FILED PURSUANT TO RULE 424(b)(3)
FILE 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 and the Prospectus Supplement dated July 18,
1997. This Supplement replaces the Supplements dated July 22, 1997, July 25,
1997, August 8, 1997, August 26, 1997, September 10, 1997 and September 24,
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 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 three
additional properties through Mortgage Loans, and in paying acquisition fees and
certain acquisition expenses, leaving approximately $29,944,000 in aggregate 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.
BUSINESS
PROPERTY ACQUISITIONS
Between July 3, 1997 and October 3, 1997, the Company acquired 42
Properties, including 30 Properties consisting of land and building and 12
Properties consisting of building only. These Properties are six Arby's
Properties (one in each of Lexington, Greensboro, Greenville, Jonesville,
Kernersville, and Kinston, North Carolina), three Boston Market Properties (one
in each of Newport News, Virginia; Edgewater, Colorado; and Hoover, Alabama);
six IHOP Properties (one in each of Houston, Lake Jackson and Victoria, Texas;
and Stockbridge, Georgia; Elk Grove, California; and Loveland, Colorado), two
Jack in the Box Properties (one in each of Woodland and West Sacramento,
California), five Tumbleweed Southwest Mesquite Grill & Bar Properties (one in
each of Lawrence, Kansas, Cookeville, Hendersonville, Nashville, and
Murfreesboro, Tennessee), five Golden Corral Properties (one in each of Fort
Walton Beach and Palatka, Florida; Duncan, Oklahoma; Mobile, Alabama; and
Olathe, Kansas), one Ruby Tuesday's Property (in London, Kentucky), one
October 7, 1997 Prospectus Dated April 18, 1997
Shoney's Property (in Las Vegas, Nevada), one T.G.I. Friday's Property (in
Superstition Springs, Arizona) and 12 Black-eyed Pea Properties (one in each of
Mesa and Tucson, Arizona, Dallas, Houston, and Waco, Texas, Forestville,
Maryland, Wichita, Kansas, two in Albuquerque, New Mexico, and three in Phoenix,
Arizona). For information regarding the Properties acquired by the Company prior
to July 3, 1997, see the Prospectus dated April 18, 1997 and the Prospectus
Supplement dated July 18, 1997.
In connection with the purchase of the six Arby's Properties, the three
Boston Market Properties, the six IHOP Properties, the two Jack in the Box
Properties, the five Golden Corral Properties, the Ruby Tuesday's Property, the
Shoney'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,
<PAGE>
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 price for the Shoney's Property in Las Vegas, Nevada, and
the T.G.I. Friday's Property in Superstition Springs, Arizona, includes
development fees of $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 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
Mexico; 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 Black-eyed Pea Properties, one of which is
located in Tucson, Arizona, and three of which are located in Phoenix, Arizona,
which are building only, the Company, as lessor, entered into long-term lease
agreements with an unaffiliated lessee. The general terms of the lease
agreements are described in the section of the Prospectus entitled "Business -
Description of Property Leases." In addition, the Company has entered into
landlord estoppel agreements with the landlord of the land and collateral
assignments of the ground leases with the lessee in order to provide the Company
with certain rights with respect to the land on which the buildings are located.
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<PAGE>
The following table sets forth the location of the 42 Properties,
including 30 Properties consisting of land and building and 12 Properties
consisting of building only, acquired by the Company, from July 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 July 3, 1997 through October 3, 1997
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
ARBY'S (5) $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.
BOSTON MARKET (6) $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.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
IHOP (7) $1,424,283 07/16/97 07/2017; $144,209; for each lease during the
(the "Houston 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 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
Property include a Kettle's, a
Pizza Inn, a Denny's, a
McDonald's, and a Burger King.
IHOP (7) $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.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
JACK IN THE BOX (8) $963,592 07/16/97 07/2015; $98,768 (7); for each lease at any time
(the "Woodland Property") (3) (9) 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 (10)
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.
JACK IN THE BOX (8) $1,073,031 07/21/97 07/2015; $109,986 (7); for each lease at any time
(the "West Sacramento (3) (9) 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 (10)
Stillwater Road, in West lease term
Sacramento, Yolo County,
California, in an area of
mixed retail, commercial, and
residential development.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
TUMBLEWEED SOUTHWEST MESQUITE $1,471,963 08/01/97 07/2017; two $161,916 (10); for each lease at any time
GRILL & BAR (11) (3) (12) 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>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
TUMBLEWEED SOUTHWEST MESQUITE $747,664 08/01/97 07/2017; two $100,935 (10); for each lease at any time
GRILL & BAR (11) (13) (3) (12) 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 (10); for each lease at any time
GRILL & BAR (11) (3) (12) 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>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
TUMBLEWEED SOUTHWEST MESQUITE $1,308,411 08/01/97 07/2017; two $143,925 (10); for each lease at any time
GRILL & BAR (11) (3) (12) five-year increases by year, (i) 5% of after the
(the "Nashville 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 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
Property include a McDonald's,
a Papa John's Pizza, a Pizza
Hut, and several local
restaurants.
ARBY'S (5) $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>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
ARBY'S (5) $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 (5) $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>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
ARBY'S (5) $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 (5) $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 Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
TUMBLEWEED SOUTHWEST MESQUITE $1,425,234 08/05/97 08/2017; two $156,776 (10); for each lease at any time
GRILL & BAR (11) (3) (12) 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 (6) $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 Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GOLDEN CORRAL (14) $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) (3) options annual gross seventh
The Duncan Property is located sales exceed lease years
on the west side of U.S. $1,956,403 (10) 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 (14) $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 and year renewal amount by which through
Restaurant to be constructed development options annual gross seventh
costss) (3) sales exceed lease years
The Fort Walton Beach Property $2,764,503 (10) and the
is located on the southeast 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>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
RUBY TUESDAY'S $1,123,720 08/19/97 08/2017; two $123,609 (9); for each lease at any time
(the "London Property") (3) (9) 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 (7) $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>
-14-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
IHOP (7) $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 (7) $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>
-15-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
IHOP (7) $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 $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) (3) options 10% after the sales minus lease year
The Las Vegas Property is 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>
-16-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
BOSTON MARKET (6) $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) (3) options 10% after the sales minus lease year
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>
-17-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GOLDEN CORRAL (14) $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) (3) options annual gross seventh
The Mobile Property is located sales exceed lease years
on the southeast side of Halls $2,502,407 (10) 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 (14) $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) (3) options annual gross seventh
The Palatka Property is sales exceed lease years
located on the southeast side $2,191,973 (10) 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>
-18-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
BLACK-EYED PEA (16) $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 (15) (16) $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>
-19-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
BLACK-EYED PEA (15) (16) $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 (15) (16) $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>
-20-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
BLACK-EYED PEA (15) (16) $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 (13) (17) $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>
-21-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
BLACK-EYED PEA (13) (17) $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 (13) (17) $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>
-22-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
BLACK-EYED PEA (13) (17) $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 (13) (17) $648,598 10/01/97 08/2008 $99,659; None at any time
(the "Houston Property") increases to after the
Existing restaurant $100,213 after seventh
the tenth lease lease year
The Houston 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 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>
-23-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
BLACK-EYED PEA (13) (17) $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 (13) (17) $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>
-24-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- -------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GOLDEN CORRAL (14) $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) (3) options annual gross seventh
The Olathe Property is located sales exceed lease years
on the west side of Blackbob $2,886,067 (10) 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>
-25-
<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:
<TABLE>
<CAPTION>
Property Federal Tax Basis Property Federal Tax Basis
-------- ----------------- -------- -----------------
<S> <C>
Lexington Property $ 462,000 Lake Jackson Property $ 799,000
Newport News Property 584,000 Loveland Property 960,000
Houston Property 888,000 Victoria Property 810,000
Stockbridge Property 705,000 Las Vegas Property 939,000
Woodland Property 661,000 Hoover Property 618,000
West Sacramento Property 612,000 Superstition Springs Property 1,269,000
Cookeville Property 1,026,000 Mobile Property 988,000
Hendersonville Property 779,000 Palatka Property 932,000
Lawrence Property 1,019,000 Mesa Property 910,000
Nashville Property 946,000 Phoenix #1 Property 675,000
Greensboro Property 403,000 Phoenix #2 Property 675,000
Greenville Property 488,000 Phoenix #3 Property 680,000
Jonesville Property 538,000 Tucson Property 676,000
Kernersville Property 411,000 Albuquerque #1 Property 703,000
Kinston Property 483,000 Albuquerque #2 Property 702,000
Murfreesboro Property 973,000 Dallas #2 Property 696,000
Edgewater Property 625,000 Forestville Property 678,000
Duncan Property 931,000 Houston Property 683,000
Fort Walton Beach Property 983,000 Waco Property 697,000
London Property 828,000 Wichita Property 696,000
Elk Grove Property 1,036,000 Olathe Property 1,097,000
</TABLE>
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the 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. During the
period commencing with the effective date of the lease to the date minimum
annual rent becomes payable for the Duncan, Fort Walton Beach, Mobile,
Palatka and Olathe Properties, as described above, interim rent equal to
ten percent per annum 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 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%) of the amount funded by the Company in
connection with the purchase and construction of the Properties.
-26-
<PAGE>
(3) The development agreements for the Properties which are to be constructed
or renovated, provides 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 amount set
forth below:
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
-------- ---------------------- -------------------------------
<S> <C>
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 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
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 Lexington, Greensboro, Greenville, Jonesville,
Kernersville and Kinston Properties is the same unaffiliated lessee.
(6) The lessee of the Newport News, Edgewater and Hoover Properties is the
same unaffiliated lessee.
(7) The lessee of the Houston, Stockbridge, Elk Grove, Lake Jackson, Loveland
and Victoria Properties is the same unaffiliated lessee.
(8) The lessee of the Woodland and West Sacramento Properties is the same
unaffiliated lessee.
(9) 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.
(10) Percentage rent shall be calculated on a calendar year basis (January 1 to
December 31).
(11) The lessee of the Cookeville, Hendersonville, Lawrence, Nashville and
Murfreesboro Properties is the same unaffiliated lessee.
-27-
<PAGE>
(12) 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.
(13) 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.
(14) The lessee of the Duncan, Fort Walton Beach, Mobile, Palatka and Olathe
Properties is the same unaffiliated lessee.
(15) 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.
(16) The lessee of the Mesa, Phoenix #1, Phoenix #2, Phoenix #3 and Tucson
Properties is the same unaffiliated lessee.
(17) The lessee of the Albuquerque #1, Albuquerque #2, Dallas #2, Forestville,
Houston, Waco and Wichita Properties is the same unaffiliated lessee.
-28-
<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 2
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.
-29-
<PAGE>
</TABLE>
<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 (8) 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 (8) 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 (8) 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 (8) 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 (8) 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 (8) at any time
Gloucester, NJ five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
</TABLE>
-30-
<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 (8) 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 (8) 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 (8) 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 (8) 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 (8) 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 (8) 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 (8) 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 (8) at any time
Wauwatosa, WI five-year renewal total cost to purchase the after the
Existing restaurant options property seventh lease
year
IHOP (6) (7) 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>
-31-
<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 at year (2)
during the lease term any time after the seventh
lease year (2)
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 (2)
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 (2)
during the lease term
On The Border (3) (4); three five- 13.64% of Total Cost (1); for each lease year, (i) 4% at any time
San Antonio, TX year renewal (5) 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>
- ---------------------------------------------
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.
-32-
<PAGE>
(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 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.
(4) 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.
(5) 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.
(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 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.
(7) 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.
(8) 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.
-33-
<PAGE>
BORROWING
On August 20, 1997, the Company's $15 million Loan was amended and
restated to enable the Company to receive advances on a revolving $35 million
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 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.
The Board of Directors has approved an increase in the amount of
financing available to fund Secured Equipment Leases. Any financing used to fund
Secured Equipment Leases, including advances under the Line of Credit, may not
exceed 10% of aggregate gross proceeds of the Initial Offering, this offering
and any subsequent offerings.
As of October 3, 1997, the Company had used approximately $20,121,000
of the $35 million available under the Line of Credit to fund Secured Equipment
Leases. The Company intends to use the remaining amounts available under the
Line of Credit to fund additional Secured Equipment Leases and to purchase
Properties. 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 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 in Properties 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 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. 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,
-34-
<PAGE>
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.
-35-
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM JULY 3, 1997
THROUGH OCTOBER 3, 1997
For a 12-Month Period (Unaudited)
The following schedule presents unaudited estimated taxable operating
results of each Property acquired by the Company from July 3, 1997 through
October 3, 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>
Arby's Boston Market IHOP IHOP
Lexington, NC (6) Newport News, VA (7) Houston, TX (8) Stockbridge, GA (8)
----------------- --------------------- --------------- -------------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $ 74,254 $104,993 $144,209 $141,451
Asset Management Fees (2) (4,449) (6,013) (8,519) (8,356)
General and Administrative
Expenses (3) (4,604) (6,510) (8,941) (8,770)
-------- -------- -------- --------
Estimated Cash Available from
Operations 65,201 92,470 126,749 124,325
Depreciation and Amortization
Expense (4) (11,835) (14,977) (22,764) (18,066)
-------- -------- -------- --------
Estimated Taxable Operating
Results $ 53,366 $ 77,493 $103,985 $106,259
======== ======== ======== ========
</TABLE>
See Footnotes
-36-
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest Tumbleweed Southwest
Jack in the Box Jack in the Box Mesquite Grill & Bar Mesquite Grill & Bar
Woodland, CA (9) West Sacramento, CA (9) Cookeville, TN (10) Hendersonville, TN(10)
----------------- ----------------------- -------------------- ----------------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) (5) (5) (5) (5)
Asset Management Fees (2) (5) (5) (5) (5)
General and Administrative
Expenses (3) (5) (5) (5) (5)
Estimated Cash Available from
Operations (5) (5) (5) (5)
Depreciation and Amortization
Expense (4) (5) (5) (5) (5)
Estimated Taxable Operating
Results (5) (5) (5) (5)
</TABLE>
See Footnotes
-37-
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest Tumbleweed Southwest
Mesquite Grill & Bar Mesquite Grill & Bar Arby's Arby's
Lawrence, KS (10) Nashville, TN (10) Greensboro, NC(6) Greenville, NC(6)
-------------------- -------------------- ----------------- -----------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) (5) (5) $ 72,727 $ 72,727
Asset Management Fees (2) (5) (5) (4,358) (4,358)
General and Administrative
Expenses (3) (5) (5) (4,509) (4,509)
-------- --------
Estimated Cash Available from
Operations (5) (5) 63,860 63,860
Depreciation and Amortization
Expense (4) (5) (5) (10,335) (12,519)
-------- --------
Estimated Taxable Operating
Results (5) (5) $ 53,525 $ 51,341
======== ========
</TABLE>
See Footnotes
-38-
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest
Arby's Arby's Arby's Mesquite Grill & Bar
Jonesville, NC (6) Kernersville, NC(6) Kinston, NC (6) Murfreesboro, TN (10)
------------------ ------------------- --------------- ---------------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $ 72,727 $ 65,000 $ 71,364 (5)
Asset Management Fees (2) (4,358) (3,894) (4,276) (5)
General and Administrative
Expenses (3) (4,509) (4,030) (4,425) (5)
-------- -------- --------
Estimated Cash Available from
Operations 63,860 57,076 62,663 (5)
Depreciation and Amortization
Expense (4) (13,786) (10,550) (12,393) (5)
-------- -------- --------
Estimated Taxable Operating
Results $ 50,074 $ 46,526 $ 50,270 (5)
======== ======== ========
</TABLE>
See Footnotes
-39-
<PAGE>
<TABLE>
<CAPTION>
Boston Market Golden Corral Golden Corral Ruby Tuesday's
Edgewater, CO (7) Duncan, OK (11) Fort Walton Beach, FL (11) London, KY
---------------- --------------- -------------------------- --------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $ 93,907 (5) (5) (5)
Asset Management Fees (2) (5,377) (5) (5) (5)
General and Administrative
Expenses (3) (5,822) (5) (5) (5)
--------
Estimated Cash Available from
Operations 82,708 (5) (5) (5)
Depreciation and Amortization
Expense (4) (16,024) (5) (5) (5)
--------
Estimated Taxable Operating
Results $ 66,684 (5) (5) (5)
========
</TABLE>
See Footnotes
-40-
<PAGE>
<TABLE>
<CAPTION>
IHOP IHOP IHOP IHOP
Elk Grove, CA (8) Lake Jackson, TX (8) Loveland, CO (8) Victoria, TX (8)
----------------- -------------------- ---------------- ----------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $155,961 $121,101 $139,398 $108,668
Asset Management Fees (2) (9,215) (7,155) (8,236) (6,420)
General and Administrative
Expenses (3) (9,670) (7,508) (8,643) (6,737)
------- ------- ------- -------
Estimated Cash Available from
Operations 137,076 106,438 122,519 95,511
Depreciation and Amortization
Expense (4) (26,552) (20,476) (24,613) (20,763)
------- ------- ------- -------
Estimated Taxable Operating
Results $110,524 $ 85,962 $ 97,906 $ 74,748
======== ======== ======== ========
</TABLE>
See Footnotes
-41-
<PAGE>
<TABLE>
<CAPTION>
Shoney's Boston Market T.G.I. Friday's Golden Corral
Las Vegas, NV Hoover, AL (7) Superstition Springs, AZ Mobile, AL (11)
------------- -------------- ------------------------- ---------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) (5) $110,270 (5) (5)
Asset Management Fees (2) (5) (6,316) (5) (5)
General and Administrative
Expenses (3) (5) (6,837) (5) (5)
-------
Estimated Cash Available from
Operations (5) 97,117 (5) (5)
Depreciation and Amortization
Expense (4) (5) (15,840) (5) (5)
-------
Estimated Taxable Operating
Results (5) $ 81,277 (5) (5)
========
</TABLE>
See Footnotes
-42-
<PAGE>
<TABLE>
<CAPTION>
Golden Corral Black-eyed Pea Black-eyed Pea Black-eyed Pea
Palatka, FL (11) Mesa, AZ (12) Phoenix #1, AZ (12) Phoenix #2, AZ (12)
---------------- -------------- ------------------- -------------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) (5) $168,000 $109,225 $100,195
Asset Management Fees (2) (5) (9,597) (3,845) (3,845)
General and Administrative
Expenses (3) (5) (10,416) (6,772) (6,212)
------- ------- -------
Estimated Cash Available from
Operations (5) 147,987 98,608 90,138
Depreciation and Amortization
Expense (4) (5) (23,333) (17,310) (17,313)
------- ------- -------
Estimated Taxable Operating
Results (5) $124,654 $ 81,298 $ 72,825
======== ======== ========
</TABLE>
See Footnotes
-43-
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Phoenix #3, AZ (12) Tucson, AZ (12) Albuquerque #1, NM (13) Albuquerque #2, NM (13)
------------------- --------------- ------------------------ -----------------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $ 95,149 $ 91,248 $ 86,087 $ 91,517
Asset Management Fees (2) (3,870) (3,848) (4,004) (3,998)
General and Administrative
Expenses (3) (5,899) (5,657) (5,337) (5,674)
------- ------- ------- -------
Estimated Cash Available from
Operations 85,380 81,743 76,746 81,845
Depreciation and Amortization
Expense (4) (17,424) (17,326) (18,027) (18,001)
------- ------- ------- -------
Estimated Taxable Operating
Results $ 67,956 $ 64,417 $ 58,719 $ 63,844
======== ======== ======== ========
</TABLE>
See Footnotes
-44-
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Dallas #2, TX (13) Forestville, MD (13) Houston, TX (13) Waco, TX (13)
------------------ -------------------- ---------------- --------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $ 90,265 $133,563 $ 99,657 $ 89,029
Asset Management Fees (2) (3,964) (3,864) (3,892) (3,970)
General and Administrative
Expenses (3) (5,596) (8,281) (6,179) (5,520)
------- ------- ------- -------
Estimated Cash Available from
Operations 80,705 121,418 89,586 79,539
Depreciation and Amortization
Expense (4) (17,850) (17,395) (17,522) (17,875)
------- ------- ------- -------
Estimated Taxable Operating
Results $ 62,855 $104,023 $ 72,064 $ 61,664
======== ======== ======== ========
</TABLE>
See Footnotes
-45-
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Golden Corral
Wichita, KS (13) Olathe, KS (11) Total
---------------- --------------- -----
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $ 89,571 (5) $2,792,263
Asset Management Fees (2) (3,964) (5) (143,961)
General and Administrative
Expenses (3) (5,553) (5) (173,120)
------- ---------
Estimated Cash Available from
Operations 80,054 (5) 2,475,182
Depreciation and Amortization
Expense (4) (17,850) (5) (468,719)
------- ---------
Estimated Taxable Operating
Results $ 62,204 (5) $2,006,463
======== ==========
</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.
-46-
<PAGE>
(5) The Property is under construction or renovation 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
-------- -------------------------------
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 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
(6) The lessee of the Lexington, Greensboro, Greenville, Jonesville,
Kernersville and Kinston Properties is the same unaffiliated lessee.
(7) The lessee of the Newport News, Edgewater and Hoover Properties is the
same unaffiliated lessee.
(8) The lessee of the Houston, Stockbridge, Elk Grove, Lake Jackson,
Loveland and Victoria Properties is the same unaffiliated lessee.
(9) The lessee of the Woodland and West Sacramento Properties is the same
unaffiliated lessee.
(10) The lessee of the Cookeville, Hendersonville, Lawrence, Nashville and
Murfreesboro Properties is the same unaffiliated lessee.
(11) The lessee of the Duncan, Fort Walton Beach, Mobile, Palatka and Olathe
Properties is the same unaffiliated lessee.
(12) The lessee of the Mesa, Phoenix #1, Phoenix #2, Phoenix #3 and Tucson
Properties is the same unaffiliated lessee.
(13) The lessee of the Albuquerque #1, Albuquerque #2, Dallas #2,
Forestville, Houston, Waco and Wichita Properties is the same
unaffiliated lessee.
-47-
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Pro Forma Consolidated Financial Information (unaudited):
Pro Forma Consolidated Balance Sheet as of June 30, 1997 50
Pro Forma Consolidated Statement of Earnings for the six months ended June 30, 1997 51
Pro Forma Consolidated Statement of Earnings for the year ended December 31, 1996 52
Notes to Pro Forma Consolidated Financial Statements for the six months ended
June 30, 1997 and the year ended December 31, 1996 53
</TABLE>
-48-
<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
$32,064,182 in gross offering proceeds from the sale of 3,206,418 additional
shares of common stock during the period July 1, 1997 through August 21, 1997,
and (iii) the application of such funds and $22,386,051 of cash and cash
equivalents at June 30, 1997, to purchase 30 additional properties acquired
during the period July 1, 1997 through August 21, 1997 (12 of which are under
construction and consist of land and building, one property which is under
construction and consists of building only and 17 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) and (iii) 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 August 21,
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
August 21, 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.
-49-
<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 $ 26,717,450 (a) $167,700,847
Net investment in direct
financing leases (b) 22,703,193 14,650,854 (a) 37,354,047
Cash and cash equivalents 31,097,346 (22,386,051)(a) 8,711,295
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 (660,586)(a) 365,467
------------ ------------ ------------
$214,941,742 $ 18,321,667 $233,263,409
============ ============ ============
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,
25,610,736 shares 224,043 32,064 (a) 256,107
Capital in excess of par value 198,913,717 28,787,726 (a) 227,701,443
Accumulated distributions in
excess of net earnings (2,015,324) (2,015,324)
------------ ------------ ------------
197,122,436 28,819,790 225,942,226
------------ ------------ ------------
$214,941,742 $ 18,321,667 $233,263,409
============ ============ ============
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
-50-
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C>
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
========== ==========
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
-51-
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ------------ ---------
<S> <C>
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
========== ==========
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
-52-
<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 $32,064,182 from the issuance of 3,206,418
shares of common stock during the period July 1, 1997 through August
21, 1997, the receipt of $26,353 of rental income during construction
(capitalized as deferred rental income), and $22,386,051 of cash and
cash equivalents used (i) to acquire 30 properties for $32,532,688 of
which one property consists of building only and 29 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
$1,442,888 and reclassify from other assets $660,586 of acquisition
fees previously incurred relating to the acquired properties and (iv)
to pay selling commissions and offering expenses (stock issuance costs)
of $3,244,392, 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 54,949 1,080,661
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
33 wholly owned properties under
construction at June 30, 1997 6,732,142 360,650 7,092,792
----------- ----------- -----------
$39,264,830 $ 2,103,474 $41,368,304
=========== =========== ===========
</TABLE>
-53-
<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:
Adjustment classified as follows:
Land and buildings on operating leases $26,717,450
Net investment in direct financing leases 14,650,854
-----------
$41,368,304
===========
(b) 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 August 21, 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.
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.
-54-
<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:
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 (b) 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.
-55-
