Filed Pursuant to Rule 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 and the Prospectus Supplement dated March 20,
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 27, 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 27, 1997, will be reported in a subsequent Supplement.
THE OFFERING
SUBSCRIPTION PROCEDURES
As of March 27, 1997, CNL XVIII had received total subscription
proceeds of $16,694,179 (1,669,418 Units) from 773 Limited Partners. As of March
27, 1997, CNL XVIII had invested or committed for investment approximately
$9,600,000 of such proceeds in eight Properties and to pay Acquisition Fees and
miscellaneous Acquisition Expenses, leaving approximately $4,900,000 in offering
proceeds available for investment in Properties. As of March 27, 1997, CNL XVIII
had incurred $751,238 in Acquisition Fees to an Affiliate of the General
Partners.
BUSINESS
PROPERTY ACQUISITIONS
Between March 7, 1997 and March 27, 1997, CNL XVIII acquired one
Property consisting of building only. The Property is a Black-eyed Pea Property
(in Atlanta, Georgia).
In connection with the purchase of this Property, CNL XVIII, 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 Leases." In addition, in
connection with this acquisition, which is building only, CNL XVIII has also
entered into a landlord estoppel agreement with the landlord of the land and
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.
The following table sets forth the location of the one Property
acquired by CNL XVIII from March 7, 1997 through March 27, 1997, a description
of the competition, and a summary of the principal terms of the acquisition and
lease of the Property.
April 2, 1997 Prospectus Dated August 11, 1995
<PAGE>
PROPERTY ACQUISITIONS
From March 7, 1997 through March 27, 1997
<TABLE>
<CAPTION>
Lease
Purchase Date Expiration and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- --------- -------- --------------- --------------------------- --------------- -----------
<S> <C>
Black-eyed Pea (3) $617,610 03/26/97 04/2023 $69,347; increases to None at any
(the "Atlanta Property") $73,700 during the time after
Existing restaurant eleventh through twentieth the fifth
lease years and $76,051 lease year
The Atlanta Property is during the twenty-first
located along the east side through twenty-sixth lease
of Peachtree Road, north of years
28th Street Northwest, in
Atlanta, Fulton County, Georgia,
in an area of mixed retail,
commercial, and residential
development. Other fast-food and
family-style restaurants located
in proximity to the Atlanta
Property include a Miami Subs,
a Wendy's, and several local
restaurants.
</TABLE>
______________________________
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of the Property acquired is set forth below:
Property Federal Tax Basis
-------- -----------------
Atlanta Property $650,000
(2) Minimum annual rent for the Property became payable on the effective
date of the lease.
(3) CNL XVIII owns the building only for this Property. CNL XVIII does not
own the underlying land; although, CNL XVIII has entered into a
landlord estoppel agreement with the landlord of the land and a
collateral assignment of the ground lease with the lessee in order to
provide CNL XVIII with certain rights with respect to the land on which
the building is located.
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<PAGE>
PENDING INVESTMENTS
As of March 27, 1997, CNL XVIII had initial commitments to acquire five
properties, including four properties which consist of land and building and one
property which consists 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 CNL
XVIII. If acquired, the leases of all five 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,
CNL XVIII anticipates owning only the building and not the underlying land.
However, 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.
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
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C>
Boston Market 15 years; five 10.38% of CNL XVIII's for each lease year at any time after the
Charlotte, NC five-year renewal total cost to purchase after the fifth lease fifth lease year
Existing restaurant options the property; increases year, (i) 5% of annual
by 10% after the fifth gross sales minus (ii)
lease year and after the minimum annual rent
every five years thereafter for such lease year
during the lease term
Golden Corral 20 years; two 11.25% of CNL XVIII's for each lease year, at any time the seventh
Stow, OH five-year renewal total cost to purchase (i) 5% of annual gross lease year (2)
Existing restaurant options the property sales minus (ii) the
mininum annual rent for
such lease year
IHOP 20 years; three 10.125% of CNL XVIII's for each lease year, during the eleventh
Santa Rosa, CA options cost to purchase the annual gross sales lease year and at the
Existing restaurant property; increases by minus (ii) the minumum end of the initial
10% after the fifth lease annual rent for such lease term
year and after every five lease year
years thereafter during the
lease term
Jack in the Box 18 years; four 10.25% of Total Cost (1); for each lease year, at any time after the
Houston, TX five-year renewal increases by 8% after the (i) 5% of annual gross seventh lease year (2)
Restaurant to be constructed options fifth lease year and after sales minus (ii) the
every five years thereafter minimum annual rent for
during the lease term such lease year
On The Border (3) (4);three five-year 13.64% of Total Cost (1); (5) for each lease year, at any time after the
San Antonio, TX renewal options (i) 4% of annual gross tenth lease year
Restaurant to be constructed sales minus (ii) the
minimum annual rent for
such lease year
</TABLE>
______________________________
FOOTNOTES:
(1) The "Total Cost" is equal to the sum of (i) the purchase price of the
property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(2) In the event CNL XVIII purchases the property directly from the lessee,
the lessee will have no option to purchase the property.
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<PAGE>
(3) 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.
(4) The lease term shall expire upon the earlier of (i) the date 15 years
from the date of closing, (ii) the expiration of the original term of
the ground lease, or (iii) the earlier termination of the ground lease.
(5) Base rent shall increase after every five years during the lease term
by the lesser of (i) 10% of the minimum base rent during the preceding
year or (ii) 150% of the change in the Consumer Price Index.
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<PAGE>
PRO FORMA ESTIMATE OF TAXABLE INCOME OF
CNL INCOME FUND XVIII, LTD.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM
MARCH 7, 1997 THROUGH MARCH 27, 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 March 7, 1997 through
March 27, 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.
Black-eyed Pea
Atlanta, GA
--------------
Pro Forma Estimate
of Taxable Income:
Base Rent (1) $ 69,347
Management Fees (2) (693)
General and Administrative
Expenses (3) (3,467)
--------
Estimated Cash Available from
Operations 65,187
Depreciation Expense (4) (16,238)
--------
Pro Forma Estimate of Taxable
Income of CNL XVIII $ 48,949
========
See Footnotes
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<PAGE>
______________________________
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if
specified levels of gross receipts are achieved.
(2) The Property 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
Property. 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 Property has been depreciated on the
straight-line method over 40 years.
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