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 January 31, 1997 and the Prospectus Supplement dated March 17,
1997. This Supplement replaces the Supplements dated March 25, 1997 and April
2, 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 2, 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 2, 1997, will be reported in a subsequent Supplement.
THE OFFERING
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 April 2,
1997, the Company had received aggregate subscription proceeds of $26,943,917
(2,694,392 Shares), including $269,388 (26,939 Shares) issued pursuant to the
Reinvestment Plan, from 1,253 stockholders. Net Offering Proceeds to the
Company after deduction of Selling Commissions, Marketing Support and Due
Diligence Expense Reimbursement Fees and Offering Expenses totalled
approximately $24,100,000. As of April 2, 1997, $1,200,354 of such amount had
been incurred in Acquisition Fees to the Advisor and the balance was available
for investment in Properties and Mortgage Loans.
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. As of April 2, 1997, the Company
had invested or committed for investment approximately $127,900,000 of net
proceeds from the Initial Offering in 129 Properties, in providing mortgage
financing to the tenants of the 43 Properties consisting of land only through
Mortgage Loans, and in paying acquisition fees to the Advisor totalling
$6,776,629 and certain acquisition expenses, leaving approximately $6,200,000 in
net offering proceeds from the Initial Offering available for investment in
Properties and Mortgage Loans. The Company expects to use such amount and Net
Offering Proceeds from this offering to invest in additional Properties and
Mortgage Loans.
SUMMARY OF THE
ARTICLES OF INCORPORATION AND BYLAWS
Description of Capital Stock
At the annual meeting held on April 4, 1997, the stockholders approved
amendments to the Company's Amended and Restated Articles of Incorporation
increasing the number of authorized shares of beneficial interest from
46,000,000 shares (consisting of 20,000,000 Common Shares, 3,000,000 Preferred
Shares and 23,000,000 Excess Shares) to 156,000,000 shares (consisting of
75,000,000 Common Shares, 3,000,000 Preferred Shares and 78,000,000 Excess
Shares).
April 8, 1997 Prospectus Dated January 31, 1997
<PAGE>
BUSINESS
PROPERTY ACQUISITIONS
Between March 7, 1997 and April 2, 1997, the Company acquired 19
Properties, including seven Properties consisting of land and building, four
Properties consisting of building only and eight Properties consisting of land
only. These Properties are two Jack in the Box Properties (one in each of
Houston, Texas, and Oxnard, California), four Black-eyed Pea Properties (one in
each of Bedford, Dallas and Fort Worth, Texas; and Oklahoma City, Oklahoma), one
Bennigan's Property (in Arvada, Colorado), three Boston Market Properties (one
in each of Cedar Park, Texas; Collinsville, Illinois; and Taylorsville, Utah)
one Burger King Property (in Ooltewah, Tennessee) and eight Pizza Hut Properties
(one in each of Wellsburg, West Virginia; Bolivar, Carrollton, Millersburg,
Steubenville and Uhrichsville, and two in New Philadelphia, Ohio) (hereinafter
referred to as the "Eight Pizza Hut Properties"). For information regarding the
110 Properties acquired by the Company prior to March 7, 1997, see the
Prospectus dated January 31, 1997 and the Prospectus Supplement dated March 17,
1997.
In connection with the purchase of the two Jack in the Box Properties, the
Bennigan's Property, the three Boston Market Properties, and the Burger King
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 Black-eyed Pea Properties in Bedford, Dallas and
Fort Worth, Texas; and Oklahoma City, Oklahoma, which are building only, the
Company, as lessor, entered into long-term lease agreements with unaffiliated
lessees. The general terms of the lease agreements are described in the section
of the Prospectus entitled "Business - Description of Property Leases." In
addition, the Company has entered into landlord estoppel agreements with the
landlords of the land and collateral assignments of the ground leases with the
lessees in order to provide the Company with certain rights with respect to the
land on which the buildings are located.
The purchase price for the Burger King Property in Ooltewah, Tennessee,
includes a development fee of $100,000 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 Eight Pizza Hut Properties, which are land only,
the Company acquired the land and is leasing these eight parcels to the lessee,
Castle Hill Holdings VII, L.L.C. ("Castle Hill"), pursuant to a master lease
agreement (the "Master Lease Agreement"). Castle Hill has subleased the Eight
Pizza Hut Properties 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 Eight Pizza Hut
Properties. In addition, the Company provided mortgage financing of $4,200,000
to the lessee of the Eight Pizza Hut Properties pursuant to a Mortgage Loan
<PAGE>
evidenced by a master mortgage note (the "Master Mortgage Note") which is
collateralized by the building improvements on the Eight Pizza Hut Properties,
the Pizza Hut property in Dover, Ohio, not yet acquired by the Company, 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 Eight Pizza Hut Properties and
anticipates owning the land relating to the property in Dover, Ohio, and due to
other underwriting criteria, the Company has sufficient collateral for the
Master Mortgage Note.
The following table sets forth the location of the 19 Properties,
including seven Properties consisting of land and building, four Properties
consisting of building only and eight Properties consisting of land only,
acquired by the Company, from March 7, 1997 through April 2, 1997, a description
of the competition, and a summary of the principal terms of the acquisition and
lease of each Property.
<PAGE>
PROPERTY ACQUISITIONS
From March 7, 1997 through April 2, 1997
<TABLE>
<CAPTION> Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
JACK IN THE BOX (11) $905,945 03/18/97 03/2015; four $92,859 (6); increases
(the "Houston #4 Property") (3)(6) five-year renewal by 8% after the fifth
Restaurant to be constructed options lease year and after
every five years
The Houston #4 Property is located on the thereafter during the
southeast corner of Hempstead Highway and lease term
34th Street, in Houston, Harris County,
Texas, in an area of mixed commercial and
residential development.
BLACK-EYED PEA (7)(10) $620,336 03/26/97 06/2013 $79,560; increases to
(the "Bedford Property") $81,950 during the
Existing restaurant eleventh through
sixteenth lease years
The Bedford Property is located within the
northeast quadrant of State Highway 121 and
Parkwood Drive, in Bedford, Tarrant County,
Texas, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Bedford Property include several local
restaurants.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
JACK IN THE BOX (11) for each lease year, at any time after
(the "Houston #4 Property") (i) 5% of annual the seventh lease
Restaurant to be constructed gross sales minus year
(ii) the minimum
The Houston #4 Property is located on the annual rent for such
southeast corner of Hempstead Highway and lease year (5)
34th Street, in Houston, Harris County,
Texas, in an area of mixed commercial and
residential development.
BLACK-EYED PEA (7)(10) None at any time after
(the "Bedford Property") the fifth lease
Existing restaurant year
The Bedford Property is located within the
northeast quadrant of State Highway 121 and
Parkwood Drive, in Bedford, Tarrant County,
Texas, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Bedford Property include several local
restaurants.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
BLACK-EYED PEA (7)(10) $620,320 03/26/97 05/2016 $75,182; increases to
(the "Dallas Property") $78,294 during the
Existing restaurant eleventh through
nineteenth lease years
The Dallas Property is located on the south
side of West Northwest Highway between Loop
12 and Interstate Highway 35E, in Dallas,
Dallas County, Texas, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Dallas Property include an Olive
Garden, a Red Lobster, a Chili's, a Tony
Roma's, and several local restaurants.
BLACK-EYED PEA (7)(10) $620,323 03/26/97 04/2011 $84,305; increases to
(the "Fort Worth Property") $86,048 during the
Existing restaurant eleventh through
fourteenth lease years
The Fort Worth Property is located on the
south side of Camp Bowie Boulevard between
Hillsdale Road and Bernie Anderson Avenue,
in Fort Worth, Tarrant County, Texas, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Fort Worth Property
include a McDonald's, a Boston Market, and
several local restaurants.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
BLACK-EYED PEA (7)(10) None at any time after
(the "Dallas Property") the fifth lease
Existing restaurant year
The Dallas Property is located on the south
side of West Northwest Highway between Loop
12 and Interstate Highway 35E, in Dallas,
Dallas County, Texas, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Dallas Property include an Olive
Garden, a Red Lobster, a Chili's, a Tony
Roma's, and several local restaurants.
BLACK-EYED PEA (7)(10) None at any time after
(the "Forth Worth Property") the fifth lease
Existing restaurant year
The Fort Worth Property is located on the
south side of Camp Bowie Boulevard between
Hillsdale Road and Bernie Anderson Avenue,
in Fort Worth, Tarrant County, Texas, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Fort Worth Property
include a McDonald's, a Boston Market, and
several local restaurants.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
BLACK-EYED PEA (7) $617,022 03/26/97 04/2012 $81,660; increases to
(the "Oklahoma City Property") $83,680 during the
Existing restaurant eleventh through
fifteenth lease years
The Oklahoma City Property is located on
the south side of Interstate Highway 240,
east of South Pennsylvania Avenue, in
Oklahoma City, Oklahoma County, Oklahoma,
in an area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Oklahoma City Property
include a Hardee's, a Denny's, a Ryan's
Family Steak House, a Wendy's, a Western
Sizzlin, a Golden Corral, and several local
restaurants.
EIGHT PIZZA HUT PROPERTIES - Land only - $1,575,622 03/27/97 03/2017; two ten- $165,440; increases by
(8)(9) located in Bolivar, Ohio (the year renewal 10% after the fifth
"Bolivar Property"), Carrollton, Ohio (the options and tenth lease years
"Carrollton Property"), Millersburg, Ohio and 12% after the
(the "Millersburg Property"), New fifteenth lease year
Philadelphia, Ohio (the "New Philadelphia
#1 Property"), New Philadelphia, Ohio (the
"New Philadelphia #2 Property"),
Steubenville, Ohio (the "Steubenville
Property"), Uhrichsville, Ohio (the
"Uhrichsville Property") and Wellsburg,
West Virginia (the "Wellsburg Property")
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
BLACK-EYED PEA (7) None at any time after
(the "Oklahoma City Property") the fifth lease
Existing restaurant year
The Oklahoma City Property is located on
the south side of Interstate Highway 240,
east of South Pennsylvania Avenue, in
Oklahoma City, Oklahoma County, Oklahoma,
in an area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Oklahoma City Property
include a Hardee's, a Denny's, a Ryan's
Family Steak House, a Wendy's, a Western
Sizzlin, a Golden Corral, and several local
restaurants.
EIGHT PIZZA HUT PROPERTIES - Land only - None at any time after
(8)(9) located in Bolivar, Ohio (the the seventh lease
"Bolivar Property"), Carrollton, Ohio (the year
"Carrollton Property"), Millersburg, Ohio
(the "Millersburg Property"), New
Philadelphia, Ohio (the "New Philadelphia
#1 Property"), New Philadelphia, Ohio (the
"New Philadelphia #2 Property"),
Steubenville, Ohio (the "Steubenville
Property"), Uhrichsville, Ohio (the
"Uhrichsville Property") and Wellsburg,
West Virginia (the "Wellsburg Property")
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
The Bolivar Property is located on the
north side of Edgebrook Boulevard just west
of State Road 212 and east of Wilkshire
Boulevard, in Bolivar, Tuscarawas County,
Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Bolivar Property include a McDonald's, a
Wendy's, and several local restaurants.
The Carrollton Property is located on the
east side of Canton Road Northwest, in
Carrollton, Carroll County, Ohio, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Carrollton Property
include a Dairy Queen, a McDonald's, a
Subway Sandwich Shop, and several local
restaurants.
The Millersburg Property is located on the
east side of State Road 83 just south of
Country Road 58, in Millersburg, Holmes
County, Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Millersburg Property include a McDonald's,
a Subway Sandwich Shop, and several local
restaurants.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
The Bolivar Property is located on the
north side of Edgebrook Boulevard just west
of State Road 212 and east of Wilkshire
Boulevard, in Bolivar, Tuscarawas County,
Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Bolivar Property include a McDonald's, a
Wendy's, and several local restaurants.
The Carrollton Property is located on the
east side of Canton Road Northwest, in
Carrollton, Carroll County, Ohio, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Carrollton Property
include a Dairy Queen, a McDonald's, a
Subway Sandwich Shop, and several local
restaurants.
The Millersburg Property is located on the
east side of State Road 83 just south of
Country Road 58, in Millersburg, Holmes
County, Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Millersburg Property include a McDonald's,
a Subway Sandwich Shop, and several local
restaurants.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
The New Philadelphia #1 Property is located
on the north side of West High Avenue east
of its intersection with 12th Street, in
New Philadelphia, Tuscarawas County, Ohio,
in an area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the New Philadelphia #1
Property include a Burger King, a Long John
Silver's, a Taco Bell, a Denny's, an Elby's
Big Boy, a Hardee's, McDonald's, and
several local restaurants.
The New Philadelphia #2 Property is located
on the east side of Fourth Street
Northwest, in New Philadelphia, Tuscarawas
County, Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the New
Philadelphia Property include a Burger
King, a McDonald's, an Arby's, a Wendy's,
and a Papa John's.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
The New Philadelphia #1 Property is located
on the north side of West High Avenue east
of its intersection with 12th Street, in
New Philadelphia, Tuscarawas County, Ohio,
in an area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the New Philadelphia #1
Property include a Burger King, a Long John
Silver's, a Taco Bell, a Denny's, an Elby's
Big Boy, a Hardee's, McDonald's, and
several local restaurants.
The New Philadelphia #2 Property is located
on the east side of Fourth Street
Northwest, in New Philadelphia, Tuscarawas
County, Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the New
Philadelphia Property include a Burger
King, a McDonald's, an Arby's, a Wendy's,
and a Papa John's.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
The Steubenville Property is located on the
north side of Sunset Boulevard, west of
U.S. 22, in Steubenville, Jefferson County,
Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Steubenville Property include a McDonald's,
a Burger King, a Taco Bell, and a Bob
Evans.
The Uhrichsville Property is located on the
west side of Commerce Drive, and also has
frontage along the easterly right-of-way of
U.S. 250, in Uhrichsville, Tuscarawas
County, Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family- style
restaurants located in proximity to the
Uhrichsville Property include an Arby's, a
KFC, a McDonald's, and several local
restaurants.
The Wellsburg Property is located on the
west side of Commerce Street, in Wellsburg,
Brooke County, West Virginia, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Wellsburg Property include a Dairy
Queen and a Wendy's.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
The Steubenville Property is located on the
north side of Sunset Boulevard, west of
U.S. 22, in Steubenville, Jefferson County,
Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Steubenville Property include a McDonald's,
a Burger King, a Taco Bell, and a Bob
Evans.
The Uhrichsville Property is located on the
west side of Commerce Drive, and also has
frontage along the easterly right-of-way of
U.S. 250, in Uhrichsville, Tuscarawas
County, Ohio, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family- style
restaurants located in proximity to the
Uhrichsville Property include an Arby's, a
KFC, a McDonald's, and several local
restaurants.
The Wellsburg Property is located on the
west side of Commerce Street, in Wellsburg,
Brooke County, West Virginia, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Wellsburg Property include a Dairy
Queen and a Wendy's.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
JACK IN THE BOX (11) $1,245,340 04/01/97 03/2015; four $127,647 (6);
(the "Oxnard Property") (3)(6) five-year renewal increases by 8% after
Restaurant to be constructed options the fifth lease year
and after every five
The Oxnard Property is located at the years thereafter
southeast quadrant of the intersection of during the lease term
Victoria Avenue and Fifth Street, in
Oxnard, Ventura County, California, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Oxnard Property include
several local restaurants.
BENNIGAN'S $1,909,167 04/01/97 03/2012; three $198,076; increases by
(the "Arvada #1 Property") five-year renewal 10% after the fifth
Existing restaurant options lease year and after
every five years
The Arvada Property is located on the east thereafter during the
side of Wadsworth Bypass on the northeast lease term
quadrant of 53rd Avenue and Wadsworth
Bypass, in Arvada, Jefferson County,
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, and
several local restaurants.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
JACK IN THE BOX (11) for each lease year, at any time after
(the "Oxnard Property") (i) 5% of annual the seventh lease
Restaurant to be constructed gross sales minus year
(ii) the minimum
The Oxnard Property is located at the annual rent for such
southeast quadrant of the intersection of lease year (5)
Victoria Avenue and Fifth Street, in
Oxnard, Ventura County, California, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Oxnard Property include
several local restaurants.
BENNIGAN'S for each lease year, at any time after
(the "Arvada #1 Property") (i) 6% of annual the fifth lease
Existing restaurant gross sales minus year
(ii) the minimum
The Arvada Property is located on the east annual rent for such
side of Wadsworth Bypass on the northeast lease year
quadrant of 53rd Avenue and Wadsworth
Bypass, in Arvada, Jefferson County,
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, and
several local restaurants.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
BOSTON MARKET $558,127 04/02/97 04/2012; five 10.38% of Total Cost
(the "Cedar Park Property") (excluding five-year renewal (4); increases by 10%
Restaurant to be constructed development options after the fifth lease
costs) (3) year and after every
The Cedar Park Property is located within five years thereafter
the northwest corner of the intersection of during the lease term
FM 1431 and U.S. Highway 183, in Cedar
Park, Williamson County, Texas, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Cedar Park Property
include a McDonald's, a Taco Bell, a KFC, a
Pizza Hut, a Mr. Gatti's, a Wendy's, and a
Burger King.
BOSTON MARKET $474,700 04/02/97 04/2012; five 10.38% of Total Cost
(the "Collinsville Property") (excluding five-year renewal (4); increases by 10%
Restaurant to be constructed development options after the fifth lease
costs) (3) year and after every
The Collinsville Property is located on five years thereafter
the southeast corner of Collinsport Drive during the lease term
and State Highway 157, in Collinsville,
Madison County, Illinois, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Collinsville Property include a Steak n
Shake, a Dairy Queen, a Burger King, a Bob
Evans, a Shoney's, an Arby's, a White
Castle, a Ponderosa, a McDonald's, a Waffle
House, a Denny's, a Wendy's, a Long John
Silver's, a Hardee's, a Pizza Hut and
several local restaurants.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
BOSTON MARKET for each lease year at any time after
(the "Cedar Park Property") after the fifth lease the fifth lease
Restaurant to be constructed year (i) 4% of annual year
gross sales minus
The Cedar Park Property is located within (ii) the minimum
the northwest corner of the intersection of annual rent for such
FM 1431 and U.S. Highway 183, in Cedar lease year
Park, Williamson County, Texas, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Cedar Park Property
include a McDonald's, a Taco Bell, a KFC, a
Pizza Hut, a Mr. Gatti's, a Wendy's, and a
Burger King.
BOSTON MARKET for each lease year at any time after
(the "Collinsville Property") after the fifth lease the fifth lease
Restaurant to be constructed year (i) 5% of annual year
gross sales minus
The Collinsville Property is located on (ii) the minimum
the southeast corner of Collinsport Drive annual rent for such
and State Highway 157, in Collinsville, lease year
Madison County, Illinois, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Collinsville Property include a Steak n
Shake, a Dairy Queen, a Burger King, a Bob
Evans, a Shoney's, an Arby's, a White
Castle, a Ponderosa, a McDonald's, a Waffle
House, a Denny's, a Wendy's, a Long John
Silver's, a Hardee's, a Pizza Hut and
several local restaurants.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2)
<S> <C>
BOSTON MARKET $861,015 04/02/97 04/2012; five 10.38% of Total Cost
(the "Taylorsville Property") (excluding five-year renewal (4); increases by 10%
Restaurant to be constructed development options after the fifth lease
costs) (3) year and after every
The Taylorsville Property is located on the five years thereafter
east side of South Redwood Road within the during the lease term
Walmart shopping center, in Taylorsville,
Salt Lake County, Utah, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Taylorsville Property include a
McDonald's, an Arby's, a Fuddruckers, an
Applebee's, a Burger King, a Kenny Rogers
Roasters, and several local restaurants.
BURGER KING $652,350 04/02/97 04/2017; two 11% of Total Cost (4)
(the "Ooltewah Property") (excluding five-year renewal
Restaurant to be constructed development options
costs) (3)
The Ooltewah Property is located at the
southwest quadrant of Lee Highway and
Collegedale-Ooltewah Connector Road, in
Ooltewah, Hamilton County, Tennessee, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Ooltewah Property include
a Wendy's, a Subway Sandwich Shop, a Little
Caesar's, a Taco Bell, a McDonald's, an
Arby's, a Hardee's, and a Waffle House.
</TABLE>
<TABLE>
<CAPTION>
Option
Property Location and Competition Percentage Rent To Purchase
<S> <C>
BOSTON MARKET for each lease year at any time after
(the "Taylorsville Property") after the fifth lease the fifth lease
Restaurant to be constructed year (i) 5% of annual year
gross sales minus
The Taylorsville Property is located on the (ii) the minimum
east side of South Redwood Road within the annual rent for such
Walmart shopping center, in Taylorsville, lease year
Salt Lake County, Utah, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Taylorsville Property include a
McDonald's, an Arby's, a Fuddruckers, an
Applebee's, a Burger King, a Kenny Rogers
Roasters, and several local restaurants.
BURGER KING for each lease year, None
(the "Ooltewah Property") (i) 8.5% of annual
Restaurant to be constructed gross sales minus
(ii) the minimum
The Ooltewah Property is located at the annual rent for such
southwest quadrant of Lee Highway and lease
Collegedale-Ooltewah Connector Road, in
Ooltewah, Hamilton County, Tennessee, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Ooltewah Property include
a Wendy's, a Subway Sandwich Shop, a Little
Caesar's, a Taco Bell, a McDonald's, an
Arby's, a Hardee's, and a Waffle House.
</TABLE>
<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
Houston #4 Property $ 539,000
Bedford Property 653,000
Dallas Property 652,000
Fort Worth Property 653,000
Oklahoma City Property 649,000
Oxnard Property 633,000
Arvada #1 Property 1,298,000
Cedar Park Property 323,000
Collinsville Property 372,000
Taylorsville Property 508,000
Ooltewah Property 727,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the Cedar
Park, Collinsville and Taylorsville 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 Ooltewah Property,
minimum annual rent will become due and payable on the possession date,
which is July 31, 1997 (the "Possession Date"). During the period
commencing with the effective date of the lease to the date minimum annual
rent becomes payable for the Cedar Park, Collinsville and Taylorsville
Properties, as described above, the tenant shall pay monthly "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.
(3) 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. 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:
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
<S> <C>
Houston #4 Property $ 905,945 September 14, 1997
Oxnard Property 1,245,340 September 28, 1997
Cedar Park Property 829,172 September 29, 1997
Collinsville Property 795,476 September 29, 1997
Taylorsville Property 1,309,574 September 29, 1997
Ooltewah Property 1,253,115 July 31, 1997
</TABLE>
<PAGE>
(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 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. The Company
entered into a Mortgage Loan evidenced by a Master Mortgage Note for
$4,200,000 collateralized by building improvements. The Master Mortgage
Note bears interest at a rate of 10.50% per annum and principal and
interest will be collected in equal monthly installments over 20 years
beginning in May 1997.
(9) The Company entered into a Master Lease Agreement for the Bolivar,
Carrollton, Millersburg, New Philadelphia #1, New Philadelphia #2,
S t eubenville and Uhrichsville, Ohio, and Wellsburg, West Virginia
Properties.
(10) The lessee of the Bedford, Dallas, and Forth Worth Properties is the same
unaffiliated lessee.
(11) The lessee of the Houston #4 and the Oxnard Properties is the same
unaffiliated lessee.
<PAGE>
BORROWING AND SECURED EQUIPMENT LEASES
Between March 7, 1997 and April 2, 1997, the Company obtained two advances
totalling $516,714 under its $15,000,000 Loan. One advance was the final
advance relating to the acquisition of Equipment for the restaurant property in
Hopkinsville, Kentucky (the "Hopkinsville Secured Equipment Lease"). The other
advance was used to acquire Equipment for the restaurant property in High Ridge,
Missouri (the "High Ridge Secured Equipment Lease").
PENDING INVESTMENTS
As of April 2, 1997, the Company had initial commitments to acquire 20
properties, including 18 properties consisting of land and building, one
property consisting of building only and one property consisting of land 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 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," except as described below.
In connection with the one Pizza Hut property consisting of land only, the
Company anticipates acquiring the land and leasing it to the tenant, Castle
Hill, pursuant to the master lease agreement for the Eight Pizza Hut Properties
acquired on March 27, 1997.
In connection with the Black-eyed Pea property in Scottsdale, Arizona, 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.
<PAGE>
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
<S> <C>
Black-eyed Pea (3) 14 years 13.66% of Total Cost None (6)
Scottsdale, AZ (1)
Restaurant to be
renovated
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Arvada #2, CO renewal options (1); increases by 10% after the fifth lease the fifth lease
Restaurant to be after the fifth lease year, (i) 4% of year
constructed year and after every annual gross sales
five years thereafter minus (ii) the
during the lease term minimum annual rent
for such lease year
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Houston, TX 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
Indianapolis, IN 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
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
<S> <C>
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Liberty, 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
Boston Market 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
San Antonio, 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
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
Einstein Bros. Bagels 15 years; five five-year 10.38% of Total Cost for each lease year at any time after
Dearborn, MI 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
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
<S> <C>
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Hollywood, CA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
IHOP 20 years; three five- 10.125% of the for each lease year, during the eleventh
Leesburg, VA year renewal options Company's total cost (i) 4% of annual lease year and at
Existing restaurant to purchase the gross sales minus the end of the
property; increases by (ii) the minimum initial lease term
10% after the fifth annual rent for such
lease year and after lease year
every five years
thereafter during the
lease term
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Bacliff, TX 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
Enunclaw, WA 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
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
<S> <C>
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Los Angeles, CA renewal options (1); increases by 8% (i) 5% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year (2)
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
Pizza Hut (4)(5) 20 years; two ten-year 10.50% of the None at any time after
Dover, OH renewal options Company's total cost the seventh lease
Land only to purchase the land; year
increases by 10% after
the fifth and tenth
lease years and 12%
after the fifteenth
lease year
Shoney's 20 years; two five-year 11% of Total Cost; for each lease year, at any time after
Phoenix, AZ renewal options increases by 10% after (i) 6% of annual the seventh lease
Restaurant to be the fifth lease year gross sales minus year
constructed and after every five (ii) the minimum
years thereafter annual rent for such
during the lease term lease year
(1)
</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
C o mpany 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 relating to this property is a land lease only. The Company has
entered into a master mortgage note receivable collateralized by the Dover
building improvements and the building improvements of the Eight Pizza Hut
Properties acquired by the Company on March 27, 1997.
(5) The Company has entered into a master lease agreement for this property
and the Eight Pizza Hut Properties acquired by the Company on March 27,
1997.
<PAGE>
PRO FORMA ESTIMATE OF TAXABLE INCOME BEFORE DIVIDENDS PAID DEDUCTION OF
CNL AMERICAN PROPERTIES FUND, INC.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM MARCH 7, 1997
THROUGH APRIL 2, 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 March 7, 1997 through April 2, 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>
Jack in the Box Black-eyed Pea Black-eyed Pea
Houston #4, TX (7)(8) Bedford, TX (9) Dallas, TX (9)
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 92,859 $ 79,560 $ 75,182
Interest Income (2) - - -
--------- --------- ---------
Total Revenues 92,859 79,560 75,182
--------- --------- ---------
Asset Management Fees (3) (5,430) (3,716) (3,716)
Mortgage Management Fee (4) - - -
General and Administrative
Expenses (5) (5,757) (4,933) (4,661)
--------- --------- ---------
Total Operating Expenses (11,187) (8,649) (8,377)
--------- --------- ---------
Estimated Cash Available from
Operations 81,672 70,911 66,805
Depreciation and Amortization Expense (6) (13,833) (16,731) (16,731)
--------- --------- ---------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 67,839 $ 54,180 $ 50,074
======== ======== ========
</TABLE>
See Footnotes
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Eight Pizza Hut Jack in the Box
Fort Worth, TX (9) Oklahoma City, OK Properties Oxnard, CA (7)(8)
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 84,305 $ 81,660 $165,440 $127,647
Interest Income (2) - - 437,918 -
--------- --------- --------- --------
Total Revenues 84,305 81,660 603,358 127,647
--------- --------- --------- --------
Asset Management Fees (3) (3,716) (3,696) (9,454) (7,466)
Mortgage Management Fee (4) - - (25,200) -
General and Administrative
Expenses (5) (5,227) (5,063) (37,408) (7,914)
--------- --------- --------- -------
Total Operating Expenses (8,943) (8,759) (72,062) (15,380)
--------- --------- --------- -------
Estimated Cash Available from
Operations 75,362 72,901 531,296 112,267
Depreciation and Amortization
Expense (6) (16,731) (16,642) (11,340) (16,227)
--------- --------- --------- -------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 58,631 $ 56,259 $519,956 $ 96,040
======== ======== ======== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bennigan's Boston Market Boston Market
Arvada #1, CO Cedar Park, TX(7) Collinsville, IL (7)
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $198,076 $ 86,068 $ 82,570
Interest Income (2) - - -
--------- --------- ---------
Total Revenues 198,076 86,068 82,570
--------- --------- ---------
Asset Management Fees (3) (11,442) (4,922) (4,722)
Mortgage Management Fee (4) - - -
General and Administrative Expenses (5) (12,281) (5,336) (5,119)
--------- --------- ---------
Total Operating Expenses (23,723) (10,258) (9,841)
--------- --------- ---------
Estimated Cash Available from
Operations 174,353 75,810 72,729
Depreciation and Amortization
Expense (6) (33,275) (8,277) (9,537)
--------- --------- ---------
Pro Forma Estimate of Taxable
Income Before Dividends
Paid Deduction of the Company $ 141,078 $ 67,533 $ 63,192
========= ========== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Boston Market Burger King
Taylorsville, UT (7) Ooltewah, TN (7) Total
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 135,934 $ 132,541 $1,341,842
Interest Income (2) - - 437,918
--------- ---------- ----------
Total Revenues 135,934 132,541 1,779,760
--------- ---------- ----------
Asset Management Fees (3) (7,780) (7,205) (73,265)
Mortgage Management Fee (4) - - (25,200)
General and Administrative
Expenses (5) (8,428) (8,218) (110,345)
--------- ---------- ----------
Total Operating Expenses (16,208) (15,423) (208,810)
--------- ---------- ----------
Estimated Cash Available from
Operations 119,726 117,118 1,570,950
Depreciation and Amortization
Expense (6) (13,026) (18,642) (190,992)
--------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 106,700 $ 98,476 $1,379,958
========== ========= ==========
</TABLE>
<PAGE>
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if specified
levels of gross receipts are achieved.
(2) The Company entered into a Master Mortgage Note agreement for $4,200,000,
collateralized by building improvements located on the Eight Pizza Hut
Properties, the Pizza Hut property in Dover, Ohio, and two additional
Pizza Hut Properties in Wintersville, Ohio, and Weirton, West Virginia.
The Master Mortgage Note bears interest at a rate of 10.50% per annum and
principal and interest will be collected in equal monthly installments
over 20 years beginning in May 1997. Amount does not include $21,000 of
loan commitment fees and $21,000 in loan origination fees collected by the
Company at closing from the borrower.
(3) 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."
(4) For managing the Mortgage Loans, the Advisor will be entitled to receive a
monthly mortgage management fee of one-twelfth of .60% of the total
principal amount of the Mortgage Loans as of the end of the preceding
month. See "Management Compensation."
(5) Estimated at 6.2% of gross rental and interest 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.
(6) 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. In connection with the Eight Pizza Hut Properties, the
Pizza Hut property in Dover, Ohio, and the two additional Pizza Hut
Properties in Wintersville, Ohio, and Weirton, West Virginia, acquisition
fees allocated to the Master Mortgage Note have been amortized on a
straight-line basis over the life of the agreement (20 years).
(7) 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
Houston #4 Property September 14, 1997
Oxnard Property September 28, 1997
Cedar Park Property September 29, 1997
Collinsville Property September 29, 1997
Taylorsville Property September 29, 1997
Ooltewah Property July 31, 1997
(8) The lessee of the Houston #4 and Oxnard Properties is the same
unaffiliated lessee.
(9) The lessee of the Bedford, Dallas, and Forth Worth Properties is the same
unaffiliated lessee.
