Rule 424(b)(3)
No. 33-78790
CNL AMERICAN PROPERTIES FUND, INC.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 26, 1996 and the Prospectus Supplement dated July 26,
1996. This Supplement replaces the Supplements dated July 31, 1996, August 9,
1996, August 30, 1996 and September 13, 1996. Capitalized terms used in this
Supplement have the same meaning as in the Prospectus unless otherwise stated
herein.
Information as to proposed properties for which the Company has
received initial commitments and as to the number and types of Properties
acquired by the Company is presented as of September 19, 1996, and all
references to commitments or Property acquisitions should be read in that
context. Proposed properties for which the Company receives initial commitments,
as well as property acquisitions that occur after September 19, 1996, will be
reported in a subsequent Supplement.
THE OFFERING
As of September 19, 1996, the Company had received aggregate
subscription proceeds of $99,751,116 (9,975,112 Shares) from 5,567 stockholders,
including $243,167 (24,317 Shares) issued pursuant to the Reinvestment Plan. As
of September 19, 1996, the Company had invested or committed for investment
approximately $78,200,000 of such proceeds in 82 Properties (including one
Property through a joint venture arrangement which consists of land and
building, six Properties which consist of building only, 33 Properties which
consist of land only and 42 Properties which consist of land and building), in
providing mortgage financing to the tenants of the 33 Properties consisting of
land only and to pay Acquisition Fees and Acquisition Expenses, leaving
approximately $9,400,000 in offering proceeds available for investment in
Properties and Mortgage Loans. As of September 19, 1996, the Company had
incurred $4,488,800 in Acquisition Fees to the Advisor.
BUSINESS
PROPERTY ACQUISITIONS
Between July 17, 1996 and September 19, 1996, the Company acquired ten
Properties, including one Property consisting of building only and nine
Properties consisting of land and building. The Properties are four Boston
Market Properties (one in each of Upland, La Quinta and Merced, California, and
Florissant, Missouri), a Jack in the Box Property (in Houston, Texas), two
Applebee's Properties (one in each of Montclair and Salinas, California) a
Golden Corral Property (in Brooklyn, Ohio) a Ryan's Family Steak House Property
(in Spring Hill, Florida) and an Arby's Property (in Avon, Indiana). For
information regarding the 72 Properties acquired by the Company prior to July
17, 1996, see the Prospectus dated April 26, 1996, and the Prospectus Supplement
dated July 26, 1996.
The Boston Market Property in Merced, California, was acquired from an
Affiliate of the Company. The Affiliate had purchased and temporarily held title
to the Property in order to facilitate the acquisition of the Property by the
Company. The Property was acquired by the Company for a purchase price of
$559,682 from an Affiliate of the Company, representing the cost of the Property
to the Affiliate (including carrying costs) due to the fact that this amount was
less than the Property's appraised value.
In connection with the purchase of the Golden Corral Property in
Brooklyn, Ohio, which is building only, the Company, as lessor, entered into a
long-term lease agreement with an unaffiliated lessee. The general terms of the
lease agreement are described in the section of the Prospectus entitled
"Business - Description of Property Leases." In connection with this
acquisition, the Company has also entered into an assignment of an
September 24, 1996 Prospectus Dated April 26, 1996
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<PAGE>
interest in the ground lease with the lessee and the owner of the land. The
assignment provides that the ground lessee is responsible for all obligations
under the ground lease and provides certain rights to the Company relating to
the maintenance of its interest in the building in the event of a default by the
lessee under the terms of the ground lease.
In connection with the purchase of the Boston Market Properties, the
Jack in the Box Property, the Applebee's Properties, the Ryan's Family Steak
House Property and the Arby's Property, which are land and building, the
Company, as lessor, entered into long-term lease agreements with unaffiliated
lessees. The general terms of the lease agreements are described in the section
of the Prospectus entitled "Business Description of Property Leases." For the
Properties that are to be constructed, the Company has entered into development
and indemnification and put agreements with the lessees. The general terms of
these agreements are described in the section of the Prospectus entitled
"Business - Site Selection and Acquisition of Properties Construction and
Renovation."
As of September 19, 1996, the Company had initial commitments to
acquire six properties, including one property which consists of building only
and five properties which consist of land and building. The acquisition of each
of these properties is subject to the fulfillment of certain conditions,
including, but not limited to, a satisfactory environmental survey and property
appraisal. There can be no assurance that any or all of the conditions will be
satisfied or, if satisfied, that one or more of these properties will be
acquired by the Company. If acquired, the leases of all six of these properties
are expected to be entered into on substantially the same terms described in the
Prospectus in the section entitled "Business - Description of Property Leases,"
except as described below.
In connection with the Wendy's property in San Diego, California, the
Company anticipates owning only the building and not the underlying land.
However, the Company anticipates entering into a tri-party agreement with the
lessee and the landlord of the land in order to provide the Company with certain
rights with respect to the land on which the building is located.
Set forth below are summarized terms expected to apply to the leases
for each of the properties. More detailed information relating to a property and
its related lease will be provided at such time, if any, as the property is
acquired.
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<PAGE>
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
<S> <C>
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Atlanta, GA renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Burger King 20 years; two five-year 11% of Total Cost (1) for each lease year, None
Chattanooga, TN renewal options (i) 8.5% of annual
Restaurant to be gross sales minus
constructed (ii) the minimum
annual rent for such
lease year
Burger King 20 years; two five-year 11% of Total Cost (1) for each lease year, None
Chicago, IL renewal options (i) 8.5% of annual
Restaurant to be gross sales minus
constructed (ii) the minimum
annual rent for such
lease year
Jack in the Box 18 years; four five-year 10.75% of Total Cost for each lease year, at any time after
Humble, TX renewal options (1); increases by 8% (i) 5% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year
constructed year and by 10% after (ii) the minimum
every five years annual rent for such
thereafter during the lease year
lease term
Shoney's 20 years; two five-year 11.75% of Total Cost for each lease year, at any time after
Fort Myers, FL renewal options (1); increases by 10% (i) 6% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
Wendy's (2) 15 years; three five- 13.26% of Total Cost for each lease year, upon the expiration
San Diego, CA year renewal options (1); increases by 8% (i) 6% of annual of the initial term
Restaurant to be after the fifth lease gross sales times the of the lease and
constructed year and after every Building Overage during any renewal
five years thereafter Multiplier (4) minus period thereafter
during the lease term (ii) the minimum (3)
annual rent for such
lease year
</TABLE>
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<PAGE>
FOOTNOTES:
(1) The "Total Cost" is equal to the sum of (i) the purchase price of the
property, (ii) closing costs, and (iii) actual development costs incurred
under the development agreement.
(2) The Company anticipates owning the building only for this property. The
Company will not own the underlying land; although, the Company anticipates
entering into a tri-party agreement with the lessee and the landlord of the
land in order to provide the Company with certain rights with respect to
the land on which the building is located.
(3) In the event that the aggregate amount of percentage rent paid by the
lessee to the Company over the term of the lease shall equal or exceed 15%
of the purchase price paid by the Company, then the option purchase price
shall equal one dollar. In the event that the aggregate percentage rent
paid shall be less than 15% of the purchase price paid by the Company, then
the option purchase price shall equal the difference of 15% of the purchase
price, less the aggregate percentage rent paid to the landlord by the
lessee under the lease.
(4) The "Building Overage Multiplier" is calculated as follows:
Building Overage Multiplier = (purchase price of the
building)/[purchase price of the building + (annual rent due under the land
lease/land lease cap rate)]
- 4 -
<PAGE>
The following table sets forth the location of the ten Properties
acquired by the Company, including the nine Properties in which the Company
acquired the land and building and the one Property in which the Company
acquired the building only, from July 17, 1996 through September 19, 1996, a
description of the competition, and a summary of the principal terms of the
acquisition and lease of each Property.
- 5 -
<PAGE>
PROPERTY ACQUISITIONS
From July 17, 1996 through September 19, 1996
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Percentage Option
Competition Price (1) Acquired Options Annual Rent (2) Rent To Purchase
<S> <C>
Boston Market (9) $762,737 07/24/96 07/2011; 10.38% of Total Cost for each at any time
(the "Upland Property") (excluding five five- (4); increases by 10% lease year after the
Restaurant to be constructed closing and year renewal after the fifth lease after the fifth lease
development options year and after every fifth lease year
The Upland Property is located costs) (3) five years thereafter year, (i) 4%
at the northeast quadrant of during the lease term of annual
the intersection of Mountain gross sales
Avenue and Foothill Boulevard, minus (ii)
Upland, San Bernardino County, the minimum
California in an area of mixed annual rent
retail, commercial, and for such
residential development. lease year
Other fast-food and family-
style restaurants located in
proximity to the Upland
Property include an Burger
King, a Taco Bell, a KFC, two
Del Taco's, a Jack in the Box,
a McDonald's, an Outback
Steakhouse and several local
restaurants.
Jack in the Box $387,621 08/05/96 07/2014; 10.75% of Total Cost for each at any
(the "Houston #2 Property") (excluding four five- (4); increases by 8% lease year, time
Restaurant to be constructed closing and year renewal after the fifth lease (i) 5% of after the
development options year and by 10% after annual gross seventh
The Houston #2 Property is costs (3) every five years sales minus lease
located on the south side of thereafter during the (ii) the year
Interstate 45 and U.S. Highway lease term minimum
90A in Houston, Harris County, annual rent
Texas, in an area of mixed for such
retail, commercial, and lease year
residential development. (5)
Other fast-food and family-
style restaurants located
inproximity to the Houston #2
Property include two
Whataburger's, a Taco Bell, a
Wendy's, a Pizza Hut, a Little
Caesar's, a McDonald's, and a
local restaurant.
-6-
<PAGE>
Applebee's $879,753 08/23/96 08/2016; two 11% of Total Cost (4); for each at any
(the "Montclair Property") (excluding five-year increases by 10% after lease year, time
Restaurant to be constructed closing and renewal the fifth lease year (i) 5% of after the
development options and after every five annual gross fifth
The Montclair Property is costs) (3) years thereafter sales minus lease
located on a pad site within during the lease term (ii) the year (6)
the Montclair Plaza Regional minimum
Mall, on the east side of annual rent
Montevista Avenue, north of I- for such
10, in Montclair, San lease year
Bernardino County, California,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Montclair Property include an
Olive Garden, a Tony Roma's, a
Red Lobster, and a local
restaurant.
Golden Corral $997,296 08/23/96 05/2010; $142,823; increases by for each upon the
(the "Brooklyn Property") (excluding (8) three five- 10% after the fifth lease year, expiration
Existing restaurant closing year renewal lease year and after (i) 4% of of the
costs) options every five years annual gross lease (7)
The Brooklyn Property is thereafter during the sales minus
located at Northcliff Avenue lease term (ii) the
and Ridge Road in Brooklyn, minimum
Cuyahoga County, Ohio, in an annual rent
area of mixed retail, for such
commercial, and residential lease year
development. Other fast-food
and family-style restaurants
located in proximity to the
Brooklyn Property include an
Applebee's, a McDonald's, a
Dunkin Donuts, a Boston
Market, and several local
restaurants.
-7-
<PAGE>
Boston Market (9) $664,898 09/06/96 09/2011; 10.38% of Total Cost for each at any
(the "La Quinta Property") (excluding five five- (4); increases by 10% lease year time
Restaurant to be constructed closing year renewal after the fifth lease after the after the
and options year and after every fifth lease fifth
The La Quinta Property is development five years thereafter year, (i) 4% lease
located on a pad site within costs) (3) during the lease term of annual year
the Albertson's/Walmart gross sales
Shopping Center, at the minus (ii)
northeast quadrant of State the minimum
Highway 111 and Simon Drive, annual rent
in La Quinta, Riverside for such
County, California, in an area lease year
of mixed retail, commercial,
residential, and recreational
development. Other fast-food
and family-style restaurants
located in proximity to the La
Quinta Property include a Taco
Bell, a McDonald's, and
several local restaurants.
Boston Market (9) $559,682 09/17/96 07/2011; 10.38% of Total Cost for each at any
(the "Merced Property") (excluding five five- (4); increases by 10% lease year time
Restaurant to be constructed closing year renewal after the fifth lease after the after the
and options year and after every fifth lease fifth
The Merced Property is located development five years thereafter year (i) 4% lease
at the northwest corner of the costs) (3) during the lease term of annual year
intersection of "M" Street and gross sales
Olive Avenue in Merced, Merced minus (ii)
County, California, in an area the minimum
of mixed retail, commercial, annual rent
and residential development. for such
Other fast-food and family- lease year
style restaurants located in
proximity to the Merced
Property include a Burger
King, an IHOP, a Jack in the
Box, a McDonald's, a Pizza Hut,
a Red Lobster, and several
local restaurants.
-8-
<PAGE>
Ryan's Family Steak House $654,588 09/18/96 09/2016; two 10.875% of Total Cost for each at any
(the "Spring Hill Property") (excluding five-year (4); increases by 12% lease year, time
Restaurant to be constructed closing renewal after the fifth lease (i) 5% of after the
and options year and after every annual gross tenth
The Spring Hill Property is development five years thereafter sales minus lease
located at the northwest costs) (3) during the lease term (ii) the year
corner of Cortez Boulevard and minimum
Chambord Street in Spring annual rent
Hill, Hernando County, for such
Florida, in an area of mixed lease year
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Spring Hill
Property include an Arby's, a
McDonald's, a Subway Sandwich
Shop, a Wendy's, and a local
restaurant.
Arby's $790,676 09/18/96 09/2016; two $81,044; increases by for each during
(the "Avon Property") (excluding five-year 4.14% after the third lease year, the
Existing restaurant closing renewal lease year and after (i) 4% of seventh
costs) options every three years annual gross and tenth
The Avon Property is located thereafter during the sales minus lease
on the southwest corner of lease term (ii) the years
Avon Crossing Drive and minimum only
Merchants Drive in the Avon annual rent
Crossing Shopping Center, in for such
Avon, Hendricks County, lease year
Indiana, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Avon Property
include a Burger King, a
McDonald's, a Noble Roman's
Pizza, a Taco Bell, a Wendy's,
and several local restaurants.
-9-
<PAGE>
Boston Market (9) $697,652 09/19/96 09/2011; 10.38% of Total Cost for each at any
(the "Florissant Property") (excluding five five- (4); increases by 10% lease year time
Restaurant to be constructed closing year renewal after the fifth lease after the after the
and options year and after every fifth lease fifth
The Florissant Property is development five years thereafter year (i) 5% lease
located on the north side of costs) (3) during the lease term of annual year
U.S. Highway 67 North, gross sales
northeast of the intersection minus (ii)
of North Waterford Road and the minimum
U.S. Highway 67, in annual rent
Florissant, St. Louis County, for such
Missouri, in an area of mixed lease year
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Florissant
Property include an
Applebee's, a Burger King, a
Church's Fried Chicken, a
Dairy Queen, a Denny's, a
Domino's, a KFC, a McDonald's,
a Ponderosa, a Rally's, a
Shoney's, a Subway Sandwich
Shop, two Taco Bell's, a
Wendy's, a White Castle, and
several local restaurants.
Applebee's $732,477 09/19/96 09/2016; two 10.87% of Total Cost for each at any
(the "Salinas Property") (excluding five-year (4); increases by 10% lease year, time
Restaurant to be constructed closing renewal after the fifth lease (i) 5% of after the
and options year and after every annual gross seventh
The Salinas Property is development five years thereafter sales minus lease
located on the west side of costs) (3) during the lease term (ii) the year
North Davis Road in the minimum
Westridge Shopping Center, in annual rent
Salinas, Monterey County, for such
California, in an area of lease year
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Salinas
Property include an IHOP, and
several local restaurants.
</TABLE>
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<PAGE>
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for construction
Properties, once the buildings are constructed, is set forth below:
Property Federal Tax Basis Property Federal Tax Basis
Upland Property $ 433,000 Merced Property $ 401,000
Houston #2 Property 595,000 Spring Hill Property 1,363,000
Montclair Property 825,000 Avon Property 484,000
Brooklyn Property 1,040,000 Florissant Property 618,000
La Quinta Property 485,000 Salinas Property 648,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the Upland, La
Quinta, Merced and Florissant Properties, minimum annual rent will become
due and payable on the date the tenant receives from the landlord its final
funding of the construction costs. For the Houston #2 Property, minimum
annual rent will become due and payable on the earlier of (i) the date the
restaurant opens for business to the public or (ii) 180 days after
execution of the lease. For the Montclair Property, minimum annual rent
will become due and payable on the earlier of (i) the date the certificate
of occupancy for the restaurant is issued, (ii) the date the restaurant
opens for business to the public, (iii) 180 days after execution of the
lease or (iv) the date the tenant receives from the landlord its final
funding of the construction costs. For the Spring Hill Property, minimum
annual rent will become due and payable on the earlier of (i) the date the
certificate of occupancy for the restaurant is issued, (ii) the date the
restaurant opens for business to the public, (iii) 150 days after execution
of the lease or (iv) the date the tenant receives from the landlord its
final funding of the construction costs. For the Salinas Property, minimum
annual rent will become due and payable on the earlier of (i) the date the
certificate of occupancy for the restaurant is issued, (ii) the date the
restaurant opens for business to the public, (iii) 140 days after execution
of the lease or (iv) the date the tenant receives from the landlord its
final funding of the construction costs. During the period commencing with
the effective date of the lease to the date minimum annual rent becomes
payable for the Upland, La Quinta, Merced and Florissant Properties, as
described above, the tenant shall pay monthly "interim rent" equal to
10.38% per annum of the amount funded by the Company in connection with the
purchase and construction of the Property. During the period commencing
with the effective date of the lease to the date minimum annual rent
becomes payable for the Houston #2 Property, as described above, the tenant
shall pay monthly "interim rent" equal to 10.75% per annum of the amount
funded by the Company in connection with the purchase and construction of
the Properties. During the period commencing with the effective date of the
lease to the date minimum annual rent becomes payable for the Montclair
Property, as described above, the tenant shall pay monthly "interim rent"
equal to 11 percent per annum of the amount funded by the Company in
connection with the purchase and construction of the Property. During the
period commencing with the effective date of the lease to the date minimum
annual rent becomes payable for the Spring Hill Property, as described
above, the tenant shall pay monthly "interim rent" equal to 10.875% per
annum of the amount funded by the Company in connection with the purchase
and construction of the Property. During the period commencing with the
effective date of the lease to the date minimum annual rent becomes payable
for the Salinas Property, as described above, the tenant shall pay monthly
"interim rent" equal to 10.87% per annum of the amount funded by the
Company in connection with the purchase and construction of the Property.
- 11 -
<PAGE>
(3) The development agreements for the Properties which are to be constructed,
provide that construction must be completed no later than the dates set
forth below. The maximum cost to the Company, (including the purchase price
of the land (if applicable), development costs (if applicable), and closing
and acquisition costs) is not expected to, but may, exceed the amounts set
forth below:
Property Estimated Maximum Cost Estimated Final Completion Date
Upland Property $ 977,643 January 20, 1997
Houston #2 Property 926,235 February 1, 1997
Montclair Property 1,654,545 February 19, 1997
La Quinta Property 951,872 March 5, 1997
Merced Property 930,834 March 16, 1997
Spring Hill Property 1,881,818 February 15, 1997
Florissant Property 1,264,986 March 18, 1997
Salinas Property 1,339,000 February 6, 1997
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
Property, (ii) closing costs, and (iii) actual development costs incurred
under the development agreement.
(5) Percentage rent shall be calculated on a calendar year basis (January 1 to
December 31).
(6) The lessee also has the option to purchase the Property after the lessee
operates at least five Applebee's restaurants.
(7) In the event that the aggregate amount of percentage rent paid by the
lessee to the Company over the term of the lease shall equal or exceed 15%
of the purchase price paid by the Company, then the option purchase price
shall equal one dollar. In the event that the aggregate percentage rent
paid shall be less than 15% of the purchase price paid by the Company, then
the option purchase price shall equal the difference of 15% of the purchase
price, less the aggregate percentage rent paid to the landlord by the
lessee under the lease.
(8) The Company accepted an assignment of an interest in the ground lease
relating to the Brooklyn Property effective August 23, 1996.
(9) The lessee of the Upland, La Quinta, Merced and Florissant Properties is
the same unaffiliated lessee.
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<PAGE>
BORROWING AND SECURED EQUIPMENT LEASES
On August 9, 1996, the Company obtained an advance of $574,557 under
its $15,000,000 Loan. The advance is a fully amortizing term loan repayable over
five years and bears interest at a rate per annum equal to 215 basis points
above the Reserve Adjusted LIBOR Rate (as defined in the Loan). The proceeds of
the advance were used to acquire Equipment for a restaurant property in
Marlboro, New Jersey, at a cost of $562,742, to pay a Secured Equipment Lease
Servicing Fee of $11,255 to the Advisor and to pay closing costs of $560.
On August 28, 1996, the Company obtained an advance of $102,570 under
its $15,000,000 Loan for partial funding of the Equipment for a restaurant
property in Winnemucca, Nevada, at a cost of $100,000, to pay a Secured
Equipment Lease Servicing Fee of $2,000 to the Advisor and to pay closing costs
of $570. The Company anticipates obtaining another advance under its Loan to
fund the balance of the acquisition price of the Equipment within four months of
obtaining the initial advance of $102,570 described above. The advance of
$102,570 is an interest only loan for the first three months and upon obtaining
the additional advance during the fourth month, the $102,570 plus the additional
advance will become a fully amortizing term loan repayable over the duration of
the Winnemucca Secured Equipment Lease, but in no event, greater than six years.
The advances will bear interest at a rate per annum equal to 215 basis points
above the Reserve Adjusted LIBOR Rate (as defined in the Loan).
The following table sets forth a summary of the principal terms of the
acquisition and lease of the Equipment.
- 13 -
<PAGE>
SECURED EQUIPMENT LEASES
From July 17, 1996 through September 19, 1996
<TABLE>
<CAPTION>
Description Purchase Date Lease Annual Option
Price (1) Acquired Expiration Rent To Purchase
<S> <C>
Equipment for TGI $562,742 08/09/96 08/2001 $146,484 (2) (3)
Friday's restaurant in (excluding
Marlboro, New Jersey closing costs
(The "Marlboro Secured and Secured
Equipment Lease") Equipment
Lease
Servicing Fee)
Equipment for Denny's $100,000 (4) 08/28/96 (5) (5) (6)
restaurant in Winnemucca, (excluding
Nevada (The "Winnemucca closing costs
Secured Equipment Lease") and Secured
Equipment
Lease
Servicing Fee)
</TABLE>
FOOTNOTES:
(1) The Secured Equipment Lease is expected to be treated as a loan secured by
personal property for federal income tax purposes.
(2) Rental payments due under the Secured Equipment Lease are payable monthly,
commencing on the effective date of the lease.
(3) Lessee may purchase the Equipment prior to the expiration of the Secured
Equipment Lease, at the then present value of the remaining rental
payments, discounted at a rate of ten percent per annum.
(4) Represents partial funding of the purchase price of the Equipment. The
Company anticipates funding the remaining balance of the Equipment purchase
price within four months of the initial acquisition date.
(5) The temporary Secured Equipment Lease has a term of four months and
requires the payment of monthly rent of $913. Upon funding the balance of
the Equipment purchase price, which is expected to occur in the fourth
month following the initial Equipment funding, the Company will enter into
a final Secured Equipment Lease. The final Secured Equipment Lease is
expected to have a term of approximately seven years and provide for the
payment of annual rent (payable monthly) in an amount equal to the total
purchase price of the Equipment times 10.68%.
(6) Lessee may purchase the Equipment prior to the expiration of the final
Secured Equipment Lease, at the then present value of the remaining rental
payments, discounted at a rate of 10.68% per annum.
- 14 -
<PAGE>
PRO FORMA ESTIMATE OF TAXABLE INCOME BEFORE DIVIDENDS PAID DEDUCTION OF
CNL AMERICAN PROPERTIES FUND, INC.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM JULY 17, 1996
THROUGH SEPTEMBER 19, 1996
For a 12-Month Period (Unaudited)
The following schedule represents pro forma unaudited estimates of
taxable income before dividends paid deduction of each Property acquired by the
Company from July 17, 1996 through September 19, 1996, for the 12-month period
commencing on the date of the inception of the respective lease on such
Property. The schedule should be read in light of the accompanying footnotes.
These estimates do not purport to present actual or expected operations
of the Company for any period in the future. These estimates were prepared on
the basis described in the accompanying notes which should be read in
conjunction herewith. No single lessee or group of affiliated lessees lease
Properties or has borrowed funds from the Company with an aggregate purchase
price in excess of 20% of the expected total net offering proceeds of the
Company.
<TABLE>
<CAPTION>
Boston Market Jack in the Box Applebee's Golden Corral
Upland, CA (5)(7) Houston, TX (5) Montclair, CA (5) Brooklyn, OH (6)
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 101,479 $ 97,618 $ 176,084 $ 142,823
Asset Management Fees (2) (5,819) (5,467) (9,563) (5,921)
General and Administrative
Expenses (3) (6,292) (6,052) (10,917) (8,855)
---------- -------- -------- --------
Estimated Cash Available from
Operations 89,368 86,099 155,604 128,047
Depreciation and Amortization
Expense (4) (11,115) (15,257) (21,142) (26,658)
---------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 78,253 $ 70,842 $ 134,462 $ 101,389
========== ======== ======== =========
</TABLE>
See Footnotes
- 15 -
<PAGE>
<TABLE>
<CAPTION>
Ryan's Family
Boston Market Boston Market Steak House Arby's
La Quinta, CA (5)(7) Merced, CA (5)(7) Spring Hill, FL (5) Avon, IN
-------------------- -------------------- ------------------- ---------
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 98,804 $ 96,704 $ 204,392 $ 81,044
Asset Management Fees (2) (5,660) (5,540) (11,112) (4,738)
General and Administrative
Expenses (3) (6,126) (5,996) (12,672) (5,025)
-------- -------- -------- --------
Estimated Cash Available from
Operations 87,018 85,168 180,608 71,281
Depreciation and Amortization
Expense (4) (12,439) (10,283) (34,952) (12,415)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 74,579 $ 74,885 $ 145,656 $ 58,866
======== ======== ======== =======
</TABLE>
See Footnotes
- 16 -
<PAGE>
<TABLE>
<CAPTION>
Boston Market Applebee's
Florissant, MO (5)(7) Salinas, CA (5) Total
--------------------- --------------- -------
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 131,306 $ 145,549 $ 1,275,803
Asset Management Fees (2) (7,523) (7,950) (69,293)
General and Administrative
Expenses (3) (8,141) (9,024) (79,100)
-------- -------- ----------
Estimated Cash Available from
Operations 115,642 128,575 1,127,410
Depreciation and Amortization
Expense (4) (15,852) (16,617) (176,730)
-------- -------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 99,790 $ 111,958 $ 950,680
======== ======== ==========
</TABLE>
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if specified
levels of gross receipts are achieved.
(2) The Properties will be managed pursuant to an advisory agreement between
the Company and CNL Fund Advisors, Inc. (the "Advisor"), pursuant to which
the Advisor will receive monthly asset management fees in an amount equal
to one-twelfth of .60% of the Company's Real Estate Asset Value as of the
end of the preceding month as defined in such agreement. See "Management
Compensation."
(3) Estimated at 6.2% of gross rental income based on the previous experience
of Affiliates of the Advisor with 17 public limited partnerships which own
properties similar to those owned by the Company. Amount does not include
soliciting dealer servicing fee due to the fact that such fee will not be
incurred until December 31 of the year following the year in which the
offering terminates.
(4) The estimated federal tax basis of the depreciable portion (the building
portion) of the Properties has been depreciated on the straight-line method
over 39 years.
- 17 -
<PAGE>
(5) The development agreements for the Properties which are to be constructed,
provide that construction must be completed no later than the dates set
forth below:
Property Estimated Final Completion Date
Upland Property January 20, 1997
Houston #2 Property February 1, 1997
Montclair Property February 19, 1997
La Quinta Property March 5, 1997
Merced Property March 16, 1997
Spring Hill Property February 15, 1997
Florissant Property March 18, 1997
Salinas Property February 6, 1997
(6) The Company accepted an assignment of an interest in a ground lease
relating to the Brooklyn Property effective August 23, 1996.
(7) The lessee of the Upland, La Quinta, Merced and Florissant Properties is
the same unaffiliated lessee.
- 18 -
