424(b)(3)
No. 33-90998-01
CNL INCOME FUND XVIII, LTD.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated May 9, 1997 and the Prospectus Supplement dated November 6,
1997. This Supplement replaces the Supplements dated December 9, 1997 and
January 8, 1998. 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 January 22, 1998, 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 January 22, 1998, will be reported in a subsequent Supplement.
THE OFFERING
Subscription Procedures
As of January 22, 1998, CNL XVIII had received total subscription proceeds
of $34,815,170 (3,481,517 Units) from 1,564 Limited Partners. As of January 22,
1998, the Company had invested or committed for investment approximately
$28,064,000 of such proceeds in 22 Properties and to pay Acquisition Fees and
miscellaneous Acquisition Expenses leaving approximately $2,568,000 in offering
proceeds available for investment in Properties. As of January 22, 1998, CNL
XVIII had incurred $1,566,683 in Acquisition Fees to an Affiliate of the General
Partners.
BUSINESS
Property Acquisitions
Between October 23, 1997 and January 22, 1998, CNL XVIII acquired one
Property consisting of land and building. The Property is a Chevy's Fresh Mex
Property (in Mesa, Arizona). For information regarding the 21 Properties
acquired by CNL XVIII prior to October 23, 1997, see the Prospectus dated May 9,
1997 and the Prospectus Supplement dated November 6, 1997.
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."
The following table sets forth the location of the one Property consisting
of land and building acquired by CNL XVIII from October 23, 1997 through January
22, 1998, a description of the competition, and a summary of the principal terms
of the acquisition and lease of the Property.
January 28, 1998 Prospectus Dated May 9, 1997
PROPERTY ACQUISITIONS
From October 23, 1997 through January 22, 1998
<TABLE>
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option To
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent Purchase
- ----------- --------- -------- --------------- --------------- --------------- --------
<S> <C>
Chevy's Fresh Mex $2,476,374 12/31/97 12/2012; two $243,643; increases for each lease at any time
(the "Mesa Property") five-year by 10% after the year, 5% of during the
Existing restaurant renewal options fifth lease year and the amount by lease term
after every five which annual
The Mesa Property is years thereafter gross sales
located on the east during the lease exceed
side of South Alma term $3,491,500
School Road, in Mesa,
Maricopa County,
Arizona, in an area of
mixed retail,
commercial, and
residential
development. Other
fast-food and family-
style restaurants
located in proximity
to the Mesa Property
include a Black-eyed
Pea, a McDonald's, a
Denny's, an
Applebee's, an Olive
Garden, a Bennigan's,
a Red Lobster, 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
-------- -----------------
Mesa Property $1,588,000
(2) Minimum annual rent for the Property became payable on the effective
date of the lease.
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Pending Investments
As of January 22, 1998, CNL XVIII had an initial commitment to acquire
one property consisting of land and building. The acquisition of this property
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 this property will be acquired by CNL XVIII. If acquired, the lease of this
property is expected to be entered into on substantially the same terms
described in the Prospectus in the section entitled "Business - Description of
Leases."
Set forth below are summarized terms expected to apply to the lease for
this property. More detailed information relating to this property and its
related lease will be provided at such time, if any, as the property is
acquired.
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<TABLE>
<CAPTION>
Lease Term and Option to
Property Renewal Options Minimum Annual Rent Percentage Rent Purchase
- -------- --------------- ------------------- --------------- --------
<S> <C>
Arby's 20 years; two (1); increases by 4.14% None at any time after
Columbus, OH five-year renewal after the third lease year the seventh lease
Restaurant to be constructed options and after every three year
years thereafter during
the lease term
</TABLE>
______________________________
FOOTNOTES:
(1) Initial construction period rent equal to 325 basis points over
non-callable U.S. Treasuries with a maturity date of 20 years. Initial
minimum annual rent shall equal the rate which is in effect 15 business
days prior to the commencement of the annual rent.
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STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
CNL INCOME FUND XVIII, LTD.
PROPERTIES ACQUIRED FROM INCEPTION
THROUGH JANUARY 22, 1998
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 January
22, 1998. 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 #1, TX (7) Echo Park, CA (6) Henderson, NV (6)
----------- ------------------ ----------------- -----------------
<S> <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)
========
</TABLE>
See Footnotes
- 5 -
<TABLE>
<CAPTION>
Jack in the Box Golden Corral Boston Market Black-eyed Pea
Centerville, TX (6) Galveston, TX (7) Raleigh, NC Atlanta, GA
------------------- ----------------- ----------- -----------
<S> <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
======== ========
</TABLE>
See Footnotes
- 6 -
<TABLE>
<CAPTION>
Golden Corral Boston Market On The Border Boston Market
Stow, OH San Antonio #1, TX San Antonio #2, TX Minnetonka, MN
------------- ------------------ ------------------ --------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) $ 42,009 (5) (5) (9)
Management Fees (2) (420) (5) (5) (9)
General and Administrative
Expenses (3) (2,100) (5) (5) (9)
--------
Estimated Cash Available from
Operations 39,489 (5) (5) (9)
Depreciation Expense (4) (7,047) (5) (5) (9)
--------
Estimate Taxable Operating Results $ 32,442 (5) (5) (9)
========
</TABLE>
See Footnotes
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<TABLE>
<CAPTION>
Wendy's Boston Market Jack in the Box Golden Corral
Sparta, TN Timonium, MD Houston #2, TX (6) Elizabethtown, KY (7)
---------- ------------ ------------------ ---------------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) (5) (5) (5) (5)
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 Expense (4) (5) (5) (5) (5)
Estimate Taxable Operating Results (5) (5) (5) (5)
</TABLE>
See Footnotes
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<TABLE>
<CAPTION>
IHOP Arby's IHOP Golden Corral
Santa Rosa, CA (8) Lexington, NC Bridgeview, IL(8) Destin, FL (7)
------------------ ------------- ----------------- --------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) $ 28,547 $ 13,861 $ 31,579 (5)
Management Fees (2) (285) (139) (316) (5)
General and Administrative
Expenses (3) (1,427) (693) (1,579) (5)
-------- -------- --------
Estimated Cash Available from
Operations 26,835 13,029 29,684 (5)
Depreciation Expense (4) (4,678) (2,499) (6,267) (5)
-------- -------- --------
Estimate Taxable Operating Results $ 22,157 $ 10,530 $ 23,417 (5)
======== ======== ========
</TABLE>
See Footnotes
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<TABLE>
<CAPTION>
Ground Round Chevy's Fresh Mex
Rochester, NY Mesa, AZ Total
------------- ----------------- -----
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) $107,159 $243,643 $529,162
Management Fees (2) (1,072) (2,436) (5,292)
General and Administrative
Expenses (3) (5,358) (12,182) (26,457)
-------- -------- --------
Estimated Cash Available from
Operations 100,729 229,025 497,413
Depreciation Expense (4) (14,478) (39,700) (84,597)
-------- -------- --------
Estimate Taxable Operating Results $ 86,251 $189,325 $412,816
======== ======== ========
</TABLE>
- -------------------------------
FOOTNOTES:
(1) Represents rental income from leases for nine of the 22 Properties
acquired from inception through December 31, 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 13 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. 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) 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 #1 Property Opened for business April 1, 1997
Echo Park Property Opened for business June 26, 1997
Henderson Property Opened for business June 30, 1997
Centerville Property Opened for business April 18, 1997
Galveston Property Opened for business May 19, 1997
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Property Estimated Final Completion Date
-------- -------------------------------
San Antonio #1 Property Opened for business August 18, 1997
San Antonio #2 Property Opened for business September 2, 1997
Sparta Property Opened for business August 25, 1997
Timonium Property Opened for business July 13, 1997
Houston #2 Property Opened for business September 24, 1997
Elizabethtown Property Opened for business October 21, 1997
Destin Property March 16, 1998
(6) The lessee of the Echo Park, Henderson, Centerville and Houston #2
Properties is the same unaffiliated lessee.
(7) The lessee of the Houston #1, Galveston, Elizabethtown and Destin
Properties is the same unaffiliated lessee.
(8) The lessee of the Santa Rosa and Bridgeview Properties is the same
unaffiliated lessee.
(9) This Property was originally acquired with the intent to construct a
Boston Market restaurant. The tenant has subsequently decided not to
develop on this location. CNL XVIII and the tenant are currently in
discussions regarding the disposition of the Property or development
into a different restaurant concept. If sold, any proceeds received
from the sale of the Property will be used by CNL XVIII to acquire an
additional Property.
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