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.

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.