SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 1997
CNL INCOME FUND XVIII, LTD.
(Exact Name of Registrant as Specified in Charter)
Florida 33-90998-01 59-3295394
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
400 East South Street, Suite 500 32801
Orlando, Florida (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (407) 422-1574
The Form 8-K of CNL Income Fund XVIII, Ltd. ("CNL XVIII") dated April 16,
1997, is being amended in order to change the Statement of Estimated Taxable
Operating Results. The changes affect the Statement of Estimated Taxable
Operating Results in Item 2; therefore, Item 2 is amended to read as follows.
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
STATUS OF THE OFFERING
Pursuant to a registration statement on Form S-11 under the
Securities Act of 1933, as amended, effective August 11, 1995 (the
"Registration Statement"), CNL Income Fund XVII, Ltd. ("CNL XVII") and CNL
Income Fund XVIII, Ltd. ("CNL XVIII"), limited partnerships with the same
general partners and investment objectives, registered for sale an aggregate
of $65,000,000 of units of limited partnership interest (the "Units")
(6,500,000 Units at $10 per Unit). The first 3,000,000 Units ($30,000,000)
were for CNL XVII, and the remaining Units are for CNL XVIII. The offering of
Units of CNL XVII terminated on September 19, 1996, at which time
subscriptions for an aggregate 3,000,000 Units ($30,000,000), including Units
sold pursuant to the Reinvestment Plan, had been received and 1,602
subscribers had been admitted as Limited Partners in accordance with the
Partnership Agreement of CNL XVII. Pursuant to the registration statement,
CNL XVIII's offering of Units could not commence until the offering of Units
of CNL XVII was terminated. CNL XVIII's offering commenced on September 20,
1996. As of April 18, 1997, CNL XVIII had received subscription proceeds of
$17,978,530 (1,797,853 Units) from 858 Limited Partners.
As stated in the Registration Statement, including the Prospectus
which constitutes a part thereof, as supplemented and amended, the proceeds of
the offering of Units are to be used to acquire restaurant properties to be
leased primarily to operators of national and regional fast-food, family-
style, and casual dining restaurant chains (the "Properties"), to pay expenses
in connection with the offering of Units and to pay partnership organizational
costs.
ACQUISITION OF PROPERTIES
From April 3, 1997 through April 18, 1997, CNL XVIII acquired two
Properties. The Properties are a Boston Market Property (in San Antonio,
Texas) and an On The Border Property (in San Antonio, Texas).
In connection with the purchase of each of these two Properties, CNL
XVIII, as lessor, entered into a long-term lease agreement with an
unaffiliated lessee. The leases are on a triple-net basis, with the lessee
responsible for all repairs and maintenance, property taxes, insurance and
utilities. The lessee also is required to pay for special assessments, sales
and use taxes, and the cost of any renovations permitted under the lease.
Upon termination of the lease, the lessee will surrender possession of the
Property to CNL XVIII, together with any improvements made to the Property
during the term of the lease. In addition, in connection with the purchase of
these Properties, which are to be constructed, CNL XVIII has entered into
development and indemnification and put agreements with the lessee.
In connection with the acquisition of the On The Border Property,
which is building only, CNL XVIII has also entered 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.
The following table sets forth the location of the two Properties,
including one Property consisting of land and building and one Property
consisting of building only, acquired by CNL XVIII from April 3, 1997 through
April 18, 1997, a description of the competition, and a summary of the
principal terms of the acquisition and lease of each Property.
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<TABLE>
PROPERTY ACQUISITIONS
From April 3, 1997 through April 18, 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>
BOSTON MARKET $621,595 04/16/97 04/2012; five 10.38% of Total for each lease at any time
(the "San Antonio #1 (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be constructed costs) (3) 10% after the year, (i) 4% of year
fifth lease annual gross
The San Antonio #1 Property is year and after sales minus (ii)
located at the northwest every five the minimum
quadrant of San Pedro Avenue years annual rent for
and West Maplewood Lane, in thereafter such lease year
San Antonio, Bexar County, during the
Texas, in an area of mixed lease term
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the San Antonio
#1 Property include a KFC, a
McDonald's, and several local
restaurants.
ON THE BORDER (5) $182,459 04/17/97 (6); three 13.64% of Total for each lease at any time
(the "San Antonio #2 (excluding five-year Cost (4); (7) year, (i) 4% of after the
Property") development renewal options annual gross tenth lease
Restaurant to be constructed costs) (3) sales minus (ii) year
the minimum
The San Antonio #2 Property is annual rent for
located along the east side of such lease year
Interstate Highway 10, north (8)
of Huebner Oaks Road, in San
Antonio, Bexar County, Texas,
in an area of mixed retail,
commercial, and residential
development.
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</TABLE>
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, once the buildings
are constructed, is set forth below:
Property Federal Tax Basis
-------- -----------------
San Antonio #1 Property $ 284,000
San Antonio #2 Property 1,251,000
(2) Minimum annual rent for the San Antonio #1 Property will become due and
payable on the date the tenant receives from the landlord its final
funding of the construction costs. For the San Antonio #2 Property,
minimum annual rent will become due and payable on the earlier of (i)
180 days after execution of the lease, (ii) the date the certificate of
occupancy for the restaurant is issued, (iii) the date the restaurant
opens for business to the public, or (iv) the date the tenant receives
from the landlord its final funding of the construction costs. During
the period commencing with the effective date of the lease to the date
minimum annual rent becomes payable for the San Antonio #1 Property, as
described above, interim rent equal to 10.38% per annum of the amount
funded by CNL XVIII in connection with the purchase and construction of
the Property 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 San Antonio #2 Property, as
described above, the tenant shall pay monthly "interim rent" equal to 11
percent per annum of the amount funded by CNL XVIII in connection with
the purchase and construction of the 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
-------- ---------------------- ---------------
San Antonio #1 Property $ 860,388 October 13, 1997
San Antonio #2 Property 1,213,504 October 14, 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) CNL XVIII owns the building only for this Property. CNL XVIII does not
own the underlying land; although, CNL XVIII has entered 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 later 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.
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(7) Annual rent shall increase after every five years during the lease term
by the lesser of (i) 10% of the minimum annual rent during the preceding
year or (ii) 150% of the change in the Consumer Price Index.
(8) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
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STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
CNL INCOME FUND XVIII, LTD.
PROPERTIES ACQUIRED FROM INCEPTION
THROUGH APRIL 18, 1997
FOR THE PERIOD OCTOBER 12, 1996 (THE DATE OPERATIONS COMMENCED)
THROUGH DECEMBER 31, 1996 (UNAUDITED)
The following statement presents unaudited estimated taxable operating
results of each Property acquired by CNL XVIII from inception through April
18, 1997. The statement presents estimated taxable operating results for each
Property that was operational as if the Property had been acquired and
operational on October 12, 1996 (the date CNL XVIII commenced operations)
through December 31, 1996. The statement 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 (7) Echo Park, CA (6) Henderson, NV (6)
----------- --------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Estimated Taxable Operating Results:
Base Rent (1) $ 19,862 (5) (5) (5)
Management Fees (2) (199) (5) (5) (5)
General and Administrative
Expenses (3) (993) (5) (5) (5)
--------
Estimated Cash Available from
Operations 18,670 (5) (5) (5)
Depreciation Expense (4) (3,660) (5) (5) (5)
--------
Estimated Taxable Operating Results $ 15,010 (5) (5) (5)
========
See Footnotes
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<CAPTION>
Jack in the Box Golden Corral Boston Market Black-eyed Pea
Centerville, TX (6) Galveston, TX (7) Raleigh, NC Atlanta, GA
------------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C>
Estimated Taxable Operating Results:
Base Rent (1) (5) (5) $ 27,144 $ 15,358
Management Fees (2) (5) (5) (271) (154)
General and Administrative
Expenses (3) (5) (5) (1,357) (768)
-------- --------
Estimated Cash Available from
Operations (5) (5) 25,516 14,436
Depreciation Expense (4) (5) (5) (2,672) (3,596)
-------- --------
Estimated Taxable Operating Results (5) (5) $ 22,844 $ 10,840
======== ========
See Footnotes
-7-
<CAPTION>
Golden Corral Boston Market On The Border
Stow, OH San Antonio, TX San Antonio, TX Total
------------- --------------- --------------- ---------
<S> <C> <C> <C> <C>
Estimated Taxable Operating Results:
Base Rent (1) $ 42,009 (5) (5) $104,373
Management Fees (2) (420) (5) (5) (1,044)
General and Administrative Expenses (3) (2,100) (5) (5) (5,218)
-------- --------
Estimated Cash Available from Operations 39,489 (5) (5) 98,111
Depreciation Expense (4) (7,047) (5) (5) (16,975)
-------- --------
Estimate Taxable Operating Results $ 32,442 (5) (5) $ 81,136
======== ========
See Footnotes
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</TABLE>
FOOTNOTES:
(1) Represents rental income from leases for four of the 11 Properties
acquired from inception through April 18, 1997, which were operational
at the time acquired by CNL XVIII, for the period commencing October 12,
1996 (the date CNL XVIII commenced operations) through December 31,
1996. The seven Properties acquired by CNL XVIII that are under
construction are not presented due to the fact that they were not
operational for the period presented.
(2) The Properties are managed pursuant to a management agreement between
CNL XVIII and an Affiliate of the General Partners, pursuant to which
the Affiliate receives an annual management fee in an amount equal to
one percent of the gross revenues that CNL XVIII earns from its
Properties.
(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) This Property is under construction and therefore was not operational
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
-------- -------------------------------
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
San Antonio #1 Property October 13, 1997
San Antonio #2 Property October 14, 1997
(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.
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EXHIBITS
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf
by the undersigned thereunto duly authorized.
CNL INCOME FUND XVIII, LTD.
Dated: May 8, 1997 By: /s/ Robert A. Bourne
---------------------------------
ROBERT A. BOURNE, General Partner
