State of Minnesota
|
41-1789725
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
30 East 7th Street, Suite 1300
St. Paul, Minnesota 55101
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(651) 227-7333
|
|
(Address of principal executive offices)
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(Registrant's telephone number)
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Not Applicable
|
(Former name, former address and former fiscal year, if changed since last report)
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☐ Large accelerated filer
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☐ Accelerated filer
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☐ Non-accelerated filer
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☒ Smaller reporting company
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☐ Emerging growth company
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Page
|
||||
Part I – Financial Information
|
||||
Item 1.
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Financial Statements:
|
|||
Balance Sheets as of June 30, 2018 and December 31, 2017
|
3
|
|||
Statements for the Periods ended June 30, 2018 and 2017:
|
||||
Operations
|
4
|
|||
Cash Flows
|
5
|
|||
Changes in Partners' Capital (Deficit)
|
6
|
|||
Notes to Financial Statements
|
7 - 11
|
|||
Item 2.
|
Management's Discussion and Analysis of Financial
|
|||
Condition and Results of Operations
|
12 - 17
|
|||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
17
|
||
Item 4.
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Controls and Procedures
|
17
|
||
Part II – Other Information
|
||||
Item 1.
|
Legal Proceedings
|
18
|
||
Item 1A.
|
Risk Factors
|
18
|
||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
18
|
||
Item 3.
|
Defaults Upon Senior Securities
|
18
|
||
Item 4.
|
Mine Safety Disclosures
|
19
|
||
Item 5.
|
Other Information
|
19
|
||
Item 6.
|
Exhibits
|
19
|
||
Signatures
|
19
|
June 30,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
(unaudited)
|
||||||||
Current Assets:
|
||||||||
Cash
|
$
|
931,930
|
$
|
2,142,394
|
||||
Receivables
|
91,761
|
50,817
|
||||||
Total Current Assets
|
1,023,691
|
2,193,211
|
||||||
Real Estate Investments:
|
||||||||
Land
|
3,659,461
|
3,659,461
|
||||||
Buildings
|
10,339,539
|
10,339,539
|
||||||
Acquired Intangible Lease Assets
|
807,178
|
807,178
|
||||||
Real Estate Held for Investment, at cost
|
14,806,178
|
14,806,178
|
||||||
Accumulated Depreciation and Amortization
|
(4,004,447
|
)
|
(3,769,205
|
)
|
||||
Real Estate Held for Investment, Net
|
10,801,731
|
11,036,973
|
||||||
Total Assets
|
$
|
11,825,422
|
$
|
13,230,184
|
Current Liabilities:
|
||||||||
Payable to AEI Fund Management, Inc.
|
$
|
57,045
|
$
|
27,235
|
||||
Distributions Payable
|
198,181
|
1,218,384
|
||||||
Unearned Rent
|
32,917
|
0
|
||||||
Total Current Liabilities
|
288,143
|
1,245,619
|
||||||
Long-term Liabilities:
|
||||||||
Acquired Below-Market Lease Intangibles, Net
|
97,205
|
106,755
|
||||||
Partners' Capital :
|
||||||||
General Partners
|
5,695
|
10,072
|
||||||
Limited Partners – 24,000 Units authorized;
19,402 and 19,616 Units issued and outstanding
as of 6/30/2018 and 12/31/2017, respectively
|
11,434,379
|
11,867,738
|
||||||
Total Partners' Capital
|
11,440,074
|
11,877,810
|
||||||
Total Liabilities and Partners' Capital
|
$
|
11,825,422
|
$
|
13,230,184
|
Three Months Ended June 30
|
Six Months Ended June 30
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Rental Income
|
$
|
259,213
|
$
|
297,795
|
$
|
518,177
|
$
|
631,952
|
||||||||
Expenses:
|
||||||||||||||||
Partnership Administration – Affiliates
|
34,466
|
41,998
|
72,096
|
86,742
|
||||||||||||
Partnership Administration and Property
Management – Unrelated Parties
|
37,381
|
22,356
|
65,742
|
37,405
|
||||||||||||
Depreciation and Amortization
|
117,621
|
392,216
|
235,242
|
525,180
|
||||||||||||
Total Expenses
|
189,468
|
456,570
|
373,080
|
649,327
|
||||||||||||
Operating Income (Loss)
|
69,745
|
(158,775
|
)
|
145,097
|
(17,375
|
)
|
||||||||||
Other Income:
|
||||||||||||||||
Interest Income
|
1,536
|
374
|
2,373
|
795
|
||||||||||||
Net Income (Loss)
|
$
|
71,281
|
$
|
(158,401
|
)
|
$
|
147,470
|
$
|
(16,580
|
)
|
||||||
Net Income (Loss) Allocated:
|
||||||||||||||||
General Partners
|
$
|
713
|
$
|
(1,584
|
)
|
$
|
1,475
|
$
|
(166
|
)
|
||||||
Limited Partners
|
70,568
|
(156,817
|
)
|
145,995
|
(16,414
|
)
|
||||||||||
Total
|
$
|
71,281
|
$
|
(158,401
|
)
|
$
|
147,470
|
$
|
(16,580
|
)
|
||||||
Net Income (Loss) per Limited
Partnership Unit
|
$
|
3.64
|
$
|
(7.99
|
)
|
$
|
7.48
|
$
|
(.84
|
)
|
||||||
Weighted Average Units Outstanding –
Basic and Diluted
|
19,402
|
19,616
|
19,509
|
19,626
|
||||||||||||
Six Months Ended June 30
|
||||||||
2018
|
2017
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net Income (Loss)
|
$
|
147,470
|
$
|
(16,580
|
)
|
|||
Adjustments to Reconcile Net Income (Loss)
To Net Cash Provided by Operating Activities:
|
||||||||
Depreciation and Amortization
|
225,692
|
515,630
|
||||||
(Increase) Decrease in Receivables
|
(40,944
|
)
|
(46,315
|
)
|
||||
Increase (Decrease) in Payable to
AEI Fund Management, Inc.
|
29,810
|
(7,186
|
)
|
|||||
Increase (Decrease) in Unearned Rent
|
32,917
|
31,797
|
||||||
Total Adjustments
|
247,475
|
493,926
|
||||||
Net Cash Provided By (Used For)
Operating Activities
|
394,945
|
477,346
|
||||||
Cash Flows from Investing Activities:
|
||||||||
Investments in Real Estate
|
0
|
(76,750
|
)
|
|||||
Cash Flows from Financing Activities:
|
||||||||
Distributions Paid to Partners
|
(1,416,564
|
)
|
(522,423
|
)
|
||||
Repurchase of Partnership Units
|
(188,845
|
)
|
(17,794
|
)
|
||||
Net Cash Provided By (Used For)
Financing Activities
|
(1,605,409
|
)
|
(540,217
|
)
|
||||
Net Increase (Decrease) in Cash
|
(1,210,464
|
)
|
(139,621
|
)
|
||||
Cash, beginning of period
|
2,142,394
|
691,125
|
||||||
Cash, end of period
|
$
|
931,930
|
$
|
551,504
|
||||
General Partners
|
Limited Partners
|
Total
|
Limited Partnership Units Outstanding
|
|||||||||||||
Balance, December 31, 2016
|
$
|
(18,553
|
)
|
$
|
12,656,556
|
$
|
12,638,003
|
19,635.64
|
||||||||
Distributions Declared
|
(5,224
|
)
|
(517,196
|
)
|
(522,420
|
)
|
||||||||||
Repurchase of Partnership Units
|
(178
|
)
|
(17,616
|
)
|
(17,794
|
)
|
(20.00
|
)
|
||||||||
Net Loss
|
(166
|
)
|
(16,414
|
)
|
(16,580
|
)
|
||||||||||
Balance, June 30, 2017
|
$
|
(24,121
|
)
|
$
|
12,105,330
|
$
|
12,081,209
|
19,615.64
|
||||||||
Balance, December 31, 2017
|
$
|
10,072
|
$
|
11,867,738
|
$
|
11,877,810
|
19,615.64
|
|||||||||
Distributions Declared
|
(3,964
|
)
|
(392,397
|
)
|
(396,361
|
)
|
||||||||||
Repurchase of Partnership Units
|
(1,888
|
)
|
(186,957
|
)
|
(188,845
|
)
|
(213.34
|
)
|
||||||||
Net Income
|
1,475
|
145,995
|
147,470
|
|||||||||||||
Balance, June 30, 2018
|
$
|
5,695
|
$
|
11,434,379
|
$
|
11,440,074
|
19,402.30
|
|||||||||
— |
Market and economic conditions which affect the value of the properties the Partnership owns and the cash from rental income such properties generate;
|
— |
the federal income tax consequences of rental income, deductions, gain on sales and other items and the effects of these consequences for the Partners;
|
— |
resolution by the General Partners of conflicts with which they may be confronted;
|
— |
the success of the General Partners of locating properties with favorable risk return characteristics;
|
— |
the effect of tenant defaults; and
|
— |
the condition of the industries in which the tenants of properties owned by the Partnership operate.
|
Period
|
Total Number
of Units
Purchased
|
Average
Price Paid
per Unit
|
Total Number of Units
Purchased as Part of
Publicly Announced
Plans or Programs
|
Maximum Number
of Units that May Yet
Be Purchased Under
the Plans or Programs
|
4/1/18 to 4/30/18
|
213.34
|
$876.33
|
4,597.70(1)
|
(2)
|
5/1/18 to 5/31/18
|
--
|
--
|
--
|
--
|
6/1/18 to 6/30/18
|
--
|
--
|
--
|
--
|
(1)
|
The Partnership's repurchase plan is mandated by the Partnership Agreement as included in the prospectus related to the original offering of the Units.
|
(2)
|
The Partnership Agreement contains annual limitations on repurchases described in the paragraph above and has no expiration date.
|
31.1 |
Certification of Chief Executive Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2 |
Certification of Chief Financial Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
|
32 |
Certification of Chief Executive Officer and Chief Financial Officer of General Partner pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Dated: August 13, 2018
|
AEI Income & Growth Fund XXI
|
|
Limited Partnership
|
||
By:
|
AEI Fund Management XXI, Inc.
|
|
Its:
|
Managing General Partner
|
|
By:
|
/s/ ROBERT P JOHNSON | |
Robert P. Johnson
|
||
President
|
||
(Principal Executive Officer)
|
||
By:
|
/s/ PATRICK W KEENE | |
Patrick W. Keene
|
||
Chief Financial Officer
|
||
(Principal Accounting Officer)
|
Date: August 13, 2018
|
/s/ ROBERT P JOHNSON |
Robert P. Johnson, President
|
|
AEI Fund Management XXI, Inc.
|
|
Managing General Partner
|
Date: August 13, 2018
|
/s/ PATRICK W KEENE |
Patrick W. Keene, Chief Financial Officer
|
|
AEI Fund Management XXI, Inc.
|
|
Managing General Partner
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ ROBERT P JOHNSON | ||
Robert P. Johnson, President
|
||
AEI Fund Management XXI, Inc.
|
||
Managing General Partner
|
||
August 13, 2018
|
||
/s/ PATRICK W KEENE | ||
Patrick W. Keene, Chief Financial Officer
|
||
AEI Fund Management XXI, Inc.
|
||
Managing General Partner
|
||
August 13, 2018
|
Document And Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | AEI Income & Growth Fund XXI Ltd Partnership |
Document Type | 10-Q |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | shares | 19,402 |
Entity Public Float | $ | $ 0 |
Amendment Flag | false |
Entity Central Index Key | 0000931755 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Smaller Reporting Company |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Jun. 30, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q2 |
Balance Sheet (Parentheticals) - Limited Partner [Member] - shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Limited Partners, units authorized | 24,000 | 24,000 |
Limited Partners, units issued | 19,402 | 19,616 |
Limited Partners, units outstanding | 19,402 | 19,616 |
Statement of Income - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Rental Income | $ 259,213 | $ 297,795 | $ 518,177 | $ 631,952 |
Expenses: | ||||
Partnership Administration – Affiliates | 34,466 | 41,998 | 72,096 | 86,742 |
Partnership Administration and Property Management – Unrelated Parties | 37,381 | 22,356 | 65,742 | 37,405 |
Depreciation and Amortization | 117,621 | 392,216 | 235,242 | 525,180 |
Total Expenses | 189,468 | 456,570 | 373,080 | 649,327 |
Operating Income (Loss) | 69,745 | (158,775) | 145,097 | (17,375) |
Other Income: | ||||
Interest Income | 1,536 | 374 | 2,373 | 795 |
Net Income | 71,281 | (158,401) | 147,470 | (16,580) |
Net Income (Loss) Allocated: | ||||
General Partners | 713 | (1,584) | 1,475 | (166) |
Limited Partners | $ 70,568 | $ (156,817) | $ 145,995 | $ (16,414) |
Net Income (Loss) per Limited Partnership Unit (in Dollars per share) | $ 3.64 | $ (7.99) | $ 7.48 | $ (0.84) |
Weighted Average Units Outstanding – Basic and Diluted (in Shares) | 19,402 | 19,616 | 19,509 | 19,626 |
Statement of Changes in Partners' Capital - USD ($) |
General Partner [Member] |
Limited Partner [Member] |
Total |
---|---|---|---|
Balance at Dec. 31, 2016 | $ (18,553) | $ 12,656,556 | $ 12,638,003 |
Balance (in Shares) at Dec. 31, 2016 | 19,635.64 | ||
Balance at Jun. 30, 2017 | (24,121) | $ 12,105,330 | 12,081,209 |
Balance (in Shares) at Jun. 30, 2017 | 19,615.64 | ||
Distributions Declared | (5,224) | $ (517,196) | (522,420) |
Repurchase of Partnership Units | (178) | $ (17,616) | (17,794) |
Units Repurchased (in Shares) | (20.00) | ||
Net Income | (166) | $ (16,414) | (16,580) |
Balance at Dec. 31, 2017 | 10,072 | $ 11,867,738 | 11,877,810 |
Balance (in Shares) at Dec. 31, 2017 | 19,616 | ||
Balance at Jun. 30, 2018 | 5,695 | $ 11,434,379 | 11,440,074 |
Balance (in Shares) at Jun. 30, 2018 | 19,402 | ||
Distributions Declared | (3,964) | $ (392,397) | (396,361) |
Repurchase of Partnership Units | (1,888) | $ (186,957) | (188,845) |
Units Repurchased (in Shares) | (213.34) | ||
Net Income | $ 1,475 | $ 145,995 | $ 147,470 |
Basis of Accounting |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Basis of Accounting [Text Block] |
(1) The condensed statements included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of operations for the interim period, on a basis consistent with the annual audited statements. The adjustments made to these condensed statements consist only of normal recurring adjustments. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) have been condensed or omitted pursuant to such rules and regulations, although the registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in the registrant’s latest annual report on Form 10K.
|
Organization |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] |
(2) Organization –
AEI Income & Growth Fund XXI Limited Partnership (“Partnership”) was formed to acquire and lease commercial properties to operating tenants. The Partnership's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing General Partner. Robert P. Johnson, the President and sole director of AFM, serves as the Individual General Partner. AFM is a wholly owned subsidiary of AEI Capital Corporation of which Mr. Johnson is the majority shareholder. AEI Fund Management, Inc. (“AEI”), an affiliate of AFM, performs the administrative and operating functions for the Partnership.
The terms of the Partnership offering called for a subscription price of $1,000 per Limited Partnership Unit, payable on acceptance of the offer. The Partnership commenced operations on April 14, 1995 when minimum subscriptions of 1,500 Limited Partnership Units ($1,500,000) were accepted. On January 31, 1997, the offering terminated when the maximum subscription limit of 24,000 Limited Partnership Units was reached. Under the terms of the Limited Partnership Agreement, the Limited Partners and General Partners contributed funds of $24,000,000 and $1,000, respectively.
During operations, any Net Cash Flow, as defined, which the General Partners determine to distribute will be distributed 90% to the Limited Partners and 10% to the General Partners; provided, however, that such distributions to the General Partners will be subordinated to the Limited Partners first receiving an annual, noncumulative distribution of Net Cash Flow equal to 10% of their Adjusted Capital Contribution, as defined, and, provided further, that in no event will the General Partners receive less than 1% of such Net Cash Flow per annum. Distributions to Limited Partners will be made pro rata by Units.
Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the General Partners determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Partners and 1% to the General Partners until the Limited Partners receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 10% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Partners and 10% to the General Partners. Distributions to the Limited Partners will be made pro rata by Units.
For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated first in the same ratio in which, and to the extent, Net Cash Flow is distributed to the Partners for such year. Any additional profits will be allocated in the same ratio as the last dollar of Net Cash Flow is distributed. Net losses from operations will be allocated 99% to the Limited Partners and 1% to the General Partners.
For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Partnership Agreement as follows: (i) first, to those partners with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Partners and 1% to the General Partners until the aggregate balance in the Limited Partners' capital accounts equals the sum of the Limited Partners' Adjusted Capital Contributions plus an amount equal to 10% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Partners and 10% to the General Partners. Losses will be allocated 98% to the Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a deficit capital balance. Upon liquidation of the Partnership or withdrawal by a General Partner, the General Partners will contribute to the Partnership an amount equal to the lesser of the deficit balances in their capital accounts or 1% of total Limited Partners' and General Partners' capital contributions.
In January 2014, the Managing General Partner mailed a Consent Statement (Proxy) seeking the consent of the Limited Partners to continue the Partnership for an additional 60 months or to initiate the final disposition, liquidation and distribution of all of the Partnership’s properties and assets. On February 14, 2014, the proposal to continue the Partnership was approved with a majority of Units voted in favor of the continuation proposal. As a result, the Managing General Partner will continue the operations of the Partnership for an additional 60 months at which time it will again ask the Limited Partners to vote on the same two proposals.
|
Recently Adopted Accounting Pronouncements |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Policy Text Block [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] |
(3) Recently Adopted Accounting Pronouncements –
In May 2014, with subsequent updates issued in August 2015 and March, April and May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. This standard was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The update’s core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities are to use a five-step contract review model to ensure revenue is recognized, measured and disclosed in accordance with this principle. Those steps include the following: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to each performance obligation in the contract, and (v) recognize revenue when or as the entity satisfies a performance obligation.
Management has concluded that all of the Partnership’s material revenue streams fall outside of the scope of this guidance. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. During 2018, the Partnership selected the modified retrospective transition method as of the date of adoption effective January 1, 2018. Management has concluded that the majority of total revenues consist of rental income from leasing arrangements, which are specifically excluded from the standard. The Partnership analyzed its remaining revenue streams, inclusive of gains and losses on real estate sales, and concluded there are no changes in revenue recognition with the adoption of the new standard. As such, adoption of the standard did not result in a cumulative adjustment recognized as of January 1, 2018, and the standard did not have a material impact on the Partnership’s financial statements.
In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption. We expect the new standard will result in all of our real estate acquisitions being considered asset acquisitions, whereby substantially all acquisition costs related to our real estate acquisitions will be capitalized. Prior to the adoption of the new standard, all of our real estate acquisitions completed after January 1, 2009, were considered acquisitions of businesses, whereby all acquisition-related costs were expensed as incurred. During 2018, the Partnership has adopted the accounting pronouncement effective January 1, 2018, and applied this guidance prospectively. The adoption did not have a material effect on its financial statements.
|
Real Estate Investments |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] |
(4) Real Estate Investments –
The Partnership owns a 30% interest in the Gander Mountain store in Champaign, Illinois. The remaining interests in the property are owned by affiliates of the Partnership. On March 10, 2017, Gander Mountain Company filed for Chapter 11 reorganization and announced it was closing the store, following a liquidation sale of its onsite assets. In June 2017, the tenant filed a motion with the bankruptcy court to reject the lease for this store effective June 30, 2017. At this time, the tenant returned possession of the property to the owners and the Partnership became responsible for its 30% share of real estate taxes and other costs associated with maintaining the property. The tenant paid rent through June 2017. The owners have listed the property for lease with a real estate broker in the Champaign area. The annual rent from this property represented approximately 13% of the total annual rent of the Partnership's property portfolio. The loss of rent and increased expenses related to this property decreased the Partnership's cash flow. Consequently, beginning with the third quarter of 2017, the Partnership reduced its regular quarterly cash distribution rate from $13.18 per Unit to $10.51 per Unit.
As a result of the bankruptcy court terminating the lease for the Gander Mountain store, the Partnership included an additional $270,097 in Depreciation and Amortization in the second quarter of 2017, which represented the unamortized balance of the in-place lease intangible that was created when the property was purchased in 2014.
In March 2017, the Partnership entered into an agreement with the tenant of the KinderCare daycare center in Andover, Minnesota to extend the lease term five years to end on June 30, 2022. The annual rent will remain the same throughout the remainder of the extended lease term. As part of the agreement, the Partnership paid a tenant improvement allowance of $30,000 that was capitalized. In addition, beginning on April 1, 2017, the tenant received free rent for three months that equaled $36,362.
In the first quarter of 2017, the Partnership decided to sell the KinderCare daycare center. In October 2017, the Partnership entered into an agreement to sell the property to an unrelated third party. On November 14, 2017, the sale closed with the Partnership receiving net proceeds of $1,696,401, which resulted in a net gain of $1,043,829. At the time of sale, the cost and related accumulated depreciation was $1,294,207 and $641,635, respectively.
In April 2017, the Partnership entered into an agreement with the tenant of the Fresenius Medical Center in Shreveport, Louisiana to extend the lease term nine years to end on June 30, 2027. The annual rent will remain the same throughout the remainder of the extended lease term. As part of the agreement, the Partnership paid a tenant improvement allowance of $46,750 that was capitalized and will be depreciated.
|
Payable to AEI Fund Management, Inc. |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] |
(5) Payable to AEI Fund Management, Inc. –
AEI Fund Management, Inc. performs the administrative and operating functions for the Partnership. The payable to AEI Fund Management represents the balance due for those services. This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.
|
Partners' Capital |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Partners' Capital Notes [Abstract] | |
Partners' Capital Notes Disclosure [Text Block] |
(6) Partners’ Capital –
For six months ended June 30, 2018 and 2017, the Partnership declared distributions of $396,361 and $522,420, respectively. The Limited Partners received distributions of $392,397 and $517,196 and the General Partners received distributions of $3,964 and $5,224 for the periods, respectively. The Limited Partners' distributions represented $20.11 and $26.35 per Limited Partnership Unit outstanding using 19,509 and 19,626 weighted average Units in 2018 and 2017, respectively. The distributions represented $0.00 and $0.00 per Unit of Net Income and $20.11 and $26.35 per Unit of contributed capital in 2018 and 2017, respectively.
As part of the distributions discussed above, the Partnership distributed net sale proceeds of $197,980 and $68,812 in 2018 and 2017, respectively. The Limited Partners received distributions of $196,000 and $68,124 and the General Partners received distributions of $1,980 and $688 for the periods, respectively. The Limited Partners’ distributions represented $10.10 and $3.47 per Unit for the periods, respectively.
On April 1, 2018, the Partnership repurchased a total of 213.34 Units for $186,957 from eight Limited Partners in accordance with the Partnership Agreement. On April 1, 2017, the Partnership repurchased a total of 20.00 Units for $17,616 from one Limited Partner. The Partnership acquired these Units using Net Cash Flow from operations. The repurchases increase the remaining Limited Partners' ownership interest in the Partnership. As a result of these repurchases and pursuant to the Partnership Agreement, the General Partners received distributions of $1,888 and $178 in 2018 and 2017, respectively.
|
Fair Value Measurements |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] |
(7) Fair Value Measurements –
As of June 30, 2018 and December 31, 2017, the Partnership had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.
|
Accounting Policies, by Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
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 |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | In May 2014, with subsequent updates issued in August 2015 and March, April and May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. This standard was developed to enable financial statement users to better understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The update’s core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities are to use a five-step contract review model to ensure revenue is recognized, measured and disclosed in accordance with this principle. Those steps include the following: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to each performance obligation in the contract, and (v) recognize revenue when or as the entity satisfies a performance obligation.
Management has concluded that all of the Partnership’s material revenue streams fall outside of the scope of this guidance. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. During 2018, the Partnership selected the modified retrospective transition method as of the date of adoption effective January 1, 2018. Management has concluded that the majority of total revenues consist of rental income from leasing arrangements, which are specifically excluded from the standard. The Partnership analyzed its remaining revenue streams, inclusive of gains and losses on real estate sales, and concluded there are no changes in revenue recognition with the adoption of the new standard. As such, adoption of the standard did not result in a cumulative adjustment recognized as of January 1, 2018, and the standard did not have a material impact on the Partnership’s financial statements.
In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption. We expect the new standard will result in all of our real estate acquisitions being considered asset acquisitions, whereby substantially all acquisition costs related to our real estate acquisitions will be capitalized. Prior to the adoption of the new standard, all of our real estate acquisitions completed after January 1, 2009, were considered acquisitions of businesses, whereby all acquisition-related costs were expensed as incurred. During 2018, the Partnership has adopted the accounting pronouncement effective January 1, 2018, and applied this guidance prospectively. The adoption did not have a material effect on its financial statements. |
Organization (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
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) | 19,402 | 19,616 | 19,615.64 | 19,635.64 | 24,000 | 1,500 |
Limited Partners' Contributed Capital | $ 24,000,000 | $ 1,500,000 | ||||
General Partner [Member] | ||||||
Organization (Details) [Line Items] | ||||||
General Partners' Contributed Capital | $ 1,000 |
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