Rule 424(b)(3)
No. 333-15411
CNL AMERICAN PROPERTIES FUND, INC.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 18, 1997. This Supplement replaces the Supplements
dated April 23, 1997 and May 6, 1997. 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 May 7, 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 May 7, 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
an offering of up to 27,500,000 Shares (the "Subsequent Offering"). As of May
7, 1997, the Company had received subscription proceeds of $44,093,060
(4,409,306 Shares), including $269,438 (26,944 Shares) issued pursuant to the
Reinvestment Plan, from 2,127 stockholders in connection with the Subsequent
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 $40,099,000. As of May 7, 1997,
the Company had invested or committed for investment approximately
$148,117,000 of aggregate net proceeds from the Initial Offering and the
Subsequent Offering in 148 Properties, in providing mortgage financing to the
tenants of the 44 Properties consisting of land only through Mortgage Loans,
and in paying acquisition fees and certain acquisition expenses, leaving
approximately $24,042,000 in aggregate net offering proceeds available for
investment in Properties and Mortgage Loans. As of May 7, 1997, $1,984,188
of the Net Offering Proceeds from the Subsequent Offering had been incurred as
Acquisition Fees to the Advisor.
BUSINESS
PROPERTY ACQUISITIONS
Between April 3, 1997 and May 7, 1997, the Company acquired 19
Properties, including 17 Properties consisting of land and building, one
Property consisting of building only and one Property consisting of land only,
with the aggregate proceeds of the Initial Offering and the Subsequent
Offering. These Properties are 11 Boston Market Properties (one in each of
Arvada, Colorado; Liberty, Missouri; Indianapolis, Indiana; San Antonio,
Texas; Vacaville, California; Lansing Michigan; and Baltimore, Gambrills,
Jessup, Riverdale, and Waldorf, Maryland), one Black-eyed Pea Property (in
Scottsdale, Arizona), two Jack in the Box Properties (one in each of Enumclaw,
Washington, and Bacliff, Texas), two Einstein Bros. Bagels Properties (one in
each of Dearborn, Michigan, and Springfield, Virginia), one Shoney's Property
(in Guadalupe, Arizona), one Pizza Hut Property (in Dover, Ohio) and one
Golden Corral Property (in Jacksonville, Florida). For information regarding
the 129 Properties acquired by the Company prior to April 3, 1997, see the
Prospectus dated April 18, 1997.
May 13, 1997 Prospectus Dated April 18, 1997
In connection with the purchase of the 11 Boston Market Properties, the
two Einstein Bros. Bagels Properties, the two Jack in the Box Properties, the
Shoney's Property, and the Golden Corral Property, which are land and
building, the Company, as lessor, entered into long-term lease agreements with
unaffiliated lessees. The general terms of the lease agreements are described
in the section of the Prospectus entitled "Business - Description of Property
Leases." For the Properties that are to be constructed 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 price for the Shoney's Property in Guadalupe, Arizona,
includes a development fee of $49,500 to an Affiliate of the Advisor for
services provided in connection with the development of the Property. 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 Property in Scottsdale, Arizona,
which is building only, the Company, as lessor, entered into a long-term lease
agreement with an unaffiliated lessee. The general terms of the lease
agreement are described in the section of the Prospectus entitled "Business -
Description of Property Leases." In addition, the Company has 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.
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. The Master
Mortgage Note bears interest at a rate of 10.50% per annum and principal and
interest are due in equal monthly installments over 20 years starting May 1,
1997. The Master Mortgage Note equals approximately 88 percent of the
appraised value of the related buildings. Management believes that, due to
the fact that the Company owns the underlying land relating to the Pizza Hut
Property in Dover, Ohio, and the eight Pizza Hut Properties previously
acquired, and due to other underwriting criteria, the Company has sufficient
collateral for the Master Mortgage Note.
The following table sets forth the location of the 19 Properties,
including 17 Properties consisting of land and building, one Property
consisting of building only and one Property consisting of land only, acquired
by the Company, from April 3, 1997 through May 7, 1997, a description of the
competition, and a summary of the principal terms of the acquisition and lease
of each Property.
-2-
<TABLE>
PROPERTY ACQUISITIONS
From April 3, 1997 through May 7, 1997
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET $629,435 04/16/97 04/2012; five 10.38% of Total for each lease at any time
(the "Arvada Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Arvada Property is year and after sales minus
located on the northwest every five (ii) the
quadrant of West 55th years minimum annual
Avenue and the Wadsworth thereafter rent for such
Bypass, in Arvada, during the lease year
Jefferson County, Colorado, lease term
in an area of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Arvada
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; five 10.38% of Total for each lease at any time
(the "Liberty Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 5% of year
fifth lease annual gross
The Liberty Property is year and after sales minus
located at the southeast every five (ii) the
corner of the intersection years minimum annual
of North Highway 291 and thereafter rent for such
Landmark Avenue, in during the lease year
Liberty, Clay County, lease term
Missouri, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Liberty
Property include a
Ponderosa, a KFC, a
Perkins, and a Pizza Hut.
-3-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
EINSTEIN BROS. BAGELS (10) $422,512 04/16/97 04/2012; five 10.38% of Total for each lease at any time
(the "Dearborn Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Dearborn Property is year and after sales minus
located on the southeast every five (ii) the
corner of Telegraph Road years minimum annual
and Sheridan Road, in thereafter rent for such
Dearborn, Wayne County, during the lease year
Michigan, in an area of lease term
mixed retail, commercial,
and residential
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 (11) $843,431 04/16/97 04/2015; four $86,452 (6); for each lease at any time
(the "Enumclaw Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be renovated renewal options after the fifth annual gross seventh
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 thereafter rent for such
of Griffin Avenue and Cedar during the lease year (5)
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.
-4-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
SHONEY'S $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 development renewal options increases by annual gross seventh
constructed costs) (3) 10% after the sales minus lease year
fifth lease (ii) the
The Guadalupe Property is year and after minimum annual
located within the every five rent for such
southeast quadrant of years lease year
Interstate 10 and Baseline thereafter
Road, in Guadalupe, during the
Maricopa County, Arizona, lease term
in an area of mixed retail,
commercial, and residential
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 (7) $769,863 04/17/97 02/2011 $105,450 (6); None at any time
(the "Scottsdale Property") (3)(6) increases to after the
Restaurant to be renovated $107,511 during fifth lease
the eleventh year
The Scottsdale Property is through
located within the fourteenth
southeast quadrant of lease years
Indian Bend Road 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.
-5-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
PIZZA HUT (8)(9) $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 options 10% after the seventh
fifth and tenth lease year
The Dover Property is lease years and
located on the west side of 12% after the
Boulevard Street, in Dover, fifteenth lease
Tuscarawas County, Ohio, in year
an area of 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 (11) $1,049,420 04/29/97 04/2015; four $107,566 (6); for each lease at any time
(the "Bacliff Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be renewal options after the fifth annual gross seventh
constructed lease year and sales minus lease year
after every (ii) the
The Bacliff Property is five years minimum annual
located on the southeast thereafter rent for such
corner of Texas State during the lease year (5)
Highway 146 and FM 646, in lease term
Bacliff, Galveston County,
Texas, in an area of mixed
commercial and residential
development.
-6-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET (12) $860,790 04/29/97 04/2012; five 10.38% of Total for each lease at any time
(the "Indianapolis (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be costs) (3) 10% after the year, (i) 4% of year
constructed fifth lease annual gross
year and after sales minus
The Indianapolis Property every five (ii) the
is located on the west side years minimum annual
of U.S. 31 South, in thereafter rent for such
Indianapolis, Marion during the lease year
County, Indiana, in an area lease term
of mixed retail,
commercial, and residential
development. 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; five 10.38% of Total for each lease at any time
(the "San Antonio (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be costs) (3) 10% after the year, (i) 4% of year
constructed fifth lease annual gross
year and after sales minus
The San Antonio Property is every five (ii) the
located at the northwest years minimum annual
corner of Tezel Road and thereafter rent for such
Camino Rosa, in San during the lease year
Antonio, Bexar County, lease term
Texas, in an area of mixed
retail, commercial, and
residential 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.
-7-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET (12) $970,269 05/06/97 05/2012; five 10.38% of Total for each lease at any time
(the "Baltimore Property") (including five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Baltimore Property is year and after sales minus
located on the south side every five (ii) the
of Security Boulevard and years minimum annual
the north side of Whitehead thereafter rent for such
Court, in Baltimore, during the lease year
Baltimore County, Maryland, lease term
in an area of mixed retail,
commercial, 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 (12) $854,895 05/06/97 05/2012; five 10.38% of Total for each lease at any time
(the "Gambrills Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Gambrills Property is year and after sales minus
located on the south side every five (ii) the
of Maryland Route 3, south years minimum annual
of its intersection with thereafter rent for such
Waugh Chapel Road, in during the lease year
Gambrills, Anne Arundel lease term
County, Maryland, in an
area of mixed retail,
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.
-8-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET (12) $909,041 05/06/97 05/2012; five 10.38% of Total for each lease at any time
(the "Jessup Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Jessup Property is year and after sales minus
located on the southeast every five (ii) the
quadrant of U.S. Route 1 years minimum annual
and Assateague Drive, in thereafter rent for such
Jessup, Howard County, during the lease year
Maryland, in an area of lease term
mixed retail, commercial,
and residential
development. 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; five 10.38% of Total for each lease at any time
(the "Lansing Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 5% of year
fifth lease annual gross
The Lansing Property is year and after sales minus
located on the northeast every five (ii) the
side of Cedar Street, north years minimum annual
of the intersection of thereafter rent for such
American Road and Cedar during the lease year
Street, in Lansing, Ingham lease term
County, Michigan, in an
area of mixed retail,
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.
-9-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET (12) $629,929 05/06/97 05/2012; five 10.38% of Total for each lease at any time
(the "Riverdale Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Riverdale Property is year and after sales minus
located within the every five (ii) the
southeast corner of the years minimum annual
intersection formed by thereafter rent for such
Kenilworth Avenue and during the lease year
Patterson Road, in lease term
Riverdale, Prince George's
County, Maryland, in an
area 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; five 10.38% of Total for each lease at any time
(the "Vacaville Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Vacaville Property is year and after sales minus
located on the southeast every five (ii) the
corner of Nut Tree Parkway years minimum annual
and Helen Power Drive, in thereafter rent for such
Vacaville, Solana County, during the lease year
California, in an area of lease term
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Vacaville
Property include an
Applebee's and several
local restaurants.
-10-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET (12) $961,255 05/06/97 05/2012; five 10.38% of Total for each lease at any time
(the "Waldorf Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Waldorf Property is year and after sales minus
located on the northwest every five (ii) the
corner of Crain Highway and years minimum annual
Plaza Drive, in Waldorf, thereafter rent for such
Charles County, Maryland, during the lease year
in an area of mixed retail, lease term
commercial, and residential
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 (10) $601,677 05/06/97 05/2012; five 10.38% of Total for each lease at any time
(the "Springfield (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be costs) (3) 10% after the year, (i) 4% of year
constructed fifth lease annual gross
year and after sales minus
The Springfield Property is every five (ii) the
located at the southeast years minimum annual
quadrant of the thereafter rent for such
intersection formed by Old during the lease year
Keene Mill Road and Rolling lease term
Road, in Springfield,
Fairfax County, Virginia,
in an area of mixed 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.
-11-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
GOLDEN CORRAL $561,270 05/06/97 05/2012; four 10.75% of Total for each lease during the
(the "Jacksonville (excluding five-year Cost (4) year, 5% of the first
Property") development renewal options amount by which through
Restaurant to be costs) (3) annual gross seventh
constructed sales exceed lease years
$2,893,405 (5) and the
The Jacksonville Property tenth
is located on the southwest through
corner of Merrill Road and fifteenth
Jane Street, 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 Property
include a Burger King, a
Hardee's, a Ryan's Family
Steak House, and several
local restaurants.
-12-
</TABLE>
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 Property $ 667,000
Liberty 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 Property 1,105,000
(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, 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 Property, 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 Property, 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. During the period commencing with the effective
date of the lease to the date minimum annual rent becomes payable for
the Arvada, Liberty, Dearborn, San Antonio, Indianapolis, Baltimore,
Gambrills, Jessup, Lansing, Riverdale, Vacaville, Waldorf, Springfield
and Jacksonville 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 Property, as described
above, the tenant shall pay monthly "interim rent" equal to 11 percent
per annum of the amount funded by the Company in connection with the
purchase and construction of the Property.
-13-
(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 (if
applicable), development costs (if applicable), and closing and
acquisition costs) is not expected to, but may, exceed the amounts set
forth below:
Estimated Final
Property Estimated Maximum Cost Completion Date
-------- ---------------------- ---------------
Arvada Property $1,152,262 October 13, 1997
Liberty Property 764,164 October 13, 1997
Dearborn Property 667,305 October 13, 1997
Enumclaw Property 843,431 October 13, 1997
Guadalupe Property 1,452,517 November 12, 1997
Scottsdale Property 769,863 September 14, 1997
Bacliff Property 1,049,420 October 26, 1997
Indianapolis Property 1,663,194 October 26, 1997
San Antonio Property 757,069 October 27, 1997
Baltimore Property 1,378,051 November 2, 1997
Gambrills Property 1,264,241 November 2, 1997
Jessup Property 1,285,243 November 2, 1997
Lansing Property 1,033,941 November 2, 1997
Riverdale Property 1,041,107 November 2, 1997
Vacaville Property 1,437,474 November 2, 1997
Waldorf Property 1,357,356 November 2, 1997
Springfield Property 633,101 November 2, 1997
Jacksonville Property 1,681,435 November 2, 1997
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
Property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(5) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(6) The 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.
(7) 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.
(8) The lease relating to this Property is a land lease only.
(9) The Company entered into a Master Lease Agreement for the Dover Property
and eight Pizza Hut Properties previously acquired.
(10) The lessee of the Dearborn and Springfield Properties is the same
unaffiliated lessee.
-14-
(11) The lessee of the Enumclaw and Bacliff Properties is the same
unaffiliated lessee.
(12) The lessee of the Indianapolis, Baltimore, Gambrills, Jessup, Riverdale
and Waldorf Properties is the same unaffiliated lessee.
-15-
BORROWING AND SECURED EQUIPMENT LEASES
Between April 3, 1997 and May 7, 1997, the Company obtained two advances
totalling $680,882 under its $15,000,000 Loan. These advances were used to
acquire Equipment for two restaurant properties in El Cajon, California (the
"El Cajon Secured Equipment Lease") and Indian Harbour Beach, Florida (the
"Indian Harbour Beach Secured Equipment Lease").
PENDING INVESTMENTS
As of May 7, 1997, the Company had initial commitments to acquire 15
properties, consisting of land and building. The acquisition of each of these
properties is subject to the fulfillment of certain conditions, including, but
not limited to, a satisfactory environmental survey and property appraisal.
There can be no assurance that any or all of the conditions will be satisfied
or, if satisfied, that one or more of these properties will be acquired by the
Company. If acquired, the leases of all 15 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."
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.
-16-
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Austin, TX renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Houston, TX (#1) renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Houston, TX (#2) renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Lawrenceville, GA renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Lewisville, TX renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Sunset Hills, MO renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
-17-
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Golden Corral 15 years; four five-year 10.75% of Total Cost for each lease year, during the first
Corpus Christi, TX renewal options (1) 5% of the amount by through seventh
Restaurant to be which annual gross lease years and the
constructed sales exceed a to be tenth through
determined breakpoint fifteenth lease
years only
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Fairfax, VA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Hollywood, CA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Leesburg, VA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Fresno, CA renewal options (1); increases by 8% (i) 5% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year (2)
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
-18-
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Los Angeles, CA renewal options (1); increases by 8% (i) 5% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year (2)
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
Popeyes 20 years; two five-year 11.75% of Total Cost for each lease year, at any time after
Starke, FL renewal options (1); increases by 10% (i) 6% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
Ruth's Chris Steak 15 years; two five-year 8.75% of the Company's for each lease year, None
House renewal options total cost to purchase 6% of annual gross
Tampa, FL the property; sales in excess of
Existing restaurant increases by $25,000 $3,400,000 and less
after the fifth lease than $4,000,000, plus
year and after every 8% of annual gross
five years thereafter sales in excess of
during the lease term $4,000,000
Shoney's 20 years; two five-year 11% of Total Cost (1); for each lease year, at any time after
Las Vegas, NV renewal options increases by 10% after (i) 6% of annual the seventh lease
Restaurant to be the fifth lease year gross sales minus year
constructed and after every five (ii) the minimum
years thereafter annual rent for such
during the lease term lease year
</TABLE>
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) In the event the Company purchases the property directly from the
lessee, the lessee will have no option to purchase the property.
-19-
PRO FORMA ESTIMATE OF TAXABLE INCOME BEFORE DIVIDENDS PAID DEDUCTION OF
CNL AMERICAN PROPERTIES FUND, INC.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM APRIL 3, 1997
THROUGH MAY 7, 1997
FOR A 12-MONTH PERIOD (UNAUDITED)
The following schedule represents pro forma unaudited estimates of
taxable income before dividends paid deduction of each Property acquired by
the Company from April 3, 1997 through May 7, 1997, for the 12-month period
commencing on the date of the inception of the respective lease on such
Property. The schedule should be read in light of the accompanying footnotes.
These estimates do not purport to present actual or expected operations
of the Company for any period in the future. These estimates were prepared on
the basis described in the accompanying notes which should be read in
conjunction herewith. No single lessee or group of affiliated lessees lease
Properties or has borrowed funds from the Company with an aggregate purchase
price in excess of 20% of the expected total net offering proceeds of the
Company.
<TABLE>
<CAPTION>
Einstein
Boston Market Boston Market Bros. Bagels Jack in the Box
Arvada, CO (5) Liberty, MO (5) Dearborn, MI (5)(6) Enumclaw, WA (5)(7)
-------------- --------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $119,605 $ 79,320 $ 69,266 $ 86,452
Asset Management Fees (2) (6,844) (4,535) (3,959) (5,055)
General and Administrative
Expenses (3) (7,415) (4,918) (4,295) (5,360)
-------- -------- -------- --------
Estimated Cash Available from
Operations 105,346 69,867 61,012 76,037
Depreciation and Amortization
Expense (4) (17,094) (9,142) (6,820) (19,584)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 88,252 $ 60,725 $ 54,192 $ 56,453
======== ======== ======== ========
See Footnotes
-20-
<CAPTION>
Shoney's Black-eyed Pea Pizza Hut Jack in the Box
Guadalupe, AZ (5) Scottsdale, AZ (5) Dover, OH Bacliff, TX (5)(7)
----------------- ------------------ --------- ------------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $159,777 $105,450 $ 23,560 $107,566
Asset Management Fees (2) (8,673) (4,610) (1,346) (6,291)
General and Administrative
Expenses (3) (9,906) (6,538) (1,461) (6,669)
-------- -------- -------- --------
Estimated Cash Available from
Operations 141,198 94,302 20,753 94,606
Depreciation and Amortization
Expense (4) (23,195) (20,757) - (17,716)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $118,003 $ 73,545 $ 20,753 $ 76,890
======== ======== ======== ========
See Footnotes
-21-
<CAPTION>
Boston Market Boston Market Boston Market Boston Market
Indianapolis, IN San Antonio, TX Baltimore, MD Gambrills, MD
(5)(8) (5) (5)(8) (5)(8)
---------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $172,640 $ 78,584 $143,042 $131,228
Asset Management Fees (2) (9,894) (4,497) (8,197) (7,519)
General and Administrative
Expenses (3) (10,704) (4,872) (8,869) (8,136)
-------- -------- -------- --------
Estimated Cash Available from
Operations 152,042 69,215 125,976 115,573
Depreciation and Amortization
Expense (4) (22,648) (8,626) (12,066) (12,086)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $129,394 $ 60,589 $113,910 $103,487
======== ======== ======== ========
See Footnotes
-22-
<CAPTION>
Boston Market Boston Market Boston Market Boston Market
Jessup, MD (5)(8) Lansing, MI (5) Riverdale, MD (5)(8) Vacaville, CA (5)
----------------- --------------- -------------------- -----------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $133,408 $107,323 $108,067 $149,210
Asset Management Fees (2) (7,644) (6,146) (6,190) (8,550)
General and Administrative
Expenses (3) (8,271) (6,654) (6,700) (9,251)
-------- -------- -------- --------
Estimated Cash Available from
Operations 117,493 94,523 95,177 131,409
Depreciation and Amortization
Expense (4) (11,155) (16,685) (12,141) (20,630)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $106,338 $ 77,838 $ 83,036 $110,779
======== ======== ======== ========
See Footnotes
-23-
<CAPTION>
Boston Market Einstein Bros. Bagels Golden Corral
Waldorf, MD (5)(8) Springfield, VA (5)(6) Jacksonville, FL (5) Total
------------------ ---------------------- -------------------- ----------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $140,894 $ 65,716 $170,004 $2,151,112
Asset Management Fees (2) (8,073) (3,759) (9,489) (121,271)
General and Administrative
Expenses (3) (8,735) (4,074) (10,540) (133,368)
-------- -------- -------- ----------
Estimated Cash Available from
Operations 124,086 57,883 149,975 1,896,473
Depreciation and Amortization
Expense (4) (11,666) (876) (28,346) (271,233)
-------- -------- -------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $112,420 $ 57,007 $121,629 $1,625,240
======== ======== ======== ==========
See Footnotes
-24-
</TABLE>
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if
specified levels of gross receipts are achieved.
(2) The Properties will be managed pursuant to an advisory agreement between
the Company and CNL Fund Advisors, Inc. (the "Advisor"), pursuant to
which the Advisor will receive monthly asset management fees in an
amount equal to one-twelfth of .60% of the Company's Real Estate Asset
Value as of the end of the preceding month as defined in such agreement.
See "Management Compensation."
(3) Estimated at 6.2% of gross rental income based on the previous
experience of Affiliates of the Advisor with 17 public limited
partnerships which own properties similar to those owned by the Company.
Amount does not include soliciting dealer servicing fee due to the fact
that such fee will not be incurred until December 31 of the year
following the year in which the offering terminates.
(4) The estimated federal tax basis of the depreciable portion (the building
portion) of each Property has been depreciated on the straight-line
method over 39 years.
(5) 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
-------- -------------------------------
Arvada Property October 13, 1997
Liberty Property October 13, 1997
Dearborn Property October 13, 1997
Enumclaw Property October 13, 1997
Guadalupe Property November 12, 1997
Scottsdale Property September 14, 1997
Bacliff Property October 26, 1997
Indianapolis Property October 26, 1997
San Antonio Property October 27, 1997
Baltimore Property November 2, 1997
Gambrills Property November 2, 1997
Jessup Property November 2, 1997
Lansing Property November 2, 1997
Riverdale Property November 2, 1997
Vacaville Property November 2, 1997
Waldorf Property November 2, 1997
Springfield Property November 2, 1997
Jacksonville Property November 2, 1997
(6) The lessee of the Dearborn and Springfield Properties is the same
unaffiliated lessee.
-25-
(7) The lessee of the Enumclaw and Bacliff Properties is the same
unaffiliated lessee.
(8) The lessee of the Indianapolis, Baltimore, Gambrills, Jessup, Riverdale
and Waldorf Properties is the same unaffiliated lessee.
-26-
