FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number
0-26218
CNL Income Fund XVI, Ltd.
(Exact name of registrant as specified in its charter)
Florida 59-3198891
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
400 E. South Street, #500
Orlando, Florida 32801
- ---------------------------- -----------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number
(including area code) (407) 422-1574
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
<PAGE>
CONTENTS
Part I Page
Item 1. Financial Statements:
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Partners' Capital 3
Condensed Statements of Cash Flows 4-5
Notes to Condensed Financial Statements 6-9
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 10-13
Part II
Other Information 14
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1996 1995
----------- --------
<S> <C>
Land and buildings on operating
leases, less accumulated
depreciation $32,046,965 $29,140,773
Net investment in direct financing
leases 6,023,419 7,464,949
Cash and cash equivalents 1,444,501 3,987,786
Restricted cash 778,526 -
Receivables, less allowance for
doubtful accounts of $6,004
and $2,962 37,920 98,673
Prepaid expenses 13,831 660
Organization costs, less accumu-
lated amortization of $3,550
and $2,550 6,450 7,450
Accrued rental income 544,822 316,482
Other assets - 223,727
----------- -----------
$40,896,434 $41,240,500
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Acquisition and construction costs
payable $ 129,600 $ 680,528
Accounts payable 1,254 4,131
Escrowed real estate taxes payable 4,564 957
Distributions payable 900,000 787,500
Due to related parties 8,248 71,689
Rents paid in advance and deposits 64,565 55,543
----------- -----------
Total liabilities 1,108,231 1,600,348
Partners' capital 39,788,203 39,640,152
----------- -----------
$40,896,434 $41,240,500
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
1
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---------- ---------- ---------- -------
<S> <C>
Revenues:
Rental income from
operating leases $ 917,916 $ 478,904 $1,766,159 $ 827,146
Earned income from
direct financing
leases 181,629 82,286 373,099 122,477
Interest and other
income 18,275 125,222 47,893 178,670
---------- ---------- ---------- ----------
1,117,820 686,412 2,187,151 1,128,293
---------- ---------- ---------- ----------
Expenses:
General operating
and administrative 52,884 33,092 105,409 49,666
Professional services 5,578 4,810 11,467 9,080
Management fees to
related parties 9,802 4,978 19,141 8,451
State and other taxes 220 80 12,806 1,160
Depreciation and
amortization 140,275 73,910 270,831 117,229
---------- ---------- ---------- ----------
208,759 116,870 419,654 185,586
---------- ---------- ---------- ----------
Income Before Gain on
Sale of Land and
Building 909,061 569,542 1,767,497 942,707
Gain on Sale of Land
and Building 124,305 - 124,305 -
---------- ---------- ---------- ---------
Net Income $1,033,366 $ 569,542 $1,891,802 $ 942,707
========== ========== ---------- ==========
Allocation of Net
Income:
General partners $ 9,091 $ 5,695 $ 17,675 $ 9,427
Limited partners 1,024,275 563,847 1,874,127 933,280
---------- ---------- ---------- ----------
$1,033,366 $ 569,542 $1,891,802 $ 942,707
========== ========== ========== ==========
Net Income Per Limited
Partner Unit $ 0.23 $ 0.13 $ 0.42 $ 0.26
========== ========== ========== ==========
Weighted Average Number
of Limited Partner
Units Outstanding 4,500,000 4,225,117 4,500,000 3,524,455
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
1996 1995
---------------- ------------
<S> <C>
General partners:
Beginning balance $ 27,184 $ 2,876
Net income 17,675 24,308
----------- -----------
44,859 27,184
----------- -----------
Limited partners:
Beginning balance 39,612,968 17,471,157
Contributions - 24,825,828
Syndication costs - (2,652,718)
Net income 1,874,127 2,406,533
Distributions ($0.39 and $0.61
per limited partner unit,
respectively) (1,743,751) (2,437,832)
----------- -----------
39,743,344 39,612,968
----------- -----------
Total partners' capital $39,788,203 $39,640,152
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
------------ --------
<S> <C>
Increase (Decrease) in Cash
and Cash Equivalents:
Net Cash Provided by
Operating Activities $ 1,861,696 $ 964,166
------------ ------------
Cash Flows From Investing
Activities:
Proceeds from sale of land
and building 775,000 -
Additions to land and
buildings on operating
leases (2,392,562) (10,997,191)
Investment in direct
financing leases (382,372) (3,087,822)
Increase in restricted cash (775,000) -
Increase in other assets - (169,629)
Other - 20,714
------------ ------------
Net cash used in
investing activities (2,774,934) (14,233,928)
------------ ------------
Cash Flows From Financing
Activities:
Collection of over payment
(reimbursement) of acquisition
and syndication costs paid
by related parties on behalf
of the Partnership, net 1,204 (376,008)
Contributions from limited
partners - 24,825,828
Distributions to limited
partners (1,631,251) (530,486)
Payment of syndication costs - (2,450,156)
------------ ------------
Net cash provided by
(used in) financing
activities (1,630,047) 21,469,178
------------ ------------
Net Increase (Decrease)in Cash
and Cash Equivalents (2,543,285) 8,199,416
Cash and Cash Equivalents at
Beginning of Period 3,987,786 2,983,496
------------ ------------
Cash and Cash Equivalents at
End of Period $ 1,444,501 $ 11,182,912
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
------------ --------
<S> <C>
Supplemental Schedule of
Non-Cash Investing and
Financing Activities:
Related parties paid certain acquisition and syndication
costs on behalf of the Partnership as follows:
Acquisition costs $ 9,356 $ 71,629
Syndication costs - 237,802
------------ ------------
$ 9,356 $ 309,431
============ ============
Land, building and other
costs incurred and unpaid
at end of period $ 129,600 $ 811,573
============ ============
Construction in progress
at December 31, 1994,
transferred to net
investment in direct
financing leases $ - $ 550,076
============ ============
Net investment in direct financing lease reclassified to building on
operating lease as a result of a change in estimated
costs $ 1,015,392 $ -
============ ===========
Distributions declared and
unpaid at end of period $ 900,000 $ 587,913
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1996 and 1995
1. Basis of Presentation:
The accompanying unaudited condensed 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 periods presented. Operating results for
the quarter and six months ended June 30, 1996, may not be indicative
of the results that may be expected for the year ending December 31,
1996. Amounts as of December 31, 1995, 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
Income Fund XVI, Ltd. (the "Partnership") for the year ended December
31, 1995.
Effective January 1, 1996, the Partnership adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The
Statement requires that an entity review long-lived assets and certain
identifiable intangibles, to be held and used, for impairment whenever
events or changes in circumstances indicate that the carrying amount of
the asset may not be recoverable. Adoption of this standard had no
material effect on the Partnership's financial position or results of
operations.
2. Land and Buildings on Operating Leases:
In April 1996, the Partnership sold its property in Appleton,
Wisconsin, and received net sales proceeds of $775,000, resulting in a
gain of $124,305 for financial reporting purposes. This property was
originally acquired by the Partnership in February 1995 and had a cost
of approximately $595,100, excluding acquisition fees and miscellaneous
acquisition expenses; therefore, the Partnership sold the property for
approximately $179,900 in excess of its original purchase price.
6
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1996 and 1995
2. Land and Buildings on Operating Leases - Continued:
Land and buildings on operating leases consisted of the following at:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
<S> <C>
Land $ 15,804,926 $ 15,233,066
Buildings 16,836,982 14,232,820
------------ ------------
32,641,908 29,465,886
Less accumulated
depreciation (594,943) (325,113)
------------ ------------
$ 32,046,965 $ 29,140,773
============ ============
</TABLE>
Generally, the leases provide for escalating guaranteed minimum rents
throughout the lease term. Income from these scheduled rent increases
is recognized on a straight-line basis over the terms of the leases.
For the six months ended June 30, 1996 and 1995, the Partnership
recognized $241,536 and $108,920, respectively, of such rental income,
$130,780 and $66,548 of which was recognized during the quarters ended
June 30, 1996 and 1995, respectively.
The following is a schedule of the future minimum lease payments to be
received on noncancellable operating leases at June 30, 1996:
1996 $ 1,580,391
1997 3,170,589
1998 3,181,425
1999 3,231,072
2000 3,369,249
Thereafter 46,227,535
-----------
$60,760,261
===========
7
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1996 and 1995
3. Net Investment in Direct Financing Leases:
The following lists the components of the net investment in direct
financing leases at:
June 30, December 31,
1996 1995
Minimum lease payments
receivable $ 14,637,269 $ 19,100,733
Estimated residual
values 1,932,560 2,290,112
Less unearned income (10,546,410) (13,925,896)
------------ ------------
Net investment in
direct financing
leases $ 6,023,419 $ 7,464,949
============ ============
The following is a schedule of future minimum lease payments to be
received on direct financing leases at June 30, 1996:
1996 $ 369,560
1997 740,834
1998 741,451
1999 742,074
2000 755,382
Thereafter 11,287,968
-----------
$14,637,269
============
4. Restricted Cash:
As of June 30, 1996, the net sales proceeds of $775,000 from the sale
of the property in Appleton, Wisconsin, plus accrued interest of
$3,526, was being held in an interest-bearing escrow account pending
the release of funds by the escrow agent to acquire an additional
property on behalf of the Partnership.
8
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1996 and 1995
5. Concentration of Credit Risk:
The following schedule presents total rental and earned income from
individual lessees, or affiliated groups of lessees, each representing
more than ten percent of the Partnership's total rental and earned
income for at least one of the quarters ended June 30:
1996 1995
-------- ------
DenAmerica Corporation $275,211 $ 7,898
Golden Corral Corporation 237,487 170,559
Foodmaker, Inc. 139,152 142,279
Checkers Drive-In Restaurants,
Inc. 72,510 72,510
In addition, the following schedule presents total rental and earned
income from individual restaurant chains, each representing more than
ten percent of the Partnership's total rental and earned income for at
least one of the quarters ended June 30:
1996 1995
-------- ------
Denny's $303,305 $ 36,325
Golden Corral Family
Steakhouse Restaurants 237,487 170,559
Jack in the Box 139,152 142,279
Long John Silver's 106,114 66,143
Checkers Drive-In Restaurants 72,510 72,510
Although the Partnership's properties are geographically diverse and
the Partnership's lessees operate a variety of restaurant concepts,
failure of any one of these lessees or restaurant chains could
significantly impact the results of operations of the Partnership.
However, the general partners believe that the risk of such a default
is reduced due to the essential or important nature of these properties
for the on-going operations of the lessees.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CNL Income Fund XVI, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on September 2, 1993, to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurant properties, as well as land upon which restaurants were to
be constructed (the "Properties"), which are leased primarily to operators of
national and regional fast-food and family-style restaurant chains. The leases
are triple-net leases, with the lessee responsible for all repairs and
maintenance, property taxes, insurance and utilities. As of June 30, 1996, the
Partnership owned 42 Properties.
Liquidity and Capital Resources
During the six months ended June 30, 1996, the Partnership invested
approximately $2,315,000 in two additional Properties. Upon completion of the
Partnership's acquisitions in March 1996, the remaining net offering proceeds
from the Partnership's offering of units were reserved for Partnership purposes.
As a result of the Partnership's tenant selling its restaurant business
located on the Partnership's Property in Appleton, Wisconsin, in April 1996, the
Partnership sold its Property for $775,000, resulting in a gain for financial
reporting purposes of $124,305. This Property was originally acquired by the
Partnership in February 1995 and had a cost of approximately $595,100, excluding
acquisition fees and miscellaneous acquisition expenses; therefore, the
Partnership sold the Property for approximately $179,900 in excess of its
original purchase price. As of June 30, 1996, the net sales proceeds of
$775,000, plus accrued interest of $3,526, were being held in an
interest-bearing escrow account. The remaining net sales proceeds are expected
to be invested in an additional Property or used for other Partnership purposes.
The general partners believe that the transaction, or a portion thereof,
relating to the sale of the Property in Appleton, Wisconsin, and the
reinvestment of the proceeds will qualify as a like-kind exchange transaction
for federal income tax purposes. However, the Partnership will distribute
amounts sufficient to enable the limited partners to pay federal and state (at a
level reasonably assumed by the general partners) income taxes, if any,
resulting from the sale.
Currently, the Partnership's primary source of capital is cash from
operations (which includes cash received from tenants and interest and other
income received, less cash paid for expenses). Cash from operations was
$1,861,696 and $964,166 for the six months ended June 30, 1996 and 1995,
respectively. The increase in cash from operations for the six months ended June
30, 1996, as compared to the six months ended June 30, 1995, is primarily a
result of changes in income and expenses as discussed in "Results of Operations"
below.
10
<PAGE>
Liquidity and Capital Resources - Continued
Currently, cash reserves and rental income from the Partnership's
Properties are invested in money market accounts or other short-term, highly
liquid investments pending the use of such funds to pay Partnership expenses or
to make distributions to partners. At June 30, 1996, the Partnership had
$1,444,501 invested in such short-term investments, as compared to $3,987,786 at
December 31, 1995. The decrease in the amount invested in short-term investments
is primarily attributable to the acquisition of additional Properties, as
described above, during the six months ended June 30, 1996. The funds remaining
at June 30, 1996, after the payment of distributions and other liabilities, will
be used to meet the Partnership's working capital and other needs.
Total liabilities of the Partnership, including distributions payable,
decreased to $1,108,231 at June 30, 1996, from $1,600,348 at December 31, 1995,
primarily as a result of the payment during the six months ended June 30, 1996,
of construction costs accrued for certain Properties at December 31, 1995. The
decrease in total liabilities for the six months ended June 30, 1996, as
compared to December 23, 1995, was partially offset by an increase in
distributions payable during the six months ended June 30, 1996. The general
partners believe that the Partnership has sufficient cash on hand to meet its
current working capital needs.
Based primarily on cash from operations, the Partnership declared
distributions to the limited partners of $1,743,751 and $969,810 for the six
months ended June 30, 1996 and 1995, respectively ($900,000 and $587,913 for the
quarters ended June 30, 1996 and 1995, respectively). This represents
distributions of $0.39 and $0.28 per unit for the six months ended June 30, 1996
and 1995, respectively ($0.20 and $0.14 per unit for the quarters ended June 30,
1996 and 1995, respectively). No distributions were made to the general partners
for the six months ended June 30, 1996 and 1995. No amounts distributed or to be
distributed to the limited partners for the six months ended June 30, 1996 and
1995, are required to be or have been treated by the Partnership as a return of
capital for purposes of calculating the limited partners' return on their
adjusted capital contributions. The Partnership intends to continue to make
distributions of cash available for distribution to the limited partners on a
quarterly basis.
The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses.
The general partners believe that the leases will continue to generate cash flow
in excess of operating expenses.
The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.
11
<PAGE>
Results of Operations
During the six months ended June 30, 1995, the Partnership owned and
leased 34 wholly owned Properties and during the six months ended June 30, 1996,
the Partnership owned and leased 43 wholly owned Properties (including one
Property in Appleton, Wisconsin, which was sold in April 1996), to operators of
fast-food and family-style restaurant chains. In connection therewith, during
the six months ended June 30, 1996 and 1995, the Partnership earned $2,139,258
and $949,623, respectively, in rental income from operating leases and earned
income from direct financing leases from these Properties, $1,099,545 and
$561,190 of which was earned during the quarters ended June 30, 1996 and 1995,
respectively. The increase in rental and earned income is primarily attributable
to the acquisition of additional Properties subsequent to June 30, 1995, and the
fact, with the exception of the one Property sold in April 1996, that Properties
acquired during the quarter and six months ended June 30, 1995, were operational
for the full quarter and six months ended June 30, 1996, as compared to a
partial quarter and six months ended June 30, 1995.
During the six months ended June 30, 1996, three lessees of the
Partnership, (i) Golden Corral Corporation, (ii) Foodmaker, Inc. and (iii)
DenAmerica Corporation, each contributed more than ten percent of the
Partnership's total rental income. As of June 30, 1996, Golden Corral
Corporation was the lessee under leases relating to six restaurants, Foodmaker,
Inc. was the lessee under leases relating to five restaurants and DenAmerica
Corporation was the lessee under leases relating to eight restaurants. It is
anticipated that, based on the minimum rental payments required by the leases,
Golden Corral Corporation, Foodmaker, Inc. and DenAmerica Corporation each will
continue to contribute more than ten percent of the Partnership's total rental
income during the remainder of 1996 and subsequent years. In addition, during
the six months ended June 30, 1996, four restaurant chains, Golden Corral Family
Steakhouse Restaurants, Jack in the Box, Denny's and Long John Silver's, each
accounted for more than ten percent of the Partnership's total rental income.
During the remainder of 1996 and subsequent years, it is anticipated that these
four restaurant chains each will continue to account for more than ten percent
of the total rental income to which the Partnership is entitled under the terms
of the leases. Any failure of these lessees or restaurant chains could
materially affect the Partnership's income. As of June 30, 1996, Golden Corral
Corporation and DenAmerica Corporation each leased Properties with an aggregate
carrying value, excluding acquisition fees and certain acquisition expenses, in
excess of 20 percent of the total assets of the Partnership.
During the six months ended June 30, 1996 and 1995, the Partnership
also earned $47,893 and $178,670, respectively, in interest and other income,
$18,275 and $125,222 of which was earned during the quarters ended June 30, 1996
and 1995, respectively. The decrease in interest and other income is primarily
attributable to the decrease in the amount of funds invested in short-term,
liquid investments due to the acquisition of additional Properties during 1995
and the six months ended June 30, 1996.
12
<PAGE>
Results of Operations - Continued
Operating expenses, including depreciation and amortization expense,
were $419,654 and $185,586 for the six months ended June 30, 1996 and 1995,
respectively, of which $208,759 and $116,870 were incurred for the quarters
ended June 30, 1996 and 1995, respectively. The increase in operating expenses
is primarily attributable to an increase in depreciation expense as the result
of the acquisition of additional Properties subsequent to June 30, 1995, and the
fact that Properties acquired during the six months ended June 30, 1995, were
operational for the full quarter and six months ended June 30, 1996, as compared
to a partial quarter and six months ended June 30, 1995. Operating expenses also
increased as a result of an increase in (i) accounting and administrative
expenses associated with operating the Partnership and its Properties, (ii)
management fees as a result of the increase in rental revenues, as described
above, (iii) the Partnership incurring additional taxes relating to the filing
of various state tax returns during 1996, and (iv) insurance expense as a result
of the general partners obtaining contingent liability and property coverage for
the Partnership, effective May 1995. This insurance policy is intended to reduce
the Partnership's exposure in the unlikely event a tenant's insurance policy
lapses or is insufficient to cover a claim relating to the Property.
As a result of the sale of the Property in Appleton, Wisconsin, as
described in "Liquidity and Capital Resources", the Partnership recognized a
gain for financial reporting purposes of $124,305 during the six months ended
June 30, 1996.
13
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
Item 2. Changes in Securities. Inapplicable.
Item 3. Defaults upon Senior Securities. Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Inapplicable.
Item 5. Other Information. Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None.
(b) No reports on Form 8-K were filed during the
quarter ended June 30, 1996.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 9th day of August, 1996.
CNL INCOME FUND XVI, LTD.
By: CNL REALTY CORPORATION
General Partner
By: /s/ James M. Seneff, Jr.
JAMES M. SENEFF, JR.
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Robert A. Bourne
ROBERT A. BOURNE
President and Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the balance sheet of CNL Income Fund XVI, Ltd. at June 30, 1996, and
its statement of income for the six months then ended and is qualified
in its entirety by reference to the Form 10-Q of CNL Income Fund XVI,
Ltd. for the six months ended June 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,223,027
<SECURITIES> 0
<RECEIVABLES> 43,924
<ALLOWANCES> 6,004
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 32,641,908
<DEPRECIATION> 594,943
<TOTAL-ASSETS> 40,896,434
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 39,788,203
<TOTAL-LIABILITY-AND-EQUITY> 40,896,434
<SALES> 0
<TOTAL-REVENUES> 2,187,151
<CGS> 0
<TOTAL-COSTS> 419,654
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,891,802
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,891,802
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,891,802
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund XVI, Ltd. has an
unclassified balance sheet; therefore, no values are shown above for
current assets and current liabilities.
</FN>
</TABLE>
