<PAGE>   1
                                  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 [FEE REQUIRED]

For the quarterly period ended          DECEMBER 31, 1997

                                       or

[ ]    TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
       OF 1934 [NO FEE REQUIRED]

For the transition period from                     to

Commission file number                    0-14551

        CORPORATE PROPERTY ASSOCIATES 6, A CALIFORNIA LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
             CALIFORNIA                                                                                  13-3247122
<S>                                                                                     <C>
(State or other jurisdiction of incorporation or organization)                           (I.R.S. Employer Identification No.)

50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK                                                                              10020
(Address of principal executive offices)                                                                           (Zip Code)
</TABLE>

Registrant's telephone number, including area code     (212) 492-1100

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

<TABLE>
<CAPTION>
                      Title of each class                                       Name of each exchange on which registered
                      -------------------                                       -----------------------------------------
<S>                  <C>                                                       <C>
                          NONE                                                                 NONE
</TABLE>



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

                          SUBSIDIARY PARTNERSHIP UNITS
                                (Title of Class)


                                (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 for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

                                            [X] Yes      [ ]  No

    Indicate by check mark if disclosure of deliquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]


    Aggregate market value of the voting stock held by non-affiliates of
Registrant: There is no active market for Subsidiary Partnership Units.
<PAGE>   2
                                     PART I




Item 1.  Business.

                  Registrant is engaged in the business of investing in
commercial and industrial real estate properties which are net leased to
commercial and industrial entities. Registrant was organized as a California
limited partnership on July 23, 1984. Effective January 1, 1998, the General
Partner of Registrant is Carey Diversified LLC ("Carey Diversified"). Carey
Corporate Property, Inc., a Delaware corporation, and William Polk Carey were
formerly Corporate General Partner and Individual General Partner, respectively.
Carey Diversified is also the General Partner of Corporate Property Associates
("CPA(R):1"), Corporate Property Associates 2 ("CPA(R):2"), Corporate Property
Associates 3 ("CPA(R):3"), Corporate Property Associates 7 - a California
limited partnership ("CPA(R):7"), Corporate Property Associates 8, L.P., a
Delaware limited partnership ("CPA(R):8"), Corporate Property Associates 9,
L.P., a Delaware limited partnership ("CPA(R):9"). Registrant has entered into
an agreement with Carey Management LLC ("Carey Management") pursuant to which
Carey Management performs a variety of management services for Registrant.

                  The properties owned by Registrant are described in Item 2.
Registrant's entire net proceeds from the Public Offering, less a working
capital reserve, have been fully invested in net leased commercial and
industrial real estate since March 21, 1988, the date of Registrant's final real
estate acquisition.

                  Registrant has two industry segments consisting of the
investment in and the leasing of industrial and commercial real estate and the
operations of hotels which were assumed subsequent to the lease terminations. By
assuming the operations of the hotel businesses, Management intends to preserve
the value of the underlying investment for remarketing purposes and generate a
contribution to Registrant's operating cash flow. See Selected Financial Data in
Item 6 and Management's Discussion and Analysis in Item 7 for a summary of
Registrant's operations. Also see the material contained in the Prospectus under
the heading INVESTMENT OBJECTIVES AND POLICIES.

                  Other than the three hotel properties, all of Registrant's
real estate properties are leased to corporate tenants and are subject to
long-term net leases whereby the tenants are generally required to pay all
operating expenses relating to the leased properties including maintenance, real
estate taxes, insurance and utilities. Lessees are required to include
Registrant as an additional insured party on all insurance policies relating to
the leased properties. In addition, substantially all of the net leases include
indemnification provisions which are intended to limit recourse to Registrant
and the General Partner. Registrant believes that the insurance and indemnity
provided on its behalf by its lessees provides adequate coverage for property
damage and any liability claims which may arise against Registrant's ownership
interests. In addition to the insurance and indemnification provisions of the
leases, Registrant has contingent property and liability insurance on its leased
properties and primary property and liability coverages on its three hotel
properties. Management believes that its insurance is adequate. To the extent
that any lessees are not financially able to satisfy indemnification obligations
which exceed insurance reimbursements, Registrant may incur the costs necessary
to repair property and settle liabilities.

                  As described above, lessees retain the obligation for the
operating expenses of their leased properties so that, other than rental income,
there are no significant operating data reportable on Registrant's leased
properties. Current rental income is reported in Note 9 to the Financial
Statements in Item 8. Registrant's leases generally provide for periodic rent
increases which are either stated and negotiated at the inception of the lease
or based on formulas indexed to increases in the Consumer Price Index ("CPI").
The initial terms of Registrant's leases are scheduled to expire between 2000
and 2011 with the leases providing for

                                      -1-
<PAGE>   3
multiple renewal terms. In addition, several of the leases provide purchase
options. The purchase options generally provide for purchase prices at the
greater of (i) fair market value, as defined in the lease, or (ii) a stated
amount. The stated amount is generally the sum of Registrant's acquisition cost
of the properties and any prepayment charges which would occur as a result of
paying off mortgage loans on the properties being sold.

                  Since Registrant's objective is to invest in properties which
are occupied by a single corporate tenant and subject to net leases backed by
the credit of the corporate lessee, Registrant's properties have not been
generally subject to the competitive conditions of local and regional real
estate markets. The competitive conditions of local and regional real estate
markets may have a more material affect on Registrant as leases terminate in the
future. In selecting real estate for investment, Registrant seeks to lease
facilities which are material to the lessee's operations in order to increase
the likelihood that lease renewals will be exercised. Because Registrant may be
affected by the financial condition of its lessees rather than the competitive
conditions of the real estate marketplace, Registrant's strategy has been to
diversify its investments among tenants, property types and industries in
addition to achieving geographical diversification. To the extent that lessees
exercise purchase options which provide for purchase prices based on a market
value as encumbered by the existing lease, local market conditions may have
little impact.

                  Registrant's operation of hotel properties (all of which are
Holiday Inn franchises) are more greatly affected by both increasing competition
and economic conditions. Registrant's hotels in Alpena and Petoskey, Michigan
have experienced increased competition over the past several years as the result
of the opening of new hotels at both locations. The Alpena and Petoskey
businesses are seasonal in nature. Effective February 1998, Registrant has
entered into a lease with Livho, Inc., an affiliate, for the Livonia hotel. The
Livonia hotel operation represented approximately 62% of hotel revenues in 1997.

                  For the year ended December 31, 1997, revenues from properties
occupied by lessees which accounted for 10% or more of operating revenues of
Registrant were as follows: Thermadyne Holdings Corp. (from a lease assigned by
Stoody Deloro Stellite, Inc.), 19%; AP Parts International, Inc. ("A.P. Parts"),
15%; AutoZone, Inc. ("AutoZone"), 12%; and Peerless Chain Company, 14%. No other
property owned by Registrant accounted for 10% or more of its total operating
revenues during 1997. See Note 9 to the Consolidated Financial Statements in
Item 8. For the year ended December 31, 1997, gross revenues from the hotel
operations segment were approximately 29% of total revenues.

                  Registrant voluntarily performed initial environmental reviews
of all of its properties in 1993. Registrant believes, based on the results of
such reviews and Phase II environmental reviews of certain of its properties in
1994, that its properties are in substantial compliance with Federal and state
environmental statutes and regulations. Phase II reviews were only performed on
certain properties based on the recommendations of the Phase I reviews. Portions
of certain properties have been subject to a limited degree of contamination,
principally in connection with either leakage from underground storage tanks or
surface spills from facility activities. In many instances, tenants are actively
engaged in the remediation process and addressing identified conditions. For
those conditions which were identified, Registrant advised its tenants of such
findings and of their obligations to perform additional investigations and any
required remediation. Tenants are generally subject to environmental statutes
and regulations regarding the discharge of hazardous materials and any related
remediation obligations. In addition, Registrant's leases generally require
tenants to indemnify Registrant from all liabilities and losses related to the
leased properties. Accordingly, Management believes that the ultimate resolution
of the aforementioned environmental matters will not have a material adverse
effect on Registrant's financial condition, liquidity or results of operations.

                  On October 16, 1997, Registrant distributed a Consent
Solicitation Statement/Prospectus to the Limited Partners that described a
proposal to consolidate Registrant with the other CPA(R) Partnerships. Proposals
that each of the nine CPA(R) limited partnerships be merged with a corresponding
subsidiary partnership of Carey Diversified, of which Carey Diversified is the
general partner, were approved by the Limited Partners of all nine of the CPA(R)
limited partnerships. Each limited partner had the option of either exchanging
his or her limited partnership interest for an interest in Carey Diversified
("Listed Shares") or to retain a limited partnership interest in the subsidiary
partnership ("Subsidiary Partnership Units"). On January 1, 1998, 2,760 holders
representing 47,261 of the 47,930 limited partnership units exchanged such units
for

                                      -2-
<PAGE>   4
3,262,427 Listed Shares with 43 holders of the remaining 669 limited partnership
units exchanging such units for Subsidiary Partnership Units. The former General
Partners received 17,695 Listed Shares for their interest in their share of the
appreciation in Registrant properties.

                  The Listed Shares are listed on the New York Stock Exchange.
The Subsidiary Partnership Units provide substantially the same economic
interest and legal rights as those of a limited partnership unit in Registrant
prior to the Consolidation, but are not listed on a securities exchange. A
liquidating distribution to holders of Subsidiary Partnership Units will be made
after an appraisal of Registrant's properties. The date of such an appraisal is
to be no later than December 31, 2001.

                  Registrant does not have any employees. Carey Management, an
affiliate of the General Partner of Registrant performs accounting, secretarial
and transfer services for Registrant. Chase Mellon Shareholder Services, Inc.
also performs certain transfer services for Registrant and The Chase Manhattan
Bank performs certain banking services for Registrant. In addition, Registrant
has entered into an agreement with Carey Management pursuant to which Carey
Management provides certain management services to Registrant.

                  Registrant's Management company has responsibility for
maintaining the company's books and records. An affiliate of the management
company services the computer systems used in maintaining such books and
records. In its preliminary assessment of Year 2000 issues, the affiliate
believes that such issues will not have a material effect on the Registrant's
operations; however, such assessment has not been completed. The Registrant
relies on its bank and transfer agent for certain computer-related services and
has initiated discussions to determine whether they are addressing Year 2000
issues that might affect the Registrant.

                                      -3-
<PAGE>   5
Item 2.      Properties.

<TABLE>
<CAPTION>
   LEASE                                                                                           TYPE OF OWNERSHIP
  OBLIGOR                      TYPE OF PROPERTY                     LOCATION                          INTEREST
  -------                      ----------------                     --------                          --------
<S>                           <C>                                  <C>                            <C>
THERMADYNE                     Warehouse and Manu-                  Industry,                      Ownership of land
HOLDINGS                       facturing Facility                   California                     and building
CORP.

YALE SECURITY,                 Manufacturing                        Lemont,                        Ownership of land
INC.                           Facility                             Illinois                       and building (1)

MOTOROLA, INC.                 Computer and                         Urbana,                        Ownership of land
                               Telecommunication Facility           Illinois                       and building (1)

LOCKHEED MARTIN                Warehouse and                        Glen Burnie,                   Ownership of land
CORPORATION                    Manufacturing Facility               Maryland                       and building

AUTOZONE, INC.                 Retail Stores -                      Charlotte, Lenoir,             Ownership of land
                               -31 locations                        Gastonia, and                  and buildings (1)
                                                                    Statesville, North
                                                                    Carolina;
                                                                    Austin, Corpus
                                                                    Christi-2, Nederland,
                                                                    San Antonio, Victoria,
                                                                    Waco,
                                                                    and West Orange, Texas;
                                                                    Bessemer, Chickasaw,
                                                                    Decatur, Mobile,
                                                                    Montgomery
                                                                    and Phenix City, Alabama;
                                                                    Alton, Belleview,
                                                                    Collinsville and
                                                                    Wood River, Illinois;
                                                                    Columbus, Georgia;
                                                                    Baton Rouge,                   Ownership of land
                                                                    Lake Charles-2                 and buildings (1)
                                                                    and West Monroe,
                                                                    Louisiana;
                                                                    Breckenridge, Maplewood,
                                                                    Overland and St. Louis,
                                                                    Missouri


(2)                            Hotel                                Petoskey and                   Ownership of 35% interest
                               - 2 locations                        Alpena, Michigan               in land and buildings (1)

PEERLESS CHAIN                 Manufacturing                        Winona,                        Ownership of land
COMPANY                        Facility                             Minnesota                      and building


HARCOURT GENERAL               Movie Theatre                        Burnsville,                    Ownership of land
CORPORATION                                                         Minnesota                      and building (1)
</TABLE>

                                      -4-
<PAGE>   6
<TABLE>
<CAPTION>
   LEASE                                                                                           TYPE OF OWNERSHIP
  OBLIGOR                      TYPE OF PROPERTY                     LOCATION                          INTEREST
  -------                      ----------------                     --------                          --------
<S>                           <C>                                  <C>                            <C>
WAL-MART STORES,               Retail/Warehouse                     West Mifflin,                  Ownership of land
INC.                           Facility                             Pennsylvania                   and building (1)




KINNEY SHOE                    Warehouse and                        Fort Lauderdale,               Ownership of land
CORPORATION/                   Office Facility                      Florida                        and building (1)
ARMEL, INC.


AP PARTS                       Manufacturing                        Toledo, Ohio;                  Ownership of land
INTERNATIONAL                  Facility -                           Pinconning,                    and buildings (1)
INC.                           2 locations                          Michigan


ANTHONY'S                      Manufacturing/                       San Fernando,                  Ownership of land
MANUFACTURING                  Warehouse and                        California                     and buildings
COMPANY, INC.                  Corporate
                               Headquarters
                               Facilities -
                               4 locations


LIVHO, INC.                    Hotel                                Livonia, Michigan              Ownership of 34.4828%
                                                                                                   interest in land
                                                                                                   and building (1)


WINN DIXIE STORES,             Supermarket                          Panama City,                   Ownership of land
INC.                                                                Florida                        and building
</TABLE>

(1) These properties are encumbered by mortgage notes payable.
(2) These properties are operated with affiliates.

                                      -5-
<PAGE>   7
                  The material terms of Registrant's leases with its significant
tenants are summarized in the following table:

<TABLE>
<CAPTION>
                    Partnership's
                       Share                      Current      Lease
Lease                of Current       Square      Rent Per   Expiration    Renewal   Ownership         Terms of
Obligor             Annual Rents      Footage      Sq.Ft.    (Mo/Year)      Terms    Interest          Purchase Option
-------             ------------      -------      ------    ---------      -----    --------          ---------------
<S>                 <C>             <C>           <C>        <C>           <C>       <C>               <C>
Thermadyne           $2,234,191       325,800      $6.86       02/10         YES       100%            The greater of
Holdings                                                                                               fair market
Corp.                                                                                                  value of the
                                                                                                       property and
                                                                                                       $11,700,000
AP Parts              1,836,534     1,380,588       1.33       12/07         YES       100             The greater of
International,-                                                                                        fair market value
Inc. (2)                                                                                               of the property
                                                                                                       and $11,700,000
                                                                                                       plus any mortgage
                                                                                                       prepayment
                                                                                                       premium.
AutoZone,             1,483,958       185,990       7.11       01/11         YES       100             N/A
Inc. (2)                                                       02/11

Anthony's               876,000       182,845       4.79       02/02         YES       100             The greater of
Manufact-                                                                                              fair market
uring                                                                                                  value and
Company,                                                                                               $11,500,000 plus
Inc.                                                                                                   any mortgage
                                                                                                       prepayment
                                                                                                       premium.
Peerless              1,463,425       357,760       4.09       06/11         YES       100             The greater of
Chain                                                                                                  fair market value
Company                                                                                                and $7,820,000 and
                                                                                                       any mortgage
                                                                                                       prepayment
                                                                                                       premium.
Wal-Mart                891,129       118,125       7.54       01/07         YES       100             The greater of
Stores, Inc.                                                                                           fair market value
(2)                                                                                                    plus 2% and $6,275,000
                                                                                                       plus any mortgage
                                                                                                       prepayment
                                                                                                       premium.
Kinney Shoe             964,941        80,450      11.99       09/01         YES       100             The greater of
Corp./Armel,                                                                                           fair market value
Inc.                                                                                                   and $5,260,350 plus
                                                                                                       any mortgage
                                                                                                       prepayment
                                                                                                       premium.
Yale
Security, Inc.          399,000       130,000       3.07       03/11                   100             N/A
</TABLE>

                                      -6-
<PAGE>   8
<TABLE>
<CAPTION>
                    Partnership's
                       Share                      Current      Lease
Lease                of Current       Square      Rent Per   Expiration    Renewal   Ownership         Terms of
Obligor             Annual Rents      Footage      Sq.Ft.    (Mo/Year)      Terms    Interest          Purchase Option
-------             ------------      -------      ------    ---------      -----    --------          ---------------
<S>                 <C>              <C>          <C>        <C>           <C>       <C>               <C>
Motorola,           $   540,000        46,350     $11.65       12/00         YES       100%             Fair market value
Inc. (2)

Harcourt                467,500        31,837      14.68       07/06         YES       100                    N/A
General
Corporation (2)

Lockheed                310,000        45,804       6.77       04/01         YES       100              Fair market value
Martin
Corporation

Winn-Dixie              170,399        34,710       4.91       03/08         YES       100                    N/A
Stores, Inc.
</TABLE>

(1) Includes original cost of investment and net increases or decreases to net
investment subsequent to purchase.
(2) These properties are encumbered by limited recourse mortgages.

                                      -7-
<PAGE>   9
Item 3.      Legal Proceedings.

                  As of the date hereof, Registrant is not a party to any
material pending legal proceedings.



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

                  Information with respect to matters submitted to a vote of
security holders during the fourth quarter of the year ended December 31, 1997
is hereby incorporated by reference to Page 27 of Registrant's Annual Report
contained in Appendix A.


                                     PART II


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

                  Information with respect to Registrant's common equity is
hereby incorporated by reference to page 27 of Registrant's Annual Report
contained in Appendix A.


Item 6.      Selected Financial Data.

                  Selected Financial Data are hereby incorporated by reference
to page 1 of Registrant's Annual Report contained in Appendix A.


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

                  Management's Discussion and Analysis are hereby incorporated
by reference to pages 2 to 4 of Registrant's Annual Report contained in Appendix
A.


Item 8.      Consolidated Financial Statements and Supplementary Data.

                  The following consolidated financial statements and
supplementary data are hereby incorporated by reference to pages 5 to 20 of
Registrant's Annual Report contained in Appendix A:

         (i)      Report of Independent Accountants.
         (ii)     Consolidated Balance Sheets as of December 31, 1996 and 1997.
         (iii)    Consolidated Statements of Income for the years ended December
                  31, 1995, 1996 and 1997. 
         (iv)     Consolidated Statements of Partners' Capital for the years
                  ended December 31, 1995, 1996 and 1997.
         (v)      Consolidated Statements of Cash Flows for the years ended
                  December 31, 1995, 1996 and 1997.
         (vi)     Notes to Consolidated Financial Statements.


Item 9.      Disagreements on Accounting and Financial Disclosure.

                  NONE

                                      -8-
<PAGE>   10
                                    PART III


Item 10.     Directors and Executive Officers of the Registrant.

                  Registrant has no officers or directors. The directors and
executive officers of the General Partner, Carey Diversified LLC, are as
follows:

<TABLE>
<CAPTION>
                                                                                                   Has Served as a
                                                                                                   Director and/or
    Name                             Age           Positions Held                                  Officer Since (1)
    ----                             ---           --------------                                  -----------------
<S>                                  <C>         <C>                                               <C>
Francis J. Carey                      72         Chairman of the Board                                   1/98
                                                 Chief Executive Officer
                                                 Director

William Polk Carey                    67         Chairman of the Executive Committee                     1/98
                                                 Director

Steven M. Berzin                      47         Vice Chairman                                           1/98
                                                 Chief Legal Officer
                                                 Director

Gordon F. DuGan                       31         President                                               1/98
                                                 Chief Acquisitions Officer
                                                 Director

Donald E. Nickelson                   64         Chairman of the Audit Committee                         1/98
                                                 Director

Eberhard Faber, IV                    61         Director                                                1/98

Barclay G. Jones III                  37         Director                                                1/98

Lawrence R. Klein                     77         Director                                                1/98

Charles C. Townsend, Jr.              69         Director                                                1/98

Reginald Winssinger                   55         Director                                                1/98

Claude Fernandez                      45         Executive Vice President                                1/98
                                                 - Financial Operations

John J. Park                          33         Executive Vice President                                1/98
                                                 Chief Financial Officer
                                                 Treasurer

H. Augustus Carey                     40         Senior Vice President                                   1/98
                                                 Secretary

Samantha K. Garbus                    29         Vice President - Asset Management                       1/98

Susan C. Hyde                         29         Vice President - Shareholder Services                   1/98

Robert C. Kehoe                       37         Vice President - Accounting                             1/98

Edward V. LaPuma                      24         Vice President - Acquisitions                           1/98
</TABLE>

                  William Polk Carey and Francis J. Carey are brothers. H.
Augustus Carey is the nephew of William Polk Carey and the son of Francis J.
Carey.

                                      -9-
<PAGE>   11
                  A description of the business experience of each officer and
director of the Corporate General Partner is set forth below:

                  Francis J. Carey, Chairman of the Board, Chief Executive
Officer and Director, was elected President and a Managing Director of W. P.
Carey & Co. ("W.P. Carey") in April 1987, having served as a Director since its
founding in 1973. Prior to joining the firm full-time, he was a senior partner
in Philadelphia, head of the Real Estate Department nationally and a member of
the executive committee of the Pittsburgh based firm of Reed Smith Shaw &
McClay, counsel for Registrant, the General Partners, the CPA(R) Partnerships,
W.P. Carey and some of its affiliates. He served as a member of the Executive
Committee and Board of Managers of the Western Savings Bank of Philadelphia from
1972 until its takeover by another bank in 1982 and is former chairman of the
Real Property, Probate and Trust Section of the Pennsylvania Bar Association.
Mr. Carey served as a member of the Board of Overseers of the School of Arts and
Sciences of the University of Pennsylvania from 1983 through 1990. He has also
served as a member of the Board of Trustees of the Investment Program
Association since 1990 and on the Business Advisory Council of the Business
Council for the United Nations since 1994. He holds A.B. and J.D.
degrees from the University of Pennsylvania.

                  Gordon F. DuGan, President, Chief Acquisitions Officer and
Director, was elected Executive Vice President and a Managing Director of W.P.
Carey in June 1997. Mr. Dugan rejoined W.P. Carey as Deputy Head of Acquisitions
in February 1997. Mr. Dugan was until September 1995 a Senior Vice President in
the Acquisitions Department of W.P. Carey. Mr. Dugan joined W.P. Carey as
Assistant to the Chairman in May 1988, after graduating from the Wharton School
at the University of Pennsylvania where he concentrated in Finance. From October
1995 until February 1997, Mr. Dugan was Chief Financial Officer of
Superconducting Core Technologies, Inc., a Colorado-based wireless
communications equipment manufacturer.

                  Steven M. Berzin, Vice Chairman, Chief Legal Officer and
Director, was elected Executive Vice President, Chief Financial Officer, Chief
Legal Officer and a Managing Director of W.P. Carey in July 1997. From 1993 to
1997, Mr. Berzin was Vice President - Business Development of General Electric
Capital Corporation in the office of the Executive Vice President and, more
recently, in the office of the President, where he was responsible for business
development activities and acquisitions. From 1985 to 1992, Mr. Berzin held
various positions with Financial Guaranty Insurance Company, the last two being
Managing Director, Corporate Development and Senior Vice President and Chief
Financial Officer. Mr. Berzin associated with the law firm of Cravath, Swaine &
Moore from 1978 to 1985 and from 1976 to 1977, he served as law clerk to the
Honorable Anthony M. Kennedy, then a United States Circuit Judge. Mr. Berzin
received a B.A. and M.A. in Applied Mathematics from Harvard University, a B.A.
in Jurisprudence and an M.A. from Oxford University and a J.D. from Harvard Law
School.

                  Donald E. Nickelson, Chairman of the Audit Committee and
Director, serves as Chairman of the Board and a Director of Greenfield
Industries, Inc. and a Director of Allied Healthcare Products, Inc. Mr.
Nickelson is Vice-Chairman and a Director of the Harbor Group, a leverage
buy-out firm. He is also a Director of Sugen Corporation and D.T.I. Industries,
Inc. and a Trustee of mainstay Mutual Fund Group. From 1986 to 1988, Mr.
Nickelson was President of PaineWebber Incorporated; from 1988 to 1990, he was
President of the PaineWebber Group; and from 1980 to 1993 a Director. Prior to
1986, Mr. Nickelson served in various capacities with affiliates of PaineWebber
Incorporated and its predecessor firm. From 1988 to 1989, Mr. Nickelson was a
Director of a diverse group of corporations in the manufacturing, service and
retail sectors, including Wyndham Baking Co., Inc., Hoover Group, Inc., Peebles,
Inc. and Motor Wheel Corporation. He is a former Chairman of National Car
Rentals, inc. Mr. Nickelson is also a former Director of the Chicago Board
Options Exchange and is the former Chairman of the Pacific Stock Exchange.

                  William Polk Carey, Chairman of the Executive Committee and
Director, has been active in lease financing since 1959 and a specialist in net
leasing of corporate real estate property since 1964. Before founding W.P. Carey
in 1973, he served as Chairman of the Executive Committee of Hubbard, Westervelt
& Mottelay (now Merrill Lynch Hubbard), head of Real Estate and Equipment
Financing at Loeb Rhoades & Co. (now Lehman Brothers), head of Real Estate and
Private Placements, Director of Corporate Finance and Vice Chairman of the
Investment Banking Board of duPont Glore Forgan Inc. A graduate of the
University of Pennsylvania's Wharton School of Finance and Commerce, Mr. Carey
is a Governor of the National Association of Real Estate Investment Trusts
(NAREIT). He also serves on the boards of The Johns Hopkins University, The
James A. Baker III Institute for Public Policy at Rice University, Templeton
College of

                                      -10-
<PAGE>   12
Oxford University and other educational and philanthropic institutions. He
founded the Visiting Committee to the Economics Department of the University of
Pennsylvania and co-founded with Dr. Lawrence R. Klein the Economics Research
Institute at that University. Mr. Carey is also a Director of CPA(R):10, CIP(TM)
and CPA(R):12.

                  Eberhard Faber IV, is currently a Director of PNC Bank, N.A.,
Chairman of the Board and Director of the newspaper Citizens Voice, a Director
of Ertley's Motorworld, Inc., Vice-Chairman of the Board of King's College and a
Director of Geisinger Wyoming Valley Hospital. Mr. Faber served as Chairman and
Chief Executive Officer of Eberhard Faber, Inc., from 1973 to 1987. Mr. Faber
also served as the Director of the Philadelphia Federal Reserve Bank, including
service as the Chairman of its Budget and Operations Committee from 1980 to
1986. Mr. Faber has served on the boards of several companies, including First
Eastern bank from 1980 to 1993.

                  Barclay G. Jones III, Executive Vice President, Managing
Director, and head of the Investment Department. Mr. Jones joined W.P. Carey as
Assistant to the President in July 1982 after his graduation from the Wharton
School of the University of Pennsylvania, where he majored in Finance and
Economics. He was elected to the Board of Directors of W.P. Carey in April 1992.
Mr. Jones is also a Director of the Wharton Business School Club of New York.

                  Lawrence R. Klein, Director, is Benjamin Franklin Professor of
Economics Emeritus at the University of Pennsylvania, having joined the faculty
of Economics and the Wharton School in 1958. He holds earned degrees from the
University of California at Berkeley and Massachusetts Institute of Technology
and has been awarded the Nobel Prize in Economics as well as over 20 honorary
degrees. Founder of Wharton Econometric Forecasting Associates, Inc., Dr. Klein
has been counselor to various corporations, governments, and government agencies
including the Federal Reserve Board and the President's Council of Economic
Advisers.

                  Charles C. Townsend, Jr., Director, currently is an Advisory
Director of Morgan Stanley & Co., having held such position since 1979. Mr.
Townsend was a Partner and a Managing Director of Morgan Stanley & Co. from 1963
to 1978 and served as Chairman of Morgan Stanley Realty Corporation from 1977 to
1982. Mr. Townsend holds a B.S.E.E. from Princeton University and an M.B.A. from
Harvard University. Mr. Townsend serves as Director of CIP(TM) and CPA(R)14.

                  Reginald Winssinger, Director, is currently Chairman of the
Board and Director of Horizon Real Estate Group, Inc. Mr. Winssinger has managed
portfolios of diversified real estate assets exceeding $500 million throughout
the United States for more than 20 years. Mr. Winssinger is active in the
planning and development of major land parcels and has developed 20 commercial
properties. Mr. Winssinger is a native of Belgium with more than 25 years of
real estate practice, including 10 years based in Brussels, overseeing
appraisals, construction and management. Mr. Winssinger holds a B.S. in
Geography from the University of California at berkeley and received a degree in
Appraisal and Survey in Belgium. Mr. Winssinger presently serves as Honorary
Belgium Consul to the State of Arizona, a position he has held since 1991.

                  Claude Fernandez, Executive Vice President - Financial
Operations, joined W.P. Carey in 1983. Previously associated with Coldwell
Banker, Inc. for two years and with Arthur Andersen & Co., he is a Certified
Public Accountant. Mr. Fernandez received a B.S. degree in accounting from New
York University in 1975 and his M.B.A. in Finance from Columbia University
Graduate School of Business in 1981.

                  John J. Park, Executive Vice President, Chief Financial
Officer and Treasurer, joined W.P. Carey as an Investment Analyst in December
1987. Mr. Park received his undergraduate degree from Massachusetts Institute of
Technology and his M.B.A. in Finance from New York University.

                  H. Augustus Carey, Senior Vice President and Secretary,
returned to W.P. Carey in 1988 and is President of W.P. Carey's broker-dealer
subsidiary. Mr. Carey previously worked for W.P. Carey from 1979 to 1981 as
Assistant to the President. Prior to rejoining W.P. Carey, Mr. Carey served as a
loan officer of the North American Department of Kleinwort Benson Limited in
London, England. He received an A.B. from Amherst College in 1979 and an M.Phil.
in Management Studies from Oxford University in 1984. Mr. Carey is a trustee of
the Oxford Management Centre Associates Council.

                                      -11-
<PAGE>   13
                  Samantha K Garbus, Vice President - Director of Asset
Management, became a Second Vice President of W.P. Carey in April 1995 and a
Vice President in April 1997. Ms. Garbus joined W. P. Carey as a Property
Management Associate in January 1992. Ms. Garbus received a B.A. in History from
Brown University in May 1990 and an M.B.A. from the Stern School of New York
University in January 1997.

                  Susan C. Hyde, Vice President - Director of Shareholder
Services, joined W. P. Carey in 1990, became a Second Vice President in April
1995 and a Vice President in April 1997. Ms. Hyde graduated from Villanova
University in 1990 where she received a B.S. in Business Administration with a
concentration in Marketing and a B.A. in English.

                  Robert C. Kehoe, Vice President - Accounting, joined W.P.
Carey as a Senior Accountant in 1987. Mr. Kehoe became a Second Vice President
of W. P. Carey in April 1992 and a Vice President in July 1997. Prior to joining
the company, Mr. Kehoe was associated with Deloitte, Haskins & Sells for three
years and was Manager of Financial Controls at CBS Educational and Professional
Publishing for two years. Mr. Kehoe received a B.S. in Accounting from Manhattan
College in 1982 and an M.B.A. in Finance from Pace University in 1993.

                  Edward V. LaPuma, Vice President - Acquisitions, joined W. P.
Carey as an Assistant to the Chairman in July 1995, became a Second Vice
President in July 1996 and a Vice President in April 1997. A graduate of the
University of Pennsylvania, Mr. LaPuma received a B.A. in Global Economic
Strategies from The College of Arts and Sciences and a B.S. in Economics with a
Concentration in Finance from the Wharton School.


Item 11.     Executive Compensation.

                  Until January 1, 1998, under the Amended Agreement of Limited
Partnership of Registrant (the "Agreement"), 5% of Distributable Cash From
Operations, as defined, was payable to the former Corporate General Partner and
1% of Distributable Cash From Operations was payable to the former Individual
General Partner. The former Corporate General Partner and the former Individual
General Partner received $232,633 and $49,522, respectively, from the Registrant
as their share of Distributable Cash From Operations during the year ended
December 31, 1997. As owner of 100 Limited Partnership Units, the former
Corporate General Partner received cash distributions of $14,021 ($140.21 per
Unit) during the year ended December 31, 1997. See Item 6 for the net income
allocated to the General Partners under the Agreement. Registrant is not
required to pay, and has not paid, any remuneration to the officers or directors
of the former Corporate General Partner, W.P. Carey or any other affiliate of
Registrant during the year ended December 31, 1997.

                  In the future, a special limited partner, Carey Management LLC
will receive 5% of Distributable Cash From Operations, William Polk Carey will
receive, as a special limited partner, 1% of Distributable Cash From Operations
and each General Partner will continue to be allocated the same percentage of
the profits and losses of Registrant as had been allocated in the past. For a
description of the subordinated interest of the former Corporate General Partner
and the former Individual General Partner in Cash From Sales and Cash From
Financings, reference is made to the materials contained in the Prospectus under
the heading MANAGEMENT COMPENSATION.


Item 12.     Security Ownership of Certain Beneficial Owners and
             Management.

                  As of December 31, 1997, no person owned of record, or was
known by Registrant to own beneficially more than 5% of Registrant.

                  The following table sets forth as of March 25, 1998 certain
information as to the ownership by directors and executive officers of
securities of Registrant:

                                      -12-
<PAGE>   14
<TABLE>
<CAPTION>
                                                                    Number of Listed
                                    Name of                       Shares and Nature of              Percent
Title of Class                  Beneficial Owner                  Beneficial Ownership              of Class
--------------                  ----------------                  --------------------              --------
<S>                             <C>                               <C>                               <C>
Listed Shares                   William Polk Carey
                                Francis J. Carey
                                Steven M. Berzin
                                Gordon F. DuGan
                                Donald E. Nickelson
                                Eberhard Faber IV
                                Barclay G. Jones III
                                Lawrence R. Klein
                                Charles C. Townsend, Jr.
                                Reginald Winssinger
                                John J. Park
                                Claude Fernandez
                                H. Augustus Carey
                                Samantha K. Garbus
                                Susan C. Hyde
                                Robert C. Kehoe
                                Edward V. LaPuma

All executive officers
and directors as a
group (17 persons)
</TABLE>



                  In connection with Consolidation of Registrant into Carey
Diversified LLC, effective January 1, 1998, no officer or director, other than
William Polk Carey, owns a direct interest in Registrant. William Polk Carey
owns a 1% interest in Registrant as a special limited partner and has a
controlling interest in Carey Management LLC which owns a 5% interest in
Registrant as a special limited partner. Effective January 1, 1998, Carey
Diversified owns an approximate 93% interest in Registrant.

                  There exists no arrangement, known to Registrant, the
operation of which may at a subsequent date result in a change of control of
Registrant.



Item 13.     Certain Relationships and Related
Transactions.

                  For a description of transactions and business relationships
between Registrant and its affiliates and their directors and officers, see
Notes 2 and 3 to the Consolidated Financial Statements contained in Item 8.
Michael B. Pollack, Senior Vice President and Secretary, until July 1997, of the
Corporate General Partner, is a partner of Reed Smith Shaw & McClay which is
engaged to perform legal services for Registrant.

                  No officer or director of the Corporate General Partner, W.P.
Carey or any other affiliate of Registrant or any member of the immediate family
or associated organization of any such officer or director was indebted to
Registrant at any time since the beginning of Registrant's last fiscal year.

                                      -13-
<PAGE>   15
                                     PART IV




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


    (a)           1.       Financial Statements:

                           The following financial statements are filed as a
part of this Report:

    Report of Independent Accountants.

    Consolidated Balance Sheets, December 31, 1996 and 1997.

    Consolidated Statements of Income for the years ended December 31, 1995,
1996 and 1997.

    Consolidated Statements of Partners' Capital for the years ended December
31, 1995, 1996 and 1997.

    Consolidated Statements of Cash Flows for the years ended December 31, 1995,
1996 and 1997.

    Notes to Consolidated Financial Statements.


    The financial statements are hereby incorporated by reference to pages 5 to
    20 of Registrant's Annual Report contained in Appendix A.





(a)               2.       Financial Statement Schedule:

                           The following schedule is filed as a part of this
Report:

    Schedule III -Real Estate and Accumulated Depreciation as of December 31,
1997.

    Notes to Schedule III.



    Schedule III and notes thereto are hereby incorporated by reference to pages
    21 to 24 of Registrant's Annual Report contained in Appendix A.




                  Financial Statement Schedules other than those listed above
are omitted because the required information is given in the Consolidated
Financial Statements or the Notes thereto, or because the conditions requiring
their filing do not exist.

                                      -14-
<PAGE>   16
    (a)    3.     Exhibits:

                  The following exhibits are filed as part of this Report.
Documents other than those designated as being filed herewith are incorporated
herein by reference.


<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     3.1       Amended agreement of Limited Partnership                                 Exhibit to Registration
               of Registrant dated as of November 26,                                   Statement (Form S-11)
               1984.                                                                    No. 2-92393

     4.1       $7,000,000 Promissory Note Secured by                                    Exhibit 4.1 to Form 8-K
               Deed of Trust dated February 15, 1985                                    filed February 28, 1985
               from Registrant to E. F. Hutton Life
               Insurance Company("Hutton Life").

     4.2       Deed of Trust, Assignment of Rents and                                   Exhibit 4.2 to Form 8-K
               Security Agreement dated February 14,                                    filed February 28, 1985
               1985 from Registrant to Hutton Life.

     4.3       Collateral Assignment of Lease dated                                     Exhibit 4.3 to Form 8-K
               February 14, 1985 from Registrant to                                     filed February 28, 1985
               Hutton Life.

     4.4       Seller's/Lessee's Certificate dated                                      Filed as Exhibit 4.1
               December 23, 1985 from Gould Inc. to                                     to Registrant's
               Registrant.                                                              Form 8-K dated
                                                                                        January 6, 1986

     4.5       Assignment of Rights in Purchase                                         Filed as Exhibit 4.2
               Agreement dated November 21, 1985                                        to Registrant's
               between JB Properties, as Assignor,                                      Form 8-K dated
               and Registrant as Assignee.                                              January 6, 1986

     4.6       Seller/Lessee's Certificate dated                                        Filed as Exhibit 4.1
               January 17, 1986 from Malone & Hyde                                      to Registrant's
               to Registrant.                                                           Form 8-K dated
                                                                                        January 30, 1986

     4.9       Mortgage, Assignment of Leases and                                       Filed as Exhibit 4.3
               Security Agreement dated January 30, 1986 between                        to Registrant's
               CPA(R):5, as Mortgagor, and Lloyds and Texas                             Form 8-K dated
               Commerce, collectively as Mortgagee, on Broomall,                        March 13, 1986
               PA property.

     4.10      Modification Agreement dated March 1, 1986 in                            Filed as Exhibit 4.4
               connection with the Mortgage, Assignment of                              to Registrant's
               Leases and Security Agreement dated                                      Form 8-K dated
               January 30, 1986 on Broomall, PA property.                               March 13, 1986

     4.11      Mortgage Assignment of Leases and                                        Filed as Exhibit 4.5
               Security Agreement dated January 30, 1986 between                        to Registrant's
               CPA(R):5, as Mortgagor, and Lloyds and Texas                             Form 8-K dated
               Commerce, collectively as Mortgagee, on Cuyahoga                         March 13, 1986
               Falls, OH property.
</TABLE>

                                      -15-
<PAGE>   17
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.12      Modification Agreement dated March 1, 1986 in                            Filed as Exhibit 4.6
               connection with the Mortgage, Assignment of                              to Registrant's
               Leases and Security Agreement dated                                      on Form 8-K dated
               January 30, 1986 on Cuyahoga Falls, OH property.                         March 13, 1986

     4.13      Deed of Trust, Assignment of Leases and                                  Filed as Exhibit 4.7
               Security Agreement dated January 30, 1986,                               to Registrant's
               between CPA(R):5, as Grantor, and Lawyers                                Form 8-K dated
               Title Insurance, as Trustee on Duffield, VA property.                    March 13, 1986

     4.14      Deed of Trust Modification Agreement dated March 1,                      Filed as Exhibit 4.8
               1986 in connection with the Deed of Trust,                               to Registrant's
               Assignment of Leases and Security Agreement dated                        Form 8-K dated
               January 30, 1986 on Duffield, VA property.                               March 13, 1986

     4.23      $3,700,000 Promissory Note dated January 30, 1986                        Filed as Exhibit 4.17
               from CPA(R):5, as Payee, to Registrant and                               to Registrant's Form 8-K
               CPA(R):5, collectively 10.1 to 10.6 as Payor.                            dated March 13, 1986

     4.24      $6,000,000 Note dated April 30, 1986                                     Filed as Exhibit 4.1
               from First Southern Federal Savings                                      to Registrant's Form
               and Loan Association ("First Southern"), as                              8-K dated May 15, 1986
               Lender to the Registrant, as Borrower.

     4.25      Mortgage and Security Agreement dated as                                 Filed as Exhibit 4.2
               of April 30, 1986 between Registrant, as                                 to Registrant's Form
               Mortgagor, and First Southern, as Mortgagee,                             8-K dated May 15, 1986
               (Bessemer and Birmingham, AL Properties).

     4.26      Mortgage and Security Agreement dated as of                              Filed as Exhibit 4.3
               April 30, 1986 between Registrant and First                              to Registrant's Form
               Southern (Chickasaw and Mobile, AL Properties).                          8-K dated May 15, 1986

     4.27      Mortgage and Security Agreement dated as of                              Filed as Exhibit 4.4
               April 30, 1986 between Registrant and First                              to Registrant's Form
               Southern (Decatur, AL Property).                                         8-K dated May 15, 1986

     4.28      Mortgage and Security Agreement dated as of                              Filed as Exhibit 4.5
               April 30, 1986 between Registrant and First                              to Registrant's Form
               Southern (Montgomery, AL Property).                                      8-K dated May 15, 1986

     4.29      Mortgage and Security Agreement dated as of                              Filed as Exhibit 4.6
               April 30, 1986 between Registrant and First                              to Registrant's Form
               Southern (Phenix, AL Property).                                          8-K dated May 15, 1986

     4.30      Deed to Secure Debt dated as of April 30, 1986                           Filed as Exhibit 4.7
               between Registrant, as Borrower, and First                               to Registrant's Form
               Southern, as Lender (Columbus, GA Property).                             8-K dated May 15, 1986

     4.31      Deed to Secure Debt dated as of April 30,                                Filed as Exhibit 4.8
               1986 between Registrant and First Southern                               to Registrant's Form
               (Dalton, GA Property).                                                   8-K dated May 15, 1986
</TABLE>

                                      -16-
<PAGE>   18
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.32      Mortgage and Security Agreement dated as of                              Filed as Exhibit 4.9
               April 30, 1986 between Registrant, as                                    to Registrant's Form
               Mortgagor, and First Southern, as Mortgagee                              8-K dated May 15, 1986
               (Alton, Collinsville, and Wood River, IL Properties).

     4.33      Mortgage and Security Agreement dated as of                              Filed as Exhibit 4.10
               April 30, 1986 between Registrant and First                              to Registrant's Form
               Southern (Belleville, IL Property).                                      8-K dated May 15, 1986

     4.34      Mortgage dated as of April 30, 1986 between                              Filed as Exhibit 4.11
               Registrant, as Mortgagor, and First Southern,                            to Registrant's Form
               as Mortgagee (Baton Rouge and West Monroe                                8-K dated May 15, 1986
               Properties).

     4.35      Mortgage dated as of April 30, 1986 between                              Filed as Exhibit 4.12
               Registrant and First Southern (two Lake                                  to Registrant's Form
               Charles Properties).                                                     8-K dated May 15, 1986

     4.36      Missouri Deed of Trust and Security Agreement                            Filed as Exhibit 4.13
               dated as of April 30, 1986 by Registrant, as                             to Registrant's Form
               Borrower, Michael G. O'Flaherty, as Trustee,                             8-K dated May 15, 1986
               and First Southern, as Lender (Breckenridge,
               Maplewood and Overland, MO Properties).

     4.37      Missouri Deed of Trust and Security Agreement                            Filed as Exhibit 4.14
               dated as of April 30, 1986 by Registrant,                                to Registrant's Form
               Michael G. O'Flaherty and First Southern                                 8-K dated May 15, 1986
               (St. Louis, MO Property).

     4.38      North Carolina Deed of Trust dated as of                                 Filed as Exhibit 4.15
               April 30, 1986 by Registrant, as Grantor,                                to Registrant's Form
               Harold D. Parkman, as Trustee, and First                                 8-K dated May 15, 1986
               Southern, as Note Holder (Charlotte, NC
               Property).

     4.39      North Carolina Deed of Trust dated as of April                           Filed as Exhibit 4.16
               30, 1986 by Registrant, Harold D. Parkman,                               to Registrant's Form
               and First Southern (Gastonia, NC Property).                              8-K dated May 15, 1986

     4.40      North Carolina Deed of Trust dated as of April                           Filed as Exhibit 4.17
               30, 1986 by Registrant, Harold D. Parkman,                               to Registrant's Form
               and First Southern (Lenoir, NC Property).                                8-K dated May 15, 1986

     4.41      North Carolina Deed of Trust dated as of April                           Filed as Exhibit 4.18
               30, 1986 by Registrant, Harold D. Parkman                                to Registrant's Form
               and First Southern (Statesville, NC Property).                           8-K dated May 15, 1986

     4.42      Deed of Trust, Security Agreement and Assignment                         Filed as Exhibit 4.19
               of Rents dated as of April 30, 1986 by Registrant,                       to Registrant's Form
               as Grantor, Charles Odom, as Trustee, and                                8-K dated May 15, 1986
               First Southern, as beneficiary (Austin, TX Property).

     4.43      Deed of Trust, Security Agreement and Assignment of Rents                Filed as Exhibit 4.20
               dated as of April 30, 1986 by Registrant, Charles Odom                   to Registrant's Form
               and First Southern (two Corpus Christi, TX Properties).                  8-K dated May 15, 1986
</TABLE>

                                      -17-
<PAGE>   19
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.44      Deed of Trust, Security Agreement and Assignment of Rents                Filed as Exhibit 4.21
               dated as of April 30, 1986 by Registrant, Charles Odom and               to Registrant's Form
               First Southern (McAllen and Weslaco, TX Properties).                     8-K dated May 15, 1986

     4.45      Deed of Trust, Security Agreement and Assignment of Rents                Filed as Exhibit 4.22
               dated as of April 30, 1986 by Registrant, Charles Odom and               to Registrant's Form
               First Southern (Nederland and Port Arthur, TX Properties).               8-K dated May 15, 1986

     4.46      Deed of Trust, Security Agreement and Assignment of Rents                Filed as Exhibit 4.23
               dated as of April 30, 1986 by Registrant, Charles Odom                   to Registrant's Form
               and First Southern (San Antonio, TX Property).                           8-K dated May 15, 1986

     4.47      Deed of Trust, Security Agreement and Assignment of                      Filed as Exhibit 4.24
               Rents dated as of April 30, 1986 by Registrant, Charles                  to Registrant's Form
               Odom and First Southern (Victoria, TX Property).                         8-K dated May 15, 1986

     4.48      Deed of Trust, Security Agreement and Assignment of                      Filed as Exhibit 4.25
               Rents dated as of April 30, 1986 by Registrant, Charles                  to Registrant's Form
               Odom and First Southern (Waco, TX Property).                             8-K dated May 15, 1986

     4.49      Deed of Trust, Security Agreement and Assignment of Rents                Filed as Exhibit 4.26
               dated as of April 30, 1986 by Registrant, Charles                        to Registrant's Form
               Odom and First Southern (West Orange, TX Property).                      8-K dated May 15, 1986

     4.50      Assignment of Leases and Rents dated as of April 30,                     Filed as Exhibit 4.27
               1986 from Registrant, as Assignor, to First Southern,                    to Registrant's Form
               as Assignee (Bessemer and Birmingham, AL Properties).                    8-K dated May 15, 1986

     4.51      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.28
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Chickasaw and Mobile, AL Properties).                          8-K dated May 15, 1986

     4.52      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.29
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Decatur, AL Property).                                         8-K dated May 15, 1986

     4.53      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.30
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Montgomery, AL Property).                                      8-K dated May 15, 1986

     4.54      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.31
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Phenix, AL Property).                                          8-K dated May 15, 1986

     4.55      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.32
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Columbus, GA Property).                                        8-K dated May 15, 1986

     4.56      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.33
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Dalton, GA Property).                                          8-K dated May 15, 1986

     4.57      Assignment of Leases and Rents dated as of April 30, 1986                Filed as Exhibit 4.34
               from Registrant to First Southern (Alton, Collinsville                   to Registrant's Form
               and Wood River, IL Properties).                                          8-K dated May 15, 1986
</TABLE>

                                      -18-
<PAGE>   20
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.58      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.35
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Belleville, IL Property).                                      8-K dated May 15, 1986

     4.59      Notice of Assignment and Assignment of Leases                            Filed as Exhibit 4.36
               and Rents dated as of April 30, 1986 from                                to Registrant's Form
               Registrant to First Southern (Baton Rouge,                               8-K dated May 15, 1986
               LA Property).

     4.60      Notice of Assignment and Assignment of Leases                            Filed as Exhibit 4.37
               and Rents dated as of April 30, 1986 from                                to Registrant's Form
               Registrant to First Southern (two Lake                                   8-K dated May 15, 1986
               Charles, LA Properties).

     4.61      Notice of Assignment and Assignment of Leases                            Filed as Exhibit 4.38
               and Rents dated as of April 30, 1986 from                                to Registrant's Form
               Registrant to First Southern (West Monroe,                               8-K dated May 15, 1986
               LA Property).

     4.62      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.39
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Breckenridge, Maplewood and                                    8-K dated May 15, 1986
               Overland, MO Properties).

     4.63      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.40
               April 30. 1986 from Registrant to First                                  to Registrant's Form
               Southern (St. Louis, MO Property).                                       8-K dated May 15, 1986

     4.64      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.41
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Charlotte, NC Property).                                       8-K dated May 15, 1986

     4.65      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.42
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Gastonia, NC Property).                                        8-K dated May 15, 1986

     4.66      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.43
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Lenoir, NC Property).                                          8-K dated May 15, 1986

     4.67      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.44
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Statesville, NC Property).                                     8-K dated May 15, 1986

     4.68      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.45
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Austin, TX Property).                                          8-K dated May 15, 1986

     4.69      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.46
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (two Corpus Christi Properties).                                8-K dated May 15, 1986
</TABLE>

                                      -19-
<PAGE>   21
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.70      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.47
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (McAllen and Weslaco, TX Properties).                           8-K dated May 15, 1986

     4.71      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.48
               April 30, 1986 from Registrant to First Southern                         to Registrant's Form
               (Nederland and Port Arthur, TX Properties).                              8-K dated May 15, 1986

     4.72      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.49
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (San Antonio, TX Property).                                     8-K dated May 15, 1986

     4.73      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.50
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Victoria, TX Property).                                        8-K dated May 15, 1986

     4.74      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.51
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (Waco, TX Property).                                            8-K dated May 15, 1986

     4.75      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.52
               April 30, 1986 from Registrant to First                                  to Registrant's Form
               Southern (West Orange, TX Property).                                     8-K dated May 15, 1986

     4.76      Security Agreement dated as of April 30, 1986                            Filed as Exhibit 4.53
               between Registrant, as Borrower, and First                               to Registrant's Form
               Southern, as Lender.                                                     8-K dated May 15, 1986

     4.77      Master Loan Agreement dated as of April 30,                              Filed as Exhibit 4.54
               1986 between Registrant and First Southern.                              to Registrant's Form
                                                                                        8-K dated May 15, 1986

     4.78      Assignment of Lease from Jeffrey M. Browne                               Filed as Exhibit 4.1
               and Anne M. Browne, dba JB Properties, as                                to Registrant's Form
               Assignor to the Registrant, as Assignee.                                 8-K dated May 29, 1986

     4.89      Mortgage Note dated as of August 7, 1986                                 Filed as Exhibit 4.6
               from Registrant to Union National.                                       to Registrant's Form 8-K
                                                                                        dated August 21, 1986

     4.90      Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.7
               August 7, 1986 between Registrant, as                                    to Registrant's Form 8-K
               Assignor, and Union National, as Assignee.                               dated August 21, 1986

     4.91      Assignment of Rights in Contract of Sale                                 Filed as Exhibit 4.8
               dated as of July 31, 1986 between American                               to Registrant's Form 8-K
               Industrial Warehouse, Inc. and Registrant.                               dated August 21, 1986

     4.92      Agreement to Assign Contract of Sale dated                               Filed as Exhibit 4.9
               as of July 29, 1986 between American                                     to Registrant's Form 8-K
               Industrial Warehouses, Inc., as Vendor,                                  dated August 21, 1986
               and CPA(R):5, as Vendee.
</TABLE>

                                      -20-
<PAGE>   22
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.93      Bond Purchase Agreement, dated as of                                     Filed as Exhibit 4.1
               December 20, 1984, among Broward County, as                              to Registrant's Form 8-K
               Issuer, Armel, Inc. ("Armel"), as the                                    dated October 1, 1986
               Company, and NCNB National Bank of Florida ("NCNB"), as the
               Purchaser, relating to the Industrial Development Revenue Bond
               (the "Armel, Inc. Project").

     4.94      Mortgage and Security Agreement, dated as of                             Filed as Exhibit 4.2
               December 20, 1984, between Armel, as the                                 to Registrant's Form 8-K
               Mortgagor, and Broward County, as the                                    dated October 1, 1986
               Mortgagee.

     4.95      Assignment of Rights, dated as of December                               Filed as Exhibit 4.3
               20, 1984 between Broward County, as                                      to Registrant's Form 8-K
               Assignor, and NCNB, as Assignee.                                         dated October 1, 1986

     4.96      Installment Purchase Contract, dated as of                               Filed as Exhibit 4.4
               December 20, 1984, between Broward County,                               to Registrant's Form 8-K
               as Issuer, and Armel, as the Company,                                    dated October 1, 1986
               relating to the Armel, Inc. Project.

     4.97      Corporate Guaranty Agreement, dated as of                                Filed as Exhibit 4.5
               December 28, 1984 by Armel, as Guarantor,                                to Registrant's Form 8-K
               and the subsidiaries of Armel, as                                        dated October 1, 1986
               additional Guarantors, to NCNB, as the Bank,
               and any subsequent Bond owners, relating
               to the Armel, Inc. Project.

     4.98      Bond Put Agreement, dated as of December 20,                             Filed as Exhibit 4.6
               1984 from Armel, as Option or, to NCNB, as                                to Registrant's Form 8-K
               Optionee.                                                                dated October 1, 1986

     4.99      Letter, dated September 2, 1986, from NCNB,                              Filed as Exhibit 4.7
               as holder of the Mortgage and Security                                   to Registrant's Form 8-K
               Agreement dated as of December 20, 1984, to                              dated October 1, 1986
               Registrant, granting its consent to the purchase of the Armel
               Property by Registrant from Armel, and the leasing of the Armel
               Property from Registrant to Armel.

     4.100     Collateral Assignment of Leases, Rent and                                Filed as Exhibit 4.8
               Profits, made as of September 5, 1986, by                                to Registrant's Form 8-K
               and between Registrant, as Assignor, and                                 dated October 1, 1986
               NCNB, as Assignee.

     4.101     Certificate of Purchaser, dated September 5,                             Filed as Exhibit 4.9
               1986, from Registrant, as Purchaser, to                                  to Registrant's Form 8-K
               Armel, as Seller.                                                        dated October 1, 1986
</TABLE>

                                      -21-
<PAGE>   23
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.102     Assumption and Consent Agreement, dated as                               Filed as Exhibit 4.10
               of September 5, 1986 by and between                                      to Registrant's Form 8-K
               Registrant and Armel, collectively as the                                dated October 1, 1986
               Guarantors, with NCNB, as the Bondholder, and Broward County, as
               Issuer.

     4.103     $2,700,000 Promissory Note dated October 1,                              Filed as Exhibit 4.1
               1986 from the Registrant, as borrower, to                                to Registrant's Form 8-K
               New England Mutual Life Insurance Company                                dated October 15, 1986
               ("New England Mutual Life"), as Lender.

     4.104     Mortgage and Security Agreement dated as of                              Filed as Exhibit 4.2
               October 1, 1986 between the Registrant, as                               to Registrant's Form 8-K
               Borrower, and New England Mutual Life, as                                dated October 15, 1986
               Lender and Secured Party.

     4.105     Assignment of Leases and Rents dated as of                               Filed as Exhibit 4.3
               October 1, 1986 from Registrant, as Borrower,                            to Registrant's Form 8-K
               to New England Mutual Life, as Lender.                                   dated October 15, 1986

     4.106     $2,000,000 Promissory Note dated October 8,                              Filed as Exhibit 4.4
               1986 from the Registrant, as Borrower, to                                to Registrant's Form 8-K
               St. Paul Life Insurance Company ("St. Paul                               dated October 15, 1986
               Life"), as Lender.

     4.107     Mortgage, Security Agreement and Financing                               Filed as Exhibit 4.5
               Statement dated as of October 8, 1986 between                            to Registrant's Form 8-K
               the Registrant, as Mortgagor, and St. Paul                               dated October 15, 1986
               Life, as Mortgagee and Secured Party.

     4.108     Assignment of Rents and Leases dated as of                               Filed as Exhibit 4.6
               October 8, 1986 from the Registrant, as                                  to Registrant's Form 8-K
               Assignor, to St. Paul Life, as Assignee.                                 dated October 15, 1986

     4.109     $7,000,000 Non-Recourse Cognovit Term Note                               Filed as Exhibit 4.1
               dated December 23, 1986 from the Registrant,                             to Registrant's Form 8-K
               as Borrower, to The Toledo Trust Company                                 dated January 6, 1987
               ("Toledo Trust"), as Lender.

     4.110     Mortgage dated December 23, 1986 between                                 Filed as Exhibit 4.2
               the Registrant, as Borrower, and Toledo                                  to Registrant's Form 8-K
               Trust, as Lender, for Pinconning, Michigan                               dated January 6, 1987
               property.

     4.111     Assignment of Leases and Rents dated                                     Filed as Exhibit 4.3
               December 23, 1986 from Registrant, as                                    to Registrant's Form 8-K
               Borrower, to Toledo Trust, as Lender for                                 dated January 6, 1987
               Pinconning, Michigan property.

     4.112     Mortgage dated December 23, 1986 between                                 Filed as Exhibit 4.4
               the Registrant, as Borrower, and Toledo                                  to Registrant's Form 8-K
               Trust, as Lender, for Toledo, Ohio property.                             dated January 6, 1987
</TABLE>

                                      -22-
<PAGE>   24
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
     4.113     Assignment of Leases and Rents dated December 23,                        Filed as Exhibit 4.5
               1986 from Registrant, as Borrower, to Toledo Trust,                      to Registrant's Form 8-K
               as Lender for Toledo, Ohio property.                                     dated January 6, 1987

     4.118     Loan Agreement dated May 23, 1987                                        Filed as Exhibit 4.2
               between Registrant, as Borrower, and                                     to Registrant's Form 8-K
               First Southern, as Lender.                                               dated May 27, 1987

     4.119     Deed of Trust, Assignment of Rents, dated May 13, 1987                   Filed as Exhibit 4.3
               by Registrant, as Trustor, Ticor Title Insurance Company                 dated May 27, 1987
               of California, as Trustee, and First Southern as Beneficiary,
               affecting properties located in Los Angeles County, California.

     4.120     Security Agreement dated May 23, 1987                                    Filed as Exhibit 4.4
               between Registrant, as Debtor, and                                       to Registrant's Form 8-K
               First Southern, as Secured Party.                                        dated May 27, 1987

     4.121     Assignment of Lessor's Interest in Leases dated May 13,                  Filed as Exhibit 4.5
               1987, from Registrant to First Southern affecting                        to Registrant's Form 8-K
               properties located in Los Angeles County, California.                    dated May 27, 1987

     4.122     $7,250,000 Note dated May 13, 1987, from                                 Filed as Exhibit 4.1
               Registrant to First Southern Federal Savings                             to Registrant's Form 8-K
               and Loan Association ("First Southern").                                 dated May 27, 1987

     4.123     Loan Agreement dated May 13, 1987 between                                Filed as Exhibit 4.2
               Registrant, as Borrower, and First Southern,                             to Registrant's Form 8-K
               as Lender.                                                               dated May 27, 1987

     4.124     Deed of Trust, Assignment of Rents, Security 1987 by                     Filed as Exhibit 4.3
               Registrant, as Trustor, Ticor Title Insurance Company                    dated May 27, 1987
               of California, as Trustee, and First Southern, as Beneficiary,
               affecting properties located in Los Angeles County, California.

     4.125     Security Agreement dated May 13, 1987                                    Filed as Exhibit 4.4
               between Registrant, as Debtor, and First                                 to Registrant's Form 8-K
               Southern, as Secured Party.                                              dated May 27, 1987

     4.126     Assignment of Lessor's Interest in Leases dated May 13,                  Filed as Exhibit 4.5
               1987, from Registrant to First Southern affecting                        to Registrant's Form 8-K
               properties located in Los Angeles County, California.                    dated May 27, 1987

     4.127     $12,000,000 Promissory Note dated November                               Filed as Exhibit 4.1
               16, 1987 from Registrant and CPA(R):7, as                                to Registrant's Form 8-K
               Borrower, to Ford, as Holder.                                            dated February 8, 1988

     4.128     Mortgage and Assignment of Leases and Rents and Security                 Filed as Exhibit 4.2
               Agreement dated November 18, 1987 between Registrant                     to Registrant's Form 8-K
               and CPA(R):7, as Mortgagor, and Ford, as Mortgagee.                      dated February 8, 1988

     4.129     $2,000,000 Deed of Trust Note dated January                              Filed as Exhibit 4.3
               21, 1988 from Registrant, as Borrower, to                                to Registrant's Form 8-K
               Altus Bank, N.A., as Lender.                                             dated February 8, 1988
</TABLE>

                                      -23-
<PAGE>   25
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
   4.130       Deed of Trust dated January 21, 1988 by and among                        Filed as Exhibit 4.4
               Registrant, as Grantor, and Jerry M. Broughton and                       to Registrant's Form 8-K
               Roland V. Lee, Jr., as Trustees.                                         dated February 8, 1988

   4.131       Security Agreement dated January 21, 1988 between                        Filed as Exhibit 4.5
               Registrant, as Borrower, and Altus Bank, N.A., as                        to Registrant's Form 8-K
               Lender.                                                                  dated February 8, 1988

    10.1       Agreement of Sale dated February 14, 1985 by and between                 Exhibit 10.1 to Form 8-K
               Victor Equipment Company ("Victor") and Registrant.                      filed February 28, 1985

    10.2       Lease Agreement dated February 15, 1985 between Registrant               Exhibit 10.2 to Form 8-K
               as landlord and Stoody Company ("Stoody") as tenant.                     filed February 28, 1985

    10.3       Subordination, nondisturbance and Attornment Agreement                   Exhibit 10.3 to Form 8-K
               dated February 15, 1985 among Hutton Life, Registrant                    filed February 28, 1985
               and Stoody.

    10.4       Lease Agreement dated August 13, 1985 between Registrant                 Filed as Exhibit 10.1
               and Sunroc Corporation ("Sunroc").                                       to Registrant's Form 10-Q
                                                                                        dated November 14, 1985

    10.5       Memorandum of Lease dated August 13,                                     Filed as Exhibit 10.2
               1985 between Registrant and Sunroc.                                      to Registrant's Form 10-Q
                                                                                        dated November 14, 1985

    10.6       Guaranty dated August 13, 1985 by                                        Filed as Exhibit 10.3
               SFA Acquisition Company to Registrant.                                   to Registrant's Form 10-Q
                                                                                        dated November 14, 1985

    10.7       Lease Agreement dated December 23,                                       Filed as Exhibit 10.4
               1985 between Registrant, as Lessor,                                      to Registrant's Form 8-K
               and Gould Inc., as Lessee.                                               dated January 6, 1986

    10.8       Memorandum of Lease dated December 23,                                   Filed as Exhibit 10.5
               1985, between Registrant, as Landlord,                                   to Registrant's Form 8-K
               and Gould Inc., as Tenant.                                               dated January 6, 1986

    10.9       Lease Agreement dated January 17,                                        Filed as Exhibit 10.1
               1986 by and between Registrant as                                        to Registrant's Form 8-K
               Landlord, and Malone & Hyde, as Tenant.                                  dated January 30, 1986

    10.10      Lease Amendment dated January 17,                                        Filed as Exhibit 10.2
               1986 between Registrant and Malone                                       to Registrant's Form 8-K
               & Hyde.                                                                  dated January 30, 1986

    10.11      Memorandum of Lease dated January 17, 1986                               FiIed as Exhibit 10.3
               between Registrant, as Landlord, and Malone                              to Registrant's Form 8-K
               & Hyde, as Tenant, for Charlotte, NC property.                           dated January 30, 1986

    10.12      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.4
               between Registrant, as Landlord, and Malone                              to Registrant's Form 8-K
               & Hyde, as Tenant, for Gastonia, NC property.                            dated January 30, 1986

    10.13      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.5
               between Registrant, as Landlord, and Malone                              to Registrant's Form 8-K
               & Hyde, as Tenant, for Lenoir, NC property.                              dated January 30, 1986
</TABLE>

                                      -24-
<PAGE>   26
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    10.14      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.6
               between Registrant, as Landlord, and Malone                              to Registrant's Form 8-K
               & Hyde, as Tenant, for Statesville, NC property.                         dated January 30, 1986

    10.15      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.7
               between Registrant, as Landlord, and Malone                              to Registrant's Form 8-K
               & Hyde, as Tenant for Austin, TX property.                               dated January 30, 1986

    10.16      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.8
               between Registrant, as Landlord, and Malone &                            to Registrant's Form 8-K
               Hyde, as Tenant, for the two Corpus Christi, TX properties.              dated January 30, 1986

    10.17      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.9
               between Registrant, as Landlord, and Malone &                            to Registrant's Form 8-K
               Hyde, as Tenant for McAllen and Weslaco, TX properties.                  dated January 30, 1986

    10.18      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.10
               between Registrant, as Landlord, and Malone & Hyde,                      to Registrant's Form 8-K
               as Tenant, for Nederland and Port Arthur, TX properties.                 dated January 30, 1986

    10.19      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.11
               between Registrant, as Landlord, and Malone &                            to Registrant's Form 8-K
               Hyde, as Tenant, for San Antonio, TX property.                           dated January 30, 1986

    10.20      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.12
               between Registrant, as Landlord, and Malone &                            to Registrant's Form 8-K
               Hyde, as Tenant for Victoria, TX properties.                             dated January 30, 1986

    10.21      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.13
               between Registrant, as Landlord, and Malone &                            to Registrant's Form 8-K
               Hyde, as Tenant for Waco, TX property.                                   dated January 30, 1986

    10.22      Memorandum of Lease dated January 17, 1986                               Filed as Exhibit 10.14
               between Registrant, as Landlord, and Malone &                            to Registrant's Form 8-K
               Hyde, as Tenant, for West Orange, TX property.                           dated January 30, 1985

    10.23      Joint Venture Agreement dated January                                    Filed as Exhibit 10.1
               30, 1986 between Registrant and CPA(R):5.                                to Registrant's Form 8-K
                                                                                        dated March 13, 1986

    10.24      Lease Agreement dated as of January                                      Filed as Exhibit 10.2
               30, 1986 by and between Registrant and                                   to Registrant's Form 8-K
               CPA(R):5, collectively as Landlord, and                                  dated March 13, 1986
               Lakes Hotel Corporation ("Great Lakes"),                                 March 13, 1986
               as Tenant.
</TABLE>

                                      -25-
<PAGE>   27
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    10.25      Lease Agreement dated as of March 6,                                     Filed as Exhibit 10.3
               1986 by and between Registrant and                                       to Registrant's Form 8-K
               CPA(R):5, collectively as Landlord, and                                  dated March 13, 1986
               Northwoods Hotel Corporation
               ("Northwoods"), as Tenant

    10.26      Memorandum of Lease dated January 30,                                    Filed as Exhibit 10.4
               1986 between Registrant and CPA(R):5,                                    to Registrant's Form 8-K
               collectively, as Landlord, and Great                                     dated March 13, 1986
               Lakes, as Tenant.

    10.27      Memorandum of Lease dated March 6,                                       Filed as Exhibit 10.5
               1986 between Registrant and CPA(R):5,                                    to Registrant's Form 8-K
               as Landlord, and Northwoods, as                                          dated March 13, 1986
               Tenant.

    10.28      Lease Guaranty dated January 30,                                         Filed as Exhibit 10.6
               1986 from Landmark Hotel Corporation                                     to Registrant's Form 8-K
               ("Landmark"), as Guarantor, to                                           dated March 13, 1986
               Registrant and CPA(R):5, collectively, as Landlord.

    10.29      Lease Guaranty dated March 6, 1986                                       Filed as Exhibit 10.7
               from Landmark, as Guarantor, to                                          to Registrant's Form 8-K
               Registrant and CPA(R):5, collectively as                                 dated March 13, 1986
               Landlord.

    10.30      Lease Agreement dated April 30, 1986 between                             Filed as Exhibit 10.1
               Registrant, as Landlord, and Malone & Hyde,                              to Registrant's Form
               as Tenant.                                                               8-K dated May 15, 1986

    10.31      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.2
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Bessemer and Birmingham, AL Properties).                                8-K dated May 15, 1986

    10.32      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.3
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Chickasaw and Mobile, AL Properties).                                   8-K dated May 15, 1986

    10.33      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.4
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Decatur, AL Property).                                                  8-K dated May 15, 1986

    10.34      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.5
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Montgomery, AL Property).                                               8-K dated May 15, 1986

    10.35      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.6
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Phenix, AL Property).                                                   8-K dated May 15, 1986

    10.36      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.7
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Columbus, GA Property).                                                 8-K dated May 15, 1986
</TABLE>

                                      -26-
<PAGE>   28
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    10.37      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.8
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Dalton, GA Property).                                                   8-K dated May 15, 1986

    10.38      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.9
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Alton, Collinsville and Wood River,                                     8-K dated May 15, 1986
               IL Properties).

    10.39      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.10
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Belleville, IL Property).                                               8-K dated May 15, 1986

    10.40      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.11
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Baton Rouge, LA Property).                                              8-K dated May 15, 1986

    10.41      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.12
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Two Lake Charles, LA Properties).                                       8-K dated May 15, 1986

    10.42      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.13
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (West Monroe, LA Property).                                              8-K dated May 15, 1986

    10.43      Memorandum of Lease dated as of April 30,                                Filed as Exhibit 10.14
               1986 between Registrant and Malone & Hyde                                to Registrant's Form
               (Breckenridge, Maplewood, Overland and                                   8-K dated May 15, 1986
               St. Louis, MO Properties).

    10.44      Lease Agreement between JB Properties, as                                Filed as Exhibit 10.1
               Lessor, and Gould Inc. ("Gould"), as Lessee.                             to Registrant's Form
                                                                                        8-K dated May 29, 1986

    10.45      Lease Agreement dated as of June 18, 1986                                Filed as Exhibit 10.1
               between Registrant, as Landlord, and                                     to Registrant's Form
               Peerless, as Tenant.                                                     8-K dated July 2, 1986

    10.46      Memorandum of Lease made as of June 18, 1986                             Filed as Exhibit 10.2
               between Registrant and Peerless.                                         to Registrant's Form
                                                                                        8-K dated July 2, 1986

    10.47      Lease Agreement dated as of August 7, 1986                               Filed as Exhibit 10.1
               between Registrant, as Landlord, and Pace,                               to Registrant's Form 8-K
               as Tenant.                                                               dated August 21, 1986

    10.48      Memorandum of Lease made as of August 7, 1986                            Filed as Exhibit 10.2
               between Registrant and Pace.                                             to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    10.49      Lease Agreement dated as of July 29, 1986                                Filed as Exhibit 10.3
               between Registrant and GCC Minnesota.                                    to Registrant's Form 8-K
                                                                                        dated August 21, 1986
</TABLE>

                                      -27-
<PAGE>   29
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    10.50      Memorandum of Lease made as of July 29, 1986                             Filed as Exhibit 10.4
               between Registrant and GCC Minnesota.                                    to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    10.51      Lease Guaranty dated as of July 29, 1986                                 Filed as Exhibit 10.5
               from GCC as Guarantor to Registrant, as                                  to Registrant's Form 8-K
               Landlord.                                                                dated August 21, 1986

    10.52      Lease Agreement dated as of September 5, 1986                            Filed as Exhibit 10.1
               by and between Registrant, as Landlord, and                              to Registrant's Form 8-K
               Armel, as Tenant.                                                        dated October 1, 1986

    10.53      Rider to Lease Agreement, dated as of                                    Filed as Exhibit 10.2
               September 5, 1986.                                                       to Registrant's Form 8-K
                                                                                        dated October 1, 1986

    10.54      Memorandum of Lease, made as of September 5,                             Filed as Exhibit 10.3
               1986, between Registrant and Armel.                                      to Registrant's Form 8-K
                                                                                        dated October 1, 1986

    10.55      Lease Agreement dated December 23, 1986 by                               Filed as Exhibit 10.1
               and between Registrant, as Landlord,                                     to Registrant's Form 8-K
               and AP, as Tenant.                                                       dated January 6, 1987

    10.56      Memorandum of Lease dated December 23, 1986                              Filed as Exhibit 10.2
               between Registrant, as Landlord, and AP, as                              to Registrant's Form 8-K
               Tenant, for Pinconning, Michigan property.                               dated January 6, 1987

    10.57      Memorandum of Lease dated December 23, 1986                              Filed as Exhibit 10.3
               between Registrant, as Landlord, and AP, as                              to Registrant's Form 8-K
               Tenant, for Toledo, Ohio property.                                       dated January 6, 1987

    10.58      Lease Agreement dated February 24, 1987                                  Filed as Exhibit 10.1
               by and between Registrant, as Landlord, and                              to Registrant's Form 8-K
               Anthony's, as Tenant.                                                    dated March 10, 1987

    10.59      Memorandum of Lease dated February 24, 1987                              Filed as Exhibit 10.2
               between Registrant, as Landlord, and                                     to Registrant's Form 8-K
               Anthony's, as Tenant.                                                    dated March 10, 1987

    10.60      Lease Agreement dated November 16, 1987 by                               Filed as Exhibit 10.1
               and between Registrant and CPA(R):7, as                                  to Registrant's Form 8-K
               Landlord, and Brock, as Tenant.                                          dated February 8, 1988

    10.61      Assignment of Leases and Rents dated January                             Filed as Exhibit 10.2
               21, 1988 from Registrant, as Assignor, to                                to Registrant's Form 8-K
               Altus Bank, N.A., as Assignee.                                           dated February 8, 1988

    10.62      Lease Agreement dated March 10, 1988                                     Filed as Exhibit 10.62
               by and between Registrant and as                                         to Registrant's Form 10-K
               Landlord, and Winn-Dixie, as Tenant.                                     dated March 30, 1988
</TABLE>

                                      -28-
<PAGE>   30
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    10.63      Lease Guaranty dated March 10, 1988                                      Filed as Exhibit 10.63
               from Winn-Dixie Stores, as Guarantor,                                    to Registrant's Form 10-K
               to Registrant, as Lessor.                                                dated March 30, 1988

    28.1       Bill of Sale dated February 14, 1985                                     Exhibit 28.1 to Form 8-K
               from Stoody to Victor.                                                   filed February 28, 1985

    28.2       Bill of Sale dated February 14, 1985                                     Exhibit 28.2 to Form 8-K
               from Victor to Registrant.                                               filed February 28, 1985

    28.3       Corporation Grant Deed dated February                                    Exhibit 28.3 to Form 8-K
               14, 1985 from Stoody to Victor.                                          filed February 28, 1985.

    28.4       Corporation Grant Deed dated February                                    Exhibit 28.4 to Form 8-K
               14, 1985 from Victor to Registrant.                                      filed February 28, 1985.

    28.5       Deed dated July 12, 1985 between                                         Filed as Exhibit 28.1
               LasSalle National Bank (LaSalle") and                                    to Registrant's Form 10-Q
               Registrant.                                                              dated November 14, 1985

    28.6       Bill of Sale dated August 16, 1985 by                                    Filed as Exhibit 28.2
               Telkee, Inc. ("Telkee") to Registrant.                                   to Registrant's Form 10-Q
                                                                                        dated November 14, 1985

    28.7       Seller's Certificate dated August 16,                                    Filed as Exhibit 28.3
               1985 by Telkee to Registrant.                                            to Registrant's Form 10-Q
                                                                                        dated November 14, 1985

    28.8       Lesee's Certificate dated August 16,                                     Filed as Exhibit 28.4
               1985 by Sunroc to Registrant.                                            to Registrant's Form 10-Q
                                                                                        Form 10-Q dated
                                                                                        November 14, 1985

    28.9       Deed dated December 19, 1985 from                                        Filed as Exhibit 28.5
               Gould Inc. to Registrant.                                                to Registrant's Form 8-K
                                                                                        Form 8-K dated
                                                                                        January 6, 1986

    28.10      Bill of Sale dated December 23, 1985                                     Filed as Exhibit 28.6
               from Gould Inc. to Registrant.                                           to Registrant's
                                                                                        Form 8-K dated
                                                                                        January 6, 1986

    28.11      Purchase Agreement dated July 25, 1985                                   Filed as Exhibit 28.7
               by Gould Inc., as Seller, with JB                                        to Registrant's
               Properties, as Buyer.                                                    Form 8-K dated
                                                                                        January 6, 1986

    28.12      North Carolina General Warranty Deed                                     Filed as Exhibit 28.1
               dated January 17, 1986 by and between                                    to Registrant's
               Malone & Hyde, as Grantor and                                            From 8-K dated
               Registrant, as Grantee, for Charlotte,                                   January 6, 1986
</TABLE>

                                      -29-
<PAGE>   31
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.13      North Carolina General Warranty Deed                                     Filed as Exhibit 28.2
               dated January 17, 1986 by and between Malone &                           to Registrant's
               Hyde, as Grantor, and Registrant, as Grantee, for                        Form 8-K dated
               Gastonia, NC property.                                                   January 30, 1986

    28.14      North Carolina General Warranty Deed                                     Filed as Exhibit 28.3
               dated January 17, 1986 by and between Malone &                           to Registrant's
               Hyde, as Grantor, and Registrant, as Grantee, for                        Form 8-K dated
               Lenoir, NC property.                                                     January 30, 1986

    28.15      North Carolina General Warranty Deed                                     Filed as Exhibit 28.4
               dated January 17, 1986 by and between Malone &                           to Registrant's
               Hyde, as Grantor, and Registrant, as Grantee, for                        Form 8-K dated
               Austin, TX property.                                                     January 30, 1986

    28.16      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.5
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               Austin, TX property.                                                     January 30, 1986

    28.17      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.6
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               Corpus Christi (Unit No. 1328), TX                                       January 30, 1986
               property.

    28.18      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.7
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               Corpus Christi (Unit No. 1344), TX                                       January 30, 1986
               property.

    28.19      Warranty Deed dated January 17,1986                                      Filed as Exhibit 28.8
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as grantee, for                                          Form 8-K dated
               McAllen, TX property.                                                    January 30, 1986

    28.20      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.9
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               McAllen TX property.                                                     January 30, 1986

    28.21      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.10
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               Port Arthur, TX property.                                                January 30, 1986

    28.22      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.11
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               San Antonio, TX property.                                                January 30, 1986
</TABLE>

                                      -30-
<PAGE>   32
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.23      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.12
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               Victoria, TX property.                                                   January 30, 1986

    28.24      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.13
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee, for                                          Form 8-K dated
               Waco, TX property.                                                       January 30, 1986

    28.25      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.14
               between Malone & Hyde, as Grantor,                                       to Registrant's
               and Registrant, as Grantee for                                           Form 8-K dated
               Weslaco, TX property.                                                    January 30, 1986

    28.26      Warranty Deed dated January 17, 1986                                     Filed as Exhibit 28.15
               between Malone & Hyde, as Grantor                                        to Registrant's
               and Registrant, as Grantee for                                           Form 8-K dated
               West Orange, TX property.                                                January 30, 1986

    28.27      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.16
               from Malone & Hyde to Registrant for                                     to Registrant's
               Charlotte, NC property.                                                  Form 8-K dated
                                                                                        January 30, 1986

    28.28      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.17
               from Malone & Hyde to Registrant for                                     to Registrant's
               Gastonia, NC property.                                                   Form 8-K dated
                                                                                        January 30, 1986

    28.29      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.18
               from Malone & Hyde to Registrant for                                     to Registrant's
               Lenoir, NC property.                                                     Form 8-K dated
                                                                                        January 30, 1986

    28.30      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.19
               from Malone & Hyde to Registrant for                                     to Registrant's
               Statesville, NC property.                                                Form 8-K dated
                                                                                        January 30, 1986

    28.31      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.20
               from Malone & Hyde to Registrant for                                     to Registrant's
               Austin, TX property.                                                     Form 8-K dated
                                                                                        January 30, 1986

    28.32      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.21
               from Malone & Hyde to Registrant for                                     to Registrant's
               Corpus Christi (Unit No. 1328, TX                                        Form 8-K dated
               property.                                                                January 30, 1986

    28.33      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.22
               from Malone & Hyde to Registrant for                                     to Registrant's
               Corpus Christi (Unit No. 1344), TX                                       From 8-K dated
               property.                                                                January 30, 1986
</TABLE>

                                      -31-
<PAGE>   33
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.34      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.23
               from Malone & Hyde to Registrant for                                     to Registrant's
               McAllen, TX property.                                                    Form 8-K dated
                                                                                        January 30, 1986

    28.35      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.24
               from Malone & Hyde to Registrant for                                     to Registrant's
               Nederland, TX property.                                                  Form 8-K dated
                                                                                        January 30, 1986

    28.36      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.25
               from Malone & Hyde to Registrant for                                     to Registrant's
               Port Arthur, TX property.                                                From 8-K dated
                                                                                        January 30, 1986

    28.37      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.26
               from Malone & Hyde to Registrant for                                     to Registrant's
               San Antonio, TX property.                                                Form 8-K dated
                                                                                        January 30, 1986

    28.38      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.27
               from Malone & Hyde to Registrant for                                     to Registrant's
               Victoria, TX property.                                                   Form 8-K dated
                                                                                        January 30, 1986

    28.39      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.28
               from Malone & Hyde to Registrant for                                     to Registrant's
               Waco, TX property.                                                       Form 8-K dated
                                                                                        January 30, 1986

    28.40      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.29
               from Malone & Hyde to Registrant for                                     to Registrant's
               Weslaco, TX property.                                                    Form 8-K dated
                                                                                        January 30, 1986

    28.41      Bill of Sale dated January 17, 1986                                      Filed as Exhibit 28.30
               from Malone & Hyde to Registrant for                                     to Registrant's
               West Orange, TX property.                                                From 8-K dated
                                                                                        January 30, 1986

    28.42      Waranty Deed dated January 30, 1986                                      Filed as Exhibit 28.1
               among Adventure Restaurant Corporation                                   to Registrant's
               ("Adventure"), Registrant and CPA(R):5.                                  Form 8-K dated
                                                                                        March 13, 1986

    28.43      Waranty Deed dated March 6, 1986                                         Filed as Exhibit 28.2
               among Adventure, Registrant and CPA(R):5.                                to Registrant's
                                                                                        Form 8-K dated
                                                                                        March 13, 1986

    28.44      Bill of Sale dated January 30, 1986                                      Filed as Exhibit 28.3
               from Adventure to Registrant and CPA(R):5.                               to Registrant's
                                                                                        Form 8-K dated
                                                                                        March 13, 1986
</TABLE>

                                      -32-
<PAGE>   34
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.45      Bill of Sale dated March 6, 1986                                         Filed as Exhibit 28.4
               Adventure to Registrant and CPA(R):5.                                    to Registrant's
                                                                                        Form 8-K dated
                                                                                        March 13, 1986

    28.46      Seller/Lessee.s Certificate dated as of                                  Filed as Exhibit 28.1
               April 30, 1986 from Malone & Hyde to                                     to Registrant's Form
               Registrant.                                                              8-K dated May 15, 1986

    28.47      Bill of Sale dated as of April 30, 1986                                  Filed as Exhibit 28.2
               from Malone & Hyde to Registrant (Bessemer,                              to Registrant's Form
               AL Property).                                                            8-K dated May 15, 1986

    28.48      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.3
               Malone & Hyde to Registrant (Birmingham,                                 to Registrant's Form
               AL Property).                                                            8-K dated May 15, 1986

    28.49      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.4
               Malone & Hyde to Registrant (Chickasaw,                                  to Registrant's Form
               AL Property).                                                            8-K dated May 15, 1986

    28.50      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.5
               Malone & Hyde to Registrant (Decatur, AL                                 to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.51      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.6
               Malone & Hyde to Registrant (Mobile, AL                                  to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.52      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.7
               Malone & Hyde to Registrant (Montgomery,                                 to Registrant's Form
               AL Property).                                                            8-K dated May 15, 1986

    28.53      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.8
               Malone & Hyde to Registrant (Phenix, AL                                  to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.54      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.9
               Malone & Hyde to Registrant (Columbus, GA                                to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.55      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.10
               Malone & Hyde to Registrant (Dalton, GA                                  to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.56      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.11
               Malone & Hyde to Registrant (Alton, IL                                   to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.57      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.12
               Malone & Hyde to Registrant (Belleville, IL                              to Registrant's Form
               Property).                                                               8-K dated May 15, 1986
</TABLE>

                                      -33-
<PAGE>   35
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.58      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.13
               Malone & Hyde to Registrant (Collinsville, IL                            to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.59      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.14
               Malone & Hyde to Registrant (Wood River, IL                              to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.60      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.15
               Malone & Hyde to Registrant (Baton Rouge, LA                             to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.61      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.16
               Malone & Hyde to Registrant (Medora St.,                                 to Registrant's Form
               Lake Charles, LA Properties).                                            8-K dated May 15, 1986

    28.62      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.17
               Malone & Hyde to Registrant (Prien Lake Rd.,                             to Registrant's Form
               Lake Charles, LA Property).                                              8-K dated May 15, 1986

    28.63      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.18
               Malone & Hyde to Registrant (West Monroe, LA                             to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.64      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.19
               Malone & Hyde to Registrant (Breckenridge,                               to Registrant's Form
               MO Property).                                                            8-K dated May 15, 1986

    28.65      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.20
               Malone & Hyde to Registrant (Maplewood, MO                               to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.66      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.21
               Malone & Hyde to Registrant (Overland, MO                                to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.67      Bill of Sale dated as of April 30, 1986 from                             Filed as Exhibit 28.22
               Malone & Hyde to Registrant (St. Louis, MO                               to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.68      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.23
               Malone & Hyde, as Grantor, to Registrant, as                             to Registrant's Form
               Grantee (Bessemer, AL Property).                                         8-K dated May 15, 1986

    28.69      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.24
               Malone & Hyde to Registrant (Birmingham, AL                              to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.70      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.25
               Malone & Hyde to Registrant (Chickasaw, AL                               to Registrant's Form
               Property).                                                               8-K dated May 15, 1986
</TABLE>

                                      -34-
<PAGE>   36
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.71      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.26
               Malone & Hyde to Registrant (Decatur, AL                                 to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.72      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.27
               Malone & Hyde to Registrant (Mobile, AL                                  to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.73      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.28
               Malone & Hyde to Registrant (Montgomery, AL                              to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.74      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.29
               Malone & Hyde to Registrant (Phenix, AL                                  to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.75      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.30
               Malone & Hyde to Registrant (Columbus, GA                                to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.76      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.31
               Malone & Hyde to Registrant (Dalton. GA                                  to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.77      Warranty Deed dated as ot April 30, 1986 from                            Filed as Exhibit 28.32
               Malone & Hyde to Registrant (Alton, IL                                   to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.78      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.33
               Malone & Hyde to Registrant (Belleville, IL                              to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.79      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.34
               Malone & Hyde to Registrant (Collinsville, IL                            to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.80      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.35
               Malone & Hyde to Registrant (Wood River, IL                              to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.81      Cash Sale Deed dated as of April 30, 1986 from                           Filed as Exhibit 28.36
               Malone & Hyde to Registrant (Baton Rouge, LA                             to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.82      Cash Sale Deed dated as of April 30, 1986 from                           Filed as Exhibit 28.37
               Malone & Hyde to Registrant (Medora St., Lake                            to Registrant's Form
               Charles, LA Property).                                                   8-K dated May 15, 1986

    28.83      Cash Sale Deed dated as of April 30, 1986 from                           Filed as Exhibit 28.38
               Malone & Hyde to Registrant (Prien Lake Rd.,                             to Registrant's Form
               Lake Charles, LA Property).                                              8-K dated May 15, 1986
</TABLE>

                                      -35-
<PAGE>   37
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.84      Cash Deed dated as of April 30, 1986 from                                Filed as Exhibit 28.39
               Malone & Hyde to Registrant (West Monroe,                                to Registrant's Form
               LA Property).                                                            8-K dated May 15, 1986

    28.85      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.40
               Malone & Hyde to Registrant (Breckenridge, MO                            to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.86      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.41
               Malone & Hyde to Registrant (Maplewood, MO                               to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.87      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.42
               Malone & Hyde to Registrant (Overland, MO                                to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.88      Warranty Deed dated as of April 30, 1986 from                            Filed as Exhibit 28.43
               Malone & Hyde to Registrant (St. Louis, MO                               to Registrant's Form
               Property).                                                               8-K dated May 15, 1986

    28.89      Letter dated April 30, 1986 from First                                   Filed as Exhibit 28.44
               Southern to Registrant regarding the                                     to Registrant's Form
               understanding that interest on the Note will                             8-K dated May 15, 1986
               begin accruing as of the date of the wiring0
               of the funds.

    28.90      Letter dated April 30, 1986 from Registrant                              Filed as Exhibit 28.45
               to Malone & Hyde and agreed to by First                                  to Registrant's Form
               Southern regarding the understanding that the                            8-K dated May 15, 1986
               Lease will commence as of the date of the
               wiring of the funds.

    28.91      Seller's Certificate from Jeffrey M. Browne                              Filed as Exhibit 28.1
               and Anne M. Browne, collectively as Seller,                              to Registrant's Form
               to Registrant, as Purchaser.                                             8-K dated May 29, 1986

    28.92      Lessee's Certificate from Gould, as Lessee,                              Filed as Exhibit 28.2
               to Registrant, as Lessor.                                                to Registrant's Form
                                                                                        8-K dated May 29, 1986

    28.93      Deed between Jeffrey M. Browne and Anne M.                               Filed as Exhibit 28.3
               Browne, as Transferor and Registrant, as                                 to Registrant's Form
               Transferee.                                                              8-K dated May 29, 1986

    28.94      Bill of Sale from Jeffrey M. Browne and                                  Filed as Exhibit 28.4
               Anne M. Browne to Registrant.                                            to Registrant's Form
                                                                                        8-K dated May 29, 1986

    28.95      Bill of Sale dated June 18, 1986 from                                    Filed as Exhibit 28.1
               Peerless to Registrant.                                                  to Registrant's Form
                                                                                        8-K dated July 2, 1986
</TABLE>

                                      -36-
<PAGE>   38
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.96      Warranty Deed dated June 18, 1986 from                                   Filed as Exhibit 28.2
               Peerless to Registrant.                                                  to Registrant's Form
                                                                                        8-K dated July 2, 1986

    28.97      Seller/Lessee's Certificate from Peerless to                             Filed as Exhibit 28.3
               Registrant dated June 18, 1986.                                          to Registrant's Form
                                                                                        8-K dated July 2, 1986

    28.98      Certificate dated June 18, 1986 from Peerless                            Filed as Exhibit 28.4
               to Northwestern and Western States.                                      to Registrant's Form
                                                                                        8-K dated July 2, 1986

    28.99      Certificate dated June 18, 1986 from                                     Filed as Exhibit 28.5
               Registrant to Northwestern and                                           to Registrant's Form
               Western States.                                                          8-K dated July 2, 1986

    28.100     Bill of Sale dated as of August 7, 1986                                  Filed as Exhibit 28.1
               from Pace to Registrant.                                                 to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.101     Deed dated as of August 7, 1986 from Pace                                Filed as Exhibit 28.2
               to Registrant.                                                           to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.102     Seller/Lessee s Certificate dated as of                                  Filed as Exhibit 28.3
               August 7, 1986 from Pace to Registrant.                                  to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.103     Bill of Sale dated as of July 30, 1986 from                              Filed as Exhibit 28.4
               GCC Minnesota to Registrant.                                             to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.104     Warranty Deed dated as of July 29, 1986 from                             Filed as Exhibit 28.5
               GCC Minnesota to Registrant.                                             to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.105     Seller's Certificate dated as of July 29,                                Filed as Exhibit 28.6
               1986 from GCC Minnesota to Registrant.                                   to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.106     Indemnity Agreement dated as of                                          Filed as Exhibit 28.7
               July 30, 1986.                                                           to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.107     Registrant's Current Report on Form 8-K                                  Filed as Exhibit 28.8
               dated January 6, 1986.                                                   to Registrant's Form 8-K
                                                                                        dated August 21, 1986

    28.108     Bill of Sale, dated September 5, 1986, from                              Filed as Exhibit 28.1
               Armel to Registrant.                                                     to Registrant's Form 8-K
                                                                                        dated October 1, 1986
</TABLE>

                                      -37-
<PAGE>   39
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.109     Warranty Deed, made as of September 5, 1986,                             Filed as Exhibit 28.2
               by Armel, as Grantor, to Registrant, as                                  to Registrant's Form 8-K
               Grantee.                                                                 dated October 1, 1986

    28.110     Seller/Lessee's Certificate, dated September                             Filed as Exhibit 28.3
               5, 1986, from Armel, as Seller, to Registrant                            to Registrant's Form 8-K
               as Purchaser.                                                            dated October 1, 1986

    28.111     Escrow Letter from Greenburg, Traurig, Askew,                            Filed as Exhibit 28.4
               Hoffman, Lipoff, Rosen & Quentel, P.A.,                                  to Registrant's Form 8-K
               acknowledged and consented to on September                               dated October 1, 1986
               3, 1986, by Armel and Registrant.

    28.112     Escrow Trust Instructions dated October, 1986                            Filed as Exhibit 28.1
               to Chicago Title and Trust Company, as Escrow                            to Registrant's Form 8-K
               Trustee, from Registrant and Focus Real Estate                           dated October 15, 1986
               Finance Company, on behalf of St. Paul Life.

    28.113     Letter dated October 6, 1986 from Fidelity                               Filed as Exhibit 28.2
               Bank to St. Paul Life confirming that Folger                             to Registrant's Form 8-K
               Adam, as Tenant, is not in default under the                             dated October 15, 1986
               Credit Agreement referred to in the Assignment of Tenant's
               Interest in Leases.

    28.114     Letter dated October 8, 1986 from St. Paul                               Filed as Exhibit 28.3
               Life to Registrant in connection with the                                to Registrant's Form 8-K
               mortgage loan.                                                           dated October 15, 1986

    28.115     Bill of Sale dated December 23, 1986 from                                Filed as Exhibit 28.1
               AP to Registrant.                                                        to Registrant's Form 8-K
                                                                                        dated January 6, 1987

    28.116     Warranty Deed, made as of December 19, 1986                              Filed as Exhibit 28.2
               by AP, as Grantor, to Registrant, as Grantee,                            to Registrant's Form 8-K
               for Pinconning, Michigan property.                                       dated January 6, 1987

    28.117     Warranty Deed, made as of December 19, 1986                              Filed as Exhibit 28.3
               by AP, as Grantor, to Registrant, as Grantee,                            to Registrant's Form 8-K
               for Toledo, Ohio property.                                               dated January 6, 1987

    28.118     Seller/Tenant's Certificate dated December                               Filed as Exhibit 28.4
               23, 1986, from AP, as Seller, to Registrant,                             to Registrant's Form 8-K
               as Purchaser.                                                            dated January 6, 1987

    28.119     Corporation Grant Deed, made as of February                              Filed as Exhibit 28.1
               20, 1987, by Anthony's, as Grantor, to                                   to Registrant's Form 8-K
               Registrant, as Grantee.                                                  dated March 10, 1987

    28.120     Seller's/Lessee's Certificate dated February                             Filed as Exhibit 28.2
               24, 1987, from Anthony's, as Seller, to                                  to Registrant's Form 8-K
               Registrant, as Purchaser.                                                dated March 10, 1987
</TABLE>

                                      -38-
<PAGE>   40
<TABLE>
<CAPTION>
Exhibit                                                                                 Method of
  No.             Description                                                           Filing
  ---             -----------                                                           ------
<S>            <C>                                                                      <C>
    28.121     Deed dated November 12, 1987 between                                     Filed as Exhibit 28.1
               Northwestern, as Transferor, to Registrant                               to Registrant's Form 8-K
               and CPA(R):7, as Transferee.                                             dated February 8, 1988

    28.122     Bill of Sale dated November 12, 1987 from                                Filed as Exhibit 28.2
               Northwestern, as Seller, to Registrant and                               to Registrant's Form 8-K
               CPA(R):7, as Purchaser.                                                  dated February 8, 1988

    28.123     Seller's Certificate dated November 16, 1987                             Filed as Exhibit 28.3
               from Northwestern, as seller, to Registrant                              to Registrant's Form 8-K
               and CPA(R):7, as Purchaser.                                              dated February 8, 1988

    28.124     Lessee's Certificate dated November 16, 1987                             Filed as Exhibit 28.4
               from Brock, as Lessee, to Registrant and                                 to Registrant's Form 8-K
               CPA(R):7, as Lessor.                                                     dated February 8, 1988

    28.125     Warranty Deed dated March 10, 1988                                       Filed as Exhibit 28.125
               between Winn-Dixie, as Grantor, and                                      to Registrant's Form 10-K
               Registrant, as Grantee.                                                  dated March 30, 1988

    28.126     Bill of Sale dated March 10, 1988                                        Filed as Exhibit 28.126
               from Winn-Dixie, as Seller, to Registrant,                               to Registrant's Form 10-K
               as Purchaser.                                                            dated March 30, 1988

    28.127     Seller's Certificate date March 10, 1988                                 Filed as Exhibit 28.127
               from Winn-Dixie, as Seller, to Registrant,                               to Registrant's Form 10-K
               as Purchaser.                                                            dated March 30, 1988

    28.128     Prospectus of Registrant                                                 Filed as Exhibit 28.128
               dated November 30, 1984.                                                 to Registrant's Form 10-K/A
                                                                                        Amendment No. 1

    28.129     Press release dated June 30, 1993                                        Filed as Exhibit 28.1 to
               announcing the suspension of secondary                                   Form 8-K dated July 12, 1993
               market sales of Limited Partnership Units.
</TABLE>




    (b)    Reports on Form 8-K

                  The Registrant filed a report on Form 8-K dated January 1,
1998 pursuant to Item 5 -Other Events (EX-99.1 Press Release From W.P. Carey &
Co., Inc. (December 17, 1997)).

                                      -39-
<PAGE>   41
                                   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.

                                    CORPORATE PROPERTY ASSOCIATES 6
                                    - a California limited partnership
                                    and SUBSIDIARIES
                                    BY:     CAREY DIVERSIFIED LLC

     03/25/98                       BY:      /s/ John J. Park
---------------------                       -----------------------------------
     Date                                   John J. Park
                                            Executive Vice President, Chief
                                            Financial Officer and Treasurer
                                            (Principal Financial Officer)

                  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>
<S>                                 <C>
                                    BY:     CAREY DIVERSIFIED LLC

     03/25/98                       BY:      /s/ Francis J. Carey
------------------------                    ---------------------------------------------
     Date                                   Francis J. Carey
                                            Chairman of the Board, Chief Executive
                                            Officer and Director
                                            (Principal Executive Officer)

     03/25/98                       BY:      /s/ William P. Carey
------------------------                    ---------------------------------------------
     Date                                   William P. Carey
                                            Chairman of the Executive Committee
                                            and Director

     03/25/98                       BY:      /s/ Steven M. Berzin
------------------------                    ---------------------------------------------
     Date                                   Steven M. Berzin
                                            Vice Chairman, Chief Legal Officer and
                                            Director

     03/25/98                       BY:      /s/ Gordon F. DuGan
------------------------                    ---------------------------------------------
      Date                                  Gordon F. DuGan
                                            President, Chief Acquisitions Officer
                                            and Director

     03/25/98                       BY:      /s/ Donald E. Nickelson
------------------------                    ---------------------------------------------
     Date                                   Donald E. Nickelson
                                            Chairman of the Audit Committee and
                                            Director

     03/25/98                       BY:      /s/ Eberhard Faber IV
------------------------                    ---------------------------------------------
     Date                                   Eberhard Faber IV
                                            Director

     03/25/98                       BY:      /s/ Barclay G. Jones, III
------------------------                    ---------------------------------------------
      Date                                  Barclay G. Jones, III
                                            Director

     03/25/98                       BY:      /s/ Dr. Lawrence R. Klein
------------------------                    ---------------------------------------------
     Date                                   Dr. Lawrence R. Klein
                                            Director

     03/25/98                       BY:      /s/ Charles C. Townsend, Jr.
------------------------                    ---------------------------------------------
     Date                                   Charles C. Townsend, Jr.
                                            Director

     03/25/98                       BY:      /s/ Reginald Winssinger
------------------------                    ---------------------------------------------
     Date                                   Reginald Winssinger
                                            Director

     03/25/98                       BY:      /s/ John J. Park
------------------------                    ---------------------------------------------
     Date                                   John J. Park
                                            Executive Vice President, Chief
                                            Financial Officer and Treasurer
                                            (Principal Financial Officer)

     03/25/98                       BY:      /s/ Claude Fernandez
------------------------                    ---------------------------------------------
     Date                                   Claude Fernandez
                                            Executive Vice President - Financial
                                            Operations
                                            (Principal Accounting Officer)
</TABLE>

                                      -40-
<PAGE>   42
                                                         APPENDIX A TO FORM 10-K













                         CORPORATE PROPERTY ASSOCIATES 6
                       - A CALIFORNIA LIMITED PARTNERSHIP
                                AND SUBSIDIARIES















                                                              1997 ANNUAL REPORT
<PAGE>   43
SELECTED FINANCIAL DATA


(In thousands except per unit amounts)



<TABLE>
<CAPTION>
                                      1993           1994          1995            1996          1997
                                      ----           ----          ----            ----          ----
<S>                                 <C>            <C>            <C>            <C>            <C>
OPERATING DATA:
  Revenues                          $15,387        $15,694        $16,738        $16,537        $17,384

Income before
  extraordinary gain (1)              3,920          3,099          5,771          6,025          6,840

Income before
  extraordinary gain
  allocated:
To General Partners                     235            186            347            428            410
To Limited Partners                   3,685          2,913          5,424          5,597          6,430
Per unit                              76.85          60.76         113.16         116.78         134.14

  Distributions attributable (2):
      To General Partners               281            281            286            295            355
      To Limited Partners             4,406          4,429          4,483          4,629          5,558
      Per unit                        91.88          92.26          93.53          96.58         115.96

  Payment of mortgage
      principal (3)                   1,300          1,331          1,356          1,156          1,286

BALANCE SHEET DATA:
  Total assets                       92,570         90,186         88,422         88,154         84,650

  Long-term
      obligations (4)                51,362         36,603         36,298         34,279         14,868
</TABLE>

(1)   Net income for 1995 includes an extraordinary gain on the extinguishment
      of debt of $2,088,000.
(2)   Includes distributions attributable to the fourth quarter of each fiscal
      year payable in the following fiscal year less distributions in the first
      fiscal quarter applicable to the prior year. The distribution
      attributable to the fourth quarter of 1997 was paid to Limited Partners in
      December 1997.
(3)   Represents scheduled payment of mortgage principal paid.
(4)   Represents mortgage and note payable obligations due after more than one
      year.

                                      -1-
<PAGE>   44
MANAGEMENT'S DISCUSSION AND ANALYSIS





                  Results of Operations

                  Net income increased by $815,000 for the year ended December
31, 1997 as compared with the year ended December 31, 1996. The increase was due
to increases in lease revenues (rental income and interest income from direct
financing leases) and hotel earnings and a decrease in interest expense.

                  The increase in lease revenues was due to a rent increase in
January 1997 on the lease with AP Parts International, Inc., the full year's
effect of 1996 rent increases on leases with Wal-Mart Stores, Inc.; Peerless
Chain Company; Kinney Shoe Corporation/Armel, Inc. and increases in 1997 of
percentage rents on the AutoZone, Inc. leases. The decrease in interest expense
resulted from paying off mortgage loans collateralized by the Winn-Dixie Stores,
Inc. and Yale Security, Inc. properties in 1996 and 1997, respectively, the
refinancing at a lower rate of interest of the mortgage loan on the Wal-Mart
property in 1996 and the continuing amortization of the Partnership's limited
recourse mortgage loans. The increase in hotel earnings was due to increased
revenues from the three hotel properties. Hotel earnings increased by 13% in
1997, sustaining the rate of increase realized in 1996. The increase in hotel
earnings was due to a 3.5% increase in revenues while operating expenses were
stable. The occupancy rate of the Livonia, Michigan hotel remained stable at 75%
while the average room rate increased by 10%. The Petoskey hotel realized
increases in occupancy and average room rates of 3% and 4%, respectively, while
the average room rate increased by 7% at the Alpena Hotel offsetting a 2%
decrease in occupancy rates. As described below, the Partnership has entered
into a lease for the Livonia Hotel with an affiliate.

                  Net income for the year ended December 31, 1996 decreased by
$1,834,000 as compared with net income for the year ended December 31, 1995.
Excluding the effects of a nonrecurring other income item of $688,000 and an
extraordinary gain of $2,088,000, both in 1995, income would have increased by
$942,000. The increase in income, as adjusted was primarily due to decreases in
interest, property and general and administrative expenses and an increase in
lease revenues. This was partially offset by an increase in depreciation
expense.

                  The decrease in interest expense in 1996 was due to the
satisfaction of the mortgage loans on the Stoody Deloro Stellite, Inc.,
Anthony's Manufacturing, Inc. and the Peerless Chain properties in 1995 and the
refinancing of an existing mortgage loan on the property leased to Wal-Mart in
1996. The Stoody and Anthony's loans were paid off, in part, by obtaining
$10,000,000 of recourse financing; however, overall interest on this obligation
was lower than the interest incurred on the retired mortgage loans. The decrease
in property expenses was primarily due to the provision for uncollected rents
incurred on the lease with Folger Adam Company in 1995, which lease was
terminated in 1996, and the legal costs incurred in connection with the
settlement of the Anthony's dispute in 1995. The decrease in general and
administrative expenses was due to a decrease in legal costs, provisions for
state taxes and office occupancy costs. Lease revenues increased due to rent
increases on the Partnership's leases with Peerless, Wal-Mart and Armel in 1996
and leases with Motorola and Stoody in 1995. Lease revenues also benefited from
increased rent from the AP Parts lease in connection with the Partnership's
funding of improvements in January 1996 at one of the AP Parts properties. The
increase in depreciation expense was due to the classification of a new lease
with Yale Security, Inc. as an operating lease in March 1996. Depreciation also
increased due to the funding of $1,700,000 of improvements at AP Parts.

                  Earnings from the Partnership's hotel operations for 1996
increased by $120,000 to $1,154,000 as compared with 1995, an increase of
approximately 12%. Operating income from the Alpena and Petoskey hotels
increased 7% and 11%, respectively, for the year ended December 31, 1996. The
average room rate remained stable at the Alpena hotel with the occupancy rate
increasing by 6%. There was a 14% increase in the occupancy rate at the Petoskey
hotel; however, the average room rate decreased by 9%. Petoskey also benefited
from a decrease in operating expenses. The decrease in Petoskey room rates was
the result of increased competition from other resorts. The earnings of the
Livonia hotel increased by 13% as a result of a 6% increase in revenues and only
a 3% increase in expenses. The increase in revenues was due to an increase of
10% in overall average room rates, with increases sustained in each room rate
category. The ability to raise rates was due to favorable economic and business
conditions in the Detroit metropolitan area.

                                      -2-
<PAGE>   45
                  In connection with the transaction with Carey Diversified LLC
which became effective in January 1, 1998, the operations of the Livonia hotel
and related licenses have been transferred to an affiliate, Livho, Inc. Based on
Management's analysis, retaining direct control of the hotel would have adverse
tax consequences on those Limited Partners who exchanged Limited Partnership
Units for interests in Carey Diversified. The lease with Livho will provide the
Partnership with annual rents of $810,000 in the first year of the lease. Cash
flow from the Livonia hotel in 1997, before debt service payments, was $930,000.
The Partnership will retain the obligation to fund replacements and improvements
to the property.

                  Because of the long-term nature of the Partnership's net
leases, inflation and changing prices should not unfavorably affect the
Partnership's revenues and net income or have an impact on the continuing
operations of the Partnership's properties. The Partnership's net leases have
rent increases based on the Consumer Price Index and may have caps on such CPI
increases, or sales overrides, which should increase operating revenues in the
future. The moderate increases in the CPI over the past several years will
affect the rate of such future rent increases. Management believes that hotel
operations will not be significantly impacted by changing prices. In addition,
Management believes that reasonable increases in hotel operating costs may be
partially or entirely offset by increases in room rates.


                  Financial Condition

                  The Partnership's cash balances of $1,389,000 decreased by
$1,949,000 from the previous year. Cash flows from operations of $8,076,000 were
sufficient to fund four quarterly distributions of approximately $4,937,000,
scheduled mortgage principal payments of $1,286,000 and a mortgage prepayments
of $1,872,000. In addition, the Partnership paid a distribution in December 1997
of $43.09 per Limited Partnership Unit ($2,065,000).

                  The distribution paid in December 1997 reflected an exchange
transaction which occurred on January 1, 1998. The majority of the Partnership's
Limited Partners and its General Partners approved a consolidation by merger
with a subsidiary limited partnership of Carey Diversified, as proposed in the
Consent Solicitation Statement/Prospectus of Carey Diversified dated October
16,1997. In connection with the merger, 2,760 Limited Partnership Unitholders
owning 47,261 Limited Partnership Units elected to exchange their limited
partnership units for interests in Carey Diversified. The December 1997
distribution intended to (a) distribute funds in order to adjust the net assets
of the Partnership with the estimate of Total Exchange values, as defined in the
Consent Solicitation Statement/Prospectus, of those assets and (b) pay the
January distribution.

                  Limited Partners owning 669 Limited Partnership Units elected
to retain a limited partnership interest in the Partnership as Subsidiary
Partnership Unitholders. Subsidiary Partnership Units have economic interests
and legal rights in the Partnership that are substantially similar to those of
Limited Partnership Units and represent a direct ownership interest in the
Partnership. The holders of Subsidiary Partnership Units will be paid a pro rata
share of any distribution paid by the Partnership to Carey Diversified. The
Partnership will continue to pay distributions on a quarterly basis until
liquidating distributions are made, as described in the Consent Solicitation
Statement/Prospectus. Although Carey Diversified will use quarterly
distributions from the Partnership to fund its distributions to its
shareholders, the Partnership must first pay its Subsidiary Partnership
Unitholders. The objective with respect to Subsidiary Partnership Units will be
to pay distributions as if the Consolidation never had occurred based upon the
net cash flows generated by the Partnership.

                  The Partnership's investing activities consisted of $43,000
for the replacement of furniture, fixtures, and equipment at the hotel
properties. Up to approximately $1,380,000 is budgeted for improvements to the
Livonia hotel in 1998 in order to comply with the Holiday Inn product
improvement plan.

                  The Partnership has a balloon payment scheduled of $8,618,000
on the AutoZone limited recourse mortgage loan in 1998. The Partnership has also
negotiated short-term extensions of the maturity of mortgage loans on the
Motorola and Livonia properties which had been scheduled to mature. The Motorola
loan of $2,052,000 and the Livonia loan of $2,568,000 are now scheduled to
mature in 1998. The Partnership does not currently have the cash necessary to
pay all of these loans. Management believes the prospects for refinancing the
properties servicing these loans are good as these properties will remain
subject to leases for a number of years. The Partnership currently has
sufficient capacity to borrow against several of its unleveraged properties
while still remaining in compliance with the covenants of the recourse loan. In
addition, Carey

                                      -3-
<PAGE>   46
Diversified, the general partner, will have substantial cash resources, and
expects to have the capability to advance funds to the Partnership, if
necessary. In the case of limited recourse mortgage financing that does not
fully amortize over its term, the Partnership would be responsible for the
balloon payment required only to the extent of its interest in the encumbered
property because the holder of each such obligation has recourse only to the
property collateralizing such debt. In the event that balloon payments come due,
the Partnership's alternatives include seeking to refinance the loans,
restructuring the debt with the existing lenders, evaluating its ability to
satisfy the mortgages from existing cash reserves or selling the property and
using the sales proceeds to satisfy the mortgage debt.

                  Except for the three hotel properties, all of the properties
are currently leased to unaffiliated corporate tenants. All of the properties
are subject to environmental statutes and regulations regarding the discharge of
hazardous materials and any related remediation obligations. The Partnership
normally structures its leases to require tenants to comply with all laws. In
addition, substantially all of the Partnership's net leases include
indemnification provisions which require tenants to indemnify the Partnership
from all liabilities and losses related to their operations at the leased
properties. If the Partnership undertakes to clean up or remediate any of its
leased properties, the General Partner believes that in most cases the
Partnership will be entitled to full reimbursement from tenants for such costs.
In the event that the Partnership absorbs such costs, the General Partner
believes that the ultimate resolution of the aforementioned environmental
matters will not have a material adverse effect on the Partnership's financial
condition, liquidity or results of operations.

                  In June 1997, the FASB issued Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income" and SFAS
No. 131, "Disclosure about Segments of an Enterprise and Related Information."
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in full set
general purpose financial statements. SFAS No. 131 establishes accounting
standards for the way that public business enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. SFAS No. 130 and SFAS No. 131 are required to be adopted by 1998.
The Partnership is currently evaluating the impact, if any, of SFAS No. 130 and
SFAS 131.

                  The Partnership's management company has responsibility for
maintaining the Partnership's books and records and servicing the computer
systems used in maintaining such books and records. In its preliminary
assessment of Year 2000 issues, the management company believes that such issues
will not have a material effect on the Partnership's operations; however such
assessment has not been completed. The Partnership relies on its bank and
transfer agent for certain computer-related services and has initiated
discussions to determine whether they are addressing Year 2000 issues that might
affect the Partnership.

                                      -4-
<PAGE>   47
                        REPORT of INDEPENDENT ACCOUNTANTS





To the Partners of
 Corporate Property Associates 6
 - a California limited partnership
 and Subsidiaries:


                  We have audited the accompanying consolidated balance sheets
of Corporate Property Associates 6 - a California limited partnership and
Subsidiaries as of December 31, 1996 and 1997, and the related consolidated
statements of income, partners' capital and cash flows for each of the three
years in the period ended December 31, 1997. We have also audited the financial
statement schedule included on pages 21 to 24 of this Annual Report. These
financial statements and financial statement schedule are the responsibility of
the General Partners. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.

                  We conducted our audits in accordance with generally accepted
auditing standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant estimates
made by the General Partners, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

                  In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Corporate Property Associates 6 - a California limited partnership and
Subsidiaries as of December 31, 1996 and 1997, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles. In addition, in our opinion, the Schedule of Real Estate and
Accumulated Depreciation as of December 31, 1997, when considered in relation to
the basic financial statements taken as a whole, presents fairly, in all
material respects, the financial information required to be included therein
pursuant to Securities and Exchange Commission Regulation S-X Rule 12-28.




                                              /s/Coopers & Lybrand L.L.P.
New York, New York
March 25, 1998

                                      -5-
<PAGE>   48
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1996 and 1997


<TABLE>
<CAPTION>
                                                                    1996                 1997
                                                                    ----                 ----
<S>                                                              <C>                  <C>
        ASSETS:

Real estate leased to others:
   Accounted for under the
      operating method:
         Land                                                    $ 11,502,589         $ 11,502,589
         Buildings                                                 40,059,299           40,059,299
                                                                 ------------         ------------
                                                                   51,561,888           51,561,888
         Accumulated depreciation                                  11,955,764           13,291,069
                                                                 ------------         ------------
                                                                   39,606,124           38,270,819
   Net investment in direct financing leases                       32,887,655           32,887,655
                                                                 ------------         ------------
         Real estate leased to others                              72,493,779           71,158,474
Operating real estate, net of accumulated depreciation of
   $4,639,138 in 1996 and $5,084,150 in 1997                        8,362,428            7,960,203
Cash and cash equivalents                                           3,338,391            1,389,144
Note receivable from affiliate                                      1,151,000            1,151,000
Other assets, net of accumulated amortization
   of $810,994 in 1996 and $1,070,882 in 1997
   and net of reserve for uncollected rents of
   $89,750 in 1997                                                  2,807,973            2,991,508
                                                                 ------------         ------------
             Total assets                                        $ 88,153,571         $ 84,650,329
                                                                 ============         ============

        LIABILITIES:

Mortgage notes payable                                           $ 32,057,088         $ 28,898,623
Note payable                                                       10,000,000           10,000,000
Accrued interest payable                                              439,078              458,317
Accounts payable and accrued expenses                                 372,012              369,947
Accounts payable to affiliates                                        131,275              387,382
Deferred rental income                                              3,544,624            3,299,462
Other liabilities                                                     361,816              296,161
                                                                 ------------         ------------
             Total liabilities                                     46,905,893           43,709,892
                                                                 ------------         ------------

Commitments and contingencies


        PARTNERS' CAPITAL:

General Partners                                                       (4,515)             (21,022)
Limited Partners (47,930 Limited
  Partnership Units issued and outstanding)                        41,252,193           40,961,459
                                                                 ------------         ------------
             Total partners' capital                               41,247,678           40,940,437
                                                                 ------------         ------------
             Total liabilities and
             partners' capital                                   $ 88,153,571         $ 84,650,329
                                                                 ============         ============
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                      -6-
<PAGE>   49
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                        CONSOLIDATED STATEMENTS of INCOME

              For the years ended December 31, 1995, 1996 and 1997


<TABLE>
<CAPTION>
                                                               1995               1996               1997
                                                               ----               ----               ----
<S>                                                        <C>                <C>                <C>
Revenues:
   Rental income                                           $ 5,195,838        $ 5,675,049        $ 6,111,378
   Interest income from
      direct financing leases                                5,814,312          5,613,415          5,831,086
   Other interest income                                       332,480            307,947            278,338
   Revenue of hotel operations                               4,630,619          4,868,017          5,036,301
   Other income                                                764,650             72,868            126,985
                                                           -----------        -----------        -----------
                                                            16,737,899         16,537,296         17,384,088
                                                           -----------        -----------        -----------

Expenses:
   Interest expense                                          4,499,692          4,003,726          3,715,143
   Depreciation                                              1,525,011          1,664,514          1,780,317
   General and administrative                                  624,249            513,074            686,848
   Operating expense of hotel
      operations                                             3,596,408          3,714,173          3,736,178
   Property expense                                            512,797            394,761            365,787
   Amortization                                                209,074            292,530            259,888
                                                           -----------        -----------        -----------
                                                            10,967,231         10,582,778         10,544,161
                                                           -----------        -----------        -----------

        Income before gain on sales and
         extraordinary item                                  5,770,668          5,954,518          6,839,927

Gain on sales of real estate                                                       70,878
                                                           -----------        -----------        -----------
      Income before extraordinary item                       5,770,668          6,025,396          6,839,927

Extraordinary gain on extinguishment of debt                 2,088,268
                                                           -----------        -----------        -----------
        Net income                                         $ 7,858,936        $ 6,025,396        $ 6,839,927
                                                           ===========        ===========        ===========

Net income allocated to:
   Individual General Partner                              $    78,588        $    71,357        $    68,399
                                                           ===========        ===========        ===========
   Corporate General Partner                               $   392,948        $   356,792        $   341,997
                                                           ===========        ===========        ===========
   Limited Partners                                        $ 7,387,400        $ 5,597,247        $ 6,429,531
                                                           ===========        ===========        ===========
Net income per Unit:
   (47,935 weighted average Limited
   Partnership Units outstanding in 1995 and 47,930
   Limited Partnership Units
   outstanding in 1996 and 1997)
       Income before extraordinary gain                    $    113.16        $    116.78        $    134.14
       Extraordinary gain                                        40.95
                                                           -----------        -----------        -----------
                                                           $    154.11        $    116.78        $    134.14
                                                           ===========        ===========        ===========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                      -7-
<PAGE>   50
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                  CONSOLIDATED STATEMENTS of PARTNERS' CAPITAL

              For the years ended December 31, 1995, 1996 and 1997




<TABLE>
<CAPTION>
                                                                           Partners' Capital Accounts
                                                    -------------------------------------------------------------------
                                                                                                               Limited
                                                                                                               Partners'
                                                                          General            Limited          Amount Per
                                                       Total             Partners            Partners         Unit  (a)
                                                       -----             --------            --------         ---------
<S>                                                 <C>                 <C>                <C>                <C>
Balance, December 31, 1994                          $37,000,616         $(345,685)         $37,346,301           $778

Distributions                                        (4,736,359)         (282,718)          (4,453,641)           (93)

Purchase of Limited Partnership Units                   (20,000)                               (20,000)


Net income, 1995                                      7,858,936           471,536            7,387,400            154
                                                    -----------         ---------          -----------           ----


Balance, December 31, 1995                           40,103,193          (156,867)          40,260,060            839

Distributions                                        (4,880,911)         (275,797)          (4,605,114)           (96)

Net income, 1996                                      6,025,396           428,149            5,597,247            117
                                                    -----------         ---------          -----------           ----


Balance, December 31, 1996                           41,247,678            (4,515)          41,252,193            860

Distributions                                        (7,129,069)         (408,804)          (6,720,265)          (140)

Accrued preferred distribution                          (18,099)          (18,099)


Net income, 1997                                      6,839,927           410,396            6,429,531            134
                                                    -----------         ---------          -----------           ----


Balance, December 31, 1997                          $40,940,437         $ (21,022)         $40,961,459           $854
                                                    ===========         =========          ===========           ====
</TABLE>

(a) Based on weighted average Units issued and outstanding.

The accompanying notes are an integral part of the consolidated financial
statements.

                                       -8-
<PAGE>   51
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                      CONSOLIDATED STATEMENTS of CASH FLOWS
              For the years ended December 31, 1995, 1996 and 1997



<TABLE>
<CAPTION>
                                                                 1995                 1996                 1997
                                                                 ----                 ----                 ----
<S>                                                          <C>                  <C>                  <C>
Cash flows from operating activities:
    Net income                                               $  7,858,936         $  6,025,396         $  6,839,927
    Adjustments to reconcile net income to net
       cash provided by operating activities:
       Depreciation and amortization                            1,734,085            1,957,044            2,040,205
       Extraordinary gain on extinguishment of debt            (2,088,268)
       Restructuring fees received                              3,800,000
       Amortization of deferred rental income
         and straight-line rent adjustments                       (10,215)            (286,620)            (305,139)
       Gain on sale of real estate                                                     (70,878)                 
       Provision for uncollected rents                            119,331                                    89,570
       Net change in operating assets and liabilities            (280,833)              (9,416)            (588,846)
                                                             ------------         ------------         ------------
            Net cash provided by operating activities          11,133,036            7,615,526            8,075,717
                                                             ------------         ------------         ------------

Cash flows from investing activities:
    Amounts received on partial prepayment of note
       receivable from affiliate                                  144,000
    Proceeds from sale of real estate                                                  603,285
    Additional capitalized costs                                 (418,020)          (1,897,022)             (42,787)
                                                             ------------         ------------         ------------
            Net cash used in investing activities                (274,020)          (1,293,737)             (42,787)
                                                             ------------         ------------         ------------

Cash flows from financing activities:
    Distributions to partners                                  (4,736,359)          (4,880,911)          (7,002,505)
    Purchase of Limited Partner Units                             (20,000)
    Proceeds from issuance of note payable                     10,000,000
    Proceeds from mortgages                                                          9,500,000
    Prepayments of mortgage notes payable                     (15,400,020)          (9,550,413)          (1,872,107)
    Payments of mortgage principal                             (1,356,271)          (1,155,596)          (1,286,358)
    Deferred financing costs net of
       amounts refunded by lender                                (282,320)            (373,393)             178,793
                                                             ------------         ------------         ------------
            Net cash used in financing activities             (11,794,970)          (6,460,313)          (9,982,177)
                                                             ------------         ------------         ------------


            Net decrease in cash and
               cash equivalents                                  (935,954)            (138,524)          (1,949,247)


Cash and cash equivalents, beginning of year                    4,412,869            3,476,915            3,338,391
                                                             ------------         ------------         ------------


         Cash and cash equivalents, end of year              $  3,476,915         $  3,338,391         $  1,389,144
                                                             ============         ============         ============
</TABLE>

                                   (Continued)

                                      -9-
<PAGE>   52
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                     CONSOLIDATED STATEMENTS of CASH FLOWS, Continued
                   For the years ended December 31, 1995, 1996 and 1997
                               






Supplemental disclosure of financing activities:

<TABLE>
<CAPTION>
<S>                                                                                <C>
A.  Accrued preferred distribution as of December 31, 1997                                                 $    18,099
                                                                                   ===========           

B. During the year ended December 31, 1995, the Partnership recognized an
extraordinary gain on the extinguishment of debt.


                  Cash payment made in connection with satisfaction
                      of debt obligation                                           $(5,440,000)
                  Direct costs of transaction                                          (31,085)
                  Mortgage note payable balance at extinguishment                    6,853,966
                  Accrued interest on mortgage debt at extinguishment                  705,387
                                                                                   -----------
                           Extraordinary gain on extinguishment of debt            $ 2,088,268
                                                                                   ===========
</TABLE>




The accompanying notes are an integral part of the consolidated financial
statements.

                                      -10-
<PAGE>   53
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                   NOTES to CONSOLIDATED FINANCIAL STATEMENTS

1.      Summary of Significant Accounting Policies:

         Basis of Consolidation:

            The consolidated financial statements include the accounts of
               Corporate Property Associates 6 and two 99% owned subsidiaries,
               CPA(R) Burnhaven Limited Partnership and CPA(R) Peerless Limited
               Partnership, (collectively, the "Partnership"). All material
               inter-entity transactions have been eliminated

         Use of Estimates:

            The preparation of financial statements in conformity with generally
               accepted accounting principles requires management to make
               estimates and assumptions that affect the reported amounts of
               assets and liabilities and disclosure of contingent assets and
               liabilities at the date of the financial statements and the
               reported amounts of revenues and expenses during the reporting
               period. The most significant estimates relate to the assessment
               of recoverability of real estate assets. Actual results could
               differ from those estimates

         Real Estate Leased to Others:

            Real estate is leased to others on a net lease basis, whereby the
               tenant is generally responsible for all operating expenses
               relating to the property, including property taxes, insurance,
               maintenance, repairs, renewals and betterments.

            The Partnership diversifies its real estate investments among
               various corporate tenants engaged in different industries and by
               property type throughout the United States.

            The leases are accounted for under either the direct financing or
               operating methods. Such methods are described below:

                      Direct financing method - Leases accounted for under the
                      direct financing method are recorded at their net
                      investment (Note 5). Unearned income is deferred and
                      amortized to income over the lease terms so as to produce
                      a constant periodic rate of return on the Partnership's
                      net investment in the lease.

                      Operating method - Real estate is recorded at cost, rental
                      revenue is recognized on a straight-line basis over the
                      term of the leases and expenses (including depreciation)
                      are charged to operations as incurred.

            The Partnership assesses the recoverability of its real estate
               assets, including residual interests, based on projections of
               undiscounted cash flows over the life of such assets. In the
               event that such cash flows are insufficient, the assets are
               adjusted to their estimated fair value.

            Substantially all of the Partnership's leases provide for either
               scheduled rent increases, periodic rent increases based on
               formulas indexed to increases in the Consumer Price Index or
               sales overrides.

         Operating Real Estate:

            Land, buildings and personal property are carried at cost. Major
               renewals and improvements are capitalized to the property
               accounts, while replacements, maintenance and repairs which do
               not improve or extend the lives of the respective assets are
               expensed currently.

                                    Continued

                                      -11-
<PAGE>   54
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


         Depreciation:

            Depreciation is computed using the straight-line method over the
               estimated useful lives of the components of the particular
               properties, which range from 5 to 30 years.

         Cash Equivalents:

            The Partnership considers all short-term, highly liquid investments
               that are both readily convertible to cash and have a maturity of
               generally three months or less at the time of purchase to be cash
               equivalents. Items classified as cash equivalents include
               commercial paper and money market funds. Substantially all of the
               Partnership's cash and cash equivalents at December 31, 1996 and
               1997 were held in the custody of three and two financial
               institutions, respectively.

         Other Assets:


            Included in the assets are deferred rental income, deferred charges
               incurred in connection with mortgage note financings and
               refinancings and deferred costs of Consolidation (see Note 15).
               Deferred rental is the aggregate difference for operating leases
               between scheduled rents which vary during the lease term and
               income recognized on a straight-line basis. Deferred charges are
               amortized over the terms of the mortgages. Deferred costs of
               Consolidation represent certain costs related to a Consolidation
               transaction which have been capitalized. Consolidation costs will
               be included in the revaluation of assets subsequent to December
               31, 1997.


         Income Taxes:

            A partnership is not liable for Federal income taxes as each
               partner recognizes his proportionate share of the partnership
               income or loss in his tax return. Accordingly, no provision for
               income taxes is recognized for financial statement purposes.

         Deferred Rental Income:

            A lease amendment fee of $3,800,000 received in 1995 in connection
               with the amendment of one of the Partnership's leases is being
               amortized as deferred rental income from the date of the
               amendment through the end of the initial term of the lease
               (15-1/2 years).

         Reclassifications:

            Certain 1995 and 1996 amounts have been reclassified to conform to
               the 1997 financial statement presentation.

2.      Partnership Agreement:

            The Partnership was organized on July 23, 1984 under the Revised
               Uniform Limited Partnership Act of the State of California for
               the purpose of engaging in the business of investing in and
               leasing industrial and commercial real estate. The Partnership
               will terminate on December 31, 2004, or sooner, in accordance
               with the terms of the Amended Agreement of Limited Partnership
               (the "Agreement").

                                    Continued

                                      -12-
<PAGE>   55
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


            Through December 31, 1997, the Agreement provided that the General
               Partners were allocated 6% (1% to the Individual General Partner,
               William Polk Carey and 5% to the Corporate General Partner, Carey
               Corporate Property, Inc. ("Carey Property")), and the Limited
               Partners were allocated 94% of the profits and losses as well as
               distributions of Distributable Cash From Operations, as defined.
               The partners are also to receive net proceeds from the sale of
               Partnership properties as defined in the Agreement. Effective
               January 1, 1998, as a result of the merger (Note 15) of the
               Partnership with a subsidiary partnership of Carey Diversified
               LLC ("Carey Diversified"), Carey Diversified is the sole general
               partner of the Partnership. Carey Diversified and the holders of
               Subsidiary Partnership Units are allocated 94% of the profits and
               losses and distributable cash, and two special limited partners,
               Carey Management LLC ("Carey Management") and William Polk Carey,
               are allocated 5% and 1% of the profits and losses and
               distributable cash, respectively.

            In connection with the merger with Carey Diversified and the listing
               on the New York Stock Exchange, a division of W.P. Carey & Co.,
               Inc. ("W.P. Carey ), an affiliate of the Corporate General
               Partner, satisfied the provisions for receiving a subordinated
               preferred return of $18,099, which was measured based upon the
               cumulative proceeds arising from the sale of the Partnership's
               assets. Such amount has been included in accounts payable to
               affiliates as of December 31, 1997. The preferred return, paid in
               January 1998, was subject to provisions that limited such payment
               until a specified cumulative return to limited partners was
               achieved.


 3.     Transactions with Related Parties:

            The Partnership holds its 35% interest in hotel properties in Alpena
               and Petoskey, Michigan and its 34.4828% ownership interest in a
               hotel property in Livonia, Michigan as tenants-in-common with
               affiliates who own the remaining interests. The Partnership's
               undivided interests in the assets and liabilities of the hotel
               properties are accounted for on a proportional basis.

            The Partnership holds a $1,151,000 note receivable made by Corporate
               Property Associates 5 ("CPA(R):5"), an affiliate. The note bears
               interest at the rate of 13.48% through August 1, 1999, at which
               time the interest rate will reset to the Applicable Federal Rate
               (as defined in the Internal Revenue Code of 1986) at that date.
               The note matures on May 1, 2012, at which time the entire
               outstanding principal balance will be due. Under certain
               circumstances, the principal balance on the note may be reduced.

            Under the Agreement, W.P. Carey and other affiliates were entitled
               to receive a property management fee and reimbursement of certain
               expenses incurred in connection with the Partnership's
               operations. General and administrative expense reimbursements
               consist primarily of the actual cost of personnel needed in
               providing administrative services necessary to the operation of
               the Partnership. Effective January 1, 1998 the fees and
               reimbursements are payable to Carey Management, an affiliate of
               Carey Diversified. Property management fee and general and
               administrative expense reimbursements are summarized as follows:

<TABLE>
<CAPTION>
                                                                           1995            1996              1997
                                                                           ----            ----              ----
<S>                                                                     <C>              <C>               <C>
                  Property management fee                               $156,629         $111,048          $115,717
                  General and administrative
                      expense reimbursements                             152,795          115,128           255,804
                                                                        --------         --------          --------
                                                                        $309,424         $226,176          $371,521
                                                                        ========         ========          ========
</TABLE>

                                   Continued

                                      -13-
<PAGE>   56
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued

            During 1995, 1996 and 1997, fees aggregating $102,893, $44,215 and
               $27,781, respectively, were incurred for legal services performed
               by a firm in which the Secretary, until July 1997, of W.P. Carey
               and Carey Property and other affiliates is a partner.

            The Partnership is a participant in an agreement with W.P. Carey and
               other affiliates for the purpose of leasing office space used for
               the administration of real estate entities and W.P. Carey and for
               sharing the associated costs. Pursuant to the terms of the
               agreement, the Partnership's share of rental, occupancy and
               leasehold improvement costs is based on adjusted gross revenues
               as defined. Expenses incurred in 1995, 1996 and 1997 were
               $94,719, $108,362 and $89,748, respectively.


 4.     Real Estate Leased to Others Accounted for Under the Operating
        Method and Operating Real Estate:

      A.    Real Estate Leased to Others:

            Scheduled future minimum rents, exclusive of renewals, under
               noncancellable operating leases amount to approximately
               $5,700,000 in 1998; $5,783,000 in 1999; $5,794,000 in 2000;
               $4,839,000 in 2001, $4,237,000 in 2002; and aggregate
               approximately $49,803,000 through 2011.

            Contingent rents were approximately $171,000, $378,000 and $352,000
               in 1995, 1996 and 1997, respectively.

      B.    Operating Real Estate:

            Operating real estate, at cost, is summarized as follows:

<TABLE>
<CAPTION>
                                                                       December 31,
                                                               --------------------------
                                                                   1996            1997
                                                                   ----            ----
<S>                                                            <C>             <C>
                      Land                                     $ 1,337,262     $ 1,337,262
                      Building                                   9,723,824       9,943,795
                      Personal property                          1,940,480       1,763,296
                                                               -----------     -----------
                                                                13,001,566      13,044,353
                      Less, Accumulated depreciation             4,639,138       5,084,150
                                                               -----------     -----------
                                                               $ 8,362,428     $ 7,960,203
                                                               ===========     ===========
</TABLE>

5.      Net Investment in Direct Financing Leases:

            Net investment in direct financing leases is summarized as follows:

<TABLE>
<CAPTION>
                                                                          December 31,
                                                                 -------------------------------
                                                                      1996              1997
                                                                      ----              ----
<S>                                                              <C>                <C>
                      Minimum lease payments receivable          $ 55,194,360       $ 50,988,454
                      Unguaranteed residual value                  32,887,655         32,887,655
                                                                 ------------       ------------
                                                                   88,082,015         83,876,109
                      Less, Unearned income                        55,194,360         50,988,454
                                                                 ------------       ------------
                                                                 $ 32,887,655       $ 32,887,655
                                                                 ============       ============
</TABLE>

                                    Continued

                                      -14-
<PAGE>   57
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued



            Scheduled future minimum rents, exclusive of renewals, under
               noncancellable financing leases amount to approximately
               $4,206,000 in each of the years 1998 to 2002 and aggregate
               approximately $50,988,000 through the year 2011.

            Contingent rents were approximately $1,113,000, $1,138,000 and
               $1,625,000 in 1995, 1996 and 1997, respectively.


 6.     Mortgage Notes Payable and Note Payable:

        A.     Mortgage notes payable, all of which are limited recourse
               obligations, are collateralized by the assignment of various
               leases and by real property with a gross amount of
               approximately $57,823,000, before accumulated depreciation. As of
               December 31, 1997, mortgage notes payable bear interest at rates
               varying from 6.6% to 10.5% per annum and mature from 1998 to
               2015.

 .           Scheduled principal payments, during each of the next five years
               following December 31, 1997 and thereafter are as follows:

<TABLE>
<CAPTION>
               Year Ending December 31,
               ------------------------
<S>            <C>                                                       <C>
                  1998                                                    $14,030,463
                  1999                                                        841,942
                  2000                                                        910,103
                  2001                                                      9,142,001
                  2002                                                        390,542
                  Thereafter                                                3,583,572
                                                                          -----------
                     Total                                                $28,898,623
                                                                          ===========
</TABLE>

        B. The Partnership's $10,000,000 note payable requires quarterly
             payments of interest only at the variable interest rate of the
             three-month London Inter-Bank Offered Rate ("LIBOR") plus 4.25% per
             annum and is subject to the following conditions: The Partnership
             must offer as a prepayment to the lender the proceeds from the sale
             of any Partnership properties; however, the lender may decline such
             proceeds. The Partnership must maintain ratios of Free Operating
             Cash Flow, as defined, to debt service on the loan ranging from
             3.4:1 to 3:1 over the life of the agreement and maintain a
             consolidated net worth and appraised property values of
             $25,000,000, as adjusted. Under the terms of the credit agreement,
             the Partnership also has agreed that it may obtain new limited
             recourse debt on any of its properties only for the purpose of
             refinancing existing mortgage debt. Total mortgage indebtedness may
             not exceed $37,952,884, at the inception of the loan, as adjusted
             for subsequent scheduled principal amortization on existing
             mortgage loans plus closing costs on any new loans. At December 31,
             1997, the Partnership is in compliance with such terms.

                                    Continued

                                      -15-
<PAGE>   58
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued




            The $10,000,000 credit agreement loan is a recourse obligation of
               the Partnership and matures on July 1, 1999. Except for the
               application of proceeds from the sale of properties and other
               limited circumstances, no loan prepayments may be made until
               January 1, 1999.

            Interest paid on mortgage notes payable and note payable was
               $4,894,003, $4,046,843 and $3,695,904 in 1995, 1996 and 1997,
               respectively.



7.      Distributions to Partners:

        Distributions are declared and paid to partners quarterly and are
               summarized as follows:

<TABLE>
<CAPTION>
                    Distributions Paid                                Limited
  Year Ending         and Payable to        Distributions Paid     Partners' Per
  December 31,       General Partners       to Limited Partners     Unit Amount
  ------------       ----------------       -------------------     -----------
<S>                 <C>                     <C>                   <C>
     1995               $282,718                $4,453,641            $92.91
                        ========                ==========            ======
     1996               $275,797                $4,605,114            $96.08
                        ========                ==========            ======
     1997               $408,804                $6,720,265           $140.21
                        ========                ==========           =======
</TABLE>


        Distributions for 1997 include distributions of $2,065,304 to Limited
Partners and $126,564 to General Partners declared and paid in December 1997.
        

 8.     Income for Federal Tax Purposes:

            Income for financial statement purposes differs from income for
               Federal income tax purposes because of the difference in the
               treatment of certain items for income tax purposes and financial
               statement purposes. A reconciliation of accounting differences is
               as follows:

<TABLE>
<CAPTION>
                                                             1995           1996              1997
                                                             ----           ----              ----
<S>                                                      <C>             <C>              <C>
             Net income per Statements of Income         $ 7,858,936     $6,025,396       $ 6,839,927
             Excess tax depreciation                      (2,289,920)    (1,608,909)       (1,617,727)
             Difference in recognition of
                lease amendment fee                        3,101,971
             Other                                          (799,351)      (723,429)         (691,789)
                                                         -----------     ----------       -----------
                    Income reported for Federal
                       income tax purposes               $ 7,871,636     $3,693,058       $ 4,530,411
                                                         ===========     ==========       ===========
</TABLE>

                                    Continued

                                      -16-
<PAGE>   59
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued




 9.     Industry Segment Information:

            The Partnership's operations consist of the investment in and the
               leasing of industrial and commercial real estate and its
               participation in the operation of three hotels.

            In 1995, 1996 and 1997, the Partnership earned its total leasing
               revenues (rental income plus interest income from financing
               leases) from the following lease obligors:

<TABLE>
<CAPTION>
                                                    1995           %             1996          %               1997         %
                                                    ----           -             ----          -               ----         -
<S>                                             <C>              <C>         <C>              <C>          <C>              <C>
   Thermadyne Holdings Corp.
      (assigned by Stoody Deloro
      Stellite, Inc.)                           $ 2,147,046       19%        $ 2,234,191       20%         $ 2,234,191      19%
   AP Parts International, Inc.                   1,526,387       14           1,728,527       15            1,836,533      15
   Peerless Chain Company                         1,279,668       12           1,611,600       14            1,708,586      14
   AutoZone, Inc.                                 1,447,852       13           1,336,895       12            1,483,958      12
   Kinney Shoe Corporation/Armel, Inc.              679,063        6             745,806        7              964,941       8
   Wal-Mart Stores, Inc.                            827,265        8             848,553        7              891,129       8
   Anthony's Manufacturing
      Company, Inc.                               1,072,711       10             876,000        8              876,000       7
   Motorola, Inc.                                   500,000        5             540,000        5              540,000       5
   Harcourt General Corporation                     467,500        4             467,500        4              467,500       4
   Yale Security, Inc.                                                           355,706        3              459,227       4
   Lockheed Martin Corporation                      293,000        3             304,333        3              310,000       3
   Winn-Dixie Stores, Inc.                          170,399        1             170,399        1              170,399       1
   Folger Adam Company                              599,259        5              68,954        1
                                                -----------      ----        -----------      ---          -----------     ----
                                                $11,010,150      100%        $11,288,464      100%         $11,942,464     100%
                                                ===========      ====        ===========      ====         ===========     ====
</TABLE>

            Summarized operating results of the Partnership's share of the
               operations of three hotels are:

<TABLE>
<CAPTION>
                                                   1995               1996             1997
                                                   ----               ----             ----
<S>                                             <C>               <C>               <C>
        Revenues                                $ 4,630,619       $ 4,868,017       $ 5,036,301
        Fees paid to hotel management
           company                                  (94,948)         (105,839)         (127,438)
        Other operating expenses                 (3,501,460)       (3,608,334)       (3,608,740)
                                                -----------       -----------       -----------
        Hotel operating income                  $ 1,034,211       $ 1,153,844       $ 1,300,123
                                                ===========       ===========       ===========
</TABLE>



10.     Hotel Property in Livonia, Michigan:

            In November 1987, the Partnership and Corporate Property Associates
               7 ("CPA(R):7"), an affiliate, purchased a Holiday Inn in Livonia,
               Michigan with 34.4828% and 65.5172% interests, respectively, as
               tenants-in-common and entered into a net lease with Brock Hotel
               Corporation which subsequently changed its name to Integra-A
               Hotel and Restaurant Company ("Integra"). Integra subsequently
               assigned its interest in the lease to a wholly-owned subsidiary,
               Livonia Inn Management, Inc. while Integra remained the guarantor
               of the lease.

                                    Continued

                                      -17-
<PAGE>   60
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued



            As a result of Integra's financial condition, the subsidiary stopped
               paying rent in May 1992 with Integra subsequently filing a
               voluntary bankruptcy petition in July 1992. Both of these events
               were defaults under the lease as well as under the mortgage note
               collateralized by the Livonia property. In August 1992, pursuant
               to a letter of agreement, the Partnership and CPA(R):7 assumed
               control of the hotel operations.

            In March 1994, the Partnership and CPA(R):7, executed a settlement
               agreement with the Hallwood Group, Inc. ("Hallwood Group"),
               Integra's largest shareholder, under which the Partnership and
               CPA(R):7 agreed to surrender a promissory note made by Hallwood
               Group, which had been pledged by Integra to the Partnership and
               CPA(R):7 as additional security to Integra's lease obligation, in
               exchange for $150,000 in cash, a $500,000 promissory note from
               Hallwood Group and an equity participation having a potential
               value of up to $500,000 from the Hallwood Group. The $500,000
               note which matured March 8, 1998 was collateralized by the
               Hallwood Group's pledge of its limited partnership units of
               Hallwood Realty Partners, L.P. ("Hallwood Realty"), a publicly
               traded partnership. Under the settlement agreement, the Hallwood
               Group had the obligation to pay to the Partnership and CPA:(R)7
               an amount equal to 25% of the increase in value of the Hallwood
               Realty units up to $500,000, from March 1994 to the note maturity
               date. On the maturity date, Hallwood Group tendered approximately
               $1,100,000 in an effort to redeem the collateral while reserving
               its right to continue litigating over its underlying obligation
               to the Partnership and CPA(R):7. The Partnership and CPA(R):7
               have determined that it is not in their best interests to accept
               on these terms and are considering other alternatives.

            During 1996 and 1997, the Partnership and CPA(R):7 received
               approximately $221,000 and $368,000 (of which the Partnership's
               share was $77,000 and $127,000) from the bankruptcy trustee in
               partial settlement of the Partnership's and CPA(R):7's claim
               against Integra.

            In January 1998, the Partnership and CPA(R):7 finalized an agreement
               to lease the Livonia property to Livho, Inc. ("Livho"), an
               affiliate. All of the licenses and franchise agreements of the
               hotel operations were transferred to Livho in 1998. The lease
               which has an initial term of 10 years and four five-year renewal
               options initially provides for annual rent of $2,348,000 (of
               which the Partnership's share is $810,000) increasing to
               $2,923,000 in 1999 and stated increases every year thereafter.
               The lease includes net lease provisions which requires Livho to
               pay the costs of insurance, real estate taxes and repairs and
               maintenance. The Partnership and CPA(R):7 will retain the
               obligation to fund capital improvements. The security holder of
               the common stock of Livho is an affiliate. If the Partnership and
               CPA(R):7 continued to operate the hotel directly, there would
               have been adverse tax consequences for those Limited Partnership
               Unitholders who had exchanged their limited partnership units for
               interests in Carey Diversified LLC ("Carey Diversified").

11.   Extraordinary Gain on Extinguishment of Debt:

            In May 1995, the Partnership and Anthony's Manufacturing Company,
               Inc. ("Anthony's") entered into a settlement agreement at which
               time the Partnership withdrew its eviction suit against
               Anthony's. The Partnership had filed an eviction notice because
               Anthony's had not paid a scheduled monthly rent increase of
               $10,485 which had been effective since March 1992 and had made
               only two monthly rental payments between February 1994 and April
               1995. In connection with the

                                    Continued

                                      -18-
<PAGE>   61
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued



               settlement agreement, Anthony's made lump sum payments
               aggregating $1,550,000 in settlement of a rent arrearage of
               $1,712,098. Of the $1,550,000 received $561,710 was applied to
               1995 rents receivable for the period from January 1, 1995 through
               May 31, 1995 with the remaining $988,290 applied to prior period
               rents. The amounts related to prior periods, had been included in
               the Partnership's reserve for uncollected rents. Net of the legal
               costs of the settlement of $300,476, the Partnership recognized
               $687,814 on the settlement which was included as other income in
               1995. Under the settlement, the Partnership and Anthony's agreed
               to modify the existing lease. Anthony's monthly rental payment
               was decreased from $112,342 to $73,000 and the expiration of the
               initial term of the lease was extended to May 2007 from February
               2002. The amended lease also provides for rental increases in
               1998, 2001 and 2005.

            In May 1995, the Partnership satisfied the mortgage loan
               collateralized by the Anthony's properties. The lender accepted a
               payment of $5,440,000 to satisfy an outstanding principal balance
               of $6,853,966 and accrued interest thereon of $705,387. In
               connection with the satisfaction of the debt, the Partnership
               recognized an extraordinary gain on the extinguishment of debt of
               $2,088,268, net of certain related legal costs in 1995.

12.   Gain on Sales of Real Estate:

            On January 26, 1996 and April 26, 1996, the Partnership sold
               property in Dalton, Georgia and Birmingham Alabama, respectively,
               leased to AutoZone, Inc. ("AutoZone"), at an aggregate price of
               $603,285, net of selling costs, realizing a gain of $70,878 on
               the sales. AutoZone's leases allow it to sever properties from
               its leases and purchase such properties that it judges to be
               unsuitable for its retail business. The Partnership was required
               to assign the proceeds of the sales to its lender as a partial
               prepayment on the mortgage loan collateralized by the AutoZone
               property. In connection with the sales, annual rent of the
               AutoZone lease was reduced by $67,635; however, cash flow
               increased because annual debt service on the mortgage loan was
               reduced by $98,197 as a result of a reamortization of the loan.


13    Environmental Matters:

            All of the Partnership's properties, other than the hotel
               properties, are currently leased to corporate tenants. All of the
               properties are subject to environmental statutes and regulations
               regarding the discharge of hazardous materials and related
               remediation obligations. The Partnership generally structures a
               lease to require the tenant to comply with all laws. In addition,
               substantially all of the Partnership's net leases include
               provisions which require tenants to indemnify the Partnership
               from all liabilities and losses related to their operations at
               the leased properties. In the event that the Partnership absorbs
               a portion of any costs, the General Partner believes such
               expenditures will not have a material adverse effect on the
               Partnership's financial condition, liquidity or results of
               operations.

            In 1994, based on the results of Phase I environmental reviews
               performed in 1993, the Partnership voluntarily conducted Phase II
               environmental reviews on various of its properties. The
               Partnership believes, based on the results of such Phase I and
               Phase II reviews, that its properties are in substantial
               compliance with Federal and state environmental statutes and
               regulations. Portions of certain properties have been documented
               as having a limited degree of contamination, principally in
               connection with leakage from underground storage tanks or surface
               spills. For those conditions which were identified, the
               Partnership advised the affected tenant of the Phase II findings
               and of its obligation to perform required remediation.

                                      -19-
<PAGE>   62
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued




14.     Disclosures About Fair Value of Financial Instruments:
               

            The carrying amounts of cash, receivables and accounts payable and
               accrued expenses approximate fair value because of the short
               maturity of these items.



            The Partnership estimates that the fair value of mortgage notes
               payable approximates the carrying amount of such mortgage notes
               at December 31, 1996 and 1997. The fair value of debt instruments
               was evaluated using a discounted cash flow with discount rates
               which take into account the credit of the tenants and interest
               rate risk. The Partnership note payable is a variable rate
               obligation indexed to the three-month LIBOR. Accordingly, the
               carrying amount of the note payable approximates fair value as of
               December 31, 1996 and 1997. Management believes that it is not
               practicable to estimate fair value for the note receivable from
               affiliate.



15.      Exchange of Limited Partnership Units:

            In October 1997, Carey Diversified distributed a Consent
               Solicitation Statement/Prospectus to the Limited Partners which
               described a proposal to consolidate the Partnership with the
               other CPA(R) Partnerships. The General Partners' proposals that
               each of the nine CPA(R) limited partnerships be merged with a
               corresponding subsidiary partnership of Carey Diversified, of
               which Carey Diversified is the general partner, was approved by
               the Limited Partners of all nine of the CPA(R) limited
               partnerships. Each limited partner had the option of either
               exchanging his or her limited partnership interest for an
               interest in Carey Diversified ("Listed Shares") or to retain a
               limited partnership interest in the subsidiary partnership
               ("Subsidiary Partnership Units"). On January 1, 1998, 2,760
               holders representing 47,261 of the 47,930 limited partnership
               units exchanged such units for 3,262,427 Listed Shares with 43
               holders with the remaining 669 limited partnership units
               exchanging such units for Subsidiary Partnership Units. The
               General Partners received 17,695 Listed Shares for their interest
               in their share of the appreciation in Partnership properties.

            Listed shares commenced public trading on the New York Stock
               Exchange on January 21, 1998. Subsidiary Partnership Units
               provide substantially the same economic interest and legal rights
               as those of a limited partnership unit in the Partnership, but
               are not listed on a securities exchange. A liquidating
               distribution to holders of Subsidiary Partnership Units will be
               made is as soon as practicable after an appraisal of the
               Partnership's properties which appraisal date is to be no later
               than December 31, 2001.

16.      Accounting Pronouncements:

            In June 1997, the FASB issued Statement of Financial Accounting
               Standards ("SFAS") No. 130, "Reporting Comprehensive Income" and
               SFAS No. 131, "Disclosure about Segments of an Enterprise and
               Related Information." SFAS No. 130 establishes standards for
               reporting and display of comprehensive income and its components
               (revenues, expenses, gains and losses) in full set general
               purpose financial statements. SFAS No. 131 establishes accounting
               standards for the way that public business enterprises report
               selected information about operating segments in interim
               financial reports issued to shareholders. SFAS No. 130 and SFAS
               No. 131 are required to be adopted by 1998. The Partnership is
               currently evaluating the impact, if any, of SFAS No. 130 and SFAS
               131.

                                      -20-
<PAGE>   63
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              SCHEDULE of REAL ESTATE and ACCUMULATED DEPRECIATION

                             as of December 31, 1997


<TABLE>
<CAPTION>

                                                       Initial Cost to                                                   Costs
                                                         Partnership                                                 Capitalized
                                                    ------------------------       Personal        Decrease in       Subsequent to
    Description                   Encumbrances      Land           Buildings       Property      Net Investment(b)   Acquisition(a)
    -----------                   ------------      ----           ---------       --------      -----------------   --------------
<S>                               <C>            <C>              <C>              <C>           <C>                 <C>

Operating method:
 Office facility leased
  to Motorola, Inc.               $ 2,051,702    $   387,000      $ 3,981,000                                          $   11,455
 Land leased to
  AutoZone, Inc.                    3,221,466      4,189,757                                         $(200,744)
 Warehouse and manufacturing
  facility leased to
  Lockheed Martin
  Corporation                                        398,475        2,590,092                                              26,491
 Motion picture theatre
  leased to Harcourt General
  Corporation                       1,895,864      1,144,000        3,186,000                                              11,035
 Warehouse and office
  facility leased to
  Kinney Shoe Corporation/
  Armel, Inc.                          11,058      1,360,935        3,899,415                                               8,000
 Manufacturing facilities
  leased to AP Parts
  Manufacturing Company, Inc.       5,397,705        443,500       11,256,500                                           1,733,087
 Manufacturing facilities
  leased to Anthony's
  Manufacturing Company, Inc.                      3,200,000        8,300,000
 Manufacturing and office
  facility leased to
  Yale Security, Inc.                                300,000        3,400,000
 Retail store leased to
  Winn Dixie Stores, Inc.                            276,600        1,631,560                                              27,730
                                  -----------    -----------      -----------                       ----------         ----------
                                  $12,577,795    $11,700,267      $38,244,567                       $ (200,744)        $1,817,798
                                  ===========    ===========      ===========                       ==========         ==========
Operating real estate (d):
 Hotel properties located in
  Alpena, Michigan                $ 2,502,500     $   73,500       $2,645,125      $  259,875                          $  439,529
  Petoskey, Michigan                2,502,500        184,450        2,526,125         267,925                             325,636
  Livonia, Michigan                 2,567,939      1,079,312        4,279,315         779,311                             184,250
                                  -----------    -----------      -----------      ----------                          ----------
                                  $ 7,572,939    $ 1,337,262      $ 9,450,565      $1,307,111                          $  949,415
                                  ===========    ===========      ===========      ==========                          ==========
</TABLE>





<TABLE>
<CAPTION>

                                         Gross Amount at which Carried
                                        at Close of Period(a)(c) (d) (e)
                                      --------------------------------------
                                                                    Personal                        Accumulated
    Description                       Land          Buildings       Property            Total       Depreciation (d)(e)
    -----------                       ----          ---------       --------            -----       -------------------
<S>                                 <C>            <C>              <C>              <C>            <C>

Operating method:
 Office facility leased
  to Motorola, Inc.                 $ 387,000      $ 3,992,455                       $ 4,379,455        $ 1,602,310
 Land leased to
  AutoZone, Inc.                    3,989,013                                          3,989,013
 Warehouse and manufacturing
  facility leased to
  Lockheed Martin
  Corporation                         401,541        2,613,517                         3,015,058          1,012,127
 Motion picture theatre
  leased to Harcourt General
  Corporation                       1,144,000        3,197,035                         4,341,035          1,216,700
 Warehouse and office
  facility leased to
  Kinney Shoe Corporation/
  Armel, Inc.                       1,360,935        3,907,415                         5,268,350          1,470,719
 Manufacturing facilities
  leased to AP Parts
  Manufacturing Company, Inc.         443,500       12,989,587                        13,433,087          4,248,706
 Manufacturing facilities
  leased to Anthony's
  Manufacturing Company, Inc.       3,200,000        8,300,000                        11,500,000          3,001,667
 Manufacturing and office
  facility leased to
  Yale Security, Inc.                 300,000        3,400,000                         3,700,000            198,333
 Retail store leased to
  Winn Dixie Stores, Inc.             276,600        1,659,290                         1,935,890            540,507
                                  -----------      -----------                       -----------        -----------
                                  $11,502,589      $40,059,299                       $51,561,888        $13,291,069
                                  ===========      ===========                       ===========         ==========
Operating real estate (d):
 Hotel properties located in
  Alpena, Michigan                $    73,500      $ 2,835,213      $  509,316       $ 3,418,029        $ 1,392,091
  Petoskey, Michigan                  184,450        2,645,016         474,670         3,304,136          1,357,535
  Livonia, Michigan                 1,079,312        4,463,566         779,310         6,322,188          2,334,524
                                  -----------      -----------      ----------       -----------        -----------
                                  $ 1,337,262      $ 9,943,795      $1,763,296       $13,044,353        $ 5,084,150
                                  ===========      ===========      ==========       ===========        ===========
</TABLE>




<TABLE>
<CAPTION>
                                                           Life on which
                                                          Depreciation in
                                                           Latest Income
                                                             Statement
    Description                    Date Acquired            is Computed
    -----------                    -------------            -----------
<S>                                <C>                    <C>
Operating method:
 Office facility leased
  to Motorola, Inc.                December 23, 1985         30 yrs.
 Land leased to                    January 17, 1986          N/A
  AutoZone, Inc.                   May 2, 1986
 Warehouse and manufacturing
  facility leased to
  Lockheed Martin
  Corporation                      May 15, 1986              30 yrs.
 Motion picture theatre
  leased to Harcourt General
  Corporation                      July 31, 1986             30 yrs.
 Warehouse and office
  facility leased to
  Kinney Shoe Corporation/
  Armel, Inc.                      September 17, 1986        30 yrs.
 Manufacturing facilities
  leased to AP Parts
  Manufacturing Company, Inc.      December 23, 1986         30 yrs.
 Manufacturing facilities
  leased to Anthony's
  Manufacturing Company, Inc.      February 24, 1987         30 yrs.
 Manufacturing and office
  facility leased to
  Yale Security, Inc.              August 13, 1985           30 yrs.
 Retail store leased to
  Winn Dixie Stores, Inc.          March 21, 1988            30 yrs.



Operating real estate (d):
 Hotel properties located in
  Alpena, Michigan                 October 28, 1991           5-30 yrs.
  Petoskey, Michigan               October 28, 1991           5-30 yrs.
  Livonia, Michigan                November 20, 1987          5-30 yrs.
</TABLE>

See accompanying notes to Schedule.

                                      -21-
<PAGE>   64
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

              SCHEDULE of REAL ESTATE and ACCUMULATED DEPRECIATION

                             as of December 31, 1997




<TABLE>
<CAPTION>
                                                       Initial Cost To                                Costs
                                                         Partnership                               Capitalized
                                                    --------------------         Decrease in       Subsequent to
   Description                  Encumbrances        Land       Buildings      Net Investment(b)   Acquisition(a)
   -----------                  ------------        ----       ---------      -----------------   --------------
<S>                            <C>              <C>           <C>             <C>                 <C>
Financing method:
 Manufacturing and
  warehouse facility
  leased to Thermodyne
  Holdings Corporation                          $2,615,000    $ 9,085,000


 Retail stores leased to
  AutoZone, Inc.                 $5,396,609                     7,004,305         $(321,900)


 Manufacturing facility
  leased to Peerless
  Chain Company                                    829,000      6,991,000


 Retail and warehouse
  facility leased to
  Wal-Mart Stores, Inc.,          3,351,280      1,467,000      5,208,000                             $10,250
                                -----------     ----------    -----------         ---------           -------

                                 $8,747,889     $4,911,000    $28,288,305         $(321,900)          $10,250
                                 ==========     ==========    ===========         =========           =======
</TABLE>




<TABLE>
<CAPTION>

                                 Gross Amount at Which Carried
                                 at Close of Period (c)
                                 -----------------------------
   Description                         Total                         Date Acquired
   -----------                         -----                         -------------
<S>                             <C>                                 <C>
Financing method:
 Manufacturing and
  warehouse facility
  leased to Thermodyne                                                                
  Holdings Corporation              $11,700,000                      February 14, 1985


Retail stores leased to                                             
 AutoZone, Inc.                      6,682,405                      January 17, 1986 and
                                                                     May 2, 1986


 Manufacturing facility
  leased to Peerless
  Chain Company                       7,820,000                      June 18, 1986


 Retail and warehouse
  facility leased to
  Wal-Mart Stores, Inc.,              6,685,250                      August 7, 1986
                                    -----------

                                    $32,887,655
                                    ===========
</TABLE>

See accompanying notes to Schedule.

                                      -22-
<PAGE>   65
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                        NOTES TO SCHEDULE of REAL ESTATE
                          and ACCUMULATED DEPRECIATION




        (a)  Consists of acquisition costs including legal fees, appraisal fees,
             title costs and other related professional fees and purchase of
             furniture, fixtures, equipment and improvements at the hotel
             properties.

        (b)  Decrease in net investment consists of decreases due to sale of
             properties.

        (c)  At December 31, 1997, the aggregate cost of real estate owned for
             Federal income tax purposes is $97,122,233.

        (d)

<TABLE>
<CAPTION>
                                                Reconciliation of Real Estate Accounted
                                                     for Under the Operating Method

                                                                      December 31,
                                                                ------------------------
                                                                1996                1997
                                                                ----                ----
<S>                                                        <C>                  <C>
         Balance at beginning
             of year                                        $46,333,108          $51,561,888

         Sale of real estate                                   (199,307)

         Additions                                            1,728,087

         Reclassification of direct financing
             lease to operating lease                         3,700,000
                                                            -----------          -----------
         Balance at close of year                           $51,561,888          $51,561,888
                                                            ===========          ===========
</TABLE>




<TABLE>
<CAPTION>
                                                        Reconciliation of Accumulated Depreciation

                                                                    December 31,
                                                              ------------------------
                                                              1996                1997
                                                              ----                ----
<S>                                                        <C>                  <C>
         Balance at beginning
             of year                                        $10,653,598          $11,955,764

         Depreciation expense                                 1,302,166            1,335,305
                                                            -----------          -----------

         Balance at close of year                           $11,955,764          $13,291,069
                                                            ===========          ===========
</TABLE>

                                      -23-
<PAGE>   66
                         CORPORATE PROPERTY ASSOCIATES 6
                       - a California limited partnership
                                and SUBSIDIARIES

                        NOTES TO SCHEDULE of REAL ESTATE
                          and ACCUMULATED DEPRECIATION






<TABLE>
<CAPTION>
        (e)                                             Reconciliation of Operating Real Estate

                                                                    December 31,
                                                              ------------------------
                                                              1996                1997
                                                              ----                ----
<S>                                                        <C>                  <C>
         Balance at beginning
             of year                                        $12,832,631          $13,001,566


         Additions                                              168,935               42,787
                                                            -----------          -----------


         Balance at close of year                           $13,001,566          $13,044,353
                                                            ===========          ===========
</TABLE>




<TABLE>
<CAPTION>
                                                         Reconciliation of Accumulated Depreciation
                                                                 for Operating Real Estate

                                                                        December 31,
                                                                 ------------------------  
                                                                 1996                1997
                                                                 ----                ----
<S>                                                         <C>                  <C>
         Balance at beginning
             of year                                         $4,276,790           $4,639,138

         Depreciation expense                                   362,348              445,012
                                                             ----------           ----------

         Balance at close of year                            $4,639,138           $5,084,150
                                                             ==========           ==========
</TABLE>

                                      -24-
<PAGE>   67
PROPERTIES




<TABLE>
<CAPTION>
  LEASE                                                                                            TYPE OF OWNERSHIP
 OBLIGOR                          TYPE OF PROPERTY                     LOCATION                       INTEREST
 -------                          ----------------                     --------                       --------
<S>                               <C>                                  <C>                         <C>
THERMADYNE                        Warehouse and Manu-                  Industry,                   Ownership of land
HOLDINGS                          facturing Facility                   California                  and building
CORP.
(assigned by STOODY
DELORO STELLITE, INC.)

YALE SECURITY, INC.               Manufacturing                        Lemont,                     Ownership of land
                                  Facility                             Illinois                    and building (1)

MOTOROLA, INC.                    Computer and                         Urbana,                     Ownership of land
                                  Telecommunication Facility           Illinois                    and building (1)

LOCKHEED MARTIN                   Warehouse and                        Glen Burnie,                Ownership of land
CORPORATION                       Manufacturing Facility               Maryland                    and building

AUTOZONE, INC.                    Retail Stores -                      Charlotte, Lenoir,          Ownership of land
                                  32 locations                         Gastonia, and               and buildings (1)
                                                                       Statesville, North          
                                                                       Carolina;
                                                                       Austin, Corpus
                                                                       Christi-2,
                                                                       Nederland,
                                                                       San Antonio,
                                                                       Victoria, Waco,
                                                                       and West Orange, Texas;
                                                                       Bessemer,
                                                                       Chickasaw, Decatur,
                                                                       Mobile, Montgomery and
                                                                       Phenix City, Alabama;
                                                                       Alton, Belleview,
                                                                       Collinsville and
                                                                       Wood River, Illinois;
                                                                       Columbus,
                                                                       Georgia
                                                                       Baton Rouge, Lake
                                                                       Charles-2 and West
                                                                       Monroe, Louisiana; and
                                                                       Breckenridge, Maplewood,
                                                                       Overland and St. Louis,
                                                                       Missouri
</TABLE>

                                      -25-
<PAGE>   68
<TABLE>
<CAPTION>
  LEASE                                                                                            TYPE OF OWNERSHIP
 OBLIGOR                          TYPE OF PROPERTY                     LOCATION                       INTEREST
 -------                          ----------------                     --------                       --------
<S>                               <C>                                  <C>                         <C>
(2)                               Hotel                                Petoskey and                Ownership of 35% interest
                                  - 2 locations                        Alpena, Michigan            in land and buildings (1)


PEERLESS CHAIN                    Manufacturing                        Winona,                     Ownership of land
COMPANY                           Facility                             Minnesota                   and building


HARCOURT GENERAL                  Movie Theatre                        Burnsville,                 Ownership of land
CORPORATION                                                            Minnesota                   and building (1)


WAL-MART STORES,                  Retail/Warehouse                     West Mifflin,               Ownership of land
INC.                              Facility                             Pennsylvania                and building (1)




KINNEY SHOE                       Warehouse and                        Fort Lauderdale,            Ownership of land
CORPORATION/                      Office Facility                      Florida                     and building (1)
ARMEL, INC.


AP PARTS                          Manufacturing                        Toledo, Ohio                Ownership of land
INTERNATIONAL,                    Facility -                           Pinconning,                 and buildings (1)
INC.                              2 locations                          Michigan


ANTHONY'S                         Manufacturing/                       San Fernando,               Ownership of land
MANUFACTURING                     Warehouse and                        California                  and buildings
COMPANY, INC.                     Corporate
                                  Headquarters
                                  Facilities -
                                  4 locations


LIVHO, INC.                       Hotel                                Livonia, Michigan           Ownership of 34.4828%
                                                                                                   interest in land
                                                                                                   and building (1)

WINN DIXIE STORES,                Supermarket                          Panama City,                Ownership of land
INC.                                                                   Florida                     and building
</TABLE>





(1)     These properties are encumbered by mortgage notes payable.
(2)     These properties are operated with affiliates.

                                      -26-
<PAGE>   69
MARKET FOR THE PARTNERSHIP'S EQUITY AND RELATED
         UNITHOLDER MATTERS





                  As of December 31, 1997, there were 2,803 holders of record of
the Limited Partnership Units of the Partnership. On January 1, 1998, 2,760
holders of Limited Partnership Units exchanged such units for interests in Carey
Diversified LLC and 43 holders exchanged such units for Subsidiary Partnership
Units. There is no established public trading market for Subsidiary Partnership
Units.

                  In accordance with the requirements of the Partnership's
Amended Agreement of Limited Partnership (the "Agreement") contained as Exhibit
A to the Prospectus, the Corporate General Partner expects to make quarterly
distributions of Distributable Cash From Operations as defined in the Agreement.
The following table shows the frequency and amount of distributions paid per
Unit since 1994:


<TABLE>
<CAPTION>
                                                 Cash Distributions Paid Per Unit
                                               -----------------------------------
                                               1995            1996           1997
                                               ----            ----           ----
<S>                                          <C>              <C>            <C>
                  First quarter              $23.13           $23.75         $24.25
                  Second quarter              23.15            24.00          24.27
                  Third quarter               23.25            24.13          24.29
                  Fourth quarter              23.38            24.20          67.40(a)
                                             ------           ------         ------
                                             $92.91           $96.08        $140.21
                                             ======           ======        =======
</TABLE>


(a) Includes distributions of $24.31 and $43.09 per Limited Partnership Unit 
    paid in October 1997 and December 1997, respectively.



                  On October 16, 1997, the Partnership began the solicitation of
consents from limited partners to approve the merger of the Partnership with all
of the CPA(R) Partnerships into Carey Diversified LLC, a Delaware limited
liability company. Limited Partners were offered the opportunity to vote to
approve or disapprove the merger and to choose either interests ("Listed
Shares") in the Carey Diversified LLC or interests ("Subsidiary Partnership
Units") in the partnership which survived the merger. The solicitation period
ended on December 16, 1997. The results of the voting were as follows:


<TABLE>
<CAPTION>
                                 Units Voted                 Units Voted            Units Voted            Units Not
                                 Yes                         No                     Abstaining             Voting
                                 ---                         --                     ----------             ------
<S>                              <C>      <C>                <C>    <C>             <C>     <C>            <C>        <C>
Merger of Partnership
with Carey Diversified           34,130   71.21%             905    1.89%           212     .44%           12,683     26.45%
</TABLE>


<TABLE>
<CAPTION>
                                                       Subsidiary
                              Listed Shares            Partnership Units
                              -------------            -----------------
<S>                           <C>                      <C>
Number of Units
Electing                      47,261                   669
</TABLE>

                                      -27-