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

                                   FORM 10-K/A
                                 Amendment No. 1


(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, 1997

                                       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 0-19141

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

                 Florida                                 59-2922869
     (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)

                              400 East South Street
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 422-1574

           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 ($500 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]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:   The  registrant   registered  an  offering  of  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 $500 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None


<PAGE>



         The Form 10-K of CNL Income  Fund V, Ltd.  for the year ended  December
31,  1997 is being  amended  to  provide  additional  disclosure  under  Item 1.
Business, Item 2. Properties and Item 7. Management's Discussion and Analysis of
Financial  Condition and Results of Operations - Capital  Resources,  Short-Term
Liquidity and Long-Term Liquidity.


                                     PART I

Item 1.  Business

         CNL Income Fund V, Ltd. (the  "Registrant" or the  "Partnership")  is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on August 17, 1988. 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 December  16,  1988,  the
Partnership offered for sale up to $25,000,000 in limited partnership  interests
(the  "Units")  (50,000  Units  at $500 per  Unit)  pursuant  to a  registration
statement  on Form S-11  under  the  Securities  Act of 1933,  as  amended.  The
offering  terminated  on June 7,  1989,  as of which date the  maximum  offering
proceeds of  $25,000,000  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,  totalled
$22,125,000,  and were used to acquire 30  Properties,  including  interests  in
three  Properties  owned  by  joint  ventures  in  which  the  Partnership  is a
co-venturer.  During the year ended December 31, 1995, the Partnership  sold its
Property in Myrtle  Beach,  South  Carolina,  to the tenant of the  Property and
accepted a promissory note for the full sales price of the Property.  During the
year ended  December 31, 1996, the  Partnership  sold its Property in St. Cloud,
Florida,  to the tenant of the  Property  and  accepted  $100,000  in cash and a
promissory  note for the  remaining  sales price of the  Property.  In addition,
during the year ended December 31, 1997, the Partnership  sold its Properties in
Franklin and Smyrna, Tennessee;  Salem, New Hampshire; Port St. Lucie and Tampa,
Florida, and Richmond,  Indiana.  The Partnership  reinvested a portion of these
net sales  proceeds  in a Property  in  Houston,  Texas and a Property in Sandy,
Utah.  In  addition,  the  Partnership  reinvested  a  portion  of the net sales
proceeds in a Property in Mesa, Arizona and a Property in Vancouver, Washington,
as  tenants-in-common,  with affiliates of the General Partners.  As a result of
the above  transactions,  the Partnership owned 26 Properties as of December 31,
1997. The 26 Properties  include  interests in three  Properties  owned by joint
ventures in which the Partnership is a co-venturer  and two Properties  owned as
tenants-in-common  with  affiliates  of the  General  Partners.  In January  and
February 1998, the Partnership  sold its Properties in Port Orange,  Florida and
Tyler,  Texas,  respectively.  The Partnership intends to reinvest the net sales
proceeds in an additional  Property , make distributions to limited partners and
use for payment of  Partnership  distributions  . Generally,  the Properties are
leased on a triple-net  basis with the lessees  responsible  for all repairs and
maintenance, property taxes, insurance and utilities.


         The  Partnership  will hold its Properties  until the General  Partners
determine that the sale or other  disposition of the Properties is  advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation,  net cash flow and  federal  income  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  In general,  the General Partners plan to seek the sale of some of
the  Properties  commencing  seven  to 12 years  after  their  acquisition.  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  or joint  venture
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
the joint ventures in which the Partnership is a co-venturer provide for initial
terms,  ranging from seven to 20 years (the  average  being 18 years) and expire
between 2001 and 2017.  All leases are 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 $37,800 to
$222,800.  Generally,  the leases provide for percentage rent, based on sales in
excess of a specified  amount, to be paid annually.  In addition,  a majority of
the leases provide that, commencing in the sixth lease year, the percentage rent
will be an amount  equal to the greater of (i) the  percentage  rent  calculated
under the lease formula or (ii) a specified  percentage (ranging from one-fourth
to five percent) of the purchase price paid by the Partnership for the Property.

         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.  Certain  lessees  also have been  granted  options to  purchase
Properties at the  Property's  then fair market value,  or pursuant to a formula
based on the original  cost of the  Property,  after a specified  portion of the
lease term has elapsed.

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

         The tenant relating to the Property in Lebanon, New Hampshire, in which
the  Partnership  has a  66.5%  interest,  defaulted  under  the  terms  of  its
agreement,  and in February  1995,  ceased  operations of the  restaurant on the
Property.  The  Partnership  is  currently  seeking  a  replacement  tenant or a
purchaser for this Property.

         In February  1994,  the tenant of the  Properties  in Belding and South
Haven,  Michigan,  defaulted  under the terms of its leases  and a new  operator
began  occupying the  Properties on a  month-to-month  basis for reduced  rental
amounts.  The new  operator  ceased  operations  of the  Belding and South Haven
Properties in October 1994 and October  1995,  respectively.  In June 1997,  the
Partnership  entered  into an  operating  agreement  with a new operator for the
Property  in  South  Haven,  Michigan.   Under  the  operating  agreement,   the
Partnership will collect amounts contingent on net operating income generated by
the restaurant.  The Partnership is currently seeking a replacement  tenant or a
purchaser for the Property in Belding, Michigan.

         In June 1997, the  Partnership  terminated the lease with the tenant of
the Property in  Connorsville,  Indiana.  In July 1997, the Partnership  entered
into a new lease for this  Property with a new tenant to operate the Property as
an Arby's  restaurant.  The lease terms of this Property are  substantially  the
same as the  Partnership's  other leases as  described  above in the first three
paragraphs of this section.

         In November and December 1997, the Partnership  reinvested a portion of
the net sales  proceeds  from the  sales of the  Properties  in Port St.  Lucie,
Florida; Franklin,  Tennessee and Salem, New Hampshire, in Properties located in
Houston,  Texas and Sandy,  Utah,  respectively.  In  addition,  in October  and
December  1997, the  Partnership  reinvested a portion of the net sales proceeds
from the  sales  of the  Properties  in  Smyrna  and  Franklin,  Tennessee,  and
Richmond,  Indiana,  in a Property  located in Mesa,  Arizona  and a Property in
Vancouver, Washington,  respectively, with affiliates of the General Partners as
tenants-in-common, as described below in "Joint Venture Arrangements." The lease
terms for these Properties are substantially the same as the Partnership's other
leases, as described above in the first three paragraphs of this section.

Major Tenants

         During 1997, two lessees of the Partnership and its consolidated  joint
venture, Shoney's, Inc. and Golden Corral Corporation, contributed more than ten
percent of the  Partnership's  total rental income (including rental income from
the Partnership's  consolidated joint venture and the Partnership's share of the
rental income from two Properties owned by unconsolidated joint ventures and two
Properties owned with affiliates as tenants-in-common). As of December 31, 1997,
Shoney's,  Inc.  was the lessee under leases  relating to four  restaurants  and
Golden  Corral   Corporation  was  the  lessee  under  leases  relating  to  two
restaurants.  It is  anticipated  that,  based on the  minimum  rental  payments
required by the leases,  these two lessees each will continue to contribute more
than ten percent of the Partnership's total rental income in 1997 and subsequent
years. In addition,  three Restaurant Chains,  Perkins,  Denny's and Wendy's Old
Fashioned Hamburger Restaurants, each accounted for more than ten percent of the
Partnership's  total  rental and  mortgage  interest  income in 1997  (including
rental  income  from  the  Partnership's  consolidated  joint  venture  and  the
Partnership's   share  of  the  rental  income  from  two  Properties  owned  by
unconsolidated  joint  ventures  and two  Properties  owned with  affiliates  as
tenants-in-common).  In subsequent  years,  it is  anticipated  that these three
Restaurant Chains each will continue to account for more than ten percent of the
total rental and mortgage  interest  income to which the Partnership is entitled
under the terms of the leases and mortgage note. Any failure of these lessees or
these Restaurant  Chains could materially  affect the  Partnership's  income. 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 Arrangements and Tenancy in Common Arrangements

         The  Partnership   has  entered  into  a  joint  venture   arrangement,
CNL/Longacre Joint Venture,  with an unaffiliated entity, to purchase and hold a
Property  through such joint venture.  The Partnership has also entered into two
separate  joint venture  arrangements:  Cocoa Joint Venture with CNL Income Fund
IV,  Ltd.,  an  affiliate  of the General  Partners,  to  purchase  and hold one
Property;  and Halls Joint Venture with CNL Income Fund VII,  Ltd., an affiliate
of the General Partners,  to purchase and hold one Property.  The affiliates are
limited  partnerships  organized  pursuant  to the laws of the State of Florida.
Each  joint  venture  arrangement  provides  for the  Partnership  and its joint
venture  partners to share in all costs and benefits  associated  with the joint
venture  in  proportion  to each  partner's  percentage  interest  in the  joint
venture.  The Partnership has a 66.5% interest in CNL/Longacre  Joint Venture, a
43.0%  interest  in Cocoa  Joint  Venture,  and a 49.0%  interest in Halls Joint
Venture.  The  Partnership  and its  joint  venture  partners  are  jointly  and
severally liable for all debts, obligations,  and other liabilities of the joint
ventures.

         Each joint venture has an initial term of 20 to 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 unless  terminated  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 partner to
dissolve the joint venture.

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

         Net cash flow from  operations of  CNL/Longacre  Joint  Venture,  Cocoa
Joint Venture and Halls Joint  Venture is  distributed  66.5%,  43.0% and 49.0%,
respectively,  to the  Partnership and the balance is distributed to each of the
other joint  venture  partners.  Any  liquidation  proceeds,  after paying joint
venture debts and liabilities and funding  reserves for contingent  liabilities,
will be distributed  first to the joint venture  partners with positive  capital
account  balances in proportion to such balances until such balances equal zero,
and thereafter in proportion to each joint venture partner's percentage interest
in the joint venture.


         In  addition  to the  above  joint  venture  agreements,  in 1997,  the
Partnership entered into separate agreements to hold a Property in Mesa, Arizona
, as  tenants-in-common  , with CNL Income Fund II,  Ltd.,  an  affiliate of the
General  Partners;  and  to  hold  a  Property  in  Vancouver,   Washington,  as
tenants-in-common, with CNL Income Fund, Ltd., CNL Income Fund II, Ltd., and CNL
Income Fund VI, Ltd.,  affiliates of the General  Partners.  The  affiliates are
limited partnerships organized pursuant to the laws of the State of Florida. The
agreements  provide  for the  Partnership  and the  affiliates  to  share in the
profits  and  losses  of the  Properties  in  proportion  to each  co-  tenant's
percentage interest.  The Partnership owns a 42.23 and 27.78 percent interest in
the  Property  in Mesa,  Arizona  and the  Property  in  Vancouver,  Washington,
respectively. The tenancy in common agreement restricts each co-tenant's ability
to sell,  transfer,  or assign its interest in the tenancy in common's  Property
without first offering it for sale to the remaining co-tenant.

         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

         CNL Income Fund Advisors,  Inc., an affiliate of the General  Partners,
provided  certain  services  relating to management of the  Partnership  and its
Properties  pursuant to a  management  agreement  with the  Partnership  through
September 30, 1995.  Under this  agreement,  CNL Income Fund Advisors,  Inc. was
responsible for collecting  rental  payments,  inspecting the Properties and the
tenants'  books and records,  assisting the  Partnership in responding to tenant
inquiries and notices and providing  information  to the  Partnership  about the
status of the leases and the  Properties.  CNL Income Fund  Advisors,  Inc. also
assisted the General Partners in negotiating the leases. For these services, the
Partnership  had agreed to pay CNL Income Fund  Advisors,  Inc. an annual fee of
one percent of the sum of gross operating  revenues from Properties wholly owned
by the Partnership plus the  Partnership's  allocable share of gross revenues of
joint ventures in which the  Partnership is a co-venturer,  but not in excess of
competitive fees for comparable services.  Under the management  agreement,  the
management  fee is  subordinated  to  receipt  by  the  Limited  Partners  of an
aggregate,  ten  percent,  cumulative,  noncompounded  annual  return  on  their
adjusted  capital  contributions  (the "10%  Preferred  Return"),  calculated in
accordance   with  the   Partnership's   limited   partnership   agreement  (the
"Partnership Agreement").

         Effective October 1, 1995, CNL Income Fund Advisors,  Inc. assigned its
rights  in,  and its  obligations  under,  the  management  agreement  with  the
Partnership  to CNL Fund  Advisors,  Inc. All of the terms and conditions of the
management agreement,  including the payment of fees, as described above, remain
unchanged.

         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.

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the officers and employees of CNL Fund Advisors,  Inc.  perform
certain  services for the  Partnership.  In addition,  the General Partners have
available to them the  resources  and expertise of the officers and employees of
CNL 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, 1997, the Partnership owned 26 Properties. Of the 26
 Properties,  21 are owned by the  Partnership  in fee  simple,  three are owned
 through joint venture arrangements and two 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.  Reference is made to the Schedule
of Real Estate and Accumulated Depreciation filed with this report for a listing
of the Properties and their  respective  costs,  including  acquisition fees and
certain acquisition expenses.


Description of Properties

         Land. The Partnership's  Property sites range from approximately 12,300
to 135,000  square  feet  depending  upon  building  size and local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.

         The following table lists the Properties owned by the Partnership as of
December 31, 1997 by state. More detailed information  regarding the location of
the  Properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation filed with this report.

                                                         1

<PAGE>


         State                                           Number of Properties
         -----                                           --------------------

         Arizona                                                  1
         Florida                                                  3
         Georgia                                                  1
         Illinois                                                 1
         Indiana                                                  3
         Michigan                                                 2
         New Hampshire                                            1
         New York                                                 2
         Ohio                                                     2
         Tennessee                                                1
         Texas                                                    5
         Utah                                                     2
         Washington                                               2
                                                             ------
         TOTAL PROPERTIES:                                       26
                                                             ======

         Buildings.  Generally,  each of the Properties owned by the Partnership
includes a building that is one of a Restaurant  Chain's approved  designs.  The
buildings   generally  are  rectangular   and  are   constructed   from  various
combinations of stucco,  steel, wood, brick and tile.  Building sizes range from
approximately  1,700 to 10,100 square feet. All buildings on Properties acquired
by the  Partnership  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,  1997,  the  Partnership  had  no  plans  for  renovation  of  the
Properties.  Depreciation  expense is computed for  buildings  and  improvements
using the straight line method using  depreciable lives of 31.5 and 40 years for
federal  income tax purposes.  As of December 31, 1997, the aggregate cost basis
of the  Properties  owned  by the  Partnership  and  joint  ventures  (including
Properties held through tenancy in common  arrangements)  for federal income tax
purposes was $15,626,886 and $5,493,388, respectively.

         The following table lists the Properties owned by the Partnership as of
December 31, 1997 by Restaurant Chain.

         Restaurant Chain                         Number of Properties
         ----------------                         --------------------

         Boston Market                                       1
         Burger King                                         2
         Captain D's                                         2
         Chevy's Fresh Mex                                   1
         Denny's                                             4
         Golden Corral                                       2
         Hardee's                                            3
         IHOP                                                1
         Pizza Hut                                           1
         Shoney's                                            1
         Taco Bell                                           2
         Tony Roma's                                         1
         Waffle House                                        1
         Wendy's                                             3
         Other                                               1
                                                        ------
         TOTAL PROPERTIES                                   26
                                                        ======

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


                                                         3

<PAGE>

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

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

         At December 31, 1997,  1996,  1995, 1994, and 1993, the Properties were
93%,  90%,  90%,  96%,  and 100%,  occupied,  respectively.  The  following is a
schedule  of the average  annual rent for each of the five years ended  December
31:
<TABLE>
<CAPTION>
<S> <C>

                                                           For the Year Ended December 31:
                                   1997            1996              1995             1994             1993
                              ---------------------------------------------------------------------------------

    Rental Revenues (1)        $1,804,300        $2,119,765       $2,231,108        $2,347,669      $2,343,965
    Properties (2)                     24                27               28                30              30
    Average Rent per Unit         $75,179           $78,510          $79,682           $78,256         $78,132
</TABLE>

(1)      Rental revenues include the Partnership's share of rental revenues from
         the three Properties  owned through joint venture  arrangements and the
         two properties  owned through  tenancy in common  arrangements.  Rental
         revenues have been adjusted,  as applicable,  for any amounts for which
         the Partnership has established an allowance for doubtful accounts.


                                                         4

<PAGE>

(2)      Excludes Properties that  were  vacant  at December 31  which  did  not
         generate rental revenues during the year ended December 31.

         The following is a schedule of lease expirations for leases in place as
of  December  31,  1997  for  each of the ten  years  beginning  with  1998  and
thereafter.
<TABLE>
<CAPTION>
<S> <C>
                                                                                            Percentage of
                                            Number              Annual Rental                Gross Annual
        Expiration Year                 of Leases                  Revenues                 Rental Income
    -----------------------        ------------------       --------------------          ----------------
             1998                              -                          -                            -
             1999                              -                          -                            -
             2000                              1                     78,078                        4.33%
             2001                              1                     39,100                        2.17%
             2002                              2                    101,860                        5.65%
             2003                              -                          -                            -
             2004                              2                    172,506                        9.58%
             2005                              -                          -                            -
             2006                              -                          -                            -
             2007                              -                          -                            -
             Thereafter                       18                  1,410,069                       78.27%
                                        --------              -------------                -------------
             Totals (1)                       24                  1,801,613                      100.00%
                                        ========              =============                =============
</TABLE>

         (1) Excludes two Properties which were vacant at December 31, 1997.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  1997 (see Item 1.  Business -
Major  Tenants),  are  substantially  the  same as  those  described  in Item 1.
Business - Leases.

         Shoney's,  Inc.  leases one  Shoney's  restaurant  and two  Captain D's
restaurants  pursuant  to three  leases,  each with an initial  term of 20 years
(expiring  in 2008).  The  average  minimum  base  annual rent for the leases is
approximately $63,600 (ranging from approximately $49,000 to $84,700).

         Golden  Corral  Corporation  leases  two  restaurants  pursuant  to two
leases,  each with an initial term of 12 to 15 years  (expiring  2002 and 2004),
respectively,  and average  minimum  base annual rent of  approximately  $97,800
($63,400 and 132,200, respectively).

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.

         At the time the Partnership elects to dispose of its Properties,  other
than as a result of the exercise of tenant options to purchase  Properties,  the
Partnership  will be in  competition  with other  persons and entities to locate
purchasers for its Properties.


                                     PART II


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


         The  Partnership was organized on August 17, 1988, to acquire for cash,
either directly or through joint venture  arrangements,  both newly  constructed
and  existing  restaurant  Properties,  as well as land  upon  which  restaurant
Properties  were to be constructed,  which are leased  primarily to operators of
selected national and regional fast-food and family-style Restaurant Chains. The
leases are triple-net  leases,  with the lessee  generally  responsible  for all
repairs and maintenance, property taxes, insurance and utilities. As of December
31, 1997, the  Partnership  owned 26 Properties,  either  directly or indirectly
through joint venture or tenancy in common arrangements.

Capital Resources

         The  Partnership's  primary  source  of  capital  for the  years  ended
December 31, 1997, 1996 and 1995, was cash from operations  (which includes cash
received from tenants,  distributions from joint ventures and interest received,
less cash paid for expenses).  Cash from operations was  $1,813,231,  $2,103,745
and  $2,142,918  for  the  years  ended  December  31,  1997,   1996  and  1995,
respectively. The decrease in cash from operations during 1997 and 1996, each as
compared to the  previous  year,  is primarily a result of changes in income and
expenses  as  discussed  in  "Results  of  Operations"  below and changes in the
Partnership's working capital during each of the respective years.

         Other  sources and uses of capital  included the  following  during the
years ended December 31, 1997, 1996 and 1995.

          During  the  years  ended  December  31,  1997,  1996  and  1995,  the
Partnership received $106,000,  $159,700 and $31,500,  respectively,  in capital
contributions  from  the  corporate  General  Partner  in  connection  with  the
operations 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.


         In August 1995,  the  Partnership  sold its  Property in Myrtle  Beach,
South Carolina, to the tenant of the Property for $1,040,000,  and in connection
therewith,  accepted  a  promissory  note in the  principal  sum of  $1,040,000,
collateralized by a mortgage on the Property.  The note bears interest at a rate
of 10.25% per annum and is being  collected in 59 equal monthly  installments of
$9,319,  with a balloon  payment of  $1,006,004  due in July  2000.  Collections
commenced  August 1, 1995. In accordance with Statement of Financial  Accounting
Standards  No.  66,  "Accounting  for  Sales of Real  Estate,"  the  Partnership
recorded the sale of the Property using the installment sales method. Therefore,
the gain on the sale of the Property was  deferred  and is being  recognized  as
income  proportionately  as payments of principal  under the  mortgage  note are
collected.  The  Partnership  recognized  a gain of $1,024,  $924 and $1,571 for
financial  reporting  purposes for the years ended  December 31, 1997,  1996 and
1995,  respectively.  The  mortgage  note  receivable  balance  relating to this
Property at December 31, 1997 and 1996, was $883,417 and $889,891, respectively,
including  accrued interest of $8,665 and $8,729,  respectively,  and net of the
remaining  deferred  gain of $139,693 and  $140,717,  respectively.  The General
Partners  anticipate  that  payments  collected  under the mortgage note will be
reinvested  in  additional   Properties  or  used  for  payment  of  Partnership
liabilities.

         In addition,  in October 1996, the Partnership sold its Property in St.
Cloud,  Florida,  to the tenant for  $1,150,000.  In connection  therewith,  the
Partnership  received $100,000 in cash and accepted the remaining sales proceeds
in  the  form  of  a  promissory  note  in  the  principal  sum  of  $1,057,299,
representing  the balance of the sales price of $1,050,000  plus tenant  closing
costs in the amount of $7,299 the Partnership  financed on behalf of the tenant.
The  promissory  note  bears  interest  at  a  rate  of  10.75%  per  annum,  is
collateralized  by a mortgage  on the  Property,  and is being  collected  in 12
monthly  installments  of  interest  only and  thereafter  in 168 equal  monthly
installments  of principal and interest.  This sale is also being  accounted for
under the installment sales method for financial reporting purposes;  therefore,
the gain on the sale of the Property was  deferred  and is being  recognized  as
income  proportionately  as payments of principal  under the  mortgage  note are
collected.  The Partnership  recognized a gain of $338 and $18,445 for financial
reporting purposes for the years ended December 31, 1997 and 1996, respectively,
and had a deferred  gain in the amount of $183,465  and $183,802 at December 31,
1997 and 1996. The mortgage note receivable balance relating to this Property at
December  31,  1997 and 1996,  was  $874,443  and  $882,967,  including  accrued
interest  of  $2,747  and  $9,471,  and net of the  remaining  deferred  gain of
$183,465 and $183,802.  Payments  collected  under the mortgage  note  totalling
$100,000 were used to pay liabilities of the  Partnership,  including  quarterly
distributions  to the Limited  Partners.  The General  Partners  anticipate that
payments  collected  under the mortgage note in the future will be reinvested in
additional Properties or used for payment of Partnership liabilities.


         In  January  1997,  the  Partnership  sold its  Property  in  Franklin,
Tennessee,  to the tenant,  for  $980,000  and  received  net sales  proceeds of
$960,741. Since the Partnership had previously established an allowance for loss
on land and  building  of $169,463  as of  December  31,  1996  relating to this
Property,  no loss was  recognized  during  1997 as a result of this  sale.  The
Partnership  used $360,000 of the net sales  proceeds to pay  liabilities of the
Partnership,  including  quarterly  distributions  to the Limited  Partners.  In
addition,  in June 1997, the Partnership entered into an operating agreement for
the Property located in South Haven,  Michigan,  with an operator to operate the
Property as an Arby's restaurant.  In connection therewith, the Partnership used
approximately  $120,400 of the net sales  proceeds from the sale of the Property
in Franklin,  Tennessee,  to fund  conversion  costs  associated with the Arby's
Property. In December 1997, the Partnership reinvested approximately $244,800 of
the net sales proceeds in a Property located in Sandy,  Utah, and  approximately
$150,000 in a Property located in Vancouver,  Washington,  as  tenants-in-common
with affiliates of the General  Partners,  as described  below.  The Partnership
intends to use the remaining net sales proceeds from the sale of the Property in
Franklin, Tennessee to fund additional renovation costs relating to the Property
in  South  Haven,  Michigan,  described  above,  and to pay  liabilities  of the
Partnership, including quarterly distributions to the Limited Partners.

         In May 1997, the Partnership sold its Property in Smyrna, Tennessee, to
a third  party for  $655,000  and  received  net  sales  proceeds  of  $634,310,
resulting in a gain of $101,995 for financial reporting purposes.  This Property
was  originally  acquired  by the  Partnership  in March  1989 and had a cost of
approximately $569,500, excluding acquisition fees and miscellaneous acquisition
expenses; therefore, the Partnership sold the Property for approximately $64,800
in excess of its original  purchase price.  The Partnership  used  approximately
$82,500  of the  net  sales  proceeds  to pay  liabilities  of the  Partnership,
including  quarterly  distributions  to the Limited  Partners.  In addition,  in
October 1997, the Partnership reinvested approximately $460,900 of the net sales
proceeds in a Property in Mesa, Arizona, as tenants-in-common  with an affiliate
of the General Partners. In December 1997, the Partnership  reinvested remaining
net  sales  proceeds  in  a  Property  located  in  Vancouver,   Washington,  as
tenants-in-common  with affiliates of the General Partners,  as described below.
The Partnership anticipates that it will distribute amounts sufficient to enable
the  Limited  Partners  to pay  federal  and  state  taxes,  if any  (at a level
reasonably assumed by the General Partners), resulting from the sale.

         In June 1997, the Partnership  terminated the leases with the tenant of
the Properties in Connorsville and Richmond,  Indiana. In connection  therewith,
the  Partnership  accepted a promissory  note from the former tenant for $35,297
for amounts  relating  to past due real  estate  taxes as a result of the former
tenant's financial difficulties. The promissory note, which is uncollateralized,
bears  interest at a rate of ten percent per annum and is being  collected in 36
monthly installments.  Receivables at December 31, 1997 included $37,099 of such
amounts,  including  accrued  interest of $1,802.  In July 1997, the Partnership
entered into a new lease for the Property in Connorsville,  Indiana,  with a new
tenant to operate the Property as an Arby's restaurant. In connection therewith,
the Partnership incurred $125,000 in renovation costs.

         In September  1997,  the  Partnership  sold its Property in Salem,  New
Hampshire,  to the tenant for $1,295,172 and received net sales proceeds (net of
$1,773 which  represents  prorated rent  returned to the tenant) of  $1,270,365,
resulting in a gain of approximately  $141,508 for financial reporting purposes.
This Property was originally  acquired by the  Partnership in May 1989 and had a
cost of approximately  $1,085,100,  excluding acquisition fees and miscellaneous
acquisition  expenses;   therefore,   the  Partnership  sold  the  Property  for
approximately  $187,000 in excess of its original  purchase  price.  In December
1997, the Partnership reinvested the net sales proceeds in a Property located in
Sandy,  Utah,  as  described  below.  The  General  Partners  believe  that  the
transaction,  or a portion  thereof,  relating  to the sale of the  Property  in
Salem,  New Hampshire,  and the  reinvestment  of the proceeds will qualify as a
like-kind  exchange  transaction for federal income tax purposes.  However,  the
Partnership will distribute amounts sufficient to enable the Limited Partners to
pay federal and state income taxes, if any (at a level reasonably assumed by the
General Partners), resulting from the sale.

         In addition,  in September 1997, the  Partnership  sold its Property in
Port St. Lucie,  Florida,  to the tenant for  $1,220,000  and received net sales
proceeds  of  $1,216,750,  resulting  in a gain of  approximately  $125,309  for
financial  reporting  purposes.  This  Property was  originally  acquired by the
Partnership  in  November  1989  and  had a cost  of  approximately  $1,176,100,
excluding acquisition fees and miscellaneous  acquisition  expenses;  therefore,
the  Partnership  sold the Property for  approximately  $40,700 in excess of its
original  purchase  price.  In November  1997,  the  Partnership  reinvested the
majority  of the net sales  proceeds  in an IHOP  Property  located in  Houston,
Texas. The General Partners believe that the transaction,  or a portion thereof,
relating  to the  sale of the  Property  in Port  St.  Lucie,  Florida,  and the
reinvestment  of the proceeds will qualify as a like-kind  exchange  transaction
for federal  income tax  purposes.  However,  the  Partnership  will  distribute
amounts  sufficient  to enable the  Limited  Partners  to pay  federal and state
income taxes, if any (at a level  reasonably  assumed by the General  Partners),
resulting from the sale.

         During the year ended December 31, 1996, the Partnership established an
allowance for the Property in Richmond,  Indiana, in the amount of $70,062 which
represented the difference between the Property's carrying value at December 31,
1996,  and the  property  manager's  estimate  of net  realizable  value  of the
Property based on an anticipated sales price of this Property. In November 1997,
the  Partnership  sold this  Property to a third party for $400,000 and received
net sales proceeds of $385,179. As a result of this transaction, the Partnership
recognized  a loss of $141,567 for  financial  reporting  purposes.  In December
1997, the Partnership reinvested the net sales proceeds in a Property located in
Vancouver,  Washington,  as  tenants-in-common  with  affiliates  of the General
Partners, as described below.


         In addition,  in December  1997, the  Partnership  sold its Property in
Tampa,  Florida,  to a third party for $850,000 and received net sales  proceeds
(net of $724 which represents  prorated rent returned to the tenant) of $804,451
resulting in a gain of $180,704 for financial reporting purposes.  This Property
was  originally  acquired by the  Partnership in February 1989 and had a cost of
approximately $673,200, excluding acquisition fees and miscellaneous acquisition
expenses;  therefore,  the  Partnership  sold  the  Property  for  approximately
$132,000 in excess of its original  purchase price.  The Partnership  intends to
use $50,000 of the net sales  proceeds to pay  liabilities  of the  Partnership,
including  quarterly  distributions  to the Limited  Partners.  The  Partnership
intends to distribute  some or all of the  remaining  net sales  proceeds to the
Limited Partners.  The Partnership will distribute  amounts sufficient to enable
the Limited  Partners to pay federal and state income taxes,  if any (at a level
reasonably  assumed  by the  General  Partners),  resulting  from the sale.  The
remaining net sales  proceeds,  if any, will be used for payment of  Partnership
liabilities.


         As described above, in December 1997, the Partnership used the majority
of the net sales proceeds from the sale of the Properties in Franklin, Tennessee
and Salem, New Hampshire,  in a Property located in Sandy, Utah. In addition, in
December 1997, the Partnership  used the majority of the net sales proceeds from
the sale of the  Properties  in Franklin  and Smyrna,  Tennessee  and  Richmond,
Indiana, in a Property located in Vancouver,  Washington,  as  tenants-in-common
with affiliates of the General Partners.

         In January  1998,  the  Partnership  sold its  Property in Port Orange,
Florida,  to the tenant,  for $1,330,000 and received net sales proceeds (net of
$2,909 which  represents  prorated rent  returned to the tenant) of  $1,283,096,
resulting in a gain of approximately  $350,300 for financial reporting purposes.
The  Partnership  intends to distribute some or all of the net sales proceeds to
the Limited Partners. The remaining net sales proceeds, if any, will be used for
other Partnership  purposes. In addition, in February 1998, the Partnership sold
its Property in Tyler, Texas, to the tenant, for $850,000 and received net sales
proceeds  of  $844,229,  resulting  in a  gain  of  approximately  $155,900  for
financial  reporting  purposes.  The  Partnership  intends to reinvest the sales
proceeds in an additional  Property  during 1998, or use the net sales  proceeds
for other Partnership purposes.


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

         Currently,  rental  income from the  Partnership's  Properties  and net
sales proceeds from the sale of Properties,  pending  reinvestment in additional
Properties,  distribution  to the  Limited  Partners  or use for the  payment of
Partnership  liabili  ties,  are  invested  in money  market  accounts  or other
short-term,  highly  liquid  investments  such as  demand  deposit  accounts  at
commercial banks, CDs and money market accounts with less than a 30-day maturity
date, pending the Partnership's use of such funds to pay Partnership expenses or
to make distributions to the partners. At December 31, 1997, the Partnership had
$1,361,290  invested in such  short-term  investments as compared to $362,922 at
December 31, 1996.  The increase in cash and cash  equivalents  during 1997,  is
primarily  attributable  to the  receipt of net sales  proceeds  relating to the
sales of several  Properties,  as described  above. As of December 31, 1997, the
average  interest rate earned on the rental income  deposited in demand  deposit
accounts at commercial banks was approximately  2.5 percent annually.  The funds
remaining at December 31, 1997,  will be reinvested  in  additional  Properties,
distributed to the Limited Partners or used for other Partnership  purposes,  as
described  above,  and will be used for the payment of  distributions  and other
liabilities.

Short-Term Liquidity

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

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

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners do not believe that  working  capital  reserves  are  necessary at this
time. In addition,  because all leases of the Partnership's  Properties are 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  primarily  on current  and  anticipated  future  cash from
operations,  a portion  of the  sales  proceeds  received  from the sales of the
Properties and additional capital  contributions from the General Partners,  the
Partnership  declared  distributions  to the Limited  Partners of $2,300,000 for
each of the years  ended  December  31,  1997,  1996 and 1995.  This  represents
distributions  of $46 per Unit for each of the years ended  December  31,  1997,
1996 and 1995. The General  Partners expect to distribute some or all of the net
sales  proceeds  from the  sales of the  Properties  in Tampa  and Port  Orange,
Florida,  to the Limited Partners.  In deciding whether to sell Properties,  the
General Partners will consider factors such as potential  capital  appreciation,
net cash flow,  and federal  income tax  considerations.  The reduced  number of
Properties  for which  the  Partnership  receives  rental  payments,  as well as
ongoing  operations,  is  expected  to reduce the  Partnership's  revenues.  The
decrease in  Partnership  revenues,  combined  with the fact that a  significant
portion of the Partnership's expenses are fixed in nature, is expected to result
in a decrease in cash  distributions  to the Limited  Partners  during 1998.  No
amounts  distributed or to be distributed to the Limited  Partners for the years
ended December  1997,  1996 and 1995, 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 1997, 1996 and 1995, affiliates of the General Partners incurred
on behalf of the Partnership $77,353, $113,560 and $114,204,  respectively,  for
certain  operating  expenses.  As of December 31, 1997 and 1996, the Partnership
owed $109,367 and  $121,464,  respectively,  to affiliates  for such amounts and
accounting and administrative  services.  In addition,  as of December 31, 1997,
the Partnership had incurred $34,500 in a real estate  disposition fee due to an
affiliate as a result of its services in  connection  with the sale during 1996,
of the  Property  in St.  Cloud,  Florida.  Amounts  payable  to other  parties,
including  distributions  payable,  increased  to $817,621 at December 31, 1997,
from $705,130 at December 31, 1996,  primarily as a result of incurring $125,000
in  renovation  costs  relating  to  the   Partnership's   Property  located  in
Connorsville,  Indiana,  which were unpaid at December 31, 1997.  Liabilities at
December  31,  1997,  to the  extent  they  exceed  cash  and  cash  equivalents
(excluding  the net sales  proceeds  held at December  31, 1997 from the sale of
Properties,  as described above), at December 31, 1997, will be paid from future
cash from operations,  from amounts collected under the mortgage notes described
above or, in the event the General  Partners  elect to make  additional  capital
contributions, from future General Partner contributions.

Long-Term Liquidity

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


Results of Operations

         During  1995,  the  Partnership   owned  and  leased  27  wholly  owned
Properties  (including one Property in Myrtle Beach,  South Carolina,  which was
sold in August 1995),  during 1996, the  Partnership  owned and leased 26 wholly
owned Properties (including one Property in St. Cloud,  Florida,  which was sold
in  October  1996) and  during  1997,  the  Partnership  owned 27  wholly  owned
Properties  (including  six  Properties,  one in each of  Franklin  and  Smyrna,
Tennessee; Salem, New Hampshire; Port St. Lucie and Tampa, Florida and Richmond,
Indiana,  which were sold during the year ended December 31, 1997). In addition,
during 1997,  1996 and 1995, the Partnership was a co-venturer in three separate
joint  ventures  that each owned and leased one Property  and during  1997,  the
Partnership  owned and leased two  Properties,  with  affiliates  of the General
Partners, as tenants-in-common.  As of December 31, 1997, the Partnership owned,
either directly or through joint venture arrangements,  26 Properties which are,
in  general,  subject  to  long-term,  triple-net  leases.  The  leases  of  the
Properties  provide for minimum base annual rental  amounts  (payable in monthly
installments)  ranging from approximately  $37,800 to $222,800.  Generally,  the
leases  provide  for  percentage  rent  based on sales in excess of a  specified
amount to be paid annually.  In addition, a majority of the leases provide that,
commencing in the sixth lease year, the percentage  rent will be an amount equal
to the greater of (i) the percentage rent calculated  under the lease formula or
(ii) a specified  percentage  (ranging  from  one-fourth to five percent) of the
purchase price paid by the Partnership for the Property. For further description
of the Partnership's leases and Properties, see Item 1. Business Leases and Item
2. Properties, respectively.


         During  the  years  ended  December  31,  1997,   1996  and  1995,  the
Partnership  and its  consolidated  joint venture,  CNL/Longacre  Joint Venture,
earned  $1,500,967,  $1,931,573 and $2,068,342,  respectively,  in rental income
from  operating  leases and earned  income from  direct  financing  leases.  The
decrease in rental and earned income during the year ended December 31, 1997, as
compared to 1996,  was  partially  attributable  to a decrease of  approximately
$322,300 as a result of the sale of its  Properties  in St.  Cloud,  Florida (in
October 1996), Franklin,  Tennessee (in January 1997), Smyrna, Tennessee (in May
1997),  Salem,  New Hampshire (in September 1997),  Port St. Lucie,  Florida (in
September  1997) and Tampa,  Florida (in December  1997),  as described above in
"Capital  Resources."  During 1997,  the decrease in rental income was partially
offset by an increase of  approximately  $24,700  due to the  reinvestment  of a
portion of these net sales  proceeds in a Property in Houston,  Texas and Sandy,
Utah, in November 1997 and December 1997,  respectively,  as described  above in
"Capital  Resources".  The General  Partners believe that the decrease in rental
and earned income will be offset by an increase  during 1998 as the  Partnership
continues to reinvest a portion of the  remaining  net sales  proceeds  from the
sale of Properties as described above in "Capital Resources," during 1998.

         Rental and  earned  income  also  decreased  in 1997 and 1996,  each as
compared to the previous  year, as a result of the  Partnership  increasing  its
allowance  for  doubtful   accounts  by   approximately   $57,700  and  $29,500,
respectively,  for rental and other amounts relating to the Hardee's  Properties
located in  Connorsville  and Richmond,  Indiana,  which were leased by the same
tenant,  due to financial  difficulties the tenant was experiencing.  Rental and
earned income  decreased by  approximately  $79,200  during 1997 due to the fact
that the  Partnership  terminated  the  lease  with the  former  tenant of these
Properties in June 1997, as described above in "Capital  Resources." The General
Partners have agreed that they will cease collection  efforts on past due rental
amounts once the former  tenant of these  Properties  pays all amounts due under
the promissory  note for past due real estate taxes  described above in "Capital
Resources."  The decrease in rental and earned income was slightly  offset by an
increase  of $8,500 in rental  income  from the new  tenant of the  Property  in
Connorsville,  Indiana,  who began operating the Property after it was renovated
into an Arby's Property.  In November 1997, the Partnership sold its Property in
Richmond, Indiana, as described above in "Capital Resources."

         The decrease in rental and earned  income  during 1996,  as compared to
1995, was partially  attributable  to a decrease of  approximately  $95,000 as a
result of the sale of its  Properties  in Myrtle Beach,  South  Carolina and St.
Cloud,  Florida,  in August 1995 and October  1996,  respectively,  as described
above in " Capital  Resources."  As a result of  accepting  promissory  notes in
conjunction  with  each of these  sales of  Properties,  as  described  above in
"Capital Resources," interest income increased during 1997 and 1996 as described
below.

         Rental and earned income also decreased by approximately  $8,100 during
1996,  as compared  to 1995,  due to the fact that in October  1995,  the tenant
ceased  operations of the Property in South Haven,  Michigan.  In June 1997, the
Partnership  incurred  renovation  costs to convert the Property  into an Arby's
restaurant  and entered into an operating  agreement  for this  Property with an
operator , as described above in "Capital  Resources," and earned  approximately
$5,100 in rental income during 1997 from the operator of the Property.


         Rental and earned income in 1997, 1996 and 1995, continued to remain at
reduced amounts due to the fact that the Partnership is not receiving any rental
income from the Properties in Belding and South Haven, Michigan and Lebanon, New
Hampshire, as a result of the tenants defaulting under the terms of their leases
and ceasing  operations of the restaurants on the Properties during 1995. During
1997,  the  Partnership  located a new tenant for the  Property in South  Haven,
Michigan,  as  described  above.  The General  Partners  are  currently  seeking
replacement  tenants or purchasers for the  Properties in Belding,  Michigan and
Lebanon, New Hampshire.  Rental and earned income for 1998 is expected to remain
at reduced  amounts until such time as the  Partnership  executes new leases for
its Properties in Belding, Michigan, and Lebanon, New Hampshire.

         For the years ended December 31, 1997,  1996 and 1995, the  Partnership
earned  $233,633,  $130,167 and $104,455,  respectively,  in  contingent  rental
income.  The increase in  contingent  rental  income during 1997, as compared to
1996,  is  primarily  attributable  to  amounts  collected  under the  operating
agreement  with  the new  operator  of the  Property  located  in  South  Haven,
Michigan.  The operating  agreement  provides for payment to the  Partnership of
reduced base rents and a percentage of the net operating income generated by the
restaurant.  The Partnership expects to continue to receive such amounts until a
lease is entered into with the current operator, at which time contingent rental
income is  expected  to  decrease,  but at which time base rent is  expected  to
increase.  The increase in contingent  rental income during 1996, as compared to
1995, is partially  attributable to increased gross sales of certain  restaurant
Properties requiring the payment of contingent rent.

         During  the  years  ended  December  31,  1997,   1996  and  1995,  the
Partnership  earned $288,637,  $137,385 and $55,785,  respectively,  in interest
income.  The increase in interest  income during 1997 and 1996, each as compared
to the previous year, was primarily  attributable  to the interest earned on the
mortgage notes receivable accepted in connection with the sale of the Properties
in St.  Cloud,  Florida and Myrtle  Beach,  South  Carolina in October  1996 and
August 1995,  respectively.  In addition,  interest income increased during 1997
due to interest earned on the net sales proceeds  received relating to the sales
of the Properties in Smyrna,  Tennessee;  Salem, New Hampshire;  Port St. Lucie,
Florida;  Richmond,  Indiana and Tampa, Florida.  Interest income is expected to
decrease  during 1998 as net sales  proceeds  held at  December  31,  1997,  are
reinvested in additional Properties, distributed to the Limited Partners or used
for other Partnership purposes.


         In addition,  for the years ended December 31, 1997, 1996 and 1995, the
Partnership earned $56,015, $46,452 and $47,018,  respectively,  attributable to
net income earned by unconsolidated joint ventures in which the Partnership is a
co-venturer. The increase in net income earned by joint ventures during 1997, as
compared to 1996,  is primarily  attributable  to the fact that in October 1997,
the  Partnership  acquired  an interest  in a Property  in Mesa,  Arizona,  with
affiliates as tenants-in-common,  as described above in "Capital Resources." Net
income earned by joint  venture is expected to increase  during 1998 as a result
of the Partnership acquiring an interest in a Property in Vancouver, Washington,
in December 1997, with affiliates of the General Partners, as described above in
"Capital Resources."


         During the years ended December 31, 1997, 1996 and 1995, two lessees of
the Partnership and its consolidated  joint venture,  Shoney's,  Inc. and Golden
Corral Corporation,  each contributed more than ten percent of the Partnership's
total rental income (including rental income from the Partnership's consolidated
joint  venture  and the  Partnership's  share  of the  rental  income  from  two
Properties owned by unconsolidated  joint ventures and two Properties owned with
affiliates as  tenants-in-common).  As of December 31, 1997, Shoney's,  Inc. was
the  lessee  under  leases  relating  to  four  restaurants  and  Golden  Corral
Corporation  was the lessee  under  leases  relating to two  restaurants.  It is
anticipated  that, based on the minimum rental payments  required by the leases,
these two  lessees  will  continue  to  contribute  more than ten percent of the
Partnership's total rental income during 1998 and subsequent years. In addition,
three Restaurant Chains,  Perkins,  Denny's and Wendy's Old Fashioned  Hamburger
Restaurants, each accounted for more than ten percent of the Partnership's total
rental and mortgage interest income during 1997, 1996 and 1995 (including rental
income from the Partnership's  consolidated  joint venture and the Partnership's
share of the rental income from two  Properties  owned by  unconsolidated  joint
ventures and two  Properties  owned with  affiliates as  tenants-in-common).  In
subsequent years, it is anticipated that these three Restaurant Chains each will
continue to account for more than ten percent of the total  rental and  mortgage
interest  income to which the  Partnership  is  entitled  under the terms of the
leases and mortgage  note.  Any failure of these  lessees or  Restaurant  Chains
could materially affect the Partnership's income.


         Operating expenses,  including  depreciation and amortization  expense,
were $574,472, $631,565 and $640,922 for the years ended December 31, 1997, 1996
and 1995, respectively. The decrease in operating expenses during 1997 and 1996,
each as compared to the previous year, was partially  attributable to a decrease
in depreciation expense as a result of the sales of Properties in 1997, 1996 and
1995, as described above in " Capital Resources."

         Operating expenses also decreased during 1996, as compared to 1995, due
to  the  fact  that  the  Partnership  and  its   consolidated   joint  venture,
CNL/Longacre Joint Venture,  recorded approximately $35,100, $40,700 and $47,200
during the years ended December 31, 1997, 1996 and 1995, respectively,  for real
estate taxes  relating to the  Properties in Lebanon,  New Hampshire and Belding
and South Haven,  Michigan,  as a result of lease terminations.  The Partnership
entered into an operating  agreement  with an operator for the Property in South
Haven,  Michigan,  as described  above in "Capital  Resources," and is currently
seeking  either a  replacement  tenant  or a  purchaser  for the  Properties  in
Lebanon,  New Hampshire and Belding,  Michigan,  as described  above in "Capital
Resources."  The  Partnership  expects to continue  to incur real estate  taxes,
insurance and maintenance  expense for its Properties in Lebanon,  New Hampshire
and  Belding,  Michigan,  until  such time as a new lease is  executed  for each
Property or until each Property is sold.


         The decrease in operating expenses during 1996, as compared to 1995, is
partially  offset by an  increase  in  accounting  and  administrative  expenses
associated  with operating the Partnership and its Properties and an increase in
insurance  expense as a result of the  General  Partners'  obtaining  contingent
liability and property coverage for the Partnership beginning in May 1995.


         In connection with the sale of its Properties in St. Cloud, Florida and
Myrtle Beach, South Carolina,  during 1996 and 1995, respectively,  as described
above in "Capital  Resources," the  Partnership  recognized a gain for financial
reporting  purposes of $1,362,  $19,369 and $1,571 for the years ended  December
31, 1997, 1996 and 1995, respectively. In accordance with Statement of Financial
Accounting  Standards  No.  66,  "Accounting  for  Sales  of Real  Estate,"  the
Partnership  recorded the sales using the installment sales method. As such, the
gain on the sales was deferred and is being recognized as income proportionately
as payments under the mortgage notes are  collected.  Therefore,  the balance of
the deferred gain of $323,157 at December 31, 1997, will be recognized as income
in future  periods as payments are  collected.  For federal income tax purposes,
gains of approximately  $194,100 and $136,900 from the sale of the Properties in
St. Cloud,  Florida, and Myrtle Beach, South Carolina,  respectively,  were also
deferred  and are being  recognized  as payments  under the  mortgage  notes are
collected.

         As a result of the sales of the Properties in Smyrna, Tennessee; Salem,
New  Hampshire;  and Port St. Lucie and Tampa,  Florida,  as described  above in
"Capital Resources," the Partnership  recognized gains totalling $549,516 during
1997,  for financial  reporting  purposes.  The gains for 1997,  were  partially
offset by a loss of $141,567 for financial  reporting  purposes,  resulting from
the November 1997 sale of the Property in Richmond,  Indiana, as described above
in "Capital  Resources." In October 1995, the Partnership also sold a portion of
the land  relating to its Property in  Dalesville,  Indiana,  as the result of a
right of way taking and  recognized a gain for financial  reporting  purposes of
$4,353 during the year ended December 31, 1995.


         During 1997, the Partnership  established an allowance for loss on land
and  building of  $151,671  for  financial  reporting  purposes  relating to the
Property in Belding,  Michigan.  The allowance represents the difference between
the  Property's  carrying  value at  December  31,  1997 and the  estimated  net
realizable  value for this Property.  In addition,  an allowance was established
for loss on land and  building  of  $99,023  for  financial  reporting  purposes
relating to the Property in Lebanon,  New Hampshire,  owned by the Partnership's
consolidated joint venture.  The allowance represents the difference between the
Property's  carrying value at December 31, 1997 and the estimated new realizable
value, based on an anticipated sales price for the Property.


         At December 31, 1996, the Partnership established an allowance for loss
on land and building in the amount of $169,463 for financial reporting purposes.
The allowance  represented  the difference  between (i) the Property's  carrying
value at December 31, 1996,  plus the additional  rental income  (accrued rental
income)  that the  Partnership  had  recognized  since  inception  of the  lease
relating to the  straight-lining  of future  scheduled rent increases minus (ii)
the  net  realizable  value  of  $960,741  received  as net  sales  proceeds  in
conjunction with the sale of the Property in January 1997, as described above in
" Capital Resources."

         In addition,  during 1996, the Partnership established an allowance for
loss on land and building for its Property in Richmond,  Indiana.  The allowance
of $70,062  represented the difference between the Property's  carrying value at
December  31, 1996,  and the  estimated  fair value of the Property  based on an
anticipated  sales price of this  Property.  This  Property was sold in November
1997, as described above in "Capital Resources."


         The General Partners of the Partnership are in the process of assessing
and addressing the impact of the year 2000 on their computer  package  software.
The  hardware and  built-in  software  are  believed to be year 2000  compliant.
Accordingly, the General Partners do not expect this matter to materially impact
how the  Partnership  conducts  business  nor its  current or future  results of
operations or financial position.


                                                         5

<PAGE>



         The  Partnership's  leases as of December  31,  1997,  are, in general,
triple-net  leases and  contain  provisions  that the General  Partners  believe
mitigate  the adverse  effect of  inflation.  Such  provisions  include  clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified  level and/or  automatic  increases in base rent at specified  times
during the term of the lease.  Management  expects that  increases in restaurant
sales

                                                         6

<PAGE>



volumes due to inflation  and real sales growth  should result in an increase in
rental income (for certain  Properties) over time.  Continued inflation also may
cause  capital  appreciation  of the  Partnership's  Properties.  Inflation  and
changing  prices,  however,  also may have an adverse impact on the sales of the
restaurants and on potential capital appreciation of the Properties.




                                                         7

<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 29th day of
July, 1999.



                                           CNL INCOME FUND V, 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.

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

/s/ Robert A. Bourne         President, Treasurer and           July 29, 1999
--------------------         Director (Principal Financial
Robert A. Bourne             and Accounting Officer)



/s/ James M. Seneff, Jr.     Chief Executive Officer            July 29, 1999
------------------------     and Director (Principal
James M. Seneff, Jr.         Executive  Officer)





<PAGE>