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

(Mark One)

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

                   For the fiscal year ended December 31, 2000

                                       OR

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

                        For the transition period from to


                         Commission file number 0-19139

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

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

                    450 South Orange Avenue
                  Orlando, Florida 32801-3336
 (Address of principal executive offices, including zip code)

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

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

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

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

            Units of limited partnership interest ($1 per Unit)
                             (Title of class)
</TABLE>

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

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

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant: The registrant registered an offering of 35,000,000 units of limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market for such Units. Each Unit was originally sold at $1 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None

<PAGE>


                                     PART I


Item 1.  Business

         CNL Income Fund VIII, Ltd. (the "Registrant" or the "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on August 18, 1989. The General  Partners of the  Partnership are Robert
A.  Bourne,  James  M.  Seneff,  Jr.  and  CNL  Realty  Corporation,  a  Florida
corporation  (the  "General  Partners").   Beginning  on  August  2,  1990,  the
Partnership offered for sale up to $35,000,000 of limited partnership  interests
(the  "Units")  (35,000,000  Units at $1 per Unit)  pursuant  to a  registration
statement on Form S-11 under the Securities  Act of 1933, as amended,  effective
January 30, 1990.  The offering  terminated  on March 7, 1991, at which date the
maximum  offering  proceeds of $35,000,000  had been received from investors who
were admitted to the Partnership as limited partners (the "Limited Partners").

         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators of national and regional fast-food and family-style  restaurant chains
(the "Restaurant Chains").  Net proceeds to the Partnership from its offering of
Units,  after  deduction  of  organizational  and  offering  expenses,   totaled
$30,975,000 and were used to acquire 38 Properties, including interests in eight
Properties  owned by joint  ventures in which the  Partnership is a co-venturer,
and to establish a working capital reserve for Partnership purposes.  During the
year ended  December  31,  1995,  the  Partnership  sold its  Property in Ocoee,
Florida and  reinvested  the majority of the net sales proceeds in a Property in
North Fort Myers,  Florida.  Also,  during the year ended December 31, 1995, the
Partnership sold two Properties in Jacksonville,  Florida. During the year ended
December 31, 1996, the  Partnership  reinvested the remaining net sales proceeds
from the 1995  sale of the  Property  in Ocoee,  Florida,  in  Middleburg  Joint
Venture,  in which the  Partnership  is a  co-venturer  to purchase and hold one
property in Middleburg  Heights,  Ohio. Also, during the year ended December 31,
1996, the Partnership  sold its Property in Orlando,  Florida.  During 1998, the
Partnership  received a settlement from the Florida Department of Transportation
for a right of way  taking  relating  to a  parcel  of land on its  Property  in
Brooksville,  Florida. In addition, during the year ended December 31, 1999, the
Partnership  received a prepaid  principal payment from the borrower relating to
one of the promissory  notes the  Partnership  had previously  accepted.  During
1999,  the  Partnership  reinvested  the  prepaid  principal,   along  with  the
settlement  received in the right of way taking,  in Bossier Joint  Venture,  in
which the  Partnership  is a  co-venturer  to purchase  and hold one Property in
Bossier  City,  Louisiana.   During  the  year  ended  December  31,  2000,  the
Partnership sold four Properties one in each of Brooksville,  Bayonet Point, Sun
City, and Jacksonville,  Florida.  In July 2000, the Partnership  reinvested the
sales  proceeds it received  from the sale of the  Properties  in Sun City,  and
Bayonet Point, Florida in a Bennigan's Property located in Deerfield,  Illinois.
In August 2000,  the  Partnership  used a portion of the net sales proceeds from
the sale of its Properties to acquire an interest in a Baker's  Square  Property
in  Libertyville,  Illinois,  with CNL Income Fund IX, Ltd.,  a Florida  limited
partnership,  and an affiliate of the General  Partners.  In October  2000,  the
Partnership  used the  remaining  net  sales  proceeds  to  acquire  a Pizza Hut
Property  in  Hialeah,  Florida.  As a result of the above  transactions,  as of
December  31, 2000,  the  Partnership  owned 36  Properties.  The 36  Properties
included  interests  in ten  Properties  owned by joint  ventures  in which  the
Partnership  is a  co-venturer  and one  Property  owned  with an  affiliate  as
tenants-in-common.  The  Properties are generally  leased on a triple-net  basis
with the lessees  responsible for all repairs and  maintenance,  property taxes,
insurance and utilities.

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

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership  would be merged with and into a subsidiary  of APF (the  "Merger").
APF is a real estate investment trust whose primary business is the ownership of
restaurant properties leased on a long-term,  "triple-net" basis to operators of
national and regional restaurant chains. Under the Agreement and Plan of Merger,
APF was to issue shares of its common stock as consideration  for the Merger. On
March 1, 2000,  the General  Partners and APF  announced  that they had mutually
agreed to terminate the Agreement and Plan of Merger. The agreement to terminate
the  Agreement  and Plan of Merger  was based,  in large  part,  on the  General
Partners'  concern  that,  in light of market  conditions  relating  to publicly
traded  real  estate  investment  trusts,  the  value  of  the  transaction  had
diminished.  As a result of such  diminishment,  the General Partners ability to
unequivocally  recommend  voting for the  transaction,  in the exercise of their
fiduciary duties, had become questionable.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's  leases. The leases of the Properties owned by the Partnership and
joint ventures in which the  Partnership is a co-venturer and the Property owned
as tenants-in-common with affiliates of the General Partners provide for initial
terms,  ranging  from 14 to 25 years (the  average  being 18 years),  and expire
between 2005 and 2020. The leases are generally on a triple-net  basis, with the
lessees responsible for all repairs and maintenance,  property taxes,  insurance
and  utilities.  The leases of the  Properties  provide for minimum  base annual
rental payments  (payable in monthly  installments)  ranging from  approximately
$51,900 to $251,500.  The majority of the leases  provide for  percentage  rent,
based on sales in excess of a specified amount.  In addition,  a majority of the
leases provide that, commencing in specified lease years (ranging from the third
to the sixth lease year),  the annual base rent required  under the terms of the
lease will increase.

         Generally,  the  leases  of the  Properties  provide  for  two to  four
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial lease.  Lessees of 27 of the  Partnership's 36 Properties also have been
granted options to purchase  Properties at the Property's then fair market value
after a specified portion of the lease term has elapsed.  Fair market value will
be determined  through an appraisal by an independent  appraisal firm. Under the
terms of certain leases,  the option purchase price may equal the  Partnership's
original cost to purchase the Property  (including  acquisition  costs),  plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised.

         The leases also  generally  provide that, in the event the  Partnership
wishes to sell the Property  subject to that lease,  the Partnership  first must
offer the  lessee  the right to  purchase  the  Property  on the same  terms and
conditions,  and for the same  price,  as any offer  which the  Partnership  has
received for the sale of the Property.

         In July 2000, the Partnership reinvested the sales proceeds it received
from the sale of the properties in Sun City, Florida and Bayonet Point,  Florida
in a Bennigan's property, located in Deerfield,  Illinois, from CNL BB Corp., an
affiliate of the general  partners.  In connection  therewith,  the  Partnership
entered into a long term,  triple-net lease with terms substantially the same as
its other leases.

         In October  2000,  the  Partnership  reinvested  the sales  proceeds it
received from the sale of its property in  Jacksonville,  Florida in a Pizza Hut
Property in Hialeah,  Florida. In connection therewith,  the Partnership entered
into a long term,  triple-net  lease with  terms  substantially  the same as its
other leases.

         During 2000, the  Partnership  reinvested the majority of the net sales
proceeds it received  from the sale of the  Property  in  Houston,  Texas,  in a
Baker's square Property located in Libertyville,  Illinois, as tenants-in-common
with CNL Income  Fund IX,  Ltd.,  an  affiliate  of the General  Partners  and a
Florida limited partnership, as described below in "Joint Venture and Tenancy in
Common  Arrangements."  The lease terms for this Property are  substantially the
same as the Partnership's other leases, as described above.

         During 2000,  the tenant of the  Property in North Fort Myers,  Florida
Restaurant  Management Services,  Inc., assigned its lease to Golden Management,
Inc. All other leases remained  unchanged and are  substantially the same as the
Partnership's other leases as described above.


Major Tenants

         During 2000, two lessees of the Partnership and its consolidated  joint
venture,  Golden Corral  Corporation and Carrols  Corporation,  each contributed
more than ten percent of the  Partnership's  total  rental,  earned and mortgage
interest income (including rental,  earned and mortgage interest income from the
Partnership's  consolidated joint venture and the Partnership's  share of rental
and earned income from nine Properties  owned by  unconsolidated  joint ventures
and  one   Property   owned  with   affiliates   of  the  General   Partners  as
tenants-in-common).  As of December 31, 2000, Golden Corral  Corporation was the
lessee under leases relating to four  restaurants,  and Carrols  Corporation was
the lessee under leases relating to five  restaurants.  It is anticipated  that,
based on the minimum rental payments  required by the leases,  these two lessees
each will  continue to  contribute  more than ten  percent of the  Partnership's
total rental,  earned and mortgage  interest income in 2001. In addition,  three
Restaurant  Chains,   Golden  Corral  Family  Steakhouse   Restaurants  ("Golden
Corral"),  Burger King and Shoney's, each accounted for more than ten percent of
the  Partnership's  total rental,  earned and mortgage  interest  income in 2000
(including  rental and earned income from the Partnership's  consolidated  joint
venture  and the  Partnership's  share of rental  and  earned  income  from nine
Properties  owned by  unconsolidated  joint ventures and one Property owned with
affiliates  of the  General  Partners  as  tenants-in-common).  In  2001,  it is
anticipated that these three Restaurant Chains each will continue to account for
more than ten percent of the  Partnership's  total  rental,  earned and mortgage
interest  income to which the  Partnership  is  entitled  under the terms of the
leases.  Any failure of these  lessees or  Restaurant  Chains  could  materially
affect the  Partnership's  income if the Partnership is not able to re-lease the
Properties in a timely manner.  No single tenant or group of affiliated  tenants
lease Properties with an aggregate carrying value in excess of 20 percent of the
total assets of the Partnership.

Joint Venture and Tenancy in Common Arrangements

         The Partnership has entered into a joint venture  arrangement,  Woodway
Joint Venture, with an unaffiliated entity to purchase and hold one Property. In
addition,   the  Partnership  has  entered  into  four  separate  joint  venture
arrangements:  Asheville  Joint  Venture  with  CNL  Income  Fund VI,  Ltd.,  an
affiliate  of the General  Partners,  to  purchase  and hold one  Property;  CNL
Restaurant Investments II with CNL Income Fund VII, Ltd. and CNL Income Fund IX,
Ltd.,  affiliates of the General Partners,  to purchase and hold six Properties;
Middleburg  Joint  Venture with CNL Income Fund XII,  Ltd.,  an affiliate of the
General  Partners,  to purchase  and hold one  Property  and Bossier  City Joint
Venture with CNL Income Fund XII, Ltd. and CNL Income Fund XIV, Ltd., affiliates
of the  General  Partners,  to  purchase  and  hold  one  Property.  Each of the
affiliates is a limited partnership  organized pursuant to the laws of the State
of Florida.

         The joint  venture  arrangements  provide for the  Partnership  and its
joint venture  partners to share in all costs and benefits  associated  with the
joint ventures in accordance with their respective  percentage  interests in the
joint ventures. The Partnership has an 87.68% interest in Woodway Joint Venture,
an  85.54%  interest  in  Asheville  Joint  Venture,  a  36.8%  interest  in CNL
Restaurant  Investments II, a 12.46% interest in Middleburg  Joint Venture and a
34%  interest  in Bossier  City Joint  Venture.  The  Partnership  and its joint
venture   partners  are  also  jointly  and  severally  liable  for  all  debts,
obligations and other liabilities of the joint ventures.

         Woodway  Joint  Venture,  Asheville  Joint  Venture,  Middleburg  Joint
Venture and Bossier  City Joint  Venture  each have an initial  term of 20 years
and, after the  expiration of the initial term,  continue in existence from year
to year unless  terminated at the option of either joint venturer or by an event
of  dissolution.  Events of dissolution  include the  bankruptcy,  insolvency or
termination  of any  joint  venturer,  sale of the  Property  owned by the joint
venture and mutual  agreement of the  Partnership and each joint venture partner
to dissolve the joint  venture.  CNL Restaurant  Investments  II's joint venture
agreement  does not provide for a fixed term,  but continues in existence  until
terminated by any of the joint venturers.

         The  Partnership  has  management  control of Woodway Joint Venture and
shares  management  control equally with affiliates of the General  Partners for
Asheville Joint Venture, CNL Restaurant Investments II, Middleburg Joint Venture
and Bossier City Joint  Venture.  The joint  venture  agreements  restrict  each
venturer's  ability  to sell,  transfer  or assign  its joint  venture  interest
without  first  offering it for sale to its joint venture  partner,  either upon
such terms and  conditions  as to which the venturers may agree or, in the event
the venturers cannot agree, on the same terms and conditions as any offer from a
third party to purchase such joint venture interest.

         Net cash flow from operations of Woodway Joint Venture, Asheville Joint
Venture,  CNL Restaurant  Investments II,  Middleburg  Joint Venture and Bossier
City  Joint  Venture  is  distributed  87.68%,  85.54%,  36.8%,  12.46% and 34%,
respectively,  to the  Partnership and the balance is distributed to each of the
other joint venture  partners in  accordance  with their  respective  percentage
interest in the joint  venture.  Any  liquidation  proceeds,  after paying joint
venture debts and liabilities and funding  reserves for contingent  liabilities,
will be distributed  first to the joint venture  partners with positive  capital
account  balances in proportion to such balances until such balances equal zero,
and thereafter in proportion to each joint venture partner's percentage interest
in the joint venture.

         In addition,  in August 2000, the Partnership entered into an agreement
to   hold  a   Baker's   Square   Property   in   Libertyville,   Illinois,   as
tenants-in-common,  with  affiliates  of the  General  Partners.  The  agreement
provides  for the  Partnership  and the  affiliates  to share in the profits and
losses of the Property and net cash flow from the  Property,  in  proportion  to
each  co-venturer's  percentage  interest.  The  Partnership  owns a 66  percent
interest in this Property.

         Each of the affiliates is a limited  partnership  organized pursuant to
the laws of the state of Florida. The tenancy in common agreement restricts each
party's  ability to sell,  transfer,  or assign its  interest  in the tenancy in
common's Property without first offering it for sale to the remaining parties.

         The use of joint venture and tenancy in common  arrangements allows the
Partnership  to fully invest its available  funds at times at which it would not
have  sufficient  funds to purchase an additional  property,  or at times when a
suitable  opportunity to purchase an additional  property is not available.  The
use of joint  venture  and  tenancy in common  arrangements  also  provides  the
Partnership  with  increased  diversification  of its portfolio  among a greater
number of properties.

Certain Management Services

         CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain  services  relating to management of the  Partnership and its Properties
pursuant to a management  agreement with the Partnership.  Under this agreement,
CNL  Fund  Advisors,   Inc.  is  responsible  for  collecting  rental  payments,
inspecting  the  Properties  and the tenants'  books and records,  assisting the
Partnership  in  responding  to  tenant  inquiries  and  notices  and  providing
information  to  the  Partnership  about  the  status  of  the  leases  and  the
Properties.  CNL Fund  Advisors,  Inc.  also  assists  the  General  Partners in
negotiating the leases.  For these  services,  the Partnership has agreed to pay
CNL  Fund  Advisors,  Inc.  an  annual  fee of one  percent  of the sum of gross
operating  revenues from  Properties  wholly owned by the  Partnership  plus the
Partnership's  allocable  share of gross revenues of joint ventures in which the
Partnership  is a  co-venturer,  but  not in  excess  of  competitive  fees  for
comparable  services.  Under the  management  agreement,  the  management fee is
subordinated  to receipt by the Limited  Partners of an aggregate,  ten percent,
cumulative,  noncompounded annual return on their adjusted capital contributions
(the "10% Preferred  Return"),  calculated in accordance with the  Partnership's
limited  partnership  agreement (the  "Partnership  Agreement").  In any year in
which the Limited  Partners  have not  received  the 10%  Preferred  Return,  no
management fee will be paid.

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

Competition

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

Employees

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

Item 2.  Properties

         As of December 31, 2000, the Partnership owned 36 Properties. Of the 36
Properties, 25 are owned by the Partnership in fee simple, ten are owned through
joint  venture  arrangements,  and  one  is  owned  through  tenancy  in  common
arrangement.  See  Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its  partnership  agreement.  Reference  is made to the Schedule of
Real Estate and  Accumulated  Depreciation  for a listing of the  Properties and
their  respective  costs,  including  acquisition  fees and certain  acquisition
expenses.

Description of Properties

         Land. The Partnership's  Property sites range from approximately 17,400
to 142,486  square  feet  depending  upon  building  size and local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.

         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by state. More detailed information  regarding the location of
the  Properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation.

               State                                    Number of Properties

               Arizona                                            1
               Florida                                            4
               Illinois                                           2
               Indiana                                            1
               Louisiana                                          2
               Michigan                                           3
               Minnesota                                          1
               New York                                           2
               North Carolina                                     2
               Ohio                                               9
               Tennessee                                          2
               Texas                                              6
               Virginia                                           1
                                                            --------------
               TOTAL PROPERTIES                                  36
                                                            ==============

         Buildings.  Each of the Properties owned by the Partnership  includes a
building that is one of a Restaurant  Chain's  approved  designs.  The buildings
generally are  rectangular  and are  constructed  from various  combinations  of
stucco,  steel,  wood, brick and tile.  Building sizes range from  approximately
2,000 to 10,900 square feet.  All buildings on Properties are  freestanding  and
surrounded by paved  parking  areas.  Buildings  are suitable for  conversion to
various uses, although modifications may be required prior to use for other than
restaurant operations. As of December 31, 2000, the Partnership had no plans for
renovation of the Properties. Depreciation expense is computed for buildings and
improvements using the straight line method using a depreciable life of 40 years
for federal income tax purposes.

         As of December 31, 2000, the aggregate cost of the Properties  owned by
the   Partnership   (including   its   consolidated   joint   venture)  and  the
unconsolidated joint ventures (including the Property owned through a tenancy in
common  arrangement),  for  federal  income tax  purposes  was  $24,980,921  and
$11,672,122, respectively.


     The following  table lists the  Properties  owned by the  Partnership as of
December 31, 2000 by Restaurant Chain.

                Restaurant Chain                  Number of Properties

                Baker's Square                              1
                Bennigan's                                  1
                Burger King                                13
                Denny's                                     1
                Golden Corral                               5
                Hardee's                                    4
                IHOP                                        1
                Jack in the Box                             2
                KFC                                         2
                Perkins                                     1
                Pizza Hut                                   1
                Quincy's                                    1
                Shoney's                                    2
                Wendy's                                     1
                                                      --------------
                TOTAL PROPERTIES                           36
                                                      ==============

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

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

         Leases.  The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains. The leases are generally on a
long-term  "triple  net"  basis,  meaning  that the  tenant is  responsible  for
repairs,  maintenance,  property taxes,  utilities and insurance.  Generally,  a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures as may be reasonably  necessary to refurbish  buildings,  premises,
signs  and  equipment  so  as  to  comply  with  the  lessee's  obligations,  if
applicable,  under the  franchise  agreement  to reflect the current  commercial
image of its Restaurant  Chain.  These capital  expenditures  are required to be
paid by the lessee during the term of the lease.  The terms of the leases of the
Properties owned by the Partnership are described in Item 1. Business - Leases.

         At December 31, 2000,  1999, 1998, 1997 and 1996, all of the Properties
were occupied.  The following is a schedule of the average rent per Property for
each of the years ended December 31:

<TABLE>
<CAPTION>


                                   2000              1999              1998              1997               1996
                               -------------     -------------    ---------------    --------------    ---------------
<S><C>
Rental Revenues (1)             $ 3,361,651       $ 3,527,515        $ 3,443,094        $3,467,720         $3,552,341
Properties                               36                37                 36                36                 36
Average Rent per Property
                                  $  93,379         $  95,338          $  95,642         $  96,326          $  98,676
</TABLE>

(1)      Rental income  includes the  Partnership's  share of rental income from
         the  Properties  owned  through  joint  venture  arrangements.   Rental
         revenues have been adjusted,  as applicable,  for any amounts for which
         the Partnership has established an allowance for doubtful accounts.

         The following is a schedule of lease expirations for leases in place as
of December 31, 2000 for each year for the next ten years and thereafter.
<TABLE>

                                                                                     Percentage of
             Expiration Year          Number             Annual Rental               Gross Annual
                                     of Leases              Revenues                 Rental Income
             -----------------    ----------------    ---------------------    --------------------------
<S><C>

              2001                             --                       --                      --
              2002                             --                       --                      --
              2003                             --                       --                      --
              2004                             --                       --                      --
              2005                             10                1,253,411                  35.23%
              2006                              1                  118,186                   3.32%
              2007                             --                       --                      --
              2008                             --                       --                      --
              2009                              1                  115,953                   3.26%
              2010                              8                  623,384                  17.52%
              Thereafter                       16                1,447,088                  40.67%
                                        ----------            -------------           -------------
              Totals                           36              $ 3,558,022                 100.00%
                                        ==========            =============           =============
</TABLE>

         Leases  with  Major   Tenants.   The  terms  of  the  leases  with  the
Partnership's  major  tenants as of December  31,  2000 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Golden Corral  Corporation leases four Golden Corral  restaurants.  The
initial  term of each  lease is 15 years  (expiring  in  2005)  and the  average
minimum base annual rent is approximately  $163,100 (ranging from  approximately
$145,500 to $189,700).

         Carrols  Corporation  leases five Burger King restaurants.  The initial
term of each lease is 20 years  (expiring in 2011) and the average  minimum base
annual rent is approximately  $100,053  (ranging from  approximately  $83,000 to
$105,000).


Item 3.  Legal Proceedings

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


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

         Not applicable.


                                     PART II


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

(a) As of March 15, 2001, there were 3,418 holders of record of the Units. There
is no public  trading  market for the Units,  and it is not  anticipated  that a
public  market for the Units will  develop.  During 2000,  Limited  Partners who
wished to sell their Units may have  offered the Units for sale  pursuant to the
Partnership's  distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their  distributions used to acquire additional Units (to the
extent Units were  available  for  purchase),  may have done so pursuant to such
Plan. The General  Partners had the right to prohibit  transfers of Units.  From
inception  through  December 31, 2000,  the price paid for any Unit  transferred
pursuant to the Plan was $.95 per Unit. The price paid for any Unit  transferred
other than pursuant to the Plan was subject to  negotiation by the purchaser and
the selling  Limited  Partner.  The  Partnership  will not redeem or  repurchase
Units.

         The following table reflects,  for each calendar quarter, the high, low
and average  sales prices for transfers of Units during 2000 and 1999 other than
pursuant to the Plan, net of commissions.

<TABLE>
<CAPTION>

                                             2000 (1)                               1999 (1)
                                 ----------------------------------     ----------------------------------
                                   High         Low        Average        High         Low         Average
                                 ---------    --------    ----------    ---------    ---------    ----------
<S><C>
         First Quarter                (2)         (2)           (2)       $ 0.95       $ 0.95        $ 0.95
         Second Quarter             $0.80      $ 0.70        $ 0.72         0.88         0.81          0.85
         Third Quarter               0.95        0.64          0.85         0.95         0.89          0.94
         Fourth Quarter              0.95        0.73          0.88         0.90         0.81          0.86
</TABLE>


 (1)     A total of  176,000  and  237,980  Units  were  transferred  other than
         pursuant  to the Plan for the years ended  December  31, 2000 and 1999,
         respectively.

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

         The  capital  contribution  per Unit was $1.  All  cash  available  for
distribution  will be distributed to the partners  pursuant to the provisions of
the Partnership Agreement.

         For each  year  ended  December  31,  2000 and  1999,  the  Partnership
declared cash distributions of $3,150,004 to the Limited Partners. Distributions
of $787,501  were  declared to the limited  partners at the close of each of the
Partnership's  calendar  quarters  during 2000 and 1999.  These amounts  include
monthly  distributions  made in arrears  for the  Limited  Partners  electing to
receive such distributions on this basis. No amounts distributed to partners for
the years  ended  December  31, 2000 and 1999,  are  required to be or have been
treated by the  Partnership  as a return of capital for purposes of  calculating
the  Limited  Partners'  return  on their  adjusted  capital  contributions.  No
distributions have been made to the General Partners to date.

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

(b)      Not applicable.


Item 6.  Selected Financial Data
<TABLE>
<CAPTION>

                                        2000               1999              1998              1997               1996
                                    --------------    ---------------    --------------    --------------    ---------------
<S><C>
Year ended December 31:
    Revenues (1)                       $3,528,989         $3,500,669        $3,625,906        $3,619,489         $3,593,610
    Net income (2)                      3,587,171          2,810,064         3,288,912         3,241,567          3,096,992
    Cash distributions
      declared (3)                      3,150,004          3,150,004         3,850,003         3,150,003          3,412,500
    Net income per Unit
      (2)                                   0.102              0.079             0.093             0.092              0.088
    Cash distributions
      declared per Unit (3)                 0.090              0.090             0.110             0.090              0.098

At December 31:
    Total assets                      $31,827,394        $31,479,495       $32,071,119       $32,258,296        $32,437,106
    Partners' capital                  30,752,534         30,315,367        30,655,307        31,216,398         31,124,834
</TABLE>


 (1)     Revenues  include equity in earnings of  unconsolidated  joint ventures
         and minority interest in income of consolidated joint ventures.

 (2)     Net income  for the year ended  December  31,  2000 and 1998,  includes
         $612,693 and $108,176,  respectively,  from gain on sale of assets.  In
         addition,  net income for the year ended  December  31,  1996  includes
         $99,031 from a loss on sale of assets.

 (3)     Distributions  for the years ended December 31, 1998 and 1996,  include
         special distributions to the Limited Partners of $350,000 and $262,500,
         respectively,  which represented  cumulative excess operating reserves.
         Distributions   for  the  year  ended  December  31,  1998  include  an
         additional  special  distribution  to the Limited  Partners of $350,000
         declared the first  quarter of 1998 from  cumulative  excess  operating
         reserves.

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


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

         The  Partnership was organized on August 18, 1989, to acquire for cash,
         either  directly  or through  joint  venture  arrangements,  both newly
         constructed and existing  restaurant  Properties,  as well as land upon
         which  restaurant  Properties were to be constructed,  which are leased
         primarily to operators of selected national and regional  fast-food and
         family-style  Restaurant  Chains.  The leases are generally  triple-net
         leases,  with the lessee  generally  responsible  for all  repairs  and
         maintenance,  property taxes,  insurance and utilities.  As of December
         31, 2000,  the  Partnership  owned 36  Properties,  either  directly or
         indirectly through joint venture arrangements.

         Capital Resources

         The  Partnership's  primary  source  of  capital  for the  years  ended
         December  31,  2000,  1999,  and 1998 was cash from  operations  (which
         includes cash received from tenants,  distributions from joint ventures
         and  interest  received,  less  cash  paid  for  expenses).  Cash  from
         operations  was  $3,349,897,  $3,321,006,  and $3,562,592 for the years
         ended December 31, 2000, 1999, and 1998, respectively.  The increase in
         cash from operations during 2000, as compared to 1999, and the decrease
         in cash  from  operations  during  1999,  as  compared  to  1998,  were
         primarily a result of changes in income and  expenses,  as described in
         "Results of Operations" below, and changes in the Partnership's working
         capital.

         Other  sources and uses of capital  included the  following  during the
         years ended December 31, 2000, 1999 and 1998.

         In July 1998, the  Partnership  received  $116,397 as a settlement from
         the  Florida  Department  of  Transportation  for a right of way taking
         relating to a parcel of land on its Property in  Brooksville,  Florida.
         In connection therewith,  the Partnership recognized a gain of $108,176
         for financial reporting purposes.  The Partnership  distributed amounts
         sufficient  to enable the  limited  partners  to pay  federal and state
         income  taxes,  if any (at a level  reasonably  assumed by the  General
         Partners),  resulting  from the right of way taking.  In November 1999,
         the  Partnership  reinvested  the  proceeds  in  a  joint  venture,  as
         described below.

         As of December 31, 1999, the Partnership had accepted three  promissory
         notes in connection  with the sale of three of its  Properties.  During
         the year ended December 31, 1999,  the borrower  relating to one of the
         promissory  notes prepaid  principal of $272,500,  which was applied to
         the outstanding principal balance.

         In November  1999, the  Partnership  reinvested the right of way taking
         proceeds  and the prepaid  principal in a joint  venture,  Bossier City
         Joint Venture,  with CNL Income Fund XII, Ltd. and CNL Income Fund XIV,
         Ltd., both Florida limited  partnerships  and affiliates of the General
         Partners.  The  joint  venture  was  formed  to  purchase  and hold one
         Property. The Partnership  contributed a total of $448,531 to the joint
         venture and owns a 34 percent interest in its profits and losses.

         In July 2000,  the  Partnership  sold its  Properties  in  Brooksville,
         Bayonet Point and Sun City,  Florida, to an unrelated third party for a
         total of  approximately  $3,465,100  and  received  net sales  proceeds
         totaling  approximately  $3,402,700,  resulting  in  a  total  gain  of
         approximately   $484,800  for  financial  reporting   purposes.   These
         Properties  were  originally  acquired by the  Partnership  in 1990 and
         1991,  and  had  costs  totaling  approximately  $2,797,000,  excluding
         acquisition fees and miscellaneous acquisition expenses; therefore, the
         Partnership sold the Properties for approximately $605,700 in excess of
         their original purchase price. The transaction  relating to the sale of
         the  Properties  in  Sun  City  and  Bayonet  Point,  Florida  and  the
         reinvestment of the net sales proceeds,  was structured to qualify as a
         like  kind  exchange  transaction  for  federal  income  tax  purposes.
         However,  the Partnership will distribute  amounts sufficient to enable
         the Limited  Partners to pay federal and state income taxes, if any (at
         a level reasonably assumed by the General Partners), resulting from the
         sale.

         In July 2000, the Partnership reinvested the sales proceeds it received
         from the sale of the Properties in Sun City, Florida and Bayonet Point,
         Florida in a Bennigan's Property located in Deerfield,  Illinois, at an
         approximate cost of $2,462,700.  The Partnership acquired this Property
         from CNL BB Corp., an affiliate of the General Partners.  In connection
         therewith,  the Partnership entered into a long term,  triple-net lease
         with terms substantially the same as its other leases.

         In  August  2000,  the  Partnership  used a  portion  of the net  sales
         proceeds  from the sale of its  properties  to acquire an interest in a
         Baker's Square property in Libertyville, Illinois, with CNL Income Fund
         IX,  Ltd.,  a Florida  limited  partnership,  and an  affiliate  of the
         general partners. As of September 30, 2000, the Partnership owned a 66%
         interest in this property.

         In September 2000, the Partnership  sold its property in  Jacksonville,
         Florida, for approximately  $422,500 and received net sales proceeds of
         approximately  $420,000,  resulting in a gain of approximately $127,900
         for financial reporting purposes. This property was originally acquired
         by the Partnership in 1990, and had a cost of  approximately  $352,400,
         excluding  acquisition  fees and  miscellaneous  acquisition  expenses;
         therefore,  the Partnership sold the property for approximately $67,600
         in excess of its original  purchase price. The Partnership  distributed
         amounts  sufficient  to enable the Limited  Partners to pay federal and
         state  income  taxes,  if any (at a  level  reasonably  assumed  by the
         General  Partners),  resulting  from the sale.  In  October  2000,  the
         Partnership  reinvested the sales proceeds it received from the sale of
         its  Property  in  Jacksonville,  Florida  in a Pizza Hut  Property  in
         Hialeah,  Florida at an  approximate  cost of $472,300.  In  connection
         therewith,  the Partnership entered into a long term,  triple-net lease
         with terms substantially the same as its other leases.

         None of the Properties  owned by the Partnership or the joint ventures,
         in which the  Partnership  owns an interest,  is or may be  encumbered.
         Under its  Partnership  Agreement,  the  Partnership is prohibited from
         borrowing for any purpose; provided, however, that the General Partners
         or their affiliates are entitled to reimbursement,  at cost, for actual
         expenses incurred by the General Partners or their affiliates on behalf
         of the  Partnership.  Affiliates  of the General  Partners from time to
         time incur certain operating  expenses on behalf of the Partnership for
         which the  Partnership  reimburses  the  affiliates  without  interest.

         Currently,  rental income from the Partnership's Properties is invested
         in money market accounts or other short-term, highly liquid investments
         such as demand  deposit  accounts at  commercial  banks,  money  market
         accounts and  certificates  of deposit with less than a 30-day maturity
         date,  pending the  Partnership's  use of such funds to pay Partnership
         expenses or to make  distributions  to the  partners.  At December  31,
         2000,  the  Partnership  had  $1,688,029  invested  in such  short-term
         investments (including certificates of deposit of $461,394) as compared
         to  $1,503,989  at December  31, 1999.  As of December  31,  2000,  the
         average  interest rate earned by the  Partnership  on the rental income
         deposited  in  demand   deposit   accounts  at  commercial   banks  was
         approximately 3.41% annually. The funds remaining at December 31, 2000,
         after the payment of distributions and other liabilities,  will be used
         to meet the Partnership's working capital and other needs.

         Short-Term Liquidity

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

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

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

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

         The Partnership  generally  distributes cash from operations  remaining
         after the payment of the operating expenses of the Partnership,  to the
         extent  that  the  General  Partners  determine  that  such  funds  are
         available for distribution.  Based on cash from operations, and for the
         year ended December 31, 1998, cumulative excess operating reserves, the
         Partnership   declared   distributions   to  the  Limited  Partners  of
         $3,150,004, $3,150,004, and $3,850,003 for the years ended December 31,
         2000, 1999 and 1998,  respectively.  This represents  distributions  of
         $0.09, $0.09, and $0.11 per Unit for the years ended December 31, 2000,
         1999,  and 1998,  respectively.  No amounts  distributed to the Limited
         Partners for the years ended  December 31, 2000,  1999,  and 1998,  are
         required to be or have been treated by the  Partnership  as a return of
         capital for purposes of  calculating  the Limited  Partners'  return on
         their  adjusted  capital  contributions.  The  Partnership  intends  to
         continue to make  distributions  of cash available for  distribution to
         the Limited Partners on a quarterly basis.

         During 2000, the General  Partners waived their right to receive future
         distributions  from the  Partnership,  including both  distributions of
         operating cash flow and distributions of liquidation  proceeds,  to the
         extent that the cumulative  amount of such  distributions  would exceed
         the balance in the General Partners' capital account as of December 31,
         1999.  Accordingly,  the General  Partners  were not  allocated any net
         income  and did not  receive  any  distributions  during the year ended
         December 31, 2000.

         As of  December  31,  2000 and 1999,  the  Partnership  owed $4,351 and
         $66,277, respectively, to affiliates for such amounts as accounting and
         administrative  services.  As of March 15, 2001,  the  Partnership  had
         reimbursed the affiliates all such amounts. In addition, as of December
         31,  2000,  the  Partnership  had  incurred   $55,050  in  real  estate
         disposition  fees  due to an  affiliate  as a  result  of  services  in
         connection  with the sale of several  Properties.  The  payment of such
         fees is deferred  until the Limited  Partners  have received the sum of
         their 10% Preferred  Return and their adjusted  capital  contributions.
         Other liabilities of the Partnership,  including distributions payable,
         decreased to $906,941 at December 31, 2000,  from  $934,222 at December
         31, 1999. The decrease in other liabilities was primarily  attributable
         to the amounts that were accrued for transaction  costs at December 31,
         1999  relating  to the  proposed  and  terminated  merger  with APF, as
         described in "Termination of Merger." The General Partners believe that
         the Partnership has sufficient cash on hand to meet its current working
         capital needs.

         Long-Term Liquidity

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

         Results of Operations

         During  2000,  the  Partnership  and its  consolidated  joint  venture,
         Woodway  Joint  Venture,  owned and leased 30 wholly  owned  Properties
         (including  four Properties  which were sold during 2000).  During 1999
         and 1998, the Partnership and its consolidated  joint venture owned and
         leased 28 wholly owned  Properties.  During 1998, the Partnership was a
         co-venturer  in three joint  ventures  that owned and leased a total of
         eight  Properties.  In addition,  during 1999,  the  Partnership  was a
         co-venturer in one  additional  joint venture that owned and leased one
         Property.  During  2000,  the  Partnership  also  owned and  leased one
         additional  Property  with  affiliates  of  the  General  Partners,  as
         tenants-in-common.  As of December 31,  2000,  the  Partnership  owned,
         either  directly or through joint venture  arrangements,  36 Properties
         which are, in general,  subject to long-term,  triple-net  leases.  The
         leases of the Properties provide for minimum base annual rental amounts
         (payable in monthly installments) ranging from approximately $51,900 to
         $251,500.  The majority of leases provide for percentage  rent based on
         sales in excess of a specified amount.  In addition,  a majority of the
         leases provide that,  commencing in specified lease years (ranging from
         the third to sixth lease year), the annual base rent required under the
         terms of the  lease  will  increase.  For  further  description  of the
         Partnership's leases and Properties,  see Item 1. Business - Leases and
         Item 2. Properties, respectively.

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
         Partnership  and its  consolidated  joint  venture  earned  $2,837,794,
         $2,901,093,  and  $2,991,048,   respectively,  in  rental  income  from
         operating  leases and earned income from direct financing  leases.  The
         decrease in rental and earned  income during 2000, as compared to 1999,
         was  partially  due  to  the  fact  that  the  Partnership   sold  four
         Properties,  as  discussed  in  "Capital  Resources,"  resulting  in  a
         decrease in rental and earned income of  approximately  $187,300 during
         the year ended  December  31,  2000.  The decrease in rental and earned
         income was partially  offset by an increase in rental and earned income
         of approximately $130,600,  during the year ended December 31, 2000, as
         a result of the  Partnership  reinvesting  a  portion  of the net sales
         proceeds in two Properties in Deerfield, Illinois and Hialeah, Florida,
         as described in "Capital Resources."

         The decrease in rental and earned  income  during 1999,  as compared to
         1998,  was  primarily  due to the fact that the leases  relating to the
         Burger  King  Properties  in New  City and  Syracuse,  New York and New
         Philadelphia  and  Mansfield,  Ohio,  were  amended to provide for rent
         reductions from August 1998 through the end of the lease terms.

         For the years ended December 31, 2000,  1999, and 1998, the Partnership
         also  earned  $113,627,  $113,285,  and  $101,911,   respectively,   in
         contingent rental income.  The increase in contingent rental income for
         1999, as compared to 1998, was primarily attributable to an increase in
         gross sales for certain restaurant  Properties requiring the payment of
         contingent rental income.

         For the years ended December 31, 2000,  1999, and 1998, the Partnership
         also earned $319,184, $276,012 and $276,721, respectively, attributable
         to net income  earned by  unconsolidated  joint  ventures  in which the
         Partnership  is a  co-venturer.  The  increase in net income  earned by
         joint  ventures  increased  during  2000,  as  compared  to  1999,  was
         primarily  due to the fact that in November  1999 and August 2000,  the
         Partnership invested in Bossier City Joint Venture and in a Property in
         Libertyville,  Illinois,  as  tenants-in-common  with affiliates of the
         General Partners,  as described in "Capital Resources." The decrease in
         net  income  by joint  ventures  for 1999,  as  compared  to 1998,  was
         primarily  due to the fact that the lease  relating  to the Burger King
         Property in Asheville,  North  Carolina of Asheville  Joint Venture was
         amended to provide for rent reductions from August 1998 through the end
         of the lease term.

         During the year ended December 31, 2000, two lessees of the Partnership
         and its  consolidated  joint  venture,  Golden Corral  Corporation  and
         Carrols  Corporation,  each  contributed  more than ten  percent of the
         Partnership's  total  rental,   earned  and  mortgage  interest  income
         (including rental and earned income from the Partnership's consolidated
         joint venture and the  Partnership's  share of rental and earned income
         from nine  Properties  owned by joint  ventures and one Property  owned
         with affiliates as tenants-in-common).  As of December 31, 2000, Golden
         Corral  Corporation  was  the  lessee  under  leases  relating  to four
         restaurants,  and  Carrols  Corporation  was the  lessee  under  leases
         relating to five  restaurants.  It is  anticipated  that,  based on the
         minimum  annual  rental  payments  required  by the  leases,  these two
         lessees  will  continue  to  contribute  more than ten  percent  of the
         Partnership's total rental,  earned and mortgage interest income during
         2001.  In addition,  during the year ended  December  31,  2000,  three
         Restaurant  Chains,  Golden  Corral,  Burger  King and  Shoney's,  each
         accounted for more than ten percent of the Partnership's  total rental,
         earned and mortgage interest income (including rental and earned income
         from the Partnership's consolidated joint venture and the Partnership's
         share of  rental  and  earned  income  from  nine  Properties  owned by
         unconsolidated joint ventures and one Property owned with affiliates as
         tenants-in-common).  In  2001,  it  is  anticipated  that  these  three
         Restaurant  Chains  each will  continue  to  account  for more than ten
         percent of the Partnership's total rental, earned and mortgage interest
         income  to which the  Partnership  is  entitled  under the terms of the
         leases.  Any  failure  of these  lessees  or  Restaurant  Chains  could
         materially  affect the  Partnership's  income if the Partnership is not
         able to re-lease the Property in a timely manner.

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
         Partnership also earned $271,702, $223,683, and $269,744, respectively,
         in interest and other income. The increase in interest and other income
         during 2000, as compared to 1999, was due to interest earned on the net
         sales proceeds  received from the sale of Properties  described  above,
         pending  reinvestment in additional  Properties,  as described above in
         "Capital  Resources."  The increase in interest and other income during
         2000, as compared to 1999,  was  partially  offset by, and the decrease
         during  1999,  as compared to 1998,  was  primarily  attributable  to a
         reduction in interest income as a result of the prepayment of principal
         on a mortgage  note of $272,500  during  1999,  as  described  above in
         "Capital Resources."

         Operating  expenses,  including  depreciation  expense,  were $554,511,
         $690,605,  and $445,170 for the years ended December 31, 2000, 1999 and
         1998, respectively.  The decrease in operating expenses during 2000, as
         compared to 1999,  and the increase  during 1999,  as compared to 1998,
         was  primarily  attributable  to the  amount of  transaction  costs the
         Partnership   incurred  related  to  the  General  Partners   retaining
         financial  and  legal   advisors  to  assist  them  in  evaluating  and
         negotiating  the proposed and terminated  Merger with APF, as described
         in "Termination  of Merger." The decrease in operating  expenses during
         2000 was partially offset by an increase in administrative expenses for
         servicing the Partnership and its Properties.

         The increase in operating  expenses  during 1999,  as compared to 1998,
         was partially due to an increase in  depreciation  expense  relating to
         the fact that during 1998, the Partnership  reclassified the leases for
         its Properties in New City and Syracuse, New York, and New Philadelphia
         and Mansfield,  Ohio, from direct financing leases to operating leases,
         as a result of lease amendments, as described above.

         As a  result  of the  right  of way  settlement  for the  Partnership's
         Property  in  Brooksville,  Florida,  as  described  above in  "Capital
         Resources,"  the  Partnership  recognized  a gain  on  sale  of land of
         $108,176  during  the year  ended  December  31,  1998,  for  financial
         reporting  purposes.  As a  result  of the  sale of the  Properties  as
         described  above in "Capital  Resources,"  the  Partnership  recorded a
         total gain of $612,693 for financial reporting purposes during the year
         ended December 31, 2000. No Properties were sold during 1999.

         The  Partnership's  leases  as of  December  31,  2000,  are  generally
         triple-net  leases and contain  provisions  that the  General  Partners
         believe  mitigate  the adverse  effect of  inflation.  Such  provisions
         include  clauses  requiring  the  payment of  percentage  rent based on
         certain  restaurant  sales above a  specified  level  and/or  automatic
         increases in base rent at specified times during the term of the lease.
         Management  expects that  increases in  restaurant  sales volume due to
         inflation  and real sales growth should result in an increase in rental
         income  over  time.   Continued   inflation   also  may  cause  capital
         appreciation of the  Partnership's  Properties.  Inflation and changing
         prices,  however,  also may have an adverse  impact on the sales of the
         restaurants and on potential capital appreciation of the Properties.

         In December 1999, the Securities and Exchange  Commission  released SAB
         101,  which  provides the staff's view in applying  generally  accepted
         accounting  principles to selected revenue  recognition issues. SAB 101
         requires the  Partnership to defer  recognition  of certain  percentage
         rental income until certain defined thresholds are met. The Partnership
         adopted SAB 101 beginning  January 1, 2000.  Implementation  of SAB 101
         did  not  have a  material  impact  on  the  Partnership's  results  of
         operations.


         In June 1998, the Financial Accounting Standards Board issued Statement
         of Financial  Accounting  Standards No. 133, "Accounting for Derivative
         Instruments  and  Hedging   Activities."   The  Statement   establishes
         accounting  and  reporting   standards  for   derivative   instruments,
         including certain derivative  instruments,  embedded in other contracts
         (collectively referred to as derivatives),  and for hedging activities.
         The Statement  requires that an entity  recognize  all  derivatives  as
         either  assets or  liabilities  in the balance  sheet and measure those
         instruments  at fair  value.  In June 1999,  the  Financial  Accounting
         Standards Board issued Statement of Financial  Accounting Standards No.
         137,  "Accounting for Derivative  Instruments and Hedging  Activities -
         Deferral of the Effective  Date of FASB Statement No. 133, an Amendment
         of FASB  Statement No. 133." FAS 137 deferred the effective date of FAS
         133 for one year. FAS 133, as amended,  is now effective for all fiscal
         quarters  of all  fiscal  years  beginning  after  June 15,  2000.  The
         Partnership  has reviewed both  statements and has determined that both
         FAS 133 and FAS 137 do not apply to the  Partnership as of December 31,
         2000.

         Termination of Merger

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
         of Merger with APF,  pursuant to which the Partnership  would be merged
         with and into a  subsidiary  of APF.  Under the  Agreement  and Plan of
         Merger,  APF was to issue shares of its common  stock as  consideration
         for the  Merger.  On  March  1,  2000,  the  General  Partners  and APF
         announced that they had mutually  agreed to terminate the Agreement and
         Plan of Merger.  The  agreement to terminate  the Agreement and Plan of
         Merger was based, in large part, on the General Partners' concern that,
         in light of market  conditions  relating to publicly traded real estate
         investment  trusts,  the value of the transaction had diminished.  As a
         result  of  such   diminishment,   the  General  Partners'  ability  to
         unequivocally recommend voting for the transaction,  in the exercise of
         their fiduciary duties, had become questionable.

         Interest Rate Risk

         The Partnership accepted a promissory note in conjunction with the sale
         of a Property.  The principal  amounts  outstanding  under the mortgage
         notes  totaled  $1,412,064 at December 31, 2000.  The General  Partners
         believe that the estimated fair value of the mortgage notes at December
         31, 2000 approximated the outstanding principal amounts.

         The  Partnership  is exposed to equity  loss in the event of changes in
         interest  rates.  The fair value of the mortgage notes would decline if
         interest rates rise.

         The following  table presents the expected cash flows of principal that
         are sensitive to these changes.

                                         Mortgage Notes
                                          Fixed Rates
                                       -------------------

                 2001                        $     54,172
                 2002                              60,256
                 2003                              67,022
                 2004                              74,553
                 2005                              82,927
                 Thereafter                     1,073,134
                                       -------------------

                                            $   1,412,064
                                       ===================


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         This information is described above in Item 7. Management's  Discussion
         and Analysis of Financial Condition -- Interest Rate Risk.


Item 8.  Financial Statements and Supplementary Data





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

                                    CONTENTS







                                                                      Page

Report of Independent Certified Public Accountants                     16

Financial Statements:

     Balance Sheets                                                    17

     Statements of Income                                              18

     Statements of Partners' Capital                                   19

     Statements of Cash Flows                                       20-21

     Notes to Financial Statements                                  22-37



               Report of Independent Certified Public Accountants



To the Partners
CNL Income Fund VIII, Ltd.



In our opinion,  the financial  statements  listed in the index  appearing under
item 14(a)(1) present fairly, in all material  respects,  the financial position
of CNL Income Fund VIII,  Ltd. (a Florida  limited  partnership) at December 31,
2000 and 1999,  and the results of its operations and its cash flows for each of
the three  years in the  period  ended  December  31,  2000 in  conformity  with
accounting  principles  generally  accepted in the United States of America.  In
addition,  in our opinion, the financial statement schedules listed in the index
appearing under item 14(a)(2)  present  fairly,  in all material  respects,  the
information  set  forth  therein  when  read in  conjunction  with  the  related
financial  statements.   These  financial  statements  and  financial  statement
schedules  are  the   responsibility  of  the  Partnership's   management;   our
responsibility  is to  express  an opinion  on these  financial  statements  and
financial  statement  schedules based on our audits.  We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United  States of America  which  require  that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
February 2, 2001








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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                              December 31,
                                                                                      2000                     1999
<S><C>                                                                        -------------------      -------------------

                             ASSETS

  Land and buildings on operating leases, less
       accumulated depreciation                                               $ 16,275,305             $ 15,469,090
  Net investment in direct financing leases                                      6,439,056                7,635,861
  Investment in joint ventures                                                   4,075,551                3,197,857
  Mortgage notes receivable                                                      1,424,436                1,473,571
  Cash and cash equivalents                                                      1,226,635                1,503,989
  Certificates of deposit                                                          461,394                       --
  Receivables, less allowance for doubtful    accounts of
  $459 and $5,764, respectively                                                    105,075                  112,454
  Due from related party                                                            30,010                       --
  Prepaid expenses                                                                  26,288                   15,485
  Accrued rental income, less allowance for
       doubtful accounts of $4,501 in 1999                                       1,710,973                2,018,517
  Other assets                                                                      52,671                   52,671
                                                                               -------------------      -------------------

                                                                              $ 31,827,394             $ 31,479,495
                                                                                ===================      ===================

               LIABILITIES AND PARTNERS' CAPITAL

  Accounts payable                                                              $   34,293               $  114,170
  Escrowed real estate taxes payable                                                12,501                    9,157
  Distributions payable                                                            787,501                  787,501
  Due to related parties                                                            59,401                  121,327
  Rents paid in advance                                                             72,646                   23,394
                                                                               -------------------      -------------------
           Total liabilities                                                       966,342                1,055,549

  Minority interest                                                                108,518                  108,579

  Partners' capital                                                             30,752,534               30,315,367
                                                                               -------------------      -------------------

                                                                              $ 31,827,394             $ 31,479,495
                                                                               ===================      ===================
See accompanying notes to financial statements.
</TABLE>



<PAGE>


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

                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>


                                                                               Year Ended December 31,
                                                                      2000                1999               1998
                                                                ------------------   ---------------    ---------------
<S><C>
Revenues:
     Rental income from operating leases                             $  1,976,318       $ 1,961,199         $1,897,209
     Earned income from direct financing leases                           861,476           939,894          1,093,839
     Contingent rental income                                             113,627           113,285            101,911
     Interest and other income                                            271,702           223,683            269,744
                                                                                                        ---------------
                                                                ------------------   ---------------
                                                                        3,223,123         3,238,061          3,362,703
                                                                ------------------   ---------------    ---------------
Expenses:
     General operating and administrative                                 175,678           150,176            146,943
     Professional services                                                 24,829            35,453             24,837
     State and other taxes                                                 18,228            19,342              5,372
     Depreciation                                                         303,352           300,188            246,976
     Transaction costs                                                     32,424           185,446             21,042
                                                                ------------------   ---------------    ---------------
                                                                          554,511           690,605            445,170
                                                                ------------------   ---------------    ---------------

Income Before Minority Interest in Income
     of Consolidated Joint Venture, Equity in
     Earnings of Unconsolidated Joint Ventures and
     Gain on Sale of Assets                                             2,668,612         2,547,456          2,917,533

Minority Interest in Income of Consolidated
     Joint Venture                                                        (13,318  )        (13,404  )         (13,518 )

Equity in Earnings of Unconsolidated Joint
     Ventures                                                             319,184           276,012            276,721

Gain on Sale of Assets                                                    612,693                --            108,176
                                                                ------------------   ---------------    ---------------

Net Income                                                           $  3,587,171       $ 2,810,064        $ 3,288,912
                                                                ==================   ===============    ===============

Allocation of Net Income
     General Partners                                                    $     --         $  28,101          $  31,807
     Limited partners                                                   3,587,171         2,781,963          3,257,105
                                                                ------------------   ---------------    ---------------

                                                                     $  3,587,171       $ 2,810,064        $ 3,288,912
                                                                ==================   ===============    ===============

Net Income Per Limited Partner Unit                                    $    0.102         $   0.079          $   0.093
                                                                ==================   ===============    ===============

Weighted Average Number of
     Limited Partner Units Outstanding                                 35,000,000        35,000,000         35,000,000
                                                                ==================   ===============    ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>



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

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>

                                                  General Partners
                                        --------------------------------------
                                                              Accumulated
                                         Contributions         Earnings
                                       ------------------   ----------------
<S><C>
Balance, December 31, 1997                   $     1,000        $   225,441

    Distributions to limited
       partners ($0.110 per
       limited partner unit)                          --                 --
    Net income                                        --             31,807
                                       ------------------   ----------------

Balance, December 31, 1998                         1,000            257,248

    Distributions to limited
       partners ($0.090 per
       limited partner unit)                          --                 --
    Net income                                        --             28,101
                                       ------------------   ----------------

Balance, December 31, 1999                         1,000            285,349

    Distributions to limited
       partners ($0.090 per
       limited partner unit)                          --                 --
    Net income                                        --                 --
                                       ------------------   ----------------

Balance, December 31, 2000                   $     1,000        $   285,349
                                       ==================   ================


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

Balance, December 31, 1997            $  35,000,000      $ (22,334,641 )     $  22,339,598     $ (4,015,000 )    $31,216,398

    Distributions to limited
       partners ($0.110 per
       limited partner unit)                     --         (3,850,003 )                --               --       (3,850,003 )
    Net income                                   --                 --           3,257,105               --        3,288,912
                                   -----------------   ----------------   -----------------   --------------   --------------

Balance, December 31, 1998               35,000,000        (26,184,644 )        25,596,703       (4,015,000 )     30,655,307

    Distributions to limited
       partners ($0.090 per
       limited partner unit)                     --         (3,150,004 )                --               --       (3,150,004 )
    Net income                                   --                 --           2,781,963               --        2,810,064
                                   -----------------   ----------------   -----------------   --------------   --------------

Balance, December 31, 1999               35,000,000        (29,334,648 )        28,378,666       (4,015,000 )     30,315,367

    Distributions to limited
       partners ($0.090 per
       limited partner unit)                     --         (3,150,004 )                --               --       (3,150,004 )
    Net income                                   --                 --           3,587,171               --        3,587,171
                                   -----------------   ----------------   -----------------   --------------   --------------

Balance, December 31, 2000            $  35,000,000      $ (32,484,652 )     $  31,965,837     $ (4,015,000 )    $30,752,534
                                   =================   ================   =================   ==============   ==============

See accompanying notes to financial statements.
</TABLE>


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

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                                 Year Ended December 31,
                                                                     2000                  1999                 1998
                                                                ----------------      ---------------       ---------------
<S><C>
Increase (Decrease) in Cash and Cash Equivalents:

      Cash Flows from Operating Activities:
         Cash received from tenants                                $  3,160,831         $  3,014,746         $  3,144,635
         Distributions from unconsolidated joint ventures               401,558              336,445              344,643
         Cash paid for expenses                                        (437,972 )           (247,332 )           (185,270  )
         Interest received                                              225,480              217,147              258,584
                                                                ----------------      ---------------       ---------------
             Net cash provided by operating activities                3,349,897            3,321,006            3,562,592
                                                                ----------------      ---------------       ---------------
      Cash Flows from Investing Activities:
         Proceeds from sale of land and buildings                     3,822,716                   --              116,397
         Additions to land and buildings on operating leases         (2,925,217 )                 --                   --
         Investment in certificates of deposit                         (450,000 )                 --                   --
         Investment in joint venture                                   (960,068 )           (448,000 )                 --
         Collections on mortgage notes receivable                        48,701              335,154               41,292
         Other                                                               --                   --                   36
                                                                ----------------      ---------------       ---------------
             Net cash provided by (used in) investing
                activities                                             (463,868 )           (112,846 )            157,725
                                                                ----------------      ---------------       ---------------

      Cash Flows from Financing Activities:
         Distributions to limited partners                           (3,150,004 )         (3,500,004 )         (3,500,003  )
         Distributions to holder of minority interest                   (13,379 )            (13,425 )            (13,292  )
                                                                ----------------
                                                                                      ---------------       ---------------
             Net cash used in financing activities                   (3,163,383 )         (3,513,429 )         (3,513,295  )
                                                                ----------------      ---------------       ---------------

Net Increase (Decrease) in Cash and Cash Equivalents                   (277,354 )           (305,269 )            207,022

Cash and Cash Equivalents at Beginning of Year                        1,503,989            1,809,258            1,602,236
                                                                ----------------      ---------------       ---------------

Cash and Cash Equivalents at End of Year                           $  1,226,635         $  1,503,989         $  1,809,258
                                                                ================      ===============       ===============

See accompanying notes to financial statements.
</TABLE>



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

                      STATEMENTS OF CASH FLOWS - CONTINUED
<TABLE>
<CAPTION>


                                                                               Year Ended December 31,
                                                                      2000               1999              1998
                                                                 ---------------    ---------------    --------------
<S><C>
Reconciliation of Net Income to Net Cash Provided
    by Operating Activities:

      Net Income                                                    $ 3,587,171        $ 2,810,064       $ 3,288,912
                                                                 ---------------    ---------------    --------------
      Adjustments to  reconcile  net income to net cash  provided  by  operating
         activities:
             Depreciation                                               303,352            300,188           246,976
             Minority interest in income of
                consolidated joint venture                               13,318             13,404            13,518
             Equity in earnings of unconsolidated joint
                ventures, net of distributions                           82,374             60,433            67,922
             Gain on sale of assets                                    (612,693 )               --          (108,176 )
             Increase in receivables                                     (3,581 )          (25,188 )         (32,504 )
             Increase in due from related party                         (30,010 )               --                --
             Decrease (increase) in prepaid expenses                    (10,803 )          (11,526 )             398
             Decrease in net investment in direct
                financing leases                                        171,457            166,924           177,947
             Increase in accrued rental income                          (61,481 )          (91,099 )        (116,089 )
             Increase (decrease) in accounts payable
                and accrued expenses                                    (76,533 )           91,231              (722 )
             Increase (decrease) in due to related
                parties                                                 (61,926 )           45,530            15,617
             Increase (decrease) in rents paid in
                advance                                                  49,252            (38,955 )           8,793
                                                                 ---------------    ---------------    --------------
                  Total adjustments                                    (237,274 )          510,942           273,680
                                                                 ---------------    ---------------    --------------

Net Cash Provided by Operating Activities                           $ 3,349,897        $ 3,321,006       $ 3,562,592
                                                                 ===============    ===============    ==============

Supplemental Schedule of Non-Cash
      Financing Activities:

         Distributions declared and unpaid at
             December 31                                             $  787,501         $  787,501       $ 1,137,501
                                                                 ===============    ===============    ==============

See accompanying notes to financial statements.
</TABLE>




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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies:
         -------------------------------

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

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

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

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

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



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

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

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

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

         Investment in Joint Ventures - The Partnership  accounts for its 87.68%
         interest  in Woodway  Joint  Venture  using the  consolidation  method.
         Minority  interest  represents  the minority  joint  venture  partner's
         proportionate  share of the  equity in the  Partnership's  consolidated
         joint venture. All significant  intercompany  accounts and transactions
         have been eliminated.


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         The   Partnership's   investments  in  Asheville  Joint  Venture;   CNL
         Restaurant  Investments II; Middleburg Joint Venture;  and Bossier City
         Joint Venture;  and a property in  Libertyville,  Illinois held with an
         affiliate of the General Partners as  tenants-in-common,  are accounted
         for using the equity method since the  Partnership  shares control with
         affiliates which have the same General Partners.

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

         Cash  accounts  maintained  on  behalf  of the  Partnership  in  demand
         deposits  at  commercial  banks  and  money  market  funds  may  exceed
         federally insured levels;  however, the Partnership has not experienced
         any losses in such accounts.

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

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

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


<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Staff  Accounting  Bulletin No. 101 ("SAB 101") - In December 1999, the
         Securities and Exchange Commission released SAB 101, which provides the
         staff's view in applying  generally accepted  accounting  principles to
         selected revenue  recognition  issues. SAB 101 requires the Partnership
         to defer recognition of certain  percentage rental income until certain
         defined  thresholds are met. The Partnership  adopted SAB 101 beginning
         January  1,  2000.  Implementation  of SAB 101 did not have a  material
         impact on the Partnership's results of operations.

         Statement of  Financial  Accounting  Standards  No. 133 ("FAS 133") and
         Statement of Financial  Accounting  Standards  No. 137 ("FAS 137") - In
         June 1998, the Financial Accounting Standards Board issued Statement of
         Financial  Accounting  Standards No. 133,  "Accounting  for  Derivative
         Instruments  and  Hedging   Activities."   The  Statement   establishes
         accounting  and  reporting   standards  for   derivative   instruments,
         including certain derivative  instruments,  embedded in other contracts
         (collectively referred to as derivatives),  and for hedging activities.
         The Statement  requires that an entity  recognize  all  derivatives  as
         either  assets or  liabilities  in the balance  sheet and measure those
         instruments  at fair  value.  In June 1999,  the  Financial  Accounting
         Standards Board issued Statement of Financial  Accounting Standards No.
         137,  "Accounting for Derivative  Instruments and Hedging  Activities -
         Deferral of the Effective  Date of FASB Statement No. 133, an Amendment
         of FASB  Statement No. 133." FAS 137 deferred the effective date of FAS
         133 for one year. FAS 133, as amended,  is now effective for all fiscal
         quarters  of all  fiscal  years  beginning  after  June 15,  2000.  The
         Partnership  has reviewed both  statements and has determined that both
         FAS 133 and FAS 137 do not apply to the  Partnership as of December 31,
         2000.

2.       Leases:
         ------

         The Partnership leases its land and buildings primarily to operators of
         national and  regional  fast-food  and  family-style  restaurants.  The
         leases are accounted for under the provisions of Statement of Financial
         Accounting  Standards  No. 13,  "Accounting  for  Leases."  Some of the
         leases have been classified as operating  leases and some of the leases
         have been classified as direct  financing  leases.  For property leases
         classified as direct  financing  leases,  the building  portions of the
         majority  of  property  leases are  accounted  for as direct  financing
         leases  while the land  portions of these leases are  accounted  for as
         operating  leases.  Substantially all leases are for 14 to 25 years and
         provide for minimum and  contingent  rentals.  In addition,  the tenant
         generally pays all



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


2.       Leases - Continued:
         ------------------

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

3.       Land and Buildings on Operating Leases:
         --------------------------------------

         Land and  buildings on operating  leases  consisted of the following at
         December 31:
<TABLE>
<CAPTION>

                                                                    2000                   1999
                                                             --------------------   --------------------
<S><C>
                 Land                                               $  9,605,325           $  9,159,115
                 Buildings                                             8,643,853              8,295,673
                                                             --------------------   --------------------
                                                                      18,249,178             17,454,788

                 Less accumulated depreciation                        (1,973,873 )           (1,985,698 )
                                                             --------------------   --------------------

                                                                    $ 16,275,305           $ 15,469,090
                                                             ====================   ====================
</TABLE>

         In July 2000,  the  Partnership  sold its  properties  in  Brooksville,
         Bayonet  Point  and Sun  City,  Florida,  for a total of  approximately
         $3,465,100  and  received  net sales  proceeds  totaling  approximately
         $3,402,700,  resulting  in a total gain of  approximately  $484,800 for
         financial reporting purposes. These properties were originally acquired
         by  the   Partnership   in  1990  and  1991,  and  had  costs  totaling
         approximately $2,797,000,  excluding acquisition fees and miscellaneous
         acquisition  expenses;  therefore,  the Partnership sold the properties
         for approximately $605,700 in excess of their original purchase price.

         In July 2000, the Partnership reinvested the sales proceeds it received
         from the sale of the properties in Sun City, Florida and Bayonet Point,
         Florida in a Bennigan's property located in Deerfield,  Illinois, at an
         approximate  cost of $2,462,700  from CNL BB Corp., an affiliate of the
         general partners. In connection therewith, the Partnership entered into
         a long term,  triple-net lease with terms substantially the same as its
         other leases (see Note 9).


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases - Continued:
         --------------------------------------------------

         In September 2000, the Partnership  sold its property in  Jacksonville,
         Florida,  for $422,506 and received net sales proceeds of approximately
         $420,000,  resulting in a gain of approximately  $127,900 for financial
         reporting  purposes.  This  property  was  originally  acquired  by the
         Partnership  in  1990,  and  had  a  cost  of  approximately  $352,400,
         excluding  acquisition  fees and  miscellaneous  acquisition  expenses;
         therefore,  the Partnership sold the property for approximately $67,600
         in excess of its original purchase price.

         In October  2000,  the  Partnership  reinvested  the sales  proceeds it
         received  from the sale of its property in  Jacksonville,  Florida in a
         Pizza Hut  Property  in  Hialeah,  Florida  at an  approximate  cost of
         $472,300. In connection therewith,  the Partnership entered into a long
         term,  triple-net lease with terms  substantially the same as its other
         leases.

         Some leases provide for escalating  guaranteed minimum rents throughout
         the  lease  terms.  Income  from  these  scheduled  rent  increases  is
         recognized on a straight-line  basis over the terms of the leases.  For
         the years ended  December 31, 2000,  1999,  and 1998,  the  Partnership
         recognized $61,481, $91,099, and $116,089, respectively, of such rental
         income.

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 2000:



                2001                             $2,008,473
                2002                              2,049,500
                2003                              2,080,110
                2004                              2,092,571
                2005                              1,967,710
                Thereafter                       10,188,451
                                            ----------------

                                                $20,386,815
                                            ================


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



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


4.       Net Investment in Direct Financing Leases:
         -----------------------------------------

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

<TABLE>
<CAPTION>

                                                       2000                  1999
                                                  ----------------      ----------------
<S><C>
               Minimum lease payments
                    receivable                       $ 10,334,143          $ 12,988,936
               Estimated residual values                2,152,532             2,457,620
               Less unearned income                    (6,047,619 )          (7,810,695 )
                                                  ----------------      ----------------

               Net investment in direct
                    financing leases                  $ 6,439,056           $ 7,635,861
                                                  ================      ================
</TABLE>

         In July  2000,  the  Partnership  sold two  properties,  for  which the
         building  portion had been classified as a direct  financing  lease. In
         connection  therewith,  the gross  investment  (minimum  lease payments
         receivable  and the  estimated  residual  value)  and  unearned  income
         relating to the  building  were  removed from the accounts and the gain
         from the sale of the property was reflected in income (see Note 3).

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2000:

                     2001                                    $ 977,631
                     2002                                      989,345
                     2003                                      989,345
                     2004                                      989,345
                     2005                                      989,345
                     Thereafter                              5,399,132
                                                       ----------------

                                                           $10,334,143
                                                       ================

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




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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999 and 1998


5.       Investment in Joint Ventures:
         ----------------------------

         The  Partnership has an 85.54%,  a 36.8%,  and a 12.46% interest in the
         profits  and  losses  of  Asheville   Joint  Venture,   CNL  Restaurant
         Investments  II,  and  Middleburg  Joint  Venture,   respectively.  The
         remaining  interests in these joint  ventures are held by affiliates of
         the Partnership which have the same general  partners.  Asheville Joint
         Venture and  Middleburg  Joint Venture each own and lease one property,
         and CNL Restaurant  Investments II owns and leases six properties to an
         operator of national fast-food or family-style restaurants.

         In  November  1999,  the  Partnership  entered  into  a  joint  venture
         arrangement, Bossier City Joint Venture, with CNL Income Fund XII, Ltd.
         and CNL Income Fund XIV, Ltd., both Florida limited  partnerships  and,
         affiliates of the general partners, to hold one restaurant property. As
         of  December  31,  2000,  the  Partnership  had  acquired  a 34 percent
         interest in the profits and losses of the joint venture.

         In  August  2000,  the  Partnership  used a  portion  of the net  sales
         proceeds  from sale of its  properties  to  acquire  an  interest  in a
         Baker's Square property in Libertyville, Illinois, with CNL Income Fund
         IX, Ltd., ("CNL IX") a Florida limited partnership, and an affiliate of
         the general partners. The Partnership accounts for its investment using
         the  equity  method  since  the  Partnership  shares  control  with  an
         affiliate.  As of  December  31,  2000,  the  Partnership  owned  a 66%
         interest in this property.



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999 and 1998


5.       Investment in Joint Ventures - Continued:
         ----------------------------------------

         The  following  presents  the  joint  ventures'   combined,   condensed
         financial information at December 31:

<TABLE>
<CAPTION>

                                                                               2000                 1999
                                                                          ----------------     ---------------
<S><C>
                  Land and buildings on operating
                      leases, less accumulated
                      depreciation                                            $ 8,714,670          $7,467,574
                  Net investment in direct financing
                      lease                                                     1,280,255           1,300,856
                  Cash                                                            117,189              74,120
                  Receivables, less allowance for
                      doubtful accounts                                            28,510              39,740
                  Prepaid expenses                                                    566               1,264
                  Accrued rental income                                           247,527             194,666
                  Liabilities                                                      80,916              47,270
                  Partners' capital                                            10,307,801           9,030,950
                  Revenues                                                      1,128,453           1,039,787
                  Net income                                                      903,843             855,805
</TABLE>

         The Partnership  recognized  income totaling  $319,184,  $276,012,  and
         $276,721  for the  years  ended  December  31,  2000,  1999,  and 1998,
         respectively, from these joint ventures.

6.       Mortgage Notes Receivable:
         -------------------------

         As of December 31, 1996,  the  Partnership  had accepted two promissory
         notes in the principal sum  totalling  $460,000 in connection  with the
         sale of two of its properties in Jacksonville,  Florida. The promissory
         notes,  which are  collateralized by mortgages on the properties,  bear
         interest at a rate of ten percent per annum, and are being collected in
         119 equal  monthly  installments  of $2,106 and  $1,931,  with  balloon
         payments of $218,252 and $200,324, respectively, due in December 2005.

         In  addition,  in  connection  with the 1996  sale of its  property  in
         Orlando,  Florida,  the  Partnership  accepted a promissory note in the
         principal  sum of  $1,388,568,  representing  the gross  sales price of
         $1,375,000,  plus tenant closing costs of $13,568 that the  Partnership
         financed on behalf of the tenant. The promissory note bears interest at
         a rate of 10.75%  per annum,  is  collateralized  by a mortgage  on the
         property and is being




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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


6.       Mortgage Notes Receivable - Continued:
         -------------------------------------

         collected in 12 monthly  installments  of interest  only, in 17 monthly
         installments  of $15,413  consisting  of principal  and  interest,  and
         thereafter  in  151  monthly  installments  of  $12,633  consisting  of
         principal and interest.  During the year ended  December 31, 1999,  the
         borrower prepaid  principal in the amount of $272,500.  This amount was
         applied to the outstanding principal balance.

         The mortgage  notes  receivable  consisted of the following at December
31:

                                            2000                 1999
                                       ----------------     ----------------

        Principal balance                  $ 1,412,064           $1,460,765
        Accrued interest receivable             12,372               12,806
                                       ----------------     ----------------

                                           $ 1,424,436           $1,473,571
                                       ================     ================

         The General  Partners believe that the estimated fair value of mortgage
         notes  receivable  at  December  31,  2000 and 1999,  approximated  the
         outstanding  principal amount based on estimated current rates at which
         similar  loans would be made to borrowers  with similar  credit and for
         similar maturities.

7.       Allocations and Distributions:
         -----------------------------

         From inception through December 31, 1999, generally, all net income and
         net losses of the Partnership, excluding gains and losses from the sale
         of properties,  were  allocated 99 percent to the limited  partners and
         one percent to the General  Partners.  From inception  through December
         31,  1999,  distributions  of net cash flow were made 99 percent to the
         limited  partners  and one percent to the General  Partners;  provided,
         however, that the one percent of net cash flow to be distributed to the
         General Partners was subordinated to receipt by the limited partners of
         an aggregate, ten percent,  cumulative,  noncompounded annual return on
         their adjusted capital contributions (the "10% Preferred Return").

         From inception through December 31, 1999, generally, net sales proceeds
         from the sale of properties not in liquidation of the  Partnership,  to
         the extent distributed,  were distributed first to the limited partners
         in an amount sufficient to provide them with their




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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


7.       Allocations and Distributions - Continued:
         -----------------------------------------

         10%  Preferred  Return,  plus  the  return  of their  adjusted  capital
         contributions.  The  General  Partners  then  received,  to the  extent
         previously subordinated and unpaid, a one percent interest in all prior
         distributions   of  net  cash  flow  and  a  return  of  their  capital
         contributions. Any remaining sales proceeds were distributed 95 percent
         to the limited partners and five percent to the General  Partners.  Any
         gain from the sale of a property not in liquidation of the  Partnership
         was, in general, allocated in the same manner as net sales proceeds are
         distributable.  Any loss from the sale of a property  was,  in general,
         allocated  first,  on a pro  rata  basis,  to  partners  with  positive
         balances  in their  capital  accounts;  thereafter,  95  percent to the
         limited partners and five percent to the General Partners.

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

         Effective  January 1, 2000, the General  Partners waived their right to
         receive  future  distributions  from the  Partnership,  including  both
         distributions  of operating cash flow and  distributions of liquidation
         proceeds,   to  the  extent   that  the   cumulative   amount  of  such
         distributions would exceed the balance in the General Partners' capital
         account as of December  31,  1999.  Accordingly,  for years  commencing
         January  1,  2000 and  after,  the  Partnership's  net  income  will be
         allocated entirely among the limited partners.  However,  if losses are
         allocated to the general  partners in a year, an amount of income equal
         to the sum of such losses may be allocated  to the General  Partners in
         succeeding years. Accordingly,  the General Partners were not allocated
         any net income and did not  receive any  distributions  during the year
         ended December 31, 2000.


         During  each of the  years  ended  December  31,  2000  and  1999,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $3,150,004.  During the year ended December 31, 1998,  the  Partnership
         declared  distributions of $3,850,003.  No distributions have been made
         to the General Partners to date.


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


8.       Income Taxes:
         ------------

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

<TABLE>
<CAPTION>

                                                                    2000             1999              1998
                                                                --------------   --------------   ---------------
<S><C>
          Net income for financial reporting purposes             $ 3,587,171       $2,810,064       $ 3,288,912

          Depreciation for tax reporting purposes in
               excess of depreciation for financial
               reporting purposes                                     (99,400 )       (113,202 )        (166,412 )

            Direct financing leases recorded as operating
               leases for tax reporting purposes                      171,457          166,924           177,946

            Allowance for doubtful accounts                            (5,305 )        (18,872 )           5,408

          Accrued rental income                                       (61,481 )        (91,099 )        (116,089 )

          Rents paid in advance                                        49,252          (38,955 )           9,293

          Gain or loss on sale of assets for tax
               reporting purposes in excess of (less than)
               gain or loss for financial reporting purposes         (597,936 )         38,341             3,170

          Capitalization (deduction) of transaction costs
               for tax reporting purposes                            (206,488 )        185,446            21,042

          Equity in earnings of unconsolidated joint
               ventures for tax reporting purposes in excess
               of equity in earnings of unconsolidated
          joint ventures for financial reporting purposes              14,929           21,563            15,563


          Minority interest in timing differences of
               consolidated joint venture                               1,113            1,292             1,443
                                                                --------------   --------------   ---------------

          Net income for federal income tax purposes              $ 2,853,312      $ 2,961,502       $ 3,240,276
                                                                ==============   ==============   ===============
</TABLE>


<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


9.       Related Party Transactions:
         --------------------------

         One of the individual General Partners, James M. Seneff, Jr., is one of
         the principal  shareholders of CNL Holdings,  Inc. The other individual
         general partner, Robert A. Bourne, serves as President and Treasurer of
         CNL Financial  Group,  Inc., a wholly owned subsidiary of CNL Holdings,
         Inc..  CNL Fund  Advisors,  Inc.  (the  "Advisor")  was majority  owned
         subsidiary  of CNL  Financial  Group,  Inc.  until it  merged  with CNL
         American  Properties Fund, Inc. ("APF"),  effective  September 1, 1999.
         The individual general partners are stockholders and directors of APF.

         The advisor  provides  certain  services  relating to management of the
         Partnership and its properties pursuant to a management  agreement with
         the Partnership. In connection therewith, the Partnership has agreed to
         pay the Advisor an annual,  noncumulative,  subordinated management fee
         of one  percent of the sum of gross  revenues  from  properties  wholly
         owned by the Partnership and the Partnership's allocable share of gross
         revenues from joint ventures, but not in excess of competitive fees for
         comparable  services.  These fees will be incurred  and will be payable
         only after the limited partners receive their 10% Preferred Return. Due
         to the fact that these fees are noncumulative,  if the limited partners
         have not received their 10% Preferred Return in any particular year, no
         management  fees will be due or payable  for such year.  As a result of
         such threshold, no management fees were incurred during the years ended
         December 31, 2000, 1999, and 1998.

         The Advisor is also entitled to receive a deferred,  subordinated  real
         estate disposition fee, payable upon the sale of one or more properties
         based on the lesser of one-half of a competitive real estate commission
         or  three  percent  of the  sales  price  if  the  Advisor  provides  a
         substantial amount of services in connection with the sale. However, if
         the net sales  proceeds are  reinvested in a replacement  property,  no
         such  real  estate   disposition  fees  will  be  incurred  until  such
         replacement   property  is  sold  and  the  net  sales   proceeds   are
         distributed.  The  payment  of  the  real  estate  disposition  fee  is
         subordinated to receipt by the limited  partners of their aggregate 10%
         Preferred  Return,  plus  their  adjusted  capital  contributions.   No
         deferred,  subordinated real estate  disposition fees were incurred for
         the years ended December 31, 2000, 1999 and 1998.



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


9.       Related Party Transactions - Continued:
         --------------------------------------

         In July 2000, the Partnership reinvested the sales proceeds it received
         from the sale of the properties in Sun City, Florida and Bayonet Point,
         Florida in a Bennigan's property located in Deerfield,  Illinois, at an
         approximate  cost of $2,462,700  from CNL BB Corp., an affiliate of the
         general partners. CNL BB Corp. had purchased and temporarily held title
         to this property in order to facilitate the acquisition of the property
         by  the  Partnership.  The  purchase  price  paid  by  the  Partnership
         represents  the costs incurred by CNL BB Corp. to acquire and carry the
         property,  including closing costs. In accordance with the Statement of
         Policy  of Real  Estate  Programs  for the  North  American  Securities
         Administrators  Association,  Inc., all income,  expenses,  profits and
         losses  generated by or  associated  with the property  were treated as
         belonging  to the  Partnership.  For the year ended  December 31, 2000,
         other income of the  Partnership  included  $6,679 of such amounts.  In
         connection  therewith,  the  Partnership  entered  into  a  long  term,
         triple-net lease with terms substantially the same as its other leases.

         During the years ended  December 31, 2000,  1999, and 1998, the Advisor
         and its affiliates provided  accounting and administrative  services to
         the Partnership on a day-to-day  basis including  services  relating to
         the proposed and terminated merger.  The Partnership  incurred $95,548,
         $118,104, and $96,202, for the years ended December 31, 2000, 1999, and
         1998, respectively, for such services.

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

                                               2000                 1999
                                         -----------------    ------------------

 Due to Advisor and its Affiliates:
      Accounting and administrative
          services                              $   4,351             $  66,277
      Deferred, subordinated real
          estate disposition fee                   55,050                55,050
                                                              ------------------
                                         -----------------

                                                $  59,401             $ 121,327
                                         =================    ==================



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


10.      Concentration of Credit Risk:
         ----------------------------

         The  following  schedule  presents  total  rental,  earned and mortgage
         interest income from individual  lessees,  each  representing more than
         ten percent of the  Partnership's  total  rental,  earned and  mortgage
         interest income (including the Partnership's  share of total rental and
         earned income from the  unconsolidated  joint ventures and the property
         held as tenants-in-common with affiliates of the general partners), for
         each of the years ended December 31:

<TABLE>
<CAPTION>

                                                  2000               1999                1998
                                             ---------------    ---------------     ---------------
<S><C>
         Golden Corral Corporation                 $694,735          $ 711,714           $ 728,641
         Carrols Corporation                        422,375            419,844             482,081
         Restaurant Management Services,
              Inc.                                      N/A            572,803             527,360
</TABLE>

         In addition,  the following schedule presents total rental,  earned and
         mortgage  interest  income  from  individual  restaurant  chains,  each
         representing more than ten percent of the  Partnership's  total rental,
         earned and mortgage interest income (including the Partnership's  share
         of  total  rental  and  earned  income  from the  unconsolidated  joint
         ventures and the property held as tenants-in-common  with affiliates of
         the general partners) for each of the years ended December 31:

<TABLE>
<CAPTION>

                                                 2000                1999               1998
                                             --------------     ---------------    ----------------
<S><C>
         Burger King                              $882,922           $ 887,291           $ 961,542
         Golden Corral Family
             Steakhouse Restaurants                722,115             747,008             750,869
         Shoney's                                  363,946             599,081             603,304
</TABLE>


         The  information   denoted  by  N/A  indicates  that  for  each  period
         presented,  the tenants and the chains did not represent  more than ten
         percent of the Partnership's total rental and mortgage interest income.

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

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


11.      Selected Quarterly Financial Data:
         ---------------------------------

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2000 and
         1999:

<TABLE>
<CAPTION>

             2000 Quarter               First            Second            Third             Fourth             Year
        ------------------------     -------------    -------------     -------------    ---------------    --------------
<S><C>
        Revenue (1)                      $857,005         $731,135          $855,989         $1,084,860        $3,528,989
        Net income                        657,317          568,458         1,336,592          1,024,804         3,587,171
        Net income per
            limited partner
            unit                         $  0.019         $  0.016          $  0.038           $  0.029          $  0.102

             1999 Quarter               First            Second            Third             Fourth             Year
        ------------------------     -------------    -------------     -------------    ---------------    --------------

        Revenue (1)                      $844,368         $864,637          $845,771          $ 945,893        $3,500,669
        Net income                        674,843          658,687           666,586            809,948         2,810,064
        Net income per
            limited partner
            unit                         $  0.019         $  0.019          $  0.019            $ 0.023          $  0.079

</TABLE>

 (1)     Revenues  include equity in earnings of  unconsolidated  joint ventures
         and minority interest in income of consolidated joint ventures.



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

         None.


                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

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

         James M. Seneff, Jr., age 54. Since 1971, Mr. Seneff has been active in
         the  acquisition,  development,  and management of real estate projects
         and, directly or through an affiliated  entity, has served as a general
         partner or co-venturer in over 100 real estate ventures. These ventures
         have involved the financing, acquisition,  construction, and leasing of
         restaurants,  office buildings,  apartment complexes, hotels, and other
         real  estate.  Mr.  Seneff has served as Director  and  Chairman of the
         Board of CNL American Properties Fund, Inc. ("APF"), a public, unlisted
         real estate  investment  trust,  since 1994. Mr. Seneff served as Chief
         Executive  Officer of APF from 1994 through  August 1999 and has served
         as Co-Chief  Executive  Officer of APF since  December 2000. Mr. Seneff
         served as Chairman of the Board and Chief Executive Officer of CNL Fund
         Advisors (the  "Advisor")  until it merged with APF in September  1999,
         and in June 2000, was re-elected to those positions of the Advisor. Mr.
         Seneff is a principal  stockholder  of CNL Holdings,  Inc.,  the parent
         company of CNL Financial  Group,  Inc.  (formerly CNL Group,  Inc.),  a
         diversified real estate company, and has served as a director, Chairman
         of the Board and Chief Executive  Officer of CNL Financial Group,  Inc.
         since its formation in 1980.  CNL Financial  Group,  Inc. is the parent
         company,  either directly or indirectly  through  subsidiaries,  of CNL
         Real Estate Services,  Inc., CNL Capital Markets,  Inc., CNL Investment
         Company and CNL Securities  Corp. Mr. Seneff also serves as a Director,
         Chairman of the Board and Chief  Executive  Officer of CNL  Hospitality
         Properties,  Inc., a public,  unlisted real estate investment trust, as
         well as, CNL Hospitality Corp., its advisor. In addition,  he serves as
         a Director,  Chairman of the Board and Chief  Executive  Officer of CNL
         Retirement Properties,  Inc., a public, unlisted real estate investment
         trust and its advisor,  CNL Retirement Corp. Since 1992, Mr. Seneff has
         also  served as a Director,  Chairman of the Board and Chief  Executive
         Officer of  Commercial  Net Lease  Realty,  Inc.,  a public real estate
         investment  trust  that is listed on the New York Stock  Exchange.  Mr.
         Seneff has also served as a  Director,  Chairman of the Board and Chief
         Executive  Officer of CNL Securities  Corp.  since 1979; CNL Investment
         Company since 1990; and CNL Institutional Advisors,  Inc., a registered
         investment  advisor for pension plans,  since 1990. Mr. Seneff formerly
         served as a Director of First Union National Bank of Florida, N.A., and
         currently  serves as the Chairman of the Board of CNL Bank.  Mr. Seneff
         previously  served on the Florida  State  Commission on Ethics and is a
         former  member and past  Chairman  of the State of  Florida  Investment
         Advisory   Council,   which   recommends   to  the  Florida   Board  of
         Administration  investments  for various  Florida  employee  retirement
         funds.  The  Florida  Board  of  Administration,   Florida's  principal
         investment   advisory  and  money  management   agency,   oversees  the
         investment  of more than $60 billion of  retirement  funds.  Mr. Seneff
         received  his degree in  Business  Administration  from  Florida  State
         University in 1968.

         Robert A.  Bourne,  age 53. Mr.  Bourne has  participated  as a general
         partner or co-venturer in over 100 real estate ventures involved in the
         financing,  acquisition,  construction,  and  leasing  of  restaurants,
         office buildings,  apartment complexes,  hotels, and other real estate.
         Mr.  Bourne is Director and Vice  Chairman of the Board of Directors of
         APF. Mr. Bourne  served as President of APF from 1994 through  February
         1999. He also served as Treasurer  from  February  1999 through  August
         1999 and from May 1994 through December 1994. He also served in various
         executive  positions  with the  Advisor  prior to its  merger  with APF
         including,  President  from 1994 through  September  1997, and Director
         from 1994  through  August 1999.  Mr.  Bourne  serves as President  and
         Treasurer of CNL Financial  Group,  Inc.  (formerly  CNL Group,  Inc.);
         Director,  Vice Chairman of the Board and President of CNL  Hospitality
         Properties,  Inc., a public,  unlisted real estate investment trust; as
         well as, Director and President of CNL Hospitality  Corp., its advisor.
         In  addition,  Mr.  Bourne  serves as  Director  and  President  of CNL
         Retirement Properties,  Inc., a public, unlisted real estate investment
         trust;  as well  as, a  Director  and  President  of its  advisor,  CNL
         Retirement  Corp.  Mr. Bourne also serves as a Director of CNL Bank. He
         has served as a Director  since 1992,  Vice Chairman of the Board since
         February 1996, Secretary and Treasurer from February 1996 through 1997,
         and President  from July 1992 through  February 1996, of Commercial Net
         Lease Realty, Inc., a public real estate investment trust listed on the
         New York Stock Exchange. Mr. Bourne also serves as Director,  President
         and Treasurer  for various  affiliates  of CNL  Financial  Group,  Inc.
         including,  CNL  Investment  Company,  CNL  Securities  Corp.  and  CNL
         Institutional  Advisors,  Inc.,  a  registered  investment  advisor for
         pension  plans.  Mr.  Bourne  began his  career as a  certified  public
         accountant employed by Coopers & Lybrand, Certified Public Accountants,
         from 1971 through  1978,  where he attained the position of Tax Manager
         in 1975.  Mr. Bourne  graduated  from Florida State  University in 1970
         where he received a B.A. in Accounting, with honors.

         Curtis B.  McWilliams,  age 45. Mr.  McWilliams  has served as Co-Chief
         Executive  Officer of APF since December 2000 and previously  served as
         Chief  Executive  Officer from  September  1999 through  December 2000.
         Prior to the  acquisition  of the  Advisor,  Mr.  McWilliams  served as
         President of APF from February 1999 until  September  1999.  From April
         1997 to February  1999, he served as Executive  Vice  President of APF.
         Mr. McWilliams  joined CNL Financial Group,  Inc.  (formerly CNL Group,
         Inc.) in April 1997 and served as an  Executive  Vice  President  until
         September 1999. In addition,  Mr. McWilliams served as President of the
         Advisor  and CNL  Financial  Services,  Inc.  from April 1997 until the
         acquisition of such entities by APF in September  1999.  From September
         1983 through March 1997, Mr. McWilliams was employed by Merrill Lynch &
         Co.  The  majority  of his  career at  Merrill  Lynch & Co.  was in the
         Investment Banking division where he served as a Managing Director. Mr.
         McWilliams  received a B.S.E.  in Chemical  Engineering  from Princeton
         University in 1977 and a Master of Business  Administration degree with
         a concentration in finance from the University of Chicago in 1983.

         John T. Walker, age 42. Mr. Walker has served as President of APF since
         September  1999 and as Chief  Operating  Officer since March 1995.  Mr.
         Walker  also  served  as a  board  member  of CNL  Restaurant  Property
         Services,  Inc., a subsidiary of APF from December 1999 until  December
         2000.  Previously,  he served as Executive  Vice  President of APF from
         January  1996 to  September  1999.  Mr.  Walker  joined the  Advisor in
         September  1994, as Senior Vice President  responsible for Research and
         Development.  He served as the Chief  Operating  Officer of the Advisor
         from April 1995 until  September  1999 and as Executive  Vice President
         from January 1996 until  September  1999,  at which time it merged with
         APF.  Mr.  Walker  also  served  as  Executive  Vice  President  of CNL
         Hospitality  Properties,  Inc. and CNL Hospitality Corp.  (formerly CNL
         Hospitality Advisors, Inc.) from 1997 to October 1998. From May 1992 to
         May  1994,   he  was   Executive   Vice   President   for  Finance  and
         Administration  and Chief Financial  Officer of Z Music,  Inc., a cable
         television   network  which  was   subsequently   acquired  by  Gaylord
         Entertainment,  where he was  responsible  for  overall  financial  and
         administrative management and planning. From January 1990 through April
         1992,  Mr.  Walker was Chief  Financial  Officer  of the First  Baptist
         Church in Orlando,  Florida.  From April 1984 through December 1989, he
         was a partner in the  accounting  firm of  Chastang,  Ferrell & Walker,
         P.A.,  where he was the  partner  in  charge  of audit  and  consulting
         services,   and  from   1981  to  1984,   Mr.   Walker   was  a  Senior
         Consultant/Audit Senior at Price Waterhouse.  Mr. Walker is a cum laude
         graduate of Wake Forest University with a Bachelor of Science degree in
         Accountancy and is a certified public accountant.

         Steven  D.  Shackelford,  age  37.  Mr.  Shackelford  was  promoted  to
         Executive  Vice  President and Chief  Financial  Officer of APF in July
         2000. He served as Senior Vice President and Chief Financial Officer of
         APF since January 1997.  Mr.  Shackelford  also served as Secretary and
         Treasurer  of APF  since  September  1999.  He  also  served  as  Chief
         Financial Officer of the Advisor from September 1996 to September 1999.
         From March 1995 to July 1996, Mr.  Shackelford  was a senior manager in
         the national  office of Price  Waterhouse LLP where he was  responsible
         for  advising  foreign  clients  seeking to raise  capital and a public
         listing in the United States.  From August 1992 to March 1995, he was a
         manager  in the  Paris,  France  office  of Price  Waterhouse,  serving
         several multi-national  clients. Mr. Shackelford was an audit staff and
         senior  from  1986 to 1992 in the  Orlando,  Florida  office  of  Price
         Waterhouse.  Mr.  Shackelford  received  a Bachelor  of Arts  degree in
         Accounting, with honors, and a Master of Business Administration degree
         from Florida State University and is a certified public accountant.



Item 11.  Executive Compensation

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


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 15,  2001,  no person was known to the  Registrant  to be a
         beneficial owner of more than five percent of the Units.

         The following  table sets forth,  as of March 15, 2001,  the beneficial
         ownership interests of the General Partners in the Registrant.

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

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

         Neither the General  Partners,  nor any of their  affiliates,  owns any
         interest in the Registrant, except as noted above.



Item 13.  Certain Relationships and Related Transactions

         The  table  below   summarizes  the  types,   recipients,   methods  of
         computation and amounts of compensation, fees and distributions paid or
         payable by the Partnership to the General Partners and their affiliates
         for the year ended December 31, 2000, exclusive of any distributions to
         which the  General  Partners  or their  affiliates  may be  entitled by
         reason of their purchase and ownership of Units.
<TABLE>
<CAPTION>

                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
          and Recipient                        Method of Computation                  Ended December 31, 2000
<S><C>
----------------------------------     --------------------------------------      ------------------------------

Reimbursement  to affiliates  for      Operating  expenses are reimbursed at       Accounting and administra-
operating expenses                     the  lower of cost or 90  percent  of       tive services:  $95,548
                                       the   prevailing    rate   at   which
                                       comparable services could have been
                                       obtained in the same geographic
                                       area. Affiliates of the General
                                       Partners from time to time incur
                                       certain operating expenses on behalf
                                       of the Partnership for which the
                                       Partnership       reimburses      the
                                       affiliates without interest.

Annual, subordinated manage-           One  percent  of  the  sum  of  gross       $-0-
ment fee to affiliates                 revenues   (excluding   noncash   and
                                       lease  accounting  adjustments)  from
                                       Properties wholly owned by the
                                       Partnership plus the Partnership's
                                       allocable share of gross revenues of
                                       joint    ventures    in   which   the
                                       Partnership    is   a    co-venturer,
                                       subordinated to certain minimum
                                       returns to the Limited Partners.
                                       The management fee, will not exceed
                                       competitive fees for comparable
                                       services.   Due  to  the  fact   that
                                       these are noncumulative, if the
                                       Limited Partners have not received
                                       their 10% Preferred Return in any
                                       particular years no management fees
                                       will be due or payable for such year.



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

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

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

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


                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

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

</TABLE>

In addition,  during 2000, the Partnership  acquired a Bennigan's  Property from
CNL BB Corp., an affiliate of the General  Partners,  for an aggregate  purchase
price of  approximately  $2,462,700.  CNL BB Corp. had purchased and temporarily
held  title to this  Property  in order to  facilitate  the  acquisition  of the
Property  by the  Partnership.  The  purchase  price  paid  by  the  Partnership
represents the costs incurred by CNL BB Corp. to acquire and carry the Property,
including closing costs.



                                     PART IV


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

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

         1.   Financial Statements

                   Report of Independent Certified Public Accountants

                   Balance Sheets at December 31, 2000 and 1999

                   Statements  of Income for the years ended  December 31, 2000,
                   1999, and 1998

                   Statements of Partners'  Capital for the years ended December
                   31, 2000, 1999, and 1998

                   Statements  of Cash Flows for the years  ended  December  31,
                   2000, 1999, and 1998

                  Notes to Financial Statements

         2.   Financial Statement Schedules

                   Schedule III - Real Estate and  Accumulated  Depreciation  at
                   December 31, 2000

                   Notes  to  Schedule   III  -  Real  Estate  and   Accumulated
                   Depreciation at December 31, 2000

                   Schedule IV - Mortgage  Loans on Real Estate at December  31,
                   2000

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

         3.   Exhibits

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

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

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

                   10.1     Management  Agreement  between CNL Income Fund VIII,
                            Ltd. and CNL Investment Company (Included as Exhibit
                            10.1 to Form  10-K  filed  with the  Securities  and
                            Exchange   Commission   on   April  1,   1996,   and
                            incorporated herein by reference.)

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

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

                   (b)      The  Registrant  filed no reports on Form 8-K during
                            the period  October  1, 2000  through  December  31,
                            2000.

<PAGE>

                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 28th day of
March, 2001.

                                 CNL INCOME FUND VIII, LTD.

                                 By:      CNL REALTY CORPORATION
                                          General Partner

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


                                 By:      ROBERT A. BOURNE
                                          General Partner

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


                                 By:      JAMES M. SENEFF, JR.
                                          General Partner

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




<PAGE>



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

               Signature                                  Title                                  Date
<S><C>


/s/ Robert A. Bourne                     President,   Treasurer   and   Director            March 28, 2001
------------------------------------
Robert A. Bourne                         (Principal   Financial  and  Accounting
                                         Officer)

/s/ James M. Seneff, Jr.                 Chief  Executive  Officer and  Director            March 28, 2001
------------------------------------
James M. Seneff, Jr.                     (Principal Executive Officer)

</TABLE>
<TABLE>
<CAPTION>
<S><C>
                                                                             Costs Capitalized
                                                                             Subsequent To
                                                    Initial Cost             Acquisition
                                          ------------------------        --------------------
                             Encum-                     Buildings and   Improve-      Carrying
                            brances         Land         Improvements    ments        Costs
                            ---------     ----------    ----------      ----------    ------
Properties the Partnership
  has Invested in Under
  Operating Leases:

    Bennigan's Restaurant
      Deerfield, Illinois      -          $1,296,452    $             $1,156,526    $          -

    Burger King Restaurants:
      Brandon, Florida         -            478,467             -             -         -
      New City, New York       -            372,977             -       557,832         -
      Mansfield, Ohio          -            377,395             -       496,524         -
      Syracuse, New York       -            363,431             -       485,920         -
      New Philadelphia, Ohio   -            310,920             -       523,967         -
      Baseball City, Florida (g-            394,813             -             -         -

    Denny's Restaurant:
      Tiffin, Ohio             -            143,592       335,971             -         -

    Golden Corral Family
      Steakhouse Restaurants:
          College Station, Texa-            517,623             -       877,505         -
          Houston, Texas       -            663,999             -     1,129,910         -
          Beaumont, Texas      -            552,646             -       893,054         -
          Grand Prairie, Texas -            681,824             -       914,235         -

    Hardee's Restaurant:
      Jefferson, Ohio          -            150,587             -             -         -

    Jack in the Box Restaurants:
      Waco, Texas              -            412,942             -             -         -
      Mesa, Arizona            -            609,921             -             -         -

    KFC Restaurant:
      Norton Shores, Michigan  -            177,897             -             -         -

    Perkins Restaurant:
      Memphis, Tennessee       -            431,065             -             -         -

    Pizza Hut Restaurant:
      Hialeah, Florida         -            279,235       193,004             -         -


    Quincy's Family Steakhouse
      Restaurant:
          Statesville, North Ca-olina       257,225             -             -         -

    Shoney's Restaurants:
      Memphis, Tennessee       -            368,290       601,660             -         -
      North Fort Myers, Florida-            398,423             -             -         -

    Wendy's Old Fashioned
      Hamburger Restaurant:
          Midlothian, Virginia -            365,601             -       477,745         -
                                          ----------    ----------    ----------    ------

                                          $9,605,325    $1,130,635    $7,513,218    $   -
                                          ==========    ==========    ==========    ======

Property of Joint  Venture in Which
   the   Partnership   has   a  66%
   Interest  and  had  Invested  in
   Under an Operating Lease:

    Bakers Square Restaurant
      Libertyville, Illinois   -           $624,626      $830,023      $      -     $   -
                                          ==========    ==========    ==========    ======

Property of Joint  Venture in Which
   the  Partnership  has an  85.54%
   Interest  and  has  Invested  in
   Under an Operating Lease:

    Burger King Restaurant:
        Asheville, North Caroli-a          $438,695      $450,432      $      -     $   -
                                          ==========    ==========    ==========    ======

Properties  of  Joint   Venture  in
   Which  the   Partnership  has  a
   36.8%  Interest and has Invested
   in Under an Operating Leases:

    Burger King Restaurants:
        Columbus, Ohio         -           $345,696      $651,985      $      -     $   -
        San Antonio, Texas     -            350,479       623,615             -         -
        Pontiac, Michigan      -            277,192       982,200             -         -
        Raceland, Louisiana    -            174,019       986,879             -         -
        New Castle, Indiana    -            264,239       662,265             -         -
        Hastings, Minnesota    -            155,553       657,159             -         -
                                          ----------    ----------    ----------    ------

                                          $1,567,178    $4,564,103     $      -     $   -
                                          ==========    ==========    ==========    ======

Property of Joint  Venture in Which
   the  Partnership  has  a  12.46%
   Interest  and  has  Invested  in
   Under an Operating Lease:

    Golden Corral Family
        Steakhouse Restaurant:
            Middleburg Heights,-Ohio       $521,571      $      -      $      -     $   -
                                          ==========    ==========    ==========    ======

Property of Joint  Venture in Which
    the   Partnership   has  a  34%
    Interest  and has  Invested  in
    Under an Operating Lease:

      IHOP Restaurant
          Bossier City, Louisiana          $453,016      $866,192      $      -     $   -
                                          ==========    ==========    ==========    ======

Properties the Partnership has
   Invested in Under Direct
   Financing Leases:

    Burger King Restaurants:
        Brandon, Florida       -           $      -             -      $483,107     $   -
        Baseball City, Florida -g)                -             -       551,446         -

    Hardee's  Restaurants:
        Brunswick, Ohio        -            116,199       457,907             -         -
        Grafton, Ohio          -             66,092       411,798             -         -
        Jefferson, Ohio        -                  -       443,444             -         -
        Lexington, Ohio        -            124,707       433,264             -         -

    Jack in the Box Restaurants:
        Waco, Texas            -                  -             -       406,745         -
        Mesa, Arizona          -                  -       561,477             -         -

    KFC Restaurants:
        Grand Rapids, Michigan -            169,175       620,623             -         -
        Norton Shores, Michigan-                  -       509,228             -         -

    Perkins Restaurant:
        Memphis, Tennessee     -                  -             -       594,154         -

    Quincy's Family  Steakhouse
      Restaurant:
          Statesville,
             North Carolina    -                  -       705,444             -         -

    Shoney's Restaurants:
        North Fort Myers, Flori-a                 -       552,240             -         -
                                          ----------    ----------    ----------    ------

                                           $476,173     $4,695,425    $2,035,452    $   -
                                          ==========    ==========    ==========    ======

Property of Joint  Venture in Which
   the  Partnership  has  a  12.46%
   Interest  and  has  Invested  in
   Under a Direct Financing Lease:

    Golden Corral Family
      Steakhouse Restaurant:
         Middleburg Heights, Oh-o          $      -     $1,357,288     $      -     $   -
                                          ==========    ==========    ==========    ======



                  Gross Amount at Which                                                  Life on Which
              Carried at Close of Period (c)                                             Depreciation in
     ----------------------------------------                   Date                     Latest Income
                   Buildings and                 Accumulated    of Con-      Date        Statement is
        Land       Improvements     Total        Depreciation   struction  Acquired      Computed
     -----------   -----------    -----------    ----------     -------    ---------     ----------





     $1,296,452    $1,156,526     $2,452,978       $16,063       2000       07/00           (b)


        478,467            (f)       478,467             -       1991       10/90           (d)
        372,977       557,832        930,809        59,571       1977       03/91           (i)
        377,395       496,524        873,919        53,024       1989       03/91           (i)
        363,431       485,920        849,351        51,892       1987       03/91           (i)
        310,920       523,967        834,887        55,955       1989       03/91           (i)
        394,813            (f)       394,813             -       1991       02/91           (d)


        143,592       335,971        479,563        86,400       1990       03/91           (h)



        517,623       877,505      1,395,128       301,317       1990       09/90           (b)
        663,999     1,129,910      1,793,909       377,049       1990       10/90           (b)
        552,646       893,054      1,445,700       314,893       1990       11/90           (b)
        681,824       914,235      1,596,059       313,177       1990       11/90           (b)


        150,587            (f)       150,587             -       1990       11/90           (d)


        412,942            (f)       412,942             -       1991       11/90           (d)
        609,921            (f)       609,921             -       1991       02/92           (d)


        177,897            (f)       177,897             -       1990       03/91           (d)


        431,065            (f)       431,065             -       1990       11/90           (d)


        279,235       193,004        472,239         1,608       2000       10/00




        257,225            (f)       257,225             -       1991       10/91           (d)


        368,290       601,660        969,950       188,300       1991       08/91           (b)
        398,423            (f)       398,423             -       1991       09/95           (d)



        365,601       477,745        843,346       154,624       1991       03/91           (b)
     -----------   -----------    -----------    ----------

     $9,605,325    $8,643,853     $18,249,178    $1,973,873
     ===========   ===========    ===========    ==========







       $624,626      $830,023     $1,454,649       $11,528
     ===========   ===========    ===========    ==========







       $438,695      $450,432       $889,127      $146,976       1986       03/91           (b)
     ===========   ===========    ===========    ==========







       $345,696      $651,985       $997,681      $201,311       1986       09/91           (b)
        350,479       623,615        974,094       192,552       1986       09/91           (b)
        277,192       982,200      1,259,392       303,271       1987       09/91           (b)
        174,019       986,879      1,160,898       304,716       1988       09/91           (b)
        264,239       662,265        926,504       204,486       1988       09/91           (b)
        155,553       657,159        812,712       202,910       1990       09/91           (b)
     -----------   -----------    -----------    ----------

     $1,567,178    $4,564,103     $6,131,281     $1,409,246
     ===========   ===========    ===========    ==========








       $521,571            (f)      $521,571     $       -       1995       05/96           (d)
     ===========                  ===========    ==========







       $453,016      $866,192     $1,319,208       $33,416       1998       11/99           (b)
     ===========   ===========    ===========    ==========






       $      -            (f)            (f)           (d)      1991       10/90           (d)
              -            (f)            (f)           (d)      1991       02/91           (d)


             (f)           (f)            (f)           (e)      1990       11/90           (e)
             (f)           (f)            (f)           (e)      1990       11/90           (e)
              -            (f)            (f)           (d)      1990       11/90           (d)
             (f)           (f)            (f)           (e)      1990       11/90           (e)


              -            (f)            (f)           (d)      1991       11/90           (d)
              -            (f)            (f)           (d)      1991       02/92           (d)


             (f)           (f)            (f)           (e)      1990       02/91           (e)
              -            (f)            (f)           (d)      1990       03/91           (d)


              -            (f)            (f)           (d)      1990       11/90           (d)




              -            (f)            (f)           (d)      1991       10/91           (d)


              -            (f)            (f)           (d)      1991       09/95           (d)
     -----------

      $       -
     ===========








      $       -            (f)            (f)           (d)      1995       05/96           (d)
     ===========

</TABLE>





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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000


 (a)     Transactions in real estate and accumulated  depreciation  during 2000,
         1999, and 1998, are summarized as follows:

<TABLE>
<CAPTION>

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

                 Balance, December 31, 1997                                 $ 15,398,766        $  1,438,534
                 Reclassified to operating lease                               2,064,243                  --
                 Dispositions                                                     (8,221 )                --
                 Depreciation expense                                                 --             246,976
                                                                         ----------------   -------------------

                 Balance, December 31, 1998                                   17,454,788           1,685,510
                 Depreciation expense                                                 --             300,188
                                                                         ----------------   -------------------

                 Balance, December 31, 1999                                   17,454,788           1,985,698
                 Dispositions                                                 (2,130,827 )          (315,177 )
                 Acquisitions                                                  2,925,217                  --
                 Depreciation expense                                                 --             303,352
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                 $ 18,249,178        $  1,973,873
                                                                         ================   =================

             Property of Joint  Venture in Which the  Partnership
               has an 85.54%  Interest  and has Invested in Under
               an Operating Lease:

                 Balance, December 1997                                          889,127             101,934
                 Depreciation expense                                                 --              15,014
                                                                         ----------------   -----------------

                 Balance, December 31, 1998                                      889,127             116,948
                 Depreciation expense                                                 --              15,014
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                      889,127             131,962
                 Depreciation expense                                                 --              15,014
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                  $   889,127         $   146,976
                                                                         ================   =================

             Property of Joint  Venture in Which the  Partnership
               has a 66%  Interest  and has  Invested in Under an
               Operating Lease

                 Balance, December 31, 1999                                     $     --            $     --
                 Acquisition                                                   1,454,649                  --
                 Depreciation expense                                                 --              11,528
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                 $  1,454,649         $    11,528
                                                                         ================   =================

</TABLE>

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

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

                        December 31, 2000

<TABLE>
<CAPTION>

                                                                                              Accumulated
                                                                              Cost            Depreciation
                                                                         ----------------   -------------------
<S><C>
            Property of Joint Venture in Which the Partnership has
               36.8% Interest and has Invested in Under Operating

               Leases:

                 Balance, December 31, 1997                                 $  6,131,281         $   952,835
                 Depreciation expense                                                 --             152,137
                                                                         ----------------   -----------------

                 Balance, December 31, 1998                                    6,131,281           1,104,972
                 Depreciation expense                                                 --             152,137
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                    6,131,281           1,257,109
                 Depreciation expense                                                 --             152,137
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                 $  6,131,281        $  1,409,246
                                                                         ================   =================

            Property of Joint Venture in Which the Partnership has
              a 34% Interest and has Invested in Under an
              Operating Lease

                 Balance, December 31, 1998                                     $     --            $     --
                 Acquisition                                                   1,319,208                  --
                 Depreciation expense                                                 --               4,542
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                    1,319,208               4,542
                 Depreciation expense                                                 --              28,874
                                                                         ----------------   -----------------

                 Balance, December 31. 2000                                 $  1,319,208         $    33,416
                                                                         ================   =================

             Property of Joint  Venture in Which the  Partnership
               has a 12.46% Interest and has Invested in Under an
               Operating Lease:

                 Balance, December 31, 1997                                  $   521,571            $     --
                 Depreciation expense                                                 --                  --
                                                                         ----------------   -----------------

                 Balance, December 31, 1998                                      521,571                  --
                 Depreciation expense                                                 --                  --
                                                                         ----------------   -----------------

                 Balance, December 31, 1999                                      521,571                  --
                 Depreciation expense                                                 --                  --
                                                                         ----------------   -----------------

                 Balance, December 31, 2000                                  $   521,571            $     --
                                                                         ================   =================

</TABLE>


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

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

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

                        December 31, 2000


(c)      As of December 31, 2000, the aggregate cost of the Properties  owned by
         the  Partnership   and  its   consolidated   joint  venture,   and  the
         unconsolidated  joint  ventures  for federal  income tax  purposes  was
         $24,980,921  and  $11,672,122,  respectively.  All  of the  leases  are
         treated as operating leases for federal income tax purposes.

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

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

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

(g)      The  restaurant on this Property was  converted  from a Popeyes  Famous
         Fried Chicken Restaurant to a Burger King restaurant in February 1993.

(h)      Effective  January 1, 1994,  the lease for this  Property  was amended,
         resulting in the  reclassification of the building portion of the lease
         as an operating  lease.  The building was recorded at net book value as
         of January 1, 1994, and depreciated  over its remaining  estimated life
         of approximately 27 years.

(i)      Effective  August 1, 1998,  the lease for this  Property  was  amended,
         resulting in the  reclassification of the building portion of the lease
         as an operating  lease.  The building was recorded at net book value as
         of August 1, 1998, and depreciated over its remaining estimated life of
         approximately 23 years.


<PAGE>


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

           SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

                        December 31, 2000
<TABLE>
<CAPTION>

                                                                                                                       Principal
                                                                                                                         Amount
                                                                                                                        of Loans
                                                                                                                       Subject to
                                                                                                     Carrying          Delinquent
                                  Final             Periodic                         Face           Amount of         Principal or
                   Interest      Maturity           Payment         Prior          Amount of        Mortgages         Description
                     Rate          Date              Terms          Liens          Mortgages           (1)              Interest
                   --------- -----------------     -----------    -----------    --------------    -------------     ---------------
<S><C>
Church's
Jacksonville, FL
First Mortgage      10.00%    December 2005           (2)              $  --         $ 240,000        $ 233,710              $   --

Church's
Jacksonville, FL
First Mortgage      10.00%    December 2005           (3)                 --           220,000          214,234                  --

Ponderosa
Orlando, FL
First Mortgage      10.75%     October 2011           (4)                 --         1,388,568          976,492                  --
                                                                  -----------    --------------    -------------     ---------------

                                                                       $  --       $ 1,848,568      $ 1,424,436             $    --
                                                                  ===========    ==============    =============     ===============
</TABLE>

 (1)     The tax carrying value of the notes is $1,412,063.

 (2)     Monthly  payments of  principal  and interest at an annual rate of 10%,
         with a balloon payment at maturity of $218,252.

 (3)     Monthly  payments of  principal  and interest at an annual rate of 10%,
         with a balloon payment at maturity of $200,324.

 (4)     Monthly  payments of $12,633 were  consisting of principal and interest
         at an annual rate of 10.75%.  During 1999, the  Partnership  received a
         prepaid  principal  payment from the  borrower  that was applied to the
         unpaid principal balance, reflected in the carrying amount of mortgage.

 (5)     The changes in the carrying amounts are summarized as follows:

<TABLE>

                                          2000           1999            1998
                                      -------------  -------------   --------------
<S><C>
     Balance at beginning of
          period                        $1,473,571     $1,811,726       $1,853,386

     Interest earned                       150,897        162,182          191,738

     Collection of principal and
          interest                        (200,032 )     (500,337 )       (233,398 )
                                      -------------  -------------   --------------

     Balance at end of period           $1,424,436     $1,473,571       $1,811,726
                                      =============  =============   ==============
</TABLE>



<PAGE>





                                    EXHIBITS




<PAGE>



                                  EXHIBIT INDEX


Exhibit Number

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

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

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

        10.1      Management  Agreement  between CNL Income Fund VIII,  Ltd. and
                  CNL Investment  Company (Included as Exhibit 10.1 to Form 10-K
                  filed with the Securities and Exchange  Commission on April 1,
                  1996, and incorporated herein by reference.)

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

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