UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-K

(Mark One)

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

                   For the fiscal year ended December 31, 2003

                                       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)

         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]

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Exchange Act Rule 12b-2): Yes___ No 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 value 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.

         As of December 31, 2000, the  Partnership  owned 36 Properties,  either
directly or indirectly through joint venture or tenancy in common  arrangements.
During the year ended  December 31, 2001, the  Partnership  sold its Property in
Statesville,  North  Carolina,  and  reinvested  the  majority  of the net sales
proceeds  in a Jack in the Box  Property  located  in Walker,  Louisiana,  and a
Bennigan's  Property located in Denver,  Colorado,  each held with affiliates of
the  General  Partners,  which are  Florida  limited  partnerships,  as separate
tenants-in-common  arrangements.  In  addition,  during 2001,  Middleburg  Joint
Venture,  in which the Partnership owns a 12.46% interest,  sold its Property to
the tenant, and the Partnership  received a return of capital from the net sales
proceeds.  In April 2001,  the  Partnership  reinvested  the majority of the net
sales proceeds  received from Middleburg  Joint Venture and entered into a joint
venture arrangement,  CNL VIII, X, XII Kokomo Joint Venture,  with affiliates of
the General Partners,  which are Florida limited  partnerships,  to purchase and
hold  one  Property  in  Kokomo,  Indiana.  In  January  2002,  the  Partnership
reinvested a portion of the net sales  proceeds it received from the sale of the
Property in Statesville, North Carolina, and the 2001 prepaid principal relating
to a promissory note, in a Denny's Property located in Ontario,  Oregon.  During
the year ended December 31, 2002, the Partnership  sold its Property in Baseball
City,  Florida and  reinvested  the majority of the net sales proceeds in a Taco
Cabana Property  located in Denton,  Texas. In 2002, CNL Restaurant  Investments
II,  in which  the  Partnership  owns a 36.8%  interest,  sold its  Property  in
Columbus,  Ohio and used the majority of the proceeds from the sale to acquire a
Taco Cabana  property in Dallas,  Texas.  In  addition in 2002,  CNL  Restaurant
Investments  II sold its  property  in  Pontiac,  Michigan  and the  Partnership
reinvested  the return of capital for its pro-rata  share of the  uninvested net
sales  proceeds  relating  to the  Property  in  Pontiac,  Michigan  in a  Texas
Roadhouse  Property  in  Kenosha,  Wisconsin,  as  tenants-in-common,   with  an
affiliate of the General Partners and a Florida limited partnership. In addition
in 2002, the  Partnership  reinvested the 2002 prepaid  principal  relating to a
promissory note in a Boston Market Property located in Eden Prairie,  Minnesota.
Finally in 2002, the Partnership, as tenants-in-common, with an affiliate of the
General  Partners and a Florida  limited  partnership,  in which the Partnership
owns a 66% interest, sold its Property in Libertyville, Illinois, and reinvested
the  liquidating  distribution  from the sale to  acquire  an IHOP  property  in
Buffalo Grove,  Illinois,  in a new tenancy in common,  with an affiliate of the
General Partners and a Florida limited partnership.

         As of December 31, 2003, the  Partnership  owned 39 Properties.  The 39
Properties  included  interests in nine Properties  owned by joint ventures,  in
which  the  Partnership  is  a  co-venturer,  and  four  Properties  owned  with
affiliates  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  holds  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  consider  factors such as potential  capital
appreciation,  net cash flow and federal income taxes. 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.

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  Properties
owned as  tenants-in-common  with affiliates of the General Partners provide for
initial  terms,  ranging  from 9 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  $49,200 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 31 of the  Partnership's 39 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 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 February 2002, a tenant, Brandon Fast Food Services, Inc., filed for
bankruptcy.  The tenant has neither  rejected  nor affirmed the one lease it has
with the  Partnership.  A workout  plan has not been  approved.  As of March 12,
2004, the Partnership has continued  receiving rental payments  relating to this
lease.  While the tenant has neither rejected nor affirmed this lease, there can
be no  assurance  that the lease will not be rejected  in the  future.  The lost
revenues  resulting  from the  possible  rejection  of this lease  would have an
adverse  effect  on  the  results  of  operations  of  the  Partnership  if  the
Partnership is unable to re-lease the Property in a timely manner.

         In March 2004,  the  Partnership  entered  into an agreement to provide
temporary  and  partial  rent relief to a tenant who is  experiencing  liquidity
difficulties.  The  Partnership  anticipates  lowering rent over the next twelve
months on the one lease the tenant has with the  Partnership  will  provide  the
necessary  relief to the tenant.  Rental  payment  terms go back to the original
terms  starting  with the  thirteenth  month.  The deferred rent is due in equal
monthly payments beginning January 2005 and continuing for 60 months thereafter.
The General  Partners do not believe that this  temporary  decline in cash flows
will have a material adverse effect on the operating results of the Partnership.

Major Tenants

         During  2003,  two  lessees  (or groups of  affiliated  lessees) of the
Partnership and its consolidated  joint venture,  Golden Corral  Corporation and
the affiliated entities under common control, Carrols Corporation and Texas Taco
Cabana (hereinafter referred to as "Carrols Corporation"), each contributed more
than ten percent of total rental revenues  (including total rental revenues from
the  Partnership's  consolidated  joint venture and the  Partnership's  share of
rental  revenues from  Properties  owned by  unconsolidated  joint  ventures and
Properties owned with affiliates of the General Partners as  tenants-in-common).
As of December 31, 2003,  Golden Corral  Corporation was the lessee under leases
relating to five  restaurants,  and  Carrols  Corporation  was the lessee  under
leases  relating to seven  restaurants.  It is  anticipated  that,  based on the
minimum rental payments required by the leases,  these two lessees (or groups of
affiliated  lessees) each will  continue to contribute  more than ten percent of
the  Partnership's  total rental  revenues in 2004. In addition,  two Restaurant
Chains,  Golden Corral Buffet and Grill ("Golden  Corral") and Burger King, each
accounted for more than ten percent of total rental  revenues in 2003 (including
rental  revenues  from the  Partnership's  consolidated  joint  venture  and the
Partnership's  share of rental revenues from Properties owned by  unconsolidated
joint ventures and Properties  owned with affiliates of the General  Partners as
tenants-in-common).  In 2004, it is anticipated that these two Restaurant Chains
each will continue to account for more than ten percent of total rental revenues
to which the Partnership is entitled under the terms of the leases.  Any failure
of these lessees or Restaurant  Chains will materially  affect the Partnership's
results of operations 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 the  following  joint  venture and
tenancy in common arrangements as of December 31, 2003:



<PAGE>
<TABLE>
<CAPTION>

 <c>

               Entity Name             Year      Ownership               Partners                   Property

      Woodway Joint Venture            1991       87.68 %     Various third party partners     Waco, TX

      Asheville Joint Venture          1991       85.54%      CNL Income Fund VI, Ltd.         Asheville, NC

      CNL Restaurant Investments II    1991       36.80%      CNL Income Fund VII, Ltd.        Dallas, TX
                                                              CNL Income Fund IX, Ltd.         Hastings, MN
                                                                                               New Castle, IN
                                                                                               Raceland, LA
                                                                                               San Antonio, TX

      Bossier City Joint Venture       1999       34.00%      CNL Income Fund XII, Ltd.        Bossier City, LA
                                                              CNL Income Fund XIV, Ltd.

      CNL VIII, X, XII Kokomo Joint    2001       10.00%      CNL Income Fund X, Ltd. CNL      Kokomo, IN
           Venture                                            Income Fund XII, Ltd.

      CNL Income Fund VIII, Ltd.       2001       17.00%      CNL Income Fund XVI, Ltd.        Walker, LA
           and CNL Income Fund XVI,
           Ltd., Tenants in Common


      CNL Income Fund VIII, Ltd.       2001       19.30%      CNL Income Fund  XVIII, Ltd.     Denver, CO
           and CNL Income Fund
           XVIII, Ltd., Tenants in
           Common

      CNL Income Fund VIII, Ltd.       2002       10.00%      CNL Income Fund XVII, Ltd.       Kenosha, WI
           and CNL Income Fund
           XVII, Ltd., Tenants in
           Common

      CNL  Income Fund VIII, Ltd.      2002       66.00%      CNL Income Fund IX, Ltd.         Buffalo Grove, IL
           and CNL Income Fund IX,
           Ltd., Tenants in Common
</TABLE>

         CNL  Restaurant  Investments  II was  formed  to hold  six  Properties;
however,  it currently holds only five. All other joint ventures or tenancies in
common were formed to hold one Property. Each CNL Income Fund is an affiliate of
the General Partners and is a limited partnership organized pursuant to the laws
of the state of Florida. The Partnership has management control of Woodway Joint
Venture but  management  control is shared  equally with the  affiliates  of the
General Partners for the other joint ventures.

         The joint  venture and tenancy in common  arrangements  provide for the
Partnership  and its joint venture or tenancy in common partners to share in all
costs and benefits in proportion to each  partner's  percentage  interest in the
Property  or entity.  The  Partnership  and its  partners  are also  jointly and
severally liable for all debts,  obligations and other  liabilities of the joint
venture or tenancy in common.  Net cash flow from  operations is  distributed to
each  joint  venture  or  tenancy  in  common  partner  in  accordance  with its
respective percentage interest in the Property or entity.

         Woodway Joint Venture,  Asheville  Joint Venture and Bossier City Joint
Venture each have an initial term of 20 years, and CNL VIII, X, XII Kokomo Joint
Venture has an initial term of 30 years and, after the expiration of the initial
term,  continues 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 its joint venture  partners to dissolve 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.  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 joint  venture  and  tenancy  in common  agreements  restrict  each
party's ability to sell,  transfer or assign its interest without first offering
it for sale to its partners,  either upon such terms and  conditions as to which
the  parties may agree or, in the event the parties  cannot  agree,  on the same
terms and  conditions  as any offer from a third  party to  purchase  such joint
venture or tenancy in common interest.

         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. In addition,  tenancy in common arrangements may allow the
Partnership  to defer the gain for federal  income tax purposes upon the sale of
the property if the proceeds are reinvested in an additional property.

Certain Management Services

         RAI  Restaurants,  Inc.  (the  "Advisor"),  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, the Advisor 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.  The Advisor also assists the General  Partners in  negotiating  the
leases.  For these  services,  the  Partnership has agreed to pay the Advisor 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  property
management agreement,  the property 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 property  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.

         During 2003,  CNL Capital  Management,  Inc.,  ("CCM"),  a wholly owned
subsidiary of CNL Financial  Group,  Inc.,  began  providing  certain  strategic
advisory  services  to  the  General  Partners  relative  to  the  Partnership's
business. CCM is not reimbursed for these services by the Partnership.  CCM also
began  providing  some  accounting  and  portfolio  management  services  to the
Partnership during 2003, through a subcontract with the Advisor.


<PAGE>


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,  the officers  and  employees of CNL  Restaurant  Properties,  Inc.
(formerly  CNL  American  Properties  Fund,  Inc.),  the  parent  company of the
Advisor,  and the officers and employees of CCM 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, 2003, the Partnership owned 39 Properties. Of the 39
Properties,  26 are  owned by the  Partnership  in fee  simple,  nine are  owned
through joint venture arrangements, and four are owned through tenancy in common
arrangements.  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.

Description of Properties

         Land. The Partnership's  Property sites, owned directly and indirectly,
range from  approximately  17,400 to 128,500 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,
directly and indirectly, as of December 31, 2003 by state.

               State                              Number of Properties

               Arizona                                      1
               Colorado                                     1
               Florida                                      3
               Illinois                                     2
               Indiana                                      2
               Louisiana                                    3
               Michigan                                     2
               Minnesota                                    2
               New York                                     2
               North Carolina                               1
               Ohio                                         7
               Oregon                                       1
               Tennessee                                    2
               Texas                                        8
               Virginia                                     1
               Wisconsin                                    1
                                                      --------------
               TOTAL PROPERTIES                            39
                                                      ==============

         Buildings.  Each of the Properties owned by the  Partnership,  directly
and indirectly, 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  2,100  to  10,600  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, 2003, 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, 2003, the aggregate cost of the Properties  owned by
the   Partnership   (including   its   consolidated   joint   venture)  and  the
unconsolidated joint ventures (including the Properties owned through tenancy in
common  arrangements),  for federal  income tax  purposes  was  $25,620,634  and
$15,995,853, respectively.

         The  following  table lists the  Properties  owned by the  Partnership,
directly and indirectly, as of December 31, 2003 by Restaurant Chain.

                Restaurant Chain                         Number of Properties

                Bennigan's                                         2
                Boston Market                                      1
                Burger King                                        10
                Denny's                                            2
                Golden Corral                                      5
                Hardee's                                           4
                IHOP                                               2
                Jack in the Box                                    3
                KFC                                                2
                Perkins                                            1
                Pizza Hut                                          1
                Shoney's                                           1
                Taco Cabana                                        2
                Texas Roadhouse                                    1
                Wendy's                                            1
                Other                                              1
                                                             --------------
                TOTAL PROPERTIES                                  39
                                                             ==============

         The General Partners  consider 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  substantially  all the Properties to
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.

         The following is a schedule of the average rent and occupancy  rate per
Property for each of the years ended December 31:
<TABLE>
<CAPTION>

 <c>
                                   2003              2002              2001              2000               1999
                               -------------     -------------    ---------------    --------------    ---------------

Rental Revenues (1)             $ 3,463,663       $ 3,226,476        $ 3,364,048       $ 3,361,651        $ 3,527,515
Properties                               39                39                 37                36                 37
Average Rent per Property         $  88,812        $   82,730          $  90,920         $  93,379          $  95,338
Occupancy Rate                         100%              100%               100%              100%               100%
</TABLE>

(1)      Rental revenues include the Partnership's share of rental revenues from
         the  Properties  owned  through  joint  venture  and  tenancy in common
         arrangements



<PAGE>



         The following is a schedule of lease expirations for leases in place as
of December 31, 2003 for each year for the next ten years and thereafter.
<TABLE>
<CAPTION>

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

              2004                               --               $     --                      --
              2005                                8                793,464                  22.08%
              2006                                1                118,124                   3.29%
              2007                               --                     --                      --
              2008                               --                     --                      --
              2009                                1                142,910                   3.98%
              2010                                7                713,240                  19.85%
              2011                               10                863,922                  24.04%
              2012                               --                     --                      --
              2013                               --                     --                      --
              Thereafter                         12                962,251                  26.76%
                                      --------------    -------------------    --------------------
              Totals                             39            $ 3,593,911                 100.00%
                                      ==============    ===================    ====================
</TABLE>

         Leases  with  Major   Tenants.   The  terms  of  the  leases  with  the
Partnership's  major  tenants as of December  31,  2003 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Golden Corral  Corporation leases five Golden Corral  restaurants.  The
initial  term of each lease is 15 years  (four  leases  expiring in 2005 and one
lease in  2016)  and the  average  minimum  base  annual  rent is  approximately
$174,500 (ranging from approximately $145,500 to $218,200).

         Carrols Corporation and Texas Taco Cabana, LP, as a group of affiliated
lessees,  lease five  Burger  King and two Texas Taco  Cabana  restaurants.  The
initial term is 20 years for five  restaurants  and 19 years for two restaurants
(expiring  between  2011 and 2020) and the average  minimum  base annual rent is
approximately $98,000 (ranging from approximately $86,300 to $117,900).


Item 3.  Legal Proceedings

         Neither the Partnership,  nor its General Partners nor any affiliate of
the Partnership, 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 12, 2004,  there were 3,377 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 2003,  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 have the right to prohibit  transfers of Units.  From
inception  through  December 31, 2003,  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 2003 and 2002 other than
pursuant to the Plan, net of commissions.
<TABLE>
<CAPTION>

 <c>
                                             2003 (1)                               2002 (1)
                                 ----------------------------------     ----------------------------------
                                   High         Low        Average        High         Low         Average
                                 ---------    --------    ----------    ---------    ---------    ----------

         First Quarter              $0.76      $ 0.65        $ 0.72        $0.78       $ 0.65        $ 0.70
         Second Quarter              0.95        0.73          0.89         0.95         0.95          0.95
         Third Quarter               0.95        0.77          0.88         0.95         0.72          0.89
         Fourth Quarter              0.95        0.76          0.90         0.87         0.78          0.83
</TABLE>

(1)      A total of  264,614  and  371,760  Units  were  transferred  other than
         pursuant  to the Plan for the years ended  December  31, 2003 and 2002,
         respectively.

         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 the  years  ended  December  31,  2003 and  2002,  the  Partnership
declared cash distributions of $3,150,004 and $3,325,004,  respectively,  to the
Limited  Partners.  During the quarter ended December 31, 2002, the  Partnership
declared a special  distribution  to the  Limited  Partners  of  $175,000  which
represented cumulative excess operating reserves.  This special distribution was
effectively a return of a portion of the Limited Partners' investment,  although
in accordance with the partnership  agreement,  $175,000, was applied toward the
Limited Partners' 10% Preferred  Return. No amounts  distributed to partners for
the years  ended  December  31,  2003 and 2002 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.  As indicated in
the chart below,  these  distributions were declared at the close of each of the
Partnership's  calendar  quarters.  These amounts include monthly  distributions
made in arrears for the Limited Partners electing to receive such  distributions
on this basis.
<TABLE>
<CAPTION>

 <c>
                              Quarter Ended                     2003                2002
                     ---------------------------------    -----------------   -----------------

                     March 31                                  $   787,501         $   787,501
                     June 30                                       787,501             787,501
                     September 30                                  787,501             787,501
                     December 31                                   787,501             962,501
</TABLE>

         The  Partnership  intends to  continue  to make  distributions  of cash
available for distribution to the Limited Partners.

(b)      Not applicable.



<PAGE>


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

 <c>
                                               2003             2002          2001         2000          1999
                                           --------------   ------------- ------------- ------------ --------------

    Year ended December 31:

    Continuing Operations (3):
          Revenues                         $   2,944,694     $ 2,874,812   $ 2,900,511   $3,133,186     $3,147,881
          Equity in earnings
            unnconsolidated
            joint ventures                      441,781         649,791        390,505      319,184        276,012
          Income from continuing
             operations (1)                    2,432,626       2,762,035     2,242,985    3,497,144      2,719,884

    Discontinued Operations (3):
          Revenues                                    --          55,304        93,561       90,027         90,180
          Income from discontinued
             operations and gain on
             disposal of discontinued
             operations (2)                           --         335,117        93,561       90,027         90,180

    Net income                                 2,432,626       3,097,152     2,336,546    3,587,171      2,810,064

    Net income per Unit:
          Continuing operations               $    0.070       $   0.078     $   0.064    $   0.099      $   0.077
          Discontinued
             operations                               --           0.010         0.003        0.003          0.003
                                           --------------   ------------- ------------- ------------ --------------
          Total                               $    0.070       $   0.088     $   0.067    $   0.102      $   0.080
                                           ==============   ============= ============= ============ ==============

    Cash distributions declared (4)         $  3,150,004     $ 3,325,004   $ 3,150,004   $3,150,004     $3,150,004
    Cash distributions declared per Unit           0.090           0.095         0.090        0.090          0.090

    At December 31:
          Total assets                      $ 30,124,338     $30,941,865   $30,977,243  $31,827,394    $31,479,495
          Total partners' capital             28,993,846      29,711,224    29,939,076   30,752,534     30,315,367
</TABLE>

(1)      Income from continuing operations for the years ended December 31, 2003
         and 2001 includes $208,137 and $299,479,  respectively, from provisions
         for  write-down of assets.  Income from  continuing  operations for the
         year ended December 31, 2001 and 2000,  includes  $28,301 and $612,693,
         respectively, from gain on sale of assets.

(2)      The year  ended  December  31,  2002  includes  a gain on  disposal  of
         discontinued operations of $279,813.

(3)      Certain items in prior years' financial data have been  reclassified to
         conform to 2003 presentation.  These reclassifications had no effect on
         net income. The results of operations  relating to properties that were
         either  disposed of or were  classified as held for sale as of December
         31,  2003 are  reported  as  discontinued  operations.  The  results of
         operations  relating to properties  that were identified for sale as of
         December  31, 2001 but sold  subsequently  are  reported as  continuing
         operations.

(4)      Distributions  for the year ended  December 31, 2002,  include  special
         distributions  to the Limited  Partners  for a total of $175,000  which
         represented 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
Restaurant Chains. The leases are generally  triple-net leases,  with the lessee
generally responsible for all repairs and maintenance, property taxes, insurance
and  utilities.  The leases  provide for  minimum  base  annual  rental  amounts
(payable  in  monthly   installments)  ranging  from  approximately  $49,200  to
$251,500. The majority of the leases provide for percentage rent, based on sales
in excess of a specified amount.  In addition,  some of the leases provide that,
commencing in specified lease years (generally the sixth lease year), the annual
base rent required under the terms of the lease will increase.

         The  Partnership  owned 26 Properties  directly as of December 31, 2003
and 2002 and 13 Properties indirectly through joint venture or tenancy in common
arrangements  as of  December  31,  2003  and  2002.  The  Partnership  owned 24
Properties  directly  and 13  Properties  indirectly  through  joint  venture or
tenancy in common arrangements as of December 31, 2001.

Capital Resources

         For the years  ended  December  31,  2003,  2002,  and 2001,  cash from
operating activities was $3,472,940,  $3,350,597, and $3,196,595,  respectively.
The increase in cash from  operating  activities  during the year ended December
31,  2003,  as compared  to the  previous  year,  was a result of changes in the
Partnership's  working capital,  such as the timing of transactions  relating to
the collection of receivables and the payment of expenses, and changes in income
and  expenses,  such as changes in rental  revenues and changes in operating and
Property  related  expenses.  The increase in cash from operating  activities in
2002,  as  compared  to the  previous  year,  was a  result  of  changes  in the
Partnership's  working capital,  such as the timing of transactions  relating to
the collection of receivables and the payment of expenses, and changes in income
and  expenses,  such as changes in rental  revenues and changes in operating and
Property related expenses.

         Other sources and uses of cash included the following  during the years
ended December 31, 2003, 2002, and 2001.

         In March 2001, Middleburg Joint Venture, in which the Partnership owned
a 12.46% interest, sold its Property to the tenant in accordance with the option
under its lease agreement to purchase the Property, for $1,900,000, and recorded
a loss of  approximately  $61,900.  Middleburg  Joint  Venture was  dissolved in
accordance  with  the  joint  venture  agreement  and no  gain  or  loss  on the
dissolution  of the joint venture was  recorded.  As a result,  the  Partnership
received approximately $236,700 as a return of capital for its pro-rata share of
the net sales proceeds.  In April 2001, the Partnership  reinvested  $211,200 in
another joint venture arrangement,  CNL VIII, X, XII Kokomo Joint Venture,  with
CNL  Income  Fund X,  Ltd.  and CNL  Income  Fund  XII,  Ltd.,  Florida  limited
partnerships and affiliates of the General Partners.  The joint venture acquired
a Property  from CNL BB Corp.,  an  affiliate of the General  Partners,  who had
purchased and temporarily held title to this Property in order to facilitate the
acquisition of the Property by the joint venture.

         In May 2001, the Partnership  sold its Property in  Statesville,  North
Carolina,  and received net sales  proceeds of $877,000,  resulting in a gain of
approximately  $28,300.  In June  and  July  2001,  the  Partnership  reinvested
$232,300  and  $422,500 of these sales  proceeds in two  additional  Properties,
Walker,  Louisiana  and  Denver,  Colorado,  as two  separate  tenancy in common
arrangements  with Florida  limited  partnerships  and affiliates of the General
Partners.

         In September  2001,  the borrower of two  promissory  notes accepted in
1999 in connection with the sale of two of the Partnership's Properties, prepaid
the total outstanding principal balance of approximately $441,500.

         In January 2002,  the  Partnership  reinvested the other portion of the
net sales  proceeds it received  from the sale of the  Property in  Statesville,
North  Carolina,  and the  prepaid  principal  received  in 2001,  in a  Denny's
Property located in Ontario, Oregon, at an approximate cost of $654,400.

         In February 2002, a tenant, Brandon Fast Food Services, Inc., filed for
bankruptcy.  The tenant has neither  rejected  nor affirmed the one lease it has
with the  Partnership.  A workout  plan has not been  approved.  As of March 12,
2004, the Partnership has continued  receiving rental payments  relating to this
lease.  While the tenant has neither rejected nor affirmed this lease, there can
be no  assurance  that the lease will not be rejected  in the  future.  The lost
revenues  resulting  from the  possible  rejection  of this lease  would have an
adverse  effect  on  the  results  of  operations  of  the  Partnership  if  the
Partnership is unable to re-lease the Property in a timely manner.

         In May 2002,  the borrower  relating to a promissory  note  accepted in
1996 in connection with the sale of one of the  Partnership's  Properties repaid
the  outstanding  principal of  approximately  $917,900.  In September 2002, the
Partnership  reinvested  the  prepaid  principal  in a Property  located in Eden
Prairie,  Minnesota,  at an  approximate  cost of  $1,093,900.  The Property was
acquired from CNL Net Lease Investors,  L.P. ("NLI").  During 2002, and prior to
the  Partnership's  acquisition of this property,  CNL Financial LP Holding,  LP
("CFN") and CNL Net Lease Investors GP Corp.  ("GP Corp")  purchased the limited
partner's interest and general partner's interest,  respectively,  of NLI. Prior
to this transaction,  an affiliate of the Partnership's General Partners owned a
0.1%  interest  in NLI and  served as a general  partner  of NLI.  The  original
general  partners of NLI waived their  rights to benefit from this  transaction.
The acquisition price paid by CFN for the limited  partner's  interest was based
on the portfolio  acquisition  price.  The Partnership  acquired the property at
CFN's  cost  and  did  not  pay  any  additional  compensation  to CFN  for  the
acquisition   of  the  property.   Each  CNL  entity  is  an  affiliate  of  the
Partnership's General Partners.

         In May 2002, the  Partnership  also sold its property in Baseball City,
Florida  to  the  tenant  and  received  net  sales  proceeds  of  approximately
$1,184,600  resulting  in a gain  on  disposal  of  discontinued  operations  of
approximately $279,800. In June 2002, the Partnership reinvested the majority of
the net sales  proceeds  it  received  from the sale of this  Property in a Taco
Cabana Property located in Denton,  Texas, at an approximate cost of $1,147,600.
In June 2002, CNL Restaurant  Investments  II, in which the  Partnership  owns a
36.8% interest,  sold its Property in Columbus,  Ohio to the tenant and received
net  sales  proceeds  of  approximately  $1,215,700,  resulting  in  a  gain  of
approximately $448,300. The joint venture used the proceeds from the sale of the
property  in  Columbus,  Ohio to  acquire  a  property  in  Dallas,  Texas at an
approximate cost of $1,147,400. The Partnership acquired the Property in Denton,
Texas and the joint  venture  acquired  the  property in Dallas,  Texas from CNL
Funding  2001-A,  LP, a Delaware  limited  partnership  and an  affiliate of the
General  Partners.  CNL Funding 2001-A,  LP had purchased and  temporarily  held
title to the Properties in order to facilitate the acquisition of the Properties
by the  Partnership  and the  joint  venture.  The  purchase  price  paid by the
Partnership and the joint venture  represented the costs incurred by CNL Funding
2001-A, LP to acquire the Properties.

         In addition in June 2002, CNL  Restaurant  Investments II also sold its
property in Pontiac,  Michigan to the tenant and received net sales  proceeds of
approximately $722,600 resulting in a loss of $189,800. The tenant exercised its
option to purchase the Property  under the terms of the lease.  The  Partnership
received  approximately  $265,900  representing  a  return  of  capital  for its
pro-rata share of the uninvested net sales proceeds  relating to the Property in
Pontiac,  Michigan.  In August 2002, the Partnership  reinvested $188,300 of the
return  of   capital  to  acquire  a  Property   in   Kenosha,   Wisconsin,   as
tenants-in-common,   with  CNL  Income  Fund  XVII,   Ltd.,  a  Florida  limited
partnership  and an affiliate of the General  Partners.  The Partnership and the
affiliate  of the  General  Partners  entered  into an  agreement  whereby  each
co-tenant will share in the profits and losses of each property in proportion to
its applicable percentage interest.

         In September  2002,  the  Partnership,  as  tenants-in-common  with CNL
Income Fund IX, Ltd., an affiliate of the General Partners, sold its Property in
Libertyville,  Illinois,  to a third party and  received  net sales  proceeds of
approximately  $1,630,400  resulting in a gain of  approximately  $199,300.  The
Partnership  owned a 66%  interest in this  Property.  The  Partnership  and the
affiliate of the General  Partners,  under a new tenancy in common  arrangement,
used the  liquidating  distribution  from the sale of the  Property to acquire a
property in Buffalo Grove,  Illinois at an approximate  cost of $1,588,800.  The
Property  was  acquired  from NLI during  2002,  and prior to the  Partnership's
acquisition  of this property,  CFN and GP Corp purchased the limited  partner's
interest and general  partner's  interest,  respectively,  of NLI. Prior to this
transaction,  an affiliate of the  Partnership's  General  Partners owned a 0.1%
interest in NLI and served as a general  partner of NLI.  The  original  general
partners  of NLI waived  their  rights to  benefit  from this  transaction.  The
acquisition  price paid by CFN for the limited  partner's  interest was based on
the portfolio  acquisition price. The Partnership acquired the Property at CFN's
cost and did not pay any additional  compensation  to CFN for the acquisition of
the  Property.  Each CNL entity is an  affiliate  of the  Partnership's  General
Partners.

         In March 2004,  the  Partnership  entered  into an agreement to provide
temporary  and  partial  rent relief to a tenant who is  experiencing  liquidity
difficulties.  The  Partnership  anticipates  lowering rent over the next twelve
months on the one lease the tenant has with the  Partnership  will  provide  the
necessary  relief to the tenant.  Rental  payment  terms go back to the original
terms  starting  with the  thirteenth  month.  The deferred rent is due in equal
monthly payments beginning January 2005 and continuing for 60 months thereafter.
The General  Partners do not believe that this  temporary  decline in cash flows
will have a material adverse effect on the operating results of the Partnership.

         None of the Properties owned by the  Partnership,  or the joint venture
or tenancy in common arrangements in which the Partnership owns an interest,  is
or may be encumbered. Subject to certain restrictions on borrowing, however, the
Partnership  may borrow  funds but will not encumber  any of the  Properties  in
connection  with any such  borrowing.  The  Partnership  will not borrow for the
purpose of returning capital to the Limited  Partners.  The Partnership will not
borrow  under  arrangements  that  would  make the  Limited  Partners  liable to
creditors of the Partnership. The General Partners further have represented that
they will use their  reasonable  efforts to structure  any  borrowing so that it
will not constitute  "acquisition  indebtedness" for federal income tax purposes
and also will limit the Partnership's  outstanding indebtedness to three percent
of the  aggregate  adjusted  tax  basis  of its  Properties.  In  addition,  the
Partnership  will not borrow  unless it first obtains an opinion of counsel that
such borrowing will not constitute acquisition  indebtedness.  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.

         At December 31, 2003, the  Partnership  had $1,701,023 in cash and cash
equivalents,  as compared to  $1,571,487  at December 31, 2002.  At December 31,
2003,  these funds were held in demand  deposit  accounts at  commercial  banks,
money  market  accounts  and  certificates  of  deposit  with less than a 90-day
maturity date. As of December 31, 2003, the average  interest rate earned on the
rental income deposited was less than one percent annually.  The funds remaining
at December 31, 2003, after the payment of distributions  and other  liabilities
will be used to fund additional construction costs and to meet the Partnership's
working capital needs.

Short-Term Liquidity

         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 net cash
flow in excess of operating expenses.

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

         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.

         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 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,   the  Partnership   declared
distributions to the Limited  Partners of $3,150,004,  $3,325,004 and $3,150,004
for the years ended  December  31,  2003,  2002,  and 2001,  respectively.  This
represents distributions of $0.09, $0.10, and $0.09 per Unit for the years ended
December  31,  2003,  2002,  and 2001,  respectively.  During the quarter  ended
December  31,  2002,  the  Partnership  declared a special  distribution  to the
Limited  Partners of $175,000,  which  represented  cumulative  excess operating
reserves. This special distribution was effectively a return of a portion of the
Limited  Partners'  investment,  although  in  accordance  with the  partnership
agreement,  the total  amount was  applied  toward  the  Limited  Partners'  10%
Preferred Return.  No amounts  distributed to the Limited Partners for the years
ended  December 31, 2003,  2002 and 2001 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 years ended December 31, 2003, 2002 and 2001.

         As of December  31, 2003 and 2002,  the  Partnership  owed  $12,655 and
$14,333,  respectively, to affiliates for such amounts as operating expenses and
accounting and  administrative  services.  As of March 12, 2004, the Partnership
had reimbursed the affiliates all such amounts. In addition,  as of December 31,
2003, 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, including distributions payable, decreased to
$960,307 at December  31,  2003,  from  $1,056,503  at December  31,  2002.  The
decrease was primarily a result of the payment of a special  distribution to the
limited  partners during the year ended December 31, 2003,  which was accrued at
December 31, 2002.  The  decrease was  partially  offset by an increase in rents
paid in advance and deposits at December 31, 2003. The special  distribution  of
$175,000  represented  accumulated,   excess  operating  reserves.  The  General
Partners  believe that the  Partnership  has sufficient cash on hand to meet its
current working capital needs.

Off-Balance Sheet Transactions

         The Partnership holds interests in various unconsolidated joint venture
and  tenancy  in common  arrangements  that are  accounted  for using the equity
method.  The  General  Partners  do not  believe  that any such  interest  would
constitute an off-balance sheet arrangement requiring any additional disclosures
under the provisions of the Sarbanes-Oxley Act of 2002.

Contractual Obligations, Contingent Liabilities, and Commitments

         The Partnership has no contractual obligations, contingent liabilities,
or commitments as of December 31, 2003.

Long-Term Liquidity

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

Critical Accounting Policies

         The  Partnership's  leases are  accounted  for under the  provisions of
Statement of Accounting Standard No. 13, "Accounting for Leases" ("FAS 13"), and
have been  accounted  for using  either the direct  financing  or the  operating
method.  FAS 13 requires  management to estimate the economic life of the leased
property,  the residual  value of the leased  property and the present  value of
minimum lease payments to be received from the tenant.  In addition,  management
assumes  that all  payments  to be  received  under its leases are  collectible.
Changes in management's  estimates or assumptions  regarding  collectibility  of
lease payments could result in a change in accounting for the lease.

         The Partnership  accounts for its  unconsolidated  joint ventures using
the equity method of accounting. Under generally accepted accounting principles,
the equity method of accounting is  appropriate  for entities that are partially
owned by the  Partnership,  but for which  operations of the investee are shared
with other partners.  The  Partnership's  joint venture  agreements  require the
consent of all partners on all key  decisions  affecting  the  operations of the
underlying Property.

         Management  reviews the  Partnership's  Properties  and  investments in
unconsolidated  entities  periodically  for  impairment  at least once a year or
whenever  events or changes in  circumstances  indicate  that the carrying of an
asset may not be recoverable.  The assessment is based on the carrying amount of
the Property or investment at the date it is tested for recoverability  compared
to the sum of the  estimated  future  cash  flows  expected  to result  from its
operation  and sale through the expected  holding  period.  If an  impairment is
indicated, the asset is adjusted to its estimated fair value.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No. 144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets" ("FAS 144").  Accordingly,  when the Partnership
makes the  decision to sell or commits to a plan to sell a Property,  within one
year, its operating results are reported as discontinued operations.

Results of Operations

Comparison of the year ended December 31, 2003 to the year ended December 31,
2002

         Rental revenues from continuing operations were $2,862,634 for the year
ended  December 31, 2003 as compared to  $2,719,772  in the same period in 2002.
The increase in rental  revenues  during 2003, as compared to the same period in
2002,  was the result of the 2002  acquisition  of three  Properties  located in
Ontario, Oregon, Denton, Texas, and Eden Prairie,  Minnesota using proceeds from
the  2001 and 2002  sales of  Properties  in  Statesville,  North  Carolina  and
Baseball  City,  Florida,  respectively,  and the  proceeds  received  from  the
collection  of  promissory  notes  during  2001  and  2002  in  connection  with
Properties sold in previous years.

         In February 2002,  Brandon Fast Food Services,  Inc., the tenant of the
Property in Brandon,  Florida,  filed for bankruptcy.  As of March 12, 2004, the
Partnership  has continued to receive  rental  payments  relating to this lease.
While the tenant has neither  rejected nor  affirmed the lease,  there can be no
assurance  that the lease will not be rejected in the future.  The lost revenues
that would result if the tenant  rejects this lease will have an adverse  effect
on the results of operations of the  Partnership if the Partnership is unable to
re-lease the Property in a timely manner.

         During the years ended December 31, 2003 and 2002, the Partnership also
earned $71,888 and $88,664, respectively, in contingent rental income.

         During the years  ended  December  31, 2003 and 2002,  the  Partnership
earned  $441,781  and  $649,791,  respectively,  attributable  to the net income
earned by  unconsolidated  joint ventures.  Net income earned by  unconsolidated
joint ventures was higher during the year ended  December 31, 2002,  because CNL
Restaurant Investments II, in which the Partnership owns a 36.8% interest,  sold
its Property in Columbus,  Ohio, in June 2002, to the tenant resulting in a gain
of  approximately  $448,300.  CNL  Restaurant  Investments II also sold, in June
2002,  its  Property in Pontiac,  Michigan to the tenant  resulting in a loss of
approximately $189,800. The Partnership recognized its pro-rata share of the net
gain resulting from these sales.

         Net income  earned by  unconsolidated  joint  ventures  was also higher
during  the  year  ended  December  31,  2002,   because  the  Partnership,   as
tenants-in-common  with CNL Income Fund IX,  Ltd.,  an  affiliate of the general
partners and a Florida limited  partnership,  sold its Property in Libertyville,
Illinois,  in  September  2002,  to  a  third  party  resulting  in  a  gain  of
approximately  $199,300.  The Partnership owned a 66% interest in this Property.
The  Partnership  recognized  its pro-rata  share of the gain from this sale, as
described below.

         The  decrease in net income  earned by  unconsolidated  joint  ventures
during the year ended December 31, 2003 was partially  offset because,  in 2002,
the Partnership  invested in two Properties,  one in Kenosha,  Wisconsin and the
other  in  Buffalo  Grove,  Illinois;  each  as a  separate  tenancy  in  common
arrangement  with an  affiliate of the General  Partners  and a Florida  limited
partnership.  The Partnership  acquired these  Properties using a portion of the
return of capital  received from CNL Restaurant  Investments II from its sale of
the Property in Pontiac,  Michigan,  and a portion of the net proceeds  received
from the sale of the Partnership's Property in Libertyville, Illinois, which the
Partnership held as a tenancy in common.

         During  2003,  two  lessees  (or groups of  affiliated  lessees) of the
Partnership and its consolidated joint venture,  Golden Corral Corporation,  and
the affiliated entities under common control, Carrols Corporation and Texas Taco
Cabana (hereinafter referred to as "Carrols Corporation"), each contributed more
than ten of percent of total rental revenues (including rental revenues from the
Partnership's  consolidated  joint venture and the Partnership's  share of total
rental  revenues from  Properties  owned by  unconsolidated  joint  ventures and
Properties owned with affiliates of the General Partners as  tenants-in-common).
As of December 31, 2003,  Golden Corral  Corporation was the lessee under leases
relating to five  restaurants,  and  Carrols  Corporation  was the lessee  under
leases  relating to seven  restaurants.  It is  anticipated  that,  based on the
minimum rental payments required by the leases,  these two lessees (or groups of
affiliated  lessees) each will  continue to contribute  more than ten percent of
total rental revenues in 2004. In addition, two Restaurant Chains, Golden Corral
Buffet and Grill ("Golden Corral") and Burger King, each accounted for more than
ten percent of total rental revenues in 2003 (including rental revenues from the
Partnership's  consolidated  joint venture and the Partnership's  share of total
rental  revenues from  Properties  owned by  unconsolidated  joint  ventures and
Properties owned with affiliates of the General Partners as  tenants-in-common).
In 2004, it is anticipated  that these two Restaurant  Chains each will continue
to account  for more than ten  percent  of total  rental  revenues  to which the
Partnership  is  entitled  under the terms of the  leases.  Any failure of these
lessees or Restaurant Chains will materially affect the Partnership's  operating
results if the  Partnership  is not able to re-lease the  Properties in a timely
manner.

         During the years ended December 31, 2003 and 2002, the Partnership also
earned  $10,172  and  $66,376,  respectively,  in  interest  and  other  income,
respectively.  The decrease in interest  and other income  during the year ended
December  31, 2003,  was  primarily  due to a reduction in interest  income as a
result of the  collection,  during 2002, of the principal  balance on a mortgage
note of  approximately  $917,900.  The  proceeds  were  reinvested  in 2002 in a
Property in Eden Prairie, Minnesota.

         Operating expenses,  including  depreciation  expense and provision for
the  write-down  of assets,  were  $941,193  and  $749,704  for the years  ended
December 31, 2003 and 2002,  respectively.  The  increase in operating  expenses
during 2003, as compared to 2002,  was  primarily the result of the  Partnership
recording  a  provision  for  write-down  of  assets of  approximately  $208,000
relating to the Property in Brandon,  Florida.  The  provision  represented  the
difference  between the  Property's  net carrying  value and it  estimated  fair
value. The tenant of this Property,  Brandon Fast Food Services, Inc., filed for
bankruptcy in February  2002, as described  above.  Also,  depreciation  expense
increased due to the  acquisition  of three  Properties  in 2002,  and state tax
expense  relating to several states in which the Partnership  conducts  business
also increased. The increase in these operating expenses was partially offset by
a decrease in the costs incurred for  administrative  expenses for servicing the
Partnership and its Properties.

         Property  expenses were also higher during the year ended  December 31,
2002,  as compared to 2003,  because the  Partnership  elected to reimburse  the
tenant of several Golden Corral Properties for certain renovation costs.  During
the year ended December 31, 2003, the Partnership incurred expenses such as real
estate taxes and legal fees relating to the Property in Brandon, Florida.

         During the year ended December 31, 2002, the Partnership identified and
sold the Property in Baseball City, Florida, the results of which are classified
as discontinued  operations in the  accompanying  financial  statements.  In May
2002, the Partnership  sold this Property  resulting in a gain of  approximately
$279,800.  The  Partnership  recognized net rental income (rental  revenues less
Property  related  expenses) of $55,304  during the year ended December 31, 2002
relating to this Property.

         In  October  2003,  CNL  Restaurant   Investments   II,  in  which  the
Partnership owns a 36.80% interest, entered into negotiations with a third party
to sell the  property in San  Antonio,  Texas.  As a result,  the joint  venture
reclassified  the assets  relating to this  property  from land and  building on
operating  leases to real estate held for sale. The property was recorded at the
lower of its carrying  amount or fair value less cost to sell. In addition,  the
joint venture stopped  recording  depreciation  upon identifying the property as
held for sale.

         During 2002, CNL Restaurant  Investments  II, in which the  Partnership
owns a 36.8% interest,  identified and sold two Properties in Columbus, Ohio and
Pontiac,  Michigan.  In June  2002,  the  joint  venture  sold its  property  in
Columbus,  Ohio to the tenant and received net sales  proceeds of  approximately
$1,215,700  resulting in a gain of approximately  $448,300.  In addition in June
2002,  this joint  venture sold its property in Pontiac,  Michigan to the tenant
and received net sales proceeds of approximately $722,600 resulting in a loss of
$189,800.  The joint  venture used the proceeds from the sale of the property in
Columbus,  Ohio to acquire a property in Dallas, Texas. The Partnership received
approximately  $265,900  representing a return of capital for its pro-rata share
of the  uninvested  net sales  proceeds  relating  to the  Property  in Pontiac,
Michigan. In August 2002, the Partnership  reinvested a portion of the return of
capital in a Property in Kenosha,  Wisconsin as tenants-in-common with a Florida
limited partnership and an affiliate of the General Partners.

         In addition,  during 2002, the Partnership,  as tenants-in  common with
CNL Income Fund IX, Ltd., an affiliate of the general  partners,  identified and
sold the Property in Libertyville,  Illinois,  to a third party and received net
sales proceeds of approximately  $1,630,400 resulting in a gain of approximately
$199,300. The Partnership owned a 66% interest in this property. The Partnership
and CNL IX,  as a new  tenancy  in  common  arrangement,  used  the  liquidating
distribution  from the sale of the  property  to acquire a  property  in Buffalo
Grove, Illinois.

         The  financial  results  of  the  Properties  in  San  Antonio,  Texas;
Columbus, Ohio; Pontiac, Michigan; and Libertyville,  Illinois, were reported as
Discontinued  Operations in the combined condensed financial information for the
unconsolidated  joint  ventures  and the  properties  held as  tenants-in-common
presented in the footnotes to the accompanying financial statements.

Comparison of the year ended December 31, 2002 to the year ended December 31,
2001

         Rental revenues from continuing operations were $2,719,772 for the year
ended  December 31, 2002 as compared to  $2,554,596  in the same period in 2001.
The increase in rental  revenues  from  continuing  operations  during 2002,  as
compared to the same period in 2001,  was primarily due to the fact that in 2002
the  Partnership  reinvested  the net  proceeds  from the 2001 and 2002 sales of
Statesville, North Carolina and Baseball City, Florida and the prepaid principal
received  in 2001 and 2002,  in three  Properties  located in  Ontario,  Oregon,
Denton,  Texas,  and Eden Prairie,  Minnesota.  The increase in rental  revenues
during 2002 was partially offset by the sale of a Property in 2001.

         Also,  during  2001,  the tenant of the  Property  in North Fort Myers,
Florida,  vacated  the  Property  and  ceased  making  rental  payments  on this
Property.  As a  result,  the  Partnership  stopped  recording  rental  revenues
relating to this  Property.  The lease was terminated in July 2001. In September
2001,  the  Partnership  entered  into a new lease  with a new  tenant  for this
Property for which  rental  payments are lower than rents due under the previous
lease;  therefore,  the Partnership expects that rental revenues from continuing
operations  in future  periods  will  remain at reduced  amounts.  However,  the
General  Partners do not  anticipate  that any decrease in rental  revenues from
continuing  operations  relating  to the new lease will have a material  adverse
affect on the Partnership's financial position or results of operations.

         During the years ended December 31, 2002 and 2001, the Partnership also
earned $88,664 and $74,926, respectively, in contingent rental income.

         During the years  ended  December  31, 2002 and 2001,  the  Partnership
earned  $649,791  and  $390,505,  respectively,  attributable  to the net income
earned by  unconsolidated  joint  ventures.  The increase in  operating  results
reported  by  unconsolidated   joint  ventures  during  2002,  was  because  the
Partnership, as tenants-in-common with CNL Income Fund IX, Ltd., an affiliate of
the General Partners,  sold its property in Libertyville,  Illinois,  to a third
party and received net sales proceeds of approximately $1,630,400 resulting in a
gain of  approximately  $199,300.  The Partnership  owned a 66% interest in this
property.  The  Partnership  recognized  its  pro-rata  share  of the  net  gain
resulting from this sale.

         In addition,  CNL Restaurant  Investments  II, in which the Partnership
owns a 36.8%  interest,  sold its property in  Columbus,  Ohio to the tenant and
received net sales proceeds of approximately  $1,215,700  resulting in a gain of
approximately $448,300. CNL Restaurant Investments II, also sold its property in
Pontiac, Michigan to the tenant and received net sales proceeds of approximately
$722,600  resulting  in a loss  of  $189,800.  The  Partnership  recognized  its
pro-rata share of the net gain resulting from these sales.

         Net operating  results reported by  unconsolidated  joint ventures also
increased during 2002,  because in both 2002 and 2001, the Partnership  invested
in a joint venture and in four Properties,  each as a separate tenants-in-common
arrangement,  with Florida  limited  partnerships  and affiliates of the General
Partners.  In addition,  net operating results reported by unconsolidated  joint
ventures were lower in 2001 because  Middleburg  Joint Venture sold its Property
and recognized a loss of approximately $61,900.

         During the years ended December 31, 2002 and 2001, the Partnership also
earned  $66,376 and $270,989,  respectively,  in interest and other income.  The
decrease  in  interest  and other  income  during  2002 was  partially  due to a
reduction in interest  income as a result of the  prepayment of principal on two
mortgage  notes of  approximately  $441,500  during 2001,  and the prepayment of
principal on a third mortgage note of  approximately  $917,900  during 2002. The
proceeds  were  reinvested  in 2002 in a Property  in Eden  Prairie,  Minnesota.
During 2001, the Partnership  received and recorded as income additional amounts
relating to 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. No such income was received during 2002.

         Operating expenses,  including  depreciation  expense and provision for
write-down of assets,  were $749,704 and $1,063,334 for the years ended December
31, 2002 and 2001,  respectively.  Operating  expenses  were higher during 2001,
primarily as a result of the recording of provisions for write-down of assets in
the amounts of $181,815 and $117,664,  relating to the  Properties in North Fort
Myers,  Florida,  and  Statesville,  North  Carolina  because the tenants ceased
operations and vacated the Properties. The provisions represented the difference
between the carrying value of the  Properties,  and their  estimated fair value.
The Partnership  also incurred  expenses such as, real estate taxes,  legal, and
repairs and maintenance,  relating to the Property in North Fort Myers,  Florida
during 2001. In September 2001, the Partnership  entered into a new lease with a
new tenant for the Property in North Fort Myers,  Florida, and the new tenant is
responsible for the property  expenses.  The decrease in operating  expenses was
partially  offset by legal expenses  incurred in 2002 relating to the filing for
bankruptcy of a tenant, Brandon Fast Food Services, Inc.

         In addition,  the decrease in operating expenses during 2002 was due to
lower  administrative  expenses  incurred for servicing the  Partnership and its
Properties  and due to a decrease in state  taxes.  The  decrease  in  operating
expenses during 2002 was partially offset by an increase in depreciation expense
due to the  purchase  of three  Properties  during 2002 and the fact that during
2001, the Partnership  reclassified  the lease relating to the Property in North
Fort Myers, Florida from direct financing leases to operating leases as a result
of the tenant vacating the Property.

         The decrease in operating  expenses during 2002 was partially offset by
higher property  expenses in 2002 because the  Partnership  elected to reimburse
the tenant of several restaurant properties for certain renovation costs.

         In May 2002,  the  Partnership  sold its  property  in  Baseball  City,
Florida  to  the  tenant  and  received  net  sales  proceeds  of  approximately
$1,184,600,  resulting  in a gain on  disposal  of  discontinued  operations  of
approximately $279,800. The partnership identified this property for sale during
2002.

         The Property in  Statesville,  North Carolina was sold in May 2001, and
the Partnership received net sales proceeds of approximately  $877,000 resulting
in a gain of approximately $28,300.

         The General Partners continuously  evaluate strategic  alternatives for
the  Partnership,  including  alternatives  to provide  liquidity to the Limited
Partners.

         The  Partnership's  leases  as of  December  31,  2003,  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.  Inflation,  overall,  has had a minimal effect on
results of operations of the Partnership.  Continued inflation 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 January 2003,  the Financial  Accounting  Standards  Board  ("FASB")
issued  FASB  Interpretation  No.  46 ("FIN  46"),  "Consolidation  of  Variable
Interest Entities" to expand upon and strengthen  existing  accounting  guidance
that  addresses  when a company  should  include  the  assets,  liabilities  and
activities of another entity in its financial  statements.  To improve financial
reporting by companies involved with variable interest entities, FIN 46 requires
that a variable  interest entity be consolidated by a company if that company is
subject  to a  majority  risk  of  loss  from  the  variable  interest  entity's
activities or entitled to receive a majority of the entity's residual returns or
both.  Prior to FIN 46, a  company  generally  included  another  entity  in its
consolidated  financial  statements  only if it  controlled  the entity  through
voting interests.  In December 2003, the FASB issued FASB Interpretation No. 46R
("FIN 46R"), to clarify some of the provisions of FIN 46. Under FIN 46R, special
effective date provisions apply to entities that have fully or partially applied
FIN 46  prior  to  issuance  of FIN 46R.  Otherwise,  application  of FIN 46R is
required in  financial  statements  of public  entities  that have  interests in
structures that are commonly referred to as special-purpose entities for periods
ending after December 15, 2003. Application by public entities, other than small
business issuers,  for all other types of variable interest entities is required
in financial statements for periods ending after March 15, 2004. The Partnership
did not fully or partially  apply FIN 46 prior to the issuance of FIN 46R. Also,
the Partnership  does not have interests in structures  commonly  referred to as
special-purpose entities.  Therefore,  application of FIN 46R is required in the
Partnership's  financial statements for periods ending after March 15, 2004. The
General  Partners  believe  adoption  of this  standard  may  result  in  either
consolidation  or  additional  disclosure   requirements  of  the  Partnership's
unconsolidated  joint  ventures,  which are  currently  accounted  for under the
equity method.  However,  such  consolidation  is not expected to  significantly
impact the Partnership's results of operations.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.


Item 8.  Financial Statements and Supplementary Data


<PAGE>


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

                                    CONTENTS







                                                                    Page

Report of Independent Certified Public Accountants                   22

Financial Statements:

     Balance Sheets                                                  23

     Statements of Income                                            24

     Statements of Partners' Capital                                 25

     Statements of Cash Flows                                     26-27

     Notes to Financial Statements                                28-40









<PAGE>









               Report of Independent Certified Public Accountants






To the Partners
CNL Income Fund VIII, Ltd.



In our opinion,  the accompanying  balance sheets and the related  statements of
income,  of partners'  capital and of cash flows present fairly, in all material
respects,  the  financial  position  of CNL Income  Fund VIII,  Ltd.  (a Florida
limited  partnership)  at  December  31,  2003 and 2002,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2003 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 15(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.

As  described in Note 1 to the  financial  statements,  on January 1, 2002,  the
Partnership  adopted  Statement  of  Financial   Accounting  Standards  No.  144
"Accounting for the Impairment or Disposal of Long-Lived Assets."




/s/ PricewaterhouseCoopers LLP

Orlando, Florida
March 24, 2004





<PAGE>



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

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

 <c>
                                                                                       December 31,
                                                                               2003                     2002
                                                                        -------------------      -------------------

                             ASSETS

  Real estate properties with operating leases, net                          $  17,855,185            $  18,256,782
  Net investment in direct financing leases                                      4,351,840                4,559,231
  Investment in joint ventures                                                   4,547,753                4,609,998
  Cash and cash equivalents                                                      1,701,023                1,571,487
  Certificates of deposit                                                          385,718                  382,249
  Receivables, less allowance for doubtful accounts of
       $15,033 and $9,084, respectively                                             44,739                   75,583
  Due from related parties                                                              --                    6,637
  Accrued rental income                                                          1,147,151                1,392,675
  Other assets                                                                      90,929                   87,223
                                                                        -------------------      -------------------

                                                                             $  30,124,338            $  30,941,865
                                                                        ===================      ===================

               LIABILITIES AND PARTNERS' CAPITAL

  Accounts payable and accrued expenses                                        $     9,181              $     3,622
  Escrowed real estate taxes payable                                                10,743                    3,207
  Distributions payable                                                            787,501                  962,501
  Due to related parties                                                            67,705                   69,383
  Rents paid in advance and security deposits                                      152,882                   87,173
                                                                        -------------------      -------------------
           Total liabilities                                                     1,028,012                1,125,886

  Minority interest                                                                102,480                  104,755

  Partners' capital                                                             28,993,846               29,711,224
                                                                        -------------------      -------------------

                                                                             $  30,124,338            $  30,941,865
                                                                        ===================      ===================
</TABLE>
                See accompanying notes to financial statements.



<PAGE>


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

                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>

 <c>

                                                                               Year Ended December 31,
                                                                      2003                2002               2001
                                                                ------------------   ---------------    ---------------

Revenues:
     Rental income from operating leases                            $   2,297,124      $  2,131,424       $  1,906,926
     Earned income from direct financing leases                           565,510           588,348            647,670
     Contingent rental income                                              71,888            88,664             74,926
     Interest and other income                                             10,172            66,376            270,989
                                                                ------------------   ---------------    ---------------
                                                                        2,944,694         2,874,812          2,900,511
                                                                ------------------   ---------------    ---------------
Expenses:
     General operating and administrative                                 254,157           283,375            342,862
     Property related                                                      31,565            71,366             44,054
     State and other taxes                                                 45,737            30,446             54,965
     Depreciation                                                         401,597           364,517            321,973
     Provision for write-down of assets                                   208,137                --            299,479
                                                                ------------------   ---------------    ---------------
                                                                          941,193           749,704          1,063,333
                                                                ------------------   ---------------    ---------------

Income before gain on sale of assets, minority
     interest and equity in earnings of unconsolidated
     joint ventures                                                     2,003,501         2,125,108          1,837,178

Gain on sale of assets                                                         --                --             28,301

Minority interest                                                         (12,656  )        (12,864  )         (12,999  )

Equity in earnings of unconsolidated joint
     ventures                                                             441,781           649,791            390,505
                                                                ------------------   ---------------    ---------------

Income from continuing operations                                       2,432,626         2,762,035          2,242,985
                                                                ------------------   ---------------    ---------------

Discontinued Operations
     Income from discontinued operations                                                     55,304             93,561
     Gain on disposal of discontinued operations                               --           279,813                 --
                                                                ------------------   ---------------    ---------------
                                                                               --           335,117             93,561
                                                                ------------------   ---------------    ---------------

Net income                                                          $   2,432,626      $  3,097,152       $  2,336,546
                                                                ==================   ===============    ===============

Income per limited partner unit
     Continuing operations                                            $     0.070        $    0.078         $    0.064
     Discontinued operations                                                   --             0.010              0.003
                                                                ------------------   ---------------    ---------------

     Total                                                            $     0.070        $    0.088         $    0.067
                                                                ==================   ===============    ===============

Weighted average number of
     limited partner units outstanding                                 35,000,000        35,000,000         35,000,000
                                                                ==================   ===============    ===============
</TABLE>
                See accompanying notes to financial statements.

<PAGE>


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

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2003, 2002, and 2001
<TABLE>
<CAPTION>

 <c>

                                         General Partners                                           Limited Partners
                                ------------------------------------   -----------------------------------------------------------
                                                      Accumulated                                               Accumulated
                                 Contributions         Earnings         Contributions       Distributions         Earnings
                                -----------------   ----------------   -----------------   ----------------   -----------------

Balance, December 31, 2000           $     1,000        $   285,349       $  35,000,000      $ (32,484,652 )     $  31,965,837

    Distributions to limited
       partners ($0.090 per
       limited partner unit)                  --                 --                  --         (3,150,004 )                --
    Net income                                --                 --                  --                 --           2,336,546
                                -----------------   ----------------   -----------------   ----------------   -----------------

Balance, December 31, 2001                 1,000            285,349          35,000,000        (35,634,656 )        34,302,383

    Distributions to limited
       partners ($0.095 per
       limited partner unit)                  --                 --                  --         (3,325,004 )                --
    Net income                                --                 --                  --                 --           3,097,152
                                -----------------   ----------------   -----------------   ----------------   -----------------

Balance, December 31, 2002                 1,000            285,349          35,000,000        (38,959,660 )        37,399,535

    Distributions to limited
       partners ($0.090 per
       limited partner unit)                  --                 --                  --         (3,150,004 )                --
    Net income                                --                 --                  --                 --           2,432,626
                                -----------------   ----------------   -----------------   ----------------   -----------------

Balance, December 31, 2003           $     1,000        $   285,349       $  35,000,000    $ (42,109,664)        $  39,832,161
                                =================   ================   =================   ================   =================


</TABLE>
                See accompanying notes to financial statements.
<PAGE>



--------------
 Syndication
    Costs            Total
--------------   --------------

 $ (4,015,000 )    $30,752,534



           --       (3,150,004 )
           --        2,336,546
--------------   --------------

   (4,015,000 )     29,939,076



           --       (3,325,004 )
           --        3,097,152
--------------   --------------

   (4,015,000 )     29,711,224



           --       (3,150,004 )
           --        2,432,626
--------------   --------------

 $ (4,015,000 )    $28,993,846
==============   ==============

                See accompanying notes to financial statements.

<PAGE>

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

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

 <c>
                                                                               Year Ended December 31,
                                                                      2003               2002              2001
                                                                 ---------------    ---------------    --------------


Cash Flows from Operating Activities:
      Net Income                                                   $  2,432,626       $  3,097,152      $  2,336,546
                                                                 ---------------    ---------------    --------------
      Adjustments to reconcile net income to net cash
         provided by operating activities:
             Depreciation                                               401,597            364,517           321,973
             Provision for write-down of assets                         208,137                 --           299,479
             Minority interest                                           12,656             12,864            12,999
             Equity in earnings of unconsolidated joint
                ventures, net of distributions                           62,245           (108,898 )         103,020
             Gain on sale of assets                                          --           (279,813 )         (28,301 )
             Decrease in receivables                                     30,844             25,546            18,894
             Decrease (increase) in due from related                      6,637             46,004           (22,631 )
                parties
             Amortization of investment in direct
                financing leases                                        207,391            187,666           181,500
             Decrease (increase) in accrued rental                       37,387              3,355              (960 )
                income
             Decrease (increase) in other assets                        (3,706)            (17,349 )           9,085
             Increase (decrease) in accounts payable
                and accrued expenses and escrowed real                  13,095              (9,425 )         (30,540 )
                estate taxes payable
             Increase (decrease) in due to related
                parties                                                 (1,678)             (6,099 )          16,081
             Increase (decrease) in rents paid in
                advance and security deposits                            65,709             35,077           (20,550 )
                                                                 ---------------    ---------------    --------------
                  Total adjustments                                   1,040,314            253,445           860,049
                                                                 ---------------    ---------------    --------------

Net Cash Provided by Operating Activities                             3,472,940          3,350,597         3,196,595

      Cash Flows from Investing Activities:
         Proceeds from sale of real estate properties                        --          1,184,559           877,000
         Additions  to  real  estate   properties  with
             operating leases                                                --         (2,894,329 )              --
         Return of capital from joint venture                                --            265,926                --
         Liquidating distribution from joint venture                         --          1,076,041           236,665
         Investment in joint venture                                         --         (1,241,259 )        (865,942 )
         Collections on mortgage notes receivable                            --            917,857           494,206
         Net  (increase)  decrease in  certificates  of
             deposit                                                    (3,469)             (8,091 )          84,661
                                                                 ---------------    ---------------    --------------
             Net cash provided by (used in) investing
                activities                                              (3,469)           (699,296 )         826,590
                                                                 ---------------    ---------------    --------------

Cash flows from Financing Activities:
         Distributions to limited partners                          (3,325,004)         (3,150,004 )      (3,150,004 )
         Distributions to holder of minority interest                  (14,931)            (14,943 )         (14,683 )
                                                                 ---------------    ---------------    --------------
             Net cash used in financing activities                  (3,339,935)         (3,164,947 )      (3,164,687 )
                                                                 ---------------    ---------------    --------------

Net Increase (Decrease) in Cash and Cash Equivalents                    129,536           (513,646 )         858,498

Cash and Cash Equivalents at Beginning of Year                        1,571,487          2,085,133         1,226,635
                                                                 ---------------    ---------------    --------------

Cash and Cash Equivalents at End of Year                           $  1,701,023       $  1,571,487      $  2,085,133
                                                                 ===============    ===============    ==============
</TABLE>

                See accompanying notes to financial statements.
<PAGE>


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

                      STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>

 <c>
                                                                               Year Ended December 31,
                                                                      2003               2002              2001
                                                                 ---------------    ---------------    --------------


Supplemental Schedule of Non-Cash
      Financing Activities:

         Distributions declared and unpaid at
             December 31                                            $   787,501        $   962,501       $   787,501
                                                                 ===============    ===============    ==============
</TABLE>
                See accompanying notes to financial statements.



<PAGE>



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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


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 real
         estate  property  acquisitions  at cost.  The  properties are leased to
         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.
         During the years ended December 31, 2003, 2002, and 2001, tenants paid,
         or are  expected  to pay  directly to real  estate  taxing  authorities
         approximately  $463,000,  $477,000,  and  $433,000,   respectively,  in
         estimated  real  estate  taxes in  accordance  with the  terms of their
         leases.

         The leases of the  Partnership  provide for base minimum  annual rental
         payments payable in monthly installments.  In addition,  certain leases
         provide for  contingent  rental  revenues  based on the tenants'  gross
         sales in  excess  of a  specified  threshold.  The  Partnership  defers
         recognition  of  the  contingent  rental  revenues  until  the  defined
         thresholds  are met.  The leases  are  accounted  for using  either the
         operating or the direct financing methods.

             Operating  method - Real estate property 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.

             Direct  financing  method - 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).  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.  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.

         Accrued  rental  income  represents  the  aggregate  amount  of  income
         recognized  on a  straight-line  basis in  excess of  scheduled  rental
         payments to date.



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies - Continued

         Substantially  all leases are for 9 to 25 years and provide for minimum
         and contingent  rentals.  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.

         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 estimated fair value.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  a provision  is recorded to increase  the
         allowance for doubtful accounts. If amounts are subsequently determined
         to be  uncollectible,  the  corresponding  receivable and 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.

         The   Partnership's   investments  in  Asheville  Joint  Venture;   CNL
         Restaurant Investments II; Bossier City Joint Venture; and CNL VIII, X,
         XII Kokomo  Joint  Venture;  and a property  in  Walker,  Louisiana;  a
         property in Denver,  Colorado; a property in Kenosha,  Wisconsin; and a
         property in Buffalo  Grove,  Illinois  for which each  property is held
         with  affiliates  of the  General  Partners as  tenants-in-common,  are
         accounted  for  using  the  equity  method  since  each  joint  venture
         agreement  requires  the consent of all  partners on all key  decisions
         affecting the operations of the underlying property.

         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.  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 represent a reduction
         of  Partnership  equity and a reduction in the basis of each  partner's
         investment.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies - Continued

         Rents Paid in  Advance - Rents  paid in  advance by lessees  for future
         periods are deferred upon receipt and are recognized as revenues during
         the period in which the rental income is earned.

         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.

         Reclassification   -  Certain  items  in  the  prior  year's  financial
         statements  have been  reclassified  to conform  to 2003  presentation.
         These  reclassifications had no effect on partner's capital, net income
         or cash flows.

         Statement of Financial Accounting Standards No. 144 - Effective January
         1, 2002,  the  Partnership  adopted  Statement of Financial  Accounting
         Standards  No.  144  ("FAS  144")  "Accounting  for the  Impairment  or
         Disposal  of  Long-Lived   Assets."  This  statement  requires  that  a
         long-lived  asset be  tested  for  recoverability  whenever  events  or
         changes in  circumstances  indicate that its carrying amount may not be
         recoverable.   The  carrying  amount  of  a  long-lived  asset  is  not
         recoverable  if it  exceeds  the  sum of the  undiscounted  cash  flows
         expected to result from the use and eventual  disposition of the asset.
         The assessment is based on the carrying amount of the asset at the date
         it is tested for recoverability.  An impairment loss is recognized when
         the carrying  amount of a long-lived  asset exceeds its estimated  fair
         value. If an impairment is recognized,  the adjusted carrying amount of
         a long-lived  asset is its new cost basis.  The statement also requires
         that the results of  operations of a component of an entity that either
         has been disposed of or is classified as held for sale be reported as a
         discontinued   operation  if  the  disposal   activity  was   initiated
         subsequent to the adoption of the Standard.

         FASB Interpretation No. 46 - In January 2003, the Financial  Accounting
         Standards Board ("FASB") issued FASB  Interpretation No. 46 ("FIN 46"),
         "Consolidation  of  Variable  Interest  Entities"  to  expand  upon and
         strengthen  existing  accounting guidance that addresses when a company
         should include the assets, liabilities and activities of another entity
         in  its  financial  statements.   To  improve  financial  reporting  by
         companies  involved with variable  interest  entities,  FIN 46 requires
         that a variable  interest  entity be  consolidated by a company if that
         company  is  subject  to a  majority  risk of loss  from  the  variable
         interest  entity's  activities or entitled to receive a majority of the
         entity's residual returns or both. Prior to FIN 46, a company generally
         included another entity in its consolidated  financial  statements only
         if it controlled the entity through voting interests. In December 2003,
         the FASB issued FASB  Interpretation  No. 46R ("FIN  46R"),  to clarify
         some of the provisions of FIN 46. Under FIN 46R, special effective date
         provisions  apply to entities that have fully or partially  applied FIN
         46 prior to issuance of FIN 46R.  Otherwise,  application of FIN 46R is
         required in financial statements of public entities that have interests
         in structures that are commonly referred to as special-purpose entities
         for periods  ending  after  December 15,  2003.  Application  by public
         entities,  other than small  business  issuers,  for all other types of
         variable  interest  entities is required in  financial  statements  for
         periods ending after March 15, 2004. The  Partnership  did not fully or
         partially  apply FIN 46 prior to the  issuance  of FIN 46R.  Also,  the
         Partnership does not have interests in structures  commonly referred to
         as  special-purpose  entities.  Therefore,  application  of FIN  46R is
         required in the Partnership's  financial  statements for periods ending
         after March 15, 2004.  The General  Partners  believe  adoption of this
         standard may result in either consolidation or


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


1.       Significant Accounting Policies - Continued

         additional disclosure requirements of the Partnership's  unconsolidated
         joint  ventures,  which are  currently  accounted  for under the equity
         method.  However,  such  consolidation is not expected to significantly
         impact the Partnership's results of operations.

2.       Real Estate Properties with Operating Leases

         Real estate properties with operating leases consisted of the following
         at December 31:
<TABLE>
<CAPTION>

 <c>
                                                                    2003                   2002
                                                             --------------------   --------------------

                 Land                                             $    9,988,909         $    9,988,909
                 Buildings                                            10,928,236             10,928,236
                                                             --------------------   --------------------
                                                                      20,917,145             20,917,145

                 Less accumulated depreciation                        (3,061,960 )           (2,660,363 )
                                                             --------------------   --------------------

                                                                  $   17,855,185         $   18,256,782
                                                             ====================   ====================
</TABLE>

         In January 2002, the Partnership  reinvested a portion of the net sales
         proceeds it  received  from the sale of the  Property  in  Statesville,
         North Carolina,  and the prepaid principal received in 2001 relating to
         a promissory  note,  in a Property  located in Ontario,  Oregon,  at an
         approximate cost of $654,400.

         In June 2002, the Partnership  reinvested the majority of the net sales
         proceeds it received  from the sale of the  Property in Baseball  City,
         Florida, in a Property located in Denton, Texas, at an approximate cost
         of approximately $1,147,600. The property was acquired from CNL Funding
         2001-A, LP, an affiliate of the general partners.

         In September  2002, the  Partnership  reinvested the prepaid  principal
         received  in May 2002  relating  to a  promissory  note,  in a Property
         located  in  Eden  Prairie,   Minnesota,  at  an  approximate  cost  of
         $1,093,900.  The property was  acquired  from CNL Net Lease  Investors,
         L.P., an affiliate of the general partners.

         The following is a schedule of the future  minimum lease payments to be
         received on noncancellable operating leases at December 31, 2003:

                2004                                $  2,334,917
                2005                                   2,208,681
                2006                                   1,742,117
                2007                                   1,700,145
                2008                                   1,702,575
                Thereafter                             7,916,354
                                                 ----------------

                                                    $ 17,604,789
                                                 ================



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


3.       Net Investment in Direct Financing Leases

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

 <c>
                                                   2003               2002
                                              -----------------  -----------------

           Minimum lease payments
             receivable                          $   5,443,051      $   6,215,952
           Estimated residual values                 1,700,249          1,700,249
           Less unearned income                     (2,791,460 )       (3,356,970 )
                                              -----------------  -----------------

           Net investment in direct
             financing leases                    $   4,351,840      $   4,559,231
                                              =================  =================
</TABLE>

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2003:

                     2004                          $   772,901
                     2005                              772,901
                     2006                              799,228
                     2007                              812,347
                     2008                              812,347
                     Thereafter                      1,473,327
                                               ----------------

                                                  $  5,443,051
                                               ================

4.       Investment in Joint Ventures

         The  Partnership  has an 85.54%,  a 36.8%, a 34%, and a 10% interest in
         the profits  and losses of  Asheville  Joint  Venture,  CNL  Restaurant
         Investments II, Bossier City Joint Venture, and CNL VIII, X, XII Kokomo
         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, Bossier City Joint Venture,
         and CNL VIII, X, XII Kokomo Joint  Venture each owns one property,  and
         CNL Restaurant  Investments II owns five properties.  In addition,  the
         Partnership  owns properties in Walker,  Louisiana;  Denver,  Colorado;
         Kenosha,  Wisconsin;  and Buffalo Grove,  Illinois as tenants-in-common
         with affiliates of the General  Partners.  As of December 31, 2003, the
         Partnership owned a 17%, 19.3%, 10%, and 66% interest, respectively, in
         these properties, as four separate tenancy-in common arrangements.

         In June 2002, CNL Restaurant  Investments  II, in which the Partnership
         owns a 36.8%  interest,  sold its  property  in  Columbus,  Ohio to the
         tenant and  received  net sales  proceeds of  approximately  $1,215,700
         resulting  in a gain of  approximately  $448,300.  In  addition in June
         2002, this joint venture sold its property in Pontiac,  Michigan to the
         tenant  and  received  net sales  proceeds  of  approximately  $722,600
         resulting  in a loss of $189,800.  The joint  venture used the proceeds
         from the sale of the property in  Columbus,  Ohio to acquire a property
         in  Dallas,  Texas at an  approximate  cost of  $1,147,400.  The  joint
         venture  acquired  this  property  from  CNL  Funding  2001-A,  LP,  an
         affiliate of the general partners.


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


4.       Investment in Joint Ventures - Continued

         The Partnership received  approximately  $265,900 representing a return
         of capital for its pro-rata  share of the uninvested net sales proceeds
         relating to the  Property in Pontiac,  Michigan.  In August  2002,  the
         Partnership  reinvested $188,300 of the return of capital in a Property
         in Kenosha,  Wisconsin as tenants-in-common  with CNL Income Fund XVII,
         Ltd. ("CNL XVII"),  a Florida  limited  partnership and an affiliate of
         the general  partners.  The  Partnership  and CNL XVII  entered into an
         agreement  whereby each  co-tenant will share in the profits and losses
         of each property in proportion to its applicable percentage interest.

         In September 2002, the  Partnership,  with CNL Income Fund IX, Ltd., an
         affiliate of the general  partner,  sold its property in  Libertyville,
         Illinois,  to  a  third  party  and  received  net  sales  proceeds  of
         approximately $1,630,400 resulting in a gain of approximately $199,300.
         The  Partnership  and CNL IX, as a new  tenancy in common  arrangement,
         used the  liquidating  distribution  from the sale of the  property  to
         acquire a property in Buffalo Grove, Illinois at an approximate cost of
         $1,588,800.  The property was  acquired  from CNL Net Lease  Investors,
         L.P., an affiliate of the general partners.

         In  October  2003,  CNL  Restaurant   Investments   II,  in  which  the
         Partnership owns a 36.80% interest,  entered into  negotiations  with a
         third party to sell the  property in San Antonio,  Texas.  As a result,
         the joint  venture  reclassified  the assets  relating to this property
         from land and  building  on  operating  leases to real  estate held for
         sale. The property was recorded at the lower of its carrying  amount or
         fair  value  less cost to sell.  The joint  venture  stopped  recording
         depreciation upon identifying the property as held for sale.

         The financial  results  relating to the  properties in Columbus,  Ohio,
         Pontiac, Michigan,  Libertyville,  Illinois, and San Antonio, Texas are
         reflected as discontinued operations below.

         The following presents the combined,  condensed  financial  information
         for  the  unconsolidated  joint  ventures  and the  properties  held as
         tenants-in-common with affiliates at:
<TABLE>
<CAPTION>

 <c>
                                                                                 December 31,
                                                                        2003                        2002
                                                                 --------------------         -----------------

          Real estate  properties  with operating  leases, net        $   12,702,163             $  13,003,195
          Net investment in direct financing leases                          967,656                   985,387
          Real estate held for sale                                          724,380                   739,968
          Cash                                                                75,287                    26,033
          Accrued rental income                                              298,654                   200,487
          Liabilities                                                         60,958                    16,475
          Partners' capital                                               14,707,182                14,938,595
</TABLE>


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


4.       Investment in Joint Ventures - Continued

<TABLE>
<CAPTION>

 <c>
                                                                          Years ended December 31,
                                                                 2003            2002              2001
                                                             -------------   --------------   ---------------

          Rental revenues                                      $1,639,138      $ 1,349,581        $  902,538
          Expenses                                               (308,261 )       (276,951 )        (202,644 )
                                                             -------------   --------------   ---------------
              Income from continuing operations                 1,330,877        1,072,630           699,894
                                                             -------------  ---------------   ---------------

          Discontinued operations
              Revenues                                             95,286          303,068           475,246
              Expenses                                            (15,988 )        (54,829 )        (103,414 )
              Gain on disposal of assets                               --          457,786                --
                                                             -------------   --------------   ---------------
                                                                   79,298          706,025           371,832
                                                             -------------   --------------   ---------------

          Net income                                           $1,410,175      $ 1,778,655      $  1,071,726
                                                             =============   ==============   ===============
</TABLE>

         The Partnership  recognized  income totaling  $441,781,  $649,791,  and
         $390,505,  for the  years  ended  December  31,  2003,  2001 and  2001,
         respectively, from these joint ventures.

5.       Mortgage Note Receivable

         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 the  property.  The
         promissory  note bore  interest  at a rate of  10.75%  per  annum,  was
         collateralized by a mortgage on the property and was being 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.
         In 1999,  the borrower  repaid a portion of the principal in the amount
         of $272,500. In 2002, the borrower repaid approximately  $917,900 which
         represented the remaining outstanding principal balance.

6.       Discontinued Operations

         In May 2002,  the  Partnership  sold its  property  in  Baseball  City,
         Florida to the tenant and received net sales proceeds of  approximately
         $1,184,600,  resulting in a gain on disposal of discontinued operations
         of approximately $279,800.

         The financial  results for this property are reflected as  discontinued
         operations  in the  accompanying  financial  statements.  The operating
         results of discontinued operations are as follows:
<TABLE>
<CAPTION>

 <c>
                                                                             Year Ended December 31,
                                                                      2003             2002             2001
                                                                 ---------------    ------------    -------------

           Rental revenues                                              $    --        $ 55,304         $ 93,561
                                                                 ---------------    ------------    -------------

           Income from discontinued operations                          $    --        $ 55,304         $ 93,561
                                                                 ===============    ============    =============
</TABLE>



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


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% 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% to the  limited
         partners  and one percent to the  General  Partners;  however,  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 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% 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% 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% 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  for the years
         ended December 31, 2003, 2002 and 2001.

         During  the  years  ended  December  31,  2003,  2002,  and  2001,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $3,150,004,  $3,325,004,  and  $3,150,004,   respectively.  During  the
         quarter ended  December 31, 2002,  the  Partnership  declared a special
         distribution  to the Limited  Partners of $175,000,  which  represented
         cumulative  excess operating  reserves.  This special  distribution was
         effectively a return of a portion of the limited partners'  investment,
         although in accordance  with the  partnership  agreement,  $175,000 was
         applied  toward  the  limited   partners'  10%  Preferred   Return.  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

                  Years Ended December 31, 2003, 2002, and 2001


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>

 <c>
                                                                    2003             2002              2001
                                                                --------------   --------------   ---------------

          Net income for financial reporting purposes           $ 2,432,626       $ 3,097,152    $     2,336,546

          Effect of timing differences relating to
             depreciation                                            (2,728)          (23,691 )          (57,394 )

          Provision for write-down of assets                        208,137               --             299,479

          Direct financing leases recorded as operating
             leases for tax reporting purposes                      207,391           299,623            181,500

          Effect of timing differences relating to
             allowance for doubtful accounts                          5,949             7,970            211,991

          Accrued rental income                                      37,387             3,355           (212,295 )

          Rents paid in advance                                      65,709            24,899            (32,217 )

          Effect of timing differences relating to gains on
             real estate property sales                                  --          (256,869 )          60,643

          Effect of timing differences relating to equity
             in earnings of unconsolidated joint ventures             2,817          (163,230 )          15,396

          Effect of timing differences relating to minority
          interest income of consolidated joint venture              (1,026)         (103,783 )            (481 )

          Other                                                        (370)               --               --
                                                               --------------   --------------   ---------------

          Net income for federal income tax purposes            $ 2,955,892      $ 2,885,426       $ 2,803,168
                                                               ==============   ==============   ===============
</TABLE>

<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


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 APF Partners,  LP, a wholly owned subsidiary of CNL Restaurant
         Properties,  Inc. (formerly CNL American  Properties Fund, Inc.) served
         as the  Partnership's  advisor until January 1, 2002,  when it assigned
         its  rights  and  obligations  under  a  management  agreement  to  RAI
         Restaurants,  Inc  ("the  Advisor").  The  Advisor  is a  wholly  owned
         subsidiary  of  CNL  Restaurant   Properties,   Inc.  ("CNL-RP").   The
         individual general partners are stockholders and directors of CNL-RP.

         The Advisor provides 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, 2003, 2002 and 2001.

         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, 2003, 2002 and 2001.

         During  the  years  ended  December  31,  2003,  2002,  and  2001,  the
         Partnership's  advisor  and  its  affiliates  provided  accounting  and
         administrative  services. The Partnership incurred $143,519,  $184,100,
         and $201,158,  for the years ended  December 31, 2003,  2002, and 2001,
         respectively, for such services.

         In April 2001, the Partnership, CNL Income Fund X, Ltd., and CNL Income
         Fund XII, Ltd., through a joint venture agreement, acquired an interest
         in a Golden  Corral  property  from CNL BB Corp.,  an  affiliate of the
         general partners, at an approximate cost of $2,112,000. CNL Income Fund
         X, Ltd. and CNL Income Fund XII, Ltd., are Florida limited partnerships
         and affiliates 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.



<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


9.       Related Party Transactions - Continued

         In June 2002,  the  Partnership  acquired a property in Denton,  Texas,
         from CNL Funding 2001-A, LP, for approximately $1,147,600. In addition,
         in June 2002, CNL Restaurant Investments II also acquired a property in
         Dallas,   Texas,  from  CNL  Funding  2001-A,   LP,  for  approximately
         $1,147,400.  CNL  Funding  2001-A,  LP,  an  affiliate  of the  general
         partners, had purchased and temporarily held title to the properties in
         order  to  facilitate   the   acquisition  of  the  properties  by  the
         Partnership  and the joint  venture.  The  purchase  price  paid by the
         Partnership and the joint venture represented the costs incurred by CNL
         Funding 2001-A, LP to acquire and carry the properties.

         In  September  2002,  the  Partnership  acquired  a  property,  in Eden
         Prairie,  Minnesota,  from CNL Net Lease Investors, L.P. ("NLI"), at an
         approximate  cost of $1,093,900.  In addition,  the Partnership and CNL
         IX, as  tenants-in-common,  acquired  from NLI a  property  in  Buffalo
         Grove, Illinois at an approximate cost of $1,588,800.  During 2002, and
         prior  to  the  Partnership's  acquisition  of  these  properties,  CNL
         Financial LP Holding,  LP ("CFN") and CNL Net Lease  Investors GP Corp.
         ("GP  Corp")  purchased  the  limited  partner's  interest  and general
         partner's interest, respectively, of NLI. Prior to this transaction, an
         affiliate of the  Partnership's  general partners owned a 0.1% interest
         in NLI and served as a general  partner of NLI.  The  original  general
         partners of NLI waived their  rights to benefit from this  transaction.
         The acquisition  price paid by CFN for the limited  partner's  interest
         was based on the portfolio  acquisition price. The Partnership acquired
         the   properties  at  CFN's  cost  and  did  not  pay  any   additional
         compensation  to CFN for the  acquisition of the  properties.  Each CNL
         entity is an affiliate of the Partnership's general partners.

         The due to related parties consisted of the following at December 31:
<TABLE>
<CAPTION>

 <c>
                                                                       2003                2002
                                                                 -----------------    ----------------

             Due to Advisor and its Affiliates:
                  Accounting and administrative services               $   12,655          $   14,333
                  Deferred, subordinated real estate
                      disposition fee                                      55,050              55,050
                                                                 -----------------    ----------------

                                                                       $   67,705          $   69,383
                                                                 =================    ================
</TABLE>

10.      Concentration of Credit Risk

         The  following  schedule  presents  total rental  revenues and mortgage
         interest income from individual  lessees,  each  representing more than
         ten percent of rental revenues and mortgage  interest income (including
         the  Partnership's  share of rental  revenues  from the  unconsolidated
         joint  ventures  and  the  properties  held as  tenants-in-common  with
         affiliates  of the  General  Partners),  for  each of the  years  ended
         December 31:
<TABLE>
<CAPTION>

 <c>
                                                              2003               2002                2001
                                                         ---------------    ---------------     ---------------

         Golden Corral Corporation                            $ 705,715          $ 710,351          $  703,279
         Carrols Corporation and Texas Taco
            Cabana, LP                                          578,826            512,513             421,048
</TABLE>


<PAGE>


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

                         NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


10.      Concentration of Credit Risk - Continued

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

 <c>
                                                             2003               2002                2001
                                                        ---------------    ---------------     ---------------

           Golden Corral Buffet and Grill                    $ 705,715          $ 710,351          $  680,395
           Burger King                                         688,063            793,019             581,888
</TABLE>

         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.

11.      Selected Quarterly Financial Data

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2003 and
         2002:
<TABLE>
<CAPTION>

 <c>
                       2003 Quarter                  First       Second         Third       Fourth         Year
          ---------------------------------------- ----------- ------------  ------------ ------------  ------------

          Continuing Operations (1):
               Revenues                             $ 717,958    $ 725,653     $ 727,756    $ 773,327    $2,944,694
               Equity in earnings of
                 unconsolidated joint ventures        110,515      109,088       109,926      112,252       441,781
               Income from continuing
                 operations                           585,273      661,157       674,687      511,509     2,432,626

          Discontinued Operations (1):
               Revenues                                    --           --            --           --            --
               Income from discontinued
                 operations                                --           --            --           --            --

          Net Income                                  585,273      661,157       674,687      511,509     2,432,626

          Income per limited partner unit:
               Continuing operations                  $ 0.017     $  0.019      $  0.019     $  0.015      $  0.070
               Discontinued operations                     --           --            --           --            --
                                                   ----------- ------------  ------------ ------------  ------------
               Total                                  $ 0.017     $  0.019      $  0.019     $  0.015      $  0.070
                                                   =========== ============  ============ ============  ============
</TABLE>


<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2003, 2002, and 2001


11.      Selected Quarterly Financial Data - Continued
<TABLE>
<CAPTION>

 <c>
                       2002 Quarter                  First       Second         Third       Fourth         Year
          ---------------------------------------- ----------- ------------  ------------ ------------  ------------

          Continuing Operations (1):
               Revenues                             $ 686,012    $ 646,295     $ 752,864    $ 789,641    $2,874,812
               Equity in earnings of
                 unconsolidated joint ventures        101,570      198,391       239,385      110,445       649,791
               Income from continuing
                 operations                           582,275      670,488       782,544      726,728     2,762,035

          Discontinued Operations (1):
                Revenues                                38,332       16,972            --           --        55,304
               Income from and gain
                 on disposal of discontinued
                 operations                            38,332      296,785            --           --       335,117

          Net Income                                  620,607      967,273       782,544      726,728     3,097,152

          Income per limited partner unit:
               Continuing operations                  $ 0.017     $  0.020      $  0.022     $  0.020      $  0.079
               Discontinued operations                  0.001        0.008            --           --         0.009
                                                   ----------- ------------  ------------ ------------  ------------
               Total                                  $ 0.018     $  0.028      $  0.022     $  0.020      $  0.088
                                                   =========== ============  ============ ============  ============
</TABLE>

         (1)  Certain   items  in  the  quarterly   financial   data  have  been
              reclassified   to   conform   to  the  2003   presentation.   This
              reclassification  had no  effect on net  income.  The  results  of
              operations relating to properties that were identified for sale as
              of  December  31,  2001  but sold  subsequently  are  reported  as
              continuing  operations.  The  results of  operations  relating  to
              properties  that were either  identified  for sale and disposed of
              subsequent to January 1, 2002 or were  classified as held for sale
              as of December  31, 2003 are reported as  discontinued  operations
              for all periods presented.




<PAGE>


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

         None.



Item 9A. Controls and Procedures


         The  General  Partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in the
Partnership's  filings  under the  Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms. The principal  executive
and  financial  officers of the  corporate  general  partner have  evaluated the
Partnership's  disclosure  controls and  procedures  as of the end of the period
covered  by this  Annual  Report  on Form  10-K and have  determined  that  such
disclosure controls and procedures are effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.

                                    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-RP,  CCM, CNL Financial  Group,  Inc. and their
affiliates, all of which are affiliates of the General Partners.

         James M. Seneff, Jr., age 57. 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-RP, a public,  unlisted real
estate investment trust since 1994. Mr. Seneff served as Chief Executive Officer
of CNL-RP from 1994 through August 1999 and as Co-Chief  Executive  Officer from
December 2000 through September 2003. Mr. Seneff served as Chairman of the Board
and  Chief  Executive  Officer  of  CNL  Fund  Advisors,   Inc.,   formerly  the
Partnership's  advisor,  from  its  inception  in 1990  until it  merged  with a
wholly-owned  subsidiary  of CNL-RP in  September  1999,  and in June 2000,  was
re-elected  to those  positions of CNL Fund  Advisors,  Inc. CNL Fund  Advisors,
Inc.,  formerly CNL  Institutional  Advisors,  Inc., is a registered  investment
advisor. Mr. Seneff is a principal stockholder of CNL Holdings, Inc., the parent
company of CNL Financial 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 1973. CNL Financial Group, Inc. is and 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.,  all of which are  engaged  in the  business  of real  estate
finance.  Mr.  Seneff also serves as a Director and Chairman of the Board of CNL
Hospitality  Properties,  Inc., a public, unlisted real estate investment trust;
and served as Chief Executive Officer of CNL Hospitality  Properties,  Inc. from
its inception in 1997 until 2003 and served as Co-Chief  Executive  Officer from
February 2003 until May 1, 2003.  Mr. Seneff has served as Chairman of the Board
of CNL Hospitality Corp., the advisor to CNL Hospitality Properties, Inc., since
its inception in 1997.  Mr. Seneff also served as Chief  Executive  Officer from
its inception in 1997 through  February 2003,  and currently  serves as Co-Chief
Executive Officer of CNL Hospitality Corp. Mr. Seneff has served as Director and
Chairman  of the Board of CNL  Retirement  Corp.  since 1997 and served as Chief
Executive Officer of CNL Retirement Corp. from 1997 through 2003. CNL Retirement
Corp. is the advisor to CNL Retirement Properties, Inc., a public, unlisted real
estate  investment trust. Mr. Seneff has also served as Director and Chairman of
the Board of Commercial Net Lease Realty,  Inc., a public real estate investment
trust  that is listed on the New York Stock  Exchange,  since 1992 and served as
Chief Executive  Officer of Commercial Net Lease Realty,  Inc. from 1992 through
February 2004. Mr. Seneff Has served as a Director,  Chairman of the Board,  and
Chief Executive Officer of CNL Securities Corp. since its formation in 1979; CNL
Investment  Company  since  1990;  and  CNL  Institutional  Advisors,   Inc.,  a
registered  investment  advisor for pension  plans,  since 1990.  Mr. Seneff has
served as Chairman of the Board and Chief  Executive  Officer of CNL  Commercial
Finance,  Inc.  since 2000.  Mr.  Seneff also serves as Chairman of the Board of
CNLBank, an independent,  state-chartered commercial 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 the
Florida  state  retirement  plan.  Mr.  Seneff  received  his degree in Business
Administration from Florida State University in 1968.

         Robert A.  Bourne,  age 56. 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 has
served as a Director and Vice  Chairman of the Board of CNL-RP  since 1994.  Mr.
Bourne also served as President of CNL-RP from 1994  through  February  1999 and
served as Treasurer  from  February  1999 through  August 1999 and from May 1994
through December 1994. Mr. Bourne served in various executive positions with CNL
Fund Advisors, Inc. prior to its merger with a wholly-owned subsidiary of CNL-RP
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. Mr. Bourne serves as Director,  Vice Chairman of the Board
and  Treasurer  and from  1997  until  June  2002  served  as  President  of CNL
Hospitality  Properties,  Inc. and as Director,  President  and Treasurer of CNL
Hospitality  Corp.  Mr.  Bourne  also serves as Director  and  Treasurer  of CNL
Retirement  Properties,  Inc.  and as Director and  Treasurer of CNL  Retirement
Corp. Mr. Bourne serves as a Director of CNLBank.  Mr. Bourne has also 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. Mr. Bourne 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. 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 48. Mr. McWilliams has served as President of
CNL-RP since May 2001 and as Chief  Executive  Officer of CNL-RP since September
2003.  Mr.  McWilliams  served as  Co-Chief  Executive  Officer  of CNL-RP  from
December 2000 through  September 2003 and served as Chief Executive Officer from
September 1999 through  December 2000. Mr.  McWilliams  also served as President
and Chief  Executive  Officer of CNL  Franchise  Network  Corp.,  a wholly owned
subsidiary  of CNL-RP  since  August 2002 and served as President of CNL-RP from
February 1999 until  September  1999 and as Executive  Vice  President of CNL-RP
from 1997 through  February  1999.  Mr.  McWilliams  served as an Executive Vice
President of CNL  Financial  Group,  Inc. from the time he joined the company in
April 1997 until September 1999. Mr.  McWilliams served as President of CNL Fund
Advisors,  Inc. and CNL Financial  Services,  Inc., a corporation engaged in the
business of real estate financing, from April 1997 until the acquisition of such
entities  by  wholly  owned  subsidiaries  of  CNL-RP 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.

         Steven  D.  Shackelford,  age  40.  Mr.  Shackelford  was  promoted  to
Executive  Vice  President  and Chief  Operating  Officer of CNL-RP in September
2003. Mr.  Shackelford has also served as Chief Financial  Officer since January
1997.  He served as Senior Vice  President  of CNL-RP from  January 1997 through
July 2000, when he was promoted to Executive Vice President. Mr. Shackelford has
also served as Secretary and Treasurer of CNL-RP since  September  1999. He also
served as Chief Financial Officer of CNL Fund Advisors, Inc. 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.

         Thomas Arasi, age 46. Mr. Arasi has served as President of CCM since it
was formed in July 2003 to provide  strategic  advisory  services to the General
Partners. He has served in various consulting capacities to CNL Hospitality Corp
and other CNL affiliates  since January 2003. Since November 2001 he has been an
independent  consultant  working  for a  variety  of  operating  and  investment
companies  in the  hospitality  industry.  Until  October  2001,  Mr.  Arasi was
President & Chief Executive  Officer,  and a member of the Board of Directors of
Lodgian,  Inc., a New York Stock  Exchange  traded  company,  one of the largest
independent hotel  owner/operators in North America, with hotel properties under
most brand names  including  Marriott,  Courtyard by Marriott,  Fairfield Inn by
Marriott,  Crowne  Plaza,  Holiday Inn,  Hilton,  and  Radisson.  From June 1997
through  November 2000,  Mr. Arasi was a member of the Management  Committee and
held  several top  operating  positions  with Bass Hotels & Resorts,  one of the
leading international owners, operators and franchisors of hotels, most recently
serving as President, Bass Hotels & Resort--The Americas. Mr. Arasi was formerly
President of Tishman  Hotel  Corporation,  Vice  President of Salomon  Brothers,
Inc.,  in New York,  Tokyo and Los Angeles  and held  positions  with  Sheraton,
Westin and HVS  International.  Mr. Arasi  graduated from Cornell  University in
January  1981,  where he received a  Bachelor's  degree in Hotel and  Restaurant
Administration.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section  16(a) of the Exchange Act requires the General  Partners,  the
officers of the  corporate  General  Partner,  and persons who own more than ten
percent  of  a  registered  class  of  the   Partnership's   equity   securities
(collectively,  the  "Reporting  Persons"),  to file  reports of  ownership  and
changes in  ownership  on Forms 3, 4 and 5 with the SEC.  Reporting  Persons are
required by SEC regulation to furnish the  Partnership  with copies of all Forms
3, 4 and 5 that they file.

         Based solely on the General Partners' review of the copies of such
forms the Partnership has received and written representations from certain
Reporting Persons that they were not required to file Forms 5 for the last
fiscal year, the General Partners believe that all Reporting Persons complied
with all filing requirements applicable to them with respect to transactions
during fiscal 2003.

Code of Business Conduct

         The  Partnership  does not have  employees  and,  accordingly,  has not
adopted a code of business  conduct  applicable  exclusively to the Partnership.
However,  employees of the General Partners or their  affiliates,  including the
individual  General Partners,  are bound by the Code of Business Conduct adopted
November 11, 2003 by CNL Holdings, Inc. Separately, the employees of the Advisor
are bound by the similar  Code of  Business  Conduct  adopted by CNL  Restaurant
Properties,  Inc. Each of these codes of business conduct will be made available
to any person who writes the Partnership requesting a copy.

Audit Committee Financial Expert

         Due to its organization as a limited partnership,  the Partnership does
not  have  an  audit   committee  that  is  responsible   for   supervising  the
Partnership's  relationship with its independent auditors.  For the Partnership,
this role is performed by the General Partners. Based on his previous service as
the principal  financial officer of companies with businesses similar to that of
the  Partnership,  Robert  A.  Bourne,  one of the  General  Partners,  has  the
requisite  experience to be considered an "audit committee  financial expert" as
defined  in  the  rules  under  the  Securities  Exchange  Act of  1934,  if the
Partnership  had an audit  committee.  As a General  Partner,  Mr. Bourne is not
independent of the Partnership.


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.




<PAGE>


Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters

         As of March 12,  2004,  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 12, 2004,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>
<CAPTION>

 <c>
                    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%
                                                                                                   ========
</TABLE>

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

         The Partnership does not have any equity compensation plans.


<PAGE>



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, 2003,  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>

 <c>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
          and Recipient                        Method of Computation                  Ended December 31, 2003
----------------------------------     --------------------------------------      ------------------------------

Reimbursement  to affiliates  for      Operating  expenses are reimbursed at       Accounting and administra-
operating expenses                     the  lower  of  cost  or  90%  of the       tive services:  $143,519
                                       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.


<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2003
---------------------------------      --------------------------------------      ------------------------------

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.


<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2003
---------------------------------      --------------------------------------      ------------------------------

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>

Item 14. Principal Accountant Fees and Services

         The  following  table  outlines  the only fees paid or  accrued  by the
Partnership  for the audit  and other  services  provided  by the  Partnership's
independent  certified public accountants,  PricewaterhouseCoopers  LLP, for the
years ended December 31:
<TABLE>
<CAPTION>

 <c>
                                                                  2003                    2002
                                                             ---------------         ----------------

              Audit Fees (1)                                    $    12,584               $    9,800
              Tax Fees (2)                                            7,919                    6,990
                                                             ---------------         ----------------
                   Total                                         $   20,503               $   16,790
                                                             ===============         ================
</TABLE>


(1)      Audit  services  of  PricewaterhouseCoopers   LLP  for  2003  and  2002
         consisted  of  the  examination  of  the  financial  statements  of the
         Partnership and quarterly review of financial statements.

(2)      Tax Fees relates to tax consulting and compliance services.

         Each of the  non-audit  services  described  above was  approved by the
General  Partners.  Due  to  its  organization  as a  limited  partnership,  the
Partnership does not have an audit committee.




<PAGE>


                                     PART IV


Item 15.  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, 2003 and 2002

            Statements  of Income for the years ended  December 31, 2003,  2002,
            and 2001

            Statements  of  Partners'  Capital for the years ended  December 31,
            2003, 2002, and 2001

            Statements  of Cash Flows for the years  ended  December  31,  2003,
            2002, and 2001

            Notes to Financial Statements

    2.   Financial Statement Schedules

            Schedule II - Valuation and Qualifying  Accounts for the years ended
            December 31, 2003, 2002, 2001

            Schedule III - Real Estate and Accumulated  Depreciation at December
            31, 2003

            Notes to Schedule III - Real Estate and Accumulated  Depreciation at
            December 31, 2003

            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.)

           10.4   Assignment of  Management  Agreement  from CNL Fund  Advisors,
                  Inc. to CNL APF  Partners,  LP.  (Included  as Exhibit 10.4 to
                  Form 10-Q filed with the Securities and Exchange Commission on
                  August 9, 2001, and incorporated herein by reference.)

           10.5   Assignment of Management  Agreement from CNL APF Partners,  LP
                  to CNL Restaurants  XVIII,  Inc.  (Included as Exhibit 10.5 to
                  Form 10-Q filed with the Securities and Exchange Commission on
                  August 14, 2002, and incorporated herein by reference.)

           31.1   Certification of Chief Executive  Officer of Corporate General
                  Partner Pursuant to Rule 13a-14 as Adopted Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

           31.2   Certification of Chief Financial  Officer of Corporate General
                  Partner Pursuant to Rule 13a-14 as Adopted Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

           32.1   Certification of Chief Executive  Officer of Corporate General
                  Partner Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant
                  to  Section  906 of the  Sarbanes-Oxley  Act of  2002.  (Filed
                  herewith.)

           32.2   Certification of Chief Financial  Officer of Corporate General
                  Partner Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant
                  to  Section  906 of the  Sarbanes-Oxley  Act of  2002.  (Filed
                  herewith.)

(b) The  Registrant  filed no reports  on Form 8-K during the period  October 1,
    2003 through December 31, 2003.


<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 24th day of
March, 2004.

                                         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>

 <c>
               Signature                                  Title                                  Date



/s/ Robert A. Bourne                     President,   Treasurer   and   Director            March 24, 2004
------------------------------------     (Principal Financial and Accounting
Robert A. Bourne                         (Officer)


/s/ James M. Seneff, Jr.                 Chief  Executive  Officer and  Director            March 24, 2004
------------------------------------     (Principal Executive Officer)
James M. Seneff, Jr.


</TABLE>

<PAGE>


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

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2003, 2002, and 2001

<TABLE>
<CAPTION>

 <c>
                                                            Additions                           Deductions
                                                  ---------------------------------    ------------------------------
                                                                                                          Collected
                                                                                                          or Deter-
                                   Balance at       Charged to       Charged to          Deemed           mined to       Balance
                                    Beginning       Costs and           Other           Uncollec-          be Col-       at End
  Year          Description          of Year         Expenses         Accounts            tible           lectible       of Year
----------    -----------------   --------------  ---------------  ----------------    ------------      ------------  ------------

  2001        Allowance for
                  doubtful
                  accounts (a)          $   459          $    --         $  58,221 (b)    $     -- (c)      $ 57,564      $  1,114
                                  ==============  ===============  ================    ============      ============  ============

  2002        Allowance for
                  doubtful
                  accounts (a)        $   1,114          $    --        $    9,394 (b)    $  1,114 (c)       $   310      $  9,084
                                  ==============  ===============  ================    ============      ============  ============

  2003        Allowance for
                  doubtful
                  accounts (a)        $   9,084         $     --        $    7,564 (b)    $  1,082 (c)       $   533      $ 15,033
                                  ==============  ===============  ================    ============      ============  ============
</TABLE>


(a) Deducted from receivables.

(b) Reduction of rental, earned and other income.

(c) Amounts written off as uncollectible.


<PAGE>


                           CNL INCOME FUND VIII, LTD.
                         (A Florida Limited Partnership)
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                December 31, 2003

<TABLE>
<CAPTION>

 <c>
                                                               Costs Capitalized
                                                                 Subsequent To     Net Cost Basis at Which
                                            Initial Cost          Acquisition    Carried at Close of Period (c)
                                      ---------------------  -----------------  ----------------------------------
                          Encum-                Buildings and Improve-  Carrying           Buildings and
                         brances        Land    Improvements  ments     Costs     Land     Improvements   Total
                         ---------    ---------- ----------  ---------  ------  ---------- -----------  ----------
Properties the Partnership
  has Invested in Under
  Operating Leases:

    Bennigan's Restaurant:
     Deerfield, Illinois    -         $1,296,452         -   $1,156,526     -   $1,296,452 $1,156,526   $2,452,978

    Boston Market Restaurant:
     Eden Prairie, Minnesota-(j)        293,917    799,934          -       -     293,917     799,934   1,093,851

    Burger King Restaurants:
     Brandon, Florida       -           478,467          -          -       -     478,467          (f)    478,467
     New City, New York     -           372,977          -    557,832       -     372,977     557,832     930,809
     Mansfield, Ohio        -           377,395          -    496,524       -     377,395     496,524     873,919
     Syracuse, New York     -           363,431          -    485,920       -     363,431     485,920     849,351
     New Philadelphia, Ohio -           310,920          -    523,967       -     310,920     523,967     834,887

    Denny's Restaurant:
     Tiffin, Ohio           -           143,592    335,971          -       -     143,592     335,971     479,563
     Ontario, Oregon        -           215,796    432,093          -       -     215,796     432,093     647,889

    Golden Corral Family
     Steakhouse Restaurants:
         College Station, Te-as         517,623          -    877,505       -     517,623     877,505   1,395,128
         Houston, Texas     -           663,999          -   1,129,910      -     663,999   1,129,910   1,793,909
         Beaumont, Texas    -           552,646          -    893,054       -     552,646     893,054   1,445,700
         Grand Prairie, Texa-           681,824          -    914,235       -     681,824     914,235   1,596,059

    Hardee's Restaurant:
     Jefferson, Ohio        -           150,587          -          -       -     150,587          (f)    150,587

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

    KFC Restaurant:
     Norton Shores, Michigan-           177,897          -          -       -     177,897          (f)    177,897

    O'Sullivan's Irish American
      Restaurant:
     North Fort Myers, Flori-a          398,423    425,676          -       -     398,423     425,676     824,099

    Perkins Restaurant:
     Memphis, Tennessee     -           431,065          -          -       -     431,065          (f)    431,065

    Pizza Hut Restaurant:
     Hialeah, Florida       -           284,269    193,004          -       -     284,269     193,004     477,273

    Shoney's Restaurants:
     Memphis, Tennessee     -           368,290    601,660          -       -     368,290     601,660     969,950

    Taco Cabana
     Denton, Texas (k)      -           520,875    626,680          -       -     520,875     626,680   1,147,555

    Wendy's Old Fashioned
     Hamburger Restaurant:
         Midlothian, Virgini-           365,601          -    477,745       -     365,601     477,745     843,346
                                      ---------- ----------  ---------  ------  ---------- -----------  ----------

                                      $9,988,909 $3,415,018  $7,513,218     -   $9,988,909 $10,928,236  $20,917,145
                                      ========== ==========  =========  ======  ========== ===========  ==========

Properties the Partnership has
   Invested in Under Direct
   Financing Leases:

    Burger King Restaurants:
        Brandon, Florida    -          $      -          -   $483,107   $   -    $      -          (f)         (f)

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

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

    KFC Restaurants:
        Grand Rapids, Michig-n          169,175    620,623          -       -          (f)         (f)         (f)
        Norton Shores, Michi-an               -    509,228          -       -           -          (f)         (f)

    Perkins Restaurant:
        Memphis, Tennessee  -                 -          -    594,154       -           -          (f)         (f)
                                      ---------- ----------  ---------  ------  ----------

                                       $476,173  $3,437,741  $1,484,006 $   -   $       -
                                      ========== ==========  =========  ======  ==========
</TABLE>


<PAGE>

                                Life of Which
                                Depreciation in
             Date               Latest Income
Accumulated  of Con-   Date      Statement is
Depreciation struction Acquired    Computed
 ----------  -------   --------    ----------





  $131,721   2000     07/00         (b)


    45,391   1996     09/02         (b)


         -   1991     10/90         (d)
   133,520   1977     03/91         (h)
   118,842   1989     03/91         (h)
   116,304   1987     03/91         (h)
   125,410   1989     03/91         (h)


   123,433   1990     03/91         (g)
    28,803   1978     01/02         (b)



   389,073   1990     09/90         (b)
   490,045   1990     10/90         (b)
   404,203   1990     11/90         (b)
   404,606   1990     11/90         (b)


         -   1990     11/90         (d)


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


         -   1990     03/91         (d)



    45,765   1991     09/95         (i)


         -   1990     11/90         (d)


    20,907   2000     10/00         (b)


   248,463   1991     08/91         (b)


    33,077   1992     06/02         (b)



   202,397   1991     03/91         (b)
 ----------

 $3,061,960
 ==========






        (d)  1991     10/90         (d)


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


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


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


        (d)  1990     11/90         (d)








<PAGE>


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

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2003


(a)      Transactions in real estate and accumulated depreciation are summarized
         below.  The balances in 2003,  2002,  and 2001,  have been  adjusted to
         reflect  the   reclassification   of   properties   accounted   for  as
         discontinued operations.
<TABLE>
<CAPTION>

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

                 Balance, December 31, 2000                                 $ 17,854,365        $  1,973,873
                 Reclassified to operating lease(i)                              425,676                  --
                 Dispositions                                                   (257,225 )                --
                 Depreciation expense                                                 --             321,973
                                                                         ----------------   -----------------

                 Balance, December 31, 2001                                   18,022,816           2,295,846
                 Acquisitions                                                  2,894,329                  --
                 Depreciation expense                                                 --             364,517
                                                                         ----------------   -----------------

                 Balance, December 31, 2002                                   20,917,145           2,660,363
                 Depreciation expense                                                 --             401,597
                                                                         ----------------   -----------------

                 Balance, December 31, 2003                                 $ 20,917,145        $  3,061,960
                                                                         ================   =================
</TABLE>

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

(c)      As of  December  31,  2003,  the  aggregate  cost of the  wholly  owned
         Properties and the Property owned by the consolidated joint venture was
         $15,995,853  for  federal  income tax  purposes.  All of the leases are
         treated as operating leases for federal income tax purposes.

(d)      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)      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)      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)      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.


<PAGE>


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

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

                                December 31, 2003


(h)      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.

(i)      Effective  July 16, 2001,  the lease for this Property was  terminated,
         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 July 16, 2001, and depreciated over its remaining  estimated life of
         approximately 24 years.

(j)      During  the  year  ended  December  31,  2002,  the   Partnership   and
         affiliates,  purchased land and building from CNL Net Lease  Investors,
         LP, an affiliate  of the General  Partners,  for an  aggregate  cost of
         approximately $1,093,900.

(k)      During  the  year  ended  December  31,  2002,  the   Partnership   and
         affiliates, purchased land and building from CNL Funding 2001-A, LP, an
         affiliate  of  the  General   Partners,   for  an  aggregate   cost  of
         approximately $1,147,600.





<PAGE>



                                  EXHIBIT INDEX



Exhibit Number


(a) 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.)

      10.4   Assignment of Management Agreement from CNL Fund Advisors,  Inc. to
             CNL APF Partners,  LP. (Included as Exhibit 10.4 to Form 10-Q filed
             with the Securities and Exchange  Commission on August 9, 2001, and
             incorporated herein by reference.)

      10.5   Assignment of Management Agreement from CNL APF Partners, LP to CNL
             Restaurants  XVIII,  Inc.  (Included  as Exhibit  10.5 to Form 10-Q
             filed with the  Securities  and Exchange  Commission  on August 14,
             2002, and incorporated herein by reference.)

      31.1   Certification  of Chief  Executive  Officer  of  Corporate  General
             Partner  Pursuant to Rule 13a-14 as Adopted Pursuant to Section 302
             of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

      31.2   Certification  of Chief  Financial  Officer  of  Corporate  General
             Partner  Pursuant to Rule 13a-14 as Adopted Pursuant to Section 302
             of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

      32.1   Certification  of Chief  Executive  Officer  of  Corporate  General
             Partner  Pursuant to 18 U.S.C.  Section 1350 as Adopted Pursuant to
             Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

      32.2   Certification  of Chief  Financial  Officer  of  Corporate  General
             Partner  Pursuant to 18 U.S.C.  Section 1350 as Adopted Pursuant to
             Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)


<PAGE>



                                  EXHIBIT 31.1



<PAGE>

                                  EXHIBIT 31.2


<PAGE>

                                  EXHIBIT 32.1


<PAGE>

                                  EXHIBIT 32.2