<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K
   Annual report pursuant to section 13 of the securities exchange act of 1934

                      For the year ended DECEMBER 31, 2001

                                       of

                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
                                    CPA(R):14

                             A MARYLAND Corporation
                   IRS Employer Identification No. 13-3951476
                            SEC File Number 000-25771


                              50 ROCKEFELLER PLAZA,
                            NEW YORK, NEW YORK 10020
                                 (212) 492-1100




CPA(R):14 has SHARES OF COMMON STOCK registered pursuant to Section 12(g) of the
Act.


CPA(R):14 is not registered on any exchanges.


CPA(R):14 does not have any Securities registered pursuant to Section 12(b) of
the Act.


CPA(R):14 is unaware of any delinquent filers pursuant to Item 405 of Regulation
S-K.


CPA(R):14 (1) has filed all reports required by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for 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.


CPA(R):14 has no active market for common stock at March 22, 2002.
Non-affiliates held 65,456,138 shares of common stock, $.001 Par Value
outstanding at March 22, 2002.


CPA(R):14 incorporates by reference its definitive Proxy Statement with respect
to its 2002 Annual Meeting of Shareholders, to be filed with the Securities and
Exchange Commission within120 days following the end of its fiscal year, into
Part III of this Report.




<PAGE>



                                     PART I


Item 1.  Business.

Corporate Property Associates 14 Incorporated ("CPA(R):14") is a Real Estate
Investment Trust ("REIT") that acquires and owns commercial properties leased to
companies nationwide, primarily on a triple net basis. As of December 31, 2001,
CPA(R):14's portfolio consisted of 111 properties leased to 53 tenants and
totaling more than 17.19 million square feet.

CPA(R):14's core investment strategy is to purchase and own properties leased to
a variety of companies on a single tenant net lease basis. These leases
generally place the economic burden of ownership on the tenant by requiring them
to pay the costs of maintenance, insurance, taxes, structural repairs and other
operating expenses. CPA(R):14 also generally includes in its leases:

     o   clauses providing for mandated rent increases or periodic rent
         increases tied to increases in the consumer price index or other
         indices or, when appropriate, increases tied to the volume of sales at
         the property;

     o   covenants restricting the activity of the tenant to reduce the risk of
         a change in credit quality;

     o   indemnification of CPA(R):14 for environmental and other liabilities;
         and

     o   guarantees from parent companies or other entities.

CPA(R):14 was formed as a Maryland corporation on June 4, 1997. Between November
1997 and November 2001, CPA(R):14 sold a total of 65,794,280 shares of common
stock for a total of $657,942,800 in gross offering proceeds. These proceeds are
being combined with limited recourse mortgage debt to acquire a portfolio of
properties. As a REIT, CPA(R):14 is not subject to federal income taxation as
long as it satisfies certain requirements relating to the nature of its income,
the level of its distributions and other factors.

Carey Asset Management Corp., CPA(R):14's advisor, provides both strategic and
day-to-day management for CPA(R):14, including acquisition services, research,
investment analysis, asset management, capital funding services, disposition of
assets, investor relations and administrative services. Carey Asset Management
Corp. also provides office space and other facilities for CPA(R):14. Carey Asset
Management Corp. has dedicated senior executives in each area of its
organization so that CPA(R):14 functions as a fully integrated operating
company. CPA(R):14 pays asset management fees to Carey Asset Management Corp.
and pays certain transactional fees. CPA(R):14 also reimburses Carey Asset
Management Corp. for certain expenses. Carey Asset Management Corp. also serves
in this capacity for Corporate Property Associates 10 Incorporated, Carey
Institutional Properties Incorporated, Corporate Property Associates 12
Incorporated and Corporate Property Associates 15 Incorporated. Carey Asset
Management Corp. is a wholly-owned subsidiary of W.P. Carey & Co. LLC, a
publicly-traded company on the New York Stock Exchange and Pacific Exchange
under the symbol "WPC."

CPA(R):14's principal executive offices are located at 50 Rockefeller Plaza, New
York, NY 10020 and its telephone number is (212) 492-1100. As of December 31,
2001, CPA(R):14 had no employees. Carey Asset Management Corp. employs 25
individuals who perform services for CPA(R):14.

BUSINESS OBJECTIVES AND STRATEGY

CPA(R):14's objectives are to:

     o   pay quarterly dividends at an increasing rate that for taxable
         shareholders are partially free from current taxation;

     o   purchase and own a portfolio of real estate that will increase in
         value; and

     o   increase the equity in its real estate by making regular mortgage
         principal payments.

CPA(R):14 seeks to achieve these objectives by purchasing and holding industrial
and commercial properties each net leased to a single corporate tenant.
CPA(R):14's portfolio is diversified by geography, property type and by tenant.

DEVELOPMENTS DURING 2001

On January 9, 2001, CPA(R):14 purchased a property in Doncaster, South
Yorkshire, United Kingdom for a purchase price of approximately $8,702,000
(based on the exchange rate for the British Pound on the date of acquisition)
and entered into a net lease with BLP UK Limited. The lease obligations of BLP



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UK Limited are guaranteed by BLP Group PLC, ("BLP Group"). In connection with
the purchase, CPA(R):14 obtained $5,690,000 of limited recourse mortgage
financing. The BLP Group lease has a thirty year term, with annual rent of
approximately $868,000 with stated rent increases of 9.27% every three years.
BLP Group may exercise a purchase option, exercisable every five years, to
purchase the property at the greater of (i) approximately $8,756,000 plus any
prepayment charge on the mortgage loan or (ii) fair market value, as defined.

The $5,690,000 loan on the BLP Group property (based on the exchange rate for
the British Pound on the date of the acquisition) is collateralized by the
property and a lease assignment and provides for a twenty year loan term with
quarterly principal and interest payments at a variable annual interest rate
based on the London Interbank Offering Rate plus 1% with quarterly principal
payments. Annual principal payments will increase over the term of the loan with
principal payments initially of $14,224 increasing annually to $54,651 in the
twentieth year. A balloon payment of approximately $3,261,000 will be due in
January 2021.

On March 19, 2001, CPA(R):14 and the Mathews Company ("Mathews"), an
unaffiliated third party, entered into two partnerships which purchased five
properties in Nashville, Tennessee; Elgin, Illinois and Bozeman, Montana for
$22,226,671 and entered into net leases with Gibson Guitar Corp. ("Gibson
Guitar"). The Gibson Guitar leases have an initial term of 20 years followed by
two ten-year renewal terms. Combined annual rent is $2,087,400 with rent
increases every two years based on increases in the Consumer Price Index
("CPI").

The joint venture agreement between CPA(R):14 and Mathews provides that the cash
flow from the Gibson Guitar properties be distributed to the joint venture
partners as follows: (i) a fixed annual payment of $66,667 to CPA(R):14, (ii) a
preferred return of 12.5% to each partner based on its equity contribution and
(iii) any remaining cash flow distributed 82.5% and 17.5% to CPA(R):14 and
Mathews, respectively. In connection with the acquisition, CPA(R):14 assumed a
limited recourse mortgage loan obligation collateralized by two of the Nashville
properties of $2,075,541 with monthly payments of principal and interest of
$16,061 at an annual interest rate of 7.57% with a balloon payment scheduled in
May 2008.

On March 28, 2001, CPA(R):14 purchased a property in Duluth, Georgia for
$13,612,565, of which $7,900,000 was financed with a limited recourse mortgage
loan, and entered into a net lease with Nexpak Corporation ("Nexpak"). The lease
provides for an initial annual rent of $1,313,000 with increases every three
years based on a formula indexed to the CPI. The lease has an initial term of 20
years with two ten-year renewal terms. The limited recourse mortgage loan is
collateralized by a deed of trust on the property and a lease assignment. The
loan provides for monthly payments of principal and interest of $54,321 and
provides for an annual rate of 7.33% and a 30-year amortization schedule. The
loan matures on April 1, 2011, at which time a balloon payment is scheduled.

In April 2001, CPA(R):14 obtained a $3,800,000 limited recourse mortgage loan on
its property in Kansas City, Missouri leased to Earle M. Jorgenson Company. The
loan, which is collateralized by a deed of trust, provides for monthly payments
of principal and interest of $27,408 at an annual interest rate of 7.82% based
on a 30-year amortization schedule, and matures on February 1, 2008, at which
time a balloon payment is scheduled.

On April 30, 2001, CPA(R):14 purchased four properties located in Florence,
Kentucky; Chelmsford, Massachusetts; Lancaster, Texas and City of Industry,
California for $17,801,047, and entered into a net lease with Waddington North
America, Inc. ("Waddington"). The lease provides for an initial annual rent of
$1,810,500 with increases every three years based on a formula indexed to the
CPI, capped at 9.27%. The lease has an initial term of 20 years, with two
ten-year renewal terms. CPA(R):14 subsequently obtained a $11,125,000 limited
recourse mortgage loan collateralized by a deed of trust and a lease assignment
on the four Waddington properties. The loan provides for monthly payments of
interest and principal of $85,938 at an annual rate of 8.01% per annum based on
a 30-year amortization schedule. The loan matures on July 11, 2011, at which
time a balloon payment is scheduled. The loan is subject to prepayment premiums
in the event of a voluntary prepayment until three months prior to maturity.

On June 5, 2001, CPA(R):14 and an affiliate, Corporate Property Associates 12
Incorporated ("CPA(R):12"), each with 50% ownership interests as
tenants-in-common, purchased properties in Mesa, Arizona and Moorpark,
California for $37,696,335 and entered into a net lease with Special Devices,
Inc. ("SDI"). The lease provides for an initial annual rent of $3,924,000 (of
which CPA(R):14's share is $1,962,000) with increases every two years based on a
formula indexed to the CPI. The lease has an initial term of 20 years with two
ten-year renewal terms. In connection with the purchase, CPA(R):14 and CPA(R):12
obtained a $17,500,000 limited recourse mortgage loan from a third-party lender
and a $4,450,000 subordinated loan from SDI.

The $17,500,000 loan on the SDI properties provides for monthly payments of
interest and principal of $126,826 at an annual rate of 7.87% based on a 30-year
amortization schedule. The loan matures on July 1, 2011, at which time



                                      -2-
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a balloon payment is scheduled. The loan may not be voluntarily prepaid until
three months prior to maturity and is subject to prepayment premiums in the
event of a voluntary prepayment. CPA(R):14's $4,450,000 note provided by SDI
provides for quarterly payments of principal and interest of $113,750 at an
annual rate of 9.3807% based on a 30-year amortization schedule. The loan, which
matures on July 31, 2021, may be extended under certain circumstances and
provides for rights of offset in the event that SDI does not meet its rental
obligations or defaults on the lease.

In December 2000, CPA(R):14 purchased land and a building in Plymouth, Michigan
for $10,224,816 and entered into a net lease with Simpson Industries, Inc. (now
known as Metaldyne Company LLC ("Metaldyne"). In June and August 2001, CPA(R):14
purchased four additional properties in Twinsburg and Solon, Ohio and Rome,
Georgia and in Niles, Illinois, respectively, for $17,742,955 and amended and
restated the Metaldyne lease. As amended the lease has a remaining initial term
of 20 years through June 2021 and an annual rent of $3,119,851 with annual CPI
increases.

On June 29, 2001, CPA(R):14 obtained $13,747,210 of limited recourse mortgage
financing collateralized by a deed of trust on the Metaldyne properties and a
lease assignment. In connection with the purchase of the Niles property in
August 2001, CPA(R):14 increased its limited recourse mortgage financing
collateralized by the Metaldyne properties to $16,700,000. The loan provides for
monthly payments of principal and interest of $116,614 and bears interest at an
annual rate of 7.48%, based on a 30-year amortization schedule, and matures in
July 2011, at which time a balloon payment is scheduled. The loan is
collateralized by a deed of trust on the Metaldyne properties and a lease
assignment.

On June 29, 2001, CPA(R):14 purchased a property in Helmond, the Netherlands for
$5,445,026 and entered into a net lease with Nexpak. The lease has an initial
term of 20 years with two ten-year renewal terms at an initial annual rent of
$498,065 (based on the exchange rate for the Dutch Guilder (NLG) at the
acquisition date), with increases every three years based on a formula indexed
to increases in the CPI. CPA(R):14 has the option to take up to $77,500 of
Nexpak's annual rent in U.S. Dollars rather than Dutch Guilders. In connection
with the purchase, CPA(R):14 obtained mortgage financing of NLG 11,400,000
($4,550,388). The loan has a term of ten years and provides for quarterly
payments of interest at an annual rate of the sum of the EURIBOR rate and 1%.
CPA(R):14 may elect a to-be-determined fixed rate and principal amortization
based on a 25-year schedule.

In July 2001, CPA(R):14 obtained a $5,000,000 limited recourse mortgage loan on
its property in Houston, Texas leased to Lennar Corporation. The loan, which is
collateralized by a deed of trust and lease assignment, provides for monthly
payments of principal and interest of $34,687 at an annual interest rate of
7.42% based on a 30-year amortization schedule, and matures on July 1, 2011, at
which time a balloon payment is scheduled.

On July 30, 2001, CPA(R):14 purchased two properties in South Windsor,
Connecticut and a property in Manchester, Connecticut for $20,628,272 and
entered into a net lease with Gerber Scientific, Inc. ("Gerber"). The lease has
an initial term of 17 years with two ten-year renewal terms at an initial annual
rent of $2,117,750, with increases each year based on a formula indexed to
increases in the CPI, capped at 4%. CPA(R):14 subsequently obtained a
$12,500,000 limited recourse mortgage loan which is collateralized by a mortgage
and lease assignment. The loan provides for monthly payments of principal and
interest of $87,744 at an annual interest rate of 7.54% based on a 30-year
amortization schedule, and matures on January 1, 2012, at which time a balloon
payment is scheduled.

In August 2001, CPA(R):14 obtained a $12,500,000 limited recourse mortgage loan
on its property in Rochester, Minnesota leased to Celestica Corporation. The
loan, which is collateralized by a mortgage and lease assignment, provides for
monthly payments of principal and interest of $94,088 at an annual interest rate
of 7.71% based on a 30-year amortization schedule, and matures on August 1,
2016, at which time a balloon payment is scheduled.

In August 2001, CPA(R):14 and CPA(R):12 entered into a five-year lease agreement
with Fleming Companies, Inc. for a vacant property in Grand Rapids, Michigan
which had previously been leased to Ameriserve Food Distribution, Inc. The lease
provides for annual rent of $1,219,000. CPA(R):14 and CPA(R):12 funded
$1,400,000 of improvements at the Fleming property which will result in an
increase in additional annual lease revenues of $348,740.

CPA(R):14 purchased a property in St. Louis, Missouri in 1998 and entered into a
net lease with The Benjamin Ansehl Company ("Benjamin Ansehl"). During 2000,
Benjamin Ansehl filed a petition of bankruptcy, and the lease was subsequently
terminated. In August 2001, CPA(R):14 sold the Benjamin Ansehl property for
$2,903,486, net of closing costs.



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On September 6, 2001, CPA(R):14 purchased a property in Milford, Ohio for
$14,869,110 and entered into a net lease with New Creative Enterprises, Inc. The
lease provides for an initial annual rent of $1,576,200 with increases every two
years based on a formula indexed to the CPI. The lease has an initial term of 20
years with five five-year renewal terms. In connection with the purchase,
CPA(R):14 obtained a $10,000,000 limited recourse mortgage loan which is
collateralized by a mortgage and lease assignment. The loan provides for monthly
payments of principal and interest of $68,897 at an annual interest rate of
7.35% based on a 30-year amortization schedule, and matures on October 1, 2011,
at which time a balloon payment is scheduled.

On September 28, 2001, CPA(R):14 purchased six properties which are located in
Albermarle, Farmville and Old Fort, North Carolina, Marshall, Michigan and
Holmesville, Ohio and Springfield, Tennessee for $27,434,555 and entered into a
net lease with Collins & Aikman Corporation. The lease provides for an initial
annual rent of $3,235,700 with annual increases based on a formula indexed to
the CPI. The lease has an initial term of 20 years with two ten-year renewal
terms. On October 5, 2001, CPA(R):14 obtained a $17,000,000 limited recourse
mortgage loan which is collateralized by a mortgage and lease assignment. The
loan provides for monthly payments of principal and interest of $123,975 at an
annual rate of 7.35% based on a 30-year amortization schedule, and matures in
November 2011, at which time a balloon payment is scheduled.

In October 2001, CPA(R):14 obtained two limited recourse mortgage loans totaling
$17,500,000 on five properties leased to APW North America, Inc. ("APW"). The
loans, which are collateralized by deeds of trust on the APW properties, provide
for combined monthly payments of principal and interest of $124,805 at an annual
interest rate of 7.10% based on a 30-year amortization schedule, and mature on
November 1, 2011, at which time balloon payments are scheduled.

On November 28, 2001, CPA(R):14 and Corporate Property Associates 15
Incorporated ("CPA(R):15"), an affiliate, formed two limited partnerships which
purchased thirteen properties for $71,971,174 and entered into two net leases
with Petsmart, Inc. ("Petsmart"). In connection with the acquisition, the
limited partnerships obtained limited recourse mortgage financing of
$43,125,000. CPA(R):15 had an initial limited partnership ownership interest of
..001% and has an option to increase such ownership interest to 30% by no later
than December 31, 2004. CPA(R):15 exercised its purchase option in March 2002.
The Petsmart leases have an initial term of 20 years followed by a ten-year
renewal option and thereafter by two five-year options. Initial annual rent is
$7,262,750 with stated increases of 9% every five years. The limited recourse
mortgage loans are collateralized by deeds of trust and lease assignments and
provide for monthly payments of interest and principal of $307,464 at an annual
fixed rate of 7.70% based on a 30-year amortization schedule. The loans mature
on December 1, 2011 at which time balloon payments are scheduled.

On December 20, 2001, CPA(R):14 and CPA(R):15 formed a limited partnership which
purchased three properties in Cincinnati, Ohio; Norcross, Georgia and Elkwood,
Virginia for $12,974,479 and entered into a master net lease with Builders First
Source-Atlanta Group, Inc. and Builders First Source-Ohio Valley, Inc.,
collectively, as lessee. The lease obligations are unconditionally guaranteed by
the lessees' parent company, Builders FirstSource, Inc. ("Builders First").
CPA(R):15 had an initial limited partnership ownership interest of 1% and has an
option to increase such ownership interest to 40% by no later than December 31,
2004. CPA(R):15 exercised its purchase option in March 2002.

The Builders First lease has an initial term of fifteen years with two ten-year
renewal options with an initial annual rent of $1,384,377. The lease provides
for rent increases every two years based on a formula indexed to increases in
the CPI, capped at 2% per year compounded for each rent increase. In February
2002, the limited partnership obtained limited recourse mortgage financing of
$7,600,000 collateralized by a deed of trust and a lease assignment and provides
for monthly payments of interest and principal of $56,510 at any annual interest
rate of 7.57% based on a 25-year amortization schedule. The loan matures in
February 2012 at which time a balloon payment is scheduled.

In November 1999, CPA(R):14 entered into a build-to-suit transaction with Atrium
Companies, Inc. ("Atrium") for a property in Wylie, Texas which was subsequently
placed in service in August 2000 at a cost of $8,716,984. On December 1, 2001,
CPA(R):14 purchased two additional properties in Welcome, North Carolina and
Murrysville, Pennsylvania for $16,963,351 and entered into a net lease with
Atrium for the Wylie property and the two newly-purchased properties. The master
lease for the three properties has an initial lease term of 20 years with two
five-year renewal options. The lease provides for initial annual rent of
$2,690,247 with rent increases every two years based on a formula indexed to
increases in the CPI, capped at 5%. If, for any two-year rent increase period,
the CPI is less than 5%, the difference between 5% and the actual percentage
increase will be carried forward for purposes of calculating subsequent rent
increases. CPA(R):14 obtained a $14,000,000 limited recourse mortgage loan which
is collateralized by a deed of trust and a lease assignment and provides for
monthly payments of interest and principal



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of $95,505 at an annual interest rate of 7.25% based on a 30-year amortization
schedule. The loan matures on November 1, 2011, at which time a balloon payment
is scheduled.

On December 19, 2001, CPA(R):14 purchased a property in Richardson, Texas for
$48,453,608 and entered into a net lease with Nortel Networks, Inc. ("Nortel").
The lease obligations of Nortel have been unconditionally guaranteed by its
parent company, Nortel Networks Limited. The lease has an initial term of
fifteen years with four five-year renewal options, and provides for an initial
annual rent of $5,287,500 with stated increases every five years. CPA(R):14
obtained a $30,000,000 limited recourse mortgage loan which is collateralized by
a deed of trust and a lease assignment. The loan provides for monthly payments
of principal and interest of $206,692 at an annual interest rate of 7.35% based
on a 30-year amortization schedule, and matures on January 1, 2012, at which
time a balloon payment is scheduled.

On December 28, 2001, CPA(R):14 purchased properties in Union, New Jersey; Grand
Prairie, Texas and Allentown and Philadelphia, Pennsylvania for $10,119,297 and
entered into a net lease with Lincoln Technical Institute, Inc. The lease has an
initial term of fifteen years with two ten-year renewal options, and provides
for an initial annual rent of $1,174,035 with annual increases based on a
formula indexed to increases in the CPI. In connection with the purchase,
CPA(R):14 obtained a $6,300,000 limited recourse mortgage loan which is
collateralized by a mortgage and a lease assignment. The loan provides for
monthly payments of principal and interest of $47,318 at an annual interest rate
of 7.58% based on a 25-year amortization schedule, and matures on January 1,
2012, at which time a balloon payment is scheduled.

On December 28, 2001, CPA(R):14 purchased a property in Turku, Finland for
27,308,849 Euros ($24,606,911 as of the purchase date) and entered into a net
lease with Wallac Oy. The lease obligations of Wallac Oy are unconditionally
guaranteed by its parent company, PerkinElmer, Inc. The lease has an initial
term of twenty years with three five-year renewal options, and provides for an
initial annual rent of 2,636,885 Euros ($2,333,949 as of the purchase date),
with annual increases for the first five years and every five years thereafter
based on a formula indexed to increases in the Finnish Cost of Living Index. In
connection with the purchase, CPA(R):14 obtained a 20,500,000 Euros loan
($24,606,911 as of the purchase date) which provides for quarterly payments of
principal and interest of 465,914 Euros ($412,388 as of the purchase date) at an
annual interest rate of 6.091%. Principal is payable based on a 3% annuity per
annum. The loan matures on December 28, 2011, at which time a balloon payment is
scheduled.

Since December 31, 2001, CPA(R):14 has purchased five properties for $26,044,593
(including a build-to-suit commitment) and entered into net leases with UTI
Holdings, Inc. and PW Eagle, Inc.

ACQUISITION STRATEGIES

Carey Asset Management Corp. has a well-developed process with established
procedures and systems for acquiring net leased property on behalf of CPA(R):14.
As a result of its reputation and experience in the industry and the contacts
maintained by its professionals, Carey Asset Management Corp. has a presence in
the net lease market that has provided it with the opportunity to invest in a
significant number of transactions on an ongoing basis. CPA(R):14 takes
advantage of Carey Asset Management Corp.'s presence in the net lease market to
build its portfolio. In evaluating opportunities for CPA(R):14, Carey Asset
Management Corp. carefully examines the credit, management and other attributes
of the tenant and the importance of the property under consideration to the
tenant's operations. Careful credit analysis is a crucial aspect of every
transaction. CPA(R):14 believes that Carey Asset Management Corp. has one of the
most extensive underwriting processes in the industry and has an experienced
staff of professionals involved with underwriting transactions. Carey Asset
Management Corp. seeks to identify those prospective tenants whose
creditworthiness is likely to improve over time. CPA(R):14 believes that the
experience of Carey Asset Management Corp.'s management in structuring
sale-leaseback transactions to meet the needs of a prospective tenant enables
Carey Asset Management Corp. to obtain a higher return for a given level of risk
than would typically be available by purchasing a property subject to an
existing lease.

Carey Asset Management Corp.'s strategy in structuring its net lease investments
for CPA(R):14 is to:

     o   combine the stability and security of long-term lease payments,
         including rent increases, with the appreciation potential inherent in
         the ownership of real estate;

     o   enhance current returns by utilizing varied lease structures;

     o   reduce credit risk by diversifying investments by tenant, type of
         facility, geographic location and tenant industry; and

     o   increase potential returns by obtaining equity enhancements from the
         tenant when possible, such as warrants to purchase tenant common stock.



                                      -5-
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FINANCING STRATEGIES

Consistent with its investment policies, CPA(R):14 uses leverage, generally
limited recourse mortgage financing, when available on favorable terms.
CPA(R):14 has approximately $463,864,022 in property level debt outstanding.
These mortgages mature between 2008 and 2026 and have interest rates between
4.94% and 8.85%. Carey Asset Management Corp. continually seeks opportunities
and considers alternative financing techniques to finance properties not
currently subject to debt, refinance debt, reduce interest expense or improve
its capital structure.

TRANSACTION ORIGINATION

In analyzing potential acquisitions, Carey Asset Management Corp. reviews and
structures many aspects of a transaction, including the tenant, the real estate
and the lease, to determine whether a potential acquisition can be structured to
satisfy CPA(R):14's acquisition criteria. The aspects of a transaction which are
reviewed and structured by Carey Asset Management Corp. include the following:

        Tenant Evaluation. Carey Asset Management Corp. evaluates each potential
        tenant for its credit, management, position within its industry,
        operating history and profitability. Carey Asset Management Corp. seeks
        tenants it believes will have stable or improving credit. By leasing
        properties to these tenants, CPA(R):14 can generally charge rent that is
        higher than the rent charged to tenants with recognized credit and
        thereby enhance its current return from these properties as compared
        with properties leased to companies whose credit potential has already
        been recognized by the market. Furthermore, if a tenant's credit does
        improve, the value of CPA(R):14's property will likely increase (if all
        other factors affecting value remain unchanged). Carey Asset Management
        Corp. may also seek to enhance the likelihood of a tenant's lease
        obligations being satisfied, such as through a letter of credit or a
        guaranty of lease obligations from the tenant's corporate parent. This
        credit enhancement provides CPA(R):14 with additional financial
        security. In evaluating a possible investment, the creditworthiness of a
        tenant generally will be a more significant factor than the value of the
        property absent the lease with such tenant. While Carey Asset Management
        Corp. will select tenants it believes are creditworthy, tenants will not
        be required to meet any minimum rating established by an independent
        credit rating agency. Carey Asset Management Corp.'s and the investment
        committee's standards for determining whether a particular tenant is
        creditworthy vary in accordance with a variety of factors relating to
        specific prospective tenants. The creditworthiness of a tenant is
        determined on a tenant by tenant, case by case basis. Therefore, general
        standards for creditworthiness cannot be applied.

        Leases with Increasing Rent. Carey Asset Management Corp. typically
        includes, or attempts to include a clause in each lease that provides
        for increases in rent over the term of the lease. These increases are
        generally tied to increases in indices such as the consumer price index.
        In the case of retail stores, these leases often provide for
        participation in gross sales above a stated level. The lease may also
        provide for mandated rental increases on specific dates or other methods
        that may not have been in existence or contemplated by us as of the date
        of this report. Carey Asset Management Corp. seeks to avoid entering
        into leases that provide for contractual reductions in rents during
        their primary term.

        Properties Important to Tenant Operations. Carey Asset Management Corp.
        generally seeks to acquire properties with operations that are essential
        or important to the ongoing operations of the tenant. Carey Asset
        Management Corp. believes that these properties provide better
        protection in the event a tenant files for bankruptcy, since leases on
        properties essential or important to the operations of a bankrupt tenant
        are less likely to be terminated by a bankrupt tenant. Carey Asset
        Management Corp. also seeks to assess the income, cash flow and
        profitability of the business conducted at the property so that, if the
        tenant is unable to operate its business, CPA(R):14 can either continue
        operating the business conducted at the property or re-lease the
        property to another entity in the industry which can operate the
        property profitably.

        Lease Provisions that Enhance and Protect Value. When appropriate, Carey
        Asset Management Corp. attempts to include provisions in its leases that
        require its consent to specified tenant activity or require the tenant
        to satisfy specific operating tests. These provisions include, for
        example, operational and financial covenants of the tenant, prohibitions
        on a change in control of the tenant and indemnification from the tenant
        against environmental and other contingent liabilities. These provisions
        protect CPA(R):14's investment from changes in the operating and
        financial characteristics of a tenant that may impact its ability to
        satisfy its obligations to us or could reduce the value of CPA(R):14's
        properties.

        Diversification. Carey Asset Management Corp. will continue to diversify
        CPA(R):14's portfolio to avoid dependence on any one particular tenant,
        type of facility, geographic location or tenant industry. By



                                      -6-
<PAGE>



        diversifying CPA(R):14's portfolio, Carey Asset Management Corp. reduces
        the adverse effect of a single under-performing investment or a downturn
        in any particular industry or geographic region.

Carey Asset Management Corp. uses a variety of other strategies in connection
with its acquisitions. These strategies include attempting to obtain equity
enhancements in connection with transactions. Typically, these equity
enhancements involve warrants to purchase stock of the tenant or the stock of
the parent of the tenant. If the value of the stock exceeds the exercise price
of the warrant, equity enhancements help CPA(R):14 to achieve its goal of
increasing funds available for the payment of distributions.

As a transaction is structured, it is evaluated by the chairman of Carey Asset
Management Corp.'s investment committee. Before a property is acquired, the
transaction is reviewed by the investment committee to ensure that it satisfies
CPA(R):14's investment criteria. The investment committee is not directly
involved in originating or negotiating potential acquisitions, but instead
functions as a separate and final step in the acquisition process. Carey Asset
Management Corp. places special emphasis on having experienced individuals serve
on its investment committee and does not invest in a transaction unless it is
approved by the investment committee.

CPA(R):14 believes that the investment committee review process gives it a
unique competitive advantage over other net lease companies because of the
substantial experience and perspective that the investment committee has in
evaluating the blend of corporate credit, real estate and lease terms that
combine to make an acceptable risk.

The following people serve on the investment committee:

     o   George E. Stoddard, Chairman, was formerly responsible for the direct
         corporate investments of The Equitable Life Assurance Society of the
         United States and has been involved with the CPA(R) programs for over
         20 years.

     o   Frank J. Hoenemeyer, Vice Chairman, was formerly Vice Chairman,
         Director and Chief Investment Officer of The Prudential Insurance
         Company of America. As Chief Investment Officer, Mr. Hoenemeyer was
         responsible for all of Prudential's investments, including stocks,
         bonds, private placements, real estate and mortgages.

     o   Nathaniel S. Coolidge previously served as Senior Vice President --
         Head of Bond & Corporate Finance Department of the John Hancock Mutual
         Life Insurance Company. His responsibility included overseeing fixed
         income investments for Hancock, its affiliates and outside clients.

     o   Lawrence R. Klein is the Benjamin Franklin Professor of Economics
         Emeritus at the University of Pennsylvania and its Wharton School. Dr.
         Klein has been awarded the Alfred Nobel Memorial Prize in Economic
         Sciences and currently advises various governments and government
         agencies.

Each property purchased by CPA(R):14 has been and future purchases will be
appraised by an independent appraiser. CPA(R):14 will not purchase any property
that has a total property cost (the purchase price of the property plus all
acquisition fees) which is in excess of its appraised value. These appraisals
may take into consideration, among other things, the terms and conditions of the
particular lease transaction, the quality of the lessee's credit and the
conditions of the credit markets at the time the lease transaction is
negotiated. The appraised value may be greater than the construction cost or the
replacement cost of a property, and the actual sale price of a property if sold
by CPA(R):14 may be greater or less than the appraised value.

Carey Asset Management Corp.'s practices include performing evaluations of the
physical condition of properties and performing environmental surveys in an
attempt to determine potential environmental liabilities associated with a
property prior to its acquisition. CPA(R):14 intends to exercise due diligence
to discover potential environmental liabilities prior to the acquisition of any
property, although there can be no assurance that hazardous substances or wastes
(as defined by present or future Federal or state laws or regulations) will not
be discovered on the property. CPA(R):14 will also consider factors peculiar to
the laws of foreign countries, in addition to the risk normally associated with
real property investments, when considering an investment located outside the
United States.

ASSET MANAGEMENT

CPA(R):14 believes that effective management of its net lease assets is
essential to maintain and enhance property values. Important aspects of asset
management include restructuring transactions to meet the evolving needs of
current tenants, re-leasing properties, refinancing debt, selling properties and
knowledge of the bankruptcy process.



                                      -7-
<PAGE>


Carey Asset Management Corp. monitors, on an ongoing basis, compliance by
tenants with their lease obligations and other factors that could affect the
financial performance of any of its properties. Monitoring involves receiving
assurances that each tenant has paid real estate taxes, assessments and other
expenses relating to the properties it occupies and confirming that appropriate
insurance coverage is being maintained by the tenant. Carey Asset Management
Corp. reviews financial statements of its tenants and undertakes regular
physical inspections of the condition and maintenance of its properties.
Additionally, Carey Asset Management Corp. periodically analyzes each tenant's
financial condition, the industry in which each tenant operates and each
tenant's relative strength in its industry.

HOLDING PERIOD

CPA(R):14 intends to hold each property it acquires for an extended period. The
determination of whether a particular property should be sold or otherwise
disposed of will be made after consideration of relevant factors with a view to
achieving maximum capital appreciation and after-tax return for the CPA(R):14
shareholders. If CPA(R):14's common stock is not listed for trading on a
national securities exchange or included for quotation on Nasdaq, CPA(R):14 will
generally begin selling properties within eight years after the proceeds of its
recently completed public offering are substantially invested, subject to market
conditions. The board of directors will make the decision whether to list the
shares, liquidate or devise an alternative liquidation strategy which is likely
to result in the greatest value for the shareholders.

COMPETITION

CPA(R):14 faces competition for the acquisition of office and industrial
properties in general, and such properties net leased to major corporations in
particular, from insurance companies, credit companies, pension funds, private
individuals, investment companies and other REITs. CPA(R):14 also faces
competition from institutions that provide or arrange for other types of
commercial financing through private or public offerings of equity or debt or
traditional bank financings. CPA(R):14 believes its management's experience in
real estate, credit underwriting and transaction structuring will allow
CPA(R):14 to compete effectively for office and industrial properties.

ENVIRONMENTAL MATTERS

Under various federal, state and local environmental laws, regulations and
ordinances, current or former owners of real estate, as well as other parties,
may be required to investigate and clean up hazardous or toxic chemicals,
substances or waste or petroleum product or waste, releases on, under, in or
from a property. These parties may be held liable to governmental entities or to
third parties for specified damages and for investigation and cleanup costs
incurred by these parties in connection with the release or threatened release
of hazardous materials. These laws typically impose responsibility and liability
without regard to whether the owner knew of or was responsible for the presence
of hazardous materials, and the liability under these laws has been interpreted
to be joint and several under some circumstances. CPA(R):14's leases often
provide that the tenant is responsible for all environmental liability and for
compliance with environmental regulations relating to the tenant's operations.

CPA(R):14 typically undertakes an investigation of potential environmental risks
when evaluating an acquisition. Phase I environmental assessments are performed
by independent environmental consulting and engineering firms for all properties
acquired by CPA(R):14. Where warranted, Phase II environmental assessments are
performed. Phase I assessments do not involve subsurface testing, whereas Phase
II assessments involve some degree of soil and/or groundwater testing. CPA(R):14
may acquire a property which is known to have had a release of hazardous
materials in the past, subject to a determination of the level of risk and
potential cost of remediation. CPA(R):14 normally requires property sellers to
indemnify it fully against any environmental problem existing as of the date of
purchase. Additionally, CPA(R):14 often structures its leases to require the
tenant to assume most or all responsibility for compliance with the
environmental provisions of the lease or environmental remediation relating to
the tenant's operations and to provide that non-compliance with environmental
laws is a lease default. In some cases, CPA(R):14 may also require a cash
reserve, a letter of credit or a guarantee from the tenant, the tenant's parent
company or a third party to assure lease compliance and funding of remediation.
The value of any of these protections depends on the amount of the collateral
and/or financial strength of the entity providing the protection. Such a
contractual arrangement does not eliminate CPA(R):14's statutory liability or
preclude claims against CPA(R):14 by governmental authorities or persons who are
not a party to the arrangement. Contractual arrangements in CPA(R):14's leases
may provide a basis for CPA(R):14 to recover from the tenant damages or costs
for which it has been found liable.


                                      -8-

<PAGE>

INDUSTRY SEGMENT

CPA(R):14 operates in one industry segment, investment in net leased real
property. For the year ended December 31, 2001, no lessee represented 10% or
more of the total operating revenue of CPA(R):14.

FACTORS AFFECTING FUTURE OPERATING RESULTS

The provisions of the Private Securities Litigation Reform Act of 1995 (the
"Act") became effective in December 1995. The Act provides a "safe harbor" for
companies which make forward-looking statements providing prospective
information. The "safe harbor" under the Act relates to protection for companies
with respect to litigation filed on the basis of such forward-looking
statements.

CPA(R):14 wishes to take advantage of the "safe harbor" provisions of the Act
and is therefore including this section in its Annual Report on Form 10-K. The
statements contained in this Annual Report, if not historical, are
forward-looking statements and involve risks and uncertainties which are
described below that could cause actual results to differ materially from the
results, financial or otherwise, or other expectations described in such
forward-looking statements. These statements are identified with the words
"anticipated," "expected," "intends," "seeks" or "plans" or words of similar
meaning. Therefore, forward-looking statements should not be relied upon as a
prediction of actual future results or occurrences.

CPA(R):14's future results may be affected by certain risks and uncertainties
including the following:

      We are subject to general real estate ownership risks.

      Our properties consist predominantly of net leased industrial and
      commercial properties located in the United States. An investment in
      CPA(R):14 is subject to risks incident to the ownership and operation of
      these types of properties, including:

         o    changes in the general economic climate;

         o    changes in local conditions such as an oversupply of space or
              reduction in demand for real estate;

         o    changes in interest rates and the availability of financing;

         o    competition from other available space; and

         o    changes in laws and governmental regulations, including those
              governing real estate usage, zoning and taxes.

      We may have difficulty selling or re-leasing our properties.

      Real estate investments are relatively illiquid compared to most financial
      assets and this illiquidity will limit our ability to quickly change our
      portfolio in response to changes in economic or other conditions. Many of
      the net leases we enter into or acquire are for properties that are
      specially suited to the particular needs of our tenant. With these
      properties, if the current lease is terminated or not renewed, we may be
      required to renovate the property or to make rent concessions in order to
      lease the property to another tenant. In addition, in the event we are
      forced to sell the property, we may have difficulty selling it to a party
      other than the tenant due to the special purpose for which the property
      may have been designed. In addition, provisions of the Internal Revenue
      Code relating to REITs limit our ability to sell properties held for fewer
      than four years. These and other limitations may affect our ability to
      sell properties without adversely affecting returns to our shareholders.

      We are dependent on tenants for our revenue.

      Most of our properties are occupied by a single tenant and, therefore, the
      success of our investments are materially dependent on the financial
      stability of our tenants. Lease payment defaults by tenants could cause us
      to reduce the amount of distributions to shareholders. A default of a
      tenant on its lease payments to us would cause us to lose the revenue from
      the property and cause us to have to find an alternative source of revenue
      to meet the mortgage payment and prevent a foreclosure if the property is
      subject to a mortgage. In the event of a default, we may experience delays
      in enforcing our rights as landlord and may incur substantial costs in
      protecting our investment and reletting our property. If a lease is
      terminated, there is no assurance that we will be able to lease the
      property for the rent previously received or sell the property without
      incurring a loss.

      The bankruptcy of tenants would cause a reduction in revenue.

      A tenant in bankruptcy could cause



                                      -9-
<PAGE>

         o    the loss of lease payments;

         o    an increase in the costs incurred to carry the property;

         o    a reduction in the value of shares; and

         o    a decrease in distributions to shareholders.

      Under bankruptcy law, a tenant who is the subject of bankruptcy
      proceedings has the option of continuing or terminating any unexpired
      lease. If the tenant terminates the lease, any claim we have for breach of
      the lease (excluding collateral securing the claim) will be treated as a
      general unsecured claim. The maximum claim will be capped at the amount
      owed for unpaid rent prior to the bankruptcy unrelated to the termination,
      plus the greater of one year's lease payments or 15% of the remaining
      lease payments payable under the lease (but no more than three years'
      lease payments). In addition, due to the long-term nature of our leases
      and terms providing for the repurchase of a property by the tenant, a
      bankruptcy court could recharacterize a net lease transaction as a secured
      lending transaction. If that were to occur, we would not be treated as the
      owner of the property, but might have additional rights as a secured
      creditor.

      Some of the programs managed by Carey Asset Management Corp. or its
      affiliates have had tenants file for bankruptcy protection and are
      involved in litigation. Four CPA(R) programs had to reduce the rate of
      distributions to their partners as a result of adverse developments
      involving tenants.

      Our tenants that are highly leveraged may be unable to pay rent.

      A tenant that has been recently restructured may be unable to pay its rent
      if there are adverse changes to their business or economic conditions. We
      anticipate providing financing to companies involved in acquisitions,
      recapitalizations or other financial restructurings through the use of a
      sale leaseback transaction. Often the tenant in this type of transaction
      will have substantially greater debt and substantially lower net worth
      than it had prior to the transaction. In addition, the payment of rent and
      debt service may reduce the working capital available to it and prevent it
      from devoting the resources necessary to keep itself competitive in its
      industry. Furthermore, in situations where management of the tenant will
      change after the transaction, it may be difficult for Carey Asset
      Management Corp. to determine the likelihood of the tenant's business
      success and of it being able to pay rents throughout the term of a lease
      with us. These companies are more vulnerable to adverse conditions in
      their business or industry, economic conditions generally and increases in
      interest rates.

      It will be difficult to sell shares.

      There is no current public market for the shares and, therefore, it will
      be difficult for shareholders to sell their shares promptly. In addition,
      the price received for any shares sold is likely to be less than the
      proportionate value of the real estate we own.

      Our success will be dependent on the performance of Carey Asset Management
      Corp.

      Our ability to achieve our investment objectives and to pay distributions
      is dependent upon the performance of Carey Asset Management Corp. in the
      acquisition of investments, the selection of tenants and the determination
      of any financing arrangements. Shareholders have no opportunity to
      evaluate the terms of transactions or other economic or financial data
      concerning our investments, and must rely entirely on the management
      ability of Carey Asset Management Corp. and the oversight of the board of
      directors.

      Carey Asset Management Corp. may be subject to conflicts of interest.

      Carey Asset Management Corp. manages our business and selects our real
      estate investments. Carey Asset Management Corp. has some conflicts of
      interest in its management of CPA(R):14 which arise primarily from the
      involvement of Carey Asset Management Corp. and its affiliates in other
      activities that may conflict with CPA(R):14. The activities in which a
      conflict could arise between CPA(R):14 and Carey Asset Management Corp.
      are:

         o    the receipt of commissions, fees and other compensation by Carey
              Asset Management Corp. and its affiliates for property purchases,
              leases, sales and financing for CPA(R):14,

         o    non-arms length agreements between CPA(R):14 and Carey Asset
              Management Corp. or any of its affiliates,

         o    purchases and loans from affiliates, subject to CPA(R):14's
              investment procedures, objectives and policies, and

         o    competition with certain affiliates for property acquisitions.



                                      -10-
<PAGE>


      Inherent in these transactions is the conflict of interest that arises due
      to the potential impact of the transaction on the amount of fees received
      by Carey Asset Management Corp. and/or its affiliates and the
      distributions to shareholders.

      Liability for uninsured losses could adversely affect our financial
      condition.

      We generally require our tenants to carry comprehensive liability, fire,
      flood and extended coverage insurance with respect to our properties with
      policy specifications and insured limits customarily carried for similar
      properties. There are, however, types of losses from disaster-type
      occurrences (such as wars or earthquakes) that may be either uninsurable
      or not insurable on economically viable terms. Should an uninsured loss
      occur, we could lose our capital investment and/or anticipated profits and
      cash flow from one or more properties.

      Potential liability for environmental matters could adversely affect our
      financial condition.

      We own industrial and commercial properties and are subject to the risk of
      liabilities under federal, state and local environmental laws. Some of
      these laws could impose the following on CPA(R):14:

         o    Responsibility and liability for the cost of removal or
              remediation of hazardous substances released on our property,
              generally without regard to our knowledge or responsibility of the
              presence of the contaminants.

         o    Liability for the costs of removal or remediation of hazardous
              substances at disposal facilities for persons who arrange for the
              disposal or treatment of these substances.

         o    Potential liability for common law claims by third parties based
              on damages and costs of environmental contaminants.

      We generally include provisions in our leases that provide that the tenant
      is responsible for all environmental liabilities and for compliance with
      environmental regulation, and must reimburse us for damages or costs for
      which we have been found liable. However, these provisions do not
      eliminate our statutory liability or preclude third party claims against
      us and, even if a we had a cause of action against the tenant to enable us
      to recover any amounts we pay, there are no assurances that we would be
      able to collect any money from the tenant. Our costs of investigation,
      remediation or removal of hazardous substances may be substantial. In
      addition, the presence of hazardous substances on one of our properties,
      or the failure to properly remediate a contaminated property, could
      adversely affect our ability to sell or lease the property or to borrow
      using the property as collateral.

      Our use of debt to finance acquisitions could adversely affect our cash
      flow.

      Increased Risk Of Insufficient Cash Flow. Most of our property
      acquisitions will be made by borrowing a portion of the purchase price and
      securing the loan with a mortgage on the property. If we are unable to
      make our debt payments as required, a lender could foreclose on the
      property or properties securing its debt. This could cause us to lose part
      or all of our investment which in turn could cause the value of the shares
      and distributions to shareholders to be reduced. In addition, payments of
      principal and interest made to service our debts may leave us with
      insufficient cash to pay the distributions that we are required to pay to
      maintain our qualification as a REIT.

      Financial Covenants Could Place Restrictions On Operations. In connection
      with the making of a mortgage loan with respect to a property, a lender
      could impose restrictions on us which affect our ability to incur
      additional debt and our distribution and operating policies. The mortgages
      on our properties contain customary negative covenants which may limit our
      ability to further mortgage the property, to discontinue insurance
      coverage, replace Carey Asset Management Corp. as our advisor or impose
      other limitations.

      Balloon Payment Obligations May Adversely Affect our Financial Condition.
      Some of our financing requires us to make a lump-sum or "balloon" payment
      at maturity. We intend to finance more properties in this manner. Our
      ability to make a balloon payment at maturity is uncertain and may depend
      upon our ability to obtain additional financing or our ability to sell the
      property. At the time the balloon payment is due, we may or may not be
      able to refinance the balloon payment on terms as favorable as the
      original loan or sell the property at a price sufficient to make the
      balloon payment. The effect of a refinancing or sale could affect the rate
      of return to shareholders and the projected time of disposition of our
      assets.

      Failure to qualify as a REIT could adversely affect our operations and
      ability to make distributions.

      If we fail to qualify as a REIT for any taxable year, we would be subject
      to federal income tax on our taxable income at corporate rates. In
      addition, we would generally be disqualified from treatment as a REIT



                                      -11-
<PAGE>

      for the four taxable years following the year of losing our REIT status.
      Losing our REIT status would reduce our net earnings available for
      investment or distribution to shareholders because of the additional tax
      liability. In addition, distributions to shareholders would no longer
      qualify for the distributions paid deduction and we would no longer be
      required to make distributions. We might be required to borrow funds or
      liquidate some investments in order to pay the applicable tax.

      Qualification as a REIT is subject to the satisfaction of tax requirements
      and various factual matters and circumstances which are not entirely
      within our control. New legislation, regulations, administrative
      interpretations or court decisions could change the tax laws with respect
      to qualification as a REIT or the federal income tax consequences of being
      a REIT.

      A limit on the number of shares a person may own may discourage a
      takeover.

      Our articles of incorporation restrict ownership of more than 9.8% of the
      outstanding shares by one person. These restrictions may discourage a
      change of control of CPA(R):14 and may deter individuals or entities from
      making tender offers for shares, which offers might be financially
      attractive to shareholders or which may cause a change in the management
      of CPA(R):14.

      Maryland law could restrict change in control.

      Provisions of Maryland law applicable to us prohibit business combinations
      with:

         o    any person who beneficially owns 10% or more of the voting power
              of outstanding shares;

         o    an affiliate of us who, at any time within the two-year period
              prior to the date in question, was the beneficial owner of 10% or
              more of the voting power of our outstanding shares ("an interested
              shareholder"); or

         o    an affiliate of an interested shareholder.

      These prohibitions last for five years after the most recent date on which
      the interested shareholder became an interested shareholder. Thereafter,
      any business combination must be recommended by our board of directors and
      approved by the affirmative vote of at least 80% of the votes entitled to
      be cast by holders of our outstanding shares and two-thirds of the votes
      entitled to be cast by holders of our shares other than shares held by the
      interested shareholder. These requirements could have the effect of
      inhibiting a change in control even if a change in control were in
      shareholders' interest. These provisions of Maryland law do not apply,
      however, to business combinations that are approved or exempted by our
      board of directors prior to the time that someone becomes an interested
      shareholder.

      Our participation in joint ventures creates additional risk.

      We participate in joint ventures with other entities, some of which may be
      unaffiliated with us. There are additional risks involved in these types
      of transactions. These risks include the potential of our joint venture
      partner becoming bankrupt and the possibility of diverging or inconsistent
      economic or business interests of us and our partner which could result
      in, among other things, subjecting us to liabilities in excess of those
      contemplated under the joint venture agreement and/or exposing us to
      liabilities of the joint venture in excess of our proportionate share of
      these liabilities.

      In some of our joint venture relationships with publicly registered
      investment programs or other entities sponsored by Carey Asset Management
      Corp. or one of its affiliate, we enter into investments as
      tenants-in-common. This poses risks in addition to those mentioned above.
      The partition rights of each co-tenant in a tenancy-in-common could reduce
      the value of each portion of the divided property. In addition, the
      fiduciary obligation that Carey Asset Management Corp. or our board may
      owe to our partner in an affiliated transaction may make it more difficult
      for us to enforce our rights.

      International investments involve additional risks.

      We own properties in the United Kingdom, the Netherlands and Finland and
      we may purchase additional property located outside the United States.
      These investments may be affected by factors peculiar to the laws of the
      jurisdiction in which the property is located. These laws may expose us to
      risks that are different from and in addition to those commonly found in
      the United States. Foreign investments could be subject to the following
      risks:

         o    changing governmental rules and policies;

         o    enactment of laws relating to the foreign ownership of property
              and laws relating to the ability of foreign persons or
              corporations to remove profits earned from activities within the
              country to the person's or corporation's country of origin;



                                      -12-
<PAGE>

         o    variations in the currency exchange rates;

         o    adverse market conditions caused by changes in national or local
              economic conditions;

         o    changes in relative interest rates;

         o    change in the availability, cost and terms of mortgage funds
              resulting from varying national economic policies;

         o    changes in real estate and other tax rates and other operating
              expenses in particular countries;

         o    changes in land use and zoning laws; and

         o    more stringent environmental laws or changes in such laws.






                                      -13-
<PAGE>





Item 2.  Properties.

Set forth below is certain information relating to CPA(R):14's properties owned
as of December 31, 2001.

<TABLE>
<CAPTION>
                                                                                    SHARE OF
                                                                       RENT PER     CURRENT
  LEASE OBLIGOR/                                          SQUARE        SQUARE       ANNUAL      INCREASE      LEASE        MAXIMUM
   LOCATION                     OWNERSHIP INTEREST(1)     FOOTAGE        FOOT       RENTS(2)      FACTOR       TERM          TERM
  --------------                ---------------------     ---------    --------     --------     --------      -----        -------
<S>                             <C>                       <C>           <C>         <C>           <C>          <C>          <C>
PETSMART, INC. (3)(5)
  Phoenix, AZ; Westlake
  Village, CA; Boca Raton,
  Lake Mary, Tallahassee,          99.999% interest
  Plantation, FL; Evanston,         in two limited
  IL; Braintree, MA; Oxon         partnerships owning       946,177       7.68      7,262,677     Stated     Nov. 2021     Nov. 2041
  Hill, MD; Flint, MI;             land and buildings
  Fridley, MN; Dallas,
  Southlake, TX

NORTEL NETWORKS LIMITED(3)
  Richardson, TX                         100%               282,000      18.75      5,287,500     Stated     Dec. 2016     Dec. 2036

ATRIUM COMPANIES, INC.(3)
  Dallas and
  Greenville(2), TX                      100%             1,055,077       1.97      2,075,000       CPI      Jul. 2020     Jul. 2030
  Welcome, NC;
  Murrysville, PA;
  Wylie, TX                              100%               774,252       3.47      2,690,247       CPI      Aug. 2020     Aug. 2020
                                                          ---------                 ---------
             Total:                                       1,829,329                 4,765,247

ADVANCE PARADIGM, INC.(3)
  Scottsdale, AZ                         100%               354,888      12.12      4,300,000      None      Sep. 2021     Sep. 2051

FEDERAL EXPRESS
  CORPORATION(3)
                                  60% interest in a
                                  limited liability
  Collierville, TN               company owning land        390,380      16.65      3,900,495       CPI      Nov. 2019     Nov. 2029
                                     and building

COLLINS & AIKMAN
  CORPORATION(3)
  Marshall, MI; Albemarle,
  Farmville and Old Fort,
  NC; Holmesville, OH;                   100%             1,924,174       1.68      3,235,700       CPI      Sep. 2021     Sep. 2041
  Springfield, TN

METALDYNE COMPANY LLC(3)
  Rome, GA; Niles, IL;
     Plymouth,                           100%               534,500       5.84      3,119,851       CPI      Jun. 2021     Jun. 2041
  MI; Solon and
     Twinsburg, OH

APPLIED MATERIALS, INC.
  (ETEC SYSTEMS, INC.)(3)
                                 49.99% interest in a
                                  limited liability
  Hayward, CA                    company owning land        342,000      27.47      3,099,771       CPI      Sep. 2014     Jan. 2030
                                     and building

ADVANCED MICRO
  DEVICES, INC.(3)
                                33 1/3% interest in a
                                  limited liability
  Sunnyvale, CA                  company owning land        362,000      25.26      3,048,195       CPI      Dec. 2018     Dec. 2038
                                    and buildings

</TABLE>


                                      -14-
<PAGE>

<TABLE>
<CAPTION>
                                                                                     SHARE OF
                                                                        RENT PER     CURRENT
  LEASE OBLIGOR/                                            SQUARE       SQUARE       ANNUAL     INCREASE     LEASE       MAXIMUM
   LOCATION                       OWNERSHIP INTEREST(1)     FOOTAGE       FOOT       RENTS(2)     FACTOR       TERM        TERM
  --------------                  ---------------------    ---------    --------     ---------   --------   ---------    ----------

<S>                             <C>                        <C>           <C>        <C>           <C>        <C>           <C>
GALYAN'S TRADING COMPANY(3)
  Kennesaw, GA;
  Plainfield, IN; Leawood,               100%               545,252       5.37      2,925,839     Stated     Aug. 2019     Aug. 2059
  KS

APW NORTH AMERICA,
  INC.(3)
  Monon, IN; Champlin, MN;
  Robbinsville, NJ; North
  Salt Lake City, UT;                    100%               841,317       3.29      2,769,899       CPI       May 2017      May 2027
  Radford, VA

AMERIX CORP.(3)
  Columbia, MD                           100%               159,577      15.40      2,457,833       CPI      Dec. 2016     Dec. 2036

SPECIAL DEVICES, INC.(3)
  Moorpark, CA; Mesa, AZ                 50%                249,275      15.74      1,962,000       CPI      Jun. 2021     Jun. 2041

BUILDERS FIRSTSOURCE, INC.
  Harrisburg, NC                         100%               174,000       5.84      1,016,083       CPI      Dec. 2019     Dec. 2029
                                  99% interest in a
                                 limited partnership
  Norcross, GA; Elkwood,           owning land and
  VA; Cincinnati, OH                  buildings(6)          389,261       3.56      1,370,533       CPI      Dec. 2016     Dec. 2036
                                                          ---------                 ---------
             Total:                                         563,261                 2,386,616

PERKINELMER, INC.(3)
  Turku, Finland                         100%               282,600       8.27      2,336,276(4)    CPI      Dec. 2021     Dec. 2036

CELESTICA CORPORATION(3)
  Rochester, MN                          100%               200,000      10.97      2,193,900     Stated     Jul. 2016     Jul. 2026

BUFFETS, INC.(3)
  Eagan, MN                              100%               100,000      21.26      2,126,250       CPI      Sep. 2020     Sep. 2040

GERBER SCIENTIFIC, INC.(3)
  South Windsor (2) and                  100%               347,500       6.09      2,117,750       CPI      Jul. 2018     Jul. 2038
  Manchester, CT

CHECKFREE HOLDINGS, INC.(3)
                                  50% interest in a
                                  limited liability
  Norcross, GA                   company owning land        220,675      18.92      2,088,107       CPI      Dec. 2015     Dec. 2015
                                     and building

BEST BUY CO., INC.
  Torrance, CA                           100%               103,686      18.78      1,946,930     Stated     Jan. 2005     Jan. 2010

MCLANE COMPANY, INC.(3)
                                60% interest in a two
  Shawnee, KS; Burlington,        limited liability
  NJ; Manassas, VA              companies owning land       686,168       4.62      1,902,748       CPI      Dec. 2020     Dec. 2040
                                    and buildings

STELLEX TECHNOLOGIES, INC.
  Valencia, CA; North                    100%               281,889       6.68      1,882,934       CPI      Mar. 2020     Mar. 2040
  Amityville, NY
</TABLE>



                                      -15-
<PAGE>


<TABLE>
<CAPTION>
                                                                                     SHARE OF
                                                                       RENT PER      CURRENT
  LEASE OBLIGOR/                                           SQUARE       SQUARE       ANNUAL      INCREASE      LEASE        MAXIMUM
   LOCATION                       OWNERSHIP INTEREST(1)    FOOTAGE       FOOT        RENTS(2)     FACTOR       TERM          TERM
  --------------                  ---------------------   ---------    --------     ---------    --------      -----        -------

<S>                             <C>                       <C>           <C>        <C>           <C>        <C>           <C>
INSTITUTIONAL JOBBERS
  COMPANY(3)
  Valdosta, GA; Johnson                  100%               411,417       4.49      1,848,575     Stated     Dec. 2019     Dec. 2028
  City, TN

NEXPAK CORPORATION(3)
  Duluth, GA                             100%               221,374       5.93      1,313,000       CPI      Mar. 2021     Mar. 2041
  Helmond, The Netherlands                100%              173,884       3.01        522,6004      CPI      Jun. 2021     Jun. 2041
                                                          ---------                 ---------
                                                            395,258                 1,835,600

WADDINGTON NORTH AMERICA,
  INC.(3)
  City of Industry, CA;
  Florence, KY; Chemsford,               100%               369,870       4.89      1,810,500       CPI      Apr. 2021     Apr. 2041
  MA; Lancaster, TX

GIBSON GUITAR CORP.(3)
                                 85% interest in two
  Bozeman, MT; Elgin, IL;        limited partnerships
  Nashville, TN (2)                owning land and          336,721       6.20      1,774,290       CPI      Mar. 2021     Mar. 2021
                                      buildings

NEW CREATIVE ENTERPRISES,
  INC.(3)
  Milford, OH                            100%               437,000       3.61      1,576,200       CPI      Sep. 2021     Sep. 2041

CONSOLIDATED THEATERS
  HOLDING, G.P.(3)
  Midlothian, VA                         100%                88,000      17.62      1,550,667     Stated     Aug. 2020     Aug. 2030

RAVE REVIEWS CINEMAS, L.L.C.
  Pensacola, FL                          100%                57,126      12.19        696,417       CPI      Jul. 2021     Jul. 2041
  Port St. Lucie, FL                     100%                52,825      13.41        708,406       CPI      Aug. 2021     Aug. 2041
                                                          ---------                 ---------
              Total:                                        109,951                 1,404,823

PRODUCTION RESOURCE
  GROUP LLC(3)
  Las Vegas, NV                          100%               127,796       7.37        941,773       CPI      Mar. 2014     Mar. 2024
  Burbank and
  Los Angeles, CA                        100%                64,236       6.53        419,205       CPI      Oct. 2014     Oct. 2024
                                                          ---------                 ---------
             Total:                                         192,032                 1,360,978

FITNESS HOLDINGS, INC.(3)
  Salt Lake City, UT                     100%                36,851      16.15        595,140       CPI       May 2020      May 2035
  St. Charles, MO3                       100%                38,432      18.77        721,526       CPI      Dec. 2020     Dec. 2035
                                                          ---------                 ---------
             Total:                                          75,283                 1,316,666

COMPUCOM SYSTEMS, INC.(3)
                                33 1/3% interest in a
                                  limited liability
  Dallas, TX                     company owning land        242,333      16.15      1,304,536       CPI      Apr. 2019     Apr. 2029
                                     and building

THE BON-TON DEPARTMENT
  STORES, INC.(3)
  York, PA (2)                           100%               301,337       4.18      1,259,250       CPI      Dec. 2020     Dec. 2050

BARJAN PRODUCTS L.L.C.
  Rock Island, IL                        100%               241,950       5.13      1,242,364     Stated     Oct. 2016     Oct. 2026

TRANSCORE HOLDINGS INC.(3)
  Albuquerque, NM                        100%                74,747      15.98      1,194,109     Stated     Sep. 2015     Sep. 2030

METAGENICS, INC.
  San Clemente, CA                       100%                88,070      13.49      1,188,288     Stated     Aug. 2011     Aug. 2021
</TABLE>




                                      -16-
<PAGE>



<TABLE>
<CAPTION>
                                                                                     SHARE OF
                                                                       RENT PER      CURRENT
  LEASE OBLIGOR/                                           SQUARE       SQUARE       ANNUAL       INCREASE      LEASE        MAXIMUM
   LOCATION                       OWNERSHIP INTEREST(1)    FOOTAGE       FOOT        RENTS(2)      FACTOR       TERM          TERM
  --------------                  ---------------------   ---------    --------     ---------     --------      -----        -------

<S>                             <C>                       <C>           <C>        <C>           <C>        <C>           <C>
LINCOLN TECHNICAL
  INSTITUTE, INC.(3)
  Union, NJ; Grand
  Prairie, TX; Allentown                 100%               158,202       7.42      1,174,035       CPI      Dec. 2016     Dec. 2016
  and Philadelphia, PA

TEXTRON, INC.(3)
                                  50% interest in a
                                  limited liability
  Gilbert, AZ                    company owning land        243,370       9.35      1,137,375       CPI      Jan. 2019     Jan. 2039
                                     and building

MERIDIAN AUTOMOTIVE
  SYSTEMS, INC.
  Salisbury, NC                          100%               333,830       3.39      1,132,801     Stated     Jun. 2016     Jun. 2036

FLEMING COMPANIES, INC.
                                  60% interest in a
                                  limited liability
  Grand Rapids, MI               company owning land        176,941       8.58        910,483     Stated     Jul. 2006     Jul. 2026
                                     and bulding

INTERNATIONAL GARDEN
  PRODUCTS, INC.
  Lakewood, NJ                           100%               220,520       3.93        866,250       CPI      Dec. 2001     Dec. 2011

TOWNE HOLDINGS, INC.(3)
  Elk Grove Village, IL                  100%                46,672      18.46        861,664       CPI      Oct. 2020     Oct. 2040

BLP GROUP PLC(3)
  Doncaster, South                       100%               351,515       2.39        841,740(4)  Stated     Jan. 2031     Jan. 2031
  Yorkshire, United Kingdom

BURLINGTON MOTOR
  CARRIERS, INC.
  Daleville, IN                          100%               106,352       7.84        833,342       CPI      Jun. 2018     Jun. 2028

LENNAR CORPORATION(3)
  Houston, TX                            100%                52,144      13.42        700,000       CPI      Oct. 2015     Oct. 2035

SCOTT COMPANIES, INC.(3)
  Gardena, CA                            100%                86,924       7.83        681,000       CPI      Aug. 2019     Aug. 2034

BRASHEAR LP(3)
  Pittsburgh, PA                         100%               146,103       4.40        643,500       CPI      Nov. 2013     Nov. 2023

EARLE M. JORGENSEN COMPANY(3)
  Kansas City, MO                        100%               120,855       5.19        627,059       CPI      Mar. 2020     Mar. 2040

WEST UNION CORPORATION(3)
  Tempe, AZ                              100%               116,922       4.55        532,350     Stated     Jan. 2015     Jan. 2035

MCCOY, INC.(3)
                                  90% interest in a
                                 limited partnership
  Houston, TX                      owning land and          140,030       3.72        468,720     Stated     Sep. 2007     Sep. 2007
                                       building

NEWPARK RESOURCES, INC.
  Lafayette, LA                          100%                34,893      10.53        367,500       CPI      Nov. 2017     Nov. 2027
</TABLE>



                                      -17-
<PAGE>




<TABLE>
<CAPTION>
                                                                                    SHARE OF
                                                                       RENT PER     CURRENT
  LEASE OBLIGOR/                                          SQUARE        SQUARE       ANNUAL      INCREASE      LEASE        MAXIMUM
   LOCATION                     OWNERSHIP INTEREST(1)     FOOTAGE        FOOT       RENTS(2)      FACTOR       TERM          TERM
  --------------                ---------------------     ---------    --------     --------     --------      -----        -------

<S>                             <C>                       <C>           <C>        <C>           <C>        <C>           <C>
VARIOUS TENANTS(3)
                                  85% interest in a
                                 limited partnership                                                         Mar. 2003     Mar. 2003
  Nashville, TN                    owning land and           35,994       4.58        140,020     Stated      through       through
                                       building                                                              Oct. 2006     Oct. 2006

VACANT
  Lindon, UT                             100%                88,221
</TABLE>



      1.    Percentage of ownership in land and building, except as noted.

      2.    Share of Current Annual Rents is the product of the Square Footage,
            the Rent per Square Foot, and the Ownership Interest percentage.

      3.    These properties are encumbered by mortgage notes payable.

      4.    Based on exchange rates at December 31, 2001.

      5.    29.999% interest sold to affiliate in February 2002 pursuant to
            purchase option in limited partnership agreements.

      6.    39% interest sold to affiliate in February 2002 pursuant to purchase
            option in limited partnership agreement.

Item 3.  Legal Proceedings.

As of the date hereof, CPA(R):14 is not a party to any material pending legal
proceedings.

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

No matter was submitted during the fourth quarter of the year ended December 31,
2001 to a vote of security holders, through the solicitation of proxies or
otherwise.



                                      -18-
<PAGE>




                                     PART II

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

Information with respect to CPA(R):14's common equity is hereby incorporated by
reference to page 24 of CPA(R):14's Annual Report contained in Appendix A.

Item 6.  Selected Financial Data.

Selected Financial Data are hereby incorporated by reference to page 1 of
CPA(R):14's Annual Report contained in appendix A.

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

Management's Discussion and Analysis are hereby incorporated by reference to
pages 2 to 7 of CPA(R):14's Annual Report contained in Appendix A.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk:

Approximately $445,333,000 of CPA(R):14's long-term debt bears interest at fixed
rates, and therefore the fair value of these instruments is affected by changes
in the market interest rates. The following table presents principal cash flows
based upon expected maturity dates of the debt obligations and the related
weighted-average interest rates by expected maturity dates for the fixed rate
debt. The interest rate on the fixed rate debt as of December 31, 2001 ranged
from 7.09% to 8.85%. The interest rate on the variable rate debt as of December
31, 2001 ranged from 5.125% to 6.480%.


<TABLE>
<CAPTION>
(in thousands)             2002       2003       2004       2005       2006     Thereafter       Total      Fair Value
                          ------     ------     ------     ------     ------    ----------      -------     ----------
<S>                       <C>        <C>        <C>        <C>        <C>       <C>             <C>         <C>
Fixed rate debt           $4,968     $5,386     $5,741     $6,268     $6,765      $416,205      $445,333   $443,422
Weighted average
    interest rate           7.59%      7.59%      7.60%      7.61%      7.61%         7.74%
Variable rate debt        $3,978     $  192     $  209     $  221     $  227      $ 13,704      $ 18,531   $ 18,531
</TABLE>

CPA(R):14 conducts business in the United Kingdom, Finland and The Netherlands.
The foreign operations were not significant to CPA(R):14's consolidated
financial position, results of operations or cash flows during the three-year
period ended December 31, 2001. Additionally, foreign currency transaction gains
and losses were not material to our results of operations for the three-year
period ended December 31, 2001. Accordingly, we were not subject to material
foreign currency exchange rate risk from the effects that exchange rate
movements of foreign currencies would have on our future costs or on future cash
flows we would receive from our foreign subsidiaries. To date, we have not
entered into any foreign currency forward exchange contracts to hedge the
effects of adverse fluctuations in foreign currency exchange rates. One lease
provides CPA(R):14 the option to receive up to $77,500 of its rents in U.S.
dollars or the functional local currency. Under accounting principles generally
accepted in the United States, this option is considered a derivative
instrument. Scheduled future minimum rents, exclusive of renewals, under
non-cancelable leases resulting from CPA(R):14's foreign operations are as
follows:

<TABLE>
<CAPTION>

(in thousands)                         2002        2003         2004         2005        2006      Thereafter        Total
                                      ------      ------       ------       -------     ------     ----------       -------
<S>                                   <C>         <C>          <C>          <C>         <C>        <C>              <C>
Rental income(1)                      $2,857      $2,857       $2,857        $2,857     $2,857        $42,823       $57,108
Interest income from direct
    financing leases(1)               $  842      $  842       $  920        $  920     $  920        $33,630       $38,074

</TABLE>

Scheduled principal payments for the mortgage notes payable during each of the
next five years following December 31, 2001 and thereafter are as follows:


<TABLE>
<CAPTION>

(in thousands)                         2002        2003         2004         2005        2006      Thereafter        Total
                                      ------      ------       ------       -------     ------     ----------       -------
<S>                                   <C>         <C>          <C>          <C>         <C>        <C>              <C>
Fixed rate debt(1)                      $661        $698         $742         $788        $837        $19,095       $22,821
Variable rate debt(1)                   $ 60        $ 63         $ 68         $ 72        $ 77        $ 5,134       $ 5,474
</TABLE>

----------------
(1)  Based on December 31, 2001 exchange rate. The mortgage notes are
     denominated in the functional currency of the country of each property.



                                      -19-
<PAGE>



Item 8.   Financial Statements and Supplementary Data.

The following consolidated financial statements and supplementary data of
CPA(R):14 are hereby incorporated by reference to pages 8 to 23 of CPA(R):14's
Annual Report contained in Appendix A:

  (i)  Report of Independent Accountants
 (ii)  Consolidated Balance Sheets at December 31, 2000 and 2001.
(iii)  Consolidated Statements of Income for the years ended December 31, 1999,
       2000 and 2001.
 (iv)  Consolidated Statements of Shareholders' Equity for the years ended
       December 31, 1999, 2000 and 2001.
  (v)  Consolidated Statements of Cash Flows for the years ended December 31,
       1999, 2000 and 2001.
 (vi)  Notes to Consolidated Financial Statements.

Item 9.  Disagreements on Accounting and Financial Disclosure.

None.




                                      -20-
<PAGE>



                                    PART III


Item 10.  Directors and Executive Officers of the Registrant.

This information will be contained in CPA(R):14's definitive Proxy Statement
with respect to CPA(R):14's Annual Meeting of Shareholders, to be filed with the
Securities and Exchange Commission within 120 days following the end of
CPA(R):14's fiscal year, and is hereby incorporated by reference.


Item 11.  Executive Compensation.

This information will be contained in CPA(R):14's definitive Proxy Statement
with respect to CPA(R):14's Annual Meeting of Shareholders, to be filed with the
Securities and Exchange Commission within 120 days following the end of
CPA(R):14's fiscal year, and is hereby incorporated by reference.


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

This information will be contained in CPA(R):14's definitive Proxy Statement
with respect to CPA(R):14's Annual Meeting of Shareholders, to be filed with the
Securities and Exchange Commission within 120 days following the end of
CPA(R):14's fiscal year, and is hereby incorporated by reference.


Item 13.  Certain Relationships and Related Transactions.

This information will be contained in CPA(R):14's definitive Proxy Statement
with respect to CPA(R):14's Annual Meeting of Shareholders, to be filed with the
Securities and Exchange Commission within 120 days following the end of the
CPA(R):14's fiscal year, and is hereby incorporated by reference.



                                      -21-
<PAGE>


                                     PART IV


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

    (a)    1.  Consolidated Financial Statements:

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

                   Report of Independent Accountants.

                   Consolidated Balance Sheets, December 31, 2000 and 2001.

                   Consolidated Statements of Income for the years ended
December 31, 1999, 2000 and 2001.

                   Consolidated Statements of Shareholders' Equity for the years
ended December 31, 1999, 2000 and 2001.

                   Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 2000 and 2001.

                   Notes to Consolidated Financial Statements.

                The consolidated financial statements are hereby incorporated by
                reference to pages 8 to 23 of CPA(R):14's Annual Report
                contained in Appendix A.

    (a)    2.  Financial Statement Schedule:

               The following schedules are filed as a part of this Report:

                  Report of Independent Accountants.

                   Schedule III - Real Estate and Accumulated Depreciation as of
December 31, 2001.

                   Schedule III of Registrant is contained on pages 30 to 36 of
this Form 10-K.

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



                                      -22-
<PAGE>




    (a)    3.  Exhibits:

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

<TABLE>
<CAPTION>
Exhibit
  No.                            Description                                       Method of Filing
------                           -----------                                       ----------------
<S>         <C>                                                             <C>
 3.1        Articles of Amendment and Restatement.                          Exhibit 3(A) to Registration Statement
                                                                            (Form S-11) No. 333-76761

 3.1(1)     Amended and Restated Articles of Incorporation of Registrant    Exhibit 3.1(1) to Registrant's
                                                                            Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

 3.1(2)     Amended and Restated Articles of Incorporation of Registrant    Exhibit 3.1(1) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

 3.2        Amended Bylaws of Registrant.                                   Exhibit 3(B) to Registration Statement
                                                                            (Form S-11) No. 333-31437

 3.2(2)     Form of Bylaws of Registrant                                    Exhibit 3.2(2) to Post-Effective
                                                                            Amendment No. 1 dated April 28, 2000

 3.2(3)     Form of Bylaws of Registrant                                    Exhibit 3.2(2) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

 5(1)       Opinion and Consent of Piper Marbury Rudnick & Wolfe LLP.       Exhibit 5(1) to Registrant's
                                                                            Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

 5(2)       Opinion and Consent of Piper Marbury Rudnick & Wolfe LLP.       Exhibit 5(1) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

 8.1(1)     Opinion of Reed Smith Shaw & McClay LLP as to certain tax       Exhibit 8.1(1) to Registrant's
            matters.                                                        Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

 8.1(2)     Opinion of Reed Smith Shaw & McClay LLP as to certain tax       Exhibit 8.1(1) to Registrant's
            matters.                                                        Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

 8.2(1)     Opinion of Reed Smith Shaw & McClay LLP as to certain ERISA     Exhibit 8.2(1) to Registrant's
            matters.                                                        Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

 8.2(2)     Opinion of Reed Smith Shaw & McClay LLP as to certain ERISA     Exhibit 8.2(1) to Registrant's
            matters.                                                        Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

10.1        Amended Advisory Agreement.                                     Exhibit 10.1 to Registration Statement
                                                                            (Form S-11) No. 333-31437
</TABLE>



                                      -23-
<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                            Description                                       Method of Filing
------                           -----------                                       ----------------
<S>         <C>                                                             <C>
10.1(2)     Lease Agreement dated July 27, 1998 by and between Best (CA)    Exhibit 10.1 to Registrant's Form 8-K
            QRS 14-4, as Landlord, and Best Buy Co. Inc., as Tenants.       Dated February 2, 1999

10.2        Lease Agreement dated July 27, 1998 by and between Best (CA)    Exhibit 10.1 to Registrant's Form 8-K
            QRS 14-4, as Landlord, and Best Buy Co. Inc., as Tenants.       dated February 2, 1999

10.2(2)     Lease Agreement dated July 27, 1998 by and between Best (CA)    Exhibit 10.2(2) to Registration
            QRS 14-4, as Landlord, and Best Co. Inc., as Tenants.           Statement (Form S-11) No. 333- 76761

10.2(3)     Lease Agreement dated July 27, 1998 by and between Best (CA)    Exhibit 10.2(3) to Registrant's Form
            QRS 14-4, as Landlord, and Best Co. Inc., as Tenants.           Post AM dated April 19, 1999

10.2(4)     Lease Agreement date July 27, 19998 by and between Best (CA)    Exhibit 10.2 to Registrant's Form 10-k
            QRS 14-4, as Landlord, and Best Buy Co. Inc. as Tenants.        for the year ended December 31, 1998,
                                                                            dated March 30, 1999

10.2(5)     Lease Agreement dated February 3, 1998 by and between ESI       Exhibit 10.2 to Registrant's Form 8-K
            (CA) QRS 12-6 INC., as Landlord and Etec Systems, Inc. as       dated February 2, 1999
            Tenants.

10.2(6)     Lease Agreement dated July 27, 1998 by and between Best (CA)    Exhibit 10.2(3) to Registrant's
            QRS 14-4, as Landlord, and Best Co. Inc., as Tenants.           Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

10.2(7)     Lease Agreement dated July 27, 1998 by and between Best (CA)    Exhibit 10.2(3) to Registrant's
            QRS 14-4, as Landlord, and Best Co. Inc., as Tenants.           Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

10.3(2)     Lease Agreement dated February 2, 1998 by and between ESI       Exhibit 10.3(2) to Registration
            (CA) QRS 12-6, as Landlord, and Etec Systems, Inc., as          Statement (Form S-11) No 333- 76761
            Tenants.

10.3(4)     Lease Agreement dated February 3, 1998 by and between ESI       Exhibit 10.3 to Registrant's Form 10-K
            (CA) QRS 12-6 Inc., as Landlord and ETEC Systems, Inc., as      for the year ended December 31, 1998
            Tenants.                                                        dated March 30, 1999

10.3(5)     Lease Agreement date July 29, 1998 by and between META (CA)     Exhibit 10.3 to Registrant's form 8-K
            QRS 14-16, as Landlord, and Metagenics Incorporated, as         dated February 2, 1999
            Tenants.

10.3(6)     Lease Agreement dated February 2, 1998 by and between ESI       Exhibit 10.3(3) to Registrant's
            (CA) QRS 12-6, as Landlord, and Etec Systems, Inc., as          Post-Effective Amendment No. 1 dated
            Tenants.                                                        April 28, 2000

10.3(7)     Lease Agreement dated February 2, 1998 by and between ESI       Exhibit 10.3(3) to Registrant's
            (CA) QRS 12-6, as Landlord, and Etec Systems, Inc., as          Post-Effective Amendment No. 2 dated
            Tenants.                                                        November 22, 2000

10.4        Lease Agreement dated July 29, 1998 by and between META (CA)    Exhibit 10.3 to Registrant's Form 8-K
            QRS 14-16, as Landlord, and Metagenics Incorporated, as         dated February 2, 1999
            Tenants.

</TABLE>


                                      -24-
<PAGE>
<TABLE>
<CAPTION>
Exhibit
  No.                            Description                                       Method of Filing
------                           -----------                                       ----------------
<S>         <C>                                                             <C>

10.4(2)     Lease Agreement dated July 29, 1998 by and between META (CA)    Exhibit 10.4(2) to Registration
            QRS 14-16, as Landlord, and Metagenics Incorporated, as         Statement (Form S-11) No. 333-76761
            Tenants.

10.4(3)     Lease Agreement dated July 29, 1998 by and between META (CA)    Exhibit 10.4 (3) to Registrant's Post
            QRS 14-16, as Landlord, and Metagenics Incorporated, as         Effective Amendment No. 2 to Form S-11
            Tenants.                                                        dated April 19, 1999

10.4(4)     Lease Agreement date July 29, 1998 by and between META (CA)     Exhibit 10.4 to Registrant's Form 10K
            QRS 14-16, as Landlord, and Metagenics Incorporated, as         for the year ended December 31, 1999,
            Tenants.                                                        dated March 30, 1999

10.4(5)     Lease Agreement dated July 30, 1998 by and between TRUCK (IN)   Exhibit 10.4 to Registrant's Form 8-K
            QRS 14-3, INC., as Landlord, and Burlington Motor Carrier as    dated February 2, 1999
            Tenant.

10.4(6)     Lease Agreement date July 29, 1998 by and between META (CA)     Exhibit 10.4(3) to Registrant's
            QRS 14-16, as Landlord, and Metagenics Incorporated, as         Post-Effective Amendment No. 1 dated
            Tenants.                                                        April 28, 2000

10.4(7)     Lease Agreement date July 29, 1998 by and between META (CA)     Exhibit 10.4(3) to Registrant's
            QRS 14-16, as Landlord, and Metagenics Incorporated, as         Post-Effective Amendment No. 2 dated
            Tenants.                                                        November 22, 2000

10.5(2)     Lease Agreement dated July 30, 1998 by and between TRUCK (IN)   Exhibit 10.5 (2) (Form S-11) No. 333-
            QRS 14-3, as Landlord, and Burlington Motor Carrier Inc., as    76761
            Tenants.

10.5(3)     Lease Agreement dated July 30, 1998 by and between TRUCK (IN)   Exhibit 10.5 to Registrant's Post
            QRS 14-3, as Landlord, and Burlington Motor Carrier as          Effective Amendment No. 2 dated April
            Tenants.                                                        19, 1999

10.5(4)     Lease Agreement dated July 30, 1998 by and between TRUCK (IN)   Exhibit 10.5 to Registrant's Form 10-K
            QRS 14-3, INC., as Landlord, and Burlington Motor Carrier       for the year ended December 31, 1998,
            Inc., as Tenants.                                               dated March 30, 1999

10.5(5)     Lease Agreement dated November 24, 1998 by and between BAC      Exhibit 10.5 to Registrant's Form 8-k
            (MO) QRS 14-10, Inc., as Landlord, and The Benjamin Ansehl      dated February 2, 1999
            Co., as Tenants

10.5(6)     Lease Agreement dated July 30, 1998 by and between TRUCK (IN)   Exhibit 10.5(3) to Registrant's
            QRS 14-3, as Landlord, and Burlington Motor Carrier Inc., as    Post-Effective Amendment No. 1 dated
            Tenants.                                                        April 28, 2000

10.5(7)     Lease Agreement dated July 30, 1998 by and between TRUCK (IN)   Exhibit 10.5(3) to Registrant's
            QRS 14-3, as Landlord, and Burlington Motor Carrier Inc., as    Post-Effective Amendment No. 2 dated
            Tenants.                                                        November 22, 2000

10.6        Lease Agreement dated December 22, 1998 by and between          Exhibit 10.6 to Registrant's Form 8-K
            Conductor (CA) QRS 14-11, Inc., as Landlord, and Advance        dated February 2, 1999

10.6(2)     Lease Agreement dated November 24, 1998 by and between BAC      Exhibit 10.6(2) to Registration
            (MO) QRS 14-10, as Landlord, and The Benjamin Ansehl Co., as    Statement (Form S-11) No. 333-76761
            Tenants


</TABLE>

                                      -25-
<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                            Description                                       Method of Filing
------                           -----------                                       ----------------
<S>         <C>                                                             <C>
10.6(3)     Lease Agreement dated November 24, 1998 by and between BAC      Exhibit 10.6(3) to Registrant's Post
            (MO) QRS 14-10, as Landlord, and The Benjamin Ansehl Co., as    Effective Amendment to Form S-11
            Tenants.                                                        Date April 19, 1999

10.6(5)     Lease Agreement dated November 24, 1998 by and between BAC      Exhibit 10.6 to Registrant's Form 10-K
            (MO) QRS 14-10, Inc., as Landlord, and The Benjamin Ansehl      for the year ended December 31, 1998,
            Co., as Tenants.                                                dated February 2,1999

10.6(6)     Lease Agreement dated November 24, 1998 by and between BAC      Exhibit 10.6(3) to Registrant's
            (MO) QRS 14-10, as Landlord, and The Benjamin Ansehl Co., as    Post-Effective Amendment No. 1 dated
            Tenants.                                                        April 28, 2000

10.6(7)     Lease Agreement dated November 24, 1998 by and between BAC      Exhibit 10.6(3) to Registrant's
            (MO) QRS 14-10, as Landlord, and The Benjamin Ansehl Co., as    Post-Effective Amendment No. 2 dated
            Tenants.                                                        November 22, 2000

10.7        Lease Agreement dated December 22, 1998 by and between          Exhibit 10.6 to Registrant's Form 8-K
            Conductor (CA) QRS 14-11, Inc., as Landlord, and Advance        dated February 2, 1999
            Micro Devices, Inc., as Tenants.

10.7(2)     Lease Agreement dated December 22, 1998 by and between          Exhibit 10.7 (2) to Registration
            Conductor (CA) QRS 14-11, as Landlord, and Advanced Micro       Statement (Form S-11) No. 333- 76761
            Devices, Inc., as Tenants.

10.7(3)     Lease Agreement dated December 22, 1998 by and between          Exhibit 10.7 (3) to Registrant's Post
            Conductor (CA) QRS 14-11, as Landlord, and Advanced Micro       Effective Amendment No. 2 dated April
            Devices, Inc., as Tenants.                                      19, 1999

10.7(4)     Lease Agreement dated December 22, 1998 by and between          Exhibit 10.7 to Registrant's Form 10-K
            Conductor (CA) QRS 14-11, as Landlord, and Advanced Micro       for year ended December 31, 1998, dated
            Devices, Inc. as Tenants.                                       March 30, 1999

10.7(5)     Lease Agreement dated December 28, 1998 by and between CBS      Exhibit 10.7 to Registrant's Form 8-K,
            (PA) QRS 14-12, Inc. as Landlord, and Contraves Brashear        dated February 2, 1999
            Systems L. P., as Tenants.

10.7(6)     Lease Agreement dated December 22, 1998 by and between          Exhibit 10.7(3) to Registrant's
            Conductor (CA) QRS 14-11, as Landlord, and Advanced Micro       Post-Effective Amendment No. 1 dated
            Devices, Inc. as Tenants.                                       April 28, 2000

10.7(7)     Lease Agreement dated December 22, 1998 by and between          Exhibit 10.7(3) to Registrant's
            Conductor (CA) QRS 14-11, as Landlord, and Advanced Micro       Post-Effective Amendment No. 2 dated
            Devices, Inc. as Tenants.                                       November 22, 2000

10.8(2)     Lease Agreement dated December 28, 1998 by and between CBS      Exhibit 10.8 (2) to Registration
            (PA) QRS 14-12, as Landlord, and Contraves Brashear Systems,    (Form S-11) No. 333-76761
            L.P., as Tenants.

10.8(3)     Lease Agreement dated December 28, 1998 by and between CBS      Exhibit 10.8 (3) to Registrant's Post
            (PA) QRS 14-12, as Landlord, and Contraves Brashear Systems,    Effective Amendment to Form S-11 dated
            L.P., as Tenants.                                               April 19, 1999

10.8(4)     Lease Agreement dated December 28, 1998 by and between CBS      Exhibit 10.8(3) to Registrant's
            (PA) QRS 14-12, as Landlord, and Contraves Brashear Systems,    Post-Effective Amendment No. 1 dated
            L.P., as Tenants.                                               April 28, 2000


</TABLE>



                                      -26-
<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                            Description                                       Method of Filing
------                           -----------                                       ----------------
<S>         <C>                                                             <C>

10.8(5)     Lease Agreement dated December 28, 1998 by and between CBS      Exhibit 10.8(3) to Registrant's
            (PA) QRS 14-12, as Landlord, and Contraves Brashear Systems,    Post-Effective Amendment No. 2 dated
            L.P., as Tenants.                                               November 22, 2000

10.28(4)    Form of Sales Agency Agreement.                                 Exhibit 10.28(4) to Registrant's
                                                                            Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

10.28(5)    Form of Sales Agency Agreement.                                 Exhibit 10.28(4) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

10.29(4)    Form of Selected Dealer Agreement.                              Exhibit 10.29(4) to Registrant's
                                                                            Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

10.29(5)    Form of Selected Dealer Agreement.                              Exhibit 10.29(4) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

10.30(1)    Advisory Agreement.                                             Exhibit 10.30(1) to Registrant's
                                                                            Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

10.30(2)    Advisory Agreement.                                             Exhibit 10.30(1) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

10.31(4)    Form of Wholesaling Agreement.                                  Exhibit 10.31(4) to Registrant's
                                                                            Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

10.31(5)    Form of Wholesaling Agreement.                                  Exhibit 10.31(4) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

10.32(4)    Form of Escrow Agreement.                                       Exhibit 10.32(4) to Registrant's
                                                                            Post-Effective Amendment No. 1 dated
                                                                            April 28, 2000

10.32(5)    Form of Escrow Agreement.                                       Exhibit 10.32(4) to Registrant's
                                                                            Post-Effective Amendment No. 2 dated
                                                                            November 22, 2000

21.1        Subsidiaries of Registrant as of March 15, 2002                 Filed herewith



</TABLE>




                                      -27-
<PAGE>



    (b)     Reports on Form 8-K

            During the quarter ended December 31, 2001 the Registrant was not
            required to file any reports on Form 8-K.

    (c)     Pursuant to Rule 701 of Regulation S-K, the use of proceeds through
            December 31, 2001 from CPA(R):14's offering of common stock which
            commenced November 17, 1999 (File # 333-76761) is as follows:

<TABLE>
                 <S>                                                                  <C>
                  Shares registered:                                                     40,000,000

                  Aggregate price of offering amount registered:                       $400,000,000

                  Shares sold:                                                           36,353,686

                  Aggregated offering price of amount sold:                            $363,536,860

                  Direct or indirect payments to directors, officers, general
                     partners of the issuer or their associates, to persons
                     owning ten percent or more of any class of equity
                     securities of the issuer and to affiliates of the issuer:           $6,276,555

                  Direct or indirect payments to others:                                $28,877,615

                  Net offering proceeds to the issuer after
                     deducting expenses:                                               $328,382,690

                  Purchases of real estate:                                            $193,121,664

                  Working capital reserves:                                              $3,635,369

                  Temporary investments in cash and cash equivalents:                  $131,625,657


</TABLE>



                                      -28-
<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.

                                   CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
                                   a Maryland corporation

   3/22/2002                       BY:      /s/ John J. Park
---------------                            -------------------------------------
    Date                                   John J. Park
                                           Managing Director and
                                           Chief Financial Officer
                                           (Principal Financial Officer)

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

                                   CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

  3/22/2002                        BY:      /s/ William Polk Carey
-------------                              -------------------------------------
    Date                                   William Polk Carey
                                           Chairman of the Board and Director
                                           (Principal Executive Officer)

  3/22/2002                        BY:      /s/ Gordon J. Whiting
-------------                              -------------------------------------
    Date                                   Gordon J. Whiting
                                           President

  3/22/2002                        BY:      /s/ William Ruder
-------------                              -------------------------------------
    Date                                   William Ruder
                                           Director

  3/22/2002                        BY:      /s/ George E. Stoddard
-------------                              -------------------------------------
    Date                                   George E. Stoddard
                                           Director

  3/22/2002                        BY:      /s/ Warren G. Wintrub
-------------                              -------------------------------------
    Date                                   Warren G. Wintrub
                                           Director

  3/22/2002                        BY:      /s/ Thomas E. Zacharias
-------------                              -------------------------------------
    Date                                   Thomas E. Zacharias
                                           Director

  3/22/2002                        BY:      /s/ John J. Park
-------------                              -------------------------------------
    Date                                   John J. Park
                                           Managing Director and
                                           Chief Financial Officer
                                           (Principal Financial Officer)

  3/22/2002                        BY:      /s/ Claude Fernandez
-------------                              -------------------------------------
    Date                                   Claude Fernandez
                                           Managing Director and
                                           Chief Administrative Officer
                                           (Principal Accounting Officer)


                                      -29-

<PAGE>


                        REPORT of INDEPENDENT ACCOUNTANTS



To the Board of Directors and Shareholders of
Corporate Property Associates 14 Incorporated:

Our audits of the consolidated financial statements referred to in our report
dated March 15, 2002 appearing in the 2001 Annual Report to Shareholders of
Corporate Property Associates 14 Incorporated (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the financial statement schedule listed in Item
14(a)(2) of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.



/s/ PricewaterhouseCoopers LLP

New York, New York
March 15, 2002




                                      -30-
<PAGE>



                 CORPORATE PROPERTY ASSOCIATES 14, INCORPORATED

             SCHEDULE III - REAL ESTATE and ACCUMULATED DEPRECIATION

                             as of December 31, 2001


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

Operating Method:
Trucking facility leased to
  Burlington Motor Carriers,
  Inc.                                                        $ 2,100,000       $ 5,439,267                          $(3,810,000)
Retail store leased to
  BestBuy Co., Inc.                                            13,059,980         6,933,851         $   45,914
Research and development
  facility leased to
  Metagenics, Inc.                                              2,390,000                            8,957,798
Manufacturing facility
  leased to Brashear LP                   $ 4,054,977             620,000         6,186,283
Manufacturing and
  distribution facilities
  leased to Production
  Resource Group L.L.C                      5,319,330           3,860,000         8,263,455
Distribution and warehouse
  facility leased to McLane
  Company, Inc.                            21,311,100           3,604,000         8,613,172         21,321,241
Distribution and warehouse
  facility leased to Fleming
  Companies, Inc.                           5,940,501             740,000         3,042,828          7,532,287
Multiplex motion picture
  theater leased to
  Consolidated Theaters
  Holding, G.P.                             2,122,676           3,515,000
Office and warehouse
  facility leased to
  Builders FirstSource, Inc.                                    3,929,891        10,397,514          8,451,397
Office and research facility
  leased to Amerix
  Corporation                              14,240,135           2,622,500        20,232,580          2,731,677
Industrial and manufacturing
  facility leased to Atrium
  Companies, Inc.                          14,000,000           1,596,442        23,910,092            316,465
Retail and service facility
  leased to Fitness
  Holdings, Inc.                            3,800,000           2,920,000         8,659,950          1,614,453






                  Gross Amount at which Carried
                     at Close of Period (e)
                 -------------------------------
                                                                                              Life on which
                                                                                             Depreciation in
                                                                                            Latest Statement
                                                     Accumulated                                of Income
Land               Buildings            Total      Depreciation (d)      Date Acquired        is Computed
----             ------------        -----------   ----------------      -------------      -----------------
<S>              <C>                 <C>           <C>                   <C>                <C>
$ 2,100,000      $  1,629,267       $  3,729,267      $   481,602        June 29, 1998         40 yrs.

 13,059,980         6,979,765         20,039,745          602,911        July 28, 1998         40 yrs.


  2,390,000         8,957,798         11,347,798          499,377        July 29, 1998         40 yrs.

    620,000         6,186,283          6,806,283          470,415      December 28, 1998       40 yrs.


                                                                      March 31, 1999 and
  3,860,000         8,263,455         12,123,455          546,482      October 15, 1999        40 yrs.


  3,604,000        29,934,413         33,538,413        1,388,336       August 18, 1999        40 yrs.


    740,000        10,575,115         11,315,115          559,258       August 18, 1999        40 yrs.



  3,515,000                            3,515,000                      September 22, 1999         N/A

                                                                       June 29, 1999 and
  3,929,891        18,848,911         22,778,802          416,214      December 20, 2001       40 yrs.


  2,622,500        22,964,257         25,586,757        1,126,268      November 1, 1999        40 yrs.

                                                                      November 18, 1999 and
  1,596,442        24,226,557         25,822,999          286,646        December 1, 2001      40 yrs.

                                                                      December 29, 1999 and
  2,920,000        10,274,403         13,194,403          302,649       December 28, 2000      40 yrs.




</TABLE>

                                      -31-
<PAGE>

                 CORPORATE PROPERTY ASSOCIATES 14, INCORPORATED

             SCHEDULE III - REAL ESTATE and ACCUMULATED DEPRECIATION

                             as of December 31, 2001


<TABLE>
<CAPTION>
                                                                Initial Cost to Company
                                                                -----------------------            Costs
                                                                                                Capitalized
                                                                                               Subsequent to     Decrease in Net
         Description                   Encumbrances              Land            Buildings    Acquisition (a)     Investment (b)
         -----------                   ------------           ------------      ------------   ---------------    ---------------
<S>                                    <C>                    <C>              <C>            <C>                <C>
Operating Method:
Office and research facility
  leased to West Union
  Corporation                          3,300,000                   940,000         4,557,382            12,498
Office and warehouse
  facility leased to Barjan
  Products, LLC                                                    500,000         9,944,545         1,887,506
Industrial and manufacturing
  facility leased to Stellex
  Technologies, Inc.                                             2,932,000        16,397,988            17,904
Manufacturing and
  distribution facility
  leased to APW North
  America Inc.                        17,478,737                 4,580,000        24,844,084            14,785
Distribution and warehouse
  facility leased to
  Langeveld International,
  Inc.                                                             710,000         4,531,037         3,167,306
Retail and services facility
  leased to Galyan's Trading
  Company                             19,473,081                 7,330,000        22,305,554         4,177,399
Land leased to Advanced
  Paradigm, Inc.                       8,912,500                14,600,000
Industrial and manufacturing
  facility leased to
  Transcore Holdings, Inc.             3,469,625                 1,490,000         4,635,655             7,176
Office and research facility
  leased to Lennar
  Corporation                          4,980,913                   570,000         6,759,843
Office and research facility
  leased to Buffets, Inc.             11,633,382                 4,225,000        15,518,481             1,420
Distribution and warehouse
  facility leased to Earle
  M. Jorgensen Company                 3,781,727                   570,000         5,869,790            39,219
Distribution and warehouse
  facility leased to
  Institutional Jobbers
  Company                             13,242,616                   650,000        16,889,267           271,809
Land leased to Towne
  Holdings, Inc.                       2,361,452                 4,100,000



                  Gross Amount at which Carried
                     at Close of Period (e)
                 -------------------------------
                                                                                                Life on which
                                                                                               Depreciation in
                                                                                              Latest Statement
                                                     Accumulated                                  of Income
Land               Buildings            Total      Depreciation (d)        Date Acquired        is Computed
----             ------------        -----------   ----------------        -------------      -----------------
<S>              <C>                 <C>           <C>                     <C>                <C>
   940,000          4,569,880          5,509,880          204,693           January 12, 2000        40 yrs.


   500,000         11,832,051         12,332,051          321,022           February 3, 2000        40 yrs.


 2,932,000         16,415,892         19,347,892          769,495           February 29, 2000       40 yrs.



 4,580,000         24,858,869         29,438,869        1,009,892             May 30, 2000          40 yrs.



   710,000          7,698,343          8,408,343          229,700             June 29, 2000         40 yrs.


 7,830,000         25,982,953         33,812,953          944,489             June 29, 2000         40 yrs.

14,600,000                           14,600,000                           September 21, 2000         N/A


 1,490,000          4,642,831          6,132,831          149,925          September 25, 2000       40 yrs.


   570,000          6,759,843          7,329,843          218,287          September 26, 2000       40 yrs.

 4,225,000         15,519,901         19,744,901          501,145          September 28, 2000       40 yrs.


   570,000          5,909,009          6,479,009          190,682          September 29, 2000       40 yrs.



   650,000         17,161,076         17,811,076          518,407            October 6, 2000        40 yrs.

 4,100,000                             4,100,000                            October 30, 2000          N/A


</TABLE>


                                      -32-
<PAGE>

                 CORPORATE PROPERTY ASSOCIATES 14, INCORPORATED

             SCHEDULE III - REAL ESTATE and ACCUMULATED DEPRECIATION

                             as of December 31, 2001


<TABLE>
<CAPTION>
                                                                Initial Cost to Company
                                                                -----------------------            Costs
                                                                                                Capitalized
                                                                                               Subsequent to     Decrease in Net
         Description                   Encumbrances              Land            Buildings    Acquisition (a)     Investment (b)
         -----------                   ------------           ------------      ------------   ---------------    ---------------
<S>                                    <C>                    <C>              <C>            <C>                <C>
Operating Method:
Office facility leased to
  Newpark Resources, Inc.                                         660,000          3,004,921
Office and research facility
  leased to Federal Express
  Corporation                           44,620,940              3,154,425         70,645,575            12,000
Retail, service,
  distribution and warehouse
  facility leased to The
  Bon-Ton Stores, Inc.                   7,431,791              1,974,000         10,067,885             9,900
Distribution and warehouse
  facility leased to McCoy,
  Inc.                                   4,147,152              1,025,000          4,530,120             9,419
Industrial and manufacturing
  facility leased to
  Metaldyne Company LLC                 16,651,051              4,140,000         23,822,057             7,859
Retail and service facility
  leased to Celestica
  Corporation                           12,449,454              3,348,824          9,275,468         8,935,652
Industrial and manufacturing
  facility leased to Gerber
  Scientific, Inc.                      12,500,000              1,555,400         18,822,872
Industrial and manufacturing
  facility leased to
  Meridian Automotive
  Systems, Inc.                                                 1,370,000          2,671,897         6,293,141
Industrial and manufacturing
  facility leased to
  Waddington North America,
  Inc.                                  11,049,408              4,398,000         13,418,144
Industrial and manufacturing
  facility leased to New
  Creative Enterprises, Inc.             9,981,023              2,000,000         12,869,110
Retail and service facility
  leased to Lincoln
  Technical Institute, Inc.              6,300,000              2,486,384          7,658,042
Manufacturing and
  distribution facility
  leased to Gibson Guitar,
  Inc.                                  12,024,569              3,900,000         17,937,226




                  Gross Amount at which Carried
                     at Close of Period (e)
                 -------------------------------
                                                                                                Life on which
                                                                                               Depreciation in
                                                                                              Latest Statement
                                                     Accumulated                                  of Income
Land               Buildings            Total      Depreciation (d)       Date Acquired         is Computed
----             ------------        -----------   ----------------     ----------------      -----------------
<S>              <C>                 <C>           <C>                     <C>                <C>
  660,000          3,004,921          3,664,921           78,253        December 1, 2000          40 yrs.


3,154,425         70,657,575         73,812,000        3,268,919        December 6, 2000        7 - 40 yrs.



1,974,000         10,077,785         12,051,785          262,319        December 27, 2000         40 yrs.


1,025,000          4,539,539          5,564,539          118,257        December 27, 2000         40 yrs.

                                                                        June 29, 2000 and
4,140,000         23,829,916         27,969,916          414,704         August 16, 2001          40 yrs.


3,348,824         18,211,120         21,559,944          276,645         August 14, 2000          40 yrs.


1,555,400         18,822,872         20,378,272          215,679          July 30, 2001             N/A



1,370,000          8,965,038         10,335,038            9,264        November 16, 2000         40 yrs.



4,398,000         13,418,144         17,816,144          237,400         April 30, 2001         7 - 40 yrs.


2,000,000         12,869,110         14,869,110           93,837        September 6, 2001         40 yrs.


2,486,384          7,658,042         10,144,426            7,977        December 28, 2001         40 yrs.



3,900,000         17,937,226         21,837,226          354,801          March 19, 2001          40 yrs.


</TABLE>

                                      -33-
<PAGE>




                 CORPORATE PROPERTY ASSOCIATES 14, INCORPORATED

             SCHEDULE III - REAL ESTATE and ACCUMULATED DEPRECIATION

                             as of December 31, 2001


<TABLE>
<CAPTION>
                                                                Initial Cost to Company
                                                                -----------------------            Costs
                                                                                                Capitalized
                                                                                               Subsequent to     Decrease in Net
         Description                   Encumbrances              Land            Buildings    Acquisition (a)     Investment (b)
         -----------                   ------------           ------------      ------------   ---------------    ---------------
<S>                                    <C>                    <C>              <C>            <C>                <C>
Operating Method:
Office and Research facility
  leased to Nortel Networks
  Limited                               30,000,000           3,400,000          45,053,608
Industrial and manufacturing
  facility leased to Perkin
  Elmer, Inc. - Finland                 18,148,874             801,195          23,389,834
Retail and service
  facilities leased to
  Petsmart, Inc.                        43,125,000          17,100,000          54,773,567
Distribution and warehouse
  facility leased to Nexpak
  Corporation                            7,844,058           2,167,000          11,445,566             5,231
Distribution and warehouse
  facility leased to Nexpak
  Corporation - Netherlands              4,672,145           2,230,224           3,425,503
Multiplex motion picture
  theater leased to Rave
  Review Cinemas, LLC                                        3,200,000           3,066,397         6,306,521
Vacant Property located in

  Lindon, Utah                                               1,390,000           1,122,716         5,320,276
                                      ------------        ------------        ------------        ----------        -----------
                                      $400,368,217        $144,455,265        $570,933,126        $87,468,253       $(3,810,000)
                                      ============        ============        ============        ===========       ============



                    Gross Amount at which Carried
                       at Close of Period (e)
                   -------------------------------
                                                                                                Life on which
                                                                                               Depreciation in
                                                                                              Latest Statement
                                                     Accumulated                                  of Income
   Land              Buildings            Total      Depreciation (d)       Date Acquired         is Computed
------------       ------------        -----------   ----------------     ----------------    -----------------
<S>                <C>                 <C>           <C>                     <C>              <C>
   3,400,000         45,053,608         48,453,608           46,931       December 19, 2001       40 yrs.


     801,195         23,389,834         24,191,029           24,364       December 28, 2001       40 yrs.


  17,100,000         54,773,567         71,873,567          171,167       November 28, 2001       40 yrs.


   2,167,000         11,450,797         13,617,797          226,532        March 28, 2001         40 yrs.


   2,230,224          3,425,503          5,655,727           46,387         June 29, 2001         40 yrs.


   3,200,000          9,372,918         12,572,918          130,077       December 7, 2000        40 yrs.


   1,390,000          6,442,992          7,832,992            6,596       December 27, 2000       40 yrs.
------------       ------------        -----------      -----------
$144,955,265       $654,091,379       $799,046,644      $17,728,004
============       ============       ============      ===========

</TABLE>




                                      -34-

<PAGE>



                  CORPORATE PROPERTY ASSOCIATES 14, INCORPORATED

            SCHEDULE III - REAL ESTATE and ACCUMULATED DEPRECIATION

                            as at December 31, 2001

<TABLE>
<CAPTION>
                                                                          Costs        Increase   Gross Amount
                                                                       Capitalized   (Decrease)     at which
                                                                       Subsequent      in Net      Carried at
                                                                           to        Investments     Close of
                                            Initial Cost to Company    Acquisition      (b)         Period (e)
                                            -----------------------    -----------   -----------  -------------
           Description        Encumbrances    Land       Buildings                                     Total        Date Acquired
           -----------        ------------    ----       ---------                                     -----        -------------
<S>                           <C>           <C>          <C>            <C>          <C>           <C>            <C>
Direct Financing Method:

Industrial/manufacturing
  facilities leased to
  Atrium Companies, Inc.      $13,048,765   $  459,608   $20,426,564                                $ 20,886,172   November 18, 1999

Industrial/manufacturing
  facilities leased to Scott
  Companies, Inc.               2,940,263    2,340,000     3,942,723                                   6,282,723     July 19, 1999

Multiplex theater facility
  leased to Consolidated
  Theaters Holding, G.P.        7,134,026                 10,818,996     $854,117     $140,324        11,813,437  September 22, 1999

Office and research facility
  leased to Advance
  Paradigm, Inc.               15,514,414                 25,414,917                                  25,414,917  September 21, 2000

Distribution and warehouse
  facility leased to Towne
  Holdings, Inc.                2,403,855                  4,172,251        1,370                      4,173,621   October 30, 2000

Manufacturing and
  distribution facility
  leased to BLP Group plc       5,474,332                  8,383,364                   (67,458)        8,315,906    January 9, 2001

Industrial and manufacturing
  facility leased to Collins
  and Aikman Corporation       16,980,150    2,961,000    24,473,555                                  27,434,555  September 28, 2001
                              -----------   ----------   -----------     --------     --------      ------------
                              $63,495,805   $5,760,608   $97,632,370     $855,487     $ 72,866      $104,321,331
                              ===========   ==========   ===========     ========     ========      ============
</TABLE>


                                      -35-
<PAGE>






                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED
                                and SUBSIDIARIES

                       NOTES to SCHEDULE III - REAL ESTATE
                          and ACCUMULATED DEPRECIATION



(a)  Consists of the costs of improvements subsequent to purchase and
     acquisition costs including legal fees, appraisal fees, title costs and
     other related professional fees.

(b)  The increase (decrease) in net investment is due to the amortization of
     unearned income producing a constant periodic rate of return on the net
     investment which is more (less) than lease payments received, foreign
     currency translation adjustments and impairment losses.

(c)  At December 31, 2001, the aggregate cost of real estate owned by CPA(R):14
     and its subsidiaries for Federal income tax purposes $691,028,000.

(d)
<TABLE>
<CAPTION>
                                                      Reconciliation of Real Estate Accounted
                                                          for Under the Operating Method
                                                                   December 31,
                                                      ----------------------------------------
                                                            2000                  2001
                                                        -------------         -------------
<S>                                                     <C>                   <C>
         Balance at beginning of year                   $ 113,048,275         $ 439,435,091
         Impairment losses                                 (2,462,400)           (3,810,000)
         Additions                                        330,224,325           366,777,516
         Dispositions                                      (1,375,109)           (3,558,600)
         Foreign currency translation adjustment                 --                 202,637
                                                        -------------         -------------
         Balance at close of year                       $ 439,435,091         $ 799,046,644
                                                        =============         =============

</TABLE>

<TABLE>
<CAPTION>
                                                    Reconciliation of Accumulated Depreciation
                                                                  December 31,
                                                    ------------------------------------------
                                                           2000                2001
                                                        ------------        ------------
<S>                                                     <C>                 <C>
         Balance at beginning of year                   $  1,152,595        $  5,445,242
         Depreciation expense                              4,292,647          12,591,767
         Dispositions                                           --              (308,633)
         Foreign currency translation adjustment                --                  (372)
                                                        ------------        ------------
         Balance at close of year                       $  5,445,242        $ 17,728,004
                                                        ============        ============
</TABLE>




                                      -36-
<PAGE>









                                                         APPENDIX A TO FORM 10-K
























                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED


























                                                              2001 ANNUAL REPORT



<PAGE>





SELECTED FINANCIAL DATA
--------------------------------------------------------------------------------


(In thousands except per share and share amounts)




<TABLE>
<CAPTION>
                                             1997(1)           1998             1999              2000              2001
                                             -------        ----------       -----------       -----------       -----------

<S>                                     <C>                <C>              <C>               <C>               <C>
OPERATING DATA:

     Revenues                                  --          $     2,209       $    10,023       $    42,858       $    67,458

     Net (loss) income                      $   (12)             1,058             7,678            21,577            18,377

     Basic earnings per share                  (.61)               .25               .39               .60               .36

     Dividends paid(2)                         --                1,324             9,781            21,466            32,811

     Dividends declared per share              --                  .47               .65               .67               .71

     Weighted average shares
     outstanding - basic                     20,000          4,273,311        19,909,834        32,721,141        51,422,168

     Payment of mortgage
     principal(3)                              --                 --                 144               628             2,557

BALANCE SHEET DATA:

     Total consolidated assets                  200            107,956           331,063           645,762         1,097,238

     Long-term obligations(4)                  --                1,629            54,350           224,015           471,942
</TABLE>



(1)      For the period from inception (June 4, 1997) through December 31, 1997.
(2)      The Company paid its first dividend in July 1998.
(3)      Represents scheduled mortgage principal amortization paid.
(4)      Represents mortgage notes payable and deferred acquisition fee
         installments that are due after more than one year.




                                      -1-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS

--------------------------------------------------------------------------------

Overview

The following discussion and analysis of the financial condition and results of
operations of Corporate Property Associates 14 Incorporated ("CPA(R):14") should
be read in conjunction with the consolidated financial statements and notes
thereto for the year ended December 31, 2001. The following discussion includes
forward looking statements. Forward looking statements, which are based on
certain assumptions, describe CPA(R):14's future plans, strategies and
expectations. Such statements involve known and unknown risks, uncertainties and
other factors that may cause CPA(R):14's actual results, performance or
achievement to be materially different from the results of operations or plan
expressed or implied by these forward looking statements. Accordingly, this
information should not be regarded as representations that the results or
condition described in these statements or objectives and plans will be
achieved.

CPA(R):14 was formed in 1997 for the purpose of engaging in the business of
investing in and owning commercial and industrial real estate. In November 1997,
CPA(R):14 commenced a public offering of 30,000,000 shares of common stock at
$10 per share on a "best efforts" basis. The offering concluded in 1999 at which
time CPA(R):14 had issued 29,440,595 shares ($294,405,950). In November 1999,
CPA(R):14 commenced a second public offering of 40,000,000 shares of common
stock at $10 per share on a "best efforts" basis. The second offering concluded
on November 15, 2001, by which time 36,353,686 shares ($363,536,860) were
issued.

CPA(R):14 is using the proceeds from the public offerings along with limited
recourse mortgage financing to purchase properties and enter into long-term net
leases with corporate tenants. A net lease is structured to place certain
economic burdens of ownership on these corporate tenants by requiring them to
pay the costs of maintenance and repair, insurance and real estate taxes. The
leases have generally been structured to include periodic rent increases that
are stated or based on increases in the consumer price index or, for retail
properties, provide for additional rents based on sales in excess of a specified
base amount.

As a real estate investment trust ("REIT"), CPA(R):14 is not subject to federal
income taxes on amounts distributed to shareholders provided it meets certain
conditions including distributing at least 90% of its REIT taxable income to its
shareholders. CPA(R):14's primary objectives are to provide rising cash flow and
to protect its investors from the effects of inflation through rent escalation
provisions, property appreciation, tenant credit improvement and regular paydown
of limited recourse mortgage debt. In addition, CPA(R):14 has successfully
negotiated grants of common stock warrants from selected tenants and expects to
realize the benefits of appreciation from those grants. CPA(R):14 cannot
guarantee that its objectives will ultimately be achieved.

CPA(R):14 is advised by Carey Asset Management Corp., a wholly-owned subsidiary
of W. P. Carey & Co. LLC, an affiliate, pursuant to an Advisory Agreement.
CPA(R):14's Advisory Agreement is renewable annually by Independent Directors
who are elected by CPA(R):14's shareholders. In connection with each renewal,
Carey Asset Management is required to provide the Independent Directors with a
comparison of the fee structure with several similar companies. The Advisory
Agreement also provides, commencing in 2003, that an independent portfolio
valuation be performed annually and Average Invested Assets, the basis for
determining asset management and performance fees, is based on the results of
this independent valuation. Until the initial valuation is performed, the fees
are calculated based on the historical cost of the purchased real estate assets.

Certain accounting policies are critical to the understanding of CPA(R):14's
financial condition and results of operations. Management believes that an
understanding of financial condition and results of operations requires an
understanding of accounting policies relating to the use of estimates.

The preparation of financial statements requires that Management make estimates
and assumptions that affect the reported amount of assets, liabilities, revenues
and expenses. For instance, CPA(R):14 must assess its ability to collect rent
and other tenant-based receivables and determine an appropriate charge for
uncollected amounts. Because CPA(R):14's real estate operations have a limited
number of lessees, Management believes that it is necessary to evaluate specific
situations rather than solely use statistical methods.

CPA(R):14 also uses estimates and judgments when evaluating whether long-lived
assets are impaired. When events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, Management




                                      -2-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED

--------------------------------------------------------------------------------



performs projections of undiscounted cash flows, and if such cash flows are
insufficient, the assets are adjusted (i.e., written down) to their estimated
fair value. An analysis of whether a real estate asset has been impaired
requires Management to make its best estimate of market rents and residual
values. In its evaluations, CPA(R):14 obtains market information from outside
sources; however, such information requires Management to determine whether the
information received is appropriate to the circumstances. Because CPA(R):14's
properties are leased to single tenants, CPA(R):14 is more likely to incur
significant writedowns when circumstances deteriorate because of the possibility
that a property will be vacated in its entirety. This makes the risks faced by
CPA(R):14 different from the risks faced by companies that own multi-tenant
properties. Events or changes in circumstances can result in further writedowns
and impact the gain or loss ultimately realized upon sale of the asset.

CPA(R):14 recognizes rental income from sales overrides when reported by
lessees, that is, after the level of sales requiring a rental payment to
CPA(R):14 is reached.

CPA(R):14 and certain affiliates are investors in certain real estate ventures.
Certain of the investments are held through incorporated or unincorporated
jointly held entities and certain investments are held directly as tenants in
common. Substantially all of these investments represent jointly purchased
properties which were net leased to a single tenant and were structured to
provide diversification and reduce concentration of a risk from a single lessee
for CPA(R):14 and the affiliate. The placement of an investment in a jointly
held entity or tenancy in common requires the approval of the Independent
Directors. All of the jointly held investments are structured so that CPA(R):14
and the affiliate contribute equity, receive distributions and are allocated
profit or loss in amounts that are proportional to their ownership interests.
The presentation of these jointly held investments and their related results in
the accompanying consolidated financial statements is determined based on
accounting principles generally accepted in the United States of America and is
based on factors such as controlling interest, significant influence and whether
each party has the ability to make independent decisions. All of the jointly
held investments are subject to contractual agreements.

Public business enterprises are required to report financial and descriptive
information about their reportable operating segments. Operating segments are
components of an enterprise about which financial information is available that
is evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. Management evaluates the
performance of CPA(R):14's portfolio of properties as a whole, rather than by
identifying discrete operating segments. This evaluation includes assessing
CPA(R):14's ability to meet distribution objectives, increase the dividend and
increase value by evaluating potential investments in single tenant net lease
real estate and by seeking favorable limited recourse mortgage financing
opportunities. As of December 31, 2001, CPA(R):14 operates in one segment, real
estate operations, and owned properties in the United States, the Netherlands,
Finland and the United Kingdom.

Results of Operations

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Net income for the year ended December 31, 2001 is not directly comparable to
net income for the year ended December 31, 2000. CPA(R):14's total assets have
increased by approximately 70% since December 31, 2000. During 2001, CPA(R):14
acquired 52 new properties and obtained $262,136,000 of new limited recourse
mortgage financing and raised more than $203,000,000, net of costs, in
connection with its public offering. Accordingly, the results of operations for
the years ended December 31, 2001 and 2000 are not fully comparable. Net income
for 2001 decreased by $3,200,000 because results for 2000 include a nonrecurring
item which contributed approximately $6,017,000 to earnings. Income for 2000 and
2001 includes noncash impairment losses of $2,462,000 and $3,810,000,
respectively. Excluding the effect of these two items, income would have
reflected an increase of $4,165,000. The increase in earnings as adjusted for
nonrecurring items and the impairment loss was due to the increase in
CPA(R):14's asset base. CPA(R):14 expects its real estate assets to continue to
increase as it still has substantial cash available for additional investment.

Lease revenues (rental income and interest income from direct financing leases)
have increased $37,733,000 due to acquisition of properties. Properties acquired
and build-to-suit projects completed in 2000 and 2001 are leased to 40 new
lessees. As of December 31, 1999, CPA(R):14 had eleven lessees. While the growth
of the portfolio can be expected to be moderate, several new lessees will be
added to the portfolio in 2002. The majority of CPA(R):14's leases provide for
rent increases based on formulas indexed to the Consumer Price Index ("CPI").
The CPI has



                                      -3-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED

--------------------------------------------------------------------------------



increased moderately over the past several years and this will affect future
rent increases on those leases which have CPI-based rent adjustments. CPA(R):14
recorded an impairment loss of $3,810,000 on a property leased to Burlington
Motor Carriers, Inc. due to its expectation that the Burlington lease will be
terminated in connection with Burlington's petition of bankruptcy. Annual
revenues from the Burlington lease are $833,000.

Interest expense increased due to a full year's effect of $166,222,000 of
limited recourse mortgage debt obtained in 2000 and $264,211,000 obtained in
2001. Property expense reflects increases in asset management and performance
fees which are calculated based on the Average Invested Assets (i.e., real
estate assets). Effective January 1, 2003, asset management and performance fees
will be determined based on an independent valuation of CPA(R):14's real estate
assets rather than the historical cost of such assets. Asset-based fees may be
expected to increase as a result of appreciation in the value of CPA(R):14's
real estate assets and the acquisition of properties.

The increase in depreciation expense is the result of the increase in real
estate assets. While accounting principles generally accepted in the United
States of America do not allow presentation of income before depreciation,
Management generally evaluates results in that manner. The increase in
depreciation for the comparable years was $8,299,000. While depreciation is a
charge to earnings, it is a noncash charge. Accordingly, the increase in cash
flow from operations was substantially greater than the increase in earnings.

As described below, earnings for 2000 include nonrecurring other income of
$10,029,000 relating to the settlement proceeds from a bankruptcy. Of this
settlement, 40% ($4,012,000) is allocable to the minority interest owner of the
subsidiaries which own the affected properties.

Because of the long-term of nature of CPA(R):14's net leases, inflation and
changing prices have not unfavorably affected CPA(R):14's revenues and net
income. CPA(R):14's net leases generally have rent increases based on formulas
indexed to increases in the CPI, sales overrides or other periodic increases
which are designed to increase lease revenues in the future.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Net income for the year ended December 31, 2000 is not fully comparable with net
income for the year ended December 31, 1999. The asset base of CPA(R):14
increased substantially during the year as a result of raising $120,868,000
through the issuance of shares and obtaining $166,222,000 of limited recourse
mortgage financing. As a result of this growth in the asset base and CPA(R):14's
investment in real estate, net income increased by $13,898,000. The results for
2000 include a noncash charge of $2,462,000 on the writedown of a property to
estimated fair value. The increase in real estate investment activity was
reflected in a $19,640,000 increase in lease revenues (rental income and
interest income from direct financing leases). Other interest income increased
during 2000 as average cash balances were higher. The average cash balances were
higher as capital raised is invested in interest-bearing accounts until the cash
is deployed for purchases of real estate investments. These revenue increases
were offset by an increase in interest expense due to the placement of limited
recourse debt in 2000. Increases in depreciation and amortization, property and
general administrative expenses were also attributable to the increase in our
asset base. Income for future periods will reflect increases in lease revenues
and expenses. Other interest income will decrease as funds from CPA(R):14's
offerings are invested fully in accordance with CPA(R):14's objectives.

In November 1998, CPA(R):14 entered into a net lease with The Benjamin Ansehl
Company. During 2000, Benjamin Ansehl filed a petition of bankruptcy and
subsequently liquidated its operations. Annual rent from the lease was $652,000
in 2000, representing approximately 2% of lease revenues. The total purchase
price was $6,081,000 of which $3,100,000 was financed with a limited recourse
loan. CPA(R):14 has subsequently sold the property.

CPA(R):14 and Corporate Property Associates 12 Incorporated ("CPA(R):12"), an
affiliate, structured two net leases with Ameriserve Food Distribution Inc. in
1999 for four distribution centers. As structured, CPA(R):14 and CPA(R):12, with
60% and 40% ownership interests, respectively, were committed to invest up to
$55,800,000 in the properties, with $32,000,000 of this commitment financed with
limited recourse mortgage debt. In addition, Ameriserve provided CPA(R):14 and
CPA(R):12 with irrevocable letters of credit of $8,700,000 as a security
deposit. During 2000, Ameriserve declared bankruptcy and subsequently entered
into a settlement agreement with CPA(R):14 and CPA(R):12. The settlement
agreement provided for a cash payment of $3,100,000 and allowed CPA(R):14 and
CPA(R):12 to draw on the full amount of the letters of credit. CPA(R):14 and
CPA(R):12 were obligated to assign a substantial portion of these funds to the
mortgage lenders. Substantially all of the amounts included in other income for
2000 in the accompanying consolidated financial statements reflect amounts
received in connection with the Ameriserve


                                      -4-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED

--------------------------------------------------------------------------------



settlement. CPA(R):14 and CPA(R):12 entered into net leases in 2000 for three of
the properties with the company that purchased Ameriserve's operations. The
guarantor of the three new leases is McLane Company Inc., a wholly-owned
subsidiary of Wal-Mart Stores Inc. During 2001, CPA(R):14 entered into a
five-year lease agreement with Fleming Companies, Inc. for the Grand Rapids,
Michigan property which had been vacant since the termination of the Ameriserve
leases.

Financial Condition

Management believes that CPA(R):14 will generate sufficient cash from operations
and equity investments and, if necessary, from the proceeds of mortgage
financings, to meet its short-term and long-term liquidity needs. Cash flows
from operating activities of $53,276,000 includes the receipt of $6,144,000 of
funds released from an escrow account. The escrow funds were assigned to the
mortgage lender in connection with a bankruptcy settlement in 2000 regarding
Ameriserve. The remaining $47,132,000 of cash provided from operations and the
$1,738,000 of equity distributions received in excess of equity income was
sufficient to fund dividend payments of $32,811,000, scheduled mortgage
principal payments of $2,557,000 and distributions to minority interests of
$2,323,000.

During the twelve months ended December 31, 2001, CPA(R):14's investing activity
included using $372,836,000 for the funding of build-to-suit projects, and the
acquisition of properties including properties leased to Gibson Guitar Corp.,
Nexpak Corporation, Gerber Scientific Inc., New Creative Enterprises Inc.,
Petsmart Inc., Builders Firstsource Inc., Atrium Companies Inc., Nortel Networks
Inc., Lincoln Technical Institute Inc. and PerkinElmer Inc. The estimated
remaining costs to complete build-to-suit commitments are $3,028,000. CPA(R):14
received a distribution of $15,003,000 from its equity investment in the Applied
Materials Inc. property, representing a return of amounts it had advanced during
the construction period and $7,661,000 from the mortgage proceeds obtained from
its interest in the properties leased to Special Devices, which are accounted
for under the equity method. CPA(R):14 also received $2,903,000 from the August
2001 sale of the St. Louis, Missouri property formerly leased to Benjamin
Ansehl.

In addition to paying dividends, scheduled mortgage principal installments and
distributions to minority partners, CPA(R):14's financing activities included
$203,156,000 of cash proceeds, net of costs paid, from the issuance of stock in
2001 under its second offering. CPA(R):14's second offering commenced in
November 1999 and concluded in November 2001 and raising approximately
$363,537,000 (36,354,000 shares) over the two-year period. During 2001,
CPA(R):14 met its preferred return criteria at which point the Advisor was
entitled to receive its performance fees in 2001. The Advisor elected to receive
performance fees in restricted stock in lieu of cash, and in 2001, CPA(R):14
issued 501,186 shares ($5,011,859) in consideration of prior and current
amounts. The issuance of stock to the Advisor is expected to enhance CPA(R):14's
liquidity and further align the interests of the shareholders and the Advisor.
The Advisor may elect to receive cash payment for performance fees in subsequent
periods.

During 2001, CPA(R):14 obtained $262,136,000 of limited recourse financing on
newly acquired properties and unencumbered properties. In connection with
obtaining mortgage financing, CPA(R):14 used $6,546,000 for financing costs and
mortgage deposits. Financing costs are deferred and amortized over the life of
the related mortgage and are included in interest expense. CPA(R):14 made
mortgage prepayments of $15,529,000, of which $12,568,000 was provided from
funds which had previously been deposited in escrow accounts, including
$4,568,000 received in 2000 under the Ameriserve settlement. In February 2002,
CPA(R):14 refinanced a limited recourse loan on a property leased to Fitness
Holdings, Inc. which had matured in August 2001 and was on a short-term
extension. As a result of refinancing the Fitness Holdings lease, annual cash
flow will decrease $53,000.

CPA(R):14's financing strategy has been to purchase substantially all of its
properties with a combination of equity and limited recourse mortgage debt. A
lender on a limited recourse mortgage loan has recourse only to the property
collateralizing such debt and not to any of CPA(R):14's other assets. This
strategy has allowed CPA(R):14 to diversify its portfolio of properties and,
thereby, limit its risk. In the event that a balloon payment comes due,
CPA(R):14 may seek to refinance the loan, restructure the debt with existing
lenders, evaluate its ability to pay the balloon payment from its cash reserves
or sell the property and use the proceeds to satisfy the mortgage debt.
CPA(R):14 had a mortgage loan which matured in February 2002 that has been
refinanced and no loans maturing in 2003. CPA(R):14 has no current plans to
obtain unsecured debt; however, its strategy may be reconsidered in the future.
CPA(R):14 may seek to refinance its unencumbered properties and use the proceeds
to make additional investments in real estate. To the extent that CPA(R):14
obtains such financing, it may increase CPA(R):14's overall leverage.
CPA(R):14's equity investments have also purchased properties using a
combination of equity and limited recourse mortgage financing.



                                      -5-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED

--------------------------------------------------------------------------------


CPA(R):14 is continuing to diversify its portfolio by using its net offering
proceeds along with limited recourse mortgage financing to purchase properties
subject to long-term net leases with corporate tenants on a single tenant basis.
Under a net lease, a tenant is generally required to pay all expenses related to
the leased property for real estate taxes, property maintenance and insurance
costs. A net lease, therefore, limits the impact on CPA(R):14 of the effects of
inflation on these property costs. CPA(R):14's leases, which generally have
initial lease terms of 10 to 20 years and provide the lessee with options for
renewal terms, typically include rent increase provisions which are fixed or
based upon increases in the CPI.

CPA(R):14 is a participant with its affiliates in a lease for office space. The
remaining minimum rents under the office lease are $6,100,000 through September
2006 and CPA(R):14's current commitment is to pay 23% of such costs. The
participation cost is adjusted quarterly based on a gross revenue formula.
Because of the continued growth of CPA(R):14, its share of costs will increase
moderately in the coming year.

A summary of CPA(R):14's obligations under contractual arrangements is as
follows:

<TABLE>
<CAPTION>

(in thousands)                      Total          2002          2003          2004          2005          2006       Thereafter
                                   --------      --------      --------      --------      --------      --------     ----------
<S>                                <C>           <C>           <C>           <C>           <C>           <C>           <C>
Limited recourse mortgage
   notes payable                   $463,864      $  8,945      $  5,579      $  5,951      $  6,489      $  6,992      $429,908
Deferred acquisition fees            18,661         1,638         2,387         2,453         2,453         2,453         7,277
Subordinated disposition fees           131                                                                                 131
Share of minimum rents
   payable under office
   cost-sharing agreement             1,430           280           307           307           307           229          --
                                   --------      --------      --------      --------      --------      --------      --------
                                   $484,086      $ 10,863      $  8,273      $  8,711      $  9,249      $  9,674      $437,316
                                   ========      ========      ========      ========      ========      ========      ========
</TABLE>


In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards ("SFAS") No. 141 "Business
Combinations" and No. 142 "Goodwill and Other Intangibles," which establish
accounting and reporting standards for business combinations and certain assets
and liabilities acquired in business combinations.

SFAS No. 141 requires that all business combinations initiated after June 30,
2001 be accounted for under the purchase method, establishes specific criteria
for the recognition of intangible assets separately from goodwill and requires
that unallocated negative goodwill be written off immediately as an
extraordinary gain. Use of the pooling-of-interests method for business
combinations is no longer permitted. The adoption of SFAS 141 did not have a
material effect on CPA(R):14's financial statements.

SFAS No. 142 primarily addresses the accounting for goodwill and intangible
assets subsequent to their acquisition and the accounting for asset
acquisitions. The provisions of SFAS No. 142 are effective for fiscal years
beginning after December 15, 2001 and must be adopted at the beginning of a
fiscal year. SFAS No. 142 provides that goodwill and indefinite-lived intangible
assets will no longer be amortized but will be tested for impairment at least
annually. Intangible assets acquired and liabilities assumed in business
combinations will only be amortized if such assets or liabilities are capable of
being separated or divided and sold, transferred, licensed, rented or exchanged
or arise from contractual or legal rights (including leases), and will be
amortized over their useful lives. The adoption of SFAS 142 is not expected to
have a material effect on CPA(R):14's financial statements.

In August 2001, FASB issued SFAS No. 144 "Accounting for the Impairment of
Long-Lived Assets" which addresses the accounting and reporting for the
impairment and disposal of long-lived assets and supercedes SFAS No. 121 while
retaining SFAS No. 121's fundamental provisions for the recognition and
measurement of impairments. SFAS 144 removes goodwill from its scope, provides
for a probability-weighted cash flow estimation approach for analyzing
situations in which alternative courses of action to recover the carrying amount
of long-lived assets are under consideration and broadens that presentation of
discontinued operations to include a component of an entity. The adoption of
SFAS 144 is not expected to have a material effect on CPA(R):14's financial
statements; however, the revenues and expenses relating to an asset held for
sale or sold must be presented as a discontinued operation for all periods
presented. The provisions of SFAS No. 144 are effective for fiscal years
beginning after December 15, 2001.



                                      -6-
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED

--------------------------------------------------------------------------------



In connection with the purchase of its properties, CPA(R):14 requires the
sellers to perform environmental reviews. Management believes, based on the
results of such reviews, that CPA(R):14's properties were in substantial
compliance with Federal and state environmental statutes at the time the
properties were acquired. However, portions of certain properties have been
subject to some degree of contamination, principally in connection with either
leakage from underground storage tanks, surface spills from facility activities
or historical on-site activities. In most instances where contamination has been
identified, tenants are actively engaged in the remediation process and
addressing identified conditions. Tenants are generally subject to environmental
statutes and regulations regarding the discharge of hazardous materials and any
related remediation obligations. In addition, CPA(R):14's leases generally
require tenants to indemnify CPA(R):14 from all liabilities and losses related
to the leased properties with provisions of such indemnification specifically
addressing environmental matters. The leases generally include provisions which
allow for periodic environmental assessments, paid for by the tenant, and allow
CPA(R):14 to extend leases until such time as a tenant has satisfied its
environmental obligations. Certain of the leases allow CPA(R):14 to require
financial assurances from tenants such as performance bonds or letters of credit
if the costs of remediating environmental conditions are, in the estimation of
CPA(R), in excess of specified amounts. Accordingly, Management believes that
the ultimate resolution of any environmental matter will not have a material
adverse effect on CPA(R):14's financial condition, liquidity or results of
operations.






                                      -7-

<PAGE>
                        REPORT of INDEPENDENT ACCOUNTANTS


To the Board of Directors and Shareholders of
  Corporate Property Associates 14 Incorporated:


In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, shareholders' equity and cash flows present
fairly, in all material respects, the financial position of Corporate Property
Associates 14 Incorporated and its subsidiaries at December 31, 2000 and 2001,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of Carey Asset Management Corp. (the
"Advisor"); our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States 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 the Advisor, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.




/s/ PricewaterhouseCoopers LLP


New York, New York
March 15, 2002




                                      -8-
<PAGE>


                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

                           Consolidated BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                           December 31,
                                                               ----------------------------------
                                                                     2000               2001
                                                               ---------------    ---------------
<S>                                                            <C>                <C>
                      ASSETS:

Real estate leased to others:
   Accounted for under the operating method
       Land                                                    $    89,473,796    $   144,955,265
       Buildings                                                   349,961,295        654,091,379
                                                               ---------------    ---------------
                                                                   439,435,091        799,046,644
       Less, accumulated depreciation                                5,445,242         17,728,004
                                                               ---------------    ---------------
                                                                   433,989,849        781,318,640
Net investment in direct financing leases                           67,575,059        104,321,331
Real estate under construction                                      37,873,678               --
                                                               ---------------    ---------------
       Real estate leased to others                                539,438,586        885,639,971
Equity investments                                                  50,780,516         41,690,489
Cash and cash equivalents                                           35,547,125        147,694,629
Accounts receivable from affiliates                                  3,367,910               --
Other assets, net of accumulated amortization of $79,116 and
     $417,953 in 2000 and 2001 and allowance for uncollected
     rents of $202,296 and $1,302,296 in 2000 and 2001              16,627,369         22,212,792
                                                               ---------------    ---------------
            Total assets                                       $   645,761,506    $ 1,097,237,881
                                                               ===============    ===============

            LIABILITIES, MINORITY INTEREST
              AND SHAREHOLDERS' EQUITY:

Liabilities:
Limited recourse mortgage notes payable                        $   218,111,151    $   463,864,022
Accrued interest                                                       799,229          2,426,408
Accounts payable to affiliates                                       4,139,284          3,651,004
Accounts payable and accrued expenses                                2,098,253          2,207,327
Prepaid rental income and security deposits                          4,365,919         12,809,469
Deferred acquisition fees payable to affiliate                      12,829,308         18,661,386
Dividends payable                                                    6,914,692         11,317,412
                                                               ---------------    ---------------
            Total liabilities                                      249,257,836        514,937,028
                                                               ---------------    ---------------

Minority interest                                                   20,642,364         19,822,225
                                                               ---------------    ---------------

Commitments and contingencies

Shareholders' equity:
Common stock, $.001 par value; authorized, 120,000,000
   shares; issued and outstanding, 43,081,544 and 66,315,466
   shares at December 31, 2000 and 2001                                 43,081             66,315
Additional paid-in capital                                         386,341,749        593,486,847
Dividends in excess of accumulated earnings                         (9,185,865)       (28,022,770)
Accumulated other comprehensive income                                    --             (101,162)
                                                               ---------------    ---------------
                                                                   377,198,965        565,429,230
Less, treasury stock at cost, 146,687 and 329,976 shares at
   December 31, 2000 and 2001                                       (1,337,659)        (2,950,602)
                                                               ---------------    ---------------
            Total shareholders' equity                             375,861,306        562,478,628
                                                               ---------------    ---------------
            Total liabilities, minority interest and
                shareholders' equity                           $   645,761,506    $ 1,097,237,881
                                                               ===============    ===============
</TABLE>

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


                                      -9-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED


                        CONSOLIDATED STATEMENTS of INCOME
<TABLE>
<CAPTION>
                                                            For the years ended December 31,
                                                       --------------------------------------------
                                                           1999            2000            2001
                                                       ------------    ------------    ------------
<S>                                                    <C>             <C>             <C>
Revenues:
     Rental income                                     $  6,643,697    $ 22,878,967    $ 55,489,619
     Interest income from direct financing leases           688,810       4,093,881       9,216,497
     Other interest income                                2,690,097       5,735,208       2,519,808
     Other income                                              --        10,149,625         232,540
                                                       ------------    ------------    ------------
                                                         10,022,604      42,857,681      67,458,464
                                                       ------------    ------------    ------------

Expenses:
     Interest expense                                     1,367,008       6,817,326      22,257,898
     Depreciation                                           976,618       4,292,647      12,591,767
     General and administrative                           1,164,036       2,585,058       4,308,482
     Property expense                                     1,585,807       3,992,926       9,246,958
     Impairment loss on real estate                            --         2,462,400       3,810,000
                                                       ------------    ------------    ------------
                                                          5,093,469      20,150,357      52,215,105
                                                       ------------    ------------    ------------

        Income before minority interest,
           income from equity investments and (loss)
           gain                                           4,929,135      22,707,324      15,243,359

Minority interest in income                                (152,219)     (4,075,339)       (291,495)
                                                       ------------    ------------    ------------

        Income before income from equity investments
           and (loss) gain                                4,776,916      18,631,985      14,951,864

Income from equity investments                            2,901,253       3,248,463       3,693,509
                                                       ------------    ------------    ------------

        Income before (loss) gain                         7,678,169      21,880,448      18,645,373

Loss on sale of real estate                                    --          (303,899)       (346,482)
Unrealized gain on derivative instrument                       --              --            78,010
                                                       ------------    ------------    ------------

        Net income                                     $  7,678,169    $ 21,576,549    $ 18,376,901
                                                       ============    ============    ============

Basic earnings per share                               $        .39    $        .60    $        .36
                                                       ============    ============    ============

Weighted average shares outstanding - basic              19,909,834      35,721,141      51,422,168
                                                       ============    ============    ============
</TABLE>



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


                                      -10-

<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED



                 CONSOLIDATED STATEMENTS of SHAREHOLDERS' EQUITY


              For the years ended December 31, 1999, 2000 and 2001
<TABLE>
<CAPTION>
                                                                      Dividends in    Accumulated
                                                                        Excess of        Other
                            Common     Additional      Comprehensive  Accumulated   Comprehensive    Treasury
                            Stock    Paid-in Capital       Income       Earnings        Income         Stock         Total
                          ---------  ---------------   -------------  ------------  -------------  ------------  -------------
<S>                       <C>         <C>               <C>           <C>           <C>            <C>           <C>
 Balance at
  December 31, 1998        $11,838    $105,705,582                   $ (1,643,957)                $  (163,360)   $103,910,103

 17,622,693 shares
  issued $.001 par, at
  $10 per share, net of
  offering costs            17,622     159,781,446                                                                159,799,068

 Dividends declared                                                   (12,930,844)                                (12,930,844)
 Purchase of treasury
  stock, 62,939 shares                                                                               (578,504)       (578,504)

 Net income                                                             7,678,169                                   7,678,169
                         ---------    ------------   -----------     ------------  ----------     -----------     -----------
 Balance at
  December 31, 1999         29,460     265,487,028                     (6,896,632)                   (741,864)    257,877,992

 13,620,950 shares
  issued $.001 par, at
  $10 per share, net
  of offering costs         13,621     120,854,721                                                                120,868,342

 Dividends declared                                                   (23,865,782)                                (23,865,782)
 Purchase of treasury
  stock, 66,848 shares                                                                               (595,795)       (595,795)
 Net income                                                            21,576,549                                  21,576,549
                         ---------    ------------   -----------     ------------  ----------     -----------     -----------
 Balance at
  December 31, 2000        43,081      386,341,749                     (9,185,865)                 (1,337,659)    375,861,306

 23,233,922 shares
  issued $.001 par, at
  $10 per share, net
  of offering costs        23,234      207,145,098                                                                207,168,332

 Dividends declared                                                   (37,213,806)                                (37,213,806)
 Purchase of treasury
  stock, 183,289 shares                                                                            (1,612,943)    (1,612,943)

 Comprehensive income:
  Net income                                         $18,376,901       18,376,901                                  18,376,901
 Other comprehensive
  income:
Foreign currency
  translation adjustment                                (101,162)                    (101,162)                       (101,162)
                         ---------    ------------   -----------     ------------  ----------     -----------     -----------
 Balance at
  December 31, 2001      $  66,315    $593,486,847   $18,275,739     $(28,022,770) $ (101,162)    $(2,950,602)    $562,478,628
                         =========    ============   ===========     ============  ==========     ===========     ============
</TABLE>


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

                                      -11-

<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED


                      CONSOLIDATED STATEMENTS of CASH FLOWS
<TABLE>
<CAPTION>
                                                                         For the year ended December 31,
                                                                 -----------------------------------------------
                                                                      1999             2000             2001
                                                                 -------------    -------------    -------------
<S>                                                              <C>              <C>              <C>
Cash flows from operating activities:
    Net income                                                   $   7,678,169    $  21,576,549    $  18,376,901
    Adjustments to reconcile net income to net cash provided
       by operating activities:
       Depreciation and amortization of financing costs                991,513        4,356,868       12,951,333
       Straight-line rent adjustments                                 (234,261)        (307,112)      (3,192,271)
       Income from equity investments in excess of
          distributions received                                          --           (191,477)         (58,406)
       Minority interest in income                                     152,219        4,075,339          291,495
       Loss on sale of real estate                                        --            303,899          346,482
       Issuance of shares in satisfaction of current and
          accrued performance fees                                        --               --          5,011,859
       Provision for uncollected rent                                   54,994          202,296        1,100,000
       Impairment loss on real estate                                     --          2,462,400        3,810,000
       Funds (deposited in) released from escrow                          --         (8,950,000)       6,144,303
       Increase in prepaid rents and security deposits                 980,612        3,041,540        8,434,688
       Unrealized gain on derivative instrument                           --               --            (78,010)
       Change in other operating assets and liabilities,
          net (a)                                                     (822,125)       2,118,847          137,129
                                                                 -------------    -------------    -------------
          Net cash provided by operating activities                  8,801,121       28,689,149       53,275,503
                                                                 -------------    -------------    -------------

Cash flows from investing activities:

    Equity distributions received in excess of equity income         1,277,311        1,198,321        1,738,136
    Purchases of real estate and equity investments
       and other capitalized costs, net                           (151,385,643)    (344,297,409)    (372,835,525)
    Funds deposited in construction escrow                                --               --         (8,000,000)
    Funds released from escrow for construction                           --               --          8,000,000
    Proceeds from sale of real estate                                     --          1,104,340        2,903,486
    Payment of deferred acquisition fees                                  --           (268,911)        (722,306)
    Funds released from escrow                                            --         10,488,450             --
    Capital distributions received from equity investments                --               --         22,663,984
                                                                 -------------    -------------    -------------
          Net cash used in investing activities                   (150,108,332)    (331,775,209)    (346,252,225)
                                                                 -------------    -------------    -------------

Cash flows from financing activities:

    Proceeds from stock issuance, net of costs                     159,799,068      120,868,342      203,156,473
    Prepayment of mortgage principal                                      --               --        (15,528,556)
    Proceeds from mortgages                                         49,661,425      142,723,788      262,135,664
    Contributions received from minority partner, net of
       capital distributions                                         8,059,878        9,163,325        1,211,723
    Payments of mortgage principal                                    (143,733)        (628,490)      (2,557,375)
    Deferred financing costs and mortgage deposits                  (1,036,271)      (2,043,742)      (6,546,318)
    Dividends paid                                                  (9,781,253)     (21,466,303)     (32,811,085)
    Purchase of treasury stock                                        (578,504)        (595,795)      (1,612,943)
    Distributions paid to minority interest partner                       --           (808,397)      (2,323,357)
                                                                 -------------    -------------    -------------
          Net cash provided by financing activities                205,980,610      247,212,728      405,124,226
                                                                 -------------    -------------    -------------

          Net increase (decrease) in cash and cash equivalents      64,673,399      (55,873,332)     112,147,504

Cash and cash equivalents, beginning of year                        26,747,058       91,420,457       35,547,125
                                                                 -------------    -------------    -------------

Cash and cash equivalents, end of year                           $  91,420,457    $  35,547,125    $ 147,694,629
                                                                 =============    =============    =============
</TABLE>


                                      -12-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED


                Consolidated Statements of Cash Flows, Continued


Noncash operating, investing and financing activities:

In connection with the acquisition of properties during the years ended December
31, 2000 and 2001, the Company assumed mortgage payable obligations of
$23,498,161 and $2,075,541, respectively.

Included in the cost basis of real estate investments acquired in 1999, 2000 and
2001 are deferred acquisition fees payable of $4,276,774, $7,192,617 and
$6,554,384, respectively.

(a)  Excludes changes in accounts payable and accrued expenses and accounts
     payable to affiliates balances that relate to the raising of capital
     (financing activities) rather than the Company's real estate operations.


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


                                      -13-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

                   NOTES to CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies:

     Basis of Consolidation:

          The consolidated financial statements include the accounts of
          Corporate Property Associates 14 Incorporated, its wholly-owned
          subsidiaries and controlling majority-owned interests in limited
          liability companies and partnerships (collectively, the "Company").
          All material inter-entity transactions have been eliminated.

     Use of Estimates:

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

     Real Estate Leased to Others:

          Real estate is leased to others on a net lease basis, whereby the
          tenant is generally responsible for all operating expenses relating to
          the property, including property taxes, insurance, maintenance,
          repairs, renewals and improvements. Expenditures for maintenance and
          repairs including routine betterments are charged to operations as
          incurred, significant renovations which increase the useful life of
          the properties are capitalized.

          The Company diversifies its real estate investments among various
          corporate tenants engaged in different industries and by property
          type.

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

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

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

          When events or changes in circumstances indicate that the carrying
          amount of a long-lived asset may not be recoverable, the Company
          assesses the recoverability of its long-lived assets, including
          residual interests of real estate assets and investments, based on
          projections of undiscounted cash flows, without interest charges, over
          the life of such assets. In the event that such cash flows are
          insufficient, the assets are adjusted to their estimated fair value.

          Substantially all of the Company's leases provide for either scheduled
          rent increases, periodic rent increases based on formulas indexed to
          increases in the Consumer Price Index ("CPI") or sales overrides.
          Rents from sales overrides (percentage rent) are recognized as
          reported by lessees, that is, after the level of sales requiring a
          rental payment to the Company is reached.

          For properties under construction, operating expenses including
          interest charges are capitalized rather than expensed and rentals
          received are recorded as a reduction of capitalized project (i.e.,
          construction) costs.


                                      -14-
<PAGE>


                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued

     Depreciation:

          Depreciation is computed using the straight-line method over the
          estimated useful lives of the properties - generally 40 years.

     Equity Investments:

          The Company's interests in limited partnerships and limited liability
          companies in which its ownership interests are 50% or less and the
          Company exerts significant influence, and jointly controlled
          tenancies-in-common. These interests are accounted for under the
          equity method, i.e. at cost, increased or decreased by the Company's
          share of earnings or losses, less distributions.

     Cash Equivalents:

          The Company considers all short-term, highly liquid investments that
          are both readily convertible to cash and have a maturity of generally
          three months or less at the time of purchase to be cash equivalents.
          Items classified as cash equivalents include commercial paper and
          money market funds. Substantially all of the Company's cash and cash
          equivalents at December 31, 2000 and 2001 were held in the custody of
          two financial institutions, and which balances at times exceed
          federally insurable limits. The Company mitigates this risk by
          depositing funds with major financial institutions.

     Foreign Currency Translation:

          The Company consolidates its real estate investments in the
          Netherlands, Finland and United Kingdom. The functional currencies for
          these investments are the Dutch Guilder, Euro and British Pound,
          respectively. The translation from these local currencies to the U.S.
          dollar is performed for assets and liabilities using current exchange
          rates in effect at the balance sheet date and for revenue and expense
          accounts using a weighted average exchange during the period. The
          gains and losses resulting from such translation are reported as a
          component of other comprehensive income as part of shareholders'
          equity.

     Other Assets:

          Included in other assets are deferred rental income and deferred
          charges. Deferred rental income is the aggregate difference for
          operating method leases between scheduled rents which vary during the
          lease term and rent recognized on a straight-line basis. Deferred
          charges are costs incurred in connection with mortgage refinancing and
          are amortized over the terms of the mortgages and included in interest
          expense.

     Derivative Instruments:

          Statement of Financial Accounting Standards No. 133 ("SFAS No. 133")
          "Accounting for Derivative Instruments and Hedging Activities" became
          effective in 2001 and established accounting and reporting standards
          for derivative instruments. Stock warrants granted to the Company by
          lessees in connection with structuring the initial lease transactions
          are defined as derivative instruments if such stock warrants are
          readily convertible to cash or provide for net settlement upon
          conversion. Pursuant to SFAS No. 133, changes in the fair value of
          such derivative instruments as determined using an option pricing
          model are recognized currently in earnings as gains or losses. For the
          year ended December 31, 2001, none of the stock warrants held by the
          Company are derivative instruments. The Company holds certain stock
          warrants which are not defined as derivative instruments and have been
          recorded at nominal values.

          Certain leases may provide the Company with an option to receive a
          portion of rental payments in the local currency or U.S. dollars.
          Pursuant to the adoption of SFAS No. 133, the option is a derivative
          instrument and changes in the fair value of such option are recognized
          in earnings as gains or losses. For the year ended December 31, 2001,
          the Company recognized an unrealized foreign currency gain of $78,010.



                                      -15-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


     Offering Costs:

          Costs incurred in connection with the raising of capital through the
          sale of common stock are charged to shareholders' equity upon the
          issuance of shares.

     Treasury Stock:

          Treasury stock is recorded at cost.

     Deferred Acquisition Fees:

          Fees are payable for services provided by Carey Asset Management Corp.
          (the "Advisor"), a wholly-owned subsidiary of W. P. Carey & Co. LLC,
          an affiliate, to the Company relating to the identification,
          evaluation, negotiation, financing and purchase of properties. A
          portion of such fees are deferred and are payable in annual
          installments with each installment equal to .25% of the purchase price
          of the properties over no less than eight years following the first
          anniversary of the date a property was purchased. Payment of such fees
          is subject to the 2%/25% Guidelines (see Note 3).

     Earnings Per Share:

          The Company has a simple equity capital structure with only common
          stock outstanding. As a result, the Company has presented basic
          per-share amounts only for all periods presented in the accompanying
          consolidated financial statements.

     Federal Income Taxes:

          The Company is qualified as a real estate investment trust ("REIT") as
          of December 31, 2001 as defined under the Internal Revenue Code of
          1986. The Company is not subject to Federal income taxes on amounts
          distributed to shareholders provided it distributes at least 90% of
          its REIT taxable income to its shareholders and meets certain other
          conditions.

     Operating Segments

          Accounting standards have been established for the way public business
          enterprises report selected information about operating segments and
          guidelines for defining the operating segment of an enterprise. Based
          on the standards' definition, the Company has reported its real estate
          operations both domestically and internationally (see Note 11).

     Reclassification:

          Certain prior year amounts have been reclassified to conform to the
          current year's financial statement presentation.

2.   Organization and Offering:

          The Company was formed on June 4, 1997 under the General Corporation
          Law of Maryland for the purpose of engaging in the business of
          investing in and owning industrial and commercial real estate. Subject
          to certain restrictions and limitations, the business of the Company
          is managed by the Advisor.

          An initial offering of the Company's shares which commenced on
          November 10, 1997 concluded on November 10, 1999 at which time the
          Company had issued an aggregate of 29,440,594 shares ($294,405,940).
          On November 17, 1999, the Company commenced an offering for a maximum
          of 40,000,000 shares of common stock. The shares were offered to the
          public on a "best efforts" basis at a price of $10 per share. The
          second offering concluded on November 15, 2001, by which time
          36,353,686 shares ($363,536,860) were issued.

          In connection with performing services relating to the Company's real
          estate purchases, affiliates of the Company received acquisition fees
          of $1,282,550, $1,971,786 and $1,820,663 in 1999, 2000 and 2001,
          respectively.

                                      -16-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


3.   Transactions with Related Parties:

          The Company's asset management and performance fees payable to the
          Advisor are each 1/2 of 1% per annum of Average Invested Assets, as
          defined in the Advisory Agreement. For the years ended December 31,
          1999, 2000 and 2001, the Company incurred asset management fees of
          $730,285, $1,598,763 and $3,591,773, respectively. Performance fees
          were in like amount. Payment of the performance fee is subordinated to
          achievement of a cumulative rate of cash flow from operations of 7%
          (based on an initial issuance of Company stock at $10 per share in
          accordance with the Advisory Agreement). General and administrative
          expense reimbursement consists primarily of the actual cost of
          personnel needed in providing administrative services. For the years
          ended December 31, 1999, 2000 and 2001 general and administrative
          reimbursements were $415,353, $944,637 and $1,371,791, respectively.

          The Company has entered into an Advisory Agreement with the Advisor
          pursuant to which the Advisor performs certain services for the
          Company including the identification, evaluation, negotiation,
          purchase and disposition of property, the day-to-day management of the
          Company and the performance of certain administrative services. The
          Advisor and certain affiliates will receive fees and compensation in
          connection with the offering and the operation of the Company as
          described in the Prospectus of the Company. In connection with
          performing services related to the Company's real estate purchases in
          1999, 2000 and 2001, affiliates of the Company received structuring
          and development fees of $3,206,374, $4,929,466 and $4,551,658,
          respectively. The affiliate is also entitled to receive deferred
          acquisition fees. The deferred acquisition fees are payable in equal
          installments over a period of no less than eight years.

          The Advisor will be entitled to receive subordinated disposition fees,
          based upon the cumulative proceeds arising from the sale of the
          Company's assets since the inception of the Company. Pursuant to the
          subordination provisions of the Advisory Agreement, the disposition
          fees may be paid only after the shareholders receive 100% of their
          initial investment from the proceeds of asset sales and a cumulative
          annual return of 6% since the inception of the Company. The Advisor's
          interest in such disposition fees amounts to $130,626 through December
          31, 2001. Payment of such amount, however, cannot be made until the
          subordination provisions are met. Management has concluded that
          payment of such disposition fees is probable and all fees from
          completed property sales have been accrued. Subordinated disposition
          fees are included in the determination of realized gain or loss on the
          sale of properties. The obligation for disposition fees is included in
          accounts payable to affiliates in the accompanying consolidated
          financial statements.

          The Advisor is obligated to reimburse the Company at least annually
          for the amount by which operating expenses of the Company exceed the
          2%/25% Guidelines (2% of Average Invested Assets or 25% of net income)
          as defined in the Advisory Agreement. To the extent that operating
          expenses payable or reimbursable by the Company exceed the 2%/25%
          Guidelines and the independent directors find that such expenses were
          justified based on such unusual and nonrecurring factors which they
          deem sufficient, the Advisor may be reimbursed in future years for the
          full amount or any portion of such excess expenses, but only to the
          extent such reimbursement would not cause the Company's operating
          expenses to exceed the 2%/25% Guidelines in any such year.

          The Company is a participant in an agreement with certain affiliates
          for the purpose of leasing office space used for the administration of
          real estate entities and for sharing the associated costs. Pursuant to
          the terms of the agreement, the Company's share of rental, occupancy
          and leasehold improvement costs is based on gross revenues. Expenses
          incurred in 1999, 2000 and 2001 were $8,574, $76,811 and $236,502,
          respectively. The Company's current share of future minimum lease
          payments for the office space is approximately $1,430,000 through
          2006.

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

          Scheduled future minimum rents, exclusive of renewals, under
          non-cancelable operating leases amount to $80,276,000 in 2002,
          $80,617,000 in 2003, $80,774,000 in 2004, $79,529,000 in 2005,
          $79,182,000 in 2006 and aggregate approximately $1,404,508,000 through
          2021.

          No contingent rents were realized in 1999. Contingent rentals
          (including CPI-based increases) were approximately $24,000 in 2000
          and $249,000 2001.


                                      -17-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


5.  Net Investment in Direct Financing Leases:

          Net investment in direct financing leases is summarized as follows:
<TABLE>
<CAPTION>

                                                      December 31,
                                              ---------------------------
                                                  2000           2001
                                              ------------   ------------
<S>                                           <C>            <C>
          Minimum lease payments receivable   $149,452,817   $245,396,755
          Unguaranteed residual value           67,521,857    103,936,996
                                              ------------   ------------
                                               216,974,674    349,333,751
          Less: unearned income                149,399,615    245,012,420
                                              ------------   ------------
                                              $ 67,575,059   $104,321,331
                                              ============   ============
</TABLE>


          Scheduled future minimum rents, exclusive of renewals, under
          non-cancelable direct financing leases are approximately $11,341,000
          in 2002 and 2003, $11,421,000 in 2004, $11,486,000 in 2005 and
          $11,576,000 in 2006 and aggregate approximately $245,397,000 through
          2031.

          Contingent rents (including CPI-based increases) were approximately
          $36,000 in 2001. No contingent rents were realized in 1999 and 2000.

6.   Mortgage Notes Payable:

          Mortgage notes payable, all of which are limited recourse to the
          Company, are collateralized by an assignment of various leases and by
          real property with a carrying value of $756,795,000. As of December
          31, 2001, mortgage notes payable had fixed interest rates ranging from
          6.091% to 8.85% and variable interest rates ranging from 4.94% to
          8.27% and maturity dates ranging from 2008 to 2026.

          Scheduled principal payments during each of the five years following
          December 31, 2001 are as follows:
<TABLE>
<CAPTION>
          Year Ending December 31,        Total Debt       Fixed Rate Debt    Variable Rate Debt
          ------------------------       ------------      ---------------    ------------------
<S>                                      <C>                <C>                  <C>
            2002                         $  8,945,044       $  4,967,457         $ 3,977,587
            2003                            5,578,594          5,386,302             192,292
            2004                            5,950,599          5,741,110             209,489
            2005                            6,489,152          6,267,980             221,172
            2006                            6,991,772          6,765,284             226,488
            Thereafter                    429,908,861        416,204,855          13,704,006
                                         ------------       ------------         -----------
               Total                     $463,864,022       $445,332,988         $18,531,034
                                         ============       ============         ===========
</TABLE>

          Interest paid, excluding capitalized interest, was $1,059,995,
          $6,245,994 and $20,271,153 in 1999, 2000 and 2001, respectively.
          Capitalized interest payments were $1,909,575 in 2000 and $1,986,255
          in 2001. In connection with the placement of mortgages, fees of
          $496,999, $1,971,786 and $1,820,663 were paid to an affiliate of the
          Company in 1999, 2000 and 2001, respectively.

7.   Dividends:

          Dividends paid to shareholders consist of ordinary income, capital
          gains, return of capital or a combination thereof for income tax
          purposes. Since the inception of the Company, dividends per share
          reported for tax purposes were as follows:
<TABLE>
<CAPTION>

                                            1999       2000       2001
                                           -----      -----      -----
<S>                                        <C>        <C>        <C>
                Ordinary income            $ .55      $ .66      $ .44
                Return of capital            .10         --        .27
                                           -----      -----      -----
                                           $ .65      $ .66      $ .71
                                           =====      =====      =====
</TABLE>

          A dividend of $.0020244 per share per day in the period from October
          1, 2001 through December 31, 2001 ($11,317,412) was declared in
          December 2001 and paid in January 2002.



                                      -18-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


 8.  Lease Revenues:

        The Company's operations consist of the investment in and the leasing of
        industrial and commercial real estate. For the years ended December 31,
        1999, 2000 and 2001, the financial reporting sources are as follows:
<TABLE>
<CAPTION>

                                                                          1999          2000           2001
                                                                      -----------   -----------    -----------
<S>                                                                   <C>           <C>            <C>
         Per Statements of Income:
           Rental income from operating leases                        $ 6,643,697   $22,878,967    $55,489,619
           Interest income from direct financing leases                   688,810     4,093,881      9,216,497
           Share of lease revenues applicable to minority interest       (378,849)   (1,591,468)    (4,578,674)
           Share of leasing revenues from equity investments            7,472,522    10,069,139     11,769,143
                                                                      -----------   -----------     ----------
                                                                      $14,426,180   $35,450,519    $71,896,585
                                                                      ===========   ===========    ===========
</TABLE>

        In 1999, 2000 and 2001, the Company earned its share of net lease
        revenues from its direct and indirect ownership of real estate from the
        following lease obligations:
<TABLE>
<CAPTION>
                                          1999         %         2000          %        2001          %
                                      -----------    -----   -----------    ------  -----------    ------
<S>                                     <C>          <C>     <C>              <C>   <C>              <C>
Advance Paradigm, Inc.                       --      --      $ 1,075,000       3%   $ 4,300,000       6%
Federal Express Corporation (a)              --      --          269,649       1      3,872,203       5
Galyan's Trading Company                     --      --        1,667,301       5      3,810,787       5
Atrium Companies, Inc.                $   386,402      3%      2,447,825       7      3,126,978       4
Applied Materials, Inc. (b)             1,675,736     12       2,897,874       8      3,071,528       4
Advanced Micro Devices, Inc. (b)        3,048,500     21       3,048,500       9      3,048,500       4
APW North America Inc.                       --      --        1,543,215       4      2,649,655       4
Amerix Corporation                        366,246      3       2,197,475       6      2,392,743       3
Institutional Jobbers Company                --      --          501,430       1      2,270,722       3
Buffets, Inc.                                --      --          588,261       2      2,131,457       3
CheckFree Holdings, Inc. (b)              737,242      5       1,680,723       5      2,088,107       3
Ameriserve Food Distribution,
    Inc./McLane Company, Inc. (c)         568,274      3       2,117,552       6      2,075,058       3
Metaldyne Company LLC                        --      --           84,378     --       2,070,656       3
Best Buy Co., Inc.                      1,973,824     14       1,988,656       6      1,988,660       3
Stellex Technologies, Inc.                   --      --        1,563,459       4      1,882,934       3
Consolidated Theaters Holding, G.P           --      --          699,239       2      1,690,813       2
Celestica Corporation                        --      --             --       --       1,613,735       2
Gibson Guitar Corp. (d)                      --      --             --       --       1,492,928       2
Metagenics, Inc.                          429,957      3       1,348,438       4      1,348,437       2
Barjan Products LLC                          --      --          289,885       1      1,333,872       2
Fitness Holdings, Inc.                       --      --          376,514       1      1,324,600       2
Compucom Systems, Inc. (b)                982,213      7       1,304,667       4      1,304,667       2
Production Resource Group LLC             782,050      5       1,277,250       4      1,292,135       2
Nexpak Corporation                           --      --             --       --       1,261,802       2
The Bon-Ton Stores, Inc.                     --      --           17,490     --       1,259,250       2
Waddington North America, Inc.               --      --             --       --       1,201,971       2
Textron Inc. (b)                        1,028,831      7       1,137,375       3      1,137,375       2
Special Devices, Inc. (b)                    --      --             --       --       1,118,967       2
Builders Firstsource, Inc.                 59,247    --          878,085       2      1,052,274       1
BLP Group plc                                --      --             --       --       1,001,216       1
Other (d)                               2,387,658     17       4,450,278      12     11,682,555      16
                                      -----------    ----    -----------    ----    -----------    ----
                                      $14,426,180    100%   $35,450,519     100%   $71,896,585     100%
                                      ===========    ====    ===========    ====    ===========    ====
</TABLE>


(a)  Net of W. P. Carey & Co. LLC's minority interest.
(b)  Represents the Company's proportionate share of lease revenues from its
     equity investments.
(c)  Net of Corporate Property Associates 12 Incorporated's minority interest.
(d)  Net of unaffiliated third party's minority interest.


                                      -19-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


9.   Acquisitions of Real Estate and Financing:

     A summary of acquisitions of real estate and mortgage financing activity
     for the period from October 1, 2001 through December 31, 2001 is as
     follows:

     A.   On November 28, 2001, the Company and Corporate Property Associates 15
          Incorporated ("CPA(R):15"), an affiliate, formed two limited
          partnerships which purchased thirteen properties for $71,971,174 and
          entered into two net leases with Petsmart, Inc. ("Petsmart"). In
          connection with the acquisition, the limited partnerships obtained
          limited recourse mortgage financing of $43,125,000. CPA(R):15 has an
          initial limited partnership ownership interest of .001% and had an
          option to increase such ownership interest to 30% by no later than
          December 31, 2004. CPA(R):15 exercised its option in March 2002.

          The Petsmart leases have an initial term of 20 years followed by a
          ten-year renewal option and thereafter by two five-year options.
          Initial annual rent is $7,262,750 with stated increases of 9% every
          five years.

          The limited recourse mortgage loans are collateralized by deeds of
          trust and lease assignments and provide for monthly payments of
          interest and principal of $307,464 at an annual fixed rate of 7.70%
          based on a 30-year amortization schedule. The loans mature on December
          1, 2011 at which time balloon payments are scheduled.

     B.   On December 20, 2001, the Company and CPA(R):15 formed a limited
          partnership which purchased three properties in Cincinnati, Ohio;
          Norcross, Georgia and Elkwood, Virginia for $12,974,479 and entered
          into a master net lease with Builders First Source-Atlanta Group, Inc.
          and Builders First Source-Ohio Valley, Inc., collectively, as lessee.
          The lease obligations are unconditionally guaranteed by the lessees'
          parent company, Builders Firstsource, Inc. ("Builders First").
          CPA(R):15 has an initial limited partnership ownership interest of 1%
          and had an option to increase such ownership interest to 40% by no
          later than December 31, 2004. CPA(R):15 exercised its option in March
          2002.

          The lease has an initial term of fifteen years with two ten-year
          renewal options with an initial annual rent of $1,384,377. The lease
          provides for rent increases every two years based on a formula indexed
          to increases in the CPI, capped at 2% per year compounded for each
          rent increase.

          In February 2002, the limited partnership obtained limited recourse
          mortgage financing of $7,600,000 collateralized by a deed of trust and
          a lease assignment and provides for monthly payments of interest and
          principal of $56,510 at any annual interest rate of 7.57% based on a
          25-year amortization schedule. The loan matures in February 2012 at
          which time a balloon payment is scheduled.

     C.   In November 1999, the Company entered into a build-to-suit transaction
          with Atrium Companies, Inc. ("Atrium") for a property in Wylie, Texas
          which was subsequently placed in service in August 2000 at a cost of
          $8,716,984. On December 1, 2001, the Company purchased two additional
          properties in Welcome, North Carolina and Murrysville, Pennsylvania
          for $16,963,351 and entered into a net lease with Atrium for the Wylie
          property and the two newly-purchased properties. The master lease for
          the three properties has an initial lease term of 20 years with two
          five-year renewal options. The lease provides for initial annual rent
          of $2,690,247 with rent increases every two years based on a formula
          indexed to increases in the Consumer Price Index ("CPI"), capped at
          5%. If, for any two-year rent increase period, the CPI is less than
          5%, the difference between 5% and the actual percentage increase will
          be carried forward for purposes of calculating subsequent rent
          increases.

          The Company obtained a $14,000,000 limited recourse mortgage loan
          which is collateralized by a deed of trust and a lease assignment and
          provides for monthly payments of interest and principal of $95,505 at
          an annual interest rate of 7.25% based on a 30-year amortization
          schedule. The loan matures on November 1, 2011, at which time a
          balloon payment is scheduled.

     D.   On December 19, 2001, the Company purchased a property in Richardson,
          Texas for $48,453,608 and entered into a net lease with Nortel
          Networks, Inc. ("Nortel"). The lease obligations of Nortel have been


                                      -20-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued

          unconditionally guaranteed by its parent company, Nortel Networks
          Limited. The lease has an initial term of fifteen years with four
          five-year renewal options, and provides for an initial annual rent of
          $5,287,500 with stated increases every five years. The Company
          obtained a $30,000,000 limited recourse mortgage loan which is
          collateralized by a deed of trust and a lease assignment. The loan
          provides for monthly payments of principal and interest of $206,692 at
          an annual interest rate of 7.35% based on a 30-year amortization
          schedule, and matures on January 1, 2012, at which time a balloon
          payment is scheduled.

     E.   On December 28, 2001, the Company purchased properties in Union, New
          Jersey; Grand Prairie, Texas and Allentown and Philadelphia,
          Pennsylvania for $10,119,297 and entered into a net lease with Lincoln
          Technical Institute, Inc. The lease has an initial term of fifteen
          years with two ten-year renewal options, and provides for an initial
          annual rent of $1,174,035 with annual increases based on a formula
          indexed to increases in the CPI.

          In connection with the purchase, the Company obtained a $6,300,000
          limited recourse mortgage loan which is collateralized by a mortgage
          and a lease assignment. The loan provides for monthly payments of
          principal and interest of $47,318 at an annual interest rate of 7.58%
          based on a 25-year amortization schedule, and matures on January 1,
          2012, at which time a balloon payment is scheduled.

     F.   On December 28, 2001, the Company purchased a property in Turku,
          Finland for 27,308,849 Euros ($24,606,911 as of the purchase date) and
          entered into a net lease with Wallac Oy. The lease obligations of
          Wallac Oy are unconditionally guaranteed by its parent company,
          PerkinElmer, Inc. The lease has an initial term of twenty years with
          three five-year renewal options, and provides for an initial annual
          rent of 2,636,885 Euros ($2,333,949 as of the purchase date), with
          annual increases for the first five years and every five years
          thereafter based on a formula indexed to increases in the Finnish Cost
          of Living Index.

          In connection with the purchase, the Company obtained a 20,500,000
          Euros ($18,144,874 as of the purchase date) loan which provides for
          quarterly payments of principal and interest of 465,914 Euros
          ($412,388 as of the purchase date) at an annual interest rate of
          6.091%. Principal is payable based on a 3% annuity per annum. The loan
          matures on December 28, 2011, at which time a balloon payment is
          scheduled.

10.  Equity Investments:

     The Company holds equity interests in various partnerships and limited
     liability companies ("LLCs") and tenant in common subject to joint control,
     all of which net lease properties to corporate lessees. All of the
     underlying investments are owned with affiliates that have similar
     investment objectives as the Company. The Company owns 33.33% interests in
     properties net leased to Advanced Micro Devices, Inc. and Compucom Systems,
     Inc. and 50% interests in properties net leased to Textron, Inc. and
     CheckFree Holdings, Inc., and a 50% tenancy-in-common interest subject to
     common control that net leases buildings to Special Devices, Inc.,
     respectively. The Company also holds an interest in a limited liability
     company that net leases property to Etec Systems, Inc. ("Etec"). The
     interest in the Etec investment is a 49.99% interest in a building on the
     Etec property. Corporate Property Associates 12 Incorporated, an affiliate,
     owns all remaining interests in the Etec property, consisting of a 50.01%
     interest in the building and a 100% interest in all of the other buildings
     owned by the limited liability company. Applied Materials, Inc., the parent
     company of Etec, has unconditionally guaranteed Etec's lease obligations.

     Summarized financial information of the Company's equity investees is as
     follows:
<TABLE>
<CAPTION>
     (In thousands)                                                        December 31,
                                                                       -------------------
                                                                          2000      2001
                                                                       --------   --------
<S>                                                                    <C>        <C>
     Assets (primarily real estate)                                    $261,776   $306,233
     Liabilities (primarily limited recourse mortgage notes payable)    169,678    200,810
     Members' equity                                                     92,098    105,423
</TABLE>



                                      -21-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
<TABLE>
<CAPTION>
     (In thousands)                                                          Year Ended December 31,
                                                                          ------------------------------
                                                                            1999       2000       2001
                                                                          --------   --------   --------
<S>                                                                       <C>        <C>        <C>
     Revenues (primarily rental revenues)                                 $ 21,966   $ 27,504   $ 31,060
     Expenses (primarily interest on mortgage and depreciation)             13,446     18,294     19,539
                                                                          --------   --------   --------
     Net income                                                           $  8,520   $  9,210   $ 11,521
                                                                          ========   ========   ========
</TABLE>


11.  Segment Information:

     The Company has determined that it operates in one business segment, real
     estate operations with domestic and foreign investments. The Company
     acquired its first foreign real estate investment in January 2001.

     For 2001, geographic information for the real estate operations segment is
     as follows:
<TABLE>
<CAPTION>
                                                 Domestic          Foreign         Total Company
                                              --------------     -----------      --------------
<S>                                           <C>                <C>              <C>
     Revenues                                 $   66,162,481     $ 1,295,983      $   67,458,464
     Expenses                                     51,209,506       1,005,599          52,215,105
     Income from equity investments                3,693,509              --           3,693,509
     Net operating income(1)                      18,354,990         290,383          18,645,373
     Total assets                              1,058,123,122      39,114,759       1,097,237,881
     Total long-lived assets                     889,238,549      38,091,911         927,330,460
</TABLE>


     The Company had no foreign operations in 1999 and 2000.

     (1)  Income before (loss) gain.

12.  Loss on Sale and Impairment Losses:

     During 2000, the Company sold excess land at two properties for $1,104,340
     and recognized a loss on sale of $303,899.

     The Company purchased a property in St. Louis, Missouri in November 1998
     and entered into a net lease with the Benjamin Ansehl Company ("Benjamin
     Ansehl"). During 2000, Benjamin Ansehl filed a petition of bankruptcy, and
     subsequently vacated the property. Due to the expected termination of the
     lease, the Company incurred an impairment loss of $2,462,400 in 2000. In
     August 2001, the Company sold the property for $2,903,486 and recognized a
     loss on sale of $346,482.

     The Company purchased a property in Daleville, Indiana in June 1998 and
     entered into a net lease with Burlington Motor Carriers, Inc.
     ("Burlington"). In connection with Burlington's petition of bankruptcy and
     the expectation that Burlington will terminate its lease, the Company has
     recorded an impairment loss of $3,810,000 on the Burlington property in
     2001.

13.  Disclosures About Fair Value of Financial Instruments:

     The Company estimates that the fair value of mortgage and notes payable at
     December 31, 2000 and 2001 was approximately $220,612,000 and $461,953,000,
     respectively. The fair value of debt instruments was evaluated using a
     discounted cash flow model with rates that take into account the credit of
     the tenants and interest rate risk.

14.  Subsequent Events:

     On February 11, 2002, the Company purchased a property in Mooresville,
     North Carolina on which a building is being constructed on a build-to-suit
     basis and entered into a net lease with UTI Holdings, Inc. ("UTI") and
     Nascar Technical Institute, Inc. ("Nascar"). The total purchase price
     including construction costs is estimated to be $11,332,550, with UTI and
     NASCAR having the obligation to fund any additional costs necessary to
     complete the project. Upon the earlier of completion or October 1, 2002, a
     lease term of 20 years with three seven-year renewal


                                      -22-
<PAGE>
                  CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED

              NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued


     terms will commence with annual rent of $1,297,572 if the entire estimated
     funding of the build-to-suit project is required. The lease provides for
     stated annual increases of 2.5%.

     On February 28, 2002, the Company purchased properties in Tacoma,
     Washington; Eugene, Oregon; Perris, California and West Jordan, Utah for
     $14,712,043 and entered into a master net lease with PW Eagle, Inc. ("PW
     Eagle"). The PW Eagle lease has an initial term of 20 years with two
     ten-year renewal terms and provides for annual rent of $1,650,875 with
     increases every two years based on a formula indexed to increases in the
     CPI. In consideration for structuring the lease, PW Eagle granted the
     Company 120,000 warrants for PW Eagle common stock, exercisable over twenty
     years at $.01 per share.

     In connection with the purchase, the Company obtained a limited recourse
     mortgage loan of $8,200,000 collateralized by deeds of trust on the PW
     Eagle properties and a lease assignment. The loan provides for monthly
     payments of interest and principal of $57,898 at an annual interest rate of
     7.6% and a thirty-year amortization schedule. The loan matures in February
     2012, at which time a balloon payment is scheduled.

15.  Accounting Pronouncements:

     In July 2001, the Financial Accounting Standards Board ("FASB") issued
     Statements of Financial Accounting Standards ("SFAS") No. 141 "Business
     Combinations" and No. 142 "Goodwill and Other Intangibles," which establish
     accounting and reporting standards for business combinations and certain
     assets and liabilities acquired in business combinations.

     SFAS No. 141 requires that all business combinations initiated after June
     30, 2001 be accounted for under the purchase method, establishes specific
     criteria for the recognition of intangible assets separately from goodwill
     and requires that unallocated negative goodwill be written off immediately
     as an extraordinary gain. Use of the pooling-of-interests method for
     business combinations is no longer permitted. The adoption of SFAS 141 did
     not have a material effect on the Company's financial statements.

     SFAS No. 142 primarily addresses the accounting for goodwill and intangible
     assets subsequent to their acquisition and the accounting for asset
     acquisitions. The provisions of SFAS No. 142 are effective for fiscal years
     beginning after December 15, 2001 and must be adopted at the beginning of a
     fiscal year. SFAS No. 142 provides that goodwill and indefinite-lived
     intangible assets will no longer be amortized but will be tested for
     impairment at least annually. Intangible assets acquired and liabilities
     assumed in business combinations will only be amortized if such assets and
     liabilities are capable of being separated or divided and sold,
     transferred, licensed, rented or exchanged or arise from contractual or
     legal rights (including leases), and will be amortized over their useful
     lives. The adoption of SFAS 142 is not expected to have a material effect
     on the Company's financial statements.

     In August 2001, FASB issued SFAS No. 144 "Accounting for the Impairment of
     Long-Lived Assets" which addresses the accounting and reporting for the
     impairment and disposal of long-lived assets and supercedes SFAS No. 121
     while retaining SFAS No. 121's fundamental provisions for the recognition
     and measurement of impairments. SFAS 144 removes goodwill from its scope,
     provides for a probability-weighted cash flow estimation approach for
     analyzing situations in which alternative courses of action to recover the
     carrying amount of long-lived assets are under consideration and broadens
     that presentation of discontinued operations to include a component of an
     entity. The adoption of SFAS 144 is not expected to have a material effect
     on the Company's financial statements; however, the revenues and expenses
     relating to an asset held for sale or sold must be presented as a
     discontinued operation for all periods presented. The provisions of SFAS
     No. 144 are effective for fiscal years beginning after December 15, 2001.



                                      -23-
<PAGE>
MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
--------------------------------------------------------------------------------


There is no established public trading market for the Shares of the Company. As
of December 31, 2001, there were 21,145 holders of record of the Shares of the
Company.

The Company is required to distribute annually 90% of its Distributable REIT
Taxable Income to maintain its status as a REIT. Quarterly dividends paid by the
Company since its inception are as follows:
<TABLE>
<CAPTION>


                                             Cash Dividends Paid Per Share
                                         ------------------------------------
                                           1999          2000          2001
                                         --------      --------      --------
<S>                                       <C>           <C>           <C>
            First quarter                 .161000       .163116       .171249
            Second quarter                .162504       .163800       .175005
            Third quarter                 .162700       .165001       .178751
            Fourth quarter                .162932       .167495       .182500
                                         --------      --------      --------
                                         $.649136      $.659412      $.707505
                                         ========      ========      ========
</TABLE>



REPORT ON FORM 10-K
--------------------------------------------------------------------------------


The Advisor will supply to any shareholder, upon written request and without
charge, a copy of the Annual Report on Form 10-K for the year ended December 31,
2001 as filed with the Securities and Exchange Commission.



                                      -24-