| State of | | | |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) | |
| | | | |
| | | ( | |
| (Address of principal executive offices) | | (Registrant’s telephone number) | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
None | | | | None |
| | |
| (Title of class) | |
| ☐ Accelerated filer |
| ☒ Smaller reporting company |
☐ Emerging growth company | |
Property
|
Purchase Date | Original Property Cost | Tenant | Annual Lease Payment | Annual Rent Per Sq. Ft. | ||||
Jared Jewelry Store
Auburn Hills, MI
(40%)
|
1/14/05 | $ | 1,466,048 | Sterling Jewelers Inc. | $ | 105,560 | $ | 45.82 | |
Best Buy Store
Eau Claire, WI
|
1/31/08 | $ | 7,057,096 | Best Buy Stores, L.P. | $ | 522,668 | $ | 11.03 | |
Dollar Tree
Cincinnati, OH
|
2/3/16 | $ | 1,809,915 |
(1)
|
Dollar Tree Stores, Inc. | $ | 122,169 | $ | 12.28 |
Advance Auto
Chelsea, AL
|
5/14/21 | $ | 1,760,000 |
(1)
|
Advance Auto Parts Inc. | $ | 110,000 | $ | 15.71 |
Memorial Hospital
Diamondhead, MS
(40%)
|
3/22/22 | $ | 1,580,000 |
(1)
|
Memorial Hospital at Gulfport, Inc. | $ | 102,326 | $ | 8.60 |
December 31,
2022
|
December 31,
2021
|
|||
Properties
|
$
|
15,116,000
|
$
|
11,225,000
|
Cash
|
175,000
|
3,269,000
|
||
Rent recievable
|
0
|
17,000
|
||
Current liabilities
|
(349,000)
|
(293,000)
|
||
Value attributable to the interest of the General Partners
|
(149,000)
|
(142,000)
|
||
Value attributable to the interest of the Limited Partners
|
$
|
14,793,000
|
$
|
14,076,000
|
Limited Partnership Units outstanding
|
17,076
|
17,429
|
||
|
|
|
|
|
Page | ||
Report of Independent Registered Public Accounting Firm (PCAOB ID | 19 – 20 | |
Balance Sheets as of December 31, 2022 and 2021 | 21 | |
Statements for the Years Ended December 31, 2022 and 2021: | ||
Income | 22 | |
Cash Flows | 23 | |
Changes in Partners’ Capital | 24 | |
Notes to Financial Statements | 25 – 38 |
/s/ Boulay PLLP | |
We have served as the Partnership’s auditor since 1994. | |
| |
March 30, 2023 |
December 31,
|
December 31,
|
|||
2022
|
2021
|
|||
Current Assets:
|
|
|||
Cash
|
$
|
|
$
|
|
Rent Receivable
|
|
|
||
Total Current Assets
|
|
|
||
|
|
|||
Real Estate Investments:
|
|
|
||
Land
|
|
|
||
Buildings
|
|
|
||
Acquired Intangible Lease Assets
|
|
|
||
Real Estate Held for Investment, at Cost
|
|
|
||
Accumulated Depreciation and Amortization
|
( |
( |
||
Real Estate Held for Investment, Net
|
|
|
||
Real Estate Held for Sale
|
|
|
||
Total Real Estate Investments
|
|
|
||
Total Assets
|
$
|
|
$
|
|
Current Liabilities:
|
|
|
|
|
Payable to AEI Fund Management, Inc.
|
$
|
|
$
|
|
Distributions Payable
|
|
|
|
|
Total Current Liabilities
|
|
|
|
|
|
|
|
|
|
Long-term Liabilities:
|
|
|
|
|
Acquired Below-Market Lease Intangibles, Net
|
|
|
|
|
|
|
|
|
|
Partners’ Capital:
|
|
|
|
|
General Partners
|
|
|
|
|
Limited Partners – as of December 31, 2022 and 2021, respectively |
|
|
|
|
Total Partners' Capital
|
|
|
|
|
Total Liabilities and Partners' Capital
|
$
|
|
$
|
|
|
Years Ended December 31
|
|||
|
2022
|
|
2021
|
|
|
|
|
|
|
Rental Income
|
$
|
|
$
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Partnership Administration – Affiliates
|
|
|
|
|
Partnership Administration and Property
Management – Unrelated Parties
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
Total Expenses
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
Other Income:
|
|
|
|
|
Gain on Sale of Real Estate
|
|
|
|
|
Interest Income
|
|
|
|
|
Miscellaneous Income
|
|
|
|
|
Total Other Income
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
|
$
|
|
|
|
|
|
|
Net Income Allocated:
|
|
|
|
|
General Partners
|
$
|
|
$
|
|
Limited Partners
|
|
|
|
|
Total
|
$
|
|
$
|
|
|
|
|
|
|
Net Income per Limited Partnership Unit:
|
$
|
|
$
|
|
|
|
|
|
|
Weighted Average Units Outstanding –
Basic and Diluted
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
|||
|
2022
|
|
2021
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net Income
|
$
|
|
$
|
|
|
|
|
|
|
Adjustments to Reconcile Net Income
To Net Cash Provided by Operating Activities:
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
Gain on Sale of Real Estate
|
|
( |
|
( |
(Increase) Decrease in Receivables
|
|
|
|
|
Increase (Decrease) in Payable to
AEI Fund Management, Inc.
|
|
|
|
( |
Total Adjustments
|
|
( |
|
|
Net Cash Provided By (Used For)
Operating Activities
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
Investments in Real Estate
|
|
( |
|
( |
Proceeds from Sale of Real Estate
|
|
|
|
|
Net Cash Provided By (Used For)
Investing Activities
|
|
( |
|
( |
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Distributions Paid to Partners
|
|
( |
|
( |
Repurchase of Partnership Units
|
|
( |
|
( |
Net Cash Provided By (Used For)
Financing Activities
|
|
( |
|
( |
|
|
|
|
|
Net Increase (Decrease) in Cash
|
|
( |
|
( |
|
|
|
|
|
Cash, beginning of year
|
|
|
|
|
|
|
|
|
|
Cash, end of year
|
$
|
|
$
|
|
|
|
|
|
|
General Partners
|
|
Limited Partners
|
|
Total
|
|
Limited Partnership Units Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2020
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions Declared
|
|
( |
|
( |
|
( |
|
|
|
|
|
|
|
|
|
|
|
Repurchase of Partnership Units
|
|
( |
|
( |
|
( |
|
( |
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions Declared
|
|
( |
|
( |
|
( |
|
|
|
|
|
|
|
|
|
|
|
Repurchase of Partnership Units
|
|
( |
|
( |
|
( |
|
( |
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2022
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
2021
|
||||
|
|
|
|
||
a.
|
AEI is reimbursed for costs incurred in providing services related to managing the Partnership's operations and properties, maintaining the Partnership's books, and communicating with the Limited Partners.
|
$
|
|
$
|
|
|
|
|
|
||
b.
|
AEI is reimbursed for all direct expenses it paid on the Partnership's behalf to third parties related to Partnership administration and property management. These expenses included printing costs, legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs.
|
$
|
|
$
|
|
|
|
|
|
||
c.
|
AEI is reimbursed for costs incurred in providing services and direct expenses related to the acquisition of property on behalf of the Partnership.
|
$
|
|
$
|
|
|
|
|
|
||
d.
|
AEI is reimbursed for costs incurred in providing services related to the sale of property on behalf of the Partnership.
|
$
|
|
$
|
|
|
|
|
|
Property
|
Land
|
Buildings
|
Total
|
Accumulated
Depreciation
|
||||
|
|
|
|
|
|
|
|
|
Jared Jewelry, Auburn Hills, MI
|
$
|
|
$
|
|
$
|
|
$
|
|
Best Buy, Eau Claire, WI
|
|
|
|
|
|
|
|
|
Dollar Tree, Cincinnati, OH
|
|
|
|
|
|
|
|
|
Advance Auto, Chelsea, AL
|
|
|
|
|
|
|
|
|
Memorial Hospital, Diamondhead, MS
|
|
|
|
|
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
2022
|
2021
|
|||||||
Cost
|
Accumulated Amortization
|
Cost
|
Accumulated Amortization
|
|||||
Acquired Intangible Lease Assets (in-place lease intangibles with a weighted average life of |
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Acquired Below-Market Lease Intangibles (weighted average life of |
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
2023
|
$
|
|
2024
|
|
|
2025
|
|
|
2026
|
|
|
2027
|
|
|
Thereafter
|
|
|
$
|
|
|
Tenants
|
Industry
|
2022
|
2021
|
|||
Sterling Jewelers Inc.
|
Retail
|
$
|
|
$
|
|
|
Best Buy Stores, L.P.
|
Retail
|
|
|
|
|
|
Dollar Tree Stores, Inc.
|
Retail
|
|
|
|
|
|
Advance Auto Parts, Inc.
|
Retail
|
|
|
|
|
|
Aggregate rental income of major tenants
|
|
|
$
|
|
$
|
|
Aggregate rental income of major tenants
as a percentage of total rental income
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
2021
|
|||
|
|
|
|
|
Net Income for Financial Reporting Purposes
|
$
|
|
$
|
|
|
|
|
|
|
Depreciation for Tax Purposes Under Depreciation
and Amortization for Financial Reporting Purposes
|
|
|
|
|
|
|
|
|
|
Gain on Sale of Real Estate for Tax Purposes
Under Gain for Financial Reporting Purposes
|
|
( |
|
( |
Taxable Income (Loss) to Partners
|
$
|
|
$
|
( |
|
|
|
|
2022
|
2021
|
|||
|
|
|
|
|
Partners' Capital for Financial Reporting Purposes
|
$
|
|
$
|
|
|
|
|
|
|
Adjusted Tax Basis of Investments in Real Estate
Over Net Investments in Real Estate
for Financial Reporting Purposes
|
|
|
|
|
|
|
|
|
|
Syndication Costs Treated as Reduction
of Capital For Financial Reporting Purposes
|
|
|
|
|
Partners' Capital for Tax Reporting Purposes
|
$
|
|
$
|
|
|
|
|
|
Name and Address
of Beneficial Owner
|
Number of
Units Held
|
Percent
of Class
|
AEI Fund Management XXI, Inc.
|
0
|
0.00%
|
Patricia L. Johnson
|
0
|
0.00%
|
Marni J. Nygard
|
0
|
0.00%
|
Kevin S. Steele
|
0
|
0.00%
|
Keith E. Petersen
|
0
|
0.00%
|
Address for all: 1300 Wells Fargo Place 30 East 7th Street, St. Paul, Minnesota 55101
|
||
David & Mary Edsall CRT
|
927.83505
|
5.43%
|
84 N Audubon Road, Indianapolis, IN 46219
|
||
Donna & Reginald Hill CRT
|
927.83505
|
5.43%
|
1912 Lakeside Lane, Indianapolis, IN 46229
|
Person or Entity
Receiving
Compensation
|
Form and Method
of Compensation
|
Amount Incurred From
Inception (August 22, 1994)
To December 31, 2022
|
||
|
|
|
||
AEI Securities, Inc.
|
Selling Commissions equal to 8% of proceeds plus a 2% nonaccountable expense allowance, most of which was reallowed to Participating Dealers.
|
$
|
2,400,000
|
|
|
|
|
||
General Partners and Affiliates
|
Reimbursement at Cost for other Organization and Offering Costs.
|
$
|
877,000
|
|
|
|
|
||
General Partners and Affiliates
|
Reimbursement at Cost for all Acquisition Expenses.
|
$
|
966,948
|
|
|
|
|
||
General Partners and Affiliates
|
Reimbursement at Cost for providing administrative services to the Fund, including all expenses related to management of the Fund's properties and all other transfer agency, reporting, partner relations and other administrative functions.
|
$
|
5,875,898
|
|
|
|
|
||
General Partners and Affiliates
|
Reimbursement at Cost for providing services related to the disposition of the Fund's properties.
|
$
|
1,426,478
|
|
|
|
|
||
General Partners
|
1% of Net Cash Flow in any fiscal year until the Limited Partners have received annual, non-cumulative distributions of Net Cash Flow equal to 10% of their Adjusted Capital Contributions and 10% of any remaining Net Cash Flow in such fiscal year.
|
$
|
318,939
|
|
|
|
Person or Entity
Receiving
Compensation
|
Form and Method
of Compensation
|
Amount Incurred From
Inception (August 22, 1994)
To December 31, 2022
|
||
|
|
|
||
General Partners
|
1% of distributions of Net Proceeds of Sale until Limited Partners have received an amount equal to (a) their Adjusted Capital Contributions, plus (b) an amount equal to 12% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously distributed. 10% of distributions of Net Proceeds of Sale thereafter.
|
$
|
126,659
|
|
|
|
|
Fee Category
|
2022
|
2021
|
||
|
|
|
|
|
Audit Fees
|
$
|
22,950
|
$
|
21,710
|
Audit-Related Fees
|
|
0
|
|
0
|
Tax Fees
|
|
0
|
|
0
|
All Other Fees
|
|
0
|
|
0
|
Total Fees
|
$
|
22,950
|
$
|
21,710
|
|
|
|
|
AEI INCOME & GROWTH FUND XXI
|
||
Limited Partnership
|
||
By:
|
AEI Fund Management XXI, Inc.
|
|
Its Managing General Partner
|
||
March 30, 2023
|
By:
|
/s/ Marni J Nygard |
Marni J. Nygard, President
|
||
(Principal Executive Officer)
|
Name
|
Title
|
Date
|
||
/s/ Marni J Nygard |
President
|
March 30, 2023
|
||
Marni J. Nygard
|
(Principal Executive Officer)
|
|||
/s/ Keith E Petersen |
Chief Financial Officer and Treasurer
|
March 30, 2023
|
||
Keith E. Petersen
|
(Principal Accounting Officer)
|
Date: March 30, 2023
|
/s/ Marni J Nygard |
Marni J. Nygard, President
|
|
AEI Fund Management XXI, Inc.
|
Date: March 30, 2023
|
/s/ Keith E Petersen |
Keith E. Petersen, Chief Financial Officer
|
|
AEI Fund Management XXI, Inc.
|
|
Managing General Partner
|
/s/ Marni J Nygard |
||
Marni J. Nygard, President
|
||
AEI Fund Management XXI, Inc.
|
||
Managing General Partner
|
||
March 30, 2023
|
||
/s/ Keith E Petersen |
||
Keith E. Petersen, Chief Financial Officer
|
||
AEI Fund Management XXI, Inc.
|
||
Managing General Partner
|
||
March 30, 2023
|
Balance Sheet (Parentheticals) - Limited Partner [Member] - shares |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Limited Partners, units authorized | 24,000 | 24,000 |
Limited Partners, units issued | 17,077 | 17,429 |
Limited Partners, units outstanding | 17,076.71 | 17,429 |
Statement of Income - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Statement [Abstract] | ||
Rental Income | $ 885,848 | $ 838,417 |
Expenses: | ||
Partnership Administration – Affiliates | 138,597 | 157,584 |
Partnership Administration and Property Management – Unrelated Parties | 46,992 | 87,413 |
Depreciation and Amortization | 439,670 | 368,352 |
Total Expenses | 625,259 | 613,349 |
Operating Income | 260,589 | 225,068 |
Other Income: | ||
Gain on Sale of Real Estate | 1,268,078 | 13,198 |
Interest Income | 2,518 | 3,608 |
Miscellaneous Income | 0 | 17,538 |
Total Other Income | 1,270,596 | 34,344 |
Net Income | 1,531,185 | 259,412 |
Net Income Allocated: | ||
General Partners | 22,102 | 4,874 |
Limited Partners | 1,509,083 | 254,538 |
Net Income | $ 1,531,185 | $ 259,412 |
Net Income per Limited Partnership Unit: (in Dollars per share) | $ 87.92 | $ 14.12 |
Weighted Average Units Outstanding – Basic and Diluted (in Shares) | 17,165 | 18,029 |
Statement of Changes in Partners' Capital - 12 months ended Dec. 31, 2022 - USD ($) |
General Partner [Member] |
Limited Partner [Member] |
Total |
---|---|---|---|
Balance at Dec. 31, 2021 | $ 109 | $ 10,097,923 | $ 10,098,032 |
Balance (in Shares) at Dec. 31, 2021 | 17,429 | ||
Distributions Declared | (6,904) | $ (683,503) | (690,407) |
Repurchase of Partnership Units | (2,696) | $ (266,947) | (269,643) |
Units Repurchased (in Shares) | (352.29) | ||
Net Income | 22,102 | $ 1,509,083 | 1,531,185 |
Balance at Dec. 31, 2022 | $ 12,611 | $ 10,656,556 | $ 10,669,167 |
Balance (in Shares) at Dec. 31, 2022 | 17,076.71 |
Organization |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] |
(1) Organization –
AEI Income & Growth Fund XXI Limited Partnership (the “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. The Estate of Robert P. Johnson serves as the Individual General Partner. AFM is a wholly owned subsidiary of AEI Capital Corporation of which the Robert P. Johnson Trust and Patricia Johnson, the wife of the deceased, 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 2021, 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 March 3, 2021, the votes were counted and neither proposal received the required majority vote. As a result, the Managing General Partner will continue the operations of the Partnership for an additional 60 months at which time it will ask the Limited Partners to vote on the same two proposals.
|
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] |
(2) Summary of Significant Accounting Policies –
Financial Statement Presentation
The accounts of the Partnership are maintained on the accrual basis of accounting for both federal income tax purposes and financial reporting purposes.
Accounting Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with United States Generally Accepted Accounting Principles (US GAAP). Those estimates and assumptions may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates, and the difference could be material. Significant items, subject to such estimates and assumptions, include the carrying value of real estate held for investment, real estate held for sale and the allocation of purchase price of real estate assets and intangible assets.
The Partnership regularly assesses whether market events and conditions indicate that it is reasonably possible to recover the carrying amounts of its investments in real estate from future operations and sales. A change in those market events and conditions could have a material effect on the carrying amount of its real estate.
Cash Concentrations of Credit Risk
The Partnership's cash is deposited in one financial institution and at times during the year it may exceed FDIC insurance limits.
Rent Receivables
Credit terms are extended to tenants in the normal course of business. The Partnership performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral.
Rent receivables are recorded at their estimated net realizable value. The Partnership follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Partnership is of the belief that such accounts, if any, will be collectible in all material respects and thus an allowance is not necessary. Accounts are considered past due if payment is not made on a timely basis in accordance with the Partnership’s credit terms. Receivables considered uncollectible are written off.
Income Taxes
The income or loss of the Partnership for federal income tax reporting purposes is includable in the income tax returns of the partners. In general, no recognition has been given to income taxes in the accompanying financial statements.
The tax return and the amount of distributable Partnership income or loss are subject to examination by federal and state taxing authorities. If such an examination results in changes to distributable Partnership income or loss, the taxable income of the partners would be adjusted accordingly. Primarily due to its tax status as a partnership, the Partnership has no significant tax uncertainties that require recognition or disclosure. The Partnership is no longer subject to U.S. federal income tax examinations for tax years before 2019, and with few exceptions, is no longer subject to state tax examinations for tax years before 2019.
Revenue Recognition
The Partnership's real estate is leased under net leases, classified as operating leases. The leases provide for base annual rental payments payable in monthly installments. The Partnership recognizes rental income according to the terms of the individual leases. For deferred rents due to COVID-19, the Partnership recognizes the deferred rent related to the month it applies and records a rental receivable. For leases that contain stated rental increases, the increases are recognized in the year in which they are effective. Contingent rental payments are recognized when the contingencies on which the payments are based are satisfied and the rental payments become due under the terms of the leases.
Real Estate Investments
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 relative fair value of each component of the property. Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management’s assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset.
The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods. The above market and below market lease values will be capitalized as intangible lease assets or liabilities. Above market lease values will be amortized as an adjustment of rental income over the remaining 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 Partnership tests real estate for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable. For properties the Partnership will hold and operate, it compares the carrying amount of the property to the estimated probability-weighted future undiscounted cash flows expected to result from the property and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the property, the Partnership recognizes an impairment loss equal to the amount by which the carrying amount of the property exceeds the fair value of the property. For properties held for sale, the Partnership determines whether impairment has occurred by comparing the property’s estimated fair value less cost to sell to its current carrying value. If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value.
For financial reporting purposes, the buildings owned by the Partnership are depreciated using the straight-line method over an estimated useful life of 25 years. Intangible lease assets are amortized using the straight-line method for financial reporting purposes based on the remaining life of the lease.
The disposition of a property or classification of a property as Real Estate Held for Sale by the Partnership does not represent a strategic shift that will have a major effect on the Partnership’s operations and financial results. Therefore, the results from operating and selling the property are included in continuing operations.
The Partnership accounts for properties owned as tenants-in-common with affiliated entities and/or unrelated third parties using the proportionate consolidation method. Each tenant-in-common owns a separate, undivided interest in the properties. Any tenant-in-common that holds more than a 50% interest does not control decisions over the other tenant-in-common interests. The financial statements reflect only this Partnership's percentage share of the properties’ land, building, intangible assets, liabilities, revenues and expenses.
The Partnership's properties are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which the properties are located. These laws could require the Partnership to investigate and remediate the effects of the release or disposal of hazardous materials at these locations if found. For each property, an environmental assessment is completed prior to acquisition. In addition, the lease agreements typically strictly prohibit the production, handling, or storage of hazardous materials (except where incidental to the tenant’s business such as use of cleaning supplies) in violation of applicable law to restrict environmental and other damage. Environmental liabilities are recorded when it is determined the liability is probable and the costs can reasonably be estimated. There were no environmental issues noted or liabilities recorded at December 31, 2022 and 2021.
Fair Value Measurements
As of December 31, 2022 and 2021, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.
Income Per Unit
Income per Limited Partnership Unit is calculated based on the weighted average number of Limited Partnership Units outstanding during each period presented. Diluted income per Limited Partnership Unit considers the effect of any potentially dilutive Unit equivalents, of which the Partnership had none for each of the years ended December 31, 2022 and 2021.
Reportable Segments
The Partnership invests in single tenant commercial properties throughout the United States that are net leased to tenants in various industries. Because these net leased properties have similar economic characteristics, the Partnership evaluates operating performance on an overall portfolio basis. Therefore, the Partnership’s properties are classified as one reportable segment.
Recently Adopted Accounting Pronouncements
During the year ended December 31, 2020, the Partnership provided lease concessions to certain tenants in response to the impact of COVID-19, in the form of rent deferrals. The Partnership made an election to account for such lease concessions consistent with how those concessions would be accounted for under lease guidance if enforceable rights and obligations for those concessions had already existed in the leases. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than total payments required by the original lease.
Substantially all of the Partnership’s concessions to date provide for a deferral of payments with no substantive changes to the consideration in the original lease. These deferrals affect the timing, but not the amount, of the lease payments. The Partnership is accounting for these deferrals as if no changes to the lease were made. Under this accounting, the Partnership increases its rent receivables as tenant payments accrue and continues to recognize rental income. During the year ended December 31, 2020, the Partnership has entered into lease modifications that deferred $51,584, which was recognized as rental income for those deferred months in 2020. The rent receivable related to rental deferrals totaled $4,299 as of December 31, 2021. All rent deferrals were collected in 2022.
Other accounting standards that have been issued or proposed by the Financial Accounting Standards Board are currently not applicable to the Company or are not expected to have a significant impact on the Partnership’s financial position, results of operations and cash flows.
|
Related Party Transactions |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions Disclosure [Text Block] |
(3) Related Party Transactions –
The Partnership owns the percentage interest shown below in the following properties as tenants-in-common with the affiliated entities listed: Jared Jewelry store in Auburn Hills, Michigan (40% – AEI Income & Growth Fund 25 LLC); Memorial Hospital in Diamondhead, Mississippi (60% - AEI Net Lease Income Fund 36 LP).
The Partnership owned a 30% interest in a Gander Mountain store. AEI Accredited Investor Fund V LP and AEI National Income Property Fund VIII LP, affiliates of the Partnership, owned a 70% interest in this property until the property was sold to an unrelated third party in 2021. The Partnership owned a 50% interest in a Jared Jewelry store. AEI Net Lease Income & Growth Fund XX LP, and affiliate of the Partnership, owned a 50% interest in this property until the property was sold to an unrelated third party in 2022.
AEI received the following reimbursements for costs and expenses from the Partnership for the years ended December 31:
The payable to AEI Fund Management, Inc. represents the balance due for the services described in 3a, b, c and d. This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.
|
Real Estate Investments |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Disclosure [Text Block] |
(4) Real Estate Investments –
The Partnership leases its properties to tenants under net leases, classified as operating leases. Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property. For some leases, the Partnership is responsible for repairs to the structural components of the building, the roof, and the parking lot. At the time the properties were acquired, the remaining primary lease terms varied from 10 to 18 years. The leases provide the tenants with two to four five-year renewal options subject to the same terms and conditions as the primary term. The leases for the Best Buy store in Eau Claire, Wisconsin and Jared Jewelry store in Auburn Hills, Michigan were extended to end on January 19, 2028 and December 31, 2024, respectively.
The Partnership's properties are commercial, single-tenant buildings. The Jared Jewelry store in Auburn Hills, Michigan was constructed in 1999 and acquired in 2005. The Best Buy store in Eau Claire, Wisconsin was constructed in 1990, renovated in 1997 and acquired in 2008. The Dollar Tree store in Cincinnati, Ohio was constructed in 2015 and acquired in 2016. The Advance Auto store in Chelsea, Alabama was constructed in 2006 and acquired in 2021. The Memorial Hospital in Diamondhead, Mississppi was construced in 2008 and acquired in 2022. There have been no costs capitalized as improvements subsequent to the acquisitions.
The cost of the properties not held for sale and related accumulated depreciation at December 31, 2022 are as follows:
For the years ended December 31, 2022 and 2021, the Partnership recognized depreciation expense of $348,206 and $329,061, respectively. The following schedule presents the cost and related accumulated amortization of acquired lease intangibles not held for sale at December 31:
For the years ended December 31, 2022 and 2021, the value of in-place lease intangibles amortized to expense was $91,464 and $39,291, and the increase to rental income for below-market leases was $8,108, respectively. For lease intangibles not held for sale as of December 31, 2022, the estimated amortization expense is $119,275 for each of the next three succeeding years, $92,930 for the year ended December 31, 2026, and $83,511 for the year ended December 31, 2027. The estimated increase to rental income for below-market leases is $8,108 for each of the next three succeeding years and $675 for the year ended December 31, 2026.
The Partnership owned a 30% interest in a Gander Mountain store in Champaign, Illinois. The remaining interests in the property were 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 on‑site 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.
On August 11, 2020, the Partnership entered into a lease agreement with a primary term of 10 years with Burlington Coat Factory of Texas, Inc. (“Burlington”) as a replacement tenant for 62% of the square footage of the property. The tenant’s obligations under the lease were guaranteed by Burlington Coat Factory Warehouse Corporation. The tenant was to operate a Burlington retail store in the space. The Partnership’s 30% share of annual rent was $102,980 and commenced on May 7, 2021. The Partnership was responsible for paying its 30% share of the buildout of the space, which was $612,992. As part of the agreement, the Partnership paid a tenant improvement allowance of $66,201 that was capitalized. The Partnership paid its 30% share of lease commissions due to real estate brokers totaling $63,443 that were owed as part of the lease transaction. This amount was capitalized and was to be amortized over the term of the lease. On February 5, 2021, the Partnership entered into a lease agreement with a primary term of 10 years with Five Below, Inc. as a replacement tenant for 38% of the square footage of the property. The tenant operated a Five Below retail store in the space. The Partnerships 30% share of the annual rent was $62,093 and commenced on August 27, 2021. The Partnership was responsible for its 30% share of the buildout of the space, which was $250,988. As part of the agreement, the Partnership paid a tenant improvement allowance of $21,995 that was capitalized. The Partnership paid its 30% share of lease commissions due to real estate brokers totaling $40,804 that were due as part of the lease transaction. This amount was capitalized and was to be amortized over the term of the lease. In August 2021, the Partnership entered into an agreement to sell its 30% interest in the Burlington Coat Factory and Five Below in Champaign, Illinois to an unrelated third party. On September 28, 2021, the sale closed with the Partnership receiving net proceeds of $2,477,214, which resulted in a net gain of $13,198. At the time of the sale, the cost and related accumulated depreciation was $3,178,923 and $714,907, respectively. 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 decreased from $124,049 to $105,560 effective January 1, 2020. On May 14, 2021, the Partnership purchased an Advance Auto Parts store in Chelsea, Alabama for $1,802,200. The Partnership allocated $158,736 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The property is leased to Advance Stores Company, Incorporated under a lease agreement with a remaining primary term of 10.4 years (as of the date of purchase) and annual rent of $110,000. In July 2021, the Partnership entered into an agreement with the tenant of the Jared Jewelry store in Hanover, Maryland to extend the lease term seven years to end on January 31, 2029. As part of the agreement, the annual rent will decrease from $224,340 to $167,500 effective February 1, 2022. In December 2021, the Partnership entered into an agreement to sell its 50% interest in the Jared Jewelry store in Hanover, Maryland to an unrelated third party. On February 14, 2022, the sale closed with the Partnership receiving net proceeds of $2,450,634, which resulted in a net gain of $1,268,078. At the time of sale, the cost and related accumulated depreciation was $1,989,135 and $806,579, respectively. On March 22, 2022, the Partnership purchased a 40% interest of the Memorial Hospital property in Diamondhead, Mississippi for $1,610,422. The Partnership allocated $114,052 of the purchase price to Acquired Lease Assets, representing in-place intangibles. The property is leased to Memorial Hospital at Gulfport, Incorporated under a lease agreement with a remaining primary term of 5.3 years (as of date of purchase) and annual rent of $100,320, scheduled to increase annually at 2%. On May 11, 2022, the Partnership purchased an additional 46% joint-venture interest in the Best Buy store in Eau Claire, Wisconsin for $3,726,043 from AEI Income & Growth Fund 26 LLC, an affiliate of the Partnership. The purchase price of the property was based upon the property’s fair market value as determined by an independent third party, commercial property appraiser. The property interest became available because AEI Income & Growth Fund 26 LLC was in the process of liquidating its property portfolio. The Partnership now owns 100% interest in the property. The Partnership allocated $306,653 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The annual rent for the additional 46% interest that was purchased is $240,432. For properties owned as of December 31, 2022, the minimum future rent payments required by the leases are as follows:
There were no contingent rents recognized in 2022 and 2021.
|
Major Tenants |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major Customers, Policy [Policy Text Block] | (5) Major Tenants – The following schedule presents rental income from individual tenants, or affiliated groups of tenants, who each contributed more than ten percent of the Partnership's total rental income for the years ended December 31:
|
Partners' Capital |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Partners' Capital Notes [Abstract] | |
Partners' Capital Notes Disclosure [Text Block] |
(6) Partners’ Capital –
For the years ended December 31, 2022 and 2021, the Partnership declared distributions of $690,407 and $613,731, respectively. The Limited Partners received distributions of $683,503 and $607,594 and the General Partners received distributions of $6,904 and $6,137 for the years ended December 31, 2022 and 2021, respectively. The Limited Partners' distributions represented $39.82 and $33.70 per Limited Partnership Unit outstanding using 17,165 and 18,029 weighted average Units in 2022 and 2021, respectively. The distributions represented $39.82 and $14.12 per Unit of Net Income and $0 and $19.58 per Unit of contributed capital in 2022 and 2021, respectively.
The Partnership may repurchase Units from Limited Partners who have tendered their Units to the Partnership. Such Units may be acquired at a discount. The Partnership will not be obligated to purchase in any year any number of Units that, when aggregated with all other transfers of Units that have occurred since the beginning of the same calendar year (excluding Permitted Transfers as defined in the Partnership Agreement), would exceed 5% of the total number of Units outstanding on January 1 of such year. In no event shall the Partnership be obligated to purchase Units if, in the sole discretion of the Managing General Partner, such purchase would impair the capital or operation of the Partnership.
On April 1, 2022, the Partnership repurchased a total of 352.29 Units for $266,947 from 30 Limited Partners in accordance with the Partnership Agreement. The Partnership acquired these Units using Net Cash Flow from operations. On April 1, 2021, the Partnership repurchased a total of 843.97 Units for $610,604 from 36 Limited Partners in accordance with the Partnership Agreement. The Partnership acquired these Units using net sales proceeds. On October 1, 2021, the Partnership repurchased a total of 518.17 Units for $389,248 from 39 Limited Partners. The Partnership acquired these Units using net sales proceeds. The repurchases increase the remaining Limited Partners' ownership interest in the Partnership. As a result of these repurchases and pursuant to the Partnership Agreement, the General Partners received distributions of $2,696 and $10,100 in 2022 and 2021, respectively.
|
Income Taxes |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] |
(7) Income Taxes –
The following is a reconciliation of net income for financial reporting purposes to income reported for federal income tax purposes for the years ended December 31:
The following is a reconciliation of Partners' capital for financial reporting purposes to Partners' capital reported for federal income tax purposes for the years ended December 31:
|
COVID-19 Outbreak |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Covi D19 Outbreak Abstract | |
COVID-19 Outbreak [Text Block] |
(8) COVID-19 Outbreak –
During the first quarter of 2020, there was a global outbreak of 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 COVID-19. Nevertheless, COVID‑19 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 tenants started paying 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 FASB. Deferred rent of $51,584 was recognized as rental income during the year ended December 31, 2020 and a corresponding rent receivable was recorded. The rent receivable related to these rental deferrals totaled $4,299 as of December 31, 2021. All rent receivables were collected in 2022.
|
Accounting Policies, by Policy (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
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 |
Basis of Accounting, Policy [Policy Text Block] | The accounts of the Partnership are maintained on the accrual basis of accounting for both federal income tax purposes and financial reporting purposes. |
Use of Estimates, Policy [Policy Text Block] | Management uses estimates and assumptions in preparing these financial statements in accordance with United States Generally Accepted Accounting Principles (US GAAP). Those estimates and assumptions may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates, and the difference could be material. Significant items, subject to such estimates and assumptions, include the carrying value of real estate held for investment, real estate held for sale and the allocation of purchase price of real estate assets and intangible assets.
The Partnership regularly assesses whether market events and conditions indicate that it is reasonably possible to recover the carrying amounts of its investments in real estate from future operations and sales. A change in those market events and conditions could have a material effect on the carrying amount of its real estate.
|
Concentration Risk, Credit Risk, Policy [Policy Text Block] | The Partnership's cash is deposited in one financial institution and at times during the year it may exceed FDIC insurance limits. |
Receivable [Policy Text Block] | Credit terms are extended to tenants in the normal course of business. The Partnership performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral.
Rent receivables are recorded at their estimated net realizable value. The Partnership follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Partnership is of the belief that such accounts, if any, will be collectible in all material respects and thus an allowance is not necessary. Accounts are considered past due if payment is not made on a timely basis in accordance with the Partnership’s credit terms. Receivables considered uncollectible are written off.
|
Income Tax, Policy [Policy Text Block] | The income or loss of the Partnership for federal income tax reporting purposes is includable in the income tax returns of the partners. In general, no recognition has been given to income taxes in the accompanying financial statements.
The tax return and the amount of distributable Partnership income or loss are subject to examination by federal and state taxing authorities. If such an examination results in changes to distributable Partnership income or loss, the taxable income of the partners would be adjusted accordingly. Primarily due to its tax status as a partnership, the Partnership has no significant tax uncertainties that require recognition or disclosure. The Partnership is no longer subject to U.S. federal income tax examinations for tax years before 2019, and with few exceptions, is no longer subject to state tax examinations for tax years before 2019.
|
Revenue Recognition, Leases [Policy Text Block] | The Partnership's real estate is leased under net leases, classified as operating leases. The leases provide for base annual rental payments payable in monthly installments. The Partnership recognizes rental income according to the terms of the individual leases. For deferred rents due to COVID-19, the Partnership recognizes the deferred rent related to the month it applies and records a rental receivable. For leases that contain stated rental increases, the increases are recognized in the year in which they are effective. Contingent rental payments are recognized when the contingencies on which the payments are based are satisfied and the rental payments become due under the terms of the leases. |
Property, Plant and Equipment, Policy [Policy Text Block] | 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 relative fair value of each component of the property. Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management’s assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset.
The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods. The above market and below market lease values will be capitalized as intangible lease assets or liabilities. Above market lease values will be amortized as an adjustment of rental income over the remaining 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 Partnership tests real estate for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable. For properties the Partnership will hold and operate, it compares the carrying amount of the property to the estimated probability-weighted future undiscounted cash flows expected to result from the property and its eventual disposition. If the sum of the expected future cash flows is less than the carrying amount of the property, the Partnership recognizes an impairment loss equal to the amount by which the carrying amount of the property exceeds the fair value of the property. For properties held for sale, the Partnership determines whether impairment has occurred by comparing the property’s estimated fair value less cost to sell to its current carrying value. If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value.
For financial reporting purposes, the buildings owned by the Partnership are depreciated using the straight-line method over an estimated useful life of 25 years. Intangible lease assets are amortized using the straight-line method for financial reporting purposes based on the remaining life of the lease.
The disposition of a property or classification of a property as Real Estate Held for Sale by the Partnership does not represent a strategic shift that will have a major effect on the Partnership’s operations and financial results. Therefore, the results from operating and selling the property are included in continuing operations.
The Partnership accounts for properties owned as tenants-in-common with affiliated entities and/or unrelated third parties using the proportionate consolidation method. Each tenant-in-common owns a separate, undivided interest in the properties. Any tenant-in-common that holds more than a 50% interest does not control decisions over the other tenant-in-common interests. The financial statements reflect only this Partnership's percentage share of the properties’ land, building, intangible assets, liabilities, revenues and expenses.
The Partnership's properties are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which the properties are located. These laws could require the Partnership to investigate and remediate the effects of the release or disposal of hazardous materials at these locations if found. For each property, an environmental assessment is completed prior to acquisition. In addition, the lease agreements typically strictly prohibit the production, handling, or storage of hazardous materials (except where incidental to the tenant’s business such as use of cleaning supplies) in violation of applicable law to restrict environmental and other damage. Environmental liabilities are recorded when it is determined the liability is probable and the costs can reasonably be estimated. There were no environmental issues noted or liabilities recorded at December 31, 2022 and 2021.
|
Fair Value of Financial Instruments, Policy [Policy Text Block] | As of December 31, 2022 and 2021, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis. |
Earnings Per Share, Policy [Policy Text Block] | Income per Limited Partnership Unit is calculated based on the weighted average number of Limited Partnership Units outstanding during each period presented. Diluted income per Limited Partnership Unit considers the effect of any potentially dilutive Unit equivalents, of which the Partnership had none for each of the years ended December 31, 2022 and 2021 |
Segment Reporting, Policy [Policy Text Block] | The Partnership invests in single tenant commercial properties throughout the United States that are net leased to tenants in various industries. Because these net leased properties have similar economic characteristics, the Partnership evaluates operating performance on an overall portfolio basis. Therefore, the Partnership’s properties are classified as one reportable segment |
COVID-19 Outbreak [Policy Text Block] | During the first quarter of 2020, there was a global outbreak of 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 COVID-19. Nevertheless, COVID‑19 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 tenants started paying 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 FASB. Deferred rent of $51,584 was recognized as rental income during the year ended December 31, 2020 and a corresponding rent receivable was recorded. The rent receivable related to these rental deferrals totaled $4,299 as of December 31, 2021. All rent receivables were collected in 2022.
|
Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | AEI received the following reimbursements for costs and expenses from the Partnership for the years ended December 31
|
Real Estate Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | properties not held for sale
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | acquired lease intangibles not held for sale
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Minimum Future Rent | minimum future rent
|
Major Tenants (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Major Tenants
|
Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of GAAP To Federal Taxable Income | reconciliation of net income for financial reporting
|
|||||||||||||||||||||||||||||||||||||||||||||
Schedule Of GAAP To Federal Tax Basis | reconciliation of Partners' capital for financial reporting
|
Organization (Details) - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2019 |
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) | 17,076.71 | 17,429 | 18,791.14 | 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 |
Summary of Significant Accounting Policies (Details) |
Dec. 31, 2021
USD ($)
|
---|---|
Accounting Policies [Abstract] | |
Deferred Rent Credit | $ 51,584 |
Deferred Rent Receivables, Net | $ 4,299 |
Related Party Transactions (Details) - Related Party Transactions - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Related Party Transactions [Abstract] | ||
a. | $ 138,597 | $ 157,584 |
b. | 46,992 | 87,413 |
c. | 58,789 | 91,839 |
d. | $ 18,516 | $ 13,306 |
Real Estate Investments (Details) - Acquired Lease Intangibles - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases, Acquired-in-Place [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 864,490 | $ 443,785 |
Lease Intangibles Accumulated Amortization | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | 268,098 | 176,635 |
Accumulated Amortization | 55,405 | 47,297 |
Off Market Unfavorable Lease | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 80,404 | $ 80,404 |
Real Estate Investments (Details) - Acquired Lease Intangibles (Parentheticals) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Leases, Acquired-in-Place [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average life | 61 months | 48 months |
Off Market Unfavorable Lease | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average life | 37 months | 49 months |
Real Estate Investments (Details) - Future Minimum Rent Payments - USD ($) |
Dec. 31, 2027 |
Dec. 31, 2026 |
Dec. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
---|---|---|---|---|---|
Future Minimum Rent Payments Abstract | |||||
2023 | $ 988,204 | ||||
2024 | $ 991,599 | ||||
2025 | $ 888,140 | ||||
2026 | $ 778,296 | ||||
2027 | $ 732,642 | ||||
Thereafter | 440,530 | ||||
$ 4,819,411 |
Major Tenants (Details) - Major Tenants - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Revenue, Major Customer [Line Items] | ||
Major Tenants | $ 807,075 | $ 728,539 |
Aggregate rental income of major tenants as a percentage of total rental income | 90.00% | 87.00% |
Sterling Jewelers Inc | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | $ 130,736 | $ 316,021 |
Best Buy Stores LP | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | 436,062 | 282,241 |
Dollar Tree Stores Inc | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | 130,277 | 130,277 |
Advance Auto Parts, Inc. 'Member' | ||
Revenue, Major Customer [Line Items] | ||
Major Tenants | $ 110,000 | $ 0 |
Income Taxes (Details) - Federal Taxable Income Reconciliation - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Federal Taxable Income Reconciliation Abstract | ||
Net Income for Financial Reporting Purposes | $ 1,531,185 | $ 259,412 |
Depreciation for Tax Purposes Under Depreciation and Amortization for Financial Reporting Purposes | 179,184 | 17,520 |
Gain on Sale of Real Estate for Tax Purposes Under Gain for Financial Reporting Purposes | (1,268,078) | (323,171) |
Taxable Income (Loss) to Partners | $ 442,291 | $ (46,239) |
Income Taxes (Details) - Federal Tax Partners' Capital - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Federal Tax Partners Capital Abstract | ||
Partners' Capital for Financial Reporting Purposes | $ 10,669,167 | $ 10,098,032 |
Adjusted Tax Basis of Investments in Real Estate Over Net Investments in Real Estate for Financial Reporting Purposes | 200,652 | 1,289,546 |
Syndication Costs Treated as Reduction of Capital For Financial Reporting Purposes | 3,208,043 | 3,208,043 |
Partners' Capital for Tax Reporting Purposes | $ 14,077,862 | $ 14,595,621 |
COVID-19 Outbreak (Details) |
Dec. 31, 2021
USD ($)
|
---|---|
Covi D19 Outbreak Abstract | |
Deferred Rent Receivables, Net | $ 4,299 |
Label | Element | Value |
---|---|---|
Limited Partner [Member] | ||
Net Income for Financial Reporting Purposes | us-gaap_ProfitLoss | $ 254,538 |
Partners' Capital | us-gaap_PartnersCapital | 11,450,831 |
General Partner [Member] | ||
Net Income for Financial Reporting Purposes | us-gaap_ProfitLoss | 4,874 |
Partners' Capital | us-gaap_PartnersCapital | $ 11,472 |