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 January 21,
1998. This Supplement replaces the Supplements dated January 27, 1998 and
February 17, 1998. 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 February 24, 1998, 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 February 24, 1998, 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 February 24, 1998, the Company had received
subscription proceeds of $247,738,219 (24,773,822 Shares), including $1,872,648
(187,265 Shares) issued pursuant to the Reinvestment Plan, from 11,081
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 $223,296,000. As of February 24, 1998, the Company had invested or
committed for investment approximately $282,717,000 of aggregate net proceeds
from the Initial Offering and this offering in 250 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 $74,623,000 in aggregate net
offering proceeds available for investment in Properties and Mortgage Loans. As
of February 24, 1998, $11,148,220 of the Net Offering Proceeds from this
offering had been incurred as Acquisition Fees to the Advisor.
BUSINESS
PROPERTY ACQUISITIONS
Between January 1, 1998 and February 24, 1998, the Company acquired six
Properties consisting of land and building. These Properties are two Golden
Corral Properties (one in each of Dubuque, Iowa; and Edmond, Oklahoma), two
Tumbleweed Southwest Mesquite Grill & Bar Properties (one in each of Clarksville
and Hermitage, Tennessee), one Arby's Property (in Jacksonville, Florida) and
one Jack in the Box Property (in Los Angeles, California). For information
regarding the Properties acquired by the Company prior to January 1, 1998, see
the Prospectus dated April 18, 1997 and the Prospectus Supplement dated January
21, 1998.
In connection with the purchase of the two Golden Corral Properties,
the two Tumbleweed Southwest Mesquite Grill & Bar Properties, the one Arby's
Property and the one Jack in the Box Property, which are land and building, the
Company, as lessor, entered into long-term lease agreements with unaffiliated
lessees. The general terms of the lease agreements are described in the section
of the Prospectus entitled "Business - Description of Property Leases." In
addition, in connection with the purchase of these Properties, which are
February 27, 1998 Prospectus Dated April 18, 1997
<PAGE>
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."
The following table sets forth the location of the six Properties
consisting of land and building, acquired by the Company, from January 1, 1998
through February 24, 1998, 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 January 1, 1998 through February 24, 1998
<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>
Golden Corral (6) $520,186 01/20/98 07/2013; four 10.75% of Total for each lease during the
(the "Dubuque #2 (excluding five-year Cost (4) year, 5% of first through
Property") development renewal options the amount by seventh
Restaurant to be costs) (3) which annual lease years
constructed gross sales and the
exceed tenth
The Dubuque #2 $2,833,105 (5) through
Property is located on fifteenth
the northeast corner of lease years
the intersection of only
Northwest Arterial and
Chavenelle Road, in
Dubuque, Dubuque
County, Iowa, in an
area of mixed retail,
commercial, and
residential
development.
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<PAGE>
Golden Corral (6) $546,484 01/20/98 07/2013; four 10.75% of Total for each lease during the
(the "Edmond (excluding five-year Cost (4) year, 5% of first through
Property") development renewal options the amount by seventh
Restaurant to be costs) (3) which annual lease years
constructed gross sales and the
exceed tenth
The Edmond Property $2,776,470 (5) through
is located on the fifteenth
northwest corner of lease years
Broadway Extension only
and Comfort Drive, in
Edmond, Oklahoma
County, Oklahoma, in
an area of mixed
retail, commercial,
and residential
development. Other
fast-food and family-
style restaurants
located in proximity
to the Edmond Property
include an Applebee's,
a Chili's, an Outback
Steak House, a Perkins,
a Chick-Fil-A, a Taco
Bell, a McDonald's, a
Burger King, a Hardee's,
and several local
restaurants.
</TABLE>
-4-
<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 $565,440 02/10/98 02/2018; two 11% of Total Cost for each lease at any time
Southwest Mesquite (excluding five-year (4); increases by year, (i) 5% of after the
Grill & Bar (7) development renewal options 10% after the fifth annual gross seventh
(the "Clarksville costs) (3) lease year and after sales minus lease year
Property") every five years (ii) the
Restaurant to be thereafter during the minimum
constructed lease term annual rent for
such lease year
The Clarksville Property
is located on the
northwest corner of
Wilma-Rudolph Boulevard
and SR 374, in
Clarksville, Montgomery
County, Tennessee, in an
area of mixed retail,
commercial, and
residential development.
Tumbleweed $511,103 02/10/98 02/2018; two 11% of Total Cost for each lease at any time
Southwest Mesquite (excluding five-year (4); increases by year, (i) 5% of after the
Grill & Bar (7) development renewal options 10% after the fifth annual gross seventh
(the "Hermitage costs) (3) lease year and after sales minus (ii) lease year
Property") every five years the minimum
Restaurant to be thereafter during the annual rent for
constructed lease term such lease year
The Hermitage Property is
located on the east side
of Old Hickory Boulevard,
in Hermitage, Davidson
County, Tennessee, in an
area of mixed retail,
commercial, and
residential development.
Other fast-food and
family- style restaurants
located in proximity to
the Hermitage Property
include an Applebee's and
a Schlotzsky's Deli.
</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>
Arby's $424,738 02/20/98 02/2018; two (8) None at any time
(the "Jacksonville (excluding five-year after the
Property") development renewal options seventh
Restaurant to be costs) (3) lease year
constructed
The Jacksonville Property
is located on the
northwest corner of
DeBarry Avenue and Wells
Road, in Jacksonville,
Clay County, Florida, in
an area of mixed retail,
commercial, and
residential development.
Other fast-food and
family- style restaurants
located in proximity to
the Jacksonville Property
include a Steak-n-Shake,
a Chili's, an Outback
Steak House, a Burger
King, a Ruby Tuesday, a
Tony Roma's, and several
local restaurants.
-6-
<PAGE>
Jack in the Box $1,380,250 02/23/98 02/2016; four $134,574 (9); None at any time
(the "Los Angeles #4 (3) (9) five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The Los Angeles #4 term
Property is located on
the southeast corner of
Pico Boulevard and
Hoover Street, in 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 #4 Property include
a Wendy's, a Domino's Pizza
and several local restaurants.
</TABLE>
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<PAGE>
- ---------------------
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the construction Properties acquired, once
the buildings are constructed, is set forth below:
Property Federal Tax Basis
-------- -----------------
Dubuque #2 Property $1,074,000
Edmond Property 1,012,000
Clarksville Property 926,000
Hermitage Property 926,000
Jacksonville Property 599,000
Los Angeles #4 Property 620,000
(2) For the Dubuque #2 and Edmond 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 restaurant opens for
business to the public. For the Clarksville, Hermitage and Jacksonville
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, (iii) the date
the restaurant opens for business to the public, or (iv) the date the
tenant receives from the landlord its final funding of the construction
costs. During the period commencing with the effective date of the
lease to the date minimum annual rent becomes payable for the Dubuque
#2 and Edmond 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. During the period commencing with the effective
date of the lease to the date minimum annual rent becomes payable for
the Clarksville and Hermitage Properties, as described above, the
tenant shall pay monthly "interim rent" equal to 11% per annum 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 Jacksonville Property, as described above, the tenant
shall pay "interim rent" equal to the product of 325 basis points over
the "Applicable Treasury Rate" (US Treasuries with a maturity date of
20 years) multiplied by the amounts funded by the Company in connection
with the purchase and construction of the Property.
(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>
Dubuque #2 Property $1,647,329 July 19, 1998
Edmond Property 1,616,169 July 19, 1998
Clarksville Property 1,488,802 August 9, 1998
Hermitage Property 1,432,291 August 9, 1998
Jacksonville Property 1,025,168 August 19, 1998
Los Angeles #4 Property 1,380,250 August 22, 1998
</TABLE>
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<PAGE>
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(5) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(6) The lessee of the Dubuque #2 and Edmond Properties is the same
unaffiliated lessee.
(7) The lessee of the Clarksville and Hermitage Properties is the same
unaffiliated lessee.
(8) Initial minimum annual rent shall equal the rate which is in effect 15
business days prior to the commencement of the annual rent (2),
multiplied by the amounts funded by the Company in connection with the
purchase and construction of the Property. Minimum annual rent shall be
adjusted upward at the end of each 36 month period after the Company's
closing on the property by the lower of (i) 4.14% of the minimum annual
rent or (ii) an amount equal to the product obtained by multiplying the
Consumer Price Index by three.
(9) 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.
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<PAGE>
PENDING INVESTMENTS
As of February 24, 1998, the Company had initial commitments to acquire
ten properties, including eight properties consisting of land and building and
two 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 ten 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.
In connection with one of the Shoney's properties in Phoenix, Arizona,
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.
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<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- -------- --------------- ------------------- --------------- ---------
<S> <C>
Boston Market 15 years; five five- 10.38% of the Company's total for each lease year at any time after
Colorado Springs, CO year renewal options cost to purchase the property; after the fifth lease the fifth lease year
Existing restaurant increases by 10% after the year, (i) 4% of annual
fifth lease year and after gross sales minus (ii)
every five years thereafter the minimum annual rent
during the lease term for such lease year
Ground Round 20 years; five five- 10.25% of the Company's (2) at any time after
Maple Shade, NJ year renewal options total cost to purchase the the seventh lease
Existing restaurant property year
IHOP (3) (4) 11.78% of the Company's for each lease year, (i) 3% at any time after
Saugus, MA total cost to purchase the of annual gross sales minus the fifth lease
Existing restaurant building; increases by 5.81% (ii) the minimum annual rent year
after the fifth lease year, for such lease year
4.66% after the tenth lease
year, and 2.83% after the
fifteenth lease year
Jack in the Box 18 years; four five- 9.75% of Total Cost (1); None at any time after
Pflugerville, TX year renewal options increases by 8% after the the seventh lease
Restaurant to be fifth lease year and after year (5)
constructed every five years thereafter
during the lease term
Jack in the Box 18 years; four five- 9.75% of Total Cost (1); None at any time after
St. Louis, MO year renewal options increases by 8% after the the seventh lease
Restaurant to be fifth lease year and after year (5)
constructed every five years thereafter
during the lease term
Jack in the Box 18 years; four five- 10% of Total Cost (1); None at any time after
Waxahachie, TX year renewal options increases by 8% after the the seventh lease
Restaurant to be fifth lease year and after year (5)
constructed every five years thereafter
during the lease term
Ruby Tuesday 20 years; two five- 11% of Total Cost (1); for each lease year, (i) at any time after
Georgetown, KY year renewal options increases by 10% after the 6% of annual gross sales the seventh lease
Restaurant to be fifth lease year and after minus (ii) the minimum year
constructed every five years thereafter annual rent for such lease
during the lease term year
-11-
<PAGE>
Ruby Tuesday 20 years; two five- 11% of Total Cost (1); for each lease year, (i) at any time after
Somerset, KY year renewal options increases by 10% after the 6% of annual gross sales the seventh lease
Restaurant to be fifth lease year and after minus (ii) the minimum year
constructed every five years thereafter annual rent for such lease
during the lease term year
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- -------- --------------- ------------------- --------------- ---------
<S> <C>
Shoney's 20 years; two five- 11% of Total Cost (1); for each lease year, (i) at any time after
Phoenix, AZ (#4) year renewal options increases by 10% after 6% of annual gross sales the seventh lease
Restaurant to be the fifth lease year minus (ii) the minimum year
renovated and after every five annual rent for such
years thereafter during lease year
the lease term
Shoney's (6) (7) 11% of Total Cost (1); for each lease year, (i) 2.5% at any time after
Phoenix, AZ (#5) increases by 10% after the of annual gross sales minus the seventh lease
Restaurant to be fifth lease year and after (ii) the minimum annual rent year
constructed every five years thereafter for such lease year
during the lease term
</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) 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.
(5) In the event the Company purchases the property directly from the
lessee, the lessee will have no option to purchase the property.
(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 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.
(7) The lease term shall expire upon the earlier of (i) the expiration of
the original term of the ground lease, or (ii) the earlier termination
of the ground lease.
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<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
BEFORE DIVIDENDS PAID DEDUCTION
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM JANUARY 1, 1998
THROUGH FEBRUARY 24, 1998
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 January 1, 1998 through February 24, 1998. 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>
Golden Corral Golden Corral Tumbleweed Southwest Tumbleweed Southwest
Dubuque #2, IA (6) Edmond, OK (6) Mesquite Grill & Bar (7) Mesquite Grill & Bar (7)
------------------ -------------- ------------------------ ------------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
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 Before Dividends
Paid Deduction (5) (5) (5) (5)
</TABLE>
See Footnotes
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<PAGE>
Arby's Jack in the Box
Jacksonville, FL Los Angeles #4, CA
---------------- ------------------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Base Rent (1) (5) (5)
Asset Management Fees (2) (5) (5)
General and Administrative
Expenses (3) (5) (5)
Estimated Cash Available from
Operations (5) (5)
Depreciation and Amortization
Expense (4) (5) (5)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (5) (5)
- --------------------
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.
-15-
<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:
Property Estimated Final Completion Date
-------- -------------------------------
Dubuque #2 Property July 19, 1998
Edmond Property July 19, 1998
Clarksville Property August 9, 1998
Hermitage Property August 9, 1998
Jacksonville Property August 19, 1998
Los Angeles #4 Property August 22, 1998
(6) The Lessee of the Dubuque #2 and Edmond Properties is the same
unaffiliated lessee.
(7) The Lessee of the Clarksville and Hermitage Properties is the same
unaffiliated lessee.
-16-
