

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

                                    FORM 10-K

(Mark One)

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

                   For the fiscal year ended December 31, 1997
                     
                                       OR

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

             For the transition period from                to
                                           ----------------   ------------------
                         Commission file number 0-12989

                        COMMERCIAL NET LEASE REALTY, INC.
             (Exact name of registrant as specified in its charter

             Maryland                                   56-1431377
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
  incorporation or organization)

                        400 East South Street, Suite 500
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 423-7348

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

      Title of each class:                 Name of exchange on which registered
  Common Stock, $.01 par value                    New York Stock Exchange

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

                                      None
                                (Title of class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Sities Exchange Act of 1934 
during the preceding 12 months (or such shorter period that the registrant was 
required to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days:  Yes      X      No
                                       -------------  ------------  
         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

         The aggregate  market value of voting stock held by  non-affiliates  of
the registrant as of March 9, 1998, was $475,609,877.

         The number of shares of common stock  outstanding  as of March 9, 1998,
was 28,877,762.


<PAGE>



                      DOCUMENTS INCORPORATED BY REFERENCE:


         1. Registrant  incorporates by reference portions of the Commercial Net
Lease Realty, Inc. Annual Report to Shareholders for the year ended December 31,
1997 (Items 5, 6, 7 and 8 of Part II).

         2. Registrant  incorporates by reference portions of the Commercial Net
Lease Realty,  Inc. Proxy  Statement for the 1998 Annual Meeting of Shareholders
(Items 10, 11, 12 and 13 of Part III).


<PAGE>



                                     PART I


Item 1.  Business

         Commercial  Net  Lease  Realty,   Inc.,  a  Maryland  corporation  (the
"Registrant" or the  "Company"),  is a real estate  investment  trust (a "REIT")
formed in 1984 that acquires, develops, owns and manages a diversified portfolio
of  high-quality,  freestanding  properties  leased to major  retail  businesses
generally under full-credit, long-term commercial net leases.

         The  Company's  strategy  is to invest in  single-tenant,  freestanding
retail  properties with purchase  prices of generally up to $7.5 million,  which
typically  are  located  along  intensive   commercial  corridors  near  traffic
generators,   such  as  regional   malls,   business   developments   and  major
thoroughfares. Management believes that these types of properties when leased to
high-quality   tenants  with  significant  market  presence  provide  attractive
opportunities  for a  stable  current  return  and  the  potential  for  capital
appreciation.  In management's  view, these types of properties also provide the
Company with  flexibility  in use and tenant  selection  when the Properties are
re-let.

         The Company will hold its properties  until it determines that the sale
or other  disposition of the properties is advantageous in view of the Company's
investment objectives. In deciding whether to sell properties,  the Company will
consider  factors  such as  potential  capital  appreciation,  net cash flow and
federal income tax considerations.

Properties

         During  the  year  ended  December  31,  1997,  the  Company   borrowed
$152,600,000  under its  credit  facility  to acquire  47  properties  and three
buildings  which  were  developed  by the  tenant on land  parcels  owned by the
Company.  As of  December  31,  1997,  the  Company  owned 236  properties  (the
"Properties") that are leased to major businesses, including Academy, Babies "R"
Us, Barnes & Noble,  Best Buy,  Borders,  Burger King,  CompUSA,  Computer City,
Denny's,  Dick's  Clothing & Sporting  Goods,  Eckerd,  Food 4 Less,  Food Lion,
Golden Corral, Good Guys, Hardee's, Hi-Lo Automotive,  HomePlace,  International
House of Pancakes, Kash N' Karry, Levitz, Linens 'n Things, Luria's,  Marshalls,
Office Depot,  OfficeMax,  Oshman's,  Pier 1 Imports,  Robb & Stucky,  Scotty's,
Sears,  Sports  Authority,   SuperValu  and  Waccamaw.  The  Company's  Property
portfolio was 100 percent leased at December 31, 1997.

         The Properties are leased under net leases pursuant to which the tenant
typically  will bear  responsibility  for  substantially  all property costs and
expenses associated with ongoing  maintenance and operation.  The leases of each
of the Company's Properties require payment of base rent plus, generally, either
percentage  rent based on the tenant's gross sales or  contractual  increases in
base rent.

         During 1997,  two of the  Company's  lessees,  Eckerd  Corporation  and
Barnes & Noble  Superstores,  Inc.,  each accounted for more than ten percent of
the Company's  total rental  income  (including  the  Company's  share of rental
income from nine properties owned by the Company's unconsolidated  partnership).
As of December 31, 1997, Eckerd Corporation and Barnes & Noble Superstores, Inc.
leased 43 Properties and 13 Properties,  respectively (including four properties
and one property,  respectively,  under leases with the Company's unconsolidated
partnership).  It is  anticipated  that,  based on the minimum  rental  payments
required by the leases, Eckerd Corporation and Barnes & Noble Superstores,  Inc.
will each continue to account for more than ten percent of the  Company's  total
rental income in 1998. Any failure of these lessees could materially  affect the
Company's income.

         Three of the  Company's  tenants,  HomePlace,  Luria's  and Levitz (the
"Tenants"), have each filed a voluntary petition for bankruptcy under Chapter 11
of the U.S.  Bankruptcy Code. As a result,  each of the Tenants has the right to
reject or affirm one or more of its leases with the Company.  As of December 31,
1997,  HomePlace,  Luria's and Levitz  leased  five,  three and one  Properties,
respectively,  which accounted for 4.5 percent of the Company's total rental and
earned income for the year ended  December 31, 1997. In February  1998,  Luria's
rejected each of its three leases with the Company.

                                        1

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Investment in Subsidiaries

         In November 1995, the Company formed two wholly owned subsidiaries, Net
Lease Realty I, Inc. and Net Lease Realty II, Inc. and in June 1997, the Company
formed two wholly-owned  subsidiaries,  Net Lease Realty III, Inc. and Net Lease
Realty IV, Inc.  Net Lease  Realty I, Inc.  and Net Lease  Realty IV, Inc.  were
formed to facilitate the acquisition of certain properties. Net Lease Realty II,
Inc. was utilized to facilitate the  acquisition of CNL Realty  Advisors,  Inc.,
the Company's advisor,  and Net Lease Realty III, Inc. is the general partner of
and holds a 20 percent interest in Net Lease Institutional  Realty, L.P. Each of
the  wholly-owned  subsidiaries  is a  qualified  real estate  investment  trust
subsidiary as defined under Internal Revenue Code Section 856(i)(2).

Investment in Partnership

         In  September   1997,  Net  Lease  Realty  III,  Inc.,  a  wholly-owned
subsidiary of the Company, entered into a limited partnership  arrangement,  Net
Lease  Institutional  Realty L.P. (the  "Partnership"),  with the Northern Trust
Company,  as Trustee of the Retirement  Plan for the Chicago  Transit  Authority
Employees ("CTA") to acquire,  own and manage nine properties.  Net Lease Realty
III, Inc. is the sole general partner (the "General  Partner") with a 20 percent
interest in the  Partnership,  and CTA is the sole limited partner (the "Limited
Partner")  with an 80  percent  interest  in the  Partnership.  Pursuant  to the
Partnership agreement,  the General Partner is responsible for the management of
the Partnership's properties. Net income and losses of the Partnership are to be
allocated  to the  partners  in  accordance  with  their  respective  percentage
interest in the Partnership.  The Partnership secured a $12 million non-recourse
mortgage  on the  Partnership's  nine  properties  in  September  1997 at  7.37%
interest rate.

         As of December 31, 1997, the  Partnership  owned nine  properties  (the
"Partnership  Properties")  leased to six major retail tenants.  Generally,  the
leases of the Partnership Properties provide for initial terms of 15 to 20 years
with annual base rent  ranging  from  $182,600 to $730,400  and  building  sites
ranging from 11,000 to 54,300 square feet. All of the Partnership Properties are
leased  under net leases  pursuant to which the tenant  typically  will bear the
responsibility  for  substantially all property costs and expenses related to on
going  maintenance  and  operation,  including  utilities,  property  taxes  and
insurance.

Advisory Services

         From July 10,  1992  through  December  31,  1997,  the Company and CNL
Realty Advisors,  Inc. (the "Advisor") were party to an advisory  agreement (the
"Advisory   Agreement"),   pursuant  to  which  the  Advisor   provided  certain
management,  advisory and acquisition  services. In accordance with the terms of
the Advisory  Agreement,  the Advisor  received an annual fee,  payable monthly,
equal to (i) seven percent of funds from  operations,  as defined  below,  up to
$10,000,000,  (ii) six percent of funds from operations in excess of $10,000,000
but less than  $20,000,000  and (iii) five percent of funds from  operations  in
excess of $20,000,000.  For the purposes of the Advisory  Agreement,  funds from
operations  means net  income  of the  Company  before  advisory  fee  excluding
depreciation  and  amortization   expense,   extraordinary   gains  and  losses,
nonrecurring   items  of  income  and  expense  and  non-cash  lease  accounting
adjustments. Under the Advisory Agreement, the Advisor generally was responsible
for administering the day-to-day investment operations of the Company, including
investment  analysis and  development,  acquisitions,  due diligence,  and asset
management and accounting  services.  These duties  included  collecting  rental
payments,  inspecting  and managing  the  Properties,  assisting  the Company in
responding to tenant inquiries and notices, providing information to the Company
about the status of the leases and the  Properties,  maintaining  the  Company's
accounting books and records, and preparing and filing various reports,  returns
or statements with various regulatory agencies. In addition,  the Advisor served
as the Company's  consultant in connection  with policy  decisions to be made by
the Board of Directors,  managed the  Company's  Properties  and rendered  other
services as the Board of Directors deemed appropriate.

         Historically,  the  Company did not have a large  enough  asset base to
provide the  economies  of scale  needed to  efficiently  support the  extensive
general and administrative expenses of an in-house management team. As a result,
the Advisor had incurred the full expense of a management and  acquisition  team
while receiving advisory and acquisition fees that have offset this expense.  In
1997,  however,   due  to  the  Company's  historical  and  anticipated  growth,
management believed that the efficiencies  derived from being externally advised
had   diminished   and  that  it  would  be  more  cost   effective   to  become
self-administered.  As a result,  on May 15, 1997, the Board of Directors of the
Company  unanimously  approved an agreement and plan of merger with the Advisor,
which when approved

                                        2

<PAGE>



by the  stockholders  of the  Company on  December  18,  1997 at the 1997 annual
meeting of stockholders,  resulted in the Company  becoming a  self-administered
and self-managed real estate investment trust (the "Advisor  Transaction").  The
Advisor  Transaction was completed on January 1, 1998. The Agreement and Plan of
Merger provided for the merger of the Advisor into a wholly owned  subsidiary of
the Company pursuant to which all of the outstanding common stock of the Advisor
was exchanged  for 220,000  shares of common stock of the Company and the right,
based upon the Company's  continued  growth in assets for a period of up to five
years,  to receive up to 1,980,000  additional  shares of the  Company's  common
stock.  In  addition,  upon the  consummation  of the Advisor  Transaction,  all
personnel  employed by the Advisor  became  employees of the Company.  Following
consummation  of the Advisor  Transaction,  the Advisory  Agreement  (as defined
above)  and the  obligation  of the  Company  to pay  any  fees  thereunder  was
terminated.  For a complete  description  of the  Advisor  Transaction,  see the
Company's  Proxy Statement dated November 13, 1997 for the Company's 1997 annual
meeting of stockholders.

Competition

         The Company generally  competes with other REIT's,  real estate limited
partnerships  and other  investors,  including  but not  limited  to,  insurance
companies,  pension  funds  and  financial  institutions,  in  the  acquisition,
leasing,   financing  and  disposition  of  investments  in  net-leased   retail
properties.

Employees

         Reference is made to Item 10.  Directors and Executive  Officers of the
Registrant for a listing of the Company's Executive Officers.


Item 2.  Properties

         As of December 31, 1997, the Company owned 236 Properties located in 36
states  that are leased to 48 major  retail  tenants.  Reference  is made to the
Schedule of Real Estate and Accumulated  Depreciation filed with this Report for
a listing of the Properties and their respective costs.


Description of Properties

         Land. The Company's Property sites range from  approximately  12,000 to
583,000 square feet depending upon building size and local demographic  factors.
Sites  purchased by the Company are in locations  zoned for commercial use which
have been  reviewed  for  traffic  patterns  and  volume.  Land costs range from
approximately $36,500 to $6,200,000.

         Buildings.  The  buildings  generally  are  rectangular,   single-story
structures  constructed from various combinations of stucco,  steel, wood, brick
and tile.  Building sizes range from approximately  1,000 to 82,000 square feet.
Building  costs  range  from  approximately  $195,000  to  $7,082,000  for  each
Property,  depending  upon the size of the building and the site and the area in
which the Property is located.  Generally,  the Properties  owned by the Company
are freestanding, with paved parking areas.

         Leases.  Although  there are  variations  in the specific  terms of the
leases,  the following is a summarized  description of the general  structure of
the  Company's  leases.  Generally,  the leases of the  Properties  owned by the
Company  provide for initial  terms of 15 to 20 years.  As of December 31, 1997,
the average  remaining lease term was approximately 14 years. The Properties are
generally  leased under net leases  pursuant to which the tenant  typically will
bear responsibility for substantially all property costs and expenses associated
with ongoing maintenance and operation,  including utilities, property taxes and
insurance.  In addition,  the majority of the Company's  leases provide that the
tenant  is  responsible  for roof and  structural  repairs.  The  leases  of the
Properties   provide  for  annual  base  rental  payments  (payable  in  monthly
installments) ranging from $21,000 to $1,032,000.  Generally, the leases provide
for either percentage rent or contractual increases in annual rent. Leases which
provide for contractual  increases in annual rent generally have increases which
range  from six to 12 percent  after  every  five  years of the lease  term.  In
addition,  for those leases which  provide for the payment of  percentage  rent,
such rent

                                        3

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is generally one to eight percent of the tenants'  annual gross sales,  less the
amount of annual base rent payable in that lease year.  As of December 31, 1997,
leases  representing  approximately  83  percent  of annual  base  rent  include
contractual  increases,  leases representing  approximately 31 percent of annual
base  rent  include   percentage   rent   provisions  and  leases   representing
approximately  22 percent  of annual  base rent  include  both  contractual  and
percentage rent provisions.

         Generally,  the leases of the Properties provide for two, three or four
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial  lease.  Some of the leases also provide  that, in the event the Company
wishes to sell the Property  subject to that lease, the Company first must offer
the lessee the right to purchase the Property on the same terms and  conditions,
and for the same price, as any offer which the Company has received for the sale
of the Property.

         During  1997,  two  of  the  Company's   lessees,   Eckerd  Corporation
(drugstore) and Barnes & Noble Superstores,  Inc. (bookstore) each accounted for
more than ten  percent of the  Company's  total  rental  income  (including  the
Company's share of rental income from the Partnership Properties. As of December
31, 1997, Eckerd Corporation and Barnes & Noble Superstores,  Inc. leased 43 and
13  Properties,  respectively  (including  four  properties  and  one  property,
respectively, under leases with the Partnership).

         As  of  December  31,  1997,  two  of  the  Company's  lessees,  Eckerd
Corporation and Barnes & Noble Superstores, Inc., leased Properties representing
11.6% and 10.6%,  respectively,  of total assets. For information  regarding the
results of operations  and financial  condition of these two entities,  refer to
their  Annual  Reports on Forms 10-K as filed with the  Securities  and Exchange
Commission for the year ended February 1, 1997.

         The Company generally  competes with other REIT's,  real estate limited
partnerships  and other  investors,  including  but not  limited  to,  insurance
companies,  pension funds and financial  institutions in the acquisition leasing
financing and disposition of investments in net-leased retail properties.

         Investments  in real  property  create a  potential  for  environmental
liability  on the  part of the  owner of such  property  from  the  presence  or
discharge of hazardous  substances on the property.  It is the Company's policy,
as a part  of its  acquisition  due  diligence  process,  to  obtain  a  Phase I
environmental site assessment for each property and where warranted,  a Phase II
environmental site assessment.  Phase I assessments  involve site reconnaissance
and review of regulatory files identifying  potential areas of concern,  whereas
Phase II assessments involve some degree of soil and/or groundwater testing. The
Company may acquire a property whose  environmental  site  assessment  indicates
that a problem or potential  problem exists,  subject to a determination  of the
level of risk and  potential  cost of  remediation.  In such cases,  the Company
requires the seller  and/or  tenant to (i)  remediate  the problem  prior to the
Company's  acquiring the property,  (ii) indemnify the Company for environmental
liabilities  or (iii)  agree to other  arrangements  deemed  appropriate  by the
Company to address environmental  conditions at the property. The Company has 14
properties currently under some level of environmental  remediation.  The seller
or the  tenant  is  generally  contractually  responsible  for  the  cost of the
environmental remediation for each of these properties.

         The Company's principal executive offices are located at 400 E. South 
Street, Suite 500, Orlando, Florida 32801.


Item 3.  Legal Proceedings


         The Company is a defendant in a law suit filed on December 20, 1994, in
the Circuit Court,  Knox County,  Tennessee,  and in the Circuit  Court,  Greene
County, Tennessee, by the surviving spouse of a patron of the Company's Property
in Tusculum, Tennessee. The plaintiff is alleging that the Company was negligent
in the design and control of the parking lot on the  Company's  Property  and is
seeking damages of $2,500,000.  Management  intends to vigorously  contest these
claims and to seek full  indemnification  from the tenant.  Management  believes
that, if the Company were to be held liable for any damages,  such damages would
be covered by insurance.


                                        4

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         The  Company  is not a party to any  other  pending  legal  proceedings
which, in the opinion of the Company and its general counsel,  is likely to have
a material adverse effect upon the Company's business or financial condition.

                                        5

<PAGE>



                                     PART II

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

         On  December  18,  1997,   the  Company  held  its  Annual  Meeting  of
Shareholders  (the  "Annual  Meeting").  At the Annual  Meeting,  the  following
nominees were elected to the Board of Directors of the Company:  Messrs.  Edward
Clark  (22,295,249  voted for and 1,763,157  abstained),  Willoughby T. Cox, Jr.
(22,298,014 voted for and 1,760,392  abstained),  Clifford R. Hinkle (22,299,014
voted for and  1,758,849  abstained),  Ted B. Lanier  (22,276,413  voted for and
1,791,993  abstained),  Robert A.  Bourne  (22,299,853  voted for and  1,758,553
abstained), James M. Seneff, Jr. (22,306,303 voted for and 1,752,103 abstained).
In  addition,  the  Shareholders  voted to  approve  the  Merger  of CNL  Realty
Advisors,  Inc.  with  and  into Net  Lease  Realty  II,  Inc.,  a  wholly-owned
subsidiary  of the Company  (16,961,917  voted for,  216,667  voted  against and
231,533  abstained) and to approve  authorization of 90,000,000 shares of common
stock (23,400,061 voted for, 425,126 voted against and 173,540 abstained).


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

         Information  responsive  to  this  Item  is  contained  in the  section
captioned "Share Price and Dividend Data" on page 27 of the Registrant's Annual
Report to Shareholders  for the year ended December 31, 1997; the information in
such  section  is filed as an exhibit  to this  report and the cited  portion of
which is incorporated herein by reference.


     Item 6. Selected Financial Data

         Information  responsive  to  this  Item  is  contained  in the  section
captioned "Historical  Financial  Highlights" on page four of the  Registrant's
Annual  Report  to  Shareholders  for the year  ended  December  31,  1997;  the
information  in such section is filed as an exhibit to this report and the cited
portion of which is incorporated herein by reference.


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

         Information  responsive  to  this  Item  is  contained  in the  section
captioned  "Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations" on pages six through 11 of the Registrant's Annual Report
to Shareholders for the year ended December 31, 1997;  the information  in such
section is filed as an exhibit to this report and the cited  portion of which is
incorporated herein by reference.


Item 8.  Financial Statements and Supplementary Data

         Certain information responsive to this Item is contained in the section
captioned "Consolidated Quarterly Financial Data" on page 26 of the Registrant's
Annual Report  to  Shareholders  for the year  ended  December  31,  1997;  the
information  in such section is filed as an exhibit to this report and the cited
portion of which is incorporated herein by reference.  The financial  statements
of the  Registrant,  together with the report  thereon of KPMG Peat Marwick LLP,
appearing in the Annual Report to  Shareholders  for the year ended December 31,
1997, are incorporated herein by reference.


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

         None.

                                        6

<PAGE>



                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

         Reference is made to the Registrant's  definitive proxy statement to be
filed with the Commission pursuant to Regulation 14(a);  information responsible
to this  Item is  contained  in the  sections  thereof  captioned  "Proposal  I:
Election of  Directors - Nominees"  and  "Proposal  I:  Election of  Directors -
Executive  Officers"  and  "Security  Ownership,"  and the  information  in such
sections is incorporated herein by reference.

Item 11.  Executive Compensation

         Reference is made to the Registrant's  definitive proxy statement to be
filed with the Commission pursuant to Regulation 14(a);  information  responsive
to this Item is contained in the section thereof captioned "Proposal I: Election
of  Directors  -   Compensation   of  Directors"   and  "Proposal  I:  Executive
Compensation,"  and the information in such sections is  incorporated  herein by
reference.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         Reference is made to the Registrant's  definitive proxy statement to be
filed with the Commission pursuant to Regulation 14(a);  information  responsive
to this Item is contained in the section thereof captioned "Security Ownership,"
and the information in such section is incorporated herein by reference.


Item 13.  Certain Relationships and Related Transactions

         Reference is made to the Registrant's  definitive proxy statement to be
filed with the Commission pursuant to Regulation 14(a);  information  responsive
to  this  Item  is  contained  in  the  section   thereof   captioned   "Certain
Transactions,"  and the  information in such section is  incorporated  herein by
reference.

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<PAGE>



                                     PART IV


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

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

         1. Financial Statements

                  Independent Auditors' Report

                  Consolidated Balance Sheets as of December 31, 1997 and 1996

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

                  Consolidated Statements of Stockholders' Equity for the years 
                  ended December 31, 1997, 1996 and 1995

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

                  Notes to Consolidated Financial Statements

         2. Financial Statement Schedule

                  Report of Independent Auditors' on Supplementary Information

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

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

                  All  other   schedules  are  omitted   because  they  are  not
                  applicable or because the required information is shown in the
                  financial statements or the notes thereto.

         3. Exhibits

         3.1      Articles of Incorporation of the Registrant (filed as 
                  Exhibit 3.3(i) to the Registrant's Registration Statement 
                  No. 1-11290 on Form 8-B, and incorporated herein by ref-
                  erence).

         3.2      Bylaws of the Registrant, (filed as Exhibit 3(ii) to Amend-
                  ment No. 2 to the Registrant's Registration No. 33-83110 on 
                  Form S-3, and incorporated herein by reference).

         3.3      Articles  of  Amendment  to the  Articles  of  Incorporation  
                  of the Registrant (filed as Exhibit 3.3 to the Registrant's
                  Form 10-Q for the quarter ended June 30, 1996, and incor-
                  porated herein by reference).

         3.4      Articles  of  Amendment  to the  Articles  of  Incorporation 
                  of the Registrant (filed as Exhibit 3.4 to the Registrant's  
                  Current Report on Form 8-K dated  February 18, 1998,  and 
                  filed with the Securities and  Exchange  Commission  on 
                  February 19,  1998, and incorporated herein by reference).

         4        Specimen  Certificate  of Common  Stock,  par  value  $.01 per
                  share,  of  the  Registrant  (filed  as  Exhibit  3.4  to  the
                  Registrant's  Registration  Statement No.  1-11290 on Form 8-B
                  and incorporated herein by reference).


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<PAGE>



         10.1     Letter Agreement dated July 10, 1992,  amending Stock Purchase
                  Agreement  dated  January 23, 1992 (filed as Exhibit  10.34 to
                  the Registrant's Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 1992, and incorporated herein by reference).

         10.2     Advisory Agreement between Registrant and CNL Realty Advisors,
                  Inc. effective as of April 1, 1993 and renewed January 1, 1997
                  (filed as Exhibit 10.04 to Amendment No. 1 to the Registrant's
                  Registration  Statement  No.  33-61214 on Form S-2, and incor-
                  porated herein by reference).

         10.3     1992 Commercial Net Lease Realty, Inc. Stock Option Plan 
                  (filed as Exhibit No. 10(x) to the Registrant's Registration 
                  Statement No. 33-83110 on Form S-3, and incorporated herein by
                  reference).

         10.4     Second  Amended  and  Restated  Line of  Credit  and  Security
                  Agreement,  dated December 7, 1995, among Registrant,  certain
                  lenders  listed  therein  and  First  Union  National  Bank of
                  Florida, as the Agent,  relating to a $100,000,000 loan (filed
                  as Exhibit 10.14 to the  Registrant's  Current  Report on Form
                  8-K  dated  January  18,  1996,  and  incorporated  herein  by
                  reference).

         10.5     Secured  Promissory  Note,  dated  December  14,  1995,  among
                  Registrant  and  Principal   Mutual  Life  Insurance   Company
                  relating to a $13,150,000  loan (filed as Exhibit 10.15 to the
                  Registrant's  Current  Report  on Form 8-K dated  January  18,
                  1996, and incorporated herein by reference).

         10.6     Mortgage  and  Security  Agreement,  dated  December 14, 1995,
                  among Registrant and Principal  Mutual Life Insurance  Company
                  relating to a $13,150,000  loan (filed as Exhibit 10.16 to the
                  Registrant's  Current  Report  on Form 8-K dated  January  18,
                  1996, and incorporated herein by reference).

         10.7     Loan Agreement,  dated January 19, 1996,  among Registrant and
                  Principal   Mutual  Life  Insurance   Company  relating  to  a
                  $39,450,000  loan (filed as Exhibit 10.12 to the  Registrant's
                  Annual  Report on Form 10-K for the year  ended  December  31,
                  1995, and incorporated herein by reference).

         10.8     Secured   Promissory  Note,  dated  January  19,  1996,  among
                  Registrant  and  Principal   Mutual  Life  Insurance   Company
                  relating to a $39,450,000  loan (filed as Exhibit 10.13 to the
                  Registrant's  Annual  Report on Form  10-K for the year  ended
                  December 31, 1995, and incorporated herein by reference).

         10.9     Third  Amended  and  Restated  Line  of  Credit  and  Security
                  Agreement,  dated September 3, 1996, by and among  Registrant,
                  certain  lenders and First Union National Bank of Florida,  as
                  the Agent,  relating to a $150,000,000  loan (filed as Exhibit
                  10.11 to the  Registrant's  Quarterly  Report on Form 10-Q for
                  the quarter ended September 30, 1996, and incorporated  herein
                  by reference).

         10.10    Second  Renewal  and   Modification   Promissory  Note,  dated
                  September  3, 1996,  by and among  Registrant  and First Union
                  National   Bank  of  Florida,   as  the  Agent,   relating  to
                  $150,000,000  loan (filed as Exhibit 10.12 to the Registrant's
                  Quarterly  Report on Form 10-Q for the quarter ended September
                  30, 1996, and incorporated herein by reference).

         10.11    Agreement  and Plan of Merger dated May 15, 1997, by and among
                  Commercial  Net Lease  Realty,  Inc.  and Net Lease Realty II,
                  Inc. and CNL Realty Advisors, Inc. and the Stockholders of CNL
                  Realty   Advisors,   Inc.   (filed  as  Exhibit  10.1  to  the
                  Registrant's  Current  Report on Form 8-K dated May 16,  1997,
                  and incorporated herein by reference).

         10.12    Fourth  Amended  and  Restated  Line of  Credit  and  Security
                  Agreement,  dated  August 6,  1997,  by and among  Registrant,
                  certain  lenders and First Union  National Bank, as the Agent,
                  relating  to a  $200,000,000  loan (filed as Exhibit 10 to the
                  Registrant's  Current  Report on Form 8-K dated  September 12,
                  1997, and incorporated herein by reference).

         13       Annual Report to Shareholders for the year ended December 31, 
                  1997 (previously filed).

                                        9

<PAGE>




         23      Consent of Independent Accountants dated March 16, 1998 
                 (previously filed).

(b)      The  Registrant  filed one report on Form 8-K on December 19, 1997, for
         the  purpose  of  incorporating  certain  items by  reference  into its
         registration  statement on Form S-3 dated  December  19, 1997,  and one
         report on form 8-K on December 22, 1997,  reporting the approval by the
         stockholders  of the  Registrant of the Agreement and Plan of Merger by
         and  among  the   Registrant,   Net  Lease  Realty  II,  Inc.  and  the
         Stockholders of CNL Realty Advisors, Inc.

                                       10

<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 16th day of
March, 1998.

                                          COMMERCIAL NET LEASE REALTY, INC.

                                          By:  /s/ James M. Seneff, Jr.
                                              --------------------------- 
                                              JAMES M. SENEFF, JR.
                                              Chairman of the Board of Directors


<PAGE>


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

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

/s/ James M. Seneff, Jr.      Chairman of the Board of         March 16, 1998
--------------------------    Directors Chief Executive 
James M. Seneff, Jr.          Officer (Principal
                              Executive Officer)




/s/ Robert A. Bourne          Vice Chairman of the Board       March 16, 1998 
-------------------------     of Directors
Robert A. Bourne              




/s/ Edward Clark              Director                         March 16, 1998
--------------------------
Edward Clark


/s/ Willoughby T. Cox, Jr.    Director                         March 16, 1998
--------------------------
Willoughby T. Cox, Jr.


/s/ Clifford R. Hinkle        Director                         March 16, 1998
--------------------------
Clifford R. Hinkle 


/s/ Ted B. Lanier             Director                         March 16, 1998
--------------------------
Ted B. Lanier


/s/ Gary M. Ralston           President                        March 16, 1998
--------------------------
Gary M. Ralston


/s/ Kevin B. Habicht          Chief Financial Officer          March 16, 1998 
--------------------------    (Principal Financial and 
Kevin B. Habicht              Accounting Officer),
                              Secretary & Treasurer                             


<PAGE>



          Report of Independent Auditors' on Supplementary Information



The Board of Directors
Commercial Net Lease Realty, Inc.:

Under date of January 16, 1998, we reported on the consolidated
balance sheets of Commercial Net Lease Realty, Inc. as of December
31, 1997 and 1996, and the related consolidated statements of
earnings, stockholders' equity and cash flows for each of the years
in the three-year period ended December 31, 1997, as contained in
the 1997 annual report to stockholders.  These consolidated
financial statements and our report thereon are both included in
Item 14(a)1 of Form 10-K and incorporated by reference in the
annual report on Form 10-K for the year 1997.  In connection with
our audit of the aforementioned consolidated financial statements,
we also audited the related consolidated financial statement
schedule at December 31, 1997.  This consolidated financial
statement schedule is the responsibility of the Company's
management.  Our responsibility is to express an opinion on this
consolidated financial statement schedule based on our audits.

In our opinion, such consolidated financial statement schedule,
when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth herein.

/s/ KPMG Peat Marwick LLP


Orlando, Florida
January 16, 1998



<PAGE>

<TABLE>


<CAPTION>

                                                               Initial Cost to Company
                                                           -------------------------------
                                      Encumbrances                                  Building and
                                          (1)                    Land               Improvements
---------------------------       --------------------     ----------------      -----------------
<S>                               <C>                       <C>                  <C>
Properties the Company
  has Invested in Under
  Under Operating Leases:

     Academy:
        Houston, TX                         -                      1,074,232           -
        Houston, TX                         -                        699,165           -
        N. Richland Hills, TX               -                      1,307,655           -
        Houston, TX                         -                      3,086,610           -
        Houston, TX                         -                        795,005           -
        Baton Rouge, LA                     -                      1,547,501           -

     Babies "R" Us:
        Arlington, TX                       -                        830,689           2,611,867

     Barnes & Noble:
        Lakeland, FL                        -                      1,070,902           1,516,983
        Brandon, FL                        1,574,542 (k)           1,476,407           1,527,150
        Denver, CO                          -                      3,244,785           2,722,087
        Houston, TX                         -                      3,307,562           2,396,024
        Cary, NC                            -                      2,778,458           2,650,008
        Plantation, FL                      -                      3,616,357           -
        Lafayette, LA                       -                      1,204,279           2,301,983
        Oklahoma City, OK                   -                      1,688,556           2,311,487
        Daytona, FL                         -                      2,587,451           2,052,643
        Freehold, NJ                        -                      2,917,219           2,260,663
        Dayton, OH                          -                      1,412,614           3,223,467
        Redding, CA                         -                        497,179           1,625,702

     Best Buy:
        Corpus Christi, TX                 1,268,679 (j)             818,448             896,395
        Brandon, FL                         -                      2,985,156           2,772,137
        Evanston, IL                        -                      1,850,996           -
        Cuyahoga Falls, OH                  -                      3,708,980           2,359,377
        Rockville, MD                       -                      6,233,342           3,418,783
        Fairfax, VA                         -                      3,052,477           3,218,018
        St. Petersburg, FL                  -                      4,031,744           2,959,316

     Blockbuster:
        Dallas, TX                          -                        346,548           1,963,773
        Conyers, GA                         -                        320,029             556,282

     Borders Books & Music:
        Wilmington, DE                     4,766,983 (k)           3,030,769           6,061,538
        Richmond, VA                       2,504,467 (k)           2,177,310           2,599,587
        Ft. Lauderdale, FL                  -                      3,164,984           3,934,577
        Bangor, ME                          -                      1,546,915           2,486,761
        Altamonte Spgs, FL                  -                      1,947,198           -

     Burger King:
        Asheboro, NC                        -                        420,508             815,190
        Galliano, LA                        -                        249,001           1,130,506
        John's Island, SC                   -                        385,517             698,309
        Lake Charles, LA                    -                        272,381             965,713
        Lancaster, OH                       -                        220,846             582,815
        Natchez, MS                         -                        206,717             653,530
        Tappahannock, VA                    -                        289,840             572,779
        Warren, MI                          -                        298,817             785,031
        Manchester, NH                      -                        619,037             428,757
        Rochester, NH                       -                        216,652             779,450
        Columbus, OH                        -                        357,114             407,093
        Coon Rapids, MN                     -                        322,658             544,936
        Opeleousas, LA                      -                        460,374             824,510
        St. Paul, MN                        -                        225,297             542,847

     Checkers:
        Orlando, FL                         -                        256,568           -

     CompUSA:
        Mission Viejo, CA                   -                      2,706,352           1,368,966

     Computer City:
        Miami, FL                          2,401,168 (k)           2,713,192           1,866,676
        Baton Rouge, LA                     -                        609,069             913,603
        Anchorage, AK                       -                        928,321           1,662,584
        Richmond, VA                        -                        888,772           1,948,036

     Dave's:
        Maple Heights, OH                   -                      1,034,758           2,874,414

     Denny's:
        Duncan, SC                          -                        219,703           -
        Greensboro, NC                      -                        265,915             493,407
        Greenville, SC                      -                        344,817             400,895
        Houston, TX                         -                        289,036             572,985
        Landrum, SC                         -                        155,429           -
        Mooresville, NC                     -                        307,299           -
        Santee, SC                          -                        244,284             312,045
        Topeka, KS                          -                        414,686           -
        Winter Springs, FL                  -                        555,232           -

     Dick's Clothing:
        Taylor, MI                          -                      1,920,032           3,526,868
        White Marsh, MD                     -                      2,680,532           3,916,889

     Eckerd:
        San Antonio, TX                      642,231 (k)             440,985           -
        Dallas, TX                           618,752 (k)             541,493           -
        Garland, TX                          497,889 (k)             239,014           -
        Arlington, TX                        526,927 (k)             368,964           -
        Millville, NJ                        653,548 (k)             417,603           -
        Atlanta, GA                          584,047 (k)             445,593           -
        Mantua, NJ                           679,434 (k)             344,022           -
        Amarillo, TX                         604,575 (k)             329,231           -
        Amarillo, TX                         785,743 (k)             650,864           -
        Glassboro, NJ                        745,401 (k)             534,243           -
        Kissimmee , FL                       868,354 (k)             715,480           -
        Colleyville, TX                      959,730 (k)             756,472           -
        Tampa, FL                           -                        604,682           -
        Douglasville, GA                    -                        413,439             995,209
        Lafayette, LA                       -                        967,528           -
        Moore, OK                           -                        414,738           -
        Midwest City, OK                    -                      1,080,637           1,103,351
        Tallhassee, FL                      -                        691,523           -
        Irving, TX                          -                      1,000,222           -
        Snellville, GA                      -                        486,272           1,320,087
        Jasper, FL                          -                        291,147           -
        Williston, FL                       -                        622,403           -
        Pantego, TX                         -                      1,016,062           1,448,911
        Conyers, GA                         -                        574,666             998,900
        Norman, OK                          -                      1,065,562           -
        Chattanooga , TN                    -                        474,267           -
        Stone Mountain, GA                  -                        638,643           1,111,064
        Arlington, TX                       -                      1,962,500           -
        Leavenworth, KS                     -                        650,170           -
        Augusta, GA                         -                        568,606           1,326,748
        Riverdale, GA                       -                      1,088,896           1,707,448
        Morrow, GA                          -                        550,457           1,248,422

     Food 4 Less:
        Lemon Grove, CA                     -                      3,695,816           -

     Golden Corral:
        Woodstock, GA          (e)          -                        200,680             328,450
        Edenton, NC                         -                         36,578             318,481
        Rockledge, FL          (e)          -                        120,593             340,889
        Gilmer, TX             (e)          -                        116,815             296,454
        Bonham, TX             (e)          -                        128,451             344,170
        Center, TX             (e)          -                        103,187             308,859
        Leitchfield, KY        (e)          -                         73,660             306,642
        Marietta, GA           (e)          -                        156,190             346,509
        Silsbee, TX            (e)          -                        132,802             302,052
        Atlanta, TX            (e)          -                         88,457             368,317
        Vernon, TX             (e)          -                        105,798             328,943
        Abbeville, LA          (e)          -                         98,577             362,416
        Fredricksburg, TX                   -                        169,984             321,189
        Clanton, AL            (e)          -                        113,017             296,921
        Pleasanton, TX         (e)          -                        139,694             316,070
        Bowie, TX              (e)          -                         57,824             311,544
        Jacksonville, TX                    -                        115,276             318,196
        Lake Placid, FL        (e)          -                        115,113             305,074
        Ennis, TX                           -                        153,701             366,639
        Melbourne, FL          (e)          -                        193,447             341,351
        Franklin, LA           (e)          -                        105,840             396,831
        Franklin, VA                        -                        100,808             424,164
        Minden, LA             (e)          -                         86,120             402,364
        Durant, OK                          -                        140,862             411,135

     The Good Guys:
        Foothill Ranch, CA                  -                      1,456,113           2,505,022
        Valencia,CA                         -                      1,622,252           2,895,298
        Riverside, CA                       -                      1,722,736           2,761,220

     Hardee's:
        Chalkville, AL                      -                        170,834             457,167
        Columbia, TN                        -                        226,300           -
        Gulf Shores, AL                     -                        348,281             595,164
        Horn Lake, MS                       -                        302,787           -
        Johnson City, TN                    -                        215,567           -
        Mobile, AL                          -                        336,696           -
        Petal, MS                           -                        277,104             415,193
        Rock Hill, SC                       -                        216,777             466,450
        Tusculum, TN                        -                        182,349             507,293
        Warrior, AL                         -                        177,659           -
        West Point, MS                      -                        173,386           -

     Hi-Lo Automotive:
        Mesquite, TX                        -                        233,420             513,523
        Arlington, TX                       -                        295,331             571,609
        Ft. Worth, TX                       -                        197,037             512,296
        Garland, TX                         -                        239,570             512,023
        Houston, TX                         -                        261,318             531,968
        Dallas, TX                          -                        281,347             543,937
        Bastrop, TX                         -                        197,905             383,144
        Eagle Pass, TX                      -                        256,745             455,841
        Lake Worth, TX                      -                        252,141             539,510
        McAllen, TX                         -                        265,177             605,397
        Nacogdoches, TX                     -                        190,324             522,232
        San Antonio, TX                     -                        200,510             643,741
        Temple, TX                          -                        177,451             587,755
        Universal City, TX                  -                        247,264             570,677

     HomePlace:
        Altamonte Spgs, FL                  -                      2,906,409           4,877,225
        White Marsh, MD                     -                      3,625,792           -
        Ft. Myers, FL                       -                      1,956,579           4,045,196
        Bowie, MD                           -                      1,965,508           -

     International House of Pancakes:
        Stafford, TX                         500,126 (k)             382,084           -
        Sunset Hills, MO                     528,585 (k)             271,853           -
        Las Vegas, NV                        594,295 (k)             519,947           -
        Ft. Worth, TX                        552,880 (k)             430,896           -
        Arlington, TX                        530,916 (k)             404,512           -
        Matthews, NC                         543,010 (k)             380,043           -
        Phoenix, AZ                          546,664 (k)             483,374           -

     Just for Feet:
        Albuquerque, NM                     -                      1,441,777           2,335,475

     Kroger:
        Columbus, OH                        -                        780,838             520,559

     Linens 'n Things:
        Freehold, NJ                       2,931,484 (j)           1,753,766           2,208,651

     Luria's:
        Coral Gables, FL                    -                      1,782,346           -
        South Miami, FL                     -                      1,379,229           -
        Tampa, FL                           -                      2,127,503           1,521,730

     Marshalls:
        Freehold, NJ                       3,431,576 (j)           2,052,946           2,585,432

     Office Depot:
        Arlington, TX                      1,052,484 (k)             596,024           1,411,432

     OfficeMax:
        Corpus Christi, TX                 1,439,600 (j)             893,270             978,344
        Dallas, TX                         1,482,890 (k)           1,118,500           1,709,891
        Cincinnati, OH                     1,110,461 (k)             543,489           1,574,551
        Evanston, IL                       1,900,778 (k)           1,867,831           1,757,618
        Altamonte Spgs, FL                  -                      1,689,793           3,050,160
        Pompano Beach, FL                   -                      2,266,908           1,904,803
        Cutler Ridge, FL                    -                        989,370           1,479,119
        Sacramento, CA                      -                      1,144,167           2,961,206
        Salinas, CA                         -                      1,353,217           1,829,325
        Redding, CA                         -                        667,174           2,181,563
        Kelso, WA                           -                      1,379,460           -

     Oshman's Sporting Goods:
        Dallas, TX                          -                      1,311,440           -

     Petco:
        Grand Forks, ND                     -                        306,629             909,671

     Pier 1 Imports:
        Dallas, TX                          -                        189,010           1,071,054
        Memphis, TN                         -                        713,319             821,770
        Sanford, FL                         -                        737,901           -

     Pizza Hut:
        Orlando, FL                         -                        220,632             258,483

     Rally's:
        Toledo, OH                          -                        125,882             319,770

     Robb & Stucky:
        Ft. Myers, FL                       -                      2,246,406           6,390,295

     Roger & Marv's:
        Kenosha, WI                         -                      1,917,607           3,431,363

     Ro-Jack's Food Store:
        Warwick, RI                         -                      1,699,330           -

     Scotty's:
        Orlando, FL                         -                      1,157,268           2,077,131
        Orlando, FL                         -                      1,044,796           2,011,952

     Sears Homelife:
        Clearwater, FL                     2,745,218 (j)           1,184,438           2,526,207
        Orlando, FL                        1,575,546 (k)             820,397           2,184,721
        Pensacola, FL                      1,820,864                 633,125           1,595,405
        Raleigh, NC                        2,284,515               1,848,026           1,753,635
        Tampa, FL                          2,414,819               1,454,908           2,045,833

     Shop & Save:
        Homestead, PA                       -                      1,139,419           -
        Penn Hills, PA                      -                      1,043,297           1,243,131

     Sports Authority:
        Memphis, TN                         -                      2,459,381           -

     SuperValu:
        Huntington, WV                      -                      1,254,238             760,602

     Top's:
        Lacey, WA                           -                      2,777,449           7,082,150

     Wacammaw:
        Fairfax, VA                         -                      2,156,801           -

     Waremart:
        Eureka, CA                          -                      3,135,036           5,470,607

     Wendy's Old Fashioned
       Hamburger:
        Fenton, MO                          -                        307,068             496,410
        Longwood, FL                        -                        333,335             194,926

     Unallocated costs
        relating to construction
        in progress

                                      ===============        ================   =================
                                          48,669,181             201,028,076         209,113,098
                                      ===============        ================   =================


Properties the Company has
  Invested in Under Direct
  Financing Leases:

     Academy:
        Houston, TX                         -                       -                  1,924,740
        Houston, TX                         -                       -                  1,867,519
        N. Richland Hills, TX               -                       -                  2,253,408
        Houston, TX                         -                       -                  2,112,335
        Houston, TX                         -                       -                  1,910,697
        Baton Rouge, LA                     -                       -                  2,405,466

     Barnes & Noble:
        Plantation, FL                      -                       -                  3,498,559

     Best Buy:
        Evanston, IL                        -                       -                  3,400,057

     Borders:
        Altamonte Spgs, FL                  -                       -                  3,267,579

     Checkers:
        Orlando, FL                         -                       -                    286,910

     Denny's:
        Landrum, SC                         -                       -                    374,684
        Mooresville, NC                     -                       -                    535,309
        Duncan, SC                          -                       -                    628,571
        Akron, OH                           -                        137,424             733,450
        Topeka, KS                          -                       -                    498,921
        Winter Springs, FL                  -                       -                    620,148

     Eckerd:
        San Antonio, TX                     -                       -                    783,974
        Dallas, TX                          -                       -                    638,684
        Garland, TX                         -                       -                    710,634
        Arlington, TX                       -                       -                    636,070
        Millville, NJ                       -                       -                    828,942
        Atlanta. GA                         -                       -                    668,390
        Mantua, NJ                          -                       -                    951,795
        Vineland, NJ                         707,459 (k)             286,231           1,063,142
        Amarillo, TX                        -                       -                    849,071
        Amarillo, TX                        -                       -                    869,846
        Amarillo, TX                         513,506 (k)             158,851             855,348
        Glassboro, NJ                       -                       -                    887,497
        Kissimmee , FL                      -                       -                    933,852
        Colleyville, TX                     -                       -                  1,076,066
        Alice,TX                             521,052 (k)             189,187             804,963
        Tampa, FL                           -                       -                  1,090,532
        Lafayette, LA                       -                       -                    949,128
        Moore, OK                           -                       -                    879,296
        Tallhassee, FL                      -                       -                  1,274,147
        East Point, GA                      -                        336,610           1,173,529
        Irving, TX                          -                       -                  1,228,436
        Ft. Worth, TX                       -                        399,592           2,529,969
        Williston, FL                       -                       -                    355,757
        Jasper, FL                          -                       -                    347,474
        Oklahoma City, OK                   -                      (m)                 1,365,125
        Oklahoma City, OK                   -                      (m)                 1,419,093
        Norman, OK                          -                       -                  1,225,477
        Chattanooga , TN                    -                       -                  1,344,240

     Food 4 Less:
        Lemon Grove, CA                     -                       -                  4,068,179

     Food Lion:
        Keystone Hts, FL                   1,014,283 (k)              88,604           1,845,988
        Chattanooga, TN                    1,068,267 (k)             336,488           1,701,072
        Lynchburg, VA                      1,333,443 (j)             128,216           1,674,167
        Martinsburg, WV                    1,044,497 (k)             448,648           1,543,573

     Good Guys:
        Stockton, CA                       1,864,093 (k)             580,609           2,974,868
        Portland, OR                        -                        817,574           2,630,652

     Hardee's:
        Mobile, AL                          -                       -                    479,107
        Warrior, AL                         -                       -                    470,556
        Horn Lake, MS                       -                       -                    555,975
        West Point, MS                      -                       -                    517,424
        Columbia, TN                        -                       -                    584,927
        Johnson City, TN                    -                       -                    570,690
        Iuka, MS                            -                        130,258             505,363
        Biscoe, NC                          -                         60,301             479,984
        Aynor, SC                           -                         44,871             521,192

     Hi-Lo Automotive:
        Copperas Cove, TX                   -                        116,637             476,331
        Ft. Worth, TX                       -                         92,779             607,971
        Baton Rouge, LA                     -                         89,954             508,146
        Lake Jackson, TX                    -                        120,313             609,300
        Edinberg, TX                        -                         97,056             418,926
        Pantego, TX                         -                        154,368             505,323
        Ft. Worth, TX                       -                         91,373             548,238
        Pharr, TX                           -                         94,576             472,880
        Baton Rouge, LA                     -                        122,349             527,930
        Houston, TX                         -                         37,508             596,069

     HomePlace:
        Arlington, TX                       -                        752,840           4,045,374
        Bowie, MD                           -                       -                  4,262,338

     International House of Pancakes:
        Stafford, TX                        -                       -                    571,832
        Sunset Hills, MO                    -                       -                    736,345
        Las Vegas, NV                       -                       -                    613,582
        Ft. Worth, TX                       -                       -                    623,641
        Arlington, TX                       -                       -                    608,132
        Matthews, NC                        -                       -                    655,668
        Phoenix, AZ                         -                       -                    559,307

     Kash N' Karry:
        Brandon, FL                         -                      1,234,519           3,255,257

     Levitz:
        Tempe, AZ                           -                        634,444           2,225,991

     Luria's:
        South Miami, FL                     -                       -                  1,756,808
        Coral Gables, FL                    -                       -                  1,692,012

     Oshman's Sporting Goods:
        Dallas, TX                          -                       -                  2,658,976

     Ro-Jack's Food Store:
        Warwick, RI                         -                       -                  2,978,154

     Shop & Save:
        Homestead, PA                       -                       -                  2,578,098

     Wacammaw:
        Fairfax, VA                         -                       -                  3,356,493


                                      ===============    ================        ===============
                                            8,066,600           7,782,180            113,631,669
                                      ===============    ================        ===============
</TABLE>



<TABLE>


               COMMERCIAL NET LEASE REALTY, INC. AND SUBSIDIARIES
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                December 31, 1997


                                            Costs Capitalized
                                              Subsequent to                           Gross Amount at Which
                                              Acquisition                           Carried at Close of Period (b)
                                      ---------------------------   -------------------------------------------------------
                                        Improve-       Carrying                          Building and
                                          ments          Costs            Land           Improvements           Total
-----------------------------------   --------------   ----------   -----------------  -----------------   ----------------
<S>                                   <C>              <C>          <C>                <C>                 <C>      
Properties the Company
  has Invested in Under
  Under Operating Leases:

     Academy:
        Houston, TX                         -              -               1,074,232         (c)                 1,074,232
        Houston, TX                         -              -                 699,165         (c)                   699,165
        N. Richland Hills, TX               -              -               1,307,655         (c)                 1,307,655
        Houston, TX                         -              -               2,098,895         (c)                 2,098,895
        Houston, TX                         -              -                 795,005         (c)                   795,005
        Baton Rouge, LA                     -              -               1,547,501         (c)                 1,547,501

     Babies "R" Us:
        Arlington, TX                       -              -                 830,689          2,611,867          3,442,556

     Barnes & Noble:
        Lakeland, FL                        -              -               1,070,902          1,516,983          2,587,885
        Brandon, FL                         -              -               1,476,407          1,527,150          3,003,557
        Denver, CO                          -              -               3,244,785          2,722,087          5,966,872
        Houston, TX                         -              -               3,307,562          2,396,024          5,703,586
        Cary, NC                            -              -               2,778,458          2,650,008          5,428,466
        Plantation, FL                      -              -               3,616,357         (c)                 3,616,357
        Lafayette, LA                       -              -               1,204,279          2,301,983          3,506,262
        Oklahoma City, OK                   -              -               1,688,556          2,311,487          4,000,043
        Daytona, FL                         -              -               2,587,451          2,052,643          4,640,094
        Freehold, NJ                        -              -               2,917,219          2,260,663          5,177,882
        Dayton, OH                          -              -               1,412,614          3,223,467          4,636,081
        Redding, CA                         -              -                 497,179          1,625,702          2,122,881

     Best Buy:
        Corpus Christi, TX                   12,222        -                 818,448            908,617          1,727,065
        Brandon, FL                         -              -               2,985,156          2,772,137          5,757,293
        Evanston, IL                        -              -               1,850,996         (c)                 1,850,996
        Cuyahoga Falls, OH                  -              -               3,708,980          2,359,377          6,068,357
        Rockville, MD                       -              -               6,233,342          3,418,783          9,652,125
        Fairfax, VA                         -              -               3,052,477          3,218,018          6,270,495
        St. Petersburg, FL                  -              -               4,031,744          2,959,316          6,991,060

     Blockbuster:
        Dallas, TX                           39,243        -                 346,548          2,003,016          2,349,564
        Conyers, GA                         -              -                 320,029            556,282            876,311

     Borders Books & Music:
        Wilmington, DE                      -              -               3,030,769          6,061,538          9,092,307
        Richmond, VA                        -              -               2,177,310          2,599,587          4,776,897
        Ft. Lauderdale, FL                  -              -               3,164,984          3,934,577          7,099,561
        Bangor, ME                          -              -               1,546,915          2,486,761          4,033,676
        Altamonte Spgs, FL                  -              -               1,947,198         (c)                 1,947,198

     Burger King:
        Asheboro, NC                        -              -                 420,508            815,190          1,235,698
        Galliano, LA                        -              -                 249,001          1,130,506          1,379,507
        John's Island, SC                   -              -                 385,517            698,309          1,083,826
        Lake Charles, LA                    -              -                 272,381            965,713          1,238,094
        Lancaster, OH                       -              -                 220,846            582,815            803,661
        Natchez, MS                         -              -                 206,717            653,530            860,247
        Tappahannock, VA                    -              -                 289,840            572,779            862,619
        Warren, MI                          -              -                 298,817            785,031          1,083,848
        Manchester, NH                      -              -                 619,037            428,757          1,047,794
        Rochester, NH                       -              -                 216,652            779,450            996,102
        Columbus, OH                        -              -                 357,114            407,093            764,207
        Coon Rapids, MN                     -              -                 322,658            544,936            867,594
        Opeleousas, LA                      -              -                 460,374            824,510          1,284,884
        St. Paul, MN                        -              -                 225,297            542,847            768,144

     Checkers:
        Orlando, FL                         -              -                 256,568         (c)                   256,568

     CompUSA:
        Mission Viejo, CA                   -              -               2,706,352          1,368,966          4,075,318

     Computer City:
        Miami, FL                           -              -               2,713,192          1,866,676          4,579,868
        Baton Rouge, LA                     -              -                 609,069            913,603          1,522,672
        Anchorage, AK                       -              -                 928,321          1,662,584          2,590,905
        Richmond, VA                        -              -                 888,772          1,948,036          2,836,808

     Dave's:
        Maple Heights, OH                   -              -               1,034,758          2,874,414          3,909,172

     Denny's:
        Duncan, SC                          -              -                 219,703         (c)                   219,703
        Greensboro, NC                      -              -                 265,915            493,407            759,322
        Greenville, SC                      -              -                 344,817            400,895            745,712
        Houston, TX                         -              -                 289,036            572,985            862,021
        Landrum, SC                         -              -                 155,429         (c)                   155,429
        Mooresville, NC                     -              -                 307,299         (c)                   307,299
        Santee, SC                          -              -                 244,284            312,045            556,329
        Topeka, KS                          -              -                 414,686         (c)                   414,686
        Winter Springs, FL                  -              -                 555,232         (c)                   555,232

     Dick's Clothing:
        Taylor, MI                          -              -               1,920,032          3,526,868          5,446,900
        White Marsh, MD                     -              -               2,680,532          3,916,889          6,597,421

     Eckerd:
        San Antonio, TX                     -              -                 440,985         (c)                   440,985
        Dallas, TX                          -              -                 541,493         (c)                   541,493
        Garland, TX                         -              -                 239,014         (c)                   239,014
        Arlington, TX                       -              -                 368,964         (c)                   368,964
        Millville, NJ                       -              -                 417,603         (c)                   417,603
        Atlanta, GA                         -              -                 445,593         (c)                   445,593
        Mantua, NJ                          -              -                 344,022         (c)                   344,022
        Amarillo, TX                        -              -                 329,231         (c)                   329,231
        Amarillo, TX                        -              -                 650,864         (c)                   650,864
        Glassboro, NJ                       -              -                 534,243         (c)                   534,243
        Kissimmee , FL                      -              -                 715,480         (c)                   715,480
        Colleyville, TX                     -              -                 756,472         (c)                   756,472
        Tampa, FL                           -              -                 604,682         (c)                   604,682
        Douglasville, GA                    -              -                 413,439            995,209          1,408,648
        Lafayette, LA                       -              -                 967,528         (c)                   967,528
        Moore, OK                           -              -                 414,738         (c)                   414,738
        Midwest City, OK                    -              -               1,080,637          1,103,351          2,183,988
        Tallhassee, FL                      -              -                 691,523         (c)                   691,523
        Irving, TX                          -              -               1,000,222         (c)                 1,000,222
        Snellville, GA                      -              -                 486,272          1,320,087          1,806,359
        Jasper, FL                          -              -                 291,147         (c)                   291,147
        Williston, FL                       -              -                 622,403         (c)                   622,403
        Pantego, TX                         -              -               1,016,062          1,448,911          2,464,973
        Conyers, GA                         -              -                 574,666            998,900          1,573,566
        Norman, OK                          -              -               1,065,562         (c)                 1,065,562
        Chattanooga , TN                    -              -                 474,267         (c)                   474,267
        Stone Mountain, GA                  -              -                 638,643          1,111,064          1,749,707
        Arlington, TX                       167,830        -               1,962,500         (g)                 1,962,500
        Leavenworth, KS                      86,279        -                 650,170         (g)                   650,170
        Augusta, GA                         -              -                 568,606          1,326,748          1,895,354
        Riverdale, GA                       -              -               1,088,896          1,707,448          2,796,344
        Morrow, GA                          -              -                 550,457          1,248,422          1,798,879

     Food 4 Less:
        Lemon Grove, CA                     -              -               3,695,816         (c)                 3,695,816

     Golden Corral:
        Woodstock, GA          (e)          -              -                 200,680            328,450            529,130
        Edenton, NC                         -              -                  36,578            318,481            355,059
        Rockledge, FL          (e)          -              -                 120,593            340,889            461,482
        Gilmer, TX             (e)          -              -                 116,815            296,454            413,269
        Bonham, TX             (e)          -              -                 128,451            344,170            472,621
        Center, TX             (e)          -              -                 103,187            308,859            412,046
        Leitchfield, KY        (e)          -              -                  73,660            306,642            380,302
        Marietta, GA           (e)          -              -                 156,190            346,509            502,699
        Silsbee, TX            (e)          -              -                 132,802            302,052            434,854
        Atlanta, TX            (e)          -              -                  88,457            368,317            456,774
        Vernon, TX             (e)          -              -                 105,798            328,943            434,741
        Abbeville, LA          (e)          -              -                  98,577            362,416            460,993
        Fredricksburg, TX                   -              -                 169,984            321,189            491,173
        Clanton, AL            (e)          -              -                 113,017            296,921            409,938
        Pleasanton, TX         (e)          -              -                 139,694            316,070            455,764
        Bowie, TX              (e)          -              -                  57,824            311,544            369,368
        Jacksonville, TX                    -              -                 115,276            318,196            433,472
        Lake Placid, FL        (e)          -              -                 115,113            305,074            420,187
        Ennis, TX                           -              -                 153,701            366,639            520,340
        Melbourne, FL          (e)          -              -                 193,447            341,351            534,798
        Franklin, LA           (e)          -              -                 105,840            396,831            502,671
        Franklin, VA                        -              -                  93,719            424,164            517,883
        Minden, LA             (e)          -              -                  86,120            402,364            488,484
        Durant, OK                          -              -                 140,862            411,135            551,997

     The Good Guys:
        Foothill Ranch, CA                  -              -               1,456,113          2,505,022          3,961,135
        Valencia,CA                         -              -               1,622,252          2,895,298          4,517,550
        Riverside, CA                       -              -               1,722,736          2,761,220          4,483,956

     Hardee's:
        Chalkville, AL                      -              -                 170,834            457,167            628,001
        Columbia, TN                        -              -                 226,300         (c)                   226,300
        Gulf Shores, AL                     -              -                 348,281            595,164            943,445
        Horn Lake, MS                       -              -                 302,787         (c)                   302,787
        Johnson City, TN                    -              -                 215,567         (c)                   215,567
        Mobile, AL                          -              -                 336,696         (c)                   336,696
        Petal, MS                           -              -                 277,104            415,193            692,297
        Rock Hill, SC                       -              -                 216,777            466,450            683,227
        Tusculum, TN                        -              -                 182,349            507,293            689,642
        Warrior, AL                         -              -                 177,659         (c)                   177,659
        West Point, MS                      -              -                 173,386         (c)                   173,386

     Hi-Lo Automotive:
        Mesquite, TX                        -              -                 233,420            513,523            746,943
        Arlington, TX                       -              -                 295,331            571,609            866,940
        Ft. Worth, TX                       -              -                 197,037            512,296            709,333
        Garland, TX                         -              -                 239,570            512,023            751,593
        Houston, TX                         -              -                 261,318            531,968            793,286
        Dallas, TX                          -              -                 281,347            543,937            825,284
        Bastrop, TX                         -              -                 197,905            383,144            581,049
        Eagle Pass, TX                      -              -                 256,745            455,841            712,586
        Lake Worth, TX                      -              -                 252,141            539,510            791,651
        McAllen, TX                         -              -                 265,177            605,397            870,574
        Nacogdoches, TX                     -              -                 190,324            522,232            712,556
        San Antonio, TX                     -              -                 200,510            643,741            844,251
        Temple, TX                          -              -                 177,451            587,755            765,206
        Universal City, TX                  -              -                 247,264            570,677            817,941

     HomePlace:
        Altamonte Spgs, FL                  -              -               2,906,409          4,877,225          7,783,634
        White Marsh, MD                   2,401,918        -               3,625,792         (g)                 3,625,792
        Ft. Myers, FL                       -              -               1,956,579          4,045,196          6,001,775
        Bowie, MD                           -              -               1,965,508         (c)                 1,965,508

     International House of Pancakes:
        Stafford, TX                        -              -                 340,561         (c)                   340,561
        Sunset Hills, MO                    -              -                 271,853         (c)                   271,853
        Las Vegas, NV                       -              -                 519,947         (c)                   519,947
        Ft. Worth, TX                       -              -                 430,896         (c)                   430,896
        Arlington, TX                       -              -                 404,512         (c)                   404,512
        Matthews, NC                        -              -                 380,043         (c)                   380,043
        Phoenix, AZ                         -              -                 483,374         (c)                   483,374

     Just for Feet:
        Albuquerque, NM                     -              -               1,441,777          2,335,475          3,777,252

     Kroger:
        Columbus, OH                        -              -                 780,838            520,559          1,301,397

     Linens 'n Things:
        Freehold, NJ                        -              -               1,753,766          2,208,651          3,962,417

     Luria's:
        Coral Gables, FL                    -              -               1,782,346         (c)                 1,782,346
        South Miami, FL                     -              -               1,379,229         (c)                 1,379,229
        Tampa, FL                           -              -               2,127,503          1,521,730          3,649,233

     Marshalls:
        Freehold, NJ                        -              -               2,052,946          2,585,432          4,638,378

     Office Depot:
        Arlington, TX                       -              -                 596,024          1,411,432          2,007,456

     OfficeMax:
        Corpus Christi, TX               76,664            -                 893,270          1,055,008          1,948,278
        Dallas, TX                          -              -               1,118,500          1,709,891          2,828,391
        Cincinnati, OH                      -              -                 543,489          1,574,551          2,118,040
        Evanston, IL                        -              -               1,867,831          1,757,618          3,625,449
        Altamonte Spgs, FL                  -              -               1,689,793          3,050,160          4,739,953
        Pompano Beach, FL                   -              -               2,266,908          1,904,803          4,171,711
        Cutler Ridge, FL                    -              -                 989,370          1,479,119          2,468,489
        Sacramento, CA                      -              -               1,144,167          2,961,206          4,105,373
        Salinas, CA                         -              -               1,353,217          1,829,325          3,182,542
        Redding, CA                         -              -                 667,174          2,181,563          2,848,737
        Kelso, WA                         1,079,000        -               1,379,460         (g)                 1,379,460

     Oshman's Sporting Goods:
        Dallas, TX                          -              -               1,311,440         (c)                 1,311,440

     Petco:
        Grand Forks, ND                     -              -                 306,629            909,671          1,216,300

     Pier 1 Imports:
        Dallas, TX                           20,710        -                 189,010          1,091,764          1,280,774
        Memphis, TN                         -              -                 713,319            821,770          1,535,089
        Sanford, FL                         -              -                 737,901         (f)                   737,901

     Pizza Hut:
        Orlando, FL                         -              -                 220,632            258,483            479,115

     Rally's:
        Toledo, OH                          -              -                 125,882            319,770            445,652

     Robb & Stucky:
        Ft. Myers, FL                       -              -               2,246,406          6,390,295          8,636,701

     Roger & Marv's:
        Kenosha, WI                         -              -               1,917,607          3,431,363          5,348,970

     Ro-Jack's Food Store:
        Warwick, RI                         -              -               1,699,330         (c)                 1,699,330

     Scotty's:
        Orlando, FL                         -              -               1,157,268          2,077,131          3,234,399
        Orlando, FL                         -              -               1,044,796          2,011,952          3,056,748

     Sears Homelife:
        Clearwater, FL                       10,555        -               1,184,438          2,536,762          3,721,200
        Orlando, FL                         -              -                 820,397          2,184,721          3,005,118
        Pensacola, FL                       -              -                 633,125          1,595,405          2,228,530
        Raleigh, NC                         -              -               1,848,026          1,753,635          3,601,661
        Tampa, FL                           -              -               1,454,908          2,045,833          3,500,741

     Shop & Save:
        Homestead, PA                       -              -               1,139,419         (c)                 1,139,419
        Penn Hills, PA                      -              -               1,043,297          1,243,131          2,286,428

     Sports Authority:
        Memphis, TN                          66,860        -               2,459,381         (g)                 2,459,381

     SuperValu:
        Huntington, WV                      -              -               1,254,238            760,602          2,014,840

     Top's:
        Lacey, WA                           -              -               2,777,449          7,082,150          9,859,599

     Wacammaw:
        Fairfax, VA                         -              -               2,156,801         (c)                 2,156,801

     Waremart:
        Eureka, CA                          -              -               3,135,036          5,470,607          8,605,643

     Wendy's Old Fashioned
       Hamburger:
        Fenton, MO                          -              -                 307,068            496,410            803,478
        Longwood, FL                        -              -                 333,335            194,926            528,261

     Unallocated costs
        relating to construction
        in progress                      208,295

                                      ==============   ==========   =================  =================   ================
                                          4,169,576            -         199,991,749        209,272,492        409,264,241
                                      ==============   ==========   =================  =================   ================


Properties the Company has
  Invested in Under Direct
  Financing Leases:

     Academy:
        Houston, TX                         -              -               -                 (c)                 (c)
        Houston, TX                         -              -               -                 (c)                 (c)
        N. Richland Hills, TX               -              -               -                 (c)                 (c)
        Houston, TX                         -              -               -                 (c)                 (c)
        Houston, TX                         -              -               -                 (c)                 (c)
        Baton Rouge, LA                     -              -               -                 (c)                 (c)

     Barnes & Noble:
        Plantation, FL                      -              -               -                 (c)                 (c)

     Best Buy:
        Evanston, IL                        -              -               -                 (c)                 (c)

     Borders:
        Altamonte Spgs, FL                  -              -               -                 (c)                 (c)

     Checkers:
        Orlando, FL                         -              -               -                 (c)                 (c)

     Denny's:
        Landrum, SC                         -              -               -                 (c)                 (c)
        Mooresville, NC                     -              -               -                 (c)                 (c)
        Duncan, SC                          -              -               -                 (c)                 (c)
        Akron, OH                           -              -              (d)                (d)                 (d)
        Topeka, KS                          -              -               -                 (c)                 (c)
        Winter Springs, FL                  -              -               -                 (c)                 (c)

     Eckerd:
        San Antonio, TX                     -              -               -                 (c)                 (c)
        Dallas, TX                          -              -               -                 (c)                 (c)
        Garland, TX                         -              -               -                 (c)                 (c)
        Arlington, TX                       -              -               -                 (c)                 (c)
        Millville, NJ                       -              -               -                 (c)                 (c)
        Atlanta. GA                         -              -               -                 (c)                 (c)
        Mantua, NJ                          -              -               -                 (c)                 (c)
        Vineland, NJ                        -              -              (d)                (d)                 (d)
        Amarillo, TX                        -              -               -                 (c)                 (c)
        Amarillo, TX                        -              -               -                 (c)                 (c)
        Amarillo, TX                        -              -              (d)                (d)                 (d)
        Glassboro, NJ                       -              -               -                 (c)                 (c)
        Kissimmee , FL                      -              -               -                 (c)                 (c)
        Colleyville, TX                     -              -               -                 (c)                 (c)
        Alice,TX                            -              -              (d)                (d)                 (d)
        Tampa, FL                           -              -               -                 (c)                 (c)
        Lafayette, LA                       -              -               -                 (c)                 (c)
        Moore, OK                           -              -               -                 (c)                 (c)
        Tallhassee, FL                      -              -               -                 (c)                 (c)
        East Point, GA                      -              -              (d)                (d)                 (d)
        Irving, TX                          -              -               -                 (c)                 (c)
        Ft. Worth, TX                       -              -              (d)                (d)                 (d)
        Williston, FL                       -              -               -                 (c)                 (c)
        Jasper, FL                          -              -               -                 (c)                 (c)
        Oklahoma City, OK                   -              -              (m)                (c)                 (c)
        Oklahoma City, OK                   -              -              (m)                (c)                 (c)
        Norman, OK                          -              -               -                 (c)                 (c)
        Chattanooga , TN                    -              -               -                 (c)                 (c)

     Food 4 Less:
        Lemon Grove, CA                     -              -               -                 (c)                 (c)

     Food Lion:
        Keystone Hts, FL                    -              -              (d)                (d)                 (d)
        Chattanooga, TN                     -              -              (d)                (d)                 (d)
        Lynchburg, VA                       -              -              (d)                (d)                 (d)
        Martinsburg, WV                     -              -              (d)                (d)                 (d)

     Good Guys:
        Stockton, CA                        -              -              (d)                (d)                 (d)
        Portland, OR                        -              -              (d)                (d)                 (d)

     Hardee's:
        Mobile, AL                          -              -               -                 (c)                 (c)
        Warrior, AL                         -              -               -                 (c)                 (c)
        Horn Lake, MS                       -              -               -                 (c)                 (c)
        West Point, MS                      -              -               -                 (c)                 (c)
        Columbia, TN                        -              -               -                 (c)                 (c)
        Johnson City, TN                    -              -               -                 (c)                 (c)
        Iuka, MS                            -              -              (d)                (d)                 (d)
        Biscoe, NC                          -              -              (d)                (d)                 (d)
        Aynor, SC                           -              -              (d)                (d)                 (d)

     Hi-Lo Automotive:
        Copperas Cove, TX                   -              -              (d)                (d)                 (d)
        Ft. Worth, TX                       -              -              (d)                (d)                 (d)
        Baton Rouge, LA                     -              -              (d)                (d)                 (d)
        Lake Jackson, TX                    -              -              (d)                (d)                 (d)
        Edinberg, TX                        -              -              (d)                (d)                 (d)
        Pantego, TX                         -              -              (d)                (d)                 (d)
        Ft. Worth, TX                       -              -              (d)                (d)                 (d)
        Pharr, TX                           -              -              (d)                (d)                 (d)
        Baton Rouge, LA                     -              -              (d)                (d)                 (d)
        Houston, TX                         -              -              (d)                (d)                 (d)

     HomePlace:
        Arlington, TX                       -              -              (d)                (d)                 (d)
        Bowie, MD                           -              -               -                 (c)                 (c)

     International House of Pancakes:
        Stafford, TX                        -              -               -                 (c)                 (c)
        Sunset Hills, MO                    -              -               -                 (c)                 (c)
        Las Vegas, NV                       -              -               -                 (c)                 (c)
        Ft. Worth, TX                       -              -               -                 (c)                 (c)
        Arlington, TX                       -              -               -                 (c)                 (c)
        Matthews, NC                        -              -               -                 (c)                 (c)
        Phoenix, AZ                         -              -               -                 (c)                 (c)

     Kash N' Karry:
        Brandon, FL                         -              -              (d)                (d)                 (d)

     Levitz:
        Tempe, AZ                           -              -              (d)                (d)                 (d)

     Luria's:
        South Miami, FL                     -              -               -                 (c)                 (c)
        Coral Gables, FL                    -              -               -                 (c)                 (c)

     Oshman's Sporting Goods:
        Dallas, TX                          -              -               -                 (c)                 (c)

     Ro-Jack's Food Store:
        Warwick, RI                         -              -               -                 (c)                 (c)

     Shop & Save:
        Homestead, PA                       -              -               -                 (c)                 (c)

     Wacammaw:
        Fairfax, VA                         -              -               -                 (c)                 (c)


                                      ==============   ==========
                                            -              -
                                      ==============   ==========


</TABLE>



<TABLE>

                                                                                      Life on Which
                                                                                     Depreciation in
                                                          Date                        Latest Income
                                       Accumulated       of Con-       Date            Statement is
                                       Depreciation     struction    Acquired            Computed
-----------------------------------   ---------------   ----------   ----------      -----------------
<S>                                   <C>               <C>          <C>             <C>
Properties the Company
  has Invested in Under
  Under Operating Leases:

     Academy:
        Houston, TX                         -             1994         05/95               (c)
        Houston, TX                         -             1995         06/95               (c)
        N. Richland Hills, TX               -             1996         08/95   (h)         (c)
        Houston, TX                         -             1996         02/96   (h)         (c)
        Houston, TX                         -             1996         06/96   (h)         (c)
        Baton Rouge, LA                     -             1997         08/96   (h)         (c)

     Babies "R" Us:
        Arlington, TX                         98,489      1996         06/96             40 years

     Barnes & Noble:
        Lakeland, FL                         112,733      1995         07/94   (h)       40 years
        Brandon, FL                          113,699      1995         08/94   (h)       40 years
        Denver, CO                           221,282      1994         09/94             40 years
        Houston, TX                          134,785      1995         10/94   (h)       40 years
        Cary, NC                             128,048      1996         05/95   (h)       40 years
        Plantation, FL                      -             1996         05/95   (h)         (c)
        Lafayette, LA                         97,834      1996         06/95   (h)       40 years
        Oklahoma City, OK                    114,021      1996         06/95   (h)       40 years
        Daytona, FL                           99,183      1996         09/95   (h)       40 years
        Freehold, NJ                         108,637      1995         01/96             40 years
        Dayton, OH                            50,367      1996         05/97             40 years
        Redding, CA                           22,015      1997         06/97             40 years

     Best Buy:
        Corpus Christi, TX                    92,987      1967         11/93             40 years
        Brandon, FL                           60,640      1996         02/97             40 years
        Evanston, IL                        -             1994         02/97               (c)
        Cuyahoga Falls, OH                    31,950      1970         06/97             40 years
        Rockville, MD                         39,174      1995         07/97             40 years
        Fairfax, VA                           30,169      1995         08/97             40 years
        St. Petersburg, FL                    21,578      1997         09/97             40 years

     Blockbuster:
        Dallas, TX                           186,430      1985         04/94             40 years
        Conyers, GA                            7,533      1997         06/97             40 years

     Borders Books & Music:
        Wilmington, DE                       458,689      1994         12/94             40 years
        Richmond, VA                         166,446      1995         06/95             40 years
        Ft. Lauderdale, FL                   180,900      1995         02/96             40 years
        Bangor, ME                            94,980      1996         06/96             40 years
        Altamonte Spgs, FL                  -             1997         09/97               (c)

     Burger King:
        Asheboro, NC                         112,089      1986         07/92             40 years
        Galliano, LA                         155,445      1991         07/92             40 years
        John's Island, SC                     96,017      1988         07/92             40 years
        Lake Charles, LA                     132,786      1988         07/92             40 years
        Lancaster, OH                         80,137      1987         07/92             40 years
        Natchez, MS                           89,860      1986         07/92             40 years
        Tappahannock, VA                      78,757      1987         07/92             40 years
        Warren, MI                           107,942      1987         07/92             40 years
        Manchester, NH                        49,234      1980         05/93             40 years
        Rochester, NH                         89,503      1987         05/93             40 years
        Columbus, OH                          45,826      1982         06/93             40 years
        Coon Rapids, MN                       61,343      1990         06/93             40 years
        Opeleousas, LA                        92,814      1989         06/93             40 years
        St. Paul, MN                          61,107      1986         06/93             40 years

     Checkers:
        Orlando, FL                         -             1988         07/92               (c)

     CompUSA:
        Mission Viejo, CA                     88,410      1994         02/94   (h)       40 years

     Computer City:
        Miami, FL                            172,795      1994         04/94             40 years
        Baton Rouge, LA                       45,741      1995         12/95             40 years
        Anchorage, AK                         76,441      1995         02/96             40 years
        Richmond, VA                          77,372      1996         05/96             40 years

     Dave's:
        Maple Heights, OH                     62,878      1985         02/97             40 years

     Denny's:
        Duncan, SC                          -             1992         05/93               (c)
        Greensboro, NC                        56,657      1992         05/93             40 years
        Greenville, SC                        46,034      1985         05/93             40 years
        Houston, TX                           65,795      1985         05/93             40 years
        Landrum, SC                         -             1992         05/93               (c)
        Mooresville, NC                     -             1992         05/93               (c)
        Santee, SC                            35,832      1992         05/93             40 years
        Topeka, KS                          -             1989         06/93               (c)
        Winter Springs, FL                  -             1994         01/94               (c)

     Dick's Clothing:
        Taylor, MI                           114,244      1996         08/96             40 years
        White Marsh, MD                      126,878      1996         08/96             40 years

     Eckerd:
        San Antonio, TX                     -             1993         12/93               (c)
        Dallas, TX                          -             1994         01/94               (c)
        Garland, TX                         -             1994         02/94               (c)
        Arlington, TX                       -             1994         02/94               (c)
        Millville, NJ                       -             1994         03/94               (c)
        Atlanta, GA                         -             1994         03/94               (c)
        Mantua, NJ                          -             1994         06/94               (c)
        Amarillo, TX                        -             1994         12/94               (c)
        Amarillo, TX                        -             1994         12/94               (c)
        Glassboro, NJ                       -             1994         12/94               (c)
        Kissimmee , FL                      -             1995         04/95               (c)
        Colleyville, TX                     -             1995         06/95               (c)
        Tampa, FL                           -             1995         12/95               (c)
        Douglasville, GA                      47,825      1996         01/96             40 years
        Lafayette, LA                       -             1995         01/96               (c)
        Moore, OK                           -             1995         01/96               (c)
        Midwest City, OK                      50,348      1996         03/96             40 years
        Tallhassee, FL                      -             1996         06/96               (c)
        Irving, TX                          -             1996         12/96               (c)
        Snellville, GA                        33,180      1996         12/96             40 years
        Jasper, FL                          -             1994         01/97               (c)
        Williston, FL                       -             1995         01/97               (c)
        Pantego, TX                           19,621      1997         06/97             40 years
        Conyers, GA                           13,527      1997         06/97             40 years
        Norman, OK                          -             1997         06/97               (c)
        Chattanooga , TN                    -             1997         09/97               (c)
        Stone Mountain, GA                     8,102      1997         09/97             40 years
        Arlington, TX                       -              (g)         11/97               (g)
        Leavenworth, KS                     -              (g)         11/97               (g)
        Augusta, GA                            1,382      1997         12/97             40 years
        Riverdale, GA                          1,779      1997         12/97             40 years
        Morrow, GA                             1,300      1997         12/97             40 years

     Food 4 Less:
        Lemon Grove, CA                     -             1996         07/95   (h)         (c)

     Golden Corral:
        Woodstock, GA          (e)           128,940      1984         11/84             35 years
        Edenton, NC                          125,075      1984         11/84             35 years
        Rockledge, FL          (e)           132,800      1984         12/84             35 years
        Gilmer, TX             (e)           115,501      1984         12/84             35 years
        Bonham, TX             (e)           134,079      1984         12/84             35 years
        Center, TX             (e)           120,334      1984         12/84             35 years
        Leitchfield, KY        (e)           119,460      1984         12/84             35 years
        Marietta, GA           (e)           134,992      1984         12/84             35 years
        Silsbee, TX            (e)           117,686      1984         12/84             35 years
        Atlanta, TX            (e)           143,117      1985         01/85             35 years
        Vernon, TX             (e)           124,528      1985         03/85             35 years
        Abbeville, LA          (e)           137,200      1985         04/85             35 years
        Fredricksburg, TX                    121,593      1985         04/85             35 years
        Clanton, AL            (e)           112,406      1985         05/85             35 years
        Pleasanton, TX         (e)           119,655      1985         05/85             35 years
        Bowie, TX              (e)           117,942      1985         05/85             35 years
        Jacksonville, TX                     120,460      1985         05/85             35 years
        Lake Placid, FL        (e)           115,492      1985         05/85             35 years
        Ennis, TX                            135,132      1985         07/85             35 years
        Melbourne, FL          (e)           125,812      1985         07/85             35 years
        Franklin, LA           (e)           146,260      1985         07/85             35 years
        Franklin, VA                         114,777      1987         02/87             40 years
        Minden, LA             (e)            88,853      1989         03/89             40 years
        Durant, OK                            86,573      1989         08/89             40 years

     The Good Guys:
        Foothill Ranch, CA                    62,962      1995         12/96             40 years
        Valencia,CA                           63,335      1995         02/97             40 years
        Riverside, CA                         43,144      1995         05/97             40 years

     Hardee's:
        Chalkville, AL                        47,721      1992         10/93             40 years
        Columbia, TN                        -             1993         10/93               (c)
        Gulf Shores, AL                       62,125      1993         10/93             40 years
        Horn Lake, MS                       -             1993         10/93               (c)
        Johnson City, TN                    -             1993         10/93               (c)
        Mobile, AL                          -             1993         10/93               (c)
        Petal, MS                             43,339      1993         10/93             40 years
        Rock Hill, SC                         48,690      1993         10/93             40 years
        Tusculum, TN                          52,953      1993         10/93             40 years
        Warrior, AL                         -             1992         10/93               (c)
        West Point, MS                      -             1993         10/93               (c)

     Hi-Lo Automotive:
        Mesquite, TX                          41,137      1994         10/94             40 years
        Arlington, TX                         44,099      1993         11/94             40 years
        Ft. Worth, TX                         39,521      1993         11/94             40 years
        Garland, TX                           39,498      1993         11/94             40 years
        Houston, TX                           41,043      1994         11/94             40 years
        Dallas, TX                            40,941      1994         12/94             40 years
        Bastrop, TX                           21,658      1994         09/95             40 years
        Eagle Pass, TX                        25,768      1994         09/95             40 years
        Lake Worth, TX                        30,497      1995         09/95             40 years
        McAllen, TX                           34,222      1995         09/95             40 years
        Nacogdoches, TX                       29,521      1995         09/95             40 years
        San Antonio, TX                       36,389      1994         09/95             40 years
        Temple, TX                            33,224      1989         09/95             40 years
        Universal City, TX                    32,259      1995         09/95             40 years

     HomePlace:
        Altamonte Spgs, FL                    35,563      1997         09/97             40 years
        White Marsh, MD                     -              (g)         10/97               (g)
        Ft. Myers, FL                          4,214      1997         12/97             40 years
        Bowie, MD                           -             1997         12/97               (c)

     International House of Pancakes:
        Stafford, TX                        -             1992         10/93               (c)
        Sunset Hills, MO                    -             1993         10/93               (c)
        Las Vegas, NV                       -             1993         12/93               (c)
        Ft. Worth, TX                       -             1993         12/93               (c)
        Arlington, TX                       -             1993         12/93               (c)
        Matthews, NC                        -             1993         12/93               (c)
        Phoenix, AZ                         -             1993         12/93               (c)

     Just for Feet:
        Albuquerque, NM                       31,626      1997         06/97             40 years

     Kroger:
        Columbus, OH                          11,387      1982         02/97             40 years

     Linens 'n Things:
        Freehold, NJ                         184,500      1994         08/94             40 years

     Luria's:
        Coral Gables, FL                    -             1994         06/96               (c)
        South Miami, FL                     -             1988         06/96               (c)
        Tampa, FL                             57,382      1994         06/96             40 years

     Marshalls:
        Freehold, NJ                         215,974      1994         08/94             40 years

     Office Depot:
        Arlington, TX                        138,122      1991         01/94             40 years

     OfficeMax:
        Corpus Christi, TX                   108,276      1967         11/93             40 years
        Dallas, TX                           171,106      1993         12/93             40 years
        Cincinnati, OH                       137,099      1994         07/94             40 years
        Evanston, IL                         112,536      1995         06/95             40 years
        Altamonte Spgs, FL                   143,236      1995         01/96             40 years
        Pompano Beach, FL                     90,724      1972         02/96             40 years
        Cutler Ridge, FL                      55,775      1995         06/96             40 years
        Sacramento, CA                        74,203      1996         12/96             40 years
        Salinas, CA                           40,016      1995         02/97             40 years
        Redding, CA                           29,542      1997         06/97             40 years
        Kelso, WA                           -              (g)         09/97               (g)

     Oshman's Sporting Goods:
        Dallas, TX                          -             1994         03/94               (c)

     Petco:
        Grand Forks, ND                          972      1996         12/97             40 years

     Pier 1 Imports:
        Dallas, TX                           101,631      1980         04/94             40 years
        Memphis, TN                           11,128      1997         09/96    (h)      40 years
        Sanford, FL                         -              (f)         06/97               (f)

     Pizza Hut:
        Orlando, FL                           54,552      1974         08/93            20.9 years

     Rally's:
        Toledo, OH                            45,347      1989         07/92            38.8 years

     Robb & Stucky:
        Ft. Myers, FL                          6,657      1997         12/97             40 years

     Roger & Marv's:
        Kenosha, WI                           70,372      1992         02/97             40 years

     Ro-Jack's Food Store:
        Warwick, RI                         -             1992         02/97               (c)

     Scotty's:
        Orlando, FL                          131,096      1995         06/95             40 years
        Orlando, FL                          128,595      1995         06/95             40 years

     Sears Homelife:
        Clearwater, FL                       290,797      1992         05/93             40 years
        Orlando, FL                          251,018      1992         05/93             40 years
        Pensacola, FL                         60,271      1994         06/96             40 years
        Raleigh, NC                           66,248      1995         06/96             40 years
        Tampa, FL                             77,287      1992         06/96             40 years

     Shop & Save:
        Homestead, PA                       -             1994         02/97               (c)
        Penn Hills, PA                        27,194      1991         02/97             40 years

     Sports Authority:
        Memphis, TN                         -              (g)         12/97               (g)

     SuperValu:
        Huntington, WV                        16,638      1971         02/97             40 years

     Top's:
        Lacey, WA                            154,922      1992         02/97             40 years

     Wacammaw:
        Fairfax, VA                         -             1995         12/95               (c)

     Waremart:
        Eureka, CA                           119,670      1965         02/97             40 years

     Wendy's Old Fashioned
       Hamburger:
        Fenton, MO                            82,859      1985         07/92             33 years
        Longwood, FL                          34,179      1982         07/92            31.4 years

     Unallocated costs
        relating to construction
        in progress

                                      ===============
                                          12,296,997
                                      ===============


Properties the Company has
  Invested in Under Direct
  Financing Leases:

     Academy:
        Houston, TX                        (c)            1994         05/95               (c)
        Houston, TX                        (c)            1995         06/95               (c)
        N. Richland Hills, TX              (c)            1996         08/95    (h)        (c)
        Houston, TX                        (c)            1996         02/96    (h)        (c)
        Houston, TX                        (c)            1996         06/96    (h)        (c)
        Baton Rouge, LA                    (c)            1997         08/96    (h)        (c)

     Barnes & Noble:
        Plantation, FL                     (c)            1996         05/95    (h)        (c)

     Best Buy:
        Evanston, IL                       (c)            1994         02/97               (c)

     Borders:
        Altamonte Spgs, FL                 (c)            1997         09/97               (c)

     Checkers:
        Orlando, FL                        (c)            1988         07/92               (c)

     Denny's:
        Landrum, SC                        (c)            1992         05/93               (c)
        Mooresville, NC                    (c)            1992         05/93               (c)
        Duncan, SC                         (c)            1992         05/93               (c)
        Akron, OH                          (d)            1992         05/93               (d)
        Topeka, KS                         (c)            1989         06/93               (c)
        Winter Springs, FL                 (c)            1994         01/94               (c)

     Eckerd:
        San Antonio, TX                    (c)            1993         12/93               (c)
        Dallas, TX                         (c)            1994         01/94               (c)
        Garland, TX                        (c)            1994         02/94               (c)
        Arlington, TX                      (c)            1994         02/94               (c)
        Millville, NJ                      (c)            1994         03/94               (c)
        Atlanta. GA                        (c)            1994         03/94               (c)
        Mantua, NJ                         (c)            1994         06/94               (c)
        Vineland, NJ                       (d)            1994         11/94               (d)
        Amarillo, TX                       (c)            1994         12/94               (c)
        Amarillo, TX                       (c)            1994         12/94               (c)
        Amarillo, TX                       (d)            1994         12/94               (d)
        Glassboro, NJ                      (c)            1994         12/94               (c)
        Kissimmee , FL                     (c)            1995         04/95               (c)
        Colleyville, TX                    (c)            1995         06/95               (c)
        Alice,TX                           (d)            1995         06/95               (d)
        Tampa, FL                          (c)            1995         12/95               (c)
        Lafayette, LA                      (c)            1995         01/96               (c)
        Moore, OK                          (c)            1995         01/96               (c)
        Tallhassee, FL                     (c)            1996         06/96               (c)
        East Point, GA                     (d)            1996         12/96               (d)
        Irving, TX                         (c)            1996         12/96               (c)
        Ft. Worth, TX                      (d)            1996         12/96               (d)
        Williston, FL                      (c)            1995         01/97               (c)
        Jasper, FL                         (c)            1994         01/97               (c)
        Oklahoma City, OK                  (c)            1997         06/97               (c)
        Oklahoma City, OK                  (c)            1997         06/97               (c)
        Norman, OK                         (c)            1997         06/97               (c)
        Chattanooga , TN                   (c)            1997         09/97               (c)

     Food 4 Less:
        Lemon Grove, CA                    (c)            1996         07/95   (h)         (c)

     Food Lion:
        Keystone Hts, FL                   (d)            1993         05/93               (d)
        Chattanooga, TN                    (d)            1993         10/93               (d)
        Lynchburg, VA                      (d)            1994         01/94               (d)
        Martinsburg, WV                    (d)            1994         08/94               (d)

     Good Guys:
        Stockton, CA                       (d)            1991         07/94               (d)
        Portland, OR                       (d)            1996         05/96               (d)

     Hardee's:
        Mobile, AL                         (c)            1993         10/93               (c)
        Warrior, AL                        (c)            1992         10/93               (c)
        Horn Lake, MS                      (c)            1993         10/93               (c)
        West Point, MS                     (c)            1993         10/93               (c)
        Columbia, TN                       (c)            1993         10/93               (c)
        Johnson City, TN                   (c)            1993         10/93               (c)
        Iuka, MS                           (d)            1993         10/93               (d)
        Biscoe, NC                         (d)            1993         10/93               (d)
        Aynor, SC                          (d)            1993         10/93               (d)

     Hi-Lo Automotive:
        Copperas Cove, TX                  (d)            1994         10/94               (d)
        Ft. Worth, TX                      (d)            1993         10/94               (d)
        Baton Rouge, LA                    (d)            1994         10/94               (d)
        Lake Jackson, TX                   (d)            1994         10/94               (d)
        Edinberg, TX                       (d)            1993         10/94               (d)
        Pantego, TX                        (d)            1993         10/94               (d)
        Ft. Worth, TX                      (d)            1993         11/94               (d)
        Pharr, TX                          (d)            1993         11/94               (d)
        Baton Rouge, LA                    (d)            1994         12/94               (d)
        Houston, TX                        (d)            1982         09/95               (d)

     HomePlace:
        Arlington, TX                      (d)            1996         06/96               (d)
        Bowie, MD                          (c)            1997         12/97               (c)

     International House of Pancakes:
        Stafford, TX                       (c)            1992         10/93               (c)
        Sunset Hills, MO                   (c)            1993         10/93               (c)
        Las Vegas, NV                      (c)            1993         12/93               (c)
        Ft. Worth, TX                      (c)            1993         12/93               (c)
        Arlington, TX                      (c)            1993         12/93               (c)
        Matthews, NC                       (c)            1993         12/93               (c)
        Phoenix, AZ                        (c)            1993         12/93               (c)

     Kash N' Karry:
        Brandon, FL                        (d)            1997         10/96   (h)         (d)

     Levitz:
        Tempe, AZ                          (d)            1994         01/95               (d)

     Luria's:
        South Miami, FL                    (c)            1988         06/96               (c)
        Coral Gables, FL                   (c)            1994         06/96               (c)

     Oshman's Sporting Goods:
        Dallas, TX                         (c)            1994         03/94               (c)

     Ro-Jack's Food Store:
        Warwick, RI                        (c)            1992         02/97               (c)

     Shop & Save:
        Homestead, PA                      (c)            1994         02/97               (c)

     Wacammaw:
        Fairfax, VA                        (c)            1995         12/95               (c)


</TABLE>



<TABLE>


                        COMMERCIAL NET LEASE REALTY, INC.
        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                December 31, 1997

<CAPTION>


(a)  Transactions in real estate and accumulated depreciation during 1997, 1996 and 1995, are summarized as follows:

                                                                               1997            1996            1995
                                                                           -----------     -----------    -----------      
     <S>                                                                   <C>             <C>            <C>
     Land and Buildings:
         Balance at the Beginning of Period                                 277,109,358     161,454,129     109,852,431
            Acquisitions                                                    156,011,944     116,563,622      51,601,698
            Sale of land and buildings                                      (19,846,879)       (908,393)         -
                                                                            -----------     -----------     -----------
         Balance at the Close of Period                                     413,274,423     277,109,358     161,454,129
                                                                            ===========     ===========     ===========

     Accumulated Depreciation:
         Balance at the Beginning of Period                                  8,078,562       5,497,390       3,761,369
            Sale of land and buildings                                        (258,942)       (222,940)         -
            Depreciation expense                                             4,477,377       2,804,112       1,736,021
                                                                            -----------     ------------     ----------
         Balance at the Close of Period                                     12,296,997       8,078,562       5,497,390
                                                                            ============    ============     ===========
</TABLE>

(b)  As of December 31, 1997, all of the leases are treated as operating  leases
     for federal  income tax  purposes.  As of December 31, 1997,  the aggregate
     cost of the properties owned by the Company and its subsidaries for federal
     income tax purposes was $534,688,369.

(c)  For financial reporting purposes,  the portion of the lease relating to the
     building  has  been  recorded  as  a  direct  financing  lease;  therefore,
     depreciation is not applicable.

(d)  For financial reporting  purposes,  the lease for the land and building has
     been recorded as a direct financing lease;  therefore,  depreciation is not
     applicable.

(e)  The tenant of this property, Golden Corral Corporation,  has subleased this
     property.  Golden  Corral  Corporation  continues  to  be  responsible  for
     complying  with all the terms of the lease  agreement  and is continuing to
     pay rent on this property to the Company.

(f)  The  Company  owns  only  land for this  property.  Pursuant  to the  lease
     agreement,  the Company is to purchase the building  once  construction  is
     complete.

(g)  The  Company  owns  only  land for this  property.  The  building  is under
     construction; therefore, no depreciation was taken.

(h)  Date acquired  represents  acquisition date of land.  Pursuant to the lease
     agreement,  the Company  purchased  the  buildings  from the  tenants  upon
     completion of construction, generally within 12 months from the acquisition
     of the land.

(i)  During the years ended  December 31, 1997,  1996 and 1995,  the Company (i)
     incurred   acquisition  fees  and  expense   reimbursement  fees  totalling
     $2,552,205,  $2,278,306  and  $937,363,  respectively,  paid to CNL  Realty
     Advsisors,  Inc.  and (ii)  acquired  land  and  buildings  purchased  from
     affiliates  of  CNL  Realty  Advisors,   Inc.  for  an  aggregate  cost  of
     $39,322,795,  $37,712,514, and $17,968,518,  respectively. Such amounts are
     included in land and buildings on operating  leases and net  investments in
     direct financing leases.

(j)  Property is encumbered as a part of the  Company's  $13,150,000  long term,
     fixed rate mortgage and security agreement.

(k)  Property is encumbered as a part of the  Company's  $39,450,000  long term,
     fixed rate mortgage and security agreement.

(l)  Encumbered  properties  for which the portion of the lease  relating to the
     land is accounted  for as an  operating  lease and the portion of the lease
     relating to the building is accounted for as a direct  financing lease, the
     total  amount of the  encumberance  is listed with the land  portion of the
     property.

(m)  The Company owns only the building for this  property.  The land is subject
     to a ground lease between the Company and an unrelated third party.





                                    EXHIBITS

                                  EXHIBIT INDEX

     Exhibit Number                                                      Page
     --------------                                                      ----

         3.1       Articles of Incorporation of the Registrant (filed as
                   Exhibit 3.3(i) to the Registrant's Registration Statement
                   No. 1-11290 on Form 8-B, and incorporated herein by
                   reference).

         3.2       Bylaws of the Registrant, (filed as Exhibit 3(ii) to
                   Amendment No. 2 to the Registrant's Registration No. 33-
                   83110 on Form S-3, and incorporated herein by reference).

         3.3       Articles of Amendment to the Articles of Incorporation of
                   the Registrant (filed as Exhibit 3.3 to the Registrant's
                   Form 10-Q for the quarter ended June 30, 1996, and
                   incorporated herein by reference).

         3.4       Articles of Amendment to the Articles of Incorporation of
                   the Registrant (filed as Exhibit 3.4 to the Registrant's
                   Current Report on Form 8-K dated February 18, 1998, and
                   filed with the Securities and Exchange Commission on
                   February 19, 1998, and incorporated herein by reference).

         4         Specimen Certificate of Common Stock, par value $.01 per
                   share, of the Registrant (filed as Exhibit 3.4 to the
                   Registrant's Registration Statement No. 1-11290 on Form 8-B
                   and incorporated herein by reference).

         10.1      Letter Agreement dated July 10, 1992, amending Stock
                   Purchase Agreement dated January 23, 1992 (filed as Exhibit
                   10.34 to the Registrant's Quarterly Report on Form 10-Q for
                   the quarter ended June 30, 1992, and incorporated herein by
                   reference).
 
         10.2      Advisory Agreement between Registrant and CNL Realty
                   Advisors, Inc. effective as of April 1, 1993 and renewed
                   January 1, 1997 (filed as Exhibit 10.04 to Amendment No. 1
                   to the Registrant's Registration Statement No. 33-61214 on
                   Form S-2, and incorporated herein by reference).

         10.3      1992 Commercial Net Lease Realty, Inc. Stock Option Plan
                   (filed as Exhibit No. 10(x) to the Registrant's Registration
                   Statement No. 33-83110 on Form S-3, and incorporated herein
                   by reference).
 
         10.4      Second Amended and Restated Line of Credit and Security
                   Agreement, dated December 7, 1995, among Registrant, certain
                   lenders listed therein and First Union National Bank of
                   Florida, as the Agent, relating to a $100,000,000 loan
                   (filed as Exhibit 10.14 to the Registrant's Current Report
                   on Form 8-K dated January 18, 1996, and incorporated herein
                   by reference).

         10.5      Secured Promissory Note, dated December 14, 1995, among
                   Registrant and Principal Mutual Life Insurance Company
                   relating to a $13,150,000 loan (filed as Exhibit 10.15 to
                   the Registrant's Current Report on Form 8-K dated January
                   18, 1996, and incorporated herein by reference).


         10.6      Mortgage and Security Agreement, dated December 14, 1995,
                   among Registrant and Principal Mutual Life Insurance Company
                   relating to a $13,150,000 loan (filed as Exhibit 10.16 to
                   the Registrant's Current Report on Form 8-K dated January
                   18, 1996, and incorporated herein by reference).

         10.7      Loan Agreement, dated January 19, 1996, among Registrant and
                   Principal Mutual Life Insurance Company relating to a
                   $39,450,000 loan (filed as Exhibit 10.12 to the Registrant's
                   Annual Report on Form 10-K for the year ended December 31,
                   1995, and incorporated herein by reference).

         10.8      Secured Promissory Note, dated January 19, 1996, among
                   Registrant and Principal Mutual Life Insurance Company
                   relating to a $39,450,000 loan (filed as Exhibit 10.13 to
                   the Registrant's Annual Report on Form 10-K for the year
                   ended December 31, 1995, and incorporated herein by
                   reference).

         10.9      Third Amended and Restated Line of Credit and Security
                   Agreement, dated September 3, 1996, by and among Registrant,
                   certain lenders and First Union National Bank of Florida, as
                   the Agent, relating to a $150,000,000 loan (filed as Exhibit
                   10.11 to the Registrant's Quarterly Report on Form 10-Q for
                   the quarter ended September 30, 1996, and incorporated
                   herein by reference).

         10.10     Second Renewal  and Modification Promissory Note, dated
                   September 3, 1996, by and among Registrant and First Union
                   National Bank of Florida, as the Agent, relating to
                   $150,000,000 loan (filed as Exhibit 10.12 to the
                   Registrant's Quarterly Report on Form 10-Q for the quarter
                   ended September 30, 1996, and incorporated herein by
                   reference).

         10.11     Agreement and Plan of Merger dated May 15, 1997, by and
                   among Commercial Net Lease Realty, Inc. and Net Lease Realty
                   II, Inc. and CNL Realty Advisors, Inc. and the Stockholders
                   of CNL Realty Advisors, Inc. (filed as Exhibit 10.1 to the
                   Registrant's Current Report on Form 8-K dated May 16, 1997,
                   and incorporated herein by reference).

         10.12     Fourth Amended and Restated Line of Credit and Security
                   Agreement, dated August 6, 1997, by and among Registrant,
                   certain lenders and First Union National Bank, as the Agent,
                   relating to a $200,000,000 loan (filed as Exhibit 10 to the
                   Registrant's Current Report on Form 8-K dated September 12,
                   1997, and incorporated herein by reference).

         13        Annual Report to Shareholders for the year ended December
                   31, 1997 (previously filed).

         23        Consent of Independent Accountants dated March 16, 1998
                   (previously filed).

     (b)           The Registrant filed one report on Form 8-K on December 19,
                   1997, for the purpose of incorporating certain items by
                   reference into its registration statement on Form S-3 dated
                   December 19, 1997, and one report on form 8-K on December
                   22, 1997, reporting the approval by the stockholders of the
                   Registrant of the Agreement and Plan of Merger by and among
                   the Registrant, Net Lease Realty II, Inc. and the
                   Stockholders of CNL Realty Advisors, Inc.
