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 June 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)
<TABLE>
<CAPTION>

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


400 East South Street
Orlando, Florida                                                                         32801
------------------------------------------------------              ------------------------------------------------
      (Address of principal executive offices)                                        (Zip Code)


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

</TABLE>

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

                      Condensed Statements of Income

                      Condensed Statements of Partners' Capital

                      Condensed Statements of Cash Flows

                      Notes to Condensed Financial Statements

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

     Item 3.      Quantitative and Qualitative Disclosures About
                      Market Risk

Part II.

     Other Information





<PAGE>



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

<TABLE>
<CAPTION>

                                                                                June 30,               December 31,
                                                                                  1999                     1998
                                                                           -------------------      -------------------
<S> <C>
                               ASSETS

   Land and buildings on operating leases, less
       accumulated depreciation of $1,835,604 and
       $1,685,510, respectively                                                  $ 15,619,184             $ 15,769,278
   Net investment in direct financing leases                                        7,721,863                7,802,785
   Investment in joint ventures                                                     2,776,099                2,809,759
   Mortgage notes receivable                                                        1,507,221                1,811,726
   Cash and cash equivalents                                                        1,896,858                1,809,258
   Receivables, less allowance for doubtful accounts
       of $24,636 in 1998                                                               5,426                   84,265
   Prepaid expenses                                                                    14,426                    3,959
   Accrued rental income, less allowance for doubtful
       accounts of $4,501 in 1999 and 1998                                          1,976,584                1,927,418
   Other assets                                                                        52,671                   52,671
                                                                           -------------------      -------------------

                                                                                 $ 31,570,332             $ 32,071,119
                                                                           ===================      ===================

                  LIABILITIES AND PARTNERS' CAPITAL

   Accounts payable                                                                $   96,091               $    4,258
   Escrowed real estate taxes payable                                                  21,347                   27,838
   Distributions payable                                                              787,501                1,137,501
   Due to related party                                                                81,968                   75,266
   Rents paid in advance                                                               60,950                   62,349
                                                                           -------------------      -------------------
       Total liabilities                                                            1,047,857                1,307,212

   Commitments and Contingencies (Note 3)

   Minority interest                                                                  108,640                  108,600

   Partners' capital                                                               30,413,835               30,655,307
                                                                           -------------------      -------------------

                                                                                 $ 31,570,332             $ 32,071,119
                                                                           ===================      ===================

</TABLE>


           See accompanying notes to condensed financial statements.


<PAGE>


                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>


                                                              Quarter Ended                     Six Months Ended
                                                                June 30,                            June 30,
                                                          1999            1998               1999              1998
                                                       ------------    ------------      -------------     -------------
<S> <C>
Revenues:
    Rental income from operating leases                  $ 492,313       $ 455,192          $ 985,302         $ 910,748
    Earned income from direct financing leases             235,628         297,998            472,487           597,440
    Contingent rental income                                13,335           2,547             16,614            21,033
    Interest and other income                               57,044          70,242            111,409           135,326
                                                       ------------    ------------      -------------     -------------
                                                           798,320         825,979          1,585,812         1,664,547
                                                       ------------    ------------      -------------     -------------

Expenses:
    General operating and administrative                    34,860          43,649             72,509            76,092
    Professional services                                    8,404           6,857             14,136            12,363
    State and other taxes                                      112             103             17,646             5,372
    Depreciation                                            75,047          52,243            150,094           104,485
    Transaction costs                                       87,527              --            121,090                --
                                                       ------------    ------------      -------------     -------------
                                                           205,950         102,852            375,475           198,312
                                                       ------------    ------------      -------------     -------------

Income Before Minority Interest in Income of
    Consolidated Joint Venture and Equity in
    Earnings of Unconsolidated Joint Ventures              592,370         723,127          1,210,337         1,466,235

Minority Interest in Income of Consolidated
    Joint Venture                                           (3,330 )        (3,307 )           (6,685 )          (6,711 )

Equity in Earnings of Unconsolidated Joint
    Ventures                                                69,647          71,149            129,878           139,253
                                                       ------------    ------------      -------------     -------------

Net Income                                               $ 658,687       $ 790,969         $1,333,530        $1,598,777
                                                       ============    ============      =============     =============

Allocation of Net Income:
    General partners                                      $  6,587        $  7,910          $  13,335         $  15,988
    Limited partners                                       652,100         783,059          1,320,195         1,582,789
                                                       ------------    ------------      -------------     -------------

                                                         $ 658,687       $ 790,969         $1,333,530        $1,598,777
                                                       ============    ============      =============     =============

Net Income Per Limited Partner Unit                       $  0.019        $  0.022          $   0.038         $   0.045
                                                       ============    ============      =============     =============

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.


<PAGE>


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

<TABLE>
<CAPTION>

                                                                      Six Months Ended                Year Ended
                                                                          June 30,                   December 31,
                                                                            1999                         1998
                                                                   ------------------------     ------------------------
<S> <C>
General partners:
    Beginning balance                                                       $  258,248                    $  226,441
    Net income                                                                  13,335                        31,807
                                                                      -----------------             -----------------
                                                                               271,583                       258,248
                                                                      -----------------             -----------------

Limited partners:
    Beginning balance                                                       30,397,059                    30,989,957
    Net income                                                               1,320,195                     3,257,105
    Distributions ($0.045 and $0.110 per
       limited partner unit, respectively                                   (1,575,002 )                  (3,850,003 )
                                                                      -----------------             -----------------
                                                                            30,142,252                    30,397,059
                                                                      -----------------             -----------------

Total partners' capital                                                    $30,413,835                   $30,655,307
                                                                      =================             =================
</TABLE>

           See accompanying notes to condensed financial statements.

<PAGE>


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


                                                                                   Six Months Ended
                                                                                       June 30,
                                                                               1999                1998
                                                                          ----------------    ----------------
<S> <C>
Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities                                  $1,717,444          $1,873,504
                                                                          ----------------    ----------------

    Cash Flows from Investing Activities:
       Collections on mortgage notes receivable                                   301,803              20,097
                                                                          ----------------    ----------------
          Net cash provided by investing activities                               301,803              20,097
                                                                          ----------------    ----------------

    Cash Flows from Financing Activities:
       Distributions to limited partners                                       (1,925,002 )        (1,925,001 )
       Distributions to holder of minority interest                                (6,645 )            (6,587 )
                                                                          ----------------    ----------------
          Net cash used in financing activities                                (1,931,647 )        (1,931,588 )
                                                                          ----------------    ----------------

Net Increase (Decrease) in Cash and Cash Equivalents                               87,600             (37,987 )

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

Cash and Cash Equivalents at End of Period                                     $1,896,858          $1,564,249
                                                                          ================    ================

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.



<PAGE>



                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 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 six months ended June 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 six months  ended June 30, 1999,  the maker  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.   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")  which,  for the  purposes  of  valuing  the merger
         consideration,  have been  valued by APF at $20.00 per APF  Share,  the
         price  paid by APF  investors  (after an  adjustment  for a one for two
         reverse stock split  effective June 3, 1999) in three  previous  public
         offerings,  the most recent of which was completed in December 1998. 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


<PAGE>


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

3.       Commitments and Contingencies - Continued:

         unchanged) at  $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
         fourth 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.  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.  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.




<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 June 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 six months ended
June 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 $1,717,444 and
$1,873,504  for the six months ended June 30, 1999 and 1998,  respectively.  The
decrease in cash from  operations  for the six months  ended June 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 six
months ended June 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 six
months ended June 30, 1999, the maker  relating to one of the  promissory  notes
prepaid  principal of $272,500  which was applied to the  outstanding  principal
balance.  The  Partnership  intends  to  reinvest  the  $272,500  payment  in an
additional Property.

         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 or to make  distributions  to the
partners.  At June 30, 1999, the  Partnership  had  $1,896,858  invested in such
short-term  investments,  as compared to  $1,809,258  at December 31, 1998.  The
funds  remaining  at June 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.



<PAGE>


         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 six months  ended  June 30,  1998,
accumulated excess operating reserves, the Partnership declared distributions to
limited  partners of $1,575,002 and $1,925,001 for the six months ended June 30,
1999 and 1998,  respectively  ($787,501 for each of the quarters  ended June 30,
1999 and 1998). This represents  distributions of $0.045 and $0.055 per unit for
the six months ended June 30, 1999 and 1998,  respectively  ($0.023 per unit for
the quarters ended June 30, 1999 and 1998).  No  distributions  were made to the
general  partners  for the quarters and six months ended June 30, 1999 and 1998.
No amounts distributed to the limited partners for the six months ended June 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 $1,047,857 at June 30, 1999,  from $1,307,212 at December 31, 1998,
partially  as a result of the  payment  of a  special  distribution  accrued  at
December 31, 1998,  of  accumulated,  excess  operating  reserves to the limited
partners of $350,000 in January 1999. In addition,  the decrease in  liabilities
is  partially  offset  by an  increase  in  liabilities  due to the  Partnership
accruing  transaction  costs  relating to the proposed  Merger with CNL American
Properties Fund, Inc. ("APF"),  as described below. 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.

Results of Operations

         During the six months ended June 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 six months ended June 30, 1999 and
1998,  the  Partnership   and  Woodway  Joint  Venture  earned   $1,457,789  and
$1,508,188,  respectively,  in rental  income from  operating  leases and earned
income from direct financing  leases,  $727,941 and $753,190 of which was earned
during the  quarters  ended  June 30,  1999 and 1998,  respectively.  Rental and
earned income


<PAGE>


decreased during the quarter and six months ended June 30, 1999, due to the fact
that 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.

         For the six months ended June 30, 1999 and 1998, the  Partnership  also
earned $16,614 and $21,033,  respectively,  in contingent rental income, $13,335
and $2,547 of which was earned during the quarters ended June 30, 1999 and 1998,
respectively.  Contingent  rental  income was lower  during the six months ended
June 30, 1999,  as compared to the six months  ended June 30,  1998,  due to the
fact that during the six months ended June 30, 1998,  the  Partnership  recorded
additional  contingent  rental  amounts  as  a  result  of  adjusting  estimated
contingent  rental  amounts  accrued at December  31, 1997,  to actual  amounts.
Contingent  rental  income was higher for the quarter  ended June 30,  1999,  as
compared to the quarter ended June 30, 1998,  due to a change in the  percentage
rent formula in accordance with the terms of the lease agreement for the Wendy's
Property in Midlothian, Virginia.

         During the six months  ended June 30,  1999 and 1998,  the  Partnership
also earned $111,409 and $135,326,  respectively,  in interest and other income,
$57,044 and $70,242 of which was earned during the quarters  ended June 30, 1999
and 1998.  The decrease in interest and other income  during the quarter and six
months ended June 30,  1999,  is  primarily  attributable  to a reduction in the
interest earned on the mortgage note accepted in connection with the sale of the
Property located in Orlando,  Florida due to the fact that the maker of the note
prepaid principal in the amount of $272,500 during the six months ended June 30,
1999, as described above in "Capital Resources."

         For the  quarters  and six  months  ended June 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
six months ended June 30, 1999 and 1998,  the  Partnership  earned  $129,878 and
$139,253,   respectively,   attributable   to  net   income   earned   by  these
unconsolidated  joint  ventures,  $69,647 and $71,149 of which was earned during
the  quarters  ended June 30, 1999 and 1998,  respectively.  The decrease in net
income  earned by joint  ventures  for the quarter and six months ended June 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 and amortization  expense,
were  $375,475  and  $198,312  for the six months  ended June 30, 1999 and 1998,
respectively,  $205,950  and  $102,852 of which was earned  during the  quarters
ended June 30, 1999 and 1998,  respectively.  The increase in operating expenses
during the  quarter  and six months  ended June 30,  1999,  as  compared  to the
quarter and six months ended June 30, 1998,  is 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.

         The increase in operating expenses for the quarter and six months ended
June 30, 1999, is also partially due to the fact that the  Partnership  incurred
$87,527 and $121,090,  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  bear  the  portion  of such  transaction  costs  based  upon the
percentage of "Against" votes and abstentions.

         In  addition,  the  increase in  operating  expenses for the six months
ended June 30, 1999 is due to the Partnership  incurring  additional state taxes
due to  changes  in tax  laws of a  state  in  which  the  Partnership  conducts
business.

         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")  which,  for the  purposes  of  valuing  the  merger
consideration,  have been valued by APF at $20.00 per APF Share,  the price paid
by APF  investors  (after an  adjustment  for a one for two reverse  stock split
effective June 3, 1999) in three previous public  offerings,  the most recent of
which was completed in December 1998. 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  $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 fourth 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.  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. 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.

Year 2000 Readiness Disclosure

         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.  As  of  June  30,  1999  the
Partnership did not have any information or non-information  technology systems.
The general  partners  and  certain of the  affiliates  of the general  partners
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 affiliates of the general partners 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 of the general  partners are primarily  facility  related and include
building  security  systems,  elevators,  fire  suppressions,  HVAC,  electrical
systems and other  utilities.  The  affiliates  of the general  partners have no
internally generated programmed software coding to correct because substantially
all of the software utilized by the general partners and affiliates is purchased
or  licensed  from  external  providers.   The  maintenance  of  non-information
technology systems at the Partnership's  Properties is the responsibility of the
tenants of the  Properties  in  accordance  with the terms of the  Partnership's
leases.

         In early 1998, the general  partners and affiliates  formed a Year 2000
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  certain of the  affiliates  of the general
partners, including representatives from senior management, information systems,
telecommunications,   legal,   office   management,   accounting   and  property
management. The Y2K Team's initial step in assessing the Partnership's Year 2000
readiness  consists of  identifying  any systems  that are  date-sensitive  and,
accordingly,  could have potential  Year 2000  problems.  The Y2K Team is in the
process of conducting inspections, interviews and tests to identify which of the
Partnership's systems could have a potential Year 2000 problem.

         The  information  system of the  affiliates of the general  partners is
comprised of hardware  and  software  applications  from  mainstream  suppliers.
Accordingly, the Y2K Team is in the process of contacting the respective vendors
and  manufacturers  to verify the Year 2000  compliance  of their  products.  In
addition,  the Y2K Team has also requested and is evaluating  documentation from
other   companies  with  which  the  Partnership  has  a  material  third  party
relationship,   including  the   Partnership's   tenants,   vendors,   financial
institutions and the  Partnership's  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.  The Y2K Team has also  requested and is  evaluating  documentation
from the  non-information  technology systems providers of the affiliates of the
general  partners.  Although the general  partners  continue 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  tenants,  financial  institutions,  transfer  agent,  other
vendors and system  providers have adequately  considered the impact of the Year
2000. The general  partners are not able to measure the effect on the operations
of the Partnership of any third party's failure to adequately address the impact
of the Year 2000.

         The general  partners and their  affiliates  have  identified  and have
implemented  upgrades for certain hardware equipment.  In addition,  the general
partners and their  affiliates have  identified  certain  software  applications
which will require upgrades to become Year 2000 compliant.  The general partners
expect  that all of these  upgrades,  as well as any  other  necessary  remedial
measures on the information  technology systems used in the business  activities
and  operations  of the  Partnership,  to be completed  by  September  30, 1999,
although,  the general  partners  cannot be assured  that the upgrade  solutions
provided by the vendors  have  addressed  all  possible  Year 2000  issues.  The
general  partners  do not expect the  aggregate  cost of the Year 2000  remedial
measures to be material to the results of operations of the Partnership.

         The general partners and their  affiliates have received  certification
from the  Partnership's  transfer agent of its Year 2000 compliance.  Due to the
material  relationship of the Partnership  with its transfer agent, the Y2K Team
is evaluating the Year 2000  compliance of the systems of the transfer agent and
expects to have the  evaluation  completed  by September  30, 1999.  Despite the
positive  response  from the transfer  agent and the  evaluation of the transfer
agent's system by the Y2K Team, the general  partners cannot be assured that the
transfer  agent has addressed  all possible Year 2000 issues.  In the event that
the  systems of the  transfer  agent are not Year 2000  compliant,  the  general
partners and their  affiliates  will 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 Partnership.

         Based upon the progress the general  partners and their affiliates have
made in addressing  the Year 2000 issues and their plan and timeline to complete
the compliance  program,  the general partners do not foresee  significant risks
associated  with Year 2000  compliance  at this time.  The general  partners and
their affiliates plan to address their significant Year 2000 issues prior to the
Partnership  being  affected  by  them;  therefore,  we  have  not  developed  a
comprehensive  contingency  plan.  However,  if the general  partners  and their
affiliates identify significant risks related to their Year 2000 compliance,  or
if their progress deviates from the anticipated  timeline,  the general partners
and their affiliates will develop  contingency plans as deemed necessary at that
time.


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
                  RISK.

         No material  changes in the  Partnership's  market risk  occurred  from
December 31, 1998 through June 30, 1999. Information regarding the Partnership's
market risk at December  31, 1998 is included in its Annual  Report on Form 10-K
for the year ended December 31, 1998.


<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.

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.

(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 and as amended June
                               4, 1999  (Filed as  Appendix B to the  Prospectus
                               Supplement  for the  Registrant,  constituting  a
                               part  of  Amendment  No.  1 to  the  Registration
                               Statement of APF on Form S-4, File No. 74329.)


<PAGE>



                      3.1      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
                      June 30, 1999.

<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 9th day of August, 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)