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 July 18,
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 July 18, 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 July 18, 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 July 18, 1997, the Company had received subscription
proceeds of $83,652,032 (8,365,203 Shares), including $643,293 (64,329 Shares)
issued pursuant to the Reinvestment Plan, from 3,971 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 $75,678,000. As of July 18,
1997, the Company had invested or committed for investment approximately
$197,582,000 of aggregate net proceeds from the Initial Offering and this
offering in 184 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 $12,141,000 in aggregate net offering proceeds available for
investment in Properties and Mortgage Loans. As of July 18, 1997, $3,764,341 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 July 18, 1997, the Company acquired five
Properties, consisting of land and building. These Properties are one Arby's
Property (in Lexington, North Carolina), one Boston Market Property (in Newport
News, Virginia), two IHOP Properties (one in each of Houston, Texas, and
Stockbridge, Georgia) and one Jack in the Box Property (in Woodland,
California). 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 each of these five Properties, 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
Property that 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."
July 22, 1997 Prospectus Dated April 18, 1997
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<PAGE>
The following table sets forth the location of the five Properties,
consisting of land and building, acquired by the Company, from July 3, 1997
through July 18, 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 July 18, 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 $742,536 07/15/97 07/2017; two $74,254; increases by for each lease year, during the
(the "Lexington Property") five-year renewal 4.14% after the third (i) 4% of annual gross seventh and
Existing restaurant options lease year and after sales minus (ii) tenth lease
every three years the minimum annual years only
thereafter during the rent for such
lease term lease year
The Lexington Property is
located on the east side of
Cotton Grove Road, north of
Interstate 85, in
Lexington, Davidson County,
North Carolina, in an area
of mixed retail,
commercial, and residential
development. Other
fast-food and familystyle
restaurants located in
proximity to the Lexington
Property include a Burger
King, a Taco Bell, and a
Cracker Barrel.
Boston Market $1,011,492 07/16/97 07/2012; five $104,993; increases for each lease at any time
(the "Newport News Property") five-year by 10% after the year after the after the
Existing restaurant renewal options fifth lease year fifth lease year, fifth lease
and after every five (i) 4% of annual year
years thereafter gross sales minus
during the lease (ii) the minimum
term annual rent for
such lease year
The Newport News Property
is located on the southwest
corner of the intersection
of Warwick Boulevard and
Prince Drew Road, in
Newport News, Virginia, in
an area of mixed 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.
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<PAGE>
<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 (6) $1,424,283 07/16/97 07/2017; three $144,209; for each lease during the eleventh
(the "Houston Property") five-year increases by year, (i) 4% lease year and
Existing restaurant renewal 10% after the of annual gross at the end of
options fifth lease year sales minus the initial
and after every (ii) the minimum lease term
five years thereafter annual rent
during the lease for such lease
term year
The Houston Property is
located at the southwest
quadrant of the
intersection of FM 1960 and
U.S. Highway 290, 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
Kettle's, a Pizza Inn, a
Denny's, a McDonald's, and
a Burger King.
IHOP (6) $1,397,047 07/16/97 07/2017; three $141,451; increases for each lease during the eleventh
(the "Stockbridge Property") five-year renewal by 10% after the year, (i) 4% of lease year and at
Existing restaurant options fifth lease year annual gross the end of the
and after every sales minus initial lease term
The Stockbridge Property is five years thereafter (ii) the minimum
located on the north side during the lease annual rent for
of Stockbridge Road, west term such lease year
of Interstate 675, in
Stockbridge, Clayton
County, Georgia, in an area
of mixed retail,
commercial, and residential
development. Other
fast-food and familystyle
restaurants located in
proximity to the
Stockbridge Property
include a ChickFil-A, an
Applebee's, a McDonald's, a
Wendy's, a Long John
Silver's, and several local
restaurants.
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<PAGE>
<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 $963,592 07/16/97 07/2015; four $98,768 (5); for each at any time
(the "Woodland Property") (3) (5) five-year increases by 8% lease year, after the
Restaurant to be constructed renewal after the fifth (i) 5% of seventh lease
options lease year and annual gross year
The Woodland Property is after every sales minus
located on the southeast five years (ii) the minimum
corner of East Main Street thereafter annual rent
and County Road 102, in during the lease for such lease
Woodland, Yolo County, term year (4)
California, in an area of
mixed retail, commercial,
and residential
development. Other
fast-food and familystyle
restaurants located in
proximity to the Woodland
Property include a Wendy's,
a Taco Bell, a Burger King,
a Denny's, a McDonald's,
and a local restaurant.
</TABLE>
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FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for the
construction Property, once the building is constructed, is set forth
below:
Property Federal Tax Basis
Lexington Property $ 462,000
Newport News Property 584,000
Houston Property 888,000
Stockbridge Property 705,000
Woodland Property 661,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease.
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<PAGE>
(3) The development agreement for the Property which is to be constructed,
provides that construction must be completed no later than the date 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
</TABLE>
(4) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(5) 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.
(6) The lessee of the Houston and Stockbridge Properties is the same
unaffiliated lessee.
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<PAGE>
BORROWING AND SECURED EQUIPMENT LEASES
Between July 3, 1997 and July 18, 1997, the Company obtained one
advance totalling $91,641 under its $15,000,000 Loan. This advance was the final
advance relating to the acquisition of Equipment for the restaurant property in
Suisun City, California.
PENDING INVESTMENTS
As of July 18, 1997, the Company had initial commitments to acquire 18
properties, including 17 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 18 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 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 triparty 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.
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<PAGE>
<TABLE>
<CAPTION>
Least Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C>
Arby's 20 years; two five-year 10.25% of the Company's for each lease year, during the seventh
Greensboro, NC renewal options total cost to purchase (i) 4% of annual gross and tenth lease years
Existing restaurant the property; increases sales minus (ii) the only
by 4.14% after the third minimum annual rent
lease year and after every for such lease year
three years thereafter
during the lease term
Arby's 20 years; two five-year 10.25% of the Company's for each lease year, during the seventh
Greenville, NC renewal options total cost to purchase (i) 4% of annual gross and tenth lease
Existing restaurant the property; increases sales minus (ii) the years only
by 4.14% after the third minimum annual rent
lease year and after for such lease year
every three years
thereafter during the
lease term
Arby's 20 years; two five-year 10.25% of the Company's for each lease year, during the seventh
Jonesville, NC renewal options total cost to purchase (i) 4% of annual and tenth lease
Existing restaurant the property; increases gross sales minus years only
by 4.14% after the third (ii) the minimum
lease year and after annual rent for
every three years such lease year
thereafter during the
lease term
Arby's 20 years; two five-year 10.25% of the Company's for each lease year, during the seventh
Kernersville, NC renewal options total cost to purchase (i) 4% of annual and tenth lease
Existing restaurant the property; increases gross sales minus years only
by 4.14% after the third (ii) the minimum
lease year and after annual rent for
every three years such lease year
thereafter during the
lease term
Arby's 20 years; two five-year 10.25% of the Company's for each lease year, during the seventh
Kinston, NC renewal options total cost to purchase (i) 4% of annual gross and tenth lease
Existing restaurant the property; increases sales minus (ii) the years only
by 4.14% after the third minimum annual rent
lease year and after for such lease year
every three years
thereafter during the
lease term
Boston Market 15 years; five five-year 10.38% of the Company's for each lease year at any time
Visalia, CA renewal options total cost to purchase after the fifth lease after the fifth
Existing restaurant the property; increases year, (i) 4% of annual lease year
by 10% after the fifth gross sales minus
lease year and after (ii) the minimum annual
every five years rent for such lease year
thereafter during the
lease term
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Least Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C>
Golden Corral 15 years; four five-year 10.75% of Total Cost (1) for each lease year, during the first
Olathe, KS renewal options 5% of the amount by through seventh
Restaurant to be which annual gross lease years and
constructed sales exceed a to the tenth through
be determined fifteenth lease
breakpoint years only
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Florissant, MO 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 gross the seventh lease
Restaurant to be after the fifth lease sales minus (ii) the year (2)
constructed year and after every minimum annual rent
five years thereafter for such lease year
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
West Sacramento, CA renewal options (1); increases by 8% (i) 5% of annual gross the seventh lease
Restaurant to be after the fifth lease sales minus (ii) the year (2)
constructed year and after every minimum annual rent for
five years thereafter such lease year
during the lease term
On The Border (3) (4); three five-year 13.64% of Total for each lease year, at any time after
San Antonio, TX renewal options Cost (1); (5) (i) 4% of annual the tenth lease year
Restaurant to be gross sales minus
constructed (ii) the minimum
annual rent for
such lease year
Shoney's 20 years; two five-year 11% of Total Cost for each lease year, at any time after the
Las Vegas, NV renewal options (1); increases by 10% (i) 6% of annual gross seventh lease year
Restaurant to be after the fifth lease sales minus (ii) the
constructed year and after every five minimum annual rent for
years thereafter during such lease year
the lease term
Tumbleweed Southwest 20 years; two five-year 11% of Total Cost for each lease year, at any time after
Mesquite Grill & Bar renewal options (1); increases by 10% (i) 5% of annual gross the seventh lease year
Cookeville, TN after the fifth lease sales minus (ii) the
Restaurant to be year and after every minimum annual rent
renovated five years thereafter for such lease year
during the lease term
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Least Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C>
Tumbleweed Southwest 20 years; two five-year 11% of Total Cost for each lease year, at any time after
Mesquite Grill & Bar renewal options (1); increases by 10% (i) 5% of annual gross the seventh lease year
Hendersonville, TN after the fifth lease sales minus (ii) the
Restaurant to be year and after every minimum annual rent
renovated five years thereafter for such lease year
during the lease term
Tumbleweed Southwest 20 years; two five-year 11% of Total Cost for each lease year, at any time after the
Mesquite Grill & Bar renewal options (1); increases by 10% (i) 5% of annual gross seventh lease year
Lawrence, KS after the fifth lease sales minus (ii) the
Restaurant to be year and after every minimum annual rent for
renovated five years thereafter such lease year
during the lease term
Tumbleweed Southwest 20 years; two five-year 11% of Total Cost for each lease year, at any time after the
Mesquite Grill & Bar renewal options (1); increases by 10% (i) 5% of annual gross seventh lease year
Murfreesboro, TN after the fifth lease sales minus (ii) the
Restaurant to be year and after every minimum annual rent for
renovated five years thereafter such lease year
during the lease term
Tumbleweed Southwest 20 years; two five-year 11% of Total Cost for each lease year, at any time after the
Mesquite Grill & Bar renewal options (1); increases by 10% (i) 5% of annual gross seventh lease year
Nashville, TN after the fifth lease sales minus (ii) the
Restaurant to be year and after every minimum annual rent for
renovated five years thereafter such lease year
during the lease term
TGI Friday's 20 years; four five-year 10.75% of Total Cost for each lease year, at any time after the
Superstition Springs, renewal options (1); increases by 10% (i) 6% of annual gross seventh lease year
AZ after the fifth lease sales minus (ii) the
Restaurant to be year and after every minimum annual rent for
constructed five years thereafter such lease year
during the lease term
</TABLE>
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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 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.
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<PAGE>
(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.
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<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM JULY 3, 1997
THROUGH JULY 18, 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 July 3, 1997 through July 18, 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 Newport News, VA Houston, TX (6) Stockbridge, GA (6)
------------- ------------------ --------------- -------------------
<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
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<PAGE>
<TABLE>
<CAPTION>
Jack in the Box
Woodland, CA Total
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) (5) $ 464,907
Asset Management Fees (2) (5) (27,337)
General and Administrative
Expenses (3) (5) (28,825)
---------
Estimated Cash Available from
Operations (5) 408,745
Depreciation and Amortization
Expense (4) (5) (67,642)
---------
Estimated Taxable Operating Results (5) $ 341,103
=========
</TABLE>
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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.
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<PAGE>
(5) The Property is under construction and therefore was not operational
for the period presented. The development agreement for the Property
which is to be constructed, provides that construction must be
completed no later than the date set forth below:
Property Estimated Final Completion Date
Woodland Property January 12, 1998
(6) The lessee of the Houston and Stockbridge Properties is the same
unaffiliated lessee.
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