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, 1998
-------------------------
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 organiza- Identification No.)
tion)
400 E. South Street
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 6-8
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 9-12
Part II
Other Information 13
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
June 30, December 31,
ASSETS 1998 1997
----------- --------
Land and buildings on operating
leases, less accumulated
depreciation of $1,705,440
and $1,437,443 $30,229,793 $30,658,994
Net investment in direct financing
leases 5,931,981 5,968,812
Investment in joint ventures 1,378,058 771,684
Cash and cash equivalents 1,838,278 1,673,869
Restricted cash - 627,899
Receivables, less allowance for
doubtful accounts of $23,011
and $879 2,251 31,946
Prepaid expenses 26,439 9,293
Organization costs, less accumu-
lated amortization of $7,550
and $6,550 2,450 3,450
Accrued rental income 1,298,409 1,192,373
----------- -----------
$40,707,659 $40,938,320
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Construction costs payable $ 5,532 $ 53,278
Accounts payable 3,969 2,707
Accrued and escrowed real estate
taxes payable 5,738 4,353
Distributions payable 900,000 900,000
Due to related parties 5,034 3,351
Rents paid in advance and deposits 86,389 69,705
----------- -----------
Total liabilities 1,006,662 1,033,394
Partners' capital 39,700,997 39,904,926
----------- -----------
$40,707,659 $40,938,320
=========== ===========
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,
1998 1997 1998 1997
---------- ---------- ---------- -------
<S> <C>
Revenues:
Rental income from
operating leases $ 883,229 $ 890,377 $1,771,324 $1,788,604
Adjustments to accrued
rental income (119,072) - (119,072) -
Earned income from direct
financing leases 160,329 175,935 335,376 352,146
Interest and other income 19,743 20,264 34,504 38,829
---------- ---------- ---------- ----------
944,229 1,086,576 2,022,132 2,179,579
---------- ---------- ---------- ----------
Expenses:
General operating and
administrative 41,002 39,919 74,023 81,059
Professional services 8,511 7,599 17,951 13,312
Management fees to
related parties 9,853 9,840 19,816 19,742
Real estate taxes 839 - 839 -
State and other taxes 89 152 19,391 20,534
Depreciation and
amortization 128,081 140,916 268,997 282,050
---------- ---------- ---------- ----------
188,375 198,426 401,017 416,697
---------- ---------- ---------- ----------
Income Before Equity in
Earnings of Joint Ventures
and Gain on Sale of Land 755,854 888,150 1,621,115 1,762,882
Equity in Earnings of Joint
Ventures 33,522 18,295 64,956 36,620
Gain on Sale of Land - - - 41,148
---------- ---------- ---------- ----------
Net Income $ 789,376 $ 906,445 $1,686,071 $1,840,650
========== ========== ========== ==========
Allocation of Net Income:
General partners $ 7,894 $ 9,065 $ 16,861 $ 17,995
Limited partners 781,482 897,380 1,669,210 1,822,655
---------- ---------- ---------- ----------
$ 789,376 $ 906,445 $1,686,071 $1,840,650
========== ========== ========== ==========
Net Income Per Limited
Partner Unit $ 0.17 $ 0.20 $ 0.37 $ 0.41
========== ========== ========== ==========
Weighted Average Number
of Limited Partner
Units Outstanding 4,500,000 4,500,000 4,500,000 4,500,000
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended
June 30, December 31,
1998 1997
---------------- --------
General partners:
Beginning balance $ 99,615 $ 63,423
Net income 16,861 36,192
----------- -----------
116,476 99,615
----------- -----------
Limited partners:
Beginning balance 39,805,311 39,781,176
Net income 1,669,210 3,624,135
Distributions ($0.42 and $0.80
per limited partner unit,
respectively) (1,890,000) (3,600,000)
----------- -----------
39,584,521 39,805,311
----------- -----------
Total partners' capital $39,700,997 $39,904,926
=========== ===========
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
1998 1997
----------- ------------
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 1,922,221 $ 1,888,155
----------- -----------
Cash Flows From Investing
Activities:
Proceeds from sale of land - 610,384
Reimbursement from developer
of construction costs 161,204 -
Investment in direct
financing leases (31,504) (29,257)
Investment in joint ventures (607,896) -
Decrease in restricted cash 610,384 -
----------- ----------
Net cash provided by
investing activities 132,188 581,127
----------- -----------
Cash Flows From Financing
Activities:
Distributions to limited
partners (1,890,000) (1,800,000)
----------- -----------
Net cash used in
financing activities (1,890,000) (1,800,000)
----------- -----------
Net Increase in Cash and Cash
Equivalents 164,409 669,282
Cash and Cash Equivalents at
Beginning of Period 1,673,869 1,546,203
----------- -----------
Cash and Cash Equivalents at End
of Period $ 1,838,278 $ 2,215,485
=========== ===========
See accompanying notes to condensed financial statements.
4
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED
Six Months Ended
June 30,
1998 1997
----------- ----------
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Land and building under operating
lease exchanged for land and
building under operating lease $ 827,789 $ -
=========== ===========
Land and building under direct
financing lease exchanged for
land and building under direct
financing lease $ 761,334 $ -
=========== ===========
Distributions declared and
unpaid at end of period $ 900,000 $ 900,000
=========== ===========
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, 1998 and 1997
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, 1998, may not be indicative
of the results that may be expected for the year ending December 31,
1998. Amounts as of December 31, 1997, 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, 1997.
The general partners are in the process of analyzing the effects of the
consensus reached by the Financial Accounting Standards Board in EITF
98-9, entitled "Accounting for Contingent Rent in the Interim Financial
Periods," issued in May 1998. The general partners do not expect that
the conclusions reached in this consensus will have a material effect
on the Partnership's financial position or results of operations.
2. Land and Building on Operating Leases:
In May 1998, the tenant of the property in Madison, Tennessee,
exercised its option under the terms of its lease agreement, to
substitute the existing property for a replacement property. In
conjunction therewith, the Partnership exchanged the Boston Market
property in Madison, Tennessee, for a Boston Market property in
Lawrence, Kansas. The lease for the property in Madison, Tennessee, was
amended to allow the property in Lawrence, Kansas, to continue under
the terms of the original lease. All closing costs were paid by the
tenant. The Partnership accounted for this as a nonmonetary exchange of
similar assets and recorded the acquisition of the property in
Lawrence, Kansas, at the net book value of the property in Madison,
Tennessee. No gain or loss was recognized due to this being accounted
for as a nonmonetary exchange of similar assets.
6
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1998 and 1997
3. Net Investment in Direct Financing Leases:
In June 1998, the tenant of the property in Chattanooga, Tennessee,
exercised its option under the terms of its lease agreement, to
substitute the existing property for a replacement property. In
conjunction therewith, the Partnership exchanged the Boston Market
property in Chattanooga, Tennessee, for a Boston Market property in
Indianapolis, Indiana. The lease for the property in Chattanooga,
Tennessee, was amended to allow the property in Indianapolis, Indiana,
to continue under the terms of the original lease. All closing costs
were paid by the tenant. The Partnership accounted for this as a
nonmonetary exchange of similar assets and recorded the acquisition of
the property in Indianapolis, Indiana, at the net book value of the
property in Chattanooga, Tennessee. No gain or loss was recognized due
to this being accounted for as a nonmonetary exchange of similar
assets.
4. Investment in Joint Ventures:
In January 1998, the Partnership acquired a 40.42% interest in an IHOP
property in Memphis, Tennessee, as tenants-in-common with affiliates of
the general partners. The Partnership accounts for its investment in
this property using the equity method since the Partnership shares
control with affiliates, and amounts relating to its investment are
included in investment in joint ventures.
The following presents the combined, condensed financial information
for the properties held as tenants-in-common with affiliates at:
June 30, December 31,
1998 1997
Land and buildings on
operating leases, less
accumulated depreciation $2,422,421 $941,142
Cash 892 8,190
Prepaid expenses 150 29
Accrued rental income 39,709 20,171
Liabilities 279 8,163
Partners' capital 2,462,893 961,369
Revenues 139,394 112,744
Net income 115,270 91,575
The Partnership recognized income totalling $64,956 and $36,620 for the
six months ended June 30, 1998 and 1997, respectively, from these
properties, $33,522 and $18,295 of which was earned for the quarters
ended June 30, 1998 and 1997, respectively.
7
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1998 and 1997
5. Concentration of Credit Risk:
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 (including the
Partnership's share of total rental income from properties held as
tenants-in-common with affiliates) for at least one of the six month
periods ended June 30:
1998 1997
-------- ------
Denny's $585,782 $583,747
Golden Corral Family
Steakhouse Restaurant 470,612 473,138
Jack in the Box 278,305 278,305
Boston Market 248,400 248,507
Although the Partnership's properties are geographically diverse
throughout the United States and the Partnership's lessees operate a
variety of restaurant concepts, default by any one of these lessee's
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.
6. Subsequent Event:
In July 1998, the tenant of the property in Las Vegas, Nevada ceased
restaurant operations and vacated the Property. As a result, as of June
30, 1998, the Partnership had written off approximately $77,000 of
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). The
Partnership also established an allowance for doubtful accounts as of
June 30, 1998, of approximately $9,000 for rental and earned income
amounts due from this tenant due to the fact that collection of such
amounts is questionable. The Partnership is currently seeking either a
replacement tenant or purchaser for this property.
8
<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, 1998, the
Partnership owned 43 Properties, including two Properties owned with affiliates
as tenants-in-common.
Liquidity and Capital Resources
The Partnership's primary source of capital for the six months ended
June 30, 1998 and 1997, was cash from operations (which includes cash received
from tenants, distributions from joint ventures, and interest and other income
received, less cash paid for expenses). Cash from operations was $1,922,221 and
$1,888,155 for the six months ended June 30, 1998 and 1997, respectively. The
increase in cash from operations for the six months ended June 30, 1998, as
compared to the six months ended June 30, 1997, is primarily a result of changes
in the Partnership's working capital.
Other sources and uses of capital included the following during the six
months ended June 30, 1998.
In January 1998, the Partnership reinvested the net sales proceeds it
received from the sale, in March 1997, of the Property in Oviedo, Florida, in a
Property located in Memphis, Tennessee, with affiliates of the general partners
as tenants-in-common. In connection therewith, the Partnership and the
affiliates entered into an agreement whereby each co-venturer will share in the
profits and losses of the Property in proportion to its applicable percentage
interest. As of June 30, 1998, the Partnership owned a 40.42% interest in this
Property.
In addition, during the six months ended June 30, 1998, the Partnership
received approximately $161,000 from the developer of the Property in
Farmington, New Mexico. This represents a reimbursement from the developer upon
final reconciliation of total construction costs, to the total construction
costs funded by the Partnership in accordance with the development agreement.
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, 1998, the Partnership had
$1,838,278 invested in such short-term investments, as compared to $1,673,869
9
<PAGE>
Liquidity and Capital Resources - Continued
at December 31, 1997. The funds remaining at June 30, 1998, 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 $1,006,662 at June 30, 1998, from $1,033,394 at December 31, 1997.
The decrease was primarily a result of the payment during 1998, of construction
costs accrued for certain Properties at December 31, 1997. The decrease was
partially offset by an increase in rents paid in advance at June 30, 1998, as
compared to December 31, 1997. The general partners believe that the Partnership
has sufficient cash on hand to meet its current working capital needs.
Based on cash from operations, and for the six months ended June 30,
1998, accumulated excess operating reserves, the Partnership declared
distributions to the limited partners of $1,890,000 and $1,800,000 for the six
months ended June 30, 1998 and 1997, respectively ($900,000 for each of the
quarters ended June 30, 1998 and 1997). This represents distributions of $0.42
and $0.40 per unit for the six months ended June 30, 1998 and 1997, respectively
($0.20 per unit for each of the quarters ended June 30, 1998 and 1997). No
distributions were made to the general partners for the quarters and six months
ended June 30, 1998 and 1997. No amounts distributed to the limited partners for
the six months ended June 30, 1998 and 1997, 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.
Results of Operations
During the six months ended June 30, 1997, the Partnership owned and
leased 42 wholly owned Properties (including one Property in Oviedo, Florida,
which was sold in March 1997), and during the six months ended June 30, 1998,
the Partnership owned and leased 43 wholly owned Properties (including two
Properties in Madison and Chattanooga, Tennessee exchanged for two Properties in
Lawrence, Kansas and Indianapolis, Indiana), to operators of fast-food and
family-style restaurant chains. In connection therewith, during the six months
ended June 30, 1998 and 1997, the Partnership earned
10
<PAGE>
Results of Operations - Continued
$1,987,628 and $2,140,750, respectively, in rental income from operating leases
(net of adjustments to accrued rental income) and earned income from direct
financing leases from these Properties, $924,486 and $1,066,312 of which was
earned during the quarters ended June 30, 1998 and 1997, respectively. The
decrease in rental and earned income during the quarter and six months ended
June 30, 1998, as compared to the quarter and six months ended June 30, 1997, is
partially attributable to the fact that in July 1998, the tenant of the Property
in Las Vegas, Nevada ceased restaurant operations and vacated the Property. As a
result, during the quarter and six months ended June 30, 1998, the Partnership
wrote off approximately $77,300 of 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). The Partnership also established an allowance for doubtful accounts
during the quarter and six months ended June 30, 1998, of approximately $9,000
for rental and earned income amounts due from this tenant due to the fact that
collection of such amounts is questionable. The general partners are currently
seeking either a replacement tenant or purchaser for this Property. The
Partnership will not recognize any rental and earned income from this Property
until a replacement tenant or purchaser for this Property is located.
In addition, the decrease in rental and earned income during the
quarter and six months ended June 30, 1998, is partially attributable to the
fact that in June 1998, the tenant of the Properties in Charlotte, North
Carolina and Celina, Ohio filed for bankruptcy and rejected the leases relating
to these Properties. As a result, during the quarter and six months ended June
30, 1998, the Partnership wrote off approximately $41,800 of accrued rental
income (non-cash accounting adjustment relating to the straight-lining of future
scheduled rent increases over the lease term in accordance with generally
accepted accounting principles). The Partnership also established an allowance
for doubtful accounts during the quarter and six months ended June 30, 1998, of
approximately $10,600 for rental and earned income amounts due from this tenant,
due to the fact that collection of such amounts is questionable. The general
partners are currently seeking either replacement tenants or purchasers for
these Properties. The Partnership will not recognize any rental and earned
income from these Properties until replacement tenants or purchasers for these
Properties are located.
In addition, the decrease in rental and earned income during the six
months ended June 30, 1998, is partially the result of a decrease in rental
income due to the sale of the Property in Oviedo, Florida, in March 1997. The
net sales proceeds were reinvested in a Property in Memphis, Tennessee, with
affiliates of the general partners as tenants-in-common, as described above.
During the six months ended June 30, 1997, the Partnership also owned
and leased one Property as tenants-in-common with an affiliate of the general
partners and during the six months ended
11
<PAGE>
Results of Operations - Continued
June 30, 1998, the Partnership owned and leased two Properties with affiliates
of the general partners as tenants-in-common. In connection therewith, during
the six months ended June 30, 1998 and 1997, the Partnership earned $64,956 and
$36,620, respectively, attributable to net income earned by these joint
ventures, $33,522 and $18,295 of which was earned during the quarters ended June
30, 1998 and 1997, respectively. The increase in net income earned by joint
ventures during the quarter and six months ended June 30, 1998, as compared to
the quarter and six months ended June 30, 1997, is primarily attributable to the
fact that in January 1998, the Partnership reinvested the net sales proceeds it
received from the 1997 sale of the Property in Oviedo, Florida, in an IHOP
Property in Memphis, Tennessee, with affiliates of the general partners as
tenants-in-common.
During the six months ended June 30, 1998 and 1997, four Restaurant
Chains, Denny's, Golden Corral Family Steakhouse Restaurant, Jack in the Box,
and Boston Market, each accounted for more than ten percent of the Partnership's
total rental income (including the Partnership's share of the rental income from
the Properties owned with affiliates as tenants-in-common). It is anticipated
that, based on the minimum rental payments required by the leases, these
restaurant chains will continue to contribute more than ten percent of the
Partnership's total rental income during the remainder of 1998 and subsequent
years. Any failure of these lessees or restaurant chains could materially affect
the Partnership's income.
Operating expenses, including depreciation and amortization expense,
were $401,017 and $416,697 for the six months ended June 30, 1998 and 1997,
respectively, $188,375 and $198,426 of which were incurred for the quarters
ended June 30, 1998 and 1997, respectively. The decrease in operating expenses
during the quarter and six months ended June 30, 1998, as compared to the
quarter and six months ended June 30, 1997, was primarily attributable to a
decrease in depreciation expense as a result of the reimbursement from the
developer of construction costs relating to the Property in Farmington, New
Mexico, as described above in "Liquidity and Capital Resources."
As a result of the sale of the Property in Oviedo, Florida, in 1997 the
Partnership recognized a gain for financial reporting purposes of $41,148 during
the six months ended June 30, 1997. No Properties were sold during the six
months ended June 30, 1998.
The general partners are in the process of analyzing the effects of the
consensus reached by the Financial Accounting Standards Board in EITF 98-9,
entitled "Accounting for Contingent Rent in the Interim Financial Periods,"
issued in May 1998. The general partners do not expect that the conclusions
reached in this consensus will have a material effect on the Partnership's
financial position or results of operations.
12
<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, 1998.
13
<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 11th day of August, 1998.
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, 1998, and its statement of income
for the six months then ended and is qualified in its entirety by reference to
the Form 10Q of CNL Income Fund XVI, Ltd. for the six months ended June 30,
1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,838,278
<SECURITIES> 0
<RECEIVABLES> 25,562
<ALLOWANCES> 23,011
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 31,935,233
<DEPRECIATION> 1,705,440
<TOTAL-ASSETS> 40,707,659
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 39,700,997
<TOTAL-LIABILITY-AND-EQUITY> 40,707,659
<SALES> 0
<TOTAL-REVENUES> 2,022,132
<CGS> 0
<TOTAL-COSTS> 401,017
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,686,071
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,686,071
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,686,071
<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>
