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
and January 29, 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 February 20, 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 February 20, 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
February 20, 1997, CNL XVIII had received total subscription proceeds of
$13,034,602 (1,303,460 Units) from 617 Limited Partners. As of February 20,
1997, CNL XVIII had invested or committed for investment approximately
$8,800,000 of such proceeds in seven Properties and to pay Acquisition Fees
and miscellaneous Acquisition Expenses, leaving approximately $2,400,000 in
offering proceeds available for investment in Properties. As of February 20,
1997, CNL XVIII had incurred $586,557 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."
February 26, 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 February 20, 1997, CNL XVIII had initial commitments to acquire
three additional properties, including two properties which consist of land
and building and one property which consists of building only. The initial
commitments for the Jack in the Box property in Houston, Texas, and the On The
Border property in San Antonio, Texas, were entered into on February 19, 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 three 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.
- 2 -
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent Percentage Rent Option to Purchase
- -------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
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
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 (2)
constructed year and after every (ii) the minimum
five years thereafter annual rent for such
during the lease term lease year
On The Border (3) (4); three five-year 13.64% of Total Cost for each lease year, at any time after
San Antonio, TX renewal options (1); (5) (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>
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.
(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.
- 3 -
The following table sets forth the location of the seven Properties
acquired by CNL XVIII from inception through February 20, 1997, a description
of the competition, and a summary of the principal terms of the acquisition
and lease of each Property.
- 4 -
<TABLE>
PROPERTY ACQUISITIONS
From inception through February 20, 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 tenth,
The Kinston Property is by 10% after (ii) the eleventh and
located at the northwest the tenth lease minimum annual twelfth
quadrant of the year and after rent for such lease years
intersection of North every five lease year only
Heritage Street and years
Phillips Street, in thereafter
Kinston, Lenoir County, during the
North Carolina, in an lease term
area of mixed retail,
commercial, and
residential 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 closing and renewal options amount by which through
constructed development annual gross seventh
costs) (3) sales exceed lease years
The Houston Property is $2,899,152 (5) and the
located at the southeast tenth
quadrant of the through
intersection of Highway fifteenth
290 and Hollister Road, lease years
in Houston, Harris only
County, Texas, in an area
of mixed retail,
commercial, and
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.
- 5 -
<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 (excluding five-year increases by 8% year, (i) 5% of
Property") closing renewal options after the fifth annual gross
Restaurant to be costs) lease year and sales minus
constructed (3)(6) after every (ii) the
five years minimum annual
The Echo Park Property is thereafter rent for such
located on the northeast during the lease year (5)
corner of Effie Street lease term
and Glendale Boulevard,
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 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 (excluding five-year increases by 8% year, (i) 5% of
Property") closing renewal options after the fifth annual gross
Restaurant to be costs) lease year and sales minus
constructed (3)(6) after every (ii) the
five years minimum annual
The Henderson Property is thereafter rent for such
located within the during the lease year (5)
eastern quadrant of the lease term
intersection of South
Boulder Highway and Texas
Avenue, in Henderson,
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.
- 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) $759,658 01/08/97 01/2015; four $77,865 (6); for each lease None
(the "Centerville (excluding five-year increases by 8% year, (i) 5% of
Property") closing renewal options after the fifth annual gross
Restaurant to be costs) lease year and sales minus
constructed (3)(6) after every (ii) the
five years minimum annual
The Centerville Property thereafter rent for such
is located within the during the lease year (5)
northwest quadrant of the lease term
intersection of Highway
45 and State Highway 7,
in Centerville, 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 (excluding five-year Cost (4) year, 5% of the first
Property") closing and renewal options amount by which through
Restaurant to be development annual gross seventh
constructed costs) (3) sales exceed lease years
$2,532,737 (5) and the
The Galveston Property is tenth
located within the through
southwest quadrant of the fifteenth
intersection of Seawall lease years
Boulevard and 61st only
Street, in Galveston,
Galveston County, Texas,
in an area of mixed
retail, 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.
- 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>
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 lease years, sales minus
the Falls Center Shopping $141,567 during (ii) the
Center, which is located the sixth minimum annual
at the northeast quadrant through tenth rent for such
of the intersection of lease years, lease year
Falls of the Neuse Road and $155,785
and Old Wake Forest Road, during the
in Raleigh, Wake County, eleventh
North Carolina, in an through
area of mixed retail, fifteenth lease
commercial, and years
residential development.
Other fast-food and
family-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
- 8 -
(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.
- 9 -
PRO FORMA ESTIMATE OF TAXABLE INCOME OF
CNL INCOME FUND XVIII, LTD.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM INCEPTION
THROUGH FEBRUARY 20, 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
February 20, 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
- 10 -
<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
- 11 -
(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.
- 12 -
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
- 13 -
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.
- 14 -
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.
- 15 -
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.
- 16 -
