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

(Mark One)

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

                   For the fiscal year ended December 31, 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 333-47411

                        CNL HEALTH CARE PROPERTIES, INC.
             (Exact name of registrant as specified in its charter)

          Maryland                                    59-3491443
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
incorporation or organization)

                             450 South Orange Avenue
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

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

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

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

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

                                      None
                                (Title of class)

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

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

     Aggregate  market  value of the common stock held by  nonaffiliates  of the
registrant: The registrant registered an offering of shares of common stock (the
"Shares") on Form S-11 under the  Securities  Act of 1933, as amended.  Since no
established  market for such Shares  exists,  there is no market  value for such
Shares.  Each  Share  was  originally  sold at $10 per  Share.  Based on the $10
offering  price  of the  shares,  $5,632,349  of our  common  stock  was held by
non-affiliates as of February 7, 2000.

     The number of shares of common stock outstanding as of February 7, 2000 was
583,235.


<PAGE>



                                     PART I

Item 1.  Business

     CNL Health Care  Properties,  Inc.  is a  corporation  which was  organized
pursuant to the laws of the state of Maryland on December 22, 1997. In order for
CNL Health Care  Properties,  Inc. to operate as an  umbrella  partnership  real
estate investment trust (UPREIT),  certain subsidiaries were formed in 1999. CNL
Health Care GP Corp. and CNL Health Care LP Corp. are wholly owned  subsidiaries
of CNL Health Care  Properties,  Inc., each of which were organized  pursuant to
the laws of the state of Delaware in December 1999. CNL Health Care Partners, LP
is a Delaware limited partnership (the  "Partnership")  formed in December 1999.
CNL  Health  Care GP Corp.  and CNL Health  Care LP Corp.  are the  general  and
limited  partners,  respectively,  of CNL Health Care Partners,  LP.  Properties
acquired are generally  expected to be held by the Partnership and, as a result,
owned by CNL Health Care Properties,  Inc.  through the  Partnership.  The terms
"Company"  or  "Registrant"  include CNL Health Care  Properties,  Inc.  and its
subsidiaries,  CNL Health Care GP Corp., CNL Health Care LP Corp. and CNL Health
Care  Partners,  LP. The Company  operates for federal  income tax purposes as a
real estate investment trust (a "REIT").

     Beginning  in  September   1998,  the  Company   offered  for  sale  up  to
$155,000,000 of shares of common stock (the "Shares")  (15,500,000 shares at $10
per share) (the  "Offering")  pursuant to a registration  statement on Form S-11
under the Securities Act of 1933, as amended,  effective  September 18, 1998. As
of  December  31,  1999,  the  Company  had  received  subscription  proceeds of
$5,435,283 (543,528 shares) from the Offering,  including $12,540 (1,254 shares)
through the distribution  reinvestment plan (the  "Reinvestment  Plan") provided
under the Company's  registration  statement and $235,000  (23,500  shares) from
Pennsylvania  investors which will be held in escrow until the Company  receives
aggregate subscriptions of at least $7,775,000. In accordance with the Company's
prospectus, the Company has elected to extend the Offering until a date no later
than September 18, 2000.

     The Company has been formed  primarily  to acquire  real estate  properties
(the  "Properties")  related to health care and seniors' housing facilities (the
"Health Care  Facilities")  located  across the United  States.  The Health Care
Facilities may include  congregate  living,  assisted living and skilled nursing
facilities,  continuing care retirement  communities and life care  communities,
and medical office buildings and walk-in clinics.  The Properties will be leased
on a long-term, "triple-net" basis to operators of Health Care Facilities. Under
the Company's  triple-net  leases,  the lessee will be responsible  for repairs,
maintenance,  property  taxes,  utilities,  and insurance.  The Company also may
offer  mortgage  financing  (the  "Mortgage  Loans") to operators of Health Care
Facilities  secured by real estate owned by the  borrower.  However,  because it
prefers  to focus on  investing  in  Properties,  which  have the  potential  to
appreciate,  the  Company  currently  expects to provide  Mortgage  Loans in the
aggregate  principal  amount of  approximately  5% to 10% of the Company's total
assets.  The Company  expects that the  interest  rate and terms of the Mortgage
Loans will be similar to those of its leases.  To a lesser  extent,  the Company
also may offer  furniture,  fixtures and  equipment  ("Equipment")  financing to
operators of Health Care  Facilities  through loans or direct  financing  leases
(collectively,  the  "Secured  Equipment  Leases").  The  aggregate  outstanding
principal  amount of Secured  Equipment  Leases is not expected to exceed 10% of
the  Company's  total  assets.  As of February 7, 2000,  the Company had not yet
acquired any  Properties,  made any  Mortgage  Loans or entered into any Secured
Equipment  Leases,  nor had any Properties,  Mortgage Loans or Secured Equipment
Leases been identified for investment.

     The Company's primary investment  objectives are to preserve,  protect, and
enhance the Company's  assets while (i) making  distributions  commencing in the
initial year of Company  operations;  (ii)  obtaining  fixed income  through the
receipt of base rent, and increasing  the Company's  income (and  distributions)
and providing  protection against inflation through automatic fixed increases in
base rent or increases  in the base rent based on  increases  in consumer  price
indices,  over the terms of the leases,  and obtaining  fixed income through the
receipt of payments  from Mortgage  Loans and Secured  Equipment  Leases;  (iii)
qualifying  and remaining  qualified as a REIT for federal  income tax purposes;
and  (iv)  providing  stockholders  of  the  Company  with  liquidity  of  their
investment within five to ten years after  commencement of the offering,  either
in whole or in part, through (a) listing of the shares on a national  securities
exchange or over-the-counter market (the "Listing"),  or (b) the commencement of
orderly sales of the Company's  assets and  distribution of the proceeds thereof
(outside the ordinary  course of business and consistent  with its objectives of
qualifying  as a  REIT).  There  can  be  no  assurance  that  these  investment
objectives  will be met. In  addition,  if the Shares are not listed by December
31, 2008, as to which there can be no  assurance,  the Company will commence the
orderly sale of its assets and the  distribution  of the proceeds.  Listing does
not assure liquidity.

     For the first five to ten years after the commencement of the offering, the
Company  intends,  to the extent  consistent  with the  Company's  objective  of
qualifying as a REIT, to reinvest in additional Properties or Mortgage Loans any
proceeds of the sale of a Property or Mortgage  Loan that are not required to be
distributed to  stockholders  in order to preserve the Company's REIT status for
federal income tax purposes.  Similarly,  and to the extent consistent with REIT
qualification,  the Company  plans to use the  proceeds of the sale of a Secured
Equipment Lease to fund additional  Secured  Equipment  Leases, or to reduce its
outstanding  indebtedness  on the  borrowings.  At or  prior  to the end of such
ten-year period, the Company intends to provide stockholders of the Company with
liquidity of their  investment,  either in whole or in part,  through Listing of
the Shares of the Company  (although  liquidity cannot be assured thereby) or by
commencing orderly sales of the Company's assets. If Listing occurs, the Company
intends  to  reinvest  in  additional  Properties,  Mortgage  Loans and  Secured
Equipment  Leases any net sales  proceeds  not  required  to be  distributed  to
stockholders in order to preserve the Company's  status as a REIT. The Company's
Articles of Incorporation  provide,  however,  that if Listing does not occur by
December 31, 2008, the Company thereafter will undertake the orderly liquidation
of the Company and the sale of the Company's  assets and will distribute any net
sales  proceeds to  stockholders.  In  addition,  the Company  will not sell any
assets if such sale would not be  consistent  with the  Company's  objective  of
qualifying as a REIT.

     In deciding the precise timing and terms of Property sales, CNL Health Care
Corp.,  formerly  known as CNL Health  Care  Advisors,  Inc.,  which acts as the
advisor to the Company,  will consider factors such as national and local market
conditions,  potential capital appreciation,  cash flows, and federal income tax
considerations. The terms of certain leases, however, may require the Company to
sell a  Property  at an  earlier  time if the  tenant  exercises  its  option to
purchase a Property after a specified portion of the lease term has elapsed. The
Company will have no  obligation to sell all or any portion of a Property at any
particular  time,  except as may be required  under  property  or joint  venture
purchase  options  granted  to  certain  tenants.  In  connection  with sales of
Properties  by the  Company,  purchase  money  obligations  may be  taken by the
Company  as part  payment  of the  sales  price.  The terms of  payment  will be
affected by custom in the area in which the  Property is located and  prevailing
economic  conditions.  When a purchase  money  obligation is accepted in lieu of
cash upon the sale of a Property,  the Company will  continue to have a mortgage
on the Property  and the proceeds of the sale will be realized  over a period of
years rather than at closing of the sale.

     The Company does not anticipate  selling the Secured Equipment Leases prior
to expiration of the lease term, except in the event that the Company undertakes
orderly liquidation of its assets. In addition,  the Company does not anticipate
selling any Mortgage Loans prior to the  expiration of the loan term,  except in
the event (i) the Company owns the Property (land only)  underlying the building
improvements which secure the Mortgage Loan and the sale of the Property occurs,
or (ii) the Company undertakes an orderly sale of its assets.

Leases

     As of December  31, 1999,  the Company had not entered into any  commitment
for an acquisition of a Property. However, leases entered into in the future are
expected to be triple-net leases, which means that the tenants generally will be
required  to pay  all  repairs,  maintenance,  property  taxes,  utilities,  and
insurance.  The tenants  also will be  required to pay for special  assessments,
sales and use taxes, and the cost of any renovations permitted under the leases.
The Company will purchase  Properties  either  directly or indirectly  through a
joint venture, partnership, or a subsidiary.

     The initial  terms of the leases are presently  anticipated  to be 10 to 20
years with up to four,  five-year  renewal  options.  The minimum rental payment
under the renewal  option  generally is expected to be greater than that due for
the final lease year of the initial  term of the lease.  During the initial term
of each lease, the tenant will pay the Company,  as lessor,  minimum annual rent
equal to a specified percentage of the Company's cost of purchasing the Property
payable  in  monthly  installments.  Typically,  the  leases  will  provide  for
automatic  fixed  increases in the minimum  annual rent or increases in the base
rent based on increases in consumer  price  indices at  predetermined  intervals
during the terms of the leases.  If the Company is acquiring a Property  that is
to be constructed or renovated pursuant to a development agreement,  the cost of
purchasing the Property will include the purchase  price of the land,  including
all fees,  costs,  and  expenses  paid by the  Company  in  connection  with its
purchase of the land, and all fees, costs and expenses  disbursed by the Company
for construction of building improvements.

     It is anticipated that if the Company wishes at any time to sell a Property
pursuant to a bona fide offer from a third  party,  the tenant of that  Property
will have the right to purchase the Property for the same price, and on the same
terms and conditions,  as contained in the offer.  In certain cases,  the tenant
also may have the right to purchase  the  Property  seven to twenty  years after
commencement  of the lease at a purchase  price  equal to the greater of (i) the
appraised value of the Property, or (ii) a specified amount,  generally equal to
the Company's purchase price of the Property,  plus a pre-determined  percentage
of the Company's purchase price.

Certain Management Services

     Pursuant to an  advisory  agreement  (the  "Advisory  Agreement")  with the
Company,  CNL Health Care Corp. (the  "Advisor")  provides  management  services
relating to the Company,  the  Properties,  the  Mortgage  Loans and the Secured
Equipment Lease program.  Under this  agreement,  the Advisor is responsible for
assisting the Company in negotiating leases,  Mortgage Loans, the line of credit
(the "Line of Credit") and Secured Equipment Leases, collecting rental, Mortgage
Loan and Secured  Equipment  Lease  payments,  inspecting the Properties and the
tenants' books and records, and responding to tenants inquiries and notices. The
Advisor also will  provide  information  to the Company  about the status of the
leases,  the Properties,  the Mortgage Loans, the Secured Equipment Leases,  the
Line of Credit and the permanent financing.  In exchange for these services, the
Advisor is entitled to receive certain fees from the Company. For supervision of
the  Properties  and the  Mortgage  Loans,  the  Advisor  will  receive an asset
management  fee,  which is payable  monthly in an amount equal to one-twelfth of
 .60% of the total amount  invested in the  Properties,  exclusive of acquisition
fees and acquisition  expenses (the "Real Estate Asset Value") plus  one-twelfth
of .60% of the outstanding principal amount of any Mortgage Loans, as of the end
of the preceding month. For negotiating Secured Equipment Leases and supervising
the Secured  Equipment  Lease program,  the Advisor will receive,  upon entering
into each lease, a secured  equipment  lease  servicing fee,  payable out of the
proceeds of the  borrowings,  equal to 2% of the purchase price of the equipment
subject to each Secured Equipment Lease (the "Secured  Equipment Lease Servicing
Fee"). For identifying the Properties,  structuring the terms of the acquisition
and leases of the Properties and  structuring  the terms of the Mortgage  Loans,
the  Advisor  will  receives  a fee  equal  to 4.5% of gross  proceeds  from the
offering, loan proceeds from permanent financing (the "Permanent Financing") and
amounts  outstanding on the Line of Credit, if any, at the time of Listing,  but
excluding  that  portion of the  Permanent  Financing  used to  finance  Secured
Equipment Leases.

     The Advisory  Agreement  continues until September 15, 2000, and thereafter
may be extended  annually  upon  mutual  consent of the Advisor and the Board of
Directors of the Company unless terminated at an earlier date upon 60 days prior
written notice by each party.

Borrowing

     The Company  plans to obtain a  revolving  Line of Credit  initially  in an
amount up to $45,000,000,  and may, in addition, also obtain Permanent Financing
to acquire  assets and to pay certain fees.  The Line of Credit may be increased
at the  discretion of the Board of  Directors.  The Line of Credit may be repaid
with offering  proceeds,  working capital or Permanent  Financing.  The Board of
Directors  anticipates  that the Permanent  Financing will not exceed 30% of the
Company's total assets.  However,  in accordance with the Company's  Articles of
Incorporation,  the aggregate  maximum  amount the Company may borrow is 300% of
the Company's net assets (as defined in the Company's  prospectus).  The Company
has engaged in discussions with a potential  lender,  but has not yet received a
commitment  for the Line of Credit or any  Permanent  Financing  and there is no
assurance  that the  Company  will  obtain  the Line of Credit or any  Permanent
Financing on  satisfactory  terms.  The Board of Directors may elect to encumber
assets in connection with any borrowing.

Competition

     The Company  anticipates that it will compete with other REITs, real estate
partnerships,  health care  providers and other  investors,  including,  but not
limited  to banks and  insurance  companies,  many of which  will  have  greater
financial resources than the Company, in the acquisition,  leasing and financing
of Health Care Facilities.  Further, non-profit entities are particularly suited
to make  investments  in senior  care  facilities  because  of their  ability to
finance  acquisitions  through  the  issuance  of  tax-exempt  bonds,  providing
non-profit  entities  with a  relatively  lower cost of capital as  compared  to
for-profit  purchasers.  In addition,  in certain states, health care facilities
owned  by  non-profit  entities  are  exempt  from  taxes on real  property.  As
profitability  increases  for investors in health care  properties,  competition
among investors likely will become increasingly intense.

Employees

     Reference  is made to Item 10.  Directors  and  Executive  Officers  of the
Registrant for a listing of the Company's Executive Officers. The Company has no
other employees.


Item 2.  Properties

     Although the Advisor has not yet selected any Properties for investment, it
is expected that any Properties  purchased by the Company will conform generally
to the following  specifications  of size, cost, and type of land and buildings.
The Company anticipates  acquiring  Properties related to Health Care Facilities
which may include, but will not be limited to, the following types:

     Congregate  Living  Facilities.  Congregate living facilities are primarily
apartment  buildings  which  contain a  significant  amount  of common  space to
accommodate dining, recreation, activities and other support services for senior
citizens.  These  properties range in size from 100 to 500 units with an average
size of approximately 225 units.  Units include studios and one and two bedrooms
ranging in size from 450 square feet to over 1,500 square feet.

     Assisted Living  Facilities.  Assisted living facilities  provide a special
combination of housing, supportive services,  personalized assistance and health
care to their  residents in a manner which is designed to respond to  individual
needs.  These  facilities  offer a  lower-cost  alternative  to skilled  nursing
facilities for those who do not require intensive nursing care. Current industry
practice generally is to build  freestanding  assisted living facilities with an
average of between 40 and 100 units, depending on such factors as market forces,
site constraints and program  orientation.  Current  economics place the size of
the private  living space of a unit in the range of 300 gross square feet for an
efficiency unit to 750 square feet for a large one bedroom unit.

     Skilled Nursing Facilities.  In addition to housing, meals,  transportation
and housekeeping,  skilled nursing facilities provide  comprehensive nursing and
long term care to their residents. Skilled nursing facilities are also generally
freestanding,  but are  typically  more  institutional  in nature,  allowing for
efficient  cleaning and  sterilization.  The rooms in skilled nursing facilities
are equipped with patient monitoring devices and emergency call systems.  Oxygen
systems may also be present.  Both  multiple  floor and single floor designs are
common.  Individual  rooms in skilled nursing  facilities may be as small as 100
square feet, with common areas varying greatly in size.

     Continuing  Care  Retirement  Communities.   Congregate  living  facilities
sometimes have assisted  living and/or skilled  nursing  facilities  attached or
adjacent to their locations.  When this occurs,  the projects are often referred
to as continuing  care  retirement  communities  or life care  communities.  The
intent of continuing care retirement  communities or life care communities is to
provide a continuum of care to the residents.  In other words,  as residents age
and their  health  care  needs  increase,  they can  receive  the care they need
without  having to move away from the  "community"  which has become their home.
Continuing care retirement  communities  typically  operate on a fee-for-service
basis and the units are rented on a monthly basis to residents,  while life care
centers generally charge an entrance fee that is partially refundable and covers
the cost of all of the residents' health care- related services,  plus a monthly
maintenance fee.

     Medical Office  Buildings.  Medical  office  buildings,  including  walk-in
clinics, are conventional office buildings with additional plumbing,  mechanical
and  electrical  service  amenities,  which  facilitate  physicians  and medical
delivery  companies  in the  practice  of medicine  and  delivery of health care
services.  These  facilities  can range in size from 3,000 square feet  (walk-in
clinic) up to 100,000 square feet (medical office building).

     Either before or after  construction  or  renovation,  the Properties to be
acquired  by the  Company  will  be one of a  Health  Care  Facility  operator's
approved  designs.  Generally,  Properties  to be acquired  by the Company  will
consist of both land and building, although in a number of cases the Company may
acquire only the land  underlying  the building  with the building  owned by the
tenant or a third party,  and also may acquire the  building  only with the land
owned by a third party.  In general,  the Properties  will be  freestanding  and
surrounded by paved parking areas and  landscaping.  Although,  buildings may be
suitable for conversion to various uses through  modifications,  some Properties
may not be economically convertible to other uses.

     A tenant  generally  will be required by the lease  agreement  to make such
capital  expenditures  as may be  reasonably  necessary to refurbish  buildings,
premises,  signs,  and  equipment  and maintain  the  leasehold in a manner that
allows operation for its intended purpose.  These capital expenditures generally
will be paid by the tenant during the term of the lease.


Item 3.  Legal Proceedings

     Neither  the  Company,  nor  any  of its  subsidiaries,  nor  any of  their
respective properties,  is a party to, or subject to, any material pending legal
proceedings.


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

         None.


<PAGE>


                                     PART II


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

(a) As of  February  7, 2000,  there were 258  stockholders  of record of common
stock. There is no currently public  established  trading market for the Shares,
and even though the Company intends to list the Shares on a national  securities
exchange or  over-the-counter  market  within ten years of  commencement  of the
offering of Shares,  there is no  assurance  that one will develop and it is not
known at this time if a public market for the Shares will develop. Prior to such
time, if any, as Listing occurs,  any  stockholder  (other than the Advisor) may
present all or any portion equal to at least 25% of such stockholders' Shares to
the  Company for  redemption  at any time,  in  accordance  with the  procedures
outlined in the Company's prospectus. At such time, the Company may, at its sole
option,  redeem such Shares  presented for  redemption for cash to the extent it
has sufficient funds available. In addition, the Company may, at its discretion,
use up to $100,000 per calendar  quarter of the proceeds of any public  offering
of its common stock for  redemptions.  There is no assurance  that there will be
sufficient  funds  available for redemption  and,  accordingly,  a stockholders'
Shares may not be redeemed. Any Shares acquired pursuant to a redemption will be
retired  and no longer  available  for  issuance  by the  Company.  The Board of
Directors of the Company, in its discretion, may amend or suspend the redemption
plan at any time they determine that such amendment or suspension is in the best
interest of the Company.  Stockholders who wish to have their distributions used
to acquire  additional Shares (to the extent Shares are available for purchase),
may do so pursuant to the Company's Reinvestment Plan.

         As of December 31, 1999, the offering price per Share was $10.

         The Company expects to make distributions to the stockholders  pursuant
to the provisions of the Articles of Incorporation.  For the year ended December
31, 1999, the Company  declared cash  distributions  of $50,404 to stockholders.
For federal income tax purposes,  100 percent of distributions paid in 1999 were
considered to be ordinary income. No amounts distributed to stockholders for the
year ended  December 31, 1999,  were  required to be or have been treated by the
Company as a return of capital for  purposes of  calculating  the  stockholders'
return  on their  invested  capital.  As  indicated  in the chart  below,  these
distributions  were  declared for each month  following  the first  admission of
stockholders to the Company.

                                                Distributions
   Record Date (1)       1999 Distribution        per Share
  ----------------       -----------------     ----------------

       August 1            $  7,422                   $0.025
    September 1               9,038                    0.025
      October 1              10,373                    0.025
     November 1              11,289                    0.025
     December 1              12,282                    0.025
                           --------                   ------
     Total                  $50,404                   $0.125
                            =======                   ======

(1)      For the period  December 22, 1997 (date of inception)  through July 13,
         1999,  the  Company  did  not  make  any  cash   distributions  because
         operations had not commenced.

         On  January  1,  2000  and  February  1,  2000,  the  Company  declared
distributions  to  stockholders  totalling  $13,501 and  $14,530,  respectively,
($0.025 per Share) payable in March 2000, to  stockholders  of record on January
1, 2000 and February 1, 2000, respectively.

         The Company  intends to continue  to declare  distributions  of cash to
stockholders  on a monthly  basis  during the  offering  period,  and  quarterly
thereafter.

(b) The  information  required  by this item is set forth in Item 7.  Management
Discussion and Analysis of Financial  Condition and Results of Operations and is
hereby incorporated by reference. Item 6. Selected Financial Data

         The  following  selected  financial  data should be read in conjunction
with the financial  statements and related notes in Item 8 hereof.
<TABLE>
<CAPTION>

                                                            1999 (1)        1998 (2)    1997 (2) (3)
                                                          -----------      ---------   --------------

<S> <C>

Year Ended December 31:
    Revenues                                                $86,231    $         --      $         --
    General operating and administrative expenses            79,621               --               --
    Organizational costs                                     35,000               --               --
    Net loss                                                (28,390)             --               --
    Cash distributions declared                              50,404              --                --
    Cash from operations                                     12,851               --               --
    Funds from operations (4)                               (28,390)              --               --
    Loss per share                                             (.07)              --               --
    Cash distributions declared per share                      .125               --               --

    Weighted average number of shares outstanding (5)       412,713               --               --

At December 31:
    Total assets                                         $5,088,560         $976,579         $280,330
    Total stockholders' equity (6)                        3,292,137          200,000          200,000

</TABLE>

     (1) No operations  commenced until the Company  received  minimum  offering
proceeds of $2,500,000 and funds were released from escrow on July 14, 1999.

     (2) No significant  operations had commenced because the Company was in its
development stage.

     (3) Selected  financial data for 1997  represents  the period  December 22,
1997 (date of inception) through December 31, 1997.

     (4) Funds from operations ("FFO"),  based on the revised definition adopted
by the Board of  Governors  of NAREIT  and as used  herein,  means net  earnings
determined in accordance with generally accepted accounting principles ("GAAP"),
excluding gains or losses from debt  restructuring  and sales of property,  plus
depreciation  and  amortization of real estate assets and after  adjustments for
unconsolidated partnerships and joint ventures. FFO was developed by NAREIT as a
relative  measure of  performance  and  liquidity  of an equity REIT in order to
recognize that  income-producing real estate historically has not depreciated on
the basis  determined  under  GAAP.  However,  FFO (i) does not  represent  cash
generated from operating  activities  determined in accordance with GAAP (which,
unlike FFO, generally reflects all cash effects of transactions and other events
that enter into the  determination  of net  earnings),  (ii) is not  necessarily
indicative  of cash flow  available  to fund cash needs and (iii)  should not be
considered as an alternative to net earnings  determined in accordance with GAAP
as an indication of the Company's  operating  performance,  or to cash flow from
operating  activities  determined in accordance with GAAP as a measure of either
liquidity  or the  Company's  ability to make  distributions.  Accordingly,  the
Company  believes  that in  order to  facilitate  a clear  understanding  of the
consolidated  historical  operating  results  of  the  Company,  FFO  should  be
considered  in  conjunction  with the  Company's  net earnings and cash flows as
reported in the accompanying financial statements and notes thereto.

     (5) The weighted  average  number of Shares  outstanding  is based upon the
period the Company was operational.

     (6) Includes  subscriptions of $5,435,283  received,  net of stock issuance
costs of $2,029,352,  and excludes  subscriptions  from Pennsylvania  investors.
Stock issuance costs consist of selling  commissions,  marketing support and due
diligence expense  reimbursement  fees and organizational and offering expenses.
The ratio of stock issuance costs to subscriptions received was 1:3 during 1999.
The Company's Advisor has agreed to pay all organizational and offering expenses
which exceed 3% of the gross offering  proceeds received from the sale of Shares
of the Company.

     (7) For the year ended December 31, 1999,  operating  expenses  incurred by
the Company as a percentage of net income, each term as defined in the Company's
prospectus was 280.5 percent.  In accordance with the Company's  Prospectus,  to
the extent that operating  expenses  payable or reimbursable by the Company,  in
any four consecutive  fiscal quarters (the "Expense Year") exceed the greater of
2% of average  invested  assets or 25% of net income (the "2%/25%  Guidelines"),
the Advisor  shall  reimburse  the  Company  within 60 days after the end of the
Expense Year the amount by which the total  operating  expenses paid or incurred
by the Company  exceed the 2%/25%  Guidelines.  As of  December  31,  1999,  net
offering  proceeds had been  invested in short term,  highly  liquid  investment
pending  investment  in  Properties  and Mortgage  Loans.  Therefore,  operating
expenses as a percentage of average invested assets, as defined in the Company's
Prospectus,  is not  applicable.  Due to the  fact  that the  Company  commenced
operations  in July 1999,  the Advisor will be required to reimburse the Company
any amounts in excess of the Expense Cap commencing with the Expense Year ending
June 30, 2000.



<PAGE>


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

         This information contains forward-looking statements within the meaning
of Section 27A of the  Securities  Act of 1933 and Section 21E of the Securities
Exchange  Act of 1934.  Although  the  Company  believes  that the  expectations
reflected  in  such   forward-looking   statements  are  based  upon  reasonable
assumptions, the Company's actual results could differ materially from those set
forth in the forward-looking statements. Certain factors that might cause such a
difference  include  the  following:  changes  in general  economic  conditions,
changes in real estate  conditions,  availability of proceeds from the Company's
offering,  the  ability of the  Company to obtain a line of credit or  permanent
financing on satisfactory  terms,  the ability of the Company to locate suitable
tenants for its  properties  and  borrowers  for its mortgage  loans and secured
equipment  leases,  and the ability of tenants and  borrowers  to make  payments
under their respective leases, mortgage loans or secured equipment leases. Given
these  uncertainties,  readers are cautioned not to place undue reliance on such
statements.

Introduction

         CNL Health Care  Properties,  Inc. is a Maryland  corporation  that was
organized on December 22, 1997.  CNL Health Care GP Corp. and CNL Health Care LP
Corp.  are wholly  owned  subsidiaries  of CNL  Health  Care  Properties,  Inc.,
organized  in Delaware  in December  1999.  CNL Health  Care  Partners,  LP is a
Delaware limited  partnership  formed in December 1999. CNL Health Care GP Corp.
and CNL Health Care LP Corp. are the general and limited partner,  respectively,
of CNL Health Care Partners,  LP. Assets acquired are expected to be held by CNL
Health Care Partners,  LP and, as a result, owned by CNL Health Care Properties,
Inc.  through  the  partnership.  The term  "Company"  includes  CNL Health Care
Properties, Inc. and its subsidiaries, CNL Health Care GP Corp., CNL Health Care
LP Corp. and CNL Health Care Partners, LP.

         The Company was formed to acquire Properties related to health care and
seniors' housing  facilities  located across the United States.  The Health Care
Facilities may include  congregate  living,  assisted living and skilled nursing
facilities,  continuing care retirement  communities and life care  communities,
and medical office buildings and walk-in clinics.  The Properties will be leased
on a long-term,  "triple-net" basis. The Company may also provide Mortgage Loans
to operators of Health Care  Facilities  in the  aggregate  principle  amount of
approximately  5% to 10% of the  Company's  total  assets.  The Company also may
offer  Secured  Equipment  Leases to  operators of Health Care  Facilities.  The
aggregate principal amount of Secured Equipment Leases is not expected to exceed
10% of the Company's total assets.

         The Company's primary investment  objectives are to preserve,  protect,
and enhance the Company's  assets while (i) making  distributions  commencing in
the initial year of Company operations;  (ii) obtaining fixed income through the
receipt of base rent, and increasing  the Company's  income (and  distributions)
and providing  protection against inflation through automatic fixed increases in
base rent or increases  in the base rent based on  increases  in consumer  price
indices,  over the terms of the leases,  and obtaining  fixed income through the
receipt of payments  from Mortgage  Loans and Secured  Equipment  Leases;  (iii)
qualifying  and remaining  qualified as a REIT for federal  income tax purposes;
and  (iv)  providing  stockholders  of  the  Company  with  liquidity  of  their
investment within five to ten years after  commencement of the offering,  either
in whole or in part,  through (a) Listing of the Shares or (b) the  commencement
of the orderly sale of the Company's  assets,  and  distribution of the proceeds
thereof  (outside  the  ordinary  course of  business  and  consistent  with its
objective of qualifying as a REIT).

Liquidity and Capital Resources

         During  the  period  December  22,  1997  (date of  inception)  through
December 31, 1998, a capital  contribution  of $200,000 from the Advisor was the
Company's  sole source of capital.  Until the Company sold the minimum number of
250,000 Shares  ($2,500,000),  subscription funds were deposited with the escrow
agent for the offering of Shares.

         Pursuant to a registration  statement on Form S-11 under the Securities
Act of 1933,  effective  September 18, 1998, the Company  registered for sale an
aggregate of $155,000,000  of shares of common stock (the "Shares")  (15,500,000
Shares at $10 per Share),  500,000 of such Shares available only to stockholders
who elect to participate in the Company's  Reinvestment Plan. In accordance with
the  Company's  prospectus,  the Company  has elected to extend the  offering of
shares until a date no later than September 18, 2000. The Board of Directors may
determine  to engage in future  offerings of common  stock,  up to the number of
unissued authorized shares of common stock.

         On July 14,  1999,  the Company  had  received  aggregate  subscription
proceeds of $2,751,052  (275,105  Shares),  which exceeded the minimum  offering
amount of $2,500,000, and $2,526,052 of the funds were released from escrow. The
remaining  subscription  proceeds of $225,000  (representing funds received from
Pennsylvania  investors)  will be held in  escrow  until  the  Company  receives
aggregate subscriptions of at least $7,775,000.

         As  of  December   31,  1999,   the  Company  had  received   aggregate
subscription  proceeds of $5,435,283 (543,528 Shares),  including $12,540 (1,254
Shares)   through  its   distribution   reinvestment   plan  and  $235,000  from
Pennsylvania  investors.  As of December 31, 1999, the Company had approximately
$4,368,000  available to invest in Properties and Mortgage  Loans  following the
deduction of selling  commissions,  marketing  support and due diligence expense
reimbursement  fees,  organization and offering expenses of approximately  three
percent, and acquisition fees.

         As of February 7, 2000, the Company had received  subscription proceeds
(excluding  the capital  contribution  from the Advisor and  subscriptions  from
Pennsylvania  investors)  of  $5,632,349  (563,235  Shares) from its offering of
Shares. As of February 7, 2000, net proceeds to the Company from its offering of
Shares and capital  contributions  from the Advisor,  after deduction of selling
commissions,  marketing support and due diligence expense reimbursement fees and
organizational and offering expenses totalled  approximately  $4,521,000.  As of
February 7, 2000,  the Company had not acquired any  Properties  or entered into
any Mortgage Loans.

         The  Company  expects  to use net  offering  proceeds  from the sale of
Shares to purchase Properties and to invest in Mortgage Loans. In addition,  the
Company  intends to borrow  money to acquire  Properties,  to invest in Mortgage
Loans and Secured Equipment Leases, and to pay certain related fees. The Company
intends to encumber assets in connection with such borrowing.  The Company plans
to initially  obtain a revolving Line of Credit in an amount up to  $45,000,000.
The Company  also plans to obtain  permanent  financing.  Although  the Board of
Directors anticipates that the line of credit initially will be in the amount of
$45,000,000 and the aggregate amount of any Permanent  Financing will not exceed
30% of the Company's total assets,  the maximum amount the Company may borrow is
300% of the Company's net assets.  The Company has engaged in  discussions  with
potential  lenders but has not yet received a commitment  for the Line of Credit
or any  permanent  financing  and there is no  assurance  that the Company  will
obtain the Line of Credit or any Permanent Financing on satisfactory terms.

         Properties are expected to be leased on a long-term,  triple-net basis,
meaning that tenants are generally  required to pay all repairs and maintenance,
property  taxes,  insurance and utilities.  Rental payments under the leases are
expected to exceed the  Company's  operating  expenses.  For these  reasons,  no
short-term  or  long-term   liquidity  problems  currently  are  anticipated  by
management.

         Until Properties are acquired,  or Mortgage Loans are entered into, net
offering  proceeds  are held in  short-term,  highly  liquid  investments  which
management  believes to have  appropriate  safety of principal.  This investment
strategy  provides high  liquidity in order to  facilitate  the Company's use of
these  funds to  acquire  Properties  at such time as  Properties  suitable  for
acquisition  are located or to fund Mortgage  Loans.  At December 31, 1999,  the
Company had $4,744,222  invested in such  short-term  investments as compared to
$92 at December 31,  1998.  The  increase in the amount  invested in  short-term
investments  reflects  subscriptions  proceeds  received from the sale of Shares
during the year ended  December 31, 1999.  These funds will be used primarily to
purchase  Properties,  to make Mortgage  Loans,  to pay offering and acquisition
expenses,  to pay distributions to stockholders,  to meet other Company expenses
and, in management's discretion, to create cash reserves.

         During  the  years  ended  December  31,  1999 and 1998 and the  period
December 22, 1997 (date of inception)  through December 31, 1997,  affiliates of
the Company  incurred on behalf of the Company  $421,878,  $562,739 and $43,398,
respectively,  for certain  organizational and offering  expenses.  In addition,
during the year ended  December 31,  1999,  affiliates  of the Company  incurred
$98,206  for certain  acquisition  expenses  and  $41,307 for certain  operating
expenses on behalf of the Company. As of December 31, 1999 and 1998, the Company
owed the Advisor and its affiliates $1,775,256 and $685,372,  respectively,  for
such amounts, unpaid fees and administrative expenses. The Advisor has agreed to
pay or reimburse the Company all organizational and offering expenses (excluding
commissions and marketing support and due diligence expense  reimbursement fees)
in excess of three percent of gross offering proceeds.

         Since  the  commencement  of  the  Company's  public  offering  through
December 31, 1999,  approximately  $416,023 has been  incurred by the Company in
selling commissions,  marketing support and due diligence  reimbursement fees to
related  parties,  the  majority of which were  subsequently  paid to  unrelated
broker-dealer firms. In addition, since the commencement of the Company's public
offering  through  December  31,  1999,  the Company has  reimbursed  affiliates
approximately $135,339 for certain organizational and offering expenses incurred
on behalf of the Company and administrative services related to the offering.

         During the year ended  December 31, 1999,  the Company  generated  cash
from operations  (which includes  interest received less cash paid for operating
expenses)  of  $12,851.  Based on  current  and  anticipated  future  cash  from
operations the Company  declared  distributions  to its  stockholders of $50,404
during the period July 14, 1999 (the date operations commenced) through December
31, 1999.  No  distributions  were paid or declared for the period  December 22,
1997 (date of  inception)  through  July 13,  1999  because  operations  had not
commenced.  On  January  1, 2000 and  February  1, 2000,  the  Company  declared
distributions to stockholders of record on January 1, 2000 and February 1, 2000,
totalling  $13,501 and  $14,530,  respectively,  ($0.025 per share),  payable in
March  2000.  For  the  year  ended  December  31,  1999,  100  percent  of  the
distributions received by stockholders were considered to be ordinary income for
federal income tax purposes.  No amounts distributed or to be distributed to the
stockholders as of February 7, 2000, were required to be or have been treated by
the Company as a return of capital for purposes of calculating the stockholders'
return on their invested capital.

         Due to anticipated low operating expenses, rental income expected to be
obtained  from  Properties  after they are  acquired,  the fact that the Line of
Credit and Permanent  Financing  have not been obtained and that the Company has
not entered into Mortgage Loans or Secured Equipment Leases, management does not
believe that working capital reserves will be necessary at this time. Management
has the right to cause the Company to maintain reserves if, in their discretion,
they determine such reserves are required to meet the Company's  working capital
needs.

         As  of  February  7,  2000,  the  Company  had  not  entered  into  any
arrangements creating a reasonable probability that a Property would be acquired
by the Company or that a particular  Mortgage  Loan or Secured  Equipment  Lease
would be funded.  The number of Properties to be acquired and Mortgage  Loans to
be invested in will depend  upon the amount of net  offering  proceeds  and loan
proceeds  available to the  Company.  The amount  invested in Secured  Equipment
Leases is not expected to exceed 10% of the Company's total assets.

         Management  expects that the cash to be generated from  operations will
be adequate to pay operating expenses and to make distributions to stockholders.

Results of Operations

         No operations commenced until the Company received the minimum offering
proceeds  of  $2,500,000  on July 14,  1999.  The  Company  did not  acquire any
Properties or enter into any Mortgage  Loans during the year ended  December 31,
1999.

         During the year ended  December 31, 1999, the Company earned $86,231 in
interest income from  investments in money market  accounts.  Interest income is
expected to increase as the Company invests  subscription  proceeds  received in
the future in highly liquid  investments  pending  investment in Properties  and
Mortgage Loans. However, as net offering proceeds are invested in Properties and
used to make Mortgage Loans, the percentage of the Company's total revenues from
interest  income from  investments in money market accounts or other short term,
highly liquid investments is expected to decrease.

         Operating expenses were $114,621,  including organizational expenses of
$35,000, for the year ended December 31, 1999. Operating expenses represent only
a portion of operating  expenses which the Company is expected to incur during a
full year in which the  Company  owns  Properties  or in which  the  Company  is
operational.  The dollar amount of operating expenses is expected to increase as
the Company  acquires  Properties and invests in Mortgage Loans.  Organizational
expenses represent the cost related to forming a new entity and are not expected
to be incurred on an ongoing basis.

         When the  Company  files its 1999  income tax  return,  it will  elect,
pursuant to Internal Revenue Code Section 856(c)(1), to be taxed as a REIT under
Sections 856 through 860 of the Internal  Revenue Code of 1986, as amended,  and
related  regulations.  As a REIT, for federal  income tax purposes,  the Company
generally  will  not be  subject  to  federal  income  tax  on  income  that  it
distributes  to its  stockholders.  If the Company fails to qualify as a REIT in
any taxable year, it will be subject to federal income tax on its taxable income
at regular corporate rates and will not be permitted to qualify for treatment as
a REIT for federal income tax purposes for four years  following the year during
which qualification is lost. Such an event could materially affect the Company's
net earnings. However, the Company believes that it is organized and operates in
such a manner as to qualify for treatment as a REIT for the year ended  December
31, 1999. In addition, the Company intends to continue to operate the Company so
as to remain qualified as a REIT for federal income tax purposes.

         The Company  anticipates that its leases will be triple-net  leases and
will contain  provisions  that  management  believes will mitigate the effect of
inflation.  Such  provisions  will  include  clauses  requiring  the  payment of
percentage  rent based on certain  gross sales above a  specified  level  and/or
automatic  increases  in base rent at  specified  times  during  the term of the
lease. Management expects that increases in gross sales volumes due to inflation
and real sales growth  should  result in an increase in rental income over time.
Continued  inflation  also  may  cause  capital  appreciation  of the  Company's
Properties.  Inflation and changing  prices,  however,  also may have an adverse
impact on the sales of the Properties and on potential  capital  appreciation of
the Properties.

Year 2000 Readiness Disclosure

Overview of Year 2000 Compliance Issues

         The year 2000 compliance  issues concern the ability 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.

Readiness Status

         The Advisor and its affiliates generally provide all services requiring
the use of information and some  non-information  technology systems pursuant to
the Advisory Agreement with the Company. The Company generally does not directly
own information  technology  systems.  In early 1998,  affiliates of the Advisor
formed a year 2000 committee ("the Y2K Team") that assessed the readiness of any
systems  that  were date  sensitive  and  completed  upgrades  for the  hardware
equipment and software that was not year 2000 compliant, as necessary.  The cost
for these upgrades and other  remedial  measures was the  responsibility  of the
Advisor and its  affiliates.  The Company has not incurred,  and the Advisor and
its  affiliates  do not  expect  that  the  Company  will  incur,  any  costs in
connection  with the year 2000  readiness  measures.  In addition,  the Y2K team
requested and received  certifications  of compliance  from other companies with
which the Advisor,  its  affiliates,  and the Company have material  third party
relationships.

         In assessing the risks  presented by the year 2000  compliance  issues,
the Y2K Team identified  potential worst case scenarios involving the failure of
the information  and  non-information  technology  systems used by the Company's
transfer agent and financial  institutions.  As of February 7, 2000, the Advisor
and its affiliates have tested the information  and  non-information  technology
systems  used by the Company and have not  experienced  material  disruption  or
other significant problems. In addition, as of the same date, the Advisor is not
aware of any material year 2000  compliance  issues  relating to information and
non-information  technology  systems of third  parties  with  which the  Company
maintains  material  relationships,  including  those of the Company's  transfer
agent and financial  institutions.  In addition,  in the Company's  interactions
with its transfer agent and financial  institutions,  the systems of these third
parties have functioned normally. Until the Company's first distribution in 2000
and the delivery of the  information  by the transfer agent to  stockholders  in
early 2000, the Advisor will continue to monitor the year 2000 compliance of the
transfer  agent.  In addition,  the Advisor will continue to monitor the systems
used by the Company and to maintain  contact  with third  parties with which the
Company has material  relationships with respect to year 2000 compliance and any
year 2000  issues  that may arise at a later  date.  The  Advisor  will  develop
contingency  plans  relating  to ongoing  year 2000 issues at the time that such
issues are identified and such plans are deemed necessary.

         Based on the  information  provided to the Y2K Team,  the  upgrades and
remedial measures by the Advisor and its affiliates,  and the normal functioning
to  date of  information  and  non-information  technology  systems  used by the
Company and those third parties,  the Advisor does not foresee significant risks
associated with its year 2000 compliance at this time. In addition,  the Advisor
and its  affiliates  do not  expect to incur any  material  additional  costs in
connection  with the year  2000  compliance  efforts.  However,  there can be no
assurance that the Advisor and its affiliates or any third parties will not have
ongoing  year  2000  compliance  issues  that may have  adverse  effects  on the
Company.


Item 7A.     Quantitative and Qualitative Disclosures About Market Risk

             Not applicable


Item 8.      Financial Statements and Supplementary Data


<PAGE>




                        CNL HEALTH CARE PROPERTIES, INC.



                                    CONTENTS






                                                                 Page

Report of Independent Certified Public Accountants                15

Financial Statements:

   Consolidated Balance Sheets                                    16

   Consolidated Statements of Operations                          17

   Consolidated Statements of Stockholders' Equity                18

   Consolidated Statements of Cash Flows                          19-20

   Notes to Consolidated Financial Statements                     21-26


<PAGE>







               Report of Independent Certified Public Accountants



To the Board of Directors
CNL Health Care Properties, Inc.


In our  opinion,  the  consolidated  financial  statements  listed  in the index
appearing under Item 14(a)(1)  present  fairly,  in all material  respects,  the
financial position of CNL Health Care Properties,  Inc. (a Maryland corporation)
and its  subsidiaries  at December  31, 1999 and 1998,  and the results of their
operations  and their cash flows for each of the two years  ended  December  31,
1999 and 1998,  and the period  December  22, 1997 (date of  inception)  through
December 31, 1997 in conformity with accounting principles generally accepted in
the United States.  These  financial  statements are the  responsibility  of the
Company's  management;  our  responsibility  is to  express  an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States,  which  require  that we plan and  perform  the  audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.





/S/ PRICEWATERHOUSECOOPERS LLP

Orlando, Florida
January 14, 2000


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                                           December 31,
                                                                                       1999            1998
                                                                                    ------------    -----------

<S> <C>

                        ASSETS

Cash                                                                                $4,744,222          $   92
Deferred offering and organizational costs                                                  --         975,339
Other assets                                                                           344,338           1,148
                                                                                  -------------    ------------

                                                                                    $5,088,560        $976,579
                                                                                  =============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
    Due to related parties                                                          $1,775,256        $685,372
    Accounts payable and accrued expenses                                               21,167          91,207
                                                                                  -------------    ------------
          Total liabilities                                                          1,796,423         776,579
                                                                                  -------------    ------------

Stockholders' equity:
    Preferred stock, without par value per share
       Authorized and unissued 3,000,000 shares                                              --               --
    Excess shares, $.01 par value per share
       Authorized and unissued  103,000,000  shares -- -- Common stock, $.01 par
    value per share.
       Authorized 100,000,000 shares, issued and
       outstanding 540,028 and 20,000 shares,
       respectively                                                                      5,400             200
    Capital in excess of par value                                                   3,365,531         199,800
    Accumulated deficit                                                                (78,794 )            --
                                                                                  -------------    ------------
          Total stockholders' equity                                                 3,292,137         200,000
                                                                                  -------------    ------------

                                                                                    $5,088,560        $976,579
                                                                                  =============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>

                                                                                                December 22,
                                                                                                    1997
                                                                                                  (Date of
                                                                                                 Inception)
                                                                      Year Ended                   through
                                                                     December 31,               December 31,
                                                               1999                1998             1997
                                                            ------------        ------------    -------------

<S> <C>


Revenues:
    Interest income                                          $  86,231             $    --          $    --
                                                          -------------       -------------   --------------

Expenses:
    General operating and
       administrative                                           79,621                  --               --
    Organizational costs                                        35,000                  --               --
                                                          -------------       -------------   --------------
                                                               114,621                  --               --
                                                          -------------       -------------   --------------

Net Loss                                                    $  (28,390 )           $    --          $    --
                                                          =============       =============   ==============

Net Loss Per Share of Common
    Stock (Basic and Diluted)                                $    (.07 )           $    --          $    --
                                                          =============       =============   ==============

Weighted Average Number of
    Shares of Common Stock
    Outstanding                                                412,713                  --               --
                                                          =============       =============   ==============
</TABLE>






          See accompanying notes to consolidated financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                 Years Ended December 31, 1999 and 1998 and the
              Period December 22, 1997 (Date of Inception) through
                                December 31, 1997


<TABLE>
<CAPTION>


                                            Common stock
                                        ----------------------   Capital in
                                         Number        Par        excess of      Accumulated
                                        of Shares     value       par value        deficit           Total
                                        ----------  ----------   ------------  -----------------  ------------

<S> <C>


Balance at December 22, 1997                   --       $  --         $   --           $     --        $   --

Sale of common stock to related
    party                                  20,000         200        199,800                 --       200,000
                                        ----------  ----------   ------------  -----------------  ------------

Balance at December 31, 1997               20,000         200        199,800                 --       200,000

Subscriptions received for common
    stock through public offering           2,550          26         25,474                 --        25,500

Subscriptions held in escrow at
    December 31, 1998                      (2,550 )       (26 )      (25,474 )               --       (25,500 )
                                        ----------  ----------   ------------  -----------------  ------------

Balance at December 31, 1998               20,000         200        199,800                 --       200,000

Subscriptions received for common
    stock through public offering
    and distribution reinvestment
    plan                                  543,528       5,435      5,429,848                 --     5,435,283

Subscriptions held in escrow at
    December 31, 1999                     (23,500 )      (235 )     (234,765 )               --      (235,000 )

Stock issuance costs                           --          --     (2,029,352 )               --    (2,029,352 )

Net loss                                       --          --             --            (28,390 )     (28,390 )

Distributions declared and paid
    ($.125 per share)                          --          --             --            (50,404 )     (50,404 )
                                        ----------  ----------   ------------  -----------------  ------------

Balance at December 31, 1999              540,028     $ 5,400     $3,365,531       $    (78,794 )  $3,292,137
                                        ==========  ==========   ============  =================  ============

</TABLE>





          See accompanying notes to consolidated financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                   December 22,
                                                                                                       1997
                                                                                                     (Date of
                                                                                                    Inception)
                                                                        Year Ended                    through
                                                                       December 31,                December 31,
                                                                 1999                 1998              1997
                                                             -------------        -------------     -------------
<S> <C>


Increase (Decrease) in Cash and Cash Equivalents:

    Operating Activities:
       Interest received                                        $  86,231               $   --           $   --
       Cash paid for expenses                                     (73,380 )                 --               --
                                                            --------------       --------------    -------------
          Net   cash    provided   by    operating                 12,851                   --               --
            activities
                                                            --------------       --------------    -------------

    Financing Activities:
       Reimbursement  of amounts paid by related
         parties on behalf of the Company                          (2,447 )           (135,339 )             --
       Sale of common stock to related party                           --                   --          200,000
       Subscriptions received from stockholders                 5,200,283                   --               --
       Distributions to stockholders                              (50,404 )                 --               --
       Payment of stock issuance costs                           (416,153 )            (64,569 )             --
                                                            --------------       --------------    -------------
          Net cash provided by (used in)
            financing activities                                4,731,279             (199,908 )        200,000
                                                            --------------       --------------    -------------

Net Increase (Decrease) in Cash and Cash                        4,744,130             (199,908 )        200,000
    Equivalents

Cash and Cash Equivalents at Beginning
    of Period                                                          92              200,000               --
                                                            --------------       --------------    -------------

Cash and Cash Equivalents at End of Period                    $ 4,744,222              $    92        $ 200,000
                                                            ==============       ==============    =============

</TABLE>


          See accompanying notes to consolidated financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>

                                                                                                    December 22,
                                                                                                        1997
                                                                                                      (Date of
                                                                                                     Inception)
                                                                         Year Ended                   through
                                                                        December 31,                December 31,
                                                                  1999                 1998             1997
                                                              -------------        -------------    -------------

<S> <C>

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

       Net loss                                                  $ (28,390 )             $   --          $   --
       Adjustments to reconcile net
         loss to net cash provided by
         operating activities:
           Organizational costs                                     20,000                   --              --
           Changes in operating assets and
             liabilities:
                Other assets                                        (5,535 )                 --              --
                Accounts payable and                                                         --              --
                  other accrued expenses                            20,037
                Due to related parties                               6,739                   --              --
                                                             ==============       ==============   =============
                  Net cash provided by operating
                    activities                                   $  12,851               $   --          $   --
                                                             ==============       ==============   =============

Supplemental Schedule of Non-Cash
    Financing Activities:

       Amounts incurred by the Company and
         paid by  related  parties  on  behalf of
         the Company and its subsidiaries are as follows:
           Acquisition costs                                       $98,206               $   --          $   --
           Organizational costs                                         --               20,000              --
           Deferred offering costs                                      --              542,739          43,398
           Stock issuance costs                                    421,878                   --              --
                                                             ==============       ==============  ==============
                                                                 $ 520,084            $ 562,739       $  43,398
                                                             ==============       ==============  ==============
       Costs incurred by the Company and unpaid at
         period end are as follows:
           Acquisition costs                                     $ 239,449             $  1,148          $   --
           Deferred offering costs                                      --              267,701          36,932
           Stock issuance costs                                    235,982                   --              --
                                                             --------------       --------------  --------------
                                                                 $ 475,431            $ 268,849       $  36,932
                                                             ==============       ==============  ==============
</TABLE>





          See accompanying notes to consolidated financial statements.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 Years Ended December 31, 1999 and 1998 and the
              Period December 22, 1997 (Date of Inception) through
                                December 31, 1997


1.       Significant Accounting Policies:

         Organization and Nature of Business - CNL Health Care Properties,  Inc.
         was organized pursuant to the laws of the state of Maryland on December
         22,  1997.  CNL Health Care GP Corp.  and CNL Health Care LP Corp.  are
         wholly owned subsidiaries of CNL Health Care Properties,  Inc., each of
         which were  organized  pursuant to the laws of the state of Delaware in
         December  1999.  CNL Health  Care  Partners,  LP is a Delaware  limited
         partnership  formed in December  1999. CNL Health Care GP Corp. and CNL
         Health  Care  LP  Corp.   are  the   general   and  limited   partners,
         respectively,  of CNL Health  Care  Partners,  LP.  The term  "Company"
         includes,  unless the  context  otherwise  requires,  CNL  Health  Care
         Properties,  Inc.,  CNL Health  Care  Partners,  LP, CNL Health Care GP
         Corp. and CNL Health Care LP Corp.

         The Company  intends to use the proceeds from its public  offering (the
         "Offering") (see Note 2), after deducting offering expenses,  primarily
         to acquire real estate properties (the "Properties")  related to health
         care and seniors'  housing  facilities  (the "Health Care  Facilities")
         located  across  the United  States.  The Health  Care  Facilities  may
         include  congregate   living,   assisted  living  and  skilled  nursing
         facilities,  continuing  care  retirement  communities  and  life  care
         communities,  and medical  office  buildings and walk-in  clinics.  The
         Company  may  provide  mortgage  financing  (the  "Mortgage  Loans") to
         operators of Health Care Facilities in the aggregate  principal  amount
         of  approximately  5 to 10 percent of the Company's  total assets.  The
         Company  also may offer  furniture,  fixture  and  equipment  financing
         ("Secured  Equipment  Leases") to operators of Health Care  Facilities.
         Secured  Equipment Leases will be funded from the proceeds of a loan in
         an amount up to ten percent of the Company's total assets.

         The Company was a development  stage  enterprise from December 22, 1997
         through  July 13,  1999.  Since  operations  had not begun,  activities
         through July 13, 1999 were devoted to organization of the Company.

         Principles of Consolidation - The accompanying  consolidated  financial
         statements include the accounts of CNL Health Care Properties, Inc. and
         its wholly owned subsidiaries,  CNL Health Care GP Corp. and CNL Health
         Care LP Corp., as well as the accounts of CNL Health Care Partners, LP.
         All  significant  intercompany  balances  and  transactions  have  been
         eliminated.

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

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



<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 Years Ended December 31, 1999 and 1998 and the
              Period December 22, 1997 (Date of Inception) through
                                December 31, 1997


1.       Significant Accounting Policies - Continued:

         Income  Taxes - When the Company  files its 1999 income tax return,  it
         will elect, pursuant to Internal Revenue Code Section 856(c)(1),  to be
         taxed as a REIT under Sections 856 through 860 of the Internal  Revenue
         Code  of  1986,  as  amended,  and  related  regulations.  The  Company
         generally  will not be  subject to federal  corporate  income  taxes on
         amounts distributed to stockholders,  providing it distributes at least
         95  percent  of  its  REIT  taxable  income  and  meets  certain  other
         requirements  for qualifying as a REIT. For the year ended December 31,
         1999, the Company believes it has qualified as a REIT; accordingly,  no
         provision  for federal  income taxes has been made in the  accompanying
         consolidated financial statements.

         Earnings Per Share - Basic earnings per share are calculated based upon
         net earnings (income available to common  stockholders)  divided by the
         weighted  average number of shares of common stock  outstanding  during
         the  period.  The  weighted  average  number of shares of common  stock
         outstanding for the period July 14, 1999 through  December 31, 1999 was
         412,713.  As of  December  31,  1999,  the  Company  did not  have  any
         potentially dilutive common shares.

         Reclassification   -  Certain  items  in  the  prior  years'  financial
         statements   have  been   reclassified   to   conform   with  the  1999
         presentation.  These  reclassifications  had no effect on stockholders'
         equity or net earnings.

         Use of  Estimates  -  Management  of the  Company  has made a number of
         estimates  and  assumptions  relating  to the  reporting  of assets and
         liabilities to prepare these  financial  statements in conformity  with
         generally accepted accounting principles.
         Actual results could differ from those estimates.

2.       Public Offering:

         The Company has filed a currently effective  registration  statement on
         Form S-11 with the  Securities  and Exchange  Commission.  A maximum of
         15,500,000 shares  ($155,000,000) may be sold, including 500,000 shares
         ($5,000,000)  which are  available  only to  stockholders  who elect to
         participate in the Company's reinvestment plan. The Company has adopted
         a reinvestment  plan pursuant to which  stockholders  may elect to have
         the full amount of their cash distributions from the Company reinvested
         in additional shares of common stock of the Company.  In addition,  the
         Company has  registered  600,000  shares  issuable upon the exercise of
         warrants granted to the managing dealer of the Offering. As of December
         31, 1999, the Company had received  subscription proceeds of $5,435,283
         (543,528   shares),   including  $12,540  (1,254  shares)  through  the
         distribution  reinvestment  plan  and  $235,000  (23,500  shares)  from
         Pennsylvania  investors  which will be held in escrow until the Company
         receives aggregate subscriptions of at least $7,775,000.


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 Years Ended December 31, 1999 and 1998 and the
              Period December 22, 1997 (Date of Inception) through
                                December 31, 1997


3.       Other Assets:

         Other assets as of December 31, 1999 and 1998 were $344,338 and $1,148,
         respectively,  which  consisted of acquisition  fees and  miscellaneous
         acquisition  expenses that will be allocated to future  properties  and
         miscellaneous prepaid expenses.

4.       Stock Issuance Costs:

         The Company has incurred  certain  expenses of its Offering,  including
         commissions,  marketing support and due diligence expense reimbursement
         fees, filing fees, legal,  accounting,  printing and escrow fees, which
         have been deducted from the gross proceeds of the Offering. Preliminary
         costs incurred  prior to raising  capital were advanced by an affiliate
         of the  Company,  CNL Health Care Corp.  (formerly  known as CNL Health
         Care Advisors, Inc.) (the "Advisor"). The Advisor has agreed to pay all
         organizational  and  offering  expenses   (excluding   commissions  and
         marketing support and due diligence expense  reimbursement  fees) which
         exceed three  percent of the gross  proceeds  received from the sale of
         shares of the Company in connection with the Offering.

         During the years ended December 31, 1999 and 1998, the Company incurred
         $1,089,013 and $975,339,  respectively,  in organizational and offering
         costs, including $413,983 and $2,040, respectively,  in commissions and
         marketing  support and due diligence  expense  reimbursement  fees (see
         Note 6). Of these amounts $1,074,013 and $955,339,  respectively,  have
         been  treated  as  stock   issuance  costs  and  $15,000  and  $20,000,
         respectively,  have been treated as organization  costs and expensed in
         the  current  year.  The stock  issuance  costs  have been  charged  to
         stockholders' equity subject to the three percent cap described above.

5.       Distributions:

         For the year ended December 31, 1999, 100 percent of the  distributions
         paid to stockholders were considered ordinary income for federal income
         tax purposes.  No amounts  distributed to the stockholders for the year
         ended  December 31, 1999 are required to be or have been treated by the
         Company  as a  return  of  capital  for  purposes  of  calculating  the
         stockholders' return on their invested capital.



<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 Years Ended December 31, 1999 and 1998 and the
              Period December 22, 1997 (Date of Inception) through
                                December 31, 1997


6.       Related Party Arrangements:

         On December  22,  1997 (date of  inception),  the  Advisor  contributed
         $200,000  in cash to the  Company  and  became  its  sole  stockholder.
         Certain  directors  and officers of the Company hold similar  positions
         with  the  Advisor  and  the  managing  dealer  of  the  Offering,  CNL
         Securities  Corp.  These  affiliates  are  entitled to receive fees and
         compensation  in  connection  with the Offering,  and the  acquisition,
         management and sale of the assets of the Company.

         During the years ended December 31, 1999 and 1998, the Company incurred
         $388,109 and $1,912,  respectively,  in selling  commissions due to CNL
         Securities  Corp.  for  services in  connection  with the  Offering.  A
         substantial   portion   of  these   amounts   ($370,690   and   $1,785,
         respectively)   was  or  will  be  paid  by  CNL  Securities  Corp.  as
         commissions to other broker-dealers.

         In addition,  CNL  Securities  Corp. is entitled to receive a marketing
         support  and due  diligence  expense  reimbursement  fee  equal  to 0.5
         percent of the total amount  raised from the sale of shares,  a portion
         of which may be  reallowed  to other  broker-dealers.  During the years
         ended  December  31, 1999 and 1998,  the Company  incurred  $25,874 and
         $128, respectively,  of such fees, the majority of which were reallowed
         to other  broker-dealers  and from  which all bona  fide due  diligence
         expenses were paid.

         In addition, the Company has agreed to issue and sell soliciting dealer
         warrants  ("Soliciting  Dealer  Warrants") to CNL Securities  Corp. The
         price for each  warrant  will be $0.0008 and one warrant will be issued
         for every 25 shares sold by the managing dealer, except when prohibited
         by federal or state securities laws. All or a portion of the Soliciting
         Dealer  Warrants  may be  reallowed  to  soliciting  dealers with prior
         written  approval  from,  and in the sole  discretion  of the  managing
         dealer,  except where  prohibited by either federal or state securities
         laws.  The holder of a  Soliciting  Dealer  Warrant will be entitled to
         purchase  one  share of common  stock  from the  Company  at a price of
         $12.00  during  the  five  year  period  commencing  with  the date the
         offering  begins.  No  Soliciting  Dealer  Warrants,  however,  will be
         exercisable  until one year from the date of  issuance.  As of December
         31, 1999,  CNL Securities  Corp. was entitled to receive  approximately
         19,000 Soliciting Dealer Warrants;  however,  no such warrants had been
         issued as of that date.

         The  Advisor is entitled to receive  acquisition  fees for  services in
         identifying  Properties  and  structuring  the  terms of  leases of the
         Properties  and  Mortgage  Loans  equal  to 4.5  percent  of the  gross
         proceeds of the Offering,  loan proceeds from  permanent  financing and
         amounts  outstanding  on the  line of  credit,  if any,  at the time of
         listing,  but excluding that portion of the permanent financing used to
         finance Secured Equipment  Leases.  During the years ended December 31,
         1999 and 1998, the Company incurred $232,865 and $1,148,  respectively,
         of such fees. Such fees are included in other assets.




<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 Years Ended December 31, 1999 and 1998 and the
              Period December 22, 1997 (Date of Inception) through
                               December 31, 1997


6.       Related Party Arrangements - Continued:

         The Company incurs  operating  expenses  which,  in general,  are those
         expenses relating to administration of the Company on an ongoing basis.
         Pursuant  to  the  Advisory  Agreement,  the  Advisor  is  required  to
         reimburse the Company the amount by which the total operating  expenses
         paid or incurred by the Company exceed in any four  consecutive  fiscal
         quarters  (the "Expense  Year"),  the greater of two percent of average
         invested assets or 25 percent of net income (the "Expense Cap"). Due to
         the fact  that the  Company  commenced  operations  in July  1999,  the
         Advisor will be required to reimburse the Company any amounts in excess
         of the Expense  Cap  commencing  with the Expense  Year ending June 30,
         2000.

         The Advisor and its affiliates provide various administrative  services
         to the Company,  including  services related to accounting;  financial,
         tax and regulatory compliance reporting;  stockholder distributions and
         reporting;   due  diligence  and  marketing;   and  investor  relations
         (including administrative services in connection with the Offering), on
         a day-to-day  basis.  The expenses  incurred  for these  services  were
         classified as follows:


<TABLE>
<CAPTION>
                                                                                          December 22,
                                                                                              1997
                                                                                           (Date of)
                                                                                           Inception)
                                                                 Year Ended                 Through
                                                                December 31,              December 31,
                                                           1999              1998             1997
                                                        -----------       -----------    ---------------

<S> <C>

               Deferred offering costs                       $  --          $196,184          $15,202
               Stock issuance costs                        328,229                --               --
               Other assets                                  6,455                --               --
               General operating and
                    administrative expenses                 38,796                --               --
                                                        ===========       ===========     ============
                                                          $373,480          $196,184          $15,202
                                                        ===========       ===========     ============

</TABLE>


<PAGE>


                        CNL HEALTH CARE PROPERTIES, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 Years Ended December 31, 1999 and 1998 and the
              Period December 22, 1997 (Date of Inception) through
                                December 31, 1997


6.       Related Party Arrangements - Continued:

         Amounts due to related  parties  consisted of the following at December
         31:

<TABLE>
<CAPTION>

                                                                           1999                 1998
                                                                       --------------       --------------

<S> <C>

                   Due to the Advisor:
                        Expenditures incurred for organizational
                           and offering expenses on behalf
                           of the Company                                $1,432,291           $470,798
                        Accounting and administrative
                           services                                           6,739            211,386
                        Acquisition fees                                    336,226              1,148
                                                                       -------------        -----------
                                                                          1,775,256            683,332
                                                                       -------------        -----------

                   Due to CNL Securities Corp.:
                        Commissions                                              --              1,912
                        Marketing support and due diligence
                           expense reimbursement fee                             --                128
                                                                       -------------        -----------
                                                                                 --              2,040
                                                                       -------------        -----------

                                                                         $1,775,256           $685,372
                                                                       =============        ===========
</TABLE>

7.       Subsequent Events:

         During the period January 1, 2000 through January 14, 2000, the Company
         received   subscription   proceeds  for  an  additional  30,329  shares
         ($303,290) of common stock.

         In addition,  on January 1, 2000,  the Company  declared  distributions
         totalling $13,501 or $0.025 per share of common stock, payable in March
         2000, to stockholders of record on January 1, 2000.




<PAGE>


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

         None.

                                                      PART III

Item 10.  Directors and Executive Officers of the Registrant

         The Directors and executive officers of the Company are listed below:

      Name               Age       Position with the Company
      ----               ---       -------------------------

James M. Seneff, Jr.     53        Director, Chairman of the Board,
                                   and Chief Executive Officer
Robert A. Bourne         52        Director and President
David W. Dunbar          47        Independent Director
Timothy S. Smick         48        Independent Director
Edward A. Moses          57        Independent Director
Phillip M. Anderson, Jr. 40        Chief Operating Officer and
                                   Executive Vice President
Thomas J. Hutchison III  58        Executive Vice President
Jeanne A. Wall           41        Executive Vice President
Lynn E. Rose             51        Secretary and Treasurer

         James  M.  Seneff,  Jr.  Director,  Chairman  of the  Board  and  Chief
Executive  Officer.  Since 1971, Mr. Seneff has been active in the  acquisition,
development,  and management of real estate projects and, directly or through an
affiliated  entity,  has served as a general  partner or co-venturer in over 100
real estate ventures.  These ventures have involved the financing,  acquisition,
construction, and leasing of restaurants, office buildings, apartment complexes,
hotels,  and other real estate.  Mr.  Seneff is a principal  stockholder  of CNL
Holdings,  Inc., the parent company of CNL Financial Group,  Inc.  (formerly CNL
Group,  Inc.), a diversified real estate company,  and has served as a director,
Chairman of the Board and Chief Executive  Officer of CNL Financial Group,  Inc.
since its formation in 1980. CNL Financial Group,  Inc. is the parent company of
CNL Real Estate Services, Inc., and the parent company of CNL Health Care Corp.,
the  Advisor;  and of CNL  Capital  Markets,  Inc.,  the  parent  company of CNL
Investment  Company.  CNL  Investment  Company  is  the  parent  company  of CNL
Securities  Corp., the managing dealer in this offering.  Mr. Seneff serves as a
director,  Chairman of the Board and Chief Executive  Officer of CNL Health Care
Corp., the Advisor to the Company.  He also serves as director,  Chairman of the
Board and Chief Executive Officer of CNL Hospitality Properties, Inc., a public,
unlisted real estate  investment  trust, as well as CNL Hospitality  Corp.,  its
advisor.  Since 1992,  Mr.  Seneff has served as Chairman of the Board and Chief
Executive  Officer of Commercial  Net Lease  Realty,  Inc., a public real estate
investment trust that is listed on the New York Stock Exchange.  In addition, he
has served as a director and Chairman of the Board since  inception in 1994, and
served as Chief  Executive  Officer from 1994  through  September  1999,  of CNL
American Properties Fund, Inc., a public, unlisted real estate investment trust.
He also served as a director,  Chairman of the Board and Chief Executive Officer
of CNL Fund Advisors,  Inc., the advisor to CNL American  Properties  Fund, Inc.
until it merged with the company in September  1999.  Mr. Seneff has also served
as a  director,  Chairman  of the  Board  and  Chief  Executive  Officer  of the
following  affiliated  companies since formation:  CNL Securities  Corp.,  since
1979; CNL Investment  Company,  since 1990; and CNL  Institutional  Advisors,  a
registered investment advisor for pension plans, since 1990. Mr. Seneff formerly
served  as a  director  of First  Union  National  Bank of  Florida,  N.A.,  and
currently  serves as the Chairman of the Board of CNLBank.  Mr. Seneff served on
the Florida State  Commission on Ethics and is a former member and past Chairman
of the State of Florida  Investment  Advisory  Council,  which recommends to the
Florida  Board  of  Administration  investments  for  various  Florida  employee
retirement  funds. The Florida Board of  Administration  is Florida's  principal
investment  advisory and money management  agency and oversees the investment of
more than $60 billion of retirement  funds.  Mr.  Seneff  received his degree in
Business Administration from Florida State University in 1968.

         Robert A. Bourne. Director and President.  Since joining CNL Securities
Corp. in 1979, Mr. Bourne has  participated  as a general partner or co-venturer
in over  100  real  estate  ventures  involved  in the  financing,  acquisition,
construction, and leasing of restaurants, office buildings, apartment complexes,
hotels,  and other real estate. Mr. Bourne is the President and Treasurer of CNL
Financial Group, Inc.  (formerly CNL Group,  Inc.). Mr. Bourne is a director and
President  of CNL Health Care Corp.,  the Advisor to the  Company.  He is also a
director,   Vice  Chairman  of  the  Board  and  President  of  CNL  Hospitality
Properties,  Inc., a public,  unlisted real estate  investment trust, as well as
CNL  Hospitality  Corp.,  its advisor.  Mr.  Bourne also serves as a director of
CNLBank.  He has served as a director  since  1992,  Vice  Chairman of the Board
since  February  1996,  Secretary and Treasurer from February 1996 through 1997,
and President  from July 1992 through  February  1996,  of Commercial  Net Lease
Realty Inc., a public real estate  investment trust listed on the New York Stock
Exchange. Mr. Bourne has served as a director since inception in 1994, President
from 1994 through  February  1999,  Treasurer  from February 1999 through August
1999,  and Vice  Chairman  of the  Board  since  February  1999 of CNL  American
Properties Fund, Inc., a public,  unlisted real estate investment trust. He also
served in the following  positions for CNL Fund  Advisors,  Inc., the advisor to
CNL  American  Properties  Fund,  Inc.  prior to its  merger  with the  company:
director from 1994 through August 1999,  Treasurer from July 1998 through August
1999, President from 1994 through September 1997, and Vice Chairman of the Board
from  September  1997  through  August  1999.  Mr.  Bourne  holds the  following
positions for these affiliates of CNL Financial Group, Inc.: director, President
and Treasurer of CNL Investment Company;  director,  President,  Treasurer,  and
Registered  Principal of CNL  Securities  Corp.,  a subsidiary of CNL Investment
Company and the managing  dealer for this  offering;  and  director,  President,
Treasurer,  and Chief Investment Officer of CNL Institutional Advisors,  Inc., a
registered  investment advisor for pension plans. Mr. Bourne began his career as
a certified public  accountant  employed by Coopers & Lybrand,  Certified Public
Accountants,  from 1971  through  1978,  where he attained  the  position of tax
manager in 1975.  Mr. Bourne  graduated  from Florida  State  University in 1970
where he received a B.A. in Accounting, with honors.

     David W. Dunbar.  Independent  Director.  Mr. Dunbar serves as chairman and
chief executive officer of Peoples Bank, which he organized and founded in 1996.
Mr. Dunbar is also a member of the board of trustees of Bay Care Health Systems,
an  alliance of ten  non-profit  hospitals  in the Tampa Bay area,  as well as a
member of the board of directors of Morton  Plant Mease  Health Care,  Inc.,  an
841-bed,  not-for-profit hospital and North Bay Hospital, a 122-bed facility. He
is a former  member of the board of  directors  of Morton  Plant Mease  Hospital
Foundation.  In addition, Mr. Dunbar serves as a member of the Florida Elections
Commission,   the  body  responsible  for  investigating  and  holding  hearings
regarding alleged violations of Florida's campaign finance laws. During 1994 and
1995, Mr. Dunbar was a member of the board of directors and an executive officer
of Peoples State Bank.  Mr. Dunbar was the chief  executive  officer of Republic
Bank from 1981 through 1988 and from 1991 through 1993.  From 1988 through 1991,
Mr. Dunbar  developed  commercial  and medical office  buildings and,  through a
financial  consulting company he founded,  provided specialized lending services
for real estate development clients, specialized construction litigation support
for  national   insurance   companies  and  strategic   planning   services  for
institutional  clients.  In 1990,  Mr. Dunbar was the chief  executive  officer,
developer and owner of a 60,000 square foot medical office  building  located on
the campus of Memorial  Hospital in Tampa,  Florida.  In addition,  in 1990, Mr.
Dunbar served as the Governor's  appointee to the State of Florida  Taxation and
Budget Reform  Commission,  a 25 member,  blue ribbon commission  established to
review,  study and make  appropriate  recommendations  for  changes to state tax
laws. Mr. Dunbar received a degree in finance from Florida State University.  He
is also a graduate  of the  American  Bankers  Association  National  Commercial
Lending  School at the  University  of Oklahoma and the School of Banking of the
South at Louisiana State University.

     Timothy  S.  Smick.   Independent  Director.  Mr.  Smick  is  currently  an
independent  investor.  From  1996  through  February  1998,  he served as chief
operating  officer,  executive  vice  president  and a  member  of the  board of
directors  of  Sunrise  Assisted  Living,  Inc.,  one  of the  nation's  leading
providers of assisted living care for seniors with 68 communities  located in 13
states. In addition, Mr. Smick served as president of Sunrise Management Inc., a
wholly owned subsidiary of Sunrise Assisted Living,  Inc. During 1995, Mr. Smick
served as a senior housing consultant to LaSalle Advisory,  Ltd., a pension fund
advisory  company.  From 1985  through  1994,  Mr.  Smick was chairman and chief
executive  officer of  PersonaCare,  Inc., a company he co-founded that provided
sub-acute,  skilled  nursing and assisted  living care with 12 facilities in six
states. Mr. Smick's health care industry experience also includes serving as the
regional  operations  director  for  Manor  Healthcare,   Inc.,  a  division  of
ManorCare,  Inc., and as operations  director for Allied Health and  Management,
Inc. Prior to co-founding PersonaCare, Inc., Mr. Smick was a partner in Duncan &
Smick, a commercial real estate  development  firm. Mr. Smick received a B.A. in
English from Wheaton College and pursued graduate studies at Loyola College.

         Edward A. Moses.  Independent Director. Dr. Moses has served as dean of
the Roy E. Crummer  Graduate  School of Business at Rollins  College since 1994,
and as a professor and NationsBank professor of finance since 1989. As dean, Dr.
Moses is presently  establishing a comprehensive  program of executive education
for health care  management at the Roy E. Crummer  Graduate  School of Business.
From 1985 to 1989 he served as dean and  professor of finance at the  University
of North Florida. He has also served in academic and administrative positions at
the University of Tulsa,  Georgia State University and the University of Central
Florida.  Dr. Moses has written six textbooks in the fields of  investments  and
corporate finance as well as numerous articles in leading business journals.  He
has held offices in a number of professional organizations,  including president
of the Southern Finance and Eastern Finance Associations, served on the Board of
the Southern Business Administration Association, and served as a consultant for
major banks as well as a number of Fortune 500 companies. He currently serves as
a  faculty  member  in  the  Graduate  School  of  Banking  at  Louisiana  State
University,  and is a member of the board of  directors  of HTE,  Inc. Dr. Moses
received a B.S. in  Accounting  from the  Wharton  School at the  University  of
Pennsylvania in 1965 and a Masters of Business  Administration  (1967) and Ph.D.
in finance from the University of Georgia in 1971.

         Phillip M.  Anderson,  Jr. Chief  Operating  Officer and Executive Vice
President.  Mr.  Anderson  joined CNL Health Care Corp.  in January  1999 and is
responsible for the planning and implementation of CNL's interest in health care
industry investments, including acquisitions,  development, project analysis and
due diligence.  He currently  serves as the Chief Operating  Officer of both CNL
Health Care Corp., the Company's  Advisor,  and of CNL Health Care  Development,
Inc. From 1987 through 1998, Mr.  Anderson was employed by Classic  Residence by
Hyatt.  Classic  Residence by Hyatt  ("Classic") is affiliated with Hyatt Hotels
and Chicago's  Pritzker family.  Classic acquires,  develops,  owns and operates
seniors' housing,  assisted living,  skilled nursing and Alzheimer's  facilities
throughout  the  United  States.  Mr.  Anderson's   responsibilities  grew  from
overseeing   construction  of  Classic's  first   properties  to  acquiring  and
developing new properties.  After assuming responsibility for acquisitions,  Mr.
Anderson  doubled the number of senior living  apartments/beds  ("units") in the
portfolio  by adding  over 1,200  units.  In  addition,  the  development  of an
additional  1,000  units of  seniors'  housing  commenced  under Mr.  Anderson's
direction.  Mr. Anderson also served on Classic's  Executive  Committee  charged
with the  responsibility  of monitoring  performance of existing  properties and
development  projects.  Mr.  Anderson has been a member of the  American  Senior
Housing  Association  since 1994 and currently serves on the executive board. He
graduated from the Georgia  Institute of Technology in 1982, where he received a
B.S. in Civil Engineering, with honors.

         Thomas J. Hutchison III. Executive Vice President. Mr. Hutchison serves
as President  and Chief  Operating  Officer of CNL Real Estate  Services,  Inc.,
which is the  parent  company  of CNL  Health  Care  Corp.,  the  Advisor of the
Company.  He is the Chief Operating  Officer of CNL Community  Development Corp.
Mr.  Hutchison  joined  CNL in  January  2000  with more than 30 years of senior
management and consulting experience in the real estate development and services
industries.  He currently serves on the board of directors of Restore Orlando, a
nonprofit community volunteer organization.  Prior to joining CNL, Mr. Hutchison
was  president  and owner of  numerous  real  estate  services  and  development
companies.  From 1995 to 2000,  he was chairman and chief  executive  officer of
Atlantic Realty Services, Inc. and TJH Development  Corporation.  Since 1990, he
has  fulfilled  a  number  of  long-term   consulting   assignments   for  large
corporations, including managing a number of large international joint ventures.
From 1990 to 1991,  Mr.  Hutchison was the  court-appointed  president and chief
executive officer of General  Development  Corporation,  a real estate community
development  company,  where he assumed the  day-to-day  management  of the $2.6
billion NYSE-listed company entering re-organization.  From 1986 to 1990, he was
the  chairman  and chief  executive  officer of a number of real  estate-related
companies  engaged  in  the  master  planning  and  land  acquisition  of  forty
residential,  industrial and office development projects. From 1978 to 1986, Mr.
Hutchison was the president and chief executive  officer of Murdock  Development
Corporation  and  Murdock  Investment  Corporation,  as well as  Murdock's  nine
service  divisions.  In this capacity,  he managed an average of $350 million of
new  development  per year for over nine years.  Additionally,  he expanded  the
commercial real estate  activities to a national basis,  and established  both a
new extended care division and a hotel division that grew to 14 properties.  Mr.
Hutchison  was  educated at Purdue  University  and the  University  of Maryland
Business School.

     Jeanne A. Wall. Executive Vice President. Ms. Wall also serves as Executive
Vice  President  of CNL  Health  Care  Corp.,  the  Advisor to the  Company.  In
addition,  Ms.  Wall  serves as  Executive  Vice  President  of CNL  Hospitality
Properties, Inc., a public, unlisted real estate investment trust, and serves as
Executive Vice President and a director of CNL Hospitality  Corp.,  its advisor.
She also serves as a director  for CNLBank.  Ms. Wall serves as  Executive  Vice
President of CNL Financial Group, Inc. (formerly CNL Group,  Inc.). Ms. Wall has
served  as  Chief  Operating  Officer  of  CNL  Investment  Company  and  of CNL
Securities  Corp.  since 1994 and has served as Executive  Vice President of CNL
Investment  Company since January 1991. In 1984,  Ms. Wall joined CNL Securities
Corp.  and in 1985,  became Vice  President.  In 1987,  she became a Senior Vice
President and in July 1997,  became  Executive  Vice President of CNL Securities
Corp. In this capacity, Ms. Wall serves as national marketing and sales director
and oversees the national  marketing  plan for the CNL investment  programs.  In
addition,  Ms. Wall oversees product  development,  communications  and investor
services for  programs  offered  through  participating  brokers.  Ms. Wall also
served as Senior Vice President of CNL Institutional Advisors Inc., a registered
investment  advisor,  from 1990 to 1993.  Ms. Wall served as Vice  President  of
Commercial Net Lease Realty,  Inc., a public real estate investment trust listed
on the New York  Stock  Exchange,  from 1992  through  1997,  and served as Vice
President of CNL Realty Advisors,  Inc. from its inception in 1991 through 1997.
Ms. Wall also served as Executive  Vice  President  of CNL  American  Properties
Fund, Inc., a public,  unlisted real estate  investment trust, from 1994 through
August 1999, and as Executive  Vice  President of CNL Fund  Advisors,  Inc., its
advisor,  from 1994  through  August  1999,  at which  point it merged  with CNL
American  Properties  Fund,  Inc. Ms. Wall currently  serves as a trustee on the
Board  of the  Investment  Program  Association,  is a member  of the  Corporate
Advisory Council for the International Association for Financial Planning and is
a member of IWF, International Women's Forum. In addition, she previously served
on the Direct  Participation  Program committee for the National  Association of
Securities Dealers,  Inc. Ms. Wall holds a B.A. in Business  Administration from
Linfield College and is a registered principal of CNL Securities Corp.

         Lynn E.  Rose.  Secretary  and  Treasurer.  Ms.  Rose  also  serves  as
Secretary of the Company's  subsidiaries.  In addition, she serves as Secretary,
Treasurer and a director of CNL Health Care Corp., the  Advisor  to the Company.
Ms. Rose also serves as Secretary and Treasurer of CNL  Hospitality  Properties,
Inc., a public,  unlisted real estate investment trust, as Secretary,  Treasurer
and a director of CNL Hospitality  Corp.,  its Advisor,  and as Secretary of the
subsidiaries  of the  Company.  Ms. Rose  served as  Secretary  of CNL  American
Properties Fund, Inc., a public,  unlisted real estate  investment  trust,  from
1994 through  August 1999,  and served as Treasurer  from 1994 through  February
1999. She also served as Treasurer of CNL Fund Advisors, Inc., from 1994 through
July 1998, and served as Secretary and a director from 1994 through August 1999,
at which point it merged with CNL American Properties Fund, Inc. Ms. Rose served
as Secretary and Treasurer of Commercial  Net Lease Realty,  Inc., a public real
estate  investment  trust  listed on the New York Stock  Exchange,  from 1992 to
February 1996, and as Secretary and a director of CNL Realty Advisors, Inc., its
advisor,  from its inception in 1991 through 1997.  She also served as Treasurer
of CNL Realty  Advisors,  Inc.  from 1991  through  February  1996.  Ms. Rose, a
certified  public  accountant,  has served as Secretary of CNL Financial  Group,
Inc.  (formerly CNL Group,  Inc.) since 1987,  served as Controller from 1987 to
1993 and has served as Chief  Financial  Officer since 1993.  She also serves as
Secretary of the  subsidiaries  of CNL Financial  Group,  Inc. and holds various
other  offices in the  subsidiaries.  In addition,  she serves as Secretary  for
approximately  50 additional  corporations  affiliated with CNL Financial Group,
Inc. and its  subsidiaries.  Ms. Rose oversees the tax and legal  compliance for
over 375 corporations,  partnerships and joint ventures,  and the accounting and
financial reporting for over 200 entities.  Prior to joining CNL, Ms. Rose was a
partner  with Robert A. Bourne in the  accounting  firm of Bourne & Rose,  P.A.,
Certified  Public  Accountants.  Ms.  Rose holds a B.A.  in  Sociology  from the
University of Central Florida. She was licensed as a certified public accountant
in 1979.


Item 11.  Executive Compensation

         No annual or  long-term  compensation  was paid by the  Company  to the
Chief Executive  Officer for services  rendered in all capacities to the Company
during the period  December 22, 1997 (date of  inception)  through  December 31,
1997 or during the years ended  December  31,  1998 and 1999.  In  addition,  no
executive  officer of the Company  received  an annual  salary or bonus from the
Company during the fiscal year ended December 31, 1999. The Company's  executive
officers also are  employees  and executive  officers of the Advisor and receive
compensation  from  CNL  Financial  Group,  Inc.  in part for  services  in such
capacities.  See Item 13 for a  description  of the fees  payable  and  expenses
reimbursed to the Advisor.



<PAGE>


Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The  following  table sets forth,  as of  February 7, 2000,  the number and
percentage of outstanding shares  beneficially owned by all persons known by the
Company  to own  beneficially  more than five  percent of the  Company's  Common
Stock,  by each  director  and nominee,  and by all officers and  directors as a
group,  based upon  information  furnished to the Company by such  stockholders,
officers and directors.

     Name and Address                 Number of Shares           Percent
     of Beneficial Owner             Beneficially Owned         of Shares

     James M. Seneff, Jr.                20,000 (1)                3.4%

     Robert A. Bourne                        0                      --

     David W. Dunbar                         0                      --

     Timothy S. Smick                        0                      --

     Edward A. Moses                         0                      --

     Phillip M. Anderson, Jr.              1,075                   (2)

     All directors and executive           21,075                  3.6%
     officers as a group (9 persons)



(1)  Includes 20,000 shares held by the Advisor of which Mr. Seneff is director.
     Mr. Seneff and his wife share  beneficial  ownership of the Advisor through
     their ownership of CNL Financial Group,  Inc. The Advisor is a wholly owned
     subsidiary of CNL Financial Group, Inc.

(2)      Less than one percent.


Item 13.  Certain Relationships and Related Transactions

     All of the executive  officers of the Company are executive officers of the
Advisor,  a wholly owned  subsidiary  of CNL  Financial  Group,  Inc.,  of which
Messrs.  Seneff and Bourne are executive officers and directors and whose shares
are beneficially owned by Mr. Seneff and his wife. In addition,  Messrs.  Seneff
and  Bourne,  Ms.  Rose and Ms. Wall are  executive  officers of CNL  Securities
Corp., the managing dealer of the Company's  offering of shares of common stock,
and a wholly owned  subsidiary of CNL Financial Group,  Inc. Messrs.  Seneff and
Bourne are directors of the Company,  the Advisor and CNL Securities  Corp., and
Ms.  Rose  is a  director  of the  Advisor.  Administration  of  the  day-to-day
operations  of the Company is provided by the Advisor,  pursuant to the terms of
the Advisory Agreement.  The Advisor also serves as the Company's  consultant in
connection with policy decisions to be made by the Company's Board of Directors,
manages the  Company's  assets and renders  such other  services as the Board of
Directors deems appropriate. The Advisor also bears the expense of providing the
executive personnel and office space to the Company. The Advisor is at all times
subject to the supervision of the Board of Directors of the Company and has only
such  functions and authority as the Company may delegate to it as the Company's
agent.


<PAGE>


     CNL Securities Corp. is entitled to receive selling  commissions  amounting
to 7.5% of the total  amount  raised from the sale of Shares of common stock for
services in connection  with the offering of Shares,  a  substantial  portion of
which will be paid as  commissions to other  broker-dealers.  For the year ended
December 31, 1999, the Company  incurred  $388,109 of such fees, the majority of
which were paid by CNL Securities Corp. as commissions to other broker-dealers.

     In  addition,  CNL  Securities  Corp.  is  entitled  to receive a marketing
support and due diligence  expense  reimbursement fee equal to 0.5% of the total
amount  raised from the sale of Shares,  a portion of which may be  reallowed to
other broker-dealers. For the year ended December 31, 1999, the Company incurred
$25,874  of  such  fees,   the  majority  of  which  were   reallowed  to  other
broker-dealers and from which all bona fide due diligence expenses will be paid.

     The  Advisor  is  entitled  to receive  acquisition  fees for  services  in
identifying  the  properties  and  structuring  the  terms of the  leases of the
Properties  and Mortgage  Loans equal to 4.5% of gross proceeds of the Company's
stock offering,  loan proceeds from Permanent  Financing and amounts outstanding
on the Company's Line of Credit,  if any, at the time of Listing,  but excluding
that  portion  of the  Permanent  Financing  used to finance  Secured  Equipment
Leases.  For the year ended December 31, 1999, the Company incurred  $232,865 of
such fees.

     The  Advisor  and its  affiliates  provide  accounting  and  administrative
services to the Company  (including  accounting and  administrative  services in
connection  with the  offering of Shares) on a  day-to-day  basis.  For the year
ended  December  31,  1999,  the Company  incurred a total of $373,480 for these
services,  $328,229 of such costs  representing  stock  issuance  costs,  $6,455
representing   acquisition  related  costs  and  $38,796   representing  general
operating and administrative expenses,  including costs related to preparing and
distributing reports required by the Securities and Exchange Commission.

     The Company has and will continue to incur certain costs in connection with
the Offering,  including filing fees, legal, accounting,  marketing and printing
costs and escrow  fees,  which will be deducted  from the gross  proceeds of the
Offering.  Certain preliminary costs incurred prior to raising capital have been
and will be advanced by an affiliate  of the Company.  The Advisor has agreed to
pay  all  organizational  and  offering  expenses  (excluding   commissions  and
marketing  support and due diligence  expense  reimbursement  fees) which exceed
three percent of the gross offering proceeds received from the sale of shares of
the Company. For the year ended December 31, 1999, the Company incurred $421,878
for such costs.

     All amounts  incurred by the Company to affiliates of CNL Financial  Group,
Inc. are believed by the Company to be fair and comparable to amounts that would
be paid for similar services provided by unaffiliated third parties.


<PAGE>


                                     PART IV

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

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

         1.  Financial Statements

                  Report of Independent Certified Public Accountants

                  Consolidated Balance Sheets at December 31, 1999 and 1998

                  Consolidated  Statements  of  Operations  for the years  ended
                  December 31, 1999 and 1998,  and the period  December 22, 1997
                  (date of inception) through December 31, 1997

                  Consolidated  Statements of Stockholders' Equity for the years
                  ended December 31, 1999 and 1998, and the period  December 22,
                  1997 (date of inception) through December 31, 1997

                  Consolidated  Statements  of Cash  Flows for the  years  ended
                  December 31, 1999 and 1998,  and the period  December 22, 1997
                  (date of inception) through December 31, 1997

                  Notes to Consolidated Financial Statements

          2.      Financial Statement Schedules

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

         3.  Exhibits

                  3.1      CNL Health Care Properties, Inc. Amended and Restated
                           Articles of Incorporation (Included as Exhibit 3.1 to
                           the  Registrant's  1998 Report on Form 10K filed with
                           the  Securities  and Exchange  Commission on March 5,
                           1999 and incorporated herein by reference.)

                  3.2      CNL Health Care Properties,  Inc. Bylaws (Included as
                           Exhibit 3.2 to the  Registrant's  1998 Report on Form
                           10-K  filed   with  the   Securities   and   Exchange
                           Commission on March 5, 1999 and  incorporated  herein
                           by reference.)

                  4.1      Reinvestment   Plan   (Included  as  Exhibit  4.4  to
                           Registration  Statement  No.  333-47411  on Form S-11
                           and incorporated herein by reference.)

                  10.1     Advisory  Agreement,  dated as of September 15, 1998,
                           between  CNL Health  Care  Properties,  Inc.  and CNL
                           Health Care Advisors,  Inc. (Included as Exhibit 10.1
                           to the  Registrant's  1998  Report on Form 10-K filed
                           with the Securities and Exchange  Commission on March
                           5, 1999 and incorporated herein by reference.)

                  10.2     Indemnification  Agreement  between  CNL Health  Care
                           Properties,  Inc. and Phillip M. Anderson,  Jr. dated
                           February 19,  1999.  Each of the  following  director
                           and/or  officer  has signed a  substantially  similar
                           agreement as follows: James M. Seneff, Jr., Robert A.
                           Bourne, David W. Dunbar,  Timothy S. Smick, Edward A.
                           Moses, Curtis B. McWilliams,  Jeanne A. Wall and Lynn
                           E. Rose dated September 15, 1998 (Included as Exhibit
                           10.2 to the  Registrant's  1998  Report  on Form 10-K
                           filed with the Securities and Exchange  Commission on
                           March 5, 1999 and incorporated herein by reference.)

                  27      Financial Data Schedule (Filed herewith.)

(b)      No  reports  on  Form 8-K  were filed during the period October 1, 1999
         through December 31, 1999.




<PAGE>








                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 11th day of
February, 2000.

                        CNL HEALTH CARE PROPERTIES, INC.

                        By:      ROBERT A. BOURNE
                                 President (Principal Financial
                                 and Accounting Officer)

                                 /s/ Robert A. Bourne
                                 --------------------------
                                 ROBERT A. BOURNE


<PAGE>


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


              Signature                                    Title                                   Date
              ---------                                    -----                                   ----

<S> <C>

/s/ James M. Seneff, Jr.                   Chairman   of  the  Board  and  Chief            February 11, 2000
---------------------------                Executive     Officer      (Principal
James M. Seneff, Jr.                       Executive Officer)



/s/ Robert A. Bourne                       Director  and  President   (Principal            February 11, 2000
---------------------------                Financial and Accounting  Officer)
Robert A. Bourne



/s/ David W. Dunbar                        Independent Director                             February 11, 2000
---------------------------
David W. Dunbar



/s/ Timothy S. Smick                       Independent Director                             February 11, 2000
---------------------------
Timothy S. Smick



/s/ Edward A. Moses                        Independent Director                             February 11, 2000
---------------------------
Edward A. Moses

</TABLE>


<PAGE>


SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH  REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

An annual report and a proxy,  proxy statement and notice of annual meeting will
be sent to  stockholders  subsequent to the filing of this Annual Report on Form
10-K and  copies of such  material  shall be  furnished  to the  Securities  and
Exchange Commission when it is sent to stockholders.



<PAGE>














                                    EXHIBITS


<PAGE>



















                                  EXHIBIT INDEX


                  Exhibit Number

                  3.1      CNL Health Care Properties, Inc. Amended and Restated
                           Articles of Incorporation (Included as Exhibit 3.1 to
                           the  Registrant's  1998 Report on Form 10K filed with
                           the  Securities  and Exchange  Commission on March 5,
                           1999 and incorporated herein by reference.)

                  3.2      CNL Health Care Properties,  Inc. Bylaws (Included as
                           Exhibit 3.2 to the  Registrant's  1998 Report on Form
                           10-K  filed   with  the   Securities   and   Exchange
                           Commission on March 5, 1999 and  incorporated  herein
                           by reference.)

                  4.1      Reinvestment   Plan   (Included  as  Exhibit  4.4  to
                           Registration Statement No. 333-47411 on Form S-11 and
                           incorporated herein by reference.)

                  10.1     Advisory  Agreement,  dated as of September 15, 1998,
                           between  CNL  Health  Care  Properties,  Inc. and CNL
                           Health  Care  Advisors,  Inc.  (Included  as  Exhibit
                           10.1  to  the  Registrants  1998  Report on Form 10-K
                           filed  with the Securities and Exchange Commission on
                           March 5, 1999 and incorporated herein by reference.)

                  10.2     Indemnification  Agreement  between  CNL Health  Care
                           Properties,  Inc. and Phillip M. Anderson,  Jr. dated
                           February 19,  1999.  Each of the  following  director
                           and/or  officer  has signed a  substantially  similar
                           agreement as follows: James M. Seneff, Jr., Robert A.
                           Bourne, David W. Dunbar,  Timothy S. Smick, Edward A.
                           Moses, Curtis B. McWilliams,  Jeanne A. Wall and Lynn
                           E. Rose dated September 15, 1998 (Included as Exhibit
                           10.2 to the  Registrant's  1998  Report  on Form 10-K
                           filed with the Securities and Exchange  Commission on
                           March 5, 1999 and incorporated herein by reference.)

                  27       Financial Data Schedule (Filed herewith.)