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. This Supplement replaces the Supplements dated July 22, 1997 and July 25,
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 August 5, 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 August 5, 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 August 5, 1997, the Company had received
subscription proceeds of $93,345,446 (9,334,545 Shares), including $643,293
(63,329 Shares) issued pursuant to the Reinvestment Plan, from 4,401
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 $84,596.000. As of August 5, 1997, the Company had invested or
committed for investment approximately $207,931,000 of aggregate net proceeds
from the Initial Offering and this offering in 194 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 $10,709,000 in aggregate net
offering proceeds available for investment in Properties and Mortgage Loans. As
of August 5, 1997, $4,200,545 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 August 5, 1997, the Company acquired 16
Properties, including 15 Properties consisting of land and building and one
Property consisting of building only. These Properties are six Arby's Properties
(one in each of Lexington, Greensboro, Greenville, Jonesville, Kernersville, and
Kinston, North Carolina), one Boston Market Property (in Newport News,
Virginia), two IHOP Properties (one in each of Houston, Texas, and Stockbridge,
Georgia), two Jack in the Box Properties (one in each of Woodland and West
Sacramento, California) and five Tumbleweed Southwest Mesquite Grill & Bar
Properties (one in each of Lawrence, Kansas, Cookeville, Hendersonville,
Nashville, and Murfreesboro, Tennessee). For information regarding the
Properties acquired by the Company prior to July 3, 1997, see the Prospectus
dated April 18, 1997 and the Prospectus Supplement dated July 18, 1997.
In connection with the purchase of the six Arby's Properties, the
Boston Market Property, the two IHOP Properties, the two Jack in the Box
Properties, four of the Tumbleweed Southwest Mesquite Grill & Bar Properties in
Lawrence, Kansas, Cookeville, Nashville, and Murfreesboro, Tennessee, which are
land and
August 8, 1997 Prospectus Dated April 18, 1997
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<PAGE>
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."
In connection with the Tumbleweed Southwest Mesquite Grill & Bar
Property in Hendersonville, Tennessee, which is building only, the Company, as
lessor, entered into a long-term lease agreement with an unaffiliated lessee.
The general terms of the lease agreement are described in the section of the
Prospectus entitled "Business - Description of Property Leases." In connection
with the purchase of this Property, which is to be renovated, the Company has
entered into development and indemnification and put agreements with the lessee.
The general terms of these agreements are described in the section of the
Prospectus entitled "Business - Site Selection and Acquisition of Properties -
Construction and Renovation." In connection with this acquisition, the Company
has also entered into a tri-party agreement with the lessee and the owner of the
land. The tri-party agreement provides that the ground lessee is responsible for
all obligations under the ground lease and provides certain rights to the
Company relating to the maintenance of its interest in the building in the event
of a default by the lessee under the terms of the ground lease.
The following table sets forth the location of the 16 Properties,
including 15 Properties consisting of land and building and one Property
consisting of building only, acquired by the Company, from July 3, 1997 through
August 5, 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 August 5, 1997
<TABLE>
<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>
ARBY'S (4) $742,536 07/15/97 07/2017; two $74,254; for each lease during the
(the "Lexington Property") five-year increases by year, (i) 4% of seventh and
Existing restaurant renewal 4.14% after the annual gross tenth lease
options third lease sales minus years only
The Lexington Property is year and after (ii) the
located on the east side of every three minimum annual
Cotton Grove Road, north of years rent for such
Interstate 85, in Lexington, thereafter lease year
Davidson County, North during the
Carolina, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Lexington
Property include a Burger
King, a Taco Bell, and a
Cracker Barrel.
BOSTON MARKET $1,011,492 07/16/97 07/2012; $104,993; for each lease at any time
(the "Newport News Property") five five- increases by year after the after the
Existing restaurant year renewal 10% after the fifth lease fifth lease
options fifth lease year, (i) 4% of year
The Newport News Property is year and after annual gross
located on the southwest every five sales minus
corner of the intersection of years (ii) the
Warwick Boulevard and Prince thereafter minimum annual
Drew Road, in Newport News, during the rent for such
Virginia, in an area of mixed lease term lease year
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity, to the Newport News
Property include a Pizza Hut,
a McDonald's, a Hardee's, and
a local restaurant.
</TABLE>
-3-
<PAGE>
<TABLE>
<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>
IHOP (5) $1,424,283 07/16/97 07/2017; $144,209; for each lease during the
(the "Houston Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Houston Property is year and after (ii) the end of the
located at the southwest every five minimum annual initial
quadrant of the intersection years rent for such lease term
of FM 1960 and U.S. Highway thereafter lease year
290, in Houston, Harris during the
County, Texas, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Houston
Property include a Kettle's, a
Pizza Inn, a Denny's, a
McDonald's, and a Burger King.
IHOP (5) $1,397,047 07/16/97 07/2017; $141,451; for each lease during the
(the "Stockbridge Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Stockbridge Property is year and after (ii) the end of the
located on the north side of every five minimum annual initial
Stockbridge Road, west of years rent for such lease term
Interstate 675, in thereafter lease year
Stockbridge, Clayton County, during the
Georgia, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Stockbridge
Property include a Chick-Fil-
A, an Applebee's, a
McDonald's, a Wendy's, a Long
John Silver's, and several
local restaurants.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ---------- -------- --------------- --------------- --------------- -----------
<S> <C>
JACK IN THE BOX (6) $963,592 07/16/97 07/2015; $98,768 (7); for each lease at any time
(the "Woodland Property") (3) (7) four five- increases by 8% year, (i) 5% of after the
Restaurant to be constructed year renewal after the fifth annual gross seventh
options lease year and sales minus lease year
The Woodland Property is after every (ii) the
located on the southeast five years minimum annual
corner of East Main Street and thereafter rent for such
County Road 102, in Woodland, during the lease year (8)
Yolo County, California, in an lease term
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Woodland Property include a
Wendy's, a Taco Bell, a Burger
King, a Denny's, a McDonald's,
and a local restaurant.
JACK IN THE BOX (6) $1,073,031 07/21/97 07/2015; $109,986 (7); for each lease at any time
(the "West Sacramento (3) (7) four five- increases by 8% year, (i) 5% of after the
Property") year renewal after the fifth annual gross seventh
Restaurant to be constructed options lease year and sales minus lease year
after every (ii) the
The West Sacramento Property five years minimum annual
is located on the southeast thereafter rent for such
corner of Sheperd Court and during the lease year (8)
Stillwater Road, in West lease term
Sacramento, Yolo County,
California, in an area of
mixed retail, commercial, and
residential development.
</TABLE>
-5-
<PAGE>
<TABLE>
<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>
TUMBLEWEED SOUTHWEST MESQUITE $1,471,963 08/01/97 07/2017; two $161,916 (10); for each lease at any time
GRILL & BAR (9) five-year increases by year, (i) 5% of after the
(the "Cookeville Property") (3) (10) renewal 10% after the annual gross seventh
Restaurant to be renovated options fifth lease sales minus lease year
year and after (ii) the
The Cookeville Property is every five minimum annual
located on the years rent for such
northeast corner of the thereafter lease year
intersection of South during the
Jefferson Avenue and Neal lease term
Lane, in Cookeville, Putnam
County, Tennessee, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Cookeville
Property include a Pizza Hut,
an Arby's, a Wendy's, a
Captain D's, a Shoney's, a
Burger King, a McDonald's, a
Long John Silver's, a
Ponderosa Steak House, a
Cracker Barrel, a Taco Bell, a
Schlotzsky's, a Subway
Sandwich Shop, a Quincy's, a
Ryan's Family Steak House, and
a local restaurant.
</TABLE>
-6-
<PAGE>
<TABLE>
<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>
TUMBLEWEED SOUTHWEST MESQUITE $747,664 08/01/97 07/2017; two $100,935 (10); for each lease at any time
GRILL & BAR (9) (11) (3) (10) five-year increases by year, (i) 5% of after the
(the "Hendersonville renewal 10% after the annual gross seventh
Property") options fifth lease sales minus lease year
Restaurant to be renovated year and after (ii) the
every five minimum annual
The Hendersonville Property is years rent for such
located on the northeast thereafter lease year
quadrant of the intersection during the
of East Main Street and lease term
Cherokee Road North, in
Hendersonville, Sumner County,
Tennessee, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the
Hendersonville Property
include a Boston Market, a
Wendy's, a Subway Sandwich
Shop, a Shoney's, an
Applebee's, a Pizza Hut, a
Burger King, and a local
restaurant.
TUMBLEWEED SOUTHWEST MESQUITE $1,448,598 07/01/97 08/2017; two $159,346 (10); for each lease at any time
GRILL & BAR (9) (3) (10) five-year increases by 10% year, (i) 5% of after the
(the "Lawrence Property") renewal after the fifth annual gross seventh
Restaurant to be renovated options lease year and sales minus lease year
after every (ii) the
The Lawrence Property is five years minimum annual
located on the thereafter rent for such
east side of Iowa Street during the lease year
between West 24th Street and lease term
West 25th Street, in Lawrence,
Douglas County, Kansas, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Lawrence Property include an
Applebee's, a Chili's, and
several local restaurants.
</TABLE>
-7-
<PAGE>
<TABLE>
<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>
TUMBLEWEED SOUTHWEST MESQUITE $1,308,411 08/01/97 07/2017; two $143,925 (10); for each lease at any time
GRILL & BAR (9) (3) (10) five-year increases by 10% year, (i) 5% of after the
(the "Nashville Property") renewal after the fifth annual gross seventh
Restaurant to be renovated options lease year and sales minus lease year
after every (ii) the
The Nashville Property is five years minimum annual
located on the west side of thereafter rent for such
Nolensville Road, in during the lease year
Nashville, Davidson County, lease term
Tennessee, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Nashville
Property include a McDonald's,
a Papa John's Pizza, a Pizza
Hut, and several local
restaurants.
ARBY'S (4) $727,273 08/04/97 08/2017; two $72,727; for each lease at any time
(the "Greensboro Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Greensboro Property is year and after (ii) the
located on the northeast every three minimum annual
corner of the intersection of years rent for such
South Regional Boulevard and thereafter lease year
Boeing Drive, in Greensboro, during the
Guilford County, North lease term
Carolina, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Greensboro
Property include a Wendy's, a
Hardee's, a McDonald's, a
Shoney's, a Subway Sandwich
Shop, and a local restaurant.
</TABLE>
-8-
<PAGE>
<TABLE>
<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>
ARBY'S (4) $727,273 08/04/97 08/2017; two $72,727; for each lease at any time
(the "Greenville Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Greenville Property is year and after (ii) the
located on the north side of every three minimum annual
Greenville Boulevard, south of years rent for such
the Wal-Mart Super Center, in thereafter lease year
Greenville, Pitt County, North during the
Carolina, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Greenville
Property include a Perkins, a
McDonald's, an Applebee's, and
a Boston Market.
ARBY'S (4) $727,273 08/04/97 08/2017; two $72,727; for each lease at any time
(the "Jonesville Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Jonesville Property is year and after (ii) the
located on the south side of every three minimum annual
State Highway 67, east of years rent for such
Interstate 77, in Jonesville, thereafter lease year
Yadkin County, North Carolina, during the
in an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Jonesville Property include a
Cracker Barrel, a McDonald's,
a Wendy's, a Shoney's, and
several local restaurants.
</TABLE>
-9-
<PAGE>
<TABLE>
<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>
ARBY'S (4) $650,000 08/04/97 08/2017; two $65,000; for each lease at any time
(the "Kernersville Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Kernersville Property is year and after (ii) the
located on the south side of every three minimum annual
South Main Street, west of years rent for such
Interstate 40, in thereafter lease year
Kernersville, Forsyth County, during the
North Carolina, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Kernersville
Property include a Taco Bell,
and several local restaurants.
ARBY'S (4) $713,636 08/04/97 08/2017; two $71,364; for each lease at any time
(the "Kinston Property") five-year increases by year, (i) 4% of after the
Existing restaurant renewal 4.14% after the annual gross seventh
options third lease sales minus lease year
The Kinston Property is year and after (ii) the
located on the north side of every three minimum annual
West New Bern Road, west of US years rent for such
Highway 258, in Kinston, thereafter lease year
Lenoir County, North Carolina, during the
in an area of mixed retail, lease term
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Kinston Property include a
Subway Sandwich Shop, a
Hardee's, a Golden Corral, and
several local restaurants.
</TABLE>
-10-
<PAGE>
<TABLE>
<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>
TUMBLEWEED SOUTHWEST MESQUITE $1,425,234 08/05/97 08/2017; two $156,776 (10); for each lease at any time
GRILL & BAR (9) (3) (10) five-year increases by 10% year, (i) 5% of after the
(the "Murfreesboro Property") renewal after the fifth annual gross seventh
Restaurant to be renovated options lease year and sales minus lease year
after every (ii) the
The Murfreesboro Property is five years minimum annual
located on the southeast thereafter rent for such
corner of the intersection of during the lease year
Northwest Broad Street and lease term
South Front Street, in
Murfreesboro, Rutherford
County, Tennessee, in an area
of mixed retail, commercial,
and residential development.
Other fast-foot and family-
style restaurants located in
proximity to the Murfreesboro
Property include a Shoney's, a
Captain D's, a Burger King, a
KFC, a McDonald's, a Subway
Sandwich Shop, and a local
restaurant.
</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
-------- -----------------
Lexington Property $ 462,000
Newport News Property 584,000
Houston Property 888,000
Stockbridge Property 705,000
Woodland Property 661,000
West Sacramento Property 612,000
Cookeville Property 1,026,000
Hendersonville Property 779,000
Lawrence Property 1,019,000
Nashville Property 946,000
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<PAGE>
Property Federal Tax Basis
-------- -----------------
Greensboro Property 403,000
Greenville Property 488,000
Jonesville Property 538,000
Kernersville Property 411,000
Kinston Property 483,000
Murfreesboro Property 973,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease.
(3) The development agreements for the Properties which are to be constructed
or renovated, provides that construction or renovation must be completed
no later than the dates set forth below. The maximum cost to the Company,
(including the purchase price of the land, development costs, and closing
and acquisition costs) is not expected to, but may, exceed the amount set
forth below:
Property Estimated Maximum Cost Estimated Final Completion Date
------------------------------- -------------------------------
Woodland Property $ 963,592 January 12, 1998
West Sacramento Property 1,073,031 January 17, 1998
Cookeville Property 1,471,963 July 31, 1998
Hendersonville Property 747,664 July 31, 1998
Lawrence Property 1,448,598 July 31, 1998
Nashville Property 1,308,411 July 31, 1998
Murfreesboro Property 1,425,234 August 4, 1998
(4) The lessee of the Lexington, Greensboro, Greenville, Jonesville,
Kernersville and Kinston Properties is the same unaffiliated lessee.
(5) The lessee of the Houston and Stockbridge Properties is the same
unaffiliated lessee.
(6) The lessee of the Woodland and West Sacramento Properties is the same
unaffiliated lessee.
(7) 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.
(8) Percentage rent shall be calculated on a calendar year basis (January 1 to
December 31).
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<PAGE>
(9) The lessee of the Cookeville, Hendersonville, Lawrence, Nashville and
Murfreesboro Properties is the same unaffiliated lessee.
(10) The Company paid for all construction or renovation costs in advance at
closing; therefore, minimum annual rent was determined on the date
acquired and is not expected to change. In accordance with the lease
agreement, these Properties are being converted from Barb Wires Steakhouse
& Saloon restaurants to Tumbleweed Southwest Mesquite Grill & Bar
restaurants. Renovation of the Properties is expected to be completed
within 365 days of the effective date of the lease. The Properties are
expected to remain operational during renovations.
(11) The Company owns the building only for this Property. The Company does
not own the underlying land; although, the Company entered into a tri-
party agreement with the lessee and the landlord of the land in order to
provide the Company with certain rights with respect to the land on which
the building is located.
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<PAGE>
BORROWING AND SECURED EQUIPMENT LEASES
Between July 3, 1997 and August 5, 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 August 5, 1997, the Company had initial commitments to acquire 25
properties, including 19 properties consisting of land and building and six
properties consisting of building only. The acquisition of each of these
properties is subject to the fulfillment of certain conditions, including, but
not limited to, a satisfactory environmental survey and property appraisal.
There can be no assurance that any or all of the conditions will be satisfied
or, if satisfied, that one or more of these properties will be acquired by the
Company. If acquired, the leases of all 25 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 three Black-eyed Pea properties in Phoenix,
Arizona, the one in Tucson, Arizona, and the IHOP property in Saugus,
Massachusetts, the Company anticipates owning only the buildings and not the
underlying land. However, the Company anticipates entering 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.
In connection with the On The Border property in San Antonio, Texas, the
Company anticipates owning only the building and not the underlying land.
However, the Company anticipates entering into a tri-party agreement with the
lessee and the landlord of the land in order to provide the Company with certain
rights with respect to the land on which the building is located.
Set forth below are summarized terms expected to apply to the leases for
each of the properties. More detailed information relating to a property and
its related lease will be provided at such time, if any, as the property is
acquired.
-14-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- -------- ----------------- -------------------------- --------------------------- -------------
<S> <C>
Black-eyed Pea 20 years; two 10.50% of the Company's for each lease year, (i) 5% during the
Mesa, AZ five-year renewal total cost to purchase the of annual gross sales minus eighth, tenth,
Existing restaurant options property; increases by 10% (ii) the minimum annual and twelfth
after the tenth lease year rent for such lease year lease years
and after every five years only
thereafter during the lease
term
Black-eyed Pea (6) 9 years 16.85% of the Company's None (7)
Phoenix, AZ (#1) total cost to purchase the
Existing restaurant building
Black-eyed Pea (6) 11 years 15.49% of the Company's None (7)
Phoenix, AZ (#2) total cost to purchase the
Existing restaurant building
Black-eyed Pea (6) 12 years 14.69% of the Company's None (7)
Phoenix, AZ (#3) total cost to purchase the
Existing restaurant building
Black-eyed Pea (6) 13 years 14.13% of the Company's None (7)
Tucson, AZ total cost to purchase the
Existing restaurant building
Boston Market 15 years; five 10.38% of the Company's for each lease year after at any time
Colorado Springs, CO five-year renewal total cost to purchase the the fifth lease year, (i) after the
Existing restaurant options property; increases by 10% 4% of annual gross sales fifth lease
after the fifth lease year minus (ii) the minimum year
and after every five years annual rent for such lease
thereafter during the lease year
term
Boston Market 15 years; five 10.38% of the Company's for each lease year after at any time
Edgewater, CO five-year renewal total cost to purchase the the fifth lease year, (i) after the
Existing restaurant options property; increases by 10% 4% of annual gross sales fifth lease
after the fifth lease year minus (ii) the minimum year
and after every five years annual rent for such lease
thereafter during the lease year
term
Boston Market 15 years; five 10.38% of the Company's for each lease year after at any time
Hoover, AL five-year renewal total cost to purchase the the fifth lease year, (i) after the
Existing restaurant options property; increases by 10% 5% of annual gross sales fifth lease
after the fifth lease year minus (ii) the minimum year
and after every five years annual rent for such lease
thereafter during the lease year
term
</TABLE>
-15-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- -------- ----------------- -------------------------- --------------------------- -------------
<S> <C>
Golden Corral 15 years; four 10.75% of Total Cost (1) for each lease year, 5% of during the
Duncan, OK five-year renewal the amount by which annual first through
Restaurant to be options gross sales exceed a to be seventh lease
constructed determined breakpoint years and the
tenth through
fifteenth
lease years
only
Golden Corral 15 years; four 10.75% of Total Cost (1) for each lease year, 5% of during the
Fort Walton Beach, FL five-year renewal the amount by which annual first through
Restaurant to be options gross sales exceed a to be seventh lease
constructed determined breakpoint years and the
tenth through
fifteenth
lease years
only
Golden Corral 15 years; four 10.75% of Total Cost (1) for each lease year, 5% of during the
Olathe, KS five-year renewal the amount by which annual first through
Restaurant to be options gross sales exceed a to be seventh lease
constructed determined breakpoint years and the
tenth through
fifteenth
lease years
only
Golden Corral 15 years; four 10.75% of Total Cost (1) for each lease year, 5% of during the
Palatka, FL five-year renewal the amount by which annual first through
Restaurant to be options gross sales exceed a to be seventh lease
constructed determined breakpoint years and the
tenth through
fifteenth
lease years
only
IHOP 20 years; three 10.125% of the Company's for each lease year, (i) 4% during the
Elk Grove, CA five-year renewal total cost to purchase the of annual gross sales minus eleventh lease
Existing restaurant options property; increases by 10% (ii) the minimum annual year and at
after the fifth lease year rent for such lease year the end of the
and after every five years initial lease
thereafter during the lease term
term
IHOP 20 years; three 10.125% of the Company's for each lease year, (i) 4% during the
Lake Jackson, TX five-year renewal total cost to purchase the of annual gross sales minus eleventh lease
Existing restaurant options property; increases by 10% (ii) the minimum annual year and at
after the fifth lease year rent for such lease year the end of the
and after every five years initial lease
thereafter during the lease term
term
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- -------- ----------------- -------------------------- --------------------------- -------------
<S> <C>
IHOP 20 years; three 10.125% of the Company's for each lease year, (i) 4% during the
Loveland, CO five-year renewal total cost to purchase the of annual gross sales minus eleventh lease
Existing restaurant options property; increases by 10% (ii) the minimum annual year and at
after the fifth lease year rent for such lease year the end of the
and after every five years initial lease
thereafter during the lease term
term
IHOP (6) (8) 11.78% of the Company's for each lease year, (i) 3% at any time
Saugus, MA total cost to purchase the of annual gross sales minus after the
Existing restaurant building; increases by (ii) the minimum annual fifth lease
5.81% after the fifth lease rent for such lease year year
year, 4.66% after the tenth
lease year, and 2.83% after
the fifteenth lease year
IHOP 20 years; three 10.125% of the Company's for each lease year, (i) 4% during the
Victoria, TX five-year renewal total cost to purchase the of annual gross sales minus eleventh lease
Existing restaurant options property; increases by 10% (ii) the minimum annual year and at
after the fifth lease year rent for such lease year the end of the
and after every five years initial lease
thereafter during the lease term
term
Jack in the Box 18 years; four 10.25% of Total Cost (1); for each lease year, (i) 5% at any time
Florissant, MO five-year renewal increases by 8% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year year (2)
during the lease term
Jack in the Box 18 years; four 10.25% of Total Cost (1); for each lease year, (i) 5% at any time
Folsum, CA five-year renewal increases by 8% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year year (2)
during the lease term
Jack in the Box 18 years; four 10.25% of Total Cost (1); for each lease year, (i) 5% at any time
Los Angeles, CA five-year renewal increases by 8% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year year (2)
during the lease term
On The Border (3) (4); three five- 13.64% of Total Cost (1); for each lease year, (i) 4% at any time
San Antonio, TX year renewal (5) of annual gross sales minus after the
Restaurant to be options (ii) the minimum annual tenth lease
constructed rent for such lease year year
Ruby Tuesday's 20 years; two 11% of Total Cost (1); for each lease year, (i) 6% at any time
London, KY five-year renewal increases by 10% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
renovated every five years thereafter rent for such lease year year
during the lease term
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- -------- ----------------- -------------------------- --------------------------- -------------
<S> <C>
Shoney's 20 years; two 11% of Total Cost (1); for each lease year, (i) 6% at any time
Las Vegas, NV five-year renewal increases by 10% after the of annual gross sales minus after the
Restaurant to be options fifth lease year and after (ii) the minimum annual seventh lease
constructed every five years thereafter rent for such lease year year
during the lease term
TGI Friday's 20 years; four 10.75% of Total Cost (1); for each lease year, (i) 6% at any time
Superstition Springs, five-year renewal increases by 10% after the of annual gross sales minus after the
AZ options fifth lease year and after (ii) the minimum annual seventh lease
Restaurant to be every five years thereafter rent for such lease year year
constructed during the lease term
Wendy's 20 years; two 10.25% of Total Cost (1) for each lease year, (i) 7% at any time
Westlake Village, CA five-year renewal of annual gross sales minus after the
Restaurant to be options (ii) the minimum annual seventh lease
constructed rent for such lease year year
</TABLE>
- ----------------------------------------
FOOTNOTES:
(1) The "Total Cost" is equal to the sum of (i) the purchase price of the
property, (ii) closing costs, and (iii) actual development costs incurred
under the development agreement.
(2) In the event the Company purchases the property directly from the lessee,
the lessee will have no option to purchase the property.
(3) The Company anticipates owning the building only for this property. The
Company will not own the underlying land; although, the Company
anticipates entering into a tri-party agreement with the lessee and the
landlord of the land in order to provide the Company with certain rights
with respect to the land on which the building is located.
(4) The lease term shall expire upon the earlier of (i) the date 15 years from
the date of closing, (ii) the expiration of the original term of the
ground lease, or (iii) the earlier termination of the ground lease.
(5) Base rent shall increase after every five years during the lease term by
the lesser of (i) 10% of the minimum base rent during the preceding year
or (ii) 150% of the percentage change in the Consumer Price Index.
<PAGE>
(6) The Company anticipates owning the building only for this property. The
Company will not own the underlying land; although, the Company
anticipates entering into a landlord estoppel agreement with the landlord
of the land and a collateral assignment of the ground lease with the
lessee in order to provide the Company with certain rights with respect to
the land on which the building is located.
(7) The Company anticipates conveying the building to the tenant at the end of
the lease term for $1.
(8) The lease term shall expire upon the earlier of (i) the date 20 years from
the date of closing, (ii) the expiration of the original term of the
ground lease, or (iii) the earlier termination of the ground lease.
-18-
<PAGE>
BORROWING
On March 5, 1996, the Company entered into a line of credit and
security agreement with a bank to be used by the Company to offer Secured
Equipment Leases. The Loan provides that the Company will be able to receive
advances of up to $15,000,000 until March 4, 1998. Generally, advances under the
Loan will be fully amortizing term loans repayable in terms equal to the
duration of the Secured Equipment Leases, but in no event greater than 72
months. Generally, all advances under the Loan will bear interest at either (i)
a rate per annum equal to 215 basis points above the Reserve Adjusted LIBOR Rate
(as defined in the Loan) or (ii) a rate per annum equal to the bank's prime
rate, whichever the Company selects at the time advances are made. In the past,
the Company generally has entered into agreements to effectively convert the
interest rate for the advance from a variable to a fixed rate. As of August 5,
1997, approximately $6,647,000 had been advanced under the Loan to fund the
Secured Equipment Leases, the commitment fee, legal fees and closing costs
related to the Loan. The Board of Directors may determine to use additional
financing to fund Secured Equipment Leases, provided that the amount of such
additional financing may not exceed 10% of Gross Proceeds of this offering and
gross proceeds of any subsequent offering.
On August 5, 1997, the Company obtained a commitment (the "Commitment")
from a bank to amend and restate its Loan described above. The Commitment
provides that the Company will be able to receive advances on a revolving
$35,000,000 unsecured line of credit (the "Line of Credit") to purchase and
develop Properties and to fund Mortgage Loans and Secured Equipment Leases. The
advances will bear interest at a rate of LIBOR plus 1.65% or the bank's prime
rate, whichever the Company selects at the time of borrowing. Interest only will
be repayable monthly until June 30, 1999, at which time all remaining interest
and principal shall be due. The Line of Credit will provide for two
one-year renewal options. The Commitment will expire unless it is closed on
or before August 29, 1997.
The Line of Credit will provide short-term financing which the Company
anticipates will be repaid using additional offering proceeds and payments
received from Secured Equipment Leases, or refinanced on a long-term basis. The
Company will not encumber Properties in connection with the Line of Credit.
Management believes that during the offering period the Line of Credit will
allow the Company to make investments in Properties that the Company otherwise
would be forced to delay until it raised a sufficient amount of proceeds from
the sale of Shares to allow the Company to make the investments. By eliminating
this delay the Company will also eliminate the risk that these investments will
no longer be available, or the terms of the investment will be less favorable,
when the Company has raised sufficient offering proceeds. Alternatively,
Affiliates of the Advisor could make such investments, pending receipt by the
Company of sufficient offering proceeds, in order to preserve the investment
opportunities for the Company. However, Properties acquired by the Company in
this manner would be subject to closing costs both on the original purchase by
the Affiliate and on the subsequent purchase by the Company, which would
increase the amount of expenses associated with the acquisition of Properties
and reduce the amount of offering proceeds available for investment in
income-producing assets. Management believes that the use of Line of Credit by
the Company will enable the Company to reduce or eliminate the instances in
which the Company will be required to pay duplicate closing costs.
- 19 -
<PAGE>
The Company, or Joint Venture in which the Company becomes a joint
venturer, will initially acquire Properties without borrowing. The Board of
Directors does not anticipate that the Company will borrow funds, other than the
Loan, the Line of Credit or for the purpose of preserving its status as a REIT.
For example, the Company may borrow to the extent necessary to permit the
Company to make Distributions required in order to enable the Company to qualify
as a REIT for federal income tax purposes; however, the Company will not borrow
for the purpose of returning capital to the stockholders unless necessary to
eliminate corporate- level tax to the Company. Until Listing occurs, the Company
will not encumber Properties in connection with any borrowing. If Listing
occurs, however, the Board of Directors may elect to cause the Company to borrow
funds in connection with the purchase of additional Properties or for other
Company purposes and to encumber any or all of the Company's Properties in
connection with any such borrowing. The aggregate borrowing of the Company,
secured and unsecured, shall be reasonable in relation to Net Assets of the
Company and shall be reviewed by the Board of Directors at least quarterly. The
Board of Directors anticipates that the aggregate amount of any borrowing will
not exceed 50% of Real Estate Asset Value, although the maximum amount of
borrowing in relation to Net Assets, in the absence of a satisfactory showing
that a higher level of borrowing is appropriate, shall not exceed 300% of Net
Assets (an amount which the Company anticipates will correspond to approximately
75% of Real Estate Asset Value). Any excess in borrowing over such 300% level
shall occur only with approval by a majority of the Independent Directors and
will be disclosed and explained to stockholders in the first quarterly report of
the Company prepared after such approval occurs.
- 20 -
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM JULY 3, 1997
THROUGH AUGUST 5, 1997
For a 12-Month Period (Unaudited)
The following schedule presents unaudited estimated taxable operating
results of each Property acquired by the Company from July 3, 1997 through
August 5, 1997, for the 12-month period commencing on the date of the inception
of the respective lease on such Property. The schedule should be read in light
of the accompanying footnotes.
These estimates do not purport to present actual or expected operations
of the Company for any period in the future. These estimates were prepared on
the basis described in the accompanying notes which should be read in
conjunction herewith. No single lessee or group of affiliated lessees lease
Properties or has borrowed funds from the Company with an aggregate purchase
price in excess of 20% of the expected total net offering proceeds of the
Company.
<TABLE>
<CAPTION>
Arby's Boston Market IHOP IHOP
Lexington, NC (6) Newport News, VA Houston, TX (7) Stockbridge, GA (7)
----------------- ------------------ --------------- -------------------
<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
- 21 -
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest Tumbleweed Southwest
Jack in the Box Jack in the Box Mesquite Grill & Bar Mesquite Grill & Bar
Woodland, CA (8) West Sacramento, CA (8) Cookeville, TN (9) Hendersonville, TN(9)
----------------- ----------------------- -------------------- ---------------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) (5) (5) (5 (5)
Asset Management Fees (2) (5) (5) (5) (5)
General and Administrative
Expenses (3) (5) (5) (5) (5)
Estimated Cash Available from
Operations (5) (5) (5) (5)
Depreciation and Amortization
Expense (4) (5) (5) (5) (5)
Estimated Taxable Operating
Results (5) (5) (5) (5)
</TABLE>
See Footnotes
- 22 -
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest Tumbleweed Southwest
Mesquite Grill & Bar Mesquite Grill & Bar Arby's Arby's
Lawrence, KS (9) Nashville, TN (9) Greensboro, NC(6) Greenville, NC(6)
-------------------- -------------------- ----------------- -----------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) (5) (5) $72,727 $72,727
Asset Management Fees (2) (5) (5) (4,358) (4,358)
General and Administrative
Expenses (3) (5) (5) (4,509) (4,509)
------- -------
Estimated Cash Available from
Operations (5) (5) 63,860 63,860
Depreciation and Amortization
Expense (4) (5) (5) (10,335) (12,519)
------- -------
Estimated Taxable Operating
Results (5) (5) $53,525 $51,341
======= =======
</TABLE>
See Footnotes
- 23 -
<PAGE>
<TABLE>
<CAPTION>
Tumbleweed Southwest
Arby's Arby's Arby's Mesquite Grill & Bar
Jonesville, NC (6) Kernersville, NC(6) Kinston, NC (6) Murfreesboro, TN (9)
------------------ ------------------- --------------- --------------------
<S> <C>
Estimated Taxable Operating
Results
Base Rent (1) $72,727 $65,000 $71,364 (5)
Asset Management Fees (2) (4,358) (3,894) (4,276) (5)
General and Administrative
Expenses (3) (4,509) (4,030) (4,425) (5)
------- ------- -------
Estimated Cash Available from
Operations 63,860 57,076 62,663 (5)
Depreciation and Amortization
Expense (4) (13,786) (10,550) (12,393) (5)
------- ------- -------
Estimated Taxable Operating
Results $50,074 $46,526 $50,270 (5)
======= ======= =======
</TABLE>
See Footnotes
- 24 -
<PAGE>
Total
-----
Estimated Taxable Operating
Results
Base Rent (1) $819,452
Asset Management Fees (2) (48,581)
General and Administrative
Expenses (3) (50,807)
--------
Estimated Cash Available from
Operations 720,064
Depreciation and Amortization
Expense (4) (127,225)
---------
Estimated Taxable Operating
Results $592,839
--------
- ---------------------------------------
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.
- 25 -
<PAGE>
(5) The Property is under construction or renovation for the period
presented. The development agreements for the Properties which are to
be constructed or renovated, provide that construction or renovation
must be completed no later than the dates set forth below:
Property Estimated Final Completion Date
-------- -------------------------------
Woodland Property January 12, 1998
West Sacramento Property January 17, 1998
Cookeville Property July 31, 1998
Hendersonville Property July 31, 1998
Lawrence Property July 31, 1998
Nashville Property July 31, 1998
Murfreesboro Property August 4, 1998
(6) The lessee of the Lexington, Greensboro, Greenville, Jonesville,
Kernersville and Kinston Properties is the same unaffiliated lessee.
(7) The lessee of the Houston and Stockbridge Properties is the same
unaffiliated lessee.
(8) The lessee of the Woodland and West Sacramento Properties is the same
unaffiliated lessee.
(9) The lessee of the Cookeville, Hendersonville, Lawrence, Nashville and
Murfreesboro Properties is the same unaffiliated lessee.
- 26 -
