1032462--3/16/2006--TRUSTREET_PROPERTIES

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{investment, property, distribution}

{debt, indebtedness, cash}

{loan, real, estate}

{operation, natural, condition}

{acquisition, growth, future}

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{regulation, government, change}

{personnel, key, retain}

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Risks Relating to Our Business The operations of CNLRP, USRP and the Income Funds may not be integrated successfully and intended benefits of the Mergers may not be realized, which could adversely affect our results of operations. Our substantial debt could adversely affect our cash flow, limit our flexibility to raise additional capital and prevent us from making distributions on the outstanding shares of common stock. Our cash flow from operations and borrowings under our financing arrangements may not be sufficient to satisfy our debt service obligations or to fund our other liquidity needs or capital expenditures. We utilize an UPREIT structure and, as a result, we rely on the receipt of funds from our subsidiaries in order to meet our cash needs, service our indebtedness and make distributions on the outstanding shares of our common stock. The financing agreements governing our debt contain various covenants that limit our discretion in the operation of our business and could lead to acceleration of debt repayment. We cannot assure you we will continue to make distributions at historical rates. Our operations and financial condition could be adversely affected by a number of factors affecting the value of real estate. We rely on a small number of tenants for a significant portion of our revenue, and rental payment defaults by these significant tenants could adversely affect our results of operations. Changes in trends in the restaurant industry could adversely affect the sales, profitability and success of the chain restaurants that our tenants operate. Tenant bankruptcy proceedings could negatively affect our income. We may not be able to re-lease properties upon the termination, expiration or rejection of leases at comparable lease rates or at all. Our investment property sales program may be adversely affected by a significant reduction in or elimination of capital gains taxes or changes in interest rates. We may be unable to sell properties when appropriate because real estate investments are illiquid. We may not be able to acquire or sell properties on terms that are acceptable, or at all. Our assets may decline in value and, as a result, may be subject to impairment charges. If we cannot obtain additional capital, our ability to grow will be limited. Our securitizations could require replacement property contributions or accelerated principal paydowns and could be adversely affected by changes in rating agencies perceptions of the securitizations and the leases and loans underlying them. Severe weather conditions and other catastrophes may result in an increase in the number of defaults by our tenants. The development and redevelopment of properties presents risks not present in existing operating properties. Environmental laws and regulations could reduce the value of our properties or our tenants profitability. The revenues generated by our tenants could be negatively affected by various federal, state and local laws and regulations to which they are subject. The loss of certain members of our management team could adversely affect our business. Because we are a REIT, our distributions do not receive favorable tax treatment. We will be subject to increased taxation if we fail to qualify as a REIT for federal income tax purposes. Excessive non-real estate asset values may jeopardize our REIT status. Certain of our leases may be recharacterized as financings, which would eliminate our depreciation deductions on our properties. We may have to borrow funds or sell assets to meet our distribution requirements. We may be subject to other tax liabilities.

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1032462--3/16/2006--TRUSTREET_PROPERTIES_INC