<PAGE>

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(X)             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

For the quarterly period ended               September 30, 1999
                               -------------------------------------------------

                                       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
                                     0-19139
                  ---------------------------------------------


                           CNL Income Fund VIII, Ltd.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Florida                                         59-2963338
-----------------------------------------      ---------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                        Identification No.)


450 S. Orange Avenue
Orlando, Florida                                             32801
-----------------------------------------      ---------------------------------
(Address of principal executive offices)                  (Zip Code)


Registrant's telephone number
(including area code)                                   (407) 540-2000
                                               ---------------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for 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
                                      -----  -----
<PAGE>

                                    CONTENTS
                                    --------


                                                                         Page
                                                                         ----
Part I.

  Item 1. Financial Statements:

           Condensed Balance Sheets                                       1

           Condensed Statements of Income                                 2

           Condensed Statements of Partners' Capital                      3

           Condensed Statements of Cash Flows                             4

           Notes to Condensed Financial Statements                        5-7

  Item 2. Management's Discussion and Analysis of Financial
           Condition and Results of Operations                            8-15

  Item 3. Quantitative and Qualitative Disclosures About
           Market Risk                                                    15

Part II.

  Other Information                                                       16-17
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                         September 30,            December 31,
                                                                            1999                      1998
                                                                         -----------               -----------
                                  ASSETS
                                  ------
<S>                                                                     <C>                     <C>
Land and buildings on operating leases, less
    accumulated depreciation of $1,910,651 and
    $1,685,510 in 1999 and 1998, respectively                            $15,544,137               $15,769,278
Net investment in direct financing leases                                  7,679,517                 7,802,785
Investment in joint ventures                                               2,756,955                 2,809,759
Mortgage notes receivable                                                  1,487,840                 1,811,726
Cash and cash equivalents                                                  2,012,110                 1,809,258
Receivables, less allowance for doubtful accounts
    of $24,636 in 1998                                                           308                    84,265
Prepaid expenses                                                               9,572                     3,959
Accrued rental income, less allowance for doubtful
    accounts of $4,501 in 1999 and 1998                                    1,997,551                 1,927,418
Other assets                                                                  52,671                    52,671
                                                                         -----------               -----------

                                                                         $31,540,661               $32,071,119
                                                                         ===========               ===========

                     LIABILITIES AND PARTNERS' CAPITAL
                     ---------------------------------

Accounts payable                                                         $   146,857               $     4,258
Escrowed real estate taxes payable                                            23,970                    27,838
Distributions payable                                                        787,501                 1,137,501
Due to related party                                                          64,283                    75,266
Rents paid in advance                                                        116,539                    62,349
                                                                         -----------               -----------
    Total liabilities                                                      1,139,150                 1,307,212

Commitments and Contingencies (Note 4)

Minority interest                                                            108,591                   108,600

Partners' capital                                                         30,292,920                30,655,307
                                                                         -----------               -----------

                                                                         $31,540,661               $32,071,119
                                                                         ===========               ===========
</TABLE>


           See accompanying notes to condensed financial statements.

                                       1
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                     Quarter Ended                         Nine Months Ended
                                                                     September 30,                           September 30,
                                                                1999               1998                1999                1998
                                                           ------------        ------------        ------------        ------------
<S>                                                       <C>                 <C>                 <C>                 <C>
Revenues:
    Rental income from operating leases                    $    490,669        $    478,742        $  1,475,971        $  1,389,490
    Earned income from direct financing leases                  234,358             258,348             706,845             855,788
    Contingent rental income                                         --                  --              16,614              21,033
    Interest and other income                                    56,972              66,175             168,381             201,501
                                                           ------------        ------------        ------------        ------------
                                                                781,999             803,265           2,367,811           2,467,812
                                                           ------------        ------------        ------------        ------------
Expenses:
    General operating and administrative                         30,006              40,683             102,515             116,775
    Professional services                                         8,961               4,248              23,097              16,611
    State and other taxes                                            --                  --              17,646               5,372
    Depreciation                                                 75,047              67,445             225,141             171,930
    Transaction costs                                            65,171                  --             186,261                  --
                                                           ------------        ------------        ------------        ------------
                                                                179,185             112,376             554,660             310,688
                                                           ------------        ------------        ------------        ------------

Income Before Minority Interest in Income of
    Consolidated Joint Venture, Equity in
    Earnings of Unconsolidated Joint Ventures
    and Gain on Sale of Land                                    602,814             690,889           1,813,151           2,157,124

Minority Interest in Income of Consolidated
    Joint Venture                                                (3,349)             (3,412)            (10,034)            (10,123)


Equity in Earnings of Unconsolidated Joint
    Ventures                                                     67,121              71,177             196,999             210,430

Gain on Sale of Land                                                 --             108,176                  --             108,176
                                                           ------------        ------------        ------------        ------------

Net Income                                                 $    666,586        $    866,830        $  2,000,116        $  2,465,607
                                                           ============        ============        ============        ============

Allocation of Net Income:
    General partners                                       $      6,666        $      7,586        $     20,001        $     23,574
    Limited partners                                            659,920             859,244           1,980,115           2,442,033
                                                           ------------        ------------        ------------        ------------

                                                           $    666,586        $    866,830        $  2,000,116        $  2,465,607
                                                           ============        ============        ============        ============

Net Income Per Limited Partner Unit                        $      0.019        $      0.025        $      0.057        $      0.070
                                                           ============        ============        ============        ============

Weighted Average Number of Limited Partner
    Units Outstanding                                        35,000,000          35,000,000          35,000,000          35,000,000
                                                           ============        ============        ============        ============
</TABLE>


           See accompanying notes to condensed financial statements.

                                       2
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL


                                              Nine Months Ended     Year Ended
                                                September 30,       December 31,
                                                    1999               1998
                                             -------------------  --------------

General partners:
    Beginning balance                           $    258,248       $    226,441
    Net income                                        20,001             31,807
                                                ------------       ------------
                                                     278,249            258,248
                                                ------------       ------------

Limited partners:
    Beginning balance                             30,397,059         30,989,957
    Net income                                     1,980,115          3,257,105
    Distributions ($0.068 and $0.110 per
      limited partner unit, respectively          (2,362,503)        (3,850,003)
                                                ------------       ------------
                                                  30,014,671         30,397,059
                                                ------------       ------------

Total partners' capital                         $ 30,292,920       $ 30,655,307
                                                ============       ============


           See accompanying notes to condensed financial statements.

                                       3
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                                September 30,
                                                                      1999                       1998
                                                                   -----------                -----------
<S>                                                               <C>                        <C>
Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities                      $ 2,604,386                $ 2,697,992
                                                                   -----------                -----------
    Cash Flows from Investing Activities:
        Proceeds from sale of land                                        --                      116,397
        Collections on mortgage notes receivable                       321,012                     30,554
                                                                   -----------                -----------
            Net cash provided by investing activities                  321,012                    146,951
                                                                   -----------                -----------

    Cash Flows from Financing Activities:
        Distributions to limited partners                           (2,712,503)                (2,712,502)
        Distributions to holder of minority interest                   (10,043)                    (9,932)
                                                                   -----------                -----------
            Net cash used in financing activities                   (2,722,546)                (2,722,434)
                                                                   -----------                -----------

Net Increase in Cash and Cash Equivalents                              202,852                    122,509

Cash and Cash Equivalents at Beginning of Period                     1,809,258                  1,602,236
                                                                   -----------                -----------

Cash and Cash Equivalents at End of Period                         $ 2,012,110                $ 1,724,745
                                                                   ===========                ===========

Supplemental Schedule of Non-Cash Financing
    Activities:

        Distributions declared and unpaid at end of
            period                                                 $   787,501                $   787,501
                                                                   ===========                ===========
</TABLE>


           See accompanying notes to condensed financial statements.

                                       4
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
          Quarters and Nine Months Ended September 30, 1999 and 1998


1.   Basis of Presentation:
     ---------------------

     The accompanying unaudited condensed financial statements have been
     prepared in accordance with the instructions to Form 10-Q and do not
     include all of the information and note disclosures required by generally
     accepted accounting principles. The financial statements reflect all
     adjustments, consisting of normal recurring adjustments, which are, in the
     opinion of management, necessary to a fair statement of the results for the
     interim periods presented. Operating results for the quarter and nine
     months ended September 30, 1999 may not be indicative of the results that
     may be expected for the year ending December 31, 1999. Amounts as of
     December 31, 1998, included in the financial statements, have been derived
     from audited financial statements as of that date.

     These unaudited financial statements should be read in conjunction with the
     financial statements and notes thereto included in Form 10-K of CNL Income
     Fund VIII, Ltd. (the "Partnership") for the year ended December 31, 1998.

     The Partnership accounts for its approximate 88 percent interest in Woodway
     Joint Venture using the consolidation method. Minority interest represents
     the minority joint venture partner's proportionate share of the equity in
     the Partnership's consolidated joint venture. All significant intercompany
     accounts and transactions have been eliminated.


2.   Mortgage Notes Receivable:
     -------------------------

     As of December 31, 1998, the Partnership had accepted three promissory
     notes in connection with the sale of three of its properties. During the
     nine months ended September 30, 1999, the borrower relating to one of the
     promissory notes prepaid principal in the amount of $272,500. The amount
     was applied to the outstanding principal balance.

3.   Related Party Transactions:
     --------------------------

     On September 1, 1999, CNL American Properties Fund, Inc. ("APF"), an
     affiliate of the general partners, acquired CNL Fund Advisors, Inc.
     ("CFA"), an affiliate who provides certain services relating to management
     of the Partnership and its properties pursuant to a management agreement
     with the Partnership. As a result of this acquisition, CFA became a wholly
     owned subsidiary of APF; however, the terms of the management agreement
     between the Partnership and CFA remain unchanged and in effect.

                                       5
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
          Quarters and Nine Months Ended September 30, 1999 and 1998


4.   Commitments and Contingencies:
     -----------------------------

     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
     2,021,318 shares of its common stock, par value $0.01 per share (the "APF
     Shares"). 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 fair value of the Partnership's property
     portfolio and other assets was $39,843,631 as of December 31, 1998. 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 first quarter of
     2000, 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. 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.

     On May 11, 1999, four limited partners in several of the CNL Income Funds
     served a lawsuit against the general partners and APF in connection with
     the proposed Merger. On July 8, 1999, the plaintiffs amended the complaint
     to add three additional limited partners as plaintiffs. Additionally, on
     June 22, 1999, a limited partner in certain of the CNL Income Funds served
     a lawsuit against the general partners, APF, CNL Fund Advisors, Inc. and
     certain of its affiliates in connection with the proposed Merger. On
     September 23, 1999, the judge assigned to the two lawsuits entered an order
     consolidating the two cases. Pursuant to this order, the plaintiffs in
     these cases filed a consolidated and amended complaint on November 8, 1999.
     The various defendants, including the general partners, have 45 days to
     respond to that consolidated complaint. The general partners and APF
     believe that the lawsuits are without merit and intend to defend vigorously
     against the claims. See Part II - Item 1. Legal Proceedings.

                                       6
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                   NOTES TO CONDENSED FINANCIAL STATEMENTS
          Quarters and Nine Months Ended September 30, 1999 and 1998


5.   Subsequent Events:
     -----------------

     In November 1999, the Partnership used the proceeds from the prepayment of
     principal from one of its promissory notes to enter into a joint venture
     arrangement, Bossier City Joint Venture, with CNL Income Fund XII, Ltd. and
     CNL Income Fund XIV, Ltd., both Florida limited partnerships and,
     affiliates of the general partners, to hold one restaurant property. The
     Partnership contributed approximately $448,000 to acquire the restaurant
     property. The Partnership owns an approximate 34 percent interest in the
     profits and losses of the joint venture. The Partnership will account for
     its investment in this joint venture under the equity method since the
     Partnership will share control with an affiliate.

                                       7
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


     CNL Income Fund VIII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on August 18, 1989 to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurants, as well as land 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 leases
are triple-net leases, with the lessees responsible for all repairs and
maintenance, property taxes, insurance and utilities. As of September 30, 1999,
the Partnership owned 36 Properties, which included interests in nine Properties
owned by joint ventures in which the Partnership is a co-venturer.

Capital Resources
-----------------

     The Partnership's primary source of capital for the nine months ended
September 30, 1999 and 1998, was cash from operations (which includes cash
received from tenants, distributions from joint ventures, and interest and other
income received, less cash paid for expenses). Cash from operations was
$2,604,386 and $2,697,992 for the nine months ended September 30, 1999 and 1998,
respectively. The decrease in cash from operations for the nine months ended
September 30, 1999, 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.

     Other sources and uses of capital included the following during the nine
months ended September 30, 1999.

     As of December 31, 1998, the Partnership had accepted three promissory
notes in connection with the sale of three of its Properties. During the nine
months ended September 30, 1999, the borrower relating to one of the promissory
notes prepaid principal of $272,500 which was applied to the outstanding
principal balance. In November 1999, the Partnership reinvested the prepaid
principal in a joint venture, Bossier City Joint Venture, with CNL Income Fund
XII, Ltd. and CNL Income Fund XIV, Ltd., both Florida limited partnerships and
affiliates of the general partners, to hold one restaurant property. The
Partnership owns an approximate 34 percent interest in the profits and losses of
the joint venture. The Partnership will distribute amounts sufficient to enable
the limited partners to pay federal and state income taxes, if any (at a level
reasonably assumed by the general partners), resulting from the prepayment of
principal.

     Currently, rental income from the Partnership's Properties and any amounts
collected under its promissory note, as described above, are invested in money
market accounts or other short-term, highly liquid investments such as demand
deposit accounts at commercial banks, certificates of deposits, and money market
accounts with less than a 30-day maturity date, pending the Partnership's use of
such funds to pay Partnership expenses, to make distributions to the partners
and to invest in an additional Property. At September 30, 1999, the Partnership
had $2,012,110 invested in such short-term investments, as compared to
$1,809,258 at December 31, 1998. The increase in cash and cash equivalents at
September 30, 1999, is primarily attributable to the receipt of the prepaid
principal of $272,500 during the nine months ended September 30, 1999, relating
to one of the Partnership's promissory notes, as described above. The funds

                                       8
<PAGE>

remaining at September 30, 1999, after payment of distributions and other
liabilities, will be used to invest in an additional Property and to meet the
Partnership's working capital and other needs.

Short-Term Liquidity
--------------------

     The Partnership's short-term liquidity requirements consist primarily of
the operating expenses of the Partnership.

     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.

     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.

     The Partnership generally distributes cash from operations remaining after
the payment of operating expenses of the Partnership, to the extent that the
general partners determine that such funds are available for distribution. Based
on cash from operations, and for the nine months ended September 30, 1998,
accumulated excess operating reserves, the Partnership declared distributions to
limited partners of $2,362,503 and $2,712,502 for the nine months ended
September 30, 1999 and 1998, respectively ($787,501 for each of the quarters
ended September 30, 1999 and 1998). This represents distributions of $0.068 and
$0.078 per unit for the nine months ended September 30, 1999 and 1998,
respectively ($0.023 per unit for each of the quarters ended September 30, 1999
and 1998). No distributions were made to the general partners for the quarters
and nine months ended September 30, 1999 and 1998. No amounts distributed to the
limited partners for the nine months ended September 30, 1999 and 1998 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.

     Total liabilities of the Partnership, including distributions payable,
decreased to $1,139,150 at September 30, 1999, from $1,307,212 at December 31,
1998, partially as a result of the payment in January 1999 of a special
distribution accrued at December 31, 1998, of $350,000, representing
accumulated, excess operating reserves. In addition, the decrease in liabilities
was partially offset by an increase in accounts payable at September 30, 1999,
as compared to December 31, 1998 due to the Partnership accruing transaction
costs relating to the proposed Merger with CNL American Properties Fund, Inc.
("APF"), as described below, and as a result of an increase in rents paid in
advance at September 30, 1999. The general partners believe that the Partnership
has sufficient cash on hand to meet its current working capital needs.

Long-Term Liquidity
-------------------

     The Partnership has no long-term debt or other long-term liquidity
requirements.

                                       9
<PAGE>

Results of Operations
---------------------

     During the nine months ended September 30, 1999 and 1998, the Partnership
and its consolidated joint venture, Woodway Joint Venture, owned and leased 28
wholly owned Properties to operators of fast-food and family-style restaurant
chains. In connection therewith, during the nine months ended September 30, 1999
and 1998, the Partnership and Woodway Joint Venture earned $2,182,816 and
$2,245,278, respectively, in rental income from operating leases and earned
income from direct financing leases, $725,027 and $737,090 of which was earned
during the quarters ended September 30, 1999 and 1998, respectively. Rental and
earned income decreased during the quarter and nine months ended September 30,
1999, due to the fact that during the quarter and nine months ended September
30, 1998, the leases relating to four Burger King Properties were amended to
provide for rent reductions from August 1998 through the end of the lease term.

     During the nine months ended September 30, 1999 and 1998, the Partnership
also earned $168,381 and $201,501, respectively, in interest and other income,
$56,972 and $66,175 of which was earned during the quarters ended September 30,
1999 and 1998. The decrease in interest and other income during the quarter and
nine months ended September 30, 1999, as compared to September 30, 1998, is
primarily attributable to a reduction in interest income as a result of the
prepayment of principal on a mortgage note of $272,500 during the nine months
ended September 30, 1999, as described above in "Capital Resources."

     For the quarters and nine months ended September 30, 1999 and 1998, the
Partnership owned and leased eight Properties indirectly through joint venture
arrangements. In connection with these joint venture arrangements, during the
nine months ended September 30, 1999 and 1998, the Partnership earned $196,999
and $210,430, respectively, attributable to net income earned by these
unconsolidated joint ventures, $67,121 and $71,177 of which was earned during
the quarters ended September 30, 1999 and 1998, respectively. The decrease in
net income earned by joint ventures for the quarter and nine months ended
September 30, 1999, is primarily due to the fact that the lease relating to the
Burger King Property in Asheville, North Carolina, owned by Asheville Joint
Venture, was amended to provide for rent reductions from August 1998 through the
end of the lease term.

     Operating expenses, including depreciation expense, were $554,660 and
$310,688 for the nine months ended September 30, 1999 and 1998, respectively,
$179,185 and $112,376 of which was incurred during the quarters ended September
30, 1999 and 1998, respectively. The increase in operating expenses during the
quarter and nine months ended September 30, 1999, as compared to the quarter and
nine months ended September 30, 1998, was partially due to an increase in
depreciation expense due to the fact that, in August 1998, the Partnership
reclassified the leases for four Burger King Properties from direct financing
leases to operating leases, as a result of lease amendments, as described above.

     The increase in operating expenses for the quarter and nine months ended
September 30, 1999, was also partially due to the fact that the Partnership
incurred $65,171 and $186,261, respectively, 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 below. 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

                                       10
<PAGE>

bear the portion of such transaction costs based upon the percentage of
"Against" votes and abstentions.

     As a result of a right of way settlement for the Partnership's Property in
Brooksville, Florida, the Partnership recognized a gain on sale of land of
$108,176 during the quarter and nine months ended September 30, 1998, for
financial reporting purposes. No Properties were sold during the quarter and
nine months ended September 30, 1999.

Proposed Merger
---------------

     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 (the "Merger"). As consideration for the Merger, APF has
agreed to issue 2,021,318 shares of its common stock, par value $0.01 per share
(the "APF Shares"). 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 fair value of the Partnership's property portfolio and other
assets was $39,843,631 as of December 31, 1998. 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 first quarter of 2000, 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. 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.

     On May 11, 1999, four limited partners in several of the CNL Income Funds
served a lawsuit against the general partners and APF in connection with the
proposed Merger. On July 8, 1999, the plaintiffs amended the complaint to add
three additional limited partners as plaintiffs. Additionally, on June 22, 1999,
a limited partner in certain of the CNL Income Funds served a lawsuit against us
and APF in connection with the proposed Merger. On September 23, 1999, the judge
assigned to the two lawsuits entered an order consolidating the two cases.
Pursuant to this order, the plaintiffs in these cases filed a consolidated and
amended complaint on November 8, 1999. The various defendants, including the
general partners, have 45 days to respond to that consolidated complaint. The
general partners, APF and CNL Fund Advisors, Inc. and certain of its affiliates,
believe that the lawsuits are without merit and intend to defend vigorously
against the claims. See Part II - Item 1. Legal Proceedings.

                                       11
<PAGE>

Year 2000 Readiness Disclosure
------------------------------

Overview of Year 2000 Problem

     The year 2000 problem concerns the inability of information and
non-information technology systems to properly recognize and process date
sensitive information beyond January 1, 2000. The failure to accurately
recognize the year 2000 could result in a variety of problems from data
miscalculations to the failure of entire systems.

Information and Non-Information Technology Systems

     The Partnership does not have any information or non-information technology
systems. The general partners and their affiliates provide all services
requiring the use of information and non-information technology systems pursuant
to a management agreement with the Partnership. The information technology
system of the general partners' affiliates consists of a network of personal
computers and servers built using hardware and software from mainstream
suppliers. The non-information technology systems of the affiliates are
primarily facility related and include building security systems, elevators,
fire suppressions, HVAC, electrical systems and other utilities. The affiliates
have no internally generated programmed software coding to correct, because
substantially all of the software utilized by the affiliates is purchased or
licensed from external providers. The maintenance of non-information technology
systems at the Partnership's restaurant properties is the responsibility of the
tenants of such properties in accordance with the terms of the Partnership's
leases.

The Y2K Team

     In early 1998, the general partners and their affiliates formed a Year 2000
committee (the "Y2K Team") for the purpose of identifying, understanding and
addressing the various issues associated with the year 2000 problem. The Y2K
Team consists of the general partners and members from their affiliates,
including representatives from senior management, information systems,
telecommunications, legal, office management, accounting and property
management.

Assessing Year 2000 Readiness

     The Y2K Team's initial step in assessing year 2000 readiness consisted of
identifying any systems that are date-sensitive and, accordingly, could have
potential year 2000 problems. The Y2K Team has conducted inspections, interviews
and tests to identify which of the systems used by the Partnership could have a
potential year 2000 problem.

     The information system of the general partners' affiliates is comprised of
hardware and software applications from mainstream suppliers. Accordingly, the
Y2K Team has contacted and is evaluating documentation from the respective
vendors and manufacturers to verify the year 2000 compliance of their products.
The Y2K Team has also requested and is evaluating documentation from the
non-information technology systems providers of the affiliates.

                                       12
<PAGE>

     In addition, the Y2K Team has requested and is evaluating documentation
from other companies with which the Partnership has material third party
relationships. Such third parties, in addition to the providers of information
and non-information technology systems, consist of the Partnership's transfer
agent and financial institutions. The Partnership depends on its transfer agent
to maintain and track investor information and its financial institutions for
availability of cash.

     As of September 30, 1999, the Y2K Team had received responses from
approximately 62 percent of the third parties. All of the responses were in
writing. Of the third parties responding, all indicated that they are currently
year 2000 compliant or will be year 2000 compliant prior to the year 2000.
Although the Y2K Team continues to receive positive responses from the companies
with which the Partnership has third party relationships regarding their year
2000 compliance, the general partners cannot be assured that the third parties
have adequately considered the impact of the year 2000.

     In addition, the Y2K Team has requested documentation from the
Partnership's tenants. As of September 30, 1999, the Y2K Team had received
responses from approximately 75 percent of the tenants. All of the responses
were in writing. Of the tenant's responding, all indicated that they are
currently year 2000 compliant or will be year 2000 compliant prior to the year
2000. The general partners cannot be assured that the tenants have adequately
considered the impact of the year 2000. The Partnership has also instituted a
policy of requiring any new tenants to indicate that their systems are year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.

Achieving Year 2000 Compliance

     The Y2K Team has identified and completed upgrades for its hardware
equipment that was not year 2000 compliant. In addition, the Y2K Team has
identified and completed upgrades of the software applications that were not
year 2000 compliant, although the general partners cannot be assured that the
upgrade solutions provided by the vendors have addressed all possible year 2000
issues.

     The cost for these upgrades and other remedial measures is the
responsibility of the general partners and their affiliates. The general
partners do not expect that the Partnership will incur any costs in connection
with year 2000 remedial measures.

Assessing the Risks to the Partnership of Non-Compliance and Developing
Contingency Plans

Risk of Failure of Information and Non-Information Technology Systems Used by
the Partnership

     The general partners believe that the reasonably likely worst case scenario
with regard to the information and non-information technology systems used by
the Partnership is the failure of one or more of these systems as a result of
year 2000 problems. Because the Partnership's major source of income is rental
payments under long-term triple-net leases, any failure of information or
non-information technology systems used by the Partnership is not expected to
have a material impact on the results of operations of the Partnership. Even if
such systems failed, the payment of rent under the Partnership's leases would
not be affected. In addition, the Y2K Team is

                                       13
<PAGE>

expected to correct any Y2K problems within the control of the general
partners and their affiliates before the year 2000.

     The Y2K Team has determined that a contingency plan to address this risk is
not necessary at this time. However, if the Y2K Team identifies additional risks
associated with the year 2000 compliance of the information or non-information
technology systems used by the Partnership, the Y2K Team will develop a
contingency plan if deemed necessary at that time.

Risk of Inability of Transfer Agent to Accurately Maintain Partnership Records

     The general partners believe that the reasonably likely worst case scenario
with regard to the Partnership's transfer agent is that the transfer agent will
fail to achieve year 2000 compliance of its systems and will not be able to
accurately maintain the records of the Partnership. This could result in the
inability of the Partnership to accurately identify its limited partners for
purposes of distributions, delivery of disclosure materials and transfer of
units. The Y2K Team has received certification from the Partnership's transfer
agent of its year 2000 compliance. Despite the positive response from the
transfer agent, the general partners cannot be assured that the transfer agent
has addressed all possible year 2000 issues.

     The Y2K Team has developed a contingency plan pursuant to which the general
partners and their affiliates would maintain the records of the Partnership
manually, in the event that the systems of the transfer agent are not year 2000
compliant. The general partners and their affiliates would have to allocate
resources to internally perform the functions of the transfer agent. The general
partners do not anticipate that the additional cost of these resources would
have a material impact on the results of operations of the Partnership.

Risk of Loss of Short-Term Liquidity from Failure of Financial Institutions to
Achieve Year 2000 Compliance

     The general partners believe that the reasonably likely worst case scenario
with regard to the Partnership's financial institutions is that some or all of
its funds on deposit with such financial institutions may be temporarily
unavailable. The Y2K Team has received responses from 93% of the Partnership's
financial institutions indicating that their systems are currently year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.
Despite the positive responses from the financial institutions, the general
partners cannot be assured that the financial institutions have addressed all
possible year 2000 issues. The loss of short-term liquidity could affect the
Partnership's ability to pay its expenses on a current basis. The general
partners do not anticipate that a loss of short-term liquidity would have a
material impact on the results of operations of the Partnership.

     Based upon the responses received from the Partnership's financial
institutions and the inability of the Y2K Team to identify a suitable
alternative for the deposit of funds that is not subject to potential year 2000
problems, the Y2K Team has determined not to develop a contingency plan to
address this risk.

                                       14
<PAGE>

Risks of Late Payment or Non-Payment of Rent by Tenants

     The general partners believe that the reasonably likely worst case scenario
with regard to the Partnership's tenants is that some of the tenants may make
rental payments late as the result of the failure of the tenants to achieve year
2000 compliance of their systems used in the payment of rent, the failure of the
tenant's financial institutions to achieve year 2000 compliance, or the
temporary disruption of the tenants' businesses. The Y2K Team is in the process
of requesting responses from the Partnership's tenants indicating the extent to
which their systems are currently year 2000 compliant or are expected to be year
2000 compliant prior to the year 2000. The general partners cannot be assured
that the tenants have addressed all possible year 2000 issues. The late payment
of rent by one or more tenants would affect the results of operations of the
Partnership in the short-term.

     The general partners are also aware of predictions that the year 2000
problem, if uncorrected, may result in a global economic crisis. The general
partners are not able to determine if such predictions are true. A widespread
disruption of the economy could affect the ability of the Partnership's tenants
to pay rent and, accordingly, could have a material impact on the results of
operations of the Partnership.

     Because payment of rent is under the control of the Partnership's tenants,
the Y2K Team is not able to develop a contingency plan to address these risks.
In the event of late payment or non-payment of rent, the general partners will
assess the remedies available to the Partnership under its lease agreements.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The Partnership has provided fixed rate mortgage notes to borrowers. The
general partners believe that the estimated fair value of the mortgage notes at
September 30, 1999 approximated the outstanding principal amounts. The
Partnership is exposed to equity loss in the event of changes in interest rates.
The following table presents the expected cash flows of principal that are
sensitive to these changes.

                                                 Mortgage note
                                                  Fixed Rate
                                              ------------------

          1999                                 $       14,143
          2000                                         48,702
          2001                                         54,172
          2002                                         60,256
          2003                                         67,027
          Thereafter                                1,230,611
                                             -------------------

                                               $    1,474,908
                                             ===================

                                       15
<PAGE>

                           PART II. OTHER INFORMATION



Item 1.   Legal Proceedings.
          -----------------

          On May 11, 1999, four limited partners in several CNL Income Funds
          served a derivative and purported class action lawsuit filed April 22,
          1999 against the general partners and APF in the Circuit Court of the
          Ninth Judicial Circuit of Orange County, Florida, alleging that the
          general partners breached their fiduciary duties and violated
          provisions of certain of the CNL Income Fund partnership agreements in
          connection with the proposed Merger. The plaintiffs are seeking
          unspecified damages and equitable relief. On July 8, 1999, the
          plaintiffs filed an amended complaint which, in addition to naming
          three additional plaintiffs, includes allegations of aiding and
          abetting and conspiring to breach fiduciary duties, negligence and
          breach of duty of good faith against certain of the defendants and
          seeks additional equitable relief. As amended, the caption of the case
          is Jon Hale, Mary J. Hewitt, Charles A. Hewitt, Gretchen M. Hewitt
             ---------------------------------------------------------------
          Bernard J. Schulte, Edward M. and Margaret Berol Trust, and Vicky
          -----------------------------------------------------------------
          Berol v. James M. Seneff, Jr., Robert A. Bourne, CNL Realty
          -----------------------------------------------------------
          Corporation, and CNL American Properties Fund, Inc., Case No.
          ----------------------------------------------------
          CIO-99-0003561.

          On June 22, 1999, a limited partner of several CNL Income Funds served
          a purported class action lawsuit filed April 29, 1999 against the
          general partners and APF, Ira Gaines, individually and on behalf of a
                                    -------------------------------------------
          class of persons similarly situated, v. CNL American Properties Fund,
          ---------------------------------------------------------------------
          Inc., James M. Seneff, Jr., Robert A. Bourne, CNL Realty Corporation,
          ---------------------------------------------------------------------
          CNL Fund Advisors, Inc., CNL Financial Corporation a/k/a CNL Financial
          ----------------------------------------------------------------------
          Corp., CNL Financial Services, Inc. and CNL Group, Inc., Case NO.
          --------------------------------------------------------
          CIO-99-3796, in the Circuit Court of the Ninth Judicial Circuit of
          Orange County, Florida, alleging that the general partners breached
          their fiduciary duties and that APF aided and abetted their breach of
          fiduciary duties in connection with the proposed Merger. The plaintiff
          is seeking unspecified damages and equitable relief.

          On September 23, 1999, Judge Lawrence Kirkwood entered an order
          consolidating the two cases under the caption In re: CNL Income Funds
                                                        -----------------------
          Litigation, Case No. 99-3561. Pursuant to this order, the plaintiffs
          ----------------------------
          in these cases filed a consolidated and amended complaint on November
          8, 1999, and the various defendants, including the general partners,
          have 45 days to respond to that consolidated complaint.

Item 2.   Changes in Securities. Inapplicable.
          -----------------------------------

Item 3.   Defaults upon Senior Securities. Inapplicable.
          ---------------------------------------------

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

Item 5.   Other Information. Inapplicable.
          -------------------------------

Item 6.   Exhibits and Reports on Form 8-K.
          --------------------------------

                                       16
<PAGE>

(a)  Exhibits

     2.1  Agreement and Plan of Merger by and between the Registrant and CNL
          American Properties Fund, Inc. ("APF") dated March 11, 1999, as
          amended June 4, 1999, and as amended October 27, 1999 (Filed as
          Appendix B to the Prospectus Supplement for the Registrant,
          constituting a part of Amendment No. 3 to the Registration Statement
          of APF on Form S-4, File No. 333-74329.)

     5.1  Affidavit and Certificate of Limited Partnership of CNL Income Fund
          VIII, Ltd. (Included as Exhibit 3.2 to Registration Statement No.
          33-31482 on Form S-11 and incorporated herein by reference.)

     4.1  Affidavit and Certificate of Limited Partnership of CNL Income Fund
          VIII, Ltd. (Included as Exhibit 3.2 to Registration Statement No.
          33-31482 on Form S-11 and incorporated herein by reference.)

     4.2  Amended and Restated Agreement of Limited Partnership of CNL Income
          Fund VIII, Ltd. (Included as Exhibit 4.2 to Form 10-K filed with the
          Securities and Exchange Commission on April 1, 1996, and incorporated
          herein by reference.)

     10.1 Management Agreement between CNL Income Fund VIII, Ltd. and CNL
          Investment Company (Included as Exhibit 10.1 to Form 10-K filed with
          the Securities and Exchange Commission on April 1, 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.)

(b)  Reports on Form 8-K

     No reports on Form 8-K were filed during the quarter ended September 30,
     1999.

                                       17
<PAGE>

                                   SIGNATURES
                                   ----------


     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

     DATED this 10th day of November, 1999.


                                 CNL INCOME FUND VIII, LTD.

                                 By:  CNL REALTY CORPORATION
                                      General Partner


                                      By: /s/ James M. Seneff, Jr.
                                          --------------------------------------
                                          JAMES M. SENEFF, JR.
                                          Chief Executive Officer
                                          (Principal Executive Officer)


                                      By: /s/ Robert A. Bourne
                                          --------------------------------------
                                          ROBERT A. BOURNE
                                          President and Treasurer
                                          (Principal Financial and
                                          Accounting Officer)

                                       18