State of Minnesota
|
41-1789725
|
|||
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|||
30 East 7th Street, Suite 1300
St. Paul, Minnesota 55101
|
(651) 227-7333
|
|||
(Address of principal executive offices)
|
(Registrant’s telephone number)
|
Title of each class
|
Name of each exchange on which registered
|
|||
None
|
None
|
Limited Partnership Units
|
||
(Title of class)
|
o Large accelerated filer
|
o Accelerated filer
|
o Non-accelerated filer
|
x Smaller reporting company
|
Property
|
Purchase
Date
|
Original Property
Cost
|
Tenant
|
Annual
Lease
Payment
|
Annual
Rent
Per Sq. Ft.
|
||||
KinderCare Daycare Center
Andover, MN
|
6/14/02
|
$
|
1,264,207
|
KinderCare Learning
Centers LLC
|
$
|
145,447
|
$
|
16.90
|
|
Jared Jewelry Store
Hanover, MD
(50%)
|
2/9/04
|
$
|
1,989,135
|
Sterling
Jewelers Inc.
|
$
|
185,406
|
$
|
63.83
|
|
Jared Jewelry Store
Auburn Hills, MI
(40%)
|
1/14/05
|
$
|
1,466,048
|
Sterling
Jewelers Inc.
|
$
|
124,049
|
$
|
53.85
|
|
Best Buy Store
Eau Claire, WI
(54%)
|
1/31/08
|
$
|
3,637,706
|
Best Buy
Stores, L.P.
|
$
|
268,800
|
$
|
10.51
|
|
Fresenius Medical Center
Shreveport, LA
(55%)
|
10/2/08
|
$
|
1,360,617
|
Bio-Medical
Applications of
Louisiana, LLC
|
$
|
112,772
|
$
|
24.12
|
|
Tractor Supply Company Store
Canton, GA
(50%)
|
5/29/14
|
$
|
2,212,500
|
(1)
|
Tractor Supply
Company
|
$
|
164,355
|
$
|
13.76
|
Gander Mountain Store
Champaign, IL
(30%)
|
7/3/14
|
$
|
2,122,500
|
(1)
|
Gander Mountain Company
|
$
|
167,772
|
$
|
14.17
|
Period
|
Total Number
of Units
Purchased
|
Average
Price Paid
per Unit
|
Total Number of Units
Purchased as Part of
Publicly Announced
Plans or Programs
|
Maximum Number
of Units that May Yet
Be Purchased Under
the Plans or Programs
|
10/1/15 to 10/31/15
|
605.58
|
$823.07
|
3,895.12(1)
|
(2)
|
11/1/15 to 11/30/15
|
--
|
--
|
--
|
--
|
12/1/15 to 12/31/15
|
--
|
--
|
--
|
--
|
(1)
|
The Partnership's repurchase plan is mandated by the Partnership Agreement as included in the prospectus related to the original offering of the Units.
|
(2)
|
The Partnership Agreement contains annual limitations on repurchases described in the paragraph above and has no expiration date.
|
|
—
|
Market and economic conditions which affect the value of the properties the Partnership owns and the cash from rental income such properties generate;
|
|
—
|
the federal income tax consequences of rental income, deductions, gain on sales and other items and the effects of these consequences for the Partners;
|
|
—
|
resolution by the General Partners of conflicts with which they may be confronted;
|
|
—
|
the success of the General Partners of locating properties with favorable risk return characteristics;
|
|
—
|
the effect of tenant defaults; and
|
|
—
|
the condition of the industries in which the tenants of properties owned by the Partnership operate.
|
Page
|
||
Report of Independent Registered Public Accounting Firm
|
16
|
|
Balance Sheets as of December 31, 2015 and 2014
|
17
|
|
Statements for the Years Ended December 31, 2015 and 2014:
|
||
Income
|
18
|
|
Cash Flows
|
19
|
|
Changes in Partners’ Capital (Deficit)
|
20
|
|
Notes to Financial Statements
|
21 – 33
|
/s/ BOULAY PLLP | |
Boulay PLLP
|
|
Certified Public Accountants
|
|
Minneapolis, Minnesota
|
|
March 28, 2016
|
December 31,
|
December 31,
|
|||||||
2015
|
2014
|
|||||||
Current Assets:
|
||||||||
Cash
|
$ | 2,925,122 | $ | 4,540,920 | ||||
Real Estate Investments:
|
||||||||
Land
|
3,484,216 | 3,484,216 | ||||||
Buildings
|
10,126,971 | 10,126,971 | ||||||
Acquired Intangible Lease Assets
|
522,129 | 522,129 | ||||||
Real Estate Held for Investment, at cost
|
14,133,316 | 14,133,316 | ||||||
Accumulated Depreciation and Amortization
|
(3,127,521 | ) | (2,674,423 | ) | ||||
Real Estate Held for Investment, Net
|
11,005,795 | 11,458,893 | ||||||
Total Assets
|
$ | 13,930,917 | $ | 15,999,813 |
Current Liabilities:
|
||||||||
Payable to AEI Fund Management, Inc.
|
$ | 10,727 | $ | 30,299 | ||||
Distributions Payable
|
264,144 | 291,921 | ||||||
Unearned Rent
|
12,121 | 12,121 | ||||||
Total Current Liabilities
|
286,992 | 334,341 | ||||||
Long-term Liabilities:
|
||||||||
Acquired Below-Market Lease Intangibles, Net
|
63,200 | 74,191 | ||||||
Partners’ Capital (Deficit):
|
||||||||
General Partners
|
(9,126 | ) | 10,980 | |||||
Limited Partners – 24,000 Units authorized;
20,105 and 21,829 Units issued and outstanding
as of December 31, 2015 and 2014, respectively
|
13,589,851 | 15,580,301 | ||||||
Total Partners' Capital
|
13,580,725 | 15,591,281 | ||||||
Total Liabilities and Partners' Capital
|
$ | 13,930,917 | $ | 15,999,813 |
Year Ended December 31
|
||||||||
2015
|
2014
|
|||||||
Rental Income
|
$ | 1,181,792 | $ | 1,105,149 | ||||
Expenses:
|
||||||||
Partnership Administration – Affiliates
|
207,165 | 221,349 | ||||||
Partnership Administration and Property
Management – Unrelated Parties
|
40,502 | 52,344 | ||||||
Property Acquisition
|
0 | 62,022 | ||||||
Depreciation and Amortization
|
453,098 | 416,773 | ||||||
Total Expenses
|
700,765 | 752,488 | ||||||
Operating Income
|
481,027 | 352,661 | ||||||
Other Income:
|
||||||||
Income from Equity Method Investment
|
0 | 521,659 | ||||||
Interest Income
|
10,472 | 11,890 | ||||||
Total Other Income
|
10,472 | 533,549 | ||||||
Income from Continuing Operations
|
491,499 | 886,210 | ||||||
Income from Discontinued Operations
|
0 | 647,377 | ||||||
Net Income
|
$ | 491,499 | $ | 1,533,587 | ||||
Net Income Allocated:
|
||||||||
General Partners
|
$ | 4,915 | $ | 18,093 | ||||
Limited Partners
|
486,584 | 1,515,494 | ||||||
Total
|
$ | 491,499 | $ | 1,533,587 | ||||
Income per Limited Partnership Unit:
|
||||||||
Continuing Operations
|
$ | 23.35 | $ | 39.01 | ||||
Discontinued Operations
|
.00 | 28.50 | ||||||
Total – Basic and Diluted
|
$ | 23.35 | $ | 67.51 | ||||
Weighted Average Units Outstanding –
Basic and Diluted
|
20,839 | 22,447 | ||||||
Year Ended December 31
|
||||||||
2015
|
2014
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net Income
|
$ | 491,499 | $ | 1,533,587 | ||||
Adjustments to Reconcile Net Income
To Net Cash Provided by Operating Activities:
|
||||||||
Depreciation and Amortization
|
442,107 | 410,361 | ||||||
Income from Equity Method Investments
|
0 | (1,145,441 | ) | |||||
Increase (Decrease) in Payable to
AEI Fund Management, Inc.
|
(19,572 | ) | 19,250 | |||||
Total Adjustments
|
422,535 | (715,830 | ) | |||||
Net Cash Provided By (Used For)
Operating Activities
|
914,034 | 817,757 | ||||||
Cash Flows from Investing Activities:
|
||||||||
Investments in Real Estate
|
0 | (4,335,000 | ) | |||||
Cash Paid for Equity Method Investments
|
0 | (37,488 | ) | |||||
Proceeds from Equity Method Investments
|
0 | 4,373,557 | ||||||
Net Cash Provided By (Used For)
Investing Activities
|
0 | 1,069 | ||||||
Cash Flows from Financing Activities:
|
||||||||
Distributions Paid to Partners
|
(1,114,740 | ) | (1,167,688 | ) | ||||
Repurchase of Partnership Units
|
(1,415,092 | ) | (664,178 | ) | ||||
Net Cash Provided By (Used For)
Financing Activities
|
(2,529,832 | ) | (1,831,866 | ) | ||||
Net Increase (Decrease) in Cash
|
(1,615,798 | ) | (1,013,040 | ) | ||||
Cash, beginning of year
|
4,540,920 | 5,553,960 | ||||||
Cash, end of year
|
$ | 2,925,122 | $ | 4,540,920 | ||||
Supplemental Disclosure of Non-Cash Investing Activities:
|
||||||||
Contribution of Real Estate Estate (at carrying value)
in Exchange for Equity Method Investments
|
$ | 0 | $ | 3,190,628 | ||||
General Partners
|
Limited Partners
|
Total
|
Limited Partnership Units Outstanding
|
|||||||||||||
Balance, December 31, 2013
|
$ | 11,205 | $ | 15,878,354 | $ | 15,889,559 | 22,653.11 | |||||||||
Distributions Declared
|
(11,677 | ) | (1,156,010 | ) | (1,167,687 | ) | ||||||||||
Repurchase of Partnership Units
|
(6,641 | ) | (657,537 | ) | (664,178 | ) | (824.40 | ) | ||||||||
Net Income
|
18,093 | 1,515,494 | 1,533,587 | |||||||||||||
Balance, December 31, 2014
|
10,980 | 15,580,301 | 15,591,281 | 21,828.71 | ||||||||||||
Distributions Declared
|
(10,870 | ) | (1,076,093 | ) | (1,086,963 | ) | ||||||||||
Repurchase of Partnership Units
|
(14,151 | ) | (1,400,941 | ) | (1,415,092 | ) | (1,723.83 | ) | ||||||||
Net Income
|
4,915 | 486,584 | 491,499 | |||||||||||||
Balance, December 31, 2015
|
$ | (9,126 | ) | $ | 13,589,851 | $ | 13,580,725 | 20,104.88 | ||||||||
2015
|
2014
|
||||
a.
|
AEI is reimbursed for costs incurred in providing services related to managing the Partnership's operations and properties, maintaining the Partnership's books, and communicating with the Limited Partners.
|
$
|
207,165
|
$
|
221,349
|
b.
|
AEI is reimbursed for all direct expenses it paid on the Partnership's behalf to third parties related to Partnership administration and property management. These expenses included printing costs, legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs. These amounts included $3,145 of expenses related to Discontinued Operations in 2014.
|
$
|
40,502
|
$
|
55,489
|
c.
|
AEI is reimbursed for costs incurred in providing services and direct expenses related to the acquisition of properties on behalf of the Partnership.
|
$
|
0
|
$
|
62,022
|
d.
|
AEI is reimbursed for costs incurred in providing services related to the sale of property.
|
$
|
0
|
$
|
129,657
|
Property
|
Land
|
Buildings
|
Total
|
Accumulated
Depreciation
|
||||
KinderCare, Andover, MN
|
$
|
179,755
|
$
|
1,084,452
|
$
|
1,264,207
|
$
|
587,410
|
Jared Jewelry, Hanover, MD
|
861,065
|
1,128,070
|
1,989,135
|
535,835
|
||||
Jared Jewelry, Auburn Hills, MI
|
280,993
|
1,185,055
|
1,466,048
|
519,447
|
||||
Best Buy, Eau Claire, WI
|
853,357
|
2,784,349
|
3,637,706
|
881,711
|
||||
Fresenius Medical Center, Shreveport, LA
|
102,046
|
1,258,571
|
1,360,617
|
364,987
|
||||
Tractor Supply, Canton, GA
|
700,000
|
1,407,183
|
2,107,183
|
89,121
|
||||
Gander Mountain, Champaign, IL
|
507,000
|
1,279,291
|
1,786,291
|
76,758
|
||||
$
|
3,484,216
|
$
|
10,126,971
|
$
|
13,611,187
|
$
|
3,055,269
|
|
2015
|
2014
|
|||||||
Cost
|
Accumulated Amortization
|
Cost
|
Accumulated Amortization
|
|||||
Acquired Intangible Lease Assets
(in-place lease intangibles with a weighted average
life of 128 and 140 months, respectively)
|
$
|
522,129
|
$
|
72,252
|
$
|
522,129
|
$
|
24,233
|
Acquired Below-Market Lease Intangibles
(weighted average life of 69 and 81 months, respectively)
|
$
|
80,603
|
$
|
17,403
|
$
|
80,603
|
$
|
6,412
|
2016
|
$
|
1,176,574
|
2017
|
1,122,637
|
|
2018
|
738,456
|
|
2019
|
671,739
|
|
2020
|
550,117
|
|
Thereafter
|
1,848,815
|
|
$
|
6,108,338
|
|
CMLS
|
ANLP
|
Total
|
||||
Real Estate Contributed (at carrying value)
|
$
|
1,508,930
|
$
|
1,681,698
|
$
|
3,190,628
|
Cash Contributed
|
12,169
|
25,319
|
37,488
|
|||
Net Income – Rental Activity
|
32,965
|
11,750
|
44,715
|
|||
Net Income – Gain on Sale of Real Estate
|
590,817
|
509,909
|
1,100,726
|
|||
Distributions from Net Rental Income
|
(32,965)
|
(11,750)
|
(44,715)
|
|||
Proceeds from Sale of Class B Interests
|
(2,111,916)
|
(2,216,926)
|
(4,328,842)
|
|||
Equity Method Investments
|
$
|
0
|
$
|
0
|
$
|
0
|
Tenants
|
Industry
|
2015
|
2014
|
|||
Sterling Jewelers Inc.
|
Retail
|
$
|
309,455
|
$
|
298,178
|
|
Best Buy Stores, L.P.
|
Retail
|
268,800
|
268,800
|
|||
Tractor Supply Company
|
Retail
|
175,346
|
196,968
|
|||
Gander Mountain Company
|
Retail
|
167,772
|
N/A
|
|||
KinderCare Learning Centers LLC
|
Child Care
|
145,447
|
145,447
|
|||
Aggregate rental income of major tenants
|
$
|
1,066,820
|
$
|
909,393
|
||
Aggregate rental income of major tenants
as a percentage of total rental income
|
90%
|
80%
|
||||
2015
|
2014
|
|||
Rental Income
|
$
|
0
|
$
|
26,740
|
Property Management Expenses
|
0
|
(3,145)
|
||
Income from Equity Method Investment Held for Sale
|
0
|
623,782
|
||
Income from Discontinued Operations
|
$
|
0
|
$
|
647,377
|
2015
|
2014
|
|||
Cash Flows from Discontinued Operations:
|
||||
Operating Activities
|
$
|
0
|
$
|
23,595
|
Investing Activities
|
$
|
0
|
$
|
2,132,712
|
2015
|
2014
|
|||
Net Income for Financial Reporting Purposes
|
$
|
491,499
|
$
|
1,533,587
|
Depreciation for Tax Purposes Under Depreciation
and Amortization for Financial Reporting Purposes
|
149,060
|
129,852
|
||
Acquisition Costs Expensed for Financial Reporting
Purposes, Capitalized for Tax Purposes
|
0
|
62,022
|
||
Gain on Sale of Real Estate for Tax Purposes
Under Gain for Financial Reporting Purposes
|
0
|
(195,505)
|
||
Taxable Income to Partners
|
$
|
640,559
|
$
|
1,529,956
|
2015
|
2014
|
|||
Partners' Capital for Financial Reporting Purposes
|
$
|
13,580,725
|
$
|
15,591,281
|
Adjusted Tax Basis of Investments in Real Estate
Over Net Investments in Real Estate
for Financial Reporting Purposes
|
1,035,417
|
886,357
|
||
Income Accrued for Tax Purposes Over
Income for Financial Reporting Purposes
|
12,121
|
12,121
|
||
Syndication Costs Treated as Reduction
of Capital For Financial Reporting Purposes
|
3,208,043
|
3,208,043
|
||
Partners' Capital for Tax Reporting Purposes
|
$
|
17,836,306
|
$
|
19,697,802
|
Name and Address
of Beneficial Owner
|
Number of
Units Held
|
Percent
of Class
|
AEI Fund Management XXI, Inc.
|
0
|
0.00%
|
Robert P. Johnson
|
0
|
0.00%
|
Patrick W. Keene
|
0
|
0.00%
|
Address for all:
|
||
1300 Wells Fargo Place
30 East 7th Street, St. Paul, Minnesota 55101
|
Person or Entity
Receiving
Compensation
|
Form and Method
of Compensation
|
Amount Incurred From
Inception (August 22, 1994)
To December 31, 2015
|
||
AEI Securities, Inc.
|
Selling Commissions equal to 8% of proceeds plus a 2% nonaccountable expense allowance, most of which was reallowed to Participating Dealers.
|
$
|
2,400,000
|
|
General Partners and Affiliates
|
Reimbursement at Cost for other Organization and Offering Costs.
|
$
|
877,000
|
|
General Partners and Affiliates
|
Reimbursement at Cost for all Acquisition Expenses.
|
$
|
805,780
|
|
General Partners and Affiliates
|
Reimbursement at Cost for providing administrative services to the Fund, including all expenses related to management of the Fund's properties and all other transfer agency, reporting, partner relations and other administrative functions.
|
$
|
4,806,179
|
|
General Partners and Affiliates
|
Reimbursement at Cost for providing services related to the disposition of the Fund's properties.
|
$
|
1,367,705
|
|
General Partners
|
1% of Net Cash Flow in any fiscal year until the Limited Partners have received annual, non-cumulative distributions of Net Cash Flow equal to 10% of their Adjusted Capital Contributions and 10% of any remaining Net Cash Flow in such fiscal year.
|
$
|
264,794
|
|
Person or Entity
Receiving
Compensation
|
Form and Method
of Compensation
|
Amount Incurred From
Inception (August 22, 1994)
To December 31, 2015
|
||
General Partners
|
1% of distributions of Net Proceeds of Sale until Limited Partners have received an amount equal to (a) their Adjusted Capital Contributions, plus (b) an amount equal to 12% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously distributed. 10% of distributions of Net Proceeds of Sale thereafter.
|
$
|
92,896
|
Fee Category
|
2015
|
2014
|
||
Audit Fees
|
$
|
18,753
|
$
|
18,154
|
Audit-Related Fees
|
0
|
0
|
||
Tax Fees
|
0
|
0
|
||
All Other Fees
|
0
|
0
|
||
Total Fees
|
$
|
18,753
|
$
|
18,154
|
3.1
|
Certificate of Limited Partnership (incorporated by reference to Exhibit 3.1 of the registrant's Registration Statement on Form SB-2 filed October 10, 1994 [File No. 33-85076C]).
|
3.2
|
Restated Limited Partnership Agreement to the Prospectus (incorporated by reference to Exhibit A of Amendment No. 2 of the registrant's Registration Statement on Form SB-2 filed January 20, 1995 [File No. 33-85076C]).
|
10.1
|
Net Lease Agreement dated June 14, 2002 between the Partnership and ARAMARK Educational Resources, Inc. relating to the Property at 1485 Bunker Lake Boulevard NW, Andover, Minnesota (incorporated by reference to Exhibit 10.4 of Form 8-K filed June 27, 2002).
|
10.2
|
Assignment and Assumption of Lease dated February 9, 2004 between the Partnership, AEI Net Lease Income & Growth Fund XX Limited Partnership and Transmills, LLC relating to the Property at 7684 Arundel Mills, Hanover, Maryland (incorporated by reference to Exhibit 10.2 of Form 8-K filed February 24, 2004).
|
10.3
|
Assignment and Assumption of Lease dated January 14, 2005 between the Partnership, AEI Income & Growth Fund 25 LLC and LMB Auburn Hills I LLC relating to the Property at 3960 Baldwin Road, Auburn Hills, Michigan (incorporated by reference to Exhibit 10.26 of Form 10-KSB filed March 30, 2005).
|
10.4
|
Assignment and Assumption of Lease dated January 31, 2008 between the Partnership, AEI Income & Growth Fund 23 LLC, AEI Income & Growth Fund 26 LLC and Eau Claire Equity Fund Limited Partnership relating to the Property at 4090 Commonwealth Avenue, Eau Claire, Wisconsin (incorporated by reference to Exhibit 10.2 of Form 8-K filed February 6, 2008).
|
31.1
|
Certification of Chief Executive Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer of General Partner pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
AEI INCOME & GROWTH FUND XXI
|
||
Limited Partnership
|
||
By:
|
AEI Fund Management XXI, Inc.
|
|
Its Managing General Partner
|
||
March 28, 2016
|
By:
|
/s/ ROBERT P JOHNSON |
Robert P. Johnson, President and Director
|
||
(Principal Executive Officer)
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Name
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Title
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Date
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/s/ ROBERT P JOHNSON |
President (Principal Executive Officer)
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March 28, 2016
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Robert P. Johnson
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and Sole Director of Managing General
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Partner
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/s/ PATRICK W KEENE |
Chief Financial Officer and Treasurer
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March 28, 2016
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Patrick W. Keene
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(Principal Accounting Officer)
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Date: March 28, 2016
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/s/ ROBERT P JOHNSON
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Robert P. Johnson, President
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AEI Fund Management XXI, Inc.
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Managing General Partner
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Date: March 28, 2016
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/s/ PATRICK W KEENE
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Patrick W. Keene, Chief Financial Officer
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AEI Fund Management XXI, Inc.
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Managing General Partner
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
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/s/ ROBERT P JOHNSON
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||
Robert P. Johnson, President
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AEI Fund Management XXI, Inc.
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Managing General Partner
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March 28, 2016
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/s/ PATRICK W KEENE
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||
Patrick W. Keene, Chief Financial Officer
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||
AEI Fund Management XXI, Inc.
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Managing General Partner
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March 28, 2016
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Document And Entity Information |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | AEI Income & Growth Fund XXI Ltd Partnership |
Document Type | 10-K |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | shares | 20,105 |
Entity Public Float | $ | $ 0 |
Amendment Flag | false |
Entity Central Index Key | 0000931755 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Smaller Reporting Company |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2015 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | FY |
Balance Sheet (Parentheticals) - Limited Partner [Member] - shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Limited Partners, units authorized | 24,000 | 24,000 |
Limited Partners, units issued | 20,105 | 21,829 |
Limited Partners, units outstanding | 20,105 | 21,829 |
Statement of Changes in Partners' Capital - USD ($) |
General Partner [Member] |
Limited Partner [Member] |
Total |
---|---|---|---|
Balance, December 31, 2013 at Dec. 31, 2013 | $ 11,205 | $ 15,878,354 | $ 15,889,559 |
Balance, December 31, 2013 (in Shares) at Dec. 31, 2013 | 22,653.11 | ||
Balance at Dec. 31, 2014 | 10,980 | $ 15,580,301 | 15,591,281 |
Balance (in Shares) at Dec. 31, 2014 | 21,829 | ||
Distributions Declared | 11,677 | $ 1,156,010 | 1,167,687 |
Repurchases | $ 6,641 | $ 657,537 | 664,178 |
Units Repurchased (in Shares) | 824.40 | 824.40 | |
Net Income | $ 18,093 | $ 1,515,494 | 1,533,587 |
Balance at Dec. 31, 2015 | (9,126) | $ 13,589,851 | 13,580,725 |
Balance (in Shares) at Dec. 31, 2015 | 20,105 | ||
Distributions Declared | 10,870 | $ 1,076,093 | 1,086,963 |
Repurchases | 14,151 | $ 1,400,941 | 1,415,092 |
Units Repurchased (in Shares) | 1,723.83 | ||
Net Income | $ 4,915 | $ 486,584 | $ 491,499 |
Organization |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] |
(1) Organization –
AEI Income & Growth Fund XXI Limited Partnership (“Partnership”) was formed to acquire and lease commercial properties to operating tenants. The Partnership's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing General Partner. Robert P. Johnson, the President and sole director of AFM, serves as the Individual General Partner. AFM is a wholly owned subsidiary of AEI Capital Corporation of which Mr. Johnson is the majority shareholder. AEI Fund Management, Inc. (“AEI”), an affiliate of AFM, performs the administrative and operating functions for the Partnership.
The terms of the Partnership offering called for a subscription price of $1,000 per Limited Partnership Unit, payable on acceptance of the offer. The Partnership commenced operations on April 14, 1995 when minimum subscriptions of 1,500 Limited Partnership Units ($1,500,000) were accepted. On January 31, 1997, the offering terminated when the maximum subscription limit of 24,000 Limited Partnership Units was reached. Under the terms of the Limited Partnership Agreement, the Limited Partners and General Partners contributed funds of $24,000,000 and $1,000, respectively.
During operations, any Net Cash Flow, as defined, which the General Partners determine to distribute will be distributed 90% to the Limited Partners and 10% to the General Partners; provided, however, that such distributions to the General Partners will be subordinated to the Limited Partners first receiving an annual, noncumulative distribution of Net Cash Flow equal to 10% of their Adjusted Capital Contribution, as defined, and, provided further, that in no event will the General Partners receive less than 1% of such Net Cash Flow per annum. Distributions to Limited Partners will be made pro rata by Units.
Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the General Partners determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Partners and 1% to the General Partners until the Limited Partners receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 10% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Partners and 10% to the General Partners. Distributions to the Limited Partners will be made pro rata by Units.
For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated first in the same ratio in which, and to the extent, Net Cash Flow is distributed to the Partners for such year. Any additional profits will be allocated in the same ratio as the last dollar of Net Cash Flow is distributed. Net losses from operations will be allocated 99% to the Limited Partners and 1% to the General Partners.
For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Partnership Agreement as follows: (i) first, to those partners with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Partners and 1% to the General Partners until the aggregate balance in the Limited Partners' capital accounts equals the sum of the Limited Partners' Adjusted Capital Contributions plus an amount equal to 10% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Partners and 10% to the General Partners. Losses will be allocated 98% to the Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a deficit capital balance. Upon liquidation of the Partnership or withdrawal by a General Partner, the General Partners will contribute to the Partnership an amount equal to the lesser of the deficit balances in their capital accounts or 1% of total Limited Partners' and General Partners' capital contributions.
In January 2014, the Managing General Partner mailed a Consent Statement (Proxy) seeking the consent of the Limited Partners to continue the Partnership for an additional 60 months or to initiate the final disposition, liquidation and distribution of all of the Partnership’s properties and assets. On February 14, 2014, the proposal to continue the Partnership was approved with a majority of Units voted in favor of the continuation proposal. As a result, the Managing General Partner will continue the operations of the Partnership for an additional 60 months at which time it will again ask the Limited Partners to vote on the same two proposals.
|
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] |
(2) Summary of Significant Accounting Policies –
Financial Statement Presentation
The accounts of the Partnership are maintained on the accrual basis of accounting for both federal income tax purposes and financial reporting purposes.
Accounting Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with United States Generally Accepted Accounting Principles (US GAAP). Those estimates and assumptions may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Significant items, subject to such estimates and assumptions, include the carrying value of real estate held for investment, real estate held for sale and related intangible assets.
The Partnership regularly assesses whether market events and conditions indicate that it is reasonably possible to recover the carrying amounts of its investments in real estate from future operations and sales. A change in those market events and conditions could have a material effect on the carrying amount of its real estate.
Cash Concentrations of Credit Risk
The Partnership's cash is deposited in one financial institution and at times during the year it may exceed FDIC insurance limits.
Receivables
Credit terms are extended to tenants in the normal course of business. The Partnership performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral.
Receivables are recorded at their estimated net realizable value. The Partnership follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Partnership is of the belief that such accounts, if any, will be collectible in all material respects and thus an allowance is not necessary. Accounts are considered past due if payment is not made on a timely basis in accordance with the Partnership’s credit terms. Receivables considered uncollectible are written off.
Income Taxes
The income or loss of the Partnership for federal income tax reporting purposes is includable in the income tax returns of the partners. In general, no recognition has been given to income taxes in the accompanying financial statements.
The tax return and the amount of distributable Partnership income or loss are subject to examination by federal and state taxing authorities. If such an examination results in changes to distributable Partnership income or loss, the taxable income of the partners would be adjusted accordingly. Primarily due to its tax status as a partnership, the Partnership has no significant tax uncertainties that require recognition or disclosure. The Partnership is no longer subject to U.S. federal income tax examinations for tax years before 2012, and with few exceptions, is no longer subject to state tax examinations for tax years before 2012.
Revenue Recognition
The Partnership's real estate is leased under net leases, classified as operating leases. The leases provide for base annual rental payments payable in monthly installments. The Partnership recognizes rental income according to the terms of the individual leases. For leases that contain stated rental increases, the increases are recognized in the year in which they are effective. Contingent rental payments are recognized when the contingencies on which the payments are based are satisfied and the rental payments become due under the terms of the leases.
Real Estate
Upon acquisition of real properties, the Partnership records them in the financial statements at cost. The purchase price is allocated to tangible assets, consisting of land and building, and to identified intangible assets and liabilities, which may include the value of above market and below market leases and the value of in-place leases. The allocation of the purchase price is based upon the fair value of each component of the property. Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management’s assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset.
The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods. The above market and below market lease values will be capitalized as intangible lease assets or liabilities. Above market lease values will be amortized as an adjustment of rental income over the remaining terms of the respective leases. Below market leases will be amortized as an adjustment of rental income over the remaining term of the respective leases, including any bargain renewal periods. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market and below market in-place lease values relating to that lease would be recorded as an adjustment to rental income.
The fair values of in-place leases will include estimated direct costs associated with obtaining a new tenant, and opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease. Direct costs associated with obtaining a new tenant may include commissions, tenant improvements, and other direct costs and are estimated, in part, by management’s consideration of current market costs to execute a similar lease. These direct costs will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases. The value of opportunity costs will be calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. These intangibles will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed.
The Partnership tests real estate for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable. For properties the Partnership will hold and operate, it compares the carrying amount of the property to the estimated probability-weighted future undiscounted cash flows expected to result from the property and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the property, the Partnership recognizes an impairment loss by the amount by which the carrying amount of the property exceeds the fair value of the property. For properties held for sale, the Partnership determines whether impairment has occurred by comparing the property’s estimated fair value less cost to sell to its current carrying value. If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value.
For financial reporting purposes, the buildings owned by the Partnership are depreciated using the straight-line method over an estimated useful life of 25 years. Intangible lease assets are amortized using the straight-line method for financial reporting purposes based on the remaining life of the lease.
The disposition of a property or classification of a property as Real Estate Held for Sale by the Partnership does not represent a strategic shift that will have a major effect on the Partnership’s operations and financial results. Therefore, the results from operating and selling the property are included in continuing operations. However, if a property was classified as Real Estate Held for Sale at December 31, 2013, the property was considered discontinued operations under prior accounting guidance.
The Partnership accounts for properties owned as tenants-in-common with affiliated entities and/or unrelated third parties using the proportionate consolidation method. Each tenant-in-common owns a separate, undivided interest in the properties. Any tenant-in-common that holds more than a 50% interest does not control decisions over the other tenant-in-common interests. The financial statements reflect only this Partnership's percentage share of the properties' land, building, liabilities, revenues and expenses.
The Partnership's properties are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which the properties are located. These laws could require the Partnership to investigate and remediate the effects of the release or disposal of hazardous materials at these locations if found. For each property, an environmental assessment is completed prior to acquisition. In addition, the lease agreements typically strictly prohibit the production, handling, or storage of hazardous materials (except where incidental to the tenant’s business such as use of cleaning supplies) in violation of applicable law to restrict environmental and other damage. Environmental liabilities are recorded when it is determined the liability is probable and the costs can reasonably be estimated. There were no environmental issues noted or liabilities recorded at December 31, 2015 and 2014.
Fair Value Measurements
As of December 31, 2015 and 2014, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.
Income Per Unit
Income per Limited Partnership Unit is calculated based on the weighted average number of Limited Partnership Units outstanding during each period presented. Diluted income per Limited Partnership Unit considers the effect of any potentially dilutive Unit equivalents, of which the Partnership had none for each of the years ended December 31, 2015 and 2014.
Reportable Segments
The Partnership invests in single tenant commercial properties throughout the United States that are net leased to tenants in various industries. Because these net leased properties have similar economic characteristics, the Partnership evaluates operating performance on an overall portfolio basis. Therefore, the Partnership’s properties are classified as one reportable segment.
Recently Issued Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets, initially measured at the present value of the lease payments. The accounting guidance for lessors is largely unchanged. The ASU is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. It is to be adopted using a modified retrospective approach. Management is currently evaluating the impact the adoption of this guidance will have on the Partnership’s financial statements.
NOTES TO FINANCIAL STATEMENTS
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Related Party Transactions |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions Disclosure [Text Block] |
(3) Related Party Transactions –
The Partnership owns the percentage interest shown below in the following properties as tenants-in-common with the affiliated entities listed: Jared Jewelry store in Hanover, Maryland (50% – AEI Net Lease Income & Growth Fund XX Limited Partnership); Jared Jewelry store in Auburn Hills, Michigan (40% – AEI Income & Growth Fund 25 LLC); Best Buy store (54% – AEI Income & Growth Fund 23 LLC and AEI Income & Growth Fund 26 LLC); Fresenius Medical Center (55% – AEI Income & Growth Fund 24 LLC); Tractor Supply Company store in Canton, Georgia (50% – AEI Accredited Investor Fund V LP); and Gander Mountain store (30% – AEI Accredited Investor Fund V LP and AEI National Income Property Fund VIII LP).
During 2014, the Partnership sold its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia. The remaining interests in the property that were owned by three affiliated entities, AEI Income & Growth Fund 24 LLC, AEI Income & Growth Fund 25 LLC and AEI Private Net Lease Millennium Fund Limited Partnership, were also sold in 2014. During 2014, the Partnership sold its 63% interest in the Tractor Supply Company store in Rapid City, South Dakota. The remaining interest in the property that was owned by AEI Income & Growth Fund 25 LLC was also sold in 2014.
AEI received the following reimbursements for costs and expenses from the Partnership for the years ended December 31:
The payable to AEI Fund Management, Inc. represents the balance due for the services described in 3a, b, c and d. This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.
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Real Estate Investments |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Disclosure [Text Block] |
(4) Real Estate Investments –
The Partnership leases its properties to tenants under net leases, classified as operating leases. Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property. For some leases, the Partnership is responsible for repairs to the structural components of the building, the roof, and the parking lot. At the time the properties were acquired, the remaining primary lease terms varied from 10 to 18 years, except for the Tractor Supply Company store in Canton, Georgia, which had a remaining primary term of 7.3 years. The leases provide the tenants with two to four five-year renewal options subject to the same terms and conditions as the primary term.
The Partnership's properties are commercial, single-tenant buildings. The KinderCare daycare center in Andover, Minnesota was constructed in 1998 and acquired in 2002. The Jared Jewelry store in Hanover, Maryland was constructed in 2001 and acquired in 2004. The Jared Jewelry store in Auburn Hills, Michigan was constructed in 1999 and acquired in 2005. The Best Buy store was constructed in 1990, renovated in 1997 and acquired in 2008. The Fresenius Medical Center was constructed and acquired in 2008. The Tractor Supply Company store in Canton, Georgia was constructed in 2006 and acquired in 2014. The Gander Mountain store was constructed in 1994 and renovated and acquired in 2014. There have been no costs capitalized as improvements subsequent to the acquisitions.
The cost of the properties not held for sale and related accumulated depreciation at December 31, 2015 are as follows:
For the years ended December 31, 2015 and 2014, the Partnership recognized depreciation expense from continuing operations of $405,079 and $392,540, respectively.
On May 29, 2014, the Partnership purchased a 50% interest in a Tractor Supply Company store in Canton, Georgia for $2,212,500. The Partnership allocated $185,920 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles and allocated $80,603 to Acquired Below-Market Lease Intangibles. The Partnership incurred $27,970 of acquisition expenses related to the purchase that were expensed. The property is leased to Tractor Supply Company under a Lease Agreement with a remaining primary term of 7.3 years (as of the date of purchase) and annual rent of $164,355 for the interest purchased.
On July 3, 2014, the Partnership purchased a 30% interest in a Gander Mountain store in Champaign, Illinois for $2,122,500. The Partnership allocated $336,209 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The Partnership incurred $34,052 of acquisition expenses related to the purchase that were expensed. The property is leased to Gander Mountain Company under a Lease Agreement with a remaining primary term of 14.9 years and annual rent of $167,772 for the interest purchased.
On February 3, 2016, the Partnership purchased a Dollar Tree store in Cincinnati, Ohio for $1,809,915. The property is leased to Dollar Tree Stores, Inc. under a Lease Agreement with a remaining primary term of 10 years and annual rent of $122,169.
The following schedule presents the cost and related accumulated amortization of acquired lease intangibles not held for sale at December 31:
For the years ended December 31, 2015 and 2014, the value of in-place lease intangibles amortized to expense was $48,019 and $24,233 and the increase to rental income for below-market leases was $10,991 and $6,412, respectively. For lease intangibles not held for sale at December 31, 2015, the estimated amortization expense is $48,019 and the estimated increase to rental income is $10,991 for each of the next five succeeding years.
For properties owned as of December 31, 2015, the minimum future rent payments required by the leases are as follows:
There were no contingent rents recognized in 2015 and 2014.
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Equity Method Investments |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Policy Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments, Policy [Policy Text Block] |
(5) Equity Method Investments –
In the fourth quarter of 2013, the Partnership decided to sell its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia. At December 31, 2013, the property was classified as Real Estate Held for Sale with a carrying value of $1,508,930. The remaining interests in the property were owned by three affiliated entities, AEI Income & Growth Fund 24 LLC, AEI Income & Growth Fund 25 LLC and AEI Private Net Lease Millennium Fund Limited Partnership. On March 7, 2014, to facilitate the sale of the property, the Partnership and affiliated entities contributed their respective interests in the property via a limited liability company to CM Lithia Springs DST (“CMLS”), a Delaware statutory trust (“DST”), in exchange for Class B ownership interests in CMLS. In addition, a small amount of cash was contributed for working capital. A DST is a recognized mechanism for selling property to investors who are looking for replacement real estate to complete like-kind exchanges under Section 1031 of the Internal Revenue Code. As investors purchased Class A ownership interests in CMLS, the proceeds received were used to redeem, on a one-for-one basis, the Class B ownership interests of the Partnership and affiliated entities. From March 13, 2014 to July 25, 2014, CMLS sold 100% of its Class A ownership interests to investors and redeemed 100% of the Class B ownership interests from the Partnership and affiliated entities. As of December 31, 2014, the Partnership had no ongoing interest in CMLS.
On August 29, 2014, to facilitate the sale of its 63% interest in the Tractor Supply Company store in Rapid City, South Dakota, the Partnership contributed the property via a limited liability company to AEI Net Lease Portfolio DST (“ANLP”) in exchange for 16.95% of the Class B ownership interests in ANLP. The remaining interest in the property, owned by an affiliated entity, along with two other properties owned by two other affiliated entities, were also contributed to ANLP in exchange for 83.05% of the Class B ownership interests in ANLP. In addition, cash was contributed for working capital. From September 5, 2014 to October 30, 2014, ANLP sold 100% of its Class A ownership interests to investors and redeemed 100% of the Class B ownership interests from the Partnership and affiliated entities. As of December 31, 2014, the Partnership had no ongoing interest in ANLP.
The investments in CMLS and ANLP were recorded using the equity method of accounting in the accompanying financial statements. Under the equity method, the investments are stated at cost and adjusted for the Partnership’s share of net income or losses and reduced by proceeds received from the sale of the Class B ownership interests of the DSTs as well as distributions from net rental income. As of December 31, 2014, the investment balances consisted of the following:
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Major Tenants |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Disclosure of Major Customers |
(6) Major Tenants –
The following schedule presents rental income from individual tenants, or affiliated groups of tenants, who each contributed more than ten percent of the Partnership's total rental income for the years ended December 31:
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
(7) Discontinued Operations –
In the fourth quarter of 2013, the Partnership decided to sell its 20% interest in the CarMax Auto Superstore in Lithia Springs, Georgia. At December 31, 2013, the property was classified as Real Estate Held for Sale with a carrying value of $1,508,930. On March 7, 2014, to facilitate the sale of the property, the Partnership contributed its interest in the property via a limited liability company to CM Lithia Springs DST as described in Note 5.
The financial results for this property are reflected as Discontinued Operations in the accompanying financial statements. The following are the results of discontinued operations for the years ended December 31:
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Partners' Capital |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Partners' Capital Notes [Abstract] | |
Partners' Capital Notes Disclosure [Text Block] |
(8) Partners’ Capital –
For the years ended December 31, 2015 and 2014, the Partnership declared distributions of $1,086,963 and $1,167,687, respectively. The Limited Partners received distributions of $1,076,093 and $1,156,010 and the General Partners received distributions of $10,870 and $11,677 for the years, respectively. The Limited Partners' distributions represented $51.64 and $51.50 per Limited Partnership Unit outstanding using 20,839 and 22,447 weighted average Units in 2015 and 2014, respectively. The distributions represented $23.35 and $51.50 per Unit of Net Income and $28.29 and $0.00 per Unit of contributed capital in 2015 and 2014, respectively.
As part of the distributions discussed above, the Partnership distributed net sale proceeds of $153,357 and $262,444 in 2015 and 2014, respectively. The Limited Partners received distributions of $151,823 and $259,820 and the General Partners received distributions of $1,534 and $2,624 for the years, respectively. The Limited Partners’ distributions represented $7.22 and $11.57 per Unit for the years, respectively.
The Partnership may repurchase Units from Limited Partners who have tendered their Units to the Partnership. Such Units may be acquired at a discount. The Partnership will not be obligated to purchase in any year any number of Units that, when aggregated with all other transfers of Units that have occurred since the beginning of the same calendar year (excluding Permitted Transfers as defined in the Partnership Agreement), would exceed 5% of the total number of Units outstanding on January 1 of such year. In no event shall the Partnership be obligated to purchase Units if, in the sole discretion of the Managing General Partner, such purchase would impair the capital or operation of the Partnership.
During 2015, the Partnership repurchased a total of 1,723.83 Units for $1,400,941 from 44 Limited Partners in accordance with the Partnership Agreement. On October 1, 2014, the Partnership repurchased a total of 824.40 Units for $657,537 from 41 Limited Partners. The Partnership acquired these Units using net sale proceeds. The repurchases increase the remaining Limited Partners' ownership interest in the Partnership. As a result of these repurchases and pursuant to the Partnership Agreement, the General Partners received distributions of $14,151 and $6,641 in 2015 and 2014, respectively.
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Income Taxes |
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Income Tax Disclosure [Text Block] |
(9) Income Taxes –
The following is a reconciliation of net income for financial reporting purposes to income reported for federal income tax purposes for the years ended December 31:
The following is a reconciliation of Partners' capital for financial reporting purposes to Partners' capital reported for federal income tax purposes for the years ended December 31:
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Accounting Policies, by Policy (Policies) |
12 Months Ended |
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Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Distribution Policy, Members or Limited Partners, Description | During operations, any Net Cash Flow, as defined, which the General Partners determine to distribute will be distributed 90% to the Limited Partners and 10% to the General Partners; provided, however, that such distributions to the General Partners will be subordinated to the Limited Partners first receiving an annual, noncumulative distribution of Net Cash Flow equal to 10% of their Adjusted Capital Contribution, as defined, and, provided further, that in no event will the General Partners receive less than 1% of such Net Cash Flow per annum. Distributions to Limited Partners will be made pro rata by Units.Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the General Partners determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Partners and 1% to the General Partners until the Limited Partners receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 10% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Partners and 10% to the General Partners. Distributions to the Limited Partners will be made pro rata by Units. |
Key Provisions of Operating or Partnership Agreement, Description | For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated first in the same ratio in which, and to the extent, Net Cash Flow is distributed to the Partners for such year. Any additional profits will be allocated in the same ratio as the last dollar of Net Cash Flow is distributed. Net losses from operations will be allocated 99% to the Limited Partners and 1% to the General Partners.For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Partnership Agreement as follows: (i) first, to those partners with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Partners and 1% to the General Partners until the aggregate balance in the Limited Partners' capital accounts equals the sum of the Limited Partners' Adjusted Capital Contributions plus an amount equal to 10% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Partners and 10% to the General Partners. Losses will be allocated 98% to the Limited Partners and 2% to the General Partners.The General Partners are not required to currently fund a deficit capital balance. Upon liquidation of the Partnership or withdrawal by a General Partner, the General Partners will contribute to the Partnership an amount equal to the lesser of the deficit balances in their capital accounts or 1% of total Limited Partners' and General Partners' capital contributions.In January 2014, the Managing General Partner mailed a Consent Statement (Proxy) seeking the consent of the Limited Partners to continue the Partnership for an additional 60 months or to initiate the final disposition, liquidation and distribution of all of the Partnership’s properties and assets. On February 14, 2014, the proposal to continue the Partnership was approved with a majority of Units voted in favor of the continuation proposal. As a result, the Managing General Partner will continue the operations of the Partnership for an additional 60 months at which time it will again ask the Limited Partners to vote on the same two proposals |
Basis of Accounting, Policy [Policy Text Block] | Financial Statement Presentation
The accounts of the Partnership are maintained on the accrual basis of accounting for both federal income tax purposes and financial reporting purposes.
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Use of Estimates, Policy [Policy Text Block] | Accounting Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with United States Generally Accepted Accounting Principles (US GAAP). Those estimates and assumptions may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Significant items, subject to such estimates and assumptions, include the carrying value of real estate held for investment, real estate held for sale and related intangible assets.
The Partnership regularly assesses whether market events and conditions indicate that it is reasonably possible to recover the carrying amounts of its investments in real estate from future operations and sales. A change in those market events and conditions could have a material effect on the carrying amount of its real estate.
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Concentration Risk, Credit Risk, Policy [Policy Text Block] | Cash Concentrations of Credit Risk
The Partnership's cash is deposited in one financial institution and at times during the year it may exceed FDIC insurance limits.
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Receivables, Policy [Policy Text Block] | Receivables
Credit terms are extended to tenants in the normal course of business. The Partnership performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral.
Receivables are recorded at their estimated net realizable value. The Partnership follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Partnership is of the belief that such accounts, if any, will be collectible in all material respects and thus an allowance is not necessary. Accounts are considered past due if payment is not made on a timely basis in accordance with the Partnership’s credit terms. Receivables considered uncollectible are written off.
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Income Tax, Policy [Policy Text Block] | Income Taxes
The income or loss of the Partnership for federal income tax reporting purposes is includable in the income tax returns of the partners. In general, no recognition has been given to income taxes in the accompanying financial statements.
The tax return and the amount of distributable Partnership income or loss are subject to examination by federal and state taxing authorities. If such an examination results in changes to distributable Partnership income or loss, the taxable income of the partners would be adjusted accordingly. Primarily due to its tax status as a partnership, the Partnership has no significant tax uncertainties that require recognition or disclosure. The Partnership is no longer subject to U.S. federal income tax examinations for tax years before 2012, and with few exceptions, is no longer subject to state tax examinations for tax years before 2012
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Revenue Recognition Leases [Policy Text Block] | Revenue Recognition
The Partnership's real estate is leased under net leases, classified as operating leases. The leases provide for base annual rental payments payable in monthly installments. The Partnership recognizes rental income according to the terms of the individual leases. For leases that contain stated rental increases, the increases are recognized in the year in which they are effective. Contingent rental payments are recognized when the contingencies on which the payments are based are satisfied and the rental payments become due under the terms of the leases.
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Property, Plant and Equipment, Policy [Policy Text Block] | Real Estate
Upon acquisition of real properties, the Partnership records them in the financial statements at cost. The purchase price is allocated to tangible assets, consisting of land and building, and to identified intangible assets and liabilities, which may include the value of above market and below market leases and the value of in-place leases. The allocation of the purchase price is based upon the fair value of each component of the property. Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management’s assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset.
The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods. The above market and below market lease values will be capitalized as intangible lease assets or liabilities. Above market lease values will be amortized as an adjustment of rental income over the remaining terms of the respective leases. Below market leases will be amortized as an adjustment of rental income over the remaining term of the respective leases, including any bargain renewal periods. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market and below market in-place lease values relating to that lease would be recorded as an adjustment to rental income.
The fair values of in-place leases will include estimated direct costs associated with obtaining a new tenant, and opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease. Direct costs associated with obtaining a new tenant may include commissions, tenant improvements, and other direct costs and are estimated, in part, by management’s consideration of current market costs to execute a similar lease. These direct costs will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases. The value of opportunity costs will be calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. These intangibles will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed.
The Partnership tests real estate for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable. For properties the Partnership will hold and operate, it compares the carrying amount of the property to the estimated probability-weighted future undiscounted cash flows expected to result from the property and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the property, the Partnership recognizes an impairment loss by the amount by which the carrying amount of the property exceeds the fair value of the property. For properties held for sale, the Partnership determines whether impairment has occurred by comparing the property’s estimated fair value less cost to sell to its current carrying value. If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value.
For financial reporting purposes, the buildings owned by the Partnership are depreciated using the straight-line method over an estimated useful life of 25 years. Intangible lease assets are amortized using the straight-line method for financial reporting purposes based on the remaining life of the lease.
The disposition of a property or classification of a property as Real Estate Held for Sale by the Partnership does not represent a strategic shift that will have a major effect on the Partnership’s operations and financial results. Therefore, the results from operating and selling the property are included in continuing operations. However, if a property was classified as Real Estate Held for Sale at December 31, 2013, the property was considered discontinued operations under prior accounting guidance.
The Partnership accounts for properties owned as tenants-in-common with affiliated entities and/or unrelated third parties using the proportionate consolidation method. Each tenant-in-common owns a separate, undivided interest in the properties. Any tenant-in-common that holds more than a 50% interest does not control decisions over the other tenant-in-common interests. The financial statements reflect only this Partnership's percentage share of the properties' land, building, liabilities, revenues and expenses.
The Partnership's properties are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which the properties are located. These laws could require the Partnership to investigate and remediate the effects of the release or disposal of hazardous materials at these locations if found. For each property, an environmental assessment is completed prior to acquisition. In addition, the lease agreements typically strictly prohibit the production, handling, or storage of hazardous materials (except where incidental to the tenant’s business such as use of cleaning supplies) in violation of applicable law to restrict environmental and other damage. Environmental liabilities are recorded when it is determined the liability is probable and the costs can reasonably be estimated. There were no environmental issues noted or liabilities recorded at December 31, 2015 and 2014.
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value Measurements
As of December 31, 2015 and 2014, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.
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Earnings Per Share, Policy [Policy Text Block] | Income Per Unit
Income per Limited Partnership Unit is calculated based on the weighted average number of Limited Partnership Units outstanding during each period presented. Diluted income per Limited Partnership Unit considers the effect of any potentially dilutive Unit equivalents, of which the Partnership had none for each of the years ended December 31, 2015 and 2014
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Segment Reporting, Policy [Policy Text Block] | Reportable Segments
The Partnership invests in single tenant commercial properties throughout the United States that are net leased to tenants in various industries. Because these net leased properties have similar economic characteristics, the Partnership evaluates operating performance on an overall portfolio basis. Therefore, the Partnership’s properties are classified as one reportable segment
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New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Recently Issued Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets, initially measured at the present value of the lease payments. The accounting guidance for lessors is largely unchanged. The ASU is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. It is to be adopted using a modified retrospective approach. Management is currently evaluating the impact the adoption of this guidance will have on the Partnership’s financial statements
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Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | Related Party Transactions
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Real Estate Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | Properties not held for sale
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Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | Acquired lease intangibles not held for sale
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Minimum future rent
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Equity Method Investments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Policy Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments [Table Text Block] | Equity Method Investments
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Major Tenants (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Major Tenants
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Discontinued Operations (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] | Discontinued Operations
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Cash Flow, Supplemental Disclosures [Text Block] | Cash Flows from Discontinued Operations
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of GAAP To Federal Taxable Income | reconciliation of net income for financial reporting
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Schedule Of GAAP To Federal Tax Basis | reconciliation of Partners' capital for financial reporting
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Organization (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Jan. 31, 1997 |
Apr. 14, 1995 |
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Limited Partner [Member] | |||||
Organization (Details) [Line Items] | |||||
Capital Units, Value | $ 1,000 | ||||
Limited Partners' Capital Account, Units Outstanding (in Shares) | 20,105 | 21,829 | 22,653.11 | 24,000 | 1,500 |
Limited Partners' Contributed Capital | $ 24,000,000 | $ (1,500,000) | |||
General Partner [Member] | |||||
Organization (Details) [Line Items] | |||||
General Partners' Contributed Capital | $ 1,000 |
Related Party Transactions (Details) - Related Party Transactions (Parentheticals) |
12 Months Ended |
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Dec. 31, 2014
USD ($)
| |
Related Party Transactions [Abstract] | |
Expenses Related to Discontinued Operations | $ 3,145 |
Real Estate Investments (Details) - Acquired Intangibles (Parentheticals) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Leases, Acquired-in-Place [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average life | 128 months | 140 months |
Off Market Unfavorable Lease | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average life | 69 months | 81 months |
Real Estate Investments (Details) - Future Minimum Rent Payments |
Dec. 31, 2015
USD ($)
|
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Future Minimum Rent Payments [Abstract] | |
2016 | $ 1,176,574 |
2017 | 1,122,637 |
2018 | 738,456 |
2019 | 671,739 |
2020 | 550,117 |
Thereafter | 1,848,815 |
$ 6,108,338 |
Equity Method Investments (Details) |
Aug. 29, 2014 |
Mar. 07, 2014 |
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AEI Net Lease Portfolio DST | ||
Equity Method Investments (Details) [Line Items] | ||
Equity Method Investment, Ownership Percentage | 16.95% | |
CM Lithia Springs DST | CarMax Auto Superstore Lithia Springs GA | ||
Equity Method Investments (Details) [Line Items] | ||
Equity Method Investment, Ownership Percentage | 20.00% | |
Disposal Date | Mar. 07, 2014 | |
AEI Net Lease Portfolio DST | Tractor Supply Rapid City SD | ||
Equity Method Investments (Details) [Line Items] | ||
Disposal Date | Aug. 29, 2014 |
Major Tenants (Details) - Major Tenants - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Revenue, Major Customer [Line Items] | ||
Major Tenants | $ 1,066,820 | $ 909,393 |
Aggregate rental income of major tenants as a percentage of total rental income | 90.00% | 80.00% |
Sterling Jewelers Inc | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | $ 309,455 | $ 298,178 |
Best Buy Stores LP | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | 268,800 | 268,800 |
Tractor Supply Company | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | 175,346 | $ 196,968 |
Gander Mountain Company | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | 167,772 | |
KinderCare Learning Centers LLC | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | $ 145,447 | $ 145,447 |
Discontinued Operations (Details) |
Dec. 31, 2013
USD ($)
|
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CarMax Auto Superstore Lithia Springs GA | |
Discontinued Operations (Details) [Line Items] | |
Real Estate Held-for-sale | $ 1,508,930 |
Discontinued Operations (Details) - Discontinued Operations - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Discontinued Operations [Abstract] | ||
Rental Income | $ 0 | $ 26,740 |
Property Management Expenses | 0 | (3,145) |
Income from Equity Method Investment Held for Sale | 0 | 623,782 |
Income from Discontinued Operations | $ 0 | $ 647,377 |
Discontinued Operations (Details) - Cash Flows from Discontinued Operations - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Cash Flows from Discontinued Operations: | ||
Operating Activities | $ 0 | $ 23,595 |
Investing Activities | $ 0 | $ 2,132,712 |
Income Taxes (Details) - Federal Taxable Income Reconciliation - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Federal Taxable Income Reconciliation [Abstract] | ||
Net Income for Financial Reporting Purposes | $ 491,499 | $ 1,533,587 |
Depreciation for Tax Purposes Under Depreciation and Amortization for Financial Reporting Purposes | 149,060 | 129,852 |
Acquisition Costs Expensed for Financial Reporting Purposes, Capitalized for Tax Purposes | 0 | 62,022 |
Gain on Sale of Real Estate for Tax Purposes Under Gain for Financial Reporting Purposes | 0 | (195,505) |
Taxable Income to Partners | $ 640,559 | $ 1,529,956 |
Income Taxes (Details) - Federal Tax Partners' Capital - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Federal Tax Partners' Capital [Abstract] | ||
Partners' Capital for Financial Reporting Purposes | $ 13,580,725 | $ 15,591,281 |
Adjusted Tax Basis of Investments in Real Estate Over Net Investments in Real Estate for Financial Reporting Purposes | 1,035,417 | 886,357 |
Income Accrued for Tax Purposes Over Income for Financial Reporting Purposes | 12,121 | 12,121 |
Syndication Costs Treated as Reduction of Capital For Financial Reporting Purposes | 3,208,043 | 3,208,043 |
Partners' Capital for Tax Reporting Purposes | $ 17,836,306 | $ 19,697,802 |
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