CNL HEALTH CARE PROPERTIES INC
424B3, 1999-05-12
REAL ESTATE INVESTMENT TRUSTS
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                        CNL HEALTH CARE PROPERTIES, INC.

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                     Supplement No. 1, dated May 12, 1999
                      to Prospectus, dated September 18, 1998
================================================================================


         This Supplement is part of, and should be read in conjunction with, the
Prospectus  dated  September  18,  1998.  This  Supplement  replaces  all  prior
Supplements to the  Prospectus.  Capitalized  terms used in this Supplement have
the same meaning as in the Prospectus unless otherwise stated herein.

         As of March 26, 1999,  the Company had not acquired any  properties nor
entered  into any initial  commitments  to acquire any  properties.  Information
regarding   proposed   properties  for  which  the  Company   receives   initial
commitments,  as well as property  acquisitions that occur after March 26, 1999,
will be reported in a subsequent Supplement.


                                  RISK FACTORS

TAX RISKS

         Our leases may be  recharacterized  as financings which would eliminate
depreciation deductions on health care properties. Our tax counsel, Shaw Pittman
Potts & Trowbridge, is of the opinion, based upon certain assumptions,  that the
leases of health care and  seniors'  housing  facilities  where we would own the
underlying  land would  constitute  leases  for  federal  income  tax  purposes.
However,  with respect to the health care and seniors' housing  facilities where
we would not own the  underlying  land,  Shaw  Pittman is unable to render  this
opinion.  If the lease of a health care and seniors'  housing  facility does not
constitute  a lease for  federal  income tax  purposes,  it will be treated as a
financing  arrangement.  In the opinion of Shaw Pittman, the income derived from
such a financing  arrangement  would  satisfy  the 75% and the 95% gross  income
tests for REIT qualification  because it would be considered to be interest on a
loan secured by real property.  Nevertheless,  the recharacterization of a lease
in this fashion may have adverse tax  consequences for us, in particular that we
would not be  entitled  to claim  depreciation  deductions  with  respect to the
health  care  facility  (although  we would  be  entitled  to treat  part of the
payments we would receive under the  arrangement as the repayment of principal).
In such event, in some taxable years our taxable income,  and the  corresponding
obligation to distribute 95% of such income, would be increased. Any increase in
our  distribution  requirements  may limit our  ability to invest in  additional
health care and seniors'  housing  facilities  and to make  additional  mortgage
loans.


                             MANAGEMENT COMPENSATION

         For  information  concerning  compensation  and  fees to be paid to the
Advisor and its Affiliates  which have been incurred since the date of inception
of the Company, see "Certain Relationships and Related Transactions."


                             SELECTED FINANCIAL DATA

         The following  table sets forth certain  financial  information for the
Company,  and should be read in conjunction  with  "Management's  Discussion and
Analysis of Financial  Condition  and Results of  Operations " and the Financial
Statements included in Appendix B.

<TABLE>
<CAPTION>
<S> <C>

                                             Quarter Ended                        Year Ended
                                 March 31, 1999 (1)    March 31, 1998 (1)         December 31,
                                    (Unaudited)            (Unaudited)        1998 (1)    1997 (1) (2) 
                                 -----------------     -----------------  --------------  ------------ 

    Revenues                      $         -          $          -       $          -       $     -  
    Net earnings                            -                     -                  -  
    Cash distributions declared             -                     -                  -             -  

                                 March 31, 1999        March 31, 1998      December 31,     December 31,
                                  (Unaudited)           (Unaudited)            1998             1997         
                                  -----------           -----------        ------------     ------------         

    Total assets                     $1,115,219            $282,378             $976,579        $280,330
    Total stockholder's equity          200,000             200,000              200,000         200,000

</TABLE>

(1)      As of the  date of  this  Prospectus,  no  significant  operations  had
         commenced and the Company was in its  development  stage. No operations
         will commence  until such time as the Company has sold at least 250,000
         Shares ($2,500,000).

(2)      Selected  financial  data for 1997  represents the period  December 22,
         1997 (date of inception)  through December 31, 1997.



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

         The Company is a Maryland  corporation  that was  organized on December
22, 1997,  to acquire  Properties  related to health care and  seniors'  housing
facilities  located  across the United  States.  The Health Care  Facilities may
include  congregate  living,  assisted  living and skilled  nursing  facilities,
continuing care retirement  communities and life care  communities,  and medical
office  buildings  and  walk-in  clinics.  The  Properties  will be  leased on a
long-term,  "triple-net"  basis.  The Company may also provide Mortgage Loans to
operators  of  Health  Care  Facilities  in the  aggregate  principal  amount of
approximately  5% to 10% of the  Company's  total  assets.  The Company also may
offer  Secured  Equipment  Leases to  operators of Health Care  Facilities.  The
aggregate principal amount of Secured Equipment Leases is not expected to exceed
10% of the Company's total assets.

         The Company's primary investment  objectives are to preserve,  protect,
and enhance the Company's  Assets while (i) making  Distributions  commencing in
the initial year of Company operations;  (ii) obtaining fixed income through the
receipt of base rent, and increasing  the Company's  income (and  distributions)
and providing  protection against inflation through automatic fixed increases in
base rent or increases  in the base rent based on  increases  in consumer  price
indices,  over the term of the lease,  and  obtaining  fixed income  through the
receipt of payments  from Mortgage  Loans and Secured  Equipment  Leases;  (iii)
qualifying  and remaining  qualified as a REIT for federal  income tax purposes;
and  (iv)  providing  stockholders  of  the  Company  with  liquidity  of  their
investment within five to ten years after  commencement of the offering,  either
in whole or in part, through (a) Listing, or (b) the commencement of the orderly
Sale of the Company's Assets,  and distribution of the proceeds thereof (outside
the ordinary  course of business and consistent with its objective of qualifying
as a REIT).



<PAGE>


         In connection  with this offering,  the Company  registered for sale an
aggregate of $155,000,000 of Shares (15,500,000  Shares at $10 per Share),  with
500,000 of such Shares  available only to stockholders  who elect to participate
in the  Company's  Reinvestment  Plan.  The  offering  of  Shares  commenced  on
September 18, 1998 and will terminate no later than  September 18, 1999,  unless
the Company  elects to extend the offering to a date no later than September 18,
2000, in states that permit such extension.

         This information contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933. Although the Company believes that
the  expectations  reflected in such  forward-looking  statements are based upon
reasonable  assumptions,  the Company's  actual results could differ  materially
from those set forth in the  forward-looking  statements.  Certain  factors that
might cause such a difference include the following: changes in general economic
conditions,  changes in local real estate  conditions,  availability of proceeds
from the  Company's  offering,  the  ability of the  Company to obtain a Line of
Credit or Permanent  Financing on satisfactory terms, the ability of the Company
to locate  suitable  tenants for its  Properties  and borrowers for its Mortgage
Loans and Secured Equipment Leases,  and the ability of tenants and borrowers to
make payments under their respective leases, Mortgage Loans or Secured Equipment
Leases.

LIQUIDITY AND CAPITAL RESOURCES

         A capital  contribution  of $200,000  from the Advisor is the Company's
sole  source of capital  until the Company  sells the minimum  number of 250,000
Shares ($2,500,000). As of April 23, 1999, subscription funds totalling $905,990
had been  deposited with the escrow agent for the offering.  Until  subscription
proceeds  for the  Company  total  at least  $2,500,000  (250,000  Shares),  the
proceeds will be held in escrow. In the event subscriptions for at least 250,000
Shares are not  obtained  by  September  18,  1999,  the  subscriptions  will be
returned promptly with interest to investors.

         The Company will use Net Offering  Proceeds  (Gross  Proceeds less fees
and expenses of the offering)  from this offering to purchase  Properties and to
invest in Mortgage Loans. See "Investment Objectives and Policies." In addition,
the Company intends to borrow money to acquire Assets and to pay certain related
fees. The Company  intends to encumber Assets in connection with such borrowing.
The Company plans to obtain a revolving Line of Credit initially in an amount up
to $45,000,000,  and may, in addition, also obtain Permanent Financing. The Line
of Credit may be increased at the  discretion  of the Board of Directors and may
be repaid  with  offering  proceeds,  working  capital or  Permanent  Financing.
Although the Board of Directors  anticipates  that the Line of Credit  initially
may be in the amount of  $45,000,000  and the aggregate  amount of any Permanent
Financing shall not exceed 30% of the Company's total Assets, the maximum amount
the Company  may borrow is 300% of the  Company's  Net  Assets.  The Company has
engaged  in  preliminary  discussions  with  potential  lenders  but has not yet
received a  commitment  for the Line of Credit or any  Permanent  Financing  and
there is no  assurance  that the  Company  will obtain the Line of Credit or any
Permanent Financing on satisfactory terms.

         Upon the receipt of  subscriptions  of at least 250,000  Shares and the
initial  release  of funds  from  escrow,  Company  funds  will be  invested  in
short-term,  highly liquid U.S.  Government  securities or in other  short-term,
highly  liquid  investments  with  appropriate  safety  of  principal,   pending
investment in suitable  Properties and Mortgage  Loans.  Management  anticipates
that after the Company has invested in Assets,  lease and mortgage payments paid
to the Company by the tenants and borrowers  will be sufficient to pay operating
expenses, provide cash Distributions to the stockholders and service debt.

         At March 31, 1999 and December 31, 1998 and 1997,  the Company's  total
assets were  $1,115,219,  $976,579 and $280,330,  respectively.  The increase in
total assets reflects  deferred offering costs incurred during the quarter ended
March 31, 1999 and the year ended December 31, 1998, respectively.

         During the year ended  December  31, 1998 and the period  December  22,
1997 (date of inception)  through  December 31, 1997,  Affiliates of the Company
incurred  $562,739 and $43,397,  respectively,  for certain  Organizational  and
Offering  Expenses.  As of  December  31, 1998 and 1997,  the  Company  owed the
Affiliates $685,372 and $58,600, respectively, for such amounts, unpaid fees and
administrative  expenses. In addition,  during the quarters ended March 31, 1999
and  1998,   Affiliates   of  the  Company   incurred   $128,789  and  $146,489,
respectively,  for certain organizational and offering expenses. As of March 31,
1999,  the Company owed  Affiliates  $911,689 for such amounts,  unpaid fees and
administrative  expenses.  In the event the minimum  offering  proceeds  are not
received by the  Company,  the  Company  will have no  obligation  to repay such
amounts.  Further, the Advisor has agreed to pay all Organizational and Offering
Expenses  (excluding  selling  commissions  and the  marketing  support  and due
diligence  expense  reimbursement  fee) in  excess  of  three  percent  of Gross
Proceeds.

         Due to anticipated low Operating Expenses, rental income expected to be
obtained  from  Properties  after they are  acquired,  the fact that the Line of
Credit and Permanent  Financing  have not been obtained and that the Company has
not entered into Mortgage Loans or Secured Equipment Leases, management does not
believe that working capital reserves will be necessary at this time. Management
has the right to cause the Company to maintain reserves if, in their discretion,
they determine such reserves are required to meet the Company's  working capital
needs.

         As of the date of this Prospectus, the Company had not entered into any
arrangements creating a reasonable probability that a Property would be acquired
by the Company or that a particular  Mortgage  Loan or Secured  Equipment  Lease
would be  funded.  The number of  Properties  to be  acquired  and the number of
Mortgage  Loans to be invested in by the Company  will depend upon the amount of
Net  Offering  Proceeds  available  and the amount of funds  borrowed to acquire
Properties and make Mortgage Loans. The number of Secured Equipment Leases to be
offered  is  currently  undetermined,  but the  Company  will  fund the  Secured
Equipment  Leases  with  the  proceeds  from  the Line of  Credit  or  Permanent
Financing,  and the Company has  undertaken,  consistent  with its  objective of
qualifying as a REIT for federal  income tax purposes,  to ensure that the value
of the Secured Equipment  Leases,  in the aggregate,  will not exceed 25% of the
Company's total assets and that the value of the Secured  Equipment  Leases to a
single  lessee,  in the  aggregate,  will not exceed 5% of the  Company's  total
assets.   Management  is  not  aware  of  any  material  trends,   favorable  or
unfavorable,  in either  capital  resources  or the outlook for  long-term  cash
generation,  nor does management expect any material changes in the availability
and relative cost of such capital  resources,  other than as referred to in this
Prospectus.

         Management  expects that the cash to be generated from  operations will
be adequate to pay operating expenses and to make Distributions to stockholders.

RESULTS OF OPERATIONS

         As of the  date of  this  Prospectus,  no  significant  operations  had
commenced  because the Company was in its development  stage. No operations will
commence  until  such  time as the  Company  has  sold at least  250,000  Shares
($2,500,000).  Management  is not  aware of any known  trends or  uncertainties,
other than national  economic  conditions,  which may  reasonably be expected to
have a material impact, favorable or unfavorable, on revenues or income from the
acquisition  and  operations  of real  properties,  other than those  Properties
referred to in this Prospectus.

         There  currently  are  no  material  changes  being  considered  in the
objectives and policies of the Company as set forth in this Prospectus.

         Year 2000  Compliance.  The Year 2000 problem concerns the inability of
information and  non-information  technology  systems to properly  recognize and
process date-sensitive  information beyond January 1, 2000. The Company does not
have any  information or  non-information  technology  systems.  The Advisor and
affiliates of the Advisor provide all services  requiring the use of information
and  non-information  technology  systems pursuant to an advisory agreement with
the Company. The information  technology system of the Affiliates of the Advisor
consists of a network of personal computers and servers built using hardware and
software from mainstream  suppliers.  The non-information  technology systems of
the  Affiliates  of the  Advisor  are  primarily  facility  related  and include
building  security  systems,  elevators,  fire  suppressions,  HVAC,  electrical
systems and other  utilities.  The  Affiliates of the Advisor have no internally
generated  programmed  software coding to correct,  as substantially  all of the
software  utilized by the Advisor and  Affiliates  is purchased or licensed from
external providers.

         In early 1998, the Advisor and Affiliates  formed a Year 2000 committee
(the "Y2K Team") for the purpose of  identifying,  understanding  and addressing
the various issues  associated with Year 2000 compliance.  The Y2K Team consists
of members from the Advisor and its Affiliates,  including  representatives from
senior  management,  information  systems,  telecommunications,   legal,  office
management,  accounting and property management.  The Y2K Team's initial step in
assessing the Company's Year 2000 ("Y2K") readiness  consists of identifying any
systems that are date  sensitive  and,  accordingly,  could have  potential  Y2K
problems. The Y2K Team is in the process of conducting  inspections,  interviews
and tests to identify which of the Company's  systems could have a potential Y2K
problem.

         The  information  system of the Advisor and its Affiliates is comprised
of hardware and software  applications from mainstream  suppliers;  accordingly,
the Y2K  Team  is in the  process  of  contacting  the  respective  vendors  and
manufacturers to verify the Y2K compliance of their products.  In addition,  the
Y2K Team has also requested and is evaluating documentation from other companies
with which the Company has a material  third party  relationship,  including the
Company's major vendors,  financial institutions and transfer agent. The Company
depends on its financial institutions for availability of cash and financing and
its transfer agent to maintain and track investor information.  The Y2K Team has
also  requested  and  is  evaluating   documentation  from  the  non-information
technology systems providers of the Advisor and Affiliates. Although the Advisor
continues  to receive  positive  responses  from its third  party  relationships
regarding their Y2K compliance, the Advisor cannot be assured that the financial
institutions,  transfer  agent,  other  vendors and  non-information  technology
system  providers  have  adequately  considered the impact of the Year 2000. The
Advisor is not able to measure the effect on the  operations  of the Advisor and
its Affiliates of any third party's failure to adequately  address the impact of
the Year 2000.

         The Advisor and its Affiliates  have  identified  and have  implemented
upgrades  for  certain  hardware  equipment.  In  addition,  the Advisor and its
Affiliates  have identified  certain  software  applications  which will require
upgrades  to become  Year  2000  compliant.  The  Advisor  expects  all of these
upgrades as well as any other  necessary  remedial  measures on the  information
technology systems used in the business activities and operations of the Company
to be completed by September 30, 1999,  although,  the Advisor cannot be assured
that the upgrade  solutions  provided by the vendors have addressed all possible
Year 2000  issues.  The Advisor does not expect the  aggregate  cost of the Year
2000  remedial  measures  to be material  to the  results of  operations  of the
Company.

         The  Advisor  and  Affiliates  have  received  certification  from  the
Company's transfer agent of its Y2K compliance. Due to the material relationship
of the Company with its transfer agent, the Y2K Team is evaluating the Year 2000
compliance  of the  systems  of the  transfer  agent  and  expects  to have  the
evaluation  completed by September 30, 1999.  Despite the positive response from
the transfer agent and the evaluation of the transfer  agent's system by the Y2K
Team,  the Advisor  cannot be assured that the transfer  agent has addressed all
possible Year 2000 issues.  In the event that the systems of the transfer  agent
are not Y2K compliant,  the worst case scenario of the Advisor would be that the
Advisor would have to allocate  resources to internally perform the functions of
the transfer agent.  The Advisor does not anticipate that the additional cost of
these resources would have a material impact on the Company.

         Based  upon the  progress  the  Advisor  and  Affiliates  have  made in
addressing  the Year 2000 issues and their plan and  timeline  to  complete  the
compliance  program,  the Advisor does not foresee  significant risks associated
with its Year 2000  compliance  at this time.  The Advisor  plans to address its
significant  Y2K issues prior to being affected by them;  therefore,  it has not
developed a comprehensive  contingency plan.  However, if the Advisor identifies
significant  risks  related  to its  Year  2000  compliance  or if its  progress
deviates from the  anticipated  timeline,  the Advisor will develop  contingency
plans as deemed necessary at that time.


                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

         The Directors and executive officers of the Company are listed below:

      Name               Age       Position with the Company
      ----               ---       -------------------------
James M. Seneff, Jr.       52      Director, Chairman of the Board, and Chief
                                   Executive Officer
Robert A. Bourne           52      Director and President
David W. Dunbar            46      Independent Director
Timothy S. Smick           47      Independent Director
Edward A. Moses            57      Independent Director
Phillip M. Anderson, Jr.   39      Chief Operating Officer and Executive Vice
                                   President
Daniel L. Simmons          46      Executive Vice President
Jeanne A. Wall             40      Executive Vice President
Lynn E. Rose               50      Secretary and Treasurer

         James  M.  Seneff,  Jr.  Director,  Chairman  of the  Board  and  Chief
Executive Officer. Mr. Seneff currently holds the position of director, Chairman
of the Board and Chief Executive Officer of CNL Health Care Advisors,  Inc., the
Advisor , and CNL Health  Care  Development,  Inc.  Mr.  Seneff also serves as a
director,  Chairman  of the Board and Chief  Executive  Officer of CNL  American
Properties Fund, Inc. and CNL Hospitality  Properties,  Inc.,  public,  unlisted
real estate investment trusts,  and CNL Fund Advisors,  Inc. and CNL Hospitality
Advisors,  Inc.,  their  advisors,  respectively.  Mr.  Seneff  is  a  principal
stockholder  of CNL Group,  Inc., a  diversified  real estate  company,  and has
served as a director,  Chairman of the Board and Chief  Executive  Officer since
its formation in 1980.  CNL Group,  Inc. is the parent company of CNL Securities
Corp.,  which is acting as the Managing Dealer in this offering,  CNL Investment
Company,  CNL Health  Care  Advisors,  Inc.,  CNL Fund  Advisors,  Inc.  and CNL
Hospitality Advisors, Inc. Mr. Seneff has been a director, Chairman of the Board
and Chief Executive Officer of CNL Securities Corp. since its formation in 1979.
Mr.  Seneff also has held the  position  of a  director,  Chairman of the Board,
Chief Executive  Officer and President of CNL Management  Company,  a registered
investment advisor,  since its formation in 1976. In addition, Mr. Seneff serves
as a  director,  Chairman  of the  Board  and  Chief  Executive  Officer  of CNL
Investment  Company.  Mr.  Seneff has served as  Chairman of the Board and Chief
Executive Officer of Commercial Net Lease Realty, Inc. since 1992, and served as
Chairman of the Board and Chief Executive  Officer of CNL Realty Advisors,  Inc.
from its  inception in 1991 through 1997 at which time such company  merged with
Commercial Net Lease Realty, Inc., a public real estate investment trust that is
listed on the New York Stock Exchange.  Mr. Seneff has also held the position of
a  director,   Chairman  of  the  Board  and  Chief  Executive  Officer  of  CNL
Institutional  Advisors,  Inc.,  a  registered  investment  advisor,  since  its
inception in 1990.  Mr. Seneff also serves as a director of First Union National
Bank of  Florida,  N.A.  Mr.  Seneff  previously  served  on the  Florida  State
Commission  on Ethics and is a former  member and past  Chairman of the State of
Florida  Investment  Advisory Council,  which recommends to the Florida Board of
Administration  investments for various Florida employee  retirement  funds. The
Florida Board of Administration,  Florida's  principal  investment  advisory and
money  management  agency,  oversees the  investment of more than $60 billion of
retirement  funds.  Since 1971,  Mr. Seneff has been active in the  acquisition,
development,  and management of real estate projects and, directly or through an
affiliated entity, has served as a general partner or joint venturer in over 100
real estate ventures involved in the financing,  acquisition,  construction, and
rental of restaurants,  office buildings, apartment complexes, hotels, and other
real  estate.  Included  in these real  estate  ventures  are  approximately  65
privately offered real estate limited  partnerships  with investment  objectives
similar  to one or more of the  Company's  investment  objectives,  in which Mr.
Seneff,  directly  or through an  affiliated  entity,  serves or has served as a
general partner. Mr. Seneff received his degree in Business  Administration from
Florida State University in 1968.

         Robert A. Bourne.  Director and President.  Mr. Bourne  currently holds
the position of director and  President of the Advisor and serves as a director,
President and Treasurer of CNL Health Care Development, Inc. Mr. Bourne has also
served as Vice  Chairman of the Board and  Treasurer of CNL American  Properties
Fund,  Inc. since  February 1999 and serves as a director,  Vice Chairman of the
Board and President of CNL Hospitality Properties,  Inc. , public, unlisted real
estate  investment  trusts.  Mr. Bourne has served as a director of CNL American
Properties  Fund,  Inc. since May 1994, and previously  served as President from
May 1994 through  February  1999. In addition,  Mr. Bourne serves as a director,
Vice  Chairman of the Board , and  Treasurer  of CNL Fund  Advisors,  Inc. and a
director,  Vice Chairman of the Board and President of CNL Hospitality Advisors,
Inc.,  the advisors to the two REITs above,  respectively.  Mr. Bourne served as
President  of CNL Fund  Advisors,  Inc.  from the date of its  inception in 1994
through October 1997. Mr. Bourne is President and Treasurer of CNL Group,  Inc.,
a director,  President,  Treasurer and a registered  principal of CNL Securities
Corp.  (the  Managing  Dealer  of this  offering),  a  director,  President  and
Treasurer  of CNL  Investment  Company,  and a  director,  Treasurer  and  Chief
Investment Officer of CNL Institutional Advisors,  Inc., a registered investment
advisor. Mr. Bourne served as President of CNL Institutional Advisors, Inc. from
the date of its inception through June 30, 1997. In addition,  Mr. Bourne served
as President from July 1992 to February 1996,  served as Secretary and Treasurer
from February 1996 through  December  1997,  and has served as a director  since
July 1992 and Vice Chairman of the Board since  February 1996, of Commercial Net
Lease Realty, Inc. , a public real estate investment trust that is listed on the
New York Stock  Exchange.  Mr.  Bourne  also  served as  President  from 1991 to
February  1996,  as a director  from 1991  through  December  1997,  and as Vice
Chairman of the Board and Treasurer from February 1996 through December 1997, of
CNL Realty Advisors,  Inc. at which time such company merged with Commercial Net
Lease Realty,  Inc. Upon graduation from Florida State University in 1970, where
he received a B.A. in Accounting,  with honors, Mr. Bourne worked as a certified
public accountant and, from September 1971 through December 1978 was employed by
Coopers & Lybrand,  Certified Public Accountants,  where he held the position of
tax manager beginning in 1975. From January 1979 until June 1982, Mr. Bourne was
a partner in the  accounting  firm of Cross & Bourne and from July 1982  through
January  1987 he was a partner in the  accounting  firm of Bourne & Rose,  P.A.,
Certified  Public  Accountants.  Mr. Bourne,  who joined CNL Securities Corp. in
1979, has  participated  as a general partner or joint venturer in over 100 real
estate ventures involved in the financing, acquisition, construction, and rental
of restaurants,  office buildings,  apartment complexes,  hotels, and other real
estate.  Included in these real estate ventures are  approximately  64 privately
offered real estate limited  partnerships with investment  objectives similar to
one or more  of the  Company's  investment  objectives,  in  which  Mr.  Bourne,
directly  or through  an  affiliated  entity,  serves or has served as a general
partner.

         David W. Dunbar.  Independent  Director.  Mr. Dunbar serves as chairman
and chief executive  officer of Peoples Bank,  which he organized and founded in
1996.  Mr.  Dunbar is also a member of the boards of  directors  of Morton Plant
Mease Health Care, Inc., an 841-bed, not-for-profit hospital, Morton Plant Mease
Hospital Foundation and North Bay Hospital, a 122-bed facility. In addition, Mr.
Dunbar  serves  as a  member  of the  Florida  Elections  Commission,  the  body
responsible for investigating and holding hearings  regarding alleged violations
of Florida's  campaign  finance  laws.  During 1994 and 1995,  Mr.  Dunbar was a
member of the board of directors and an executive officer of Peoples State Bank.
Mr.  Dunbar was the chief  executive  officer of Republic Bank from 1991 through
1993. From 1988 through 1991, Mr. Dunbar developed commercial and medical office
buildings  and,  through a financial  consulting  company he  founded,  provided
specialized  lending services for real estate development  clients,  specialized
construction  litigation support for national insurance  companies and strategic
planning services for institutional  clients.  In 1990, Mr. Dunbar was the chief
executive  officer,  developer and owner of a 60,000 square foot medical  office
building  located on the  campus of  Memorial  Hospital  in Tampa,  Florida.  In
addition, in 1990, Mr. Dunbar served as the Governor's appointee to the State of
Florida  Taxation  and  Budget  Reform  Commission,  a 25  member,  blue  ribbon
commission established to review, study and make appropriate recommendations for
changes to state tax laws. Mr. Dunbar  received a degree in finance from Florida
State  University.  He is also a graduate of the  American  Bankers  Association
National  Commercial Lending School at the University of Oklahoma and the School
of Banking of the South at Louisiana State University.

         Edward A. Moses.  Independent Director. Dr. Moses has served as dean of
the Roy E. Crummer  Graduate  School of Business at Rollins  College since 1994,
and as a professor and NationsBank professor of finance since 1989. As dean, Dr.
Moses is presently  establishing a comprehensive  program of executive education
for health care  management at the Roy E. Crummer  Graduate  School of Business.
From 1985 to 1989 he served as dean and  professor of finance at the  University
of North Florida. He has also served in academic and administrative positions at
the University of Tulsa,  Georgia State University and the University of Central
Florida.  Dr. Moses has written six textbooks in the fields of  investments  and
corporate finance as well as numerous articles in leading business journals.  He
has held offices in a number of professional organizations,  including president
of the Southern Finance and Eastern Finance Associations, served on the Board of
the Southern Business Administration Association, and served as a consultant for
major banks as well as a number of Fortune 500 companies. He currently serves as
a  faculty  member  in  the  Graduate  School  of  Banking  at  Louisiana  State
University.  Dr. Moses received a B.S. in Accounting  from the Wharton School at
the University of Pennsylvania in 1965 and an M.B.A. (1967) and Ph.D. in finance
from the University of Georgia in 1971.

         Timothy S. Smick.  Independent  Director.  From 1996  through  February
1998, Mr. Smick served as chief operating officer,  executive vice president and
a member of the board of directors of Sunrise Assisted Living,  Inc., one of the
nation's  leading  providers  of  assisted  living  care  for  seniors  with  68
communities located in 13 states. In addition,  Mr. Smick served as president of
Sunrise  Management  Inc., a wholly owned subsidiary of Sunrise Assisted Living,
Inc.  During 1995,  Mr. Smick served as a senior  housing  consultant to LaSalle
Advisory,  Ltd., a pension fund advisory  company.  From 1985 through 1994,  Mr.
Smick was chairman and chief executive  officer of PersonaCare,  Inc., a company
he co-founded that provided sub-acute,  skilled nursing and assisted living care
with 12  facilities  in six states with  revenues of $87  million.  Mr.  Smick's
health care industry experience also includes serving as the regional operations
director for Manor  Healthcare,  Inc.,  a division of  ManorCare,  Inc.,  and as
operations  director for Allied Health & Management,  Inc.  Prior to co-founding
PersonaCare,  Inc., Mr. Smick was a partner in Duncan & Smick, a commercial real
estate  development  firm.  Mr.  Smick  received a B.A. in English  from Wheaton
College and pursued graduate studies at Loyola College.

         Phillip M.  Anderson,  Jr. Chief  Operating  Officer and Executive Vice
President.  Mr. Anderson  joined CNL Health Care Advisors,  Inc. in January 1999
and is  responsible  for the planning and  implementation  of CNL's  interest in
health care industry investments,  including acquisitions,  development, project
analysis and due diligence.  He currently serves as the Chief Operating  Officer
of both the Advisor  and CNL Health Care  Development,  Inc.  From 1987  through
1998, Mr. Anderson was employed by Classic Residence by Hyatt. Classic Residence
by Hyatt  ("Classic")  is affiliated  with Hyatt Hotels and  Chicago's  Pritzker
family. Classic acquires, develops, owns and operates seniors' housing, assisted
living, skilled nursing and Alzheimer's facilities throughout the United States.
Mr. Anderson's  responsibilities grew from overseeing  construction of Classic's
first  properties to acquiring and  developing  new  properties.  After assuming
responsibility  for  acquisitions,  Mr.  Anderson  doubled  the number of senior
living apartments/beds ("units") in the portfolio by adding over 1,200 units. In
addition,  the  development  of an  additional  1,000 units of seniors'  housing
commenced under Mr. Anderson's direction.  Mr. Anderson also served on Classic's
Executive Committee charged with the responsibility of monitoring performance of
existing properties and development projects.  Mr. Anderson has been a member of
the American Senior Housing  Association  since 1994 and currently serves on the
executive board. He graduated from the Georgia  Institute of Technology in 1982,
where he received a B.S. in Civil Engineering, with honors.

         Daniel L. Simmons.  Executive  Vice  President.  Mr.  Simmons serves as
Executive Vice President of the Advisor. Since 1996, Mr. Simmons has served as a
consultant to The Celebration  Company, a subsidiary of The Walt Disney Company,
regarding  seniors'  housing  issues.  In addition,  since 1997, Mr. Simmons has
consulted  for  Celebration   Associates,   Inc.,  a  master  planned  community
development  and advisory  firm,  on issues  relating to health  care,  seniors'
housing and  commercial  projects.  From November 1997 to June 1998, Mr. Simmons
served as a consultant to CNL Group, Inc.,  providing advice on issues regarding
health care property development and management.  From 1984 to 1993, Mr. Simmons
was a  co-founder  and  partner in the  Johnson  Simmons  Company,  where he was
responsible for site acquisition, design, development,  financing and regulatory
matters for three continuing care communities.  Mr. Simmons was also responsible
for the development, financing and operations associated with the restaurant and
commercial  properties  divisions  of the Johnson  Simmons  Company.  During his
tenure,  Johnson  Simmons  Company  developed  and  managed  over 1,100 units of
seniors' housing and 300 skilled nursing beds, held in excess of $100 million in
assets,  and employed more than 1,200  people.  From 1983 to 1984,  Mr.  Simmons
served as  director  of  development  for Cadem  Corporation,  a  subsidiary  of
National  Medical  Enterprises.  At Cadem, he was responsible for site,  design,
development and regulatory issues for proposed  seniors' housing projects.  From
1982 to 1983,  Mr.  Simmons  served as vice  president  of  Southern  Management
Services  Corporation,   where  he  was  responsible  for  the  development  and
operations of seniors' housing, assisted living, and skilled nursing facilities.
He was also  responsible  for all  regulatory  issues with the State of Florida,
Department of Insurance,  and the current Agency for Health Care  Administration
regarding   the  licensing  and   regulation  of  continuing   care   retirement
communities,  nursing homes and assisted living facilities. Mr. Simmons attended
Florida State  University and the University of South Florida and was a founding
member of the National Association of Senior Living Industries.

         Jeanne A. Wall. Executive Vice President.  Ms. Wall serves as Executive
Vice President of the Advisor.  Ms. Wall is also Executive Vice President of CNL
American  Properties Fund, Inc. and CNL Hospitality  Properties,  Inc.,  public,
unlisted real estate investment trusts, and Executive Vice President of CNL Fund
Advisors,  Inc. and Executive  Vice  President  and director of CNL  Hospitality
Advisors,  Inc.,  their  advisors,  respectively.  Ms. Wall currently  serves as
Executive Vice President of CNL Group,  Inc., a diversified real estate company.
Ms. Wall has served as Chief Operating Officer of CNL Investment  Company and of
CNL  Securities  Corp.  since  November  1994 and has served as  Executive  Vice
President of CNL Investment Company since January 1991. In 1984, Ms. Wall joined
CNL Securities Corp. and in 1985,  became Vice President.  In 1987, she became a
Senior Vice President and in July 1997,  became  Executive Vice President of CNL
Securities  Corp. In this  capacity,  Ms. Wall serves as national  marketing and
sales  director and oversees the national  marketing plan for the CNL investment
programs. In addition,  Ms. Wall oversees product development and communications
and investor services for programs offered through  participating  brokers.  Ms.
Wall also has served as Senior Vice  President  of CNL  Institutional  Advisors,
Inc., a registered  investment advisor,  from 1990 to 1993, as Vice President of
CNL Realty  Advisors,  Inc. from its inception in 1991 through 1997, and as Vice
President of Commercial Net Lease Realty,  Inc., a public real estate investment
trust that is listed on the New York Stock Exchange, from 1992 through 1997. Ms.
Wall holds a B.A.  in Business  Administration  from  Linfield  College and is a
registered  principal of CNL Securities  Corp.  Ms. Wall  currently  serves as a
trustee on the Board of the Investment  Program  Association  and is a member of
the Corporate  Advisory Council for the International  Association for Financial
Planning and previously served on the Direct Participation Program committee for
the National Association of Securities Dealers, Inc.

         Lynn E. Rose.  Secretary and  Treasurer.  Ms. Rose serves as Secretary,
Treasurer  and a director  of the  Advisor  and  Secretary  of CNL  Health  Care
Development,  Inc. Ms. Rose is also Secretary of CNL American  Properties  Fund,
Inc. and Secretary and Treasurer of CNL Hospitality  Properties,  Inc.,  public,
unlisted real estate investment  trusts,  and Secretary and director of CNL Fund
Advisors,  Inc.  and  Secretary,  Treasurer  and a director  of CNL  Hospitality
Advisors,  Inc.,  their  advisors,  respectively.  Ms. Rose, a certified  public
accountant, has served as Secretary since 1987, as Chief Financial Officer since
December 1993, and previously served as Controller from 1987 until December 1993
of CNL Group,  Inc. In addition,  Ms. Rose has served as Chief Financial Officer
and  Secretary of CNL  Securities  Corp.  since July 1994.  She also  previously
served as Chief  Operating  Officer and Vice  President of CNL Shared  Services,
Inc. (formerly CNL Corporate Services,  Inc.) from November 1994 to January 1999
and has served as Secretary  since  November  1994.  Ms. Rose also has served as
Chief Financial Officer and Secretary of CNL Institutional  Advisors, Inc. since
its  inception in 1990.  In addition,  she served as Secretary and a director of
CNL Realty  Advisors,  Inc.  from its  inception  in 1991 through  1997,  and as
Treasurer of CNL Realty Advisors,  Inc. from 1991 to February 1996. In addition,
Ms. Rose served as Secretary and Treasurer of Commercial Net Lease Realty, Inc.,
a public real estate  investment  trust  listed on the New York Stock  Exchange,
from 1992 to February  1996.  Ms. Rose also  currently  serves as Secretary  for
approximately   50  additional   corporations.   Ms.  Rose  oversees  the  legal
compliance,   accounting,   tenant  compliance,   and  reporting  for  over  250
corporations, partnerships


<PAGE>


and joint ventures.  Prior to joining CNL, Ms. Rose was a partner with Robert A.
Bourne  in the  accounting  firm  of  Bourne  &  Rose,  P.A.,  Certified  Public
Accountants.  Ms. Rose holds a B.A. in Sociology  from the University of Central
Florida. She was licensed as a certified public accountant in 1979.


                     THE ADVISOR AND THE ADVISORY AGREEMENT

THE ADVISOR

         CNL Health Care Advisors,  Inc. is a Florida  corporation  organized in
July 1997 to provide  management,  advisory  and  administrative  services.  The
Company entered into the Advisory Agreement with the Advisor effective September
15,  1998.  CNL  Health  Care  Advisors,  Inc.,  as  Advisor,  has  a  fiduciary
responsibility to the Company and the stockholders.

         The directors and officers of the Advisor are as follows:

     James M. Seneff, Jr.        Chairman of the Board, Chief Executive Officer,
                                 and Director
     Robert A. Bourne            President and Director
     Phillip M. Anderson, Jr.    Chief Operating Officer and Executive Vice
                                 President
     Daniel L. Simmons           Executive Vice President
     Jeanne A. Wall              Executive Vice President
     Lynn E. Rose                Secretary, Treasurer and Director

         The  backgrounds  of  these   individuals  are  described  above  under
"Management -- Directors and Executive Officers."

THE ADVISORY AGREEMENT

         The Advisory Agreement,  which was entered into by the Company with the
unanimous  approval  of  the  Board  of  Directors,  including  the  Independent
Directors,  expires one year after the date of execution,  subject to successive
one-year  renewals  upon mutual  consent of the  parties.  The current  Advisory
Agreement  expires on  September  15,  1999.  In the event that a new Advisor is
retained, the previous Advisor will cooperate with the Company and the Directors
in  effecting an orderly  transition  of the  advisory  functions.  The Board of
Directors  (including a majority of the Independent  Directors)  shall approve a
successor  Advisor  only  upon  a  determination   that  the  Advisor  possesses
sufficient  qualifications to perform the advisory functions for the Company and
that the  compensation  to be received  by the new  Advisor  pursuant to the new
Advisory Agreement is justified.


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The  Managing  Dealer  is  entitled  to  receive  Selling   Commissions
amounting  to 7.5% of the  total  amount  raised  from  the sale of  Shares  for
services in connection  with the offering of Shares,  a  substantial  portion of
which will be paid as commissions to other broker-dealers. For the quarter ended
March 31, 1999 and the year ended  December 31,  1998,  the Company had incurred
$16,763  and $1,912,  respectively  of such fees,  of which  $14,945 and $1,785,
respectively,  will be paid by CNL  Securities  Corp.  as  commissions  to other
broker-dealers.  These  fees will not be paid until  subscriptions  for at least
250,000 Shares ($2,500,000) have been obtained from the offering.

         In  addition,  the  Managing  Dealer is entitled to receive a marketing
support and due diligence  expense  reimbursement fee equal to 0.5% of the total
amount  raised from the sale of Shares,  a portion of which may be  reallowed to
other  broker-dealers.  For the quarter  ended March 31, 1999 and the year ended
December 31, 1998, the Company had incurred  $1,118 and $128,  respectively,  of
such fees, the majority of which will be reallowed to other  broker-dealers  and
from which all bona fide due diligence  expenses  will be paid.  These fees will
not be paid until  subscriptions  for at least 250,000 Shares  ($2,500,000) have
been obtained from the offering.

         In addition, the Company has agreed to issue and sell Soliciting Dealer
Warrants to the Managing Dealer.  The price for each warrant will be $0.0008 and
one warrant will be issued for every 25 Shares sold by the Managing Dealer.  All
or a portion of the  Soliciting  Dealer  Warrants may be reallowed to Soliciting
Dealers with prior  written  approval  from,  and in the sole  discretion of the
Managing  Dealer,  except where prohibited by either federal or state securities
laws. The holder of a Soliciting Dealer Warrant will be entitled to purchase one
Share  from the  Company  at a price of  $12.00  during  the  five  year  period
commencing  with the date the offering  begins.  No Soliciting  Dealer  Warrant,
however,  will be  exercisable  until  one year from the date of  issuance.  The
Company had not issued any Soliciting  Dealer Warrants to the Managing Dealer as
of March 31, 1999.  Mr.  Seneff is Chairman of the Board of Directors  and Chief
Executive  Officer and Mr. Bourne is a director,  President and Treasurer of the
Managing Dealer.

         The  Advisor is entitled to receive  Acquisition  Fees for  services in
identifying  the Properties and  structuring  the terms of the  acquisition  and
leases of the Properties and  structuring  the terms of the Mortgage Loans equal
to 4.5% of Total Proceeds.  During the quarter ended March 31, 1999 and the year
ended December 31, 1998, the Company incurred $10,058 and $1,148,  respectively,
of such fees.  Such fees are  included in other  assets.  These fees will not be
paid until  subscriptions  for at least 250,000  Shares  ($2,500,000)  have been
obtained from the offering.

         The Advisor and its Affiliates provide various administrative  services
to the Company,  including  services related to accounting;  financial,  tax and
regulatory compliance reporting;  stockholder  distributions and reporting;  due
diligence  and  marketing;  and  investor  relations  (including  administrative
services in connection with the offering of Shares) on a day-to-day  basis.  For
the  quarter  ended March 31,  1999,  the year ended  December  31, 1998 and the
period  December 22, 1997 (date of  inception)  through  December 31, 1997,  the
Company  incurred  $70,291,  $196,184  and  $15,202,   respectively,  for  these
services.  Such amounts are included in deferred  offering costs.  Mr. Seneff is
Chairman of the Board of Directors and Chief Executive Officer and Mr. Bourne is
a director and President of the Advisor.

         The Company believes that all amounts paid or payable by the Company to
Affiliates  are fair and  comparable  to amounts  that would be paid for similar
services provided by unaffiliated third parties.


                          PRIOR PERFORMANCE INFORMATION

         The  information  presented in this section  represents  the historical
experience  of certain real estate  programs  organized by certain  officers and
directors of the Advisor. Prior public programs have invested only in restaurant
properties and hotel properties and have not invested in Health Care Facilities.
Investors in the Company should not assume that they will experience returns, if
any,  comparable  to those  experienced  by  investors in such prior public real
estate  programs.  Investors  who purchase  Shares will not thereby  acquire any
ownership  interest in any  partnerships  or corporations to which the following
information relates.

         Two  Directors  of the  Company,  Robert A. Bourne and James M. Seneff,
Jr.,  individually  or with others have served as general  partners of 88 and 89
real estate limited  partnerships,  respectively,  including 18 publicly offered
CNL Income Fund  partnerships,  and as  directors  and  officers of two unlisted
public REITs.  None of these  limited  partnerships  or unlisted  REITs has been
audited by the IRS. Of course,  there is no guarantee  that the Company will not
be audited. Based on an analysis of the operating results of the prior programs,
Messrs.  Bourne  and Seneff  believe  that each of such  programs  has met or is
meeting its principal investment objectives in a timely manner.

         CNL Realty Corporation, which was organized as a Florida corporation in
November  1985 and whose  sole  stockholders  are  Messrs.  Bourne  and  Seneff,
currently serves as the corporate general partner with Messrs. Bourne and Seneff
as individual general partners of 18 CNL Income Fund limited  partnerships,  all
of which were organized to invest in fast-food, family-style and, in the case of
two of the partnerships,  casual-dining  restaurant  properties . Messrs. Bourne
and Seneff also  currently  serve as  directors  and  officers  of CNL  American
Properties  Fund,  Inc.  , an  unlisted  public  REIT,  organized  to  invest in
fast-food,  family-style and casual-dining restaurant properties, mortgage loans
and secured equipment leases;  and CNL Hospitality  Properties Inc., an unlisted
public REIT organized to invest in hotel properties,  mortgage loans and secured
equipment leases. Both REITs have investment  objectives similar to those of the
Company.  As of December  31,  1998,  the 18  partnerships  and the two unlisted
public  REITs  had  raised a total  of  $1,404,977,615  from a total  of  82,982
investors,  and had invested in 1,139 fast-food,  family-style and casual-dining
restaurant properties, and two hotels. None of the 18 public partnerships or the
two  unlisted  public  REITs has  invested  in Health Care  Facilities.  Certain
additional  information  relating to the offerings and investment history of the
18 public partnerships and the two unlisted public REITs is set forth below.

<TABLE>
<CAPTION>
<S> <C>

                                                                                 Number of    Date 90% of Net
                                                                                  Limited     Proceeds Fully
                           Maximum                                              Partnership     Invested or
Name of                    Offering                                              Units or      Committed to
Entity                     Amount (1)                Date Closed                Shares Sold   Investment (2)
- ------                     ----------                -----------                -----------   --------------
CNL Income                 $15,000,000               December 31, 1986               30,000    December 1986
Fund, Ltd.                 (30,000 units)

CNL Income                 $25,000,000               August 21, 1987                 50,000    November 1987
Fund II, Ltd.              (50,000 units)

CNL Income                 $25,000,000               April 29, 1988                  50,000    June 1988
Fund III, Ltd.             (50,000 units)

CNL Income                 $30,000,000               December 6, 1988                60,000    February 1989
Fund IV, Ltd.              (60,000 units)

CNL Income                 $25,000,000               June 7, 1989                    50,000    December 1989
Fund V, Ltd.               (50,000 units)

CNL Income                 $35,000,000               January 19, 1990                70,000    May 1990
Fund VI, Ltd.              (70,000 units)

CNL Income                 $30,000,000               August 1, 1990              30,000,000    January 1991
Fund VII, Ltd.             (30,000,000 units)

CNL Income                 $35,000,000               March 7, 1991              35,000,000     September 1991
Fund VIII, Ltd.            (35,000,000 units)

CNL Income                 $35,000,000               September 6, 1991           3,500,000     November 1991
Fund IX, Ltd.              (3,500,000 units)

CNL Income                 $40,000,000               April 22, 1992              4,000,000     June 1992
Fund X, Ltd.               (4,000,000 units)

CNL Income                 $40,000,000               October 8, 1992             4,000,000     September 1992
Fund XI, Ltd.              (4,000,000 units)

CNL Income                 $45,000,000               April 15, 1993              4,500,000     July 1993
Fund XII, Ltd.             (4,500,000 units)

CNL Income                 $40,000,000               September 13, 1993          4,000,000     August 1993
Fund XIII, Ltd.            (4,000,000 units)

CNL Income                 $45,000,000               March 23, 1994              4,500,000     May 1994
Fund XIV, Ltd.             (4,500,000 units)

CNL Income                 $40,000,000               September 22, 1994          4,000,000     December 1994
Fund XV, Ltd.              (4,000,000 units)

CNL Income                 $45,000,000               July 18, 1995               4,500,000     August 1995
Fund XVI, Ltd.             (4,500,000 units)

CNL Income                 $30,000,000               October 10, 1996            3,000,000     December 1996
Fund XVII, Ltd.            (3,000,000 units)

CNL Income                 $35,000,000               February 6, 1998            3,500,000     December 1997
Fund XVIII, Ltd            (3,500,000 units)

CNL American               $747,464,413                     (3)                  (3)                 (3)
Properties Fund, Inc.      (74,746,441 shares)

CNL Hospitality            $165,000,000                     (4)                  (4)                 (4)
Properties, Inc.           (16,500,000 shares)
</TABLE>

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

(1)  The amount  stated  includes the  exercise by the general  partners of each
     partnership  of their option to increase by $5,000,000  the maximum size of
     the offering of CNL Income Fund, Ltd., CNL Income Fund II, Ltd., CNL Income
     Fund III,  Ltd.,  CNL Income Fund IV, Ltd.,  CNL Income Fund VI, Ltd.,  CNL
     Income Fund VIII, Ltd., CNL Income Fund X, Ltd., CNL Income Fund XII, Ltd.,
     CNL Income Fund XIV,  Ltd.,  CNL Income Fund XVI,  Ltd. and CNL Income Fund
     XVIII, Ltd.

(2)  For a description of the property acquisitions by these programs,  see  the
     table set forth on the following page.

(3)  In April 1995, CNL American Properties Fund, Inc., commenced an offering of
     a maximum of 16,500,000 shares of common stock ($165,000,000).  On February
     6,  1997,  the  initial  offering  closed  upon  receipt  of  subscriptions
     totalling  $150,591,765  (15,059,177  shares),  including  $591,765 (59,177
     shares) through the reinvestment plan.  Following completion of the initial
     offering on February 6, 1997, CNL American  Properties Fund, Inc. commenced
     a subsequent  offering (the "1997  Offering")  of up to  27,500,000  shares
     ($275,000,000)  of common stock. On March 2, 1998, the 1997 Offering closed
     upon receipt of subscriptions  totalling $251,872,648  (25,187,265 shares),
     including  $1,872,648  (187,265  shares)  through  the  reinvestment  plan.
     Following  completion of the 1997  Offering on March 2, 1998,  CNL American
     Properties Fund, Inc. commenced a subsequent offering (the "1998 Offering")
     of up to 34,500,000  shares  ($345,000,000) of common stock. As of December
     31, 1998, CNL American  Properties  Fund,  Inc. had received  subscriptions
     totalling $345,000,000  (34,500,000 shares),  including $3,107,848 (310,785
     shares)  through the  reinvestment  plan,  from the 1998  Offering  and had
     purchased  409  properties.  As of December 31,  1998,  net proceeds to CNL
     American  Properties Fund, Inc. from its Initial  Offering,  1997 Offering,
     1998 Offering and capital  contributions from its advisor,  after deduction
     of stock issuance costs, totalled $670,336,817.  Approximately $549,917,000
     of such amount had been  invested or  committed  for  investment.  The 1998
     Offering closed in January 1999, upon receipt of the proceeds from the last
     subscriptions.

(4)  Effective  July 9, 1997, CNL  Hospitality  Properties,  Inc.  (formerly CNL
     American  Realty  Fund,  Inc.)  commenced  an offering of up to  16,500,000
     shares of  ($165,000,000)  of common  stock.  As of December 31, 1998,  CNL
     Hospitality   Properties,   Inc.  had  received   subscriptions   totalling
     $43,019,080  (4,301,908  shares),  including $37,299 (3,730 shares) through
     the reinvestment  plan. As of such date, CNL Hospitality  Properties,  Inc.
     had purchased , directly or indirectly, two properties.

         As of December 31, 1998, Mr. Seneff and Mr. Bourne, directly or through
affiliated  entities,  also had served as joint general partners of 69 nonpublic
real estate  limited  partnerships.  The  offerings of all of these 69 nonpublic
limited   partnerships  had  terminated  as  of  December  31,  1998.  These  69
partnerships  raised a total of $185,927,353 from approximately 4,519 investors,
and purchased,  directly or through  participation in a joint venture or limited
partnership, interests in a total of 216 projects as of December 31, 1998. These
216  projects  consist of 19  apartment  projects  (comprising  10% of the total
amount raised by all 69 partnerships), 13 office buildings (comprising 5% of the
total amount raised by all 69  partnerships),  169 fast-food,  family-style,  or
casual-dining  restaurant property and business  investments  (comprising 69% of
the total amount raised by all 69  partnerships),  one  condominium  development
(comprising  0.5% of the  total  amount  raised  by all 69  partnerships),  four
hotels/motels (comprising 5% of the total amount raised by all 69 partnerships),
eight commercial/retail properties (comprising 10% of the total amount raised by
all 69 partnerships), and two tracts of undeveloped land (comprising 0.5% of the
total amount raised by all 69 partnerships).

         Mr. Bourne also has served, without Mr. Seneff, as a general partner of
one additional  nonpublic real estate limited partnership program which raised a
total of $600,000 from 13 investors and purchased,  through  participation  in a
limited  partnership,  one apartment building located in Georgia with a purchase
price of $1,712,000.

         Mr. Seneff also has served, without Mr. Bourne, as a general partner of
two additional  nonpublic real estate limited  partnerships which raised a total
of  $240,000  from 12  investors  and  purchased  two office  buildings  with an
aggregate  purchase price of $928,390.  Both of the office buildings are located
in Florida.

         Of the 90 real estate limited  partnerships  whose offerings had closed
as of December 31, 1998 (including 18 CNL Income Fund limited  partnerships)  in
which Mr. Seneff  and/or Mr. Bourne serve or have served as general  partners in
the past, 39 invested in restaurant  properties leased on a "triple-net"  basis,
including  eight  which  also  invested  in  franchised   restaurant  businesses
(accounting  for  approximately  93% of the total  amount  raised by all 90 real
estate limited partnerships).

         The following table sets forth summary information,  as of December 31,
1998, regarding property acquisitions by the 18 limited partnerships and the two
unlisted REITs.




<PAGE>

<TABLE>
<CAPTION>
<S> <C>

Name of                Type of                                             Method of              Type of
Entity                 Property                  Location                  Financing              Program
- ------                 --------                  --------                  ---------              -------

CNL Income Fund, Ltd.  22 fast-food or        AL, AZ, CA, FL, GA,           All cash                Public
                       family-style           LA, MD, OK, PA, TX,
                       restaurants            VA, WA

CNL Income Fund II,    49 fast-food or        AL, AZ, CO, FL, GA,           All cash                Public
Ltd.                   family-style           IL, IN, KS, LA, MI,
                       restaurants            MN, MO, NC, NM, OH,
                                              TN, TX, WA, WY

CNL Income Fund III,   37 fast-food or        AZ, CA, CO, FL, GA,           All cash                Public
Ltd.                   family-style           IA, IL, IN, KS, KY,
                       restaurants            MD, MI, MN, MO, NC,
                                              NE, OK, TX


<PAGE>





Name of                Type of                                             Method of              Type of
Entity                 Property                  Location                  Financing              Program
- ------                 --------                  --------                  ---------              -------

CNL Income Fund IV,    46 fast-food or        AL, DC, FL, GA, IL,           All cash                Public
Ltd.                   family-style           IN, KS, MA, MD, MI,
                       restaurants            MS, NC, OH, PA, TN,
                                              TX, VA

CNL Income Fund V,     35 fast-food or        AZ, FL, GA, IL, IN,           All cash                Public
Ltd.                   family-style           MI, NH, NY, OH, SC,
                       restaurants            TN, TX, UT, WA

CNL Income Fund VI,    56 fast-food or        AR, AZ, FL, GA, IL,           All cash                Public
Ltd.                   family-style           IN, KS, MA, MI, MN,
                       restaurants            NC, NE, NM, NY, OH,
                                              OK, PA, TN, TX, VA,
                                              WA, WY

CNL Income Fund VII,   49 fast-food or        AZ, CO, FL, GA, IN,           All cash                Public
Ltd.                   family-style           LA, MI, MN, NC, OH,
                       restaurants            SC, TN, TX, UT, WA

CNL Income Fund        42 fast-food or        AZ, FL, IN, LA, MI,           All cash                Public
VIII, Ltd.             family-style           MN, NC, NY, OH, TN,
                       restaurants            TX, VA

CNL Income Fund IX,    43 fast-food or        AL, CO, FL, GA, IL,           All cash                Public
Ltd.                   family-style           IN, LA, MI, MN, MS,
                       restaurants            NC, NH, NY, OH, SC,
                                              TN, TX

CNL Income Fund X,     52 fast-food or        AL, CA, CO, FL, ID,           All cash                Public
Ltd.                   family-style           IL, LA, MI, MO, MT,
                       restaurants            NC, NH, NM, NY, OH,
                                              PA, SC, TN, TX

CNL Income Fund XI,    41 fast-food or        AL, AZ, CA, CO, CT,           All cash                Public
Ltd.                   family-style           FL, KS, LA, MA, MI,
                       restaurants            MS, NC, NH, NM, OH,
                                              OK, PA, SC, TX, VA, WA

CNL Income Fund XII,   50 fast-food or        AL, AZ, CA, FL, GA,           All cash                Public
Ltd.                   family-style           LA, MO, MS, NC, NM,
                       restaurants            OH, SC, TN, TX, WA

CNL Income Fund        50 fast-food or        AL, AR, AZ, CA, CO,           All cash                Public
XIII, Ltd.             family-style           FL, GA, IN, KS, LA,
                       restaurants            MD, NC, OH, PA, SC,
                                              TN, TX, VA


<PAGE>


Name of                Type of                                             Method of              Type of
Entity                 Property                  Location                  Financing              Program
- ------                 --------                  --------                  ---------              -------

CNL Income Fund XIV,   65 fast-food or        AL, AZ, CO, FL, GA,           All cash                Public
Ltd.                   family-style           KS, LA, MN, MO, MS,
                       restaurants            NC, NJ, NV, OH, SC,
                                              TN, TX, VA

CNL Income Fund XV,    55 fast-food or        AL, CA, FL, GA, KS,           All cash                Public
Ltd.                   family-style           KY, MN, MO, MS, NC,
                       restaurants            NJ, NM, OH, OK, PA,
                                              SC, TN, TX, VA

CNL Income Fund XVI,   48 fast-food or        AZ, CA, CO, DC, FL,           All cash                Public
Ltd.                   family-style           GA, ID, IN, KS, MN,
                       restaurants            MO, NC, NM, NV, OH,
                                              TN, TX, UT, WI

CNL Income Fund        29 fast-food,          CA, FL, GA, IL, IN,           All cash                Public
XVII, Ltd.             family-style or        MI, NC, NV, OH, SC,
                       casual-dining          TN, TX
                       restaurants

CNL Income Fund        24 fast-food,          AZ, CA, FL, GA, IL,           All cash                Public
XVIII, Ltd.            family-style or        KY, MD, MN, NC, NV,
                       casual-dining          NY, OH, TN, TX
                       restaurants

CNL American           409 fast-food,         AL, AZ, CA, CO, CT,           All cash              Public REIT
Properties Fund, Inc.  family-style, or       DE, FL, GA, IA, ID,
                       casual-dining          IL, IN, KS, KY, MD,
                       restaurants            MI, MN, MO, MS, NC,
                                              NE, NJ, NM, NV, NY,
                                              OH, OK, OR, PA, RI,
                                              SC, TN, TX, UT, VA,
                                              WA, WI, WV

CNL Hospitality        2 limited service,     GA                                (1)               Public REIT
Properties, Inc.       extended stay or
                       full service hotels

</TABLE>

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


(1)      In  connection  with  the  acquisition  of  its  two  properties,   CNL
         Hospitality  Properties,  Inc. used proceeds from its line of credit in
         addition  to  net  offering  proceeds.   As  of  March  31,  1999,  CNL
         Hospitality Properties, Inc. had repaid amounts borrowed on its line of
         credit using additional net offering proceeds.

         A more detailed  description of the acquisitions by real estate limited
partnerships  and the unlisted REITs  sponsored by Messrs.  Bourne and Seneff is
set forth in prior performance Table VI, included in Part II of the registration
statement filed with the Securities and Exchange Commission for this offering. A
copy of Table VI is available  to  stockholders  from the Company upon  request,
free of charge.  In  addition,  upon  request to the  Company,  the Company will
provide,  without  charge,  a copy of the most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission for CNL Income Fund, Ltd., CNL
Income Fund II, Ltd.,  CNL Income Fund III,  Ltd., CNL Income Fund IV, Ltd., CNL
Income Fund V, Ltd.,  CNL Income Fund VI, Ltd.,  CNL Income Fund VII,  Ltd., CNL
Income Fund VIII,  Ltd.,  CNL Income Fund IX, Ltd., CNL Income Fund X, Ltd., CNL
Income Fund XI, Ltd., CNL Income Fund XII, Ltd., CNL Income Fund XIII, Ltd., CNL
Income Fund XIV,  Ltd., CNL Income Fund XV, Ltd., CNL Income Fund XVI, Ltd., CNL
Income Fund XVII,  Ltd., CNL Income Fund XVIII,  Ltd.,  CNL American  Properties
Fund,  Inc.  and CNL  Hospitality  Properties,  Inc.  as  well as a copy,  for a
reasonable fee, of the exhibits filed with such reports.

         In order to provide potential  purchasers of Shares in the Company with
information  to enable  them to  evaluate  the prior  experience  of the Messrs.
Seneff and Bourne as general partners of real estate limited partnerships and as
directors and officers of the two unlisted  REITs,  including those set forth in
the foregoing table,  certain financial and other  information  concerning those
limited  partnerships  and the two  unlisted  REITs with  investment  objectives
similar to one or more of the Company's investment objectives is provided in the
Prior Performance  Tables included as Appendix C. Information about the previous
public  partnerships,  the  offerings of which became fully  subscribed  between
January 1994 and December 1998, is included therein.  Potential stockholders are
encouraged to examine the Prior  Performance  Tables  attached as Appendix C (in
Table III), which include information as to the operating results of these prior
partnerships, for more detailed information concerning the experience of Messrs.
Seneff and Bourne.


                                 SUMMARY OF THE
                      ARTICLES OF INCORPORATION AND BYLAWS

DESCRIPTION OF CAPITAL STOCK

         General.  The Company has authorized a total of  206,000,000  shares of
capital stock, consisting of 100,000,000 shares of Common Stock, $0.01 par value
per  share,  3,000,000  shares  of  Preferred  Stock  ("Preferred  Stock"),  and
103,000,000 additional shares of excess stock ("Excess Shares"), $0.01 par value
per share.  Of the  103,000,000  Excess  Shares,  100,000,000  are  issuable  in
exchange for Common Stock and  3,000,000  are issuable in exchange for Preferred
Stock as described  below at  "Restriction  of Ownership." As of March 26, 1999,
the Company had 20,000 shares of Common Stock outstanding and no Preferred Stock
or Excess Shares outstanding.  The Board of Directors may determine to engage in
future  offerings  of Common  Stock of up to the number of  unissued  authorized
shares of Common Stock available.

<PAGE>

LIMITATION OF LIABILITY AND INDEMNIFICATION

         The Company has entered into  indemnification  agreements  with each of
the Company's officers and Directors.  The  indemnification  agreements require,
among other things, that the Company indemnify its officers and Directors to the
fullest  extent  permitted by law, and advance to the officers and Directors all
related expenses, subject to reimbursement if it is subsequently determined that
indemnification  is not  permitted.  In accordance  with these  agreements,  the
Company must indemnify and advance all expenses  reasonably incurred by officers
and  Directors  seeking  to  enforce  their  rights  under  the  indemnification
agreements.  The  Company  also must  cover  officers  and  Directors  under the
Company's   directors'  and  officers'  liability   insurance.   Although  these
indemnification  agreements  offer  substantially  the same  scope  of  coverage
afforded by the indemnification  provisions in the Articles of Incorporation and
the Bylaws,  it provides  greater  assurance  to  Directors  and  officers  that
indemnification  will be available  because these  contracts  cannot be modified
unilaterally by the Board of Directors or by the stockholders.


                        FEDERAL INCOME TAX CONSIDERATIONS

TAXATION OF THE COMPANY

         General. The Company expects to elect to be taxed as a REIT for federal
income tax  purposes,  as  defined  in  Sections  856  through  860 of the Code,
commencing with its taxable year ending December 31, 1999. The Company  believes
that it will be  organized  and will operate in such a manner as to qualify as a
REIT,  and the Company  intends to continue to operate in such a manner,  but no
assurance  can be given  that it will  operate  in a manner so as to  qualify or
remain  qualified as a REIT. The provisions of the Code  pertaining to REITs are
highly  technical  and  complex.  Accordingly,  this summary is qualified in its
entirety  by  the  applicable  Code  sections,   rules  and  regulations  issued
thereunder, and administrative and judicial interpretations thereof.

         If the Company  qualifies for taxation as a REIT, it generally will not
be subject to federal  corporate  income tax on its net income that is currently
distributed to holders of Shares.  This treatment  substantially  eliminates the
"double  taxation"  (at the  corporate and  stockholder  levels) that  generally
results  from an  investment  in a  corporation.  However,  the Company  will be
subject to federal income tax in the following circumstances. First, the Company
will be taxed  at  regular  corporate  rates on any  undistributed  real  estate
investment  trust taxable  income,  including  undistributed  net capital gains.
Second,  under  certain  circumstances,  the  Company  may  be  subject  to  the
alternative  minimum tax on its items of tax  preference.  Third, if the Company
has net  income  from  foreclosure  property,  it will be subject to tax on such
income at the highest corporate rate.  Foreclosure property generally means real
property (and any personal  property  incident to such real  property)  which is
acquired  as a result of a  default  either  on a lease of such  property  or on
indebtedness   which  such  property  secured  and  with  respect  to  which  an
appropriate election is made. Fourth, if the Company has net income derived from
prohibited transactions, such income will be subject to a 100% tax. A prohibited
transaction  generally  includes a sale or other  disposition of property (other
than  foreclosure  property) that is held primarily for sale to customers in the
ordinary  course of business.  Fifth,  if the Company should fail to satisfy the
75% gross income test or the 95% gross income test (as discussed below), but has
nonetheless  maintained  its  qualification  as a  REIT  because  certain  other
requirements  have been met,  it will be subject to a 100% tax on the net income
attributable  to the greater of the amount by which the Company fails the 75% or
95% test.  Sixth, if, during each calendar year, the Company fails to distribute
at least the sum of (i) 85% of its real estate  investment trust ordinary income
for such year;  (ii) 95% of its real estate  investment  trust  capital gain net
income for such year;  and (iii) any  undistributed  taxable  income  from prior
periods,  the  Company  will be subject to a 4% excise tax on the excess of such
required  distribution over the amounts actually  distributed.  Seventh,  if the
Company  acquires any asset from a C corporation  (i.e. a corporation  generally
subject to full corporate  level tax) in a transaction in which the basis of the
asset in the  Company's  hands is  determined  by  reference to the basis of the
asset (or any other property) in the hands of the C corporation, and the Company
recognizes  gain on the  disposition  of such asset  during the  10-year  period
beginning on the date on which such asset was acquired by the Company,  then, to
the extent of such  property's  "built-in  gain" (the  excess of the fair market
value  of such  property  at the time of  acquisition  by the  Company  over the
adjusted  basis in the property at such time),  such gain will be subject to tax
at the highest  regular  corporate  rate  applicable (as provided in regulations
promulgated  by  the  United  States  Department  of  Treasury  under  the  Code
("Treasury  Regulations")  that  have not yet been  promulgated).  (The  results
described  above with respect to the  recognition of "built-in gain" assume that
the Company will make an election pursuant to IRS Notice 88-19.)

         If the  Company  fails to  qualify as a REIT for any  taxable  year and
certain relief  provisions do not apply,  the Company will be subject to federal
income tax (including alternative minimum tax) as an ordinary corporation on its
taxable  income at regular  corporate  rates without any deduction or adjustment
for distributions to holders of Shares. To the extent that the Company would, as
a consequence, be subject to tax liability for any such taxable year, the amount
of cash available for  satisfaction of its  liabilities and for  distribution to
holders  of Shares  would be  reduced.  Distributions  made to holders of Shares
generally  would be taxable  as  ordinary  income to the  extent of current  and
accumulated earnings and profits and, subject to certain  limitations,  would be
eligible for the corporate  dividends  received  deduction,  but there can be no
assurance that any such Distributions would be made. The Company would not


<PAGE>


be eligible to elect REIT  status for the four  taxable  years after the taxable
year during which it failed to qualify as a REIT,  unless its failure to qualify
was  due  to  reasonable  cause  and  not  willful  neglect  and  certain  other
requirements were satisfied.

         Opinion of Counsel.  Based upon representations made by officers of the
Company  with  respect to  relevant  factual  matters,  upon the  existing  Code
provisions,  rules and regulations  promulgated  thereunder  (including proposed
regulations) and reported administrative and judicial  interpretations  thereof,
upon Counsel's  independent  review of such documents as Counsel deemed relevant
in the  circumstances  and upon the assumption  that the Company will operate in
the manner described in this  Prospectus,  Counsel has advised the Company that,
in its opinion,  commencing with the Company's  taxable year ending December 31,
1999,  the Company will be organized in  conformity  with the  requirements  for
qualification  as a REIT,  and the Company's  proposed  method of operation will
enable  it to meet the  requirements  for  qualification  as a REIT.  It must be
emphasized,  however, that the Company's ability to qualify and remain qualified
as a REIT is dependent upon actual  operating  results and future actions by and
events involving the Company and others,  and no assurance can be given that the
actual  results of the Company's  operations  and future actions and events will
enable  the  Company  to  satisfy  in  any  given  year  the   requirements  for
qualification and taxation as a REIT.


                             REPORTS TO STOCKHOLDERS

         The Company  will  furnish  each  stockholder  with its audited  annual
report  within 120 days  following  the close of each fiscal year.  These annual
reports  will  contain the  following:  (i)  financial  statements,  including a
balance sheet,  statement of operations,  statement of stockholders' equity, and
statement  of  cash  flows,  prepared  in  accordance  with  generally  accepted
accounting principles which are audited and reported on by independent certified
public  accountants;  (ii) the ratio of the costs of raising  capital during the
period to the capital  raised;  (iii) the aggregate  amount of advisory fees and
the aggregate  amount of other fees paid to the Advisor and any Affiliate of the
Advisor by the Company and including fees or charges paid to the Advisor and any
Affiliate of the Advisor by third parties doing business with the Company;  (iv)
the  Operating  Expenses of the Company,  stated as a percentage  of the Average
Invested  Assets (the average of the  aggregate  book value of the assets of the
Company,  for a specified period,  invested,  directly or indirectly,  in equity
interests in and 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) and as a percentage
of its Net Income; (v) a report from the Independent Directors that the policies
being followed by the Company are in the best interest of its  stockholders  and
the basis for such determination; (vi) separately stated, full disclosure of all
material terms,  factors and circumstances  surrounding any and all transactions
involving the Company, Directors, Advisor and any Affiliate thereof occurring in
the year for which the  annual  report is made,  and the  Independent  Directors
shall be  specifically  charged with a duty to examine and comment in the report
on  the  fairness  of  such  transactions;   and  (vii)   Distributions  to  the
stockholders for the period, identifying the source of such Distributions and if
such  information  is not available at the time of the  distribution,  a written
explanation of the relevant circumstances will accompany the Distributions (with
the statement as to the source of  Distributions  to be sent to stockholders not
later than 60 days after the end of the  fiscal  year in which the  distribution
was made).

         Within 75 days  following the close of each Company  fiscal year,  each
stockholder  that is a Qualified Plan will be furnished with an annual statement
of Share valuation to enable it to file annual reports required by ERISA as they
relate to its investment in the Company. For any period during which the Company
is making a public offering of shares of Common Stock, the statement will report
an estimated value of each share at the public  offering price per share,  which
during the term of this  offering  is $10 per share.  If no public  offering  is
ongoing, and until Listing, the statement will report an estimated value of each
share, based on (i) appraisal updates performed by the Company based on a review
of  the  existing   appraisal  and  lease  of  each  Property,   focusing  on  a
re-examination  of the  capitalization  rate applied to the rental  stream to be
derived from that Property;  and (ii) a review of the outstanding Mortgage Loans
and Secured  Equipment  Leases focusing on a determination of present value by a
re-examination of the capitalization  rate applied to the stream of payments due
under the terms of each Mortgage Loan and Secured Equipment Leases.  The Company
may elect to deliver such reports to all stockholders.  Stockholders will not be
forwarded  copies of  appraisals  or  updates.  In  providing  such  reports  to
stockholders,  neither the Company nor its Affiliates thereby make any warranty,
guarantee,  or  representation  that (i) the  stockholders or the Company,  upon
liquidation,  will actually  realize the estimated  value per Share, or (ii) the
stockholders  will realize the estimated net asset value if they attempt to sell
their Shares.


                                     EXPERTS

         The audited  balance  sheets of the Company as of December 31, 1998 and
1997,  and the related  statements  of  stockholder's  equity for the year ended
December  31,  1998 and for the period  December  22,  1997 (date of  inception)
through  December  31, 1997,  included in this  Prospectus,  have been  included
herein in  reliance  on the report of  PricewaterhouseCoopers  LLP,  independent
accountants,  given on the authority of that firm as experts in  accounting  and
auditing.


                                   DEFINITIONS

         "Reinvestment  Agent" or "Agent"  means the  independent  agent,  which
currently is MMS Securities, Inc., for Participants in the Reinvestment Plan.

         "Secured  Equipment  Lease  Servicing Fee" means the fee payable to the
Advisor by the  Company out of the  proceeds of the Line of Credit or  Permanent
Financing for negotiating  Secured  Equipment Leases and supervising the Secured
Equipment  Lease  program  equal to 2% of the  purchase  price of the  Equipment
subject to each Secured  Equipment  Lease and paid upon entering into such lease
or loan. No other fees will be payable in connection with the Secured  Equipment
Lease program.


<PAGE>



                                   APPENDIX B

                              FINANCIAL INFORMATION


                 -------------------------------------------------
                 |                                               |
                 |  THE  FINANCIAL STATEMENTS INCLUDED IN  THIS  |
                 |  APPENDIX B UPDATE AND  REPLACE  APPENDIX  B  | 
                 |  TO THE ATTACHED PROSPECTUS, DATED SEPTEMBER  |
                 |  18, 1998.                                    |
                 -------------------------------------------------


<PAGE>


                          INDEX TO FINANCIAL STATEMENTS

                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)






                                                                         Page
                                                                         ----
Updated Unaudited Financial Statements:

     Balance Sheets as of March 31, 1999 and December 31, 1998            B-1

     Statements of Stockholder's Equity for the quarter ended
        March 31, 1999 and the year ended December 31, 1998               B-2

     Notes to Financial Statements for the quarters ended March
        31, 1999 and 1998                                                 B-3

Audited Financial Statements:

     Report of Independent Accountants                                    B-6

     Balance Sheets as of December 31, 1998 and 1997                      B-7

     Statements of  Stockholder's  Equity for the year ended
        December 31, 1998, and the period December 22, 1997
        (date of inception) through December 31, 1997                     B-8

     Notes to Financial Statements for the year ended December
        31, 1998, and the period December 22, 1997 (date of
        inception) through December 31, 1997                              B-9


<PAGE>



                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                        March 31,              December 31,
                                                                          1999                    1998
                                                                     ---------------         ----------------
<S> <C>
                           ASSETS

Cash                                                                       $    92                  $   92
Deferred offering costs                                                  1,103,922                 975,339
Other                                                                       11,205                   1,148
                                                                     --------------            ------------

                                                                         1,115,219                $976,579
                                                                     ==============            ============

                LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:
    Due to related parties                                                $911,689                $685,372
    Accounts payable and accrued expenses                                    3,530                  91,207
                                                                     --------------            ------------
       Total liabilities                                                   915,219                 776,579
                                                                     --------------            ------------

Stockholder's equity:
    Preferred stock, without par value.
       Authorized and unissued 3,000,000 shares                                 -                       -
    Excess shares, $.01 par value per share.
       Authorized and unissued 103,000,000 shares                               -                       -
    Common stock, $.01 par value per share.
       Authorized 100,000 shares, issued and
       outstanding 20,000 shares                                               200                     200
    Capital in excess of par value                                         199,800                 199,800
                                                                     --------------            ------------
                                                                           200,000                 200,000
                                                                     --------------            ------------

                                                                        $1,115,219                $976,579
                                                                     ==============            ============


</TABLE>



                 See accompanying notes to financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                       STATEMENTS OF STOCKHOLDER'S EQUITY

                        Quarter Ended March 31, 1999 and
                          Year Ended December 31, 1998

<TABLE>
<CAPTION>


                                             Common stock 
                                        -----------------------      Capital in
                                         Number         Par          excess of
                                        of Shares      value         par value          Total
                                        ----------    ---------     -------------    ------------
<S> <C>
Balance at December 31, 1997               20,000         $200          $199,800        $200,000

Subscriptions received for common
    stock through public offering           2,550           26            25,474          25,500

Subscriptions held in escrow               (2,550 )        (26 )         (25,474 )       (25,500 )
                                        ----------     --------      ------------    ------------

Balance at December 31, 1998               20,000          200           199,800         200,000

Subscriptions received for common
    stock through public offering          22,350          224           223,276         223,500

Subscriptions held in escrow              (22,350 )       (224 )        (223,276 )      (223,500 )
                                        ----------     --------      ------------    ------------

Balance at March 31, 1999                  20,000         $200          $199,800        $200,000
                                        ==========     ========      ============    ============






</TABLE>




                 See accompanying notes to financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                          NOTES TO FINANCIAL STATEMENTS

                     Quarters Ended March 31, 1999 and 1998


1.       Significant Accounting Policies:

         Basis of Presentation - The accompanying unaudited financial statements
         have been prepared in accordance with the instructions to Form 10-Q and
         do not include all of the information and note disclosures  required by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of management,  necessary to a fair statement
         of the results for the interim period presented.  Operating results for
         the quarter ended March 31, 1999,  may not be indicative of the results
         that may be expected for the year ending December 31, 1999.  Amounts as
         of December 31, 1998, included in the financial  statements,  have been
         derived from audited financial statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Health  Care  Properties,  Inc.  (the  "Company")  for the  year  ended
         December 31, 1998.

         The Company is in the development stage and has not begun operations.

         New  Accounting  Standard - In April 1998,  the  American  Institute of
         Certified Public Accountants issued Statement of Position ("SOP") 98-5,
         "Reporting on the Costs of Start-Up Activities," which became effective
         for the  Company  January  1,  1999.  This SOP  requires  start-up  and
         organization  costs  to be  expensed  as  incurred  and  also  requires
         previously  deferred  start-up  costs to be  recognized as a cumulative
         effect  adjustment in the  statement of earnings.  The Company plans to
         expense  $20,000 of  organization  costs  once it becomes  operational.
         Management  of the Company  does not  believe the  adoption of this SOP
         will have a material effect on the Company's financial position.

2.       Deferred Offering Costs:

         The Company has and will  continue to incur certain costs in connection
         with the offering, including filing fees, legal, accounting,  marketing
         and  printing  costs and escrow fees,  which will be deducted  from the
         gross  proceeds of the offering.  Certain  preliminary  costs  incurred
         prior to raising  capital have been and will be advanced by  affiliates
         of the Company.

3.       Related Party Arrangements:

         Certain affiliates of the Company will receive fees and compensation in
         connection with the offering, and the acquisition, management, and sale
         of the assets of the Company.




<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                     Quarters Ended March 31, 1999 and 1998


3.       Related Party Arrangements - Continued:

         CNL Securities  Corp. is entitled to receive  commissions  amounting to
         7.5% of the total amount raised from the sale of shares for services in
         connection  with the offering of the shares,  a substantial  portion of
         which will be paid as commissions to other  broker-dealers.  During the
         quarter  ended March 31,  1999,  the Company  incurred  $16,763 of such
         fees,  of  which  $14,945  will  be  paid by CNL  Securities  Corp.  as
         commissions to other broker-dealers.  These fees will not be paid until
         subscriptions  for at  least  250,000  shares  ($2,500,000)  have  been
         obtained from the offering.

         In addition,  CNL  Securities  Corp. is entitled to receive a marketing
         support and due diligence  expense  reimbursement  fee equal to 0.5% of
         the total amount raised from the sale of shares, a portion of which may
         be reallowed to other  broker-dealers.  During the quarter  ended March
         31,  1999,  the Company  incurred  $1,118 of such fee,  the majority of
         which will be reallowed to other broker-dealers and from which all bona
         fide due diligence  expenses will be paid.  These fees will not be paid
         until  subscriptions for at least 250,000 shares ($2,500,000) have been
         obtained from the offering.

         In addition, the Company has agreed to issue and sell soliciting dealer
         warrants  ("Soliciting  Dealer  Warrants") to CNL Securities  Corp. The
         price for each  warrant  will be $0.0008 and one warrant will be issued
         for every 25 shares sold by the  managing  dealer.  All or a portion of
         the Soliciting  Dealer Warrants may be reallowed to soliciting  dealers
         with prior written  approval from,  and in the sole  discretion of, the
         managing  dealer,  except where  prohibited by either  federal or state
         securities  laws.  The holder of a  Soliciting  Dealer  Warrant will be
         entitled  to purchase  one share of common  stock from the Company at a
         price of $12.00  during the five year period  commencing  with the date
         the offering begins.  No Soliciting  Dealer Warrant,  however,  will be
         exercisable until one year from the date of issuance.

         CNL Health Care Advisors,  Inc. is entitled to receive acquisition fees
         for  services  in  finding,  negotiating  the  leases of and  acquiring
         properties  on behalf of the Company  equal to 4.5% of gross  proceeds,
         loan proceeds from permanent  financing and amounts  outstanding on the
         line of  credit,  if any,  at the time of  listing  of the  shares on a
         national securities exchange or over-the-counter  market, but excluding
         that  portion  of the  permanent  financing  used  to  finance  secured
         equipment leases.  During the quarter ended March 31, 1999, the Company
         incurred  $10,058 of such fees.  Such fees are included in other assets
         at March 31, 1999. These fees will not be paid until  subscriptions for
         at least  250,000  shares  ($2,500,000)  have  been  obtained  from the
         offering.





<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                     Quarters Ended March 31, 1999 and 1998


3.       Related Party Arrangements - Continued:

         CNL Health Care  Advisors,  Inc.  and its  affiliates  provide  various
         administrative  services to the Company,  including services related to
         accounting;   financial,   tax  and  regulatory  compliance  reporting;
         stockholder  distributions and reporting;  due diligence and marketing;
         and investor relations (including administrative services in connection
         with the offering), on a day-to-day basis. For the quarters ended March
         31, 1999 and 1998, $70,291 and $12,629,  respectively,  were classified
         as deferred offering costs for these services.

         Amounts due to related parties consisted of the following at:
<TABLE>
<CAPTION>

                                                                   March 31,             December 31,
                                                                     1999                    1998
                                                                 --------------         ---------------
<S> <C>
             Due to CNL Health Care Advisors, Inc.:
                  Expenditures incurred on behalf of the
                     Company                                          $599,587                $470,798
                  Accounting and administrative services               281,677                 211,386
                  Acquisition fees                                      11,205                   1,148
                                                                ---------------        ----------------
                                                                       892,469                 683,332
                                                                ---------------        ----------------

             Due to CNL Securities Corp.:
                  Commissions                                           17,975                   1,912
                  Marketing support and due diligence
                     expense reimbursement fee                           1,245                     128
                                                                ---------------        ----------------
                                                                        19,220                   2,040
                                                                ---------------
                                                                                       ----------------

                                                                      $911,689                $685,372
                                                                ===============        ================
</TABLE>

4.       Subsequent Event:

         During the period  April 1, 1999 through  April 23,  1999,  the Company
         received  subscription  proceeds of 65,699 shares  ($656,990) of common
         stock.





<PAGE>


                        Report of Independent Accountants



To the Board of Directors
CNL Health Care Properties, Inc.


In our opinion,  the accompanying  balance sheets and the related  statements of
stockholder's  equity  present  fairly in all material  respects,  the financial
position  of CNL Health Care  Properties,  Inc. (a  development  stage  Maryland
corporation) at December 31, 1998 and 1997 in conformity with generally accepted
accounting principles.  These financial statements are the responsibility of the
Company's  management;  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 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  audits  provide  a
reasonable basis for the opinion expressed above.





PRICEWATERHOUSECOOPERS  LLP

Orlando, Florida
January 15, 1999


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                     December 31,             December 31,
                                                                         1998                      1997
                                                                     ------------               -----------
<S> <C>
                        ASSETS

Cash                                                                     $   92                  $200,000
Deferred offering costs                                                 975,339                    80,330
Other assets                                                              1,148                        --
                                                                     -----------               -----------

                                                                       $976,579                  $280,330
                                                                     ===========               ===========

                LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:
    Due to related parties                                             $685,372                   $58,600
    Accounts payable and accrued expenses                                91,207                    21,730
                                                                     -----------               -----------
          Total liabilities                                             776,579                    80,330
                                                                     -----------               -----------

Stockholder's equity:
    Preferred stock, without par value per share
       Authorized and unissued 3,000,000 shares                               --                         --
    Excess shares, $.01 par value per share
       Authorized and unissued 103,000,000 shares                             --                         --
    Common stock, $.01 par value per share
       Authorized 100,000,000 and 100,000
       shares, respectively; 20,000 shares
       issued and outstanding                                               200                       200
    Capital in excess of par value                                      199,800                   199,800
                                                                     -----------               -----------
          Total stockholder's equity                                    200,000                   200,000
                                                                     -----------               -----------

                                                                       $976,579                  $280,330
                                                                     ===========               ===========







                 See accompanying notes to financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                       STATEMENTS OF STOCKHOLDER'S EQUITY

                   Year Ended December 31, 1998 and the Period
                  December 22, 1997 (Date of Inception) through
                                December 31, 1997



                                             Common stock
                                        -----------------------     Capital in
                                         Number         Par          excess of
                                        of Shares      value         par value          Total
                                        ----------    ---------     ------------     ------------

Balance, December 22, 1997
    (Date of Inception)                        --         $ --            $   --          $   --


Cash received from sale
    of common stock to
    CNL Health Care
    Advisors, Inc.                         20,000          200           199,800         200,000
                                        ----------    ---------      ------------    ------------

Balance at December 31, 1997               20,000          200           199,800         200,000

Subscriptions received for common
    stock through public offering           2,550           26            25,474          25,500

Subscriptions held in escrow at
    December 31, 1998                      (2,550 )        (26 )         (25,474 )       (25,500 )
                                        ----------    ---------      ------------    ------------

Balance at December 31, 1998               20,000        $ 200         $ 199,800     $   200,000
                                        ==========    =========      ============    ============


</TABLE>






                 See accompanying notes to financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                          NOTES TO FINANCIAL STATEMENTS

                   Year Ended December 31, 1998 and the Period
                  December 22, 1997 (Date of Inception) through
                                December 31, 1997


1.       Significant Accounting Policies:

         Organization and Nature of Business - CNL Health Care Properties,  Inc.
         (the  "Company")  was  organized  pursuant  to the laws of the state of
         Maryland on December 22, 1997. The Company  intends to use the proceeds
         from its public offering (the "Offering") (see Note 2), after deducting
         offering  expenses,  primarily to acquire real estate  properties  (the
         "Properties")  related to health care and seniors'  housing  facilities
         (the "Health Care  Facilities")  located across the United States.  The
         Health Care Facilities may include congregate  living,  assisted living
         and skilled nursing facilities,  continuing care retirement communities
         and life care  communities,  and medical  office  buildings and walk-in
         clinics.  The Company may provide  mortgage  financing  (the  "Mortgage
         Loans")  to  operators  of  Health  Care  Facilities  in the  aggregate
         principal  amount of  approximately  5% to 10% of the  Company's  total
         assets.  The Company also may offer  furniture,  fixture and  equipment
         financing  ("Secured  Equipment  Leases") to  operators  of Health Care
         Facilities.  Secured  Equipment Leases will be funded from the proceeds
         of a loan in an amount up to ten percent of the Company's total assets.

         As of December 31, 1998, the Company was in the  development  stage and
         had not begun operations.

         Income Taxes - The Company intends to make an election to be taxed as a
         real estate investment trust ("REIT") under Sections 856 through 860 of
         the  Internal  Revenue  Code  commencing  with its taxable  year ending
         December 31, 1999. If the Company qualifies for taxation as a REIT, the
         Company  generally will not be subject to federal  corporate income tax
         to  the  extent  it   distributes   its  REIT  taxable  income  to  its
         stockholders, so long as it distributes at least 95 percent of its REIT
         taxable income.  REITs are subject to a number of other  organizational
         and  operational  requirements.  Even  if  the  Company  qualifies  for
         taxation as a REIT,  it may be subject to certain state and local taxes
         on its income and property,  and federal income and excise taxes on its
         undistributed income.

         Use of  Estimates  -  Management  of the  Company  has made a number of
         estimates  and  assumptions  relating  to the  reporting  of assets and
         liabilities to prepare these  financial  statements in conformity  with
         generally accepted accounting  principles.  Actual results could differ
         from those estimates.

         New  Accounting  Standard - In April 1998,  the  American  Institute of
         Certified Public Accountants issued Statement of Position ("SOP") 98-5,
         "Reporting  on  the  Costs  of  Start-Up  Activities,"  which  will  be
         effective  for the  Company as of January  1, 1999.  This SOP  requires
         start-up  and  organization  costs to be expensed as incurred  and also
         requires  previously  deferred  start-up  costs to be  recognized  as a
         cumulative effect  adjustment in the statement of earnings.  Management
         of the Company does not believe  that  adoption of this SOP will have a
         material  effect on the  Company's  financial  position  or  results of
         operations.




<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                   Year Ended December 31, 1998 and the Period
                  December 22, 1997 (Date of Inception) through
                                December 31, 1997


2.       Public Offering:

         The Company has filed a currently effective  registration  statement on
         Form S-11 with the  Securities  and Exchange  Commission.  A maximum of
         15,500,000 shares  ($155,000,000) may be sold, including 500,000 shares
         ($5,000,000)  which are  available  only to  stockholders  who elect to
         participate in the Company's reinvestment plan. The Company has adopted
         a reinvestment  plan pursuant to which  stockholders  may elect to have
         the full amount of their cash distributions from the Company reinvested
         in additional shares of common stock of the Company.  In addition,  the
         Company has  registered  600,000  shares  issuable upon the exercise of
         warrants granted to the managing dealer of the Offering. As of December
         31,  1998,  the Company had received  subscription  proceeds of $25,500
         (2,550  shares).  Until  subscription  proceeds  for the Company  total
         $2,500,000 (250,000 shares), the proceeds will be held in escrow.

3.       Deferred Offering Costs:

         The Company has and will  continue to incur certain costs in connection
         with the Offering, including filing fees, legal, accounting,  marketing
         and  printing  costs and escrow fees,  which will be deducted  from the
         gross  proceeds of the Offering.  Certain  preliminary  costs  incurred
         prior to raising capital have been and will be advanced by an affiliate
         of the Company.  CNL Health Care  Advisors,  Inc. (the  "Advisor")  has
         agreed  to pay all  organizational  and  offering  expenses  (excluding
         commissions   and   marketing   support  and  due   diligence   expense
         reimbursement  fees) which exceed three  percent of the gross  offering
         proceeds received from the sale of shares of the Company.

         As  of  December  31,  1998,  the  Company  had  incurred  $975,339  in
         organizational  and  offering  costs which has been treated as deferred
         offering  costs.  Once the  Company  receives  the  minimum  amount  of
         subscriptions,  the  offering  costs will be  charged to  stockholders'
         capital subject to the three percent cap described above.

4.       Capitalization:

         In September 1998, the Company amended the Articles of Incorporation to
         increase the number of authorized  shares of capital stock from 100,000
         shares to 206,000,000  shares (consisting of 100,000,000 common shares,
         3,000,000 preferred shares and 103,000,000 excess shares).

5.       Related Party Arrangements:

         On December  22, 1997 (date of  inception),  CNL Health Care  Advisors,
         Inc.  contributed  $200,000  in cash to the Company and became its sole
         stockholder.

         The Advisor and certain affiliates of the Company will receive fees and
         compensation  in  connection  with the Offering,  and the  acquisition,
         management, and sale of the assets of the Company.





<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                   Year Ended December 31, 1998 and the Period
                  December 22, 1997 (Date of Inception) through
                                December 31, 1997


5.       Related Party Arrangements - Continued:

         CNL Securities  Corp. is entitled to receive  commissions  amounting to
         7.5% of the total amount raised from the sale of shares for services in
         connection  with the offering of the shares,  a substantial  portion of
         which will be paid as commissions to other  broker-dealers.  During the
         year ended December 31, 1998, the Company  incurred $1,912 of such fees
         of which $1,785 will be paid by CNL Securities  Corp. as commissions to
         other  broker-dealers.  These fees will not be paid until subscriptions
         for at least 250,000  shares  ($2,500,000)  have been obtained from the
         Offering.

         In addition,  CNL  Securities  Corp. is entitled to receive a marketing
         support and due diligence  expense  reimbursement  fee equal to 0.5% of
         the total amount raised from the sale of shares, a portion of which may
         be reallowed to other  broker-dealers.  During the year ended  December
         31, 1998, the Company  incurred $128 of such fee, the majority of which
         will be reallowed to other  broker-dealers and from which all bona fide
         due diligence  expenses will be paid. These fees will not be paid until
         subscriptions  for at  least  250,000  shares  ($2,500,000)  have  been
         obtained from the Offering.

         The  Advisor is entitled to receive  acquisition  fees for  services in
         finding,  negotiating the leases of and acquiring  properties on behalf
         of the Company  equal to 4.5% of gross  proceeds,  loan  proceeds  from
         permanent  financing and amounts  outstanding on the line of credit, if
         any,  at the  time  of  Listing,  but  excluding  that  portion  of the
         permanent  financing used to finance Secured Equipment  Leases.  During
         the year ended December 31, 1998, the Company  incurred  $1,148 of such
         fees.  Such fees are  included in other  assets at December  31,  1998.
         These fees will not be paid until  subscriptions  for at least  250,000
         shares ($2,500,000) have been obtained from the Offering.

         In addition, the Company has agreed to issue and sell soliciting dealer
         warrants  ("Soliciting  Dealer  Warrants") to CNL Securities  Corp. The
         price for each  warrant  will be $0.0008 and one warrant will be issued
         for every 25 shares sold by the  managing  dealer.  All or a portion of
         the Soliciting  Dealer Warrants may be reallowed to soliciting  dealers
         with prior written  approval  from,  and in the sole  discretion of the
         managing  dealer,  except where  prohibited by either  federal or state
         securities  laws.  The holder of a  Soliciting  Dealer  Warrant will be
         entitled  to purchase  one share of common  stock from the Company at a
         price of $12.00  during the five year period  commencing  with the date
         the offering begins.  No Soliciting  Dealer Warrant,  however,  will be
         exercisable until one year from the date of issuance.

         The Advisor and its affiliates provide various administrative  services
         to the Company,  including  services related to accounting;  financial,
         tax and regulatory compliance reporting;  stockholder distributions and
         reporting;   due  diligence  and  marketing;   and  investor  relations
         (including administrative services in connection with the Offering), on
         a day-to-day basis. For the year ended December 31, 1998 and the period
         December  22,  1997 (date of  inception)  through  December  31,  1997,
         $196,184  and  $15,202,  respectively,   were  classified  as  deferred
         offering costs for these services.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                   (A Development Stage Maryland Corporation)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                   Year Ended December 31, 1998 and the Period
                  December 22, 1997 (Date of Inception) through
                                December 31, 1997


5.       Related Party Arrangements - Continued:

         Amounts due to related parties consisted of the following at:

<TABLE>
<CAPTION>

                                                                December 31,         December 31,
                                                                    1998                 1997
                                                                -------------       -------------
<S> <C>
            Due to the Advisor:
                 Expenditures incurred for organizational
                    and offering expenses on behalf
                    of the Company                                  $470,798            $43,398
                 Accounting and administrative
                    services                                         211,386             15,202
                 Acquisition fees                                      1,148                 --
                                                                -------------        -----------
                                                                     683,332             58,600
                                                                -------------        -----------

            Due to CNL Securities Corp.:
                 Commissions                                           1,912                 --
                 Marketing support and due diligence
                    expense reimbursement fee                            128                 --
                                                                -------------        -----------
                                                                       2,040                 --
                                                                -------------        -----------

                                                                    $685,372            $58,600
                                                                =============        ===========
</TABLE>


6.       Subsequent Event:

         During the period January 1, 1999 through January 15, 1999, the Company
         received  subscription  proceeds of 1,000  shares  ($10,000)  of common
         stock.




<PAGE>



                                   APPENDIX C

                            PRIOR PERFORMANCE TABLES



                 ----------------------------------------------
                 | THE  FOLLOWING   INFORMATION  UPDATES  AND |
                 | REPLACES THE CORRESPONDING  INFORMATION IN |
                 | APPENDIX C  TO  THE  ATTACHED  PROSPECTUS, |
                 | DATED SEPTEMBER 18, 1998.                  |
                 ----------------------------------------------



<PAGE>


                                   APPENDIX C

                            PRIOR PERFORMANCE TABLES

         The information in this Appendix C contains  certain  relevant  summary
information  concerning  certain prior public  programs  sponsored by two of the
Company's  principals (who also serve as the Chairman of the Board and President
of the Company) and their  Affiliates (the "Prior Public  Programs")  which were
formed to invest  in  restaurant  properties  leased  on a  triple-net  basis to
operators of national and regional fast-food and family-style restaurant chains,
or in the case of CNL  Hospitality  Properties,  Inc.,  to invest in  restaurant
properties  and hotel  properties.  No Prior  Public  Programs  sponsored by the
Company's  Affiliates  have  invested  in  health  care  facilities  leased on a
triple-net basis to operators of health care facilities.

         A more detailed  description  of the  acquisitions  by the Prior Public
Programs is set forth in Part II of the  registration  statement  filed with the
Securities  and Exchange  Commission for this Offering and is available from the
Company upon request,  without charge. In addition, upon request to the Company,
the Company  will  provide,  without  charge,  a copy of the most recent  Annual
Report on Form 10-K filed with the  Securities  and Exchange  Commission for CNL
Income Fund,  Ltd.,  CNL Income Fund II, Ltd.,  CNL Income Fund III,  Ltd.,  CNL
Income Fund IV, Ltd.,  CNL Income Fund V, Ltd.,  CNL Income Fund VI,  Ltd.,  CNL
Income Fund VII, Ltd., CNL Income Fund VIII, Ltd., CNL Income Fund IX, Ltd., CNL
Income Fund X, Ltd.,  CNL Income Fund XI, Ltd.,  CNL Income Fund XII,  Ltd., CNL
Income Fund XIII, Ltd., CNL Income Fund XIV, Ltd., CNL Income Fund XV, Ltd., CNL
Income Fund XVI, Ltd., CNL Income Fund XVII, Ltd., CNL Income Fund XVIII,  Ltd.,
CNL American Properties Fund, Inc., and CNL Hospitality Properties, Inc. as well
as a copy, for a reasonable fee, of the exhibits filed with such reports.

         The  investment  objectives  of the  Prior  Public  Programs  generally
include  preservation  and  protection  of capital,  the potential for increased
income and protection against inflation, and potential for capital appreciation,
all  through  investment  in  restaurant  properties,  or in  the  case  of  CNL
Hospitality  Properties,  Inc., through investment in restaurant  properties and
hotel  properties.  In addition,  the investment  objectives of the Prior Public
Programs included making partially tax-sheltered distributions.

         Stockholders  should not construe  inclusion of the following tables as
implying  that the company will have results  comparable  to those  reflected in
such tables.  Distributable cash flow,  federal income tax deductions,  or other
factors  could be  substantially  different.  Stockholders  should note that, by
acquiring shares in the company,  they will not be acquiring any interest in any
prior public programs.

Description of Tables

         The following Tables are included herein:

                  Table I - Experience in Raising and Investing Funds

                  Table II - Compensation to Sponsor

                  Table III - Operating Results of Prior Programs

                  Table V - Sales or Disposal of Properties

         Unless otherwise indicated in the Tables, all information  contained in
the Tables is as of December 31, 1998.  The following is a brief  description of
the Tables:



                                                        C-1

<PAGE>



         Table I - Experience in Raising and Investing Funds

         Table  I  presents  information  on  a  percentage  basis  showing  the
experience  of two of the  principals  of the  Company and their  Affiliates  in
raising and  investing  funds for the Prior Public  Programs,  the  offerings of
which became fully subscribed between January 1994 and December 1998.

         The Table sets forth  information on the offering expenses incurred and
amounts  available  for  investment  expressed as a percentage  of total dollars
raised.  The Table  also  shows the  percentage  of  property  acquisition  cost
leveraged, the date the offering commenced, and the time required to raise funds
for investment.

         Table II - Compensation to Sponsor

         Table II  provides  information,  on a total  dollar  basis,  regarding
amounts and types of  compensation  paid to the two of the Company's  principals
and their Affiliates which sponsored the Prior Public Programs.

         The Table indicates the total offering proceeds and the portion of such
offering proceeds paid or to be paid to two of the principals of the Company and
their Affiliates in connection with the Prior Public Programs,  the offerings of
which became fully subscribed  between January 1994 and December 1998. The Table
also shows the amounts  paid to two of the  principals  of the Company and their
Affiliates  from cash  generated  from  operations  and from cash generated from
sales or refinancing by each of the Prior Public Programs on a cumulative  basis
commencing with inception and ending December 31, 1998.

         Table III - Operating Results of Prior Programs

         Table III presents a summary of  operating  results for the period from
inception through December 31, 1998, of the Prior Public Programs, the offerings
of which became fully subscribed between January 1994 and December 1998.

         The  Table  includes  a summary  of income or loss of the Prior  Public
Programs,  which are  presented  on the basis of generally  accepted  accounting
principles ("GAAP"). The Table also shows cash generated from operations,  which
represents  the cash  generated  from  operations of the properties of the Prior
Public  Programs,  as  distinguished  from cash  generated  from  other  sources
(special  items).  The section of the Table entitled  "Special  Items"  provides
information  relating  to cash  generated  from or used by items  which  are not
directly  related  to the  operations  of the  properties  of the  Prior  Public
Programs,  but rather are related to items of an investing or financing  nature.
These items  include  proceeds  from  capital  contributions  of  investors  and
disbursements  made from these sources of funds,  such as syndication  (or stock
issuance) and  organizational  costs,  acquisition  of the  properties and other
costs  which  are  related  more  to the  organization  of the  entity  and  the
acquisition of properties than to the actual operations of the entities.

         The Table also presents  information  pertaining to investment  income,
returns of capital on a GAAP basis, cash  distributions  from operations,  sales
and  refinancing   proceeds  expressed  in  total  dollar  amounts  as  well  as
distributions and tax results on a per $1,000 investment basis.

         Table IV - Results of Completed Programs

         Table IV is  omitted  from this  Appendix  C because  none of the Prior
Public  Programs  have  completed   operations  (meaning  they  no  longer  hold
properties).

         Table V - Sales or Disposal of Properties

         Table  V  provides  information  regarding  the  sale  or  disposal  of
properties  owned by the Prior Public Programs between January 1994 and December
1998.

         The Table  includes the selling price of the property,  the cost of the
property, the date acquired and the date of sale.

                                                        C-2

<PAGE>



                                     TABLE I
                    EXPERIENCE IN RAISING AND INVESTING FUNDS


<TABLE>
<CAPTION>



                                       CNL Income      CNL Income      CNL Income       CNL American
                                        Fund XIV,       Fund XV,        Fund XVI,      Properties Fund,
                                          Ltd.            Ltd.            Ltd.               Inc.      
                                       ----------      ----------      ----------      ----------------      
                                                                                           (Note 1)
<S> <C>
Dollar amount offered                 $45,000,000     $40,000,000     $45,000,000         $745,000,000
                                      ===========     ===========     ===========         ============

Dollar amount raised                        100.0%          100.0%          100.0%               100.0%
                                      -----------     -----------     -----------         ------------

Less offering expenses:

  Selling commissions
    and discounts                            (8.5)           (8.5)           (8.5)                (7.5)
  Organizational expenses                    (3.0)           (3.0)           (3.0)                (2.2)
  Marketing support and
    due diligence expense
    reimbursement fees
    (includes amounts
    reallowed to
    unaffiliated
    entities)                                (0.5)           (0.5)           (0.5)                (0.5)
                                      -----------     -----------     -----------          -----------
                                            (12.0)          (12.0)          (12.0)               (10.2)
                                      -----------     -----------     -----------          -----------
Reserve for operations                        --              --              --                    --
                                      -----------     -----------     -----------          -----------

Percent available for
  investment                                 88.0%           88.0%           88.0%                89.8%
                                      ===========     ===========     ===========          ===========

Acquisition costs:

  Cash down payment                          82.5%           82.5%          82.5%                 85.3%
  Acquisition fees paid
    to affiliates                             5.5             5.5            5.5                  4.5
  Loan costs                                  --              --             --                   -- 
                                      -----------     -----------    -----------          -----------

Total acquisition costs                      88.0%           88.0%          88.0%                 89.8%
                                      ===========     ===========    ===========           ===========

Percent leveraged
  (mortgage financing
  divided by total
  acquisition costs)                          --             --              --                   --

Date offering began                       8/27/93         2/23/94        9/02/94     4/19/95, 2/06/97
                                                                                          and 3/02/98
Length of offering (in
  months)                                       6               6              9        22, 13 and 9,
                                                                                         respectively

Months to invest 90% of
  amount available for
  investment measured
  from date of offering                        11              10             11       23, 16 and 11,
                                                                                         respectively


Note 1:  Pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933, as
         amended, effective March 29, 1995, CNL American Properties Fund, Inc. ("APF") registered
         for sale $165,000,000 of shares of common stock (the "Initial Offering"), including
         $15,000,000 available only to stockholders participating in the company's reinvestment
         plan.  The Initial Offering of APF commenced April 19, 1995, and upon completion of the
         Initial Offering on February 6, 1997, had received subscription proceeds of $150,591,765
         (15,059,177 shares), including $591,765 (59,177 shares) issued pursuant to the
         reinvestment plan.  Pursuant to a Registration Statement on Form S-11 under the
         Securities Act of 1933, as amended, effective January 31, 1997, APF registered for sale
         $275,000,000 of shares of common stock (the "1997 Offering"), including $25,000,000
         available only to stockholders participating in the company's reinvestment plan.  The
         1997 Offering of APF commenced following the completion of the Initial Offering on
         February 6, 1997, and upon completion of the 1997 Offering on March 2, 1998, had received
         subscription proceeds of $251,872,648 (25,187,265 shares), including $1,872,648 (187,265
         shares) issued pursuant to the reinvestment plan.  Pursuant to a Registration Statement
         on Form S-11 under the Securities Act of 1933, as amended, effective May 12, 1998, APF
         registered for sale $345,000,000 of shares of common stock (the "1998 Offering".  The
         1998   Offering  of  APF  commenced

</TABLE>


                                                        C-3

<PAGE>











      CNL Income        CNL Income       CNL Hospitality
      Fund XVII,        Fund XVIII,        Properties,
         Ltd.              Ltd.                Inc.
      ----------        -----------      ---------------      
                                             (Note 2)

      $30,000,000       $35,000,000

            100.0%            100.0%
      -----------       -----------




             (8.5)             (8.5)
             (3.0)             (3.0)






             (0.5)             (0.5)
      -----------       -----------
            (12.0)            (12.0)
      -----------       -----------
              --                -- 
      -----------       -----------


             88.0%             88.0%
      ===========       ===========



             83.5%             83.5%

              4.5               4.5
              --                -- 
      -----------       -----------

             88.0%             88.0%
      ===========       ===========




              --                --

          9/02/95           9/20/96


               12                17





               15                17


Note 1
(Continued):      following  the  completion  of the 1997  Offering  on March 2,
                  1998. As of December 31, 1998, APF had received  subscriptions
                  totalling  approximately  $345,000,000 from the 1998 Offering,
                  including   $3,107,848   issued   pursuant  to  the  company's
                  reinvestment  plan. The 1998 Offering became fully  subscribed
                  in December 1998 and proceeds from the last subscriptions were
                  received in January 1999.

Note 2:           Pursuant to a Registration Statement on Form  S-11  under  the
                  Securities  Act of 1933, as amended,  effective  July 9, 1997,
                  CNL   Hospitality   Properties,   Inc.   registered  for  sale
                  $165,000,000 of shares of common stock,  including $15,000,000
                  available only to stockholders  participating in the company's
                  reinvestment  plan. The offering of shares of CNL  Hospitality
                  Properties, Inc. commenced July 9, 1997.


                                                        C-4

<PAGE>



                                    TABLE II
                             COMPENSATION TO SPONSOR


<TABLE>
<CAPTION>



                                               CNL Income    CNL Income    CNL Income        CNL American
                                                Fund XIV,     Fund XV,      Fund XVI,      Properties Fund,
                                                  Ltd.          Ltd.          Ltd.               Inc.      
                                               ----------    ----------    -----------     ----------------      
                                                                                               (Note 1)

<S> <C>

Date offering commenced                           8/27/93       2/23/94       9/02/94      4/19/95, 2/06/97
                                                                                                and 3/02/98

Dollar amount raised                          $45,000,000   $40,000,000   $45,000,000          $747,253,675
                                              ===========   ===========   ===========          ============
Amount paid to sponsor from
  proceeds of offering:
    Selling commissions and
      discounts                                 3,825,000     3,400,000     3,825,000            56,044,026
    Real estate commissions                            -             -             -                     -
    Acquisition fees                            2,475,000     2,200,000     2,475,000            33,595,134
    Marketing support and
      due diligence expense
      reimbursement fees
      (includes amounts
      reallowed to
      unaffiliated entities)                      225,000       200,000       225,000             3,736,268
                                              -----------   -----------   -----------          ------------
Total amount paid to sponsor                    6,525,000     5,800,000     6,525,000            93,375,428
                                              ===========   ===========   ===========          ============
Dollar amount of cash generated
  from operations before
  deducting payments to
  sponsor:
    1998                                        3,662,593     3,343,292     3,765,104            42,216,874
    1997                                        3,734,726     3,419,967     3,909,781            18,514,122
    1996                                        3,841,163     3,557,073     3,911,609             6,096,045
    1995                                        3,823,939     3,361,477     2,619,840               594,425
    1994                                        2,897,432     1,154,454       212,171                    -
    1993                                          329,957            -             -                     -
Amount paid to sponsor from operations
  (administrative, accounting  and
  management fees):
    1998                                          148,049       126,564       141,410             3,100,599
    1997                                          128,536       113,372       129,357             1,437,908
    1996                                          134,867       122,391       157,883               613,505
    1995                                          114,095       122,107       138,445                95,966
    1994                                           84,801        37,620         7,023                    -
    1993                                            8,220            -             -                     -
Dollar amount of property sales and
  refinancing before deducting payments
  to sponsor:
    Cash (Note 3)                               5,168,000     3,312,297     1,385,384             9,046,652
    Notes                                              -             -             -                     -
Amount paid to sponsors
  from property sales and
  refinancing:
    Real estate commissions                            -             -             -                     -
    Incentive fees                                     -             -             -                     -
    Other (Note 2)                                     -             -             -                     -

Note 1:  Pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933, as
         amended, effective March 29, 1995, CNL American Properties Fund, Inc. ("APF") registered
         for sale $165,000,000 of shares of common stock (the "Initial Offering"), including
         $15,000,000 available only to stockholders participating in the company's reinvestment
         plan.  The Initial Offering of APF commenced April 19, 1995, and upon completion of the
         Initial Offering on February 6, 1997, had received subscription proceeds of $150,591,765
         (15,059,177 shares), including $591,765 (59,177 shares) issued pursuant to the
         reinvestment plan.  Pursuant to a Registration Statement on Form S-11 under the
         Securities Act of 1933, as amended, effective January 31, 1997, APF registered for sale
         $275,000,000 of shares of common stock (the "1997 Offering"), including $25,000,000
         available only to stockholders participating in the company's reinvestment plan.  The
         1997 Offering of APF commenced following the completion of the Initial Offering on
         February 6, 1997, and upon completion of the 1997 Offering on March 2, 1998, had received
         subscription proceeds of $251,872,648 (25,187,265 shares), including $1,872,648 (187,265
         shares) issued pursuant to the reinvestment plan.  Pursuant to a Registration Statement
         on Form S-11 under the Securities Act of 1933, as amended, effective May 12, 1998, APF
         registered for sale $345,000,000 of shares of common stock (the "1998 Offering").  The
         1998 Offering of APF commenced following the completion of the 1997 Offering on March 2,
         1998.  As of December 31, 1998, APF had received subscriptions totalling approximately
         $345,000,000 from the 1998 Offering, including $3,107,848 issued pursuant to the
         company's reinvestment plan.  The 1998 Offering became fully subscribed in December 1998
         and proceeds from the last subscriptions were received in January 1999.  The amounts
         shown represent the combined results of the Initial Offering, the 1997 Offering and the
         1998 Offering as of December 31, 1998, including shares issued pursuant to the company's
         reinvestment plans.

Note 2:  For negotiating secured equipment leases and  supervising  the  secured
         equipment lease program,  APF is entitled to receive a one-time secured
         equipment  lease  servicing fee of two percent of the purchase price of
         the equipment that is the subject of a secured equipment lease.  During
         the years ended December 31, 1998, 1997 and 1996, APF incurred $54,998,
         $87,665 and $70,070, respectively, in secured equipment lease servicing
         fees.

</TABLE>


                                                        C-5

<PAGE>










     CNL Income    CNL Income        CNL Hospitality
     Fund XVII,    Fund XVIII,         Properties,
        Ltd.          Ltd.                Inc.       
     ----------    -----------       ---------------       
                                        (Note 4)
        9/02/95        9/20/96

    $30,000,000    $35,000,000



      2,550,000      2,975,000
             -              -
      1,350,000      1,575,000



        150,000        175,000
      ---------      ---------
      4,050,000      4,725,000
      =========      =========


      2,638,733      2,964,628
      2,611,191      1,459,963
      1,340,159         30,126
         11,671             -
             -              -
             -              -




        117,814        132,890
        116,077         98,207
        107,211          2,980
          2,659             -
             -              -
             -              -




             -              -
             -              -



             -              -
             -              -
             -              -

Note 3:        Excludes  properties  sold  and  substituted   with   replacement
               properties, as permitted under the terms of the lease agreements.
<TABLE>
<CAPTION>
<S> <C>
Note 4:        Pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933,
               as amended, effective July 9, 1997, CNL Hospitality Properties, Inc. registered for
               sale $165,000,000 of shares of common stock, including $15,000,000 available only to
               stockholders participating in the company's reinvestment plan.  The offering of
               shares of CNL Hospitality Properties, Inc. commenced September 11, 1997.  As of
               December 31, 1998, CNL Hospitality Properties, Inc. had sold 4,301,908 shares,
               representing subscription proceeds of $43,019,080 from the offering, including 3,730
               shares ($37,299) through the reinvestment plan.  From the commencement of the
               offering through December 31, 1998, total selling commissions and discounts were
               $3,226,431, marketing support and due diligence expense reimbursement fees were
               $215,095, and acquisition fees were $1,935,859, for a total amount paid to sponsor
               of $5,377,385.  CNL Hospitality Properties, Inc. had cash generated from operations
               for the period October 15, 1997 (the date funds were originally released from
               escrow) through December 31, 1998, of $2,799,434.  CNL Hospitality Properties, Inc.
               made payments of $215,379 to the sponsor from operations for this period.

</TABLE>




                                                        C-6

<PAGE>


                                    TABLE III
                     Operating Results of Prior Programs
                            CNL INCOME FUND XIV, LTD.

<TABLE>
<CAPTION>
                                                           1992
                                                          (Note 1)       1993            1994            1995
                                                        ------------ ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Gross revenue                                        $          0    $    256,234    $  3,135,716    $  4,017,266
Equity in earnings of joint ventures                            0           1,305          35,480         338,717
Profit (Loss) from sale of properties
  (Notes 4, 6, 7, 8 and 9)                                      0               0               0         (66,518)
Provision for loss on building (Note 10)                        0               0               0               0
Interest income                                                 0          27,874         200,499          50,724
Less: Operating expenses                                        0         (14,049)       (181,980)       (248,840)
      Interest expense                                          0               0               0               0
      Depreciation and amortization                             0         (28,918)       (257,640)       (340,112)
                                                     ------------    ------------    ------------    ------------

Net income - GAAP basis                                         0         242,446       2,932,075       3,751,237
                                                     ============    ============    ============    ============

Taxable income

  - from operations                                             0         278,845       2,482,240       3,162,165
                                                     ============    ============    ============    ============
  - from gain (loss) on sale                                    0               0               0               0
                                                     ============    ============    ============    ============

Cash generated from operations
  (Notes 2 and 3)                                               0         321,737       2,812,631       3,709,844
Cash generated from sales (Notes 4, 6,
  7, 8 and 9)                                                   0               0               0         696,012
Cash generated from refinancing                                 0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated from operations, sales
  and refinancing                                               0         321,737       2,812,631       4,405,856
Less: Cash distributions to investors
  (Note 5)
    - from operating cash flow                                  0          (9,050)     (2,229,952)     (3,543,751)
    - from sale of properties                                   0               0               0               0
    - from cash flow from prior period                          0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash
  distributions                                                 0         312,687         582,679         862,105
Special items (not including sales and
  refinancing):
    Limited partners' capital
      contributions                                             0      28,785,100      16,214,900               0
    General partners' capital
      contributions                                         1,000               0               0               0
    Syndication costs                                           0      (2,771,892)     (1,618,477)              0
    Acquisition of land and buildings                           0     (13,758,004)    (11,859,237)       (964,073)
    Investment in direct financing leases                       0      (4,187,268)     (5,561,748)        (75,352)
    Investment in joint ventures                                0        (315,209)     (1,561,988)     (1,087,218)
    Return of capital from joint venture                        0               0               0               0
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XIV, Ltd. by related parties                              0        (706,215)       (376,738)           (577)
    Increase in other assets                                    0        (444,267)              0               0
    Increase (decrease) in restricted cash                      0               0               0               0
    Other                                                       0               0               0           5,530
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash

  distributions and special items                           1,000       6,914,932      (4,180,609)     (1,259,585)
                                                     ============    ============    ============    ============

TAX AND DISTRIBUTION DATA PER
  $1,000 INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                             0              16              56              70
                                                     ============    ============    ============    ============
  - from recapture                                              0               0               0               0
                                                     ============    ============    ============    ============

Capital gain (loss) (Notes 4, 6, 7,

  8 and 9)                                                      0               0               0               0
                                                     ============    ============    ============    ============

</TABLE>

                                                        C-7
<PAGE>

<TABLE>
<CAPTION>
                                                 1996            1997           1998
                                             ------------    ------------   ------------
<S>                                              <C>             <C>            <C> 
Gross revenue                                $  3,999,813    $  3,918,582   $  3,440,910
Equity in earnings of joint ventures              459,137         309,879        317,654
Profit (Loss) from sale of properties
  (Notes 4, 6, 7, 8 and 9)                              0               0        112,206
Provision for loss on building (Note 10)                0               0        (37,155)
Interest income                                    44,089          40,232         73,246
Less: Operating expenses                         (246,621)       (262,592)      (326,960)
      Interest expense                                  0               0              0
      Depreciation and amortization              (340,089)       (340,161)      (380,814)
                                             ------------    ------------   ------------

Net income - GAAP basis                         3,916,329       3,665,940      3,199,087
                                             ============    ============   ============

Taxable income

  - from operations                             3,236,329       3,048,675      3,230,884
                                             ============    ============   ============
  - from gain (loss) on sale                            0          47,256         53,034
                                             ============    ============   ============

Cash generated from operations
  (Notes 2 and 3)                               3,706,296       3,606,190      3,514,544
Cash generated from sales (Notes 4, 6,
  7, 8 and 9)                                           0         318,592      1,648,110
Cash generated from refinancing                         0               0              0
                                             ------------    ------------   ------------
Cash generated from operations, sales
  and refinancing                               3,706,296       3,924,782      5,162,654
Less: Cash distributions to investors
  (Note 5)
    - from operating cash flow                 (3,706,296)     (3,606,190)    (3,514,544)
    - from sale of properties                           0               0              0
    - from cash flow from prior period             (6,226)       (106,330)      (197,976)
                                             ------------    ------------   ------------
Cash generated (deficiency) after cash
  distributions                                    (6,226)        212,262      1,450,134
Special items (not including sales and
  refinancing):
    Limited partners' capital
      contributions                                     0               0              0
    General partners' capital
      contributions                                     0               0              0
    Syndication costs                                   0               0              0
    Acquisition of land and buildings                   0               0       (605,712)
    Investment in direct financing leases               0               0       (931,237)
    Investment in joint ventures                   (7,500)       (121,855)      (568,498)
    Return of capital from joint venture                0          51,950              0
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XIV, Ltd. by related parties                      0               0              0
    Increase in other assets                            0               0              0
    Increase (decrease) in restricted cash              0        (318,592)       318,592
    Other                                               0               0              0
                                             ------------    ------------   ------------
Cash generated (deficiency) after cash

  distributions and special items                 (13,726)       (176,235)      (336,721)
                                             ============    ============  =============

TAX AND DISTRIBUTION DATA PER
  $1,000 INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                    71              67             71
                                             ============    ============   ============
  - from recapture                                      0               0              0
                                             ============    ============   ============

Capital gain (loss) (Notes 4, 6, 7,
  8 and 9)                                              0               1              1
                                             ============    ============   ============
</TABLE>

                                      C-8

<PAGE>

TABLE III - CNL INCOME FUND XIV, LTD. (continued)


<TABLE>
<CAPTION>
                                                         1992
                                                       (Note 1)          1993            1994            1995
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>            <C>             <C>
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                                      0               1              51              79
  - from capital gain                                           0               0               0               0
  - from return of capital                                      0               0               0               0
  - from investment income from prior

      period                                                    0               0               0               0
                                                     ------------    ------------    ------------    ------------
Total distributions on GAAP basis (Note 5)                      0               1              51              79
                                                     ============    ============    ============    ============

  Source (on cash basis)
  - from sales                                                  0               0               0               0
  - from operations                                             0               1              51              79
  - from cash flow from prior period                            0               0               0               0
                                                     ------------    ------------    ------------    ------------

Total distributions on cash basis (Note 5)                      0               1              51              79
                                                     ============    ============    ============    ============
Total cash distributions as a percentage of

  original $1,000 investment (Note 11)                       0.00%           4.50%           6.50%           8.06%
Total cumulative cash distributions
  per $1,000 investment from inception                          0               1              52             131

Amount (in percentage terms) remaining invested
  in program properties at the end of each year
  (period) presented (original total
  acquisition cost of properties retained,
  divided by original total acquisition cost of
  all properties in program) (Notes 4, 6, 7, 8
  and 9)                                                       N/A            100%            100%            100%
</TABLE>


                                       C-9
<PAGE>

<TABLE>
<CAPTION>
                                                      1996            1997           1998
                                                  ------------    ------------   ------------
<S>                                                   <C>             <C>            <C> 
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income
  - from capital gain                                       83              81             68
  - from return of capital                                   0               0              2
  - from investment income from prior                        0               0              0

      period
                                                             0               2             12
Total distributions on GAAP basis (Note 5)        ------------    ------------   ------------
                                                            83              83             82
                                                  ============    ============   ============
  Source (on cash basis)
  - from sales
  - from operations                                          0               0              4
  - from cash flow from prior period                        83              81             78

                                                             0               2              0
Total distributions on cash basis (Note 5)        ------------    ------------   ------------
                                                            83              83             82
Total cash distributions as a percentage of       ============    ============   ============

  original $1,000 investment (Note 11)
Total cumulative cash distributions                       8.25%           8.25%          8.25%
  per $1,000 investment from inception
                                                           214             297            379
Amount (in percentage terms) remaining invested
  in program properties at the end of each year
  (period) presented (original total
  acquisition cost of properties retained,
  divided by original total acquisition cost of
  all properties in program) (Notes 4, 6, 7, 8
  and 9)                                                   100%            100%           100%
</TABLE>


Note 1:  Pursuant to a registration statement on Form S-11 under the Securities
         Act of 1933, as amended, CNL Income Fund XIV, Ltd. ("CNL XIV") and CNL
         Income Fund XIII, Ltd. each registered for sale $40,000,000 units of
         limited partnership interests ("Units"). The offering of Units of CNL
         Income Fund XIII, Ltd. commenced March 17, 1993. Pursuant to the
         registration statement, CNL XIV could not commence until the offering
         of Units of CNL Income Fund XIII, Ltd. was terminated. CNL Income Fund
         XIII, Ltd. terminated its offering of Units on August 26, 1993, at
         which time the maximum offering proceeds of $40,000,000 had been
         received. Upon the termination of the offering of Units of CNL Income
         Fund XIII, Ltd., CNL XIV commenced its offering of Units. Activities
         through September 13, 1993, were devoted to organization of the
         partnership and operations had not begun.

Note 2:  Cash generated from operations  includes cash received from tenants,
         plus  distributions  from joint ventures,  less cash paid for expenses,
         plus interest received.

Note 3:  Cash  generated  from  operations  per this  table  agrees  to cash
         generated  from  operations per the statement of cash flows included in
         the financial statements of CNL Income Fund XIV, Ltd.

Note 4:  During 1995, the partnership sold two of its properties to a tenant for
         its original purchase price, excluding acquisition fees and
         miscellaneous acquisition expenses. The net sales proceeds were used to
         acquire two additional properties. As a result of these transactions,
         the partnership recognized a loss for financial reporting purposes of
         $66,518 primarily due to acquisition fees and miscellaneous acquisition
         expenses the partnership had allocated to the property and due to the
         accrued rental income relating to future scheduled rent increases that
         the partnership had recorded and reversed at the time of sale. In
         addition, during 1996, Wood-Ridge Real Estate Joint Venture, in which
         the partnership owns a 50% interest, sold its two properties to the
         tenant and recognized a gain of approximately $261,100 for financial
         reporting purposes. As a result, the partnership's pro rata share of
         such gain of approximately $130,550 is included in equity in earnings
         of unconsolidated joint ventures for 1996.

Note 5:  As a result of the partnership's change in investor services agents in
         1993, distributions are now declared at the end of each quarter and
         paid in the following quarter. Since this table generally presents
         distributions on a cash basis (rather than amounts declared),
         distributions on a cash basis for 1993 only reflect payments for three
         quarters. Distributions declared for the quarters ended December 31,
         1993, 1994, 1995, 1996 and 1997, are reflected in the 1994, 1995, 1996,
         1997 and 1998 columns, respectively, for distributions on a cash basis
         due to the payment of such distributions in January 1994, 1995, 1996,
         1997 and 1998, respectively. As a result of 1994, 1995, 1996, 1997 and
         1998 distributions being presented on a cash basis, distributions
         declared and unpaid as of December 31, 1994, 1995, 1996, 1997 and 1998
         are not included in the 1994, 1995, 1996, 1997 and 1998 totals,
         respectively.

Note 6:  In January 1998, the partnership sold its property in Madison, Alabama,
         to a third party for $740,000 and received net sales proceeds of
         $696,486. Due to the fact that during 1997 the partnership wrote off
         $13,314 in accrued rental income (non-cash accounting adjustments
         relating to the straight-lining of future scheduled rent increases over
         the lease term in accordance with generally accepted accounting
         principles), no gain or loss was incurred for financial reporting
         purposes in January 1998 relating to this sale. In April 1998, the
         partnership reinvested a portion of the net sales proceeds from the
         sale of the property in Madison, Alabama in Melbourne Joint Venture,
         with an affiliate of the partnership which has the same general
         partners. The partnership intends to use the remaining proceeds to
         invest in an additional property or for other partnership purposes.

Note 7:  In January  1998,  the  partnership  sold one of its  properties  in
         Richmond,  Virginia for  $512,462  and  received net sales  proceeds of
         $512,246,  resulting  in a gain  of  $70,798  for  financial  reporting
         purposes.  The  partnership  reinvested  the net  sales  proceeds  in a
         property in Fayetteville, North Carolina.

Note 8:  In April 1998, the partnership reached an agreement to accept
         $360,000 for the property in Riviera Beach, Florida, which was taken
         through a right of way taking in December 1997. The partnership had
         received preliminary sales proceeds of $318,592 as of December 31,
         1997. Upon agreement and receipt of the final sales price of $360,000,
         the partnership recognized a gain of $41,408 for financial reporting
         purposes. The partnership reinvested the net sales proceeds in a
         property in Fayetteville, North Carolina.

Note 9:  In July 1998, the Partnership sold one of its properties in Richmond,
         Virginia for $415,000 and received net sales proceeds of $397,970. Due
         to the fact that during 1998 the partnership wrote off $12,060 in
         accrued rental income (non-cash accounting adjustments relating to the
         straight-lining of future scheduled rent increases over the lease term
         in accordance with generally accepted accounting principles), no gain
         or loss was incurred for financial reporting purposes in July 1998
         relating to this sale. In October 1998, the partnership reinvested the
         net sales proceeds from the sale of the property in Richmond, Virginia
         in a property in Fayetteville, North Carolina.

Note 10: At December 31, 1998, the Partnership recorded a provision for loss
         on building in the amount of $37,155 for financial reporting purposes
         relating to a Long John Silver's Property whose lease was rejected by
         the tenant. The tenant of this Property filed for bankruptcy and ceased
         payment of rents under the terms of its lease agreement. The allowance
         represents the difference between the carrying value of the Property at
         December 31, 1998 and the estimated net realizable value for the
         Property.

                                      C-10

<PAGE>

                                    TABLE III
                     Operating Results of Prior Programs
                            CNL INCOME FUND XV, LTD.

<TABLE>
<CAPTION>
                                                         1993
                                                       (Note 1)          1994            1995            1996
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Gross revenue                                        $          0    $  1,143,586    $  3,546,320    $  3,632,699
Equity in earnings of joint ventures                            0           8,372         280,606         392,862
Profit (Loss) from sale of properties
  (Note 4)                                                      0               0         (71,023)              0
Provision for loss on land and buildings
  (Note 7)                                                      0               0               0               0
Interest income                                                 0         167,734          88,059          43,049
Less: Operating expenses                                        0         (62,926)       (228,319)       (235,319)
      Interest expense                                          0               0               0               0
      Depreciation and amortization                             0         (70,848)       (243,175)       (248,232)
                                                     ------------    ------------    ------------    ------------

Net income - GAAP basis                                         0       1,185,918       3,372,468       3,585,059
                                                     ============    ============    ============    ============

Taxable income

  - from operations                                             0       1,026,715       2,861,912       2,954,318
                                                     ============    ============    ============    ============
  - from gain on sale                                           0               0               0               0
                                                     ============    ============    ============    ============

Cash generated from operations
  (Notes 2 and 3)                                               0       1,116,834       3,239,370       3,434,682
Cash generated from sales (Note 4)                              0               0         811,706               0
Cash generated from refinancing                                 0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated from operations, sales
  and refinancing                                               0       1,116,834       4,051,076       3,434,682
Less: Cash distributions to investors
  (Notes 5, 6 and 9)
    - from operating cash flow                                  0        (635,944)     (2,650,003)     (3,200,000)
    - from sale of properties                                   0               0               0               0
    - from cash flow from prior period                          0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash
  distributions                                                 0         480,890       1,401,073         234,682
Special items (not including sales and
  refinancing):
    Limited partners' capital contri-
      butions                                                   0      40,000,000               0               0
    General partners' capital contri-
      butions                                               1,000               0               0               0
    Syndication costs                                           0      (3,892,003)              0               0
    Acquisition of land and buildings                           0     (22,152,379)     (1,625,601)              0
    Investment in direct financing
      leases                                                    0      (6,792,806)     (2,412,973)              0
    Investment in joint ventures                                0      (1,564,762)       (720,552)       (129,939)
    Return of capital from joint venture                        0               0               0               0
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XV, Ltd. by related parties                               0      (1,098,197)        (23,507)              0
    Increase in other assets                                    0        (187,757)              0               0
    Other                                                     (38)         (6,118)         25,150               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash

  distributions and special items                             962       4,786,868      (3,356,410)        104,743
                                                     ============    ============    ============    ============
TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                             0              33              71              73
                                                     ============    ============    ============    ============
  - from recapture                                              0               0               0               0
                                                     ============    ============    ============    ============
Capital gain (loss) (Note 4)                                    0               0               0               0
                                                     ============    ============    ============    ============

</TABLE>

                                      C-11

<PAGE>

                                                1997            1998
                                            ------------    ------------
Gross revenue                               $  3,622,123    $  3,179,911
Equity in earnings of joint ventures             239,249         236,553
Profit (Loss) from sale of properties
  (Note 4)                                             0               0
Provision for loss on land and buildings
  (Note 7)                                             0        (280,907)
Interest income                                   46,642          54,576
Less: Operating expenses                        (224,761)       (265,748)
      Interest expense                                 0               0
      Depreciation and amortization             (248,348)       (281,888)
                                            ------------    ------------
Net income - GAAP basis                        3,434,905       2,642,497
                                            ============    ============

Taxable income

  - from operations                            2,856,893       2,847,638
                                            ============    ============
  - from gain on sale                             47,256               0
                                            ============    ============

Cash generated from operations
  (Notes 2 and 3)                              3,306,595       3,216,728
Cash generated from sales (Note 4)                     0               0
Cash generated from refinancing                        0               0

Cash generated from operations, sales
  and refinancing                              3,306,595       3,216,728
Less: Cash distributions to investors
  (Notes 5, 6 and 9)
    - from operating cash flow                (3,280,000)     (3,216,728)
    - from sale of properties                          0               0
    - from cash flow from prior period                 0        (183,272)

Cash generated (deficiency) after cash
  distributions                                   26,595        (183,272)
Special items (not including sales and
  refinancing):
    Limited partners' capital contri-
      butions                                          0               0
    General partners' capital contri-
      butions                                          0               0
    Syndication costs                                  0               0
    Acquisition of land and buildings                  0               0
    Investment in direct financing
      leases                                           0               0
    Investment in joint ventures                       0        (216,992)
    Return of capital from joint venture          51,950               0
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XV, Ltd. by related parties                      0               0
    Increase in other assets                           0               0
    Other                                              0               0
                                            ------------    ------------
Cash generated (deficiency) after cash
  distributions and special items                 78,545        (400,264)
                                            ============    ============

TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                   71              70
                                            ============    ============
  - from recapture                                     0               0
                                            ============    ============
Capital gain (loss) (Note 4)                           1               0
                                            ============    ============

                                      C-12

<PAGE>

TABLE III - CNL INCOME FUND XV, LTD. (continued)

<TABLE>
<CAPTION>
                                                         1993
                                                       (Note 1)          1994            1995            1996
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>            <C>              <C>             <C>
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                                      0              21              66              80
  - from capital gain                                           0               0               0               0
  - from investment income from prior

      period                                                    0               0               0               0
                                                     ------------    ------------    ------------    ------------
Total distributions on GAAP basis (Note 5)                      0              21              66              80
                                                     ============    ============    ============    ============

  Source (on cash basis)
  - from sales                                                  0               0               0               0
  - from refinancing                                            0               0               0               0
  - from operations                                             0              21              66              80
  - from investment income from prior period                    0               0               0               0
                                                     ------------    ------------    ------------    ------------

Total distributions on cash basis (Note 5)                      0              21              66              80
                                                     ============    ============    ============    ============
Total cash distributions as a percentage

  of original $1,000 investment (Notes 6,
  8 and 9).0.00%                                             5.00%           7.25%           8.20%
Total cumulative cash distributions per
  $1,000 investment from inception                              0              21              87            167
Amount (in percentage terms) remaining
  invested in program properties at the
  end of each year (period) presented
  (original total acquisition cost of
  properties retained, divided by original
  total acquisition cost of all properties
  in program) (Note 4)                                        N/A             100%            100%           100%

</TABLE>


Note 1:  The registration statement relating to this offering of Units of CNL
         Income Fund XV, Ltd.  became  effective  February 23, 1994.  Activities
         through March 23, 1994, were devoted to organization of the partnership
         and operations had not begun.

Note 2:  Cash generated from operations  includes cash received from tenants,
         plus  distributions  from joint  venture,  less cash paid for expenses,
         plus interest received.

Note 3:  Cash  generated  from  operations  per this  table  agrees  to cash
         generated  from  operations per the statement of cash flows included in
         the financial statements of CNL Income Fund XV, Ltd.

Note 4:  During 1995, the partnership sold three of its properties to a tenant
         for its original purchase price, excluding acquisition fees and
         miscellaneous acquisition expenses. The majority of the net sales
         proceeds were used to acquire additional properties. As a result of
         these transactions, the partnership recognized a loss for financial
         reporting purposes of $71,023 primarily due to acquisition fees and
         miscellaneous acquisition expenses the partnership had allocated to the
         three properties and due to the accrued rental income relating to
         future scheduled rent increases that the partnership had recorded and
         reversed at the time of sale. In addition, during 1996, Wood-Ridge Real
         Estate Joint Venture, in which the partnership owns a 50% interest,
         sold its two properties to the tenant and recognized a gain of
         approximately $261,100 for financial reporting purposes. As a result,
         the partnership's pro rata share of such gain of approximately $130,550
         is included in equity in earnings of unconsolidated joint ventures for
         1996.

Note 5:  Distributions  declared for the quarters  ended  December 31, 1994,
         1995,  1996 and 1997 are  reflected  in the 1995,  1996,  1997 and 1998
         columns,  respectively,  due to the  payment of such  distributions  in
         January  1995,  1996,  1997 and  1998,  respectively.  As a  result  of
         distributions being presented on a cash basis,  distributions  declared
         and unpaid as of December 31, 1994,  1995,  1996, 1997 and 1998 are not
         included in the 1994, 1995, 1996, 1997 and 1998 totals, respectively.

Note 6:  On December 31, 1996, CNL Income Fund XV, Ltd. declared a special
         distribution of cumulative excess operating reserves equal to .20% of
         the total invested capital. Accordingly, the total yield for 1996 was
         8.20%

Note 7.  During the year ended December 31, 1998, the Partnership established
         an allowance  for loss on land and  buildings of $280,907 for financial
         reporting  purposes  relating  to two of the four  Long  John  Silver's
         properties  whose  leases were  rejected  by the tenant.  The tenant of
         these properties filed for bankruptcy and ceased payment of rents under
         the terms of the lease  agreements.  The loss represents the difference
         between the carrying  value of the  Properties at December 31, 1998 and
         the current estimated net realizable value for these Properties.

Note 8:  Total cash distributions as a percentage of original $1,000 investment
         are calculated based on actual distributions declared for the period.
         (See Note 5 above)

Note 9:   Cash  distributions  for 1998 include an additional  amount equal to
         0.50% of invested  capital which was earned in 1997 or prior years, but
         declared payable in the first quarter of 1998.


                                      C-13

<PAGE>


                                                 1997            1998
                                             ------------    ------------

Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                             82              65
  - from capital gain                                   0               0
  - from investment income from prior

      period                                            0              20
                                             ------------    ------------
Total distributions on GAAP basis (Note 5)             82              85
                                             ============    ============

  Source (on cash basis)
  - from sales                                          0               0
  - from refinancing                                    0               0
  - from operations                                    82              80
  - from investment income from prior period            0               5
                                             ------------    ------------

Total distributions on cash basis (Note 5)             82              85
                                             ============    ============
Total cash distributions as a percentage

  of original $1,000 investment (Notes 6,
  8 and 9).0.00%                                     8.00%           8.50%
Total cumulative cash distributions per
  $1,000 investment from inception                    249             334
Amount (in percentage terms) remaining
  invested in program properties at the
  end of each year (period) presented
  (original total acquisition cost of
  properties retained, divided by original
  total acquisition cost of all properties
  in program) (Note 4)                                100%            100%


                                      C-14

<PAGE>

                                    TABLE III
                     Operating Results of Prior Programs
                            CNL INCOME FUND XVI, LTD.

<TABLE>
<CAPTION>
                                                         1993
                                                       (Note 1)          1994            1995            1996
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Gross revenue                                        $          0    $    186,257    $  2,702,504    $  4,343,390
Equity in earnings from joint venture                           0               0               0          19,668
Profit from sale of properties (Notes 4
  and 5)                                                        0               0               0         124,305
Provision for loss on building (Note 8)                         0               0               0               0
Interest income                                                 0          21,478         321,137          75,160
Less: Operating expenses                                        0         (10,700)       (274,595)       (261,878)
      Interest expense                                          0               0               0               0
      Depreciation and amortization                             0          (9,458)       (318,205)       (552,447)
                                                     ------------    ------------    ------------    ------------

Net income - GAAP basis                                         0         187,577       2,430,841       3,748,198
                                                     ============    ============    ============    ============

Taxable income

  - from operations                                             0         189,864       2,139,382       3,239,830
                                                     ============    ============    ============    ============
  - from gain on sale (Notes 4 and 5)                           0               0               0               0
                                                     ============    ============    ============    ============

Cash generated from operations
  (Notes 2 and 3)                                               0         205,148       2,481,395       3,753,726
Cash generated from sales (Notes 4 and 5)                       0               0               0         775,000
Cash generated from refinancing                                 0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated from operations, sales
  and refinancing                                               0         205,148       2,481,395       4,528,726
Less: Cash distributions to investors
  (Note 6)
    - from operating cash flow                                  0          (2,845)     (1,798,921)     (3,431,251)
    - from sale of properties                                   0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash
  distributions                                                 0         202,303         682,474       1,097,475
Special items (not including sales and
  refinancing):
    Limited partners' capital contri-
      butions                                                   0      20,174,172      24,825,828               0
    General partners' capital contri-
      butions                                               1,000               0               0               0
    Syndication costs                                           0      (1,929,465)     (2,452,743)              0
    Acquisition of land and buildings                           0     (13,170,132)    (16,012,458)     (2,355,627)
    Investment in direct financing
      leases                                                    0        (975,853)     (5,595,236)       (405,937)
    Investment in joint ventures                                0               0               0        (775,000)
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XVI, Ltd. by related parties                              0        (854,154)       (405,569)         (2,494)
    Increase in other assets                                    0        (443,625)        (58,720)              0
    Increase (decrease) in restricted cash                      0               0               0               0
    Reimbursement from developer of
      construction costs                                        0               0               0               0
    Other                                                     (36)        (20,714)         20,714               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash

  distributions and special items                             964       2,982,532       1,004,290      (2,441,583)
                                                     ============    ============    ============    ============
TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                             0              17              53              71
                                                     ============    ============    ============    ============
  - from recapture                                              0               0               0               0
                                                     ============    ============    ============    ============
Capital gain (loss) (Notes 4 and 5)                             0               0               0               0
                                                     ============    ============    ============    ============

</TABLE>

                                      C-15

<PAGE>

                                                 1997            1998
                                             ------------    ------------

Gross revenue                                $  4,308,853    $  3,901,555
Equity in earnings from joint venture              73,507         132,002
Profit from sale of properties (Notes 4
  and 5)                                           41,148               0
Provision for loss on building (Note 8)                 0        (266,257)
Interest income                                    73,634          60,199
Less: Operating expenses                         (272,932)       (295,141)
      Interest expense                                  0               0
      Depreciation and amortization              (563,883)       (555,360)
                                             ------------    ------------

Net income - GAAP basis                         3,660,327       2,976,998
                                             ============    ============

Taxable income

  - from operations                             3,178,911       3,153,618
                                             ============    ============
  - from gain on sale (Notes 4 and 5)              64,912               0
                                             ============    ============

Cash generated from operations
  (Notes 2 and 3)                               3,780,424       3,623,694
Cash generated from sales (Notes 4 and 5)         610,384               0
Cash generated from refinancing                         0               0
                                             ------------    ------------
Cash generated from operations, sales
  and refinancing                               4,390,808       3,623,694
Less: Cash distributions to investors
  (Note 6)
    - from operating cash flow                 (3,600,000)     (3,623,694)
    - from sale of properties                           0         (66,306)
                                             ------------    ------------
Cash generated (deficiency) after cash
  distributions                                   790,808         (66,306)
Special items (not including sales and
  refinancing):
    Limited partners' capital contri-
      butions                                           0               0
    General partners' capital contri-
      butions                                           0               0
    Syndication costs                                   0               0
    Acquisition of land and buildings             (23,501)         (3,545)
    Investment in direct financing
      leases                                      (29,257)        (28,403)
    Investment in joint ventures                        0        (744,058)
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XVI, Ltd. by related parties                      0               0
    Increase in other assets                            0               0
    Increase (decrease) in restricted cash       (610,384)        610,384
    Reimbursement from developer of
      construction costs                                0         161,648
    Other                                               0               0
                                             ------------    ------------
Cash generated (deficiency) after cash
  distributions and special items                 127,666         (70,280)
                                             ============    ============

TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                    70              69
                                             ============    ============
  - from recapture                                      0               0
                                             ============    ============
Capital gain (loss) (Notes 4 and 5)                     1               0
                                             ============    ============

                                      C-16
<PAGE>



TABLE III - CNL INCOME FUND XVI, LTD. (continued)


<TABLE>
<CAPTION>
                                                         1993
                                                       (Note 1)          1994            1995            1996
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>              <C>             <C>             <C>
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                                      0               1              45              76
  - from capital gain                                           0               0               0               0
  - from investment income from
      prior period                                              0               0               0               0
                                                     ------------    ------------    ------------    ------------
Total distributions on GAAP basis (Note 6)                      0               1              45              76
                                                     ============    ============    ============    ============

  Source (on cash basis)
  - from sales                                                  0               0               0               0
  - from refinancing                                            0               0               0               0
  - from operations                                             0               1              45              76
  - from prior period                                           0               0               0               0
                                                     ------------    ------------    ------------    ------------

Total distributions on cash basis (Note 6)                      0               1              45              76
                                                     ============    ============    ============    ============
Total cash distributions as a percentage

  of original $1,000 investment (Notes 7
  and 9)                                                     0.00%           4.50%           6.00%           7.88%
Total cumulative cash distributions per
  $1,000 investment from inception                              0               1              46             122
Amount (in percentage terms) remaining
  invested  in program  properties  at the
  end of each year  (period)  presented
  (original total acquisition cost of
  properties  retained,  divided by original
  total acquisition cost of all properties
  in program) (Notes 4 and 5)                                 N/A             100%            100%            100%

</TABLE>


Note 1:  Pursuant to a registration statement on Form S-11 under the Securities
         Act of 1933, as amended, CNL Income Fund XVI, Ltd. ("CNL XVI") and CNL
         Income Fund XV, Ltd. each registered for sale $40,000,000 units of
         limited partnership interests ("Units"). The offering of Units of CNL
         Income Fund XV, Ltd. commenced February 23, 1994. Pursuant to the
         registration statement, CNL XVI could not commence until the offering
         of Units of CNL Income Fund XV, Ltd. was terminated. CNL Income Fund
         XV, Ltd. terminated its offering of Units on September 1, 1994, at
         which time the maximum offering proceeds of $40,000,000 had been
         received. Upon the termination of the offering of Units of CNL Income
         Fund XV, Ltd., CNL XVI commenced its offering of Units. Activities
         through September 22, 1994, were devoted to organization of the
         partnership and operations had not begun.

Note 2:  Cash generated from operations  includes cash received from tenants,
         less cash paid for expenses, plus interest received.

Note 3:   Cash  generated  from  operations  per this  table  agrees  to cash
         generated  from  operations per the statement of cash flows included in
         the financial statements of CNL Income Fund XVI, Ltd.

Note 4:  In April 1996,  CNL Income Fund XVI, Ltd. sold one of its properties
         and  received net sales  proceeds of  $775,000,  resulting in a gain of
         $124,305  for  financial  reporting  purposes.  In  October  1996,  the
         partnership reinvested the net sales proceeds in an additional property
         as tenants-in-common with an affiliate of the general partners.

Note 5:  In March 1997,  CNL Income Fund XVI, Ltd. sold one of its properties
         and  received net sales  proceeds of  $610,384,  resulting in a gain of
         $41,148  for  financial  reporting  purposes.   In  January  1998,  the
         partnership reinvested the net sales proceeds in an additional property
         as tenants-in-common with affiliates of the general partners.

Note 6:  Distributions  declared for the quarters  ended  December 31, 1994,
         1995,  1996 and 1997 are  reflected  in the 1995,  1996,  1997 and 1998
         columns,  respectively,  due to the  payment of such  distributions  in
         January  1995,  1996,  1997 and  1998,  respectively.  As a  result  of
         distributions being presented on a cash basis,  distributions  declared
         and unpaid as of December 31, 1994,  1995,  1996, 1997 and 1998 are not
         included in the 1994, 1995, 1996, 1997 and 1998 totals, respectively.

Note 7:  Cash  distributions  for 1998 include an additional  amount equal to
         0.20% of invested capital which was earned in 1997 but declared payable
         in the first quarter of 1998.

Note 8:  During the year ended December 31, 1998, the Partnership  recorded a
         provision  for loss on  building of $266,257  for  financial  reporting
         purposes relating to a Long John Silver's property in Celina, Ohio. The
         tenant of this  property  filed for  bankruptcy  and ceased  payment of
         rents under the terms of its lease agreement.  The allowance represents
         the difference  between the  Property's  carrying value at December 31,
         1998 and the estimated net realizable value for this Property.

Note 9:  Total cash distributions as a percentage of original $1,000 investment
         are calculated based on actual distributions declared for the period.
         (See Note 6 above)

                                      C-17

<PAGE>

                                                 1997            1998
                                             ------------    ------------

Cash distributions to investors
  Source (on GAAP basis)                               80              65
  - from investment income                              0               0
  - from capital gain
  - from investment income from
      prior period                                      0              17
                                             ------------    ------------
Total distributions on GAAP basis (Note 6)             80              82
                                             ============    ============

  Source (on cash basis)
  - from sales                                          0               0
  - from refinancing                                    0               0
  - from operations                                    80              81
  - from prior period                                   0               1
                                              -----------    ------------

Total distributions on cash basis (Note 6)             80              82
                                             ============    ============
Total cash distributions as a percentage
  of original $1,000 investment (Notes 7
  and 9)                                             8.00%           8.20%
Total cumulative cash distributions per
  $1,000 investment from inception                    202             284
Amount (in percentage terms) remaining
  invested  in program  properties  at the
  end of each year  (period)  presented
  (original total acquisition cost of
  properties  retained,  divided by original
  total acquisition cost of all properties
  in program) (Notes 4 and 5)                         100%            100%



                                      C-18

<PAGE>

                                    TABLE III
                       Operating Results of Prior Programs
                       CNL AMERICAN PROPERTIES FUND, INC.

<TABLE>
<CAPTION>
                                                         1994                                            1997
                                                       (Note 1)          1995            1996          (Note 2)
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Gross revenue                                        $          0    $    539,776    $  4,363,456    $ 15,516,102
Equity in earnings of joint venture                             0               0               0               0
Provision for loss on land and buildings
  (Note 12)                                                     0               0               0               0
Interest income                                                 0         119,355       1,843,228       3,941,831
Less: Operating expenses                                        0        (186,145)       (908,924)     (2,066,962)
      Interest expense                                          0               0               0               0
      Depreciation and amortization                             0        (104,131)       (521,871)     (1,795,062)
      Minority interest in income of
        consolidated joint venture                              0             (76)        (29,927)        (31,453)
                                                     ------------    ------------    ------------    ------------

Net income - GAAP basis                                         0         368,779       4,745,962      15,564,456
                                                     ============    ============    ============    ============

Taxable income

  - from operations (Note 8)                                    0         379,935       4,894,262      15,727,311
                                                     ============    ============    ============    ============
  - from gain (loss) on sale                                    0               0               0         (41,115)
                                                     ============    ============    ============    ============

Cash generated from operations
  (Notes 4 and 5)                                               0         498,459       5,482,540      17,076,214
Cash generated from sales (Note 7)                              0               0               0       6,289,236
Cash generated from refinancing                                 0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated from operations, sales
  and refinancing                                               0         498,459       5,482,540      23,365,450
Less: Cash distributions to investors
  (Note 9)
    - from operating cash flow                                  0        (498,459)     (5,439,404)    (16,854,297)
    - from sale of properties                                   0               0               0               0
    - from cash flow from prior period                          0               0               0               0
    - from return of capital (Note 10)                          0        (136,827)              0               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash
  distributions                                                 0        (136,827)         43,136       6,511,153
Special items (not including sales of
  real estate and refinancing):
    Subscriptions received from
      stockholders                                              0      38,454,158     100,792,991     222,482,560
    Sale of common stock to CNL Fund
      Advisors, Inc.                                      200,000               0               0               0
    Retirement of shares of common stock
      (Note 13)                                                 0               0               0               0
    Contributions from minority interest                        0         200,000          97,419               0
    Distributions to holder of minority
      interest                                                  0               0         (39,121)        (34,020)
    Stock issuance costs                                      (19)     (3,680,704)     (8,486,188)    (19,542,862)
    Acquisition of land and buildings                           0     (18,835,969)    (36,104,148)   (143,542,667)
    Investment in direct financing
      leases                                                    0      (1,364,960)    (13,372,621)    (39,155,974)
    Proceeds from sale of equipment direct
      financing leases                                          0               0               0         962,274
    Investment in joint venture                                 0               0               0               0
    Purchase of other investments                               0               0               0               0
    Investment in mortgage notes
      receivable                                                0               0     (13,547,264)     (4,401,982)
    Collections on mortgage notes
      receivable                                                0               0         133,850         250,732
    Investment in equipment notes receivable                    0               0               0     (12,521,401)
    Collections on equipment notes receivable                   0               0               0               0
    Investment in certificate of deposit                        0               0               0      (2,000,000)
    Proceeds of borrowing on line of
      credit                                                    0               0       3,666,896      19,721,804
    Payment on line of credit                                   0               0        (145,080)    (20,784,577)
    Reimbursement of organization,
      acquisition, and deferred offering
      and stock issuance costs paid on
      behalf of CNL American Properties
      Fund, Inc. by related parties                      (199,036)     (2,500,056)       (939,798)     (2,857,352)
    Increase in intangibles and other assets                    0        (628,142)     (1,103,896)              0
    Other                                                       0               0         (54,533)         49,001
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash

  distributions and special items                             945      11,507,500      30,941,643       5,136,689
                                                     ============    ============    ============    ============
TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED (Note 6)
Federal income tax results:
Ordinary income (loss) (Note 11)

  - from operations (Note 8)                                    0              20              61              67
                                                     ============    ============    ============    ============
  - from recapture                                              0               0               0               0
                                                     ============    ============    ============    ============
Capital gain (loss)                                             0               0               0               0
                                                     ============    ============    ============    ============

</TABLE>

                                      C-19

<PAGE>


                                                    1998
                                                  (Note 3)
                                               --------------
Gross revenue                                    $ 33,202,491
Equity in earnings of joint venture                    16,018
Provision for loss on land and buildings
  (Note 12)                                          (611,534)
Interest income                                     8,984,546
Less: Operating expenses                           (5,354,859)
      Interest expense                                      0
      Depreciation and amortization                (4,054,098)
      Minority interest in income of
        consolidated joint venture                    (30,156)
                                                --------------
Net income - GAAP basis                            32,152,408
                                                ==============

Taxable income

  - from operations (Note 8)                       33,553,390
                                                ==============
  - from gain (loss) on sale                         (149,948)
                                                ==============

Cash generated from operations
  (Notes 4 and 5)                                  39,116,275
Cash generated from sales (Note 7)                  2,385,941
Cash generated from refinancing                             0
                                                 -------------
Cash generated from operations, sales
  and refinancing                                  41,502,216
Less: Cash distributions to investors
  (Note 9)
    - from operating cash flow                    (39,116,275)
    - from sale of properties                               0
    - from cash flow from prior period               (265,053)
    - from return of capital (Note 10)                (67,821)
                                                  ------------
Cash generated (deficiency) after cash
  distributions                                     2,053,067
Special items (not including sales of
  real estate and refinancing):
    Subscriptions received from
      stockholders                                385,523,966
    Sale of common stock to CNL Fund
      Advisors, Inc.                                        0
    Retirement of shares of common stock
      (Note 13)                                      (639,528)
    Contributions from minority interest                    0
    Distributions to holder of minority
      interest                                        (34,073)
    Stock issuance costs                          (34,579,650)
    Acquisition of land and buildings            (200,101,667)
    Investment in direct financing
      leases                                      (47,115,435)
    Proceeds from sale of equipment direct
      financing leases                                      0
    Investment in joint venture                      (974,696)
    Purchase of other investments                 (16,083,055)
    Investment in mortgage notes
      receivable                                   (2,886,648)
    Collections on mortgage notes
      receivable                                      291,990
    Investment in equipment notes receivable       (7,837,750)
    Collections on equipment notes receivable       1,263,633
    Investment in certificate of deposit                    0
    Proceeds of borrowing on line of
      credit                                        7,692,040
    Payment on line of credit                          (8,039)
    Reimbursement of organization,
      acquisition, and deferred offering
      and stock issuance costs paid on
      behalf of CNL American Properties
      Fund, Inc. by related parties                (4,574,925)
    Increase in intangibles and other assets       (6,281,069)
    Other                                             (95,101)
                                                --------------
Cash generated (deficiency) after cash
  distributions and special items                  75,613,060
                                                ==============
TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED (Note 6)
Federal income tax results:
Ordinary income (loss) (Note 11)

  - from operations (Note 8)                               63
                                                ==============
  - from recapture                                          0
                                                ==============
Capital gain (loss)                                         0
                                                ==============

                                      C-20

<PAGE>



TABLE III - CNL AMERICAN PROPERTIES FUND, INC. (continued)


<TABLE>
<CAPTION>
                                                         1994                                            1997
                                                       (Note 1)          1995            1996          (Note 2)
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                                      0              19              59              66
  - from capital gain                                           0               0               0               0
  - from investment income from
      prior period                                              0               0               0               0
  - from return of capital (Note 10)                            0              14               8               6
                                                     ------------    ------------    ------------    ------------

Total distributions on GAAP basis (Note 11)                     0              33              67              72
                                                     ============    ============    ============    ============
  Source (on cash basis)
  - from sales                                                  0               0               0               0
  - from refinancing                                            0               0               0               0
  - from operations                                             0              26              67              72
  - from cash flow from prior period                            0               0               0               0
  - from return of capital (Note 10)                            0               7               0               0
                                                     ------------    ------------    ------------    ------------
Total distributions on cash basis (Note 11)                     0              33              67              72
                                                     ============    ============    ============    ============
Total cash distributions as a percentage

  of original $1,000 investment (Note 6 and 9)               0.00%           5.34%           7.06%           7.45%
Total cumulative cash distributions per
  $1,000 investment from inception                              0              33             100             172

Amount (in percentage terms) remaining invested in
  program properties at the end of each year
  (period) presented (original total acquisition
  cost of properties retained, divided by original
  total acquisition cost of all properties in
  program) (Note 7)                                            N/A            100%            100%            100%
</TABLE>



Note 1:  Pursuant to a Registration Statement on Form S-11 under the Securities
         Act of 1933, as amended, effective March 29, 1995, CNL American
         Properties Fund, Inc. ("APF") registered for sale $165,000,000 of
         shares of common stock (the "Initial Offering"), including $15,000,000
         available only to stockholders participating in the company's
         reinvestment plan. The Initial Offering of APF commenced April 19,
         1995, and upon completion of the Initial Offering on February 6, 1997,
         had received subscription proceeds of $150,591,765 (15,059,177 shares),
         including $591,765 (59,177 shares) issued pursuant to the reinvestment
         plan. Pursuant to a Registration Statement on Form S-11 under the
         Securities Act of 1933, as amended, effective January 31, 1997, APF
         registered for sale $275,000,000 of shares of common stock (the "1997
         Offering"), including $25,000,000 available only to stockholders
         participating in the company's reinvestment plan. The 1997 Offering of
         APF commenced following the completion of the Initial Offering on
         February 6, 1997, and upon completion of the 1997 Offering on March 2,
         1998, had received subscription proceeds of $251,872,648 (25,187,265
         shares), including $1,872,648 (187,265 shares) issued pursuant to the
         reinvestment plan. Pursuant to a Registration Statement on Form S-11
         under the Securities Act of 1933, as amended, effective May 12, 1998,
         APF registered for sale $345,000,000 of shares of common stock (the
         "1998 Offering"). The 1998 Offering of APF commenced following the
         completion of the 1997 Offering on March 2, 1998. As of December 31,
         1998, APF had received subscriptions totalling approximately
         $345,000,000 from the 1998 Offering, including $3,107,848 issued
         pursuant to the company's reinvestment plan. The 1998 Offering became
         fully subscribed in December 1998 and proceeds from the last
         subscriptions were received in January 1999. Activities through June 1,
         1995, were devoted to organization of APF and operations had not begun.

Note 2:  The amounts  shown  represent  the  combined  results of the Initial
         Offering and the 1997 Offering.

Note 3:  The amounts  shown  represent  the  combined  results of the Initial
         Offering, 1997 Offering and 1998 Offering.

Note 4:  Cash generated from operations  includes cash received from tenants,
         less cash paid for expenses, plus interest received.

Note 5:  Cash  generated  from  operations  per this  table  agrees  to cash
         generated  from  operations per the statement of cash flows included in
         the financial statements of APF.

Note 6:  Total  cash  distributions  as  a  percentage  of  original  $1,000
         investment are calculated  based on actual  distributions  declared for
         the period.

Note 7:  In May 1997 and July 1997, APF sold four properties and one property,
         respectively, to a tenant for $5,254,083 and $1,035,153, respectively,
         which was equal to the carrying value of the properties at the time of
         sale. In May and July 1998, APF sold two and one properties,
         respectively, to third parties for $1,605,154 and $1,152,262,
         respectively, (and received net sales proceeds of approximately
         $1,233,700 and $629,435, respectively, after deduction of construction
         costs incurred but not paid by APF as of the date of the sale) which
         approximated the carrying value of the properties at the time of sale.
         As a result, no gain or loss was recognized for financial reporting
         purposes. The company reinvested the proceeds from the sale of
         properties in additional properties.

Note 8:  Taxable income presented is before the dividends paid deduction.

Note 9:  For the years ended December 31, 1998, 1997, 1996 and 1995,  84.87%,
         93.33%, 90.25% and 59.82%, respectively,  of the distributions received
         by  stockholders  were  considered  to be  ordinary  income and 15.13%,
         6.67%,  9.75% and 40.18%,  respectively,  were  considered  a return of
         capital for federal  income tax  purposes.  No amounts  distributed  to
         stockholders for the years ended December 31, 1998, 1997, 1996 and 1995
         are  required to be or have been  treated by the company as a return of
         capital for purposes of calculating the  stockholders'  return on their
         invested capital.

                                      C-21

<PAGE>

                                                         1998
                                                       (Note 3)
                                                    --------------
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                                     60
  - from capital gain                                           0
  - from investment income from
      prior period                                              0
  - from return of capital (Note 10)                           14
                                                    --------------
Total distributions on GAAP basis (Note 11)                    74
                                                    ==============
  Source (on cash basis)
  - from sales                                                  0
  - from refinancing                                            0
  - from operations                                            73
  - from cash flow from prior period                            1
  - from return of capital (Note 10)                            0
                                                    --------------
Total distributions on cash basis (Note 11)                    74
                                                    ==============
Total cash distributions as a percentage
  of original $1,000 investment (Note 6 and 9)               7.62%
Total cumulative cash distributions per
  $1,000 investment from inception                            246

Amount (in percentage terms) remaining invested in
  program properties at the end of each year
  (period) presented (original total acquisition
  cost of properties retained, divided by original
  total acquisition cost of all properties in
  program) (Note 7)                                           100%


Note 10:     Cash distributions presented above as a return of capital on a GAAP
             basis  represent  the  amount  of cash  distributions  in excess of
             accumulated  net  income on a GAAP  basis.  Accumulated  net income
             includes  deductions for depreciation and amortization  expense and
             income from certain non-cash items.  This amount is not required to
             be  presented  as a return of capital  except for  purposes of this
             table,  and APF has not treated  this amount as a return of capital
             for any other purpose.

Note 11:     Tax and  distribution  data and total  distributions  on GAAP basis
             were  computed  based on the weighted  average  shares  outstanding
             during each period presented.

Note 12:     During the year ended  December 31, 1998,  APF recorded  provisions
             for  losses on land and  buildings  in the amount of  $611,534  for
             financial  reporting  purposes relating to two Shoney's  properties
             and two Boston Market  Properties.  The tenants of these properties
             experienced  financial  difficulties  and  ceased  payment of rents
             under the terms of their lease agreements. The allowances represent
             the  difference  between the carrying  value of the  Properties  at
             December 31, 1998 and the estimated net realizable  value for these
             Properties.

Note 13:     In October 1998, the Board of Directors of APF elected to implement
             APF's  redemption  plan.  Under the redemption plan, APF elected to
             redeem  shares,  subject to  certain  conditions  and  limitations.
             During  the year  ended  December  31,  1998,  69,514  shares  were
             redeemed  at $9.20 per share  ($639,528)  and  retired  from shares
             outstanding of common stock.

                                      C-22

<PAGE>

                                    TABLE III
                     Operating Results of Prior Programs
                           CNL INCOME FUND XVII, LTD.

<TABLE>
<CAPTION>
                                                         1995
                                                       (Note 1)          1996            1997            1998
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Gross revenue                                        $          0    $  1,195,263    $  2,643,871    $  2,816,845
Equity in earnings of unconsolidated
  joint ventures                                                0           4,834         100,918         140,595
Interest income                                            12,153         244,406          69,779          51,240
Less: Operating expenses                                   (3,493)       (169,536)       (181,865)       (182,681)
      Interest expense                                          0               0               0               0
      Depreciation and amortization                          (309)       (179,208)       (387,292)       (369,209)
      Minority interest in income of
        consolidated joint venture                                              0         (41,854)        (62,632)
                                                     ------------    ------------    ------------    ------------

Net income - GAAP basis                                     8,351       1,095,759       2,203,557       2,394,158
                                                     ============    ============    ============    ============

Taxable income

  - from operations                                        12,153       1,114,964       2,058,601       2,114,039
                                                     ============    ============    ============    ============
  - from gain on sale                                           0               0               0               0
                                                     ============    ============    ============    ============

Cash generated from operations
  (Notes 2 and 3)                                           9,012       1,232,948       2,495,114       2,520,919
Cash generated from sales                                       0               0               0               0
Cash generated from refinancing                                 0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated from operations, sales
  and refinancing                                           9,012       1,232,948       2,495,114       2,520,919
Less: Cash distributions to investors
  (Note 4)
    - from operating cash flow                             (1,199)       (703,681)     (2,177,584)     (2,400,000)
    - from sale of properties                                   0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash
  distributions                                             7,813         529,267         317,530         120,919
Special items (not including sales and
  refinancing):
    Limited partners' capital contri-
      butions                                           5,696,921      24,303,079               0               0
    General partners' capital contri-
      butions                                               1,000               0               0               0
    Contributions from minority interest                        0         140,676         278,170               0
    Distribution to holder of minority
      interest                                                  0               0         (41,507)        (49,023)
    Syndication costs                                    (604,348)     (2,407,317)              0               0
    Acquisition of land and buildings                    (332,928)    (19,735,346)     (1,740,491)              0
    Investment in direct financing
      leases                                                    0      (1,784,925)     (1,130,497)              0
    Investment in joint ventures                                0        (201,501)     (1,135,681)       (124,452)
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XVII, Ltd. by related parties                      (347,907)       (326,483)        (25,444)              0
    Increase in other assets                             (221,282)              0               0               0
    Reimbursement from developer of
      construction costs                                        0               0               0         306,100
    Other                                                    (410)            410               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash

  distributions and special items                       4,198,859         517,860      (3,477,920)        253,544
                                                     ============    ============    ============    ============
TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                            36              37              69              70
                                                     ============    ============    ============    ============
  - from recapture                                              0               0               0               0
                                                     ============    ============    ============    ============
Capital gain (loss)                                             0               0               0               0
                                                     ============    ============    ============    ============

</TABLE>

                                      C-23

<PAGE>

TABLE III - CNL INCOME FUND XVII, LTD. (continued)

<TABLE>
<CAPTION>
                                                         1995
                                                       (Note 1)          1996            1997            1998
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                                      4              23              73              79
  - from capital gain                                           0               0               0               0
  - from investment income from

      prior period                                              0               0               0               1
                                                     ------------    ------------    ------------    ------------
Total distributions on GAAP basis (Note 4)                      0              23              73              80
                                                     ============    ============    ============    ============

  Source (on cash basis)
  - from sales                                                  0               0               0               0
  - from refinancing                                            0               0               0               0
  - from operations                                             4              23              73              80
                                                     ------------    ------------    ------------    ------------

Total distributions on cash basis (Note 4)                      4              23              73              80
                                                     ============    ============    ============    ============
Total cash distributions as a percentage

  of original $1,000 investment (Note 5)                     5.00%           5.50%          7.625%           8.00%
Total cumulative cash distributions per
  $1,000 investment from inception                              4              27             100             180
Amount (in percentage terms) remaining
  invested in program properties at the
  end of each year (period) presented
  (original total acquisition cost of
  properties  retained,  divided by original
  total acquisition cost of all properties
  in program) (Note 6)                                        N/A              98%            100%             98%

</TABLE>


Note 1:  Pursuant to a registration  statement on Form S-11 under the Securities
         Act of 1933,  as amended,  effective  August 11, 1995,  CNL Income Fund
         XVII, Ltd. ("CNL XVII") and CNL Income Fund XVIII, Ltd. each registered
         for sale $30,000,000 units of limited partnership  interests ("Units").
         The offering of Units of CNL Income Fund XVII, Ltd. commenced September
         2, 1995.  Pursuant to the registration  statement,  CNL XVIII could not
         commence until the offering of Units of CNL Income Fund XVII,  Ltd. was
         terminated. CNL Income Fund XVII, Ltd. terminated its offering of Units
         on September  19,  1996,  at which time  subscriptions  for the maximum
         offering   proceeds  of  $30,000,000   had  been  received.   Upon  the
         termination of the offering of Units of CNL Income Fund XVII, Ltd., CNL
         XVIII commenced its offering of Units.  Activities  through November 3,
         1995,  were devoted to  organization  of the partnership and operations
         had not begun.

Note 2:  Cash generated from operations  includes cash received from tenants,
         plus  distributions  from joint ventures,  less cash paid for expenses,
         plus interest received.

Note 3:  Cash  generated  from  operations  per this  table  agrees  to cash
         generated  from  operations per the statement of cash flows included in
         the financial statements of CNL XVII.

Note 4:  Distributions  declared for the quarters  ended  December 31, 1995,
         1996  and 1997  are  reflected  in the  1996,  1997  and 1998  columns,
         respectively, due to the payment of such distributions in January 1996,
         1997  and  1998,  respectively.  As a  result  of  distributions  being
         presented  on a cash  basis,  distributions  declared  and unpaid as of
         December 31, 1996, 1997 and 1998 are not included in the 1996, 1997 and
         1998 totals, respectively.

Note 5:  Total cash  distributions as a percentage of original $1,000 investment
         are calculated based on actual  distributions  declared for the period.
         (See Note 4 above)

Note 6:  During 1998, CNL Income Fund XVII, Ltd. received approximately $306,100
         in reimbursements from the developer upon final reconciliation of total
         construction  costs relating to the properties in Aiken, South Carolina
         and  Weatherford,  Texas,  in accordance  with the related  development
         agreements. The partnership intends to reinvest the funds in additional
         properties.

                                      C-24
<PAGE>

                                    TABLE III
                       Operating Results of Prior Programs
                          CNL INCOME FUND XVIII, LTD.

<TABLE>
<CAPTION>
                                                         1995
                                                       (Note 1)          1996            1997            1998
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Gross revenue                                        $          0    $      1,373    $  1,291,416    $  2,956,349
Equity in earnings of joint venture                             0               0               0               0
Provision for loss on land (Note 5)                             0               0               0        (197,466)
Interest income                                                 0          30,241         161,826         141,408
Less: Operating expenses                                        0          (3,992)       (156,403)       (223,496)
      Interest expense                                          0               0               0               0
      Depreciation and amortization                             0            (712)       (142,079)       (374,473)
                                                     ------------    ------------    ------------    ------------

Net income - GAAP basis                                         0          26,910       1,154,760       2,302,322
                                                     ============    ============    ============    ============

Taxable income

  - from operations                                             0          30,223       1,318,750       2,324,746
                                                     ============    ============    ============    ============
  - from gain on sale                                           0               0               0               0
                                                     ============    ============    ============    ============

Cash generated from operations
  (Notes 2 and 3)                                               0          27,146       1,361,756       2,831,738
Cash generated from sales                                       0               0               0               0
Cash generated from refinancing                                 0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated from operations, sales
  and refinancing                                               0          27,146       1,361,756       2,831,738
Less: Cash distributions to investors
  (Note 4)
    - from operating cash flow                                  0          (2,138)       (855,957)     (2,468,400)
    - from sale of properties                                   0               0               0               0
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash
  distributions                                                 0          25,008         505,799         363,338
Special items (not including sales and
  refinancing):
    Limited partners' capital contri-
      butions                                                   0       8,498,815      25,723,944         854,241
    General partners' capital contri-
      butions                                               1,000               0               0               0
    Contributions from minority interest                        0               0               0               0
    Syndication costs                                           0        (845,657)     (2,450,214)       (161,142)
    Acquisition of land and buildings                           0      (1,533,446)    (18,581,999)     (3,134,046)
    Investment in direct financing leases                       0               0      (5,962,087)        (12,945)
    Investment in joint venture                                 0               0               0        (166,025)
    Increase in restricted cash                                 0               0               0               0
    Reimbursement of organization,
      syndication and acquisition costs
      paid on behalf of CNL Income Fund
      XVIII, Ltd. by related parties                            0        (497,420)       (396,548)        (37,135)
    Increase in other assets                                    0        (276,848)              0               0
    Other                                                     (20)           (107)        (66,893)        (10,000)
                                                     ------------    ------------    ------------    ------------
Cash generated (deficiency) after cash

  distributions and special items                             980       5,370,345      (1,227,998)     (2,303,714)
                                                     ============    ============    ============    ============
TAX AND DISTRIBUTION DATA PER $1,000

  INVESTED
Federal income tax results:
Ordinary income (loss)

  - from operations                                             0               6              57              66
                                                     ============    ============    ============    ============
  - from recapture                                              0               0               0               0
                                                     ============    ============    ============    ============
Capital gain (loss)                                             0               0               0               0
                                                     ============    ============    ============    ============

</TABLE>

                                      C-25

<PAGE>

TABLE III - CNL INCOME FUND XVIII, LTD. (continued)

<TABLE>
<CAPTION>
                                                         1995
                                                       (Note 1)          1996            1997            1998
                                                     ------------    ------------    ------------    ------------

<S>                                                  <C>             <C>             <C>              <C>
Cash distributions to investors
  Source (on GAAP basis)
  - from investment income                                      0               0              38              65
  - from capital gain                                           0               0               0               0
  - from investment income from prior

      period                                                    0               0               0               6
                                                     ------------    ------------    ------------    ------------
Total distributions on GAAP basis (Note 4)                      0               0              38              71
                                                     ============    ============    ============    ============

  Source (on cash basis)
  - from sales                                                  0               0               0               0
  - from refinancing                                            0               0               0               0
  - from operations                                             0               0              38              71
                                                     ------------    ------------    ------------    ------------

Total distributions on cash basis (Note 4)                      0               0              38              71
                                                     ============    ============    ============    ============
Total cash distributions as a percentage
  of original $1,000 investment from
  inception                                                  0.00%           5.00%           5.75%           7.63%
Total cumulative cash distributions per
  $1,000 investment (Note 6)                                    0               0              38             109
Amount (in percentage terms) remaining
  invested  in program  properties  at the
  end of each year (period) presented
  (original total acquisition cost of
  properties  retained,  divided by original
  total acquisition cost of all properties
  in program)                                                 N/A              83%             95%             96%

</TABLE>


Note 1:  Pursuant to a registration statement on Form S-11 under the
         Securities Act of 1933, as amended, effective August 11, 1995, CNL
         Income Fund XVIII, Ltd ("CNL XVIII") and CNL Income Fund XVII, Ltd.
         each registered for sale $30,000,000 units of limited partnership
         interest ("Units"). The offering of Units of CNL Income Fund XVII, Ltd.
         commenced September 2, 1995. Pursuant to the registration statement,
         CNL XVIII could not commence until the offering of Units of CNL Income
         Fund XVII, Ltd. was terminated. CNL Income Fund XVII, Ltd. terminated
         its offering of Units on September 19, 1996, at which time the maximum
         offering proceeds of $30,000,000 had been received. Upon the
         termination of the offering of Units of CNL Income Fund XVII, Ltd., CNL
         XVIII commenced its offering of Units. Activities through October 11,
         1996, were devoted to organization of the partnership and operations
         had not begun.

Note 2:  Cash generated from operations  includes cash received from tenants,
         less cash paid for expenses, plus interest received.

Note 3:  Cash  generated  from  operations  per this  table  agrees  to cash
         generated  from  operations per the statement of cash flows included in
         the financial statements of CNL XVIII.

Note 4:  Distributions declared for the quarters ended December 1996 and 1997
         are  reflected in the 1997 and 1998 columns,  respectively,  due to the
         payment of such  distributions in January 1997 and 1998,  respectively.
         As  a  result  of  distributions  being  presented  on  a  cash  basis,
         distributions  declared and unpaid as of December 31, 1997 and 1998 are
         not included in the 1997 and 1998 totals, respectively.

Note 5:  During the year ended December 31, 1998, the partnership established
         an  allowance  for loss on land of  $197,466  for  financial  reporting
         purposes relating to the property in Minnetonka,  Minnesota. The tenant
         of this Boston Market  property  declared  bankruptcy  and rejected the
         lease  relating to this  property.  The loss  represents the difference
         between the  Property's  carrying  value at  December  31, 1998 and the
         current estimate of net realizable value.

Note 6:  Total cash distributions as a percentage of original $1,000 investment
         are calculated based on actual distributions declared for the period.
         (See Note 4 above)

Note 7:  Certain data for columns representing less than 12 months have been
         annualized.

                                      C-26

<PAGE>



                                     TABLE V
                        SALES OR DISPOSALS OF PROPERTIES

<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      Total
================================================================================================================
<S>                              <C>       <C>      <C>          <C>        <C>         <C>          <C>
CNL Income Fund, Ltd.:
  Burger King -
    San Dimas, CA (14)           02/05/87  06/12/92 $1,169,021         0        0            0       $1,169,021
  Wendy's -
    Fairfield, CA (14)           07/01/87  10/03/94  1,018,490         0        0            0        1,018,490
  Wendy's -
    Casa Grande, AZ              12/10/86  08/19/97    795,700         0        0            0          795,700
  Wendy's -
    North Miami, FL (9)          02/18/86  08/21/97    473,713         0        0            0          473,713
  Popeye's -
    Kissimmee, FL (14)           12/31/86  04/30/98    661,300         0        0            0          661,300

CNL Income Fund II, Ltd.:
  Golden Corral -
    Salisbury, NC                05/29/87  07/21/93    746,800         0        0            0          746,800
  Pizza Hut -
    Graham, TX                   08/24/87  07/28/94    261,628         0        0            0          261,628
  Golden Corral -
    Medina, OH (11)              11/18/87  11/30/94    825,000         0        0            0          825,000
  Denny's -
    Show Low, AZ (8)             05/22/87  01/31/97    620,800         0        0            0          620,800
  KFC -
    Eagan, MN                    06/01/87  06/02/97    623,882         0   42,000            0          665,882
  KFC -
    Jacksonville, FL             09/01/87  09/09/97    639,363         0        0            0          639,363
  Wendy's -
    Farmington Hills, MI (12)    05/18/87  10/09/97    833,031         0        0            0          833,031
  Wendy's -
    Farmington Hills, MI (13)    05/18/87  10/09/97  1,085,259         0        0            0        1,085,259
  Denny's -
    Plant City, FL               11/23/87  10/24/97    910,061         0        0            0          910,061
  Pizza Hut -
    Mathis, TX                   12/17/87  12/04/97    297,938         0        0            0          297,938
  KFC -
    Avon Park, FL                09/02/87  12/10/97    501,975         0        0            0          501,975

CNL Income Fund III, Ltd.:
  Wendy's -
    Chicago, IL (14)             06/02/88  01/10/97    496,418         0        0            0          496,418
  Perkins -
    Bradenton, FL                06/30/88  03/14/97  1,310,001         0        0            0        1,310,001
  Pizza Hut -
    Kissimmee, FL                02/23/88  04/08/97    673,159         0        0            0          673,159
</TABLE>

<TABLE>
<CAPTION>
=========================================================================================
                                          Cost of Properties
                                        Including Closing and
                                              Soft Costs
                                 ---------------------------------------     Excess
                                                 Total                    (deficiency)
                                               acquisition                 of property
                                              cost, capital               operating cash
                                  Original     improvements                receipts over
                                  mortgage     closing and                     cash
       Property                  financing    soft costs (1)      Total     expenditures
==========================================================================================
<S>                              <C>           <C>              <C>         <C>
CNL Income Fund, Ltd.:
  Burger King -
    San Dimas, CA (14)                 0          $955,000      $955,000       $214,021
  Wendy's -
    Fairfield, CA (14)                 0           861,500       861,500        156,990
  Wendy's -
    Casa Grande, AZ                    0           667,255       667,255        128,445
  Wendy's -
    North Miami, FL (9)                0           385,000       385,000         88,713
  Popeye's -
    Kissimmee, FL (14)                 0           475,360       475,360        185,940

CNL Income Fund II, Ltd.:
  Golden Corral -
    Salisbury, NC                      0           642,800       642,800        104,000
  Pizza Hut -
    Graham, TX                         0           205,500       205,500         56,128
  Golden Corral -
    Medina, OH (11)                    0           743,000       743,000         82,000
  Denny's -
    Show Low, AZ (8)                   0           484,185       484,185        136,615
  KFC -
    Eagan, MN                          0           601,100       601,100         64,782
  KFC -
    Jacksonville, FL                   0           405,000       405,000        234,363
  Wendy's -
    Farmington Hills, MI (12)          0           679,000       679,000        154,031
  Wendy's -
    Farmington Hills, MI (13)          0           887,000       887,000        198,259
  Denny's -
    Plant City, FL                     0           820,717       820,717         89,344
  Pizza Hut -
    Mathis, TX                         0           202,100       202,100         95,838
  KFC -
    Avon Park, FL                      0           345,000       345,000        156,975

CNL Income Fund III, Ltd.:
  Wendy's -
    Chicago, IL (14)                   0           591,362       591,362        (94,944)
  Perkins -
    Bradenton, FL                      0         1,080,500      1,080,500       229,501
  Pizza Hut -
    Kissimmee, FL                      0           474,755       474,755        198,404
</TABLE>



                                                       C-27

<PAGE>


                                                      TABLE V
                                         SALES OR DISPOSALS OF PROPERTIES
 <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      Total
================================================================================================================
<S>                              <C>       <C>      <C>          <C>        <C>         <C>          <C>
  Burger King -
    Roswell, GA                  06/08/88  06/20/97    257,981         0  685,000            0         942,981
  Wendy's -
    Mason City, IA               02/29/88  10/24/97    217,040         0        0            0         217,040
  Taco Bell -
    Fernandina Beach, FL (14)    04/09/88  01/15/98    721,655         0        0            0         721,655
  Denny's -
    Daytona Beach, FL (14)       07/12/88  01/23/98  1,008,976         0        0            0       1,008,976
  Wendy's -
    Punta Gorda, FL              02/03/88  02/20/98    665,973         0        0            0         665,973
  Po Folks -
    Hagerstown, MD               06/21/88  06/10/98    788,884         0        0            0         788,884
  Denny's -
   Hazard, KY                    02/01/88  12/23/98    432,625         0        0            0         432,625

CNL Income Fund IV, Ltd.:
  Taco Bell -
    York, PA                     03/22/89  04/27/94    712,000         0        0            0         712,000
  Burger King -
    Hastings, MI                 08/12/88  12/15/95    518,650         0        0            0         518,650
  Wendy's -
    Tampa, FL                    12/30/88  09/20/96  1,049,550         0        0            0       1,049,550
  Checkers -
    Douglasville, GA             12/08/94  11/07/97    380,695         0        0            0         380,695
  Taco Bell -
    Fort Myers, FL (14)          12/22/88  03/02/98    794,690         0        0            0         794,690
  Denny's -
    Union Township, OH (14)      11/01/88  03/31/98    674,135         0        0            0         674,135
  Perkins -
    Leesburg, FL                 01/11/89  07/09/98    529,288         0        0            0         529,288
  Taco Bell -
    Naples, FL                   12/22/88  09/03/98    533,127         0        0            0         533,127

CNL Income Fund V, Ltd.:
  Perkins -
    Myrtle Beach, SC (2)         02/28/90  08/25/95          0         0 1,040,000           0       1,040,000
  Ponderosa -
    St. Cloud, FL (6) (14)       06/01/89  10/24/96     73,713         0 1,057,299           0       1,131,012
  Franklin National Bank -
    Franklin, TN                 06/26/89  01/07/97    960,741         0        0            0         960,741
  Shoney's -
    Smyrna, TN                   03/22/89  05/13/97    636,788         0        0            0         636,788
  KFC -
    Salem, NH                    05/31/89  09/22/97  1,272,137         0        0            0       1,272,137
</TABLE>

 <TABLE>
<CAPTION>
=========================================================================================
                                          Cost of Properties
                                        Including Closing and
                                              Soft Costs
                                 ---------------------------------------     Excess
                                                 Total                    (deficiency)
                                               acquisition                 of property
                                              cost, capital               operating cash
                                  Original     improvements                receipts over
                                  mortgage     closing and                     cash
       Property                  financing    soft costs (1)      Total     expenditures
==========================================================================================
<S>                              <C>           <C>              <C>         <C>
  Burger King -
    Roswell, GA                       0            775,226       775,226        167,755
  Wendy's -
    Mason City, IA                    0            190,252       190,252         26,788
  Taco Bell -
    Fernandina Beach, FL (14)         0            559,570       559,570        162,085
  Denny's -
    Daytona Beach, FL (14)            0            918,777       918,777         90,799
  Wendy's -
    Punta Gorda, FL                   0            684,342       684,342        (18,369)
  Po Folks -
    Hagerstown, MD                    0          1,188,315      1,188,315      (399,431)
  Denny's -
   Hazard, KY                         0            647,622       647,622       (214,997)

CNL Income Fund IV, Ltd.:
  Taco Bell -
    York, PA                          0            616,501       616,501         95,499
  Burger King -
    Hastings, MI                      0            419,936       419,936         98,714
  Wendy's -
    Tampa, FL                         0            828,350       828,350        221,200
  Checkers -
    Douglasville, GA                  0            363,768       363,768         16,927
  Taco Bell -
    Fort Myers, FL (14)               0            597,998       597,998        196,692
  Denny's -
    Union Township, OH (14)           0            872,850       872,850       (198,715)
  Perkins -
    Leesburg, FL                      0            737,260       737,260       (207,972)
  Taco Bell -
    Naples, FL                        0            410,546       410,546        122,581

CNL Income Fund V, Ltd.:
  Perkins -
    Myrtle Beach, SC (2)              0            986,418       986,418         53,582
  Ponderosa -
    St. Cloud, FL (6) (14)            0            996,769       996,769        134,243
  Franklin National Bank -
    Franklin, TN                      0          1,138,164      1,138,164      (177,423)
  Shoney's -
    Smyrna, TN                        0            554,200       554,200         82,588
  KFC -
    Salem, NH                         0          1,079,310      1,079,310       192,827
</TABLE>

                                                       C-28

<PAGE>



                                                      TABLE V
                                         SALES OR DISPOSALS OF PROPERTIES

 <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      Total
================================================================================================================
<S>                              <C>       <C>      <C>          <C>        <C>         <C>          <C>
  Perkins -
    Port St. Lucie, FL           11/14/89  09/23/97  1,216,750         0        0            0       1,216,750
  Hardee's -
    Richmond, VA                 02/17/89  11/07/97    397,785         0        0            0         397,785
  Wendy's -
    Tampa, FL                    02/16/89  12/29/97    805,175         0        0            0         805,175
  Denny's -
    Port Orange, FL (14)         07/10/89  01/23/98  1,283,096         0        0            0       1,283,096
  Shoney's -
    Tyler, TX                    03/20/89  02/17/98    844,229         0        0            0         894,229

CNL Income Fund VI, Ltd.:
  Hardee's -
    Batesville, AR               11/02/89  05/24/94    791,211         0        0            0         791,211
  Hardee's -
    Heber Springs, AR            02/13/90  05/24/94    638,270         0        0            0         638,270
  Hardee's -
    Little Canada, MN            11/28/89  06/29/95    899,503         0        0            0         899,503
  Jack in the Box -
    Dallas, TX                   06/28/94  12/09/96    982,980         0        0            0         982,980
  Denny's -
    Show Low, AZ (8)             05/22/87  01/31/97    349,200         0        0            0         349,200
  KFC -
    Whitehall Township, MI       02/26/90  07/09/97    629,888         0        0            0         629,888
  Perkins -
    Naples, FL                   12/26/89  07/09/97  1,487,725         0        0            0       1,487,725
  Burger King -
    Plattsmouth, NE              01/19/90  07/18/97    699,400         0        0            0         699,400
  Shoney's -
    Venice, FL                   08/03/89  09/17/97  1,206,696         0        0            0       1,206,696
  Jack in the Box -
    Yuma, AZ (10)                07/14/94  10/31/97    510,653         0        0            0         510,653
  Denny's -
    Deland, FL                   03/22/90  01/23/98  1,236,971         0        0            0       1,236,971
  Wendy's -
    Liverpool, NY                12/08/89  02/09/98    145,221         0        0            0         145,221
  Perkin's -
    Melbourne, FL                02/03/90  02/12/98    552,910         0        0            0         552,910
  Hardee's
    Bellevue, NE                 05/03/90  06/05/98    900,000         0        0            0         900,000
</TABLE>

 <TABLE>
<CAPTION>
=========================================================================================
                                          Cost of Properties
                                        Including Closing and
                                              Soft Costs
                                 ---------------------------------------     Excess
                                                 Total                    (deficiency)
                                               acquisition                 of property
                                              cost, capital               operating cash
                                  Original     improvements                receipts over
                                  mortgage     closing and                     cash
       Property                  financing    soft costs (1)      Total     expenditures
==========================================================================================
<S>                              <C>           <C>              <C>         <C>
  Perkins -
    Port St. Lucie, FL                0          1,203,207      1,203,207        13,543
  Hardee's -
    Richmond, VA                      0            695,464       695,464       (297,679)
  Wendy's -
    Tampa, FL                         0            657,800       657,800        147,375
  Denny's -
    Port Orange, FL (14)              0          1,021,000      1,021,000       262,096
  Shoney's -
    Tyler, TX                         0            770,300       770,300         73,929

CNL Income Fund VI, Ltd.:
  Hardee's -
    Batesville, AR                    0            605,500       605,500        185,711
  Hardee's -
    Heber Springs, AR                 0            532,893       532,893        105,377
  Hardee's -
    Little Canada, MN                 0            821,692       821,692         77,811
  Jack in the Box -
    Dallas, TX                        0            964,437       964,437         18,543
  Denny's -
    Show Low, AZ (8)                  0            272,354       272,354         76,846
  KFC -
    Whitehall Township, MI            0            725,604       725,604        (95,716)
  Perkins -
    Naples, FL                        0          1,083,869      1,083,869       403,856
  Burger King -
    Plattsmouth, NE                   0            561,000       561,000        138,400
  Shoney's -
    Venice, FL                        0          1,032,435      1,032,435       174,261
  Jack in the Box -
    Yuma, AZ (10)                     0            448,082       448,082         62,571
  Denny's -
    Deland, FL                        0          1,000,000      1,000,000       236,971
  Wendy's -
    Liverpool, NY                     0            341,440       341,440       (196,219)
  Perkin's -
    Melbourne, FL                     0            692,850       692,850       (139,940)
  Hardee's
    Bellevue, NE                      0            899,512       899,512            488
</TABLE>

                                                       C-29

<PAGE>

                                                      TABLE V
                                         SALES OR DISPOSALS OF PROPERTIES
 <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      Total
================================================================================================================
<S>                              <C>       <C>      <C>          <C>        <C>         <C>          <C>
CNL Income Fund VII, Ltd.:
  Taco Bell -
    Kearns, UT                   06/14/90  05/19/92    700,000         0          0            0        700,000
  Hardee's -
    St. Paul, MN                 08/09/90  05/24/94    869,036         0          0            0        869,036
  Perkins -
    Florence, SC (3)             08/28/90  08/25/95          0         0   1,160,000           0      1,160,000
  Church's Fried Chicken -
    Jacksonville, FL (4) (14)    04/30/90  12/01/95          0         0    240,000            0        240,000
  Shoney's -
    Colorado Springs, CO         07/03/90  07/24/96  1,044,909         0          0            0      1,044,909
  Hardee's -
    Hartland, MI                 07/10/90  10/23/96    617,035         0          0            0        617,035
  Hardee's -
    Columbus, IN                 09/04/90  05/30/97    223,590         0          0            0        223,590
  KFC -
    Dunnellon, FL                08/02/90  10/07/97    757,800         0          0            0        757,800
  Jack in the Box -
    Yuma, AZ (10)                07/14/94  10/31/97    471,372         0          0            0        471,372

CNL Income Fund VIII, Ltd.:
  Denny's -
    Ocoee, FL                    03/16/91  07/31/95  1,184,865         0          0            0      1,184,865
  Church's Fried Chicken -
    Jacksonville, FL (4) (14)    09/28/90  12/01/95          0         0    240,000            0        240,000
  Church's Fried Chicken -
    Jacksonville, FL (5) (14)    09/28/90  12/01/95          0         0    220,000            0        220,000
  Ponderosa -
    Orlando, FL (6) (14)         12/17/90  10/24/96          0         0   1,353,775           0      1,353,775

CNL Income Fund IX, Ltd.:
  Burger King -
    Woodmere, OH (15)            05/31/91  12/12/96    918,445         0          0            0        918,445
  Burger King -
    Alpharetta, GA               09/20/91  06/30/97  1,053,571         0          0            0      1,053,571

CNL Income Fund X, Ltd.:
  Shoney's -
    Denver, CO                   03/04/92  08/11/95  1,050,186         0          0            0      1,050,186
  Jack in the Box -
    Freemont, CA                 03/26/92  09/23/97  1,366,550         0          0            0      1,366,550
</TABLE>

 <TABLE>
<CAPTION>
=========================================================================================
                                          Cost of Properties
                                        Including Closing and
                                              Soft Costs
                                 ---------------------------------------     Excess
                                                 Total                    (deficiency)
                                               acquisition                 of property
                                              cost, capital               operating cash
                                  Original     improvements                receipts over
                                  mortgage     closing and                     cash
       Property                  financing    soft costs (1)      Total     expenditures
==========================================================================================
<S>                              <C>           <C>              <C>         <C>
CNL Income Fund VII, Ltd.:
  Taco Bell -
    Kearns, UT                         0           560,202        560,202        139,798
  Hardee's -
    St. Paul, MN                       0           742,333        742,333        126,703
  Perkins -
    Florence, SC (3)                   0         1,084,905       1,084,905        75,095
  Church's Fried Chicken -
    Jacksonville, FL (4) (14)          0           233,728        233,728          6,272
  Shoney's -
    Colorado Springs, CO               0           893,739        893,739        151,170
  Hardee's -
    Hartland, MI                       0           841,642        841,642       (224,607)
  Hardee's -
    Columbus, IN                       0           219,676        219,676          3,914
  KFC -
    Dunnellon, FL                      0           546,333        546,333        211,467
  Jack in the Box -
    Yuma, AZ (10)                      0           413,614        413,614         57,758

CNL Income Fund VIII, Ltd.:
  Denny's -
    Ocoee, FL                          0           949,199        949,199        235,666
  Church's Fried Chicken -
    Jacksonville, FL (4) (14)          0           238,153        238,153          1,847
  Church's Fried Chicken -
    Jacksonville, FL (5) (14)          0           215,845        215,845          4,155
  Ponderosa -
    Orlando, FL (6) (14)               0         1,179,210       1,179,210       174,565

CNL Income Fund IX, Ltd.:
  Burger King -
    Woodmere, OH (15)                  0           918,445        918,445              0
  Burger King -
    Alpharetta, GA                     0           713,866        713,866        339,705

CNL Income Fund X, Ltd.:
  Shoney's -
    Denver, CO                         0           987,679        987,679         62,507
  Jack in the Box -
    Freemont, CA                       0         1,102,766       1,102,766       263,784
</TABLE>

                                      C-30

<PAGE>

                                                      TABLE V
                                         SALES OR DISPOSALS OF PROPERTIES

 <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      Total
===============================================================================================================
<S>                              <C>       <C>      <C>          <C>        <C>         <C>          <C>
  Jack in the Box -
    Sacramento, CA               12/19/91  01/20/98  1,234,175         0        0            0       1,234,175
  Pizza Hut -
    Billings, MT                 04/16/92  10/07/98    359,990         0        0            0         359,990

CNL Income Fund XI, Ltd.:
  Burger King -
    Philadelphia, PA             09/29/92  11/07/96  1,044,750         0        0            0       1,044,750
  Burger King -
    Columbus, OH (19)            06/29/92  09/30/98    795,264         0        0            0         795,264
  Burger King -
    Nashua, NH                   06/29/92  10/07/98  1,630,296         0        0            0       1,630,296

CNL Income Fund XII, Ltd.:
  Golden Corral -
    Houston, TX                  12/28/92  04/10/96  1,640,000         0        0            0       1,640,000
  Long John Silver's -
    Monroe, NC                   06/30/93  12/31/98    483,550         0        0            0         483,550

CNL Income Fund XIII, Ltd.:
  Checkers -
    Houston, TX                  03/31/94  04/24/95    286,411         0        0            0         286,411
  Checkers -
    Richmond, VA                 03/31/94  11/21/96    550,000         0        0            0         550,000
  Denny's -
    Orlando, FL                  09/01/93  10/24/97    932,849         0        0            0         932,849

CNL Income Fund XIV, Ltd.:
  Checkers -
    Knoxville, TN                03/31/94  03/01/95    339,031         0        0            0         339,031
  Checkers -
    Dallas, TX                   03/31/94  03/01/95    356,981         0        0            0         356,981
  TGI Friday's -
    Woodridge, NJ (7)            01/01/95  09/27/96  1,753,533         0        0            0       1,753,533
  Wendy's -
    Woodridge, NJ (7)            11/28/94  09/27/96    747,058         0        0            0         747,058
  Hardee's -
    Madison, AL                  12/14/93  01/08/98    700,950         0        0            0         700,950
  Checkers -
    Richmond, VA (#548)          03/31/94  01/29/98    512,462         0        0            0         512,462
  Checkers -
    Riviera Beach, FL            03/31/94  04/14/98    360,000         0        0            0         360,000
  Checkers -
    Richmond, VA (#486)          03/31/94  07/27/98    397,985         0        0            0         397,985
</TABLE>

 <TABLE>
<CAPTION>
==========================================================================================
                                           Cost of Properties
                                         Including Closing and
                                               Soft Costs
                                  ---------------------------------------     Excess
                                                  Total                    (deficiency)
                                                acquisition                 of property
                                               cost, capital               operating cash
                                   Original     improvements                receipts over
                                   mortgage     closing and                     cash
       Property                   financing    soft costs (1)      Total     expenditures
===========================================================================================
<S>                               <C>           <C>              <C>         <C>
  Jack in the Box -
    Sacramento, CA                     0           969,423         969,423        264,752
  Pizza Hut -
    Billings, MT                       0           302,000         302,000         57,990

CNL Income Fund XI, Ltd.:
  Burger King -
    Philadelphia, PA                   0           818,850         818,850        225,900
  Burger King -
    Columbus, OH (19)                  0           795,264         795,264              0
  Burger King -
    Nashua, NH                         0         1,217,015        1,217,015       413,281

CNL Income Fund XII, Ltd.:
  Golden Corral -
    Houston, TX                        0         1,636,643        1,636,643         3,357
  Long John Silver's -
    Monroe, NC                         0           239,788         239,788        243,762

CNL Income Fund XIII, Ltd.:
  Checkers -
    Houston, TX                        0           286,411         286,411              0
  Checkers -
    Richmond, VA                       0           413,288         413,288        136,712
  Denny's -
    Orlando, FL                        0           934,120         934,120         (1,271)

CNL Income Fund XIV, Ltd.:
  Checkers -
    Knoxville, TN                      0           339,031         339,031              0
  Checkers -
    Dallas, TX                         0           356,981         356,981              0
  TGI Friday's -
    Woodridge, NJ (7)                  0         1,510,245        1,510,245       243,288
  Wendy's -
    Woodridge, NJ (7)                  0           672,746         672,746         74,312
  Hardee's -
    Madison, AL                        0           658,977         658,977         41,973
  Checkers -
    Richmond, VA (#548)                0           382,435         382,435        130,027
  Checkers -
    Riviera Beach, FL                  0           276,409         276,409         83,591
  Checkers -
    Richmond, VA (#486)                0           352,034         352,034         45,951
</TABLE>

                                                       C-31

<PAGE>



                                                      TABLE V
                                         SALES OR DISPOSALS OF PROPERTIES

 <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      Total
===============================================================================================================
<S>                              <C>       <C>      <C>          <C>        <C>         <C>          <C>
CNL Income Fund XV, Ltd.:
  Checkers -
    Knoxville, TN                05/27/94  03/01/95    263,221         0        0            0         263,221
  Checkers -
    Leavenworth, KS              06/22/94  03/01/95    259,600         0        0            0         259,600
  Checkers -
    Knoxville, TN                07/08/94  03/01/95    288,885         0        0            0         288,885
  TGI Friday's -
    Woodridge, NJ (7)            01/01/95  09/27/96  1,753,533         0        0            0       1,753,533
  Wendy's -
    Woodridge, NJ (7)            11/28/94  09/27/96    747,058         0        0            0         747,058

CNL Income Fund XVI, Ltd.:
  Long John Silver's -
    Appleton, WI                 06/24/95  04/24/96    775,000         0        0            0         775,000
  Checker's -
    Oviedo, FL                   11/14/94  02/28/97    610,384         0        0            0         610,384
  Boston Market -
    Madison, TN (16)             05/05/95  05/08/98    774,851         0        0            0         774,851
  Boston Market -
    Chattanooga, TN (17)         05/05/95  06/16/98    713,386         0        0            0         713,386

CNL Income Fund XVII, Ltd.:
  Boston Market -
    Troy, OH (18)                07/24/96  06/16/98    857,487         0        0            0         857,487

CNL American Properties Fund, Inc.:
  TGI Friday's -
    Orange, CT                   10/30/95  05/08/97  1,312,799         0        0            0       1,312,799
  TGI Friday's -
    Hazlet, NJ                   07/15/96  05/08/97  1,324,109         0        0            0       1,324,109
  TGI Friday's -
    Marlboro, NJ                 08/01/96  05/08/97  1,372,075         0        0            0       1,372,075
  TGI Friday's -
    Hamden, CT                   08/26/96  05/08/97  1,245,100         0        0            0       1,245,100
  Boston Market -
    Southlake, TX                07/02/97  07/21/97  1,035,153         0        0            0       1,035,135
  Boston Market -
    Franklin, TN (20)            08/18/95  04/14/98    950,361         0        0            0         950,361
  Boston Market -
    Grand Island, NE (21)        09/19/95  04/14/98    837,656         0        0            0         837,656
  Burger King -
    Indian Head Park, IL         04/03/96  05/05/98    674,320         0        0            0         674,320
</TABLE>

 <TABLE>
<CAPTION>
=========================================================================================
                                          Cost of Properties
                                        Including Closing and
                                              Soft Costs
                                 ---------------------------------------     Excess
                                                 Total                    (deficiency)
                                               acquisition                 of property
                                              cost, capital               operating cash
                                  Original     improvements                receipts over
                                  mortgage     closing and                     cash
       Property                  financing    soft costs (1)      Total     expenditures
==========================================================================================
<S>                              <C>           <C>              <C>         <C>
CNL Income Fund XV, Ltd.:
  Checkers -
    Knoxville, TN                     0           263,221        263,221           0
  Checkers -
    Leavenworth, KS                   0           259,600        259,600           0
  Checkers -
    Knoxville, TN                     0           288,885        288,885           0
  TGI Friday's -
    Woodridge, NJ (7)                 0         1,510,245       1,510,245    243,288
  Wendy's -
    Woodridge, NJ (7)                 0           672,746        672,746      74,312

CNL Income Fund XVI, Ltd.:
  Long John Silver's -
    Appleton, WI                      0           613,838        613,838     161,162
  Checker's -
    Oviedo, FL                        0           506,311        506,311     104,073
  Boston Market -
    Madison, TN (16)                  0           774,851        774,851           0
  Boston Market -
    Chattanooga, TN (17)              0           713,386        713,386           0

CNL Income Fund XVII, Ltd.:
  Boston Market -
    Troy, OH (18)                     0           857,487        857,487           0

CNL American Properties Fund, Inc
  TGI Friday's -
    Orange, CT                        0         1,310,980       1,310,980      1,819
  TGI Friday's -
    Hazlet, NJ                        0         1,294,237       1,294,237     29,872
  TGI Friday's -
    Marlboro, NJ                      0         1,324,288       1,324,288     47,787
  TGI Friday's -
    Hamden, CT                        0         1,203,136       1,203,136     41,964
  Boston Market -
    Southlake, TX                     0         1,035,135       1,035,135          0
  Boston Market -
    Franklin, TN (20)                 0           950,361        950,361           0
  Boston Market -
    Grand Island, NE (21)             0           837,656        837,656           0
  Burger King -
    Indian Head Park, IL              0           670,867        670,867       3,453
</TABLE>
                                                       C-32

<PAGE>



                                                      TABLE V
                                         SALES OR DISPOSALS OF PROPERTIES

 <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      Total
===============================================================================================================
<S>                              <C>       <C>      <C>          <C>        <C>         <C>          <C>
  Boston Market -
    Dubuque, IA (22)             10/04/95  05/08/98    969,159         0        0            0        969,159
  Boston Market -
    Merced, CA (23)              10/06/96  05/08/98    930,834         0        0            0        930,834
  Boston Market -
    Arvada, CO (24)              07/21/97  07/28/98  1,152,262         0        0            0      1,152,262
</TABLE>

 <TABLE>
<CAPTION>
=========================================================================================
                                          Cost of Properties
                                        Including Closing and
                                              Soft Costs
                                 ---------------------------------------      Excess
                                                 Total                     (deficiency)
                                               acquisition                  of property
                                              cost, capital               operating cash
                                  Original     improvements                receipts over
                                  mortgage     closing and                     cash
       Property                  financing    soft costs (1)      Total     expenditures
==========================================================================================
<S>                              <C>           <C>              <C>         <C>
  Boston Market -
    Dubuque, IA (22)                 0             969,159       969,159          0
  Boston Market -
    Merced, CA (23)                  0             930,834       930,834          0
  Boston Market -
    Arvada, CO (24)                  0           1,152,262     1,152,262          0
</TABLE>

(1)  Amounts shown do not include pro rata share of original offering costs or
     acquisition fees.
(2)  Amount shown is face value and does not represent discounted current value.
     The mortgage note bears interest at a rate of 10.25% per annum and provides
     for a balloon payment of $1,006,004 in July 2000.
(3)  Amount shown is face value and does not represent discounted current value.
     The mortgage note bears interest at a rate of 10.25% per annum and provides
     for a balloon payment of $1,106,657 in July 2000.
(4)  Amounts shown are face value and do not represent discounted current value.
     Each mortgage note bears interest at a rate of 10.00% per annum and
     provides for a balloon payment of $218,252 in December 2005.
(5)  Amount shown is face value and does not represent discounted current value.
     The mortgage note bears interest at a rate of 10.00% per annum and provides
     for a balloon payment of $200,324 in December 2005.
(6)  Amounts shown are face value and do not represent discounted current value.
     Each mortgage note bears interest at a rate of 10.75% per annum and
     provides for 12 monthly payments of interest only and thereafter, 168 equal
     monthly payments of principal and interest.
(7)  CNL Income Fund XIV, Ltd. and CNL Income Fund XV, Ltd. each owned a 50
     percent interest in Wood-Ridge Real Estate Joint Venture, which owned two
     properties. The amounts presented for CNL Income Fund XIV, Ltd. and CNL
     Income Fund XV, Ltd. represent each partnership's 50 percent interest in
     the properties owned by Wood-Ridge Real Estate Joint Venture.
(8)  CNL Income Fund II, Ltd. owns a 64 percent interest and CNL Income Fund VI,
     Ltd. owns a 36 percent interest in this joint venture. The amounts
     presented for CNL Income Fund II, Ltd. and CNL Income Fund VI, Ltd.
     represent each partnership's percent interest in the property owned by Show
     Low Joint Venture.
(9)  CNL Income Fund, Ltd. owns a 50 percent interest in this joint venture. The
     amounts presented represent the partnerships percent interest in the
     property owned by Seventh Avenue Joint Venture. A third party owns the
     remaining 50 percent interest in this joint venture.
(10) CNL Income Fund VI, Ltd. and CNL Income Fund VII, Ltd. own a 52 percent and
     48 percent interest, respectively, in the property in Yuma, Arizona. The
     amounts presented for CNL Income Fund VI, Ltd. and CNL Income Fund VII,
     Ltd. represent each partnership's respective interest in the property.
(11) Cash received net of closing costs includes $198,000 received as a lease
     termination fee.
(12) Cash received net of closing costs includes $93,885 received as a lease
     termination fee.
(13) Cash received net of closing costs includes $120,115 received as a lease
     termination fee.
(14) Closing costs deducted from net sales proceeds do not include deferred,
     subordinated real estate disposition fees payable to CNL Fund Advisors or
     its affiliates.
(15) The Burger King property in Woodmere, Ohio was exchanged on December 12,
     1996 for a Burger King property in Carrboro, NC at the option of the tenant
     as permitted under the terms of the lease agreement. Due to the exchange,
     the Burger King property in Carrboro, NC is being leased under the same
     lease as the Burger King property in Woodmere, OH.
(16) The Boston Market property in Madison, TN was exchanged on May 8, 1998 for
     a Boston Market property in Lawrence, KS at the option of the tenant as
     permitted under the terms of the lease agreement. Due to the exchange, the
     Boston Market property in Lawrence, KS is being leased under the same lease
     as the Boston Market property in Madison, TN.
(17) The Boston Market property in Chattanooga, TN was exchanged on June 16,
     1998 for a Boston Market property in Indianapolis, IN at the option of the
     tenant as permitted under the terms of the lease agreement. Due to the
     exchange, the Boston Market property in Indianapolis, IN is being leased
     under the same lease as the Boston Market property in Chattanooga, TN.
(18) The Boston Market property in Troy, OH was exchanged on June 16, 1998 for a
     Boston Market property in Inglewood, CA at the option of the tenant as
     permitted under the terms of the lease agreement. Due to the exchange, the
     Boston Market property in Inglewood, CA is being leased under the same
     lease as the Boston Market property in Troy, OH.
(19) The Burger King property in Columbus, OH was exchanged on September 30,
     1998 for a Burger King property in Danbury, CT at the option of the tenant
     as permitted under the terms of the lease agreement. Due to the exchange,
     the Burger King property in Danbury, CT is being leased under the same
     lease as the Burger King property in Columbus, OH.

                                      C-33

<PAGE>


(20) The Boston Market property in Franklin, TN was exchanged on April 14, 1998
     for a Boston Market property in Glendale, AZ at the option of the tenant as
     permitted under the terms of the lease agreement. Due to the exchange, the
     Boston Market property in Glendale, AZ is being leased under the same lease
     as the Boston Market property in Franklin, TN.
(21) The Boston Market property in Grand Island, NE was exchanged on April 14,
     1998 for a Boston Market property in Warwick, RI at the option of the
     tenant as permitted under the terms of the lease agreement. Due to the
     exchange, the Boston Market property in Warwick, RI is being leased under
     the same lease as the Boston Market property in Grand Island, NE.
(22) The Boston Market property in Dubuque, IA was exchanged on May 8, 1998 for
     a Boston Market property in Columbus, OH at the option of the tenant as
     permitted under the terms of the lease agreement. Due to the exchange, the
     Boston Market property in Columbus, OH is being leased under the same lease
     as the Boston Market property in Dubuque, IA.
(23) Cash received net of closing costs includes $362,949 in construction costs
     incurred but not paid by CNL American Properties Fund, Inc. as of the
     closing date, which were deducted from the actual net sales proceeds
     received by CNL American Properties Fund, Inc.
(24) Cash received net of closing costs includes $522,827 in construction costs
     incurred but not paid by CNL American Properties Fund, Inc. as of the
     closing date, which were deducted from the actual net sales proceeds
     received by CNL American Properties Fund, Inc.

                                      C-34
<PAGE>



                                   APPENDIX D
                              SUBSCRIPTION DOCUMENT



                 -----------------------------------------------
                 | THE  SUBSCRIPTION DOCUMENT INCLUDED IN THIS |
                 | APPENDIX D UPDATES AND REPLACES APPENDIX D  |
                 | TO THE ATTACHED PROSPECTUS, DATED SEPTEMBER |
                 | 18, 1998.                                   |
                 ----------------------------------------------



<PAGE>



                                      CNL
                                  HEALTH CARE
                                PROPERTIES, INC.
- --------------------------------------------------------------------------------




                   Up to 15,500,000 Shares -- $10.00 per Share
                     Minimum Purchase -- 250 Shares ($2,500)
            100 Shares ($1,000) for IRAs, Keogh, and Qualified Plans
               (Minimum purchase may be higher in certain states)





================================================================================
PLEASE READ CAREFULLY this  Subscription  Agreement and the Notices (on the back
of the Agreement)  before  completing  this  document.  TO SUBSCRIBE FOR SHARES,
complete and sign, where  appropriate,  and deliver the Subscription  Agreement,
along with your check, to your Registered  Representative.  YOUR CHECK SHOULD BE
MADE PAYABLE TO:

              SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.

ALL ITEMS ON THE  SUBSCRIPTION  AGREEMENT  MUST BE  COMPLETED  IN ORDER FOR YOUR
SUBSCRIPTION TO BE PROCESSED.
================================================================================





               Overnight Packages:                Regular Mail Packages:

            Attn:  Investor Services             Attn:  Investor  Services
              400 E. South Street                   Post Office Box 1033
             Orlando, Florida  32801            Orlando, Florida  32802-1033


                            For Telephone Inquiries:
                              CNL SECURITIES CORP.
                        (407) 650-1000 OR (800) 522-3863


<PAGE>





CNL HEALTH CARE PROPERTIES, INC.

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

1.--------------- INVESTMENT ---------------------------------------------------

This subscription is in the amount of $ _____________ for the purchase of ______
Shares ($10.00 per Share).  The  minimum  initial  subscription  is  250  Shares
($2,500); 100 Shares ($1,000) for IRA, Keogh and qualified plan accounts (except
in states with higher minimum purchase requirements).   |_| ADDITIONAL  PURCHASE
|_| REINVESTMENT PLAN - Investor elects to participate in Plan  (See  prospectus
for details.)


2.--------------- SUBSCRIBER INFORMATION ---------------------------------------
     
Name (1st)                   |_| M |_| F   Date of Birth (MM/DD/YY)
          -----------------                                        -------------
Name (2nd)                   |_| M |_| F   Date of Birth (MM/DD/YY)
          -----------------                                        -------------
Address
       -------------------------------------------------------------------------
City                          State               Zip Code
    -------------------------      --------------          ---------------------

Custodian Account No.                     Daytime Phone # (    )
                     -------------------                   ----  ---------------

|_|  U.S. Citizen   |_|  Resident Alien   |_|  Foreign Resident   Country
                                                                         -------
|_|  Check if Subscriber is a U.S. citizen residing outside the U.S.

Income Tax Filing State
                        --------------------------------------------------------
ALL SUBSCRIBERS:  State of Residence of Subscriber/Plan Beneficiary
                  (required)
                            ----------------------------------------------------

Taxpayer Identification Number:  For most individual  taxpayers,  it  is   their
Social Security number.  Note:  If the purchase is in more than one  name,   the
number should be that of the first person listed. For IRAs, Keoghs and qualified
plans,  enter  both  the  Social  Security  number and  the  custodian  taxpayer
identification number.

    Taxpayer ID#        -           Social Security #      -         -
                ------------------                   ------  --------  ---------

3. --------------- INVESTOR MAILING ADDRESS ------------------------------------

For the Subscriber of an IRA, Keogh, or qualified plan to receive  informational
mailings, please complete if different from address in Section 2.

Name
    ----------------------------------------------------------------------------
Address
       -------------------------------------------------------------------------
City                               State                 Zip Code
     -----------------------------       ---------------          --------------
Daytime Phone #(         )
                 -------   ---------------------------

4. --------------- DIRECT DEPOSIT ADDRESS --------------------------------------

Investors  requesting direct deposit of distribution checks to another financial
institution or mutual fund, please complete below. In no event will the  Company
or Affiliates be responsible for any adverse consequences of direct deposit.

Company
       -------------------------------------------------------------------------
Address
       -------------------------------------------------------------------------
City                               State                Zip Code
    -----------------------------        ------------            ---------------
Account No.                                   Phone #(      )
            --------------------------------          ------  ------------------

5. --------------- FORM OF OWNERSHIP -------------------------------------------

(Select only one)
|_|INDIVIDUAL-one signature required (1)
|_|HUSBAND AND WIFE, AS COMMUNITY PROPERTY- two
   signatures required (15)
|_|TENANTS IN COMMON-two signatures required (9)
|_|TENANTS BY THE ENTIRETY-two signatures required (31)
|_|S-CORPORATION (22)
|_|C-CORPORATION (5)
|_|IRA-custodian signature required (23)
|_|ROTH IRA-custodian signature required (36)
|_|SEP-custodian signature required (38)
|_|TAXABLE TRUST (7)
|_|TAX-EXEMPT TRUST (20)
|_|JOINT TENANTS WITH RIGHT OF SURVIVORSHIP - all parties must sign (8)
|_|A MARRIED PERSON/SEPARATE PROPERTY - one signature required (34)
|_|KEOGH (H.R.10) - trustee signature required (24)
|_|CUSTODIAN - custodian signature required (33)
|_|PARTNERSHIP (3)
|_|NON-PROFIT ORGANIZATION (12)
|_|PENSION PLAN - trustee signature(s) required (19)
|_|PROFIT SHARING PLAN - trustee signature(s) required (27)
|_|CUSTODIAN UGMA-STATE of _________ - custodian signature required (16)
|_|CUSTODIAN UTMA-STATE of _________ - custodian signature required (42)
|_|ESTATE - Personal Representative signature required (13)
|_|REVOCABLE GRANTOR TRUST - grantor signature required (25)
|_|IRREVOCABLE TRUST - trustee signature required (21)


<PAGE>

                                                CNL Health Care Properties, Inc.

6. -------------- SUBSCRIBER SIGNATURES ----------------------------------------

If the  Subscriber is executing the  Subscriber  Signature  Page, the Subscriber
understands  that, BY EXECUTING THIS  AGREEMENT A SUBSCRIBER  DOES NOT WAIVE ANY
RIGHTS HE MAY HAVE UNDER THE SECURITIES  ACT OF 1933 OR THE SECURITIES  EXCHANGE
ACT OF 1934 OR UNDER ANY STATE SECURITIES LAW:

X                                                                               
  ---------------------------------------------       --------------------------
  Signature of 1st Subscriber                         Date                      

X                                                                           
  ---------------------------------------------       --------------------------
  Signature of 2nd Subscriber                         Date

7. -------------- BROKER/DEALER INFORMATION ------------------------------------

Broker/Dealer NASD Firm Name
                            ----------------------------------------------------
Registered Representative
                         -------------------------------------------------------
Branch Mail Address
                   -------------------------------------------------------------
City                                   State            Zip Code                
    ----------------------------------       ----------          ---------------

|_|  Please check if new address

Phone #(      )                Fax #(      )                |_|  Sold CNL before
        ------  -------------        ------  -------------
Shipping Address
                ----------------------------------------------------------------
City                                   State            Zip Code
    ----------------------------------      -----------          ---------------

|_|     Telephonic Subscriptions (check here): If the Registered  Representative
        and Branch  Manager are executing  the  signature  page on behalf of the
        Subscriber,  both must sign below. Registered Representatives and Branch
        Managers may not sign on behalf of residents  of Florida,  Iowa,  Maine,
        Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New
        Mexico,  North  Carolina,  Ohio,  Oregon,  South  Dakota,  Tennessee  or
        Washington.  [NOTE:  Not to be executed until  Subscriber(s)  has (have)
        acknowledged receipt of final prospectus.] Telephonic  subscriptions may
        not be completed for IRA accounts.

|_|     Deferred  Commission Option (check here): The Deferred Commission Option
        means  an   agreement   between   a   stockholder,   the   participating
        Broker/Dealer  and the Managing Dealer to have Selling  Commissions paid
        over a seven  year  period  as  described  in "The  Offering  -- Plan of
        Distribution."   This   option  will  only  be   available   with  prior
        authorization by the Broker/Dealer.

|_|     Registered  Investment  Advisor (RIA) (check here):  This  investment is
        made  through the RIA in its  capacity as an RIA and not in its capacity
        as a Registered Representative,  if applicable. If an owner or principal
        or  any  member  of  the  RIA  firm  is  an  NASD  licensed   Registered
        Representative  affiliated with a Broker/Dealer,  the transaction should
        be conducted through that Broker/Dealer, not through the RIA.

        PLEASE READ CAREFULLY THE  REVERSE  SIDE  OF  THIS  SIGNATURE  PAGE  AND
        SUBSCRIPTION AGREEMENT BEFORE COMPLETING

X
  --------------------------------  --------------   ---------------------------
  Principal, Branch Manager or      Date             Print or Type Name of
  Other Authorized Signature                         Person Signing

X
  --------------------------------  --------------   ---------------------------
  Registered Representative/        Date             Print or Type Name of 
  Investment Advisor Signature                       Person Signing

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

 Make check payable to :  SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.,
                          ESCROW AGENT
<TABLE>
<CAPTION>
<S> <C>
 Please remit check and          For overnight delivery, please send to:       For Office Use Only
 subscription document to:
                                 CNL SECURITIES CORP.

 CNL SECURITIES CORP.            Attn:  Investor Services                      Sub. #
 Attn:  Investor Services        400 E. South Street                                 -------------
 Post Office Box 1033            Orlando, FL  32801                            Admit Date
 Orlando, FL  32802-1033         (407)  650- 1000                                        ---------
 (800) 522-3863                  (800) 522-3863                                Amount
                                                                                     -------------
                                                                               Region
                                                                                     -------------
                                                                               RSVP#
                                                                                    --------------

</TABLE>

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



<PAGE>





NOTICE TO ALL INVESTORS:

 (a) The purchase of Shares by an IRA, Keogh, or other  tax-qualified  plan does
not, by itself, create the plan.

 (b) The Company, in its sole and absolute discretion,  may accept or reject the
Subscriber's  subscription  which if rejected  will be promptly  returned to the
Subscriber,   without  interest.  Non-U.S.   stockholders  (as  defined  in  the
Prospectus) will be admitted as stockholders with the approval of the Advisor.

 (c) THE SALE OF SHARES  SUBSCRIBED FOR HEREUNDER MAY NOT BE COMPLETED  UNTIL AT
LEAST  FIVE  BUSINESS  DAYS  AFTER  THE DATE  THE  SUBSCRIBER  RECEIVES  A FINAL
PROSPECTUS.  EXCEPT AS PROVIDED IN THIS  NOTICE,  THE NOTICE  BELOW,  AND IN THE
PROSPECTUS,  THE  SUBSCRIBER  WILL NOT BE  ENTITLED  TO REVOKE OR  WITHDRAW  HIS
SUBSCRIPTION.


The  subscriber  is asked to refer to the  prospectus  concerning  the  Deferred
Commission  Option  outlined  in "The  Offering -- Plan of  Distribution."  This
option will only be available with prior authorization by the Broker/Dealer.



NOTICE TO NORTH  CAROLINA  RESIDENTS:  By signing this  Subscription  Agreement,
North  Carolina  investors  acknowledge  receipt of the Prospectus and represent
that they meet the suitability  standards for North Carolina investors listed in
the Prospectus.



BROKER/DEALER AND FINANCIAL ADVISOR:

By signing this subscription agreement,  the signers certify that they recognize
and have complied with their  obligations  under the NASD's Conduct  Rules,  and
hereby further certify as follows:  (i) a copy of the Prospectus,  including the
Subscription  Agreement  attached  thereto  as  Appendix  D, as  amended  and/or
supplemented  to date,  has been  delivered  to the  Subscriber;  (ii) they have
discussed such investor's  prospective purchase of Shares with such investor and
have advised such investor of all pertinent  facts with regard to the liquidity,
valuation,  and  marketability  of the  Shares;  and (iii) they have  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, that such
investor  is  legally  capable  of  purchasing  such  Shares  and will not be in
violation  of any  laws for  having  engaged  in such  purchase,  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 and will maintain  documentation on which the  determination was
based for a period of not less than six years;  (iv) under penalties of perjury,
(a) the information  provided in this Subscription  Agreement to the best of our
knowledge and belief is true, correct, and complete,  including, but not limited
to, the number shown above as the Subscriber's taxpayer  identification  number;
(b) to the best of our  knowledge and belief,  the  Subscriber is not subject to
backup  withholding either because the Subscriber has not been notified that the
Subscriber is subject to backup  withholding  as result of failure to report all
interest  or  dividends  or  the  Internal  Revenue  Service  has  notified  the
subscriber that the Subscriber is no longer subject to backup  withholding under
Section  3406(a)(1)(C) of the Internal Revenue Code of 1986, as amended; and (c)
to the best of our  knowledge  and belief,  the  Subscriber is not a nonresident
alien,  foreign  corporation,  foreign  trust,  or foreign  estate for U.S.  tax
purposes, and we hereby agree to notify the Company if it comes to the attention
of either of us that the Subscriber becomes such a person within sixty (60) days
of any event giving rise to the Subscriber becoming such a person.



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