424(b)(3)
No. 33-90998-01
CNL INCOME FUND XVII, LTD.
AND
CNL INCOME FUND XVIII, LTD.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated August 11, 1995. This Supplement replaces the Supplements
dated October 16, 1996, December 20, 1996, January 6, 1997, January 14, 1997,
January 29, 1997 and February 26, 1997. Capitalized terms used in this
Supplement have the same meaning as in the Prospectus unless otherwise stated
herein.
All subscriptions are for the purchase of Units of CNL Income Fund
XVIII, Ltd. ("CNL XVIII"). Offers are no longer being made nor are the
General Partners accepting subscriptions for CNL XVII. THE ACQUISITION OF
UNITS OF ONE PARTNERSHIP WILL NOT ENTITLE THE INVESTOR TO ANY OWNERSHIP
INTEREST IN THE OTHER PARTNERSHIP OR ITS PROPERTIES.
Information as to proposed properties for which CNL XVIII has received
initial commitments and as to the number and types of Properties acquired by
CNL XVIII is presented as of March 6, 1997, and all references to commitments
or Property acquisitions should be read in that context. Proposed properties
for which CNL XVIII receives initial commitments, as well as property
acquisitions that occur after March 6, 1997, will be reported in a subsequent
Supplement.
THE OFFERING
SUBSCRIPTION PROCEDURES
As of October 11, 1996, CNL XVIII had received aggregate subscription
proceeds of $1,733,131, which exceeded the minimum offering amount of
$1,500,000, and $1,517,431 of the funds (which excluded all funds received
from New York and Pennsylvania investors) were released from escrow. As of
March 6, 1997, CNL XVIII had received total subscription proceeds of
$15,034,343 (1,503,434 Units) from 704 Limited Partners. As of March 6, 1997,
CNL XVIII had invested or committed for investment approximately $8,900,000 of
such proceeds in seven Properties and to pay Acquisition Fees and
miscellaneous Acquisition Expenses, leaving approximately $4,100,000 in
offering proceeds available for investment in Properties. As of March 6,
1997, CNL XVIII had incurred $676,545 in Acquisition Fees to an Affiliate of
the General Partners.
BUSINESS
PROPERTY ACQUISITIONS
Since inception, CNL XVIII has acquired seven Properties. The
Properties are a Burger King Property (in Kinston, North Carolina), two Golden
Corral Properties (one in each of Houston and Galveston, Texas), three Jack in
the Box Properties (one in each of Echo Park, California, Henderson, Nevada,
and Centerville, Texas) and a Boston Market Property (in Raleigh, North
Carolina).
In connection with the purchase of each of these seven Properties, CNL
XVIII, as lessor, entered into a long-term lease agreement with an
unaffiliated lessee. The general terms of the lease agreements are described
in the section of the Prospectus entitled "Business - Description of Leases."
March 13, 1997 Prospectus Dated August 11, 1995
For the Properties that are to be constructed, CNL XVIII 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."
As of March 6, 1997, CNL XVIII had initial commitments to acquire six
additional properties, including four properties which consist of land and
building and two properties which consist of building only. The initial
commitments for the Black-eyed Pea property in Atlanta, Georgia, the Golden
Corral property in Stow, Ohio, and the IHOP property in Santa Rosa,
California, were entered into on March 6, 1997. 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 CNL XVIII. If acquired, the leases of all six
of these properties are expected to be entered into on substantially the same
terms described in the Prospectus in the section entitled "Business -
Description of Leases," except as described below.
In connection with the On The Border property in San Antonio, Texas, and
the Black-eyed Pea property in Atlanta, Georgia, CNL XVIII anticipates owning
only the buildings and not the underlying land. However, for the On The
Border property, CNL XVIII anticipates entering into a tri-party agreement
with the lessee and the landlord of the land in order to provide CNL XVIII
with certain rights with respect to the land on which the building is located.
In addition, for the Black-eyed Pea property, CNL XVIII 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
CNL XVIII 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.
- 2 -
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Black-eyed Pea (2) 26 years 11.23% of CNL XVIII's None (3)
Atlanta, GA total cost to purchase
Existing restaurant the building
Boston Market 15 years; five five-year 10.38% of CNL XVIII's for each lease year at any time after
Charlotte, NC renewal options total cost to purchase after the fifth lease the fifth lease
Existing restaurant the property; year, (i) 5% of year
increases by 10% after annual gross sales
the fifth lease year minus (ii) the
and after every five minimum annual rent
years thereafter for such lease year
during the lease term
Golden Corral 20 years; two five-year 11.25% of CNL XVIII's for each lease year, at any time after
Stow, OH renewal options total cost to purchase (i) 5% of annual the seventh lease
Existing restaurant the property gross sales minus year
(ii) the minimum
annual rent for such
lease year
IHOP 20 years; three five- 10.125% of CNL XVIII's for each lease year, during the eleventh
Santa Rosa, CA year renewal options total cost to purchase (i) 4% of annual lease year and at
Existing restaurant the property; gross sales minus the end of the
increases by 10% after (ii) the minimum initial lease term
the fifth lease year annual rent for such
and after every five lease year
years thereafter
during the lease term
Jack in the Box 18 years; four five-year 10.25% of Total Cost for each lease year, at any time after
Houston, TX renewal options (1); increases by 8% (i) 5% of annual the seventh lease
Restaurant to be after the fifth lease gross sales minus year (4)
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
On The Border (5) (6); three five-year 13.64% of Total Cost for each lease year, at any time after
San Antonio, TX renewal options (1); (7) (i) 4% of annual the tenth lease
Restaurant to be gross sales minus year
constructed (ii) the minimum
annual rent for such
lease year
</TABLE>
- 3 -
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) CNL XVIII anticipates owning the building only for this property. CNL
XVIII will not own the underlying land; although, CNL XVIII 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 CNL XVIII with certain rights with respect to the land
on which the building is located.
(3) CNL XVIII anticipates conveying the building to the tenant at the end of
the lease term for $1.
(4) In the event CNL XVIII purchases the property directly from the lessee,
the lessee will have no option to purchase the property.
(5) The Company anticipates owning the building only for this property. CNL
XVIII will not own the underlying land; although, CNL XVIII anticipates
entering into a tri-party agreement with the lessee and the landlord of
the land in order to provide CNL XVIII with certain rights with respect
to the land on which the building is located.
(6) 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.
(7) 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 change in the Consumer Price Index.
- 4 -
The following table sets forth the location of the seven Properties
acquired by CNL XVIII from inception through March 6, 1997, a description of
the competition, and a summary of the principal terms of the acquisition and
lease of each Property.
- 5 -
<TABLE>
PROPERTY ACQUISITIONS
From inception through March 6, 1997
<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> <C> <C> <C> <C> <C>
BURGER KING $875,000 12/27/96 12/2016; four $89,688; for each lease during the
(the "Kinston Property") five-year increases by 5% year, (i) 6% of eighth,
Existing restaurant renewal options after the fifth annual gross ninth,
lease year and sales minus (ii) tenth,
The Kinston Property is by 10% after the minimum eleventh and
located at the northwest the tenth lease annual rent for twelfth
quadrant of the intersection year and after such lease year lease years
of North Heritage Street and every five only
Phillips Street, in Kinston, years
Lenoir County, North Carolina, thereafter
in 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
Kinston Property include a
Hardee's, a Golden Corral, a
KFC, two Pizza Huts, and a
local restaurant.
GOLDEN CORRAL (8) $579,704 12/27/96 12/2011; four 10.75% of Total for each lease during the
(the "Houston Property") (excluding five-year Cost (4) year, 5% of the first
Restaurant to be constructed closing and renewal options amount by which through
development annual gross seventh
The Houston Property is costs) (3) sales exceed lease years
located at the southeast $2,899,152 (5) and the
quadrant of the intersection tenth
of Highway 290 and Hollister through
Road, in Houston, Harris fifteenth
County, Texas, in an area of lease years
mixed retail, commercial, and only
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Houston
Property include a Burger
King, a Taco Bell, a
Fuddrucker's, an Outback
Steakhouse, a Shoney's, a Red
Lobster, a Whataburger, and
several local restaurants.
- 6 -
<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> <C> <C> <C> <C> <C>
JACK IN THE BOX (7) $1,258,223 01/07/97 01/2015; four $128,968 (6); for each lease None
(the "Echo Park Property") (excluding five-year increases by 8% year, (i) 5% of
Restaurant to be constructed closing renewal options after the fifth annual gross
costs) lease year and sales minus (ii)
The Echo Park Property is (3)(6) after every the minimum
located on the northeast five years annual rent for
corner of Effie Street and thereafter such lease year
Glendale Boulevard, in Los during the (5)
Angeles, Los Angeles County, lease term
California, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Echo Park
Property include a KFC and a
McDonald's.
JACK IN THE BOX (7) $1,067,175 01/07/97 01/2015; four $109,385 (6); for each lease None
(the "Henderson Property") (excluding five-year increases by 8% year, (i) 5% of
Restaurant to be constructed closing renewal options after the fifth annual gross
costs) lease year and sales minus (ii)
The Henderson Property is (3)(6) after every the minimum
located within the eastern five years annual rent for
quadrant of the intersection thereafter such lease year
of South Boulder Highway and during the (5)
Texas Avenue, in Henderson, lease term
Clark County, Nevada, in an
area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Henderson Property include an
Arby's, a Domino's Pizza, a
KFC, a McDonald's, a Pizza
Hut, a Sizzler, a Sonic Drive-
In, a Taco Bell, and several
local restaurants.
- 7 -
<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> <C> <C> <C> <C> <C>
JACK IN THE BOX (7) $759,658 01/08/97 01/2015; four $77,865 (6); for each lease None
(the "Centerville Property") (excluding five-year increases by 8% year, (i) 5% of
Restaurant to be constructed closing renewal options after the fifth annual gross
costs) lease year and sales minus (ii)
The Centerville Property is (3)(6) after every the minimum
located within the northwest five years annual rent for
quadrant of the intersection thereafter such lease year
of Highway 45 and State during the (5)
Highway 7, in Centerville, lease term
Leon County, Texas, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Centerville
Property include a Dairy Queen
and several local restaurants.
GOLDEN CORRAL (8) $424,883 01/22/97 01/2012; four 10.75% of Total for each lease during the
(the "Galveston Property") (excluding five-year Cost (4) year, 5% of the first
Restaurant to be constructed closing and renewal options amount by which through
development annual gross seventh
The Galveston Property is costs) (3) sales exceed lease years
located within the southwest $2,532,737 (5) and the
quadrant of the intersection tenth
of Seawall Boulevard and 61st through
Street, in Galveston, fifteenth
Galveston County, Texas, in an lease years
area of mixed retail, only
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Galveston Property include an
IHOP, a Western Sizzling, a
Shoney's, a Jack in the Box, a
Whataburger, an Arby's, and
several local restaurants.
- 8 -
<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> <C> <C> <C> <C> <C>
BOSTON MARKET $1,225,686 01/23/97 01/2012; five $122,569; for each lease at any time
(the "Raleigh Property") (excluding five-year increases to year after the after the
Existing restaurant closing renewal options $132,497 during fifth lease fifth lease
costs) the third year, (i) 5% of year
The Raleigh Property is through fifth annual gross
located on a pad site in the lease years, sales minus (ii)
Falls Center Shopping Center, $141,567 during the minimum
which is located at the the sixth annual rent for
northeast quadrant of the through tenth such lease year
intersection of Falls of the lease years,
Neuse Road and Old Wake Forest and $155,785
Road, in Raleigh, Wake County, during the
North Carolina, in an area of eleventh
mixed retail, commercial, and through
residential development. fifteenth lease
Other fast-food and family- years
style restaurants located in
proximity to the Raleigh
Property include a Bojangles,
three Pizza Huts, a Red
Lobster, a Burger King, two
Wendy's, four Subway Sandwich
Shops, two Golden Corrals, two
Hardees, two KFCs, a Taco Bell
Express, three McDonald's, a
Ryan's Family Steakhouse, a
Pizza Inn, a Denny's, a
Sizzler, and several local
restaurants.
</TABLE>
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for the
construction Properties, once the buildings are constructed, is set
forth below:
Property Federal Tax Basis
-------- -----------------
Kinston Property $ 661,000
Houston Property 1,058,000
Echo Park Property 655,000
Henderson Property 605,000
Centerville Property 540,000
Galveston Property 1,003,000
Raleigh Property 483,000
- 9 -
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the Houston
and Galveston Properties, minimum annual rent will become due and
payable on the earlier of (i) the date the certificate of occupancy for
the restaurant is issued, (ii) the date the restaurant opens for
business to the public or (iii) 180 days after execution of the lease.
During the period commencing with the effective date of the lease to the
date minimum annual rent becomes payable for the Houston and Galveston
Properties, as described above, "interim rent" equal to ten percent per
annum of the amount funded by CNL XVIII in connection with the purchase
and construction of the Property shall accrue and shall be payable in a
single lump sum on the date minimum annual rent becomes payable for this
Property.
(3) The development agreements for the Properties which are to be
constructed, provide that construction must be completed no later than
the dates set forth below. The maximum cost to CNL XVIII (including the
purchase price of the land, (if applicable), development costs (if
applicable), and closing and acquisition costs) is not expected to, but
may, exceed the amounts set forth below:
Estimated Final
Property Estimated Maximum Cost Completion Date
-------- ---------------------- ---------------
Houston Property $1,684,643 June 25, 1997
Echo Park Property 1,258,223 July 6, 1997
Henderson Property 1,067,175 July 6, 1997
Centerville Property 759,658 July 7, 1997
Galveston Property 1,480,132 July 21, 1997
(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) CNL XVIII paid for all construction costs in advance at closing;
therefore, minimum annual rent was determined on the date acquired and
is not expected to change.
(7) The lessee of the Echo Park, Henderson and Centerville Properties is the
same unaffiliated lessee.
(8) The lessee of the Houston and Galveston Properties is the same
unaffiliated lessee.
- 10 -
PRO FORMA ESTIMATE OF TAXABLE INCOME OF
CNL INCOME FUND XVIII, LTD.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM INCEPTION
THROUGH MARCH 6, 1997
FOR A 12-MONTH PERIOD (UNAUDITED)
The following schedule represents pro forma unaudited estimates of
taxable income of each Property acquired by CNL XVIII from inception through
March 6, 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 CNL XVIII 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 with an aggregate purchase price in excess of 20% of the expected
total net offering proceeds of CNL XVIII.
<TABLE>
<CAPTION>
Burger King Golden Corral Jack in the Box Jack in the Box
Kinston, NC Houston, TX (5)(7) Echo Park, CA (5)(6) Henderson, NV (5)(6)
----------- ------------------ -------------------- --------------------
<S> <C> <C> <C> <C>
Pro Forma Estimate
of Taxable Income:
Base Rent (1) $ 89,688 $170,349 $128,968 $109,385
Management Fees (2) (897) (1,703) (1,290) (1,094)
General and Administrative
Expenses (3) (4,484) (8,517) (6,448) (5,469)
-------- -------- -------- --------
Estimated Cash Available from
Operations 84,307 160,129 121,230 102,822
Depreciation Expense (4) (16,525) (26,460) (16,377) (15,115)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income of CNL XVIII $ 67,782 $133,669 $104,853 $ 87,707
======== ======== ======== ========
See Footnotes
- 11 -
<CAPTION>
Jack in the Box Golden Corral Boston Market
Centerville, TX (5)(6) Galveston, TX (5)(7) Raleigh, NC Total
---------------------- -------------------- ------------- ---------
<S> <C> <C> <C> <C>
Pro Forma Estimate
of Taxable Income:
Base Rent (1) $ 77,865 $148,364 $122,569 $ 847,188
Management Fees (2) (779) (1,484) (1,226) (8,473)
General and Administrative
Expenses (3) (3,893) (7,418) (6,128) (42,357)
-------- -------- -------- ---------
Estimated Cash Available from
Operations 73,193 139,462 115,215 796,358
Depreciation Expense (4) (13,489) (25,084) (12,065) (125,115)
-------- -------- -------- ---------
Pro Forma Estimate of Taxable
Income of CNL XVIII $ 59,704 $114,378 $103,150 $ 671,243
======== ======== ======== =========
</TABLE>
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 a management agreement
between CNL XVIII and an Affiliate of the General Partners, pursuant to
which the Affiliate will receive an annual management fee in an amount
equal to one percent of the gross revenues that CNL XVIII earns from its
Properties. See "Management Compensation."
(3) Estimated at five percent of gross rental income based on the previous
experience of Affiliates of the General Partners with 17 public limited
partnerships which own properties similar to that owned by CNL XVIII.
(4) The estimated federal tax basis of the depreciable portion (the building
portion) of the Properties has been depreciated on the straight-line
method over 40 years.
(5) The development agreements for the Properties which are to be
constructed, provide that construction must be completed no later than
the dates set forth below:
Property Estimated Final Completion Date
-------- -------------------------------
Houston Property June 25, 1997
Echo Park Property July 6, 1997
Henderson Property July 6, 1997
Centerville Property July 7, 1997
Galveston Property July 21, 1997
- 12 -
(6) The lessee of the Echo Park, Henderson and Centerville Properties is the
same unaffiliated lessee.
(7) The lessee of the Houston and Galveston Properties is the same
unaffiliated lessee.
- 13 -
INDEX TO PRO FORMA FINANCIAL STATEMENTS
---------------------------------------
Page
----
CNL INCOME FUND XVIII, LTD.
(A FLORIDA LIMITED PARTNERSHIP)
Pro Forma Financial Information (unaudited):
Pro Forma Balance Sheet as of September 30, 1996 15
Notes to Pro Forma Balance Sheet as of September 30, 1996 16
- 14 -
PRO FORMA FINANCIAL INFORMATION
The following Pro Forma Balance Sheet of CNL Income Fund XVIII, Ltd.
("CNL XVIII") gives effect to (i) the subscriptions for 60,676 units
($606,760) of limited partnership interest (the "Units") pursuant to a
registration statement on Form S-11 under the Securities Act of 1933, as
amended, effective August 11, 1995, which had been received and were being
held in escrow as of September 30, 1996, (ii) the receipt of $9,813,904 in
gross offering proceeds from the sale of 981,390 additional Units during the
period October 1, 1996 through January 24, 1997, and the release of the
$606,760 previously held in escrow as of September 30, 1996, and (iii) the
application of such funds to purchase seven properties, five of which are
under construction, and to pay offering expenses, acquisition fees, and
miscellaneous acquisition expenses, all as reflected in the pro forma
adjustments described in the related notes. The Pro Forma Balance Sheet as of
September 30, 1996, includes the transactions described in (i) above, from its
historical balance sheet, adjusted to give effect to the transactions in (ii)
and (iii) above, as if they had occurred on September 30, 1996.
No Pro Forma Statement of Income is presented due to the facts that (i)
CNL XVIII did not commence operations until October 12, 1996 (the date
following when CNL XVIII received its minimum offering proceeds and the funds
were released from escrow) and (ii) the properties owned by CNL XVIII as of
January 24, 1997, did not have previous rental histories.
This pro forma financial information is presented for informational
purposes only and does not purport to be indicative of CNL XVIII's financial
results or condition if the various events and transactions reflected therein
had occurred on the dates, or been in effect during the periods, indicated.
This pro forma financial information should not be viewed as predictive of CNL
XVIII's financial results or conditions in the future.
- 15 -
CNL INCOME FUND XVIII, LTD.
(A FLORIDA LIMITED PARTNERSHIP)
UNAUDITED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
Pro Forma
ASSETS Historical Adjustments Pro Forma
---------- -------------- ----------
Land and building on
operating leases $ - $8,547,527 (a) $8,547,527
Cash and cash equivalents 730 446,713 (a) 447,443
Organization costs 10,000 10,000
Deferred syndication costs 504,079 (504,079)(b) -
Other assets 27,324 2,040 (a) 29,364
---------- ---------- ----------
$ 542,133 $8,492,201 $9,034,334
========== ========== ==========
LIABILITIES AND
PARTNERS' CAPITAL
Accounts payable $ 8,505 $ (8,505)(a) $ -
Due to related parties 532,628 (532,628)(a) -
---------- ---------- ----------
Total liabilities 541,133 (541,133) -
Partners' capital 1,000 9,537,413 (a)
(504,079)(b) 9,034,334
---------- ---------- ----------
$ 542,133 $8,492,201 $9,034,334
========== ========== ==========
See accompanying notes to unaudited pro forma balance sheet.
- 16 -
CNL INCOME FUND XVIII, LTD.
(A FLORIDA LIMITED PARTNERSHIP)
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
Pro Forma Balance Sheet:
- -----------------------
(a) Represents gross proceeds of $9,813,904 from the sale of 981,390 Units
during the period October 1, 1996 through January 24, 1997, and the
release of $606,760 held in escrow as of September 30, 1996, used (i) to
acquire seven properties for $8,107,941, (ii) to pay acquisition fees of
$468,930, ($27,304 of which was accrued as due to related parties at
September 30, 1996, $439,586 of which was allocated to the seven
properties acquired and $2,040 of which was classified as other assets
and will be allocated to future properties) and (iii) to pay selling
commissions and offering expenses (syndication costs) of $1,387,080
which have been netted against partners' capital, and organization costs
of $10,000 (a total of $513,829 of which had been incurred as of
September 30, 1996) leaving $446,713 in additional cash and cash
equivalents available for future investment.
The pro forma adjustments to land and buildings on operating leases as a
result of the above transactions were as follows:
Estimated Acquisition
purchase price fees
(including allocated
closing costs) to property Total
-------------- ----------- ----------
Golden Corral in
Houston, TX $1,565,433 $ 84,872 $1,650,305
Burger King in
Kinston, NC 875,000 47,440 922,440
Jack in the Box in
Echo Park, CA 1,257,223 68,163 1,325,386
Jack in the Box in
Hendersonville, NV 1,066,175 57,805 1,123,980
Jack in the Box in
Centerville, TX 758,658 41,132 799,790
Golden Corral in
Galveston, TX 1,359,566 73,711 1,433,277
Boston Market in
Raleigh, NC 1,225,886 66,463 1,292,349
---------- ---------- ----------
$8,107,941 $ 439,586 $8,547,527
========== ========== ==========
(b) Represents reclassification of deferred syndication costs totalling
$504,079 at September 30, 1996, to syndication costs which have been
netted against partners' capital.
- 17 -
