,070 6,202,200 6,241,041
Less: Cash distribution to investors:
-- from operating cash flow(11)........ 5,635,916 5,684,084 5,732,256 5,780,425 5,828,596
-- from sales and refinancing.......... 0 0 0 0 0
Cash generated (deficiency) after cash
distributions.......................... 1,515,435 211,533 (334,186) 421,775 412,445
Less: special items..................... 0
Cash generated (deficiency) after cash
distributions and special items........ 1,515,435 211,533 (334,186) 421,775 412,445
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)................. $ 13.28 $ 14.24 $ 17.90 $ 25.41 $ 33.87
Capital gain (loss).................... 1.45 0 (0.04) 14.48 0
Other.................................. 0 0 0 43.48 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income................... 72.47 68.56 47.88 96.00 74.67
-- Return of capital................... 21.13 25.84 47.32 0 22.13
Source (on cash basis):
-- Sales............................... 0 0 0 0 0
-- Refinancing......................... 0 0 0 0 0
-- Operations.......................... 93.60 94.40 95.20 96.00 96.80
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program.................. 98.51% 97.60% 97.45% 94.12% 94.12%

<CAPTION>
CPA(R):5
--------------------------------------------------------------
1994 1995 1996 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Gross Revenues.......................... $18,125,156 $15,768,137 $13,204,966 $ 9,749,000
Other................................... N/A N/A N/A N/A
Profit (loss) on sale or disposition of
properties............................. 1,242,614(14) 614,234(16) 5,284,165(18) 956,829(20)
Extraordinary charge on extinguishment
of debt................................ (117,619)(15) N/A N/A N/A
Write-down of property.................. 0 (1,980,550)(17) (1,300,000)(19) (1,350,000)(21)
Less:
Operating expenses..................... 7,111,014 6,927,470 6,006,397 4,176,004
Interest expenses...................... 4,518,529 3,495,872 2,075,230 1,363,680
Depreciation........................... 2,181,432 2,065,781 1,331,028 1,131,397
Minority Interest...................... N/A N/A N/A N/A
Net Income-GAAP Basis................... 5,439,186 1,912,698 7,776,476 2,685,448
Taxable Income (Loss):
-- from operations..................... 866,115 1,621,566 1,690,288 1,481,174
-- from gain (loss) on sale or
disposition........................... 10,019,470 0 8,338,765 2,927,201
-- from other.......................... 0 0 0 0
Cash generated from operations(10)...... 6,292,833 4,688,070 7,901,310 4,393,646
Cash generated from sales............... 0 1,187,362(16) 8,583,803 0
Cash generated from refinancing......... 0 0 0 0
Cash generated from operations, sales
and refinancing........................ 6,292,833 5,875,432 16,485,113 4,393,646
Less: Cash distribution to investors:
-- from operating cash flow(11)........ 5,862,314 8,054,982 4,456,949 5,175,122
-- from sales and refinancing.......... 0 0 0 792,400(18)
Cash generated (deficiency) after cash
distributions.......................... 430,519 (2,179,550) 12,028,164 (1,573,876)
Less: special items..................... 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........ 430,519 (2,179,550) 12,028,164 (1,573,876)
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)................. $ 14.87 $ 26.93 $ 28.07 $ 24.60
Capital gain (loss).................... 166.40 0 141.45 48.61
Other.................................. 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income................... 90.33 31.77 74.02 44.60
-- Return of capital................... 7.03 102.01 0 54.51
Source (on cash basis):
-- Sales............................... 0 0 0 0
-- Refinancing......................... 0 0 0 0
-- Operations.......................... 97.36 133.78 74.02 99.11
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program.................. 92.97% 81.82% 63.06% 46.45%
</TABLE>

A-8
<PAGE> 137

TABLE III (6 OF 10)

OPERATING RESULTS OF PRIOR PROGRAMS

Less: Special items.................... 0 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........ 772,456 234,939 1,084,978 785,403 785,402 885,926
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)................. $ 51.96 $ 50.54 $ 19.26 $ 23.92 $ 23.88 $ 26.23
Other.................................. 0 0 0 0 0 0
Capital gain........................... 0 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.................. 47.49 72.72 68.46 74.81 69.06 70.62
-- Return of capital.................. 0 7.85 12.98 7.49 14.20 13.99
Source (on cash basis):
-- Sales.............................. 0 0 0 0 0 0
-- Refinancing........................ 0 0 0 0 0 0
-- Operations......................... 47.49 80.57 81.44 82.30 83.26 84.61
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program)................. N/A N/A N/A 100% 100% 100%

<CAPTION>
CPA(R):6
-------------------------------------------------------------------------------
1991 1992 1993 1994 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Gross Revenues.......................... $11,406,582 $14,177,113 $15,387,180 $15,693,853 $16,737,899
Gain on sale............................ 0 0 0 0 0
Other................................... (55,783)(1) (75,211)(3) N/A N/A N/A
Extraordinary (charge) gain............. (13,559)(2) 0 N/A N/A 2,088,268(6)
Less:
Operating expenses..................... 1,078,174 2,858,645 4,706,491 5,933,070 4,942,528
Interest expense....................... 5,222,844 5,319,971 5,122,703 5,040,589 4,499,692
Depreciation........................... 1,418,968 1,668,951 1,637,678 1,621,029 1,525,011
Net Income-GAAP Basis................... 3,617,254 4,254,335 3,920,308 3,099,165 7,858,936
Taxable Income:
-- from operations..................... 1,831,848 2,227,427 2,091,787 1,156,303 7,871,636
-- from gain on sale................... 0 0 0 0 0
-- from extraordinary charge........... (13,559)(2) 0 0 0 0
-- from other.......................... (250,032)(1) 27,303(3) 0 0 0
Cash generated from operations(4)....... 5,719,005 6,066,705 5,531,994 5,094,336 11,133,036
Cash generated from sales............... 0 0 0 0 0
Cash generated from refinancing......... 870,913 2,414,076 0 0 0
Cash generated from other............... 0 17,008(3) 0 0 0
Cash generated from operations, sales,
refinancing and other.................. 6,589,918 8,497,789 5,531,994 5,094,336 11,133,036
Less: Cash distribution to investors:
-- from operating cash flow(5)......... 4,421,586 4,633,297 4,676,223 4,704,691 4,736,359
-- from sales and refinancing.......... 0 0 0 0 0
Cash generated (deficiency) after cash
distributions.......................... 2,168,332 3,864,492 855,771 389,645 6,396,677
Less: Special items.................... 0 0 0 0 0
Cash generated (deficiency) after cash
distributions and special items........ 2,168,332 3,864,492 855,771 389,645 6,396,677
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)................. $ 35.65 $ 43.67 $ 41.01 $ 22.67 $ 154.38
Other.................................. 0 0.54 0 0 0
Capital gain........................... 0 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.................. 70.91 83.40 76.85 60.76 92.89
-- Return of capital.................. 15.77 7.43 14.82 31.47 0
Source (on cash basis):
-- Sales.............................. 0 0 0 0 0
-- Refinancing........................ 0 0 0 0 0
-- Operations......................... 86.68 90.83 91.67 92.23 92.89
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program)................. 100% 100% 100% 100% 100%

<CAPTION>
CPA(R):6
------------------------------
1996 1997
----------- -----------
<S> <C> <C>
Gross Revenues.......................... $16,537,296 $17,384,088
Gain on sale............................ 70,878(7) N/A
Other................................... N/A N/A
Extraordinary (charge) gain............. N/A N/A
Less:
Operating expenses..................... 4,914,538 5,048,701
Interest expense....................... 4,003,726 3,715,143
Depreciation........................... 1,664,514 1,780,317
Net Income-GAAP Basis................... 6,025,396 6,839,927
Taxable Income:
-- from operations..................... 3,450,345 4,530,411
-- from gain on sale................... 242,713 0
-- from extraordinary charge........... 0 0
-- from other.......................... 0 0
Cash generated from operations(4)....... 7,615,526 8,075,717
Cash generated from sales............... 0 0
Cash generated from refinancing......... 0 0
Cash generated from other............... 0 0
Cash generated from operations, sales,
refinancing and other.................. 7,615,526 8,075,717
Less: Cash distribution to investors:
-- from operating cash flow(5)......... 4,880,911 7,002,505
-- from sales and refinancing..........
Cash generated (deficiency) after cash
distributions.......................... 2,734,615 1,073,212
Less: Special items.................... 0 0
Cash generated (deficiency) after cash
distributions and special items........ 2,734,615 1,073,212
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)................. $ 67.67 $ 88.85
Other.................................. 0 0
Capital gain........................... 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.................. 95.72 134.14
-- Return of capital.................. 0 3.19
Source (on cash basis):
-- Sales.............................. 0 0
-- Refinancing........................ 0 0
-- Operations......................... 95.72 137.33
Amount (in percentage terms) remaining
invested in program properties at the
end of the last year reported in the
Table (original total acquisition cost
of properties retained divided by
original total acquisition cost of all
properties in program)................. 99.79% 99.79%
</TABLE>

A-9
<PAGE> 138

TABLE III (7 OF 10)
OPERATING RESULTS OF PRIOR PROGRAMS

Table III includes information showing the start-up and operational phase
of Prior Programs, the offerings of which have been closed since December 31,
1979. This Table is designed to provide the investor with information on the
financial operations of such Prior Programs. The results shown in this Table are
in all cases for years ended December 31. THE INFORMATION PRESENTED IN THIS
TABLE SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PARTNERSHIPS. MORTGAGE FINANCING FOR THE CPA(R)
PARTNERSHIPS MAY HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR
INVESTMENT BY SUCH PARTNERSHIPS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY
ALTER CERTAIN OF THE INFORMATION PRESENTED IN THIS TABLE.
<TABLE>
<CAPTION>
CPA(R):7
----------------------------------------------------------------
1986 1987 1988 1989 1990
-------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Gross Revenues.............................................. $ 90,399 $4,119,934 $9,066,142 $14,071,843 $13,725,684
Profit (loss) on sale of properties......................... N/A N/A N/A N/A 58,172(1)
Gain on sale of securities.................................. N/A N/A 1,766,185(3) 48,158(3) 69,544(3)
Extraordinary gain charge...................................
Write-down of property...................................... N/A N/A N/A N/A (500,000)(2)
Other....................................................... N/A N/A N/A N/A N/A
Less:
Operating expenses......................................... 46,413 326,846 1,848,463 5,576,552 6,194,008
Interest expense........................................... 22,911 1,389,385 3,479,631 4,657,478 4,718,573
Depreciation............................................... 0 131,567 1,009,247 1,422,116 1,567,896
Net Income-GAAP Basis....................................... 21,075 2,272,136 4,494,986 2,463,855 872,923
Taxable Income (Loss):
-- from operations......................................... (51,877) 1,203,013 1,585,180 1,195,514 3,689
-- from gain (loss) on sales............................... 0 0 1,766,185(3) 48,158(3) 127,716(1)(3)
-- other................................................... 0 0 0 0 0
Cash generated from operations.............................. 1,550,648 1,115,274 4,136,538 3,745,289 3,153,131
Cash generated from sales................................... 0 0 1,766,185(3) 48,158(3) 245,324
Cash generated from refinancing............................. 0 0 0 0 0
Cash generated from other................................... 0 0 0 0 0
Cash generated from operations, sales, refinancing and
other...................................................... 1,550,648 1,115,274 5,902,723 3,793,447 3,398,455
Less: Cash distribution to investors:
-- from operating cash flow(6)............................. 0 1,363,271 3,902,233 3,940,765 3,992,781
-- from sales and refinancing.............................. 0 0 0 0 0
Cash generated (deficiency) after cash distributions........ 1,550,648 (247,997) 2,000,490 (147,318) (594,326)
Less: Special items......................................... 0 0 0 0 0
Cash generated (deficiency) after cash distributions and
special items.............................................. 1,550,648 (247,997) 2,000,490 (147,318) (594,326)
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................... $ (4.29) $ 24.98 $ 32.91 $ 24.82 $ .08
Other...................................................... 0 0 0 0 0
Capital gain............................................... 0 0 36.67 1.00 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................... 0 60.60 81.02 51.16 18.12
-- Return of capital....................................... 0 0 0 30.66 64.78
Source (on cash basis):
-- Sales................................................... 0 0 0 0 0
-- Refinancing............................................. 0 0 0 0 0
-- Operations.............................................. 0 60.60 81.02 81.82 82.90
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the
Table (original total acquisition cost of properties
retained divided by original total acquisition cost of
all properties in program)............................... N/A N/A N/A 100% 99.86%

<CAPTION>
CPA(R):7
-------------------------------------------------------------
1991 1992 1993 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Gross Revenues.............................................. $13,648,275 $14,502,032 $12,243,029 $13,840,052
Profit (loss) on sale of properties......................... 54,197(4) N/A (552,383)(8) 7,814,474(10)
Gain on sale of securities.................................. N/A N/A N/A N/A
Extraordinary gain charge................................... 879,433(12) (511,503)
Write-down of property...................................... N/A N/A (3,303,228)(9) (641,731)(11)
Other....................................................... N/A (141,723)(5) 435,106(3) 986,155
Less:
Operating expenses......................................... 6,170,575 6,404,695 4,485,628 4,336,235
Interest expense........................................... 4,471,097 4,155,956 3,324,398 3,537,640
Depreciation............................................... 1,607,889 1,616,335 1,647,397 1,619,726
Net Income-GAAP Basis....................................... 1,452,911 2,183,323 244,534 11,993,846
Taxable Income (Loss):
-- from operations......................................... 746,150 1,534,247 11,218,042 2,452,425
-- from gain (loss) on sales............................... 54,197(4) 0 2,093,467 10,460,324
-- other................................................... 0 51,875(5) 283,740 682,500
Cash generated from operations.............................. 3,303,198 4,489,865 4,135,048 5,347,231
Cash generated from sales................................... 183,430(4) 0 283,740 14,662,004
Cash generated from refinancing............................. 978,087 0 1,047,890 700,000
Cash generated from other................................... 0 32,313(5) 3,578 38,281
Cash generated from operations, sales, refinancing and
other...................................................... 4,464,715 4,522,178 5,470,256 20,747,516
Less: Cash distribution to investors:
-- from operating cash flow(6)............................. 3,303,198 3,388,324(7) 2,948,590 3,246,729
-- from sales and refinancing.............................. 503,673 0 0 0
Cash generated (deficiency) after cash distributions........ 657,844 1,133,854 2,521,666 17,500,787
Less: Special items......................................... 0 0 0 0
Cash generated (deficiency) after cash distributions and
special items.............................................. 657,844 1,133,854 2,521,666 17,500,787
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................... $ 15.49 $ 31.85 $ 232.91 $ 50.92
Other...................................................... 0 1.08 5.89 14.17
Capital gain............................................... 0 0 43.47 217.18
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................... 30.17 45.33 5.08 67.41
-- Return of capital....................................... 53.03 20.86 56.14 0
Source (on cash basis):
-- Sales................................................... 0 0 0 0
-- Refinancing............................................. 10.46 0 0 0
-- Operations.............................................. 72.74 66.19 61.22 67.41
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the
Table (original total acquisition cost of properties
retained divided by original total acquisition cost of
all properties in program)............................... 99.70% 99.70% 97.86% 83.50%

<CAPTION>
CPA(R):7
-----------------------------------------------
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Gross Revenues.............................................. $12,196,252 $12,731,328 $12,706,396
Profit (loss) on sale of properties......................... 1,019,362(13) 74,729(17) N/A
Gain on sale of securities.................................. 1,323,858(13) N/A N/A
Extraordinary gain charge................................... -- N/A
Write-down of property...................................... (319,685)(14) -- (139,999)(18)
Other....................................................... 111,226(15) (128,879)(15) (128,649)(19)
Less:
Operating expenses......................................... 4,986,585 5,181,249 5,921,214
Interest expense........................................... 2,456,129 1,942,737 1,868,189
Depreciation............................................... 1,361,952 1,154,088 1,213,286
Net Income-GAAP Basis....................................... 5,526,347 4,399,104 3,435,066
Taxable Income (Loss):
-- from operations......................................... 3,451,813 3,856,378 3,268,674
-- from gain (loss) on sales............................... 0 (188,980) (144,260)
-- other................................................... 0 0 0
Cash generated from operations.............................. 5,089,776 5,499,073 4,682,499
Cash generated from sales................................... 1,546,019(13) 617,867(17) 200,000
Cash generated from refinancing............................. -- --
Cash generated from other................................... 31,457(16) 27,761(16) 30,787
Cash generated from operations, sales, refinancing and
other...................................................... 6,667,252 6,144,701 4,913,286
Less: Cash distribution to investors:
-- from operating cash flow(6)............................. 10,434,626 3,483,017 3,751,664
-- from sales and refinancing.............................. 0 0 0
Cash generated (deficiency) after cash distributions........ (3,767,490) 2,661,684 1,161,622
Less: Special items......................................... 0 0
Cash generated (deficiency) after cash distributions and
special items.............................................. (3,767,490) 2,661,684 1,161,622
Tax and Distribution Data Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss)..................................... $ 71.77 $ 80.18 $ 67.95
Other...................................................... 0 0 (3.00)
Capital gain............................................... 0 (4.14) 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income....................................... 114.82 91.47 71.42
-- Return of capital....................................... 101.98 0 6.58
Source (on cash basis):
-- Sales................................................... 0 0
-- Refinancing............................................. 0 0
-- Operations.............................................. 216.80 72.42 78.00
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the
Table (original total acquisition cost of properties
retained divided by original total acquisition cost of
all properties in program)............................... 73.82% 73.16% 73.16%
</TABLE>

A-10
<PAGE> 139

TABLE III (8 OF 10)

OPERATING RESULTS OF PRIOR PROGRAMS

<TABLE>
<CAPTION>
CPA(R):8
------------------------------------------------------------------------------------
1988 1989 1990 1991 1992 1993
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues..................... $2,877,969 $11,744,379 $14,120,755 $14,396,115 $15,176,928 $18,060,581
Profit on sale of properties....... N/A N/A N/A 1,736(1) N/A N/A
Other.............................. N/A N/A N/A N/A (51,219)(2) 21,111
Extraordinary charge............... N/A N/A N/A N/A N/A N/A
Less:
Operating expenses................ 322,625 934,022 912,831 1,214,634 2,227,334 4,151,151
Interest expense.................. 939,460 4,871,609 6,917,234 7,095,848 6,943,303 6,737,293
Depreciation...................... 214,618 877,918 1,204,389 1,490,532 1,642,518 1,935,624
Minority Interest................. N/A N/A N/A N/A N/A N/A
Net Income-GAAP Basis.............. 1,401,266 5,060,830 5,086,301 4,596,837 4,312,554 5,257,624
Taxable Income (Loss):
-- from operations................ 1,043,085 3,268,042 2,910,667 2,819,692 3,009,471 5,060,536
-- from gain on sale..............
-- from other..................... 0 0 0 1,736(1) (17,110)(2) 0
-- from extraordinary charge...... 0 0 0 0 0 0
Cash generated from operations..... 1,697,043 5,752,461 6,303,966 6,285,116 6,321,159 8,376,844
Cash generated from sales.......... 0 0 0 7,991(1) 0 0
Cash generated from refinancing.... 0 0 0 0 0 0
Cash generated from other.......... 0 0 0 0 16,408(2) 253,858
Cash generated from operations,
sales, refinancing and other...... 1,697,043 5,752,461 6,303,966 6,293,107 6,337,567 8,630,702
Less: Cash distribution to
investors:
-- from operating cash flow(4).... 728,786 5,575,793 6,165,188 6,225,409 6,285,600 6,327,785
-- from sales and refinancing..... 0 0 0 0 0 0
Cash generated (deficiency) after
cash distributions................ 968,257 176,668 138,778 67,698 51,697 2,302,917
Less: Special items................ 0 0 0 0 0 0
Cash generated (deficiency) after
cash distributions and special
items............................. 968,257 176,668 138,778 67,698 51,697 2,302,917
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss).......... $ 16.97 $ 43.41 $ 38.67 $ 37.46 $ 39.98 $ 67.23
Other........................... 0 0 0 0.02(1) (0.23)(2) 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............ 20.91 67.23 67.57 61.07 57.29 69.84
-- Return of capital............ 0 6.84 14.33 21.63 26.21 14.22
Source (on cash basis):
-- Sales........................ 0 0 0 0 0 0
-- Refinancing.................. 0 0 0 0 0 0
-- Operations................... 20.91 74.07 81.90 82.70 83.50 84.06
Amount (in percentage terms)
remaining invested in program
properties at the end of the last
year reported in the Table
(original total acquisition cost
of properties retained divided by
original total acquisition cost of
all properties in program)........ N/A N/A 100% 99.99% 99.99% 99.99%

<CAPTION>
CPA(R):8
-----------------------------------------------------------
1994 1995 1996 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Gross Revenues..................... $18,804,769 $19,886,284 $16,207,400(5) $14,927,898
Profit on sale of properties....... N/A N/A 21,697(6) N/A
Other.............................. 83,736 (62,359)(4) 1,239,400(4) 738,979(7)
Extraordinary charge............... (120,000)(3) N/A N/A N/A
Less:
Operating expenses................ 4,445,083 3,774,470 1,242,655 1,918,771
Interest expense.................. 6,266,275 5,799,127 5,232,928 4,543,266
Depreciation...................... 1,997,946 1,912,503 1,539,737 1,325,929
Minority Interest................. N/A N/A N/A N/A
Net Income-GAAP Basis.............. 5,892,029 8,337,825 9,453,177 7,878,911
Taxable Income (Loss):
-- from operations................ 4,565,116 7,475,178 7,792,097 6,578,096
-- from gain on sale.............. 50,641 0
-- from other..................... 0 0 0 0
-- from extraordinary charge...... 0 0 0 0
Cash generated from operations..... 8,627,436 10,271,234 10,947,671 9,261,145
Cash generated from sales.......... 0 154,499 0
Cash generated from refinancing.... 0 0 0 0
Cash generated from other.......... 289,805 282,992(4) 161,795(4) 366,663
Cash generated from operations,
sales, refinancing and other...... 8,917,241 10,554,226 11,263,965 9,627,808
Less: Cash distribution to
investors:
-- from operating cash flow(4).... 6,357,899 6,413,927 6,549,558 7,357,886
-- from sales and refinancing..... 0 0 0 0
Cash generated (deficiency) after
cash distributions................ 2,559,342 4,140,299 4,714,407 2,269,922
Less: Special items................ 0 0 0 0
Cash generated (deficiency) after
cash distributions and special
items............................. 2,559,342 4,140,299 4,714,407 2,269,922
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss).......... $ 60.64 $ 99.55 $ 103.77 $ 87.60
Other........................... 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income............ 78.27 85.34 87.22 97.99
-- Return of capital............ 6.19 0 0 0
Source (on cash basis):
-- Sales........................ 0 0 0 0
-- Refinancing.................. 0 0 0 0
-- Operations................... 84.46 85.34 87.22 97.99
Amount (in percentage terms)
remaining invested in program
properties at the end of the last
year reported in the Table
(original total acquisition cost
of properties retained divided by
original total acquisition cost of
all properties in program)........ 97.69% 97.69% 97.25% 97.25%
</TABLE>

A-11
<PAGE> 140

TABLE III (9 OF 10)
OPERATING RESULTS OF PRIOR PROGRAMS
Table III includes information showing the start-up and operational phase of
Prior Programs, the offerings of which have been closed since December 31, 1979.
This Table is designed to provide the investor with information on the financial
operations of such Prior Programs. The results shown in this Table are in all
cases for years ended December 31. THE INFORMATION PRESENTED IN THIS TABLE
SHOULD NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE
COMPANY. PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY
OWNERSHIP IN THE CPA(R) PROGRAMS. MORTGAGE FINANCING FOR THE CPA(R) PROGRAMS MAY
HEREAFTER OCCUR WHICH WOULD MAKE AVAILABLE ADDITIONAL FUNDS FOR INVESTMENT BY
SUCH PROGRAMS. ANY ADDITIONAL INVESTMENTS COULD SIGNIFICANTLY ALTER CERTAIN OF
THE INFORMATION PRESENTED IN THIS TABLE.

<TABLE>
<CAPTION>
CPA(R):9
------------------------------------------------------------------
1989 1990 1991 1992 1993
---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Gross Revenues.............. $2,543,943 $10,284,029 $12,514,907 $12,280,669 $12,216,612
Profit on sale of
properties.................. N/A N/A 1,731(1) N/A N/A
Other....................... N/A N/A N/A N/A 658,052
Write-down of property......
Extraordinary charge........ N/A N/A N/A N/A N/A
Less:
Operating expenses......... 432,917 808,315 887,820 1,308,664 963,533
Interest expense........... 1,122,585 5,063,322 6,631,202 6,425,597 6,347,577
Depreciation............... 29,901 1,141,461 1,697,599 1,697,599 1,697,599
Minority Interest.......... N/A N/A N/A N/A N/A
Net Income-GAAP Basis....... 958,540 3,270,931 3,300,017 2,848,809 3,865,955
Taxable Income (Loss):
-- from operations......... 710,320 2,624,917 2,816,278 2,612,003 3,316,011
-- from gain on sale.......
-- from other.............. 0 0 1,731(1) 0 0
-- from extraordinary
charge.................... 0 0 0 0 0
Cash generated from
operations................. 1,784,343 3,895,420 5,662,385 5,211,896 5,906,190
Cash generated from sales... 0 0 1,897 0 522,878
Cash generated from
refinancing................ 0 0 0 0 0
Cash generated from other... 0 0 0 0 0
Cash generated from
operations, sales,
refinancing and other...... 1,784,343 3,895,420 5,664,282 5,211,896 6,429,068
Less: Cash distribution to
investors:
-- from operating cash
flow(4)................... 551,330 4,802,863 5,476,956 5,526,795 5,562,850
-- from sales and
refinancing............... 0 0 0 0 0
Cash generated (deficiency)
after cash distributions... 1,233,013 (907,443) 187,326 (314,899) 866,218
Less: Special items......... 0 0 0 0 0
Cash generated (deficiency)
after cash distributions
and special items.......... 1,233,013 (907,443) 187,326 (314,899) 866,218
Tax and Distribution Data
Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).... $ 12.64 $ 39.38 $ 42.30 $ 39.24 $ 49.81
Capital gain..............
Other..................... 0 0 0.03(1) 0 0
Cash Distributions to
Investors:
Source (on GAAP basis):
-- Investment income...... 20.12 49.07 49.57 42.79 58.07
-- Return of capital...... 0 22.98 32.65 40.23 25.49
Source (on cash basis):

<CAPTION>
CPA(R):9 CPA(R):10
------------------------------------------------------- ---------------------------------------
1994 1995 1996 1997 1990 1991 1992
----------- ----------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross Revenues.............. $11,612,360 $11,946,610 $12,074,578 $11,986,186 $1,783,676 $11,169,869 $15,889,968
Profit on sale of
properties.................. N/A N/A 45,066(11) N/A N/A N/A N/A
Other....................... 669,020 (535,337)(6) 658,416(9) 687,423(9) N/A N/A N/A
Write-down of property...... N/A
Extraordinary charge........ (480,000)(4) N/A N/A N/A N/A (40,818)(2) N/A
Less:
Operating expenses......... 949,925 998,762 564,905 1,415,642 393,287 1,358,840 2,241,255
Interest expense........... 5,726,296 5,525,604 5,360,760 5,121,709 711,223 5,149,717 7,460,861
Depreciation............... 1,697,599 1,697,599 1,677,253 1,450,319 230,176 1,242,512 1,756,126
Minority Interest.......... N/A N/A N/A 0 72,594 492,191 570,880
Net Income-GAAP Basis....... 3,427,560 3,189,308 5,175,142 4,685,939 376,396 2,885,791 3,860,846
Taxable Income (Loss):
-- from operations......... 3,030,197 3,805,214 4,431,434 4,410,918 452,075 2,958,235 3,059,213
-- from gain on sale....... 106,024 (1,037,083)
-- from other.............. 0 0 0 0 0 0 0
-- from extraordinary
charge.................... 0 0 0 0 0 (40,818)(2) 0
Cash generated from
operations................. 5,807,477 5,921,560 6,162,302 6,568,323 496,208 4,881,135 6,071,495
Cash generated from sales... 0 0 324,126(11) 0 0 0 0
Cash generated from
refinancing................ 0 0 0 0 0 0 0
Cash generated from other... 484,044 463,274(7) 388,329(7) 350,364 0 0 0
Cash generated from
operations, sales,
refinancing and other...... 6,291,521 6,384,834 6,874,757 6,918,687 496,208 4,881,135 6,071,495
Less: Cash distribution to
investors:
-- from operating cash
flow(4)................... 5,589,709 5,616,322 5,643,736 6,779,152 0 4,266,821 5,860,479
-- from sales and
refinancing............... 0 0 0 0 0 0 0
Cash generated (deficiency)
after cash distributions... 701,812 768,512 1,231,021 139,535 496,208 614,314 211,016
Less: Special items......... 0 0 0 0 0 0 0
Cash generated (deficiency)
after cash distributions
and special items.......... 701,812 768,512 1,231,021 139,535 496,208 614,314 211,016
Tax and Distribution Data
Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).... $ 45.51 $ 57.16 $ 66.56 $ 66.25 $ 9.38 $ 40.42 $ 42.39
Capital gain.............. 0 (15.58)
Other..................... 0 0 0 0 0 0.00 0
Cash Distributions to
Investors:
Source (on GAAP basis):
-- Investment income...... 51.48 47.90 77.73 70.38 0 45.13 53.49
-- Return of capital...... 32.48 36.45 7.04 31.44 0 21.60 27.71
Source (on cash basis):

<CAPTION>
CPA(R):10
-------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues.............. $16,128,694 $16,386,307 $16,131,750 $15,505,748 $14,665,622 14,462,401
Profit on sale of
properties.................. N/A 1,177,284(5) N/A 1,051,823(13) (362,038)(14)(16) N/A
Other....................... 1,478,086 1,529,736 1,595,406(9) 1,718,797(9) 1,806,760(9) 1,908,256(9)
Write-down of property...... (7,519,431)(8) (1,753,139)(12) N/A N/A
Extraordinary charge........ N/A (253,902) 1,638,375(17)
Less:
Operating expenses......... 2,511,268 2,894,710 2,887,021 3,030,780 3,850,490(15) 3,719,149
Interest expense........... 8,082,223 8,151,222 8,310,440 7,911,209 3,277,006 6,130,144
Depreciation............... 1,944,589 1,945,769 1,967,631 2,007,557 6,467,266 2,043,223
Minority Interest.......... 587,472 599,839 (1,881,218) 583,283 2,023,890 636,617
Net Income-GAAP Basis....... 4,481,228 5,247,885 (1,076,149) 2,990,400 607,472 5,479,899
Taxable Income (Loss):
-- from operations......... 2,697,330 2,618,952 3,778,032 3,529,835 7,585,200 5,169,310
-- from gain on sale....... 129,811 6,100,391 0
-- from other.............. 0 823,905 0 0 0
-- from extraordinary
charge.................... 0 0 0 0 0 0
Cash generated from
operations................. 6,284,822 6,311,466 6,263,624 6,656,840 6,481,196 6,226,328
Cash generated from sales... 0 0 5,122,501(10) 7,781,582(13) 1,480,259(14) N/A
Cash generated from
refinancing................ 0 0 0 0 0 0
Cash generated from other... 0 0 0 0 0 0
Cash generated from
operations, sales,
refinancing and other...... 6,284,822 6,311,466 11,386,125 14,438,422 7,961,455 6,226,328
Less: Cash distribution to
investors:
-- from operating cash
flow(4)................... 5,916,386 5,950,669 5,975,481 5,981,514 5,294,000 5,231,589
-- from sales and
refinancing............... 0 0 0 0 0 0
Cash generated (deficiency)
after cash distributions... 368,436 360,797 5,410,644 8,456,908 2,667,455 994,739
Less: Special items......... 0 0 0 0 0 0
Cash generated (deficiency)
after cash distributions
and special items.......... 368,436 360,797 5,410,644 8,456,908 2,667,455 994,739
Tax and Distribution Data
Per $1000 Invested
Federal Income Tax Results:
Ordinary income (loss).... $ 37.37 $ 36.29 $ 52.35 $ 48.98 $ 84.65 $ 67.82
Capital gain.............. 1.80 0 0
Other..................... 0 11.42 0 0 0 0
Cash Distributions to
Investors:
Source (on GAAP basis):
-- Investment income...... 62.09 72.71 (14.93) 41.50 73.46 68.84
-- Return of capital...... 19.88 9.74 97.81 41.50 0 0
Source (on cash basis):
</TABLE>

A-12
<PAGE> 141

<TABLE>
<CAPTION>
CPA(R):9
------------------------------------------------------------------
1989 1990 1991 1992 1993
---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
- -- Sales.................... 0 0 0 0 0
-- Refinancing............ 0 0 0 0 0
-- Operations............. 20.12 72.05 82.22 83.02 83.56
Amount (in percentage terms)
remaining invested in
program properties at the
end of the last year
reported in the Table
(original total acquisition
cost of properties retained
divided by original total
acquisition cost of all
properties in program)..... N/A N/A 99.99% 99.99% 99.99%

A-13
<PAGE> 142

TABLE III (10 OF 10)
OPERATING RESULTS OF PRIOR PROGRAMS

<TABLE>
<CAPTION>
CIP(R)
---------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues..................... $ 92,097 $5,306,275 $17,637,235 $25,958,329 $29,238,322 $32,546,638
Profit (loss) on sale of
properties......................... NA 1,535,763(2) 0 (7,630)(6)
Other.............................. 1,478,086 1,613,451 2,800,337(4) 3,633,869(4)(7)
Extraordinary charge............... NA NA (401,269)(3) (275,000)(3)
Write-down of property............. (1,753,455)
Less:
Operating expenses................ 207,640 1,638,870 3,456,274 4,490,683 5,654,751 6,022,323
Interest expense.................. 22,790 1,338,083 6,652,011 11,027,689 13,512,254 14,241,203
Depreciation...................... 9,799 312,609 1,018,886 1,514,114 2,493,366 2,968,173
Minority Interest................. 0 459,583 748,841 766,582
Net Income (Loss) -- GAAP Basis.... (148,132) 2,016,713 7,990,823 11,615,474 9,228,178 10,146,141
Taxable Income (Loss):
-- from gain on sale..............
-- from operations................ (148,132) 1,880,687 6,450,406 7,806,855 9,638,818 10,048,321
-- from other..................... 0 0 0 656,796
-- from extraordinary charge...... 0 0 0 0
Cash generated from operations..... 73,399 2,913,159 0 12,086,809 13,008,549 15,346,178
Cash generated from sales.......... 0 12,008,853 5,927,217(5) 2,044,260(6)
Cash generated from refinancing.... 0 160,000 --
Cash generated from other.......... 0 0 2,003,099(4) 835,243(7)
Cash generated from operations,
sales, refinancing and other...... 73,399 0 10,717,806 24,255,662 20,938,865 18,225,681
Less: Cash distribution to
investors:
-- from operating cash flow(1).... 2,915,819 8,122,156 11,358,858 11,452,669 12,488,221
-- from sales and refinancing..... 0 0 0 0
Cash generated (deficiency) after
cash distributions................ 73,399 (2,660) 2,595,650 12,896,804 9,486,196 5,737,460
Less: Special items................ 0 0 0 0
Cash generated (deficiency) after
cash distributions and special
items............................. 73,399 (2,660) 2,595,650 12,896,804 9,486,196 5,737,460
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)............ $ (84.90) $ 29.24 $ 52.14 $ 55.10 $ 68.09 $ 63.43
Capital Gain...................... 4.15
Other............................. 0 0 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............. 31.35 64.59 80.17 65.19 64.05
-- Return of capital.............. 13.98 1.06 0 15.71 14.79
Source (on cash basis):
-- Sales.......................... 0 0 0 0
-- Refinancing.................... 0 0 0 0
-- Operations..................... 45.33 65.65 80.17 80.90 78.84
Amount (in percentage terms)
remaining invested in program
properties at the end of the last
year reported in the Table
(original total acquisition cost
of properties retained divided by
original total acquisition cost of
all properties in program)........ N/A N/A N/A N/A N/A N/A

<CAPTION>
CIP(R)
-------------------------------
1997 1998
---- ----
<S> <C> <C>
Gross Revenues..................... $34,247,395 $35,043,910
Profit (loss) on sale of
properties......................... (343,963)(8)(10) N/A
Other.............................. 3,109,120(4) 3,264,738(11)
Extraordinary charge............... 427,448(9) 1,638,375(12)
Write-down of property............. N/A
Less:
Operating expenses................ 7,942,880 8,285,568
Interest expense.................. 14,202,295 13,542,952
Depreciation...................... 3,435,128 3,577,549
Minority Interest................. 773,317 809,309
Net Income (Loss) -- GAAP Basis.... 11,086,326 13,731,645
Taxable Income (Loss):
-- from gain on sale.............. 81,144 0
-- from operations................ 11,157,568 13,630,377
-- from other..................... 0 0
-- from extraordinary charge...... 0 0
Cash generated from operations..... 14,953,605 18,043,726
Cash generated from sales.......... 1,194,272(8) N/A
Cash generated from refinancing.... -- 0
Cash generated from other.......... -- 0
Cash generated from operations,
sales, refinancing and other...... 16,147,877 18,043,726
Less: Cash distribution to
investors:
-- from operating cash flow(1).... 13,681,539 14,957,641
-- from sales and refinancing..... 0 0
Cash generated (deficiency) after
cash distributions................ 2,466,338
Less: Special items................ 0
Cash generated (deficiency) after
cash distributions and special
items............................. 2,466,338 3,086,085
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)............ $ 64.87 $ 65.66
Capital Gain...................... .47 0
Other............................. 0 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............. 64.46 66.15
-- Return of capital.............. 15.09 5.91
Source (on cash basis):
-- Sales.......................... 0 0
-- Refinancing.................... 0 0
-- Operations..................... 79.55 72.05
Amount (in percentage terms)
remaining invested in program
properties at the end of the last
year reported in the Table
(original total acquisition cost
of properties retained divided by
original total acquisition cost of
all properties in program)........ N/A N/A

<CAPTION>
CPA(R):12
---------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross Revenues..................... $ 2,558 $465,327 $3,993,647 $11,433,627 $ 25,313,419 $34,563,142
Profit (loss) on sale of
properties......................... -- N/A
Other.............................. 554,571 1,322,990(11) 2,042,400(11) 2,086,993(11) 2,178,813
Extraordinary charge............... -- (379,246)(13)
Write-down of property............. -- N/A (4,281,421)(14)
Less:
Operating expenses................ 5,211 900,393 1,551,098 2,792,846 5,074,248 6,664,488
Interest expense.................. 147,256 1,260,189 3,525,774 6,499,865 8,557,890
Depreciation...................... 390,307 947,206 3,022,683 5,160,001
Minority Interest................. 0
Net Income (Loss) -- GAAP Basis.... (2,653) (27,751) 2,115,043 6,210,201 12,803,616 11,698,909
Taxable Income (Loss):
-- from gain on sale.............. -- 6,900 0
-- from operations................ (2,653) 390,164 2,375,613 5,670,787 15,389,092 15,794,247
-- from other..................... 0
-- from extraordinary charge...... --
Cash generated from operations..... 2,807 591,308 3,661,087 7,747,104 19,955,591 21,781,298
Cash generated from sales.......... 1,375,000(11) -- 138,960,203 N/A
Cash generated from refinancing.... 7,042,051
Cash generated from other.......... 0
Cash generated from operations,
sales, refinancing and other...... 2,807 591,308 5,036,087 7,747,104 158,915,794 28,823,349
Less: Cash distribution to
investors:
-- from operating cash flow(1).... 2,350,687 6,779,669 15,081,819 23,027,690
-- from sales and refinancing..... -- -- 0
Cash generated (deficiency) after
cash distributions................ 2,807 591,308 2,685,400 967,435 143,833,975
Less: Special items................ --
Cash generated (deficiency) after
cash distributions and special
items............................. 2,807 591,308 2,685,400 967,435 143,833,975 5,795,659
Tax and Distribution Data Per $1000
Invested
Federal Income Tax Results:
Ordinary income (loss)............ $ (.13) $ 14.36 $ 59.14 $ 54.71 $ 54.44 $ 55.25
Capital Gain...................... .02 0
Other............................. 0
Cash Distributions to Investors:
Source (on GAAP basis):
-- Investment income.............. $ 52.66 $ 59.91 $ 45.30 40.92
-- Return of capital.............. 5.87 5.49 8.06 39.63
Source (on cash basis):
-- Sales.......................... 0
-- Refinancing.................... 0
-- Operations..................... 58.53 65.40 53.36 80.55
Amount (in percentage terms)
remaining invested in program
properties at the end of the last
year reported in the Table
(original total acquisition cost
of properties retained divided by
original total acquisition cost of
all properties in program)........ N/A N/A N/A N/A N/A N/A
</TABLE>

A-14
<PAGE> 143

FOOTNOTES TO CPA(R):1

(1) Results from the sale of a one acre portion of the land which was a part of
the property net leased to Varo, Inc. The net proceeds from the sale of this
land were applied to repay a portion of the outstanding principal balance of
the mortgage loan to CPA(R):1 used to finance the acquisition of the
Property.

(2) Results from the sale of 11.37 acres of land which was a part of the
property net leased to the Gap Stores, Inc.

(3) Represents loss on disposition of the 2400 Industrial Lane Property as a
result of the transfer of the Partnership's interest in the Property.

(4) Represents write-down of the 2400 Industrial Lane Property.

(5) Results from the sale of properties net leased to Kobacker Stores, Inc.

(6) Result of refinancing mortgage loan on property leased to the Gap Inc.

(7) Results from the sale of the property net leased to Winn-Dixie Stores, Inc.

(8) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS, No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects of
changes primarily in accrued liabilities, receivables and other assets are
taken into account but other items such as principal amortization of loans
are not included. Cash from operations pursuant to the Statement of Changes
in Financial Position includes the effect of loan amortization, but excludes
the effects of changes in accrued liabilities, receivables and other assets.

(9) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.

FOOTNOTES TO CPA(R):2

(1) Results from the sale of 3,441 square feet of land net leased to G.D. Searle
& Co. and sale of the property net leased to General Refractories Company.

(2) Represents unamortized balance of deferred charges in connection with
refinancing of mortgage loans on properties leased to Heekin Can Inc., Paper
Corporation of America and Gibson Greeting Cards, Inc.

(3) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects of
changes primarily in accrued liabilities, receivables and other assets are
taken into account but other items such as principal amortization of loans
are not included. Cash from operations pursuant to the Statement of Changes
in Financial Position includes the effect of loan amortization, but excludes
the effects of changes in accrued liabilities, receivables and other assets.

(4) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.

(5) Results from the sale of properties leased to Heekin Can, Inc.

(6) In connection with the sale of the Heekin properties, CPA(R):2 incurred an
extraordinary charge upon paying off the related mortgage loan.

(7) Results from the sale of property in Hammond, Louisiana leased to G.D.
Searle and Company.

(8) Represents write-down of the Moorestown, N.J. property.

(9) Represents write-down of the Reno, Nevada property.

FOOTNOTES TO CPA(R):3

(1) Results from the sale of properties net leased to Commodities Corporation
and Knudsen Corporation.

(2) Represents unamortized balance of deferred charges in connection with
refinancing of mortgage loan on property net leased to Gibson Greeting
Cards, Inc. and pay-off of mortgage loan on property net leased to The
Leslie Fay Company.

(3) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS. No. 95. In
determining Cash from Operations pursuant to the Statement of Cash Flows,
the effects of changes primarily in accrued liabilities, receivables and
other assets are taken into account but other items such as principal
amortization of loans are not included. Cash from operations pursuant to
the Statement of Changes in Financial Position includes the effect of loan
amortization, but excludes the effects of changes in accrued liabilities,
receivables and other assets.

(4) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.

A-15
<PAGE> 144

(5) Represents deposit received from Leslie Fay Co. in the amount of $8,533,614
for partial payment due under a purchase option for property it leases in
Wilkes Barre, Pennsylvania. $3,333,333 of this amount was distributed to
partners in July 1992.

(6) Represents write-down of the Moorestown, N.J. property.

(7) Represents write-down of the Reno, Nevada property.

(8) Represents write-down of the Leslie Fay property to net sales proceeds.

(9) Results of settlement with Leslie Fay.

(10) Represents sales proceeds of property in Wilkes Barre, Pennsylvania.

FOOTNOTES TO CPA(R):4

(1) Results from the sale of properties net leased to Knudsen Corporation.

(2) Represents writedown of Beaumont, Texas property, formerly net leased to
Gulf Consolidated Services, Inc.

(3) Represents gain on restructuring of debt on Beaumont, Texas property
formerly net leased to Gulf Consolidated Services, Inc.

(4) Represents prepayment charge resulting from refinancing of the original
loan for property net leased to Simplicity Manufacturing, Inc.

(5) Represents prepayment charge resulting from refinancing of the original
loan for property net leased to Brodart Co.

(6) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects
of changes primarily in accrued liabilities, receivables and other assets
are taken into account, but other items such as principal amortization of
loans are not included. Cash from operations pursuant to the Statement of
Changes in Financial Position includes the effect of loan amortization, but
excludes the effects of changes in accrued liabilities, receivables and
other assets.

(7) Represents acquisition of hotel operations for a property formerly leased
to Integra-A Hotel and Restaurant Company.

(8) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.

(9) Represents extinguishment of debt on the property located in Beaumont,
Texas.

(10) Results from sale of property net leased to Genesco, Inc.

(11) Includes equity income and net hotel operating results for 1996.

(12) Results from the exchange of a hotel property in Kenney, Louisiana for an
investment in American General Hospitality Operating Partnership L.P.

(13) Represents writedown of the property net leased to Simplicity
Manufacturing, Inc.

(14) Represents equity income for 1997.

FOOTNOTES TO CPA(R):5

(1) Represents sale of Buffalo, New York property formerly net leased to
Williams Hand Tool, Inc.

(2) Represents exchange of property net leased to Industrial General
Corporation.

(3) Represents prepayment charge resulting from refinancing of the original
loan for property net leased to Pace Membership Warehouse, Inc.

(4) Represents write-down of Buffalo, New York property formerly net leased to
Williams Hand Tool, Inc.

(5) Represents acquisition of hotel operations for properties formerly leased
to subsidiaries of Landmark Hotel Corporation.

(6) Results from the sale of a 3.0815 acre parcel of land which was a portion
of the property net leased to Industrial General Corporation.

(7) Represents write-down of Columbus, Georgia property leased to Williams Hand
Tool, Inc.

(8) Represents a gain on release of mortgage escrow funds and related interest
income earned in the escrow reserve accounts for the hotel properties
located in Alpena and Petoskey, Michigan.

(9) Represents disposition of Columbus, Georgia property formerly leased to
Williams Hand Tool, Inc. and sale of a parcel of land in Elyria, Ohio
formerly leased to Industrial General Corporation.

(10) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects
of changes primarily in accrued liabilities, receivables and other assets
are taken into account but other items such as principal amortization of
loans are not included. Cash from operations pursuant to the Statement of
Changes in Financial

A-16
<PAGE> 145

Position includes the effect of loan amortization, but excludes the effects
of changes in accrued liabilities, receivables and other assets.

(11) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.

(12) Results from the settlement and lease termination agreement for the hotel
properties in Michigan.

(13) Represents write-down of the preferred stock investment and the estimated
residual value of the South Boston and Kenbridge, Virginia properties.

(14) Results from sale of the Tampa, Florida and the Forrest City, Arkansas
properties.

(15) Represents the extinguishment of debt on the Tampa, Florida property and
properties located in Gordonsville, Virginia and North Bergen, NJ.

(16) Results from sale of properties in Bold Knob, Arkansas, Ballville, Ohio,
Newburyport, Massachusetts, Gardensville, Virginia and North Bergen, New
Jersey.

(17) Represents the writedown of hotel property in Rapid City, South Dakota and
the property on Elepia, Ohio; and writing off the note receivable and
preferred stock of Rochester Butten Company.

(18) Represents sale of property in Hodgkins, Illinois leased to GATX Logistics,
Inc., property in Helena, Montana and a hotel property in Rapid City, South
Dakota.

(19) Represents write-down of hotel property in Rapid City, South Dakota. A
special distribution of $792,400 was declared and paid in January 1997.

(20) Results from foreclosure on the properties net leased to Arley Merchandise
Corporation.

(21) Represents writedown of properties net leased to Arley Merchandise
Corporation.

FOOTNOTES TO CPA(R):6

(1) Represents acquisition of hotel operations for properties formerly leased to
subsidiaries of Landmark Hotel Corporation.

(2) Represents unamortized balance of deferred charges in connection with the
refinancing of the mortgage loan secured by a property leased to Martin
Marrietta Corporation.

(3) Represents acquisition of hotel operations for property formerly leased to
Integra-A Hotel and Restaurant Company.

(4) For the years up to and including 1985, the figures for cash generated from
operations were derived from the Statements of Changes in Financial
Position, whereas for the years after 1985, the figures were derived from
the Statements of Cash Flows in accordance with SFAS No. 95. In determining
Cash from Operations pursuant to the Statement of Cash Flows, the effects of
changes primarily in accrued liabilities, receivables and other assets are
taken into account, but other items such as principal amortization of loans
are not included. Cash from operations pursuant to the Statement of Changes
in Financial Position includes the effect of loan amortization, but excludes
the effects of changes in accrued liabilities, receivables and other assets.

(5) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.

(6) Represents gain on restructuring of debt on the property leased to Anthony's
Manufacturing Company, Inc.

(7) Result from the sale of two properties leased to Autozone, Inc.

FOOTNOTES TO CPA(R):7

(1) Results from the sale of approximately 10 acres of land which was a portion
of the property net leased to Emb-Tex Corporation.

(2) Represents write-down of 10 properties formerly net leased to Yellow Front
Stores, Inc.

(3) Represents the gain on the sale of securities of Mid-Continent Bottlers,
Inc. and income from equity investments.

(4) Results of the sale of .22 acres of land formerly part of a property
located in Scottsdale, Arizona. See Table V.

(5) Represents acquisition of hotel operations for property formerly leased to
Integra-A Hotel and Restaurant Company.

(6)To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations in
prior years that has not previously been distributed.

(7) Includes $200,364 of distributions paid to the Corporate General Partner
attributable to 1991.

(8) Results from sale of properties located in Travelers Rest, South Carolina
and Phoenix, Arizona.

A-17
<PAGE> 146

(9) Represents write-down of the Jupiter and Plant City, Florida properties.

(10) Results from sale of properties leased to Mid-Continent, Bottlers, Inc.

(11) Represents write-down of properties located in Fredricksburg, Virginia and
Jefferson, Georgia.

(12) Represents an extraordinary gain upon extinguishment of the Yellow Front
Stores, Inc. loan.

(13) Result of sale of the Jupiter, Florida Property.

(14) Represents writedown of Monte Vista, Colorado property.

(15) Represents earnings from discontinued operations and loss from equity
investments.

(16) Represents cash distributed from equity investments.

(17) Result of sale of property in Denham Springs, Louisiana leased to AutoZone,
Inc. and a property in Monte Vista, Colorado formerly leased to Yellow
Front Stores, Inc.

(18) Represents writedown on properties net leased to Swiss M-Tex, L.P.

(19) Represents equity income for 1997.

FOOTNOTES TO CPA(R):8

(1) Results from the sale of a parcel of land which was a portion of the
property net leased to Furon Company.

(2) Represents acquisition of hotel operations for property formerly leased to
Integra-A Hotel and Restaurant Company.

(3) Results from the refinancing of property leased to Detroit Diesel
Corporation.

(4) Includes of equity income for 1993, 1994, 1995 and 1996 income (loss) and
hotel operating results for 1996.

(5) Results from the exchange of a hotel property in Kennes, Louisiana for an
investment in American General Hospitality Operating Partnership L.P.

(6) Results from the sale of two properties leased to Furon Company.

(7) Represents equity income for 1997.

FOOTNOTES TO CPA(R):9 & CPA(R):10

(1) Results from the sale of a parcel of land which was a portion of the
property net leased to Furon Company.

(2) Represents loan prepayment charge resulting from refinancing of loan
secured by property located in Denton, Texas leased to K mart Corporation.

(3) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.

(4) Results from the refinancing of property leased to Detroit Diesel
Corporation.

(5) Results from sale of properties leased to Data Documents Inc. and the Pace
Membership Warehouse, Inc.

(6) Represents write-off of investment in Limited Partnership and income from
Equity investments.

(7) Represents cash distributions from Equity investments in excess of income.

(8) Represents write-down of the Stamford, Connecticut property.

(9) Results of Equity investments for 1993, 1994, 1995, 1996, 1997 and 1998.

(10) Results of sale of Data Documents property.

(11) Results from the sale of two properties leased to Furon Company.

(12) Represents write-down of the Harvest Foods, Inc. properties.

(13) Results from the sale of properties leased to Safeway Stores Incorporated,
Empire of America Realty Credit Corp. and Best Buy Co., Inc.

(14) Results from the sale of Enviro Works, Inc. securities, and the sale of
properties formerly leased to Harvest Foods, Inc.

(15) Results from the transfer of CPA:10's general partnership interest in Hope
Street Connecticut to CPA:9 and the extinguishment of debt on a first
priority mortgage loan on properties formerly leased to Harvest Foods, Inc.

(16) Results include subordinated disposition fees.

(17) Results from the satisfaction of a subordinated mortgage note.

NOTES TO CPA(R):10

(1) CPA(R):10 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1999 -- $17.69, April,
1999 -- $17.71, July 1999 -- 17.73 and October 1999 -- $17.75.

A-18
<PAGE> 147

FOOTNOTES TO CIP(R) & CPA(R):12

(1) To the extent "cash distribution to investors from operating cash flow"
exceeds "cash generated from operations" in any given year, such excess
represents the distribution of cash generated from partnership operations
in prior years that has not previously been distributed.

(2) Results from sale of property leased to Data Documents, Inc.

(3) Result of refinancing mortgage loans on property leased to TBWA Chait/Day.

(4) Results of Equity Investments for 1993, 1994, 1995 and 1996 income (loss)
and cash distributed.

(5) Results of Sale of Data Documents property.

(6) Loss on sale of properties based to Safeway Stores, Incorporated.

(7) Gain on sale of 22,500 Garden Ridge Corporation common stock warrants.

(8) Results of sale of properties formerly leased to Harvest Foods, Inc.

(9) Gain on the extinguishment of debt on a first priority mortgage loan on
properties formerly leased to Harvest Foods, Inc.

(10) Results include subordinated disposition fees.

(11) Results of equity investments income (loss) and cash distributed.

(12) Results from the satisfaction of a subordinated mortgage note.

(13) Results from the prepayment of mortgage debt on the Etec Systems, Inc.
properties.

(14) Represents writedown of Lanxide Corporation property.

NOTES TO CIP(R) & CPA(R):12

(1) CIP(R) made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1999 -- $20.68; April,
1999 -- $20.70; July, 1999 -- $20.72 and October, 1999 -- $20.74.

(2) CPA(R):12 made quarterly distributions in the following amounts per $1,000
invested on the dates specified: January, 1999 -- $20.68; April,
1999 -- $20.33; July, 1999 -- $20.35 and October, 1999 -- $20.37.

A-19
<PAGE> 148

TABLE IV
RESULTS OF COMPLETED PROGRAMS

Table IV provides information on Prior Programs that have completed
operations since January 1, 1993. THE INFORMATION PRESENTED IN THIS TABLE SHOULD
NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE OPERATIONS OF THE COMPANY.
<TABLE>
<CAPTION>
CPA(R):1 CPA(R):2 CPA(R):3 CPA(R):4 CPA(R):5 CPA(R):6 CPA(R):7
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Dollar Amount Raised......... $20,000,000 $27,500,000 $33,000,000 $42,784,000 $56,600,000 $47,930,000 $45,274,000
Number of Properties
Purchased.................... 24 19 17 12 36 54 53
Date of Closing of
Offering................... 9/30/79 9/23/80 5/13/82 6/16/83 3/31/84 2/13/85 9/17/87
Date of First Sale of
Property................... 6/6/89 7/15/86 10/22/86 10/22/86 12/31/87 4/28/95 12/3/93
Date of Final Sale of
Property(1)................ 1/1/98 1/1/98 1/1/98 1/1/98 1/1/98 1/1/98 1/1/98
Tax and Distribution Data per
$1000 Investment Through
Federal Income Tax Results:
Ordinary income (loss)... $ 547.51 $ 1,044.25 $ 1,844.85 $ 678.36 $ 300.55 $ 649.69 $ 629.58
-- from operations..... 0.00 0.00 0.00 (0.33) 0.00 0.00 0.00
Capital Gain (loss)...... $ 11.34 $ 858.72 $ 105.88 $ 109.97 $ 354.66 $ 0.00 $ 291.18
-- Other............... $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 43.48 $ 0.54 $ 21.14
Cash Distributions to
Investors
Source (on Gaap basis)
-- Investment Income..... 765.68 2,069.50 2,115.01 1,405.10 928.11 1,017.83 636.60
-- Return of Capital..... 1,517.49 1,524.35 1,832.07 1,591.09 1,136.70 1,509.79 1,441.83
Source (on Cash basis)
-- Sales................. 1,051.80 1,818.20 1,677.00 1,358.60 734.80 1,380.60 1,107.80
-- Refinancing........... 0.00 0.00 0.00 0.00 0.00 0.00 10.46
-- Operations............ 1,231.37 1,775.65 100.00 1,542.63 1,330.01 1,147.02 941.13
-- Other................. 0.00 0.00 1,935.48 0.00 0.00 0.00 0.00

<CAPTION>
CPA(R):8 CPA(R):9
----------- -----------
<S> <C> <C>
Dollar Amount Raised......... $67,749,000 $59,990,000
Number of Properties
Purchased.................... 47 33
Date of Closing of
Offering................... 6/30/89 4/30/91
Date of First Sale of
Property................... 4/15/94 9/5/96
Date of Final Sale of
Property(1)................ 1/1/98 1/1/98
Tax and Distribution Data per
$1000 Investment Through
Federal Income Tax Results:
Ordinary income (loss)... $ 595.28 $ 418.85
-- from operations..... 0.00 0.00
Capital Gain (loss)...... $ 0.00 $ (15.58)
-- Other............... $ (0.21) $ 0.03
Cash Distributions to
Investors
Source (on Gaap basis)
-- Investment Income..... 692.73 467.11
-- Return of Capital..... 1,480.42 1,281.36
Source (on Cash basis)
-- Sales................. 1,391.00 1,052.60
-- Refinancing........... 0.00 0.00
-- Operations............ 782.15 695.89
-- Other................. 0.00 0.00
</TABLE>

FOOTNOTES

(1) Date of exchange of Partnership units for listed shares of Carey Diversified
LLC.

A-20
<PAGE> 149

TABLE V
SALES OR DISPOSITIONS OF PROPERTIES AS OF DECEMBER 31, 1997

Table V provides information on the sales and dispositions of property held
by Prior Programs since January 1, 1994. THE INFORMATION IN THIS TABLE SHOULD
NOT BE CONSIDERED AS INDICATIVE OF THE POSSIBLE PERFORMANCE OF THE COMPANY.
PURCHASERS OF THE SHARES OFFERED BY THIS PROSPECTUS WILL NOT HAVE ANY OWNERSHIP
IN THE CPA(R) PARTNERSHIPS.
<TABLE>
<CAPTION>

SELLING PRICE NET OF CLOSING COSTS AND GAAP ADJUSTMENTS
-----------------------------------------------------
PURCHASE
CASH MONEY ADJUSTMENTS
RECEIVED MORTGAGE MORTGAGE RESULTING
NET OF BALANCE TAKEN FROM
DATE DATE OF CLOSING AT TIME BACK BY APPLICATION
PROPERTY ACQUIRED SALE COSTS OF SALE PROGRAM OF GAAP
-------- -------- ------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
G.D. Searle and Co.(1)............................. 5/15/80 1/4/94 $ 124,615 $ 0 0 None
Plant City, Florida(2)............................. 3/31/89 4/15/94 1,200,000 0 0 None
Jefferson, Georgia(3).............................. 3/31/89 8/5/94 844,778 0 0 None
Mid Continental Bottlers, Inc.(4).................. 12/31/86 10/14/94 13,904,680 3,895,320 0 None
Pace Membership Warehouse, Inc.(5)................. 8/12/86 11/10/94 3,639,563 3,290,437 0 None
Pace Membership Warehouse, Inc.(6)................. 12/23/92 11/10/94 3,466,100 3,500,000 0 None
Data Documents, Inc.(7)............................ 3/18/93 11/28/94 7,710,740 7,721,000 0 None
Industrial General Corporation(8).................. 8/30/85 12/30/94 4,062 645,938 0 None
Industrial General Corporation(12)................. 8/30/85 9/14/95 466,961 2,920,401 0 None
Liberty Fabrics of New York(13).................... 1/3/84 12/3/95 5,509,000 3,850,000 0 None
Genesco, Inc.(14).................................. 6/2/83 6/30/95 9,477,492 5,722,508 0 None
Jupiter, Florida(15)............................... 12/11/86 12/20/95 1,546,020 2,602,883 0 None
Leslie Fay Company(16)............................. 4/30/82 1/10/96 14,053,816 0 0 None
Helena, Montana(17)................................ 5/1/85 1/19/96 1,741,261 2,866,324 0 None
Autozone, Inc.(18)................................. 5/2/86 1/26/96 0 627,106 0 None
Safeway Stores, Inc.(19)........................... 12/19/91 1/26/96 4,649,270 0 0 None
& 2/15/96
Autozone, Inc.(20)................................. 8/24/87 2/12/96 431,779 0 0 None
Monte Vista, Colorado(21).......................... 1/29/88 2/14/96 186,090 0 0 None
Empire of America Credit Corp.(22)................. 6/28/91 3/15/96 3,583,013 4,442,872 0 None
GATX Logistics, Inc.(23)........................... 6/7/86 4/9/96 9,428,270 3,208,526 0 None
Best Buy Co. Inc.(24).............................. 10/16/92 5/16/96 1,593,559 1,509,371 0 None
Furon Company(25).................................. 1/29/90 9/9/96 478,626 892,180 0 None
Rapid City, South Dakota(26)....................... 4/24/85 10/1/96 (290,728) 4,505,000 0 None
Kobacker Stores, Inc.(27).......................... 1/17/79 10/17/96 216,451 139,507 0 None
Winn-Dixie Stores, Inc.(28)........................ 12/28/79 8/11/97 1,042,200 0 0 None
Harvest Foods, Inc.(29)............................ 2/21/92 9/3/97 2,388,544 0 0 None
& 9/30/97
Arley Merchandise Corporation(30).................. 7/13/84 11/17/97 0 4,754,940 0 None
Swiss M-Tex, L.P.(31).............................. 8/26/87 11/26/97 200,000 0 0 None
----------- -----------
$87,596,162 $57,094,313 0 --
=========== ===========

COST OF PROPERTIES INCLUDING
CLOSING AND SOFT COSTS(11)
SELLING PRICE NET OF CLOSING COSTS AND GAAP ADJUSTMENTS
----------- TOTAL
ACQUISITION EXCESS
COST, (DEFICIENCY)
TOTAL CAPITAL OF OPERATING
PROCEEDS ORIGINAL ORIGINAL IMPROVEMENT, RECEIPTS OVER
RECEIVED EQUITY MORTGAGE CLOSING AND CASH
PROPERTY FROM SALE INVESTMENT FINANCING SOFT COSTS EXPENDITURES(9)
-------- --------- ---------- --------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
G.D. Searle and Co.(1)............................. $ 124,615 $ 218,038 $ 0 $ 218,038 $ 249,998
Plant City, Florida(2)............................. 1,200,000 934,075 1,370,064 2,304,139 964,989
Jefferson, Georgia(3).............................. 844,778 893,466 1,310,496 2,203,962 855,611
Mid Continental Bottlers, Inc.(4).................. 17,800,000 4,945,126 5,040,000 9,985,126 10,004,008
Pace Membership Warehouse, Inc.(5)................. 6,930,000 2,433,500 3,400,000 5,833,500 2,485,104
Pace Membership Warehouse, Inc.(6)................. 6,966,100 3,149,314 3,500,000 6,649,314 439,632
Data Documents, Inc.(7)............................ 15,431,740 5,455,634 8,000,000 13,455,634 941,446
Industrial General Corporation(8).................. 650,000 759,902 777,352 1,537,254 1,143,549
Industrial General Corporation(12)................. 3,387,362 3,055,324 3,124,940 6,180,264 4,596,363
Liberty Fabrics of New York(13).................... 9,359,000 2,500,000 4,500,000 7,000,000 6,139,226
Genesco, Inc.(14).................................. 15,200,000 5,102,128 6,600,000 11,702,128 12,865,450
Jupiter, Florida(15)............................... 4,148,903 2,766,322 4,000,000 7,855,572 1,207,991
Leslie Fay Company(16)............................. 14,053,816 4,000,000 5,400,000 9,400,000 17,810,804
Helena, Montana(17)................................ 4,607,585 4,012,908 2,937,500 6,950,408 4,923,483
Autozone, Inc.(18)................................. 627,106 242,508 280,136 522,644 254,234
Safeway Stores, Inc.(19)........................... 4,649,270 5,541,790 0 5,541,790 1,852,277
Autozone, Inc.(20)................................. 431,779 357,050 0 357,050 303,583
Monte Vista, Colorado(21).......................... 186,090 259,422 358,869 618,291 96,429
Empire of America Credit Corp.(22)................. 8,025,885 2,830,000 4,500,000 7,463,792 1,571,108
GATX Logistics, Inc.(23)........................... 12,636,796 8,780,378 3,500,000 12,280,378 16,661,862
Best Buy Co. Inc.(24).............................. 3,102,930 835,000 1,600,000 2,538,839 520,071
Furon Company(25).................................. 1,370,806 618,777 932,240 1,551,017 416,119
Rapid City, South Dakota(26)....................... 4,214,272 3,100,000 6,800,000 10,515,701 3,470,494
Kobacker Stores, Inc.(27).......................... 355,958 166,882 211,949 378,831 209,139
Winn-Dixie Stores, Inc.(28)........................ 1,042,200 1,101,904 0 1,101,904 1,708,409
Harvest Foods, Inc.(29)............................ 2,388,544 1,026,210 1,593,224 2,619,434 509,403
Arley Merchandise Corporation(30).................. 4,754,940 2,808,555 5,000,000 7,808,555 3,241,515
Swiss M-Tex, L.P.(31).............................. 200,000 215,852 277,524 493,510 --(10)
----------- ----------- ----------- ------------ -----------
$144,690,475 $68,110,065 $75,014,294 $145,067,075 $95,442,297
=========== =========== =========== ============ ===========
</TABLE>

A-21
<PAGE> 150

FOOTNOTES

(1) On May 15, 1980, CPA(R):2 purchased an improved property and net leased it
to G.D. Searle and Co. On January 4, 1994 the property was sold for
$124,615, net of closing costs representing a loss of $93,423 over the
$218,038 cost basis of the property.

(2) On March 31, 1989 CPA(R):7 and CPA(R):8 purchased six improved properties
and net leased them to NV Ryan L.P. with 37.037% and 62.963%, respectively.
On April 15, 1994 the Plant City, Florida property was sold for $1,200,000
representing a loss of $1,104,139 over the $2,304,139 cost basis of the
property.

(3) On August 5, 1994 the Jefferson, Georgia property which was formerly leased
to NV Ryan L.P. by CPA(R):7 and CPA(R):8 was sold for $844,778, net of
closing costs representing a loss of $1,359,184 over the $2,203,962 cost
basis of the property.

(4) On December 31, 1986, CPA(R):7 purchased eight improved properties and net
leased them to Mid-Continent Bottlers, Inc. and subsequently transferred
the interest in one property to another tenant. On October 14, 1994, the
remaining seven properties were sold for $17,800,000 representing a gain of
$7,814,874 over the $9,985,126 cost basis of the property.

(5) On August 12, 1986, CPA(R):5 purchased an improved property which was
subsequently leased to Pace Membership Warehouse, Inc. On November 10,
1994, the property was sold for $6,930,000 net of closing costs
representing a gain of $1,096,500 over the $5,833,500 cost basis of the
property.

(6) On December 23, 1992, CPA(R)10 purchased an improved property and net
leased it to Pace Membership Warehouse, Inc. On November 10, 1994, the
property was sold for $6,966,100 net of closing costs, representing a gain
of $316,786 over the $6,649,314 cost basis of the property.

(7) On March 18, 1993 CPA(R):10 and CIP(R) purchased five improved properties
and net leased them to Data Documents, Inc. with 22.22% and 77.78%
interests, respectively. On November 28, 1994, the properties were sold for
$15,431,740 net of closing costs representing a gain of $1,976,706 over the
$13,455,034 cost basis of the property.

(8) On August 30, 1985, CPA(R):5 purchased seven improved properties and net
leased them to Industrial General Corporation. On December 30, 1994, the
Forrest City, Arkansas property was sold for $650,000 net of closing costs,
representing a loss of $887,254 over the $1,537,254 cost basis of the
property.

(9) Operating receipts include rental income from the properties as well as
certain receipts from the settlement of bankruptcy claims, where
applicable. The net excess (deficiency) presented is for the entire period
the property was owned by the applicable Partnership. No amounts are
presented for partial land sales since such amounts are negligible.

(10) The property sold represented only a portion of the property owned by the
partnership and no receipts or expenses have been separately allocated.

(11) The term "soft costs" refers to miscellaneous closing costs such as
accounting fees, legal fees, title insurance costs and survey costs.

(12) On August 30, 1985, CPA(R):5 purchased seven properties and net leased
them to Industrial General Corporation. On September 14, 1995, the Bald
Knob, Belville and Newbury port properties were sold for $3,387,362 net of
closing cost, representing a loss of $2,792,902 over the $6,180,264 cost
basis of the property.

(13) On January 3, 1984, CPA(R):5 purchased properties in Gardensville,
Virginia and in North Bergen, New Jersey and leased them to Liberty
Fabrics. On December 31, 1995, CPA recognized a gain on sale of $2,359,000
in connection with the sale.

(14) On June 2, 1983 CPA(R):4 purchased a property in Allentown, Pennsylvania
and leased it to Genesco, Inc. On June 30, 1995 the property was sold for
$15,200,000 net of closing costs representing a gain of $3,497,872 over
the $11,702,128 costs basis of the property.

A-22
<PAGE> 151

(15) On December 11, 1986 CPA(R):7 purchased a food service facility. On
December 20, 1995 the facility and operations were sold for $4,148,903
representing a loss of $3,706,669 over the $7,855,572 cost basis of the
property.

(16) On April 30, 1993, CPA(R):3 purchased a warehouse property in
Wilkes-Barre, Pennsylvania and leased it to the Leslie Fay Company. On
January 10, 1996 CPA(R):3 sold the property recognizing a gain of
$4,653,816 over the cost basis of the property. Cash received net of
closing cost of $14,303,816, included two lump sum payments of $7,200,000
and $5,000,000 from Leslie Fay in connection with settlement agreement
regarding a purchase option which did not ultimately result in the sale of
the property to Leslie Fay. A third purchased the property for $1,853,816,
net of selling costs.

(17) On May 1, 1985, CPA(R):5 purchased an office building in Helena, Montana
and was assigned an existing net lease with IBM Corporation which
subsequently reduced its occupancy from 100% to 40% leasable space.
CPA(R):5 subsequently leased the remaining space to various other tenants.
On January 19, 1996 CPA(R):5 recognized a loss of $2,342,023 over cost
basis of the property.

(18) On May 2, 1986 CPA(R):6 purchased property in Dalton, Georgia and
Birmingham, Alabama and leased them to Autozone, Inc. On January 26, 1996
and April 26, 1996 the properties were sold for $627,106 net of selling
cost. CPA(R):6 recognized gains on sales over the cost basis of the
properties of $104,462 in connection with sales.

(19) On December 19, 1991, CPA(R):10 and CIP(R) purchased three supermarkets
subject to existing net leases with Safeway Stores, Inc. as
tenants-in-common, each with 50% ownership interests. On January 26, 1996
and February 15, 1996 CPA(R):10 and CIP(R) sold the Glendale, Arizona and
Escondido, California properties, respectively. CPA(R):10 and CIP(R)
recognized a net loss on both sales of $892,250 over the cost basis of the
properties.

(20) On August 28, 1987, CPA(R):7 purchased seven improved properties and net
leased them to Autozone, Inc. On February 12, 1996 the Denham Spring,
Louisiana property and was sold for $431,779 representing a gain of
$74,729 over the $357,050 cost basis of the property.

(21) On January 29, 1988 CPA(R):7 purchased 10 improved properties and net
leased them to Yellow Front Stores, Inc. The Yellow Front lease was
ultimately terminated and the property was released. On February 14, 1996
the Monte Vista, Colorado property was sold for $186,090, net of closings
costs representing a loss of $432,201 over the $618,291 cost basis of the
property.

(22) On June 28, 1991, CPA(R):10 purchased an office building occupied by
Empire of America Realty Credit Corp. ("Empire") for $7,330,000 of which
$4,500,000 was financed by a mortgage loan. On March 15, 1996, CPA(R):10
accepted Empire's purchase offer of $8,500,000 and recognized a net gain
on sale of $562,093 over the original cost of the property.

(23) On June 7, 1985, CPA(R):5 purchased a warehouse property in Hodgkins,
Illinois which was net leased to General Motors Corporation. In November
1993, the General Motors Corporation lease terminated and CPA(R):5 entered
into a new lease with GATX Logistics, Inc. On April 4, 1996, CPA(R):5
recognized a gain on sale of $356,418 over the cost basis of the property.

(24) On October 16, 1992, CPA(R):10 purchased land and a retail store for
$2,435,000 subject to an existing net lease with Sports Town, Inc. Best
Buy Co., Inc. subsequently assumed the lease. CPA(R):10 obtained a
$1,600,000 mortgage loan for this property in September 1993. On May 16,
1996, CPA(R):10 sold the retail store for $3,250,000 and recognized a gain
of $564,091 over the original cost basis of the property.

(25) On January 29, 1990 CPA(R):8 and CPA(R):9 purchased nine properties as
tenants-in-common and leased them to the Furon Company. On September 9,
1996, two properties were sold in Liverpool, Pennsylvania and the other in
Twinsburg, Ohio, CPA(R):8 and 9 recognized a loss of $189,211 over the
cost basis of the two properties.

(26) On April 24, 1985, CPA(R):5 purchased a hotel in Rapid City, South Dakota
which it operated as a Holiday Inn. On October 1, 1996, the hotel property
and its operations were sold for $4,105,000. CPA(R):5 recognized a loss of
$6,301,429 over the cost basis of the property. The mortgage balance

A-23
<PAGE> 152

at the time of sale of $6,800,000 is presented net of sinking fund
reserves of $2,295,000 which were applied as principal payments at the
time of sale. The net cash received on sale was $290,728 less than the
amount necessary to pay the remaining mortgage principal balance.

(27) On January 17, 1979, CPA(R):1 purchased fifteen properties located in
California, Ohio and Indiana and net leased these properties to Kobacker
Stores, Inc. On October 17, 1996, Kobacker exercised options under the
terms of its leases for properties in Eastlake and Cleveland, Ohio to
purchase such properties for stated purchase prices of $165,000 and
$200,000, respectively, resulting in a loss of $22,873 over the cost basis
of the properties.

(28) On December 28, 1979, CPA(R):1 purchased a supermarket in Louisville,
Kentucky and net leased it to Winn-Dixie Stores, Inc. On August 11, 1997,
CPA:1 sold the property and recognized a gain of $607,861.

(29) On February 21, 1992, CPA:(R)10 and CIP(R) purchased as tenants-in-common,
each with undivided 50% ownership interests, 13 supermarkets and two
office buildings and entered into a master lease with Harvest Foods, Inc.
In September 1997, CPA(R):10 and CIP(R) sold three properties and
recognized a gain of $105,131 each.

(30) On July 13, 1984, CPA(R):5 purchased two properties in Sumter and
Columbia, South Carolina and net leased them to Arley Merchandise
Corporation ("Arley"). In July 1997, the Arley lease was terminated by the
Bankruptcy Court in connection with Arley's voluntary petition of
bankruptcy. In May 1997, the lender on the limited recourse mortgage loan
collateralized by the Arley properties made a demand for payment for the
entire outstanding principal balance of the loan of $4,754,940. The lender
initiated a lawsuit for the purpose of foreclosing on the Arley
properties, which CPA(R):5 did not contest. On November 17, 1997, the
ownership of the Arley properties was transferred to the lender and the
loan obligation was canceled. In connection with the foreclosure, CPA(R):5
recognized a gain of $956,829 on the difference between liabilities
forgiven and assets surrendered.

(31) On August 26, 1987, CPA(R):7 purchased properties in Travelers Rest and
Liberty, South Carolina and net leased them to Swiss M-Tex, L.P. On
November 26, 1997, CPA(R):7 sold the Liberty property for $200,000. In
connection with the sale, CPA(R):7 wrote down the Liberty property to an
estimated net realizable value of $200,000 and incurred a charge of
$139,999 on the writedown.

A-24
<PAGE> 153

EXHIBIT B

CPA LOGO

CORPORATE PROPERTY ASSOCIATES 14
INCORPORATED

ORDER FORM

[SPECIMEN LOGO]
B-1
<PAGE> 154

INSTRUCTIONS FOR COMPLETION
OF CPA(R):14 ORDER FORM

INSTRUCTIONS TO INVESTORS

YOU MUST COMPLETE ALL ITEMS AND SIGN THE ORDER FORM IN ITEM 7. INVESTORS ARE
ENCOURAGED TO READ THE PROSPECTUS IN ITS ENTIRETY FOR A COMPLETE EXPLANATION
OF AN INVESTMENT IN THE COMPANY.

Item 1 Check the appropriate box to indicate form of ownership. If the
investor is a Custodian, Corporation, Partnership or Trust, please provide the
additional requested information and/or documents.

Item 2 Indicate the number of shares you are purchasing (250 Shares is the
minimum for investors other than IRAs and KEOGHS; 200 Shares is the minimum for
investors who are IRAs or KEOGHS (250 shares if you are resident of Iowa)) and
the dollar amount of your investment. Check the appropriate box to indicate
whether this is an initial or additional investment and whether the order is to
be combined with that of another investor for the purpose of obtaining a volume
discount available to "single purchasers."

Item 3 Please print name(s) in which Shares are to be registered and
provide address and telephone numbers. Check appropriate box if you are a
non-resident alien, a U.S. citizen residing outside U.S. or subject to back up
withholding (if the latter applies to you, cross out clause (ii) in the
paragraph appearing immediately above Item 1). IRAs and KEOGHs should provide
the taxpayer identification number of the account AND the social security number
of the accountholder. Trusts should provide their taxpayer identification
number. Custodians should provide the minor's social security number. All
individual investors should provide their social security number. Other entities
should provide their taxpayer identification number. If you have an account with
the broker/dealer named on the reverse side of the form, provide your account
number.

Item 4 SHAREHOLDER REPORT ADDRESS: If you would like duplicate copies of
shareholder reports sent to your home address or an address other than listed in
Item 3, please complete this section.

Item 5 Provide dividend payment preference.

Item 6 Print the two-letter abbreviation of your state of residence (if an
IRA or KEOGH, state of residence of beneficiary).

Item 7 You MUST sign the form in Item 7. Signature(s) must be witnessed
and the date of signing must be inserted on the line provided.

AFTER FOLLOWING THE ABOVE INSTRUCTIONS, DETACH THE ORDER FORM ALONG THE
PERFORATION AND RETURN THE ORDER FORM TO THE BROKER WHO SOLICITED YOUR ORDER
TOGETHER WITH A CHECK MADE PAYABLE TO "THE U.S. TRUST COMPANY OF NEW YORK AS
ESCROW AGENT" (OR, INSTEAD OF A CHECK, A REQUEST TO THE BROKER IN THE AMOUNT OF
YOUR ORDER). TRUSTS should furnish a copy of the signature and the pages of the
trust instrument and all amendments thereto. CORPORATIONS should furnish an
appropriate corporation resolution authorizing the purchase of the Shares.
PARTNERSHIPS should furnish a copy of the partnership agreement.

INSTRUCTIONS TO BROKERS

Please be sure to verify all investor information on the Order Form. YOU
MUST COMPLETE ITEM 8 AND SIGN THE ORDER FORM FOR THE ORDER TO BE ACCEPTED.
Please verify that investors have signed Item 7.

Please send check(s) payable to "The U.S. Trust Company of New York, as
Escrow Agent" and completed Order Form(s) to The U.S. Trust Company of New York,
770 Broadway, 13th Floor, New York, New York 10003, Attention: Ana Espinosa. For
wiring instructions, contact The U.S. Trust Company of New York at 212-420-6679
prior to wiring funds.

[Specimen Logo]

B-2
<PAGE> 155

CORPORATE PROPERTY ASSOCIATES 14
INCORPORATED

ORDER FORM

The investor named below, under penalties of perjury, certifies that (i) the
number shown under Item 3 on this Order Form is his correct Taxpayer
Identification Number (or he is waiting for a number to be issued to him) and
(ii) he is not subject to backup withholding either because he has not been
notified by the Internal Revenue Service ("IRS") that he is subject to backup
withholding as a result of a failure to report all interest or dividends, or the
IRS has notified him that he is no longer subject to backup withholding [NOTE:
CLAUSE (ii) IN THIS CERTIFICATION SHOULD BE CROSSED OUT IF THE APPROPRIATE BOX
IN ITEM 3 BELOW HAS BEEN CHECKED].

<TABLE>
<S> <C>
1. FORM OF OWNERSHIP Mark only one box.

[ ] IRA
[ ] SINGLE PERSON
[ ] KEOGH
[ ] HUSBAND AND WIFE AS COMMUNITY PROPERTY
(In Item 7, both signatures must appear) [ ] PENSION OR PROFIT SHARING PLAN
[ ] JOINT TENANTS WITH RIGHT OF SURVIVORSHIP [ ] TRUST (signature and title pages of
(In Item 7, both signatures must appear) Trust Agreement MUST be enclosed)
ALL SECTIONS MUST BE FILLED IN
[ ] TENANTS IN COMMON Trustee name(s)
---------------------------------------------
[ ] A MARRIED PERSON SEPARATE PROPERTY (In Item 7, Trust date---------------------
only one signature must appear) Month Day Year
[ ] CUSTODIAN [ ] For the benefit of
Custodian for ------------------------------------------
- ------------------------------------------------
Under Uniform Gift to Minors Act of the State of [ ] OTHER
--------------
[ ] ESTATE
[ ] CORPORATION OR PARTNERSHIP
(Corporate Resolution or Partnership Agreement MUST be [ ] CHARITABLE REMAINDER TRUST
enclosed)
[ ] NON-PROFIT ORGANIZATION [ ] TOD
------------------------------------------------------
(Please complete enclosed TOD form)
</TABLE>

2. PURCHASE INFORMATION

<TABLE>
<S> <C> <C>
No. of Shares--minimum 250 (or Dollar Amount
200 for an IRA or KEOGH) ------------------------ of $
------------------------------
Investment
($10 per Share)
</TABLE>

THIS IS AN (CHECK ONE): [ ] INITIAL INVESTMENT [ ] ADDITIONAL INVESTMENT IN
THIS OFFERING
[ ] Check box if the Shares ordered are to be combined with an order of another
investor for the purpose of obtaining volume discounts to "single
purchasers." Name of other investor(s)
- --------------------------------------------------------------------------------

3. INVESTOR INFORMATION Name(s) and address will be recorded exactly as printed
below.

Name
- --------------------------------------------------------------------------------

Name
of Joint
- --------------------------------------------------------------------------------
Investor

Address
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
City
- ------------------------------------------------------ State
- ------- Zip Code
- ----------------

Investor Business Phone Number
- ---------
- ---------
- ------------ [ ] Check box if you are a non-resident alien
[ ] Check box if you are a U.S. citizen residing outside the U.S.
[ ] Check box if you are subject to backup withholding
Investor Home Phone Number
- ---------
- ---------
- ------------

- --------------------------------- --------------------------------- ---------------------------------
Investor's Social Security No. Joint Investor's Taxpayer
Social Security No. ID. No.
</TABLE>

Investor's Account Number with Broker Dealer
- ----------------------------------------------------------
(if any)

4. SHAREHOLDER REPORT ADDRESS: If you are investing through a Trust, IRA or
KEOGH and want duplicate copies of shareholder reports sent to you, please
complete.

Address
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

City
- ------------------------------------------------------ State
- ------- Zip Code
- ----------------

(REVERSE SIDE MUST BE SIGNED BY

BROKER AND BY INVESTOR)

[SPECIMEN LOGO]

DETACH ALONG PERFORATION

B-3
<PAGE> 156

5. DIVIDEND PAYMENT OPTIONS: (NON-QUALIFIED PLANS) INVESTORS MAY CHOOSE EITHER
OPTION A OR B.

A. Please indicate the address(es) to which dividends should be mailed.
Dividends may be split on a percentage basis, between a maximum of two (2)
payees.

Destination
1: ------------%*
Company ------------------------------
Address ------------------------------
------------------------------
City ------------------------------
State ------------------ Zip
Code ------------------
Account number (if
any) ------------------
Account
name ------------------------------

* Percentage amount listed above must equal 100%.

B. AUTOMATIC DEPOSITS--Please include a voided check or savings deposit slip.
I authorize Imperial Bank to initiate variable entries to my checking or savings
account. This authority will remain in effect until I notify the CPA(R):14
Investor Relations Department or Resource/Phoenix, the transfer agent for
CPA(R):14, in writing to cancel in such time as to afford a reasonable
opportunity to act on the cancellation.

Financial Institution Name and
Address --------------------------------------------------

Account Type (circle one): Checking Savings Other

Account Number ------------------------------ Bank ABA Routing
Number ------------------------------

6. STATE OF RESIDENCE --------

7. SIGNATURE OF INVESTOR(S)
Signature of investor is required.
- ------------------------ ------------------------ ---------------------
SIGNATURE OF WITNESS SIGNATURE OF
INVESTOR DATE
- ------------------------ ------------------------ ---------------------
SIGNATURE OF WITNESS SIGNATURE OF
INVESTOR DATE
- ------------------------------------------------------------
- ------------------------------------------------------------

8. BROKER/DEALER INFORMATION THE BROKER MUST SIGN BELOW TO COMPLETE ORDER.
BROKER HEREBY WARRANTS THAT IT IS A DULY
LICENSED BROKER AND MAY LAWFULLY SELL SHARES IN
THE STATE DESIGNATED AS THE INVESTOR'S
RESIDENCE.

Licensed Firm Name ------------------------------

Broker Name ------------------------------

Broker Mailing Address ------------------------------

City -------------------- State ---------- Zip Code ----------

Broker Number ------------------ Telephone Number ------------------
The undersigned confirms by his signature that he (i) has reasonable grounds to
believe that the information and representations concerning the investor
identified herein are true, correct and complete in all respects; (ii) has
discussed such investor's prospective purchase of Shares with such investor;
(iii) has advised such investor of all pertinent facts with regard to the
liquidity and marketability of the Shares; (iv) has delivered a current
Prospectus and related supplements, if any, to such investor; and (v) has
reasonable grounds to believe that the purchase of Shares is a suitable
investment for such investor, that such investor meets the suitability standards
applicable to such investor set forth in the Prospectus and related supplements,
if any, and that such investor is in a financial position to enable such
investor to realize the benefits of such an investment and to suffer any loss
that may occur with respect thereto.
------------------------------ ------------------
Broker
Signature Date

ALL INVESTOR AND BROKER/DEALER INFORMATION MUST BE COMPLETED OR
REGISTRATION CANNOT BE PROCESSED.
- ------------------------------------------------------------
FOR COMPANY USE ONLY:

Destination
2: ------------%*
Company ------------------------------
Address ------------------------------
------------------------------
City ------------------------------
State ------------------ Zip
Code ------------------
Account number (if
any) ------------------
Account
name ------------------------------

[Specimen Logo]

B-4
<PAGE> 157

- ------------------------------------------------------------
- ------------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................... 8
Risk Factors............................... 13
Suitability Standards...................... 18
Estimated Use of Proceeds.................. 20
Management Compensation.................... 22
Conflicts of Interest...................... 31
Prior Offerings by Affiliates.............. 35
Management................................. 39
Investment Objectives and Policies......... 51
Holders of Shares of the Company........... 62
Management Discussion and Analysis of
Financial Condition...................... 62
Distributions.............................. 67
Description of Properties.................. 67
Income Tax Considerations.................. 76
ERISA Considerations....................... 87
Description of Shares...................... 90
The Offering............................... 96
Reports to Shareholders.................... 99
Legal Matters.............................. 100
Experts.................................... 100
Sales Literature........................... 100
Further Information........................ 100
Financial Statements....................... F-1
Prior Performance Tables................... A-1
Specimen CPA(R):14 Order
Form -- Exhibit B........................ B-1
</TABLE>

- ------------------------------------------------------------
- ------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS UNLESS
PRECEDED OR ACCOMPANIED BY THIS PROSPECTUS NOR HAS ANY PERSON BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. HOWEVER, IF
ANY MATERIAL CHANGE OCCURS WHILE THIS PROSPECTUS IS REQUIRED BY LAW TO BE
DELIVERED, THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.

WPCAREY LOGO

CPA LOGO
CORPORATE PROPERTY
ASSOCIATES 14
Incorporated
A Maximum of 40,000,000 Shares of Common Stock

PROSPECTUS

CAREY FINANCIAL CORPORATION
- ------------------------------------------------------------
- ------------------------------------------------------------
<PAGE> 158

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 30. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
SEC registration fee........................................ $ 111,200
NASD filing fee............................................. 30,500
Legal fees and expenses..................................... 250,000
Printing and engraving...................................... 250,000
Accounting fees and expenses................................ 175,000
Blue sky expenses........................................... 150,500
Escrow and transfer agents' fees and expenses............... 40,000
Advertising and sales literature............................ 375,000
Miscellaneous............................................... 17,800
----------
TOTAL....................................................... $1,400,000
==========
</TABLE>

ITEM 31. SALES TO SPECIAL PARTIES.

None.

ITEM 32. RECENT SALES OF UNREGISTERED SECURITIES.

On June 10, 1997 Carey Property Advisors purchased 20,000 shares of common
stock of the Registrant for $200,000 cash.

Since the transaction described above was not considered to have involved a
"public offer" within the meaning of Section 4(2) of the Securities Act of 1933,
as amended, the shares issued were deemed to be exempt from registration under
said Act. The recipient of shares in the Registrant in the foregoing transaction
represented that such interests were being acquired by it for the purposes of
investment and not with a view to the distribution thereof.

ITEM 33. INDEMNIFICATION OF OFFICERS AND DIRECTORS.

Indemnification is provided for in Article VI of the Articles of
Incorporation of the Registrant and in Article X of the Bylaws of the
Registrant, and such provisions are incorporated herein by reference.

ITEM 34. TREATMENT OF PROCEEDS FROM STOCK BEING REGISTERED.

Not Applicable.

ITEM 35. FINANCIAL STATEMENTS AND EXHIBITS.

(a) 1. CONSOLIDATED FINANCIAL STATEMENTS

The following consolidated financial statements are filed as part of
this Report:

Report of Independent Accountants

Consolidated Balance Sheets at December 31, 1997 and 1998.

Consolidated Statements of Operations for the period from Inception
(June 4, 1997) to December 31, 1997 and for the year ended December
31, 1998.

Consolidated Statements of Shareholders' Equity for the period from
Inception (June 4, 1997) to December 31, 1997 and for the year ended
December 31, 1998.

Consolidated Statements of Cash Flows for the period from Inception
(June 4, 1997) to December 31, 1997 and for the year ended December
31, 1998.
II-1
<PAGE> 159

Notes to Consolidated Financial Statements.

(b) Exhibits

<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -------
<C> <S>
3.1() Amended and Restated Articles of Incorporation of
Registrant.
3.2(1) Form of Bylaws of Registrant.
5 Opinion and Consent of Piper Marbury Rudnick & Wolfe LLP.
8.1 Opinion of Reed Smith Shaw & McClay LLP as to certain tax
matters.
8.2 Opinion of Reed Smith Shaw & McClay LLP as to certain ERISA
matters.
10.2(2) Lease Agreement dated July 27, 1998 by and between Best (CA)
QRS 14-4, as Landlord, and Best Co. Inc., as Tenants.
10.3(2) Lease Agreement dated February 2, 1998 by and between ESI
(CA) QRS 12-6, as Landlord, and Etec Systems, Inc., as
Tenants.
10.4(2) Lease Agreement dated July 29, 1998 by and between META (CA)
QRS 14-16, as Landlord, and Metagenics Incorporated, as
Tenants.
10.5(2) Lease Agreement dated July 30, 1998 by and between TRUCK
(IN) QRS 14-3, as Landlord, and Burlington Motor Carrier
Inc., as Tenants.
10.6(2) Lease Agreement dated November 24, 1998 by and between BAC
(MO) QRS 14-10, as Landlord, and The Benjamin Ansehl Co., as
Tenants.
10.7(2) Lease Agreement dated December 22, 1998 by and between
Conductor (CA) QRS 14-11, as Landlord, and Advanced Micro
Devices, Inc., as Tenants.
10.8(2) Lease Agreement dated December 28, 1998 by and between CBS
(PA) QRS 14-12, as Landlord, and Contraves Brashear Systems,
L.P., as Tenants.
10.28(3) Form of Sales Agency Agreement.
10.29(3) Form of Selected Dealer Agreement.
10.30 Advisory Agreement.
10.31(3) Form of Wholesaling Agreement.
10.32(3) Form of Escrow Agreement.
21.1(4) Subsidiaries of Registrant as of March 24, 1999.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Piper Marbury Rudnick & Wolfe LLP (contained in
Exhibit 5).
99.1 Table VI: Acquisition of Properties by Prior Programs.
</TABLE>

- ---------------

(1) Filed with Form S-11 (Reg. No. 333-31437) filed on July 16, 1997.

(2) Filed with Report on Form 8-K dated February 2, 1999.

(3) Filed with Form S-11 (Reg. No. 333-76761) filed on April 21, 1997.

(4) Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.

ITEM 36. UNDERTAKINGS.

(a) Registrant undertakes (1) to file, during any period in which offers or
sales are being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section (10)(a)(3) of the Securities
Act, (ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; (2) that, for
the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at this time shall be deemed to be the initial bona fide offering thereof; (3)
that all post-effective amendments will comply
II-2
<PAGE> 160

with the applicable forms, rules and regulations of the Securities and Exchange
Commission in effect at the time such post-effective amendments are filed; and
(4) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant unless in the opinion of its counsel the matter has been
settled by controlling precedent, will submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(c) Registrant undertakes to file a sticker supplement pursuant to rule
424(c) under the Securities Act during the distribution period describing each
Property not identified in the Prospectus at such time as there arises a
reasonable probability that such Property will be acquired and to consolidate
all such stickers into a post-effective amendment filed at least once every
three months, with the information contained in such amendment provided
simultaneously to the existing Shareholders if such information has not
previously been provided. Each sticker supplement should disclose all
compensation and fees received by the Advisor and its affiliates in connection
with any such acquisition. The post-effective amendment shall include audited
financial statements meeting the requirements of Rule 3-14 or Regulation S-X
only for properties acquired during the distribution period, if appropriate.

II-3
<PAGE> 161

POWERS OF ATTORNEY AND SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-11/A and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York on the 12th day of
November, 1999.

CORPORATE PROPERTY ASSOCIATES 14
INCORPORATED

By: /s/ H. AUGUSTUS CAREY
---------------------------------------
H. Augustus Carey
President

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints H. Augustus Carey and William P. Carey his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same, with all exhibit thereto, and any other documents in
connection therewith, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----

/s/ WILLIAM P. CAREY Chairman of the Board and Chief November 16, 1999
- --------------------------------------------------- Executive Officer (Principal
William P. Carey Executive Officer) of the
Registrant

/s/ H. AUGUSTUS CAREY President of the Registrant November 16, 1999
- ---------------------------------------------------
H. Augustus Carey

/s/ WILLIAM RUDER Independent Director of the November 16, 1999
- --------------------------------------------------- Registrant
William Ruder

/s/ GEORGE E. STODDARD Independent Director of the November 16, 1999
- --------------------------------------------------- Registrant
George E. Stoddard

/s/ CHARLES C. TOWNSEND Independent Director of the November 16, 1999
- --------------------------------------------------- Registrant
Charles C. Townsend

/s/ WARREN G. WINTRUB Independent Director of the November 16, 1999
- --------------------------------------------------- Registrant
Warren G. Wintrub
</TABLE>

II-4
<PAGE> 162

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----

<S> <C> <C>
/s/ THOMAS ZACHARIAS Executive Vice President and Chief November 16, 1999
- --------------------------------------------------- Financial Officer of the
Thomas Zacharias Registrant

/s/ STEVEN M. BERZIN Executive Vice President and Chief November 16, 1999
- --------------------------------------------------- Financial Officer of the
Steven M. Berzin Registrant

/s/ GORDON F. DUGAN Executive President of the November 16, 1999
- --------------------------------------------------- Registrant
Gordon F. DuGan

/s/ CLAUDE FERNANDEZ Executive Vice President and Chief November 16, 1999
- --------------------------------------------------- Administrative Officer of the
Claude Fernandez Registrant

/s/ GORDON J. WHITING Executive Vice President and November 16, 1999
- --------------------------------------------------- Portfolio Manager of the
Gordon J. Whiting Registrant
</TABLE>

II-5
<PAGE> 163

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE
- ----------- ------- ----
<C> <S> <C>
3.1 Amended and Restated Articles of Incorporation of
Registrant..................................................
3.2(1) Form of Bylaws of Registrant................................
5 Opinion of Piper Marbury Rudnick & Wolfe LLP as to legality
of securities issued........................................
8.1 Opinion of Reed Smith Shaw & McClay LLP as to certain tax
matters.....................................................
8.2 Opinion of Reed Smith Shaw & McClay LLP as to certain ERISA
matters.....................................................
10.2(2) Lease Agreement dated July 27, 1998 by and between Best (CA)
QRS 14-4, as Landlord, and Best Co. Inc., as Tenants........
10.3(2) Lease Agreement dated February 2, 1998 by and between ESI
(CA) QRS 12-6, as Landlord, and Etec Systems, Inc., as
Tenants.....................................................
10.4(2) Lease Agreement dated July 29, 1998 by and between META (CA)
QRS 14-16, as Landlord, and Metagenics Incorporated, as
Tenants.....................................................
10.5(2) Lease Agreement dated July 30, 1998 by and between TRUCK
(IN) QRS 14-3, as Landlord, and Burlington Motor Carrier
Inc., as Tenants............................................
10.6(2) Lease Agreement dated November 24, 1998 by and between BAC
(MO) QRS 14-10, as Landlord, and The Benjamin Ansehl Co., as
Tenants.....................................................
10.7(2) Lease Agreement dated December 22, 1998 by and between
Conductor (CA) QRS 14-11, as Landlord, and Advanced Micro
Devices, Inc., as Tenants...................................
10.8(2) Lease Agreement dated December 28, 1998 by and between CBS
(PA) QRS 14-12, as Landlord, and Contraves Brashear Systems,
L.P., as Tenants............................................
10.28(3) Form of Sales Agency Agreement..............................
10.29(3) Form of Selected Dealer Agreement...........................
10.30 Amended Advisory Agreement..................................
10.31(3) Form of Wholesaling Agreement...............................
10.32(3) Form of Escrow Agreement....................................
21.1(4) Subsidiaries of Registrant as of March 24, 1999.............
23.1 Consent of PricewaterhouseCoopers LLP.......................
23.2 Consent of Piper Marbury Rudnick & Wolfe LLP (contained in
Exhibit 5)..................................................
99.1 Table VI: Acquisition of Properties by Prior Programs.......
</TABLE>

- ---------------

(1) Filed with Form S-11 (Reg. No. 333-31437) filed on July 16, 1997.

(2) Filed with Report on Form 8-K dated February 2, 1999.

(3) Filed with Form S-11 (Reg. No. 333-76761) filed on April 21, 1999.

(4) Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.

II-6

<PAGE> 1
EXHIBIT 3.1

CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

ARTICLES OF AMENDMENT

Corporate Property Associates 14 Incorporated, a Maryland Corporation
(hereinafter called the "Company"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:

FIRST: The charter of the Company is hereby amended by striking out
Paragraph (a) of Article III and inserting in lieu thereof the following new
Article III, Paragraph (a):

(a) The total number of shares of stock of all classes which the
Company has authority to issue is 120,000,000 shares of capital stock (par
value $.001 per share), amounting in aggregate to $120,000.00 par value,
all of which shares are initially classified as "common stock" (the
"Shares").

SECOND: The amendment of the charter of the Company as hereinabove set
forth has been duly advised by the board of directors and has been approved by
the shareholders of the Company.

THIRD: (a) The total number of shares of all classes of stock of the
Company heretofore authorized, and the number and par value of the shares of
each class are as follows:

<TABLE>
<CAPTION>
Class Number of Shares Par Value Per Share Aggregate Par Value
----- ---------------- ------------------- -------------------
<S> <C> <C> <C>
Common 60,000,000 $0.001 $60,000.00
</TABLE>

(b) the total number of shares of all classes of stock of the Company as
increased, and the number and par value of the shares of each class, are as
follows:

<TABLE>
<CAPTION>
Class Number of Shares Par Value Per Share Aggregate Par Value
----- ---------------- ------------------- -------------------
<S> <C> <C> <C>
Common 120,000,000 $0.001 $120,000.00
</TABLE>

We, the undersigned officers of the Company, swear under penalties of
perjury that the foregoing is a corporate act.

/s/ Susan C. Hyde /s/ George E. Stoddard
- -------------------------- --------------------------------
Name: Susan C. Hyde Name: George E. Stoddard
Title: Secretary Title: Senior Executive Vice President

[NOTARY STAMP]

<PAGE> 1
Exhibit 5

PIPER MARBURY RUDNICK & WOLFE LLP OPINION

[PIPER MARBURY RUDNICK & WOLFE LLP LETTERHEAD] November 8, 1999
Corporate Property Associates 14 Incorporated
50 Rockefeller Plaza
New York, New York 10020

Ladies and Gentlemen:

We have acted as special Maryland counsel to Corporate Property Associates
14 Incorporated, a Maryland corporation (the "Company"), in connection with the
registration under the Securities Act of 1933, as amended (the "Act"), pursuant
to a Registration Statement on Form S-11 of the Company (Registration No.
333-76761) (the "Registration Statement") filed on April 21, 1999 with the
Securities and Exchange Commission (the "Commission"), of up to 40,000,000
shares (the "Shares") of Common Stock, par value $.001 per share (the "Common
Stock") to be issued to the public on a best-efforts basis from time to time
through one or more dealers. This opinion is being furnished to you at your
request in connection with the filing of the Registration Statement.

In rendering the opinion expressed herein, we have reviewed originals or
copies, certified or otherwise identified to our satisfaction, of the
Registration Statement, the Charter and By-Laws of the Company, the proceedings
of the Board of Directors of the Company or a committee thereof relating to the
organization of the Company and to the authorization and issuance of the Shares,
a Certificate of the Secretary of the Company (the "Certificate"), and such
other statutes, certificates, instruments, and documents relating to the Company
and matters of law as we have deemed necessary to the issuance of this opinion.

In our examination of the aforesaid documents, we have assumed, without
independent investigation, the genuineness of all signatures, the legal capacity
of all individuals who have executed any of the aforesaid documents, the
authenticity of all documents submitted to us as originals, the conformity with
originals of all documents submitted to us as copies (and the authenticity of
the originals of such copies), and the accuracy and completeness of all public
records reviewed by us. In making our examination of documents executed by
parties other than the Company, we have assumed that such parties had the power,
corporate or other, to enter into and perform all obligations thereunder, and we
have also assumed the due authorization by all requisite action, corporate or
other, and the valid execution and delivery by such parties of such documents
and the validity, binding effect and enforceability thereof with respect to such
parties. As to any facts materials to this opinion which we did not
independently establish or verify, we have relied solely upon the Certificate.

Based upon the foregoing, having regard for such legal considerations as
we deem relevant, and limited in all respects to applicable Maryland law, we
are of the opinion and advise you that:

(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland.

(2) The Shares have been duly authorized, and, upon the issuance and
delivery of the Shares in accordance with the terms set forth in the
Registration Statement and the resolutions authorizing their issuance, the
Shares will be validly issued, fully paid, and non-assessable.

In addition to the qualifications set forth above, this opinion is subject
to the qualification that we express no opinion as to the laws of any
jurisdiction other than the State of Maryland. We assume that the issuance of
the Shares will not cause the Company to issue shares of Common Stock in excess
of the number of such shares authorized by the Company's Charter and will not
cause any person to violate any of the Ownership Limit provisions of the
Company's Charter (as defined in Article VII thereof). This opinion concerns
only the effect of the laws (exclusive of the securities or "blue sky" laws and
the principles of conflict of laws) of the State of Maryland as currently in
effect. We assume no obligation to supplement this opinion if any applicable
laws change after the date hereof or if any facts or circumstances come to our
attention after the date hereof that might change this opinion. To the extent
that any documents referred to herein are governed by the law of a jurisdiction
other than Maryland, we have assumed that the laws of such jurisdiction are the
same as the laws of the State of Maryland.

<PAGE> 2

Corporate Property Associates 14 Incorporated
November 8, 1999
Page 2

This opinion may be relied upon by Reed Smith Shaw & McClay LLP in giving
their legality opinion to be filed as an exhibit to the Registration Statement.
This opinion is limited to the matters set forth herein, and no other opinion
should be inferred beyond the matters expressly stated.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Opinions" in the Prospectus included in the Registration Statement. In giving
our consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.

Very truly yours,

Piper Marbury Rudnick & Wolfe LLP

<PAGE> 1
Exhibit 8.1

[LETTERHEAD REED SMITH SHAW & MCCLAY, L.L.P.]

November 15, 1999

Corporate Property Associates 14 Incorporated
50 Rockefeller Plaza
New York, New York 10020

Ladies and Gentlemen:

You have requested our opinions with respect to certain Federal income
tax matters in connection with the proposed Offering of 40,000,000 shares of
common stock (the "Shares") of Corporate Property Associates 14 Incorporated, a
Maryland corporation (the "Company"), as a more fully described in the
Registration Statement on Form S-11, Registration 333-76761 ("Registration
Statement"), and the Prospectus included therein, filed by the Company with the
Securities and Exchange Commission. All terms used herein have the respective
meanings set forth in the Prospectus.

We have acted as counsel to the Company with respect to the Offering of
Shares. This letter is for delivery in connection with the proposed Offering of
Shares made by the Prospectus and is intended to confirm as of the date hereof
certain opinions described in the "United States Federal Income Tax
Considerations" section of the Prospectus. This letter and the opinions
expressed or confirmed herein are for delivery to the Company and may be relied
upon only by it and those Shareholders who acquire their Shares on or before
termination of the sale of Shares under the Registration Statement.

In rendering our opinions, we have reviewed and relied upon the
Registration Statement and exhibits to the Registration Statement, including the
Articles of Incorporation and Bylaws, each as amended. In addition, we have
relied upon the letter from the Advisor and the Company to this firm, dated
November 15, 1999 representing the truth and accuracy of the representations
attributed to them in the Prospectus, we have had discussions with executive
personnel of the Advisor, and we have examined and relied upon such records,
documents, certificates, instructions, resolutions, and other matters which, in
our judgment, were necessary in order to enable us to render the opinions herein
set forth.

<PAGE> 2
[LETTERHEAD REED SMITH SHAW & MCCLAY, L.L.P.]

Corporate Property Associates 14 Incorporated
November 15, 1999
Page 2

Based on and subject to the foregoing, we are of the opinion that under
Federal income tax laws as of the date hereof:

(1) Assuming that the Company: (a) operates in the manner described in
the Registration Statement, (b) operates in accordance with the representations
therein, and (c) will have at least 100 Shareholders and will not be closely
held, its method of operation permits it to meet the requirements for
qualification and taxation as a REIT under the Code; and

(2) The section of the Registration Statement entitled "United States
Federal Income Tax Considerations" accurately reflects, in the aggregate, the
state of Federal income tax law and addresses, in relation to the facts, the
material Federal income tax issues with respect to which there exists a
reasonable likelihood of challenge by the IRS.

With respect to our opinion contained in paragraph (1) above, you
should note that actual qualification of the Company as a REIT will depend upon
the Company's ability, through its actual operations, to meet the various
qualification tests imposed by the Code and that no prediction as to those
actual operating results is implied by our opinion. You should also be aware
that our opinion relates only to matters of Federal income tax law. While there
are a variety of state and local tax laws which could apply to the Company
and/or its Shareholders, our opinion does not purport to address the effect of
any such laws.

Our opinions and the analysis set forth above are based upon the
existing provisions of the Code, regulations promulgated thereunder, existing
published revenue rulings, procedures and releases issued by the IRS and
relevant judicial decisions, any of which could be changed at any time. Any such
changes may be retroactive with respect to transactions entered into prior to
the date of such changes and, therefore, could require a modification of our
opinions. You should also note that Congress from time to time has directed its
attention toward reforming Subchapter C of the Code, which includes the
framework for all corporations. It is possible that any legislative proposals
will address the taxation of certain corporations, such as REITs and regulated
investment companies, which are treated differently under the Code from regular
corporations.
<PAGE> 3
[LETTERHEAD REED SMITH SHAW & MCCLAY, L.L.P.]

Corporate Property Associates 14 Incorporated

November 15, 1999

Page 3

We hereby consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement and to the references to Reed Smith Shaw & McClay LLP in
the Registration Statement and in the Prospectus forming part of the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended.

Very truly yours,

REED SMITH SHAW & McCLAY LLP

<PAGE> 1
Exhibit 8.2

[Reed Smith Shaw & McClay letterhead]

(215) 851-8182

November 15, 1999

Corporate Property Associates 14 Incorporated
50 Rockefeller Plaza
New York, New York 10020

Re: Corporate Property Associates 14 Incorporated

Gentlemen:

Corporate Property Associates 14 Incorporated (the "Company") is a
Maryland corporation which has qualified as a real estate investment trust
("REIT") for Federal income tax purposes. The Company intends to make a public
offering of 40,000,000 shares of its common stock, $.001 par value (the
"Shares"). The Company has requested our opinion as to whether pursuant to the
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. sections
1001-1461 ("ERISA"), the assets of the Company would be treated as the assets
of an employee benefit plan by virtue of that plan's purchase of Shares.

In rendering our opinion, we have reviewed the Registration Statement on
Form S-11, Registration No. 333-76761 (the "Registration Statement"), and the
Prospectus included therein, filed by the Company with the Securities and
Exchange Commission, the Company's Articles of Incorporation and Bylaws, each
as amended. We have assumed the authenticity of the documents provided and have
not attempted to verify independently any factual information.

Based on and subject to the foregoing, we are of the opinion that as of
the date hereof:

1) Assuming the offering takes place as described in the Registration
Statement, the Shares should constitute "publicly-offered securities," as that
term is used in regulations
<PAGE> 2
[Reed Smith Shaw & McClay letterhead]

Corporate Property Associates 14 Incorporated
November 15, 1999]
Page 2

promulgated by the Department of Labor (the "Department") and codified at 29
C.F.R. 2510.3-101, and the underlying assets of the Company should not be
considered to be plan assets by virtue of an employee benefit plan's purchase
of Shares; and

2) The discussions contained in the portions of the Registration
Statement entitled "Risk Factors--Other Investment Risks--Investment by Pension
or Profit-Sharing Trusts, Keoghs or IRAs" and "ERISA Considerations" (all of
which are incorporated by reference into this opinion) accurately reflect the
relevant state of the law affecting employee benefit plans and their
fiduciaries.

This opinion is based on existing law which is to a large extent the
result of a regulation and administrative interpretations by the Department. No
assurance can be given that administrative opinions or judicial decisions may
not be forthcoming which would modify the conclusions expressed in this opinion.

We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to this firm under the captions "ERISA
Considerations" and "Risk Factors" therein concerning this opinion.

Sincerely,

REED SMITH SHAW & McCLAY LLP

MBP/jrg

<PAGE> 1
EXHIBIT 10.30

AMENDED AND RESTATED ADVISORY AGREEMENT

THIS AMENDED AND RESTATED ADVISORY AGREEMENT, dated as of December
16, 1998 is between CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED, a Maryland
corporation (the "Company"), and CAREY PROPERTY ADVISORS, a Pennsylvania limited
partnership (the "Advisor") and amends the Agreement originally dated November
10, 1997.

W I T N E S S E T H:

WHEREAS, the Company has filed with the Securities and Exchange
Commission a Registration Statement (No. 333-31437) on Form S-11 covering shares
of its common stock ("Shares"), par value $.001, to be offered to the public,
and the Company may subsequently issue securities other than such Shares
("Securities") or otherwise raise additional capital;

WHEREAS, the Company intends to qualify as a REIT (as defined
below), and to invest its funds in investments permitted by the terms of the
Registration Statement and Sections 856 through 860 of the Code (as defined
below);

WHEREAS, the Company desires to avail itself of the experience,
sources of information, advice and assistance of, and certain facilities
available to, the Advisor and to have the Advisor undertake the duties and
responsibilities hereinafter set forth, on behalf of, and subject to the
supervision of the Board of Directors of, the Company, all as provided herein;
and

WHEREAS, the Advisor is willing to render such services, subject to
the supervision of the Board of Directors, on the terms and conditions
hereinafter set forth;

NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

1. DEFINITIONS. As used in this Agreement, the following terms
have the definitions hereinafter indicated:

Acquisition Expenses. Those expenses, including but not limited to
legal fees and expenses, travel and communications expenses, costs of
appraisals, nonrefundable option payments on Property not acquired,
accounting fees and expenses, title insurance and miscellaneous expenses,
related to selection and acquisition of Properties, whether or not
acquired. Acquisition Expenses shall not include Acquisition Fees.

Acquisition Fees. The total of all fees and commissions (including
any interest thereon) paid by any party to any party in connection with
the making or investing in mortgage loans or the purchase, development or
construction of Properties by the Company. A Development Fee or a
Construction Fee paid to a Person not affiliated with

-1-
<PAGE> 2
the Sponsor in connection with the actual development or construction of a
project after acquisition of the Property by the Company shall not be
deemed an Acquisition Fee. Included in the computation of such fees or
commissions shall be any real estate commission, selection fee,
development fee (other than as described above), non-recurring management
fee, mortgage placement fee, lease-up fee, transaction structuring fee or
any fee of a similar nature, however designated. Acquisition Fees include
Subordinated Acquisition Fees. Acquisition Fees shall not include
Acquisition Expenses.

Adjusted Investor Capital. As of any date, the Initial Investor
Capital for such date reduced by any distributions on or prior to such
date deemed by the Board to be from Cash from Sales and Financings, but
only to the extent such distributions exceed the amount necessary to
satisfy any accrued but unpaid portion of the Preferred Return not
satisfied by distributions of cash generated through operations through
the date Cash from Sales or Financings are distributed by the Company.

Advisor. Carey Property Advisors, a limited partnership organized
under the laws of the Commonwealth of Pennsylvania.

Affiliate. An Affiliate of another Person shall mean (i) any Person
directly or indirectly owning, controlling, or holding, with power to vote
ten percent or more of the outstanding voting securities of such other
Person, (ii) any Person ten percent or more of whose outstanding voting
securities are directly or indirectly owned, controlled, or held, with
power to vote, by such other Person, (iii) any Person directly or
indirectly controlling, controlled by, or under common control with such
other Person, (iv) any executive officer, director, trustee or general
partner of such other Person, or (iv) any legal entity for which such
Person acts as an executive officer, director, trustee or general partner.

Appraised Value. Value according to an appraisal made by an
Independent Appraiser.

Articles of Incorporation. Articles of Incorporation of the Company
under the General Corporation Law of Maryland, as amended from time to
time, pursuant to which the Company is organized.

Asset Management Fee. The Asset Management Fee as defined in
Section 9(a) hereof.

Average Invested Assets. Except as otherwise set forth in the
penultimate sentence in Section 9(a) and (b) hereof, for a specified
period, the average of the aggregate book value of the assets of the
Company invested, directly or indirectly, in Properties and in Loans
secured by real estate, before reserves for depreciation or bad debts or
other similar non-cash reserves, computed by taking the average of such
values at the end of each month during such period. For the purpose of
calculating the Asset Management Fee and the

-2-
<PAGE> 3
Performance Fee, Average Invested Assets shall be calculated in
accordance with Section 9(a) and 9(b) hereof, respectively.

Board or Board of Directors. The Board of Directors of the Company.

Bylaws. The Bylaws of the Company.

Cash from Financings. Net cash proceeds realized by the Company
from the financing of Properties or the refinancing of any Company
indebtedness.

Cash from Sales. Net cash proceeds realized by the Company from the
sale, exchange or other disposition of any of its assets after deduction
of all expenses incurred in connection therewith. Cash from Sales shall
not include Cash from Financings.

Cash from Sales and Financings. The total sum of Cash from Sales
and Cash from Financings.

Cause. With respect to the termination of this Agreement, fraud,
criminal conduct, willful misconduct or willful or negligent breach of
fiduciary duty by the Advisor or a breach of this Agreement by the
Advisor.

Change of Control. A change of control of the Company of a nature
that would be required to be reported in response to the disclosure
requirements of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
enacted and in force on the date hereof, whether or not the Company is
then subject to such reporting requirements; provided, however, that,
without limitation, a Change of Control shall be deemed to have occurred
if: (i) any "person" (within the meaning of Section 13(d) of the Exchange
Act, as enacted and in force on the date hereof) is or becomes the
"beneficial owner" (as that term is defined in Rule 13d-3, as enacted and
in force on the date hereof, under the Exchange Act) of securities of the
Company representing 8.5% or more of the combined voting power of the
Company's securities then outstanding; (ii) there occurs a merger,
consolidation or other reorganization of the Company which is not approved
by the Board of Directors; (iii) there occurs a sale, exchange, transfer
or other disposition of substantially all of the assets of the Company to
another entity, which disposition is not approved by the Board of
Directors; or (iv) there occurs a contested proxy solicitation of the
Shareholders of the Company that results in the contesting party electing
candidates to a majority of the Board of Directors' positions next up for
election.

Code. Internal Revenue Code of 1986, as amended.

Company. Corporate Property Associates 14 Incorporated, a
corporation organized under the laws of the State of Maryland.

-3-
<PAGE> 4
Competitive Real Estate Commission. The real estate or brokerage
commission paid in a competitive market for the purchase or sale of a
property that is reasonable, customary and competitive in light of the
size, type and location of the property.

Construction Fee. A fee or other remuneration for acting as general
contractor and/or construction manager to construct improvements,
supervise and coordinate projects or to provide major repairs or
rehabilitation on a Property.

Contract Purchase Price. The amount actually paid for or allocated
(as of the date of purchase) to the purchase, development, construction or
improvement of a Property, exclusive of Acquisition Fees and Acquisition
Expenses.

Contract Sales Price. The total consideration received by the
Company for the sale of a Property.

Cumulative Return. For the period for which the calculation is being
made, the percentage resulting from dividing (A) the total Dividends paid
on each Dividend payment date during such period (not including Dividends
paid out of Cash from Sales and Financings), by (B) the product of (i) the
average Adjusted Investor Capital for such period (calculated on a daily
basis), and (ii) the number of years (including fractions thereof) elapsed
during such period.

Development Fee. A fee for the packaging of a Property including
negotiating and approving plans, and undertaking to assist in obtaining
zoning and necessary variances and necessary financing for the specific
Property, either initially or at a later date.

Directors. The persons holding such office, as of any particular
time, under the Articles of Incorporation, whether they be the directors
named therein or additional or successor directors.

Dividends. Dividends declared by the Board.

Equity Interest. The stock of or other interests in, or warrants or
other rights to purchase the stock of or other interests in, any entity
that has borrowed money from the Company or that is a tenant of the
Company or that is a parent or controlling Person of any such borrower or
tenant.

Final Closing Date. The last date on which purchasers of Shares
offered pursuant to the Prospectus are issued such Shares.

Good Reason. With respect to the termination of this Agreement, (i)
any failure to obtain a satisfactory agreement from any successor to the
Company to assume and agree to

-4-
<PAGE> 5
perform the Company's obligations under this Agreement; or (ii) any
material breach of this Agreement of any nature whatsoever by the Company.

Gross Offering Proceeds. The aggregate purchase price of Shares
sold pursuant to the Offering.

Independent Appraiser. A qualified appraiser of real estate as
determined by the Board, who is not affiliated, directly or indirectly,
with the Company, the Advisor or their respective Affiliates. Membership
in a nationally recognized appraisal society such as the American
Institute of Real Estate Appraisers or the Society of Real Estate
Appraisers shall be conclusive evidence of such qualification.

Independent Director. A Director of the Company who is not
associated and has not been associated within the last two years, directly
or indirectly, with the Sponsor or the Advisor. A Director shall be deemed
to be associated with the Sponsor or the Advisor if he or she (i) owns an
interest in, is employed by, has any material business or professional
relationship with, or is an officer or director of, the Sponsor, the
Advisor, or any of their Affiliates, other than as a director or trustee
or officer of not more than two other REITs organized by the Sponsor or
advised by the Advisor, or (ii) performs services, other than as a
Director, for the Company. An indirect relationship shall include
circumstances in which a Director's spouse, parents, children, siblings,
mothers- or fathers-in-law, sons- or daughters-in-law, or brothers- or
sisters-in-law is or has been associated with the Sponsor, the Advisor,
any of their Affiliates or the Company.

Individual. Any natural person and those organizations treated as
natural persons in Section 542(a) of the Code.

Initial Closing Date. The first date on which purchasers of Shares
offered pursuant to the Prospectus are issued such Shares.

Initial Investor Capital. The total amount of capital invested from
time to time by Shareholders (computed at a rate of $10 per Share for
every Share including those Shares for which reduced selling commissions
were paid in connection with their purchase from the Company). Upon
completion of the Offering, the Initial Investor Capital shall be equal to
the Gross Offering Proceeds.

Loan Refinancing Fee. The Loan Refinancing Fee as defined in
Section 9(e) hereof.

Loans. The notes and other evidences of indebtedness or obligations
acquired or entered into by the Company as lender which are secured or
collateralized by personal property, or fee or leasehold interests in real
estate or other assets, including but not limited to first or subordinate
mortgage loans, construction loans, development loans, loans

-5-
<PAGE> 6
secured by capital stock or any other assets or form of equity interest
and any other type of loan or financial arrangement, such as providing or
arranging for letters of credit, providing guarantees of obligations to
third parties, or providing commitments for loans. The term "Loans" shall
not include leases which are not recognized as leases for Federal income
tax reporting purposes.

Nasdaq. The national automated quotation system operated by the
National Association of Securities Dealers, Inc.

Net Income. For any period, the total revenues applicable to such
period, less the total expenses applicable to such period excluding
additions to reserves for depreciation, bad debts or other similar
non-cash reserves; provided, however, Net Income for purposes of
calculating total allowable Operating Expenses shall exclude the gain from
the sale of the Company's assets.

Offering. The offering of Shares pursuant to the Prospectus.

Operating Expenses. All operating, general and administrative
expenses paid or incurred by the Company, as determined under generally
accepted accounting principles, except the following: (i) interest and
discounts and other cost of borrowed money; (ii) taxes (including state
and Federal income tax, property taxes and assessments, franchise taxes
and taxes of any other nature); (iii) expenses of raising capital,
including Organization and Offering Expenses, printing, engraving, and
other expenses, and taxes incurred in connection with the issuance,
distribution, transfer, registration and stock exchange listing of the
Company's Shares and Securities; (iv) expenses connected with the
acquisition, disposition, ownership and operation of real estate
interests, mortgage loans, or other property, including the costs of
foreclosure, insurance premiums, legal services, brokerage and sales
commissions, maintenance, repair and improvement of property; (v) the
Acquisition Fee or Subordinated Disposition Fee payable to the Advisor or
any other party; and (vi) non-cash items, such as depreciation,
amortization, depletion, and additions to reserves for depreciation,
amortization, depletion, losses and bad debts. Notwithstanding anything
herein to the contrary, Operating Expenses shall include the Asset
Management Fee, the Performance Fee and the Loan Refinancing Fee.

Organization and Offering Expenses. Those expenses payable by the
Company in connection with the formation, qualification and registration
of the Company and in marketing and distributing Shares, including, but
not limited to, (i) the preparing, printing, filing and delivery of the
Registration Statement and the Prospectus (including any amendments
thereof or supplements thereto) and the preparing and printing of
contractual agreements between the Company and the Sales Agent and the
Selected Dealers (including copies thereof), (ii) the preparing and
printing of the Articles of Incorporation and Bylaws, solicitation
material and related documents and the filing and/or recording of such
documents necessary to comply with the laws of the State of Maryland for
the formation of

-6-
<PAGE> 7
a corporation and thereafter for the continued good standing of a
corporation, (iii) the qualification or registration of the Shares under
state securities or "Blue Sky" laws, (iv) any escrow arrangements,
including any compensation to an escrow agent, (v) the filing fees payable
to the SEC and to the National Association of Securities Dealers, Inc.,
(vi) reimbursement for the reasonable and identifiable out-of-pocket
expenses of the Sales Agent and the Selected Dealers, including the cost
of their counsel, (vii) the fees of the Company's counsel and independent
public accountants, (viii) all advertising expenses incurred in connection
with the Offering, including the cost of all sales literature and the
costs related to investor and broker-dealer sales and information meetings
and marketing incentive programs, and (ix) selling commissions, marketing
fees, incentive fees and wholesaling fees and expenses incurred in
connection with the sale of the Shares.

Performance Fee. The Performance Fee as defined in Section 9(d).

Person. An Individual, corporation, partnership, joint venture,
association, company, trust, bank, or other entity, or government or any
agency or political subdivision of a government.

Preferred Return. A Cumulative Return of 6% computed from the
Initial Closing Date through the date as of which such amount is being
calculated.

Property or Properties. The Company's partial or entire interest in
real property (including leasehold interests) and personal or mixed
property connected therewith.

Property Management Fee. The Property Management Fee as defined in
Section 9(f) hereof.

Prospectus. The final prospectus of the Company pursuant to which
the Company will offer up to 30,000,000 Shares, as the same may at any
time and from time to time be amended or supplemented after the effective
date of the Registration Statement.

Registration Statement. The Registration Statement on Form S-11 of
which the Prospectus is a part.

REIT. A real estate investment trust, as defined in Sections 856-860
of the Code.

Sales Agent. Carey Financial Corporation.

Securities. Any stock, shares (other than currently outstanding
Shares and subsequently issued shares of common stock of the Company),
voting trust certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise
or in general any instruments commonly known as "securities" or any
certificate of interest, shares or participation in temporary or interim

-7-
<PAGE> 8
certificates for receipts (or, guarantees of, or warrants, options or
rights to subscribe to, purchase or acquire any of the foregoing), which
subsequently may be issued by the Company.

Selected Dealer Fee. A due diligence and management fee payable to
Selected Dealers by the Company (through the Sales Agent) of up to 1% of
the price of each Share sold by those Selected Dealers to which the Sales
Agent agrees to pay such due diligence and management fee.

Selected Dealers. Broker-dealers who are members of the National
Association of Securities Dealers, Inc. and who have executed an
agreement with the Sales Agent in which the Selected Dealers agree to
participate with the Sales Agent in the Offering.

Shareholders. Those Persons who at any particular time are shown
as holders of record of Shares on the books and records of the Company.

Shares. All of the shares of common stock of the Company, $.001
par value, and all other shares of common stock of the Company issued in
the Offering or any subsequent offering.

Sponsor. W.P. Carey & Co., Inc. and any other person directly or
indirectly instrumental in organizing, wholly or in part, the Company or
any person who will manage or participate in the management of the
Company, and any Affiliate of any such person. Sponsor does not include
a person whose only relationship to the Company is that of an independent
property manager and whose only compensation is as such. Sponsor also
does not include wholly independent third parties such as attorneys,
accountants and underwriters whose only compensation is for professional
services.

Subordinated Acquisition Fee. The Subordinated Acquisition Fee as
defined in Section 9(d).

Subordinated Disposition Fee. The Subordinated Disposition Fee as
defined in Section 9(g) hereof.

Subordinated Incentive Fee. The Subordinated Incentive Fee as
defined in Section 9(h) hereof.

Termination Date. The effective date of any termination of this
Agreement.

Termination Fee. An amount equal to 15% of the amount, if any, by
which (1) the Appraised Value of the Properties on the Termination Date,
less the amount of all indebtedness secured by such Properties, exceeds
(2) the total of the Initial Investor Capital on the Final Closing Date
plus an amount equal to the Preferred Return through the

-8-
<PAGE> 9
Termination Date reduced by the total Dividends paid by the Company from
its inception through the Termination Date.

Total Property Cost. With regard to any Property, an amount equal to
the sum of the Contract Purchase Price of such Property plus the
Acquisition Fees paid in connection with such Property.

2%/25% Guidelines. The requirement that, in any 12-month period, the
Operating Expenses not exceed the greater of 2% of the Company's Average
Invested Assets during such 12-month period or 25% of the Company's Net
Income over the same 12-month period.

Underlying Real Property. Property serving as collateral for any
Loan.

Valuation. An estimate of value of the assets of the Company as
determined by a Person approved by the Independent Directors, which
Person shall be independent of the Company and the Advisor.

2. APPOINTMENT. The Company hereby appoints the Advisor to serve as
its advisor on the terms and conditions set forth in this Agreement, and the
Advisor hereby accepts such appointment.

3. DUTIES OF THE ADVISOR. The Advisor undertakes to use its best
efforts to present to the Company potential investment opportunities and to
provide a continuing and suitable investment program consistent with the
investment objectives and policies of the Company as determined and adopted from
time to time by the Directors. In performance of this undertaking, subject to
the supervision of the Directors and consistent with the provisions of the
Registration Statement, Articles of Incorporation and Bylaws of the Company, the
Advisor shall, either directly or by engaging an Affiliate:

(a) serve as the Company's investment and financial advisor
and provide research and economic and statistical data in connection
with the Company's assets and investment policies;

(b) provide the daily management of the Company and perform
and supervise the various administrative functions reasonably
necessary for the management of the Company;

(c) investigate, select, and, on behalf of the Company, engage
and conduct business with such Persons as the Advisor deems
necessary to the proper performance of its obligations hereunder,
including but not limited to consultants, accountants,
correspondents, lenders, technical advisors, attorneys, brokers,

-9-
<PAGE> 10
underwriters, corporate fiduciaries, escrow agents, depositaries,
custodians, agents for collection, insurers, insurance agents,
banks, builders, developers, property owners, mortgagors, and any
and all agents for any of the foregoing, including Affiliates of the
Advisor, and Persons acting in any other capacity deemed by the
Advisor necessary or desirable for the performance of any of the
foregoing services, including but not limited to entering into
contracts in the name of the Company with any of the foregoing;

(d) consult with the officers and Directors of the Company and
assist the Directors in the formulation and implementation of the
Company's financial policies, and, as necessary, furnish the
Directors with advice and recommendations with respect to the making
of investments consistent with the investment objectives and
policies of the Company and in connection with any borrowings
proposed to be undertaken by the Company;

(e) subject to the provisions of Sections 3(g) and 4 hereof,
(i) locate, analyze and select potential investments in Property and
Loans; (ii) structure and negotiate the terms and conditions of
transactions pursuant to which investments in Properties and Loans
will be made, purchased or acquired by the Company; (iii) make
investments in Property on behalf of the Company in compliance with
the investment objectives and policies of the Company; (iv) arrange
for financing, and refinancing and make other changes in the asset
or capital structure of, and dispose of, reinvest the proceeds from
the sale of or otherwise deal with the investments in Property and
Loans; and (v) enter into leases and service contracts for
Properties and, to the extent necessary, perform all other
operational functions for the maintenance and administration of such
Properties;

(f) provide the Directors with periodic reports regarding
prospective investments in Properties and Loans;

(g) obtain the prior approval of the Directors (including a
majority of the Independent Directors) for any and all investments
in Property which do not meet all of the requirements set forth in
Section 4(b) hereof and obtain the prior approval of the Independent
Directors for all investments in Loans;

-10-
<PAGE> 11
(h) negotiate on behalf of the Company with banks or lenders
for loans to be made to the Company, and negotiate on behalf of the
Company with investment banking firms and broker-dealers or
negotiate private sales of Shares and Securities or obtain loans for
the Company, but in no event in such a way so that the Advisor shall
be acting as broker-dealer or underwriter; and provided, further,
that any fees and costs payable to third parties incurred by the
Advisor in connection with the foregoing shall be the responsibility
of the Company;

(i) obtain reports (which may be prepared by the Advisor or
its Affiliates), where appropriate, concerning the value of
investments or contemplated investments of the Company in Property
and/or Loans;

(j) obtain for, or provide to, the Company such services as
may be required in acquiring, managing and disposing of Company
Property and/or Loans, including, but not limited to; (i) the
negotiation, making and servicing of Loans; (ii) the disbursement
and collection of Company monies; (iii) the payment of debts of and
fulfillment of the obligations of the Company; and (iv) the
handling, prosecuting and settling of any claims of or against the
Company, including, but not limited to, foreclosing and otherwise
enforcing mortgages and other liens securing the Loans;

(k) from time to time, or at any time reasonably requested by
the Directors, make reports to the Directors of its performance of
services to the Company under this Agreement;

(l) communicate on behalf of the Company with Shareholders as
required to satisfy the reporting and other requirements of any
governmental bodies or agencies to Shareholders and third parties
and otherwise as requested by the Company;

(m) provide or arrange for administrative services and items,
legal and other services, office space, office furnishings,
personnel and other overhead items necessary and incidental to the
Company's business and operations;

(n) provide the Company with such accounting data and any
other information so requested concerning the investment activities
of the Company as shall be required to prepare and to file

-11-
<PAGE> 12
all periodic financial reports and returns required to be filed with
the Securities and Exchange Commission and any other regulatory
agency, including annual financial statements;

(o) maintain the books and records of the Company;

(p) supervise the performance of such ministerial and
administrative functions as may be necessary in connection with the
daily operations of the Properties and Loans;

(q) provide the Company with all necessary cash management
services;

(r) do all things necessary to assure its ability to render
the services described in this Agreement;

(s) perform such other services as may be required from time
to time for management and other activities relating to the assets
of the Company as the Advisor shall deem advisable under the
particular circumstances;

(t) deliver to or maintain on behalf of the Company copies of
all appraisals obtained in connection with investments in Properties
and Loans; and

(u) notify the Board of all proposed transactions before they
are completed.

4. AUTHORITY OF ADVISOR.

(a) Pursuant to the terms of this Agreement (including the
restrictions included in this Section 4 and in Section 7 hereof), and subject to
the continuing and exclusive authority of the Directors over the management of
the Company, the Directors hereby delegate to the Advisor the authority to (1)
locate, analyze and select investment opportunities, (2) structure the terms and
conditions of transactions pursuant to which investments will be made or
acquired for the Company, (3) acquire Property and make Loans in compliance with
the investment objectives and policies of the Company, (4) arrange for financing
or refinancing, or make changes in the asset or capital structure of, and
dispose of or otherwise deal with, Property and Loans, (5) enter into leases and
service contracts for Properties, and perform other property level operations,
(6) oversee non-affiliated property managers and other non-affiliated Persons
who perform services for the Company, and (7) undertake accounting and other
record-keeping functions at the Property level.

-12-
<PAGE> 13
(b) Notwithstanding the foregoing, any investment in Property,
including any acquisition of any Property by the Company (as well as any
financing acquired by the Company in connection with such acquisition), will
require the prior approval of the Directors unless, prior to completion of any
such transaction, the Advisor provides the Company with:

(i) an appraisal for the Property indicating that the Total
Property Cost of the Property does not exceed the Appraised Value of
the Property; and

(ii) a representation from the Advisor that the Property, in
conjunction with the Company's other investments and proposed
investments, at the time the Company is committed to purchase the
Property, is reasonably expected to fulfill the Company's investment
objectives and policies as established by the Directors and then in
effect.

(c) If a transaction requires approval by the Independent Directors,
the Advisor will deliver to the Independent Directors all documents required by
them to properly evaluate the proposed investment in such Property or such Loan.

Notwithstanding the foregoing, the prior approval of the Directors,
including a majority of the Independent Directors, will be required for
transactions involving (a) investments in Properties in respect of which all of
the requirements specified in Section 4(b) hereof have not be satisfied, (b)
investments in Properties made through joint venture arrangements with
Affiliates of the Advisor, (c) investments in Properties which are not
contemplated by the terms of the Prospectus, (d) transactions that present
issues which involve conflicts of interest for the Advisor (other than conflicts
involving the payment of fees or the reimbursement of expenses), (e) investments
in equity securities, and (f) the lease of assets to the Sponsor, any Director
or the Advisor.

The Directors may, at any time upon the giving of notice to the
Advisor, modify or revoke the authority set forth in this Section 4. If and to
the extent the Directors so modify or revoke the authority contained herein, the
Advisor shall henceforth submit to the Directors for prior approval such
proposed transactions involving investments in Property as thereafter require
prior approval, provided however, that such modification or revocation shall be
effective upon receipt by the Advisor and shall not be applicable to investment
transactions to which the Advisor has committed the Company prior to the date of
receipt by the Advisor of such notification.

5. BANK ACCOUNTS. The Advisor may establish and maintain one or more
bank accounts in its own name for the account of the Company or in the name of
the Company and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company,
provided that no funds shall be commingled with

-13-
<PAGE> 14
the funds of the Advisor; and the Advisor shall from time to time render
appropriate accountings of such collections and payments to the Directors and to
the auditors of the Company.

6. RECORDS; ACCESS. The Advisor shall maintain appropriate records
of all its activities hereunder and make such records available for inspection
by the Directors and by counsel, auditors and authorized agents of the Company,
at any time or from time to time during normal business hours. The Advisor shall
at all reasonable times have access to the books and records of the Company.

7. LIMITATIONS ON ACTIVITIES. Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would adversely affect the
status of the Company as a REIT, subject the Company to regulation under the
Investment Company Act of 1940, would violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company, its Shares or its Securities, or otherwise not be permitted by the
Articles of Incorporation or Bylaws, except if such action shall be ordered by
the Directors, in which case the Advisor shall notify promptly the Directors of
the Advisor's judgment of the potential impact of such action and shall refrain
from taking such action until it receives further clarification or instructions
from the Directors. In such event the Advisor shall have no liability for acting
in accordance with the specific instructions of the Directors so given.
Notwithstanding the foregoing, the Advisor, its partners and employees, and
partners, stockholders, directors and officers of the Advisor's partners shall
not be liable to the Company, or to the Directors or Shareholders for any act or
omission by the Advisor, its partners or employees, or partners, stockholders,
directors or officers of the Advisor's partners except as provided in Sections
20 and 22 hereof.

8. RELATIONSHIP WITH DIRECTORS. Partners and employees of the
Advisor or partners in the Advisor or any corporate parents of a partner, or
directors, officers or stockholders of any partner or corporate parent of a
partner may serve as a Director and as officers of the Company, except that no
partner in or employee of the Advisor or its Affiliates who also is a Director
or officer of the Company shall receive any compensation from the Company for
serving as a Director or officer other than for reasonable reimbursement for
travel and related expenses incurred in attending meetings of the Directors.

9. FEES.

(a) ASSET MANAGEMENT FEE. The Company shall pay to the Advisor as
compensation for the advisory services rendered to the Company hereunder an
amount equal to .5% per annum of the Average Invested Assets of the Company (the
"Asset Management Fee") calculated as set forth below. The Asset Management Fee
will be calculated monthly, beginning with the month in which the Company first
makes an investment in Properties or Loans, on the basis of one-twelfth of .5%
of the Average Invested Assets during the previous month, computed as a daily
average. The Asset Management Fee calculated with respect to each month shall be
payable monthly on the last day of such month, or the first business day
following the last day of

-14-
<PAGE> 15
such month. If at the end of any fiscal quarter, the Company's Operating
Expenses exceed the 2%/25% Guidelines over the immediately preceding 12 months,
payment of the Asset Management Fee will be withheld to the extent necessary to
cause the Company to satisfy the 2%/25% Guidelines. Any portion of the Asset
Management Fee not paid due to the Company's failure to satisfy the 2%/25%
Guidelines shall be paid at the end of the next fiscal quarter to the extent
such payment would not cause the Company to fail to satisfy the 2%/25%
Guidelines if such payment were to be included in the Company's Operating
Expenses for the 12 months preceding such payment. For purposes of determining
the amount of the Asset Management Fee, the Average Invested Assets will be, in
any particular month, (i) for all months during the period from inception of the
Company through December 31, 2002, the average of the aggregate book value of
the assets of the Company invested, directly or indirectly, in equity interests,
in Properties and in Loans secured by real estate, before reserves for
depreciation or bad debts or other similar non-cash reserves, all as shown on
the books of the Company on each day of such month and (ii) for all months
beginning after December 31, 2002, the estimated value of all of the Properties
determined in accordance with the most recently conducted Valuation, plus the
principal balance of all Loans. Any part of the Asset Management Fee that has
been subordinated pursuant to this subsection (a) shall not be deemed earned
until such time as payable hereunder.

(b) PERFORMANCE FEE. In addition to the Asset Management Fee
described in Section 9(a) above, the Company shall also pay to the Advisor as
compensation for the advisory services rendered to the Company hereunder an
amount equal to .5% per annum of the Average Invested Assets of the Company (the
"Performance Fee") calculated as set forth below. The Performance Fee will be
calculated monthly, beginning with the month in which the Company first makes an
investment in Properties or Loans, on the basis of one-twelfth of .5% of the
Average Invested Assets during the previous month, computed as a daily average.
The Performance Fee calculated with respect to each month shall be payable on a
quarterly basis on the last day of the first month of the immediately following
fiscal quarter, but only if the Company has paid Dividends to Shareholders in an
amount sufficient to pay the Preferred Return for the period beginning with the
Initial Closing Date and ending on the last day of the most recently completed
fiscal quarter. Any portion of the Performance Fee not paid due to the Company's
failure to pay the Preferred Return shall be paid by the Company, to the extent
it is not restricted by the 2%/25% Guidelines as described below, at the end of
the next fiscal quarter through which the Company has paid the Preferred Return.
If at the end of any fiscal quarter, the Company's Operating Expenses exceed the
2%/25% Guidelines over the immediately preceding 12 months, payment of the
Performance Fee will be withheld to the extent necessary to cause the Company to
satisfy the 2%/25% Guidelines. Any portion of the Performance Fee not paid due
to the Company's failure to satisfy the 2%/25% Guidelines shall be paid at the
end of the next fiscal quarter to the extent such payment would not cause the
Company to fail to satisfy the 2%/25% Guidelines if such payment were to be
included in the Company's Operating Expenses for the 12 months preceding such
payment. For purposes of determining the amount of the Performance Fee, the
Average Invested Assets will be, in any particular month, (i) for all months
during the period from inception of the Company through December 31, 1998, the
average of the aggregate book value of the assets of the Company invested,
directly or indirectly, in equity interests, in Properties and in Loans secured
by

-15-
<PAGE> 16
real estate, before reserves for depreciation or bad debts or other similar
non-cash reserves, all as shown on the books of the Company on each day of such
month and (ii) for all months beginning after December 31, 1998, the estimated
value of all of the Company's Properties determined in accordance with the most
recently conducted Valuation, plus the principal balance of all Loans. Any part
of the Performance Fee that has been subordinated pursuant to this subsection
(b) shall not be deemed earned until such time as payable hereunder.

(c) ACQUISITION FEE. The Advisor may receive as compensation for
services rendered in connection with the investigation, selection and
acquisition (by purchase, investment or exchange) of Property an Acquisition Fee
payable by the seller of such Property or the Company. The total Acquisition
Fees (not including Subordinated Acquisition Fees) payable to the Advisor and
its Affiliates plus Acquisition Fees (not including Subordinated Acquisition
Fees) payable by the Company to any other party may not exceed 2.5% of the
aggregate Total Property Cost of all Properties purchased by the Company with
proceeds from the Offering (calculated after all such proceeds are invested)
unless a majority of the Directors (including a majority of the Independent
Directors) not otherwise interested in any transaction approve the excess as
being commercially competitive, fair and reasonable to the Company. The total
amount of Acquisition Fees (including Subordinated Acquisition Fees and any
interest thereon) and Acquisition Expenses paid by the Company may not exceed
six percent (6%) of the aggregate Contract Purchase Price of all Properties
purchased by the Company unless a majority of the Board (including a majority of
the Independent Directors) not otherwise interested in any transaction approves
fees in excess of this limit as being commercially competitive, fair and
reasonable to the Company. No Acquisition Fees will be payable on the
reinvestment of proceeds from the sale or refinancing of Properties.

(d) SUBORDINATED ACQUISITION FEE. In addition to the Acquisition Fee
described in Section 9(c) above, the Advisor may receive as additional
compensation for services rendered in connection with the investigation,
selection and acquisition (by purchase, investment or exchange) of a Property a
Subordinated Acquisition Fee payable by the seller of such Property or the
Company. The total Subordinated Acquisition Fees payable to the Advisor and its
Affiliates plus Subordinated Acquisition Fees payable by the Company to any
other party may not exceed 2.0% of the aggregate Total Property Cost of all
Properties purchased by the Company with proceeds from the Offering (calculated
after all such proceeds are invested) unless a majority of the Directors
(including a majority of the Independent Directors) not otherwise interested in
any transaction approve the excess as being commercially competitive, fair and
reasonable to the Company. The unpaid portion of the Subordinated Acquisition
Fee with respect to any Property shall bear interest at the rate of [7%] per
annum from the date of acquisition of such Property until such portion is paid.
Subject to the following sentence, the Subordinated Acquisition Fee with respect
to any Property shall be payable in equal annual installments on January 1 of
each of the eight calendar years following the first anniversary of the date
such Property was purchased. Accrued interest shall also be payable on such
dates. The portion of the Subordinated Acquisitions Fees, and accrued interest
thereon, otherwise payable for any year on January 1 of the following year shall
be payable only if the Company has paid Dividends to Shareholders in an amount
sufficient to pay the Preferred Return for the period beginning with the Initial
Closing

-16-
<PAGE> 17
Date and ending on the last day of such year. Any portion of the Subordinated
Acquisitions Fees, and accrued interest thereon, not paid due to the Company's
failure to pay the Preferred Return for the most recently completed fiscal year
shall be paid by the Company on January 1 following the fiscal year through
which the Company has paid the Preferred Return. In the event that the Shares
are listed for trading on a national securities exchange or are included for
quotation on NASDAQ, all Subordinated Acquisition Fees, and accrued interest
thereon, shall be due and payable on the date of such listing or inclusion. No
Subordinated Acquisition Fees will be payable on the reinvestment of proceeds
from the sale or refinancing of Properties.

(e) LOAN REFINANCING FEE. The Company shall pay to the Advisor for
all qualifying loan refinancings of Properties a Loan Refinancing Fee in the
amount of 1% of the principal amount of any loan secured by a Property. Any Loan
Refinancing Fee shall be due and payable upon the funding of the related
mortgage loan or as soon thereafter as is reasonably practicable. A refinancing
will qualify for a Loan Refinancing Fee only if (i) any new loan is approved by
the Independent Directors as being in the best interests of the Company, (ii)
payment of the fee is approved by a majority of the Independent Directors, and
(iii) the terms of the new loan represent an improvement over the terms of the
refinanced loan, the new loan materially increases the total debt secured by a
particular Property or the maturity date of the refinanced loan (which must have
a term of five years or more) is less than one year from the date of the
refinancing.

(f) PROPERTY MANAGEMENT FEE. The Advisor may cause the Company to
pay Property Management Fees for property management services rendered by the
Advisor or its Affiliates in connection with Properties acquired directly or
through foreclosure. The Advisor or an Affiliate will provide property
management services only if a Property becomes vacant or requires more active
management than contemplated at the time such Property is acquired. In either
event, the Company, by approval of the Directors (including a majority of the
Independent Directors), may engage the Advisor or an Affiliate, subject to such
Advisor's or such Affiliate's qualifying as an "independent contractor" pursuant
to Section 856(d)(3) of the Code, to provide property management services. If
such services are rendered by the Advisor or an Affiliate, the maximum Property
Management Fees which may be paid to the Advisor or an Affiliate will be 6% of
gross revenues from commercial Properties and 5% of gross revenues from
residential Properties, plus reimbursed expenses, paid monthly, where such
entity performs property management and leasing, re-leasing and leasing related
services, or 3% of the gross revenues of the Property if only property
management services are performed by such entity. Property Management Fees
payable to the Advisor or an Affiliate for an industrial or commercial Property
leased on a long-term (defined as at least ten years, excluding renewals) triple
net basis, may not exceed 1% of the gross revenues from such Property, except
for a one-time initial leasing fee equal to 3% of total base rents payable for
the first five years of the lease, payable in five equal annual installments.
Such fees to the Advisor or its Affiliate cannot exceed the usual and customary
amounts charged for similar services in the same geographic area.

-17-
<PAGE> 18
(g) SUBORDINATED DISPOSITION FEE. If the Advisor or an Affiliate
provides a substantial amount of the services (as determined by a majority of
the Independent Directors) in the sale of a Property, the Advisor or an
Affiliate shall receive a Subordinated Disposition Fee equal to the lesser of
(i) 50% of the Competitive Real Estate Commission and (ii) 3% of the Contract
Sales Price of such Property. The Subordinated Disposition Fee will be paid only
if Shareholders have received total Dividends in an amount equal to 100% of
Initial Investor Capital plus an amount sufficient to pay a Cumulative Return of
6% from the Initial Closing Date through the date payment is made. To the extent
that Subordinated Disposition Fees are not paid by the Company on a current
basis due to the foregoing limitation, the unpaid fees will be accrued and paid
at such time as the limitation has been satisfied. The Subordinated Disposition
Fee may be paid in addition to real estate commissions paid to non-Affiliates,
provided that the total real estate commissions paid to all Persons by the
Company shall not exceed an amount equal to the lesser of (i) 6% of the Contract
Sales Price of a Property or (ii) the Competitive Real Estate Commission. In the
event this Agreement is terminated prior to such time as the Shareholders have
received total Dividends in an amount equal to 100% of Initial Investor Capital
plus an amount sufficient to pay a Cumulative Return of 6% from the Initial
Closing Date through the date of termination of this Agreement, an appraisal of
the Properties then owned by the Company shall be made and the Subordinated
Disposition Fee on Properties previously sold will be deemed earned if the
Appraised Value of the Properties then owned by the Company plus total Dividends
received prior to the date of termination of this Agreement is equal to 100% of
Initial Investor Capital plus an amount sufficient to pay a Cumulative Return of
6% from the Initial Closing Date through the date of termination of this
Agreement. In the event the Company's Shares are listed on a national securities
exchange or included for quotation on NASDAQ and, at the time of such listing,
the Advisor has accrued a Subordinated Disposition Fee which has not been paid,
for purposes of determining whether the subordination conditions have been
satisfied, Shareholders will be deemed to have received a Dividend in an amount
equal to the product of the total number of outstanding Shares and the average
of the closing prices (or average bid and asked quotes) of the Shares over a
period, beginning 180 days after listing of the Shares, of 30 days during which
the Shares are traded.

(h) SUBORDINATED INCENTIVE FEE. The Subordinated Incentive Fee shall
be payable to the Advisor in an amount equal to 15% of Cash from Sales and
Financings distributed to the Shareholders after the Shareholders have received
total Dividends in an amount equal to 100% of Initial Investor Capital plus an
amount sufficient to pay the Preferred Return from the Initial Closing Date
through the date on which each distribution out of Cash From Sales and
Financings is made. In the event the Shares are listed on a national securities
exchange or included for quotation on NASDAQ, the Advisor shall be paid the
Subordinated Incentive Fee in an amount equal to 12% of the excess (the "Excess
Return") of (A) the sum (the "Hypothetical Return") of (i) the market value of
the Company, measured by taking the average closing price or bid and asked
price, as the case may be, over a period, beginning 180 days after listing of
the Shares, of 30 days during which the Shares are traded (the "Market Value")
plus (ii) the total of the Dividends paid to Shareholders from the Initial
Closing Date until the date the Shares are listed or included for quotation over
(B) the sum of (i) 100% of Initial Investor Capital and (ii) the total

-18-
<PAGE> 19
amount of the Dividends required to be paid to Shareholders in order to pay the
Preferred Return through the date the Market Value is determined. The
Subordinated Incentive Fee shall be increased to 13% of the Excess Return if the
Hypothetical Return is an amount sufficient to return to investors 100% of
Initial Investor Capital plus a cumulative return of 8% or more but less than
9%; 14% if the Hypothetical Return is an amount sufficient to return 100% of
Initial Investor Capital plus a cumulative return of 9% or more but less than
10%; and 15% if the Hypothetical Return is an amount sufficient to return 100%
of Initial Investor Capital plus a cumulative return of 10% or more. The
Cumulative return shall be measured from the Initial Closing Date through the
last day on which the Market Value is determined. The fee may only be paid if
the average closing price of the Shares over any consecutive three-month period
ending within 24 months of the date of listing is sufficient, when added to
Dividends previously paid from the Initial Closing Date through the end of such
three-month period, to return 100% of Initial Investor Capital plus a 6%
cumulative return from the Initial Closing Date through the last day of such
three-month period. The Company shall have the option to pay such fee in the
form of cash, a promissory note or any combination thereof. The promissory note
shall be fully amortizing over five years, provide for quarterly payments and
bear interest at the prime rate announced from time to time by The Bank of New
York.

(i) LOANS FROM AFFILIATES. If any loans are made to the Company by
the Advisor or an Affiliate of the Advisor, the maximum amount of interest that
may be charged by such Affiliate shall be the lesser of (i) 1% above the prime
rate of interest charged from time to time by The Bank of New York and (ii) the
rate that would be charged to the Company by unrelated lending institutions on
comparable loans for the same purpose in the locality of the Property. The terms
of any such loans shall be no less favorable than the terms available between
non-Affiliated Persons for similar commercial loans.

(j) CHANGES TO FEE STRUCTURE. In the event the Shares are listed on
a national securities exchange or are included for quotation on Nasdaq, the
Company and the Advisor shall negotiate in good faith to establish a fee
structure appropriate for a entity with a perpetual life. A majority of the
Independent Directors must approve the new fee structure negotiated with the
Advisor. In negotiating a new fee structure, the Independent Directors shall
consider all of the factors they deem relevant, including but not limited to:
(a) the size of the advisory fee in relation to the size, composition and
profitability of the Company's portfolio; (b) the success of the Advisor in
generating opportunities that meet the investment objectives of the Company; (c)
the rates charged to other REITs and to investors other than REITs by Advisors
performing similar services; (d) additional revenues realized by the Advisor and
its Affiliates through their relationship with the Company, including loan
administration, underwriting or broker commissions, servicing, engineering,
inspection and other fees, whether paid by the Company or by others with whom
the Company does business; (e) the quality and extent of service and advice
furnished by the Advisor; (f) the performance of the investment portfolio of the
Company, including income, conversion or appreciation of capital, frequency of
problem investments and competence in dealing with distress situations; and (g)
the quality of the portfolio of the Company

-19-
<PAGE> 20
in relationship to the investments generated by the Advisor for its own account.
The new fee structure can be no more favorable to the Advisor than the current
fee structure.

(k) PAYMENT. Compensation payable to the Advisor pursuant to this
Section 9 shall be paid in cash; provided, however, that the Performance Fee
payable pursuant to Section 9(b) may be paid, at the option of the Advisor, in
the form of (i) cash, (ii) common stock of the Company or (iii) a combination of
cash and common stock. The Advisor shall notify the Company in writing of the
form in which the fee shall be paid. Such notice shall be provided no later than
January 15 of each year. If no such notice is provided, the fee shall be paid in
cash. For purposes of the payment of compensation to the Advisor in the form of
stock, the value of each share of common stock shall be (i) $10 per share for
each year ending before January 1, 2003 and (ii) thereafter, the Net Asset Value
per Share determined in accordance with the appraisal of the Company's assets
performed as of the end of the immediately preceding year by an Independent
Appraiser. The Net Asset Value determined on the basis of such appraisal may be
adjusted on a quarterly basis by the Board of Directors of the Company to
account for significant capital transactions. Fees paid in the form of stock
shall be paid pursuant to the terms of the form of the Restricted Stock
Agreement attached hereto as Exhibit A or such other terms as the Advisor and
the Company may from time to time agree.

10. EXPENSES. In addition to the compensation paid to the Advisor
pursuant to Section 9 hereof, the Company shall pay directly or reimburse the
Advisor for the following expenses:

(i) the Company's Organizational and Offering Expenses; provided
however, that within 60 days after the end of the month in which the
Offering terminates, the Advisor shall reimburse the Company for any
Organizational and Offering Expense reimbursements received by the
Advisor pursuant to this Section 10 to the extent that such
reimbursements, when added to the balance of the Organizational and
Offering Expenses (excluding selling commissions, and fees paid and
expenses reimbursed to the Selected Dealers) paid directly by the
Company, exceed 3.5% of the Gross Offering Proceeds; provided
further, however, that the Advisor shall be responsible for the
payment of all Organizational and Offering Expenses (excluding such
commissions and such fees and expense reimbursements) in excess of
3.5% of the Gross Offering Proceeds;

(ii) Acquisition Expenses incurred in connection with the
initial investment of the funds of the Company;

(iii) expenses other than Acquisition Expenses incurred in
connection with the investment of the funds of the Company;

-20-
<PAGE> 21
(iv) interest and other costs for borrowed money, including
discounts, points and other similar fees;

(v) taxes and assessments on income or Property and taxes as an
expense of doing business;

(vi) costs associated with insurance required in connection with
the business of the Company or by the Directors;

(vii) expenses of managing and operating Properties owned by the
Company, whether payable to an Affiliate of the Company or a
non-affiliated Person;

(viii) fees and expenses of legal counsel for the Company;

(ix) fees and expense of non-affiliated auditors and accountants
for the Company;

(x) all expenses in connection with payments to
the Directors and meetings of the Directors and
Shareholders;

(xi) expenses associated with listing the Shares and Securities
on a securities exchange or NASDAQ if requested by the Directors or
with the issuance and distribution of Shares and Securities, such as
selling commissions and fees, taxes, legal and accounting fees,
listing and registration fees, and other Organization and Offering
Expenses;

(xii) expenses connected with payments of Dividends in cash or
otherwise made or caused to be made by the Directors to the
Shareholders;

(xiii) expenses of organizing, revising, amending, converting,
modifying, or terminating the Company or the Articles of
Incorporation;

(xiv) expenses of maintaining communications with Shareholders,
including the cost of preparation, printing and mailing annual
reports and other Shareholder reports, proxy statements and other
reports required by governmental entities;

(xv) expenses related to the Properties and Loans and other fees
relating to making investments including personnel and other costs

-21-
<PAGE> 22
incurred in Property or Loan transactions where a fee is not payable
to the Advisor; and

(xvi) all other expenses the Advisor incurs in connection with
providing services to the Company including reimbursement to the
Advisor or its Affiliates for the cost of rent, goods, materials and
personnel incurred by them based upon the compensation of the
Persons involved and an appropriate share of overhead allocable to
those Persons.

No reimbursement shall be made for the cost of personnel to the
extent that such personnel are used in transactions for which the Advisor
receives a separate fee.

Expenses incurred by the Advisor on behalf of the Company and
payable pursuant to this Section 10 shall be reimbursed quarterly to the Advisor
within 60 days after the end of each quarter. The Advisor shall prepare a
statement documenting the expenses of the Company during each quarter, and shall
deliver such statement to the Company within 45 days after the end of each
quarter.

11. OTHER SERVICES. Should the Directors request that the Advisor or
any partner or employee thereof render services for the Company other than set
forth in Section 3 hereof, such services shall be separately compensated and
shall not be deemed to be services pursuant to the terms of this Agreement.

12. FIDELITY BOND. The Advisor shall maintain a fidelity bond for
the benefit of the Company which bond shall insure the Company from losses of up
to $5,000,000 and shall be of the type customarily purchased by entities
performing services similar to those provided to the Company by the Advisor.

13. REFUND BY ADVISOR. Within 60 days after the end of any fiscal
quarter of the Company which begins following the date the Company first
commences operations, if Operating Expenses of the Company during the fiscal
year, ending at the end of such quarter exceed the greater of (a) 2% of the
Average Invested Assets or (b) 25% of the Net Income of the Company during that
fiscal year and a majority of the Independent Directors find this excess amount
justified based on such unusual and non-recurring factors which they deem
sufficient, the Advisor may be reimbursed in future years for the full amount of
such excess expenses, or any portion thereof, but only to the extent such
reimbursement would not cause the Company's Operating Expenses to exceed the
2%/25% Guidelines in any such year. In no event shall the Operating Expenses
paid by the Company in any twelve month period ending at the end of a fiscal
quarter exceed the 2%/25% Guidelines. All figures used in the foregoing
computation shall be determined in accordance with generally accepted accounting
principles applied on a consistent basis. If the Advisor receives an incentive
fee for the sale of Property, Net Income, for purposes of calculating the
Operating Expenses, shall exclude the gain from the sale of such Property.

-22-
<PAGE> 23
14. OTHER ACTIVITIES OF THE ADVISOR. Nothing herein contained shall
prevent the Advisor from engaging in other activities, including without
limitation the rendering of advice to other investors (including other REITs)
and the management of other programs advised, sponsored or organized by the
Advisor or its Affiliates; nor shall this Agreement limit or restrict the right
of any director, officer, employee, partner or shareholder of the Advisor or its
Affiliates to engage in any other business or to render services of any kind to
any other partnership, corporation, firm, individual, trust or association. The
Advisor may, with respect to any investment in which the Company is a
participant, also render advice and service to each and every other participant
therein. The Advisor shall report to the Directors the existence of any
condition or circumstance, existing or anticipated, of which it has knowledge,
which creates or could create a conflict of interest between the Advisor's
obligations to the Company and its obligations to or its interest in any other
partnership, corporation, firm, individual, trust or association. The Advisor or
its Affiliates shall promptly disclose to the Directors knowledge of such
condition or circumstance. If the Sponsor, Advisor, Director or Affiliates
thereof have sponsored other investment programs with similar investment
objectives which have investment funds available at the same time as the
Company, it shall be the duty of the Directors (including the Independent
Directors) to adopt the method set forth in the Registration Statement or
another reasonable method by which properties are to be allocated to the
competing investment entities and to use their best efforts to apply such method
fairly to the Company.

The Advisor shall be required to use its best efforts to present a
continuing and suitable investment program to the Company which is consistent
with the investment policies and objectives of the Company, but neither the
Advisor nor any Affiliate of the Advisor shall be obligated generally to present
any particular investment opportunity to the Company even if the opportunity is
of character which, if presented to the Company, could be taken by the Company.

In the event that the Advisor or its Affiliates is presented with a
potential investment which might be made by the Company and by another
investment entity which the Advisor or its Affiliates advises or manages, the
Advisor shall consider the investment portfolio of each entity, cash flow of
each entity, the effect of the acquisition on the diversification of each
entity's portfolio, rental payments during any renewal period, the estimated
income tax effects of the purchase on each entity, the policies of each entity
relating to leverage, the funds of each entity available for investment, the
amount of equity required to make the investment and the length of time such
funds have been available for investment. To the extent that a Property might be
suitable for the Company and for another investment entity which is advised or
managed by the Advisor, the Advisor shall give priority to the investment
entity, including the Company, which has uninvested funds for the longest period
of time. The Advisor may consider the Property for private placement only if
such Property is deemed inappropriate for any investment entity which is advised
or managed by the Advisor, including the Company.

15. RELATIONSHIP OF ADVISOR AND COMPANY. The Company and the Advisor
agree that they have not created and do not intend to create by this Agreement a
joint venture or

-23-
<PAGE> 24
partnership relationship between them and nothing in this Agreement shall be
construed to make them partners or joint venturers or impose any liability as
partners or joint venturers on either of them.

16. TERM; TERMINATION OF AGREEMENT. This Agreement shall continue in
force until December 31, 1998, and thereafter shall be automatically renewed
from year to year, unless either party shall give notice in writing of
non-renewal to the other party not less than 60 days before the end of any such
year.

17. TERMINATION BY COMPANY. At the sole option of a majority of the
Independent Directors, this Agreement may be terminated immediately by written
notice of termination from the Company to the Advisor if, in addition to the
occurrence of events which would constitute Cause, any of the following events
occur:

(a) If the Advisor shall violate any material provision of
this Agreement, and after written notice of such violation, shall
not cure such default within 30 days or have begun action within 30
days to cure the default which shall be completed with reasonable
diligence; or

(b) If the Advisor shall be adjudged bankrupt or insolvent by
a court of competent jurisdiction, or an order shall be made by a
court of competent jurisdiction for the appointment of a receiver,
liquidator, or trustee of the Advisor, for all or substantially all
of its property by reason of the foregoing, or if a court of
competent jurisdiction approves any petition filed against the
Advisor for reorganization, and such adjudication or order shall
remain in force or unstayed for a period of 30 days; or

(c) If the Advisor shall institute proceedings for voluntary
bankruptcy or shall file a petition seeking reorganization under the
federal bankruptcy laws, or for relief under any law for relief of
debtors, or shall consent to the appointment of a receiver for
itself or for all or substantially all of its property, or shall
make a general assignment for the benefit of its creditors, or shall
admit in writing its inability to pay its debts, generally, as they
become due.

Any notice of termination under Section 16 or 17 shall be effective
on the date specified in such notice, which may be the day on which such notice
is given or any date thereafter. The Advisor agrees that if any of the events
specified in Section 17 (b) or (c) shall occur, it shall give written notice
thereof to the Directors within 15 days after the occurrence of such event.

-24-
<PAGE> 25
18. TERMINATION BY EITHER PARTY. This Agreement may be terminated
immediately without penalty by the Advisor by written notice of termination to
the Company upon the occurrence of events which would constitute Good Reason or
by the Company without cause or penalty by action of the Directors, the
Independent Directors or by action of a majority of the Shareholders, in either
case upon 60 days' written notice.

19. ASSIGNMENT PROHIBITION. This Agreement may not be assigned by
the Advisor without the approval of a majority of the Directors (including a
majority of the Independent Directors); provided, however, that such approval
shall not be required in the case of an assignment to a corporation,
partnership, association, trust or organization which may take over the assets
and carry on the affairs of the Advisor, provided (i) that at the time of such
assignment, such successor organization shall be owned substantially by the then
partners of the Advisor or their Affiliates and only if such entity has a net
worth of at least $5,000,000 and (ii) that a general partner of the Advisor
shall deliver to the Directors a statement in writing indicating the ownership
structure and net worth of the successor organization and a certification from
the new Advisor as to its net worth. Such an assignment shall bind the assignees
hereunder in the same manner as the Advisor is bound by this Agreement. The
Advisor may assign any rights to receive fees or other payments under this
Agreement without obtaining the approval of the Directors. This Agreement shall
not be assigned by the Company without the consent of the Advisor, except in the
case of an assignment by the Company to a corporation or other organization
which is a successor to the Company, in which case such successor organization
shall be bound hereunder and by the terms of said assignment in the same manner
as the Company is bound by this Agreement.

20. PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.

(a) After the Termination Date, the Advisor shall not be entitled to
compensation for further services hereunder except it shall be entitled to
receive from the Company within 30 days after the effective date of such
termination the following:

(i) all unpaid reimbursements of Organization and Offering
Expenses and of Operating Expenses payable to the Advisor;

(ii) all earned but unpaid Asset Management Fees and
Performance Fees payable to the Advisor prior to the termination of
this Agreement;

(iii) all earned but unpaid Subordinated Acquisition Fees and
all unaccrued Subordinated Acquisition Fees, in each case payable to
the Advisor relating to the acquisition of any Property prior to the
termination of this Agreement;

(iv) all earned but unpaid Subordinated Disposition Fees
payable to the Advisor relating to the sale of any Property prior to
the termination of this Agreement;

-25-
<PAGE> 26
(v) all earned but unpaid Loan Refinancing Fees payable to the
Advisor relating to the financing or refinancing of any Property
prior to the termination of this Agreement; and

(vi) all earned but unpaid Property Management Fees payable to
the Advisor or its Affiliates relating to the management of any
property prior to the termination of this Agreement.

Notwithstanding the foregoing, in the event this Agreement is
terminated by the Company for Cause or by the Advisor for other than Good
Reason, the Advisor will not be entitled to receive the sums in subparagraphs
20(a)(i)-(vi), above. All amounts payable to the Advisor in the event of a
termination shall be evidenced by a non-interest bearing promissory note (the
"Note") having a principal amount of the unpaid amount payable to the Advisor.

(b) If this Agreement is terminated by the Company for any reason
other than Cause, by either party in connection with a Change of Control, or by
the Advisor for Good Reason, the Advisor shall be entitled to payment of the
Termination Fee.

(c) The Termination Fee shall be paid in a manner determined by the
Directors, but in no event shall any portion of the Termination Fee remain
unpaid three years after the termination, non-renewal or substantial
modification of this Agreement, nor shall the Termination Fee be paid in less
than 12 equal quarterly installments, with interest, on the unpaid balance at
the prime rate of interest then in effect as announced by The Bank of New York.
Notwithstanding the preceding sentence, any amounts which may be deemed payable
at the date the obligation to pay the Termination Fee is incurred (i) shall be
an amount which provides compensation to the Advisor only for that portion of
the holding period for the respective Properties during which the Advisor
provided services to the Company, (ii) shall not be due and payable until the
Property to which such fees relate is sold or refinanced, and (iii) shall not
bear interest until the Property to which such fees relate is sold or
refinanced. A portion of the Termination Fee shall be paid as each Property
owned by the Company on the Termination Date is sold. The portion of the
Termination Fee payable upon each such sale shall be equal to (y) the
Termination Fee multiplied by (z) the percentage calculated by dividing the
Appraised Value (at the Termination Date) of the Property sold by the Company
divided by the total Appraised Value (at the Termination Date) of all Properties
owned by the Company on the Termination Date.

The Note for amounts payable as described above shall mature upon
the liquidation of the Company (or ten years from date of issuance whichever is
earlier) and shall be payable at any time prior to maturity. The compensation
payable under this Subsection shall be paid or delivered to the Advisor within
30 days after funds shall become available to the Company for the making of such
payments.

(d) Notwithstanding the foregoing, the Advisor shall not be entitled
to payment of the Termination Fee in the event this Agreement is terminated
because of failure of the Company

-26-
<PAGE> 27
and the Advisor to establish, pursuant to Section 9(j) hereof, a fee structure
appropriate for an entity with a perpetual life in the event the Shares are
listed on a national securities exchange or are included for quotation on
NASDAQ.

(e) The Advisor shall promptly upon termination:

(i) pay over to the Company all money collected and held for
the account of the Company pursuant to this Agreement, after
deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled;

(ii) deliver to the Directors a full accounting, including a
statement showing all payments collected by it and a statement of
all money held by it, covering the period following the date of the
last accounting furnished to the Directors;

(iii) deliver to the Directors all assets, including
Properties and Loans, and documents of the Company then in the
custody of the Advisor; and

(iv) cooperate with the Company to provide an orderly
management transition.

21. INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and
hold harmless the Advisor and its Affiliates, including their respective
officers, directors, partners and employees, from all liability, claims, damages
or losses arising in the performance of their duties hereunder, and related
expenses, including reasonable attorneys' fees, to the extent such liability,
claims, damages or losses and related expenses are not fully reimbursed by
insurance, subject to any limitations imposed by the laws of the State of
Maryland, the Articles of Incorporation or the Bylaws of the Company.
Notwithstanding the foregoing, the Advisor shall not be entitled to
indemnification or be held harmless pursuant to this Section 21 for any activity
which the Advisor shall be required to indemnify or hold harmless the Company
pursuant to Section 22.

22. INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and hold
harmless the Company from liability, claims, damages, taxes or losses and
related expenses including attorneys' fees, to the extent that such liability,
claims, damages, taxes or losses and related expenses are not fully reimbursed
by insurance and are incurred by reason of the Advisor's bad faith, fraud,
willful misfeasance, misconduct, negligence or reckless disregard of its duties.

23. NOTICES. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is accepted by the party to
whom it is given, and shall be given by being

-27-
<PAGE> 28
delivered by hand or by overnight mail or other overnight delivery service to
the addresses set forth herein:

To the Directors Corporate Property Associates 14
and to the Company: Incorporated
50 Rockefeller Plaza
New York, NY 10020

To the Advisor: Carey Property Advisors
50 Rockefeller Plaza
New York, NY 10020

Either party may at any time give notice in writing to the other
party of a change in its address for the purposes of this Section 23.

24. MODIFICATION. This Agreement shall not be changed, modified,
terminated, or discharged, in whole or in part, except by an instrument in
writing signed by both parties hereto, or their respective successors or
assignees.

25. SEVERABILITY. The provisions of this Agreement are independent
of and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

26. CONSTRUCTION. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York.

27. ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

28. INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on
the part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.

-28-
<PAGE> 29
29. GENDER. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

30. TITLES NOT TO AFFECT INTERPRETATION. The titles of Sections and
subsections contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

31. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

32. NAME. W.P. Carey & Co., Inc. has a proprietary interest in the
name "Corporate Property Associates" and "CPA(R)." Accordingly, and in
recognition of this right, if at any time the Company ceases to retain Carey
Property Advisors or an Affiliate thereof to perform the services of Advisor,
the Directors of the Company will, promptly after receipt of written request
from Carey Property Advisors, cease to conduct business under or use the name
"Corporate Property Associates" or "CPA(R)" or any diminutive thereof and the
Company shall use its best efforts to change the name of the Company to a name
that does not contain the name "Corporate Property Associates" or "CPA(R)" or
any other word or words that might, in the sole discretion of the Advisor, be
susceptible of indication of some form of relationship between the Company and
the Advisor or any Affiliate thereof. Consistent with the foregoing, it is
specifically recognized that the Advisor or one or more of its Affiliates has in
the past and may in the future organize, sponsor or otherwise permit to exist
other investment vehicles (including vehicles for investment in real estate) and
financial and service organizations having "Corporate Property Associates" or
"CPA(R)" as a part of their name, all without the need for any consent (and
without the right to object thereto) by the Company or its Directors.

33. INITIAL INVESTMENT. The Advisor has contributed to the Company
$200,000 in exchange for 20,000 Shares (the "Initial Investment"). The Advisor
or its Affiliates may not sell any of the Shares purchased with the Initial
Investment during the term of this Agreement. The restrictions included above
shall not continue to apply to any Shares other than the Share acquired through
the Initial Investment acquired by the Advisor or its Affiliates. The Advisor
shall not vote any Shares it now owns or hereafter acquires in any vote for the
election of Directors or any vote regarding the approval or termination of any
contract with the Advisor or any of its Affiliates.

IN WITNESS WHEREOF, the parties hereto have executed this Advisory
Agreement as of the day and year first above written.

-29-
<PAGE> 30
CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

By:_________________________________________
Name:
Title:

CAREY PROPERTY ADVISORS, L.P.

By: CAREY FIDUCIARY ADVISORS, INC.
Its General Partner

By:___________________________________
Name:
Title:

-30-
<PAGE> 31
EXHIBIT A

RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT dated ________________, by and between
Corporate Property Associates 14 Incorporated ("CPA(R):14"), a Maryland
corporation and Carey Property Advisors L.P. ("Advisor"), a Pennsylvania
limited partnership.

WITNESSETH

WHEREAS, CPA(R):14 and Advisor entered into an Advisory Agreement dated
November 10, 1997 (the "Advisory Agreement") and amended on December 17, 1998
pursuant to which Advisor provides various services to CPA(R):14;

WHEREAS, pursuant to the Advisory Agreement, CPA(R):14 is required to pay
certain fees to the Advisor and the Advisor may request that certain fees be
paid with common stock of the Company; and

WHEREAS, the Advisor has requested that CPA(R):14 pay a portion of the
fees due to Advisor in the form of shares of common stock of CPA(R):14.

NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows.

1. Payment of Fees with Stock. CPA(R):14 hereby grants to Advisor
shares of common stock of CPA(R):14 (the "Shares").

2. Restrictions. The Shares are subject to vesting over a five-year
period. The Shares shall vest ratably over a five-year period with 20% of the
Shares paid in each payment vesting on each of the first through fifth
anniversary of the date hereof. Prior to the vesting of the ownership of the
Shares in the Advisor, the Shares may not be transferred by the Advisor.

3. Immediate Vesting. Upon the expiration of the Advisory Agreement
for any reason other than a termination for Cause under paragraph 17 of the
Advisory Agreement or upon a "Change of Control" of CPA(R):14 (as defined
below), all Shares granted to the Advisor
<PAGE> 32
hereunder shall vest immediately and all restrictions shall lapse. For purposes
of this Agreement, a "Change of Control" of the Company shall be deemed to have
occurred if there has been a change in the ownership of the Company of a nature
that would be required to be reported in response to the disclosure requirements
of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended (the "Act"), as enacted and in force on the date hereof,
whether or not the Company is then subject to such reporting requirements;
provided, however, that, without limitation, a Change of Control shall be deemed
to have occurred if:

(i) any "person", as such term is used in Sections 13(d) and
14(d) of the Act (other than the Company, any of its subsidiaries, any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan of the Company or any of its subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in Rule 14b-2 under the
Act) of such person, shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 25% or more of either (A) the combined voting power of
the Company's then outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting Securities") or (B) the
then outstanding common stock of the Company (in either such case other than as
a result of acquisition of securities directly from the Company);

(ii) persons who, as of the date hereof, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason, including
without limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the Board of
Directors, provided that any person becoming a director of the Company
subsequent to the date hereof whose election or nomination for election was
approved by a vote of at least a majority of the Incumbent Directors shall, for
purposes of this Agreement, be considered an Incumbent Director; or

(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any subsidiary where the stockholders
of the Company, immediately

A-2
<PAGE> 33
prior to the consolidation or merger, would not, immediately after the
consolidation or merger, beneficially own (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, shares representing in the aggregate 50%
or more of the voting equity of the entity issuing cash or securities in the
consolidation or merger (or of its ultimate parent entity, if any), (B) any
sale, lease, exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company or (C) any plan or proposal for
the liquidation or dissolution of the Company.

Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of Shares of Common Stock outstanding, increases (x) the proportionate
number of Shares beneficially owned by any person to 25% or more of the Shares
then outstanding or (y) the proportionate voting power represented by the Shares
beneficially owned by any person to 25% or more of the combined voting power of
all then outstanding voting Securities; provided, however, that if any person
referred to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional Shares or other Voting Securities (other than
pursuant to a Share split, Share dividend, or similar transaction), then a
"Change of Control" shall be deemed to have occurred for purposes of the
foregoing clause (i).

A-3
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

CORPORATE PROPERTY ASSOCIATES 14
INCORPORATED

By:____________________________________

CAREY PROPERTY ADVISORS, L.P.

By: CAREY FIDUCIARY ADVISORS, INC.,
its general partner

By:______________________________

A-4

<PAGE> 1

EXHIBIT 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-11 of our
reports dated March 5, 1999, relating to the (i) consolidated financial
statements and financial statement schedule of Corporate Property Associates 14
Incorporated and Subsidiaries which appear in such Registration Statement, and
(ii) financial statements and financial statement schedule of ET LLC which
appear in such Registration Statement. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

New York, New York

November 12, 1999

<PAGE> 1

EXHIBIT 99.1

TABLE VI (1 OF 5)
ACQUISITION OF PROPERTIES BY

CIP(R) & CPA(R):12 AS OF DECEMBER 31, 1998

GROSS
LEASABLE ORIGINAL CASH DOWN
TYPE OF SPACE DATE OF MORTGAGE PAYMENT-
OCCUPANT/GUARANTOR PROPERTY LOCATION (SQ.FT.) PURCHASE FINANCING EQUITY
- ------------------ ------------- ------------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Big V Holding Corp.(3)......... 45% interest Ellenville 133,554 7/13/94 3,334,416 3,077,187
in and Warwick,
Supermarkets NY
Wal-Mart Stores, Inc. ......... Distribution Greenfield, 82,620 2/10/95 2,500,000 1,278,781
facility Indiana
Etec Systems, Inc.............. Office/ Hayward, 153,531 2/16/95 15,000,000 9,408,792
Manufacturing California
facility
Q Clubs, Inc. (formerly Sports
&
Fitness Club, Inc.)........... Health club Austin, Texas 43,935 5/8/95 2,750,000 2,747,000
The Garden Companies........... Manufacturing Chattanooga, 242,317 6/20/95 3,500,000 3,475,000
facility Tennessee
Del Monte Foods, Inc. ......... Warehouses Mendota, 239,850 11/9/95 6,250,000 4,453,200
and special Illinois; 210,000
purpose Plover, 274,750
facility Wisconsin; 11,165
Toppenish and
Yakima,
Washington
Applied Bioscience............. Warehouse/ Austin, Texas 173,000 11/13/95 7,500,000 5,068,295
office/research
facility
Rheometric Scientific, Inc..... Office/ Piscataway, 104,120 2/23/1996 6,300,000
Manufacturing New Jersey
facility
Telos Corporation.............. Office Loudon 192,775 3/11/1996 6,250,000 5,897,000
facility County,
Virginia
**Lanxide Corporation.......... Research and Newark, 162,220 3/28/1996 4,400,000 4,272,000
development Delaware
facility
Q Clubs, Inc................... Health club Houston, 46,733 7/25/1996 0 6,180,000
Texas

<CAPTION>
CONTRACT
PURCHASE PRICE
PLUS OTHER CASH OTHER
ACQUISITION EXPENDITURES CAPITALIZED TOTAL COST
OCCUPANT/GUARANTOR FEES EXPENSED EXPENDITURES(1)(2) OF PROPERTY
- ------------------ -------------- ------------ ------------------ -----------
<S> <C> <C> <C> <C>
Big V Holding Corp.(3)......... 6,411,603 0 58,940 6,470,543
Wal-Mart Stores, Inc. ......... 3,778,781 0 12,921 3,791,702
Etec Systems, Inc.............. 24,408,792 0 5,241,343 29,650,135
Q Clubs, Inc. (formerly Sports
&
Fitness Club, Inc.)........... 5,497,000 0 0 5,497,000
The Garden Companies........... 6,975,000 0 0 6,975,000
Del Monte Foods, Inc. ......... 10,703,200 0 (159,903) 10,543,297
Applied Bioscience............. 12,568,295 0 27,856 12,596,151
Rheometric Scientific, Inc..... 6,300,000 0 4,500 6,304,500
Telos Corporation.............. 12,147,000 0 5,500 12,152,500
**Lanxide Corporation.......... 8,672,000 0 7,421 8,679,421
Q Clubs, Inc................... 6,180,000 0 0 6,180,000
</TABLE>

1
<PAGE> 2

TABLE VI (2 OF 5)
ACQUISITION OF PROPERTIES BY

CIP(R) & CPA(R):12 AS OF DECEMBER 31, 1998

GROSS
LEASABLE ORIGINAL CASH DOWN
TYPE OF SPACE DATE OF MORTGAGE PAYMENT-
OCCUPANT/GUARANTOR PROPERTY LOCATION (SQ.FT.) PURCHASE FINANCING EQUITY
- ------------------ ------------- ------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Celadon Group, Inc................. Distribution/ Indianapolis, 60,938 8/19/1996 0 6,801,000
warehouse Indiana
facility
Spectrian Corporation.............. Office/ Sunnyvale, 81,318 11/19/1996 10,000,000 7,643,979
research California
facility
Garden Ridge Corporation........... Retail store Tulsa, 141,284 12/16/1996 4,600,000 3,462,530
Oklahoma
Knogo North America, Inc........... Office/ Hauppauge, 68,333 12/24/1996 0 4,925,000
distribution New York
facility
Scott Companies, Inc............... Office/ San Leandro, 270,000 1/23/97 10,300,000 7,610,000
Research California
facility
Childtime Childcare, Inc........... Childcare Chandler, 33,684 1/29/1997 2,500,000 5,882,120
Centers Arizona
(under Fleming
construction) Island,
Florida
Sugar Land
and New
Territory,
Texas,
Ackworth,
Georgia
Silverdale,
Washington
Hauppauge, NY
Hampton, VA
Patchaque, NY
QMS, Inc. ......................... Office/ Mobile, 277,000 2/18/1997 5,900,000 7,974,346
Research Alabama
Facility
The Bon-Ton Stores, Inc. .......... Retail and Allentown, 399,175 4/10/997 6,900,000 5,141,885
Distribution Pennsylvania
facilities Johnstown, 80,884
Pennsylvania
Silgan Containers Corporation...... Technology/ Manomonie and 228,381 6/13/97 0 12,389,345
Manufacturing
facilities Oconomowoc,
Wisconsin

<CAPTION>
CONTRACT
PURCHASE PRICE
PLUS OTHER CASH OTHER TOTAL COST
ACQUISITION EXPENDITURES CAPITALIZED OF
OCCUPANT/GUARANTOR FEES EXPENSED EXPENDITURES(1)(2) PROPERTY
- ------------------ -------------- ------------ ------------------ ----------
<S> <C> <C> <C> <C>
Celadon Group, Inc................. 6,801,000 0 40,000 6,841,000
Spectrian Corporation.............. 17,643,979 0 4,119 17,648,098
Garden Ridge Corporation........... 8,062,530 0 0 8,062,530
Knogo North America, Inc........... 4,925,000 0 0 4,925,000
Scott Companies, Inc............... 17,910,000 0 5,356 17,915,356
Childtime Childcare, Inc........... 8,382,120 0 (181,525) 8,200,595
QMS, Inc. ......................... 13,874,346 0 0 13,874,346
The Bon-Ton Stores, Inc. .......... 12,041,885 0 0 12,041,885
Silgan Containers Corporation...... 12,389,345 0 0 12,389,345
</TABLE>

2
<PAGE> 3

TABLE VI (3 OF 5)
ACQUISITION OF PROPERTIES BY

CIP(R) & CPA(R):12 AS OF DECEMBER 31, 1998

GROSS
LEASABLE ORIGINAL CASH DOWN
TYPE OF SPACE DATE OF MORTGAGE PAYMENT-
OCCUPANT/GUARANTOR PROPERTY LOCATION (SQ.FT.) PURCHASE FINANCING EQUITY
- ------------------ ------------- ------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Pagg Corporation................... Office/ Milford, 108,125 7/8/1997 3,200,000 2,349,738
Research Massachusetts
facility
Vermont Teddy Bear Co.............. Office/ Shelburne, 55,446 7/18/97 3,311,509 2,552,365
Manufacturing Vermont
facility
Texas Freezer Company, Inc. ....... Warehouse/ Dallas, Texas 219,814 9/23/97 4,500,000 4,415,123
Special
Purpose
facility
(under
construction)
GDE Systems, Inc. ................. Research San Diego, 123,200 9/23/97 0 12,766,810
facility California
Westell Technologies Inc........... Office/ Aurora, 185,410 9/29/97 0 17,435,000
Manufacturing Illinois
facility
Brown Institute, Ltd............... Administration/ Mendota 118,241 11/12/97 0 9,990,486
Classroom Heights,
facility Minnesota
Randall International, Inc. ....... Office/ Carlsbald, 11/26/97 0 4,749,442
Manufacturing California
and
Warehouse
facility
(under
construction)
Perry Graphic Communications,
Inc............................... Printing Baraboo and 895,356 12/16/97 11,000,000 8,109,948
facilities Waterloo,
Wisconsin
Sandwich Bankcorp, Inc. ........... Office/ Boume, 21,606 12/30/97 0 1,820,000
Banking Sandwich and
facilities Wareham,
Massachusetts
Nutramax Products, Inc. ........... Manufacturing/ Houston, 248,960 3/28/1998 0 7,323,953
Distribution Texas
facilities

<CAPTION>
CONTRACT
PURCHASE PRICE
PLUS OTHER CASH OTHER TOTAL COST
ACQUISITION EXPENDITURES CAPITALIZED OF
OCCUPANT/GUARANTOR FEES EXPENSED EXPENDITURES(1)(2) PROPERTY
- ------------------ -------------- ------------ ------------------ ----------
<S> <C> <C> <C> <C>
Pagg Corporation................... 5,549,738 0 0 5,549,738
Vermont Teddy Bear Co.............. 5,863,874 0 1,640 5,865,514
Texas Freezer Company, Inc. ....... 8,915,123 0 (397,221) 8,517,902
GDE Systems, Inc. ................. 12,766,810 0 446,911 13,213,721
Westell Technologies Inc........... 17,435,000 0 17,055 17,452,055
Brown Institute, Ltd............... 9,990,486 0 1,795,282 11,785,768
Randall International, Inc. ....... 4,749,442 0 (211,446) 4,537,996
Perry Graphic Communications,
Inc............................... 19,109,948 0 8,000 19,117,948
Sandwich Bankcorp, Inc. ........... 1,820,000 0 0 1,820,000
Nutramax Products, Inc. ........... 7,323,953 0 4,016 7,327,969
</TABLE>

3
<PAGE> 4

TABLE VI (4 OF 5)
ACQUISITION OF PROPERTIES BY

CIP(R) & CPA(R):12 AS OF DECEMBER 31, 1998

GROSS
LEASABLE ORIGINAL CASH DOWN
TYPE OF SPACE DATE OF MORTGAGE PAYMENT-
OCCUPANT/GUARANTOR PROPERTY LOCATION (SQ.FT.) PURCHASE FINANCING EQUITY
- ------------------ ------------- ------------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Omnicom Group Inc.............. Office Playa Vista, 120,000 3/30/1998 18,400,000 4,125,000
facilities California
International Management
Consulting, Inc. .............. Office/Light Asburn, 69,983 5/18/1998 0 5,331,602
assembly Virginia
facilities
Balance Care Corporation....... Office Mechanicburg, 42,000 6/23/1998 0 2,311,434
facilities Pennsylvania
----------- -----------
132,095,925 197,268,361
=========== ===========
Investment in BB Property
Company(4)
Best Buy Co., Inc. ............ 37% interest Ft. Collins 558,695 5/13/94 12,136,000 4,970,210
as Limited and Denver,
Partner in Colorado;
Partnership Bloomingdale,
which owns Matteson,
retail stores Bedford Park,
Aurora and
Schaumburg,
Illinois;
Omaha,
Nebraska;
Albuquerque,
New Mexico;
Beaumont, El
Paso,
Houston, Fort
Worth,
Arlington,
Plano and
Dallas,
Texas;
Madison,
Wisconsin
Investment in GENA Property
Company(5)
Gensis, Inc. .................. 50% interest San Diego, 144,311 10/14/94 6,500,000 5,237,498
in a California
partnership
which owns an
Office/
Research and
Development
facility

<CAPTION>
CONTRACT
PURCHASE PRICE
PLUS OTHER CASH OTHER
ACQUISITION EXPENDITURES CAPITALIZED TOTAL COST
OCCUPANT/GUARANTOR FEES EXPENSED EXPENDITURES(1)(2) OF PROPERTY
- ------------------ -------------- ------------ ------------------ -----------
<S> <C> <C> <C> <C>
Omnicom Group Inc.............. 22,525,000 51,631 (439,506) 22,137,125
International Management
Consulting, Inc. .............. 5,331,602 0 (118,063) 5,213,539
Balance Care Corporation....... 2,311,434 0 (66,039) 2,245,395
----------- ------ ---------- -----------
329,364,286 51,631 6,107,157 335,523,074
=========== ====== ========== ===========
Investment in BB Property
Company(4)
Best Buy Co., Inc. ............ 17,106,210 0 595 17,106,805
Investment in GENA Property
Company(5)
Gensis, Inc. .................. 11,737,498 0 (272,961) 11,464,537
</TABLE>

4
<PAGE> 5

TABLE VI (5 OF 5)
ACQUISITION OF PROPERTIES BY

CIP(R) & CPA(R):12 AS OF DECEMBER 31, 1998

FOOTNOTES

(1) Consists of cost of improvements subsequent to acquisitions and closing
costs relating to the acquisition or properties such as the costs of
appraisals and other closing costs such as attorneys' fees and accountants'
fees and costs of title reports, transfer and recording taxes and title
insurance.
(2) For properties under construction, interest on mortgages is capitalized
rather than expensed and rentals received are recorded as a reduction of the
basis in the properties.
(3) CPA(R):12 has a 45% ownership in this property. The remaining 55% is owned
by CIP(R), an affiliate of CPA(R):12, CPA(R):12 and CIP(R) hold title to
their respective interests as tenants-in-common.
(4) CPA(R):12 has a 37% interest as a limited partner in a partnership with
CIP(R) which owns 63% as a general partner.
(5) CPA(R):12 has 50% ownership in this property. The remaining 50% is owned by
CIP(R). CIP(R) and CPA(R):12 hold title to their respective interests as
tenants-in-common.

(6) CPA(R):12 has a 50% ownership in these properties. The remaining 50% is
owned by CIP(R). CIP(R) and CPA(R):12 hold title to their respective
interests as tenants-in-common. All dollar figures shown reflect CPA(R):12's
interest in the property.

(7) CPA(R):12 has a 33.33% ownership in these properties. The remaining 66.67%
is owned by CIP(R) and CPA(R):14. CIP(R), CPA(R):12 and CPA(R):14 hold title
to their respective interests as tenants-in-common.
All dollar figures shown reflect CPA(R):12's interest in the property.

** Lanoxide writedown not included