UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    FORM 10-K

(Mark One)

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

                   For the fiscal year ended December 31, 1998

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION  13  OR  15  (d)  OF  THE  SECURITIES
     EXCHANGE ACT OF 1934

              For the transition period from ________ to ________


                         Commission file number 0-26216

                            CNL INCOME FUND XV, LTD.
             (Exact name of registrant as specified in its charter)

                Florida                                  59-3198888
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
    incorporation or organization)

                              400 East South Street
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 650-1000

           Securities registered pursuant to Section 12(b) of the Act:

    Title of each class:                Name of exchange on which registered:
           None                                      Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:

              Units of limited partnership interest ($10 per Unit)
                                (Title of class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or such shorter  period that the registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days: Yes X     No
                                      -----     -----

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [x]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:  The registrant registered an offering of 4,000,000 units of limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market value for such Units. Each Unit was originally sold at $10 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None


<PAGE>


                                     PART I


Item 1.  Business

         CNL Income Fund XV, Ltd. (the  "Registrant" or the  "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on September 2, 1993. The general partners of the Partnership are Robert
A.  Bourne,  James  M.  Seneff,  Jr.  and  CNL  Realty  Corporation,  a  Florida
corporation  (the  "General  Partners").  Beginning on February  23,  1994,  the
Partnership offered for sale up to $40,000,000 of limited partnership  interests
(the  "Units")  (4,000,000  Units at $10 per Unit)  pursuant  to a  registration
statement on Form S-11 under the Securities  Act of 1933, as amended,  effective
February 23, 1994.  The offering  terminated on September 1, 1994, at which date
the maximum  offering  proceeds of $40,000,000  had been received from investors
who  were  admitted  to  the  Partnership  as  limited  partners  (the  "Limited
Partners").

         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators of national and regional fast-food and family-style  restaurant chains
(the "Restaurant Chains").  Net proceeds to the Partnership from its offering of
Units,  after  deduction  of  organizational  and  offering  expenses,  totalled
$35,200,000  and were used to acquire 45  Properties,  including  15  Properties
consisting of only land and two Properties owned by a joint venture in which the
Partnership is a co-venturer, to pay acquisition fees totalling $2,200,000 to an
affiliate of the General Partners and to establish a working capital reserve for
Partnership purposes. During the year ended December 31, 1995, the tenant of two
Checkers  Properties  in  Knoxville,  Tennessee,  and one  Checkers  Property in
Leavenworth,  Kansas,  which  consisted  of land only,  exercised  its option in
accordance with the lease  agreements to substitute  other  Properties for these
three  Properties.  The  Partnership  sold  the  two  Properties  in  Knoxville,
Tennessee,  and the  Property  in  Leavenworth,  Kansas,  and used the net sales
proceeds to acquire two Checkers Properties, consisting of land only, located in
Orlando and  Bradenton,  Florida.  During the year ended  December 31, 1996, the
Partnership acquired a Property in Clinton,  North Carolina,  with affiliates of
the General Partners as  tenants-in-common.  In addition,  during the year ended
December 31, 1996,  Wood-Ridge  Real Estate Joint  Venture,  a joint  venture in
which  the  Partnership  is a  co-venturer  with  an  affiliate  of the  General
Partners,  sold its two Properties to the tenant.  The joint venture  reinvested
the majority of the net sales proceeds in four Boston Market  Properties (one of
which  consisted of only land) and one Golden Corral  Property.  During the year
ended  December 31, 1997,  Wood-Ridge  Real Estate Joint Venture  reinvested the
remaining  proceeds from the sales of the two Properties in 1996, in a Taco Bell
Property in Anniston,  Alabama. In addition,  during the year ended December 31,
1998,  the  Partnership  acquired a Property  in Fort  Myers,  Florida,  with an
affiliate of the General Partners as tenants-in-common. As a result of the above
transactions,  as of December 31, 1998,  the  Partnership  owned 50  Properties,
including 14 wholly owned  Properties  consisting of only land,  six  Properties
owned by a joint  venture  in which the  Partnership  is a  co-venturer  and two
Properties  owned with  affiliates  as  tenants-in-common.  The lessee of the 14
wholly owned Properties  consisting of only land owns the buildings currently on
the land and has the right,  if not in default  under the leases,  to remove the
buildings from the land at the end of the lease terms. The Properties are leased
on a  triple-net  basis  with  the  lessees  responsible  for  all  repairs  and
maintenance, property taxes, insurance and utilities.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership  would be merged with and into a subsidiary  of APF (the  "Merger").
APF is a real estate investment trust whose primary business is the ownership of
restaurant properties leased on a long-term,  "triple-net" basis to operators of
national and regional  restaurant  chains. APF has agreed to issue shares of its
common stock, par value $0.01 per share (the "APF Shares"), as consideration for
the Merger.  At a special meeting of the partners that is expected to be held in
the third  quarter  of 1999,  Limited  Partners  holding in excess of 50% of the
Partnership's  outstanding limited partnership interests must approve the Merger
prior to consummation of the transaction. If the Limited Partners at the special
meeting approve the Merger,  APF will own the Properties and other assets of the
Partnership. See Item 8.
Financial Statements and Supplementary Data -- Note 10. Subsequent Events.

         In the event that the Limited  Partners  vote  against the Merger,  the
Partnership will hold its Properties  until the General Partners  determine that
the sale or other  disposition of the Properties is  advantageous in view of the
Partnership's investment objectives. In deciding whether to sell Properties, the
General Partners will consider factors such as potential  capital  appreciation,
net cash flow and federal income tax  considerations.  Certain lessees also have
been granted  options to purchase  Properties,  generally at the Property's then
fair market value after a specified  portion of the lease term has elapsed.  The
Partnership  has no  obligation  to sell all or any portion of a Property at any
particular  time,  except as may be required  under  property  purchase  options
granted to certain lessees.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's leases. The leases of the Properties owned by the Partnership, the
joint venture in which the Partnership is a co-venturer and the Properties owned
with affiliates as tenants-in-common,  provide for initial terms ranging from 15
to 20 years  (the  average  being 19 years) and  expire  between  2009 and 2018.
Generally,  the leases are on a triple-net basis,  with the lessees  responsible
for all repairs and maintenance,  property taxes,  insurance and utilities.  The
leases of the  Properties  provide  for  minimum  base  annual  rental  payments
(payable  in  monthly   installments)  ranging  from  approximately  $22,500  to
$190,600. The majority of the leases provide for percentage rent, based on sales
in excess of a specified amount. In addition, the majority of the leases provide
that,  commencing in specified  lease years  (generally the sixth or ninth lease
year), the annual base rent required under the terms of the lease will increase.

         Generally,  the  leases  of the  Properties  provide  for  two to  five
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial  lease.  Certain  lessees  also have been  granted  options to  purchase
Properties at the Property's then fair market value after a specified portion of
the lease  term has  elapsed.  Under the terms of  certain  leases,  the  option
purchase  price  may equal  the  Partnership's  original  cost to  purchase  the
Property (including  acquisition  costs),  plus a specified  percentage from the
date of the lease or a specified percentage of the Partnership's purchase price,
if that amount is greater than the Property's  fair market value at the time the
purchase option is exercised.

         In June and October 1998 and January  1999,  three  tenants,  Long John
Silvers,  Inc., Finest Foodservice,  LLP, and B.C. Superior,  LLC, respectively,
filed for bankruptcy and rejected the leases relating to six of their ten leases
(including  two  Properties  held by Wood-Ridge  Real Estate Joint  Venture) and
ceased making rental payments to the  Partnership  relating to those leases that
were rejected.  The Partnership will not recognize rental and earned income from
these six Properties until new tenants for these Properties are located or until
the  Properties  are sold and the  proceeds  from such sales are  reinvested  in
additional  Properties.  As of March 11, 1999,  the  Partnership  has  continued
receiving  rental payments on the Properties that have not been rejected.  While
Long John  Silver's has not rejected or affirmed  their  remaining  four leases,
there can be no assurance that some or all of the leases will not be rejected in
the future.  The lost revenues resulting from the six leases that were rejected,
as described  above,  and the possible  rejection of the  remaining  four leases
could have an adverse effect on the results of operations of the  Partnership if
the  Partnership is unable to re-lease these  Properties in a timely manner.  In
February  1999,  the  Partnership  entered  into a new  lease for one of the two
Boston Market  Properties  with a new tenant.  The lease terms for this Property
are substantially the same as the Partnership's other leases as described above.
The General Partners are currently  seeking either new tenants or purchasers for
the remaining five Properties.

Major Tenants

         During 1998,  five lessees of the  Partnership,  Flagstar  Enterprises,
Inc., Checkers Drive-In Restaurants,  Inc., Long John Silver's, Inc., Foodmaker,
Inc., and Golden Corral  Corporation,  each contributed more than ten percent of
the  Partnership's  total rental income  (including the  Partnership's  share of
rental income from six  Properties  owned by a joint venture and two  Properties
owned with affiliates as  tenants-in-common).  As of December 31, 1998, Flagstar
Enterprises,  Inc. was the lessee under  leases  relating to eight  restaurants,
Checkers Drive-In  Restaurants,  Inc. was the lessee under leases relating to 14
restaurants,  Long John Silver's,  Inc. was the lessee under leases  relating to
four  restaurants  (excluding  four  restaurants  for which  Long John  Silver's
rejected the leases as a result of filing for  bankruptcy  as described  above),
Foodmaker,  Inc. was the lessee under leases  relating to four  restaurants  and
Golden  Corral  Corporation  was  the  lessee  under  leases  relating  to  five
restaurants.  It is  anticipated  that,  based on the  minimum  rental  payments
required  by  the  leases,   Flagstar   Enterprises,   Inc.,  Checkers  Drive-In
Restaurants,  Inc.,  Foodmaker,  Inc., and Golden Corral  Corporation  each will
continue to contribute more than ten percent of the  Partnership's  total rental
income in 1999. In addition, five Restaurant Chains, Hardee's, Checkers Drive-In
Restaurants,  Long John Silver's,  Golden Corral Family  Steakhouse  Restaurants
("Golden  Corral") and Jack in the Box, each accounted for more than ten percent
of  the   Partnership's   total  rental  income  during  1998   (including   the
Partnership's  share  of  rental  income  from six  Properties  owned by a joint
venture and two Properties owned with affiliates as tenants-in-common). In 1999,
it is anticipated that Hardee's,  Checkers Drive-In Restaurants,  Golden Corral,
and Jack in the Box each will  continue  to account for more than ten percent of
the total rental income to which the  Partnership is entitled under the terms of
the leases.  Any failure of these lessees or Restaurant  Chains could materially
affect the  Partnership's  income if the Partnership is not able to re-lease the
Properties in a timely manner,  as described above. No single tenant or group of
affiliated tenants lease Properties with an aggregate carrying value,  excluding
acquisition fees and certain  acquisition  expenses,  in excess of 20 percent of
the total assets of the Partnership.

Joint Venture Arrangement

         In  August  1994,  the   Partnership   entered  into  a  joint  venture
arrangement,  Wood-Ridge  Real Estate  Joint  Venture,  with an affiliate of the
General  Partners  to  purchase  and hold two  Properties.  In  September  1996,
Wood-Ridge  Real Estate Joint Venture sold its two  Properties to the tenant and
as of December 31, 1997,  had  reinvested the majority of the net sales proceeds
in six replacement  Properties.  The joint venture distributed the remaining net
sales proceeds to the Partnership and its co-venture partner on a pro-rata basis
during 1997. The joint venture arrangement  provides for the Partnership and its
joint  venture  partner to share in all costs and benefits  associated  with the
joint venture in accordance with their  respective  percentage  interests in the
joint venture.  The  Partnership  and its joint venture partner are also jointly
and severally  liable for all debts,  obligations  and other  liabilities of the
joint venture.

         Wood-Ridge  Real Estate  Joint  Venture has an initial term of 30 years
and, after the expiration of the initial term,  continues in existence from year
to year unless  terminated at the option of either of the joint  venturers or by
an  event  of  dissolution.   Events  of  dissolution  include  the  bankruptcy,
insolvency or termination of any joint  venturer,  sale of the Property owned by
the joint venture,  unless agreed to by mutual  agreement of the Partnership and
its joint  venture  partner  to  reinvest  the  sales  proceeds  in  replacement
Properties,  and by mutual  agreement of the  Partnership  and its joint venture
partner to dissolve the joint venture.

         The Partnership  shares management control equally with an affiliate of
the General Partners for Wood-Ridge Real Estate Joint Venture. The joint venture
agreement  restricts  each  venturer's  ability to sell,  transfer or assign its
joint venture  interest  without first offering it for sale to its joint venture
partner,  either upon such terms and  conditions  as to which the  venturers may
agree or,  in the  event  the  venturers  cannot  agree,  on the same  terms and
conditions  as any offer  from a third  party to  purchase  such  joint  venture
interest.

         Net cash flow from  operations of Wood-Ridge  Real Estate Joint Venture
is  distributed  50 percent  to each  joint  venture  partner.  Any  liquidation
proceeds,  after paying joint venture debts and liabilities and funding reserves
for  contingent  liabilities,  will be  distributed  first to the joint  venture
partners with positive  capital account  balances in proportion to such balances
until such  balances  equal zero,  and  thereafter  in  proportion to each joint
venture partner's percentage interest in the joint venture.

         In January 1996,  the  Partnership  entered into an agreement to hold a
Golden  Corral  Property as  tenants-in-common  with  affiliates  of the General
Partners. The agreement provides for the Partnership and the affiliates to share
in the profits and losses of the Property in  proportion  to each  co-venturer's
percentage  interest.  The  Partnership  owns  a 16  percent  interest  in  this
Property.

         In June 1998,  the  Partnership  entered  into an  agreement  to hold a
Bennigan's  Property  as  tenants-in-common  with an  affiliate  of the  General
Partners.  The agreement provides for the Partnership and the affiliate to share
in the profits and losses of the Property in  proportion  to each  co-venturer's
percentage  interest.  The  Partnership  owns  a 15  percent  interest  in  this
Property.

Certain Management Services

         CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain  services  relating to management of the  Partnership and its Properties
pursuant to a management  agreement with the Partnership.  Under this agreement,
CNL  Fund  Advisors,   Inc.  is  responsible  for  collecting  rental  payments,
inspecting  the  Properties  and the tenants'  books and records,  assisting the
Partnership  in  responding  to  tenant  inquiries  and  notices  and  providing
information  to  the  Partnership  about  the  status  of  the  leases  and  the
Properties.  CNL Fund  Advisors,  Inc.  also  assists  the  General  Partners in
negotiating the leases.  For these  services,  the Partnership has agreed to pay
CNL Fund Advisors,  Inc. an annual fee of one percent of the sum of gross rental
revenues from Properties  wholly owned by the Partnership plus the Partnership's
allocable  share of gross revenues of joint ventures in which the Partnership is
a co-venturer, but not in excess of competitive fees for comparable services.

         The management agreement continues until the Partnership no longer owns
an interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.

Competition

         The fast-food and family-style  restaurant business is characterized by
intense  competition.  The restaurants on the Partnership's  Properties  compete
with  independently  owned  restaurants,  restaurants which are part of local or
regional chains and restaurants in other well-known  national chains,  including
those offering different types of food and service.

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the officers and employees of CNL Fund Advisors,  Inc.  perform
certain  services for the  Partnership.  In addition,  the General Partners have
available to them the  resources  and expertise of the officers and employees of
CNL Group, Inc., a diversified real estate company, and its affiliates,  who may
also perform certain services for the Partnership.


Item 2.  Properties

         As of December 31, 1998,  the  Partnership  owned,  either  directly or
through  joint  venture  arrangements,  50  Properties,  located  in 18  states.
Reference  is made to the Schedule of Real Estate and  Accumulated  Depreciation
filed  with this  report for a listing of the  Properties  and their  respective
costs, including acquisition fees and certain acquisition expenses.

Description of Properties

         Land. The Partnership's  Property sites range from approximately 15,600
to 137,700  square  feet  depending  upon  building  size and local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.

         Buildings.  Each of the Properties owned by the Partnership  includes a
building that is one of a Restaurant  Chain's  approved  designs.  However,  the
buildings located on the 14 Checkers Properties owned by the Partnership and one
Boston Market  Property owned by Wood-Ridge  Real Estate Joint Venture are owned
by the tenants. The buildings generally are rectangular and are constructed from
various  combinations of stucco,  steel,  wood, brick and tile. The sizes of the
buildings  owned by the  Partnership  range from  approximately  1,500 to 11,000
square feet.  All buildings on Properties  are  freestanding  and  surrounded by
paved  parking  areas.  Buildings  are suitable for  conversion to various uses,
although  modifications  may be required prior to use for other than  restaurant
operations.

         Generally,  a  lessee  is  required,  under  the  terms  of  its  lease
agreement,  to make such capital  expenditures as may be reasonably necessary to
refurbish  buildings,  premises,  signs and  equipment  so as to comply with the
lessee's  obligations,  if applicable,  under the franchise agreement to reflect
the current commercial image of its Restaurant Chain. These capital expenditures
are required to be paid by the lessee during the term of the lease.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  1998 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Flagstar  Corporation  leases seven Hardee's  restaurants.  The initial
term of each lease is 20 years (expiring  between 2013 and 2014) and the average
minimum base annual rent is approximately  $73,800  (ranging from  approximately
$62,900 to $87,800).

         Checkers  Drive-In  Restaurants,   Inc.  leases  14  Checkers  Drive-In
Restaurants  ("Checkers").  The  initial  term of each of its leases is 20 years
(expiring  between  2014 and 2015) and the average  minimum  base annual rent is
approximately  $42,900  (ranging  from  approximately  $22,500 to $63,100).  The
leases for the 14 Checkers  Properties consist of only land. The tenant owns the
buildings  currently on the land and has the right,  if not in default under the
lease, to remove the buildings from the land at the end of the lease term.

         Long John  Silver's,  Inc.  leases four Long John Silver's  restaurants
(excluding four other Properties which were rejected by this tenant as described
above in Item 1. Business -- Leases) with an initial term of 20 years  (expiring
in 2014) and the  average  minimum  base annual  rent is  approximately  $74,400
(ranging from approximately $60,400 to $92,900).

         Foodmaker,  Inc. leases four Jack in the Box  restaurants.  The initial
term of each lease is 18 years  (expiring in 2012) and the average  minimum base
annual rent is  approximately  $91,100  (ranging from  approximately  $71,000 to
$102,200).

         In  addition,  Golden  Corral  Corporation  leases five  Golden  Corral
restaurants.  The initial term of each lease is 15 years (expiring  between 2009
and 2011) and the average  minimum  base annual rent is  approximately  $136,900
(ranging from approximately $88,000 to $190,600).

         The General Partners consider the Properties to be well-maintained  and
sufficient for the Partnership's operations.


Item 3.  Legal Proceedings

         Neither the  Partnership,  nor its General Partners or any affiliate of
the General Partners, nor any of their respective properties,  is a party to, or
subject to, any material pending legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders

         Not applicable.



                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         As of March 11, 1999,  there were 2,705 holders of record of the Units.
There is no public trading market for the Units,  and it is not anticipated that
a public  market for the Units will develop.  Limited  Partners who wish to sell
their  Units  may  offer  the  Units  for  sale  pursuant  to the  Partnership's
distribution  reinvestment  plan (the "Plan"),  and Limited Partners who wish to
have their  distributions  used to acquire additional Units (to the extent Units
are  available  for  purchase),  may do so  pursuant  to such Plan.  The General
Partners have the right to prohibit  transfers of Units.  From inception through
December 31, 1998, the price paid for any Unit transferred  pursuant to the Plan
was $9.50 per Unit. The price paid for any Unit transferred  other than pursuant
to the Plan was subject to negotiation by the purchaser and the selling  Limited
Partner. The Partnership will not redeem or repurchase Units.



<PAGE>


         The following table reflects,  for each calendar quarter, the high, low
and average  sales prices for transfers of Units during 1998 and 1997 other than
pursuant to the Plan, net of commissions.

<TABLE>
<CAPTION>
<S> <C>

                                              1998 (1)                                    1997 (1)
                                  ----------------------------------       ----------------------------------------
                                   High         Low        Average           High           Low          Average
                                  --------    --------    ----------       ----------    ----------    ------------
   First Quarter                  $ 9.50       $ 8.01        $ 8.44           $10.00        $ 8.30          $ 9.37
   Second Quarter                     (2)         (2)           (2)             9.98          8.50            8.99
   Third Quarter                     9.00        6.10          8.03            10.00          8.07            8.91
   Fourth Quarter                    9.50        7.17          8.47             9.50          8.17            9.14

</TABLE>

(1)      A total of 26,755 and 26,053 Units were transferred other than pursuant
         to the Plan for the years ended December 31, 1998 and 1997.

(2) No transfer of Units took place  during the quarter  other than  pursuant to
the Plan.

         The  capital  contribution  per Unit was $10.  All cash  available  for
distribution  will be distributed to the partners  pursuant to the provisions of
the Partnership Agreement.

         For the  years  ended  December  31,  1998 and  1997,  the  Partnership
declared cash distributions of $3,400,000 and $3,200,000,  respectively,  to the
Limited  Partners.  During the quarter  ended March 31,  1998,  the  Partnership
declared a special  distribution  to the  Limited  Partners  of  $200,000  which
represented  cumulative  excess operating  reserves.  No amounts  distributed to
partners for the years ended  December 31, 1998 and 1997,  are required to be or
have been  treated by the  Partnership  as a return of capital  for  purposes of
calculating   the   Limited   Partners'   return  on  their   adjusted   capital
contributions.  No distributions have been made to the General Partners to date.
As indicated in the chart below, these  distributions were declared at the close
of each of the Partnership's  calendar  quarters.  These amounts include monthly
distributions  made in arrears for the Limited Partners electing to receive such
distributions on this basis.

          Quarter Ended                     1998              1997
          -------------
                                         ------------      ------------

          March 31                        $1,000,000         $ 800,000
          June 30                            800,000           800,000
          September 30                       800,000           800,000
          December 31                        800,000           800,000

         The  Partnership  intends to  continue  to make  distributions  of cash
available  for  distribution  to the  Limited  Partners  on a  quarterly  basis,
although some Limited  Partners,  in  accordance  with their  election,  receive
monthly distributions, for an annual fee.


Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
<S> <C>

                                             1998           1997           1996           1995            1994
                                         -------------- -------------- -------------  --------------  -------------
Year ended December 31:
     Revenues (1)                           $3,471,040    $3,908,014     $4,068,610      $3,914,985     $1,319,692
     Net income (2)                          2,642,497     3,434,905      3,585,059       3,372,468      1,185,918
     Cash distributions declared (4)         3,400,000     3,200,000      3,280,000       2,900,001      1,185,946
     Net income per Unit (2) (3)                  0.65          0.85           0.89            0.83           0.41
     Cash distributions declared
         per Unit (3)                             0.85          0.80           0.82            0.73           0.41

At December 31:
     Total assets                          $36,359,054   $37,045,723    $36,936,678     $36,516,732    $37,058,475
     Partners' capital                     $35,465,900   $36,223,403    $35,988,498     $35,683,439    $35,210,972

</TABLE>


(1)      Revenues   include   equity  in  earnings  of  the  joint  venture  and
         adjustments to accrued  rental income due to Long John  Silver's,  Inc.
         filing for bankruptcy and rejecting four of the Partnership's leases.

(2)      Net income for the year ended December 31, 1995,  includes $71,023 from
         loss on sale of land.  Net income for the year ended  December 31, 1998
         includes $280,907 from provision for loss on land and buildings.

(3)      Based  on  the  weighted   average  number  of  Limited  Partner  Units
         outstanding  during the years ended December 31, 1998,  1997,  1996 and
         1995, and the period March 24, 1994 through December 31, 1994.

(4)      Distributions for the years ended December 31, 1998 and 1996, include a
         special  distribution to the Limited  Partners of $200,000 and $80,000,
         respectively, which represented cumulative excess operating reserves.

         The above selected  financial  data should be read in conjunction  with
the financial statements and related notes contained in Item 8 hereof.


Item 7.  Management's  Discussion  and  Analysis  of  Financial  Condition   and
         Results of Operations

         The  Partnership  was  organized on  September 2, 1993,  to acquire for
cash,  either  directly  or  through  joint  venture  arrangements,  both  newly
constructed  and  existing  restaurant  Properties,  as well as land upon  which
restaurant  Properties  were to be  constructed,  which are leased  primarily to
operators  of  selected   national  and  regional   fast-food  and  family-style
Restaurant Chains. The leases are generally  triple-net leases, with the lessees
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities. As of December 31, 1998, the Partnership owned 50 Properties,  either
directly or through joint venture arrangements.

Liquidity and Capital Resources

         Currently,  the  Partnership's  primary  source of capital is cash from
operations (which includes cash received from tenants,  distributions from joint
ventures  and  interest  received,  less  cash  paid for  expenses).  Cash  from
operations  was  $3,216,728,  $3,306,595  and  $3,434,682  for the  years  ended
December  31,  1998,  1997 and 1996,  respectively.  The  decrease  in cash from
operations  during 1998, as compared to 1997,  and the decrease  during 1997, as
compared to 1996,  is  primarily  a result of changes in income and  expenses as
described  in "Results  of  Operations"  below and changes in the  Partnership's
working capital.

         In January 1996, the  Partnership  invested in a Golden Corral Property
located in Clinton,  North Carolina,  with affiliates of the General Partners as
tenants-in-common.  In connection therewith,  the Partnership and its affiliates
entered into an agreement whereby each co-venturer will share in the profits and
losses of the Property in proportion to its applicable  percentage interest.  As
of  December  31,  1998,  the  Partnership  owned a 16 percent  interest in this
Property.

         In  September  1996,  Wood-Ridge  Real Estate  Joint  Venture,  a joint
venture  in which  the  Partnership  owns a 50  percent  interest,  sold its two
Properties  to the tenant for  $5,020,878  and  received  net sales  proceeds of
$5,001,180,  resulting in a gain to the joint venture of approximately  $261,100
for financial reporting  purposes.  These Properties were originally acquired by
Wood-Ridge  Real Estate Joint Venture in September 1994 and had a combined total
cost of approximately  $4,302,500,  excluding acquisition fees and miscellaneous
acquisition  expenses;  therefore,  the joint venture sold these  Properties for
approximately  $698,700 in excess of their original  purchase  price. In October
1996,  Wood-Ridge  Real Estate Joint  Venture  reinvested  $4,404,046 of the net
sales proceeds in five Properties. In January 1997, the joint venture reinvested
$502,598 of the remaining net sales  proceeds in an additional  Property.  As of
December  31,  1998,  the  Partnership  had  received   approximately   $52,000,
representing its pro-rata share of the uninvested net sales proceeds.

         In June 1998, the Partnership invested in a Bennigan's Property located
in  Fort  Myers,   Florida,  with  an  affiliate  of  the  General  Partners  as
tenants-in-common.  In connection  therewith,  the Partnership and its affiliate
entered into an agreement whereby each co-venturer will share in the profits and
losses of the Property in proportion to its applicable  percentage interest.  As
of  December  31,  1998,  the  Partnership  owned a 15 percent  interest in this
Property.

         None of the Properties  owned by the  Partnership or the joint ventures
in which the  Partnership  owns an interest is or may be encumbered.  Subject to
certain restrictions on borrowing, however, the Partnership may borrow funds but
will not encumber any of the Properties in connection  with any such  borrowing.
The  Partnership  will not borrow for the  purpose of  returning  capital to the
Limited Partners.  The Partnership will not borrow under arrangements that would
make the Limited  Partners liable to creditors of the  Partnership.  The General
Partners further have represented that they will use their reasonable efforts to
structure   any   borrowing  so  that  it  will  not   constitute   "acquisition
indebtedness"   for  federal  income  tax  purposes  and  also  will  limit  the
Partnership's  outstanding  indebtedness  to  three  percent  of  the  aggregate
adjusted tax basis of its  Properties.  Affiliates of the General  Partners from
time to time incur certain  operating  expenses on behalf of the Partnership for
which the Partnership reimburses the affiliates without interest.

         Currently,  cash  reserves  and rental  income  from the  Partnership's
Properties  are invested in money market  accounts or other  short-term,  highly
liquid  investments   pending  the  Partnership's  use  of  such  funds  to  pay
Partnership  expenses or make  distributions to partners.  At December 31, 1998,
the  Partnership  had  $1,214,444  invested in such  short-term  investments  as
compared to  $1,614,708  at December  31,  1997.  The  decrease in cash and cash
equivalents  during  1998,  is  primarily  due to the fact that in June 1998 the
Partnership  invested  in a  Bennigan's  Property as  tenants-in-common  with an
affiliate  of the  General  Partners  and due to the fact  that the  Partnership
declared and paid a special distribution of cumulative excess operating reserves
to the Limited Partners of $200,000 during 1998. The funds remaining at December
31, 1998, after payment of distributions and other liabilities,  will be used to
meet the Partnership's working capital and other needs.

         During 1998,  1997 and 1996, the  affiliates  incurred on behalf of the
Partnership $98,978,  $78,821 and $86,714,  respectively,  for certain operating
expenses.  As of December 31, 1998 and 1997,  the  Partnership  owed $23,337 and
$4,311,  respectively,  to related  parties  for such  amounts,  accounting  and
administrative  services  and  management  fees.  As  of  March  11,  1999,  the
Partnership had reimbursed the affiliates all such amounts.  Other  liabilities,
including  distributions  payable,  increased  to $869,817 at December 31, 1998,
from  $818,009 at December  31,  1997,  primarily  as a result of an increase in
rents paid in advance at December 31, 1998.  The General  Partners  believe that
the  Partnership has sufficient cash on hand to meet its current working capital
needs.

         Based on cash from operations and for the years ended December 31, 1998
and 1996, cumulative operating reserves,  the Partnership declared distributions
to the Limited  Partners of $3,400,000,  $3,200,000 and $3,280,000 for the years
ended  December  31,  1998,  1997  and  1996,   respectively.   This  represents
distributions  of $0.85,  $0.80, and $0.82 per Unit for the years ended December
31,  1998,  1997  and  1996,  respectively.  No  amounts  distributed  or  to be
distributed to the Limited  Partners for the years ended December 31, 1998, 1997
or 1996 are required to be or have been treated by the  Partnership  as a return
of capital for purposes of  calculating  the Limited  Partners'  return on their
adjusted  capital  contributions.  The  Partnership  intends to continue to make
distributions  of cash available for  distribution to the Limited  Partners on a
quarterly basis.

         The General Partners believe that the Properties are adequately covered
by  insurance.  In  addition,  the General  Partners  have  obtained  contingent
liability and property coverage for the Partnership.  This insurance is intended
to reduce the Partnership's  exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The General Partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners believe that the Partnership has sufficient working capital reserves at
this time. In addition,  because all leases of the Partnership's  Properties are
on a  triple-net  basis,  it is not  anticipated  that a  permanent  reserve for
maintenance  and  repairs  will be  established  at this  time.  To the  extent,
however,  that the Partnership  has  insufficient  funds for such purposes,  the
General Partners will contribute to the Partnership an aggregate amount of up to
one percent of the offering  proceeds for maintenance  and repairs.  The General
Partners have the right to cause the Partnership to maintain additional reserves
if, in their  discretion,  they determine such reserves are required to meet the
Partnership's working capital needs.

         The General  Partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with APF,  pursuant to which the Partnership  would be merged with and
into a subsidiary  of APF. As  consideration  for the Merger,  APF has agreed to
issue  3,733,901  APF Shares  which,  for the  purposes  of  valuing  the merger
consideration,  have been valued by APF at $10.00 per APF Share,  the price paid
by APF  investors in APF's most recent public  offering.  In order to assist the
General  Partners in evaluating the proposed merger  consideration,  the General
Partners  retained  Valuation  Associates,  a nationally  recognized real estate
appraisal firm, to appraise the  Partnership's  restaurant  property  portfolio.
Based on Valuation Associates'  appraisal,  the Partnership's property portfolio
and other assets were valued on a going concern basis  (meaning the  Partnership
continues  unchanged) at  $36,726,950  as of December 31, 1998.  Legg Mason Wood
Walker,  Incorporated  has  rendered  a  fairness  opinion  that  the APF  Share
consideration, payable by APF, is fair to the Partnership from a financial point
of view.  The APF Shares are  expected  to be listed for trading on the New York
Stock Exchange concurrently with the consummation of the Merger, and, therefore,
would be freely  tradable  at the option of the former  Limited  Partners.  At a
special meeting of the partners that is expected to be held in the third quarter
of  1999,  Limited  Partners  holding  in  excess  of 50%  of the  Partnership's
outstanding  limited  partnership  interests  must  approve the Merger  prior to
consummation of the  transaction.  The General Partners intend to recommend that
the Limited Partners of the Partnership  approve the Merger.  In connection with
their  recommendation,  the  General  Partners  will  solicit the consent of the
Limited Partners at the special meeting.

Results of Operations

         The  Partnership  owned and leased 42 wholly  owned  Properties  during
1996,  1997,  and  1998.  In  addition,  during  1996,  the  Partnership  was  a
co-venturer  in one  joint  venture  that  owned  and  leased  seven  Properties
(including  two Properties in Wood-Ridge  Real Estate Joint Venture,  which were
sold in September 1996) and the  Partnership  owned and leased one Property with
affiliates, as tenants-in-common. During 1997, the Partnership was a co-venturer
in one joint venture that owned and leased six  Properties  and owned and leased
one Property with affiliates as tenants-in-common.  During 1998, the Partnership
owned and leased one additional Property with an affiliate as tenants-in-common.
As of December 31, 1998, the Partnership owned, either directly or through joint
venture arrangements,  50 Properties,  which are generally subject to long-term,
triple-net  leases. The leases of the Properties provide for minimum base annual
rental payments  (payable in monthly  installments)  ranging from  approximately
$22,500 to $190,600.  The  majority of the leases  provide for  percentage  rent
based on sales in excess of a specified amount. In addition, the majority of the
leases provide that,  commencing in specified  lease years  (generally  from the
sixth or the ninth lease year), the annual base rent required under the terms of
the lease will increase. For further description of the Partnership's leases and
Properties, see Item 1. Business - Leases and Item 2. Properties, respectively.

         During  the  years  ended  December  31,  1998,   1997  and  1996,  the
Partnership  earned $3,130,205,  $3,586,791,  and $3,596,466,  respectively,  in
rental  income from  operating  leases  (net of  adjustments  to accrued  rental
income) and earned income from direct  financing  leases from Properties  wholly
owned by the Partnership.  The decrease in rental and earned income during 1998,
as compared to 1997,  is primarily due to a decrease in rental and earned income
of  approximately  $197,700  due to the  fact  that,  in June  1998,  Long  John
Silver's, Inc., filed for bankruptcy and rejected the leases relating to four of
the eight Properties leased by Long John Silver's, Inc. As a result, this tenant
ceased making rental payments on the four rejected  leases.  The Partnership has
continued  receiving rental payments  relating to the leases not rejected by the
tenant.  In  conjunction  with the four rejected  leases,  during the year ended
December 31, 1998, the Partnership wrote off  approximately  $250,600 of accrued
rental income (non-cash accounting adjustment relating to the straight-lining of
future scheduled rent increases over the lease term in accordance with generally
accepted  accounting  principles).  The General  Partners are currently  seeking
either new tenants or purchasers for these Properties.  The Partnership will not
recognize  rental and earned income from these  Properties until new tenants for
these  Properties  are located or until the Properties are sold and the proceeds
from  such  sales are  reinvested  in  additional  Properties.  While  Long John
Silver's, Inc. has not rejected or affirmed the remaining four leases, there can
be no  assurance  that some or all of the  leases  will not be  rejected  in the
future. The lost revenues resulting from the four leases that were rejected,  as
described above,  and the possible  rejection of the remaining four leases could
have an adverse  effect on the results of operations of the  Partnership  if the
Partnership is unable to re-lease these Properties in a timely manner.

         During  the  years  ended  December  31,  1998,   1997  and  1996,  the
Partnership  also  earned  $41,463,  $25,791,  and  $23,318,   respectively,  in
contingent  rental income.  Contingent rental income for the year ended December
31,  1998,  as compared to 1997,  increased  primarily  as a result of increased
gross  sales of  certain  restaurant  Properties  that  are  subject  to  leases
requiring payment of contingent rental income.

         In addition,  for the years ended December 31, 1998, 1997 and 1996, the
Partnership earned $236,553, $239,249 and $392,862,  respectively,  attributable
to  net  income  earned  by  joint  ventures  in  which  the  Partnership  is  a
co-venturer. The decrease in net income earned by joint ventures during 1997, as
compared to 1996, is primarily  attributable to the fact that in September 1996,
Wood-Ridge Real Estate Joint Venture, in which the Partnership owns a 50 percent
interest,  recognized a gain of approximately  $261,100 for financial  reporting
purposes  as a result  of the  sale of its  Properties  in  September  1996,  as
described  above  in  "Liquidity  and  Capital  Resources."  The  joint  venture
reinvested the majority of the net sales proceeds in five  Properties in October
1996 and one Property in January 1997, therefore, the sale of the two Properties
did not have a material adverse effect on operations.

         During  the  year  ended  December  31,  1998,   five  lessees  of  the
Partnership,  Flagstar Enterprises,  Inc., Checkers Drive-In Restaurants,  Inc.,
Long John Silver's,  Inc., Foodmaker,  Inc. and Golden Corral Corporation,  each
contributed  more than ten  percent of the  Partnership's  total  rental  income
(including the Partnership's share of rental income from six Properties owned by
a joint venture and two Properties owned with affiliates as  tenants-in-common).
As of December 31, 1998, Flagstar Enterprises,  Inc. was the lessee under leases
relating to eight  restaurants,  Checkers  Drive-In  Restaurants,  Inc.  was the
lessee under leases relating to 14 restaurants, Long John Silver's, Inc. was the
lessee  under leases  relating to four  restaurants  (excluding  the four leases
rejected by the tenant as described above), Foodmaker, Inc. was the lessee under
leases  relating to four  restaurants  and Golden Corral  Corporation was lessee
under leases relating to five restaurants.  It is anticipated that, based on the
minimum rental  payments  required by the leases,  Flagstar  Enterprises,  Inc.,
Checkers Drive-In  Restaurants,  Foodmaker,  Inc., and Golden Corral Corporation
each will  continue to  contribute  more than ten  percent of the  Partnership's
total rental  income in 1999.  In addition,  during the year ended  December 31,
1998, five Restaurant Chains, Hardee's, Checkers Drive-In Restaurants, Long John
Silver's,  Golden Corral and Jack in the Box,  each  accounted for more than ten
percent of the  Partnership's  total rental income  (including the Partnership's
share of rental  income  from six  Properties  owned by a joint  venture and two
Properties  owned  with  affiliates  as  tenants-in-common).   In  1999,  it  is
anticipated that Hardee's,  Checker's  Drive-In  Restaurants,  Golden Corral and
Jack in the Box each will  continue  to account for more than ten percent of the
total rental income to which the  Partnership is entitled under the terms of the
leases.  Any failure of these  lessees or  Restaurant  Chains  could  materially
affect the  Partnership's  income if the Partnership is not able to re-lease the
Properties in a timely manner.

         Operating expenses,  including  depreciation and amortization  expense,
were  $547,636,  $473,109,  and $483,551 for the years ended  December 31, 1998,
1997 and 1996, respectively.  The increase in operating expenses during 1998, as
compared to 1997,  is partially  attributable  to the fact that the  Partnership
accrued insurance and real estate taxes as a result of Long John Silver's,  Inc.
filing for  bankruptcy and rejecting the leases  relating to four  Properties in
June 1998. In addition, the increase in operating expenses during the year ended
December 31,  1998,  is partially  attributable  to an increase in  depreciation
expense  due to the fact that  during  the year ended  December  31,  1998,  the
Partnership  reclassified  these assets from net investment in direct  financing
leases to land and buildings on operating leases.  The Partnership will continue
to incur certain expenses,  such as real estate taxes, insurance and maintenance
relating to these Properties with rejected leases until  replacement  tenants or
purchasers are located.  The Partnership is currently seeking either replacement
tenants or purchasers for these Properties.

         The increase in operating  expenses for 1998, is also  partially due to
the fact that the Partnership  incurred $23,196 in transaction  costs related to
the General  Partners  retaining  financial and legal advisors to assist them in
evaluating and  negotiating  the proposed Merger with APF, as described above in
"Liquidity and Capital  Resources." If the Limited  Partners  reject the Merger,
the Partnership  will bear the portion of the  transaction  costs based upon the
percentage of "For" votes and the General Partners will bear the portion of such
transaction  costs based upon the percentage of "Against" votes and abstentions.
The  decrease in  operating  expenses  during  1997,  as  compared  to 1996,  is
primarily  attributable to a decrease in accounting and administrative  expenses
associated with operating the Partnership and its Properties.



<PAGE>


         During the year ended December 31, 1998, the Partnership established an
allowance  for loss on land and  buildings of $280,907 for  financial  reporting
purposes relating to two of the four Long John Silver's  Properties whose leases
were  rejected  by the tenant,  as  described  above.  The loss  represents  the
difference between the carrying value of the Properties at December 31, 1998 and
the  current  estimated  net  realizable  value  for these  Properties.  No such
allowance was established during the years ended December 31, 1997 and 1996.

         The Partnership's leases as of December 31, 1998, are triple-net leases
and contain  provisions that the General  Partners  believe mitigate the adverse
effect of inflation.  Such provisions  include clauses  requiring the payment of
percentage rent based on certain restaurant sales above a specified level and/or
automatic  increases  in base rent at  specified  times  during  the term of the
lease.  Management  expects that  increases in  restaurant  sales volumes due to
inflation  and real sales growth  should  result in an increase in rental income
over  time.  Continued  inflation  also may cause  capital  appreciation  of the
Partnership's Properties.  Inflation and changing prices, however, also may have
an  adverse  impact on the sales of the  restaurants  and on  potential  capital
appreciation of the Properties.

Year 2000

         The Year 2000 problem is the result of information  technology  systems
and embedded  systems  (products which are made with  microprocessor  (computer)
chips such as HVAC systems,  physical  security  systems and elevators)  using a
two-digit  format,  as  opposed  to four  digits,  to  indicate  the year.  Such
information  technology and embedded systems may be unable to properly recognize
and process date-sensitive information beginning January 1, 2000.

         The  Partnership  currently  does not have any  information  technology
systems.  Affiliates of the General Partners provide all services  requiring the
use of information  technology  systems pursuant to a management  agreement with
the  Partnership.   The  maintenance  of  embedded  systems,   if  any,  at  the
Partnership's  Properties is the responsibility of the tenants of the Properties
in accordance with the terms of the Partnership's  leases.  The General Partners
and  affiliates  have  established  a team  dedicated to reviewing  the internal
information technology systems used in the operation of the Partnership, and the
information  technology and embedded  systems and the Year 2000 compliance plans
of the Partnership's tenants, significant suppliers,  financial institutions and
transfer agent.

         The  information  technology  infrastructure  of the  affiliates of the
General  Partners  consists of a network of personal  computers and servers that
were  obtained   from  major   suppliers.   The   affiliates   utilize   various
administrative  and financial  software  applications on that  infrastructure to
perform the business functions of the Partnership.  The inability of the General
Partners  and  affiliates  to identify  and timely  correct  material  Year 2000
deficiencies  in  the  software  and/or   infrastructure   could  result  in  an
interruption in, or failure of, certain of the Partnership's business activities
or operations.  Accordingly,  the General Partners and affiliates have requested
and  are  evaluating  documentation  from  the  suppliers  of the  software  and
infrastructure  of the  affiliates  regarding the Year 2000  compliance of their
products  that  are  used  in  the  business  activities  or  operations  of the
Partnership.   The  General  Partners  and  affiliates  have  not  yet  received
sufficient certifications to be assured that the suppliers have fully considered
and mitigated any potential material impact of the Year 2000  deficiencies.  The
costs  expected to be incurred by the General  Partners and affiliates to become
Year 2000  compliant  will be incurred by the General  Partners and  affiliates;
therefore,  these  costs  will  have no impact  on the  Partnership's  financial
position or results of operations.

         The  Partnership  has  material  third  party  relationships  with  its
tenants,  financial  institutions and transfer agent. The Partnership depends on
its  tenants  for  rents  and  cash  flows,   its  financial   institutions  for
availability  of cash and its  transfer  agent to  maintain  and track  investor
information.  If any of these third parties are unable to meet their obligations
to the  Partnership  because of the Year 2000  deficiencies,  such a failure may
have a material impact on the  Partnership.  Accordingly,  the General  Partners
have requested and are evaluating  documentation from the Partnership's tenants,
financial  institutions,   and  transfer  agent  relating  to  their  Year  2000
compliance  plans.  The  General  Partners  have  not  yet  received  sufficient
certifications  to be assured  that the  tenants,  financial  institutions,  and
transfer agent have fully considered and mitigated any potential material impact
of the Year 2000 deficiencies.  Therefore,  the General Partners do not, at this
time,  know of the potential  costs to the  Partnership of any adverse impact or
effect of any Year 2000 deficiencies by these third parties.

         The General  Partners  currently  expect that all year 2000  compliance
testing  and any  necessary  remedial  measures  on the  information  technology
systems used in the business  activities and operations of the Partnership  will
be completed prior to June 30, 1999.  Based on the progress the General Partners
and affiliates  have made in identifying and addressing the  Partnership's  Year
2000 issues and the plan and timeline to complete the  compliance  program,  the
General  Partners  do  not  foresee   significant   risks  associated  with  the
Partnership's  Year 2000 compliance at this time.  Because the General  Partners
and affiliates are still  evaluating  the status of the  information  technology
systems used in business  activities and operations of the  Partnership  and the
systems of the third parties with which the  Partnership  conducts its business,
the General Partners have not yet developed a comprehensive contingency plan and
are unable to identify "the most reasonably  likely worst case scenario" at this
time.  If  the  General  Partners  identify  significant  risks  related  to the
Partnership's  Year 2000 compliance or if the Partnership's Year 2000 compliance
program's  progress deviates  substantially from the anticipated  timeline,  the
General Partners will develop appropriate contingency plans.


Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.

Item 8.   Financial Statements and Supplementary Data


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                                    CONTENTS








                                                                      Page
                                                                      ----

Report of Independent Accountants                                     

Financial Statements:

  Balance Sheets                                                      

  Statements of Income                                                

  Statements of Partners' Capital                                     

  Statements of Cash Flows                                            

  Notes to Financial Statements                                       


<PAGE>






                        Report of Independent Accountants




To the Partners
CNL Income Fund XV, Ltd.


In our opinion,  the financial  statements  listed in the index  appearing under
item 14(a)(1) present fairly, in all material  respects,  the financial position
of CNL Income Fund XV, Ltd. (a Florida limited partnership) at December 31, 1998
and 1997,  and the results of its  operations and its cash flows for each of the
three years in the period ended  December 31, 1998 in conformity  with generally
accepted  accounting  principles.  In addition,  in our opinion,  the  financial
statement  schedule listed in the index  appearing under item 14(a)(2)  presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related financial  statements.  These financial  statements
and the financial statement schedule are the responsibility of the Partnership's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  and  the  financial  statement  schedule  based  on our  audits.  We
conducted our audits of these  statements in accordance with generally  accepted
auditing  standards  which  require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.







Orlando,  Florida
January 27, 1999,  except for the second  paragraph of Note 10
for which the date is March 11, 1999.


<PAGE>

<TABLE>
<CAPTION>


                                              CNL INCOME FUND XV, LTD.
                                           (A Florida Limited Partnership)

                                                   BALANCE SHEETS
                                                   --------------

<S> <C>

                                                                                         December 31,
                                                                                 1998                     1997
                                                                           -----------------        -----------------

                         ASSETS

Land and buildings on operating leases, less
    accumulated depreciation and allowance
    for loss on land and building                                               $23,173,909              $22,145,138
Net investment in direct financing leases                                         7,589,694                9,264,307
Investment in joint ventures                                                      2,743,450                2,561,816
Cash and cash equivalents                                                         1,214,444                1,614,708
Receivables, less allowance for doubtful
    accounts of $849 in 1998                                                         62,465                   26,888
Prepaid expenses                                                                      9,627                    7,633
Organization costs, less accumulated
    amortization of $9,549 and $7,548                                                   451                    2,452
Accrued rental income                                                             1,565,014                1,422,781
                                                                           -----------------        -----------------

                                                                                $36,359,054              $37,045,723
                                                                           =================        =================


LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                                                   $    592                $   6,991
Accrued and escrowed real estate
    taxes payable                                                                    16,019                    6,158
Distributions payable                                                               800,000                  800,000
Due to related parties                                                               23,337                    4,311
Rents paid in advance                                                                53,206                    4,860
                                                                           -----------------        -----------------
       Total liabilities                                                            893,154                  822,320

Partners' capital                                                                35,465,900               36,223,403
                                                                           -----------------        -----------------

                                                                                $36,359,054              $37,045,723
                                                                           =================        =================





                 See accompanying notes to financial statements.


<PAGE>


                                              CNL INCOME FUND XV, LTD.
                                           (A Florida Limited Partnership)

                                                STATEMENTS OF INCOME
                                                --------------------



                                                                            Year Ended December 31,
                                                                 1998                1997                  1996
                                                            --------------       --------------       --------------
Revenues:
    Rental income from operating leases                        $2,443,550           $2,527,261           $2,527,261
    Adjustments to accrued rental income                         (250,631 )                 --                   --
    Earned income from direct
       financing leases                                           937,286            1,059,530            1,069,205
    Contingent rental income                                       41,463               25,791               23,318
    Interest and other income                                      62,819               56,183               55,964
                                                            --------------       --------------       --------------
                                                                3,234,487            3,668,765            3,675,748
                                                            --------------       --------------       --------------
Expenses:
    General operating and administrative                          137,794              135,714              149,388
    Professional services                                          26,208               24,526               19,881
    Management fees to related parties                             33,990               35,321               35,126
    Real estate taxes                                              16,797                   --                   --
    State and other taxes                                          27,763               29,200               30,924
    Depreciation and amortization                                 281,888              248,348              248,232
    Transaction costs                                              23,196                   --                   --
                                                            --------------       --------------       --------------
                                                                  547,636              473,109              483,551
                                                            --------------       --------------       --------------
Income Before Equity in Earnings
    of Joint Ventures and Provision for
    Loss on Land and Buildings                                  2,686,851            3,195,656            3,192,197

Equity in Earnings of Joint Ventures                              236,553              239,249              392,862

Provision for Loss on Land and Buildings                         (280,907 )                 --                   --
                                                            --------------       --------------       --------------

Net Income                                                     $2,642,497           $3,434,905           $3,585,059
                                                            ==============       ==============       ==============

Allocation of Net Income:
    General partners                                             $ 28,218             $ 34,349             $ 35,851
    Limited partners                                            2,614,279            3,400,556            3,549,208
                                                            --------------       --------------       --------------

                                                               $2,642,497           $3,434,905           $3,585,059
                                                            ==============       ==============       ==============

Net Income Per Limited Partner Unit                              $   0.65             $   0.85             $   0.89
                                                            ==============       ==============       ==============

Weighted Average Number of Limited
    Partner Units Outstanding                                   4,000,000            4,000,000            4,000,000
                                                            ==============       ==============       ==============



                 See accompanying notes to financial statements.


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 1998, 1997 and 1996


                                    General Partners                                        Limited Partners
                              -------------------------- ------------------------------------------------------------------------
                                             Accumulated                                Accumulated    Syndication
                              Contributions    Earnings  Contributions  Distributions     Earnings        Costs           Total
                              -------------  ----------- ------------- ---------------  ------------   ------------   --------------

Balance, December 31, 1995     $    1,000    $  46,211   $ 40,000,000  $ (4,085,947 )    $4,512,175    $(4,790,000)   $ 35,683,439

    Distributions to limited
       partners ($0.82 per
       limited partner unit)           --           --             --    (3,280,000 )            --             --      (3,280,000 )
    Net income                         --       35,851             --            --       3,549,208             --       3,585,059
                               ----------   ----------  -------------   ------------     ----------   ------------    --------------

Balance, December 31, 1996          1,000       82,062     40,000,000    (7,365,947 )     8,061,383     (4,790,000)     35,988,498

    Distributions to limited
       partners ($0.80 per
       limited partner unit)           --           --             --    (3,200,000 )            --             --      (3,200,000 )
    Net income                         --       34,349             --            --       3,400,556             --       3,434,905
                               ----------   ----------  -------------   ------------     ----------   ------------   ---------------

Balance, December 31, 1997          1,000      116,411     40,000,000    10,565,947 )    11,461,939     (4,790,000)     36,223,403

    Distributions to limited
       partners ($0.85 per
       limited partner unit)           --           --             --    (3,400,000 )            --             --      (3,400,000 )
    Net income                         --       28,218             --            --       2,614,279             --       2,642,497
                               ----------   ----------  -------------   ------------    -----------   ------------   ---------------

Balance, December 31, 1998     $    1,000    $ 144,629   $ 40,000,000   $(13,965,947 )  $14,076,218   $ (4,790,000)   $ 35,465,900
                               ==========   ==========  =============   ============    ===========   ============   ===============





                 See accompanying notes to financial statements.


<PAGE>


                                             CNL INCOME FUND XV, LTD.
                                          (A Florida Limited Partnership)

                                             STATEMENTS OF CASH FLOWS


                                                                                  Year Ended December 31,
                                                                        1998              1997                1996
                                                                    --------------     -------------     --------------

Increase (Decrease) in Cash and Cash Equivalents:

      Cash Flows from Operating Activities:
         Cash received from tenants                                    $3,143,119       $3,228,741         $3,378,973
         Distributions from joint ventures                                271,075          249,318            259,407
         Cash paid for expenses                                          (252,042 )       (218,106  )        (246,748  )
         Interest received                                                 54,576           46,642             43,050
                                                                    --------------     -------------     --------------
             Net cash provided by operating activities                  3,216,728        3,306,595          3,434,682
                                                                    --------------     -------------     --------------

      Cash Flows from Investing Activities:
         Investment in joint ventures                                    (216,992 )             --           (129,939  )
         Return of capital from joint venture                                  --           51,950                 --
                                                                    --------------     -------------     --------------
             Net cash provided by (used in) investing
                activities                                               (216,992 )         51,950           (129,939  )
                                                                    --------------     -------------     --------------

      Cash Flows from Financing Activities:
         Distributions to limited partners                             (3,400,000 )     (3,280,000  )      (3,200,000  )
                                                                    --------------     -------------     --------------
                Net cash used in financing activities                  (3,400,000 )     (3,280,000  )      (3,200,000  )
                                                                    --------------     -------------     --------------

Net Increase (Decrease) in Cash and Cash Equivalents                     (400,264 )         78,545            104,743

Cash and Cash Equivalents at Beginning of Year                          1,614,708        1,536,163          1,431,420
                                                                    --------------     -------------     --------------

Cash and Cash Equivalents at End of Year                               $1,214,444       $1,614,708         $1,536,163
                                                                    ==============     =============     ==============






                 See accompanying notes to financial statements.


<PAGE>


                                              CNL INCOME FUND XV, LTD.
                                           (A Florida Limited Partnership)

                                        STATEMENTS OF CASH FLOWS - CONTINUED



                                                                               Year Ended December 31,
                                                                    1998                  1997                1996
                                                               ---------------      ---------------    ----------------

Reconciliation of Net Income to Net Cash Provided by
   Operating Activities:

      Net income                                                  $ 2,642,497          $ 3,434,905         $ 3,585,059
                                                               ---------------      ---------------    ----------------
      Adjustments to reconcile net income to net cash
         provided  by  operating activities:
             Depreciation                                             279,051              245,563             245,563
             Amortization                                               2,837                2,785               2,669
             Equity in earnings of joint  ventures, net
                of distributions                                       34,522               10,069            (133,455 )
             Provision for loss on land and buildings                 280,907                   --                  --
             Decrease (increase) in receivables                       (33,427 )              3,288              58,013
             Decrease in net investment in direct
                financing leases                                       85,884               87,508              77,834
             Increase in prepaid expenses                              (1,994 )               (584 )            (4,234 )
             Increase in accrued rental income                       (142,233 )           (431,079 )          (431,654 )
             Increase in accounts payable and accrued
                expenses                                                3,462                1,515               1,972
             Increase (decrease)  in  due  to  related               
                parties                                                16,876                2,956              (6,880 )
             Increase (decrease) in rents paid in
                advance                                                48,346              (50,331 )            39,795
                                                               ---------------      ---------------    ----------------
                   Total adjustments                                  574,231             (128,310 )          (150,377 )
                                                               ---------------      ---------------    ----------------

Net Cash Provided by Operating Activities                         $ 3,216,728          $ 3,306,595         $ 3,434,682
                                                               ===============      ===============    ================

Supplemental Schedule of Non-Cash Financing
Activities:

   Distributions declared and unpaid at December 31                $  800,000           $  800,000          $  880,000
                                                               ===============      ===============    ================

</TABLE>




                 See accompanying notes to financial statements.


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 1998, 1997, and 1996


1.       Significant Accounting Policies:

         Organization  and Nature of Business - CNL Income  Fund XV,  Ltd.  (the
         "Partnership") is a Florida limited  partnership that was organized for
         the purpose of acquiring both newly constructed and existing restaurant
         properties,  as well as properties  upon which  restaurants  were to be
         constructed,  which are leased  primarily  to operators of national and
         regional fast-food and family-style restaurant chains.

         The general partners of the Partnership are CNL Realty Corporation (the
         "Corporate  General  Partner"),  James M.  Seneff,  Jr.  and  Robert A.
         Bourne.  Mr. Seneff and Mr. Bourne are also 50 percent  shareholders of
         the Corporate General Partner. The general partners have responsibility
         for managing the day-to-day operations of the Partnership.

         Real  Estate  and  Lease  Accounting  -  The  Partnership  records  the
         acquisition of land and buildings at cost,  including  acquisition  and
         closing costs. Land and buildings are leased to unrelated third parties
         on a triple-net basis, whereby the tenant is generally  responsible for
         all operating  expenses  relating to the property,  including  property
         taxes, insurance, maintenance and repairs. The leases are accounted for
         using  either the  direct  financing  or the  operating  methods.  Such
         methods are described below:

                  Direct  financing  method - The leases accounted for using the
                  direct  financing  method are recorded at their net investment
                  (which at the inception of the lease generally  represents the
                  cost of the asset) (Note 4).  Unearned  income is deferred and
                  amortized  to income  over the lease  terms so as to produce a
                  constant  periodic  rate of  return on the  Partnership's  net
                  investment in the leases.

                  Operating  method - Land and  building  leases  accounted  for
                  using the  operating  method are recorded at cost,  revenue is
                  recognized as rentals are earned and  depreciation  is charged
                  to operations as incurred.  Buildings are  depreciated  on the
                  straight-line  method over their estimated  useful lives of 30
                  years.  When  scheduled  rentals  vary  during the lease term,
                  income is recognized on a straight-line basis so as to produce
                  a constant periodic rent over the lease term commencing on the
                  date the property is placed in service.




<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


1.       Significant Accounting Policies - Continued:

                  Accrued  rental  income  represents  the  aggregate  amount of
                  income  recognized  on a  straight-line  basis  in  excess  of
                  scheduled rental payments to date.  Whenever a tenant defaults
                  under  the  terms  of its  lease,  or  events  or  changes  in
                  circumstance  indicate  that the  tenant  will not  lease  the
                  property  through the end of the lease term,  the  Partnership
                  either  reserves or writes-off the  cumulative  accrued rental
                  income balance.

         When  the  properties  are  sold,  the  related  cost  and  accumulated
         depreciation  for operating  leases and the net  investment  for direct
         financing leases,  plus any accrued rental income, are removed from the
         accounts and gains or losses from sales are  reflected  in income.  The
         general  partners of the Partnership  review  properties for impairment
         whenever events or changes in circumstances  indicate that the carrying
         amount of the assets may not be  recoverable  through  operations.  The
         general partners  determine whether an impairment in value has occurred
         by comparing the estimated future  undiscounted  cash flows,  including
         the  residual  value of the  property,  with the  carrying  cost of the
         individual  property.  If an impairment  is  indicated,  the assets are
         adjusted to their fair value.  Although the general  partners have made
         their best estimate of these factors based on current conditions, it is
         reasonably  possible  that  change  could  occur in the near term which
         could adversely affect the general  partners' best estimate of net cash
         flows  expected to be generated  from its  properties  and the need for
         asset impairment write downs.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  an  adjustment  is made to  increase  the
         allowance for doubtful accounts,  which is netted against  receivables,
         and to decrease rental or other income or increase bad debt expense for
         the  current  period,  although  the  Partnership  continues  to pursue
         collection of such amounts.  If amounts are subsequently  determined to
         be  uncollectible,  the  corresponding  receivable  and  allowance  for
         doubtful accounts are decreased accordingly.

         Investment  in  Joint  Ventures  - The  Partnership  accounts  for  its
         interests in  Wood-Ridge  Real Estate Joint  Venture and  properties in
         Clinton,   North   Carolina   and   Fort   Myers,   Florida,   held  as
         tenants-in-common  with  affiliates,  using the equity method since the
         Partnership  shares control with affiliates which have the same general
         partners.

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial  banks and money market funds (some of which are
         backed by government  securities).  Cash equivalents are stated at cost
         plus accrued interest, which approximates market value.


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


1.       Significant Accounting Policies - Continued:

         Cash  accounts  maintained  on  behalf  of the  Partnership  in  demand
         deposits  at  commercial  banks  and  money  market  funds  may  exceed
         federally insured levels;  however, the Partnership has not experienced
         any losses in such  accounts.  The  Partnership  limits  investment  of
         temporary cash investments to financial  institutions  with high credit
         standing;  therefore, the Partnership believes it is not exposed to any
         significant credit risk on cash and cash equivalents.

         Organization  Costs - Organization costs were amortized over five years
         using the straight-line method.

         Income Taxes - Under  Section 701 of the  Internal  Revenue  Code,  all
         income,  expenses and tax credit items flow through to the partners for
         tax  purposes.  Therefore,  no  provision  for federal  income taxes is
         provided in the accompanying  financial statements.  The Partnership is
         subject to certain state taxes on its income and property.

         Additionally,  for tax  purposes,  syndication  costs are  included  in
         Partnership equity and in the basis of each partner's  investment.  For
         financial  reporting  purposes,  syndication  costs are netted  against
         partners' capital and represent a reduction of Partnership equity and a
         reduction in the basis of each partner's investment.

         Use of Estimates - The general  partners of the Partnership have made a
         number of estimates and assumptions relating to the reporting of assets
         and liabilities and the disclosure of contingent assets and liabilities
         to prepare these  financial  statements in  conformity  with  generally
         accepted  accounting  principles.  The more significant areas requiring
         the use of  management  estimates  relate to the allowance for doubtful
         accounts  and future  cash flows  associated  with  long-lived  assets.
         Actual results could differ from those estimates.

2.       Leases:

         The  Partnership  leases its land or land and  buildings  primarily  to
         operators  of  national  and  regional   fast-food   and   family-style
         restaurants.  The  leases are  accounted  for under the  provisions  of
         Statement of Financial  Accounting  Standards No. 13,  "Accounting  for
         Leases." Some of the leases are classified as operating leases and some
         of the leases are classified as direct financing leases. For the leases
         classified as direct  financing  leases,  the building  portions of the
         property leases are accounted for as direct  financing leases while the
         land  portions of the  majority of these leases are  operating  leases.
         Substantially all leases are for 15 to 20 years and provide for minimum
         and  contingent  rentals.  In addition,  generally  the tenant pays all
         property taxes and assessments, fully maintains the interior and


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


2.       Leases - Continued:

         exterior of the  building  and carries  insurance  coverage  for public
         liability,   property  damage,   property  damage,  fire  and  extended
         coverage. The lease options generally allow tenants to renew the leases
         for two to five successive  five-year periods subject to the same terms
         and conditions as the initial lease.  Most leases also allow the tenant
         to purchase the property at fair market value after a specified portion
         of the lease has elapsed.

3.       Land and Buildings on Operating Leases:

         Land and  buildings on operating  leases  consisted of the following at
         December 31:

                                                 1998              1997
                                            -------------     -------------

            Land                              $15,579,852       $15,579,852
            Buildings                           8,955,616         7,366,887
                                            -------------     -------------
                                               24,535,468        22,946,739

            Less accumulated depreciation      (1,080,652 )        (801,601 )
                                            -------------     -------------
                                               23,454,816        22,145,138

            Less allowance for loss on
                land and buildings               (280,907 )              --
                                            -------------     -------------
                                              $23,173,909       $22,145,138
                                            =============     =============

         During the year ended December 31, 1998, the Partnership established an
         allowance  for loss on land and  buildings  of $280,907  for  financial
         reporting  purposes  relating  to two of the four  Long  John  Silver's
         properties  whose leases were rejected by the tenant as a result of the
         tenant  filing  for  bankruptcy.  The loss  represents  the  difference
         between the carrying  value of the  properties at December 31, 1998 and
         the current estimated net realizable value for these properties.

         Generally,  the leases provide for escalating  guaranteed minimum rents
         throughout the lease term.  Income from these  scheduled rent increases
         is  recognized on a  straight-line  basis over the terms of the leases.
         For the years ended December 31, 1998,  1997 and 1996, the  Partnership
         recognized  $142,233  (net of $250,631 in  write-offs),  $431,079,  and
         $431,654, respectively, of such rental income.



<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


3.       Land and Buildings on Operating Leases - Continued:

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 1998:

                1999                                              $2,079,263
                2000                                               2,205,272
                2001                                               2,208,745
                2002                                               2,239,958
                2003                                               2,255,872
                Thereafter                                        24,476,132
                                                           ------------------

                                                                 $35,465,242
                                                           ==================

         Since  lease  renewal  periods  are  exercisable  at the  option of the
         tenant, the above table only presents future minimum lease payments due
         during  the  initial  lease  terms.  In  addition,  this table does not
         include any amounts for future contingent rentals which may be received
         on the leases based on a percentage of the tenant's gross sales.

4.       Net Investment in Direct Financing Leases:

         The following lists the components of  the  net  investment  in  direct
         financing leases at December 31:

                                                       1998            1997
                                                  ---------------  -------------

             Minimum lease payments receivable      $15,275,632    $19,905,444
             Estimated residual values                2,460,656      2,873,859
             Less unearned income                   (10,146,594 )  (13,514,996 )
                                                  ---------------  -------------

             Net investment in direct financing
                 leases                              $7,589,694     $9,264,307
                                                  ===============  =============



<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


4.       Net Investment in Direct Financing Leases - Continued:

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 1998:

                1999                                            $  922,497
                2000                                               925,241
                2001                                               930,728
                2002                                               953,085
                2003                                               958,440
                Thereafter                                      10,585,641
                                                         ------------------

                                                               $15,275,632
                                                         ==================

         The above table does not include  future  minimum  lease  payments  for
         renewal  periods or for contingent  rental payments that may become due
         in future periods (see Note 3).

         During the year ended December 31, 1998,  four of the eight leases with
         Long John  Silver's,  Inc. were rejected in connection  with the tenant
         filing for bankruptcy.  As a result, the Partnership reclassified these
         assets  from net  investment  in  direct  financing  leases to land and
         buildings on operating  leases.  In  accordance  with the  Statement of
         Financial  Accounting  Standards  #13,  "Accounting  for  Leases,"  the
         Partnership  recorded the reclassified  assets at the lower of original
         cost,  present fair value, or present carrying amount. No losses on the
         termination  of direct  financing  leases were  recorded for  financial
         reporting purposes.

5.       Investment in Joint Ventures:

         The Partnership has a 50 percent  interest in the profits and losses of
         Wood-Ridge  Real Estate Joint Venture.  The remaining  interest in this
         joint venture is held by an affiliate of the Partnership  which has the
         same general  partners.  The Partnership also has a 16 percent interest
         in a Property  in  Clinton,  North  Carolina,  with  affiliates  of the
         Partnership that has the same general partners,  as  tenants-in-common.
         The Partnership  accounts for its investment in this property using the
         equity method since the Partnership shares control with affiliates, and
         amounts  relating to its investment are included in investment in joint
         ventures.



<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


5.       Investment in Joint Ventures - Continued:

         In January  1997,  Wood-Ridge  Real  Estate  Joint  Venture  reinvested
         $502,598,  of the net sales  proceeds  from the sale of two  properties
         during 1996 in one property.  As of December 31, 1998, the  Partnership
         had received approximately $52,000,  representing its pro-rata share of
         the  uninvested  net sales  proceeds.  As of  December  31,  1998,  the
         Partnership  owned a 50 percent  interest  in the profits and losses of
         the joint venture.

         In June  1998,  the  Partnership  acquired a  property  in Fort  Myers,
         Florida,    with   an   affiliate   of   the   general    partners   as
         tenants-in-common. In connection therewith, the Partnership contributed
         an amount to  acquire  a 15  percent  interest  in such  property.  The
         Partnership  accounts for its  investment  in this  property  using the
         equity method since the Partnership shares control with affiliates, and
         amounts  relating to its investment are included in investment in joint
         ventures.

         Wood-Ridge  Real Estate Joint Venture owns and leases six properties to
         operators  of  national  fast-food  or  family-style  restaurants.  The
         Partnership  and  affiliates,  as  tenants-in-common  in  two  separate
         tenancy-in-common  arrangements,  each own and lease one property to an
         operator  of  national  fast-food  or  family-style  restaurants.   The
         following presents the combined,  condensed  financial  information for
         all of the Partnership's investments in joint ventures at December 31:

                                                          1998          1997
                                                      ------------  ------------

             Land and buildings on operating leases,
                 less accumulated depreciation          $6,063,237    $5,563,722
             Net investment in direct financing lease      826,780            --
             Cash                                           87,245        10,890
             Receivables                                     1,677         5,923
             Accrued rental income                          96,768        74,001
             Other assets                                      857         1,078
             Liabilities                                    69,285        18,195
             Partners' capital                           7,007,279     5,637,419
             Revenues                                      705,002       650,354
             Net income                                    579,480       522,611

         The Partnership  recognized  income  totalling  $236,553,  $239,249 and
         $392,862  for the  years  ended  December  31,  1998,  1997  and  1996,
         respectively, from these entities.



<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


6.       Allocations and Distributions:

         Generally,  all net  income and  losses of the  Partnership,  excluding
         gains and losses from the sale of properties,  are allocated 99 percent
         to the  limited  partners  and one  percent  to the  general  partners.
         Distributions  of net  cash  flow are made 99  percent  to the  limited
         partners and one percent to the general  partners;  provided,  however,
         that the one percent of net cash flow to be  distributed to the general
         partners shall be subordinated to receipt by the limited partners of an
         aggregate,  eight percent,  cumulative,  noncompounded annual return on
         their  invested  capital   contributions  (the  "Limited  Partners'  8%
         Return").

         Generally,  net  sales  proceeds  from the sales of  properties  not in
         liquidation  of the  Partnership,  to the extent  distributed,  will be
         distributed  first to the limited  partners in an amount  sufficient to
         provide them with their Limited Partners' 8% Return, plus the return of
         their adjusted  capital  contributions.  The general partners will then
         receive,  to the  extent  previously  subordinated  and  unpaid,  a one
         percent  interest  in all  prior  distributions  of net cash flow and a
         return of their capital  contributions.  Any remaining  sales  proceeds
         will be distributed 95 percent to the limited partners and five percent
         to the  general  partners.  Any gain from a sale of a  property  not in
         liquidation of the  Partnership  is, in general,  allocated in the same
         manner as net sales proceeds are distributable.  Any loss from the sale
         of a property is, in general,  allocated first, on a pro rata basis, to
         partners  with  positive  balances  in  their  capital  accounts,   and
         thereafter,  95 percent to the limited partners and five percent to the
         general partners.

         Generally,  net sales  proceeds from a liquidating  sale of properties,
         will be used in the following  order: i) first to pay and discharge all
         of the Partnership's liabilities to creditors, ii) second, to establish
         reserves that may be deemed necessary for any anticipated or unforeseen
         liabilities or obligations of the  Partnership,  iii) third, to pay all
         of the  Partnership's  liabilities,  if any, to the general and limited
         partners,  iv) fourth,  after  allocations of net income,  gains and/or
         losses,  to distribute to the partners with positive  capital  accounts
         balances,  in proportion to such balances,  up to amounts sufficient to
         reduce such positive  balances to zero,  and v)  thereafter,  any funds
         remaining shall then be distributed 95 percent to the limited  partners
         and five percent to the general partners.

         During  the  years  ended  December  31,  1998,   1997  and  1996,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $3,400,000,  $3,200,000 and $3,280,000,  respectively. No distributions
         have been made to the general partners to date.



<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997 and 1996


7.       Income Taxes:

         The following is a reconciliation of net income for financial reporting
         purposes to net income for federal  income tax  purposes  for the years
         ended December 31:

<TABLE>
<CAPTION>


                                                                    1998              1997             1996
                                                                 ------------      ------------     ------------
<S> <C>
                  Net income for financial reporting
                       purposes                                   $2,642,497        $3,434,905       $3,585,059

                  Depreciation for tax reporting
                      purposes in excess of depreciation
                      for financial reporting purposes              (126,518 )        (160,007 )       (160,007 )

                  Direct financing leases recorded as
                      operating leases for tax reporting
                      purposes                                        85,884            87,508           77,834

                  Allowance for loss on land and
                      buildings                                      280,907                --               --

                  Equity in earnings of joint ventures for
                      tax  reporting purposes in excess of
                      (less than) equity in earnings of joint
                      ventures for financial reporting purposes       33,872            23,823         (158,836 )

                  Accrued rental income                             (142,233 )        (431,079 )       (431,654 )

                  Rents paid in advance                               48,346           (50,331 )         39,795

                  Capitalization  of transaction  costs
                      for tax reporting purposes                      23,196                --               --

                  Other                                                1,686              (670 )          2,127
                                                                 ------------      ------------     ------------

                  Net income for federal income tax
                      purposes                                    $2,847,637        $2,904,149       $2,954,318
                                                                 ============      ============     ============


</TABLE>


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997, and 1996


8.       Related Party Transactions:

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal shareholders of CNL Group, Inc., the majority stockholder
         of CNL Fund Advisors, Inc. The other individual general partner, Robert
         A. Bourne, serves as treasurer, director and vice chairman of the board
         of CNL Fund  Advisors,  Inc.  During the years ended December 31, 1998,
         1997, and 1996, CNL Fund Advisors, Inc. (hereinafter referred to as the
         "Affiliate")  performed  certain  services  for  the  Partnership,   as
         described below.

         During the years ended December 31, 1998, 1997, and 1996, the Affiliate
         acted  as  manager  of  the  Partnership's  properties  pursuant  to  a
         management agreement with the Partnership. In connection therewith, the
         Partnership agreed to pay the Affiliate a management fee of one percent
         of the sum of  gross  revenues  from  properties  wholly  owned  by the
         Partnership  and the  Partnership's  allocable  share of gross revenues
         from joint  ventures.  The  management  fee, which will not exceed fees
         which are competitive for similar services in the same geographic area,
         may or may not be  taken,  in whole or in part as to any  year,  in the
         sole discretion of the Affiliate.  All or any portion of the management
         fee not taken as to any fiscal year shall be deferred  without interest
         and may be taken  in such  other  fiscal  year as the  Affiliate  shall
         determine. The Partnership incurred management fees of $33,990, $35,321
         and $35,126  for the years  ended  December  31,  1998,  1997 and 1996,
         respectively.

         The Affiliate is also entitled to receive a deferred, subordinated real
         estate disposition fee, payable upon the sale of one or more properties
         based on the lesser of one-half of a competitive real estate commission
         or three  percent  of the  sales  price  if the  Affiliate  provides  a
         substantial amount of services in connection with the sale. However, if
         the net sales  proceeds are  reinvested in a replacement  property,  no
         such  real  estate   disposition  fees  will  be  incurred  until  such
         replacement   property  is  sold  and  the  net  sales   proceeds   are
         distributed.  The  payment  of  the  real  estate  disposition  fee  is
         subordinated  to receipt by the limited  partners of their aggregate 8%
         Preferred  Return,  plus  their  invested  capital  contributions.   No
         deferred,  subordinated real estate disposition fees have been incurred
         since inception.

         During the years ended December 31, 1998,  1997 and 1996, the Affiliate
         of the general partners provided accounting and administrative services
         to the  Partnership on a day-to-day  basis.  The  Partnership  incurred
         $92,573,  $78,051 and $87,265 for the years ended  December  31,  1998,
         1997 and 1996, respectively, for such services.

         The due to related  parties at  December  31,  1998 and 1997,  totalled
         $23,337 and $4,311, respectively.



<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997 and 1996


9.       Concentration of Credit Risk:

         The  following  schedule  presents  total rental and earned income from
         individual  lessees or affiliated groups of lessees,  each representing
         more than ten  percent  of the  Partnership's  total  rental and earned
         income  (including the  Partnership's  share of total rental and earned
         income from joint ventures) for each of the years ended December 31:

<TABLE>
<CAPTION>

                                                                    1998               1997              1996
                                                                -------------      -------------     --------------
<S> <C>
           Checkers Drive-In Restaurants, Inc.                      $719,308           $716,905           $723,558
           Golden Corral Corporation                                 595,343            582,600            531,775
           Flagstar Enterprises, Inc. (and
               Quincy's Restaurants, Inc. for the
               years ended December 31, 1997                         541,527            635,413            638,042
               and 1996)
           Long John Silver's, Inc.                                  510,187            710,325            714,804
           Foodmaker, Inc.                                           417,426            417,426            417,426

         In addition,  the following  schedule  presents total rental and earned
         income from individual  restaurant chains,  each representing more than
         ten  percent  of the  Partnership's  total  rental  and  earned  income
         (including  the  Partnership's  share of rental and earned  income from
         joint ventures) for each of the years ended December 31:

                                                                    1998              1997              1996
                                                                -------------     -------------     -------------

           Checkers Drive-In Restaurants                            $719,308          $716,905          $723,558
           Golden Corral Family Steakhouse
               Restaurants                                           595,343           582,600           531,775
           Long John Silver's                                        573,104           773,265           777,743
           Hardee's                                                  541,527           543,889           546,037
           Jack in the Box                                           417,426           417,426           417,426
</TABLE>

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States and the  Partnership's  lessees  operate a
         variety of restaurant concepts,  default by any one of these lessees or
         restaurant chains could significantly  impact the results of operations
         of the  Partnership  if the  Partnership  is not able to  re-lease  the
         properties in a timely manner.



<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997 and 1996


9.       Concentration of Credit Risk - Continued:

         In June 1998, the tenant of eight of the Long John Silver's  Properties
         filed  for  bankruptcy  and  rejected  the  leases   relating  to  four
         Properties.  The  rental  income  relating  to  these  Properties  will
         terminate  until new tenants or buyers for the  Properties are located.
         While  Long John  Silver's,  Inc.  has not  rejected  or  affirmed  the
         remaining  four leases,  there can be no assurance  that some of all of
         the  leases  will not be  rejected  in the  future.  The lost  revenues
         resulting from the four leases that were rejected,  as described above,
         and the possible  rejection of the remaining  four leases could have an
         adverse  effect on the results of operations of the  Partnership if the
         Partnership is unable to re-lease these Properties in a timely manner.

10.      Subsequent Events:

         In January 1999, a Boston  Market tenant  rejected its lease and ceased
         making rental payments related to this lease.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
         of Merger with CNL American Properties Fund, Inc. ("APF"),  pursuant to
         which the Partnership would be merged with and into a subsidiary of APF
         (the  "Merger").  As  consideration  for the Merger,  APF has agreed to
         issue 3,733,901  shares of its common stock,  par value $0.01 per share
         (the "APF  Shares")  which,  for the  purposes  of  valuing  the merger
         consideration,  have been  valued by APF at $10.00 per APF  Share,  the
         price paid by APF  investors in APF's most recent public  offering.  In
         order to assist the general  partners in evaluating the proposed merger
         consideration,  the general partners retained Valuation  Associates,  a
         nationally  recognized  real estate  appraisal  firm,  to appraise  the
         Partnership's   restaurant  property  portfolio.   Based  on  Valuation
         Associates'  appraisal,  the Partnership's property portfolio and other
         assets were valued on a going  concern basis  (meaning the  Partnership
         continues unchanged) at $36,726,950 as of December 31, 1998. Legg Mason
         Wood Walker,  Incorporated has rendered a fairness opinion that the APF
         Share consideration,  payable by APF, is fair to the Partnership from a
         financial  point of view.  The APF Shares are expected to be listed for
         trading  on  the  New  York  Stock  Exchange   concurrently   with  the
         consummation of the Merger, and, therefore, would be freely tradable at
         the option of the former limited partners.  At a special meeting of the
         partners  that is  expected  to be held in the third  quarter  of 1999,
         limited  partners  holding  in  excess  of  50%  of  the  Partnership's
         outstanding limited partnership interests must approve the


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1998, 1997 and 1996


10.      Subsequent Events - Continued:

         Merger prior to consummation of the  transaction.  The general partners
         intend  to  recommend  that the  limited  partners  of the  Partnership
         approve  the  Merger.  In  connection  with their  recommendation,  the
         general  partners  will solicit the consent of the limited  partners at
         the special  meeting.  If the limited  partners reject the Merger,  the
         Partnership  will bear the portion of the transaction  costs based upon
         the  percentage  of "For" votes and the general  partners will bear the
         portion  of  such  transaction  costs  based  upon  the  percentage  of
         "Against" votes and abstentions.


<PAGE>


Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

         None.



                                    PART III


Item 10. Directors and Executive Officers of the Registrant

         The General Partners of the Registrant are James M. Seneff, Jr., Robert
A.  Bourne  and CNL  Realty  Corporation,  a Florida  corporation.  The  General
Partners  manage  and  control  the  Partnership's   affairs  and  have  general
responsibility   and  the  ultimate  authority  in  all  matters  affecting  the
Partnership's  business.  The  Partnership  has  available  to it the  services,
personnel and experience of CNL Fund Advisors,  Inc., CNL Group,  Inc. and their
affiliates, all of which are affiliates of the General Partners.

         James M. Seneff, Jr., age 52, is a principal  stockholder of CNL Group,
Inc., a diversified  real estate company,  and has served as its Chairman of the
Board of Directors,  a director and Chief Executive  Officer since its formation
in 1980. Mr. Seneff has been Chairman of the Board of Directors,  director,  and
Chief Executive Officer of CNL Securities Corp. since its formation in 1979. Mr.
Seneff also has held the position of Chairman of the Board of  Directors,  Chief
Executive  Officer,   President  and  director  of  CNL  Management  Company,  a
registered investment advisor,  since its formation in 1976, has served as Chief
Executive  Officer,  Chairman  of the Board  and a  director  of CNL  Investment
Company,  has served as Chief Executive  Officer, a director and Chairman of the
Board of Directors of Commercial Net Lease Realty, Inc., a publicly-traded REIT,
listed on the NYSE, since 1992,  served as Chief Executive  Officer,  a director
and  Chairman of the Board of Directors of CNL Realty  Advisors,  Inc.  from its
inception in May 1992 through  December  1997, at which time such company merged
with  Commercial  Net Lease  Realty,  Inc.,  and has held the  position of Chief
Executive  Officer,  Chairman of the Board and a director  of CNL  Institutional
Advisors, Inc., a registered investment advisor, since its inception in December
1990.  Mr.  Seneff  has  served as  Chairman  of the Board of  Directors  of CNL
American  Properties  Fund, Inc. since December 1994 and as a director and Chief
Executive  Officer  since May 1994.  Mr.  Seneff has served as  Chairman  of the
Board,  Chief Executive Officer and a director of CNL Fund Advisors,  Inc. since
March 1994.  Mr.  Seneff has served as Chairman  of the Board,  Chief  Executive
Officer and a director of CNL Hospitality  Properties,  Inc. since June 1996 and
of CNL Hospitality Advisors, Inc. since January 1997. Mr. Seneff has also served
as Chairman of the Board,  Chief Executive  Officer and a director of CNL Health
Care  Properties,  Inc. since  December 1997 and CNL Health Care Advisors,  Inc.
since July 1997. Mr. Seneff previously served on the Florida State Commission on
Ethics  and is a  former  member  and past  Chairman  of the  State  of  Florida
Investment  Advisory Council,  which advises the Florida Board of Administration
investments for various Florida employee  retirement funds. The Florida Board of
Administration,  Florida's  principal  investment  advisory and money management
agency,  oversees the  investment of more then $60 billion of retirement  funds.
Mr.  Seneff  has  served as a member of the board of  directors  of First  Union
National  Bank of  Florida  since  May 1998 and has  served  as a member  of the
Orlando Advisory Board of First Union National Bank of Florida since March 1994.
Since 1971,  Mr.  Seneff has been active in the  acquisition,  development,  and
management  of real  estate  projects  and,  directly  or through an  affiliated
entity,  has  served as a general  partner  or joint  venturer  in over 100 real
estate ventures involved in the financing, acquisition, construction, and rental
of restaurants,  office buildings,  apartment complexes,  hotels, and other real
estate.  Included in these real estate ventures are  approximately  65 privately
offered  real  estate  limited  partnerships  in which Mr.  Seneff,  directly or
through an affiliated  entity,  serves or has served as a general partner.  Also
included are CNL Income Fund,  Ltd.,  CNL Income Fund II, Ltd.,  CNL Income Fund
III,  Ltd.,  CNL Income Fund IV, Ltd.,  CNL Income Fund V, Ltd., CNL Income Fund
VI, Ltd., CNL Income Fund VII, Ltd., CNL Income Fund VIII, Ltd., CNL Income Fund
IX, Ltd.,  CNL Income Fund X, Ltd.,  CNL Income Fund XI,  Ltd.,  CNL Income Fund
XII,  Ltd.,  CNL Income Fund XIII,  Ltd.,  CNL Income Fund XIV, Ltd., CNL Income
Fund XVI, Ltd., CNL Income Fund XVII, Ltd. and CNL Income Fund XVIII,  Ltd. (the
"CNL Income Fund  Partnerships"),  public real estate limited  partnerships with
investment  objectives similar to those of the Partnership,  in which Mr. Seneff
serves as a  general  partner.  Mr.  Seneff  received  his  degree  in  Business
Administration from Florida State University in 1968.

         Robert A.  Bourne,  age 51, is  President  and  Treasurer of CNL Group,
Inc.,  President,  Treasurer,  a director,  and a  registered  principal  of CNL
Securities  Corp.,  President,  Treasurer,  and a  director  of  CNL  Investment
Company,  and  Chief  Investment  Officer,  a  director  and  Treasurer  of  CNL
Institutional Advisors, Inc., a registered investment advisor. Mr. Bourne served
as President of CNL Institutional  Advisor,  Inc. from the date of its inception
through  July 1997.  Mr.  Bourne  served as President  of  Commercial  Net Lease
Realty,  Inc.  from July 1992 through  February  1996,  served as Secretary  and
Treasurer from February 1996 through December 1997, and has served as a director
since July 1992 and as Vice  Chairman of the Board of Directors  since  February
1996. In addition,  Mr. Bourne served as President of CNL Realty Advisors,  Inc.
from May 1992 through  February  1996,  served as Treasurer  from  February 1996
through  December 1997,  served as a director from May 1992 through December 31,
1997 and served as Vice Chairman from  February 1996 through  December  1997, at
which time such company merged with Commercial Net Lease Realty, Inc. Mr. Bourne
has served as a Vice  Chairman of the Board of  Directors  and  Treasurer of CNL
American  Properties  Fund,  Inc.  since February 1999, has served as a director
since May 1994 and previously served as President from May 1994 through February
1999. Mr. Bourne has served as a director of CNL Fund Advisors, Inc. since March
1994, has served as Treasurer and Vice Chairman of the Board of Directors  since
September  1997,  and  previously  served as  President  from March 1994 through
September  1997.  Mr.  Bourne has  served as  President  and a  director  of CNL
Hospitality  Properties,  Inc. since June 1996 and of CNL Hospitality  Advisors,
Inc.  since January 1997. Mr. Bourne has served as President and director of CNL
Health Care  Properties,  Inc. since December 1997 and CNL Health Care Advisors,
Inc. since July 1997. Mr. Bourne,  who joined CNL Securities  Corp. in 1979, has
participated  as a general  partner or joint  venturer  in over 100 real  estate
ventures  involved in the financing,  acquisition,  construction,  and rental of
restaurants,  office  buildings,  apartment  complexes,  hotels,  and other real
estate.  Included in these real estate ventures are  approximately  64 privately
offered  real  estate  limited  partnerships  in which Mr.  Bourne,  directly or
through an affiliated  entity,  serves or has served as a general partner.  Also
included  are the CNL Income  Fund  Partnerships,  public  real  estate  limited
partnerships with investment objectives similar to those of the Partnership,  in
which  Mr.  Bourne  serves as a  general  partner.  Mr.  Bourne  formerly  was a
certified public  accountant with Coopers & Lybrand and a partner in the firm of
Bourne & Rose, P.A. Mr. Bourne received a B.A. in Accounting,  with honors, from
Florida State University in 1970.

         CNL Realty Corporation is a corporation organized on November 26, 1985,
under the laws of the State of Florida.  Its sole directors and shareholders are
James M. Seneff, Jr. and Robert A. Bourne, the individual General Partners.  CNL
Realty  Corporation  was organized to serve as the corporate  general partner of
real estate limited partnerships,  such as the Partnership,  organized by one or
both of the individual General Partners. CNL Realty Corporation currently serves
as the corporate general partner of the CNL Income Fund Partnerships.

         CNL  Fund  Advisors,  Inc.  provides  certain  management  services  in
connection with the Partnership and its Properties. CNL Fund Advisors, Inc. is a
corporation  organized  in 1994 under the laws of the State of Florida,  and its
principal  office is located at 400 East South Street,  Orlando,  Florida 32801.
CNL Fund  Advisors,  Inc. is a majority owned  subsidiary of CNL Group,  Inc., a
diversified  real  estate  company,   and  was  organized  to  perform  property
acquisition, property management and other services.

         CNL  Group,  Inc.,  which is the parent  company of CNL Fund  Advisors,
Inc.,  was organized in 1980 under the laws of the State of Florida.  CNL Group,
Inc. is a diversified  real estate  company which  provides a wide range of real
estate,  development  and  financial  services to companies in the United States
through the  activities  of its  subsidiaries.  These  activities  are primarily
focused  on the  franchised  restaurant  and  hospitality  industries.  James M.
Seneff,  Jr., an individual General Partner of the Partnership,  is the Chairman
of the Board,  Chief Executive  Officer,  and a director of CNL Group,  Inc. Mr.
Seneff and his wife own all of the outstanding shares of CNL Group, Inc.

         The following persons serve as operating officers of CNL Group, Inc. or
its affiliates or  subsidiaries  in the discretion of the Boards of Directors of
those companies,  but, except as specifically indicated, do not serve as members
of the Boards of Directors of those  entities.  The Boards of Directors have the
responsibility for creating and implementing the policies of CNL Group, Inc. and
its affiliated companies.

         Curtis B. McWilliams,  age 43, joined CNL Group, Inc. in April 1997 and
currently serves as an Executive Vice President. In addition, Mr. McWilliams has
served  as  President  of  CNL  Fund  Advisors,  Inc.  and as  President  of the
Restaurant  and Financial  Services  Groups within CNL Group,  Inc.  since April
1997. Mr.  McWilliams has served as President of CNL American  Properties  Fund,
Inc. since February 1999 and previously  served as Executive Vice President from
February 1998 through February 1999. From September 1983 through March 1997, Mr.
McWilliams  was employed by Merrill  Lynch & Co.,  most  recently as Chairman of
Merrill  Lynch's  Private  Advisory  Services until March 1997.  Mr.  McWilliams
received a B.S.E. in Chemical  Engineering from Princeton University in 1977 and
a Masters of Business  Administration  with a concentration  in finance from the
University of Chicago in 1983.

         John T. Walker,  age 40, has served as Executive  Vice President of CNL
American  Properties  Fund, Inc. since January 1996, as Chief Operating  Officer
since March 1995, and previously  served as Senior Vice President since December
1994. In addition, Mr. Walker has served as Executive Vice President of CNL Fund
Advisors, Inc. since January 1996, Chief Operating Officer since April 1995, and
previously  served as Senior Vice President  from November 1994 through  January
1996. In addition,  Mr. Walker  previously served as Executive Vice President of
CNL Hospitality  Properties,  Inc. and CNL Hospitality  Advisors,  Inc. From May
1992 to May 1994, Mr. Walker, a certified public accountant,  was Executive Vice
President for Finance and Administration and Chief Financial Officer of Z Music,
Inc.,   a  cable   television   network   (subsequently   acquired   by  Gaylord
Entertainment),   where  he  was   responsible   for   overall   financial   and
administrative  management  and planning.  From January 1990 through April 1992,
Mr. Walker was Chief  Financial  Officer of the First Baptist Church in Orlando,
Florida.  From  April  1984  through  December  1989,  he was a  partner  in the
accounting firm of Chastang, Ferrell & Walker, P.A., where he was the partner in
charge of audit and consulting services, and from 1981 to 1984, Mr. Walker was a
Senior  Consultant/Audit  Senior at Price Waterhouse.  Mr. Walker is a Cum Laude
graduate of Wake Forest University with a B.S. in Accountancy and is a certified
public accountant.

         Lynn E. Rose,  age 50, a  certified  public  accountant,  has served as
Secretary of CNL American  Properties  Fund, Inc. since December 1994 and served
as Treasurer from December 1994 through  February 1999. Ms. Rose has served as a
director  and  Secretary of CNL Fund  Advisors,  Inc.  since March 1994,  and as
Treasurer  from the date of its  inception  through June 30, 1997.  Ms. Rose has
served as Secretary of CNL Group, Inc. since 1987, as Chief Financial Officer of
CNL Group, Inc. since December 1993, and served as Controller of CNL Group, Inc.
from 1987  until  December  1993.  In  addition,  Ms.  Rose has  served as Chief
Financial Officer and Secretary of CNL Securities Corp. since July 1994. She has
served as Chief Operating Officer, Vice President and Secretary of CNL Corporate
Services,  Inc. since November 1994. Ms. Rose also has served as Chief Financial
Officer and Secretary of CNL Institutional Advisors, Inc. since its inception in
1990, as Treasurer of CNL Realty Advisors,  Inc. from 1991 to February 1996, and
as Secretary and a director of CNL Realty Advisors,  Inc. since its inception in
1991 until  December 31, 1997, at which time CNL Realty  Advisors,  Inc.  merged
with Commercial Net Lease Realty, Inc. In addition, Ms. Rose served as Secretary
and Treasurer of Commercial  Net Lease Realty,  Inc. from 1992 to February 1996.
Ms. Rose also serves as Secretary and Treasurer of CNL  Hospitality  Properties,
Inc. and CNL Health Care  Properties,  Inc. and as  Secretary,  Treasurer  and a
director of CNL Hospitality  Advisors,  Inc. and CNL Health Care Advisors,  Inc.
Ms. Rose also  currently  serves as Secretary  for  approximately  50 additional
corporations.  Ms.  Rose  oversees  the  legal  compliance,  accounting,  tenant
compliance,  and reporting  for over 250  corporations,  partnerships  and joint
ventures.  Prior to joining CNL, Ms. Rose was a partner with Robert A. Bourne in
the accounting firm of Bourne & Rose, P.A.,  Certified Public  Accountants.  Ms.
Rose holds a B.A. in Sociology from the University of Central Florida.

         Jeanne A. Wall,  age 40, has served as Executive  Vice President of CNL
American  Properties  Fund,  Inc.  since  December  1994. Ms. Wall has served as
Executive  Vice  President of CNL Fund  Advisors,  Inc. since November 1994, and
previously  served as Vice President from March 1994 through  November 1994. Ms.
Wall has served as Chief Operating Officer of CNL Investment  Company and of CNL
Securities  Corp. since November 1994 and has served as Executive Vice President
of CNL  Investment  Company since January 1991.  Ms. Wall joined CNL  Securities
Corp. in 1984. In 1985, Ms. Wall became Vice  President of CNL Securities  Corp.
In 1987, she became Senior Vice President and in July 1997 she became  Executive
Vice  President of CNL  Securities  Corp. In this  capacity,  Ms. Wall serves as
national  marketing and sales director and oversees the national  marketing plan
for  the CNL  investment  programs.  In  addition,  Ms.  Wall  oversees  product
development,  partnership  administration  and  investor  services  for programs
offered  through  participating  brokers and  corporate  communications  for CNL
Group,  Inc.  and its  affiliates.  Ms.  Wall also has  served  as  Senior  Vice
President of CNL Institutional Advisors,  Inc., a registered investment advisor,
from 1990 to 1993,  as Vice  President of CNL Realty  Advisors,  Inc.  since its
inception in 1991 until  December 31, 1997,  at which time CNL Realty  Advisors,
Inc. merged with Commercial Net Lease Realty, Inc., and served as Vice President
of  Commercial  Net Lease Realty,  Inc. from 1992 through  December 31, 1997. In
addition,  Ms.  Wall  serves as  Executive  Vice  President  of CNL  Hospitality
Properties,  Inc., CNL Hospitality  Advisors,  Inc., CNL Health Care Properties,
Inc.  and CNL Health  Care  Advisors,  Inc.  Ms.  Wall holds a B.A.  in Business
Administration  from  Linfield  College  and is a  registered  principal  of CNL
Securities  Corp.  Ms.  Wall  currently  serves as a trustee on the board of the
Investment Program Association and on the Direct Participation Program committee
for the National Association of Securities Dealers (NASD).



<PAGE>


         Steven D.  Shackelford,  age 35, a  certified  public  accountant,  has
served as Chief Financial  Officer of CNL American  Properties  Fund, Inc. since
January 1997 and as Chief  Financial  Officer of CNL Fund  Advisors,  Inc. since
September  1996.  From  March 1995 to July 1996,  Mr.  Shackelford  was a senior
manager in the national office of Price  Waterhouse where he was responsible for
advising  foreign  clients  seeking to raise capital and a public listing in the
United  States.  From August  1992 to March 1995,  he served as a manager in the
Price Waterhouse,  Paris, France office serving several  multinational  clients.
Mr.  Shackelford  was an audit  staff and audit  senior from 1986 to 1992 in the
Orlando, Florida office of Price Waterhouse.  Mr. Shackelford received a B.A. in
Accounting,  with honors, and a Masters of Business  Administration from Florida
State University.


Item 11.  Executive Compensation

         Other than as  described in Item 13, the  Partnership  has not paid and
does not intend to pay any executive compensation to the General Partners or any
of their affiliates.  There are no compensatory plans or arrangements  regarding
termination of employment or change of control.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 11,  1999,  no person was known to the  Registrant  to be a
beneficial owner of more than five percent of the Units.

         The following  table sets forth,  as of March 11, 1999,  the beneficial
ownership interests of the General Partners in the Registrant.


             Title of Class          Name of Partner           Percent of Class
             --------------          ---------------           ----------------

    General Partnership Interests    James M. Seneff, Jr.             45%
                                     Robert A. Bourne                 45%
                                     CNL Realty Corporation           10%
                                                                    -----
                                                                     100%
                                                                    =====

         Neither the General  Partners,  nor any of their  affiliates,  owns any
interest  in the  Registrant,  except as noted  above.  On March 11,  1999,  the
Registrant  entered  into an  Agreement  and Plan of  Merger  with CNL  American
Properties  Fund, Inc.  ("APF") pursuant to which the Registrant would be merged
with and into a subsidiary of APF (the "Merger").  For further  discussion,  see
Item 8. Financial Statements and Supplementary Data -- Note 10.
Subsequent Event.




<PAGE>


Item 13.  Certain Relationships and Related Transactions

         The  table  below   summarizes  the  types,   recipients,   methods  of
computation and amounts of compensation,  fees and distributions paid or payable
by the  Partnership  to the General  Partners and their  affiliates for the year
ended  December 31, 1998,  exclusive of any  distributions  to which the General
Partners or their  affiliates  may be entitled by reason of their  purchase  and
ownership of Units.

<TABLE>
<CAPTION>

                                                                                                 Amount Incurred
       Type of Compensation                                                                       For the Year
            and Recipient                            Method of Computation                   Ended December 31, 1998
      -----------------------                        ---------------------                   -----------------------
<S> <C>
Reimbursement     to    affiliates    for     Operating  expenses  are  reimbursed          Operating expenses
operating expenses                            at the  lower of cost or 90  percent          incurred on behalf of the
                                              of  the  prevailing  rate  at  which          Partnership: $98,978
                                              comparable  services could have been
                                              obtained  in  the  same   geographic          Accounting and
                                              area.   Affiliates  of  the  General          administrative services:
                                              Partners  from  time to  time  incur          $92,573
                                              certain   operating    expenses   on
                                              behalf of the  Partnership for which
                                              the   Partnership   reimburses   the
                                              affiliates without interest.


Annual management fee to affiliates           One  percent  of the  sum  of  gross          $33,990
                                              revenues  from   Properties   wholly
                                              owned  by the  Partnership  plus the
                                              Partnership's   allocable  share  of
                                              gross  revenues of joint ventures in
                                              which   the    Partnership    is   a
                                              co-venturer.   The  management  fee,
                                              which  will not  exceed  competitive
                                              fees for comparable  services in the
                                              same  geographic  area,  may  or may
                                              not be  taken,  in  whole or in part
                                              as  to  any   year,   in  the   sole
                                              discretion of the  affiliates of the
                                              General   Partners.   All   or   any
                                              portion  of the  management  fee not
                                              taken as to any  fiscal  year  shall
                                              be  deferred  without  interest  and
                                              may be  taken in such  other  fiscal
                                              year   as   the   affiliates   shall
                                              determine.



<PAGE>



                                                                                                 Amount Incurred
       Type of Compensation                                                                       For the Year
            and Recipient                            Method of Computation                   Ended December 31, 1998
      -----------------------                        ---------------------                   -----------------------

Deferred,    subordinated   real   estate     A   deferred,    subordinated   real        $ - 0 -
disposition fee payable to affiliates         estate   disposition   fee,  payable
                                              upon   sale   of   one   or   more
                                              Properties,  in an amount equal to
                                              the  lesser of (i)  one-half  of a
                                              competitive       real      estate
                                              commission,  or (ii) three percent
                                              of  the   sales   price   of  such
                                              Property or Properties. Payment of
                                              such  fee  shall  be made  only if
                                              affiliates of the General Partners
                                              provide  a  substantial  amount of
                                              services  in  connection  with the
                                              sale of a Property  or  Properties
                                              and  shall  be   subordinated   to
                                              certain  minimum  returns  to  the
                                              Limited Partners.  However, if the
                                              net sales  proceeds are reinvested
                                              in a replacement Property, no such
                                              real estate  disposition  fee will
                                              be incurred until such replacement
                                              Property is sold and the net sales
                                              proceeds are distributed.

General        Partners'        deferred,     A   deferred,   subordinated   share        $ - 0 -
sub-ordinated  share of  Partnership  net     equal to one percent of  Partnership
cash flow                                     distributions   of  net  cash  flow,
                                              subordinated   to  certain   minimum
                                              returns to the Limited Partners.

General        Partners'        deferred,     A   deferred,   subordinated   share        $ - 0 -
sub-ordinated  share of  Partnership  net     equal    to    five    percent    of
sales  proceeds  from a sale or sales not     Partnership  distributions  of  such
in liquidation of the Partnership             net sales proceeds,  subordinated to
                                              certain   minimum   returns  to  the
                                              Limited Partners.



<PAGE>



                                                                                                 Amount Incurred
       Type of Compensation                                                                       For the Year
            and Recipient                            Method of Computation                   Ended December 31, 1998
      -----------------------                        ---------------------                   -----------------------

General  Partners'  share of  Partnership     Distributions  of net sales proceeds        $ - 0 -
net sales  proceeds  from a sale or sales     from   a   sale    or    sales    of
in liquidation of the Partnership             substantially     all     of     the
                                              Partnership's   assets   will   be
                                              distributed in the following order
                                              or priority: (i) first, to pay all
                                              debts  and   liabilities   of  the
                                              Partnership   and   to   establish
                                              reserves; (ii) second, to Partners
                                              with  positive   capital   account
                                              balances,   determined  after  the
                                              allocation  of  net  income,   net
                                              loss, gain and loss, in proportion
                                              to such  balances,  up to  amounts
                                              sufficient to reduce such balances
                                              to zero; and (iii) thereafter, 95%
                                              to the Limited  Partners and 5% to
                                              the General Partners.

</TABLE>


         As discussed  above in Item 8. Financial  Statements and  Supplementary
Data -- Note 10.  Subsequent Event, the Registrant has entered into an Agreement
and Plan of  Merger,  dated  March  11,  1999,  with APF  pursuant  to which the
Registrant would be merged with and into a subsidiary of APF in exchange for the
issuance of APF Shares.  The APF Shares are expected to be listed for trading on
the New York Stock Exchange concurrently with the consummation of the Merger. If
the Merger is approved by Limited Partners holding units greater than 50% of the
outstanding  units of the  Registrant,  the General  Partners of the  Registrant
would receive certain  benefits.  For instance,  following the Merger,  James M.
Seneff, Jr. and Robert A. Bourne, the individual General Partners, will continue
to serve as directors of APF, with Mr. Seneff serving as Chairman and Mr. Bourne
serving as Vice Chairman. As APF directors, they may also be entitled to receive
stock options under any stock option plan adopted by APF.



<PAGE>


                                     PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)      The following documents are filed as part of this report.

         1.  Financial Statements

                  Report of Independent Accountants

                  Balance Sheets at December 31, 1998 and 1997

                  Statements  of Income for the years ended  December  31, 1998,
                  1997, and 1996

                  Statements of Partners'  Capital for the years ended  December
                  31, 1998, 1997, and 1996

                  Statements  of Cash  Flows for the years  ended  December  31,
                  1998, 1997, and 1996

                  Notes to Financial Statements

         2.  Financial Statement Schedule

                  Schedule  III - Real Estate and  Accumulated  Depreciation  at
                  December 31, 1998

                  Notes  to  Schedule   III  -  Real   Estate  and   Accumulated
                  Depreciation at December 31, 1998

                  All other Schedules are omitted as the required information is
                  inapplicable  or is presented in the  financial  statements or
                  notes thereto.

         3.  Exhibits

                  3.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XV, Ltd.  (Included as Exhibit 3.1 to
                           Registration  Statement No. 33-69968 on Form S-11 and
                           incorporated herein by reference.)

                  4.1      Affidavit and  Certificate of Limited  Partnership of
                           CNL Income Fund XV, Ltd.  (Included as Exhibit 3.1 to
                           Registration  Statement No. 33-69968 on Form S-11 and
                           incorporated herein by reference.)

                  4.2      Amended and Restated Agreement of Limited Partnership
                           of CNL Income Fund XV, Ltd.  (Included as Exhibit 4.2
                           to Form 10-K filed with the  Securities  and Exchange
                           Commission on March 30, 1995, and incorporated herein
                           by reference.)

                  10.1     Management Agreement between CNL Income Fund XV, Ltd.
                           and CNL Investment  Company (Included as Exhibit 10.1
                           to Form 10-K filed with the  Securities  and Exchange
                           Commission on March 30, 1996, and incorporated herein
                           by reference.)

                  10.2     Assignment   of   Management   Agreement   from   CNL
                           Investment Company to CNL Income Fund Advisors,  Inc.
                           (Included as Exhibit 10.2 to Form 10-K filed with the
                           Securities and Exchange Commission on March 30, 1995,
                           and incorporated herein by reference.)



<PAGE>


                  10.3     Assignment  of Management  Agreement  from CNL Income
                           Fund  Advisors,  Inc.  to  CNL  Fund  Advisors,  Inc.
                           (Included as exhibit 10.3 to Form 10-K filed with the
                           Securities and Exchange  Commission on April 1, 1996,
                           and incorporated herein by reference.)

                  27       Financial Data Schedule (Filed herewith.)

         (b)      The Registrant  filed no reports on Form 8-K during the period
                  October 1, 1998 through  December 31, 1998.


<PAGE>




                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 26th day of
March, 1999.

                                       CNL INCOME FUND XV, LTD.

                                       By:          CNL REALTY CORPORATION
                                                    General Partner

                                                    /s/ Robert A. Bourne 
                                                    ROBERT A. BOURNE, President


                                       By:          ROBERT A. BOURNE
                                                    General Partner

                                                    /s/ Robert A. Bourne 
                                                    ROBERT A. BOURNE


                                       By:          JAMES M. SENEFF, JR.
                                                    General Partner

                                                    /s/ James M. Seneff, Jr. 
                                                    JAMES M. SENEFF, JR.


<PAGE>


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>


              Signature                                    Title                                   Date
              ---------                                    -----                                   ----
<S> <C>
/s/ Robert A. Bourne                       President,   Treasurer  and  Director              March 26, 1999
---------------------------
Robert A. Bourne                           (Principal  Financial and  Accounting
                                           Officer)

/s/ James M. Seneff, Jr.                   Chief Executive  Officer and Director              March 26, 1999
---------------------------
James M. Seneff, Jr.                       (Principal Executive Officer)

</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                                                            CNL INCOME FUND XV, LTD.
                                                        (A Florida Limited Partnership)
                                              SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                              December 31, 1998
<S> <C>

                                                                                          Costs Capitalized    
                                                                                            Subsequent To      
                                                                 Initial Cost                Acquisition       
                                                       ----------------------------    ----------------------- 
                                       Encum-                         Buildings and      Improve-     Carrying 
                                      brances             Land         Improvements       ments         Costs  
                                     -----------      -------------   -------------    -------------  -------- 

Properties the Partnership
  has Invested in Under
  Operating Leases:

     Checkers Drive-In Restaurants:
       Englewood, Florida                -               $339,499             -              -            -    
       Marietta, Georgia                 -                432,547             -              -            -    
       Norcross, Georgia                 -                405,256             -              -            -    
       Philadelphia, Pennsylvania        -                417,014             -              -            -    
       St. Petersburg, Florida           -                557,206             -              -            -    
       Stratford, New Jersey             -                309,370             -              -            -    
       Lake Mary, Florida                -                614,471             -              -            -    
       Philadelphia, Pennsylvania        -                599,586             -              -            -    
       Winter Garden, Florida            -                353,799             -              -            -    
       Chamblee, Georgia                 -                427,829             -              -            -    
       Largo, Florida                    -                407,211             -              -            -    
       Seminole, Florida                 -                423,116             -              -            -    
       Orlando, Florida                  -                604,920             -              -            -    
       Bradenton, Florida                -                215,478             -              -            -    

     Denny's Restaurant:
       Huntsville, Texas                 -                349,266             -              -            -    

     East Side Mario's Restaurant:
       Mentor, Ohio                      -                520,557             -              -            -    

     Golden Corral Family
       Steakhouse Restaurants:
            Aberdeen, North Carolina     -                406,989             -        849,648            -    
            Norman, Oklahoma             -                763,892             -        939,205            -    
            Augusta, Georgia             -                766,891             -      1,124,687            -    

     Hardee's  Restaurants:
       Olive Branch, Mississippi         -                209,243             -              -            -    
       Columbia, South Carolina          -                230,268       497,047              -            -    
       Pawleys Island, South Carolina    -                307,911       593,997              -            -    
       Cookeville, Tennessee             -                216,335             -              -            -    
       Niceville, Florida                -                310,511       480,398              -            -    

     Jack in the Box Restaurants:
       Woodland Hills, California        -                617,887       406,122              -            -    
       Redlands, California              -                494,336       566,016              -            -    
       Altadena, California              -                501,099       272,441              -            -    
       Port Arthur, Texas                -                426,378       646,811              -            -    

     Long John Silver's Restaurants:
       Medina, Ohio (h)                  -                445,614             -        399,974            -    
       Lexington, Kentucky               -                346,854             -              -            -    
       Jackson, Tennessee                -                254,023             -              -            -    
       Lancaster, South Carolina (i)     -                221,251             -        349,162            -    
       Albuquerque, New Mexico           -                210,008       311,622              -            -    
       Gastonia, North Carolina (h)      -                379,499       439,209              -            -    
       Irving, Texas                     -                454,448             -              -            -    
       Lexington, North Carolina (h)     -                274,513             -        400,384            -    
       Neosho, Missouri                  -                171,859             -              -            -    

     Wendy's Old Fashioned
       Hamburgers Restaurants:
            Arlington, Virginia          -                592,918       678,893              -            -    
                                                    -------------  ------------  -------------       -------  -

                                                      $15,579,852    $4,892,556     $4,063,060            -    
                                                    =============  ============  =============       =======  =

Properties of Joint Venture in Which
  the Partnership has a 50% Interest
  and has Invested in Under an Operating
  Lease:

    Boston Market Restaurants:
      Murfeesboro, Tennessee             -              $398,313             -              -             -    
      Matthews, North Carolina           -               409,942       737,391              -             -    
      Raleigh, North Carolina            -               518,507       542,919              -             -    
      Blaine, Minnesota                  -               253,934       531,509              -             -    

    Golden Corral Family
     Steakhouse Restaurant:
      Paris, Texas                       -               303,608       685,064              -             -    

    Taco Bell:
      Anniston, Alabama                  -                173,396       329,201              -            -    
                                                    -------------  ------------  -------------       -------  -

                                                       $2,057,700    $2,826,084              -            -    
                                                    =============  ============  =============       =======  =


Property in Which the Partnership
  has a 16% Interest as Tenants-in-
  Common and has Invested in Under an
  Operating Lease:

    Golden Corral Family
     Steakhouse Restaurant:
      Clinton, North Carolina            -               $138,382      $676,588              -            -    
                                                    =============  ============  =============       =======  =

Property in Which the Partnership
  has a 15% Interest as Tenants-in-
  Common and has Invested in Under an
  Operating Lease:

    Bennigan's Restaurant:
      Ft. Myers, Florida                 -                $638,026            -              -            -    
                                                     =============  ===========  =============       =======  =

Properties the Partnership has
  Invested in Under Direct
  Financing Leases:

    Denny's Restaurant:
      Huntsville, Texas                  -                     -             -       $590,147             -    
      Bartlesville, Oklahoma             -                199,747       789,589             -             -    

    East Side Mario's Restaurant:
      Mentor, Ohio                       -                     -             -      1,201,696             -    

    Hardee's Restaurants:
      Chester, South Carolina            -                140,016       587,718             -             -    
      Cookeville, Tennessee              -                     -        574,511             -             -    
      Branch, Mississippi                -                     -        510,712             -             -    
      Piney Flats, Tennessee             -                141,724       504,827             -             -    

    Long John Silver's Restaurants:
      Jackson, Tennessee                 -                     -        459,725             -             -    
      Lexington, Kentucky                -                     -             -        316,937             -    
      Neosho, Missouri                   -                     -             -        403,331             -    
      Irving, Texas                      -                     -             -        414,009             -    

    Quincy's Restaurant:
      Greer, South Carolina              -                178,404       849,860             -             -    
                                                    -------------  ------------  -------------       -------

                                                         $659,891    $4,276,942     $2,926,120            -
                                                    =============  ============  =============       =======


Property of Joint Venture in
  Which the Partnership has a
  15% Interest and has Invested
  in Under Direct Financing Lease:

     Bennigan's Restaurant:
       Ft. Myers, Florida                -                     -       $831,741             -             -    
                                                    =============  ============  =============       =======




         Gross Amount at Which                                                     Life on Which
        Carried at Close of Period (c)                                            Depreciation in
 -----------------------------------------                    Date                 Latest Income                   
               Buildings and                 Accumulated     of Con-      Date      Statement is        
      Land       Improvements     Total      Depreciation   struction   Acquired      Computed        
 -------------  ------------  ------------   ------------   ---------   --------  ----------------      
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
   $339,499             -      $339,499           (d)           -         05/94          (d)              
    432,547             -       432,547           (d)           -         05/94          (d)              
    405,256             -       405,256           (d)           -         05/94          (d)              
    417,014             -       417,014           (d)           -         05/94          (d)              
    557,206             -       557,206           (d)           -         05/94          (d)              
    309,370             -       309,370           (d)           -         05/94          (d)              
    614,471             -       614,471           (d)           -         07/94          (d)              
    599,586             -       599,586           (d)           -         08/94          (d)              
    353,799             -       353,799           (d)           -         08/94          (d)              
    427,829             -       427,829           (d)           -         12/94          (d)              
    407,211             -       407,211           (d)           -         12/94          (d)              
    423,116             -       423,116           (d)           -         12/94          (d)              
    604,920             -       604,920           (d)           -         03/95          (d)              
    215,478             -       215,478           (d)           -         03/95          (d)              
                                                                                                 
                                                                                                 
    349,266           (e)       349,266           (f)         1994        05/94          (f)              
                                                                                                 
                                                                                                 
    520,557           (e)       520,557           (f)         1995        10/94          (f)              
                                                                                                 
                                                                                                 
                                                                                                 
    406,989       849,648     1,256,637      120,444          1994        06/94          (b)              
    763,892       939,205     1,703,097      126,685          1994        08/94          (b)              
    766,891     1,124,687     1,891,578      150,266          1994        09/94          (b)              
                                                                                                 
                                                                                                 
    209,243           (e)       209,243           (f)         1994        04/94          (f)              
    230,268       497,047       727,315       78,325          1993        04/94          (b)              
    307,911       593,997       901,908       92,517          1992        04/94          (b)              
    216,335           (e)       216,335           (f)         1992        04/94          (f)              
    310,511       480,398       790,909       74,868          1993        04/94          (b)              
                                                                                                 
                                                                                                 
    617,887       406,122     1,024,009       59,908          1988        07/94          (b)              
    494,336       566,016     1,060,352       83,494          1988        07/94          (b)              
    501,099       272,441       773,540       40,188          1976        07/94          (b)              
    426,378       646,811     1,073,189       91,691          1994        09/94          (b)              
                                                                                                 
                                                                                                 
    445,614       399,974       845,588        8,448          1994        06/94          (h)              
    346,854           (e)       346,854           (f)         1994        06/94          (f)              
    254,023           (e)       254,023           (f)         1994        06/94          (f)              
    221,251       349,162       570,413        7,265          1994        07/94          (i)              
    210,008       311,622       521,630       37,267          1976        05/95          (b)              
    379,499       439,209       818,708        9,349          1994        07/94          (h)              
    454,448           (e)       454,448           (f)         1995        07/94          (f)              
    274,513       400,384       674,897        8,426          1994        07/94          (h)              
    171,859           (e)       171,859           (f)         1994        07/94          (f)              
                                                                                                 
                                                                                                 
                                                                                                 
    592,918       678,893     1,271,811       91,511          1994        12/94          (b)              
------------  ------------  ------------  -----------                                            
                                                                                                 
$15,579,852    $8,955,616   $24,535,468   $1,080,652                                             
============  ============  ============  ===========                                            
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
   $398,313             -      $398,313           (d)          -          10/96          (d)              
    409,942       737,391     1,147,333       54,805         1994         10/96          (b)              
    518,507       542,919     1,061,426       40,351         1994         10/96          (b)              
    253,934       531,509       785,443       39,503         1996         10/96          (b)              
                                                                                                 
                                                                                                 
                                                                                                 
    303,608       685,064       988,672       50,916         1996         10/96          (b)              
                                                                                                 
                                                                                                 
    173,396       329,201       502,597       21,694         1993         01/97          (b)              
------------  ------------  ------------  -----------                                            
                                                                                                 
 $2,057,700    $2,826,084    $4,883,784     $207,269                                             
============  ============  ============  ===========                                            
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
   $138,382      $676,588      $814,970      $66,274         1996         01/96          (b)              
============  ============  ============  ===========                                            
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
   $638,026            (e)     $638,026           (f)       1982          06/98          (f)              
============  ============  ============                                                         
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
          -            (e)           (e)          (f)       1994          05/94          (f)              
         (e)           (e)           (e)          (g)       1983          08/95          (g)              
                                                                                                 
                                                                                                 
          -            (e)           (e)          (f)       1995          10/94          (f)              
                                                                                                 
                                                                                                 
         (e)           (e)           (e)          (g)       1994          04/94          (g)              
          -            (e)           (e)          (f)       1992          04/94          (f)              
          -            (e)           (e)          (f)       1994          04/94          (f)              
         (e)           (e)           (e)          (g)       1993          04/94          (g)              
                                                                                                 
                                                                                                 
          -            (e)           (e)          (f)       1994          06/94          (f)              
          -            (e)           (e)          (f)       1994          06/94          (f)              
          -            (e)           (e)          (f)       1994          07/94          (f)              
          -            (e)           (e)          (f)       1995          07/94          (f)              
                                                                                                 
                                                                                                 
         (e)           (e)           (e)          (g)       1988          06/94          (g)              
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
          -            (e)           (e)          (f)       1982          06/98          (f)           


</TABLE>






                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 1998



  (a)    Transactions  in real estate and accumulated depreciation during  1998,
         1997 and 1996 are summarized as follows:

<TABLE>
<CAPTION>


                                                                                          Accumulated
                                                                           Cost           Depreciation
                                                                        ------------      -------------
<S> <C>
                Properties the Partnership has Invested
                    in Under Operating Leases:

                        Balance, December 31, 1995                      $22,946,739         $  310,475
                        Depreciation expense                                     --            245,563
                                                                        ------------      -------------

                        Balance, December 31, 1996                       22,946,739            556,038
                        Depreciation expense                                     --            245,563
                                                                        ------------      -------------

                        Balance, December 31, 1997                       22,946,739            801,601
                        Reclassified from net investment in
                            direct financing lease                        1,588,729                  --
                        Depreciation expense                                      --            279,051
                                                                        ------------      -------------

                        Balance, December 31, 1998                      $24,535,468        $ 1,080,652
                                                                        ============      =============

                Properties of Joint Venture in Which the
                    Partnership  has a  50%  Interest  and  has
                Invested
                    in Under Operating Leases:

                        Balance, December 31, 1995                      $ 3,175,594         $   26,042
                        Dispositions                                     (3,175,594 )          (43,711 )
                        Acquisitions                                      4,404,047                 --
                        Depreciation expense                                     --             37,122
                                                                        ------------      -------------

                        Balance, December 31, 1996                        4,404,047             19,453
                        Acquisitions                                        502,597                 --
                        Depreciation expense                                     --             94,718
                                                                        ------------      -------------

                        Balance, December 31, 1997                        4,906,644            114,171
                        Dispositions                                        (22,860 )               --
                        Depreciation expense                                     --             93,098
                                                                        ------------      -------------

                        Balance, December 31, 1998                      $ 4,883,784         $  207,269
                                                                        ============      =============


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 1998


                                                                                                         Accumulated
                                                                                          Cost          Depreciation
                                                                                      ------------      -------------
                         Property Which the  Partnership  has a 16%  Interest as
                             Tenants-in-Common  and has  Invested  in  Under  an
                             Operating Lease:

                                 Balance, December 31, 1995                                 $   --            $    --
                                 Acquisition                                               814,970                 --
                                 Depreciation expense                                           --             21,168
                                                                                      ------------      -------------

                                 Balance, December 31, 1996                                814,970             21,168
                                 Depreciation expense                                           --             22,553
                                                                                      ------------      -------------

                                 Balance, December 31, 1997                                814,970             43,721
                                 Depreciation expense                                           --             22,553
                                                                                      ------------      -------------

                                 Balance, December 31, 1998                              $ 814,970          $  66,274
                                                                                      ============      =============

                         Property Which the  Partnership  has a 15%  Interest as
                             Tenants-in-Common  and has  Invested  in  Under  an
                             Operating Lease:

                                 Balance, December 31, 1997                                 $   --            $    --
                                 Acquisition                                               638,026                 --
                                 Depreciation expense (f)                                       --                 --
                                                                                      ------------      -------------

                                 Balance, December 31, 1998                              $ 638,026            $    --
                                                                                      ============      =============
</TABLE>


  (b)      Depreciation expense is computed for buildings and improvements based
           upon estimated lives of 30 years.

  (c)      As of December 31, 1998, the aggregate  cost of the Properties  owned
           by the Partnership and joint ventures for federal income tax purposes
           was $32,521,622 and $6,778,303,  respectively.  All of the leases are
           treated as operating leases for federal income tax purposes.

  (d)      The  building  portion  of this  Property  is owned  by  the  tenant;
           therefore, depreciation is not applicable.

  (e)      For financial  reporting  purposes,  certain  components of the lease
           relating  to  land  and  building  have  been  recorded  as a  direct
           financing lease.  Accordingly,  costs relating to these components of
           this lease are not shown.

  (f)      For financial reporting  purposes,  the portion of the lease relating
           to the building has been recorded as a direct  financing  lease.  The
           cost of the building has been  included in net  investment  in direct
           financing leases; therefore, depreciation is not applicable.


<PAGE>


                            CNL INCOME FUND XV, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 1998


(g)        For financial reporting purposes, the lease for the land and building
           has been recorded as a direct  financing  lease. The cost of the land
           and  building  has been  included  in the net  investment  in  direct
           financing leases; therefore, depreciation is not applicable.

(h)        Effective June 11, 1998, the lease for this Property was  terminated,
           resulting  in the  reclassification  of the  building  portion of the
           lease to an  operating  lease.  The building was recorded at net book
           value as of June 11,1998 and depreciated over its remaining estimated
           life of approximately 26 years.

(i)        Effective June 14, 1998, the lease for this Property was  terminated,
           resulting  in the  reclassification  of the  building  portion of the
           lease to an  operating  lease.  The building was recorded at net book
           value  as of  June  14,  1998  and  depreciated  over  its  remaining
           estimated life of approximately 26 years.



<PAGE>



                                    EXHIBITS


<PAGE>



                                  EXHIBIT INDEX


   Exhibit Number

         3.1      Affidavit and Certificate of Limited Partnership of CNL Income
                  Fund  XV,  Ltd.  (Included  as  Exhibit  3.1  to  Registration
                  Statement No. 33-69968 on Form S-11 and incorporated herein by
                  reference.)

        4.1       Affidavit and Certificate of Limited Partnership of CNL Income
                  Fund  XV,  Ltd.  (Included  as  Exhibit  3.1  to  Registration
                  Statement No. 33-69968 on Form S-11 and incorporated herein by
                  reference.)

        4.2       Amended and Restated  Agreement of Limited  Partnership of CNL
                  Income  Fund XV,  Ltd.  (Included  as Exhibit 4.2 to Form 10-K
                  filed with the Securities and Exchange Commission on March 30,
                  1995, and incorporated herein by reference.)

        10.1      Management  Agreement between CNL Income Fund XV, Ltd. and CNL
                  Investment  Company  (Included  as  Exhibit  10.1 to Form 10-K
                  filed with the Securities and Exchange Commission on March 30,
                  1996, and incorporated herein by reference.)

        10.2      Assignment of Management Agreement from CNL Investment Company
                  to CNL Income Fund Advisors, Inc. (Included as Exhibit 10.2 to
                  Form 10-K filed with the Securities and Exchange Commission on
                  March 30, 1995, and incorporated herein by reference.)

        10.3      Assignment  of  Management  Agreement  from  CNL  Income  Fund
                  Advisors, Inc. to CNL Fund Advisors, Inc. (Included as exhibit
                  10.3 to Form  10-K  filed  with the  Securities  and  Exchange
                  Commission  on April  1,  1996,  and  incorporated  herein  by
                  reference.)

        27        Financial Data Schedule (Filed herewith.)