Rule 424(b)(3)
No. 333-15411
CNL AMERICAN PROPERTIES FUND, INC.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 18, 1997. This Supplement replaces the Supplement
dated April 23, 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 April 30, 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 April 30, 1997, will be reported in a
subsequent Supplement.
THE OFFERING
As of the completion of its Initial Offering, the Company had received
subscription proceeds of $150,591,765 (15,059,177 shares), including $591,765
(59,177 shares) issued pursuant to the Reinvestment Plan and after deduction
of selling commissions, marketing support and due diligence expense
reimbursement fees and offering expenses, net proceeds to the Company from its
Initial Offering totalled approximately $134,000,000. Following the
completion of its Initial Offering on February 6, 1997, the Company commenced
an offering of up to 27,500,000 Shares (the "Subsequent Offering"). As of
April 30, 1997, the Company had received aggregate subscription proceeds of
$40,474,060 (4,047,406 Shares), including $269,388 (26,939 Shares) issued
pursuant to the Reinvestment Plan, from 1,946 stockholders in connection with
the Subsequent Offering. Net Offering Proceeds to the Company after deduction
of Selling Commissions, Marketing Support and Due Diligence Expense
Reimbursement Fees and Offering Expenses totalled approximately $36,800,000.
As of April 30, 1997, the Company had invested or committed for investment
approximately $137,000,000 of aggregate net proceeds from the Initial Offering
and the Subsequent Offering in 139 Properties, in providing mortgage financing
to the tenants of the 44 Properties consisting of land only through Mortgage
Loans, and in paying acquisition fees and certain acquisition expenses,
leaving approximately $32,000,000 in aggregate net offering proceeds available
for investment in Properties and Mortgage Loans. As of April 30, 1997,
$1,821,333 of the Net Offering Proceeds from the Subsequent Offering had been
incurred as Acquisition Fees to the Advisor.
BUSINESS
PROPERTY ACQUISITIONS
Between April 3, 1997 and April 30, 1997, the Company acquired ten
Properties, including eight Properties consisting of land and building, one
Property consisting of building only and one Property consisting of land only,
with the aggregate proceeds of the Initial Offering and the Subsequent
Offering. These Properties are four Boston Market Properties (one in each of
Arvada, Colorado; Liberty, Missouri; Indianapolis, Indiana; and San Antonio,
Texas), one Black-eyed Pea Property (in Scottsdale, Arizona), two Jack in the
Box Properties (one in each of Enumclaw, Washington, and Bacliff, Texas), one
Einstein Bros. Bagels Property (in Dearborn, Michigan), one Shoney's Property
(in Guadalupe, Arizona) and one Pizza Hut Property (in Dover, Ohio). For
information regarding the 129 Properties acquired by the Company prior to
April 3, 1997, see the Prospectus dated April 18, 1997.
May 6, 1997 Prospectus Dated April 18, 1997
In connection with the purchase of the four Boston Market Properties,
the Einstein Bros. Bagels Property, the two Jack in the Box Properties, and
the Shoney's Property which are land and building, the Company, as lessor,
entered into long-term lease agreements with unaffiliated lessees. The
general terms of the lease agreements are described in the section of the
Prospectus entitled "Business - Description of Property Leases." For the
Properties that are to be constructed or renovated, the Company has entered
into development and indemnification and put agreements with the lessees. The
general terms of these agreements are described in the section of the
Prospectus entitled "Business - Site Selection and Acquisition of Properties -
Construction and Renovation."
The purchase price for the Shoney's Property in Guadalupe, Arizona,
includes a development fee of $49,500 to an Affiliate of the Advisor for
services provided in connection with the development of the Property. The
Company considers development fees, to the extent that they are paid to
Affiliates, to be Acquisition Fees. Such development fees must be approved by
a majority of the Directors (including a majority of the Independent
Directors) not otherwise interested in such transactions, subject to a
determination that such transactions are fair and reasonable to the Company
and on terms and conditions not less favorable to the Company than those
available from unaffiliated third parties and not less favorable than those
available from the Advisor or its Affiliates in transactions with unaffiliated
third parties. See the sections of the Prospectus entitled "Management
Compensation" and Business - Site Selection and Acquisition of Properties."
In connection with the Black-eyed Pea Property in Scottsdale, Arizona,
which is building only, the Company, as lessor, entered into a long-term lease
agreement with an unaffiliated lessee. The general terms of the lease
agreement are described in the section of the Prospectus entitled "Business -
Description of Property Leases." In addition, the Company has entered into a
landlord estoppel agreement with the landlord of the land and a collateral
assignment of the ground lease with the lessee in order to provide the Company
with certain rights with respect to the land on which the building is located.
In connection with the Pizza Hut Property in Dover, Ohio, which is land
only, the Company acquired the land and is leasing this parcel to the lessee,
Castle Hill Holdings VII, L.L.C. ("Castle Hill"), along with eight Pizza Hut
Properties previously acquired, pursuant to a master lease agreement (the
"Master Lease Agreement"). Castle Hill has subleased the Pizza Hut Property
in Dover, Ohio, along with the eight Pizza Hut Properties previously acquired,
to one of its affiliates, Midland Food Services III, L.L.C., which is the
operator of the restaurants. The general terms of the Master Lease Agreement
are similar to those described in the section of the Prospectus entitled
"Business - Description of Property Leases." If the lessee does not exercise
its option to purchase the Properties upon termination of the Master Lease
Agreement, the sublessee and lessee will surrender possession of the
Properties to the Company, together with any improvements on such Properties.
The lessee owns the buildings located on the Pizza Hut Property in Dover,
Ohio, along with the eight Pizza Hut Properties previously acquired. In
addition, the Company provided mortgage financing of $4,200,000 to the lessee
of the Pizza Hut Property in Dover, Ohio, along with the eight Pizza Hut
Properties previously acquired, pursuant to a Mortgage Loan evidenced by a
master mortgage note (the "Master Mortgage Note") which is collateralized by
the building improvements on the Pizza Hut Property in Dover, Ohio, the eight
Pizza Hut Properties previously acquired, and two additional Pizza Hut
Properties in Wintersville, Ohio, and Weirton, West Virginia, which will not
be owned by the Company. The Master Mortgage Note bears interest at a rate of
10.50% per annum and principal and interest are due in equal monthly
installments over 20 years starting May 1, 1997. The Master Mortgage Note
equals approximately 88 percent of the appraised value of the related
buildings. Management believes that, due to the fact that the Company owns
the underlying land relating to the Pizza Hut Property in Dover, Ohio, and the
eight Pizza Hut Properties previously acquired, and due to other underwriting
criteria, the Company has sufficient collateral for the Master Mortgage Note.
The following table sets forth the location of the ten Properties,
including eight Properties consisting of land and building, one Property
consisting of building only and one Property consisting of land only, acquired
by the Company, from April 3, 1997 through April 30, 1997, a description of
the competition, and a summary of the principal terms of the acquisition and
lease of each Property.
-2-
<TABLE>
PROPERTY ACQUISITIONS
From April 3, 1997 through April 30, 1997
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ------------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET $629,435 04/16/97 04/2012; five 10.38% of Total for each lease at any time
(the "Arvada Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Arvada Property is year and after sales minus
located on the northwest every five (ii) the
quadrant of West 55th years minimum annual
Avenue and the Wadsworth thereafter rent for such
Bypass, in Arvada, during the lease year
Jefferson County, lease term
Colorado, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Arvada
Property include an
Applebee's, a Ruby
Tuesday, an IHOP, a
Fazoli's, a McDonald's,
and several local
restaurants.
BOSTON MARKET $456,801 04/16/97 04/2012; five 10.38% of Total for each lease at any time
(the "Liberty Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 5% of year
fifth lease annual gross
The Liberty Property is year and after sales minus
located at the southeast every five (ii) the
corner of the years minimum annual
intersection of North thereafter rent for such
Highway 291 and Landmark during the lease year
Avenue, in Liberty, Clay lease term
County, Missouri, in an
area of mixed retail,
commercial, and
residential development.
Other fast-food and
family-style restaurants
located in proximity to
the Liberty Property
include a Ponderosa, a
KFC, a Perkins, and a
Pizza Hut.
-3-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ------------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
EINSTEIN BROS. BAGELS $422,512 04/16/97 04/2012; five 10.38% of Total for each lease at any time
(the "Dearborn Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The Dearborn Property is year and after sales minus
located on the southeast every five (ii) the
corner of Telegraph Road years minimum annual
and Sheridan Road, in thereafter rent for such
Dearborn, Wayne County, during the lease year
Michigan, in an area of lease term
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Dearborn
Property include a Boston
Market, a Subway Sandwich
Shop, and several local
restaurants.
JACK IN THE BOX (10) $843,431 04/16/97 04/2015; four $86,452 (6); for each lease at any time
(the "Enumclaw Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be renewal options after the fifth annual gross seventh
renovated lease year and sales minus lease year
after every (ii) the
The Enumclaw Property is five years minimum annual
located at the northwest thereafter rent for such
corner of the during the lease year (5)
intersection of Griffin lease term
Avenue and Cedar Street,
in Enumclaw, King County,
Washington, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Enumclaw
Property include a Subway
Sandwich Shop, a Burger
King, a McDonald's, a
Pizza Hut, and a local
restaurant.
-4-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ------------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
SHONEY'S $679,095 04/16/97 04/2017; two 11% of Total for each lease at any time
(the "Guadalupe (excluding five-year Cost (4); year, (i) 6% of after the
Property") development renewal options increases by annual gross seventh
Restaurant to be costs) (3) 10% after the sales minus lease year
constructed fifth lease (ii) the
year and after minimum annual
The Guadalupe Property is every five rent for such
located within the years lease year
southeast quadrant of thereafter
Interstate 10 and during the
Baseline Road, in lease term
Guadalupe, 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 Guadalupe Property
include a Denny's, a Taco
Bell, a KFC, a Jack in
the Box, a Waffle House,
and several local
restaurants.
BLACK-EYED PEA (7) $769,863 04/17/97 02/2011 $105,450 (6); None at any time
(the "Scottsdale (3)(6) increases to after the
Property") $107,511 during fifth lease
Restaurant to be the eleventh year
renovated through
fourteenth
The Scottsdale Property lease years
is located within the
southeast quadrant of
Indian Bend Road and Pima
Road, in Scottsdale,
Maricopa County, Arizona,
in an area of mixed
retail, commercial, and
residential development.
Other fast-food and
family-style restaurants
located in proximity to
the Scottsdale Property
include a KFC, a Denny's,
an Arby's, a Taco Bell, a
McDonald's, and a local
restaurant.
-5-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ------------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
PIZZA HUT (8)(9) $224,378 04/17/97 03/2017; two $23,560; None at any time
(the "Dover Property") ten-year increases by after the
Land only renewal options 10% after the seventh
fifth and tenth lease year
The Dover Property is lease years and
located on the west side 12% after the
of Boulevard Street, in fifteenth lease
Dover, Tuscarawas County, year
Ohio, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and
family-style restaurants
located in proximity to
the Dover Property
include a Taco Bell, a
Long John Silver's, a
Friendly's, and several
local restaurants.
JACK IN THE BOX (10) $1,049,420 04/29/97 04/2015; four $107,566 (6); for each lease at any time
(the "Bacliff Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be renewal options after the fifth annual gross seventh
constructed lease year and sales minus lease year
after every (ii) the
The Bacliff Property is five years minimum annual
located on the southeast thereafter rent for such
corner of Texas State during the lease year (5)
Highway 146 and FM 646, lease term
in Bacliff, Galveston
County, Texas, in an area
of mixed commercial and
residential development.
-6-
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ------------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET $860,790 04/29/97 04/2012; five 10.38% of Total for each lease at any time
(the "Indianapolis (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be costs) (3) 10% after the year, (i) 4% of year
constructed fifth lease annual gross
year and after sales minus
The Indianapolis Property every five (ii) the
is located on the west years minimum annual
side of U.S. 31 South, in thereafter rent for such
Indianapolis, Marion during the lease year
County, Indiana, in an lease term
area of mixed retail,
commercial, and
residential development.
Other fast-food and
family-style restaurants
located in proximity to
the Indianapolis Property
include a McDonald's, a
Steak N Shake, a Wendy's,
and several local
restaurants.
BOSTON MARKET $469,369 04/30/97 04/2012; five 10.38% of Total for each lease at any time
(the "San Antonio (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be costs) (3) 10% after the year, (i) 4% of year
constructed fifth lease annual gross
year and after sales minus
The San Antonio Property every five (ii) the
is located at the years minimum annual
northwest corner of Tezel thereafter rent for such
Road and Camino Rosa, in during the lease year
San Antonio, Bexar lease term
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 Burger King, a
Taco Bell, and several
local restaurants.
-7-
</TABLE>
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for
construction Properties, once the buildings are constructed, is set
forth below:
Property Federal Tax Basis
-------- -----------------
Arvada Property $667,000
Liberty Property 357,000
Dearborn Property 266,000
Enumclaw Property 764,000
Guadalupe Property 905,000
Scottsdale Property 810,000
Bacliff Property 691,000
Indianapolis Property 883,000
San Antonio Property 336,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the
Liberty, Dearborn, San Antonio and Indianapolis Properties, minimum
annual rent will become due and payable on the date the tenant receives
from the landlord its final funding of the construction costs. For the
Arvada Property, minimum annual rent for the remainder of 1997 and 1998
shall be prepaid on the date the tenant receives from the landlord its
final funding of the construction costs. For the Guadalupe Property,
minimum annual rent will become due and payable on the earlier of (i)
210 days after execution of the lease, (ii) the date the certificate of
occupancy for the restaurant is issued, (iii) the date the restaurant
opens for business to the public, or (iv) the date the tenant receives
from the landlord its final funding of the construction costs. During
the period commencing with the effective date of the lease to the date
minimum annual rent becomes payable for the Arvada, Liberty, Dearborn,
San Antonio and Indianapolis Properties, as described above, interim
rent equal to 10.38% 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 Guadalupe Property, as described above, the tenant shall
pay monthly "interim rent" equal to 11 percent per annum of the amount
funded by the Company in connection with the purchase and construction
of the Property.
-8-
(3) The development agreements for the Properties which are to be
constructed or renovated, provide that construction or renovation must
be completed no later than the dates set forth below. The maximum cost
to the Company, (including the purchase price of the land (if
applicable), development costs (if applicable), and closing and
acquisition costs) is not expected to, but may, exceed the amounts set
forth below:
Estimated Final
Property Estimated Maximum Cost Completion Date
-------- ---------------------- ---------------
Arvada Property $1,152,262 October 13, 1997
Liberty Property 764,164 October 13, 1997
Dearborn Property 667,305 October 13, 1997
Enumclaw Property 843,431 October 13, 1997
Guadalupe Property 1,452,517 November 12, 1997
Scottsdale Property 769,863 September 14, 1997
Bacliff Property 1,049,420 October 26, 1997
Indianapolis Property 1,663,194 October 26, 1997
San Antonio Property 757,069 October 27, 1997
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
Property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(5) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(6) The Company paid for all construction or renovation costs in advance at
closing; therefore, minimum annual rent was determined on the date
acquired and is not expected to change.
(7) The Company owns the building only for this Property. The Company does
not own the underlying land; although, the Company entered into a
landlord estoppel agreement with the landlord of the land and a
collateral assignment of the ground lease with the lessee in order to
provide the Company with certain rights with respect to the land on
which the building is located.
(8) The lease relating to this Property is a land lease only.
(9) The Company entered into a Master Lease Agreement for the Dover Property
and eight Pizza Hut Properties previously acquired.
(10) The lessee of the Enumclaw and Bacliff Properties is the same
unaffiliated lessee.
-9-
BORROWING AND SECURED EQUIPMENT LEASES
Between April 3, 1997 and April 30, 1997, the Company obtained two
advances totalling $680,882 under its $15,000,000 Loan. These advances were
used to acquire Equipment for two restaurant properties in El Cajon,
California (the "El Cajon Secured Equipment Lease") and Indian Harbour Beach,
Florida (the "Indian Harbour Beach Secured Equipment Lease").
PENDING INVESTMENTS
As of April 30, 1997, the Company had initial commitments to acquire 20
properties, consisting of land and building. The acquisition of each of these
properties is subject to the fulfillment of certain conditions, including, but
not limited to, a satisfactory environmental survey and property appraisal.
There can be no assurance that any or all of the conditions will be satisfied
or, if satisfied, that one or more of these properties will be acquired by the
Company. If acquired, the leases of all 20 of these properties are expected
to be entered into on substantially the same terms described in the section of
the Prospectus entitled "Business -Description of Property Leases."
Set forth below are summarized terms expected to apply to the leases for
each of the properties. More detailed information relating to a property and
its related lease will be provided at such time, if any, as the property is
acquired.
-10-
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Austin, TX renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Baltimore, MD renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Citrus Heights, CA renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Gambrills, MD renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Houston, TX renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Independence, MO renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
-11-
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Jessup, MD renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Lansing, MI renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Lewisville, TX renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Reno, NV renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Riverdale, MD renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Vacaville, CA renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
-12-
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Waldorf, MD renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 5% of year
renovated year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Einstein Bros. Bagels 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Springfield, VA renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Golden Corral 15 years; four five-year 10.75% of Total Cost for each lease year, during the first
Jacksonville, FL renewal options (1) 5% of the amount by through seventh
Restaurant to be which annual gross lease years and the
constructed sales exceed a to be tenth through
determined breakpoint fifteenth lease
years only
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Fairfax, VA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Hollywood, CA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
-13-
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Leesburg, VA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Fresno, CA renewal options (1); increases by 8% (i) 5% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year (2)
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Los Angeles, CA renewal options (1); increases by 8% (i) 5% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year (2)
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
</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.
-14-
<TABLE>
PRO FORMA ESTIMATE OF TAXABLE INCOME BEFORE DIVIDENDS PAID DEDUCTION OF
CNL AMERICAN PROPERTIES FUND, INC.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM APRIL 3, 1997
THROUGH APRIL 30, 1997
FOR A 12-MONTH PERIOD (UNAUDITED)
The following schedule represents pro forma unaudited estimates of taxable income before dividends
paid deduction of each Property acquired by the Company from April 3, 1997 through April 30, 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.
<CAPTION>
Boston Market Boston Market Einstein Bros. Bagels Jack in the Box
Arvada, CO (5) Liberty, MO (5) Dearborn, MI (5) Enumclaw, WA (5)(6)
-------------- --------------- --------------------- -------------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $119,605 $ 79,320 $ 69,266 $ 86,452
Asset Management Fees (2) (6,844) (4,535) (3,959) (5,055)
General and Administrative
Expenses (3) (7,415) (4,918) (4,295) (5,360)
-------- -------- -------- --------
Estimated Cash Available from
Operations 105,346 69,867 61,012 76,037
Depreciation and Amortization
Expense (4) (17,094) (9,142) (6,820) (19,584)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 88,252 $ 60,725 $ 54,192 $ 56,453
======== ======== ======== ========
See Footnotes
-15-
<CAPTION>
Shoney's Black-eyed Pea Pizza Hut Jack in the Box
Guadalupe, AZ (5) Scottsdale, AZ (5) Dover, OH Bacliff, TX (5)(6)
----------------- ------------------ --------- ------------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $159,777 $105,450 $ 23,560 $107,566
Asset Management Fees (2) (8,673) (4,610) (1,346) (6,291)
General and Administrative
Expenses (3) (9,906) (6,538) (1,461) (6,669)
-------- -------- -------- --------
Estimated Cash Available from
Operations 141,198 94,302 20,753 94,606
Depreciation and Amortization
Expense (4) (23,195) (20,757) - (17,716)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $118,003 $ 73,545 $ 20,753 $ 76,890
======== ======== ======== ========
See Footnotes
-16-
<CAPTION>
Boston Market Boston Market
Indianapolis, IN (5) San Antonio, TX (5) Total
-------------------- ------------------- ----------
<S> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $172,640 $ 78,584 $1,002,220
Asset Management Fees (2) (9,894) (4,497) (55,704)
General and Administrative
Expenses (3) (10,704) (4,872) (62,138)
-------- -------- ----------
Estimated Cash Available from
Operations 152,042 69,215 884,378
Depreciation and Amortization
Expense (4) (22,648) (8,626) (145,582)
-------- -------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $129,394 $ 60,589 $ 738,796
======== ======== ==========
</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.
-17-
(5) The development agreements for the Properties which are to be
constructed or renovated, provide that construction or renovation must
be completed no later than the dates set forth below:
Property Estimated Final Completion Date
-------- -------------------------------
Arvada Property October 13, 1997
Liberty Property October 13, 1997
Dearborn Property October 13, 1997
Enumclaw Property October 13, 1997
Guadalupe Property November 12, 1997
Scottsdale Property September 14, 1997
Bacliff Property October 26, 1997
Indianapolis Property October 26, 1997
San Antonio Property October 27, 1997
(6) The lessee of the Enumclaw and Bacliff Properties is the same
unaffiliated lessee.
