FILED PURSUANT TO RULE 424B3
FILE NUMBER 333-15411
CNL AMERICAN PROPERTIES FUND, INC.
Supplement No. 2, dated October 21, 1997
to Prospectus, dated April 18, 1997
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 18, 1997. 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.
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 October 3, 1997, 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 October 3, 1997, will be reported in a
subsequent Supplement.
THE OFFERING
As of the completion of its Initial Offering, the Company had received
subscription proceeds of $150,591,765 (15,059,177 shares), including $591,765
(59,177 shares) issued pursuant to the Reinvestment Plan and after deduction of
selling commissions, marketing support and due diligence expense reimbursement
fees and offering expenses, net proceeds to the Company from its Initial
Offering totalled approximately $134,000,000. Following the completion of its
Initial Offering on February 6, 1997, the Company commenced this offering of up
to 27,500,000 Shares. As of October 3, 1997, the Company had received
subscription proceeds of $141,214,029 (14,121,403 Shares), including $1,183,289
(118,329 Shares) issued pursuant to the Reinvestment Plan, from 6,506
stockholders in connection with this offering. Net Offering Proceeds to the
Company after deduction of Selling Commissions, Marketing Support and Due
Diligence Expense Reimbursement Fees and Offering Expenses totalled
approximately $127,399,000. As of October 3, 1997, the Company had invested or
committed for investment approximately $236,499,000 of aggregate net proceeds
from the Initial Offering and this offering in 220 Properties, in providing
mortgage financing to the tenants of the 44 Properties consisting of land only
to purchase the buildings on these Properties and the buildings on two
additional properties through Mortgage Loans, and in paying acquisition fees and
certain acquisition expenses, leaving approximately $24,944,000 in Net Offering
Proceeds available for investment in Properties and Mortgage Loans. As of
October 3, 1997, $6,354,631 of the Net Offering Proceeds from this offering had
been incurred as Acquisition Fees to the Advisor.
SUBSEQUENT OFFERING
On October 10, 1997, the Company filed a registration statement with
the Securities and Exchange Commission in connection with the proposed sale by
the Company of up to 34,500,000 shares of common stock in a public offering (the
"Subsequent Offering") expected to commence immediately following the
termination of this offering. Of the 34,500,000 shares of common stock to be
offered, 2,000,000 will be available only to stockholders purchasing through the
Reinvestment Plan. The price per share and the other terms of the Subsequent
Offering, including the percentage of gross proceeds payable to the Managing
Dealer for selling commissions and expenses in connection with the offering,
payable to the Advisor for acquisition fees and acquisition expenses and
reimbursable to the Advisor for offering expenses, will be the same as those for
this offering. Net proceeds from the Subsequent Offering will be invested in
additional Properties and Mortgage Loans.
<PAGE>
BUSINESS
GENERAL
The Company acquires Properties which are leased on a long-term
(generally, 15 to 20 years, plus renewal options for an additional 10 to 20
years), "triple-net" basis. With proceeds of this offering, the Company intends
to purchase fast-food, family-style, and casual dining restaurant Properties.
"Triple-net" means that the tenant will be responsible for repairs, maintenance,
property taxes, utilities and insurance. The Properties may consist of land and
building, the land underlying the restaurant building with the building owned by
the tenant or a third party, and the building only with the land owned by a
third party. The Company also provides financing (the "Mortgage Loans") for the
purchase of buildings, generally by tenants that lease the underlying land from
the Company. To a lesser extent, the Company offers furniture, fixture and
equipment ("Equipment") financing to operators of Restaurant Chains pursuant to
which the Company will finance, through direct financing leases or loans, the
Equipment (collectively, the "Secured Equipment Leases.")
As of October 3, 1997, the Company owned 220 Properties. It is
anticipated that the Company will acquire a total of 400 to 450 Properties if
the maximum number of Shares is sold in this offering (including 260 to 300
Properties to be acquired with the proceeds of this offering).
The Properties, which typically are freestanding and are located across
the United States, are leased to operators of the Restaurant Chains selected by
the Advisor and approved by the Board of Directors. Each Property acquisition
and Mortgage Loan commitment by the Company is subject to the approval of the
Board of Directors. Properties purchased by the Company are leased under
arrangements requiring base annual rent equal to a specified percentage of the
Company's cost of purchasing a particular Property, with automatic rent
increases, and/or percentage rent based on gross sales. See "Description of
Leases -- Computation of Lease Payments," below.
The Company invests in Properties of selected Restaurant
Chains that are national and regional restaurant chains, primarily fast-food,
family-style, and casual dining chains. Fast-food restaurants feature quality
food and quick service, which often includes drive-through service, and offer a
variety of menu items such as hamburgers, steaks, seafood, chili, pizza, pasta
dishes, chicken, hot and cold sandwiches, and salads. Family-style restaurants
feature services that generally are associated with full-service restaurants,
such as full table service and cooked-to-order food, but at more moderate
prices. The casual dining (or dinner house) concept features a variety of
popular contemporary foods, full table service, moderate prices, and
surroundings that are appealing to families. The casual dining segment of the
restaurant industry, like the family-style segment, features services that
generally are associated with the full-service restaurant category. According to
forecasts appearing in the January 1, 1997 issue of Restaurants and
Institutions, it is projected that the casual dining segment of full-service
restaurants sales will experience 3.8% real growth in sales this year, with
sales predicted to reach $49 billion. The top 15 casual dining chains by sales
have a total of 2,977 restaurants throughout the United States.
The restaurant industry is one of the largest industries in the United
States in volume of sales and number of employees (more than 9 million persons)
and includes fast-food outlets, cafeterias, lunchrooms, convenience stores,
family-style restaurants, casual dining facilities, full-service restaurants,
and contract and industrial feeders. By the year 2000, food service sales are
expected to exceed $392 billion. Industry publications project that restaurant
industry sales will increase from $173.7 billion in 1985 to $320 billion in
1997. Restaurant industry sales for 1996 are projected to be $307.6 billion. In
1996, nominal growth, which is comprised of real growth and inflationary growth,
was 4.6% and is estimated to be 4.2% in 1997. Real growth of the restaurant
industry in 1996 was 1.7%, and industry analysts currently estimate that the
restaurant industry will achieve 1.4% real growth in 1997; however, according to
the National Restaurant Association, fast-food restaurants should outpace the
industry average for real growth, with a projected 2.5% increase over 1996.
Sales in this segment of the restaurant industry are projected to be $103.5
billion for 1997.
The Company invests in the fast-food, family-style, and casual dining
segments of the restaurant industry, the most rapidly growing segments in recent
years. According to the National Restaurant Association, 51% of adults eat at a
quick-service restaurant and 42% of adults patronize a moderately-priced family
restaurant at least once each week. In addition, the National Restaurant
Association indicates that Americans spend approximately 43 cents of every food
dollar on dining away from home. Surveys published in Restaurant Business
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indicate that families with children choose quick-service restaurants four out
of every five times they dine out. Additionally, according to The Wall Street
Journal (May 11, 1992), the average American spends $19,791 on fast-food in a
lifetime. Further, according to Nation's Restaurant News, the 100 largest
restaurant chains posted an average of 4.59% growth in their systemwide sales
figures for 1996. Casual-theme dining concepts are the chains showing the
strongest growth. In 1996, the family-style segment experienced sales growth of
3.61% over 1995 figures, and, the casual dining segment experienced systemwide
sales growth in 1996 of 12.37%, compared to 12.99% in 1995. Management believes
that the Company will have the opportunity to participate in this growth through
the ownership of Properties leased to operators of the Restaurant Chains.
The fast-food, family-style and casual dining segments of the
restaurant industry have demonstrated their ability to adapt to changes in
consumer preferences, such as health and dietary issues, decreases in the
disposable income of consumers and environmental awareness, through various
innovative techniques, including special value pricing and promotions, increased
advertising, menu changes featuring low-calorie, low-cholesterol menu items, and
new packaging and energy conservation techniques.
The table set forth below provides information with respect to certain
Restaurant Chains in which the Company and Affiliates of the Company (consisting
of a listed public REIT, 18 public partnerships and 8 private partnerships) have
invested, as of June 30, 1997:
<TABLE>
<CAPTION>
Aggregate
Dollars Invested by Percentage of Number of
Name Company Affiliates Dollars Invested Prior Programs
- ---- ------------------ ---------------- --------------
<S> <C>
Golden Corral $143,663,000 16.7% 26
Burger King 105,659,000 12.3% 25
Denny's 91,365,000 10.6% 20
Jack in the Box 90,060,000 10.5% 15
Hardee's 58,599,000 6.8% 13
Boston Market 46,259,000 5.4% 8
Shoney's 35,663,000 4.2% 13
Long John Silver's 32,029,000 3.7% 6
Wendy's 30,011,000 3.5% 16
TGI Friday's 28,184,000 3.3% 9
Darryl's 22,296,000 2.6% 4
Checkers 21,263,000 2.5% 7
Perkins 16,311,000 1.9% 9
Pizza Hut 15,578,000 1.8% 8
KFC 13,642,000 1.6% 10
Popeyes 10,589,000 1.2% 9
Taco Bell 6,915,000 0.8% 7
Black-eyed Pea 6,432,000 0.8% 4
Arby's 5,573,000 0.7% 5
Houlihan's 4,741,000 0.6% 1
</TABLE>
COMPLETED INVESTMENTS
As of October 3, 1997, the Company had invested or committed for
investment approximately $236,499,000 of the aggregate net proceeds from the
Initial Offering and this offering in 220 Properties (156 Properties which
consist of land and building, 44 Properties which consist of land only and 20
Properties which consist of building only), in Mortgage Loans to the tenants of
the 44 Properties consisting of land only and two additional properties and to
pay related Acquisition Fees and Acquisition Expenses. See "Certain
Transactions." All of the Properties are owned directly by the Company, except
for one Property which is owned through a joint venture arrangement. All of the
Properties were acquired since the Company commenced operations on June 1, 1995
and have leases expiring from 14 to 25 years after the date on which each lease
commenced.
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<PAGE>
The following tables set forth information for the Properties owned by
the Company as of October 3, 1997, including the number of Properties by
Restaurant Chain and the number of Properties by state.
Restaurant Number of Properties
---------- --------------------
Applebee's 2
Arby's 8
Bennigan's 1
Black-eyed Pea 18
Boston Market 32
Burger King 9
Charley's Place 2
Darryl's 15
Denny's 4
Einstein Bros. Bagels 2
Golden Corral 26
Houlihan's 3
IHOP 8
Jack in the Box 26
Kenny Rogers Roasters 1
KFC 1
Mr. Fable's 1
Pizza Hut 44
Popeyes 1
Ruby Tuesday's 1
Ruth's Chris Steakhouse 1
Ryan's Family Steak House 1
Shoney's 3
T.G.I. Friday's 1
Tumbleweed Southwest Mesquite Grill & Bar 5
Wendy's 4
----
Total 220
=======
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<PAGE>
State Number of Properties
----- --------------------
Alabama 5
Arizona 8
California 19
Colorado 4
Connecticut 1
Delaware 1
Florida 13
Georgia 2
Idaho 1
Illinois 5
Indiana 5
Iowa 1
Kansas 3
Kentucky 4
Maryland 6
Michigan 7
Minnesota 2
Missouri 6
Nebraska 1
Nevada 2
New Mexico 3
North Carolina 9
Ohio 35
Oklahoma 4
Oregon 1
Pennsylvania 4
Tennessee 13
Texas 34
Utah 1
Virginia 8
Washington 2
West Virginia 10
---
Total 220
===
PROPERTY ACQUISITIONS
Between April 3, 1997 and October 3, 1997, the Company acquired 95
Properties, including 81 Properties consisting of land and building, 13
Properties consisting of building only and one Property consisting of land only,
with the remaining net offering proceeds of the Initial Offering and a portion
of the Net Offering Proceeds of this offering. These Properties are six Arby's
Properties (one in each of Lexington, Greensboro, Greenville, Jonesville,
Kernersville and Kinston, North Carolina), 15 Boston Market Properties (one in
each of Liberty, Missouri; Indianapolis, Indiana; Vacaville, California; Lansing
Michigan; Newport News, Virginia; Hoover, Alabama; Arvada and Edgewater,
Colorado; San Antonio and Stafford, Texas; and Baltimore, Gambrills, Jessup,
Riverdale, and Waldorf, Maryland), 13 Black-eyed Pea Properties (one in each of
Forestville, Maryland; Wichita, Kansas; Scottsdale, Mesa and Tucson, Arizona;
Dallas, Houston, and Waco, Texas; two in Albuquerque, New Mexico; and three in
Phoenix, Arizona), eight Jack in the Box Properties (one in each of Enumclaw,
Washington; Fresno, Woodland and West Sacramento, California; and Bacliff,
Corinth, Channelview, and Garland, Texas), two Einstein Bros. Bagels Properties
(one in each of Dearborn, Michigan, and Springfield, Virginia), two Shoney's
Properties (one in each of Guadalupe, Arizona; and Las Vegas, Nevada), one Pizza
Hut Property (in Dover, Ohio), ten Golden Corral Properties (one in each of
Corpus Christi, Texas; Liberty, Missouri; Mobile, Alabama; Olathe, Kansas; Enid
and
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Duncan, Oklahoma; Fort Walton Beach and Palatka, Florida; and two in
Jacksonville, Florida), eight IHOP Properties (one in each of Stockbridge,
Georgia; Elk Grove, California; Loveland, Colorado; Leesburg and Fairfax,
Virginia; and Houston, Lake Jackson and Victoria, Texas), one Popeyes Property
(in Starke, Florida), one Ruth's Chris Steak House Property (in Tampa, Florida),
two Charley's Place Properties (one in each of King of Prussia, Pennsylvania,
and McLean, Virginia), 15 Darryl's Properties (one in each of Evansville,
Indiana; Louisville, Kentucky; Hampton, Virginia; Winston-Salem, North Carolina;
Huntsville, Mobile and Montgomery, Alabama; Knoxville and Nashville, Tennessee;
Orlando and Pensacola, Florida; and two in each of Raleigh, North Carolina, and
Richmond, Virginia), three Houlihan's Properties (one in each of Bethel Park,
Langhorne and Plymouth Meeting, Pennsylvania) , one KFC Property (in Putnam,
Connecticut), five Tumbleweed Southwest Mesquite Grill & Bar Properties (one in
each of Lawrence, Kansas; Cookeville, Hendersonville, Nashville and
Murfreesboro, Tennessee), one Ruby Tuesday's Property (in London, Kentucky) and
one T.G.I. Friday's Property (in Superstition Springs, Arizona). For information
regarding the Properties acquired by the Company prior to April 3, 1997, see the
Prospectus dated April 18, 1997.
In connection with the purchase of the six Arby's Properties, the 15
Boston Market Properties, the two Einstein Bros. Bagels Properties, the eight
Jack in the Box Properties, the two Shoney's Properties, the ten Golden Corral
Properties, the eight IHOP Properties, the Popeyes Property, the Ruth's Chris
Steak House Property, the two Charley's Place Properties, the 15 Darryl's
Properties, the three Houlihan's Properties , the KFC Property, the Ruby
Tuesday's Property, the T.G.I. Friday's Property, the Black-eyed Pea Property in
Mesa, Arizona, and four of the Tumbleweed Southwest Mesquite Grill & Bar
Properties in Lawrence, Kansas; Cookeville, Nashville and Murfreesboro,
Tennessee, 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 or renovated, 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."
The purchase prices for the Shoney's Properties in Guadalupe, Arizona ;
and Las Vegas, Nevada, and the T.G.I. Friday's Property in Superstition Springs,
Arizona, include development fees of $49,500, $73,191 and $17,500, respectively,
to an Affiliate of the Advisor for services provided in connection with the
development of the Properties. The Company considers development fees, to the
extent that they are paid to Affiliates, to be Acquisition Fees. Such
development fees must be approved by a majority of the Directors (including a
majority of the Independent Directors) not otherwise interested in such
transactions, subject to a determination that such transactions
are fair and reasonable to the Company and on terms and conditions not less
favorable to the Company than those available from unaffiliated third parties
and not less favorable than those available from the Advisor or its Affiliates
in transactions with unaffiliated third parties. See the sections of the
Prospectus entitled "Management Compensation" and "Business - Site Selection and
Acquisition of Properties."
In connection with the Black-eyed Pea Properties, one of which is
located in each of Scottsdale and Tucson, Arizona; and three of which are
located in Phoenix, Arizona, all of which are building only, 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." In connection
with the purchase of the Scottsdale Property, which is to be renovated, the
Company has entered into development and indemnification and put agreements with
the lessee. 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." In connection with these
acquisitions, the Company has also entered into landlord estoppel agreements
with the landlords of the land and collateral assignments of the ground leases
with the lessees in order to provide the Company with certain rights with
respect to the land on which the buildings are located.
In connection with the Tumbleweed Southwest Mesquite Grill & Bar
Property in Hendersonville, Tennessee, and the Black-eyed Pea Properties, one of
which is located in each of Dallas, Houston, and Waco, Texas; Forestville,
Maryland; and Wichita Kansas; and two of which are located in Albuquerque, New
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Mexico; all of which are building only, 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." In connection with the purchase of
the Hendersonville Property, which is to be renovated, the Company has entered
into development and indemnification and put agreements with the lessee. 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." In connection with these acquisitions, the Company has also
entered into tri-party agreements with the lessees and the owners of the land.
The tri-party agreements provide that the ground lessees are responsible for all
obligations under the ground leases and provide certain rights to the Company
relating to the maintenance of its interest in the buildings in the event of a
default by the lessees under the terms of the ground leases.
In connection with the Pizza Hut Property in Dover, Ohio, which is land
only, the Company acquired the land and is leasing this parcel to the lessee,
Castle Hill Holdings VII, L.L.C. ("Castle Hill"), along with eight Pizza Hut
Properties previously acquired, pursuant to a master lease agreement (the
"Master Lease Agreement"). Castle Hill has subleased the Pizza Hut Property in
Dover, Ohio, along with the eight Pizza Hut Properties previously acquired, to
one of its affiliates, Midland Food Services III, L.L.C., which is the operator
of the restaurants. The general terms of the Master Lease Agreement are similar
to those described in the section of the Prospectus entitled "Business
Description of Property Leases." If the lessee does not exercise its option to
purchase the Properties upon termination of the Master Lease Agreement, the
sublessee and lessee will surrender possession of the Properties to the Company,
together with any improvements on such Properties. The lessee owns the buildings
located on the Pizza Hut Property in Dover, Ohio, along with the eight Pizza Hut
Properties previously acquired. In addition, the Company provided mortgage
financing of $4,200,000 to the lessee, pursuant to a Mortgage Loan evidenced by
a master mortgage note (the "Master Mortgage Note") which is collateralized by
the building improvements on the Pizza Hut Property in Dover, Ohio, the eight
Pizza Hut Properties previously acquired, and two additional Pizza Hut
Properties in Wintersville, Ohio, and Weirton, West Virginia, which will not be
owned by the Company, as described in the section of the Prospectus entitled
"Business - Property Acquisitions."
The following table sets forth the location of the 95 Properties,
including 81 Properties consisting of land and building, 13 Properties
consisting of building only and one Property consisting of land only, acquired
by the Company, from April 3, 1997 through October 3, 1997, a description of the
competition, and a summary of the principal terms of the acquisition and lease
of each Property.
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<PAGE>
PROPERTY ACQUISITIONS
From April 3, 1997 through October 3, 1997
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET $629,435 04/16/97 04/2012; 10.38% of Total for each lease at any time
(the "Arvada #2 Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Arvada #2 Property is located (3) fifth lease annual gross
on the northwest quadrant of year and after sales minus
West 55th Avenue and the every five (ii) the
Wadsworth Bypass, in Arvada, years minimum annual
Jefferson County, Colorado, in thereafter rent for such
an area of mixed retail, during the lease year
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Arvada #2 Property include an
Applebee's, a Ruby Tuesday, an
IHOP, a Fazoli's, a
McDonald's, and several local
restaurants.
BOSTON MARKET $456,801 04/16/97 04/2012; 10.38% of Total for each lease at any time
(the "Liberty #1 Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 5% of year
The Liberty #1 Property is (3) fifth lease annual gross
located at the southeast year and after sales minus
corner of the intersection of every five (ii) the
North Highway 291 and Landmark years minimum annual
Avenue, in Liberty, Clay thereafter rent for such
County, Missouri, in an area during the lease year
of mixed retail, commercial, lease term
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Liberty #1
Property include a Ponderosa,
a KFC, a Perkins, and a Pizza
Hut.
</TABLE>
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<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
EINSTEIN BROS. BAGELS (5) $422,512 04/16/97 04/2012; 10.38% of Total for each lease at any time
(the "Dearborn Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Dearborn Property is (3) fifth lease annual gross
located on the southeast year and after sales minus
corner of Telegraph Road and every five (ii) the
Sheridan Road, in Dearborn, years minimum annual
Wayne County, Michigan, in an thereafter rent for such
area of mixed retail, during the lease year
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Dearborn Property include a
Boston Market, a Subway
Sandwich Shop, and several
local restaurants.
JACK IN THE BOX (6) $843,431 04/16/97 04/2015; $86,452 (7); for each lease at any time
(the "Enumclaw Property") (3)(7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be renovated year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Enumclaw Property is after every (ii) the
located at the northwest five years minimum annual
corner of the intersection of thereafter rent for such
Griffin Avenue and Cedar during the lease year (8)
Street, in Enumclaw, King lease term
County, Washington, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Enumclaw
Property include a Subway
Sandwich Shop, a Burger King,
a McDonald's, a Pizza Hut, and
a local restaurant.
</TABLE>
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<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
SHONEY'S (9) $679,095 04/16/97 04/2017; two 11% of Total for each lease at any time
(the "Guadalupe Property") (excluding five-year Cost (4); year, (i) 6% of after the
Restaurant to be constructed development renewal increases by annual gross seventh
costs) options 10% after the sales minus lease year
The Guadalupe Property is (3) fifth lease (ii) the
located within the southeast year and after minimum annual
quadrant of Interstate 10 and every five rent for such
Baseline Road, in Guadalupe, years lease year
Maricopa County, Arizona, in thereafter
an area of mixed retail, during the
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Guadalupe Property include a
Denny's, a Taco Bell, a KFC, a
Jack in the Box, a Waffle
House, and several local
restaurants.
BLACK-EYED PEA (10) $769,863 04/17/97 02/2011 $105,450 (7); None at any time
(the "Scottsdale Property") (3)(7) increases to after the
Restaurant to be renovated $107,511 during fifth lease
the eleventh year
The Scottsdale Property is through
located within the southeast fourteenth
quadrant of Indian Bend Road lease years
and Pima Road, in Scottsdale,
Maricopa County, Arizona, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Scottsdale Property include a
KFC, a Denny's, an Arby's, a
Taco Bell, a McDonald's, and a
local restaurant.
</TABLE>
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<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
PIZZA HUT (11)(12) $224,378 04/17/97 03/2017; two $23,560; None at any time
(the "Dover Property") ten-year increases by after the
Land only renewal 10% after the seventh
options fifth and tenth lease year
The Dover Property is located lease years and
on the west side of Boulevard 12% after the
Street, in Dover, Tuscarawas fifteenth lease
County, Ohio, in an area of year
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Dover
Property include a Taco Bell,
a Long John Silver's, a
Friendly's, and several local
restaurants.
JACK IN THE BOX (6) $1,049,420 04/29/97 04/2015; $107,566 (7); for each lease at any time
(the "Bacliff Property") (3)(7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be constructed year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Bacliff Property is after every (ii) the
located on the southeast five years minimum annual
corner of Texas State Highway thereafter rent for such
146 and FM 646, in Bacliff, during the lease year (8)
Galveston County, Texas, in an lease term
area of mixed commercial and
residential development.
</TABLE>
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<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $860,790 04/29/97 04/2012; 10.38% of Total for each lease at any time
(the "Indianapolis Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Indianapolis Property is (3) fifth lease annual gross
located on the west side of year and after sales minus
U.S. 31 South, in every five (ii) the
Indianapolis, Marion County, years minimum annual
Indiana, in an area of mixed thereafter rent for such
retail, commercial, and during the lease year
residential development. lease term
Other fast-food and family-
style restaurants located in
proximity to the Indianapolis
Property include a McDonald's,
a Steak N Shake, a Wendy's,
and several local restaurants.
BOSTON MARKET $469,369 04/30/97 04/2012; 10.38% of Total for each lease at any time
(the "San Antonio Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The San Antonio Property is (3) fifth lease annual gross
located at the northwest year and after sales minus
corner of Tezel Road and every five (ii) the
Camino Rosa, in San Antonio, years minimum annual
Bexar County, Texas, in an thereafter rent for such
area of mixed retail, during the lease year
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
San Antonio Property include a
Burger King, a Taco Bell, and
several local restaurants.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $970,269 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Baltimore Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Baltimore Property is (3) fifth lease annual gross
located on the south side of year and after sales minus
Security Boulevard and the every five (ii) the
north side of Whitehead Court, years minimum annual
in Baltimore, Baltimore thereafter rent for such
County, Maryland, in an area during the lease year
of mixed retail, commercial, lease term
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Baltimore
Property include a Wendy's, a
Red Lobster, a Burger King,
two McDonald's, an IHOP, a
Bennigan's, and several local
restaurants.
BOSTON MARKET (5) $854,895 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Gambrills Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Gambrills Property is (3) fifth lease annual gross
located on the south side of year and after sales minus
Maryland Route 3, south of its every five (ii) the
intersection with Waugh Chapel years minimum annual
Road, in Gambrills, Anne thereafter rent for such
Arundel County, Maryland, in during the lease year
an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Gambrills Property include a
Wendy's, a Taco Bell, a
Popeyes, a Pizza Hut, a KFC,
and a McDonald's.
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $909,041 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Jessup Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Jessup Property is located (3) fifth lease annual gross
on the southeast quadrant of year and after sales minus
U.S. Route 1 and Assateague every five (ii) the
Drive, in Jessup, Howard years minimum annual
County, Maryland, in an area thereafter rent for such
of mixed retail, commercial, during the lease year
and residential development. lease term
Other fast-food and family-
style restaurants located in
proximity to the Jessup
Property include a Burger
King, a Subway Sandwich Shop,
and several local restaurants.
BOSTON MARKET $451,618 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Lansing Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 5% of year
The Lansing Property is (3) fifth lease annual gross
located on the northeast side year and after sales minus
of Cedar Street, north of the every five (ii) the
intersection of American Road years minimum annual
and Cedar Street, in Lansing, thereafter rent for such
Ingham County, Michigan, in an during the lease year
area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Lansing Property include a
Denny's, a KFC, a Long John
Silver's, a Wendy's, a Bob
Evans, and several local
restaurants.
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $629,929 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Riverdale Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Riverdale Property is (3) fifth lease annual gross
located within the southeast year and after sales minus
corner of the intersection every five (ii) the
formed by Kenilworth Avenue years minimum annual
and Patterson Road, in thereafter rent for such
Riverdale, Prince George's during the lease year
County, Maryland, in an area lease term
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Riverdale
Property include a Wendy's, a
McDonald's, and an IHOP.
BOSTON MARKET $711,882 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Vacaville Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Vacaville Property is (3) fifth lease annual gross
located on the southeast year and after sales minus
corner of Nut Tree Parkway and every five (ii) the
Helen Power Drive, in years minimum annual
Vacaville, Solana County, thereafter rent for such
California, in an area of during the lease year
mixed retail, commercial, and lease term
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Vacaville
Property include an Applebee's
and several local restaurants.
</TABLE>
-15-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $961,255 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Waldorf Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Waldorf Property is (3) fifth lease annual gross
located on the northwest year and after sales minus
corner of Crain Highway and every five (ii) the
Plaza Drive, in Waldorf, years minimum annual
Charles County, Maryland, in thereafter rent for such
an area of mixed retail, during the lease year
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Waldorf Property include a
Shoney's, a Red Lobster, a
McDonald's, a Pizzeria Uno, an
Olive Garden, a Kenny Rogers
Roasters, a Taco Bell, a
Burger King, a Checkers, and
several local restaurants.
EINSTEIN BROS. BAGELS (5) $601,677 05/06/97 05/2012; 10.38% of Total for each lease at any time
(the "Springfield Property") (excluding five five- Cost (4); year after the after the
Restaurant to be constructed development year renewal increases by fifth lease fifth lease
costs) options 10% after the year, (i) 4% of year
The Springfield Property is (3) fifth lease annual gross
located at the southeast year and after sales minus
quadrant of the intersection every five (ii) the
formed by Old Keene Mill Road years minimum annual
and Rolling Road, in thereafter rent for such
Springfield, Fairfax County, during the lease year
Virginia, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Springfield
Property include two
McDonald's and several local
restaurants.
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
GOLDEN CORRAL (13) $561,270 05/06/97 05/2012; 10.75% of Total for each lease during the
(the "Jacksonville #1 (excluding four five- Cost (4) year, 5% of the first
Property") development year renewal amount by which through
Restaurant to be constructed costs) options annual gross seventh
(3) sales exceed lease years
The Jacksonville #1 Property $2,893,405 (8) and the
is located on the southwest tenth
corner of Merrill Road and through
Jane Street, in Jacksonville, fifteenth
Duval County, Florida, in an lease years
area of mixed retail, only
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Jacksonville #1 Property
include a Burger King, a
Hardee's, a Ryan's Family
Steak House, and several local
restaurants.
GOLDEN CORRAL (13) $558,820 05/21/97 05/2012; 10.75% of Total for each lease during the
(the "Corpus Christi (excluding four five- Cost (4) year, 5% of the first
Property") closing year renewal amount by which through
Restaurant to be constructed and options annual gross seventh
development sales exceed lease years
The Corpus Christi Property is costs) $2,708,230 (8) and the
located on the southwest (3) tenth
corner of South Padre Island through
Drive and Silverberry Drive, fifteenth
in Corpus Christi, Nueces lease years
County, Texas, in an area of only
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Corpus
Christi Property include a
Dairy Queen, a Popeyes Famous
Fried Chicken, a Church's
Fried Chicken, and several
local restaurants.
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
IHOP (14) $1,181,818 05/21/97 05/2017; $119,659; for each lease during the
(the "Leesburg Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Leesburg Property is year and after (ii) the end of the
located at the northwest every five minimum annual initial
quadrant of the intersection years rent for such lease term
of Highway 15 Bypass and thereafter lease year
Edwards Ferry Road, in during the
Leesburg, Loudon County, lease term
Virginia, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Leesburg
Property include a Ponderosa
Steak House, a Burger King, a
Taco Bell, a McDonald's, an
Applebee's, a Ruby Tuesday,
and a Domino's Pizza.
POPEYES $199,354 05/22/97 05/2017; two 11.50% of Total for each lease at any time
(the "Starke Property") (excluding five year Cost (4); year, (i) 6% of after the
Restaurant to be constructed development renewal increases by annual gross seventh
costs) options 10% after the sales minus lease year
The Starke Property is located (3) fifth lease (ii) the
on the east side of U.S. year and after minimum annual
Highway 301, just south of every five rent for such
Alligator Creek, in Starke, years lease year
Bradford County, Florida, in thereafter
an area of mixed retail, during the
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Starke Property include a
Shoney's, a Taco Bell, a
McDonald's, a Captain D's, a
KFC, a Western Steer, a
Checkers, a Burger King, a
Wendy's, and a local
restaurant.
</TABLE>
-18-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
JACK IN THE BOX (6) $839,981 05/30/97 05/2015; $86,098 (7); for each lease at any time
(the "Fresno Property") (3)(7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be constructed year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Fresno Property is located after every (ii) the
within the northwest corner of five years minimum annual
the intersection of Golden thereafter rent for such
State Boulevard and Ashlon during the lease year (8)
Avenue, in Fresno, Fresno lease term
County, California, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Fresno
Property include a Dairy Queen
and several local restaurants.
JACK IN THE BOX (6) $955,333 06/05/97 06/2015; $97,922 (7); for each lease at any time
(the "Corinth Property") (3)(7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be constructed year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Corinth Property is after every (ii) the
located on the northwest five years minimum annual
corner of Interstate Highway thereafter rent for such
35 and FM 2181, in Corinth, during the lease year (8)
Denton County, Texas, in an lease term
area of mixed retail,
commercial, and residential
development.
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
RUTH'S CHRIS STEAK HOUSE $2,000,000 06/05/97 08/2011; two $175,000; for each lease None
(the "Tampa Property") (excluding five-year increases by year, 6% of
Existing restaurant closing renewal $25,000 after annual gross
costs) options the fifth lease sales in excess
The Tampa Property is located year and after of $3,400,000,
at the southwest corner of every five but less than
Union Street and North West years $4,000,000,
Shore Boulevard in Tampa, thereafter plus 8% of
Hillsborough County, Florida, during the annual gross
in an area of mixed retail, lease term sales in excess
commercial, and residential of $4,000,000
development. Other fast-food
and family-style restaurants
located in proximity to the
Tampa Property include a Steak
and Ale and a local
restaurant.
GOLDEN CORRAL (13) $527,801 06/06/97 06/2012; 10.75% of Total for each lease during the
(the "Jacksonville #2 (excluding four five- Cost (4) year, 5% of the first
Property") closing year renewal amount by which through
Restaurant to be constructed and options annual gross seventh
development sales exceed lease years
The Jacksonville #2 Property costs) $2,920,205 (8) and the
is located at the northwest (3) tenth
quadrant of the intersection through
of Southside Boulevard and fifteenth
Touchton Road, in lease years
Jacksonville, Duval County, only
Florida, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Jacksonville
#2 Property include a Burger
King.
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
CHARLEY'S PLACE (15) $1,435,865 06/11/97 06/2017; two $150,766; for each lease None
(the "King of Prussia five-year increases by year (i) 4.50%
Property") renewal 10% after the of annual gross
Existing restaurant options fifth lease sales minus
year and after (ii) the
The King of Prussia Property every five minimum annual
is located on the northwest years rent for such
corner of the intersection of thereafter lease year
North Gulph Road and Goddard during the
Boulevard in King of Prussia, lease term
Upper Merion Township,
Montgomery County,
Pennsylvania, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the King of
Prussia Property include a
Bennigan's, a Denny's, a
Chili's, a Pizzeria Uno, a TGI
Friday's, a Houlihan's, a
McDonald's, a Burger King, a
Lone Star Steakhouse & Saloon,
and several local restaurants.
CHARLEY'S PLACE (15) $1,549,822 06/11/97 06/2017; two $162,731; for each lease None
(the "McLean Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The McLean Property is located year and after (ii) the
within the intersection of every five minimum annual
Dolly Madison Boulevard and years rent for such
Old Dominion Drive, in McLean, thereafter lease year
Fairfax County, Virginia, in during the
an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
McLean Property include a Roy
Rogers, a McDonald's, a Pizza
Hut, and several local
restaurants
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $1,458,656 06/11/97 06/2017; two $153,159; for each lease None
(the "Evansville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Evansville Property is year and after (ii) the
located on the east side of every five minimum annual
Green River Road, within the years rent for such
Eastland Place shopping thereafter lease year
center, in Evansville, during the
Vanderburg County, Indiana, in lease term
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Evansville Property include a
Denny's, a Chili's, a
Grandy's, a Chi Chi's, a
Fazoli's, a Lone Star
Steakhouse & Saloon, an Olive
Garden, a Morrison's
Cafeteria, and several local
restaurants.
</TABLE>
-22-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $1,203,391 06/11/97 06/2017; two $126,356; for each lease None
(the "Hampton Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Hampton Property is year and after (ii) the
located on the east side of every five minimum annual
Coliseum Drive, north of years rent for such
Mercury Boulevard, in Hampton, thereafter lease year
York County, Virginia, in an during the
area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Hampton Property include a
Boston Market, a Bennigan's, a
Steak and Ale, a Piccadilly
Cafeteria, an Applebee's, a
Burger King, a Pizza Hut, a
KFC, a Chili's, a McDonald's,
a Golden Corral, a Chi Chi's,
a Waffle House, a
Schlotzsky's, a Red Lobster, a
Rally's, an Olive Garden, a
Denny's, and several local
restaurants.
DARRYL'S (15) $1,367,490 06/11/97 06/2017; two $143,586; for each lease None
(the "Huntsville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Huntsville Property is year and after (ii) the
located on the south side of every five minimum annual
University Drive Northwest, years rent for such
east of Route 53, in thereafter lease year
Huntsville, Madison County, during the
Alabama, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Huntsville
Property include a Quincy's, a
Steak and Ale, an Olive
Garden, a McDonald's, a
Wendy's, an Arby's, and
several local restaurants.
</TABLE>
-23-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $1,231,653 06/11/97 06/2017; two $129,324; for each lease None
(the "Knoxville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Knoxville Property is year and after (ii) the
located on the northeast side every five minimum annual
of Merchants Center Boulevard, years rent for such
north of Merchants Drive, in thereafter lease year
Knoxville, Knox County, during the
Tennessee, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Knoxville
Property include a Red
Lobster, a Bob Evans, a
McDonald's, a Burger King, two
Waffle Houses, a Captain D's,
a Subway Sandwich Shop, a
Cracker Barrel, a Denny's, a
Sonic Drive-In, an Applebee's,
a Ryan's Family Steak House,
and several local restaurants.
DARRYL'S (15) $1,481,448 06/11/97 06/2017; two $155,552; for each lease None
(the "Louisville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Louisville Property is year and after (ii) the
located on the west side of every five minimum annual
Bardstown Road and the years rent for such
southeast side of Gardiner thereafter lease year
Lane, in Louisville, Jefferson during the
County, Kentucky, in an area lease term
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Louisville
Property include a Boston
Market and a Steak N Shake.
</TABLE>
-24-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $1,426,748 06/11/97 06/2017; two $149,809; for each lease None
(the "Mobile Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Mobile Property is located year and after (ii) the
on the south side of South every five minimum annual
Beltline Highway, west of years rent for such
Airport Boulevard, in Mobile, thereafter lease year
Mobile County, Alabama, in an during the
area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Mobile Property include a
Denny's, a Chili's, an Olive
Garden, an Outback Steakhouse,
and several local restaurants.
DARRYL'S (15) $1,230,741 06/11/97 06/2017; two $129,228; for each lease None
(the "Montgomery Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Montgomery Property is year and after (ii) the
located on the east side of every five minimum annual
Eastern Boulevard, north of years rent for such
Vaughn Road, in Montgomery, thereafter lease year
Montgomery County, Alabama, in during the
an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Montgomery Property include an
Olive Garden, a Kenny Rogers
Roasters, a Wendy's, and
several local restaurants.
</TABLE>
-25-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $1,185,158 06/11/97 06/2017; two $124,442; for each lease None
(the "Nashville #1 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Nashville #1 Property is year and after (ii) the
located on the west side of every five minimum annual
Sidco Drive, in Nashville, years rent for such
Davidson County, Tennessee, in thereafter lease year
an area of mixed retail, during the
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Nashville #1 Property include
a Cracker Barrel, a Waffle
House, and several local
restaurants.
DARRYL'S (15) $2,142,401 06/11/97 06/2017; two $224,952; for each lease None
(the "Orlando Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Orlando Property is year and after (ii) the
located at the southwest every five minimum annual
quadrant of the intersection years rent for such
of International Drive and thereafter lease year
Jamaican Court, in Orlando, during the
Orange County, Florida, in an lease term
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Orlando Property include a
Pizzeria Uno, a Golden Corral,
a McDonald's, a Perkins, a
Denny's, and several local
restaurants.
</TABLE>
-26-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $1,057,526 06/11/97 06/2017; two $111,040; for each lease None
(the "Pensacola Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Pensacola Property is year and after (ii) the
located on the north side of every five minimum annual
Plantation Road, west of Davis years rent for such
Highway, in Pensacola, thereafter lease year
Escambia County, Florida, in during the
an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Pensacola Property include a
Bennigan's, a Denny's, a
Shoney's, a Steak and Ale, a
Perkins, and a local
restaurant.
DARRYL'S (15) $1,276,324 06/11/97 06/2017; two $134,014; for each lease None
(the "Raleigh #1 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Raleigh #1 Property is year and after (ii) the
located on the west side of every five minimum annual
Old Wake Forest Road and the years rent for such
north side of Ollie Street, in thereafter lease year
Raleigh, Wake County, North during the
Carolina, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Raleigh #1
Property include a Pizza Hut,
a Boston Market, a Cooker Bar
& Grille, a Red Lobster, a
Lone Star Steakhouse & Saloon,
a TGI Friday's, and a local
restaurant.
</TABLE>
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<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $1,754,946 06/11/97 06/2017; two $184,269; for each lease None
(the "Raleigh #2 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Raleigh #2 Property is year and after (ii) the
located on the north side of every five minimum annual
Glenwood Avenue and the west years rent for such
side of Deblyn Avenue, in thereafter lease year
Raleigh, Wake County, North during the
Carolina, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Raleigh #2
Property include a Miami Subs,
a Boston Market, a Golden
Corral, a Chili's, a Taco
Bell, and several local
restaurants.
DARRYL'S (15) $1,321,907 06/11/97 06/2017; two $138,800; for each lease None
(the "Richmond #1 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Richmond #1 Property is year and after (ii) the
located on the north side of every five minimum annual
Midlothian Turnpike, east of years rent for such
Fairwood Drive and west thereafter lease year
Providence Road, in Richmond, during the
Chesterfield County, Virginia, lease term
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Richmond #1 Property include a
Fuddrucker's, a Morrison's
Cafeteria, a Golden Corral, a
Bob Evans, a Chili's, a
Friendly's, a Steak and Ale, a
Red Lobster, and several local
restaurants.
</TABLE>
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<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
DARRYL'S (15) $911,660 06/11/97 06/2017; two $95,724; for each lease None
(the "Richmond #2 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Richmond #2 Property is year and after (ii) the
located on the southwest every five minimum annual
quadrant of Starling Drive and years rent for such
Quioccasin Road, in Richmond, thereafter lease year
Henrico County, Virginia, in during the
an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Richmond #2 Property include
an Arby's, a Boston Market, an
Applebee's, a Hardee's, a
McDonald's, a Subway Sandwich
Shop, a KFC, a Pizza Hut, and
several local restaurants.
DARRYL'S (15) $1,185,158 06/11/97 06/2017; two $124,442; for each lease None
(the "Winston-Salem Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Winston-Salem Property is year and after (ii) the
located on the north side of every five minimum annual
Brownsboro Road and the east years rent for such
side of University Parkway, in thereafter lease year
Winston-Salem, Forsyth County, during the
North Carolina, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Winston-Salem
Property include a Golden
Corral, a Bennigan's, an IHOP,
and several local restaurants.
</TABLE>
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<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
HOULIHAN'S (15) $1,367,490 06/11/97 06/2017; two $143,586; for each lease None
(the "Bethel Park Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Bethel Park Property is year and after (ii) the
located at the northeast every five minimum annual
corner of the intersection of years rent for such
Washington Road and Fort Couch thereafter lease year
Road, in Bethel Park, during the
Allegheny County, lease term
Pennsylvania, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Bethel Park
Property include a TGI
Friday's, an Olive Garden, a
Burger King, an Einstein Bros.
Bagels, and a Boston Market.
HOULIHAN'S (15) $1,390,282 06/11/97 06/2017; two $145,980; for each lease None
(the "Langhorne Property") five-year increases by year (i) 4.50%
Existing restaurant renewal 10% after the of annual gross
options fifth lease sales minus
The Langhorne Property is year and after (ii) the
located on the north side of every five minimum annual
Old Lincoln Highway, in years rent for such
Langhorne, Middletown thereafter lease year
Township, Burks County, during the
Pennsylvania, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Langhorne
Property include a Red
Lobster, an Olive Garden, a
Burger King, a Boston Market,
a Pizzeria Uno, a Taco Bell, a
Chi Chi's, a Macaroni Grill,
and several local restaurants.
</TABLE>
-30-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
HOULIHAN'S (15) $1,982,861 06/11/97 06/2017; two $208,200; for each lease None
(the "Plymouth Meeting five-year increases by year (i) 4.50%
Property") renewal 10% after the of annual gross
Existing restaurant options fifth lease sales minus
year and after (ii) the
The Plymouth Meeting Property every five minimum annual
is located at the northwest years rent for such
quadrant of the intersection thereafter lease year
of West Germantown Pike and during the
Hickory Road, in Plymouth lease term
Meeting, Montgomery County,
Pennsylvania, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Plymouth
Meeting Property include a
Friendly's, and several local
restaurants.
GOLDEN CORRAL (13) $355,340 06/17/97 06/2012; 10.75% of Total for each lease during the
(the "Enid Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs) options annual gross seventh
The Enid Property is located (3) sales exceed lease years
on the southeast corner of $2,034,928 (8) and the
West Garriott Road and West tenth
Brow Road, in Enid, Garfield through
County, Oklahoma, in an area fifteenth
of mixed retail, commercial, lease years
and residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Enid Property
include an Applebee's, a Red
Lobster, a Grandy's, and
several local restaurants.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
IHOP (14) $1,709,091 06/18/97 06/2017; $173,045; for each lease during the
(the "Fairfax Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Fairfax Property is year and after (ii) the end of the
located at the southeast every five minimum annual initial
corner of the intersection of years rent for such lease term
Lee Highway and Blake Lane, in thereafter lease year
Fairfax, Fairfax County, during the
Virginia, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Fairfax
Property include a McDonald's,
a Ruby Tuesday, a Subway
Sandwich Shop, and several
local restaurants.
GOLDEN CORRAL (13) $397,339 06/19/97 06/2012; 10.75% of Total for each lease during the
(the "Liberty #2 Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs) options annual gross seventh
The Liberty #2 Property is (3) sales exceed lease years
located within the southwest $2,349,786 (8) and the
quadrant of North Church Road tenth
and State Route 152, in through
Liberty, Clay County, fifteenth
Missouri, in an area of mixed lease years
retail, commercial, and only
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Liberty #2
Property include an
Applebee's, a Cracker Barrel,
a McDonald's, and a local
restaurant.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $1,077,979 07/02/97 07/2012; $111,894; for each lease at any time
(the "Stafford Property") five five- increases by year after the after the
Existing restaurant year renewal 10% after the fifth lease fifth lease
options fifth lease year, (i) 4% of year
The Stafford Property is year and after annual gross
located at the southwest every five sales minus
quadrant of the intersection years (ii) the
of Southwest Freeway and thereafter minimum annual
Airport Boulevard, in during the rent for such
Stafford, Fort Bend County, lease term lease year
Texas, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Stafford
Property include a Captain
D's, a Jack in the Box, a Taco
Bell, a Macaroni Grill, a
Chuck E. Cheese, and several
local restaurants.
JACK IN THE BOX (6) $1,008,970 07/02/9 07/2015; $103,419 (7); for each lease at any time
(the "Channelview Property") (3)(7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be constructed year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Channelview Property is after every (ii) the
located on the northeast five years minimum annual
corner of Interstate Highway thereafter rent for such
10 and Magnolia Avenue, in during the lease year (8)
Channelview, Harris County, lease term
Texas, in an area of mixed
retail, commercial, and
residential development.
JACK IN THE BOX (6) $936,119 07/02/97 07/2015; $95,952 (7); for each lease at any time
(the "Garland Property") (3)(7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be constructed year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Garland Property is after every (ii) the
located on the northeast five years minimum annual
quadrant of the intersection thereafter rent for such
of Interstate 30 and Roan during the lease year (8)
Road, in Garland, Dallas lease term
County, Texas, in an area of
mixed retail, commercial, and
residential development.
</TABLE>
-33-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
KFC $794,700 07/02/97 05/2022; $89,960; None None
(the "Putnam Property") four five- increases by
Existing restaurant year renewal 10% after the
options fifth lease
The Putnam Property is located year and after
on the east side of the every five
entrance drive to the Putnam years
Parkade shopping center, in thereafter
Putnam, Windham County, during the
Connecticut, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Putnam
Property include a McDonald's,
a Wendy's, a Dunkin Donuts,
and a Subway Sandwich Shop.
ARBY'S (16) $742,536 07/15/97 07/2017; two $74,254; for each lease during the
(the "Lexington Property") five-year increases by year, (i) 4% of seventh and
Existing restaurant renewal 4.14% after the annual gross tenth lease
options third lease sales minus years only
The Lexington Property is year and after (ii) the
located on the east side of every three minimum annual
Cotton Grove Road, north of years rent for such
Interstate 85, in Lexington, thereafter lease year
Davidson County, North during the
Carolina, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Lexington
Property include a Burger
King, a Taco Bell, and a
Cracker Barrel.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $1,011,492 07/16/97 07/2012; $104,993; for each lease at any time
(the "Newport News Property") five five- increases by year after the after the
Existing restaurant year renewal 10% after the fifth lease fifth lease
options fifth lease year, (i) 4% of year
The Newport News Property is year and after annual gross
located on the southwest every five sales minus
corner of the intersection of years (ii) the
Warwick Boulevard and Prince thereafter minimum annual
Drew Road, in Newport News, during the rent for such
Virginia, in an area of mixed lease term lease year
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity, to the Newport News
Property include a Pizza Hut,
a McDonald's, a Hardee's, and
a local restaurant.
IHOP (14) $1,424,283 07/16/97 07/2017; $144,209; for each lease during the
(the "Houston #5 Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Houston #5 Property is year and after (ii) the end of the
located at the southwest every five minimum annual initial
quadrant of the intersection years rent for such lease term
of FM 1960 and U.S. Highway thereafter lease year
290, in Houston, Harris during the
County, Texas, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Houston #5
Property include a Kettle's, a
Pizza Inn, a Denny's, a
McDonald's, and a Burger King.
</TABLE>
-35-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
IHOP (14) $1,397,047 07/16/97 07/2017; $141,451; for each lease during the
(the "Stockbridge Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Stockbridge Property is year and after (ii) the end of the
located on the north side of every five minimum annual initial
Stockbridge Road, west of years rent for such lease term
Interstate 675, in thereafter lease year
Stockbridge, Clayton County, during the
Georgia, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Stockbridge
Property include a Chick-Fil-
A, an Applebee's, a
McDonald's, a Wendy's, a Long
John Silver's, and several
local restaurants.
JACK IN THE BOX (6) $963,592 07/16/97 07/2015; $98,768 (7); for each lease at any time
(the "Woodland Property") (3)(7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be constructed year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Woodland Property is after every (ii) the
located on the southeast five years minimum annual
corner of East Main Street and thereafter rent for such
County Road 102, in Woodland, during the lease year (8)
Yolo County, California, in an lease term
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Woodland Property include a
Wendy's, a Taco Bell, a Burger
King, a Denny's, a McDonald's,
and a local restaurant.
</TABLE>
-36-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
JACK IN THE BOX (6) $1,073,031 07/21/97 07/2015; $109,986 (7); for each lease at any time
(the "West Sacramento (3)(7) four five- increases by 8% year, (i) 5% of after the
Property") year renewal after the fifth annual gross seventh
Restaurant to be constructed options lease year and sales minus lease year
after every (ii) the
The West Sacramento Property five years minimum annual
is located on the southeast thereafter rent for such
corner of Sheperd Court and during the lease year (8)
Stillwater Road, in West lease term
Sacramento, Yolo County,
California, in an area of
mixed retail, commercial, and
residential development.
TUMBLEWEED SOUTHWEST MESQUITE $1,471,963 08/01/97 07/2017; two $161,916 (18); for each lease at any time
GRILL & BAR (17) (3)(18) five-year increases by year, (i) 5% of after the
(the "Cookeville Property") renewal 10% after the annual gross seventh
Restaurant to be renovated options fifth lease sales minus lease year
year and after (ii) the
The Cookeville Property is every five minimum annual
located on the years rent for such
northeast corner of the thereafter lease year
intersection of South during the
Jefferson Avenue and Neal lease term
Lane, in Cookeville, Putnam
County, Tennessee, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Cookeville
Property include a Pizza Hut,
an Arby's, a Wendy's, a
Captain D's, a Shoney's, a
Burger King, a McDonald's, a
Long John Silver's, a
Ponderosa Steak House, a
Cracker Barrel, a Taco Bell, a
Schlotzsky's, a Subway
Sandwich Shop, a Quincy's, a
Ryan's Family Steak House, and
a local restaurant.
</TABLE>
-37-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
TUMBLEWEED SOUTHWEST MESQUITE $747,664 08/01/97 07/2017; two $100,935 (18); for each lease at any time
GRILL & BAR (17)(19) (3)(18) five-year increases by year, (i) 5% of after the
(the "Hendersonville renewal 10% after the annual gross seventh
Property") options fifth lease sales minus lease year
Restaurant to be renovated year and after (ii) the
every five minimum annual
The Hendersonville Property is years rent for such
located on the northeast thereafter lease year
quadrant of the intersection during the
of East Main Street and lease term
Cherokee Road North, in
Hendersonville, Sumner County,
Tennessee, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the
Hendersonville Property
include a Boston Market, a
Wendy's, a Subway Sandwich
Shop, a Shoney's, an
Applebee's, a Pizza Hut, a
Burger King, and a local
restaurant.
TUMBLEWEED SOUTHWEST MESQUITE $1,448,598 08/01/97 07/2017; two $159,346 (18); for each lease at any time
GRILL & BAR (17) (3)(18) five-year increases by year, (i) 5% of after the
(the "Lawrence Property") renewal 10% after the annual gross seventh
Restaurant to be renovated options fifth lease sales minus lease year
year and after (ii) the
The Lawrence Property is every five minimum annual
located on the years rent for such
east side of Iowa Street thereafter lease year
between West 24th Street and during the
West 25th Street, in Lawrence, lease term
Douglas County, Kansas, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Lawrence Property include an
Applebee's, a Chili's, and
several local restaurants.
</TABLE>
-38-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
TUMBLEWEED SOUTHWEST MESQUITE $1,308,411 08/01/97 07/2017; two $143,925 (18); for each lease at any time
GRILL & BAR (17) (3)(18) five-year increases by year, (i) 5% of after the
(the "Nashville #2 Property") renewal 10% after the annual gross seventh
Restaurant to be renovated options fifth lease sales minus lease year
year and after (ii) the
The Nashville #2 Property is every five minimum annual
located on the west side of years rent for such
Nolensville Road, in thereafter lease year
Nashville, Davidson County, during the
Tennessee, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Nashville #2
Property include a McDonald's,
a Papa John's Pizza, a Pizza
Hut, and several local
restaurants.
ARBY'S (16) $727,273 08/04/97 08/2017; two $72,727; for each lease at any time
(the "Greensboro Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Greensboro Property is year and after (ii) the
located on the northeast every three minimum annual
corner of the intersection of years rent for such
South Regional Boulevard and thereafter lease year
Boeing Drive, in Greensboro, during the
Guilford County, North lease term
Carolina, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Greensboro
Property include a Wendy's, a
Hardee's, a McDonald's, a
Shoney's, a Subway Sandwich
Shop, and a local restaurant.
</TABLE>
-39-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
ARBY'S (16) $727,273 08/04/97 08/2017; two $72,727; for each lease at any time
(the "Greenville Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Greenville Property is year and after (ii) the
located on the north side of every three minimum annual
Greenville Boulevard, south of years rent for such
the Wal-Mart Super Center, in thereafter lease year
Greenville, Pitt County, North during the
Carolina, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Greenville
Property include a Perkins, a
McDonald's, an Applebee's, and
a Boston Market.
ARBY'S (16) $727,273 08/04/97 08/2017; two $72,727; for each lease at any time
(the "Jonesville Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Jonesville Property is year and after (ii) the
located on the south side of every three minimum annual
State Highway 67, east of years rent for such
Interstate 77, in Jonesville, thereafter lease year
Yadkin County, North Carolina, during the
in an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Jonesville Property include a
Cracker Barrel, a McDonald's,
a Wendy's, a Shoney's, and
several local restaurants.
</TABLE>
-40-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
ARBY'S (16) $650,000 08/04/97 08/2017; two $65,000; for each lease at any time
(the "Kernersville Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Kernersville Property is year and after (ii) the
located on the south side of every three minimum annual
South Main Street, west of years rent for such
Interstate 40, in thereafter lease year
Kernersville, Forsyth County, during the
North Carolina, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Kernersville
Property include a Taco Bell,
and several local restaurants.
ARBY'S (16) $713,636 08/04/97 08/2017; two $71,364; for each lease at any time
(the "Kinston Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Kinston Property is year and after (ii) the
located on the north side of every three minimum annual
West New Bern Road, west of US years rent for such
Highway 258, in Kinston, thereafter lease year
Lenoir County, North Carolina, during the
in an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Kinston Property include a
Subway Sandwich Shop, a
Hardee's, a Golden Corral, and
several local restaurants.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
TUMBLEWEED SOUTHWEST MESQUITE $1,425,234 08/05/97 08/2017; two $156,776 (18); for each lease at any time
GRILL & BAR (17) (3)(18) five-year increases by year, (i) 5% of after the
(the "Murfreesboro Property") renewal 10% after the annual gross seventh
Restaurant to be renovated options fifth lease sales minus lease year
year and after (ii) the
The Murfreesboro Property is every five minimum annual
located on the southeast years rent for such
corner of the intersection of thereafter lease year
Northwest Broad Street and during the
South Front Street, in lease term
Murfreesboro, Rutherford
County, Tennessee, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Murfreesboro
Property include a Shoney's, a
Captain D's, a Burger King, a
KFC, a McDonald's, a Subway
Sandwich Shop, and a local
restaurant.
BOSTON MARKET (5) $904,691 08/19/97 08/2012; $93,907; for each lease at any time
(the "Edgewater Property") five five- increases by year after the after the
Existing restaurant year renewal 10% after the fifth lease fifth lease
options fifth lease year, (i) 4% year
The Edgewater Property is year and after of annual gross
located within the Market every five sales minus
Place Shopping Center on the years (ii) the
west side of Sheridan thereafter minimum annual
Boulevard, in Edgewater, during the rent for such
Jefferson County, Colorado, in lease term lease year
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Edgewater Property include a
Taco Bell, a Fazoli's, an A&W,
a McDonald's, and several
local restaurants.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
GOLDEN CORRAL (13) $168,813 08/19/97 08/2012; 10.75% of Total for each lease during the
(the "Duncan Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs) options annual gross seventh
The Duncan Property is located (3) sales exceed lease years
on the west side of U.S. $1,956,403 (8) and the
Highway 81, south of State tenth
Road 7, in Duncan, Stephens through
County, Oklahoma, in an area fifteenth
of mixed retail, commercial, lease years
and residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Duncan
Property include a McDonald's,
an Arby's, a Pizza Hut, and
several local restaurants.
GOLDEN CORRAL (13) $570,497 08/19/97 08/2012; 10.75% of Total for each lease during the
(the "Fort Walton Beach (excluding four five- Cost (4) year, 5% of the first
Property") closing year renewal amount by which through
Restaurant to be constructed and options annual gross seventh
development sales exceed lease years
The Fort Walton Beach Property costs) $2,764,503 (8) and the
is located on the southeast (3) tenth
corner of Mary Esther through
Boulevard south of Beal fifteenth
Parkway, in Fort Walton Beach, lease years
Okaloosa County, Florida, in only
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Fort Walton Beach Property
include an Applebee's, a
Burger King, a Chili's, a
Blimpie's, a Fazoli's, a
Krystal Burger, a McDonald's,
a Hardee's, a Wendy's, and a
Sonic Drive-in.
</TABLE>
-43-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
RUBY TUESDAY'S $1,123,720 08/19/97 08/2017; two $123,609 (7); for each lease at any time
(the "London Property") (3)(7) five-year increases by year, (i) 6% of after the
Restaurant to be renovated renewal 10% after the annual gross seventh
options fifth lease sales minus lease year
The London Property is located year and after (ii) the
on the east side of Interstate every five minimum annual
75, on the south side of years rent for such
Highway 192 and Park South thereafter lease year
Road, in London, Laurel during the
County, Kentucky, in an area lease term
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the London
Property include an Arby's, a
Hardee's, a Fazoli's, a
Frisch's Big Boy, a Krystal
Burger, a Burger King, a
Ponderosa Steak House, a Taco
Bell, a Captain D's, and
several local restaurants.
IHOP (14) $1,540,356 08/20/97 08/2017; $155,961; for each lease during the
(the "Elk Grove Property") (excluding three five- increases by year, (i) 4% eleventh
Existing restaurant closing year renewal 10% after the of annual gross lease year
costs) options fifth lease sales minus and at the
The Elk Grove Property is year and after (ii) the end of the
located on the south side of every five minimum annual initial
East Stockton Boulevard, just years rent for such lease term
north of Bond Boulevard and thereafter lease year
east of Route 99, in Elk during the
Grove, Sacramento County, lease term
California, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Elk Grove
Property include a Taco Bell,
an Applebee's, a McDonald's,
and several local restaurants.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
IHOP (14) $1,196,060 08/20/97 08/2017; $121,101; for each lease during the
(the "Lake Jackson Property") (excluding three five- increases by year, (i) 4% of eleventh
Existing restaurant closing year renewal 10% after the annual gross lease year
costs) options fifth lease sales minus and at the
The Lake Jackson Property is year and after (ii) the end of the
located on the west side of every five minimum annual initial
State Highway 332, in Lake years rent for such lease term
Jackson, Brazoria County, thereafter lease year
Texas, in an area of mixed during the
retail, commercial, and lease term
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Lake Jackson
Property include a Boston
Market, a Ryan's Family Steak
House, a Pizza Hut, a Burger
King, a Red Lobster, a
Whataburger, a McDonald's, a
Taco Bell, a Chick-Fil-A, and
several local restaurants.
IHOP (14) $1,376,767 08/20/97 08/2017; $139,398; for each lease during the
(the "Loveland Property") (excluding three five- increases by year, (i) 4% eleventh
Existing restaurant closing year renewal 10% after the of annual gross lease year
costs) options fifth lease sales minus and at the
The Loveland Property is year and after (ii) the end of the
located on the south side of every five minimum annual initial
Stone Creek Circle, with years rent for such lease term
visibility from Highway 34 and thereafter lease year
Interstate 25, in Loveland, during the
Larimer County, Colorado, in lease term
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Loveland Property include a
Lonestar Steak House.
</TABLE>
-45-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
IHOP (14) $1,073,262 08/20/97 08/2017; $108,668; for each lease during the
(the "Victoria Property") (excluding three five- increases by year, (i) 4% of eleventh
Existing restaurant closing year renewal 10% after the annual gross lease year
costs) options fifth lease sales minus and at the
The Victoria Property is year and after (ii) the end of the
located on the north side of every five minimum annual initial
Lentz Parkway west of U.S. years rent for such lease term
Highway 77, in Victoria, thereafter lease year
Victoria County, Texas, in an during the
area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Victoria Property include a
Denny's, a Red Lobster, a Taco
Bell, a McDonald's, a Ryan's
Family Steak House, a Sonic
Drive-in, and several local
restaurants.
SHONEY'S (9) $799,047 08/20/97 08/2017; two 11% of Total for each lease at any time
(the "Las Vegas Property") (excluding five-year Cost (4); year, (i) 6% after the
Restaurant to be constructed development renewal increases by of annual gross seventh
costs) options 10% after the sales minus lease year
The Las Vegas Property is (3) fifth lease (ii) the
located on the west side of year and after minimum annual
Rock Springs Drive, north of every five rent for such
Lake Mead Drive, in Las Vegas, years lease year
Clark County, Nevada, in an thereafter
area of mixed retail, during the
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Las Vegas Property include a
Boston Market, a Wendy's, an
Arby's, a Chili's, a Macaroni
Grill, a Tony Roma's, a
McDonald's, and an In and Out
Burgers.
</TABLE>
-46-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BOSTON MARKET (5) $1,062,327 09/05/97 09/2012; $110,270; for each lease at any time
(the "Hoover Property") five five- increases by year after the after the
Existing restaurant year renewal 10% after the fifth lease fifth lease
options fifth lease year, (i) 4% of year
The Hoover Property is located year and after annual gross
on the southeast quadrant of every five sales minus
U.S. Highway 31 and Lorna years (ii) the
Road, in Hoover, Jefferson thereafter minimum annual
County, Alabama, in an area of during the rent for such
mixed retail, commercial, and lease term lease year
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Hoover
Property include a Taco Bell,
a McDonald's, a Wendy's, and a
Pizza Hut.
T.G.I. FRIDAY'S $872,422 09/05/97 09/2017; 10.75% of Total for each lease at any time
(the "Superstition Springs (excluding four five- Cost (4); year, (i) 6% of after the
Property") development year renewal increases by annual gross seventh
Restaurant to be constructed costs) options 10% after the sales minus lease year
(3) fifth lease (ii) the
The Superstition Springs year and after minimum annual
Property is located on the every five rent for such
northwest corner of the years lease year
intersection of Superstition thereafter
Springs Boulevard and South during the
Power Road, in Superstition lease term
Springs, Maricopa County,
Arizona, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Superstition
Springs Property include a
Burger King, an Outback
Steakhouse, a Jack in the Box,
a Denny's, a McDonald's, a
Wendy's, a Chili's, and
several local restaurants.
</TABLE>
-47-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
GOLDEN CORRAL (13) $417,329 09/17/97 03/2013; 10.75% of Total for each lease during the
(the "Mobile Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs) options annual gross seventh
The Mobile Property is located (3) sales exceed lease years
on the southeast side of Halls $2,502,407 (8) and the
Mill Road, south of Range Line tenth
Road, in Mobile, Mobile through
County, Alabama, in an area of fifteenth
mixed retail, commercial, and lease years
residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Mobile
Property include a KFC, a
McDonald's, an Arby's, a
Popeyes, a Checkers, a Waffle
House, a Quincy's Family Steak
House, a Shoney's, a Pizza
Inn, a Taco Bell, a Burger
King, a Pizza Hut, a
Godfather's Pizza, and several
local restaurants.
GOLDEN CORRAL (13) $319,140 09/17/97 03/2013; 10.75% of Total for each lease during the
(the "Palatka Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs) options annual gross seventh
The Palatka Property is (3) sales exceed lease years
located on the southeast side $2,191,973 (8) and the
of Highway 19, south of U.S. tenth
17, in Palatka, Putnam County, through
Florida, in an area of mixed fifteenth
retail, commercial, and lease years
residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Palatka
Property include an In and Out
Burgers, a Pizza Hut, and
several local restaurants.
</TABLE>
-48-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BLACK-EYED PEA (20) $1,600,000 09/30/97 09/2017; two $168,000; for each lease during the
(the "Mesa Property") five-year increases by year, 6% of the eighth,
Existing restaurant renewal 11% after the amount by which tenth, and
options fifth lease annual gross twelfth
The Mesa Property is located year and after sales exceed lease years
on the northeast corner of the every five $2,200,000 only
intersection of South Alma years
School Road and West Holmes thereafter
Road, in Mesa, Maricopa during the
County, Arizona, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Mesa Property
include a Chevy's, a
McDonald's, a Denny's, an
Applebee's, an American Grill,
an Olive Garden, a Bennigan's,
a Red Lobster, and several
local restaurants.
BLACK-EYED PEA (10)(20) $641,254 09/30/97 11/2006 $109,225 None at any time
(the "Phoenix #1 Property") after the
Existing restaurant fifth lease
year
The Phoenix #1 Property is
located on the southeast
quadrant of Peoria Avenue and
35th Avenue, in Phoenix,
Maricopa County, Arizona, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Phoenix #1 Property include a
McDonald's, a Jack in the Box,
a Taco Bell, a Wendy's, a
Sizzler, a Whataburger, a
Bennigan's, and several local
restaurants.
</TABLE>
-49-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BLACK-EYED PEA (10)(20) $641,371 09/30/97 06/2008 $100,195; None at any time
(the "Phoenix #2 Property") increases to after the
Existing restaurant $100,583 after fifth lease
the tenth lease year
The Phoenix #2 Property is year
located on the southeast
quadrant of North 75th Avenue
and Thomas Road, in Phoenix,
Maricopa County, Arizona, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Phoenix #2 Property include a
Wendy's, a Fazoli's, a
McDonald's, an Olive Garden, a
Denny's, a Whataburger, a Taco
Bell, and several local
restaurants.
BLACK-EYED PEA (10)(20) $645,471 09/30/97 08/2009 $95,149; None at any time
(the "Phoenix #3 Property") increases to after the
Existing restaurant $96,112 after fifth lease
the tenth lease year
The Phoenix #3 Property is year
located on the southeast
quadrant of Cactus Road and
48th Street, in Phoenix,
Maricopa County, Arizona, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Phoenix #3 Property include a
Red Lobster, an Olive Garden,
a Don Pablo's, an Outback
Steakhouse, a Denny's, an
IHOP, a McDonald's, and
several local restaurants.
</TABLE>
-50-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BLACK-EYED PEA (10)(20) $641,871 09/30/97 08/2010 $91,251; None at any time
(the "Tucson Property") increases to after the
Existing restaurant $92,576 after fifth lease
the tenth lease year
The Tucson Property is located year
on the southwest quadrant of
West River Road and Stone
Road, in Tucson, Pima County,
Arizona, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Tucson
Property include a Chili's, an
On The Border, and several
local restaurants.
BLACK-EYED PEA (19)(21) $667,290 10/01/97 09/2013 $86,087; None at any time
(the "Albuquerque #1 increases to after the
Property") $88,584 after seventh
Existing restaurant the tenth lease lease year
year
The Albuquerque #1 Property is
located on the northwest
corner of San Mateo Boulevard
Northeast and Lumber Avenue
Northeast, in Albuquerque,
Bernalillo County, New Mexico,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Albuquerque #1 Property
include a Sweet Tomatoes, a
Hooters, a Pizza Hut, a
Grady's, a Chili's, an
Austin's, an Applebee's, an
Olive Garden, and a local
restaurant.
</TABLE>
-51-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BLACK-EYED PEA (19)(21) $666,355 10/01/97 07/2011 $91,517; None at any time
(the "Albuquerque #2 increases to after the
Property") $93,270 after seventh
Existing restaurant the tenth lease lease year
year
The Albuquerque #2 Property is
located on the northwest
quadrant of Interstate 40 and
Juan Tabo Boulevard Northeast,
in Albuquerque, Bernalillo
County, New Mexico, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Albuquerque
#2 Property include an Olive
Garden, a Village Inn, a
Grandy's, and several local
restaurants.
BLACK-EYED PEA (19)(21) $660,748 10/01/97 09/2011 $90,265; None at any time
(the "Dallas #2 Property") increases to after the
Existing restaurant $92,064 after seventh
the tenth lease lease year
The Dallas #2 Property is year
located on the south side of
Beltline Road, in Dallas,
Dallas County, Texas, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Dallas #2 Property include a
Chili's, an On The Border, an
Olive Garden, a Grady's, a
Macaroni Grill, and several
local restaurants.
</TABLE>
-52-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BLACK-EYED PEA (19)(21) $643,925 10/01/97 06/2004 $133,563 None at any time
(the "Forestville Property") after the
Existing restaurant seventh
lease year
The Forestville Property is
located on the northeast
quadrant of the intersection
of Silver Hill Road and
Pennsylvania Avenue, in
Forestville, Prince Georges
County, Maryland, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Forestville
Property include a Subway
Sandwich Shop, a Pizza Hut,
and several local restaurants.
BLACK-EYED PEA (19)(21) $648,598 10/01/97 08/2008 $99,659; None at any time
(the "Houston #6 Property") increases to after the
Existing restaurant $100,213 after seventh
the tenth lease lease year
The Houston #6 Property is year
located on the corner of
Northwest Freeway and
Deauville Plaza Drive, in
Houston, Harris County, Texas,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Houston #6 Property include a
Ryan's Steakhouse, a Denny's,
an Olive Garden, a Bennigan's,
a Chili's, a Kettle's, and
several local restaurants.
</TABLE>
-53-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
BLACK-EYED PEA (19)(21) $661,682 10/01/97 03/2012 $89,029; None at any time
(the "Waco Property") increases to after the
Existing restaurant $91,002 after seventh
the tenth lease lease year
The Waco Property is located year
on the north side of Bosque
Road within the Lake Air Mall,
in Waco, McLennan County,
Texas, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Waco Property
include a Piccadilly
Cafeteria, a Chili's, a
Fuddrucker's, and several
local restaurants.
BLACK-EYED PEA (19)(21) $660,748 10/01/97 12/2011 $89,571; None at any time
(the "Wichita Property") increases to after the
Existing restaurant $91,456 after seventh
the tenth lease lease year
The Wichita Property is year
located on the south side of
East Central Avenue within
Dillow's Superstore Shopping
Center, in Wichita, Sedgwick
County, Kansas, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Wichita
Property include a Chili's,
and an Olive Garden.
</TABLE>
-54-
<PAGE>
<TABLE>
<CAPTION>
Lease
Expiration
Property Location and Purchase Date and Renewal Minimum Option
Competition Price (1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- ------------- ---------------- ----------------- -------------
<S> <C>
GOLDEN CORRAL (13) $529,105 10/02/97 03/2012; 10.75% of Total for each lease during the
(the "Olathe Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs) options annual gross seventh
The Olathe Property is located (3) sales exceed lease years
on the west side of Blackbob $2,886,067 (8) and the
Road, north of U.S. 169, in tenth
Olathe, Johnson County, through
Kansas, in an area of mixed fifteenth
retail, commercial, and lease years
residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Olathe
Property include a Dairy
Queen, a Fazoli's, a KFC, a
Taco Bell, and an Applebee's.
</TABLE>
-55-
<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
-------- -----------------
Arvada #2 Property $ 667,000
Liberty #1 Property 357,000
Dearborn Property 266,000
Enumclaw Property 764,000
Guadalupe Property 905,000
Scottsdale Property 810,000
Bacliff Property 691,000
Indianapolis Property 883,000
San Antonio Property 336,000
Baltimore Property 471,000
Gambrills Property 471,000
Jessup Property 435,000
Lansing Property 651,000
Riverdale Property 474,000
Vacaville Property 805,000
Waldorf Property 455,000
Springfield Property 34,000
Jacksonville #1 Property 1,105,000
Corpus Christi Property 984,000
Leesburg Property 579,000
Starke Property 405,000
Fresno Property 601,000
Corinth Property 615,000
Tampa Property 1,056,000
Jacksonville #2 Property 1,124,000
King of Prussia Property 547,000
McLean Property 687,000
Evansville Property 971,000
Hampton Property 536,000
Huntsville Property 661,000
Knoxville Property 706,000
Louisville Property 912,000
Mobile Property 1,005,000
Montgomery Property 949,000
Nashville #1 Property 734,000
Orlando Property 770,000
Pensacola Property 723,000
Raleigh #1 Property 503,000
Raleigh #2 Property 717,000
Richmond #1 Property 773,000
Richmond #2 Property 648,000
Winston-Salem Property 810,000
Bethel Park Property 593,000
Langhorne Property 646,000
Plymouth Meeting Property 905,000
Enid Property 776,000
Fairfax Property 703,000
Liberty #2 Property 925,000
Stafford Property 679,000
Channelview Property 708,000
Garland Property 608,000
Putnam Property 534,000
Lexington Property 462,000
Newport News Property 584,000
Houston #5 Property 888,000
Stockbridge Property 705,000
Woodland Property 661,000
West Sacramento Property 612,000
Cookeville Property 1,026,000
Hendersonville Property 779,000
Lawrence Property 1,019,000
Nashville #2 Property 946,000
Greensboro Property 403,000
Greenville Property 488,000
Jonesville Property 538,000
Kernersville Property 411,000
Kinston Property 625,000
Murfreesboro Property 973,000
Edgewater Property 625,000
Duncan Property 931,000
-56-
<PAGE>
Property Federal Tax Basis
-------- -----------------
Fort Walton Beach Property $ 983,000
London Property 828,000
Elk Grove Property 1,036,000
Lake Jackson Property 799,000
Loveland Property 960,000
Victoria Property 810,000
Las Vegas Property 939,000
Hoover Property 618,000
Superstition Springs Property 1,269,000
Mobile Property 988,000
Palatka Property 932,000
Mesa Property 910,000
Phoenix #1 Property 675,000
Phoenix #2 Property 675,000
Phoenix #3 Property 680,000
Tucson Property 676,000
Albuquerque #1 Property 703,000
Albuquerque #2 Property 702,000
Dallas #2 Property 696,000
Forestville Property 678,000
Houston #6 Property 683,000
Waco Property 697,000
Wichita Property 696,000
Olathe Property 1,097,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the
Liberty #1, Dearborn, San Antonio, Indianapolis, Baltimore, Gambrills,
Jessup, Lansing, Riverdale, Vacaville, Waldorf and Springfield
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 Arvada #2, Indianapolis, Lansing and
Vacaville Properties, minimum annual rent for the remainder of 1997 and
1998 shall be prepaid on the date the tenant receives from the landlord
its final funding of the construction costs. For the Guadalupe
Property, minimum annual rent will become due and payable on the
earlier of (i) 210 days after execution of the lease, (ii) the date the
certificate of occupancy for the restaurant is issued, (iii) the date
the restaurant opens for business to the public, or (iv) the date the
tenant receives from the landlord its final funding of the construction
costs. For the Jacksonville #1, Corpus Christi, Jacksonville #2, Enid ,
Liberty #2, Duncan, Fort Walton Beach, Mobile, Palatka and Olathe
Properties, minimum annual rent will become due and payable on the
earlier of (i) 180 days after execution of the lease, (ii) the date the
certificate of occupancy for the restaurant is issued, or (iii) the
date the restaurant opens for business to the public. For the Las Vegas
and Superstition Springs Properties, minimum annual rent will become
due and payable on the earlier of (i) 180 days after execution of the
lease, (ii) the date the certificate of occupancy for the restaurant is
issued, (iii) the date the restaurant opens for business to the public,
or (iv) the date the tenant receives from the landlord its final
funding of the construction costs. For the Starke Property, minimum
annual rent will become due and payable on the earlier of (i) 120 days
after execution of the lease, (ii) the date the certificate of
occupancy for the restaurant is issued, (iii) the date the restaurant
opens for business to the public, 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 Arvada #2, Liberty #1,
Dearborn, San Antonio, Indianapolis, Baltimore, Gambrills, Jessup,
Lansing, Riverdale, Vacaville, Waldorf, Springfield, Jacksonville #1,
Corpus Christi, Jacksonville #2, Enid , Liberty #2, Duncan, Fort Walton
Beach, Mobile, Palatka and Olathe Properties, as described above,
interim rent equal to a specified rate per annum (ranging from 10% to
10.38%) of the amount funded by the Company in connection with the
purchase and construction of the Properties shall accrue and be payable
in a single lump sum at the time of 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
Guadalupe, Starke, Las Vegas and Superstition Springs Properties, as
described above, the tenant shall pay monthly "interim rent" equal to a
specified rate per annum (ranging from 10.75% to 11.50%) of the amount
funded by the Company in connection with the purchase and construction
of the Properties.
-57-
<PAGE>
(3) The development agreements for the Properties which are to be
constructed or renovated, provide that construction or renovation must
be completed no later than the dates set forth below. The maximum cost
to the Company, (including the purchase price of the land , development
costs, and closing and acquisition costs) is not expected to, but may,
exceed the amounts set forth below:
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
-------- ---------------------- -------------------------------
<S> <C>
Arvada #2 Property $1,152,262 Opened for business July 21, 1997
Liberty #1 Property 764,164 Opened for business August 18, 1997
Dearborn Property 667,305 Opened for business July 12, 1997
Enumclaw Property 843,431 Opened for business July 31, 1997
Guadalupe Property 1,452,517 Opened for business August 27, 1997
Scottsdale Property 769,863 Opened for business September 30, 1997
Bacliff Property 1,049,420 Opened for business August 3, 1997
Indianapolis Property 1,663,194 Opened for business September 2, 1997
San Antonio Property 757,069 Opened for business September 25, 1997
Baltimore Property 1,378,051 Opened for business August 19, 1997
Gambrills Property 1,264,241 Opened for business August 26, 1997
Jessup Property 1,285,243 Opened for business July 13, 1997
Lansing Property 1,033,941 November 2, 1997
Riverdale Property 1,041,107 November 2, 1997
Vacaville Property 1,437,474 Opened for business July 13, 1997
Waldorf Property 1,357,356 Opened for business July 13, 1997
Springfield Property 633,101 Opened for business July 7, 1997
Jacksonville #1 Property 1,681,435 Opened for business September 24, 1997
Corpus Christi Property 1,577,372 Opened for business September 24, 1997
Starke Property 599,800 Opened for business August 11, 1997
Fresno Property 839,981 Opened for business August 31, 1997
Corinth Property 955,333 Opened for business September 16, 1997
Jacksonville #2 Property 1,696,394 Opened for business September 3, 1997
Enid Property 1,202,286 December 14, 1997
Liberty #2 Property 1,378,020 December 16, 1997
Channelview Property 1,008,970 Opened for business September 21, 1997
Garland Property 936,119 Opened for business September 27, 1997
Woodland Property 963,592 January 12, 1998
West Sacramento Property 1,073,031 January 17, 1998
Cookeville Property 1,471,963 July 31, 1998
Hendersonville Property 747,664 July 31, 1998
Lawrence Property 1,448,598 July 31, 1998
Nashville #2 Property 1,308,411 July 31, 1998
Murfreesboro Property 1,425,234 August 4, 1998
Duncan Property 1,158,457 February 15, 1998
Fort Walton Beach Property 1,609,490 February 15, 1998
London Property 1,123,720 November 17, 1997
Las Vegas Property 1,577,243 February 16, 1998
</TABLE>
-58-
<PAGE>
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
--------- ---------------------- --------------------------------
<S> <C>
Superstition Springs Property $ 2,044,922 March 4, 1998
Mobile Property 1,463,204 March 16, 1998
Palatka Property 1,289,938 March 16, 1998
Olathe Property 1,677,340 March 31, 1998
</TABLE>
(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) The lessee of the Dearborn, Indianapolis, Baltimore, Gambrills, Jessup,
Riverdale, Waldorf, Springfield, Stafford, Newport News, Edgewater and
Hoover Properties is the same unaffiliated lessee.
(6) The lessee of the Enumclaw, Bacliff, Fresno, Corinth, Channelview,
Garland, Woodland and West Sacramento Properties is the same
unaffiliated lessee or group of unaffiliated lessees.
(7) The Company paid for all construction or renovation costs in advance at
closing; therefore, minimum annual rent was determined on the date
acquired and is not expected to change.
(8) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(9) The lessee of the Guadalupe and Las Vegas Properties is the same
unaffiliated lessee.
(10) The Company owns the building only for this Property. The Company does
not own the underlying land; although, the Company entered into a
landlord estoppel agreement with the landlord of the land and a
collateral assignment of the ground lease with the lessee in order to
provide the Company with certain rights with respect to the land on
which the building is located.
(11) The lease relating to this Property is a land lease only.
(12) The Company entered into a Master Lease Agreement for the Dover
Property and eight Pizza Hut Properties previously acquired. The
amounts presented in the table above represent additional amounts due
under the Master Lease Agreement, as described in the section of the
Prospectus entitled "Business - Property Acquisitions," as a result of
the acquisition of the Dover Property.
(13) The lessee of the Jacksonville #1, Corpus Christi, Jacksonville #2,
Enid , Liberty #2, Duncan, Fort Walton Beach, Mobile, Palatka and
Olathe Properties is the same unaffiliated lessee.
-59-
<PAGE>
(14) The lessee of the Leesburg , Fairfax, Houston #5, Stockbridge, Elk
Grove, Lake Jackson, Loveland and Victoria Properties is the same
unaffiliated lessee.
(15) The lessee of the King of Prussia, McLean, Evansville, Hampton,
Huntsville, Knoxville, Louisville, Mobile, Montgomery, Nashville #1,
Orlando, Pensacola, Raleigh #1, Raleigh #2, Richmond #1, Richmond #2,
Winston-Salem, Bethel Park, Langhorne and Plymouth Meeting Properties
is the same unaffiliated lessee.
(16) The lessee of the Lexington, Greensboro, Greenville, Jonesville,
Kernersville and Kinston Properties is the same unaffiliated lessee.
(17) The lessee of the Cookeville, Hendersonville, Lawrence, Nashville #2
and Murfreesboro Properties is the same unaffiliated lessee.
(18) The Company paid for all construction or renovation costs in advance at
closing; therefore, minimum annual rent was determined on the date
acquired and is not expected to change. In accordance with the lease
agreement, these Properties are being converted from Barb Wires
Steakhouse & Saloon restaurants to Tumbleweed Southwest Mesquite Grill
& Bar restaurants. Renovation of the Properties is expected to be
completed within 365 days of the effective date of the lease. The
Properties are expected to remain operational during renovations.
(19) The Company owns the building only for this Property. The Company does
not own the underlying land; although, the Company entered 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.
(20) The lessee of the Mesa, Phoenix #1, Phoenix #2, Phoenix #3 and Tucson
Properties is the same unaffiliated lessee.
(21) The lessee of the Albuquerque #1, Albuquerque #2, Dallas #2,
Forestville, Houston #6, Waco and Wichita Properties is the same
unaffiliated lessee.
-60-
<PAGE>
BORROWING
The Company has entered into a revolving $35,000,000 unsecured Line of
Credit with a bank to enable the Company to receive advances to fund Secured
Equipment Leases and to purchase and develop Properties and fund Mortgage Loans.
The advances will bear interest at a rate of LIBOR plus 1.65%, or the bank's
prime rate, whichever the Company selects at the time of borrowing. Interest
only is repayable monthly until July 31, 1999, at which time all remaining
interest and principal shall be due. The Line of Credit provides for two
one-year renewal options.
As of October 3, 1997, the Company had used approximately $20,121,000
of the $35,000,000 available under the Line of Credit to fund Secured Equipment
Leases. Advances used to fund Secured Equipment Leases will be repaid using
payments received from Secured Equipment Leases and will be refinanced in regard
to any Secured Equipment Lease not fully repaid at the end of the term of the
Line of Credit. Advances used to purchase and develop Properties and to fund
Mortgage Loans will be repaid using additional offering proceeds or refinanced
on a long-term basis.
The Company will not encumber Properties in connection with the Line of
Credit. Management believes that during the offering period the Line of Credit
will allow the Company to make investments that the Company otherwise would be
forced to delay until it raised a sufficient amount of proceeds from the sale of
Shares to allow the Company to make the investments. By eliminating this delay
the Company will also eliminate the risk that these investments will no longer
be available, or the terms of the investment will be less favorable, when the
Company has raised sufficient offering proceeds. Alternatively, Affiliates of
the Advisor could make such investments, pending receipt by the Company of
sufficient offering proceeds, in order to preserve the investment opportunities
for the Company. However, Properties acquired by the Company in this manner
would be subject to closing costs both on the original purchase by the Affiliate
and on the subsequent purchase by the Company, which would increase the amount
of expenses associated with the acquisition of Properties and reduce the amount
of offering proceeds available for investment in income-producing assets.
Management believes that the use of the Line of Credit by the Company will
enable the Company to reduce or eliminate the instances in which the Company
will be required to pay duplicate closing costs.
The Board of Directors does not anticipate that the Company will borrow
funds, other than the Line of Credit and any additional financing the Board of
Directors may determine to obtain to fund Secured Equipment Leases or to
purchase and develop Properties and fund Mortgage Loans. However, the Company
may also borrow funds for the purpose of preserving its status as a REIT. For
example, the Company may borrow to the extent necessary to permit the Company to
make Distributions required in order to enable the Company to qualify as a REIT
for federal income tax purposes; however, the Company will not borrow for the
purpose of returning capital to the stockholders unless necessary to eliminate
corporate-level tax to the Company. Until Listing occurs, the Company will not
encumber Properties in connection with any borrowing. If Listing occurs,
however, the Board of Directors may elect to cause the Company to borrow funds
in connection with the purchase of additional Properties or for other Company
purposes and to encumber any or all of the Company's Properties in connection
with any such borrowing. The aggregate borrowing of the Company, secured and
unsecured, shall be reasonable in relation to Net Assets of the Company and
shall be reviewed by the Board of Directors at least quarterly. The Board of
Directors anticipates that the aggregate amount of any borrowing will not exceed
50% of Real Estate Asset Value, although the maximum amount of borrowing in
relation to Net Assets, in the absence of a satisfactory showing that a higher
level of borrowing is appropriate, shall not exceed 300% of Net Assets (an
amount which the Company anticipates will correspond to approximately 75% of
Real Estate Asset Value). Any excess in borrowing over such 300% level shall
occur only with approval by a majority of the Independent Directors and will be
disclosed and explained to stockholders in the first quarterly report of the
Company prepared after such approval occurs. Any additional financing obtained
to fund Secured Equipment Leases may not exceed 10% of aggregate gross proceeds
of the Company's Prior Offerings, this offering and any subsequent offering.
-61-
<PAGE>
PENDING INVESTMENTS
As of October 3, 1997, the Company had initial commitments to acquire
23 properties, including 21 properties consisting of land and building and two
properties consisting of building only. 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 23 of these properties are expected to
be entered into on substantially the same terms described in the section of the
Prospectus entitled "Business -Description of Property Leases."
In connection with the IHOP property in Saugus, Massachusetts, the
Company anticipates owning only the building and not the underlying land.
However, the Company anticipates entering into a landlord estoppel agreement
with the landlord of the land and a collateral assignment of the ground lease
with the lessee in order to provide the Company with certain rights with respect
to the land on which the building is located.
In connection with the On The Border property in San Antonio, Texas,
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.
-62-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- --------- ------------------ -------------------- ------------------- -----------
<S> <C>
Boston Market 15 years; five 10.38% of the Company's for each lease year after at any time
Colorado Springs, CO five-year renewal total cost to purchase the the fifth lease year, (i) after the
Existing restaurant options property; increases by 10% 4% of annual gross sales fifth lease
after the fifth lease year minus (ii) the minimum year
and after every five years annual rent for such lease
thereafter during the lease year
term
Golden Corral 15 years; four 10.75% of Total Cost (1) for each lease year, 5% of during the
Muskogee, OK five-year renewal the amount by which annual first through
Restaurant to be options gross sales exceed a to be seventh lease
constructed determined breakpoint years and the
tenth through
fifteenth
lease years
only
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Allentown, PA five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Colerain, OH five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Crystal, MN five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Dubuque, IA five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Ewing, NJ five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Gloucester, NJ five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
</TABLE>
-63-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- --------- ------------------ -------------------- ------------------- -----------
<S> <C>
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Janesville, WI five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Kalamazoo, MI five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Maple Shade, NJ five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Nanuet, NY five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Parma, OH five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Reading, PA five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Waterloo, IA five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
Ground Round 20 years; five 10.25% of the Company's (2) at any time
Wauwatosa, WI five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
IHOP (3) (4) 11.78% of the Company's for each lease year, (i) 3% at any time
Saugus, MA total cost to purchase the of annual gross sales minus after the
Existing restaurant building; increases by (ii) the minimum annual fifth lease
5.81% after the fifth lease rent for such lease year year
year, 4.66% after the tenth
lease year, and 2.83% after
the fifteenth lease year
</TABLE>
-64-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- --------- ------------------ -------------------- ------------------- -----------
<S> <C>
Jack in the Box 18 years; four 10.25% of Total Cost (1); for each lease year, (i) 5% at any time
Florissant, MO five-year renewal increases by 8% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year year (5)
during the lease term
Jack in the Box 18 years; four 10.25% of Total Cost (1); for each lease year, (i) 5% at any time
Folsum, CA five-year renewal increases by 8% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year year (5)
during the lease term
Jack in the Box 18 years; four 10.25% of Total Cost (1); for each lease year, (i) 5% at any time
Los Angeles, CA five-year renewal increases by 8% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year year (5)
during the lease term
On The Border (6) (7); three five- 13.64% of Total Cost (1); for each lease year, (i) 4% at any time
San Antonio, TX year renewal (8) of annual gross sales minus after the
Restaurant to be options (ii) the minimum annual tenth lease
constructed rent for such lease year year
Ruby Tuesday's 20 years; two 11% of Total Cost (1); for each lease year, (i) 6% at any time
Georgetown, KY five-year renewal increases by 10% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year at year
during the lease term any time after the seventh
lease year
Wendy's 20 years; two 10.25% of Total Cost (1) for each lease year, (i) 7% at any time
Westlake Village, CA five-year renewal of annual gross sales minus after the
Restaurant to be options (ii) the minimum annual seventh lease
constructed rent for such lease year year
</TABLE>
-65-
<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) For each lease year, percentage rent shall be calculated upon the
amount by which gross sales exceed a to be determined breakpoint (base
sales) as follows; 6% for an increase of 0% to 33.33% above base sales,
5.5% for an increase of 33.34% to 66.7% above base sales, and 5% for an
increase of 66.8% to 100% above base sales. For increases in gross
sales in excess of 100%, percentage rent shall decrease by .5% for
every additional 33.33% increase above base sales.
(3) 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 landlord estoppel agreement with the
landlord of the land and a collateral assignment of the ground lease
with the lessee in order to provide the Company with certain rights
with respect to the land on which the building is located.
(4) The lease term shall expire upon the earlier of (i) the date 20 years
from the date of closing, (ii) the expiration of the original term of
the ground lease, or (iii) the earlier termination of the ground lease.
(5) In the event the Company purchases the property directly from the
lessee, the lessee will have no option to purchase the property.
(6) 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.
(7) The lease term shall expire upon the earlier of (i) the date 15 years
from the date of closing, (ii) the expiration of the original term of
the ground lease, or (iii) the earlier termination of the ground lease.
(8) Base rent shall increase after every five years during the lease term
by the lesser of (i) 10% of the minimum base rent during the preceding
year or (ii) 150% of the percentage change in the Consumer Price Index.
-66-
<PAGE>
SALE OF PROPERTIES AND SECURED EQUIPMENT LEASES
In May 1997, the Company sold its Properties in Orange and Hamden,
Connecticut, and Marlboro and Hazlet, New Jersey, to the tenant for a total of
$5,266,327. In addition, in July 1997, the Company sold its Property in
Southlake, Texas, to the tenant for $1,035,153. The Company intends to reinvest
the net sales proceeds from the sale of Properties in additional Properties.
In February 1997 and April 1997, the Company sold the Equipment
relating to two Secured Equipment Leases for the Properties in Spring Hill,
Florida, and High Ridge, Missouri, respectively, to the tenant and used the
proceeds therefrom to repay amounts previously advanced under its Loan. In
addition, in May 1997, the Company sold the Equipment relating to two Secured
Equipment Leases for the Properties in Marlboro and Hazlet, New Jersey, to the
tenant and used the proceeds therefrom to repay amounts previously advanced
under its Loan.
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 Exhibit B to this Prospectus.
<TABLE>
<CAPTION>
May 2,
1994 (Date
of Inception)
Six Months Ended Year Ended through
June 30, 1997 June 30, 1996 December 31, December 31,
(Unaudited) (Unaudited) 1996 1995 1994
------------- ---------------- -------- ------ ------------
<S> <C>
Revenues $6,715,234 $2,381,472 $6,206,684 $ 659,131 $ -
Net earnings 5,227,095 1,689,042 4,745,962 368,779 -
Cash distributions declared (1) 6,282,470 1,868,487 5,436,072 638,618 -
Funds from operations (2) 5,801,102 1,892,079 5,257,040 469,097 -
Earnings per Share 0.29 0.30 0.59 0.19 -
Cash distributions declared per Share 0.37 0.35 0.71 0.34 -
Weighted average number of Shares
outstanding (3) 17,826,025 5,649,041 8,071,670 1,898,350 -
<CAPTION>
June 30, 1997 June 30, 1996 December 31, December 31, December 31,
(Unaudited) (Unaudited) 1996 1995 1994
-------------- -------------- --------------- ------------ ------------
Total assets $214,941,742 $ 70,597,609 $134,825,048 $ 33,603,084 $ 929,585
Total equity 197,122,436 66,240,326 122,867,427 31,980,648 200,000
</TABLE>
(1) Approximately eight percent, 15 percent, 13 percent and 42 percent of
cash distributions ($0.03, $0.05, $0.06 and $0.14 per Share) for the
six months ended June 30, 1997 and 1996, and the years ended December
31, 1996 and 1995, respectively, represents a return of capital in
accordance with generally accepted accounting principles ("GAAP ").
Cash distributions treated as a return of capital on a GAAP basis
represent the amount of cash distributions in excess of accumulated net
earnings on a GAAP basis. The Company has not treated such amount as a
return of capital for purposes of calculating Invested Capital and the
Stockholders' 8% Return, as described in the Prospectus.
(2) Funds from operations ("FFO"), based on the revised definition adopted
by the Board of Governors of NAREIT and as used herein, means net
earnings determined in accordance with generally accepted accounting
principles ("GAAP"), excluding gains or losses from debt restructuring
and sales of property, plus depreciation and amortization of real
estate assets, and after adjustments for unconsolidated partnerships
and joint ventures. FFO was developed by NAREIT as a relative measure
of performance and liquidity of
-67-
<PAGE>
an equity REIT in order to recognize that income-producing real estate
historically has not depreciated on the basis determined under GAAP.
However, FFO (i) does not represent cash generated from operating
activities determined in accordance with GAAP (which, unlike FFO,
generally reflects all cash effects of transactions and other events
that enter into the determination of net earnings), (ii) is not
necessarily indicative of cash flow available to fund cash needs and
(iii) should not be considered as an alternative to net earnings
determined in accordance with GAAP as an indication of the Company's
operating performance, or to cash flow from operating activities
determined in accordance with GAAP as a measure of either liquidity or
the Company's ability to make distributions. Accordingly, the Company
believes that in order to facilitate a clear understanding of the
consolidated historical operating results of the Company, FFO should be
considered in conjunction with the Company's net earnings and cash
flows as reported in the accompanying consolidated financial statements
and notes thereto. See Exhibit B - Financial Information.
(3) The weighted average number of Shares outstanding is based upon the
period the Company was operational.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OF THE COMPANY
INTRODUCTION
The Company is a Maryland corporation that was organized on May 2,
1994, to acquire Properties, directly or indirectly through Joint Venture or
co-tenancy arrangements, to be leased on a long-term, "triple-net" basis to
operators of certain national and regional fast-food, family-style and casual
dining Restaurant Chains. In addition, the Company may provide financing
generally for the purchase of buildings by borrowers that lease the underlying
land from the Company. To a lesser extent, the Company may offer Secured
Equipment Leases to operators of Restaurant Chains.
LIQUIDITY AND CAPITAL RESOURCES
In April 1995, the Company commenced the Initial Offering of its shares
of common stock. During the period April 1, 1995 through February 6, 1997, the
Company received subscription proceeds of $150,591,765 (15,059,177 shares)
including $591,765 (59,177 shares) pursuant to the Company's Reinvestment Plan,
from the Initial Offering, thereby completing such offering. Following the
completion of the Initial Offering on February 6, 1997, the Company commenced
this offering. As of June 30, 1997, the Company had received subscription
proceeds of $73,251,412 (7,325,141 shares) from this offering, including
$643,293 (64,329 shares) pursuant to the Reinvestment Plan.
As of June 30, 1997, net proceeds to the Company from the Initial
Offering and this offering , after deduction of selling commissions, marketing
support and due diligence expense reimbursement fees and offering expenses
totalled $198,917,759. Approximately $185,000,000 of such amount had been
used to invest, or committed for investment, in 174 Properties (33 Properties
which were under construction as of June 30, 1997), in providing mortgage
financing of $17,047,000 and to pay acquisition fees to the Advisor totalling
$10,072,943 and certain acquisition expenses. The Company acquired 15 of the 174
Properties from Affiliates for purchase prices totalling approximately
$11,000,000. The Affiliates had purchased and temporarily held title to these
Properties in order to facilitate the acquisition of the Properties by the
Company. Each Property was acquired at a cost no greater than the lesser of the
cost of the Property to the Affiliate (including carrying costs) or the
Property's appraised value.
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In connection with the 33 Properties under construction at June 30,
1997, the Company has entered into various development agreements with tenants
which provide terms and specifications for the construction of buildings the
tenants have agreed to lease. The agreements provide a maximum amount of
development costs (including the purchase price of the land and closing costs)
to be paid by the Company. The aggregate maximum development costs the Company
has agreed to pay are approximately $37,343,000, of which approximately
$29,936,300 had been incurred as of June 30, 1997. The buildings under
construction as of June 30, 1997, are expected to be operational by December
1997. In connection with the purchase of each Property, the Company, as lessor,
entered into a long-term lease agreement.
In May 1997, the Company sold four of its Properties and the Equipment
relating to two Secured Equipment Leases to a tenant. The Company received net
proceeds of approximately $6,216,400 which was equal to the carrying value of
the Properties and the Equipment at the time of the sale. As a result, no gain
or loss was recognized for financial reporting purposes. In addition, in July
1997, the Company sold one of its Properties to a tenant for approximately
$1,035,200, resulting in a gain of approximately $10,700 for financial reporting
purposes.
During the period July 1, 1997 through October 3, 1997, the Company
acquired 46 additional Properties (11 on which restaurants are being constructed
and six on which a restaurant is being renovated) for cash at a total cost of
approximately $41,109,900. The buildings under construction or renovation are
expected to be operational by August 1998.
The Company presently is negotiating to acquire additional Properties, but as of
October 3, 1997, had not acquired any such Properties.
As of October 3, 1997, the Company had received aggregate subscription
proceeds of $291,805,794 (29,180,579 shares) from the Initial Offering and this
offering, including $1,775,054 (177,505 shares) through its Reinvestment Plan.
As of October 3, 1997, the Company had invested or committed for investment
approximately $236,499,000 of aggregate net proceeds from the Initial Offering
and this offering in 220 Properties, in providing mortgage financing to the
tenants of 44 Properties consisting of land only and two additional Properties
through Mortgage Loans and in paying acquisition fees and certain acquisition
expenses, leaving approximately $24,944,000 in aggregate net offering proceeds
available for investment in Properties and Mortgage Loans.
The Company expects to use uninvested Net Offering Proceeds, plus any
Net Offering Proceeds from the sale of additional Shares, to purchase additional
Properties, to fund construction costs relating to the Properties under
construction and to make Mortgage Loans. The number of Properties to be acquired
and Mortgage Loans to be entered into will depend upon the amount of Net
Offering Proceeds available to the Company, although the Company is expected to
have a total portfolio of 400 to 450 Properties if the maximum number of Shares
are sold in this offering. The Company expects to use the proceeds of the Line
of Credit to fund the Secured Equipment Lease program. The Company intends to
limit the amount of Secured Equipment Leases it enters into to ten percent of
gross offering proceeds from its offerings.
On October 10, 1997, the Company filed a registration statement with
the Securities and Exchange Commission in connection with the proposed sale by
the Company of up to 34,500,000 shares of common stock in the Subsequent
Offering expected to commence immediately following the termination of this
offering. Of the 34,500,000 shares of common stock to be offered, 2,000,000 will
be available only to stockholders purchasing through the Reinvestment Plan. The
price per share and the other terms of the Subsequent Offering, including the
percentage of gross proceeds payable to the Managing Dealer for selling
commissions and expenses in connection with the offering, payable to the Advisor
for acquisition fees and acquisition expenses and reimbursable to the Advisor
for offering expenses, will be the same as those for this offering. Net proceeds
from the Subsequent Offering will be invested in additional Properties and
Mortgage Loans.
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The Company has entered into a revolving $35,000,000 unsecured Line of Credit
with a bank to fund Secured Equipment Leases and to purchase and develop
Properties or fund Mortgage Loans. The advances will bear interest at a rate of
LIBOR plus 1.65% or the bank's prime rate, whichever the Company selects at the
time of borrowing. Interest only will be repayable monthly until July 31, 1999,
at which time all remaining interest and principal shall be due. The Line of
Credit provides for two one-year renewal options. Management believes that
during the offering period the Line of Credit will allow the Company to make
investments that the Company otherwise would be forced to delay until it raised
sufficient offering proceeds. Advances used to fund Secured Equipment Leases
will be repaid using payments received from Secured Equipment Leases and will be
refinanced in regard to any Secured Equipment Lease not fully repaid at the end
of the term of the Line of Credit. Advances used to purchase and develop
Properties and fund Mortgage Loans will be repaid using additional offering
proceeds from this offering or refinanced on a long-term basis. The Company will
not encumber Properties in connection with the Line of Credit.
Properties are and will be leased on a triple-net basis, meaning that
tenants are generally required to pay all repairs and maintenance, property
taxes, insurance and utilities. Rental payments under the leases are expected to
exceed the Company's operating expenses. For these reasons, no short-term or
long-term liquidity problems currently are anticipated by management.
Until Properties are acquired, or Mortgage Loans are entered into, Net
Offering Proceeds are held in short-term, highly liquid investments which
management believes to have appropriate safety of principal. This investment
strategy provides high liquidity in order to facilitate the Company's use of
these funds to acquire Properties or to fund Mortgage Loans at such time as
Properties suitable for acquisition and investments in Mortgage Notes are
identified. At June 30, 1997, the Company had $31,097,346 invested in such
short-term investments, as compared to $42,450,088 at December 31, 1996. These
funds will be used primarily to purchase and develop or renovate Properties
(directly or indirectly through joint venture arrangements), to make Mortgage
Loans, to pay offering and acquisition costs, to pay Distributions to
stockholders, to meet Company expenses and, in management's discretion, to
create cash reserves. The decrease in the amount invested in short-term
investments is primarily attributable to the acquisition of additional
Properties during the six months ended June 30, 1997.
During the six months ended June 30, 1997 and 1996, Affiliates of the
Company incurred on behalf of the Company $1,361,009 and $495,800, respectively,
for certain offering expenses, $329,237 and $107,383, respectively, for certain
acquisition expenses, and $236,639 and $149,802, respectively, for certain
operating expenses. As of June 30, 1997, the Company owed the Advisor $790,223
for such amounts, unpaid fees and accounting and administrative expenses. As of
August 5, 1997, the Company had reimbursed all such amounts. The Advisor has
agreed to pay or reimburse to the Company all offering expenses in excess of
three percent of gross offering proceeds.
During the six months ended June 30, 1997 and 1996, the Company
generated cash from operations (which includes cash received from tenants and
interest and other income received, less cash paid for operating expenses) of
$6,314,003 and $1,573,575, respectively. Based on current and anticipated future
cash from operations, the Company declared Distributions to the stockholders of
$6,282,470 and $1,868,487 during the six months ended June 30, 1997 and 1996,
respectively. In addition, on July 1, 1997, August 1, 1997, and September 1,
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1997, the Company declared Distributions to its stockholders totalling
$1,403,182, $1,516,974 and $1,677,329, respectively, payable in September 1997.
In addition, on October 1, 1997, the Company declared Distributions to its
stockholders totalling $1,845,170 payable in December 1997. For the six months
ended June 30, 1997 and 1996, approximately 92 and 85 percent, respectively, of
the Distributions received by stockholders were considered to be ordinary income
and approximately eight and 15 percent, respectively, were considered a return
of capital for federal income tax purposes. However, no amounts distributed or
to be distributed to the stockholders as of October 3, 1997, 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.
Management believes that the Properties are adequately covered by
insurance. In addition, the Advisor obtained contingent liability and property
coverage for the Company. This insurance policy is intended to reduce the
Company's exposure in the unlikely event a tenant's insurance policy lapses or
is insufficient to cover a claim relating to the Property. The Company's
investment strategy of acquiring Properties for cash and leasing them under
triple-net leases to operators who meet specified financial standards is
expected to minimize the Company's operating expenses.
Due to the fact that the Properties are leased on a long-term,
triple-net basis, management does not believe that working capital reserves are
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.
Management expects that the cash generated from operations will be
adequate to pay operating expenses.
RESULTS OF OPERATIONS
As of June 30, 1997, the Company and its consolidated joint venture,
CNL/Corral South Joint Venture (hereinafter, collectively referred to as the
Company) had purchased and entered into long-term, triple-net leases for 178
Properties (including four Properties in each of Marlboro and Hazlet, New Jersey
and Hamden and Orange, Connecticut, which were sold in May 1997). The leases
provide for minimum base annual rental payments (payable in monthly
installments) ranging from approximately $34,800 to $467,500. In addition,
certain leases provide for percentage rent based on sales in excess of a
specified amount. The majority of the leases also provide that, commencing in
generally the sixth lease year, the annual base rent required under the terms of
the leases will increase. In connection therewith, during the six months ended
June 30, 1997 and 1996, the Company earned $4,965,297 and $1,704,185,
respectively, in rental income from operating leases and earned income from
direct financing leases from 143 Properties and 16 Secured Equipment Leases in
1997 (including two Secured Equipment Leases in Marlboro and Hazlet, New Jersey,
which were sold in May 1997) and from 41 Properties in 1996 ($2,875,512 and
$905,104 of which was earned during the quarters ended June 30, 1997 and 1996,
respectively). Because the Company has not yet acquired all of its Properties,
revenues for the six months ended June 30, 1997 and 1996, represent only a
portion of revenues which the Company is expected to earn in future periods in
which the Company's Properties are operational.
As of June 30, 1997, the Company had also entered into Mortgage Loans
in the principal sum of $17,047,000, collateralized by mortgages on the
buildings relating to 44 Pizza Hut Properties and two additional Pizza Hut
buildings. The Mortgage Loans bear interest at rates ranging from 10.5% to
10.75% per annum and are being collected in 240 equal monthly installments in
the aggregate amount of $167,455. In connection therewith, the Company earned
$815,192 and $465,498 in interest income relating to such Mortgage Loans during
the six months ended June 30, 1997 and 1996, respectively, $439,835 and $280,549
of which was earned during the quarters ended June 30, 1997 and 1996,
respectively.
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During the six months ended June 30, 1997, two affiliated groups of
lessees or borrowers, Castle Hill Holdings V, L.L.C., Castle Hill Holdings VI,
L.L.C., and Castle Hill Holdings VII, L.L.C. (hereinafter referred to as Castle
Hill), and Foodmaker, Inc., each represented more than ten percent of the
Company's total rental, earned and interest income from its Properties, Mortgage
Loans and Secured Equipment Leases. Castle Hill is the lessee under leases
relating to 44 restaurants and is the borrower on Mortgage Loans relating to the
buildings on such Properties and two additional Properties and Foodmaker, Inc.
is the lessee under leases relating to 17 restaurants. In addition, during the
six months ended June 30, 1997, four Restaurant Chains, Golden Corral Family
Steakhouse, Pizza Hut, Jack in the Box, and Boston Market, each accounted for
more than ten percent of the Company's total rental, earned and interest income
relating to its Properties, Mortgage Loans and Secured Equipment Leases. Because
the Company has not completed its investment in Properties and Mortgage Loans,
it is not possible to determine which lessees, borrowers or Restaurant Chains
will contribute more than ten percent of the Company's rental, earned and
interest income during the remainder of 1997 and subsequent years. In the event
that certain lessees, borrowers or Restaurant Chains contribute more than ten
percent of the Company's rental and interest income in the current and future
years, any failure of such lessees, borrowers or Restaurants Chains could
materially affect the Company's income.
During the six months ended June 30, 1997 and 1996, the Company also
earned $934,745 and $211,789, respectively, in interest income from investments
in money market accounts or other short-term, highly liquid investments and
other income, $460,329 and $135,940 of which was earned during the quarters
ended June 30, 1997 and 1996, respectively. As net offering proceeds are
invested in Properties and used to make Mortgage Loans, interest income from
investments in money market accounts or other short-term, highly liquid
investments is expected to decrease.
Operating expenses, including depreciation and amortization expense,
were $1,472,413 and $670,107 for the six months ended June 30, 1997 and 1996,
respectively, of which $792,590 and $369,568 were incurred for the quarters
ended June 30, 1997 and 1996, respectively. Operating expenses increased
primarily as a result of the Company having invested in additional Properties
and Mortgage Loans during the quarter and six months ended June 30, 1997, as
compared to the quarter and six months ended June 30, 1996. General and
administrative expenses as a percentage of total revenues is expected to
decrease as the Company acquires additional Properties, invests in Mortgage
Loans and the Properties under construction become operational. However, asset
management fees and depreciation and amortization expense are expected to
increase as the Company invests in additional Properties and Mortgage Loans.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, "Earnings Per Share." The
statement , which is effective for fiscal years ending after December 15, 1997,
provides for a revised computation of earnings per share. The Company will adopt
this standard in 1997 and does not expect compliance with such standard to have
a material effect, if any, on the Company's earnings per share.
This information contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. 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, continued availability of proceeds from
this offering, the availability of proceeds from the Subsequent Offering, if
any, the ability of the Company to locate suitable tenants for its Properties
and borrowers for its Mortgage Loans, and the ability of tenants and borrowers
to make payments under their respective leases or Mortgage Loans.
MANAGEMENT COMPENSATION
FEES AND EXPENSES PAID TO THE
ADVISOR AND ITS AFFILIATES
The following presents information regarding this offering from
commencement on February 7, 1997 through October 3, 1997, unless otherwise
noted. For information regarding the Initial Offering for the years ended
December 31, 1995 and 1996, and the period January 1, 1997 through February 6,
1997, see the section of the Prospectus entitled "Certain Transactions."
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Selling Commissions and Marketing Support and Due Diligence Expense
Reimbursement Fee. In connection with the formation of the Company and the
offering of the Shares, the Managing Dealer will receive Selling Commissions of
7.5% (a maximum of $20,625,000 if 27,500,000 Shares are sold), and a marketing
support and due diligence expense reimbursement fee of 0.5% (a maximum of
$1,375,000 if 27,500,000 Shares are sold), of the total amount raised from the
sale of Shares, computed at $10.00 per Share sold ("Gross Proceeds"). The
Managing Dealer in turn may reallow Selling Commissions of up to 7% on Shares
sold, and all or a portion of the 0.5% marketing support and due diligence
expense reimbursement fee to certain Soliciting Dealers, who are not Affiliates
of the Company. As of October 3, 1997, the Company had incurred $10,591,052 for
Selling Commissions due to the Managing Dealer, a substantial portion of which
has been paid as commissions to other Soliciting Dealers. In addition, as of
October 3, 1997, the Company had incurred $706,070 in marketing support and due
diligence expense reimbursement fees due to the Managing Dealer. A portion of
these fees has been reallowed to other Soliciting Dealers, and all due diligence
expenses will be paid from such fees.
Soliciting Dealer Servicing Fee. The Company will incur a Soliciting
Dealer Servicing Fee in the amount of .20% of Invested Capital (a maximum of
$550,000 if 27,500,000 Shares are sold). The Soliciting Dealer Servicing Fee
will be payable on December 31 of each year, commencing on December 31 of the
year following the year in which the related offering terminates, and generally
will be payable to the Managing Dealer, which in turn may reallow all or a
portion of such fee to Soliciting Dealers whose clients held Shares on such
date. As of October 3, 1997, no such fees had been incurred by the Company.
Acquisition Fees. 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 equal to 4.5% of Gross Proceeds,
payable by the Company as Acquisition Fees. As of October 3, 1997, the Company
had incurred $6,354,631 in such acquisition fees payable to the Advisor.
Other Acquisition Fees to Affiliates of the Advisor. In connection
with the financing, development, construction or renovation of a Property by
Affiliates, the Company will incur other acquisition fees, payable to Affiliates
of the Advisor as Acquisition Fees. Such fees are in addition to 4.5% of Gross
Proceeds payable to the Advisor as Acquisition Fees, and payment of such fees
will be subject to approval by the Board of Directors, including a majority of
the Independent Directors, not otherwise interested in the transaction. As of
October 3, 1997, the Company had incurred $140,191 of such fees in connection
with Net Offering Proceeds of this offering.
Asset Management Fee. For managing the Properties, the Advisor will be
entitled to receive a monthly Asset Management Fee of one-twelfth of .60% of the
Company's Real Estate Asset Value (generally, the total amount invested in the
Properties, exclusive of Acquisition Fees and Acquisition Expenses) and the
outstanding principal amount of the Mortgage Loans as of the end of the
preceding month. For the six months ended June 30, 1997, the Company had
incurred $300,656 of such fees, $41,400 of which has been capitalized as part of
the cost of building for Properties under construction, including amounts
incurred relating to Properties acquired with Net Offering Proceeds from the
Company's Initial Offering.
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Secured Equipment Lease Servicing Fee. For negotiating Secured
Equipment Leases and supervising the Secured Equipment Lease program, the
Advisor will be entitled to receive from the Company a one-time Secured
Equipment Lease Servicing Fee of 2% of the purchase price of the Equipment that
is the subject of a Secured Equipment Lease. During the six months ended June
30, 1997, the Company had incurred $54,598 of such fees.
Real Estate Disposition Fee. Prior to Listing, the Advisor may receive
a real estate disposition fee of 3% of the gross sales price of one or more
Properties for providing substantial services in connection with the Sale, which
will be deferred and subordinated until the stockholders have received
Distributions equal to the sum of 100% of the stockholders' aggregate Invested
Capital plus an aggregate, annual, cumulative, noncompounded 8% return on their
Invested Capital (the "Stockholders' 8% Return"). Upon Listing, if the Advisor
has accrued but not been paid such real estate disposition fee, then for
purposes of determining whether the subordination conditions have been
satisfied, stockholders will be deemed to have received a Distribution in an
amount equal to the product of the total number of Shares outstanding and the
average closing prices of the Shares over a period, beginning 180 days after
Listing, of 30 days during which the Shares are traded. As of June 30, 1997, no
such fees had been incurred by the Company.
Subordinated Share of Net Sales Proceeds. A subordinated share of Net
Sales Proceeds will be paid to the Advisor upon the Sale of one or more
Properties or Secured Equipment Leases in an amount equal to 10% of Net Sales
Proceeds. This amount will be subordinated and paid only after the stockholders
have received Distributions equal to the sum of 100% of the stockholders'
aggregate Invested Capital, plus the Stockholders' 8% Return. As of June 30,
1997, no such amounts had been incurred by the Company.
Administrative and Other Expenses. The Advisor provides accounting and
administrative services (including accounting and administrative services in
connection with the Offering of Shares) to the Company on a day-to-day basis.
During the six months ended June 30, 1997, the Company had incurred $757,096 of
such costs that are included in stock issuance costs and $269,208 of such costs
that are included in general and administrative expenses, including amounts
incurred in connection with activities of the Company's Initial Offering.
Reimbursement of Out-of-Pocket Expenses. The Advisor and its Affiliates
are entitled to receive reimbursement, at cost, for expenses they incur for
Organizational and Offering Expenses, Acquisition Expenses and Operating
Expenses. During the six months ended June 30, 1997, the Advisor and its
Affiliates incurred $1,361,009, $329,237, and $236,639 on behalf of the Company
for Offering Expenses, Acquisition Expenses, and Operating Expenses,
respectively, including amounts incurred in connection with activities of the
Company's Initial Offering.
MANAGEMENT
Robert A. Bourne. Director and President. Mr. Bourne currently holds
the position of Vice Chairman of the Board, director and Treasurer of CNL Fund
Advisors, Inc., the Advisor to the Company. Mr. Bourne served as President of
CNL Fund Advisors, Inc. from the date of its inception through June 30, 1997.
Mr. Bourne also has served as President and a director of CNL American Realty
Fund, Inc. since 1996 and of CNL Real Estate Advisors, Inc. since January 1997.
Mr. Bourne is President and Treasurer of CNL Group, Inc., President, a director,
and a registered principal of CNL Securities Corp. (the Managing Dealer of this
offering), President and a director of CNL Investment Company, and Chief
Investment Officer, Vice Chairman of the Board, a director and Treasurer 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. Mr. Bourne also has served as President and a director
from July 1992 to February 1996, and has served as Vice Chairman of the Board of
Directors, Secretary and Treasurer since February 1996, of Commercial Net Lease
Realty, Inc. In addition, Mr. Bourne served as President of CNL Realty
Advisors, Inc. from 1991 to February 1996, and has served as a director of CNL
Realty Advisors, Inc. since 1991, and as Treasurer and Vice Chairman since
February 1996. 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
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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.
Lynn E. Rose. Secretary and Treasurer. Ms. Rose is also Secretary and
Treasurer of CNL American Realty Fund, Inc. Ms. Rose serves as Secretary and a
director of CNL Fund Advisors, Inc., the Advisor to the Company, and CNL Real
Estate Advisors, Inc. Ms. Rose served as Treasurer of CNL Fund Advisors, Inc.
from the date of its inception through June 30, 1997. Ms. Rose, a certified
public accountant, has served as Secretary of CNL Group, Inc. since 1987, as
Chief Financial Officer of CNL Group, Inc. since December 1993, and served as
Controller of CNL Group, Inc. from 1987 until December 1993. In addition, Ms.
Rose has served as Chief Financial Officer and Secretary of CNL Securities Corp.
since July 1994. She has served as Chief Operating Officer, Vice President and
Secretary of CNL Corporate Services, Inc. since November 1994. Ms. Rose also
has served as Chief Financial Officer and Secretary of CNL Institutional
Advisors, Inc. since its inception in 1990, as Secretary and a director of CNL
Realty Advisors, Inc. since its inception in 1991, and as a 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. from 1992 to
February 1996. Ms. Rose also currently serves as Secretary for approximately 50
additional corporations. Ms. Rose oversees the management information services,
administration, legal compliance, accounting, tenant compliance, and reporting
for over 250 corporations, partnerships 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
The directors and officers of the Advisor are as follows:
<TABLE>
<S> <C>
James M. Seneff, Jr. ............................. Chairman of the Board, Chief Executive Officer and Director
Robert A. Bourne ................................. Vice Chairman of the Board, Treasurer and Director
Curtis B. McWilliams ............................. President
John T. Walker ................................... Chief Operating Officer and Executive Vice President
Steven D. Shackelford............................. Chief Financial Officer
Lynn E. Rose ..................................... Secretary and Director
Jeanne A. Wall ................................... Executive Vice President
</TABLE>
Curtis B. McWilliams. Mr. McWilliams joined CNL Group, Inc. in April 1997 and
currently serves as President of the Advisor. In addition, Mr. McWilliams serves
as Executive Vice President of CNL Group, Inc. and as President of CNL
Institutional Advisors, Inc. and certain other subsidiaries of CNL Group, Inc.
From January 1991 to August 1996, Mr. McWilliams was a managing director in the
corporate banking group of Merrill Lynch's investment banking division. During
this time, he was a senior relationship manager with Merrill Lynch and as such
was responsible for a number of the firm's relationships with companies such as
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AT&T, AT&T Capital, AMR Corporation, J.C. Penney and the Robert M. Bass Group.
In addition, from February 1990 to February 1993, he served as co-head of one of
the Industrial Banking Groups within Merrill Lynch's investment banking division
and had administrative responsibility for 25 bankers overseeing 150 client
relationships, including the firm's transportation group. In addition, from
September 1996 to March 1997, Mr. McWilliams served as Chairman of Private
Advisory Services, Merrill Lynch's high net worth brokerage business. Mr.
McWilliams received a B.S.E. in Chemical Engineering from Princeton University
in 1977 and a Masters of Business Administration with a concentration in finance
from the University of Chicago in 1983.
CERTAIN TRANSACTIONS
The Managing Dealer is entitled to receive Selling Commissions
amounting to 7.5% of the total amount raised from the sale of Shares of common
stock for services in connection with the offering of Shares, a substantial
portion of which has been or will be paid as commissions to other
broker-dealers. During the period February 7, 1997 (the date this offering
commenced) through October 3, 1997, the Company incurred $10,591,052 in such
fees in connection with this offering, the majority of which has been or will be
paid as commissions to other broker-dealers.
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. During the period February 7, 1997 (the date this offering
commenced) through October 3, 1997, the Company incurred $706,070 in such fees
in connection with this offering, substantially all of which were reallowed to
other broker-dealers and from which all bona fide due diligence expenses were
paid.
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 the total amount raised from the sale of Shares. For the period
February 7, 1997 (the date this offering commenced) through October 3, 1997, the
Company incurred $6,354,631 in such fees in connection with this offering.
For negotiating Secured Equipment Leases and supervising the Secured
Equipment Lease program, the Advisor is entitled to receive from the Company 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 period January 1, 1997 through October 3, 1997, the Company incurred
$334,851 in such fees.
The Company and the Advisor have entered into an Advisory Agreement
pursuant to which the Advisor will receive a monthly asset management fee of
one-twelfth of 0.60% of the Company's Real Estate Asset Value, plus one-twelfth
of 0.60% of the total principal amount of the Company's Mortgage Loans as of the
end of the preceding month. The management fee, which will not exceed fees which
are competitive for similar services in the same geographic area, may or may not
be taken, in whole or in part as to any year, in the sole discretion of the
Advisor. All or any portion of the management fee not taken as to any fiscal
year shall be deferred without interest and may be taken in such other fiscal
year as the Advisor shall determine. During the six months ended June 30, 1997,
the Company incurred $300,656 of such fees, $41,400 of which has been
capitalized as part of the cost of the buildings for Properties that have been
or are being constructed.
The Advisor and its Affiliates provide accounting and administrative
services to the Company (including accounting and administrative services in
connection with the offering of Shares) on a day-to-day basis. For the six
months ended June 30, 1997, the Company incurred a total of $1,026,304 for these
services, $757,096 of such costs representing stock issuance costs and $269,208
representing general operating and administrative expenses, including costs
related to preparing and distributing reports required by the Securities and
Exchange Commission and costs associated with activities from the Initial
Offering.
In connection with the acquisition of four Properties during the period
January 1, 1997 through October 3, 1997, that were constructed or renovated by
Affiliates, the Company incurred development/construction management fees
totalling $369,570. Such fees were included in the purchase price of Properties.
All of these fees were paid in accordance with the provisions of the
Company's Articles of Incorporation.
-76-
<PAGE>
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. INVESTORS IN THE COMPANY SHOULD NOT ASSUME THAT THEY
WILL EXPERIENCE RETURNS, IF ANY, COMPARABLE TO THOSE EXPERIENCED BY INVESTORS IN
SUCH PRIOR REAL ESTATE PROGRAMS. INVESTORS WHO PURCHASE SHARES IN THE COMPANY
WILL NOT THEREBY ACQUIRE ANY OWNERSHIP INTEREST IN ANY PARTNERSHIPS 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 85 and 86
real estate limited partnerships, respectively, including the 18 publicly
offered CNL Income Fund partnerships, which purchased properties similar to
those to be acquired by the Company, listed in the table below. None of these
limited partnerships 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 partnerships, the general partners of these
partnerships believe that each of such partnerships 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 funds, casual dining restaurant properties similar to those that the Company
intends to acquire and have investment objectives similar to those of the
Company. As of June 30, 1997, these 18 partnerships had raised a total of
$602,212,212 from a total of 48,461 investors, and had invested in 691
fast-food, family-style or casual dining restaurant properties. Certain
additional information relating to the offerings and investment history of the
18 public partnerships is set forth below.
<TABLE>
<CAPTION>
DATE 90% OF
NET PROCEEDS
NUMBER OF FULLY
MAXIMUM LIMITED INVESTED OR
NAME OF OFFERING PARTNERSHIP COMMITTED TO
PARTNERSHIP AMOUNT (1) DATE CLOSED UNITS SOLD INVESTMENT (2)
- ----------- ---------- ----------- ----------- --------------
<S> <C>
CNL Income $15,000,000 December 31, 30,000 December 1986
Fund, Ltd. (30,000 1986
Units)
CNL Income $25,000,000 August 21, 50,000 November 1987
Fund II, (50,000 1987
Ltd. Units)
CNL Income $25,000,000 April 29, 50,000 June 1988
Fund III, (50,000 1988
Ltd. Units)
CNL Income $30,000,000 December 6, 60,000 February 1989
Fund IV, (60,000 1988
Ltd. 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, 70,000 May 1990
Fund VI, (70,000 1990
Ltd. Units)
CNL Income $30,000,000 August 1, 30,000,000 January 1991
Fund VII, (30,000,000 1990
Ltd. Units)
</TABLE>
-77-
<PAGE>
<TABLE>
<CAPTION>
DATE 90% OF
NET PROCEEDS
NUMBER OF FULLY
MAXIMUM LIMITED INVESTED OR
NAME OF OFFERING PARTNERSHIP COMMITTED TO
PARTNERSHIP AMOUNT (1) DATE CLOSED UNITS SOLD INVESTMENT (2)
- ----------- ---------- ----------- ---------- --------------
<S> <C>
CNL Income $35,000,000 March 7, 35,000,000 September
Fund VIII, (35,000,000 1991 1991
Ltd. Units)
CNL Income $35,000,000 September 6, 3,500,000 November 1991
Fund IX, (3,500,000 1991
Ltd. Units)
CNL Income $40,000,000 March 18, 4,000,000 June 1992
Fund X, Ltd. (4,000,000 1992
Units)
CNL Income $40,000,000 September 28, 4,000,000 September
Fund XI, (4,000,000 1992 1992
Ltd. Units)
CNL Income $45,000,000 March 15, 4,500,000 July 1993
Fund XII, (4,500,000 1993
Ltd. Units)
CNL Income $40,000,000 August 26, 4,000,000 August 1993
Fund XIII, (4,000,000 1993
Ltd. Units)
CNL Income $45,000,000 February 22, 4,500,000 May 1994
Fund XIV, (4,500,000 1994
Ltd. Units)
CNL Income $40,000,000 September 1, 4,000,000 December 1994
Fund XV, (4,000,000 1994
Ltd. Units)
CNL Income $45,000,000 June 12, 1995 4,500,000 August 1995
Fund XVI, (4,500,000
Ltd. Units)
CNL Income $30,000,000 September 19, 3,000,000 December 1996
Fund XVII, (3,000,000 1996
Ltd. Units)
CNL Income $35,000,000 (3) (3) (3)
Fund XVIII, (3,500,000
Ltd. Units)
</TABLE>
-78-
<PAGE>
- ----------------
(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 limited
partnerships, see the table set forth on the following page.
(3) As of June 30, 1997, CNL Income Fund XVIII, Ltd., which is offering a
maximum of 3,500,000 limited partnership units ($35,000,000), had
received subscriptions totalling $22,192,212 (2,219,221 units). As of
such date, CNL Income Fund XVIII, Ltd. had purchased 17 properties.
As of June 30, 1997, Mr. Seneff and Mr. Bourne, directly or through
affiliated entities, also had served as joint general partners of 67 nonpublic
real estate limited partnerships. The offerings of 65 of these 67 nonpublic
limited partnerships had terminated as of June 30, 1997. These 65 partnerships
raised a total of $166,969,266 from approximately 4,180 investors, and
-79-
<PAGE>
purchased, directly or through participation in a joint venture or limited
partnership, interests in a total of 203 projects as of June 30, 1997. These 203
projects consist of 19 apartment projects (comprising 11% of the total amount
raised by all 65 partnerships), 13 office buildings (comprising 5% of the total
amount raised by all 65 partnerships), 157 fast-food, family-style or casual
dining restaurant property and business investments (comprising 68% of the total
amount raised by all 65 partnerships), one condominium development (comprising
.5% of the total amount raised by all 65 partnerships), four hotels/motels
(comprising 5% of the total amount raised by all 65 partnerships), seven
commercial/retail properties (comprising 10% of the total amount raised by all
65 partnerships), and two tracts of undeveloped land (comprising .5% of the
total amount raised by all 65 partnerships). The offering of the two remaining
nonpublic limited partnerships (offerings aggregating $16,750,000) had raised
$9,700,000 from 201 investors (approximately 57.9% of the total offering amount)
as of June 30, 1997.
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 85 real estate limited partnerships whose offerings had closed
as of June 30, 1997 (including 17 CNL Income Fund limited partnerships) in which
Mr. Seneff and/or Mr. Bourne serve or have served as general partners in the
past, 35 invested in restaurant properties leased on a "triple-net" basis,
including six which also invested in franchised restaurant businesses
(accounting for approximately 93% of the total amount raised by all 85 real
estate limited partnerships).
The following table sets forth summary information, as of June 30, 1997
regarding property acquisitions by the 17 limited partnerships that, either
individually or through a joint venture or partnership arrangement, acquired
restaurant properties and that have investment objectives similar to those of
the Company.
<TABLE>
<CAPTION>
NAME OF TYPE OF METHOD OF TYPE OF
PARTNERSHIP PROPERTY LOCATION FINANCING PROGRAM
- ------------ --------- --------- --------- ----------
<S> <C>
CNL Income 20 fast-food AL, AZ, CA, FL, All cash Public
Fund, Ltd. or family- GA, LA, MD, OK,
style TX, VA
restaurants
CNL Income 44 fast-food AL, AZ, CO, FL, All cash Public
Fund II, or family- GA, IL, IN, LA,
Ltd. style MI, MN, MO, NC,
restaurants NM, OH, TX, WY
CNL Income 33 fast-food AZ, CA, FL, GA, All cash Public
Fund III, or family- IA, IL, IN, KS,
Ltd. style KY, MD, MI, MN,
restaurants MO, NC, NE, OK,
TX
CNL Income 45 fast-food AL, DC, FL, GA, All cash Public
Fund IV, or family- IL, IN, KS, MA,
Ltd. style MD, MI, MS, NC,
restaurants OH, PA, TN, TX,
VA
CNL Income 30 fast-food FL, GA, IL, IN, All cash Public
Fund V, or family- MI, NH, NY, OH,
Ltd. style SC, TN, TX, UT,
restaurants WA
</TABLE>
-80-
<PAGE>
<TABLE>
<CAPTION>
NAME OF TYPE OF METHOD OF TYPE OF
PARTNERSHIP PROPERTY LOCATION FINANCING PROGRAM
- ------------ --------- --------- --------- ----------
<S> <C>
CNL Income 48 fast-food AR, AZ, FL, GA, All cash Public
Fund VI, or family- IN, MA, MI, MN,
Ltd. style NC, NE, NM, NY,
restaurants OH, OK, PA, TN,
TX, VA, WY
CNL Income 47 fast-food AZ, CO, FL, GA, All cash Public
Fund VII, or family- IN, LA, MI, MN,
Ltd. style OH, SC, TN, TX,
restaurants UT, WA
CNL Income 42 fast-food AZ, FL, IN, LA, All cash Public
Fund VIII, or family- MI, MN, NC, NY,
Ltd. style OH, TN, TX, VA
restaurants
CNL Income 42 fast-food AL, FL, GA, IL, All cash Public
Fund IX, or family- IN, LA, MI, MN,
Ltd. style MS, NC, NH, NY,
restaurants OH, SC, TN, TX
CNL Income 49 fast-food AL, CA, CO, FL, All cash Public
Fund X, or family- ID, IL, LA, MI,
Ltd. style MO, MT, NC, NH,
restaurants NM, NY, OH, PA,
SC, TN, TX
CNL Income 40 fast-food AL, AZ, CA, CO, All cash Public
Fund XI, or family- CT, FL, KS, LA,
Ltd. style MA, MI, MS, NC,
restaurants NH, NM, OH, OK,
PA, SC, TX, VA,
WA
CNL Income 49 fast-food AL, AZ, CA, FL, All cash Public
Fund XII, or family- GA, LA, MO, MS,
Ltd. style NC, NM, OH, SC,
restaurants TN, TX, WA
CNL Income 49 fast-food AL, AR, AZ, CA, All cash Public
Fund XIII, or family- CO, FL, GA, IN,
Ltd. style KS, LA, MD, NC,
restaurants OH, PA, SC, TN,
TX, VA
CNL Income 62 fast-food AL, AZ, CO, All cash Public
Fund XIV, or family- FL, GA, KS,
Ltd. style LA, MN, MO,
restauants MS, NC, NJ,
NV, OH, SC,
TN, TX, VA
CNL Income 54 fast-food AL, CA, FL, GA, All cash Public
Fund XV, or family- KS, KY, MN, MO,
Ltd. style MS, NC, NJ, NM,
restaurants OH, OK, PA, SC,
TN, TX, VA
</TABLE>
-81-
<PAGE>
<TABLE>
<CAPTION>
NAME OF TYPE OF METHOD OF TYPE OF
PARTNERSHIP PROPERTY LOCATION FINANCING PROGRAM
- ------------ --------- --------- --------- ----------
<S> <C>
CNL Income 44 fast-food AZ, CA, CO, DC, All cash Public
Fund XVI, or family- FL, GA, ID, IN,
Ltd. style KS, MN, MO, NC,
restaurants NM, NV, OH, TN,
TX, UT, WI
CNL Income 27 fast-food, CA, FL, GA, IL, All cash Public
Fund XVII, family-style IN, MI, NC, NV,
Ltd. or casual OH, SC, TN, TX
dining
restaurants
CNL Income 17 fast-food, CA, GA, KY, MD, All cash Public
Fund family-style MN, NC, NV, OH,
XVIII, or casual TN, TX
Ltd. dining
restaurants
</TABLE>
- ----------------------------------------------------------
A more detailed description of the acquisitions by real estate limited
partnerships 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., and CNL Income Fund XVIII, Ltd., 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,
including those set forth in the foregoing table, certain financial and other
information concerning those limited partnerships with investment objectives
similar to one or more of the Company's investment objectives in which Messrs.
Seneff and Bourne are general partners is provided in the Prior Performance
Tables included as Exhibit C. Information about the previous public
partnerships, the offerings of which became fully subscribed between July 1992
and June 1997, is included therein. Potential stockholders are encouraged to
examine the Prior Performance Tables attached as Exhibit 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.
-82-
<PAGE>
DISTRIBUTION POLICY
DISTRIBUTIONS
The following table reflects the total Distributions and Distributions
per Share declared by the Company for each month since the Company commenced
operations.
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
Month Total Per Share Total Per Share Total Per Share
- ----- ----------- --------- ---------- --------- -------- ----------
<S> <C>
January $ - $ - $225,354 $0.058300 $ 827,978 $0.059375
February - - 255,649 0.058300 884,806 0.059375
March - - 287,805 0.058300 980,573 0.060416
April - - 323,721 0.058300 1,091,142 0.061458
May - - 368,155 0.058300 1,202,718 0.062500
June 15,148 0.030000 407,803 0.058300 1,295,253 0.062500
July 30,682 0.030000 458,586 0.059375 1,403,182 0.062500
August 57,739 0.035000 517,960 0.059375 1,516,974 0.062500
September 84,467 0.050000 559,599 0.059375 1,677,329 0.063540
October 104,733 0.050000 615,914 0.059375 1,845,170 0.063540
November 155,665 0.058300 683,907 0.059375
December 190,184 0.058300 731,569 0.059375
</TABLE>
The Company intends to make regular Distributions to stockholders. The
payment of Distributions commenced in July 1995. Distributions will be made to
those stockholders who are stockholders as of the record date selected by the
Directors. Distributions will be declared monthly and paid on a quarterly basis
during the offering period and declared and paid quarterly thereafter. The
Company is required to distribute annually at least 95% of its real estate
investment trust taxable income to maintain its objective of qualifying as a
REIT. Generally, income distributed will not be taxable to the Company under
federal income tax laws if the Company complies with the provisions relating to
qualification as a REIT. If the cash available to the Company is insufficient to
pay such Distributions, the Company may obtain the necessary funds by borrowing,
issuing new securities, or selling assets. These methods of obtaining funds
could affect future Distributions by increasing operating costs. To the extent
that Distributions to stockholders exceed earnings and profits, such amounts
constitute a return capital for federal income tax purposes, although such
Distributions will not reduce stockholders' aggregate Invested Capital. For the
years ended December 31, 1996 and 1995, the Company declared and made
Distributions totalling $5,436,072 and $638,618, respectively, of which 90.25%
and 59.82%, respectively, of such amounts were characterized as ordinary income
and 9.75% and 40.18%, respectively, were characterized as return of capital for
federal income tax purposes. For the six months ended June 30, 1997, the Company
declared and made Distributions totalling $6,282,470, 92% of which were
characterized as ordinary income and 8% as return of capital for federal income
tax purposes. However, no amounts distributed to stockholders as of September
17, 1997, 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. Due to the fact that the Company had not acquired all of its Properties
and was still in its offering period as of June 30, 1997, the characterization
of Distributions for federal income tax purposes is not necessarily considered
by management to be representative of the characterization of Distributions in
future years. Distributions in kind shall not be permitted, except for
distributions of readily marketable securities; distributions of beneficial
interests in a liquidating trust established for the dissolution of the Company
and the liquidation of its assets in accordance with the terms of the Articles
of Incorporation; or distributions of in-kind property as long as the Directors
(i) advise each stockholder of the risks associated with direct ownership of the
property; (ii) offer each stockholder the election of receiving in-kind property
distributions; and (iii) distribute in-kind property only to those stockholders
who accept the Directors' offer.
-83-
<PAGE>
SUMMARY OF THE
ARTICLES OF INCORPORATION AND BYLAWS
DESCRIPTION OF CAPITAL STOCK
At the Company's annual meeting of stockholders held on April 4, 1997,
the stockholders approved amendments to the Company's Amended and Restated
Articles of Incorporation, and effective May 8, 1997, the Company filed with the
State of Maryland an amendment, increasing the number of authorized shares of
capital stock from 46,000,000 shares to 156,000,000 shares (consisting of
75,000,000 Common Shares, 3,000,000 Preferred Shares and 78,000,000 Excess
Shares). 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 following the termination of this offering. As of October 3, 1997, the
Company had 29,200,579 shares of Common Stock outstanding (including 20,000
issued to the Advisor prior to the commencement of this offering and 177,505
Shares issued pursuant to the Reinvestment Plan) and no Preferred Stock or
Excess Shares outstanding.
-84-
<PAGE>
ADDENDUM TO
EXHIBIT B
FINANCIAL INFORMATION
THE UPDATED PRO FORMA FINANCIAL
STATEMENTS AND THE UNAUDITED FINANCIAL STATEMENTS
OF CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY
CONTAINED IN THIS ADDENDUM SHOULD BE READ IN CONJUNCTION WITH
EXHIBIT B TO THE ATTACHED PROSPECTUS, DATED APRIL 18, 1997
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
INDEX TO UPDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Pro Forma Consolidated Financial Information (unaudited):
Pro Forma Consolidated Balance Sheet as of June 30, 1997 B-2
Pro Forma Consolidated Statement of Earnings for the six months ended June 30, 1997 B-3
Pro Forma Consolidated Statement of Earnings for the year ended December 31, 1996 B-4
Notes to Pro Forma Consolidated Financial Statements for the six months ended
June 30, 1997 and the year ended December 31, 1996 B-5
Updated Unaudited Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996 B-9
Condensed Consolidated Statements of Earnings for the six months ended June 30, 1997
and 1996 B-11
Condensed Consolidated Statements of Stockholders' Equity for the six months
ended June 30, 1997 and the year ended December 31, 1996 B-11
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 1997
and 1996 B-12
Notes to Condensed Consolidated Financial Statements for the six months ended June 30,
1997 and 1996 B-14
</TABLE>
<PAGE>
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following Pro Forma Consolidated Balance Sheet of the Company gives
effect to (i) property acquisition transactions from inception through June 30,
1997, including the receipt of $223,843,177 in gross offering proceeds from the
sale of 22,384,318 shares of common stock and the application of such proceeds
to purchase 174 properties (including 121 properties which consist of land and
building, one property through a joint venture arrangement which consists of
land and building, eight properties which consist of building only and 44
properties which consist of land only), 33 of which were under construction at
June 30, 1997, to provide mortgage financing to the lessees of the 44 properties
consisting of land only, and to pay organizational and offering expenses,
acquisition fees and miscellaneous acquisition expenses, (ii) the receipt of net
sales proceeds in the amount of $1,035,153 relating to the sale of a property
consisting of land and building which had been sold during the period July 1,
1997 through October 3, 1997, (iii) the receipt of $67,962,617 in gross offering
proceeds from the sale of 6,796,262 additional shares of common stock during the
period July 1, 1997 through October 3, 1997, (iv) the application of such funds
and $8,009,833 of cash and cash equivalents at June 30, 1997, to purchase 47
additional properties acquired during the period July 1, 1997 through October 3,
1997 (16 of which are under construction and consist of land and building, one
property which is under construction and consists of building, 11 properties
which consist of building only, and 19 properties which consist of land and
building), to pay additional costs for the 33 properties under construction at
June 30, 1997, and to pay offering expenses, acquisition fees and miscellaneous
acquisition expenses, all as reflected in the pro forma adjustments described in
the related notes. The Pro Forma Consolidated Balance Sheet as of June 30, 1997,
includes the transactions described in (i) above from the historical
consolidated balance sheet, adjusted to give effect to the transactions in (ii),
(iii), and (iv) above, as if they had occurred on June 30, 1997.
The Pro Forma Consolidated Statements of Earnings for the six months
ended June 30, 1997 and the year ended December 31, 1996, include the historical
operating results of the properties described in (i) above from the dates of
their acquisitions plus operating results for six of the properties that were
acquired by the Company during the period January 1, 1996 through October 3,
1997, and had a previous rental history prior to the Company's acquisition of
such properties, from (A) the later of (1) the date the property became
operational as a rental property by the previous owner or (2) January 1, 1996,
to (B) the earlier of (1) the date the property was acquired by the Company or
(2) the end of the pro forma period presented. No pro forma adjustments have
been made to the Pro Forma Consolidated Statement of Earnings for the remaining
properties acquired by the Company during the period January 1, 1996 through
October 3, 1997, due to the fact that these properties did not have a previous
rental history.
This pro forma consolidated financial information is presented for
informational purposes only and does not purport to be indicative of the
Company's financial results or condition if the various events and transactions
reflected therein had occurred on the dates, or been in effect during the
periods, indicated. This pro forma consolidated financial information should not
be viewed as predictive of the Company's financial results or conditions in the
future.
B-1
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
<TABLE>
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
------------ ---------------- ------------
<S> <C>
Land and buildings on operating
leases, less accumulated
depreciation $140,983,397 $ 33,734,922 (a)
(1,025,712)(b) $173,692,607
Net investment in direct
financing leases (c) 22,703,193 24,391,282 (a) 47,094,475
Cash and cash equivalents 31,097,346 (8,009,833)(a)
1,035,153 (b) 24,122,666
Receivables 497,307 497,307
Mortgage notes receivable 17,737,107 17,737,107
Organization costs, less
accumulated amortization 11,682 11,682
Loan costs, less accumulated
amortization 23,954 23,954
Accrued rental income 861,703 861,703
Other assets 1,026,053 154,904 (a) 1,180,957
------------ ------------ ------------
$214,941,742 $ 50,280,716 $265,222,458
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Note payable $ 4,756,658 $ 4,756,658
Accrued interest payable 26,751 26,751
Accrued construction costs
payable 10,524,476 $(10,524,476)(a) -
Accounts payable and other
accrued expenses 113,317 113,317
Due to related parties 790,223 790,223
Rents paid in advance 305,524 305,524
Deferred rental income 1,005,050 26,353 (a) 1,031,403
Other payables 10,315 10,315
------------ ------------ ------------
Total liabilities 17,532,314 (10,498,123) 7,034,191
------------ ------------ ------------
Minority interest 286,992 286,992
------------ ------------ ------------
Stockholders' equity:
Preferred stock, without par
value. Authorized and unissued
3,000,000 shares - -
Excess shares, $.01 par value per
share. Authorized and unissued
78,000,000 shares - -
Common stock, $.01 par value per
share. Authorized 75,000,000
shares; issued and outstanding
22,404,318 shares; issued and
outstanding, as adjusted,
29,200,580 shares 224,043 67,963 (a) 292,006
Capital in excess of par value 198,913,717 60,701,435 (a) 259,615,152
Accumulated distributions in
excess of net earnings (2,015,324) 10,463 (b)
(1,022)(b) 2,005,883
------------ ----------- ------------
197,122,436 60,778,839 257,901,275
------------ ------------ ------------
$214,941,742 $ 50,280,716 $265,222,458
============ ============ ============
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
B-2
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 30, 1997
Pro Forma
Historical Adjustments Pro Forma
---------- -------------- ----------
Revenues:
Rental income from
operating leases $4,006,805 $ 8,188 (1) $4,014,993
Earned income from
direct financing leases (2) 958,492 958,492
Interest income from
mortgage notes receivable 815,192 815,192
Other interest and income 934,745 (3,359)(3) 931,386
---------- ---------- ----------
6,715,234 4,829 6,720,063
---------- ---------- ----------
Expenses:
General operating and
administrative 481,211 481,211
Professional services 44,679 44,679
Asset and mortgage management
fees to related party 259,256 873 (4) 260,129
State and other taxes 107,863 107,863
Depreciation and amortization 579,404 2,142 (6) 581,546
---------- ---------- ----------
1,472,413 3,015 1,475,428
---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 5,242,821 1,814 5,244,635
Minority Interest in Income of
Consolidated Joint Venture (15,726) (15,726)
--------- ---------- ---------
Net Earnings $5,227,095 $ 1,814 $5,228,909
========== ========== ==========
Earnings Per Share of
Common Stock (7) $ 0.29 $ 0.29
========== ==========
Weighted Average Number of
Shares of Common Stock
Outstanding (7) 17,826,025 17,826,025
========== ==========
See accompanying notes to unaudited pro forma consolidated financial statements.
B-3
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Historical Adjustments Pro Forma
---------- -------------- ----------
Revenues:
Rental income from
operating leases $3,717,886 $ 62,167 (1) $3,780,053
Earned income from
direct financing leases (2) 625,492 34,282 (1) 659,774
Contingent rental income 13,920 13,920
Interest income from
mortgage notes receivable 1,069,349 1,069,349
Other interest and income 780,037 (24,826)(3) 755,211
---------- ---------- ----------
6,206,684 71,623 6,278,307
---------- ---------- ----------
Expenses:
General operating and
administrative 542,564 542,564
Professional services 58,976 58,976
Asset and mortgage management
fees to related party 251,200 5,435 (4) 256,635
State and other taxes 56,184 1,218 (5) 57,402
Depreciation and amortization 521,871 6,852 (6) 528,723
---------- ---------- ----------
1,430,795 13,505 1,444,300
---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 4,775,889 58,118 4,834,007
Minority Interest in Income of
Consolidated Joint Venture (29,927) (29,927)
---------- ---------- ----------
Net Earnings $4,745,962 $ 58,118 $4,804,080
========== ========== ==========
Earnings Per Share of
Common Stock (7) $ 0.59 $ 0.60
========== ==========
Weighted Average Number of
Shares of Common Stock
Outstanding (7) 8,071,670 8,071,670
========== ==========
See accompanying notes to unaudited pro forma consolidated financial statements.
B-4
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet:
(a) Represents gross proceeds of $67,962,617 from the issuance of 6,796,262
shares of common stock during the period July 1, 1997 through October
3, 1997, the receipt of $26,353 of rental income during construction
(capitalized as deferred rental income), and $8,009,833 of cash and
cash equivalents used (i) to acquire 47 properties for $48,490,648 of
which 12 properties consists of building only and 35 properties consist
of land and building, (ii) to fund estimated construction costs of
$17,256,618 ($10,524,476 of which was accrued as construction costs
payable at June 30, 1997) relating to 33 wholly-owned properties under
construction at June 30, 1997, (iii) to pay acquisition fees of
$3,058,318 ($2,903,414 of which was allocated to properties and
$154,904 of which was classified as other assets and will be allocated
to future properties) and (iv) to pay selling commissions and offering
expenses (stock issuance costs) of $7,193,219, which have been netted
against capital in excess of par value.
The pro forma adjustments to land and buildings on operating leases and
net investment in direct financing leases as a result of the above
transactions were as follows:
<TABLE>
<CAPTION>
Estimated purchase
price (including
construction and
closing costs) Acquisition fees
and additional allocated to
construction costs property Total
------------------ ---------------- ---------
<S> <C>
Boston Market in Southlake, TX $ 1,025,712 $ - $ 1,025,712
Boston Market in Stafford, TX 1,068,222 57,226 1,125,448
Jack in the Box in Channelview, TX 1,007,970 53,998 1,061,968
Jack in the Box in Garland, TX 935,120 50,096 985,216
KFC in Putnam, CT 794,700 42,573 837,273
Arby's in Lexington, NC 741,536 39,725 781,261
Boston Market in Newport News, VA 1,002,216 53,690 1,055,906
IHOP in Houston, TX 1,419,809 76,061 1,495,870
IHOP in Stockbridge, GA 1,392,627 74,605 1,467,232
Jack in the Box in Woodland, CA 962,592 51,568 1,014,160
Jack in the Box in West Sacramento, CA 1,072,031 57,430 1,129,461
Tumbleweed Southwest Mesquite
Grill & Bar in Cookeville, TN 1,456,843 78,045 1,534,888
Tumbleweed Southwest Mesquite
Grill & Bar in Hendersonville, TN 739,655 39,624 779,279
Tumbleweed Southwest Mesquite
Grill & Bar in Lawrence, KS 1,433,474 76,794 1,510,268
Tumbleweed Southwest Mesquite
Grill & Bar in Nashville, TN 1,294,917 69,371 1,364,288
Arby's in Greensboro, NC 726,273 38,908 765,181
Arby's in Greenville, NC 726,273 38,907 765,180
Arby's in Jonesville, NC 726,273 38,907 765,180
Arby's in Kernersville, NC 649,000 34,768 683,768
Arby's in Kinston, NC 712,636 38,177 750,813
Tumbleweed Southwest Mesquite
Grill & Bar in Murfreesboro, TN 1,410,322 75,553 1,485,875
Boston Market in Edgewater, CO 896,187 48,010 944,197
Golden Corral in Fort Walton Beach, FL 1,490,657 79,857 1,570,514
Golden Corral in Duncan, OK 1,036,607 55,532 1,092,139
Ruby Tuesday's in London, KY 1,119,970 59,999 1,179,969
IHOP in Elk Grove, CA 1,535,840 82,278 1,618,118
IHOP in Lake Jackson, TX 1,192,497 63,884 1,256,381
IHOP in Loveland, CO 1,372,745 73,540 1,446,285
IHOP in Victoria, TX 1,070,000 57,321 1,127,321
Shoney's in Las Vegas, NV 1,519,984 81,428 1,601,412
Boston Market in Hoover, AL 1,052,658 56,392 1,109,050
TGI Friday's in Superstition Springs, AZ 2,038,893 109,227 2,148,120
Golden Corral in Mobile, AL 1,343,204 71,957 1,415,161
Golden Corral in Palatka, FL 1,189,051 63,699 1,252,750
Black-eyed Pea in Mesa, AZ 1,599,500 85,688 1,685,188
Black-eyed Pea in Phoenix, AZ (#1) 640,754 34,326 675,080
Black-eyed Pea in Phoenix, AZ (#2) 640,871 34,332 675,203
Black-eyed Pea in Phoenix, AZ (#3) 644,971 34,552 679,523
Black-eyed Pea in Tucson, AZ 641,371 34,359 675,730
</TABLE>
B-5
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet - Continued:
<TABLE>
<CAPTION>
Estimated purchase
price (including
construction and
closing costs) Acquisition fees
and additional allocated to
construction costs property Total
------------------ ---------------- -----------
<S> <C>
Black-eyed Pea in Albuquerque, NM (#1) 667,290 35,748 703,038
Black-eyed Pea in Albuquerque, NM (#2) 666,355 35,698 702,053
Black-eyed Pea in Dallas, TX 660,748 35,397 696,145
Black-eyed Pea in Forestville, MD 643,925 34,496 678,421
Black-eyed Pea in Houston, TX 648,599 34,745 683,344
Black-eyed Pea in Waco, TX 661,682 35,447 697,129
Black-eyed Pea in Wichita, KS 660,748 35,397 696,145
Golden Corral in Olathe, KS 1,557,340 83,429 1,640,769
33 wholly owned properties under
construction at June 30, 1997 6,732,142 360,650 7,092,792
----------- ----------- -----------
$55,222,790 $ 2,903,414 $58,126,204
=========== =========== ===========
Adjustment classified as follows:
Land and buildings on operating leases $33,734,922
Net investment in direct financing leases 24,391,282
-----------
$58,126,204
===========
</TABLE>
(b) Represents net sales proceeds in the amount of $1,035,153 received in
conjunction with the sale of a property consisting of land and
building, purchased and sold during the period July 1, 1997 through
October 3, 1997, of which $1,022 had been depreciated through the date
of sale and was sold at a gain of $10,463.
(c) In accordance with generally accepted accounting principles, leases in
which the present value of future minimum lease payments equals or
exceeds 90 percent of the value of the related properties are treated
as direct financing leases rather than as land and buildings. The
categorization of the leases has no effect on rental revenues received.
Pro Forma Consolidated Statement of Earnings:
(1) Represents rental income from operating leases and earned income from
direct financing leases for six of the properties acquired during the
period January 1, 1996 through October 3, 1997, which had a previous
rental history prior to the acquisition of the property by the Company
(the "Pro Forma Properties"), for the period commencing (A) the later
of (i) the date the Pro Forma Property became operational as a rental
property by the previous owner or (ii) January 1, 1996, to (B) the
earlier of (i) the date the Pro Forma Property was acquired by the
Company or (ii) the end of the pro forma period presented. Each of the
six Pro Forma Properties was acquired from an affiliate who had
purchased and temporarily held title to the property. The
noncancellable leases for the Pro Forma Properties in place during the
period the affiliate owned the properties were assigned to the Company
at the time the Company acquired the properties. The following presents
the actual date the Pro Forma Properties were acquired or placed in
service by the Company as compared to the date the Pro Forma Properties
were treated as becoming operational as a rental property for purposes
of the Pro Forma Consolidated Statement of Earnings.
B-6
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Statement of Earnings - Continued:
Date Pro Forma
Date Placed Property Became
in Service Operational as
By the Company Rental Property
-------------- ---------------
Mr. Fable's in Grand
Rapids, MI March 1996 January 1996
Denny's in McKinney, TX June 1996 January 1996
Boston Market in Merced, CA October 1996 July 1996
Boston Market in
St. Joseph, MO December 1996 June 1996
Burger King in Kent, OH February 1997 December 1996
Golden Corral in
Hopkinsville, KY February 19, 1997 February 18, 1997
In accordance with generally accepted accounting principles, lease
revenue from leases accounted for under the operating method is
recognized over the terms of the leases. For operating leases providing
escalating guaranteed minimum rents, income is reported on a
straight-line basis over the terms of the leases. For leases accounted
for as direct financing leases, future minimum lease payments are
recorded as a receivable. The difference between the receivable and the
estimated residual values less the cost of the properties is recorded
as unearned income. The unearned income is amortized over the lease
terms to provide a constant rate of return. Accordingly, pro forma
rental income from operating leases and earned income from direct
financing leases does not necessarily represent rental payments that
would have been received if the properties had been operational for the
full pro forma period.
Generally, the leases provide for the payment of percentage rent in
addition to base rental income. However, due to the fact that no
percentage rent was due under the leases for the Pro Forma Properties
during the portion of 1996 and 1997 that the previous owners held the
properties, no pro forma adjustment was made for percentage rental
income for the six months ended June 30, 1997 and the year ended
December 31, 1996.
(2) See Note (c) under "Pro Forma Consolidated Balance Sheet" above for a
description of direct financing leases.
(3) Represents adjustment to interest income due to the decrease in the
amount of cash available for investment in interest bearing accounts
during the periods commencing (A) on the later of (i) the dates the Pro
Forma Properties became operational as rental properties by the
previous owners or (ii) January 1, 1996, through (B) the earlier of (i)
the actual dates of acquisition by the Company or the end of the pro
forma period presented, as described in Note (1) above. The estimated
pro forma adjustment is based upon the fact that interest income on
interest bearing accounts was earned at a rate of approximately four
percent per annum by the Company during the six months ended June 30,
1997 and the year ended December 31, 1996.
(4) Represents incremental increase in asset management fees relating to
the Pro Forma Properties for the period commencing (A) on the later of
(i) the date the Pro Forma Properties became operational as rental
properties by the previous owners or (ii) January 1, 1996 through (B)
the earlier of (i) the date the Pro Forma Properties were acquired by
the Company or (ii) the end of the pro forma period presented, as
described in Note (1) above. Asset management fees are equal to 0.60%
of the Company's Real Estate Asset Value (estimated to be approximately
$873,000 and $3,509,000 for the Pro Forma Properties for the six months
ended June 30, 1997 and the year ended December 31, 1996,
respectively), as defined in the Company's prospectus.
(5) Represents adjustment to state tax expense due to the incremental
increase in rental revenues of Pro Forma Properties. Estimated pro
forma state tax expense was calculated based on an analysis of state
laws of the various states in which the Company has acquired the Pro
Forma Properties. The estimated pro forma state taxes consist primarily
of income and franchise taxes ranging from zero to approximately two
percent of the Company's pro forma rental income of each Pro Forma
Property. Due to the fact that the Company's leases are triple net, the
Company has not included any amounts for real estate taxes in the pro
forma statement of earnings.
(6) Represents incremental increase in depreciation expense of the building
portions of the Pro Forma Properties accounted for as operating leases
using the straight-line method over an estimated useful life of 30
years.
(7) Historical earnings per share were calculated based upon the weighted
average number of shares of common stock outstanding during the six
months ended June 30, 1997 and the year ended December 31, 1996.
B-7
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
ASSETS 1997 1996
------------ ------------
Land and buildings on operating leases,
less accumulated depreciation $140,983,397 $ 60,243,146
Net investment in direct financing leases 22,703,193 15,186,686
Cash and cash equivalents 31,097,346 42,450,088
Receivables 497,307 160,675
Mortgage notes receivable 17,737,107 13,389,607
Organization costs, less accumulated
amortization of $8,318 and $6,318 11,682 13,682
Loan costs, less accumulated amortization
of $36,680 and $22,034 23,954 32,499
Accrued rental income 861,703 422,076
Other assets 1,026,053 2,926,589
------------ ------------
$214,941,742 $134,825,048
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Note payable $ 4,756,658 $ 3,521,816
Accrued interest payable 26,751 13,164
Accrued construction costs payable 10,524,476 6,587,573
Accounts payable and accrued expenses 113,317 79,817
Due to related parties 790,223 997,084
Rents paid in advance 305,524 118,900
Deferred rental income 1,005,050 335,849
Other payables 10,315 15,117
------------ ------------
Total liabilities 17,532,314 11,669,320
------------ ------------
Minority interest 286,992 288,301
------------ ------------
Commitments (Note 12)
Stockholders' equity:
Preferred stock, without par value.
Authorized and unissued 3,000,000
shares - -
Excess shares, $.01 par value per share.
Authorized and unissued 78,000,000
shares - -
Common stock, $.01 par value per share.
Authorized 75,000,000 shares, issued
and outstanding 22,404,318 and
13,944,715, respectively 224,043 139,447
Capital in excess of par value 198,913,717 123,687,929
Accumulated distributions in excess of
net earnings (2,015,324) (959,949)
------------ ------------
Total stockholders' equity 197,122,436 122,867,427
------------ ------------
$214,941,742 $134,825,048
============ ============
See accompanying notes to condensed consolidated
financial statements.
B-8
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
---------- ---------- ---------- -------
<S> <C>
Revenues:
Rental income from
operating leases $2,363,731 $ 854,846 $4,006,805 $1,618,001
Earned income from
direct financing
leases 511,781 50,258 958,492 86,184
Interest income from
mortgage notes
receivable 439,835 280,549 815,192 465,498
Other interest and
income 460,329 135,940 934,745 211,789
---------- ---------- ---------- ----------
3,775,676 1,321,593 6,715,234 2,381,472
---------- ---------- ---------- ----------
Expenses:
General operating and
administrative 225,755 143,790 481,211 272,897
Professional services 6,216 18,699 44,679 48,391
Asset and mortgage
management fees to
related party 148,740 57,303 259,256 97,673
State and other taxes 72,513 9,486 107,863 12,384
Depreciation and
amortization 339,366 140,290 579,404 238,762
---------- ---------- ---------- ----------
792,590 369,568 1,472,413 670,107
---------- ---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint
Venture 2,983,086 952,025 5,242,821 1,711,365
Minority Interest in
Income of Consolidated
Joint Venture (7,833) (7,571) (15,726) (22,323)
---------- ---------- ---------- ----------
Net Earnings $2,975,253 $ 944,454 $5,227,095 $1,689,042
========== ========== ========== ==========
Earnings Per Share of
Common Stock $ 0.15 $ 0.14 $ 0.29 $ 0.30
========== ========== ========== ==========
Weighted Average Number
of Shares of Common
Stock Outstanding 19,997,391 6,649,040 17,826,025 5,649,041
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed consolidated
financial statements.
B-9
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended June 30, 1997 and
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Accumulated
Common stock distributions
------------------------- Capital in in excess
Number Par excess of of net
of shares value par value earnings Total
--------- ----- --------- ------------- ------------
<S> <C>
Balance at
December 31, 1995 3,865,416 $ 38,654 $ 32,211,833 $ (269,839) $ 31,980,648
Subscriptions
received for
common stock
through public
offering and
distribution
reinvestment
plan 10,079,299 100,793 100,692,198 - 100,792,991
Stock issuance
costs - - (9,216,102) - (9,216,102)
Net earnings - - - 4,745,962 4,745,962
Distributions
declared and
paid ($.71
per share) - - - (5,436,072) (5,436,072)
---------- -------- ------------ ------------ ------------
Balance at
December 31, 1996 13,944,715 139,447 123,687,929 (959,949) 122,867,427
Subscriptions
received for
common stock
through public
offering and
distribution
reinvestment
plan 8,459,603 84,596 84,511,434 84,596,030
Stock issuance
costs (9,285,646) (9,285,646)
Net earnings 5,227,095 5,227,095
Distributions
declared and
paid ($.35
per share) (6,282,470) (6,282,470)
---------- -------- ------------ ------------ ------------
Balance at
June 30, 1997 22,404,318 $224,043 $198,913,717 $ (2,015,324) $197,122,436
========== ======== ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated
financial statements.
B-10
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
1997 1996
------------ -------------
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 6,314,003 $ 1,573,575
------------ ------------
Cash Flows From Investing Activities:
Additions to land and buildings
on operating leases (75,111,847) (18,316,555)
Investment in direct financing
leases (14,391,675) (1,555,641)
Proceeds from sale of buildings and
equipment under direct financing
leases 6,216,357 -
Investment in mortgage notes
receivable (4,443,982) (12,363,000)
Collection of deferred financing
income 42,000 43,270
Collection on mortgage notes
receivable 117,192 41,022
Increase in other assets - (644,752)
------------ ------------
Net cash used in investing
activities (87,571,955) (32,795,656)
------------ ------------
Cash Flows From Financing Activities:
Reimbursement of acquisition and
stock issuance costs paid by
related parties on behalf of
the Company (1,524,434) (556,511)
Proceeds of borrowing on line
of credit 2,888,163 603,745
Payment on line of credit (1,653,321) -
Payment of loan costs (6,101) (53,500)
Contribution from minority
interest of consolidated
joint venture - 97,419
Subscriptions received from
stockholders 84,646,030 38,362,490
Distributions to minority interest (17,035) (22,010)
Distributions to stockholders (6,282,470) (1,871,820)
Payment of stock issuance costs (8,145,622) (3,502,100)
Other - 25,500
------------ ------------
Net cash provided by
financing activities 69,905,210 33,083,213
------------ ------------
Net Increase (Decrease) in Cash and Cash
Equivalents (11,352,742) 1,861,132
Cash and Cash Equivalents at Beginning
of Period 42,450,088 11,508,445
------------ ------------
Cash and Cash Equivalents at End
of Period $ 31,097,346 $ 13,369,577
============ ============
See accompanying notes to condensed consolidated
financial statements.
B-11
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Six Months Ended
June 30,
1997 1996
------------ ------------
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Related parties paid certain
acquisition and stock issuance
costs on behalf of the Company
as follows:
Acquisition costs $ 329,237 $ 107,383
Stock issuance costs 1,361,009 495,800
------------ ------------
$ 1,690,246 $ 603,183
============ ============
See accompanying notes to condensed consolidated
financial statements.
B-12
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1997 and 1996
1. Organization and Nature of Business:
CNL American Properties Fund, Inc. (the "Company") was organized in
Maryland on May 2, 1994, primarily for the purpose of acquiring,
directly or indirectly through joint venture or co-tenancy
arrangements, restaurant properties (the "Properties") to be leased on
a long-term, triple-net basis to operators of certain national and
regional fast-food, family- style and casual dining restaurant chains.
The Company may provide financing ("Mortgage Loans") for the purchase
of buildings, generally by tenants that lease the underlying land from
the Company. To a lesser extent, the Company may offer furniture,
fixtures and equipment financing ("Secured Equipment Leases") to
operators of restaurant chains.
2. Basis of Presentation:
The accompanying unaudited condensed consolidated 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, 1997, may not be indicative
of the results that may be expected for the year ending December 31,
1997. Amounts as of December 31, 1996, 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 the Company's
Form 10-K for the year ended December 31, 1996.
The Company accounts for its 85.47% interest in CNL/Corral South Joint
Venture using the consolidation method. Minority interest represents
the minority joint venture partner's proportionate share of the equity
in the Company's consolidated joint venture. All significant
intercompany accounts and transactions have been eliminated.
Certain items in the prior year's financial statements have been
reclassified to conform to 1997 presentation. These reclassifications
had no effect on stockholders' equity or net earnings.
B-13
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
2. Basis of Presentation - Continued:
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, "Earnings Per
Share." The Statement, which is effective for fiscal years ending after
December 15, 1997, provides for a revised computation of earnings per
share. The Company will adopt this Standard in 1997 and does not expect
compliance with such Standard to have a material effect, if any, on the
Company's earnings per share.
3. Leases:
The Company leases its land, buildings and equipment subject to Secured
Equipment Leases to operators or franchisees of national and regional
fast-food, family-style and casual dining restaurants. The leases are
accounted for under the provisions of Statement of Financial Accounting
Standards No. 13, "Accounting for Leases." The leases relating to 152
of the Company's Properties have been classified as operating leases
(including the leases relating to 33 properties under construction as
of June 30, 1997) and the leases relating to 22 Properties and 14
Secured Equipment Leases have been classified as direct financing
leases. For the leases classified as direct financing leases, the
building portions of the leases are accounted for as direct financing
leases while the land portions of 14 of these leases are accounted for
as operating leases.
4. Land and Buildings on Operating Leases:
In May 1997, the Company sold four of its Properties and the equipment
relating to two secured Equipment Leases to the tenant. The Company
received net proceeds of approximately $6,216,400 which was equal to
the carrying value of the Properties and the equipment at the time of
the sale. As a result, no gain or loss was recognized for financial
reporting purposes.
B-14
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
4. Land and Buildings on Operating Leases - Continued:
Land and buildings on operating leases consisted of the following at:
June 30, December 31,
1997 1996
------------ ------------
Land $ 79,480,653 $ 33,850,436
Buildings 49,214,317 24,152,610
------------ ------------
128,694,970 58,003,046
Less accumulated
depreciation (1,185,404) (611,396)
------------ ------------
127,509,566 57,391,650
Construction in
progress 13,473,831 2,851,496
------------ ------------
$140,983,397 $ 60,243,146
============ ============
Some leases provide for scheduled rent increases throughout the lease
term and/or rental payments during the construction of a Property prior
to the date it is placed in service. Such amounts are recognized on a
straight-line basis over the terms of the leases commencing on the date
the Property is placed in service. For the six months ended June 30,
1997 and 1996, the Company recognized $616,027 and $176,080,
respectively, of such rental income, $346,287 and $63,175 of which was
earned during the quarters ended June 30, 1997 and 1996, respectively.
The following is a schedule of future minimum lease payments to be
received on the noncancellable operating leases at June 30, 1997:
1997 $ 5,899,037
1998 10,723,569
1999 10,737,880
2000 10,761,481
2001 10,953,725
Thereafter 165,685,054
------------
$214,760,746
============
Since leases are renewable at the option of the tenant, the above table
only presents future minimum lease payments due during the initial
lease terms. In addition, this table does not include any amounts for
future contingent rents which may be received on the leases based on
the percentage of the tenant's gross sales. These amounts do not
include minimum lease payments that will become due when Properties
under development are completed (See Note 12).
B-15
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
5. Net Investment in Direct Financing Leases:
The following lists the components of the net investment in direct
financing leases at:
June 30, December 31,
1997 1996
----------- ------------
Minimum lease payments
receivable $ 46,870,056 $ 30,162,465
Estimated residual
values 3,527,032 1,346,332
Less unearned income (27,693,895) (16,322,111)
------------ ------------
Net investment in
direct financing
leases $ 22,703,193 $ 15,186,686
============ ============
The following is a schedule of future minimum lease payments to be
received on the direct financing leases at June 30, 1997:
1997 $ 1,635,590
1998 3,273,686
1999 3,273,686
2000 3,273,686
2001 3,045,726
Thereafter 32,367,682
-----------
$46,870,056
===========
The above table does not include future minimum lease payments for
renewal periods or for contingent rental payments that may become due
in future periods (see Note 4).
6. Mortgage Notes Receivable:
In March 1997, in connection with the acquisition of land for eight
Pizza Hut restaurants, the Company accepted a promissory note in the
principal sum of $4,200,000, collateralized by a mortgage on the
buildings on the eight Pizza Hut Properties and three additional Pizza
Hut buildings. The promissory note bears interest at a rate of 10.5%
per annum and is being collected in 240 equal monthly installments of
$41,943.
B-16
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
6. Mortgage Notes Receivable - Continued:
Mortgage notes receivable consisted of the following at:
June 30, December 31,
1997 1996
------------ ------------
Outstanding principal $16,795,958 $12,713,151
Accrued interest income 79,162 35,285
Deferred financing income (87,562) (46,268)
Unamortized loan costs 949,549 687,439
----------- -----------
$17,737,107 $13,389,607
=========== ===========
Management believes that the estimated fair value of mortgage notes
receivable at June 30, 1997, approximates the outstanding principal
amount based on estimated current rates at which similar loans would be
made to borrowers with similar credit and for similar maturities.
7. Note Payable:
On March 5, 1996, the Company entered into a line of credit and
security agreement (the "Loan") with a bank to be used by the Company
to offer Secured Equipment Leases. The Loan provides that the Company
will be able to receive advances of up to $15,000,000 until March 4,
1998. As of June 30, 1997, $4,756,658 of principal was outstanding
relating to the Loan, plus $26,751 of accrued interest. In general,
advances under the Loan are fully amortizing term loans repayable over
six years and bear interest at a rate per annum equal to 215 basis
points above the Reserve Adjusted LIBOR Rate (ranging from 7.84% to
7.86% as of June 30, 1997). The Company believes, based on current
terms, that the carrying value of its note payable at June 30, 1997,
approximates fair value.
Interest costs (including amortization of loan costs) incurred for the
quarter and six months ended June 30, 1997, were $112,985 and $210,542,
respectively, all of which were capitalized as part of the cost of
buildings under construction.
B-17
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
8. Stock Issuance Costs:
The Company has incurred certain expenses of its offerings of shares,
including commissions, marketing support and due diligence expense
reimbursement fees, filing fees, legal, accounting, printing and escrow
fees, which have been deducted from the gross proceeds of the offering.
Preliminary costs incurred prior to raising capital were advanced by an
affiliate of the Company, CNL Fund Advisors, Inc. (the "Advisor"). The
Advisor has agreed to pay all 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.
During the six months ended June 30, 1997 and the year ended December
31, 1996, the Company incurred $9,285,646 and $9,216,102, respectively,
in stock issuance costs, including $6,767,682 and $8,063,439,
respectively, in commissions and marketing support and due diligence
expense reimbursement fees (see Note 10). The stock issuance costs have
been charged to stockholders' equity subject to the three percent cap
described above.
9. Distributions:
For the six months ended June 30, 1997 and 1996, approximately 92 and
85 percent, respectively, of the distributions paid to stockholders
were considered ordinary income and approximately eight and 15 percent,
respectively, were considered a return of capital to stockholders for
federal income tax purposes. No amounts distributed to the stockholders
for the six months ended June 30, 1997 and 1996, 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. The
characterization for tax purposes of distributions declared for the six
months ended June 30, 1997, may not be indicative of the results that
may be expected for the year ending December 31, 1997.
10. Related Party Transactions:
During the six months ended June 30, 1997, the Company incurred
$6,344,702 in selling commissions due to CNL Securities Corp. for
services in connection with the offering of shares. A substantial
portion of this amount ($5,848,410) was or will be paid by CNL
Securities Corp. as commissions to other broker-dealers.
B-18
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
10. Related Party Transactions - Continued
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 re-allowed to other broker-dealers. During the six months ended June
30, 1997, the Company incurred $422,980 of such fees, the majority of
which were reallowed to other broker-dealers and from which all bona
fide due diligence expenses were paid.
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 the total amount raised from the sale of shares.
During the six months ended June 30, 1997, the Company incurred
$3,806,821 of such fees. Such fees are included in land and buildings
on operating leases, net investment in direct financing leases,
mortgage notes receivable and other assets.
In connection with the acquisition of Properties that are being or have
been constructed or renovated by affiliates, subject to approval by the
Company's Board of Directors, the Company may incur
development/construction management fees payable to affiliates of the
Company. Such fees are included in the purchase price of the Properties
and are therefore included in the basis on which the Company charges
rent on the Properties. During the six months ended June 30, 1997, the
Company incurred $178,879 of such amounts relating to three Properties.
No such amounts were incurred for the six months ended June 30, 1996.
For negotiating Secured Equipment Leases and supervising the Secured
Equipment Lease program, the Advisor 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 six months ended June 30, 1997 and 1996, the Company
incurred $54,598 and $10,776, respectively, in secured equipment lease
servicing fees.
The Company and the Advisor have entered into an advisory agreement
pursuant to which the Advisor will receive a monthly asset and mortgage
management fee of one-twelfth of 0.60% of the Company's real estate
asset value (generally, the total amount invested in the Properties as
of the end of the preceding month, exclusive of acquisition fees and
acquisition expenses), plus one-twelfth of 0.60% of the Company's total
B-19
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
10. Related Party Transactions - Continued
principal amount of the Mortgage Loans as of the end of the preceding
month. The management fee, which will not exceed fees which are
competitive for similar services in the same geographic area, may or
may not be taken, in whole or in part as to any year, in the sole
discretion of the Advisor. All or any portion of the management fee not
taken as to any fiscal year shall be deferred without interest and may
be taken in such other fiscal year as the Advisor shall determine.
During the six months ended June 30, 1997 and 1996, the Company
incurred $300,656 and $100,526, respectively, of such fees, $41,400 and
$2,853, respectively, of which was capitalized as part of the cost of
building for Properties under construction.
The Advisor and its affiliates provide accounting and administrative
services to the Company (including accounting and administrative
services in connection with the offerings of shares) on a day-to-day
basis. For the six months ended June 30, 1997 and 1996, the expenses
incurred for these services were classified as follows:
1997 1996
---------- ---------
Stock issuance costs $ 757,096 $ 379,090
General operating and
administrative expenses 269,208 154,018
---------- ---------
$1,026,304 $ 533,108
========== =========
During each of the six months ended June 30, 1997 and 1996, the Company
acquired two Properties for approximately $1,773,300 and $1,798,000,
respectively, from affiliates of the Company. The affiliates had
purchased and temporarily held title to the Properties in order to
facilitate the acquisition of the Properties by the Company. The
Properties were acquired at a cost no greater than the lesser of the
cost of each Property to the affiliate (including carrying costs) or
the Property's appraised value.
B-20
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
10. Related Party Transactions - Continued
The due to related parties consisted of the following at:
June 30, December 31,
1997 1996
-------- ------------
Due to the Advisor:
Expenditures incurred
on behalf of the
Company and accounting
and administrative
services $333,177 $199,068
Acquisition fees 178,715 383,210
-------- --------
511,892 582,278
-------- --------
Due to CNL Securities Corp:
Commissions 258,474 372,227
Marketing support and due
diligence expense reim-
bursement fees 19,857 42,579
-------- --------
278,331 414,806
-------- --------
$790,223 $997,084
======== ========
11. Concentration of Credit Risk:
The following schedule presents total rental, earned, and interest
income from individual lessees, or affiliated groups of lessees, each
representing more than ten percent of the Company's total rental,
earned, and interest income from its Properties, Mortgage Loans and
Secured Equipment Leases for at least one of the quarters ended June
30:
1997 1996
--------- ----------
Castle Hill Holdings V,
L.L.C. and Castle Hill
Holdings VI, L.L.C.
("Castle Hill") $ 690,375 $ 441,085
Foodmaker, Inc. 419,259 52,833
Golden Corral Corporation 203,070 142,178
B-21
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
11. Concentration of Credit Risk - Continued:
In addition, the following schedule presents total rental, earned, and
interest income from individual restaurant chains, each representing
more than ten percent of the Company's rental, earned, and interest
income for at least one of the quarters ended June 30:
1997 1996
------- -------
Pizza Hut 690,375 441,085
Golden Corral Family
Steakhouse Restaurants 664,687 313,694
Jack in the Box 419,259 52,833
Boston Market 378,590 85,918
Although the Company's Properties are geographically diverse and the
Company's lessees and borrowers operate a variety of restaurant
concepts, failure of any one of these restaurant chains or any lessee
or borrower that contributes more than ten percent of the Company's
rental, earned and interest income could significantly impact the
results of operations of the Company. However, management believes 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
and borrowers.
12. Commitments:
The Company has entered into various development agreements with
tenants which provide terms and specifications for the construction of
buildings the tenants have agreed to lease. The agreements provide a
maximum amount of development costs (including the purchase price of
the land and closing costs) to be paid by the Company. The aggregate
maximum development costs the Company has agreed to pay is
approximately $37,343,000 of which approximately $29,936,300 in land
and other costs had been incurred as of June 30, 1997. The buildings
currently under construction are expected to be operational by December
1997. In connection with the purchase of each Property, the Company, as
lessor, entered into a long-term lease agreement.
B-22
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
13. Subsequent Events:
During the period July 1, 1997 through August 5, 1997, the Company
received subscription proceeds for an additional 2,009,403 shares
($20,094,034) of common stock.
On July 1, 1997, the Company declared distributions of $1,403,244 or
$.0625 per share of common stock, payable in September 1997 to
stockholders of record on July 1, 1997.
During the period July 1, 1997 through August 5, 1997, the Company
acquired 20 Properties (four on which restaurants are being constructed
and five on which a restaurant is being renovated) for cash at a total
cost of approximately $20,377,100. In connection with the purchase of
each Property, the Company, as lessor, entered into a long-term lease
agreement. The buildings under construction are expected to be
operational by August 1998.
On August 5, 1997, the Company obtained a commitment (the "Commitment")
from a bank to amend and restate its Loan described in Note 7. The
Commitment provides that the Company will be able to receive advances
on a revolving $35,000,000 unsecured line of credit (the "Line of
Credit") to purchase and develop Properties and to fund Mortgage Loans
and Secured Equipment Leases. The advances will bear interest at a rate
of LIBOR plus 1.65% or the bank's prime rate, whichever the Company
selects at the time of borrowing. Interest only will be repayable
monthly until June 30, 1999, at which time all remaining interest and
principal shall be due. The Line of Credit will provide for two
one-year renewal options. The Commitment will expire unless it is
closed on or before August 29, 1997.
B-23
<PAGE>
ADDENDUM TO
EXHIBIT C
PRIOR PERFORMANCE TABLES
THE FOLLOWING INFORMATION UPDATES AND
REPLACES THE CORRESPONDING INFORMATION
IN EXHIBIT C TO THE ATTACHED
PROSPECTUS, DATED APRIL 18, 1997
<PAGE>
EXHIBIT C
PRIOR PERFORMANCE TABLES
The information in this Exhibit C contains certain relevant summary
information concerning certain prior public partnerships 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 Partnerships") which
like the Company, were formed to invest in restaurant properties leased on a
triple-net basis to operators of national and regional fast-food, family-style
and casual dining restaurant chains.
A more detailed description of the acquisitions by the Prior Public
Partnerships 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. and CNL Income Fund XVIII,
Ltd., as well as a copy, for a reasonable fee, of the exhibits filed with such
reports.
The investment objectives of the Prior Public Partnerships (like those
of the Company) 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. In
addition, the investment objectives of the Prior Public Partnerships 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 PARTNERSHIPS.
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 June 30, 1997. The following is a brief description of the
Tables:
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 Partnerships, the offerings of
which became fully subscribed between July 1992 and June 1997.
C-1
<PAGE>
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 general partners of the Prior
Public Partnerships.
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 Partnerships, the offerings
of which became fully subscribed between July 1992 and June 1997. 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 Partnerships on a cumulative
basis commencing with inception and ending June 30, 1997.
Table III - Operating Results of Prior Programs
Table III presents a summary of operating results for the period from
inception through June 30, 1997, of the Prior Public Partnerships, the offerings
of which became fully subscribed between July 1992 and June 1997.
The Table includes a summary of income or loss of the Prior Public
Partnerships, 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 Partnerships, 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
Partnerships, but rather are related to items of a partnership nature. These
items include proceeds from capital contributions of limited partners and
disbursements made from these sources of funds, such as syndication and
organizational costs, acquisition of the properties and other costs which are
related more to the organization of the partnership and the acquisition of
properties than to the actual operations of the partnerships.
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 Exhibit C because none of the directors
of the Company or their Affiliates has been involved in completed public
programs which made investments similar to those of the Company.
Table V - Sales or Disposal of Properties
Table V provides information regarding the sale or disposal of
properties owned by the Prior Public Partnerships between July 1992 and June 30,
1997.
This 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 Income
Fund XI, Fund XII, Fund XIII, Fund XIV,
Ltd. Ltd. Ltd. Ltd.
---------- ---------- ---------- ----------
<S> <C>
Dollar amount offered $40,000,000 $45,000,000 $40,000,000 $45,000,000
=========== =========== =========== ===========
Dollar amount raised 100.0% 100.0% 100.0% 100.0%
----------- ----------- ----------- -----------
Less offering expenses:
Selling commissions
and discounts (8.5) (8.5) (8.5) (8.5)
Organizational expenses (3.0) (3.0) (3.0) (3.0)
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) (12.0)
----------- ----------- ----------- -----------
Reserve for operations -- -- -- --
----------- ----------- ----------- -----------
Percent available for
investment 88.0% 88.0% 88.0% 88.0%
=========== =========== =========== ===========
Acquisition costs:
Cash down payment 83.0% 83.0% 82.5% 82.5%
Acquisition fees paid
to affiliates 5.0 5.0 5.5 5.5
Loan costs -- -- -- --
----------- ----------- ----------- ----------
Total acquisition costs 88.0% 88.0% 88.0% 88.0%
=========== =========== =========== ===========
Percent leveraged
(mortgage financing
divided by total
acquisition costs) -- -- -- --
Date offering began 3/18/92 9/29/92 3/31/93 8/27/93
Length of offering (in
months) 6 6 5 6
Months to invest 90% of
amount available for
investment measured
from date of offering 6 11 10 11
</TABLE>
C-3
<PAGE>
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS
(continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income
Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd.
---------- ---------- ----------- ------------
<S> <C> (Note 1)
Dollar amount offered $40,000,000 $45,000,000 $30,000,000
=========== =========== ===========
Dollar amount raised 100.0% 100.0% 100.0%
----------- ----------- -----------
Less offering expenses:
Selling commissions
and discounts (8.5) (8.5) (8.5)
Organizational expenses (3.0) (3.0) (3.0)
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated
entities) (0.5) (0.5) (0.5)
----------- ----------- -----------
(12.0) (12.0) (12.0)
----------- ----------- -----------
Reserve for operations -- -- --
----------- ----------- -----------
Percent available for
investment 88.0% 88.0% 88.0%
=========== =========== ===========
Acquisition costs:
Cash down payment 82.5% 82.5% 83.5%
Acquisition fees paid
to affiliates 5.5 5.5 4.5
Loan costs -- -- --
----------- ----------- -----------
Total acquisition costs 88.0% 88.0% 88.0%
=========== =========== ===========
Percent leveraged
(mortgage financing
divided by total
acquisition costs) -- -- --
Date offering began 2/23/94 9/02/94 9/02/95
Length of offering (in
months) 6 9 12
Months to invest 90% of
amount available for
investment measured
from date of offering 10 11 15
</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. and CNL Income Fund XVIII, Ltd. each registered for sale
$30,000,000 and $35,000,000, respectively, of units of limited
partnership interest (the "Units"). The offering of Units of CNL Income
Fund XVII, Ltd. commenced September 2, 1995. Pursuant to the
Registration Statement, the offering of Units of CNL Income Fund XVIII,
Ltd. could not commence until the offering of Units of CNL Income Fund
XVII, Ltd. had terminated. CNL Income Fund XVII, Ltd. terminated its
offering of Units on September 19, 1996, at which time subscriptions
for an aggregate 3,000,000 Units ($30,000,000) had been received. Upon
the termination of the offering of Units of CNL Income Fund XVII, Ltd.,
CNL Income Fund XVIII, Ltd. commenced its offering to the public of
3,500,000 Units ($35,000,000).
C-4
<PAGE>
TABLE II
COMPENSATION TO SPONSOR
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income
Fund XI, Fund XII, Fund XIII, Fund XIV,
Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- -----------
<S> <C>
Date offering commenced 3/18/92 9/29/92 3/31/93 8/27/93
Dollar amount raised $40,000,000 $45,000,000 $40,000,000 $45,000,000
=========== =========== =========== ===========
Amount paid to sponsor from
proceeds of offering:
Selling commissions and
discounts 3,400,000 3,825,000 3,400,000 3,825,000
Real estate commissions - - - -
Acquisition fees 2,000,000 2,250,000 2,200,000 2,475,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) 200,000 225,000 200,000 225,000
----------- ----------- ----------- -----------
Total amount paid to sponsor 5,600,000 6,300,000 5,800,000 6,525,000
=========== =========== =========== ===========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1997 (6 months) 1,841,174 1,981,123 1,708,175 1,856,053
1996 3,734,852 4,089,655 3,494,528 3,841,163
1995 3,758,271 3,928,473 3,482,461 3,823,939
1994 3,574,474 3,933,486 3,232,046 2,897,432
1993 3,434,512 3,320,549 1,148,550 329,957
1992 1,525,462 63,401 - -
1991 - - - -
1990 - - - -
1989 - - - -
1988 - - - -
1987 - - - -
1986 - - - -
1985 - - - -
1984 - - - -
1983 - - - -
1982 - - - -
1981 - - - -
1980 - - - -
1979 - - - -
1978 - - - -
Amount paid to sponsor from
operations (administrative,
accounting and management
fees):
1997 (6 months) 48,260 49,885 48,767 48,170
1996 133,138 137,966 126,947 134,867
1995 106,086 109,111 103,083 114,095
1994 76,533 84,524 83,046 84,801
1993 78,926 73,789 27,003 8,220
1992 30,237 2,031 - -
1991 - - - -
1990 - - - -
1989 - - - -
1988 - - - -
1987 - - - -
1986 - - - -
1985 - - - -
1984 - - - -
1983 - - - -
1982 - - - -
1981 - - - -
1980 - - - -
1979 - - - -
1978 - - - -
Dollar amount of property
sales and refinancing
before deducting payments
to sponsor:
Cash 1,044,750 1,640,000 836,411 3,196,603
Notes - - - -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - - - -
Incentive fees - - - -
Other - - - -
</TABLE>
C-5
<PAGE>
TABLE II
COMPENSATION TO SPONSOR
(continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income
Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- -------------
(Note 1)
<S> <C>
Date offering commenced 2/23/94 9/02/94 9/02/95
Dollar amount raised $40,000,000 $45,000,000 $30,000,000
=========== =========== ===========
Amount paid to sponsor from
proceeds of offering:
Selling commissions and
discounts 3,400,000 3,825,000 2,550,000
Real estate commissions - - -
Acquisition fees 2,200,000 2,475,000 1,350,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) 200,000 225,000 150,000
----------- ----------- -----------
Total amount paid to sponsor 5,800,000 6,525,000 4,050,000
=========== =========== ===========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1997 (6 months) 1,716,242 1,938,911 1,232,910
1996 3,557,073 3,911,609 1,340,159
1995 3,361,477 2,619,840 11,671
1994 1,154,454 212,171 -
1993 - - -
1992 - - -
1991 - - -
1990 - - -
1989 - - -
1988 - - -
1987 - - -
1986 - - -
1985 - - -
1984 - - -
1983 - - -
1982 - - -
1981 - - -
1980 - - -
1979 - - -
1978 - - -
Amount paid to sponsor from
operations (administrative,
accounting and management
fees):
1997 (6 months) 42,619 50,756 53,768
1996 122,391 157,883 107,211
1995 122,107 138,445 2,659
1994 37,620 7,023 -
1993 - - -
1992 - - -
1991 - - -
1990 - - -
1989 - - -
1988 - - -
1987 - - -
1986 - - -
1985 - - -
1984 - - -
1983 - - -
1982 - - -
1981 - - -
1980 - - -
1979 - - -
1978 - - -
Dollar amount of property
sales and refinancing
before deducting payments
to sponsor:
Cash 3,312,297 1,385,384 -
Notes - - -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - - -
Incentive fees - - -
Other - - -
</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. and CNL Income Fund XVIII, Ltd. each registered for sale
$30,000,000 and $35,000, respectively, of units of limited partnership
interest (the "Units"). The offering of Units of CNL Income Fund XVII,
Ltd. commenced September 2, 1995. Pursuant to the Registration
Statement, the offering of Units of CNL Income Fund XVIII, Ltd. could
not commence until the offering of Units of CNL Income Fund XVII, Ltd.
had terminated. CNL Income Fund XVII, Ltd. terminated its offering of
Units on September 19, 1996, at which time subscriptions for an
aggregate 3,000,000 Units ($30,000,000) had been received. Upon the
termination of the offering of Units of CNL Income Fund XVII, Ltd., CNL
Income Fund XVIII, Ltd. commenced its offering to the public of
3,500,000 Units ($35,000,000). As of June 30, 1997, CNL Income Fund
XVIII, Ltd. had sold 2,219,221 Units, representing $22,192,212 of
capital contributed by limited partners, and 17 properties had been
acquired. From commencement of the offering through June 30, 1997,
total selling commissions and discounts were $1,886,338, due diligence
expense reimbursement fees were $110,961, and acquisition fees were
$998,650, for a total amount paid to sponsor of $2,995,949. CNL Income
Fund XVIII, Ltd. had cash generated from operations for the period
October 11, 1996 (the date funds were originally released from escrow)
through June 30, 1997, of $490,897. CNL Income Fund XVIII, Ltd. made
payments of $33,405 to the sponsor from operations for this period.
C-6
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XI, LTD.
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 0 $ 1,269,086 $ 3,831,648 $ 3,852,107
Equity in earnings of unconsolidated
joint ventures 0 33,367 121,059 119,370
Profit from sale of properties (Note 5) 0 0 0 0
Interest income 0 150,535 24,258 30,894
Less: Operating expenses 0 (63,390) (206,987) (179,717)
Interest expense 0 0 0 0
Depreciation and amortization 0 (180,631) (469,127) (481,226)
Minority interests in income of
consolidated joint ventures 0 (23,529) (68,399) (68,936)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,185,438 3,232,452 3,272,492
============ ============ ============ ============
Taxable income
- from operations 0 1,295,104 2,855,026 2,947,445
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 4) 0 1,495,225 3,355,586 3,497,941
Cash generated from sales (Note 5) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,495,225 3,355,586 3,497,941
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (1,205,030) (2,495,002) (3,400,001)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 290,195 860,584 97,940
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 40,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Minority interests' capital
contributions 0 426,367 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (3,922,875) 0 0
Acquisition of land and buildings 0 (26,428,556) (276,157) 0
Investment in direct financing
leases 0 (6,716,561) (276,206) 0
Increase in restricted cash 0 0 0 0
Decrease in restricted cash 0 0 0 0
Investment in joint ventures 0 (1,658,925) (772) 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XI, Ltd. by
related parties 0 (1,011,487) (900) 0
Increase in other assets 0 (122,024) 0 0
Distributions to holders of minority
interests 0 (17,467) (51,562) (57,641)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 828,667 254,987 40,299
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 45 71 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-7
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XI, LTD.
(continued)
<TABLE>
<CAPTION>
6 months
1995 1996 1997
------------ ------------ ------------
<S> <C>
Gross revenue $ 3,820,990 $ 3,877,311 $ 1,847,371
Equity in earnings of unconsolidated
joint ventures 118,384 118,211 105,163
Profit from sale of properties (Note 5) 0 213,685 0
Interest income 51,192 51,381 21,104
Less: Operating expenses (237,126) (247,569) (136,290)
Interest expense 0 0 0
Depreciation and amortization (481,226) (478,198) (229,919)
Minority interests in income of
consolidated joint ventures (70,038) (70,116) (34,598)
------------ ------------ ------------
Net income - GAAP basis 3,202,176 3,464,705 1,572,831
============ ============ ============
Taxable income
- from operations 2,985,221 2,965,514 1,447,710
============ ============ ============
- from gain on sale 0 0 0
============ ============ ============
Cash generated from operations
(Notes 2 and 4) 3,652,185 3,601,714 1,792,914
Cash generated from sales (Note 5) 0 1,044,750 0
Cash generated from refinancing 0 0 0
------------ ------------ ------------
Cash generated from operations, sales
and refinancing 3,652,185 4,646,464 1,792,914
Less: Cash distributions to investors
(Note 6)
- from operating cash flow (3,500,023) (3,540,024) (1,790,012)
- from sale of properties 0 0 0
- from cash flow from prior period 0 0 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 152,162 1,106,440 2,902
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0
General partners' capital
contributions 0 0 0
Minority interests' capital
contributions 0 0 0
Organization costs 0 0 0
Syndication costs 0 0 0
Acquisition of land and buildings 0 0 0
Investment in direct financing
leases 0 0 0
Increase in restricted cash 0 (1,044,750) 0
Decrease in restricted cash 0 0 1,044,750
Investment in joint ventures 0 0 (1,044,750)
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XI, Ltd. by
related parties 0 0 0
Increase in other assets 0 0 0
Distributions to holders of minority
interests (54,227) (58,718) (29,095)
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 97,935 2,972 (26,193)
============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 74 73 36
============ ============ ============
- from recapture 0 0 0
============ ============ ============
Capital gain (loss) 0 0 0
============ ============ ============
</TABLE>
C-8
<PAGE>
TABLE III - CNL INCOME FUND XI, LTD. (continued)
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 41 62 81
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 4
- from return of capital (Note 3) 0 1 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 0 42 62 85
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 42 62 85
- from cash flow from prior
period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 6) 0 42 62 85
============ ============ ============ ============
Total cash distributions as a
percentage of original $1,000
investment (Notes 7 and 8) 0.00% 6.17% 8.31% 8.56%
Total cumulative cash distributions
per $1,000 investment from inception 0 42 104 189
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 5) N/A 100% 100% 100%
</TABLE>
C-9
<PAGE>
TABLE III - CNL INCOME FUND XI, LTD. (continued)
<TABLE>
<CAPTION>
6 months
1995 1996 1997
------------ ------------ -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 79 81 39
- from capital gain 0 5 0
- from investment income from
prior period 9 3 2
- from return of capital (Note 3) 0 0 4
------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 88 89 45
============ ============ ============
Source (on cash basis)
- from sales 0 0 0
- from refinancing 0 0 0 0
- from operations 88 89 45
- from cash flow from prior
period 0 0 0
------------ ------------ ------------
Total distributions on cash basis
(Note 6) 88 89 45
============ ============ ============
Total cash distributions as a
percentage of original $1,000
investment (Notes 7 and 8) 8.85% 8.85% 8.75%
Total cumulative cash distributions
per $1,000 investment from inception 277 366 411
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 5) 100% 97% 100%
</TABLE>
Note 1: The registration statement relating to the offering of Units by CNL
Income Fund XI, Ltd. became effective on March 12, 1992. Activities
through April 22, 1992, 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 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 CNL Income Fund
XI, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: 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 XI, Ltd.
Note 5: In November 1996, CNL Income Fund XI, Ltd. sold one if its properties
and received net sales proceeds of $1,044,750, resulting in a gain of
$213,685 for financial reporting purposes. In January 1997, the
partnership reinvested the net sales proceeds in an additional property
as tenants-in-common with an affiliate of the general partners.
Note 6: 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 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to the
payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as of
December 31, 1994, 1995 and 1996, and June 30, 1997 are not included in
the 1994, 1995, 1996 and 1997 totals, respectively.
Note 7: On December 31, 1995 and 1996, CNL Income Fund XI, Ltd. declared a
special distribution of cumulative excess operating reserves equal to
.10% for each year of the total invested capital. Accordingly, the total
yield for each of 1995 and 1996 was 8.85%.
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 6 above)
Note 9: Certain data for columns representing less than 12 months have been
annualized.
C-10
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XII, LTD.
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 0 $ 25,133 $ 3,374,640 $ 4,397,881
Equity in earnings of joint ventures 0 46 49,604 85,252
Profit (Loss) from sale of properties
(Note 7) 0 0 0 0
Interest income 0 45,228 190,082 65,447
Less: Operating expenses 0 (7,211) (193,804) (192,951)
Interest expense 0 0 0 0
Depreciation and amortization 0 (3,997) (286,293) (327,795)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 59,199 3,134,229 4,027,834
============ ============ ============ ============
Taxable income
- from operations 0 58,543 2,749,072 3,301,005
============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 5) 0 61,370 3,246,760 3,848,962
Cash generated from sales (Note 7) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 61,370 3,246,760 3,848,962
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (61,370) (1,972,769) (3,768,754)
- from sale of properties 0 0 0 0
- from return of capital (Note 4) 0 (60,867) 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 (60,867) 1,273,991 80,208
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 21,543,270 23,456,730 0
General partners' capital
contributions 1,000 0 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (2,066,937) (2,277,637) 0
Acquisition of land and buildings 0 (7,536,009) (15,472,737) (230)
Investment in direct financing
leases 0 (2,503,050) (11,875,100) (591)
Loan to tenant of joint venture,
net of repayments 0 0 (207,189) 6,400
Investment in joint ventures 0 (372,045) (468,771) (4,400)
Payment of lease costs 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XII, Ltd. by
related parties 0 (704,923) (432,749) 0
Increase in other assets 0 (654,497) 0 0
Other 0 0 0 973
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 7,634,942 (6,003,462) 82,360
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 5 64 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-11
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XII, LTD.
(continued)
<TABLE>
<CAPTION>
6 months
1995 1996 1997
------------ ------------ ------------
<S> <C>
Gross revenue $ 4,404,792 $ 4,264,273 $ 2,058,864
Equity in earnings of joint ventures 81,582 200,499 141,356
Profit (Loss) from sale of properties
(Note 7) 0 (15,355) 0
Interest income 84,197 88,286 37,968
Less: Operating expenses (228,404) (279,341) (132,808)
Interest expense 0 0 0
Depreciation and amortization (327,795) (315,319) (159,551)
------------ ------------ ------------
Net income - GAAP basis 4,014,372 3,943,043 1,945,829
============ ============ ============
Taxable income
- from operations 3,262,046 3,275,495 1,617,525
============ ============ ============
- from gain (loss) on sale 0 (41,506) 0
============ ============ ============
Cash generated from operations
(Notes 2 and 5) 3,819,362 3,951,689 1,931,238
Cash generated from sales (Note 7) 0 1,640,000 0
Cash generated from refinancing 0 0 0
------------ ------------ ------------
Cash generated from operations, sales
and refinancing 3,819,362 5,591,689 1,931,238
Less: Cash distributions to investors
(Note 6)
- from operating cash flow (3,819,362) (3,870,008) (1,912,504)
- from sale of properties 0 0 0
- from return of capital (Note 4) 0 0 0
- from cash flow from prior period (5,645) 0 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions (5,645) 1,721,681 18,734
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0
General partners' capital
contributions 0 0 0
Organization costs 0 0 0
Syndication costs 0 0 0
Acquisition of land and buildings 0 0 (55,000)
Investment in direct financing
leases 0 0 0
Loan to tenant of joint venture,
net of repayments 7,008 7,741 4,171
Investment in joint ventures 0 (1,645,024) 0
Payment of lease costs 0 0 (24,052)
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XII, Ltd. by
related parties 0 0 0
Increase in other assets 0 0 0
Other 0 0 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,363 84,398 (56,147)
============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 72 72 36
============ ============ ============
- from recapture 0 0 0
============ ============ ============
Capital gain (loss) 0 (1) 0
============ ============ ============
</TABLE>
C-12
<PAGE>
TABLE III - CNL INCOME FUND XII, LTD. (continued)
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 5 46 84
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 0
- from return of capital (Note 3) 0 7 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 0 12 46 84
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 6 46 84
- from return of capital (Note 4) 0 6 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 6) 0 12 46 84
============ ============ ============ ============
Total cash distributions as a
percentage of original $1,000
investment (Notes 8 and 9) 0.00% 5.00% 6.75% 8.50%
Total cumulative cash distributions
per $1,000 investment from inception 0 12 58 142
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>
C-13
<PAGE>
TABLE III - CNL INCOME FUND XII, LTD. (continued)
<TABLE>
<CAPTION>
6 months
1995 1996 1997
------------ ------------ -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 85 86 43
- from capital gain 0 0 0
- from investment income from
prior period 0 0 0
- from return of capital (Note 3) 0 0 0
------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 85 86 43
============ ============ ============
Source (on cash basis)
- from sales 0 0 0
- from refinancing 0 0 0
- from operations 85 86 43
- from return of capital (Note 4) 0 0 0
- from cash flow from prior period 0 0 0
------------ ------------ ------------
Total distributions on cash basis
(Note 6) 85 86 43
============ ============ ============
Total cash distributions as a
percentage of original $1,000
investment (Notes 8 and 9) 8.60% 8.50% 8.50%
Total cumulative cash distributions
per $1,000 investment from inception 227 313 356
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% 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 XII, Ltd. ("CNL XII") and CNL
Income Fund XI, Ltd. each registered for sale $40,000,000 units of
limited partnership interests ("Units"). The offering of Units of CNL
Income Fund XI, Ltd. commenced March 12, 1992. Pursuant to the
registration statement, CNL XII could not commence until the offering
of Units of CNL Income Fund XI, Ltd. was terminated. CNL Income Fund
XI, Ltd. terminated its offering of Units on September 28, 1992, 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 XI, Ltd., CNL XII commenced its offering of Units. Activities
through October 8, 1992, 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 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 CNL Income
Fund XII, Ltd. has not treated this amount as a return of capital for
any other purpose.
Note 4: CNL Income Fund XII, Ltd. makes its distributions in the current period
rather than in arrears based on estimated operating results. In cases
where distributions exceed cash from operations in the current period,
once finally determined, subsequent distributions are lowered
accordingly in order to avoid any return of capital. This amount is not
required to be presented as a return of capital except for purposes of
this table, and CNL Income Fund XII, Ltd. has not treated this amount
as a return of capital for any other purpose.
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 CNL Income Fund XII, Ltd.
Note 6: 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 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to
the payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as
of December 31, 1994, 1995 and 1996, and June 30, 1997 are not included
in the 1994, 1995, 1996 and 1997 totals, respectively.
Note 7: In April 1996, CNL Income Fund XII, Ltd. sold one of its properties to
an unrelated third party for $1,640,000. As a result of this
transaction, CNL Income Fund XII, Ltd. recognized a loss of $15,355 for
financial reporting purposes primarily due to acquisition fees and
miscellaneous acquisition expenses CNL Income Fund XII, Ltd. had
allocated to this property. In May 1996, CNL Income Fund XII, Ltd.
reinvested the proceeds from this sale, along with additional funds,
for a total of $1,645,024 in Middleburg Joint Venture.
Note 8: On December 31, 1995, CNL Income Fund XII, Ltd. declared a special
distribution of cumulative excess operating reserves equal to .10% of
the total invested capital. Accordingly, the total yield for 1995 was
8.60%.
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)
Note 10: Certain data for columns representing less than 12 months have been
annualized.
C-14
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XIII, LTD.
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 0 $ 966,564 $ 3,558,447 $ 3,806,944
Equity in earnings of joint ventures 0 1,305 43,386 98,520
Profit (Loss) from sale of properties
(Notes 4 and 5) 0 0 0 (29,560)
Provision for loss on land and net
investment in direct financing leases
(Note 8) 0 0 0 0
Interest income 0 181,568 77,379 51,410
Less: Operating expenses 0 (59,390) (183,311) (214,705)
Interest expense 0 0 0 0
Depreciation and amortization 0 (148,170) (378,269) (393,435)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 941,877 3,117,632 3,319,174
============ ============ ============ ============
Taxable income
- from operations 0 978,535 2,703,252 2,920,859
============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,121,547 3,149,000 3,379,378
Cash generated from sales (Notes 4 and 5) 0 0 0 286,411
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,121,547 3,149,000 3,665,789
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (528,364) (2,800,004) (3,350,014)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions 0 593,183 348,996 315,775
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 0 40,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Syndication costs 0 (3,932,017) (181) 0
Acquisition of land and buildings 0 (19,691,630) (5,764,308) (336,116)
Investment in direct financing leases 0 (6,760,624) (1,365,075) 0
Investment in joint ventures 0 (314,998) (545,139) (140,052)
Decrease (increase) in restricted cash 0 0 0 0
Loan to tenant 0 0 0 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIII, Ltd. by related parties 0 (799,980) (25,036) (3,074)
Increase in other assets 0 (454,909) 9,226 0
Other 0 0 0 954
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 8,639,025 (7,341,517) (162,513)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 33 67 72
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Notes 4 and 5) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-15
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XIII, LTD.
(continued)
6 months
1996 1997
------------ -------------
Gross revenue $ 3,685,280 $ 1,796,451
Equity in earnings of joint ventures 60,654 70,503
Profit (Loss) from sale of properties
(Notes 4 and 5) 82,855 0
Provision for loss on land and net
investment in direct financing leases
(Note 8) 0 (41,202)
Interest income 49,820 18,246
Less: Operating expenses (253,360) (128,593)
Interest expense 0 0
Depreciation and amortization (393,434) (197,265)
----------- -----------
Net income - GAAP basis 3,231,815 1,518,140
=========== ===========
Taxable income
- from operations 2,972,159 1,387,838
=========== ===========
- from gain (loss) on sale 0 0
=========== ===========
Cash generated from operations
(Notes 2 and 3) 3,367,581 1,659,408
Cash generated from sales (Notes 4 and 5) 550,000 0
Cash generated from refinancing 0 0
------------ ------------
Cash generated from operations, sales
and refinancing 3,917,581 1,659,408
Less: Cash distributions to investors
(Note 6)
- from operating cash flow (3,367,581) (1,659,408)
- from sale of properties 0 0
- from cash flow from prior period (32,427) (40,596)
------------ ------------
Cash generated (deficiency) after 517,573 (40,596)
cash distributions
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 0 0
General partners' capital
contributions 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 (550,000)
Decrease (increase) in restricted cash (550,000) 550,000
Loan to tenant 0 (190,997)
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIII, Ltd. by related parties 0 0
Increase in other assets 0 0
Other 0 0
------------ ------------
Cash generated (deficiency) after cash
distributions and special items (32,427) (231,593)
============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 74 34
============ ============
- from recapture 0 0
============ ============
Capital gain (loss) (Notes 4 and 5) 0 0
============ ============
C-16
<PAGE>
TABLE III - CNL INCOME FUND XIII, LTD. (continued)
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 18 70 82
- from capital gain 0 0 0 0
- from investment income from prior
period 0 0 0 2
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 6) 0 18 70 84
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 18 70 84
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 6) 0 18 70 84
============ ============ ============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 7) 0.00% 5.33% 7.56% 8.44%
Total cumulative cash distributions per
$1,000 investment from inception 0 18 88 172
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) (Notes 4 and 5) N/A 100% 100% 100%
</TABLE>
C-17
<PAGE>
TABLE III - CNL INCOME FUND XIII, LTD. (continued)
<TABLE>
<CAPTION>
6 months
1996 1997
------------ -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 78 38
- from capital gain 2 0
- from investment income from prior
period 5 5
------------ ------------
Total distributions on GAAP basis (Note 6) 85 43
============ ============
Source (on cash basis)
- from sales 0 0
- from refinancing 0 0
- from operations 84 42
- from cash flow from prior period 1 1
------------ ------------
Total distributions on cash basis (Note 6) 85 43
============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 7) 8.50% 8.50%
Total cumulative cash distributions per
$1,000 investment from inception 257 300
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) 99% 100%
</TABLE>
Note 1: The registration statement relating to the offering of Units by CNL
Income Fund XIII, Ltd. became effective on March 17, 1993. Activities
through April 15, 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 XIII, Ltd.
Note 4: During 1995, the partnership sold one 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 an additional property. As a result of this transaction,
the partnership recognized a loss for financial reporting purposes of
$29,560 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.
Note 5: In November 1996, CNL Income Fund XIII, Ltd. sold one of its properties
and received net sales proceeds of $550,000, resulting in a gain of
$82,855 for financial reporting purposes. In January 1997, the
partnership reinvested the net sales proceeds in an additional property
as tenants-in-common with an affiliate of the general partners.
Note 6: 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 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to
the payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as
of December 31, 1994, 1995 and 1996, and June 30, 1997, are not
included in the 1994, 1995, 1996 and 1997 totals, respectively.
Note 7: 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)
Note 8: During the six months ended June 30, 1997, the partnership recorded an
allowance for loss on land and net investment in the direct financing
lease of $41,202, for financial reporting purposes, relating to one of
its properties. The loss represents the difference between the
property's land carrying value and the carrying value of the net
investment in the direct financing lease, as compared to the estimated
net realizable value, based on the anticipated sales price of this
property from a third party.
Note 9: Certain data for columns representing less than 12 months have been
annualized.
C-18
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XIV, LTD.
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ----------- ------------ --------------
<S> <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
(Note 4) 0 0 0 (66,518)
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 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 (Note 4) 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
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) (Note 4) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-19
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XIV, LTD.
(continued)
<TABLE>
<CAPTION>
6 months
1996 1997
------------ ------------
<S> <C>
Gross revenue $ 3,999,813 $ 1,964,870
Equity in earnings of joint ventures 459,137 152,823
Profit (Loss) from sale of properties
(Note 4) 0 0
Interest income 44,089 23,015
Less: Operating expenses (246,621) (148,962)
Interest expense 0 0
Depreciation and amortization (340,089) (170,055)
------------ -----------
Net income - GAAP basis 3,916,329 1,821,691
============ ===========
Taxable income
- from operations 3,236,329 1,594,605
============ ===========
- from gain on sale 0 47,256
============ ===========
Cash generated from operations
(Notes 2 and 3) 3,706,296 1,807,883
Cash generated from sales (Note 4) 0 0
Cash generated from refinancing 0 0
------------ -----------
Cash generated from operations, sales
and refinancing 3,706,296 1,807,883
Less: Cash distributions to investors
(Note 5)
- from operating cash flow (3,706,296) (1,807,883)
- from sale of properties 0 0
- from cash flow from prior period (6,226) (48,377)
------------ -----------
Cash generated (deficiency) after cash
distributions (6,226) (48,377)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0
General partners' capital
contributions 0 0
Syndication costs 0 0
Acquisition of land and buildings 0 0
Investment in direct financing leases 0 0
Investment in joint ventures (7,500) 0
Return of capital from joint venture 0 51,950
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIV, Ltd. by related parties 0 0
Increase in other assets 0 0
Other 0 0
------------ ------------
Cash generated (deficiency) after cash
distributions and special items (13,726) 3,573
============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 71 35
============ ============
- from recapture 0 0
============ ============
Capital gain (loss) (Note 4) 0 1
============ ============
</TABLE>
C-20
<PAGE>
TABLE III - CNL INCOME FUND XIV, LTD. (continued)
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ ------------
<S> <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 refinancing 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 6) 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) N/A 100% 100% 100%
</TABLE>
C-21
<PAGE>
TABLE III - CNL INCOME FUND XIV, LTD. (continued)
<TABLE>
<CAPTION>
6 months
1996 1997
------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 83 40
- from capital gain 0 0
- from return of capital 0 0
- from investment income from prior
period 0 1
------------ ------------
Total distributions on GAAP basis (Note 5) 83 41
============ ============
Source (on cash basis)
- from sales 0 0
- from refinancing 0 0
- from operations 83 40
- from cash flow from prior period 0 1
------------ ------------
Total distributions on cash basis (Note 5) 83 41
============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 6) 8.25% 8.25%
Total cumulative cash distributions
per $1,000 investment from inception 214 255
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) 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.
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 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to
the payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as
of December 31, 1994, 1995 and 1996, and June 30, 1997 are not included
in the 1994, 1995, 1996 and 1997 totals, respectively.
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 5 above)
Note 7: Certain data for columns representing less than 12 months have been
annualized.
C-22
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XV, LTD.
<TABLE>
<CAPTION>
1993 6 months
(Note 1) 1994 1995 1996 1997
------------ ------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 0 $ 1,143,586 $ 3,546,320 $ 3,632,699 $ 1,799,379
Equity in earnings of joint ventures 0 8,372 280,606 392,862 117,311
Profit (Loss) from sale of properties
(Note 4) 0 0 (71,023) 0 0
Interest income 0 167,734 88,059 43,049 24,263
Less: Operating expenses 0 (62,926) (228,319) (235,319) (123,377)
Interest expense 0 0 0 0 0
Depreciation and amortization 0 (70,848) (243,175) (248,232) (124,149)
------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,185,918 3,372,468 3,585,059 1,693,427
============ ============ ============ ============ ============
Taxable income
- from operations 0 1,026,715 2,861,912 2,954,318 1,430,120
============ ============ ============ ============ ============
- from gain on sale 0 0 0 0 47,256
============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,116,834 3,239,370 3,434,682 1,673,623
Cash generated from sales (Note 4) 0 0 811,706 0 0
Cash generated from refinancing 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,116,834 4,051,076 3,434,682 1,673,623
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (635,944) (2,650,003) (3,200,000) (1,673,623)
- from sale of properties 0 0 0 0 0
- from cash flow from prior period (6,377)
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 480,890 1,401,073 234,682 (6,377)
Special items (not including sales and
refinancing):
Limited partners' capital contra-
bunions 0 40,000,000 0 0 0
General partners' capital contra-
bunions 1,000 0 0 0 0
Syndication costs 0 (3,892,003) 0 0 0
Acquisition of land and buildings 0 (22,152,379) (1,625,601) 0 0
Investment in direct financing
leases 0 (6,792,806) (2,412,973) 0 0
Investment in joint venture 0 (1,564,762) (720,552) (129,939) 0
Return of capital from joint venture 0 0 0 0 51,950
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 0
Increase in other assets 0 (187,757) 0 0 0
Other (38) (6,118) 25,150 0 0
------------ ------------ ------------ ------------ -----------
Cash generated (deficiency) after cash
distributions and special items 962 4,786,868 (3,356,410) 104,743 45,573
============ ============ ============ ============ ===========
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 33 71 73 35
============ ============ ============ ============ ===========
- from recapture 0 0 0 0 0
============ ============ ============ ============ ===========
Capital gain (loss) (Note 4) 0 0 0 0 1
============ ============ ============ ============ ===========
</TABLE>
C-23
C-24
<PAGE>
TABLE III - CNL INCOME FUND XV, LTD. (continued)
<TABLE>
<CAPTION>
1993 6 months
(Note 1) 1994 1995 1996 1997
------------ -------------- ------------ ------------- -------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 21 66 80 42
- from capital gain 0 0 0 0 0
------------ ------------ ------------ ------------ -------
Total distributions on GAAP basis (Note 5) 0 21 66 80 42
============ ============ ============ ============ =======
Source (on cash basis)
- from sales 0 0 0 0 0
- from refinancing 0 0 0 0 0
- from operations 0 21 66 80 42
------------ ------------ ------------ ------------ -------
Total distributions on cash basis (Note 5) 0 21 66 80 42
============ ============ ============ ============ =======
Total cash distributions as a percentage
of original $1,000 investment (Notes 6
and 7). 0 5.00% 7.25% 8.20% 8.00%
Total cumulative cash distributions per
$1,000 investment from inception 0 21 87 167 209
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 100% 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.
Note 5: Distributions declared for the quarters ended December 31, 1994, 1995
and 1996 are reflected in the 1995, 1996 and 1997 columns,
respectively, due to the payment of such distributions in January 1995,
1996 and 1997, respectively. As a result of distributions being
presented on a cash basis, distributions declared and unpaid as of
December 31, 1994, 1995 and 1996, and June 30, 1997 are not included in
the 1994, 1995, 1996 and 1997 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: 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 8: Certain data for columns representing less than 12 months have been
annualized.
C-25
C-26
<PAGE>
<TABLE>
<CAPTION>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XVI, LTD.
1993 6 months
(Note 1) 1994 1995 1996 1997
------------ ------------ ------------ ----------- -----------
<S> <C>
Gross revenue $ 0 $ 186,257 $ 2,702,504 $ 4,343,390 $ 2,145,424
Equity in earnings from joint venture 0 0 0 19,668 36,620
Profit from sale of properties (Notes 4
and 5) 0 0 0 124,305 41,148
Interest income 0 21,478 321,137 75,160 34,155
Less: Operating expenses 0 (10,700) (274,595) (261,878) (134,647)
Interest expense 0 0 0 0 0
Depreciation and amortization 0 (9,458) (318,205) (552,447) (282,050)
------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 0 187,577 2,430,841 3,748,198 1,840,650
============ ============ ============ ============ ============
Taxable income
- from operations 0 189,864 2,139,382 3,239,830 1,598,010
============ ============ ============ ============ ============
- from gain on sale (Notes 4 and 5) 0 0 0 0 41,148
============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 205,148 2,481,395 3,753,726 1,888,155
Cash generated from sales (Notes 4 and 5) 0 0 0 775,000 610,384
Cash generated from refinancing 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 205,148 2,481,395 4,528,726 2,498,539
Less: Cash distributions to investors
(Note 4)
- from operating cash flow 0 (2,845) (1,798,921) (3,431,251) (1,800,000)
- from sale of properties 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 202,303 682,474 1,097,475 698,539
Special items (not including sales and
refinancing):
Limited partners' capital contri-
butions 0 20,174,172 24,825,828 0 0
General partners' capital contri-
butions 1,000 0 0 0 0
Syndication costs 0 (1,929,465) (2,452,743) 0 0
Acquisition of land and buildings 0 (13,170,132) (16,012,458) (2,355,627) 0
Investment in direct financing
leases 0 (975,853) (5,595,236) (405,937) (29,257)
Investment in joint venture 0 0 0 (775,000) 0
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) 0
Collection of overpayment of acqui-
sition and syndication costs paid
by related parties on behalf of the
partnership 0 0 0 0 0
Increase in other assets 0 (443,625) (58,720) 0 0
Other (36) (20,714) 20,714 0 0
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 964 2,982,532 1,004,290 (2,441,583) 669,282
============ ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 17 53 71 35
============ ============ ============ ============ ============
- from recapture 0 0 0 0 0
============ ============ ============ ============ ============
Capital gain (loss) (Notes 4 and 5) 0 0 0 0 1
============ ============ ============ ============ ============
</TABLE>
C-27
C-28
<PAGE>
TABLE III - CNL INCOME FUND XVI, LTD. (continued)
<TABLE>
<CAPTION>
1993 6 months
(Note 1) 1994 1995 1996 1997
------------ ------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 1 45 76 39
- from capital gain 0 0 0 0 1
- from investment income from
prior period 0 0 0 0 0
------------ ------------ ------------ ------------ --------
Total distributions on GAAP basis (Note 6) 0 1 45 76 40
============ ============ ============ ============ ========
Source (on cash basis)
- from sales 0 0 0 0 0
- from refinancing 0 0 0 0 0
- from operations 0 1 45 76 40
------------ ------------ ------------ ------------ --------
Total distributions on cash basis (Note 6) 0 1 45 76 40
============ ============ ============ ============ ========
Total cash distributions as a percentage
of original $1,000 investment (Note 7) 0.00% 4.50% 6.00% 7.88% 8.00%
Total cumulative cash distributions per
$1,000 investment from inception 0 1 46 122 162
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% 99%
</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. The partnership intends to reinvest
the net sales proceeds in a replacement property.
Note 6: Distributions declared for the quarters ended December 31, 1994, 1995
and 1996 are reflected in the 1995, 1996 and 1997 columns,
respectively, due to the payment of such distributions in January 1995,
1996 and 1997, respectively. As a result of distributions being
presented on a cash basis, distributions declared and unpaid as of
December 31, 1994, 1995 and 1996, and June 30, 1997 are not included in
the 1994, 1995, 1996 and 1997 totals, respectively.
Note 7: 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)
Note 8: Certain data for columns representing less than 12 months have been
annualized.
C-29
C-30
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XVII, LTD.
<TABLE>
<CAPTION>
1995 6 months
(Note 1) 1996 1997
------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 1,195,263 $ 1,237,898
Equity in earnings of unconsolidated
joint ventures 0 4,834 45,358
Interest income 12,153 244,406 48,537
Less: Operating expenses (3,493) (169,536) (103,397)
Interest expense 0 0 0
Depreciation and amortization (309) (179,208) (188,038)
Minority interest in income of
consolidated joint venture 0 (10,432)
------------ ------------ ------------
Net income - GAAP basis 8,351 1,095,759 1,029,926
============ ============ ============
Taxable income
- from operations 12,153 1,114,964 1,138,900
============ ============ ============
- from gain on sale 0 0 0
============ ============ ============
Cash generated from operations
(Notes 2 and 3) 9,012 1,232,948 1,179,142
Cash generated from sales 0 0 0
Cash generated from refinancing 0 0 0
------------ ------------ ------------
Cash generated from operations, sales
and refinancing 9,012 1,232,948 1,179,142
Less: Cash distributions to investors
(Note 4)
- from operating cash flow (1,199) (703,681) (1,015,084)
- from sale of properties 0 0 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 7,813 529,267 164,058
Special items (not including sales and
refinancing):
Limited partners' capital contri-
butions 5,696,921 24,303,079 0
General partners' capital contri-
butions 1,000 0 0
Contributions from minority interest 0 140,676 278,170
Syndication costs (604,348) (2,407,317) 0
Acquisition of land and buildings (332,928) (19,735,346) (1,978,419)
Investment in direct financing
leases 0 (1,784,925) (1,009,775)
Investment in joint ventures 0 (201,501) (934,196)
Increase in restricted cash 0 0 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XVII, Ltd. by related parties (347,907) (326,483) (26,068)
Increase in other assets (221,282) 0 0
Distributions to holder of minority
interest 0 0 (16,943)
Other (410) 410 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 4,198,859 517,860 (3,523,173)
============ ============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 36 37 38
============ ============ ============
- from recapture 0 0 0
============ ============ ============
Capital gain (loss) 0 0 0
============ ============ ============
</TABLE>
C-31
<PAGE>
TABLE III - CNL INCOME FUND XVII, LTD. (continued)
<TABLE>
<CAPTION>
1995 6 months
(Note 1) 1996 1997
------------ ------------ -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 4 23 34
- from capital gain 0 0 0
- from investment income from
prior period 0 0 0
------------ ------------ ------------
Total distributions on GAAP basis (Note 4) 0 23 34
============ ============ ============
Source (on cash basis)
- from sales 0 0 0
- from refinancing 0 0 0
- from operations 4 23 34
------------ ------------ ------------
Total distributions on cash basis (Note 4) 4 23 34
============ ============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 5) 5.00% 5.50% 7.25%
Total cumulative cash distributions per
$1,000 investment from inception 4 27 61
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 98% 100%
</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 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,
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 XVII, Ltd.
Note 4: Distributions declared for the quarters ended December 31, 1995 and
1996 are reflected in the 1996 and 1997 columns, respectively, due to
the payment of such distributions in January 1996 and 1997,
respectively. As a result of distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1996 and
June 30, 1997 are not included in the 1996 and 1997 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: Certain data for columns representing less than 12 months have been
annualized.
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>
CNL Income Fund, Ltd.:
Burger King -
San Dimas, CA 02/05/87 06/12/92 $1,169,021 0 0 0 $1,169,021
Wendy's -
Fairfield, CA 07/01/87 10/03/94 1,018,490 0 0 0 1,018,490
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 11/18/87 11/30/94 626,582 0 0 0 626,582
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
CNL Income Fund III, Ltd.:
Wendy's -
Chicago, IL 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
Burger King -
Roswell, GA 06/08/88 06/20/97 257,981 0 685,000 0 942,981
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
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) 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
</TABLE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
(continued)
<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>
CNL Income Fund, Ltd.:
Burger King -
San Dimas, CA 0 $955,000 $955,000 $214,021
Wendy's -
Fairfield, CA 0 861,500 861,500 156,990
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 0 743,000 743,000 (116,418)
Denny's -
Show Low, AZ (8) 0 484,185 484,185 136,615
KFC -
Eagan, MN 0 601,100 601,100 64,782
CNL Income Fund III, Ltd.:
Wendy's -
Chicago, IL 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
Burger King -
Roswell, GA 0 775,226 775,226 167,755
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
CNL Income Fund V, Ltd.:
Perkins -
Myrtle Beach, SC (2) 0 986,418 986,418 53,582
Ponderosa -
St. Cloud, FL (6) 0 996,769 996,769 134,243
Franklin National Bank -
Franklin, TN 0 1,138,164 1,138,164 (177,423)
</TABLE>
C-33
<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>
Shoney's -
Smyrna, TN 03/22/89 05/13/97 636,788 0 0 0 636,788
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
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) 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
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) 09/28/90 12/01/95 0 0 240,000 0 240,000
Church's Fried Chicken -
Jacksonville, FL (5) 09/28/90 12/01/95 0 0 220,000 0 220,000
Ponderosa -
Orlando, FL (6) 12/17/90 10/24/96 0 0 1,353,775 0 1,353,775
</TABLE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
(continued)
<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>
Shoney's -
Smyrna, TN 0 554,200 554,200 82,588
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
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) 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
CNL Income Fund VIII, Ltd.:
Denny's -
Ocoee, FL 0 949,199 949,199 235,666
Church's Fried Chicken -
Jacksonville, FL (4) 0 238,153 238,153 1,847
Church's Fried Chicken -
Jacksonville, FL (5) 0 215,845 215,845 4,155
Ponderosa -
Orlando, FL (6) 0 1,179,210 1,179,210 174,565
</TABLE>
C-34
<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>
CNL Income Fund IX, Ltd.:
Burger King -
Woodmere, OH 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
CNL Income Fund XI, Ltd.:
Burger King -
Philadelphia, PA 09/29/92 11/07/96 1,044,750 0 0 0 1,044,750
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 12/28/92 04/10/96 1,640,000 0 0 0 1,640,000
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
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
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
</TABLE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
(continued)
<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>
CNL Income Fund IX, Ltd.:
Burger King -
Woodmere, OH 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
CNL Income Fund XI, Ltd.:
Burger King -
Philadelphia, PA 0 818,850 818,850 225,900
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 0 1,636,643 1,636,643 3,357
CNL Income Fund XIII, Ltd.:
Checkers -
Houston, TX 0 286,411 286,411 0
Checkers -
Richmond, VA 0 413,288 413,288 136,712
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
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
</TABLE>
C-35
<PAGE>
<TABLE>
<CAPTION>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
==========================================================================================================
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>
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
</TABLE>
<TABLE>
<CAPTION>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
(continued)
========================================================================================
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>
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
</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 each of 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 each of CNL Income Fund II, Ltd. and CNL Income Fund VI, Ltd.
represent each partnership's percent interest in the properties owned by
Show Low Joint Venture.
C-36
<PAGE>
ADDENDUM TO
EXHIBIT E
STATEMENT OF ESTIMATED
TAXABLE OPERATING RESULTS
BEFORE DIVIDENDS PAID DEDUCTION
THE STATEMENT OF ESTIMATED
TAXABLE OPERATING RESULTS BEFORE
DIVIDENDS PAID DEDUCTION IN THIS
ADDENDUM UPDATES AND REPLACES
EXHIBIT E TO THE ATTACHED
PROSPECTUS, DATED APRIL 18, 1997.
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
BEFORE DIVIDENDS PAID DEDUCTION
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM JANUARY 1, 1997
THROUGH OCTOBER 3, 1997
For The Year Ended December 31, 1996 (Unaudited)
The following schedule presents unaudited estimated taxable operating
results before dividends paid deduction of each Property acquired by the
Company from January 1, 1997 through October 3, 1997. The statement presents
estimated operating results for each Property that was operational as if the
Property had been acquired and operational on January 1, 1996 through December
31, 1996. 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>
Jack in the Box Jack in the Box Jack in the Box Jack in the Box
Los Angeles, CA (8) Las Vegas, NV (8) Moscow, ID (8) Kent #1, WA (8)
------------------- ----------------- -------------- ---------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) (7)
Interest Income (2) - - - -
Total Revenues (7) (7) (7) (7)
Asset Management Fees (3) (7) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (7)
Total Operating Expenses (7) (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) (7)
</TABLE>
See Footnotes
E-1
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Jack in the Box Shoney's
Hollister, CA (8) Kingsburg, CA (8) Indian Harbour Beach, FL
----------------- ----------------- ------------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7)
Interest Income (2) - - -
Total Revenues (7) (7) (7)
Asset Management Fees (3) (7) (7) (7)
Mortgage Management Fee (4) - - -
General and Administrative
Expenses (5) (7) (7) (7)
Total Operating Expenses (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7)
</TABLE>
See Footnotes
E-2
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Jack in the Box Golden Corral Burger King
Murrieta, CA (8) Humble, TX (8) Winchester, KY (9) Kent #2, OH
---------------- --------------- ------------------ -----------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) $89,688
Interest Income (2) - - - -
-------
Total Revenues (7) (7) (7) 89,688
-------
Asset Management Fees (3) (7) (7) (7) (5,237)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (5,561)
--------
Total Operating Expenses (7) (7) (7) (10,798)
--------
Estimated Cash Available from
Operations (7) (7) (7) 78,890
Depreciation and Amortization
Expense (6) (7) (7) (7) (17,602)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) $ 61,288
========
</TABLE>
See Footnotes
E-3
<PAGE>
<TABLE>
<CAPTION>
Burger King Denny's Jack in the Box Jack in the Box
Chattanooga, TN (10) Tampa, FL (11) Palmdale, CA (8) Houston #3, TX (8)
-------------------- -------------- ---------------- ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) (7)
Interest Income (2) - - - -
Total Revenues (7) (7) (7) (7)
Asset Management Fees (3) (7) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (7)
Total Operating Expenses (7) (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) (7)
</TABLE>
See Footnotes
E-4
<PAGE>
<TABLE>
<CAPTION>
Golden Corral Jack in the Box Black-eyed Pea Black-eyed Pea
Hopkinsville, KY Houston #4, TX (8) Bedford, TX (12) Dallas, TX (12)
----------------- ---------------- ---------------- -----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 141,912 (7) $ 79,560 $ 75,182
Interest Income (2) - - - -
---------- --------- --------
Total Revenues 141,912 (7) 79,560 75,182
---------- --------- ---------
Asset Management Fees (3) (7,518) (7) (3,716) (3,716)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (8,799) (7) (4,933) (4,661)
---------- --------- ---------
Total Operating Expenses (16,317) (7) (8,649) (8,377)
---------- --------- ---------
Estimated Cash Available from
Operations 125,595 (7) 70,911 66,805
Depreciation and Amortization
Expense (6) (22,573) (7) (16,731) (16,731)
---------- --------- ---------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 103,022 (7) $ 54,180 $ 50,074
========== ========= =========
</TABLE>
See Footnotes
E-5
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Eight Pizza Hut Jack in the Box
Fort Worth, TX (12) Oklahoma City, OK (13) Properties Oxnard, CA (8)
--------------------- ----------------------- ----------------- ----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 84,305 $ 81,660 $ 165,440 (7)
Interest Income (2) - - 437,918 -
--------- --------- ---------
Total Revenues 84,305 81,660 603,358 (7)
--------- --------- ---------
Asset Management Fees (3) (3,716) (3,696) (9,454) (7)
Mortgage Management Fee (4) - - (25,200) -
General and Administrative
Expenses (5) (5,227) (5,063) (37,408) (7)
--------- --------- ---------
Total Operating Expenses (8,943) (8,759) (72,062) (7)
--------- --------- ---------
Estimated Cash Available from
Operations 75,362 72,901 531,296 (7)
Depreciation and Amortization
Expense (6) (16,731) (16,642) (11,340) (7)
--------- --------- ---------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 58,631 $ 56,259 $519,956 (7)
========= ========= ========
</TABLE>
See Footnotes
E-6
<PAGE>
<TABLE>
<CAPTION>
Bennigan's Boston Market Boston Market Boston Market
Arvada #1, CO Cedar Park, TX(14) Collinsville, IL (15) Taylorsville, UT (16)
------------- ------------------ --------------------- ---------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 198,076 (7) (7) (7)
Interest Income (2) - - - -
----------
Total Revenues 198,076 (7) (7) (7)
----------
Asset Management Fees (3) (11,442) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (12,281) (7) (7) (7)
----------
Total Operating Expenses (23,723) (7) (7) (7)
----------
Estimated Cash Available from
Operations 174,353 (7) (7) (7)
Depreciation and Amortization
Expense (6) (33,275) (7) (7) (7)
----------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 141,078 (7) (7) (7)
==========
</TABLE>
See Footnotes
E-7
<PAGE>
<TABLE>
<CAPTION>
Burger King Boston Market Boston Market Einstein Bros. Bagels
Ooltewah, TN (10) Arvada #2, CO (16) Liberty #1, MO (15) Dearborn, MI (17)
----------------- ------------------ ------------------- ---------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) (7)
Interest Income (2) - - - -
Total Revenues (7) (7) (7) (7)
Asset Management Fees (3) (7) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (7)
Total Operating Expenses (7) (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) (7)
</TABLE>
See Footnotes
E-8
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Shoney's Black-eyed Pea Pizza Hut
Enumclaw (8) Guadalupe, AZ (18) Scottsdale, AZ (11) Dover, OH
--------------- ------------------ ------------------- ---------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) $23,560
Interest Income (2) - - - -
------
Total Revenues (7) (7) (7) 23,560
-------
Asset Management Fees (3) (7) (7) (7) (1,346)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (1,461)
------
Total Operating Expenses (7) (7) (7) (2,807)
------
Estimated Cash Available from
Operations (7) (7) (7) 20,753
Depreciation and Amortization
Expense (6) (7) (7) (7) -
-------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) $20,753
=======
</TABLE>
See Footnotes
E-9
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Boston Market Boston Market Boston Market
Bacliff, TX (8) Indianapolis, IN (17) San Antonia, TX (14) Baltimore, MD (17)
--------------- ------------------ ------------------- ---------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) (7)
Interest Income (2) - - - -
Total Revenues (7) (7) (7) (7)
Asset Management Fees (3) (7) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (7)
Total Operating Expenses (7) (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) (7)
</TABLE>
See Footnotes
E-10
<PAGE>
<TABLE>
<CAPTION>
Boston Market Boston Market Boston Market Boston Market
Gambrills, MD (17) Jessup, MD (17) Lansing, MI Riverdale, MD (17)
--------------- ------------------ ------------------ ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) (7)
Interest Income (2) - - - -
Total Revenues (7) (7) (7) (7)
Asset Management Fees (3) (7) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (7)
Total Operating Expenses (7) (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) (7)
</TABLE>
See Footnotes
E-11
<PAGE>
<TABLE>
<CAPTION>
Boston Market Boston Market Einstein Bros. Bagels Golden Corral
Vacaville, CA Waldorf, MD (17) Springfield, VA (17) Jacksonville #1. FL (9)
------------- ---------------- --------------------- -----------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) (7)
Interest Income (2) - - - -
Total Revenues (7) (7) (7) (7)
Asset Management Fees (3) (7) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (7)
Total Operating Expenses (7) (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) (7)
</TABLE>
See Footnotes
E-12
<PAGE>
<TABLE>
<CAPTION>
Golden Corral IHOP Popeyes Jack in the Box
Corpus Christi, TX (9) Leesburg, VA (19) Starke, FL Fresno, CA (8)
---------------------- ----------------- ---------- ---------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) $119,659 (7) (7)
Interest Income (2) - - - -
--------
Total Revenues (7) 119,659 - -
--------
Asset Management Fees (3) (7) (7,068)(7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7,419) (7) (7)
--------
Total Operating Expenses (7) (14,487) (7) (7)
--------
Estimated Cash Available from
Operations (7) 105,172 (7) (7)
Depreciation and Amortization
Expense (6) (7) (14,835) (7) (7)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) $ 90,337 (7) (7)
========
</TABLE>
See Footnotes
E-13
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Ruth's Chris Steak House Golden Corral
Corinth, TX (8) Tampa, FL Jacksonville #2, FL (9)
----------------- ------------------------ -----------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) $175,000 (7)
Interest Income (2) - - -
--------
Total Revenues (7) 175,000 (7)
--------
Asset Management Fees (3) (7) (12,127) (7)
Mortgage Management Fee (4) - - -
General and Administrative
Expenses (5) (7) (10,850) (7)
--------
Total Operating Expenses (7) (22,977) (7)
--------
Estimated Cash Available from
Operations (7) 152,023 (7)
Depreciation and Amortization
Expense (6) (7) (27,123) (7)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) $124,900 (7)
========
</TABLE>
See Footnotes
E-14
<PAGE>
<TABLE>
<CAPTION>
Charley's Place Charley's Place Darryl's Darryl's
King of Prussia, PA (20) McLean, VA (20) Evansville, IN (20) Hampton, VA (20)
---------------------- --------------- ------------------- ----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $150,766 $162,731 $153,159 $126,356
Interest Income (2) - - - -
-------- -------- -------- --------
Total Revenues 150,766 162,731 153,159 126,356
-------- -------- -------- --------
Asset Management Fees (3) (8,593) (9,269) (8,724) (7,198)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (9,347) (10,089) (9,496) (7,834)
-------- -------- -------- --------
Total Operating Expenses (17,940) (19,358) (18,220) (15,032)
-------- -------- -------- --------
Estimated Cash Available from
Operations 132,826 143,373 134,939 111,324
Depreciation and Amortization
Expense (6) (14,036) (17,608) (24,887) (13,745)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $118,790 $125,765 $110,052 $ 97,579
======== ======== ======== ========
</TABLE>
See Footnotes
E-15
<PAGE>
<TABLE>
<CAPTION>
Darryl's Darryl's Darryl's Darryl's
Huntsville, AL (20) Knoxville, TN (20) Louisville, KY (20) Mobile, AL (20)
------------------- ------------------ ------------------- ---------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $143,586 $129,324 $155,552 $149,809
Interest Income (2) - - - -
-------- -------- -------- --------
Total Revenues 143,586 129,324 155,552 149,809
-------- -------- -------- --------
Asset Management Fees (3) (8,179) (7,367) (8,865) (8,534)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (8,902) (8,018) (9,644) (9,288)
-------- -------- -------- --------
Total Operating Expenses (17,081) (15,385) (18,509) (17,822)
-------- -------- -------- --------
Estimated Cash Available from
Operations 126,505 113,939 137,043 131,987
Depreciation and Amortization
Expense (6) (16,960) (18,112) (23,376) (25,774)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $109,545 $ 95,827 $113,667 $106,213
======== ======== ======== ========
</TABLE>
See Footnotes
E-16
<PAGE>
<TABLE>
<CAPTION>
Darryl's Darryl's Darryl's Darryl's
Montgomery, AL (20) Nashville #1, TN (20) Orlando, FL (20) Pensacola, FL (20)
------------------- --------------------- ---------------- ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $129,228 $124,442 $224,952 $111,040
Interest Income (2) - - - -
-------- -------- -------- --------
Total Revenues 129,228 124,442 224,952 111,040
-------- -------- -------- --------
Asset Management Fees (3) (7,368) (7,089) (12,813) (6,326)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (8,012) (7,715) (13,947) (6,884)
-------- -------- -------- --------
Total Operating Expenses (15,380) (14,804) (26,760) (13,210)
-------- -------- -------- --------
Estimated Cash Available from
Operations 113,848 109,638 198,192 97,830
Depreciation and Amortization
Expense (6) (24,326) (18,809) (19,739) (18,536)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 89,522 $ 90,829 $178,453 $ 79,294
======== ======== ======== ========
</TABLE>
See Footnotes
E-17
<PAGE>
<TABLE>
<CAPTION>
Darryl's Darryl's Darryl's Darryl's
Raleigh #1, NC (20) Raleigh #2, NC (20) Richmond #1, VA (20) Richmond #2, VA (20)
------------------- ------------------- -------------------- --------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $134,014 $184,269 $138,800 $ 95,724
Interest Income (2) - - - -
-------- -------- -------- --------
Total Revenues 134,014 184,269 138,800 95,724
-------- -------- -------- --------
Asset Management Fees (3) (7,634) (10,496) (7,907) (5,454)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (8,309) (11,425) (8,606) (5,935)
-------- -------- -------- --------
Total Operating Expenses (15,943) (21,921) (16,513) (11,389)
-------- -------- -------- --------
Estimated Cash Available from
Operations 118,071 162,348 122,287 84,335
Depreciation and Amortization
Expense (6) (12,905) (18,379) (19,813) (16,607)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $105,166 $143,969 $102,474 $ 67,728
======== ======== ======== ========
</TABLE>
See Footnotes
E-18
<PAGE>
<TABLE>
<CAPTION>
Darryl's Houlihan's Houlihan's Houlihan's
Winston-Salem, NC (20) Bethel Park, PA (20) Langhorne, PA (20) Plymouth Meeting, PA (20)
---------------------- -------------------- ------------------ -------------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $124,442 $143,586 $145,980 $208,200
Interest Income (2) - - - -
-------- -------- -------- --------
Total Revenues 124,442 143,586 145,980 208,200
-------- -------- -------- --------
Asset Management Fees (3) (7,089) (8,179) (8,316) (11,859)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7,715) (8,902) (9,051) (12,908)
-------- -------- -------- --------
Total Operating Expenses (14,804) (17,081) (17,367) (24,767)
-------- -------- -------- --------
Estimated Cash Available from
Operations 109,638 126,505 128,613 183,433
Depreciation and Amortization
Expense (6) (20,758) (15,213) (16,572) (23,213)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 88,880 $111,292 $112,041 $160,220
======== ======== ======== ========
</TABLE>
See Footnotes
E-19
<PAGE>
<TABLE>
<CAPTION>
Golden Corral IHOP Golden Corral Boston Market
Enid, OK (9) Fairfax, VA (19) Liberty #2, MO (9) Stafford, TX (17)
-------------- ---------------- ------------------ -----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) $173,045 (7) $111,894
Interest Income (2) - - - -
-------- -------
Total Revenues (7) 173,045 (7) 111,894
-------- --------
Asset Management Fees (3) (7) (10,223) (7) (6,409)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (10,729) (7) (6,937)
-------- --------
Total Operating Expenses (7) (20,952) (7) (13,346)
-------- --------
Estimated Cash Available from
Operations (7) 152,093 (7) 98,548
Depreciation and Amortization
Expense (6) (7) (18,015) (7) (17,411)
-------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) $134,078 (7) $ 81,137
======== ========
</TABLE>
See Footnotes
E-20
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Jack in the Box KFC Arby's
Channelview, TX (8) Garland, TX (8) Putnam, CT Lexington, NC (21)
------------------- --------------- ---------- ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) $ 89,960 $ 74,254
Interest Income (2) - - - -
-------- --------
Total Revenues (7) (7) 89,960 74,254
-------- --------
Asset Management Fees (3) (7) (7) (4,768) (4,449)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (5,578) (4,604)
------- --------
Total Operating Expenses (7) (7) (10,346) (9,053)
------- ---------
Estimated Cash Available from
Operations (7) (7) 79,614 65,201
Depreciation and Amortization
Expense (6) (7) (7) (13,688) (11,835)
------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) $ 65,926 $ 53,366
======== ========
</TABLE>
See Footnotes
E-21
<PAGE>
<TABLE>
<CAPTION>
Boston Market IHOP IHOP Jack in the Box
Newport News, VA (17) Houston #5, TX (19) Stockbridge, GA (19) Woodland, CA (8)
--------------------- ------------------- -------------------- ----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $104,993 $144,209 $141,451 (7)
Interest Income (2) - - - -
-------- -------- --------
Total Revenues 104,993 144,209 141,451 (7)
-------- -------- --------
Asset Management Fees (3) (6,013) (8,519) (8,356) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (6,510) (8,941) (8,770) (7)
-------- -------- --------
Total Operating Expenses (12,523) (17,460) (17,126) (7)
-------- -------- --------
Estimated Cash Available from
Operations 92,470 126,749 124,325 (7)
Depreciation and Amortization
Expense (6) (14,977) (22,764) (18,066) (7)
------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 77,493 $103,985 $106,259 (7)
======== ======== ========
</TABLE>
See Footnotes
E-22
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest Tumbleweed Southwest Tumbleweed Southwest
Jack in the Box Mesquite Grill & Bar Mesquite Grill & Bar Mesquite Grill & Bar
West Sacramento, CA (8) Cookeville, TN (22) Hendersonville, TN (22) Lawrence, KS (22)
----------------------- --------------------- ------------------------ --------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) (7)
Interest Income (2) - - - -
Total Revenues (7) (7) (7) (7)
Asset Management Fees (3) (7) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (7)
Total Operating Expenses (7) (7) (7) (7)
Estimated Cash Available from
Operations (7) (7) (7) (7)
Depreciation and Amortization
Expense (6) (7) (7) (7) (7)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) (7)
</TABLE>
See Footnotes
E-23
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest
Mesquite Grill & Bar Arby's Arby's Arby's
Nashville #2, TN (22) Greensboro, NC (21) Greenville, NC (21) Jonesville, NC (21)
--------------------- ------------------- ------------------- -------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) $ 72,727 $ 72,727 $ 72,727
Interest Income (2) - - - -
-------- -------- -------
Total Revenues (7) 72,727 72,727 72,727
-------- -------- --------
Asset Management Fees (3) (7) (4,358) (4,358) (4,358)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (4,509) (4,509) (4,509)
-------- -------- --------
Total Operating Expenses (7) (8,867) (8,867) (8,867)
-------- -------- --------
Estimated Cash Available from
Operations (7) 63,860 63,860 63,860
Depreciation and Amortization
Expense (6) (7) (10,335) (12,519) (13,786)
-------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) $ 53,525 $ 51,341 $ 50,074
======== ======== ========
</TABLE>
See Footnotes
E-24
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest
Arby's Arby's Mesquite Grill & Bar Boston Market
Kernersville, NC (21) Kinston, NC (21) Murfreesboro, TN (22) Edgewater, CO (17)
--------------------- ---------------- --------------------- ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 65,000 $ 71,364 (7) $ 93,907
Interest Income (2) - - - -
-------- -------- -------
Total Revenues 65,000 71,364 (7) 93,907
-------- -------- --------
Asset Management Fees (3) (3,894) (4,276) (7) (5,377)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (4,030) (4,425) (7) (5,822)
-------- -------- --------
Total Operating Expenses (7,924) (8,701) (7) (11,199)
-------- -------- --------
Estimated Cash Available from
Operations 57,076 62,663 (7) 82,708
Depreciation and Amortization
Expense (6) (10,550) (12,393) (7) (16,024)
-------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 46,526 $ 50,270 (7) $ 66,684
======== ======== ========
</TABLE>
See Footnotes
E-25
<PAGE>
<TABLE>
<CAPTION>
Golden Corral Golden Corral Ruby Tuesday's IHOP
Duncan, OK (9) Fort Walton Beach, FL (9) London, KY Elk Grove, CA (19)
-------------- ------------------------- -------------- ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) (7) (7) $155,961
Interest Income (2) - - - -
-------
Total Revenues (7) (7) (7) 155,961
--------
Asset Management Fees (3) (7) (7) (7) (9,215)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7) (7) (7) (9,670)
--------
Total Operating Expenses (7) (7) (7) (18,885)
--------
Estimated Cash Available from
Operations (7) (7) (7) 137,076
Depreciation and Amortization
Expense (6) (7) (7) (7) (26,552)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) (7) (7) $110,524
========
</TABLE>
See Footnotes
E-26
<PAGE>
<TABLE>
<CAPTION>
IHOP IHOP IHOP Shoney's
Lake Jackson, TX (19) Loveland, CO (19) Victoria, TX (19) Las Vegas, NV (18)
--------------------- ----------------- ----------------- ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $121,101 $139,398 $108,668 (7)
Interest Income (2) - - - -
-------- -------- --------
Total Revenues 121,101 139,398 108,668 (7)
-------- -------- --------
Asset Management Fees (3) (7,155) (8,236) (6,420) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7,508) (8,643) (6,737) (7)
-------- -------- --------
Total Operating Expenses (14,663) (16,879) (13,157) (7)
-------- -------- --------
Estimated Cash Available from
Operations 106,438 122,519 95,511 (7)
Depreciation and Amortization
Expense (6) (20,476) (24,613) (20,763) (7)
------- --------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 85,962 $ 97,906 $74,748 (7)
======== ======== =======
</TABLE>
See Footnotes
E-27
<PAGE>
<TABLE>
<CAPTION>
Boston Market T.G.I. Friday's Golden Corral Golden Corral
Hoover, AL (17) Superstition Springs, AZ Mobile, AL (9) Palatka, FL (9)
----------------------- ----------------------- --------------- ---------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $110,270 (7) (7) (7)
Interest Income (2) - - - -
--------
Total Revenues 110,270 (7) (7) (7)
--------
Asset Management Fees (3) (6,316) (7) (7) (7)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (6,837) (7) (7) (7)
--------
Total Operating Expenses (13,153) (7) (7) (7)
--------
Estimated Cash Available from
Operations 97,117 (7) (7) (7)
Depreciation and Amortization
Expense (6) (15,840) (7) (7) (7)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 81,277 (7) (7) (7)
========
</TABLE>
See Footnotes
E-28
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Mesa, AZ (13) Phoenix #1, AZ (13) Phoenix #2, AZ (13) Phoenix #3, AZ (13)
-------------- -------------------- ------------------- -------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $168,000 $109,225 $100,195 $ 95,149
Interest Income (2) - - - -
-------- -------- -------- -------
Total Revenues 168,000 109,225 100,195 95,149
-------- -------- -------- -------
Asset Management Fees (3) (9,597) (3,845) (3,845) (3,870)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (10,416) (6,772) (6,212) (5,899)
--------- -------- -------- --------
Total Operating Expenses (20,013) (10,617) (10,057) (9,769)
--------- -------- -------- --------
Estimated Cash Available from
Operations 147,987 98,608 90,138 85,380
Depreciation and Amortization
Expense (6) (23,333) (17,310) (17,313) (17,424)
------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $124,654 $ 81,298 $72,825 $ 67,956
======== ======== ======= ========
</TABLE>
See Footnotes
E-29
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Tucson, AZ (13) Albuquerque #1, NM (11) Albuquerque #2, NM (11) Dallas #2, TX (11)
---------------- ----------------------- ------------------------ ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 91,248 $ 86,087 $ 91,517 $ 90,265
Interest Income (2) - - - -
-------- -------- -------- -------
Total Revenues 91,248 86,087 91,517 90,265
-------- -------- -------- --------
Asset Management Fees (3) (3,848) (4,004) (3,998) (3,964)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (5,657) (5,337) (5,674) (5,596)
-------- -------- -------- --------
Total Operating Expenses (9,505) (9,341) (9,672) (9,560)
-------- -------- -------- --------
Estimated Cash Available from
Operations 81,743 76,746 81,845 80,705
Depreciation and Amortization
Expense (6) (17,326) (18,027) (18,001) (17,850)
------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 64,417 $ 58,719 $63,844 $ 62,855
======== ======== ======= ========
</TABLE>
See Footnotes
E-30
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Forestville, MD (11) Houston #6, TX (11) Waco, TX (11) Wichita, KS (11)
--------------------- --------------------- -------------- ----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $133,563 $ 99,657 $ 89,029 $ 89,571
Interest Income (2) - - - -
-------- -------- -------- -------
Total Revenues 133,563 99,657 89,029 89,571
-------- -------- -------- --------
Asset Management Fees (3) (3,864) (3,892) (3,970) (3,964)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (8,281) (6,179) (5,520) (5,553)
-------- -------- -------- --------
Total Operating Expenses (12,145) (10,071) (9,490) (9,517)
-------- -------- -------- --------
Estimated Cash Available from
Operations 121,418 89,586 79,539 80,054
Depreciation and Amortization
Expense (6) (17,395) (17,522) (17,875) (17,850)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $104,023 $ 72,064 $ 61,664 $ 62,204
======== ======== ======== ========
</TABLE>
See Footnotes
E-31
<PAGE>
<TABLE>
<CAPTION>
Golden Corral
Olathe, KS (9) Total
------------- -----
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (7) $ 7,444,613
Interest Income (2) - 437,918
------------
Total Revenues (7) 7,882,531
------------
Asset Management Fees (3) (7) (407,810)
Mortgage Management Fee (4) - (25,200)
General and Administrative
Expenses (5) (7) (488,716)
-----------
Total Operating Expenses (7) (921,726)
-----------
Estimated Cash Available from
Operations (7) 6,960,805
Depreciation and Amortization
Expense (6) (7) (1,106,688)
-----------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (7) $ 5,854,117
============
</TABLE>
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if
specified levels of gross receipts are achieved.
(2) The Company entered into a Master Mortgage Note agreement for
$4,200,000, collateralized by building improvements located on the
Eight Pizza Hut Properties and three additional Pizza Hut properties.
The Master Mortgage Note bears interest at a rate of 10.50% per annum
and principal and interest will be collected in equal monthly
installments over 20 years beginning in May 1997. Amount does not
include $21,000 of loan commitment fees and $21,000 in loan origination
fees collected by the Company at closing from the borrower.
(3) 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."
(4) For managing the Mortgage Loans, the Advisor will be entitled to
receive a monthly mortgage management fee of one-twelfth of .60% of the
total principal amount of the Mortgage Loans as of the end of the
preceding month. See "Management Compensation."
(5) Estimated at 6.2% of gross rental and interest income based on the
previous experience of Affiliates of the Advisor with 18 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.
E-32
<PAGE>
(6) 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. Acquisition fees allocated to the
Master Mortgage Note have been amortized on a straight-line basis over
the life of the agreement (20 years).
(7) The Property is either currently under construction or renovation or
was under construction or renovation during, or subsequent to, the
period presented, and therefore was not operational for the period
presented. The development agreements for the Properties which are to
be constructed or renovated, provide that construction or renovation
must be completed no later than the dates set forth below:
Property Estimated Final Completion Date
-------- -------------------------------
Los Angeles Property Opened for business May 5, 1997
Las Vegas Property Opened for business April 18, 1997
Moscow Property Opened for business April 10, 1997
Kent #1 Property Opened for business April 14, 1997
Hollister Property Opened for business April 8, 1997
Kingsburg Property Opened for business April 10, 1997
Indian Harbour Beach Property Opened for business March 11, 1997
Murrieta Property Opened for business April 13, 1997
Winchester Property Opened for business June 5, 1997
Chattanooga Property Opened for business May 29, 1997
Tampa Property Opened for business August 11, 1997
Palmdale Property Opened for business May 19, 1997
Houston #3 Property Opened for business May 18, 1997
Houston #4 Property Opened for business June 13, 1997
Oxnard Property Opened for business July 3, 1997
Cedar Park Property Opened for business July 28, 1997
Collinsville Property Opened for business July 13, 1997
Taylorsville Property Opened for business June 9, 1997
Ooltewah Property Opened for business July 31, 1997
Arvada #2 Property Opened for business July 21, 1997
Liberty #1 Property Opened for business August 18, 1997
Dearborn Property Opened for business July 12, 1997
Enumclaw Property Opened for business July 31, 1997
Guadalupe Property Opened for business August 27, 1997
Scottsdale Property Opened for business September 30, 1997
Bacliff Property Opened for business August 3, 1997
Indianapolis Property Opened for business September 2, 1997
San Antonio Property Opened for business September 25, 1997
Baltimore Property Opened for business August 19, 1997
Gambrills Property Opened for business August 26, 1997
Jessup Property Opened for business July 13, 1997
Lansing Property November 2, 1997
Riverdale Property November 2, 1997
E-33
<PAGE>
Property Estimated Final Completion Date
-------- -------------------------------
Vacaville Property Opened for business July 13, 1997
Waldorf Property Opened for business July 13, 1997
Springfield Property Opened for business July 7, 1997
Jacksonville #1 Property Opened for business September 24, 1997
Corpus Christi Property Opened for business September 24, 1997
Starke Property Opened for business August 11, 1997
Fresno Property Opened for business August 31, 1997
Corinth Property Opened for business September 16, 1997
Jacksonville #2 Property Opened for business September 3, 1997
Enid Property December 14, 1997
Liberty #2 Property December 16, 1997
Channelview Property Opened for business September 21, 1997
Garland Property Opened for business September 27, 1997
Woodland Property January 12, 1998
West Sacramento Property January 17, 1998
Cookeville Property July 31, 1998
Hendersonville Property July 31, 1998
Lawrence Property July 31, 1998
Nashville #2 Property July 31, 1998
Murfreesboro Property August 4, 1998
Duncan Property February 15, 1998
Fort Walton Beach Property February 15, 1998
London Property November 17, 1997
Las Vegas Property February 16, 1998
Superstition Springs Property March 4, 1998
Mobile Property March 16,1998
Palatka Property March 16, 1998
Olathe Property March 31, 1998
(8) The lessee of the Los Angeles, Las Vegas, Moscow, Kent #1, Hollister,
Kingsburg, Murrieta, Palmdale, Houston #3, Houston #4, and Oxnard,
Enumclaw, Bacliff, Fresno, Corinth, Channelview, Garland, Woodland and
West Sacramento Properties is the same unaffiliated lessee.
(9) The lessee of the Winchester, Jacksonville #1, Corpus Christi,
Jacksonville #2, Enid, Liberty #2, Duncan, Fort Walton Beach, Mobile,
Palatka and Olathe Properties is the same unaffiliated lessee.
(10) The lessee of the Chattanooga and Ooltewah Properties is the same
unaffiliated lessee.
(11) The lessee of the Tampa, Scottsdale, Albuquerque #1, Albuquerque #2,
Dallas #2, Forestville, Houston #6, Waco and Wichita Properties is the
same unaffiliated lessee.
E-34
<PAGE>
(12) The lessee of the Bedford, Dallas, and Fort Worth Properties is the
same unaffiliated lessee.
(13) The lessee of the Oklahoma City, Mesa, Phoenix #1, Phoenix #2, Phoenix
#3 and Tucson Properties is the same unaffiliated lessee.
(14) The lessee of the Cedar Park and San Antonio Properties is the same
unaffiliated lessee.
(15) The lessee of the Collinsville and Liberty #1 Properties is the same
unaffiliated lessee.
(16) The lessee of the Taylorsville and Arvada #2 Properties is the same
unaffiliated lessee.
(17) The lessee of the Dearborn, Indianapolis, Baltimore, Gambrills, Jessup,
Riverdale, Waldorf, Springfield, Stafford, Newport News, Edgewater and
Hoover Properties is the same unaffiliated lessee or group of
unaffiliated lessees.
(18) The lessee of the Guadalupe and Las Vegas Properties is the same
unaffiliated lessee.
(19) The lessee of the Leesburg, Fairfax, Houston #5, Stockbridge, Elk
Grove, Lake Jackson, Loveland and Victoria Properties is the same
unaffiliated lessee.
(20) The lessee of the King of Prussia, McLean, Evansville, Hampton,
Huntsville, Knoxville, Louisville, Mobile, Montgomery, Nashville #1,
Orlando, Pensacola, Raleigh #1, Raleigh #2, Richmond #1, Richmond #2,
Winston-Salem, Bethel Park, Langhorne and Plymouth Meeting Properties
is the same unaffiliated lessee.
(21) The lessee of the Lexington, Greensboro, Greenville, Jonesville,
Kernersville, and Kinston Properties is the same unaffiliated lessee.
(22) The lessee of the Cookeville, Hendersonville, Lawrence, Nashville #2
and Murfreesboro Properties is the same unaffiliated lessee.
E-35
