Rule 424(b)(3)
No. 333-15411
CNL AMERICAN PROPERTIES FUND, INC.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 18, 1997 and the Prospectus Supplement dated October 21,
1997. This Supplement replaces the Supplements dated October 24, 1997, November
21, 1997 and December 9, 1997. Capitalized terms used in this Supplement have
the same meaning as in the Prospectus unless otherwise stated herein.
Information as to proposed properties for which the Company has
received initial commitments and as to the number and types of Properties
acquired by the Company is presented as of December 31, 1997, and all references
to commitments or Property acquisitions should be read in that context. Proposed
properties for which the Company receives initial commitments, as well as
property acquisitions that occur after December 31, 1997, will be reported in a
subsequent Supplement.
THE OFFERING
As of the completion of its Initial Offering, the Company had received
subscription proceeds of $150,591,765 (15,059,177 shares), including $591,765
(59,177 shares) issued pursuant to the Reinvestment Plan and after deduction of
selling commissions, marketing support and due diligence expense reimbursement
fees and offering expenses, net proceeds to the Company from its Initial
Offering totalled approximately $134,000,000. Following the completion of its
Initial Offering on February 6, 1997, the Company commenced this offering of up
to 27,500,000 Shares. As of December 31, 1997, the Company had received
subscription proceeds of $211,173,099 (21,117,310 Shares), including $1,872,648
(187,265 Shares) issued pursuant to the Reinvestment Plan, from 9,214
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 $190,868,000. As of December 31, 1997, the Company had invested or
committed for investment approximately $274,720,000 of aggregate net proceeds
from the Initial Offering and this offering in 244 Properties, in providing
mortgage financing to the tenants of the 44 Properties consisting of land only
to purchase the buildings on these Properties and the buildings on two
additional properties through Mortgage Loans, and in paying acquisition fees and
certain acquisition expenses, leaving approximately $50,192,000 in aggregate net
offering proceeds available for investment in Properties and Mortgage Loans. As
of December 31, 1997, $9,502,789 of the Net Offering Proceeds from this offering
had been incurred as Acquisition Fees to the Advisor.
BUSINESS
PROPERTY ACQUISITIONS
Between October 4, 1997 and December 31, 1997, the Company acquired 24
Properties, including 23 Properties consisting of land and building and one
Property consisting of building only. These Properties are 13 Ground Round
Properties (one in each of Allentown and Reading, Pennsylvania; Colerain and
Parma, Ohio; Dubuque and Waterloo, Iowa; Janesville and Wauwatosa, Wisconsin;
Gloucester and Ewing, New Jersey; Crystal, Minnesota; Kalamazoo, Michigan; and
Nanuet, New York), three Jack in the Box Properties (one in each of Folsom and
Los Angeles, California; and Florissant, Missouri), one On The Border
Property (in San Antonio, Texas), one Wendy's Property (in Westlake Village,
California), two Golden Corral Properties (one in each of Muskogee, Oklahoma;
and Council Bluffs, Iowa) and four Chevy's Fresh Mex Properties (one in each of
Beaverton and Lake Oswego, Oregon; Arapahoe, Colorado; and Greenbelt, Maryland).
For information regarding the Properties acquired by the Company prior to
October 4, 1997, see the Prospectus dated April 18, 1997 and the Prospectus
Supplement dated October 21, 1997.
<PAGE>
January 7, 1998 Prospectus Dated April 18, 1997
The Jack in the Box Properties in Folsom and Los Angeles, California,
and Florissant, Missouri, were acquired from Affiliates of the Company. The
Affiliates had purchased and temporarily held title to these Properties in order
to facilitate their acquisition by the Company. The Properties were acquired by
the Company for an aggregate purchase price of approximately $3,674,000,
representing the cost of the Properties to the Affiliates (including carrying
costs) due to the fact that the amounts were less than each Property's appraised
value.
In connection with the purchase of the 13 Ground Round Properties, the
three Jack in the Box Properties, the one Wendy's Property, the two Golden
Corral Properties and the four Chevy's Fresh Mex Properties, which are land and
building, the Company, as lessor, entered into long-term lease agreements with
unaffiliated lessees. The general terms of the lease agreements are described in
the section of the Prospectus entitled "Business - Description of Property
Leases." For the Properties that are to be constructed, the Company has entered
into development and indemnification and put agreements with the lessees. The
general terms of these agreements are described in the section of the Prospectus
entitled "Business - Site Selection and Acquisition of Properties - Construction
and Renovation."
In connection with the On The Border Property in San Antonio, Texas,
which is building only, the Company, as lessor, entered into a long-term lease
agreement with an unaffiliated lessee. The general terms of the lease agreement
are described in the section of the Prospectus entitled "Business - Description
of Property Leases." In connection with the purchase of this Property, which is
to be constructed, the Company has entered into development and indemnification
and put agreements with the lessee. The general terms of these agreements are
described in the section of the Prospectus entitled "Business - Site Selection
and Acquisition of Properties Construction and Renovation." In connection with
this acquisition, the Company has also entered into a tri-party agreement with
the lessee and the owner of the land. The tri-party agreement provides that the
ground lessee is responsible for all obligations under the ground lease and
provides certain rights to the Company relating to the maintenance of its
interest in the building in the event of a default by the lessee under the terms
of the ground lease.
The following table sets forth the location of the 24 Properties,
including 23 Properties consisting of land and building and one Property
consisting of building only, acquired by the Company, from October 4, 1997
through December 31, 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 October 4, 1997 through December 31, 1997
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
JACK IN THE BOX (5) $1,076,237 10/17/97 09/2015; four $110,243 (6); for each lease at any time
(the "Florissant Property") (3)(6) five-year renewal increases by 8% year, (i) 5% of after the
Restaurant to be constructed options after the fifth annual gross sales seventh lease
lease year and minus (ii) the year
The Florissant Property is located after every five minimum annual rent
on the southern quadrant of years thereafter for such lease
Charbonier Road and Howdershell during the year (7)
Road, in Florissant, St. Louis lease term
County, Missouri, in an area of
mixed retail, commercial, and
residential development.
JACK IN THE BOX (5) $1,263,688 10/17/97 09/2015; four $129,482 (6); for each lease year, None
(the "Folsom Property") (3)(6) five-year renewal increases by 8% (i) 5% of annual
Restaurant to be constructed options after the fifth gross sales minus
lease year and (ii) the minimum
The Folsom Property is located after every five annual rent for such
on the eastern quadrant of Blue years thereafter lease year (7)
Ravine Road and East Bidwell during the lease
Street, in Folsom, Sacramento term
County, California, in an area of
mixed retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Folsom Property include an
IHOP, an Arby's, a Burger King,
a Boston Market, a Manhattan Bagel,
a Subway Sandwich Shop, a Taco
Bell, a McDonald's, a KFC, a
Pizza Hut and several local
restaurants.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
ON THE BORDER (8) $292,767 10/17/97 10/2012; three 13.64% of Total for each lease year, at any time
(the "San Antonio Property") (excluding five-year Cost (4); (9) (i) 4% of annual after the
Restaurant to be constructed development renewal options gross sales minus tenth lease
costs) (3) (ii) the minimum year
The San Antonio Property is annual rent for such
located on the east side of U.S. lease year (7)
Highway 281, within the Alamo
Quarry Market Shopping Center,
in San Antonio, Bexar County,
Texas, in an area of mixed
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in
proximity to the San Antonio
Property include a Ruth's Chris
Steakhouse and several local
restaurants.
GROUND ROUND (10) $1,220,761 10/20/97 10/2017; five $125,128 (11) at any time
(the "Allentown Property") five-year after the
Existing restaurant renewal seventh lease
options year
The Allentown Property is
located on the north side of
Grape Street, in Allentown,
Lehigh County, Pennsylvania,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Allentown Property include a
Pizza Hut, a Lonestar Steak
House, a Red Lobster, a
Chili's, a KFC, an Olive
Garden, a Ponderosa Steakhouse,
a Friendly's, a Wendy's, a
Perkins, a Burger King, a
Boston Market and several local
restaurants.
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GROUND ROUND (10) $772,727 10/20/97 10/2017; five $79,205 (11) at any time
(the "Colerain Property") five-year after the
Existing restaurant renewal options seventh lease
year
The Colerain Property is located
on the north side of Springdale
Road, in Colerain, Hamilton County,
Ohio, in an area of mixed retail,
commercial, and residential
development. Other fast-food and
family-style restaurants located in
proximity to the Colerain Property
include a Red Lobster, an Outback
Steak House, an Applebee's, an
Olive Garden, a White Castle, an
Arby's, a McDonald's, a T.G.I.
Friday's and several local
restaurants.
GROUND ROUND (10) $759,091 10/20/97 10/2017; five $77,807 (11) at any time
(the "Crystal Property") five-year after the
Existing restaurant renewal options seventh lease
year
The Crystal Property is located on
the northeast corner of Bass Lake
Road and Jersey Street, in Crystal,
Hennepin County, Minnesota, in an area
of mixed retail, commercial, and
residential development. Other
fast-food and family-style restaurants
located in proximity to the Crystal
Property include a Dairy Queen, a
Taco Bell, a Subway Sandwich Shop, a
KFC and an Applebee's.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GROUND ROUND (10) $1,422,727 10/20/97 10/2017; five $145,830 (11) at any time
(the "Dubuque Property") five-year after the
Existing restaurant renewal options seventh lease
year
The Dubuque Property is located
on the west side of John F.
Kennedy Road and Cedar Cross Road,
in Dubuque, Dubuque County, Iowa,
in an area of mixed retail,
commercial, and residential
development. Other fast-food and
family-style restaurants located
in proximity to the Dubuque
Property include a Hardee's, an
Olive Garden, a Wendy's and several
local restaurants.
GROUND ROUND (10) $900,000 10/20/97 10/2017; five $92,250 (11) at any time
(the "Gloucester Property") five-year after the
Existing restaurant renewal options seventh lease
year
The Gloucester Property is located
on the southeast corner of Blackwood-
Clementon Road and Dartmouth Drive,
in Gloucester, Camden County, New
Jersey, in an area of mixed retail,
commercial, and residential
development. Other fast-food and
family-style restaurants located in
proximity to the Gloucester Property
include a Friendly's, a Boston Market,
a Chili's, an Olive Garden, a
Red Lobster, a Denny's, a Burger King,
a McDonald's, a Taco Bell, a Checkers
and several local restaurants.
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GROUND ROUND (10) $945,455 10/20/97 10/2017; five $96,909 (11) at any time
(the "Janesville Property") five-year after the
Existing restaurant renewal options seventh lease
year
The Janesville Property is
located on the northwest corner
of Milton Avenue and Lodge
Street, in Janesville, Rock
County, Wisconsin, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-style
restaurants located in proximity
to the Janesville Property
include an Applebee's, a Pizzeria
Uno, a Perkins, a Fazoli's and
several local restaurants.
GROUND ROUND (10) $945,455 10/20/97 10/2017; five $96,909 (11) at any time
(the "Kalamazoo Property") five-year after the
Existing restaurant renewal seventh lease
options year
The Kalamazoo Property is located
on Stadium Drive, east of the
intersection of Seneca Road, in
Kalamazoo, Kalamazoo County,
Michigan, in an area of mixed
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Kalamazoo Property include
an Olive Garden, an Applebee's,
a Chili's, a McDonald's, a Burger
King and several local
restaurants.
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GROUND ROUND (10) $1,118,182 10/20/97 10/2017; $114,614 (11) at any time
(the "Parma Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Parma Property is located
on the south side of Day
Drive, in Parma, Cuyahoga
County, Ohio, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Parma
Property include an Outback
Steak House, a Red Lobster, an
Olive Garden, an Arby's, a
Denny's and a local
restaurant.
GROUND ROUND (10) $1,439,551 10/20/97 10/2017; $147,554 (11) at any time
(the "Reading Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Reading Property is
located on the west side of
Fifth Street Highway at the
entrance to the Fairgrounds
Mall, in Reading, Berks
County, Pennsylvania, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Reading Property include an
Arby's, a Pizza Hut, a
McDonald's, a Burger King, a
Bojangles, a Taco Bell, a
Ponderosa Steakhouse, a Boston
Market, a Subway Sandwich Shop
and several local restaurants.
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GROUND ROUND (10) $1,036,364 10/20/97 10/2017; $106,227 (11) at any time
(the "Waterloo Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Waterloo Property is
located on the southwest
corner of East San Marnan
Drive and Penneys Street, in
Waterloo, Black Hawk County,
Iowa, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Waterloo
Property include an Olive
Garden, a Lonestar Steak
House, an Applebee's, a Pizza
Hut, a Boston Market, a Long
John Silver's and several
local restaurants.
GROUND ROUND (10) $1,354,545 10/20/97 10/2017; $138,841 (11) at any time
(the "Wauwatosa Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Wauwatosa Property is
located on the northwest
corner of Mayfair Road and
Blue Mound Road, in Wauwatosa,
Milwaukee County, Wisconsin,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Wauwatosa Property include a
Chili's, an Applebee's, a Taco
Bell, a Pizza Hut and several
local restaurants.
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GROUND ROUND (10) $1,000,000 11/18/97 11/2017; $102,500 (11) at any time
(the "Ewing Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Ewing Property is located
on the northwest quadrant of
the intersection of North
Olden Avenue and Pennington
Road, in Ewing, Mercer County,
New Jersey, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Ewing
Property include a McDonald's,
an IHOP, an Applebee's, a TGI
Friday's, a Taco Bell, a
Wendy's, a Burger King, and a
Boston Market.
WENDY'S $811,350 11/18/97 11/2017; two 10.25% of Total for each lease at any time
(the "Westlake Village (excluding five-year Cost (4) year, (i) 7% of after the
Property") development renewal annual gross seventh
Restaurant to be constructed costs) options sales minus lease year
(3) (ii) the
The Westlake Village Property minimum annual
is located on the southeast rent for such
quadrant of Thousand Oaks lease year
Boulevard and Lindero Canyon
Road, in Westlake Village, Los
Angeles County, California, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Westlake Village Property
include a McDonald's, a KFC,
and a local restaurant.
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GROUND ROUND (10) $927,273 12/02/97 12/2017; $95,045 (11) at any time
(the "Nanuet Property") five five- after the
Existing restaurant year renewal seventh
options lease year
The Nanuet Property is located
on the northwest corner of
Route 59 West and Dykes Road,
in Nanuet, Rockland County,
New York, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Nanuet
Property include a Ruby
Tuesday's, a Red Lobster, a
Pizza Hut, and a local
restaurant.
GOLDEN CORRAL (12) $384,530 12/03/97 06/2013; 10.75% of Total for each lease during the
(the "Muskogee Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs) options annual gross seventh
The Muskogee Property is (3) sales exceed lease years
located on the south side of $2,212,853 (7) and the
West Shawnee Avenue, in tenth
Muskogee, Muskogee County, through
Oklahoma, in an area of mixed fifteenth
retail, commercial, and lease years
residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Muskogee
Property include an
Applebee's, a Red Lobster, a
Burger King, a Long John
Silver's, a Western Sizzlin,
and several local restaurants.
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
GOLDEN CORRAL (12) $467,593 12/30/97 06/2013; 10.75% of Total for each lease during the
(the "Council Bluffs (excluding four five- Cost (4) year, 5% of the first
Property") development year renewal amount by which through
Restaurant to be constructed costs) options annual gross seventh
(3) sales exceed lease years
The Council Bluffs Property is $2,713,081 (7) and the
located on the northeast tenth
quadrant of Dial Drive and through
32nd Avenue, in Council fifteenth
Bluffs, Pottawattamie County, lease years
Iowa, in an area of mixed only
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Council
Bluffs Property include a
Cracker Barrel, a Red Lobster,
a Perkins, a Dairy Queen, a
Burger King, a Long John
Silver's, a Taco Bell, a
McDonald's, a Hardee's, and a
Fazoli's.
JACK IN THE BOX (5) $1,333,345 12/30/97 04/2015; $136,668 (6); for each lease at any time
(the "Los Angeles #2 (3)(6) 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 Los Angeles #2 Property is five years minimum annual
located on the southeast thereafter rent for such
corner of Crenshaw Boulevard during the lease year (7)
and Washington Boulevard, in lease term
Los Angeles, Los Angeles
County, California, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Los Angeles
#2 Property include a Taco
Bell, a McDonald's, and
several local restaurants.
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
CHEVY'S FRESH MEX (13) $2,521,428 12/31/97 12/2012; two $248,075; for each lease at any time
(the "Arapahoe Property") five-year increases by year, 5% of the during the
Existing restaurant renewal 10% after the amount by which lease term
options fifth lease annual gross
The Arapahoe Property is year and after sales exceed
located on the south side of every five $3,213,500
Arapahoe Road, in Arapahoe, years
Arapahoe County, Colorado, in thereafter
an area of mixed retail, during the
commercial, and residential lease term
development. Other fast-food
and family-style restaurants
located in proximity to the
Arapahoe Property include a
Bennigan's, a Wendy's, a Ruby
Tuesday's, an Arby's, a
McDonald's, a Denny's, and
several local restaurants.
CHEVY'S FRESH MEX (13) $2,477,078 12/31/97 12/2012; two $243,712; for each lease at any time
(the "Beaverton Property") five-year increases by year, 5% of the during the
Existing restaurant renewal 10% after the amount by which lease term
options fifth lease annual gross
The Beaverton Property is year and after sales exceed
located on the southeast every five $2,548,750
quadrant of the intersection years
of Hall Boulevard and Nimbus thereafter
Avenue, in Beaverton, during the
Washington County, Oregon, in lease term
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Beaverton Property include an
Arby's, and a local
restaurant.
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------- --------------- -----------
<S> <C>
CHEVY'S FRESH MEX (13) $2,288,676 12/31/97 12/2012; two $225,176; for each lease at any time
(the "Greenbelt Property") five-year increases by year, 5% of the during the
Existing restaurant renewal 10% after the amount by which lease term
options fifth lease annual gross
The Greenbelt Property is year and after sales exceed
located on the southeast every five $2,722,250
quadrant of the intersection years
of Greenbelt Road and the thereafter
Baltimore Washington Parkway, during the
in Greenbelt, Prince Georges lease term
County, Maryland, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Greenbelt
Property include a Denny's, a
Wendy's, a T.G.I Friday's, and
several local restaurants.
CHEVY'S FRESH MEX (13) $2,334,198 12/31/97 12/2012; two $229,654; for each lease at any time
(the "Lake Oswego Property") five-year increases by year, 5% of the during the
Existing restaurant renewal 10% after the amount by which lease term
options fifth lease annual gross
The Lake Oswego Property is year and after sales exceed
located between Interstate every five $2,983,250
Highway 5 and Bangy Road, in years
Lake Oswego, Clackamas County, thereafter
Oregon, in an area of mixed during the
retail, commercial, and lease term
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Lake Oswego
Property include an
Applebee's, an Olive Garden,
and a Taco Bell.
</TABLE>
-14-
<PAGE>
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for
construction Properties, once the buildings are constructed, is set
forth below:
Property Federal Tax Basis
-------- -------------------
Florissant Property $ 723,000
Folsom Property 702,000
San Antonio Property 1,265,000
Allentown Property 882,000
Colerain Property 533,000
Crystal Property 188,000
Dubuque Property 807,000
Gloucester Property 527,000
Janesville Property 547,000
Kalamazoo Property 710,000
Parma Property 791,000
Reading Property 790,000
Waterloo Property 657,000
Wauwatosa Property 802,000
Ewing Property 683,000
Westlake Village Property 759,000
Nanuet Property 603,000
Muskogee Property 853,000
Council Bluffs Property 1,059,000
Los Angeles #2 Property 585,000
Arapahoe Property 1,674,000
Beaverton Property 1,675,000
Greenbelt Property 1,470,000
Lake Oswego Property 1,500,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the San
Antonio Property, minimum annual rent will become due and payable on
the earlier of (i) 180 days after execution of the lease, (ii) the date
the certificate of occupancy for the restaurant is issued, (iii) the
date the restaurant opens for business to the public, or (iv) the date
the tenant receives from the landlord its final funding of the
construction costs. For the Westlake Village Property, minimum annual
rent will become due and payable on the earlier of (i) 120 days after
execution of the lease, (ii) the date the certificate of occupancy for
the restaurant is issued, (iii) the date the restaurant opens for
business to the public, or (iv) the date the tenant receives from the
landlord its final funding of the construction costs. For the Muskogee
and Council Bluffs Properties, minimum annual rent will become due and
payable on the earlier of (i) 180 days after execution of the lease,
(ii) the date the certificate of occupancy for the restaurant is
issued, or (iii) the date the
-15-
<PAGE>
restaurant opens for business to the public. During the period
commencing with the effective date of the lease to the date minimum
annual rent becomes payable for the San Antonio and Westlake Village
Properties, as described above, the tenant shall pay monthly "interim
rent" equal to a specified rate per annum (ranging from 10.25% to 11%)
of the amount funded by the Company in connection with the purchase and
construction of the Properties. During the period commencing with the
effective date of the lease to the date minimum annual rent becomes
payable for the Muskogee and Council Bluffs Properties, as described
above, interim rent equal to ten percent per annum of the amount funded
by the Company in connection with the purchase and construction of the
Properties shall accrue and be payable in a single lump sum at the time
of final funding of the construction costs.
(3) The development agreements for the Properties which are to be
constructed, provides that construction must be completed no later than
the dates set forth below. The maximum cost to the Company, (including
the purchase price of the land, development costs, and closing and
acquisition costs) is not expected to, but may, exceed the amount set
forth below:
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
-------- ----------------------- --------------------------------
<S> <C>
Florissant Property $1,075,539 March 16, 1998
Folsom Property 1,263,239 March 4, 1998
San Antonio Property 1,260,879 April 15, 1998
Westlake Village Property 1,488,479 March 18, 1998
Muskogee Property 1,301,592 June 1, 1998
Council Bluffs Property 1,580,790 June 28, 1998
Los Angeles #2 Property 1,341,495 Opened for business
September 28, 1997
</TABLE>
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(5) The lessee of the Florissant, Folsom and Los Angeles #2 Properties is
the same unaffiliated lessee.
(6) The Company paid for all construction costs in advance at closing;
therefore, minimum annual rent was determined on the date acquired and
is not expected to change.
(7) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(8) The Company owns the building only for this Property. The Company does
not own the underlying land; although, the Company entered into a
tri-party agreement with the lessee and the landlord of the land in
order to provide the Company with certain rights with respect to the
land on which the building is located.
(9) Base rent shall increase after every five years during the lease term
by the lesser of (i) 10% of the minimum base rent during the preceding
year or (ii) 150% of the percentage change in the Consumer Price Index.
(10) The lessee of the Allentown, Colerain, Crystal, Dubuque, Gloucester,
Janesville, Kalamazoo, Parma, Reading, Waterloo, Wauwatosa, Ewing and
Nanuet Properties is the same unaffiliated lessee.
-16-
<PAGE>
(11) For each lease year, percentage rent shall be calculated upon the
amount by which gross sales exceed base sales as follows: 6% for an
increase of 0% to 33.33% above base sales, 5.5% for an increase of
33.34% to 66.7% above base sales, and 5% for an increase of 66.8% to
100% above base sales. For increases in gross sales in excess of 100%,
percentage rent shall decrease by .5% for every additional 33.33%
increase above base sales. Base sales are as follows:
Property Base Sales
-------- ------------
Allentown Property $2,085,487
Colerain Property 1,320,076
Crystal Property 1,296,780
Dubuque property 2,430,493
Gloucester Property 1,537,500
Janesville Property 1,615,152
Kalamazoo Property 1,615,152
Parma Property 1,910,355
Reading Property 2,459,233
Waterloo Property 1,770,455
Wauwatosa Property 2,314,015
Ewing Property 1,708,333
Nanuet Property 1,583,777
(12) The lessee of the Muskogee and Council Bluffs Properties is the same
unaffiliated lessee.
(13) The lessee of the Arapahoe, Beaverton, Greenbelt and Lake Oswego
Properties is the same unaffiliated lessee.
-17-
<PAGE>
PENDING INVESTMENTS
As of December 31, 1997, the Company had initial commitments to acquire
seven properties, including six properties consisting of land and building and
one property consisting of building only. The acquisition of each of these
properties is subject to the fulfillment of certain conditions, including, but
not limited to, a satisfactory environmental survey and property appraisal.
There can be no assurance that any or all of the conditions will be satisfied
or, if satisfied, that one or more of these properties will be acquired by the
Company. If acquired, the leases of all seven of these properties are expected
to be entered into on substantially the same terms described in the section of
the Prospectus entitled "Business - Description of Property Leases."
In connection with the IHOP property in Saugus, Massachusetts, the
Company anticipates owning only the building and not the underlying land.
However, the Company anticipates entering into a landlord estoppel agreement
with the landlord of the land and a collateral assignment of the ground lease
with the lessee in order to provide the Company with certain rights with respect
to the land on which the building is located.
Set forth below are summarized terms expected to apply to the leases
for each of the properties. More detailed information relating to a property and
its related lease will be provided at such time, if any, as the property is
acquired.
-18-
<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 the Company's for each lease year any time after the fifth
Colorado Springs, CO renewal options total cost to purchase after the fifth lease lease year
Existing restaurant the property; increases year, (i) 4% of annual
by 10% after the fifth gross sales minus (ii)
lease year and after the minimum annual rent
every five years for such lease year at
thereafter during the
lease term
Golden Corral 15 years; four 10.75% of Total Cost for each lease year, during the first
Dubuque, IA (#2) five-year renewal (1) 5% of the amount by through seventh
Restaurant to be options which annual gross lease years and the
constructed sales exceed a to be tenth through
determined fifteenth lease
breakpoint years only
Golden Corral 15 years; four 10.75% of Total Cost (1) for each lease year, during the first
Edmond, OK five-year renewal 5% of the amount by through seventh
Restaurant to be options which annual gross lease years and the
constructed sales exceed a to be tenth through
determined fifteenth lease
breakpoint years only
Ground Round 20 years; five 10.25% of the (2) at any time after
Maple Shade, NJ five-year renewal Company's total cost the seventh lease
Existing restaurant options to purchase the year
property
IHOP (3) (4) 11.78% of the for each lease year, at any time after the
Saugus, MA Company's total cost (i) 3% of annual fifth lease year
Existing restaurant to purchase the gross sales minus
building; increases (ii) the minimum
by 5.81% after the annual rent for such
fifth lease year, lease year
4.66% after the
tenth lease year,
and 2.83% after the
fifteenth lease year
Ruby Tuesday's 20 years; two 11% of Total Cost for each lease year, at any time after
Georgetown, KY five-year renewal (1); increases by (i) 6% of annual the seventh lease
Restaurant to be options 10% after the fifth gross sales minus year
constructed lease year and after (ii) the minimum
every five years annual rent for such
thereafter during lease year at any
the lease term time after the
seventh lease year
Shoney's Phoenix, AZ 20 years; two 11% of Total Cost for each lease year, at any time after the
(#4) Restaurant to be five-year renewal (1); increases by (i) 6% of annual seventh lease year
renovated options 10% after the fifth gross sales minus
lease year and after (ii) the minimum
every five years annual rent for such
thereafter during lease year
the lease term
</TABLE>
-19-
<PAGE>
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) For each lease year, percentage rent shall be calculated upon the
amount by which gross sales exceed a to be determined breakpoint (base
sales) as follows; 6% for an increase of 0% to 33.33% above base sales,
5.5% for an increase of 33.34% to 66.7% above base sales, and 5% for an
increase of 66.8% to 100% above base sales. For increases in gross
sales in excess of 100%, percentage rent shall decrease by .5% for
every additional 33.33% increase above base sales.
(3) The Company anticipates owning the building only for this property. The
Company will not own the underlying land; although, the Company
anticipates entering into a landlord estoppel agreement with the
landlord of the land and a collateral assignment of the ground lease
with the lessee in order to provide the Company with certain rights
with respect to the land on which the building is located.
(4) The lease term shall expire upon the earlier of (i) the date 20 years
from the date of closing, (ii) the expiration of the original term of
the ground lease, or (iii) the earlier termination of the ground lease.
-20-
<PAGE>
BORROWING
Between October 4, 1997 and December 31, 1997, the Company obtained six
advances totalling $1,760,940 under the Line of Credit. The proceeds of these
advances were used to acquire Equipment for six restaurant properties, one in
each of Rapid City, South Dakota; London, Kentucky; Guadalupe, Arizona; Sparta,
Tennessee; Las Vegas, Nevada; and Kingston, Tennessee.
In addition, on November 14, 1997, the Company used $19 million of
uninvested net offering proceeds to temporarily reduce the balance outstanding
under the Line of Credit pending the investment of such offering proceeds in
Properties or Mortgage Loans in order to reduce interest expense incurred by the
Company.
-21-
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
BEFORE DIVIDENDS PAID DEDUCTION
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM OCTOBER 4, 1997
THROUGH DECEMBER 31, 1997
For the Year Ended December 31, 1996 (Unaudited)
The following schedule presents unaudited estimated taxable operating
results before dividends paid deduction of each Property acquired by the Company
from October 4, 1997 through December 31, 1997. The statement presents unaudited
estimated taxable operating results for each Property that was operational as if
the Property had been acquired and operational on January 1, 1996 through
December 31, 1996. The schedule should be read in light of the accompanying
footnotes.
These estimates do not purport to present actual or expected operations
of the Company for any period in the future. These estimates were prepared on
the basis described in the accompanying notes which should be read in
conjunction herewith. No single lessee or group of affiliated lessees lease
Properties or has borrowed funds from the Company with an aggregate purchase
price in excess of 20% of the expected total net offering proceeds of the
Company.
<TABLE>
<CAPTION>
Jack in the Box Jack in the Box On The Border Ground Round
Florissant, MO (6) Folsom, CA (6) San Antonio, TX Allentown, PA (7)
------------------ --------------- --------------- -----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (5) (5) (5) $125,128
Asset Management Fees (2) (5) (5) (5) (7,322)
General and Administrative
Expenses (3) (5) (5) (5) (7,758)
--------
Estimated Cash Available from
Operations (5) (5) (5) 110,048
Depreciation and Amortization
Expense (4) (5) (5) (5) (22,607)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (5) (5) (5) $ 87,441
========
</TABLE>
See Footnotes
-22-
<PAGE>
<TABLE>
<CAPTION>
Ground Round Ground Round Ground Round Ground Round
Colerain, OH (7) Crystal, MN (7) Dubuque, IA (7) Gloucester, NJ(7)
----------------- --------------- --------------- -----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 79,205 $ 77,807 $145,830 $ 92,250
Asset Management Fees (2) (4,633) (4,552) (8,533) (5,397)
General and Administrative
Expenses (3) (4,911) (4,824) (9,041) (5,720)
-------- -------- -------- --------
Estimated Cash Available from
Operations 69,661 68,431 128,256 81,133
Depreciation and Amortization
Expense (4) (13,658) (4,824) (20,701) (13,511)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 56,003 $ 63,607 $107,555 $ 67,622
======== ======== ======== ========
</TABLE>
See Footnotes
-23-
<PAGE>
<TABLE>
<CAPTION>
Ground Round Ground Round Ground Round Ground Round
Janesville, WI (7) Kalamazoo, MI (7) Parma, OH(7) Reading, PA(7)
------------------ ----------------- ------------ --------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 96,909 $ 96,909 $114,614 $147,554
Asset Management Fees (2) (5,670) (5,670) (6,706) (8,634)
General and Administrative
Expenses (3) (6,008) (6,008) (7,106) (9,148)
-------- -------- -------- --------
Estimated Cash Available from
Operations 85,231 85,231 100,802 129,772
Depreciation and Amortization
Expense (4) (14,015) (18,201) (20,290) (20,254)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 71,216 $ 67,030 $ 80,512 $109,518
======== ======== ======== ========
</TABLE>
See Footnotes
-24-
<PAGE>
<TABLE>
<CAPTION>
Ground Round Ground Round Ground Round Wendy's
Waterloo, IA (7) Wauwatosa, WI (7) Ewing, NJ (7) Westlake Village, CA
---------------- ---------------- ------------- --------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $106,227 $138,841 $102,500 (5)
Asset Management Fees (2) (6,215) (8,124) (5,997) (5)
General and Administrative
Expenses (3) (6,586) (8,608) (6,355) (5)
-------- -------- --------
Estimated Cash Available from
Operations 93,426 122,109 90,148 (5)
Depreciation and Amortization
Expense (4) (16,846) (20,557) (17,518) (5)
-------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 76,580 $101,552 $ 72,630 (5)
======== ======== ========
</TABLE>
See Footnotes
-25-
<PAGE>
<TABLE>
<CAPTION>
Ground Round Golden Corral Golden Corral Jack in the Box
Nanuet, NY (7) Muskogee, OK (8) Council Bluffs, IA (8) Los Angeles #2, CA (6)
-------------- ---------------- ---------------------- ----------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $ 95,045 (5) (5) (5)
Asset Management Fees (2) (5,561) (5) (5) (5)
General and Administrative
Expenses (3) (5,893) (5) (5) (5)
--------
Estimated Cash Available from
Operations 83,591 (5) (5) (5)
Depreciation and Amortization
Expense (4) (15,455) (5) (5) (5)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 68,136 (5) (5) (5)
========
</TABLE>
See Footnotes
-26-
<PAGE>
<TABLE>
<CAPTION>
Chevy's Fresh Mex Chevy's Fresh Mex Chevy's Fresh Mex Chevy's Fresh Mex
Arapahoe, CO (9) Beaverton, OR (9) Greenbelt, MD (9) Lake Oswego, OR (9)
--------------- ------------------- ----------------- --------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $248,075 $243,712 $225,176 $229,654
Asset Management Fees (2) (15,129) (14,862) (13,732) (14,005)
General and Administrative
Expenses (3) (15,381) (15,110) (13,961) (14,239)
-------- -------- -------- --------
Estimated Cash Available from
Operations 217,565 213,740 197,483 201,410
Depreciation and Amortization
Expense (4) (42,922) (42,955) (37,682) (38,458)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $174,643 $170,785 $159,801 $162,952
======== ======== ======== ========
</TABLE>
See Footnotes
-27-
<PAGE>
Total
-----
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) $2,365,436
Asset Management Fees (2) (140,742)
General and Administrative
Expenses (3) (146,657)
---------
Estimated Cash Available from
Operations 2,078,037
Depreciation and Amortization
Expense (4) (380,454)
----------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $1,697,583
==========
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.
-28-
<PAGE>
(5) The Property is under construction for the period presented. The
development agreements for the Properties which are to be constructed,
provide that construction must be completed no later than the dates set
forth below:
<TABLE>
<CAPTION>
Property Estimated Final Completion Date
-------- --------------------------------
<S> <C>
Florissant Property March 16, 1998
Folsom Property March 4, 1998
San Antonio Property April 15, 1998
Westlake Village Property March 18, 1998
Muskogee Property June 1, 1998
Council Bluffs Property June 28, 1998
Los Angeles #2 Property Opened for business
September 28, 1997
</TABLE>
(6) The lessee of the Florissant, Folsom and Los Angeles #2 Properties is
the same unaffiliated lessee.
(7) The lessee of the Allentown, Colerain, Crystal, Dubuque, Gloucester,
Janesville, Kalamazoo, Parma, Reading, Waterloo, Wauwatosa, Ewing and
Nanuet Properties is the same unaffiliated lessee.
(8) The lessee of the Muskogee and Council Bluffs Properties is the same
unaffiliated lessee.
(9) The lessee of the Arapahoe, Beaverton, Greenbelt and Lake Oswego
Properties is the same unaffiliated lessee.
-29-
