Rule 424(b)(3)
No. 333-15411
CNL AMERICAN PROPERTIES FUND, INC.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 18, 1997 and the Prospectus Supplement dated October 21,
1997. This Supplement replaces the Supplement dated October 24, 1997 and
November 21, 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 December 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 December 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 December 3, 1997, the Company had received
subscription proceeds of $187,503,099 (18,750,310 Shares), including $1,183,289
(118,329 Shares) issued pursuant to the Reinvestment Plan, from 8,516
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 $169,091,000. As of December 3, 1997, the Company had invested or
committed for investment approximately $261,112,000 of aggregate net proceeds
from the Initial Offering and this offering in 238 Properties, in providing
mortgage financing to the tenants of the 44 Properties consisting of land only
to purchase the buildings on these Properties and the buildings on two
additional properties through Mortgage Loans, and in paying acquisition fees and
certain acquisition expenses, leaving approximately $42,024,000 in aggregate net
offering proceeds available for investment in Properties and Mortgage Loans.
As of December 3, 1997, $8,437,639 of the Net Offering Proceeds from this
offering had been incurred as Acquisition Fees to the Advisor.
BUSINESS
PROPERTY ACQUISITIONS
Between October 4, 1997 and December 3, 1997, the Company acquired 18
Properties, including 17 Properties consisting of land and building and one
Property consisting of building only. These Properties are 13 Ground Round
Properties (one in each of Allentown and Reading, Pennsylvania; Colerain and
Parma, Ohio; Dubuque and Waterloo, Iowa; Janesville and Wauwatosa, Wisconsin;
Gloucester and Ewing, New Jersey; Crystal, Minnesota; Kalamazoo, Michigan; and
Nanuet, New York), two Jack in the Box Properties (one in each of Florissant,
Missouri; and Folsom, California), one On The Border Property (in San Antonio,
Texas), one Wendy's Property (in Westlake Village, California) and one Golden
Corral Property (in Muskogee, Oklahoma). For information regarding the
Properties acquired by the Company prior to October 4, 1997, see the Prospectus
dated April 18, 1997 and the Prospectus Supplement dated October 21, 1997.
December 9, 1997 Prospectus Dated April 18, 1997
<PAGE>
The Jack in the Box Properties in Florissant, Missouri, and Folsom,
California, were acquired from Affiliates of the Company. The Affiliates had
purchased and temporarily held title to these Properties in order to facilitate
their acquisition by the Company. The Properties were acquired by the Company
for an aggregate purchase price of approximately $2,340,000, representing the
cost of the Properties to the Affiliates (including carrying costs) due to the
fact that the amounts were less than each Property's appraised value.
In connection with the purchase of the 13 Ground Round Properties, the two
Jack in the Box Properties, the one Wendy's Property and the one Golden Corral
Property, which are land and building, the Company, as lessor, entered into
long-term lease agreements with unaffiliated lessees. The general terms of the
lease agreements are described in the section of the Prospectus entitled
"Business - Description of Property Leases." For the Properties that are to be
constructed, 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."
In connection with the On The Border Property in San Antonio, Texas, which
is building only, the Company, as lessor, entered into a long-term lease
agreement with an unaffiliated lessee. The general terms of the lease agreement
are described in the section of the Prospectus entitled "Business - Description
of Property Leases." In connection with the purchase of this Property, which is
to be constructed, 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 this acquisition, the Company has also entered into a tri-party agreement
with the lessee and the owner of the land. The tri-party agreement provides
that the ground lessee is responsible for all obligations under the ground lease
and provides certain rights to the Company relating to the maintenance of its
interest in the building in the event of a default by the lessee under the terms
of the ground lease.
The following table sets forth the location of the 18 Properties,
including 17 Properties consisting of land and building and one Property
consisting of building only, acquired by the Company, from October 4, 1997
through December 3, 1997, a description of the competition, and a summary of the
principal terms of the acquisition and lease of each Property.
-2-
<PAGE>
PROPERTY ACQUISITIONS
From October 4, 1997 through December 3, 1997
<TABLE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
JACK IN THE BOX (5) $1,076,237 10/17/97 09/2015; $110,243 (6); for each lease at any time
(the "Florissant Property") (3)(6) 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 Florissant Property is after every (ii) the
located on the southern five years minimum annual
quadrant of Charbonier Road thereafter rent for such
and Howdershell Road, in during the lease year (7)
Florissant, St. Louis County, lease term
Missouri, in an area of mixed
retail, commercial, and
residential development.
JACK IN THE BOX (5) $1,263,688 10/17/97 09/2015; $129,482 (6); for each lease None
(the "Folsom Property") (3)(6) four five- increases by 8% year, (i) 5% of
Restaurant to be constructed year renewal after the fifth annual gross
options lease year and sales minus
The Folsom Property is located after every (ii) the
on the eastern quadrant of five years minimum annual
Blue Ravine Road and East thereafter rent for such
Bidwell Street, in Folsom, during the lease year (7)
Sacramento County, California, lease term
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Folsom Property include an
IHOP, an Arby's, a Burger
King, a Boston Market, a
Manhattan Bagel, a Subway
Sandwich Shop, a Taco Bell, a
McDonald's, a KFC, a Pizza Hut
and several local restaurants.
-3-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
ON THE BORDER (8) $292,767 10/17/97 10/2012; 13.64% of Total for each lease at any time
(the "San Antonio Property") (excluding three five- Cost (4); (9) year, (i) 4% of after the
Restaurant to be constructed development year renewal annual gross tenth lease
costs)(3) options sales minus year
The San Antonio Property is (ii) the
located on the east side of minimum annual
U.S. Highway 281, within the rent for such
Alamo Quarry Market Shopping lease year (7)
Center, in San Antonio, Bexar
County, Texas, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the San Antonio
Property include a Ruth's
Chris Steakhouse and several
local restaurants.
GROUND ROUND (10) $1,220,761 10/20/97 10/2017; $125,128 (11) at any time
(the "Allentown Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Allentown Property is
located on the north side of
Grape Street, in Allentown,
Lehigh County, Pennsylvania,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Allentown Property include a
Pizza Hut, a Lonestar Steak
House, a Red Lobster, a
Chili's, a KFC, an Olive
Garden, a Ponderosa
Steakhouse, a Friendly's, a
Wendy's, a Perkins, a Burger
King, a Boston Market and
several local restaurants.
-4-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
GROUND ROUND (10) $772,727 10/20/97 10/2017; $79,205 (11) at any time
(the "Colerain Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Colerain Property is
located on the north side of
Springdale Road, in Colerain,
Hamilton County, Ohio, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Colerain Property include a
Red Lobster, an Outback Steak
House, an Applebee's, an Olive
Garden, a White Castle, an
Arby's, a McDonald's, a T.G.I.
Friday's and several local
restaurants.
GROUND ROUND (10) $759,091 10/20/97 10/2017; $77,807 (11) at any time
(the "Crystal Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Crystal Property is
located on the northeast
corner of Bass Lake Road and
Jersey Street, in Crystal,
Hennepin County, Minnesota, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Crystal Property include a
Dairy Queen, a Taco Bell, a
Subway Sandwich Shop, a KFC
and an Applebee's.
-5-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
GROUND ROUND (10) $1,422,727 10/20/97 10/2017; $145,830 (11) at any time
(the "Dubuque Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Dubuque Property is
located on the
west side of John F. Kennedy
Road and Cedar Cross Road, in
Dubuque, Dubuque County, Iowa,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Dubuque Property include a
Hardee's, an Olive Garden, a
Wendy's and several local
restaurants.
GROUND ROUND (10) $900,000 10/20/97 10/2017; $92,250 (11) at any time
(the "Gloucester Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Gloucester Property is
located on the
southeast corner of Blackwood-
Clementon Road and Dartmouth
Drive, in Gloucester, Camden
County, New Jersey, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Gloucester
Property include a Friendly's,
a Boston Market, a Chili's, an
Olive Garden, a Red Lobster, a
Denny's, a Burger King, a
McDonald's, a Taco Bell, a
Checkers and several local
restaurants.
-6-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
GROUND ROUND (10) $945,455 10/20/97 10/2017; $96,909 (11) at any time
(the "Janesville Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Janesville Property is
located on the northwest
corner of Milton Avenue and
Lodge Street, in Janesville,
Rock County, Wisconsin, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Janesville Property include an
Applebee's, a Pizzeria Uno, a
Perkins, a Fazoli's and
several local restaurants.
GROUND ROUND (10) $945,455 10/20/97 10/2017; $96,909 (11) at any time
(the "Kalamazoo Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Kalamazoo Property is
located on Stadium Drive, east
of the intersection of Seneca
Road, in Kalamazoo, Kalamazoo
County, Michigan, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Kalamazoo
Property include an Olive
Garden, an Applebee's, a
Chili's, a McDonald's, a
Burger King and several local
restaurants.
-7-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
GROUND ROUND (10) $1,118,182 10/20/97 10/2017; $114,614 (11) at any time
(the "Parma Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Parma Property is located
on the south side of Day
Drive, in Parma, Cuyahoga
County, Ohio, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Parma
Property include an Outback
Steak House, a Red Lobster, an
Olive Garden, an Arby's, a
Denny's and a local
restaurant.
GROUND ROUND (10) $1,439,551 10/20/97 10/2017; $147,554 (11) at any time
(the "Reading Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Reading Property is
located on the west side of
Fifth Street Highway at the
entrance to the Fairgrounds
Mall, in Reading, Berks
County, Pennsylvania, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Reading Property include an
Arby's, a Pizza Hut, a
McDonald's, a Burger King, a
Bojangles, a Taco Bell, a
Ponderosa Steakhouse, a Boston
Market, a Subway Sandwich Shop
and several local restaurants.
-8-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
GROUND ROUND (10) $1,036,364 10/20/97 10/2017; $106,227 (11) at any time
(the "Waterloo Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Waterloo Property is
located on the southwest
corner of East San Marnan
Drive and Penneys Street, in
Waterloo, Black Hawk County,
Iowa, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Waterloo
Property include an Olive
Garden, a Lonestar Steak
House, an Applebee's, a Pizza
Hut, a Boston Market, a Long
John Silver's and several
local restaurants.
GROUND ROUND (10) $1,354,545 10/20/97 10/2017; $138,841 (11) at any time
(the "Wauwatosa Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Wauwatosa Property is
located on the northwest
corner of Mayfair Road and
Blue Mound Road, in Wauwatosa,
Milwaukee County, Wisconsin,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Wauwatosa Property include a
Chili's, an Applebee's, a Taco
Bell, a Pizza Hut and several
local restaurants.
-9-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
GROUND ROUND (10) $1,000,000 11/18/97 11/2017; $102,500 (11) at any
(the "Ewing Property") five time after
Existing restaurant five-year the
renewal seventh
The Ewing Property is options lease year
located on the northwest
quadrant of the
intersection of North
Olden Avenue and
Pennington Road, in
Ewing, Mercer County, New
Jersey, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Ewing
Property include a
McDonald's, an IHOP, an
Applebee's, a TGI
Friday's, a Taco Bell, a
Wendy's, a Burger King,
and a Boston Market.
WENDY'S $811,350 11/18/97 11/2017; 10.25% of for each at any
(the "Westlake Village (excluding two five- Total Cost lease year, time after
Property") development year (4) (i) 7% of the
Restaurant to be costs)(3) renewal annual gross seventh
constructed options sales minus lease year
(ii) the
The Westlake Village minimum
Property is located on annual rent
the southeast quadrant of for such
Thousand Oaks Boulevard lease year
and Lindero Canyon Road,
in Westlake Village, Los
Angeles County,
California, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Westlake
Village Property include
a McDonald's, a KFC, and
a local restaurant.
-10-
<PAGE>
<CAPTION>
Lease
Expiration
Purchase Date and Renewal Minimum Option
Property Location and Competition Price(1) Acquired Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- -------- -------- ---------- --------------- --------------- -------------
<S> <C>
GROUND ROUND (10) $927,273 12/02/97 12/2017; $95,045 (11) at any
(the "Nanuet Property") five time after
Existing restaurant five-year the
renewal seventh
The Nanuet Property is options lease year
on the northwest
corner of Route 59 West
and Dykes Road, in
Nanuet, Rockland County,
New York, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Nanuet
Property include a Ruby
Tuesday's, a Red Lobster,
a Pizza Hut, and a local
restaurant.
GOLDEN CORRAL $384,530 12/03/97 06/2013; 10.75% of for each during the
(the "Muskogee Property") (excluding four Total Cost lease year, first
Restaurant to be development five-year (4) 5% of the through
constructed costs)(3) renewal amount by seventh
options which annual lease
The Muskogee Property is gross sales years and
located on the south side exceed the tenth
of West Shawnee Avenue, $2,212,853 through
in Muskogee, Muskogee (7) fifteenth
County, Oklahoma, in an lease
area of mixed retail, years only
commercial, and
residential development.
Other fast-food and
family-style restaurants
located in proximity to
the Muskogee Property
include an Applebee's, a
Red Lobster, a Burger
King, a Long John
Silver's, a Western
Sizzlin, and several
local restaurants.
</TABLE>
-11-
<PAGE>
- ----------------------------------
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for construction
Properties, once the buildings are constructed, is set forth below:
Property Federal Tax Basis
------------ -----------------
Florissant Property $ 720,000
Folsom Property 700,000
San Antonio Property 1,265,000
Allentown Property 882,000
Colerain Property 532,000
Crystal Property 188,000
Dubuque Property 807,000
Gloucester Property 527,000
Janesville Property 546,000
Kalamazoo Property 710,000
Parma Property 791,000
Reading Property 790,000
Waterloo Property 657,000
Wauwatosa Property 802,000
Ewing Property 683,000
Westlake Village Property 759,000
Nanuet Property 603,000
Muskogee Property 853,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the San
Antonio Property, minimum annual rent will become due and payable on the
earlier of (i) 180 days after execution of the lease, (ii) the date the
certificate of occupancy for the restaurant is issued, (iii) the date the
restaurant opens for business to the public, or (iv) the date the tenant
receives from the landlord its final funding of the construction costs.
For the Westlake Village Property, minimum annual rent will become due and
payable on the earlier of (i) 120 days after execution of the lease, (ii)
the date the certificate of occupancy for the restaurant is issued, (iii)
the date the restaurant opens for business to the public, or (iv) the date
the tenant receives from the landlord its final funding of the construction
costs. For the Muskogee Property, minimum annual rent will become due and
payable on the earlier of (i) 180 days after execution of the lease, (ii)
the date the certificate of occupancy for the restaurant is issued, or
(iii) the date the restaurant opens for business to the public. During the
period commencing with the effective date of the lease to the date minimum
annual rent becomes payable for the San Antonio and Westlake Village
Properties, as described above, the tenant shall pay monthly "interim rent"
equal to a specified rate per annum (ranging from 10.25% to 11%) of the
amount funded by the Company in connection with the purchase and
construction of the Properties. During the period commencing with the
effective date of the lease to the date minimum annual rent becomes payable
for the Muskogee Property, 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 Property shall accrue and be payable
in a single lump sum at the time of final funding of the construction
costs.
-12-
<PAGE>
(3) The development agreements for the Properties which are to be constructed,
provides that construction must be completed no later than the dates set
forth below. The maximum cost to the Company, (including the purchase price
of the land, development costs, and closing and acquisition costs) is not
expected to, but may, exceed the amount set forth below:
Estimated Estimated Final
Property Maximum Cost Completion Date
----------- ------------ ---------------
Florissant Property $1,075,539 March 16, 1998
Folsom Property 1,263,239 March 4, 1998
San Antonio Property 1,260,879 April 15, 1998
Westlake Village Property 1,488,479 March 18, 1998
Muskogee Property 1,301,592 June 1, 1998
(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 Florissant and Folsom Properties is the same unaffiliated
lessee.
(6) The Company paid for all construction costs in advance at closing;
therefore, minimum annual rent was determined on the date acquired and is
not expected to change.
(7) Percentage rent shall be calculated on a calendar year basis (January 1 to
December 31).
(8) 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.
(9) 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.
(10) The lessee of the Allentown, Colerain, Crystal, Dubuque, Gloucester,
Janesville, Kalamazoo, Parma, Reading, Waterloo, Wauwatosa, Ewing and
Nanuet Properties is the same unaffiliated lessee.
-13-
<PAGE>
(11) For each lease year, percentage rent shall be calculated upon the amount by
which gross sales exceed 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. Base sales
are as follows:
Property Base Sales
-------- ----------
Allentown Property $2,085,487
Colerain Property 1,320,076
Crystal Property 1,296,780
Dubuque property 2,430,493
Gloucester Property 1,537,500
Janesville Property 1,615,152
Kalamazoo Property 1,615,152
Parma Property 1,910,355
Reading Property 2,459,233
Waterloo Property 1,770,455
Wauwatosa Property 2,314,015
Ewing Property 1,708,333
Nanuet Property 1,583,777
-14-
<PAGE>
PENDING INVESTMENTS
As of December 3, 1997, the Company had initial commitments to acquire ten
properties, including nine properties consisting of land and building and one
property 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 ten 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.
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.
-15-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C>
Boston Market 15 years; five 10.38% of the Company's for each lease year at any time after the
Colorado Springs, CO five-year renewal total cost to purchase after the fifth lease fifth lease year
Existing restaurant options the property; increases year, (i) 4% of annual
by 10% after the fifth gross sales minus (ii)
lease year and after the minimum annual
every five years rent for such lease
thereafter during the year
lease term
Chevy's Fresh Mex 15 years; two 10.03% of the Company's for each lease year, at any time during
Arapahoe, CO five-year renewal total cost to purchase 5% of the amount by the lease term
Existing restaurant options the property; increases which annual gross
by 10% after the sixth sales exceed a to be
lease year and after determined breakpoint
every five years
thereafter during the
lease term
Chevy's Fresh Mex 15 years; two 10.03% of the Company's for each lease year, at any time during
Beaverton, OR five-year renewal total cost to purchase 5% of the amount by the lease term
Existing restaurant options the property; increases which annual gross
by 10% after the sixth sales exceed a to be
lease year and after determined breakpoint
every five years
thereafter during the
lease term
Chevy's Fresh Mex 15 years; two 10.03% of the Company's for each lease year, at any time during
Greenbelt, MD five-year renewal total cost to purchase 5% of the amount by the lease term
Existing restaurant options the property; increases which annual gross
by 10% after the sixth sales exceed a to be
lease year and after determined breakpoint
every five years
thereafter during the
lease term
Chevy's Fresh Mex 15 years; two 10.03% of the Company's for each lease year, at any time during
Lake Oswego, OR five-year renewal total cost to purchase 5% of the amount by the lease term
Existing restaurant options the property; increases which annual gross
by 10% after the sixth sales exceed a to be
lease year and after determined breakpoint
every five years
thereafter during the
lease term
Golden Corral 15 years; four 10.75% of Total Cost (1) for each lease year, during the
Council Bluffs, IA five-year renewal 5% of the amount by first through
Restaurant to be options which annual gross seventh lease
constructed sales exceed a to be years and the
determined breakpoint tenth through
fifteenth lease
years only
-16-
<PAGE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C>
Ground Round 20 years; five 10.25% of the Company's (5) at any time after
Maple Shade, NJ five-year renewal total cost to purchase the seventh lease
Existing options the property year
restaurant
IHOP (3) (4) 11.78% of the Company's for each lease year, at any time after
Saugus, MA total cost to purchase (i) 3% of annual gross the fifth lease
Existing the building; increases sales minus (ii) the year
restaurant by 5.81% after the minimum annual rent
fifth lease year, 4.66% for such lease year
after the tenth lease
year, and 2.83% after
the fifteenth lease
year
Jack in the Box 18 years; four 10.25% of Total Cost for each lease year, at any time after
Los Angeles, CA five-year renewal (1); increases by 8% (i) 5% of annual gross the seventh
Restaurant to be options after the fifth lease sales minus (ii) the lease year (2)
constructed year and after every minimum annual rent
five years thereafter for such lease year
during the lease term
Ruby Tuesday's 20 years; two 11% of Total Cost (1); for each lease year, at any time after
Georgetown, KY five-year renewal increases by 10% after (i) 6% of annual gross the seventh
Restaurant to be options the fifth lease year sales minus (ii) the lease year
constructed and after every five minimum annual rent
years thereafter during for such lease year at
the lease term any time after the
seventh lease year
</TABLE>
FOOTNOTES:
(1) The "Total Cost" is equal to the sum of (i) the purchase price of the
property, (ii) closing costs, and (iii) actual development costs incurred
under the development agreement.
(2) In the event the Company purchases the property directly from the lessee,
the lessee will have no option to purchase the property.
(3) The Company anticipates owning the building only for this property. The
Company will not own the underlying land; although, the Company anticipates
entering into a landlord estoppel agreement with the landlord of the land
and a collateral assignment of the ground lease with the lessee in order to
provide the Company with certain rights with respect to the land on which
the building is located.
(4) The lease term shall expire upon the earlier of (i) the date 20 years from
the date of closing, (ii) the expiration of the original term of the ground
lease, or (iii) the earlier termination of the ground lease.
(5) 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.
-17-
<PAGE>
BORROWING
Between October 4, 1997 and December 3, 1997, the Company obtained six
advances totalling $1,760,940 under the Line of Credit. The proceeds of these
advances were used to acquire Equipment for six restaurant properties, one in
each of Rapid City, South Dakota; London, Kentucky; Guadalupe, Arizona; Sparta,
Tennessee; Las Vegas, Nevada; and Kingston, Tennessee.
In addition, on November 14, 1997, the Company used $19 million of
uninvested net offering proceeds to temporarily reduce the balance outstanding
under the Line of Credit pending the investment of such offering proceeds in
Properties or Mortgage Loans in order to reduce interest expense incurred by the
Company.
-18-
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
BEFORE DIVIDENDS PAID DEDUCTION
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM OCTOBER 4, 1997
THROUGH DECEMBER 3, 1997
For the Year Ended December 31, 1996 (Unaudited)
The following schedule presents unaudited estimated taxable operating
results before dividends paid deduction of each Property acquired by the Company
from October 4, 1997 through December 3, 1997. The statement presents unaudited
estimated taxable operating results for each Property that was operational as if
the Property had been acquired and operational on January 1, 1996 through
December 31, 1996. The schedule should be read in light of the accompanying
footnotes.
These estimates do not purport to present actual or expected operations
of the Company for any period in the future. These estimates were prepared on
the basis described in the accompanying notes which should be read in
conjunction herewith. No single lessee or group of affiliated lessees lease
Properties or has borrowed funds from the Company with an aggregate purchase
price in excess of 20% of the expected total net offering proceeds of the
Company.
<TABLE>
<CAPTION>
Jack in the Box Jack in the Box On The Border Ground Round
Florissant, MO (6) Folsom, CA (6) San Antonio, TX Allentown, PA (7)
------------------ --------------- --------------- -----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (5) (5) (5) $125,128
Asset Management Fees (2) (5) (5) (5) (7,322)
General and Administrative
Expenses (3) (5) (5) (5) (7,758)
--------
Estimated Cash Available from
Operations (5) (5) (5) 110,048
Depreciation and Amortization
Expense (4) (5) (5) (5) (22,607)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (5) (5) (5) $ 87,441
See Footnotes ========
-19-
<PAGE>
<CAPTION>
Ground Round Ground Round Ground Round Ground Round
Colerain, OH (7) Crystal, MN (7) Dubuque, IA (7) Gloucester, NJ(7)
----------------- --------------- --------------- -----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 79,205 $ 77,807 $145,830 $ 92,250
Asset Management Fees (2) (4,633) (4,552) (8,533) (5,397)
General and Administrative
Expenses (3) (4,911) (4,824) (9,041) (5,720)
-------- -------- -------- --------
Estimated Cash Available from
Operations 69,661 68,431 128,256 81,133
Depreciation and Amortization
Expense (4) (13,658) (4,824) (20,701) (13,511)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 56,003 $ 63,607 $107,555 $ 67,622
======== ======== ======== ========
</TABLE>
See Footnotes
-20-
<PAGE>
<TABLE>
<CAPTION>
Ground Round Ground Round Ground Round Ground Round
Janesville, WI (7) Kalamazoo, MI (7) Parma, OH(7) Reading, PA(7)
------------------ ----------------- ------------ --------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 96,909 $ 96,909 $114,614 $147,554
Asset Management Fees (2) (5,670) (5,670) (6,706) (8,634)
General and Administrative
Expenses (3) (6,008) (6,008) (7,106) (9,148)
-------- -------- -------- --------
Estimated Cash Available from
Operations 85,231 85,231 100,802 129,772
Depreciation and Amortization
Expense (4) (14,015) (18,201) (20,290) (20,254)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 71,216 $ 67,030 $ 80,512 $109,518
======== ======== ======== ========
</TABLE>
See Footnotes
-21-
<PAGE>
<TABLE>
<CAPTION>
Ground Round Ground Round Ground Round Wendy's
Waterloo, IA (7) Wauwatosa, WI (7) Ewing, NJ (7) Westlake Village, CA
---------------- ----------------- ------------- --------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $106,227 $138,841 $102,500 (5)
Asset Management Fees (2) (6,215) (8,124) (5,997) (5)
General and Administrative
Expenses (3) (6,586) (8,608) (6,355) (5)
-------- -------- --------
Estimated Cash Available from
Operations 93,426 122,109 90,148 (5)
Depreciation and Amortization
Expense (4) (16,846) (20,557) (17,518) (5)
-------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 76,580 $101,552 $ 72,630 (5)
======== ======== ========
</TABLE>
See Footnotes
-22-
<PAGE>
<TABLE>
<CAPTION>
Ground Round Golden Corral
Nanuet, NY (7) Muskogee, OK Total
-------------- ------------- -----
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 95,045 (5) $1,418,819
Asset Management Fees (2) (5,561) (5) (83,014)
General and Administrative
Expenses (3) (5,893) (5) (87,966)
-------- ----------
Estimated Cash Available from
Operations 83,591 (5) 1,247,839
Depreciation and Amortization
Expense (4) (15,455) (5) (218,437)
-------- ----------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 68,136 (5) $1,029,402
======== ==========
</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.
-23-
<PAGE>
(5) The Property is under construction for the period presented. The
development agreements for the Properties which are to be constructed,
provide that construction must be completed no later than the dates
set forth below:
Property Estimated Final Completion Date
--------- -------------------------------
Florissant Property March 16, 1998
Folsom Property March 4, 1998
San Antonio Property April 15, 1998
Westlake Village Property March 18, 1998
Muskogee Property June 1, 1998
(6) The lessee of the Florissant and Folsom Properties is the same
unaffiliated lessee.
(7) The lessee of the Allentown, Colerain, Crystal, Dubuque, Gloucester,
Janesville, Kalamazoo, Parma, Reading, Waterloo, Wauwatosa, Ewing and
Nanuet Properties is the same unaffiliated lessee.
