10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  June 30, 2020

Commission File Number:  000-29274

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

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)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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    ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes    ☐ No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer	☐ Accelerated filer
☐ Non-accelerated filer	☒ Smaller reporting company
☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes    ☒ No

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

INDEX

				Page
Part I – Financial Information
	Item 1.	Financial Statements (unaudited):
		Balance Sheets as of June 30, 2020 and December 31, 2019		3
		Statements for the Periods ended June 30, 2020 and 2019:
			Income	4
			Cash Flows	5
			Changes in Partners’ Capital	6
		Notes to Financial Statements		7 - 10
	Item 2.	Management's Discussion and Analysis of Financial
			Condition and Results of Operations	11 - 15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16
	Item 4.	Controls and Procedures		16
Part II – Other Information
	Item 1.	Legal Proceedings		16
	Item 1A.	Risk Factors		16
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
	Item 3.	Defaults Upon Senior Securities		17
	Item 4.	Mine Safety Disclosures		17
	Item 5.	Other Information		17
	Item 6.	Exhibits		17
Signatures				18

2

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

BALANCE SHEETS

ASSETS

		June 30,			December 31,
		2020			2019
		(unaudited)
Current Assets:
Cash	$	3,028,531		$	3,197,449
Rent Receivable		21,493			0
Total Current Assets		3,050,024			3,197,449
Real Estate Investments:
Land		2,959,461			2,959,461
Buildings		8,932,356			8,932,356
Acquired Intangible Lease Assets		621,258			621,258
Property Acquisition Costs		6,241			0
Real Estate Held for Investment, at cost		12,519,316			12,513,075
Accumulated Depreciation and Amortization		(4,448,772	)		(4,254,350	)
Real Estate Held for Investment, Net		8,070,544			8,258,725
Long-Term Rent Receivable		30,091			0
Total Assets	$	11,150,659		$	11,456,174

LIABILITIES AND PARTNERS' CAPITAL

Current Liabilities:
Payable to AEI Fund Management, Inc.	$	75,676	$	94,400
Distributions Payable		104,546		198,178
Total Current Liabilities		180,222		292,578
Long-term Liabilities:
Acquired Below-Market Lease Intangibles, Net		45,269		49,323
Partners’ Capital :
General Partners		6,102		7,992
Limited Partners – 24,000 Units authorized;    18,791 Units issued and outstanding    as of 6/30/2020 and 12/31/2019		10,919,066		11,106,281
Total Partners' Capital		10,925,168		11,114,273
Total Liabilities and Partners' Capital	$	11,150,659	$	11,456,174

The accompanying Notes to Financial Statements are an integral part of these statements.

3

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

STATEMENTS OF INCOME

(unaudited)

		Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019
Rental Income	$	208,699	$	259,213	$	417,398	$	518,425
Expenses:
Partnership Administration – Affiliates		24,174		36,209		67,451		73,888
Partnership Administration and Property    Management – Unrelated Parties		27,130		35,779		51,888		61,183
Depreciation and Amortization		97,211		117,621		194,422		235,242
Total Expenses		148,515		189,609		313,761		370,313
Operating Income		60,184		69,604		103,637		148,112
Other Income:
Interest Income		747		3,237		6,654		6,584
Net Income	$	60,931	$	72,841	$	110,291	$	154,696
Net Income Allocated:
General Partners	$	609	$	728	$	1,103	$	1,547
Limited Partners		60,322		72,113		109,188		153,149
Total	$	60,931	$	72,841	$	110,291	$	154,696
Net Income per Limited Partnership Unit	$	3.21	$	3.74	$	5.81	$	7.94
Weighted Average Units Outstanding –       Basic and Diluted		18,791		19,264		18,791		19,296

The accompanying Notes to Financial Statements are an integral part of these statements.

4

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

STATEMENTS OF CASH FLOWS

(unaudited)

		Six Months Ended June 30
		2020			2019
Cash Flows from Operating Activities:
Net Income	$	110,291		$	154,696
Adjustments to Reconcile Net Income To Net Cash Provided by Operating Activities:
Depreciation and Amortization		190,368			225,692
(Increase) Decrease in Rent Receivable		(51,584	)		2,199
Increase (Decrease) in Payable to    AEI Fund Management, Inc.		(18,724	)		(27,770	)
Total Adjustments		120,060			200,121
Net Cash Provided By (Used For)    Operating Activities		230,351			354,817
Cash Flows from Investing Activities:
Investments in Real Estate		(6,241	)		0
Cash Flows from Financing Activities:
Distributions Paid to Partners		(393,028	)		(396,372	)
Repurchase of Partnership Units		0			(48,537	)
Net Cash Provided By (Used For)    Financing Activities		(393,028	)		(444,909	)
Net Increase (Decrease) in Cash		(168,918	)		(90,092	)
Cash, beginning of period		3,197,449			993,307
Cash, end of period	$	3,028,531		$	903,215

The accompanying Notes to Financial Statements are an integral part of these statements.

5

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

(unaudited)

		General Partners			Limited Partners			Total		Limited Partnership Units Outstanding
Balance, December 31, 2018	$	2,998		$	11,167,454		$	11,170,452		19,328.64
Distributions Declared		(1,982	)		(196,204	)		(198,186	)
Net Income		819			81,036			81,855
Balance, March 31, 2019		1,835			11,052,286			11,054,121		19,328.64
Distributions Declared		(1,982	)		(196,196	)		(198,178	)
Repurchase of Partnership Units		(486	)		(48,051	)		(48,537	)	(64.66	)
Net Income		728			72,113			72,841
Balance, June 30, 2019	$	95		$	10,880,152		$	10,880,247		19,263.98
Balance, December 31, 2019	$	7,992		$	11,106,281		$	11,114,273		18,791.14
Distributions Declared		(1,948	)		(192,902	)		(194,850	)
Net Income		494			48,866			49,360
Balance, March 31, 2020		6,538			10,962,245			10,968,783		18,791.14
Distributions Declared		(1,045	)		(103,501	)		(104,546	)
Net Income		609			60,322			60,931
Balance, June 30, 2020	$	6,102		$	10,919,066		$	10,925,168		18,791.14

The accompanying Notes to Financial Statements are an integral part of these statements.

6

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2020

(unaudited)

(1)  The condensed statements included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of operations for the interim period, on a basis consistent with the annual audited statements. The adjustments made to these condensed statements consist only of normal recurring adjustments. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations, although the registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in the registrant’s latest annual report on Form 10K.

(2)  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 Chief Executive Officer 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 and his wife own a majority interest. 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.

7

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

(2)  Organization – (Continued)

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. In consideration of the adverse impact COVID-19 is having on the World and U.S. economy, the General Partner believes it is in the best interest of the Partnership to continue operations. The General Partner will re-evaluate the situation in 12 to 24 months and may again submit the option to liquidate to a vote by the Limited Partners at that time.

8

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

(3)  Recently Issued Accounting Pronouncements –

Management has reviewed recently issued, but not yet effective, accounting pronouncements and does not expect the implementation of these pronouncements to have a significant effect on the Partnership’s financial statements.

(4)  Real Estate Investments –

The Partnership owns a 30% interest in the Gander Mountain store in Champaign, Illinois. The remaining interests in the property are owned by affiliates of the Partnership. On March 10, 2017, Gander Mountain Company filed for Chapter 11 reorganization and announced it was closing the store, following a liquidation sale of its onsite assets. In June 2017, the tenant filed a motion with the bankruptcy court to reject the lease for this store effective June 30, 2017. At this time, the tenant returned possession of the property to the owners and the Partnership became responsible for its 30% share of real estate taxes and other costs associated with maintaining the property. The tenant paid rent through June 2017. The owners have listed the property for lease with a real estate broker in the Champaign area.

In March 2019, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Auburn Hills, Michigan to extend the lease term five years to end on December 31, 2024. As part of the agreement, the annual rent will decrease from $124,049 to $105,560 effective January 1, 2020.

(5)  Payable to AEI Fund Management, Inc. –

AEI Fund Management, Inc. performs the administrative and operating functions for the Partnership. The payable to AEI Fund Management represents the balance due for those services. This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.

(6)  Partners’ Capital –

For the six months ended June 30, 2020 and 2019, the Partnership declared distributions of $299,396 and $396,364, respectively. The Limited Partners received distributions of $296,403 and $392,400 and the General Partners received distributions of $2,993 and $3,964 for the periods, respectively. The Limited Partners' distributions represented $15.77 and $20.34 per Limited Partnership Unit outstanding using 18,791 and 19,296 weighted average Units in 2020 and 2019, respectively. The distributions represented $5.81 and $5.45 per Unit of Net Income and $9.96 and $14.89 per Unit of contributed capital in 2020 and 2019, respectively.

As part of the distributions discussed above, the Partnership distributed net sale proceeds of $64,513 in 2019. The Limited Partners received distributions of $63,868 and the General Partners received distributions of $645. The Limited Partners’ distributions represented $3.29 per Unit.

9

AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

(6)  Partners’ Capital – (Continued)

On April 1, 2020, the Partnership did not repurchase any Units from the Limited Partners. On April 1, 2019, the Partnership repurchased a total of 64.66 Units for $48,051 from five Limited Partners in accordance with the Partnership Agreement. The Partnership acquired these Units using Net Cash Flow from operations. 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 $486 in 2019.

(7)  Fair Value Measurements –

As of June 30, 2020 and December 31, 2019, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.

(8)  Coronavirus Outbreak –

During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19 which continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of the virus have continued to be identified in additional countries, many countries have reacted by instituting quarantines, placing restrictions on travel, and limiting hours of operations of non-essential offices and retail centers. Such actions are creating disruption in global supply chains, and adversely impacting a number of industries, such as retail, restaurants and transportation. The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the coronavirus. Nevertheless, the coronavirus presents material uncertainty and risk with respect to the Partnership’s performance and financial results, such as the potential negative impact to the tenants of its properties, the potential closure of certain of its properties, increased costs of operations, decrease in values of its properties, changes in law and/or regulation, and uncertainty regarding government and regulatory policy. Up to the date of this filing, the Partnership has entered into rent deferral agreements with two tenants of the six properties owned by the Partnership. In June 2020, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Auburn Hills, Michigan and Hanover, Maryland to defer base rent in April and May 2020. The tenant shall pay the deferred amounts in twelve equal monthly installments beginning on February 1, 2021. The Partnership has elected not to account for these deferrals of rent as a lease modification under COVID-19 guidance issued by the Financial Accounting Standards Board. Deferred rent of $51,584 was recognized as rental income during the three months ended June 30, 2020 and a corresponding rent receivable was recorded. The Partnership continues to work closely with tenants to determine the best course of action to meet the tenants short-term rental needs during these unprecedented times.

10

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS.

This section contains "forward-looking statements" which represent management's expectations or beliefs concerning future events, including statements regarding anticipated application of cash, expected returns from rental income, growth in revenue, the sufficiency of cash to meet operating expenses, rates of distribution, and other matters. These, and other forward-looking statements, should be evaluated in the context of a number of factors that may affect the Partnership's financial condition and results of operations, including the following:

—

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.

Application of Critical Accounting Policies

The Partnership’s financial statements have been prepared in accordance with US GAAP. Preparing the financial statements requires management to use judgment in the application of these accounting policies, including making estimates and assumptions. These judgments will affect the reported amounts of the Partnership’s assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and will affect the reported amounts of revenue and expenses during the reporting periods. It is possible that the carrying amount of the Partnership’s assets and liabilities, or the results of reported operations, will be affected if management’s estimates or assumptions prove inaccurate.

Management of the Partnership evaluates the following accounting estimates on an ongoing basis, and has discussed the development and selection of these estimates and the management discussion and analysis disclosures regarding them with the managing partner of the Partnership.

Allocation of Purchase Price of Acquired Properties

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.

11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

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 term of the respective leases. Below market lease values 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 determination of the fair values of the assets and liabilities acquired will require the use of significant assumptions with regard to the current market rental rates, rental growth rates, discount and capitalization rates, interest rates and other variables. If management’s estimates or assumptions prove inaccurate, the result would be an inaccurate allocation of purchase price, which could impact the amount of reported net income.

Carrying Value of Properties

Properties are carried at original cost, less accumulated depreciation and amortization. The Partnership tests long-lived assets 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, management determines whether impairment has occurred by comparing the property’s probability-weighted future undiscounted cash flows to its current carrying value. For properties held for sale, management 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. Changes in these assumptions or analysis may cause material changes in the carrying value of the properties.

12

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

Allocation of Expenses

AEI Fund Management, Inc. allocates expenses to each of the funds they manage primarily on the basis of the number of hours devoted by their employees to each fund’s affairs. They also allocate expenses at the end of each month that are not directly related to a fund’s operations based upon the number of investors in the fund and the fund’s capitalization relative to other funds they manage. The Partnership reimburses these expenses subject to detailed limitations contained in the Partnership Agreement.

Factors Which May Influence Results of Operations

The Partnership is not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues and investment property value. However, due to the recent outbreak of the coronavirus (COVID-19) in the U.S. and globally, our tenants and operating partners may be impacted. The impact of the coronavirus on our future results could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus, the success of actions taken to contain or treat the coronavirus, and reactions by consumers, companies, governmental entities and capital markets.

Results of Operations

For the six months ended June 30, 2020 and 2019, the Partnership recognized rental income of $417,398 and $518,425, respectively. In 2020, rental income decreased due to the sale of one property in 2019. Based on the scheduled rent for the properties owned as of July 31, 2020, the Partnership expects to recognize rental income of approximately $835,000 in 2020.

For the six months ended June 30, 2020 and 2019, the Partnership incurred Partnership administration expenses from affiliated parties of $67,451 and $73,888, respectively. These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communicating with the Limited Partners. During the same periods, the Partnership incurred Partnership administration and property management expenses from unrelated parties of $51,888 and $61,183, respectively. These expenses represent direct payments to third parties for legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs.

The Partnership owns a 30% interest in the Gander Mountain store in Champaign, Illinois. The remaining interests in the property are owned by affiliates of the Partnership. On March 10, 2017, Gander Mountain Company filed for Chapter 11 reorganization and announced it was closing the store, following a liquidation sale of its onsite assets. In June 2017, the tenant filed a motion with the bankruptcy court to reject the lease for this store effective June 30, 2017. At this time, the tenant returned possession of the property to the owners and the Partnership became responsible for its 30% share of real estate taxes and other costs associated with maintaining the property. The tenant paid rent through June 2017. The owners have listed the property for lease with a real estate broker in the Champaign area.

13

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

In March 2019, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Auburn Hills, Michigan to extend the lease term five years to end on December 31, 2024. As part of the agreement, the annual rent will decrease from $124,049 to $105,560 effective January 1, 2020.

For the six months ended June 30, 2020 and 2019, the Partnership recognized interest income of $6,654 and $6,584, respectively.

Management believes inflation has not significantly affected income from operations. Leases may contain rent increases, based on the increase in the Consumer Price Index over a specified period, which will result in an increase in rental income over the term of the leases. Inflation also may cause the real estate to appreciate in value. However, inflation and changing prices may have an adverse impact on the operating margins of the properties' tenants, which could impair their ability to pay rent and subsequently reduce the Net Cash Flow available for distributions.

Liquidity and Capital Resources

During the six months ended June 30, 2020, the Partnership's cash balances decreased $168,918 as a result of distributions paid to the Partners in excess of cash generated from operating activities and cash used for property acquisition costs. During the six months ended June 30, 2019, the Partnership's cash balances decreased $90,092 as a result of distributions paid to the Partners and cash used to repurchase Units in excess of cash generated from operating activities.

Net cash provided by operating activities decreased from $354,817 in 2019 to $230,351 in 2020 as a result of a decrease in total rental and interest income in 2020 and net timing differences in the collection of payments from the tenants and the payment of expenses, which were partially offset by a decrease in Partnership administration and property management expenses in 2020.

The major components of the Partnership's cash flow from investing activities are investments in real estate and proceeds from the sale of real estate. During the six months ended June 30, 2020, the Partnership expended $6,241 of property acquisition costs related to its property in Champaign, Illinois.

The Partnership's primary use of cash flow, other than investment in real estate, is distribution payments to Partners and cash used to repurchase Units. The Partnership declares its regular quarterly distributions before the end of each quarter and pays the distribution in the first week after the end of each quarter. The Partnership attempts to maintain a stable distribution rate from quarter to quarter. The Partnership may repurchase tendered Units on April 1st and October 1st of each year subject to limitations.

14

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

For the six months ended June 30, 2020 and 2019, the Partnership declared distributions of $299,396 and $396,364, respectively, which were distributed 99% to the Limited Partners and 1% to the General Partners. The Limited Partners received distributions of $296,403 and $392,400 and the General Partners received distributions of $2,993 and $3,964 for the periods, respectively. The Partnership has temporarily reduced distribution rates for the period ended June 30, 2020 due to rent deferral agreements entered with tenants and concerns regarding the ongoing COVID-19 situation.

As part of the distributions discussed above, the Partnership distributed net sale proceeds of $64,513 in 2019. The Limited Partners received distributions of $63,868 and the General Partners received distributions of $645. The Limited Partners’ distributions represented $3.29 per Unit.

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.

On April 1, 2020, the Partnership did not repurchase any Units from the Limited Partners. On April 1, 2019, the Partnership repurchased a total of 64.66 Units for $48,051 from five Limited Partners in accordance with the Partnership Agreement. The Partnership acquired these Units using Net Cash Flow from operations. 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 $486 in 2019.

The continuing rent payments from the properties, together with cash generated from property sales, should be adequate to fund continuing distributions and meet other Partnership obligations on both a short-term and long-term basis.

Off-Balance Sheet Arrangements

As of June 30, 2020 and December 31, 2019, the Partnership had no material off-balance sheet arrangements that had or are reasonably likely to have current or future effects on its financial condition, results of operations, liquidity or capital resources.

15

ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required for a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES.

(a)  Disclosure Controls and Procedures.

Under the supervision and with the participation of management, including its President and Chief Financial Officer, the Managing General Partner of the Partnership evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, the President and Chief Financial Officer of the Managing General Partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to management, including the President and Chief Financial Officer of the Managing General Partner, in a manner that allows timely decisions regarding required disclosure.

(b)  Changes in Internal Control Over Financial Reporting.

During the most recent period covered by this report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There are no material pending legal proceedings to which the Partnership is a party or of which the Partnership's property is subject.

ITEM 1A. RISK FACTORS.

Not required for a smaller reporting company.

16

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES & USE OF PROCEEDS.

(a) None.

(b) Not applicable.

(c) Pursuant to Section 7.7 of the Partnership Agreement, as amended, each Limited Partner has the right to present Units to the Partnership for purchase by submitting notice to the Managing General Partner during January or July of each year. The purchase price of the Units is equal to 95% of the net asset value per Unit, as of the first business day of January or July of each year, as determined by the Managing General Partner in accordance with the provisions of the Partnership Agreement. Units tendered to the Partnership during January and July may be repurchased on April 1^st and October 1^st, respectively, of each year subject to the following limitations. The Partnership will not be obligated to purchase in any year more than 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 the period covered by this report, the Partnership did not purchase any Units.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

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.

17

SIGNATURES

Pursuant to the requirements 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.

Dated:  August 13, 2020	AEI Income & Growth Fund XXI
	Limited Partnership
	By:	AEI Fund Management XXI, Inc.
	Its:	Managing General Partner
	By:	/s/ MARNI J NYGARD
		Marni J. Nygard
		President
		(Principal Executive Officer)
	By:	/s/ KEITH E PETERSEN
		Keith E. Petersen
		Chief Financial Officer
		(Principal Accounting Officer)

18

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Marni J. Nygard, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AEI Income & Growth Fund XXI Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 13, 2020	/s/ MARNI J NYGARD
	Marni J. Nygard, President
	AEI Fund Management XXI, Inc.
	Managing General Partner

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Keith E. Petersen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AEI Income & Growth Fund XXI Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 13, 2020	/s/ KEITH E PETERSEN
	Keith E. Petersen, Chief Financial Officer
	AEI Fund Management XXI, Inc.
	Managing General Partner

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AEI Income & Growth Fund XXI Limited Partnership (the “Partnership”) on Form 10-Q for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Marni J. Nygard, President of AEI Fund Management XXI, Inc., the Managing General Partner of the Partnership, and Keith E. Petersen, Chief Financial Officer of AEI Fund Management XXI, Inc., each certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ MARNI J NYGARD

Marni J. Nygard, President

AEI Fund Management XXI, Inc.

Managing General Partner

August 13, 2020

/s/ KEITH E PETERSEN

Keith E. Petersen, Chief Financial Officer

AEI Fund Management XXI, Inc.

Managing General Partner

August 13, 2020

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2020 shares
Document Information Line Items
Entity Registrant Name	AEI Income & Growth Fund XXI LTD Partnership
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	18,791
Amendment Flag	false
Entity Central Index Key	0000931755
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
City Area Code	651
Document Quarterly Report	true
Document Transition Report	false
Entity Address, Address Line One	30 East 7th Street, Suite 1300
Entity Address, City or Town	St. Paul
Entity Address, Country	US
Entity Address, Postal Zip Code	55101
Entity File Number	000-29274
Entity Incorporation, State or Country Code	MN
Entity Interactive Data Current	Yes
Entity Tax Identification Number	41-1789725
Local Phone Number	227-7333
No Trading Symbol Flag	true
Security Exchange Name	NONE
Title of 12(g) Security	Limited Partnership Units

XML

Balance Sheet - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Current Assets:
Cash	$ 3,028,531	$ 3,197,449
Rent Receivable	21,493	0
Total Current Assets	3,050,024	3,197,449
Real Estate Investments:
Land	2,959,461	2,959,461
Buildings	8,932,356	8,932,356
Acquired Intangible Lease Assets	621,258	621,258
Property Acquisition Costs	6,241	0
Real Estate Held for Investment, at cost	12,519,316	12,513,075
Accumulated Depreciation and Amortization	(4,448,772)	(4,254,350)
Real Estate Held for Investment, Net	8,070,544	8,258,725
Long-Term Rent Receivable	30,091	0
Total Assets	11,150,659	11,456,174
Current Liabilities:
Payable to AEI Fund Management, Inc.	75,676	94,400
Distributions Payable	104,546	198,178
Total Current Liabilities	180,222	292,578
Long-term Liabilities:
Acquired Below-Market Lease Intangibles, Net	45,269	49,323
Partners’ Capital :
General Partners	6,102	7,992
Limited Partners – 24,000 Units authorized; 18,791 Units issued and outstanding as of 6/30/2020 and 12/31/2019	10,919,066	11,106,281
Total Partners' Capital	10,925,168	11,114,273
Total Liabilities and Partners' Capital	$ 11,150,659	$ 11,456,174

XML

Balance Sheet (Parentheticals) - Limited Partner [Member] - shares	Jun. 30, 2020	Dec. 31, 2019
Limited Partners, units authorized	24,000	24,000
Limited Partners, units issued	18,791	18,791
Limited Partners, units outstanding	18,791	18,791

XML

Statement of Income - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Rental Income	$ 208,699	$ 259,213	$ 417,398	$ 518,425
Expenses:
Partnership Administration – Affiliates	24,174	36,209	67,451	73,888
Partnership Administration and Property Management – Unrelated Parties	27,130	35,779	51,888	61,183
Depreciation and Amortization	97,211	117,621	194,422	235,242
Total Expenses	148,515	189,609	313,761	370,313
Operating Income	60,184	69,604	103,637	148,112
Other Income:
Interest Income	747	3,237	6,654	6,584
Net Income	60,931	72,841	110,291	154,696
Net Income Allocated:
General Partners	609	728	1,103	1,547
Limited Partners	$ 60,322	$ 72,113	$ 109,188	$ 153,149
Net Income per Limited Partnership Unit (in Dollars per share)	$ 3.21	$ 3.74	$ 5.81	$ 7.94
Weighted Average Units Outstanding – Basic and Diluted (in Shares)	18,791	19,264	18,791	19,296

XML

Statement of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows from Operating Activities:
Net Income	$ 110,291	$ 154,696
Adjustments to Reconcile Net Income To Net Cash Provided by Operating Activities:
Depreciation and Amortization	190,368	225,692
(Increase) Decrease in Rent Receivable	(51,584)	2,199
Increase (Decrease) in Payable to AEI Fund Management, Inc.	(18,724)	(27,770)
Total Adjustments	120,060	200,121
Net Cash Provided By (Used For) Operating Activities	230,351	354,817
Cash Flows from Investing Activities:
Investments in Real Estate	(6,241)	0
Cash Flows from Financing Activities:
Distributions Paid to Partners	(393,028)	(396,372)
Repurchase of Partnership Units	0	(48,537)
Net Cash Provided By (Used For) Financing Activities	(393,028)	(444,909)
Net Increase (Decrease) in Cash	(168,918)	(90,092)
Cash, beginning of period	3,197,449	993,307
Cash, end of period	$ 3,028,531	$ 903,215

XML

Statement of Changes in Partners' Capital - USD ($)	General Partner [Member]	Limited Partner [Member]	Total
Balance at Dec. 31, 2018	$ 2,998	$ 11,167,454	$ 11,170,452
Balance (in Shares) at Dec. 31, 2018		19,328.64
Balance at Mar. 31, 2019	1,835	$ 11,052,286	11,054,121
Balance (in Shares) at Mar. 31, 2019		19,328.64
Distributions Declared	(1,982)	$ (196,204)	(198,186)
Net Income	819	81,036	81,855
Balance at Dec. 31, 2018	2,998	$ 11,167,454	11,170,452
Balance (in Shares) at Dec. 31, 2018		19,328.64
Balance at Jun. 30, 2019	95	$ 10,880,152	10,880,247
Balance (in Shares) at Jun. 30, 2019		19,263.98
Distributions Declared	(3,964)	$ (392,400)	(396,364)
Units Repurchased	(486)	$ (48,051)
Units Repurchased (in Shares)		(64.66)
Net Income			154,696
Balance at Mar. 31, 2019	1,835	$ 11,052,286	11,054,121
Balance (in Shares) at Mar. 31, 2019		19,328.64
Balance at Jun. 30, 2019	95	$ 10,880,152	10,880,247
Balance (in Shares) at Jun. 30, 2019		19,263.98
Distributions Declared	(1,982)	$ (196,196)	(198,178)
Units Repurchased	(486)	$ (48,051)	(48,537)
Units Repurchased (in Shares)		(64.66)
Net Income	728	$ 72,113	72,841
Balance at Dec. 31, 2019	7,992	$ 11,106,281	11,114,273
Balance (in Shares) at Dec. 31, 2019		18,791
Balance at Mar. 31, 2020	6,538	$ 10,962,245	10,968,783
Balance (in Shares) at Mar. 31, 2020		18,791.14
Distributions Declared	(1,948)	$ (192,902)	(194,850)
Net Income	494	48,866	49,360
Balance at Dec. 31, 2019	7,992	$ 11,106,281	11,114,273
Balance (in Shares) at Dec. 31, 2019		18,791
Balance at Jun. 30, 2020	6,102	$ 10,919,066	10,925,168
Balance (in Shares) at Jun. 30, 2020		18,791
Distributions Declared	(2,993)	$ (296,403)	(299,396)
Net Income			110,291
Balance at Mar. 31, 2020	6,538	$ 10,962,245	10,968,783
Balance (in Shares) at Mar. 31, 2020		18,791.14
Balance at Jun. 30, 2020	6,102	$ 10,919,066	10,925,168
Balance (in Shares) at Jun. 30, 2020		18,791
Distributions Declared	(1,045)	$ (103,501)	(104,546)
Net Income	$ 609	$ 60,322	$ 60,931

XML

Basis of Accounting

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Accounting [Text Block]

(1)  The condensed statements included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of operations for the interim period, on a basis consistent with the annual audited statements. The adjustments made to these condensed statements consist only of normal recurring adjustments. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations, although the registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in the registrant’s latest annual report on Form 10K.

XML

Organization

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

(2)  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 Chief Executive Officer 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 and his wife own a majority interest. 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. In consideration of the adverse impact COVID-19 is having on the World and U.S. economy, the General Partner believes it is in the best interest of the Partnership to continue operations. The General Partner will re-evaluate the situation in 12 to 24 months and may again submit the option to liquidate to a vote by the Limited Partners at that time.

XML

Recently Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

(3)  Recently Issued Accounting Pronouncements –

Management has reviewed recently issued, but not yet effective, accounting pronouncements and does not expect the implementation of these pronouncements to have a significant effect on the Partnership’s financial statements.

XML

Real Estate Investments

6 Months Ended

Jun. 30, 2020

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

(4)  Real Estate Investments –

The Partnership owns a 30% interest in the Gander Mountain store in Champaign, Illinois. The remaining interests in the property are owned by affiliates of the Partnership. On March 10, 2017, Gander Mountain Company filed for Chapter 11 reorganization and announced it was closing the store, following a liquidation sale of its onsite assets. In June 2017, the tenant filed a motion with the bankruptcy court to reject the lease for this store effective June 30, 2017. At this time, the tenant returned possession of the property to the owners and the Partnership became responsible for its 30% share of real estate taxes and other costs associated with maintaining the property. The tenant paid rent through June 2017. The owners have listed the property for lease with a real estate broker in the Champaign area.

In March 2019, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Auburn Hills, Michigan to extend the lease term five years to end on December 31, 2024. As part of the agreement, the annual rent will decrease from $124,049 to $105,560 effective January 1, 2020.

XML

Payable to AEI Fund Management, Inc.

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(5)  Payable to AEI Fund Management, Inc. –

AEI Fund Management, Inc. performs the administrative and operating functions for the Partnership. The payable to AEI Fund Management represents the balance due for those services. This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.

XML

Partners' Capital

6 Months Ended

Jun. 30, 2020

Partners' Capital Notes [Abstract]

Partners' Capital Notes Disclosure [Text Block]

(6)  Partners’ Capital –

For the six months ended June 30, 2020 and 2019, the Partnership declared distributions of $299,396 and $396,364, respectively. The Limited Partners received distributions of $296,403 and $392,400 and the General Partners received distributions of $2,993 and $3,964 for the periods, respectively. The Limited Partners' distributions represented $15.77 and $20.34 per Limited Partnership Unit outstanding using 18,791 and 19,296 weighted average Units in 2020 and 2019, respectively. The distributions represented $5.81 and $5.45 per Unit of Net Income and $9.96 and $14.89 per Unit of contributed capital in 2020 and 2019, respectively.

As part of the distributions discussed above, the Partnership distributed net sale proceeds of $64,513 in 2019. The Limited Partners received distributions of $63,868 and the General Partners received distributions of $645. The Limited Partners’ distributions represented $3.29 per Unit.

On April 1, 2020, the Partnership did not repurchase any Units from the Limited Partners. On April 1, 2019, the Partnership repurchased a total of 64.66 Units for $48,051 from five Limited Partners in accordance with the Partnership Agreement. The Partnership acquired these Units using Net Cash Flow from operations. 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 $486 in 2019.

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

(7)  Fair Value Measurements –

As of June 30, 2020 and December 31, 2019, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.

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Coronavirus Outbreak

6 Months Ended

Jun. 30, 2020

Coronavirus Outbreak Policy [Abstract]

CoronavirusOutbreakPolicyText Block

(8)  Coronavirus Outbreak –

During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19 which continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of the virus have continued to be identified in additional countries, many countries have reacted by instituting quarantines, placing restrictions on travel, and limiting hours of operations of non-essential offices and retail centers. Such actions are creating disruption in global supply chains, and adversely impacting a number of industries, such as retail, restaurants and transportation. The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the coronavirus. Nevertheless, the coronavirus presents material uncertainty and risk with respect to the Partnership’s performance and financial results, such as the potential negative impact to the tenants of its properties, the potential closure of certain of its properties, increased costs of operations, decrease in values of its properties, changes in law and/or regulation, and uncertainty regarding government and regulatory policy. Up to the date of this filing, the Partnership has entered into rent deferral agreements with two tenants of the six properties owned by the Partnership. In June 2020, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Auburn Hills, Michigan and Hanover, Maryland to defer base rent in April and May 2020. The tenant shall pay the deferred amounts in twelve equal monthly installments beginning on February 1, 2021. The Partnership has elected not to account for these deferrals of rent as a lease modification under COVID-19 guidance issued by the Financial Accounting Standards Board. Deferred rent of $51,584 was recognized as rental income during the three months ended June 30, 2020 and a corresponding rent receivable was recorded. The Partnership continues to work closely with tenants to determine the best course of action to meet the tenants short-term rental needs during these unprecedented times.

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Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2020

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

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

Management has reviewed recently issued, but not yet effective, accounting pronouncements and does not expect the implementation of these pronouncements to have a significant effect on the Partnership’s financial statements.

CoronavirusOutbreakTextBlock

During the first quarter of 2020, there was a global outbreak of a new strain of coronavirus, COVID-19 which continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of the virus have continued to be identified in additional countries, many countries have reacted by instituting quarantines, placing restrictions on travel, and limiting hours of operations of non-essential offices and retail centers. Such actions are creating disruption in global supply chains, and adversely impacting a number of industries, such as retail, restaurants and transportation. The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the coronavirus. Nevertheless, the coronavirus presents material uncertainty and risk with respect to the Partnership’s performance and financial results, such as the potential negative impact to the tenants of its properties, the potential closure of certain of its properties, increased costs of operations, decrease in values of its properties, changes in law and/or regulation, and uncertainty regarding government and regulatory policy. Up to the date of this filing, the Partnership has entered into rent deferral agreements with two tenants of the six properties owned by the Partnership. In June 2020, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Auburn Hills, Michigan and Hanover, Maryland to defer base rent in April and May 2020. The tenant shall pay the deferred amounts in twelve equal monthly installments beginning on February 1, 2021. The Partnership has elected not to account for these deferrals of rent as a lease modification under COVID-19 guidance issued by the Financial Accounting Standards Board. Deferred rent of $51,584 was recognized as rental income during the three months ended June 30, 2020 and a corresponding rent receivable was recorded. The Partnership continues to work closely with tenants to determine the best course of action to meet the tenants short-term rental needs during these unprecedented times.

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Organization (Details) - USD ($)	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jan. 31, 1997	Apr. 14, 1995
Limited Partner [Member]
Organization (Details) [Line Items]
Capital Units, Value								$ 1,000
Limited Partners' Capital Account, Units Outstanding (in Shares)	18,791	18,791.14	18,791	19,263.98	19,328.64	19,328.64	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

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Real Estate Investments (Details) - Jared Jewelry Auburn Hills MI - USD ($)		12 Months Ended
	Mar. 01, 2019	Dec. 31, 2020	Dec. 31, 2019
Real Estate Investments (Details) [Line Items]
AverageLeaseTerm	In March 2019, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Auburn Hills, Michigan to extend the lease term five years to end on December 31, 2024.
Revenue from Contract with Customer, Excluding Assessed Tax		$ 105,560	$ 124,049

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Partners' Capital (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Partners' Capital (Details) [Line Items]
Distribution Made to Limited Partner, Cash Distributions Declared	$ 104,546	$ 194,850	$ 198,178	$ 198,186	$ 299,396	$ 396,364
SaleProceedsDistributionMadeToMemberOrLimitedPartner						64,513
Partners' Capital Account, Redemptions			48,537
Limited Partner [Member]
Partners' Capital (Details) [Line Items]
Distribution Made to Limited Partner, Cash Distributions Declared	103,501	192,902	$ 196,196	196,204	$ 296,403	$ 392,400
Distribution Made to Limited Partner, Distributions Declared, Per Unit (in Dollars per share)					$ 15.77	$ 20.34
Weighted Average Limited Partnership Units Outstanding, Basic (in Shares)					18,791	19,296
DistributionsPerUnitOfNetIncome (in Dollars per share)					$ 5.81	$ 5.45
DistributionsPerUnitOfReturnOfCapital (in Dollars per share)					$ 9.96	$ 14.89
SaleProceedsDistributionMadeToMemberOrLimitedPartner						$ 63,868
SaleProceedsDistributionMadeToLimitedPartnerPerUnit (in Dollars per share)						$ 3.29
Partners' Capital Account, Units, Redeemed (in Shares)			64.66			64.66
Partners' Capital Account, Redemptions			$ 48,051			$ 48,051
General Partner [Member]
Partners' Capital (Details) [Line Items]
Distribution Made to Limited Partner, Cash Distributions Declared	$ 1,045	$ 1,948	1,982	$ 1,982	$ 2,993	3,964
SaleProceedsDistributionMadeToMemberOrLimitedPartner						645
Partners' Capital Account, Redemptions			$ 486			$ 486