8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)  March 22, 2022

    AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP   

(Exact name of registrant as specified in its charter)

State of Minnesota	000-29274	41-1789725
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

30 East 7^th Street, Suite 1300, St. Paul, Minnesota, 55101

(Address of Principal Executive Offices)

___________________________651-227-7333______________________________

(Registrant's telephone number, including area code)

_____________________________Not Applicable______________________________

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

     (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

     (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

        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.     ☐

Section 2 – Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets.

On March 22, 2022, the Partnership purchased a 40% interest in a Memorial Hospital in Diamondhead, Mississippi for $1,580,000 from Elliot Bay Healthcare Realty, LLC, an unrelated third party.  The property is leased to Memorial Hospital at Gulfport, Incorporated under a lease agreement with a remaining primary term of 5.3 years. The lease may be renewed by the tenant for up to two consecutive terms of 5 years each.  The annual rent is $100,320 for the 40% interest. The rent in scheduled to increase 2% annually. The lease is a net lease under which the tenant is responsible for all real estate taxes, insurance, maintenance, repairs and operating expenses of the property.  The only exceptions are the Partnership is responsible for general liability insurance premiums and for repairs to the structural components of the building.

The Partnership purchased the property with cash received from the sale of property.  The store was constructed in 2012 and is a 11,500 square foot building situated on approximately 2.12 acres of land.  The freestanding retail store is located at 4300 Leisure Time Drive, Diamondhead, Mississippi.

Memorial Hospital at Gulfport is an acute-care hospital. The hospital provides inpatient, outpatient, rehabilitation, and emergency care services primarily for residents of six coastal counties of Mississippi and surrounding areas. The hospital is part of Memorial Health System, a not-for-profit healthcare system, headquartered in Gulfport, MS which operates two hospitals with a collective 328 licensed beds as well as over 100 physician clinics. For the fiscal year ended September 30, 2020, Memorial Hospital at Gulfport reported net assets of $311 million, total sales revenue of $617 million and a change in net position of $16.7 million. Memorial Hospital at Gulfport is a joint venture of the City of Gulfport and the Gulfport-West Harrison County Hospital District, which operates in the form of a government authority.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired – Because the property is leased to a single tenant on a long-term basis under a net lease that transfers substantially all of the operating costs to the tenant, we believe that financial information about the tenant is more relevant than financial statements of the property.  Financial information of the tenant is presented in the last paragraph of Item 2.01.  

(b) Pro forma financial information – A limited number of pro forma adjustments are required to illustrate the effects of the above transaction on the Partnership’s balance sheet and income statement.  The following narrative description is furnished in lieu of the pro forma statements:

Assuming the Partnership had acquired the property on January 1, 2020, the Partnership’s Real Estate Held for Investment would have increased by $1,580,000 and its Current Assets (cash) would have decreased by $1,580,000.

For the year ended December 31, 2020, Income from Operations would have increased $30,275 representing an increase in rental income of $100,320 and an increase in depreciation and amortization expense of $70,045. For the nine months ended September 30, 2021, Income from Operations would have increased $22,706, representing an increase in rental income of $75,240 and an increase in depreciation and amortization expense of $52,534.

The net effect of these pro forma adjustments would have caused Net Income to increase from $915,299 to $945,574 and from $158,182 to $180,888, which would have resulted in Net Income of $49.82 and $9.82 per Limited Partnership Unit outstanding for the year ended December 31, 2020 and the nine months ended September 30, 2021, respectively.

(c) Shell company transactions – Not Applicable.

(d) Exhibit 10.1 – Assignment of Purchase Agreement dated March 2, 2022 between the Partnership and AEI Property Corporation relating to the property at 4300 Leisure Time Drive, Diamondhead, Mississippi.

  Exhibit 10.2 – Assignment and Assumption of Lease dated March 22, 2022 between the Partnership and Elliott Bay Healthcare Realty LLC relating to the property at 4300 Leisure Time Drive, Diamondhead, Mississippi.

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 hereunto duly authorized.

	AEI Income & Growth Fund XXI
	Limited Partnership
	By:	AEI Fund Management XXI, Inc.
	Its:	Managing General Partner
Date:  March 25, 2022	By:	/s/ Keith E Petersen
		Keith E. Petersen
		Chief Financial Officer

EX-10.1

ASSIGNMENT

OF

PURCHASE AGREEMENT

AEI Property Corporation, a Minnesota corporation (“Assignor”), hereby assigns its interest to AEI Net Lease Income Fund 36 LP, a Minnesota limited partnership, as to an undivided 60% interest, and AEI Income & Growth Fund XXI Limited Partnership, a Minnesota limited partnership, as to an undivided 40% interest (collectively, the “Assignee”), in that certain Purchase and Sale Agreement between Assignor’s predecessor in interest, and Elliott Bay Healthcare Realty, LLC, a Delaware limited liability company (“Seller”), dated January 21, 2022, as amended by that certain Amendment to Purchase and Sale Agreement dated February 28, 2022, with respect to property located at 4300 Leisure Time Drive, Diamondhead, MS 39525,  known as Memorial Hospital at Gulfport medical clinic, and Assignee hereby assumes management responsibilities and obligations of its interest as Buyer thereunder.

Dated:

March 2, 2022

ASSIGNOR:

AEI PROPERTY CORPORATION,

a Minnesota corporation

By:  /s/ Marni Nygard

      Marni Nygard, its President

ASSIGNEE:

AEI Net Lease Income Fund 36 LP,

a Minnesota limited partnership

By: AEI Income Fund Manager, Inc.,

       a Minnesota corporation

Its: Corporate General Partner

By:  /s/ Marni Nygard

      Marni Nygard, its President

AEI Income & Growth Fund XXI Limited Partnership,

a Minnesota limited partnership

By: AEI Fund Management XXI, Inc.,

       a Minnesota corporation

Its: Corporate General Partner

By:  /s/ Marni Nygard

      Marni Nygard, its President

EX-10.2

ASSIGNMENT AND ASSUMPTION OF LEASE

THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made and entered into effective as of this 22 day of March 2022, by and between ELLIOTT BAY HEALTHCARE REALTY LLC, a Delaware limited liability company (“Assignor”), and AEI Net Lease Income Fund 36 LP, a Minnesota limited partnership, as to an undivided 60% interest, and AEI Income & Growth Fund XXI Limited Partnership, a Minnesota  limited partnership, as to an undivided  40% interest (collectively, “Assignee”).

RECITALS:

A.         Assignor and Assignee (as assigned by AEI Property Corporation, a Minnesota corporation) are parties to that certain Purchase and Sale Agreement dated January 21, 2022, as it may have been amended (the "Agreement"), pursuant to which Assignee is  acquiring from Assignor the real property  and improvements, located on property more particularly described on EXHIBIT A (the "Property") attached hereto and incorporated herein by this reference.

B.          Pursuant to the terms of the Agreement, Assignor desires to sell, assign, convey, transfer and set over to Assignee and Assignee desires to assume all of Assignor's interest in that certain Lease Agreement, as amended  (the "Lease"), by and between Assignor, as landlord, and Memorial Hospital at Gulfport, a Mississippi public community hospital (the "Tenant"), including all rents prepaid for any period subsequent to the date of this Assignment, subject to the terms and conditions set forth below.

NOW, THEREFORE, for good and valuable  consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, Assignor and Assignee hereby agree as follows:

1                     Assignor hereby irrevocably and unconditionally sells, assigns, conveys, transfers and sets over unto Assignee, its heirs, successors and assigns as of the date hereof (the "Effective Date"), all of Assignor's right, title and interest in, to and under: (i) the Lease, together with any and all guaranties thereof, if any, and (ii) any and all rents prepaid as of the Effective Date, held by Assignor in connection with the Lease (the "Rent”).

2.          Assignee hereby assumes and shall be liable for  any and all liabilities, claims, obligations, losses and expenses, including reasonable attorneys' fees arising  in connection with the Lease  which are actually incurred, and which arise by virtue of acts or omissions occurring thereunder, on or after the Effective Date. Assignor shall indemnify and hold Assignee  harmless from any and all liabilities,   claims, obligations,   losses and expenses,   including   reasonable attorneys' fees arising in connection with the Lease which are actually incurred, and which arise by virtue of acts or omissions occurring thereunder, or as a result of Assignor's failure to fulfill the landlord's duties and obligations   accruing under the Lease, prior to the Effective   Date. Assignee   shall indemnify and hold Assignor   harmless   from any and all liabilities, claims, obligations, loss and expenses, including reasonable attorney's fees, arising in connection with the Lease which are actually incurred, and which arise by virtue of acts or  omissions occurring thereunder, or as  a result of Assignee's failure to fulfill the landlord's duties and obligations

accruing under the Lease on or after the Effective Date. Assignee  shall be entitled to receive all income arising  from the Lease from and after said Effective Date. Assignor shall be entitled  to receive all income arising from the Lease prior to the Effective Date.

3.           Assignor shall direct the tenant and any successor tenant under the Lease to pay to Assignee the Rent and all other monetary obligations due or to become due under the Lease for the period beginning on the Effective Date.

4.          This Assignment shall be governed by and construed in accordance with the laws of the state in which the Property is located.

5.            All rights  and obligations of Assignee and Assignor hereunder shall be binding upon and inure to the benefit of Assignor, Assignee and the heirs, successors and assigns of each such party.

6.           This Assignment may be executed  in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Assignment may be detached from any counterpart of this Assignment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Assignment identical in form hereto  but having attached to it one or more additional signature pages.

7.           Whenever the context so requires in this Assignment, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to include any other genders, and the word "person" shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity.

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment effective as of the day and year first above written.

ASSIGNOR:             ELLIOTT BAY HEALTHCARE REALTY LLC, a Delaware limited liability company

By:  /s/ Christian Whipple

Name:  Christian Whipple

Title: Authorized Signatory

STATE OF WASHINGTON            )

) ss. COUNTY OF KING                         )

On this 7th day of March, 2022, before me personally appeared Christian Whipple,to me known to be the Authorized Signatory of the limited liability company that executed the within and foregoing instrument, and acknowledged   said instrument  to be the free and voluntary act and deed of said limited liability company, for  the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

In Witness Whereof I have hereunto set my hand and affixed my official seal the day and year first above written.

/s/ Katie Kelly

(Signature of officer)

Notary Public in and for the State of

Washington, residing at King County

My commission expires: 8-17-2023

[Notary seal]

Use this space for notarial stamp/seal

ASSIGNEE:             AEI Net Lease Income Fund 36 LP, a Minnesota limited partnership

By: AEI Income Fund Manager, Inc., a Minnesota corporation

Its: Corporate General Partner

By /s/ Marni Nygard

   Marni Nygard, its President

AEI Income & Growth Fund XXI Limited

Partnership,

a Minnesota limited partnership

By: AEI Fund Management XXI, Inc., a Minnesota corporation

Its: Corporate General Partner

By /s/ Marni Nygard

  Marni Nygard, its President

STATE OF MINNESOTA                )

) ss.

CITY/COUNTY OF RAMSEY        )

The forgoing instrument was acknowledged before me this 3^rd day of March

2022, by Marni Nygard, as President of AEI Income Fund Manager, Inc., a Minnesota corporation, the corporate general partner of AEI Net Lease Income Fund 36 LP, a Minnesota limited partnership, and as President of AEI Fund Management XXI, Inc., a Minnesota corporation, the corporate general partner of AEI Income & Growth FXXI Limited Partnership, a Minnesota limited partnership, on behalf of said funds.

WITNESS my hand and official seal.

[Notary seal]

/s/ Stephanie Allyn Wallisch

Notary Public

EXHIBIT A

TO ASSIGNMENT AND ASSUMPTION OF LEASE

Legal Description

BEGINNING AT THE NORTHEAST CORNER OF LOT 6 OF SECTION 3, TOWNSHIP 8 SOUTH, RANGE 14 WEST, HANCOCK COUNTY, MISSISSIPPI; THENCE WEST 416 FEET TO A STAKE; THENCE SOUTH 416 FEET TO A STAKE; THENCE EAST

416 FEET TO A STAKE; THENCE NORTH  416 FEET TO THE PLACE OF BEGINNING, CONTAINING 4 ACRES, MORE OR LESS, AND BEING PART OF THE NORTH 1/2 OF LOT 6, OF SECTION 3, TOWNSHIP 8 SOUTH, RANGE 14 WEST, HANCOCK COUNTY, MISSISSIPPI.

LESS AND EXCEPT THE LAND CONVEYED TO ARG DI51PCK001, LLC BY SPECIAL WARRANTY   DEED RECORDED IN BOO K

2019, PAGE 12627 AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

A PARCEL OF LAND SITUATED IN THE NORTH HALF OF LOT 6, OF SECTION 3, TOWNSHIP 8 SOUTH, RANGE 14 WEST, ST. STEPHENS MERIDIAN, CITY OF DIAMONDHEAD,   HANCOCK COUNTY, MISSISSIPPI AND BEING FURTHER  DESCRIBED AS FOLLOWS:

BEGINNING AT A PK NAIL FOUND DENOTING THE NORTHEAST CORNER OF SAID LOT 6, SAID CORNER ALSO BEING ON THE WEST RIGHT OF WAY LINE OF GEX ROAD; THENCE DEPARTING  SAID WEST RIGHT OF WAY LINE RUN NORTH 89

DEGREES 56 MINUTES 53 SECONDS WEST FOR A DISTANCE OF 416.15 FEET TO A 1/2 INCH IRON ROD FOUND;

THENCE RUN SOUTH 00 DEGREES 17 MINUTES 01 SECONDS WEST A DISTANCE OF 183.03 FEET TO A 1/2 INCH

CAPPED IRON ROD SET;  THENCE RUN SOUTH 89 DEGREES 56 MINUTES 54 SECONDS EAST FOR A DISTANCE OF 142.20

FEET TO A PK NAIL SET IN ASPHALT; THENCE RUN SOUTH 00 DEGREES  03 MINUTES 06 SECONDS WEST A DISTANCE OF 16.68 FEET TO A PK NAIL SET; THENCE RUN SOUTH 89 DEGREES 56 MINUTES 54 SECONDS EAST FOR A DISTANCE OF 273.72 FEET TO A PK NAIL SET ON THE WEST RIGHT OF WAY LINE OF GEX ROAD; THENCE RUN ALONG SAID WEST RIGHT OF WAY LINE NORTH 00 DEGREES 19 MINUTES 50 SECONDS EAST FOR A DISTANCE OF 199.75 FEET TO THE POINT OF BEGINNING, CONTAINING 80,726 SQUARE FEET OR 1.85 ACRES, MORE OR  LESS.

XML

Document And Entity Information	Mar. 22, 2022
Document Information Line Items
Entity Registrant Name	AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
Document Type	8-K
Amendment Flag	false
Entity Central Index Key	0000931755
Document Period End Date	Mar. 22, 2022
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	MN
Entity File Number	000-29274
Entity Tax Identification Number	41-1789725
Entity Address, Address Line One	30 East 7th Street, Suite 1300
Entity Address, City or Town	St. Paul
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55101
Local Phone Number	___________________________651-227-7333______________________________
City Area Code	___________________________651-227-7333______________________________
Entity Information, Former Legal or Registered Name	_____________________________Not Applicable______________________________
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false