SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A1
Annual Report Under Section 13 or 15(d)
Of The Securities Exchange Act Of 1934
For the Fiscal Year Ended: December 31, 1994
Commission file number: 0-14090
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHIP
(Name of Small Business Issuer in its Charter)
State of Delaware 41-6273958
(State or other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(612) 227-7333
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
Check if disclosure of delinquent filers in response to Rule 405
of Regulation S-B is not contained in this Form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Issuer's revenues for year ended December 31, 1994 were
$690,879.
As of February 28, 1995, there were 7,253.25 Units of limited
partnership interest in the registrant outstanding and owned by
nonaffiliates of the registrant, which Units had an aggregate
market value (based solely on the price at which they were sold
since there is no ready market for such Units) of $7,253,250.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant has not incorporated any documents by reference
into this report.
Transitional Small Business Disclosure Format:
Yes No X
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
The registrant is a limited partnership comprised of AEI
Fund Management 86-A, Inc. (AFM) as Managing General Partner,
Robert P. Johnson as the Individual General Partner, and
purchasers of partnership units as Limited Partners. The
Partnership was formed April 2, 1986, under the laws of Delaware.
The registrant's business is to acquire, initially on a
debt-free basis, existing and newly constructed commercial
properties located in the United States, to lease such properties
to tenants under triple net leases, to hold such properties and
to eventually sell such properties. It is anticipated that the
Partnership will sell its properties within twelve years after
acquisition. At any time prior to selling the properties, the
Partnership may mortgage one or more of its properties for up to
50% of their original purchase price.
Under the terms of the Limited Partnership Agreement, the
Limited Partners contributed funds during the organization and
property acquisition phases to pay for organization, syndication
and property acquisition costs. Upon formation of the
Partnership, the General Partners contributed $1,000 for their
interest in the Partnership.
The primary objective of the Partnership is to provide the
Partners with distributions of rental income from its properties
which, because of depreciation, may be partially tax deferred.
During the operation of the Partnership, 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 the Partnership's 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 l% to the General Partners until the
Limited Partners receive an amount equal to: (a) their Adjusted
Capital Contribution plus (b) an amount equal to 6% of their
Adjusted Capital Contribution per annum, cumulative but not
compounded, to the extent not previously distributed from Net
Cash Flow; (ii) next, 99% to the Limited Partners and 1% to the
General Partners until the Limited Partners receive an amount
equal to 14% of their Adjusted Capital Contribution per annum,
cumulative but not compounded, to the extent not previously
distributed; (iii) next, to the General Partners until cumulative
distributions to the General Partners under Items (ii) and (iii)
equal 15% of cumulative distributions to all Partners under Items
(ii) and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata by
Units.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of the Partnership's 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 90% to the
Limited Partners and 10% to the General Partners. In the event no
Net Cash Flow is distributed to the Limited Partners, 90% of each
item of Partnership income, gain or credit for each respective
year shall be allocated to the Limited Partners, and 10% of each
such item shall be allocated to the General Partners. Net losses
from operations will be allocated 98% to the Limited Partners and
2% to the General Partners.
For tax purposes, profits arising from the sale,
financing, or other disposition of the Partnership's 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
14% of their Adjusted Capital Contributions per annum, cumulative
but not compounded, to the extent not previously allocated; (iii)
third, to the General Partners until cumulative allocations to
the General Partners equal 15% of cumulative allocations. Any
remaining balance will be allocated 85% to the Limited Partners
and 15% to the General Partners. Losses will be allocated 98% to
the Limited Partners and 2% to the General Partners.
The registrant is a minor factor in the commercial real
estate business. There are numerous entities engaged in the
commercial real estate business which have greater financial
resources than the registrant.
The registrant has no direct employees. Management
services are performed for the registrant by an affiliate of AFM.
ITEM 2. DESCRIPTION OF PROPERTIES.
In December, 1986, the Partnership acquired an
office/warehouse building located in Kearney, Nebraska. The
property was acquired for $434,623 and was leased to Myron
Andersen Construction under a non-cancelable triple net master
Lease Agreement with a primary term of 10 years. Effective May
1, 1992, the Partnership replaced the original tenant in the
office building in Kearney, Nebraska, with a new tenant who, in
March, 1993, filed for reorganization. The Partnership obtained
possession of the property and listed the property for sale or
lease. The Partnership received rent of $975 per month through
March, 1994 from a tenant who was sub-leasing part of the
building from the new tenant. Since March, 1994, the Partnership
has received no rent from the property. The office and warehouse
contain 20,282 square feet and are located on a 52,085 square
foot lot.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
On June 3, 1987, the Partnership acquired an Auto Max
Muffler Shop located in Bloomington, Minnesota. Total property
acquisition costs were $838,749. The Partnership purchased the
land and building and leased it back to the seller, Auto Max,
Inc., under a 20-year non-cancelable triple-net Lease Agreement.
On March 1, 1991, the Partnership replaced Auto Max, Inc. as the
lessee with the franchisee who subleased the property from Auto
Max, Inc. The new Lease Agreement has a primary term of 15 years
with annual rental payments of $110,400. The automotive service
center contains 7,440 square feet and is located on a 33,240
square foot lot.
On June 16, 1987, the Partnership acquired a Bonanza
restaurant located in Brooklyn Park, Minnesota. The Partnership
purchased the land and building for $968,958 and leased it back
to the seller, Get-Go Food, Inc., under a 20-year non-cancelable
triple-net Lease Agreement. In March, 1992, the Partnership re-
leased the property to DeLisi's Italian Restaurant and Lounge,
Inc. under a 10-year Lease Agreement. The annual rental payments
are $60,000 for the first two years and $72,000 for the remaining
eight years. The property was remodeled by the new lessee and is
operated as an Italian restaurant. The restaurant contains 7,248
square feet and is located on a 74,786 square foot lot.
On July 24, 1987, the Partnership purchased an Auto Max
Muffler Shop located in Coon Rapids, Minnesota. Total property
acquisition costs were $795,818. The property was leased back to
the seller, Auto Max, Inc., under a 20-year non-cancelable triple-
net Lease Agreement. In February, 1991, the Partnership replaced
Auto Max, Inc. as the lessee with an independent operator who
will continue to operate the property as an Auto Max automotive
center. The new Lease Agreement has a primary term of 15-years
with annual rent of $48,000. The Partnership entered into a
second Lease Agreement with a tenant who was subleasing part of
the property from Auto Max, Inc. The second Lease expires April
30, 1997 with annual rental payments of approximately $34,000.
The automotive service center contains 7,186 square feet and is
located on a 51,162 square foot lot.
On August 21, 1987, the Partnership acquired an am/pm Mini
Market located in Carson City, Nevada. The Partnership purchased
the land and building and leased it back to the seller, B. Wells
O'Brien & Co., under a 20-year non-cancelable triple-net Lease
Agreement. Total property acquisition costs were $779,896. The
annual rental payment is $99,947. The property consists of a
48,711 square foot lot which contains a 2,498 square foot
convenience store and eight gasoline dispensing stations.
On February 1, 1988, the Partnership purchased an
Applebee's restaurant located in Fort Myers, Florida, for
$1,179,405. The property is leased to Apple South, Inc. under a
20-year triple-net Lease Agreement. The annual rental payment is
$149,085. The restaurant contains 3,267 square feet and is
located on a 58,472 square foot lot.
In March, 1995, the lessee of the Applebee's restaurant in
Fort Myers, Florida, exercised an option in the Lease Agreement
to purchase the property. The purchase price will be
approximately $1,660,000, which will result in a net gain of
approximately $690,000.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
On June 7, 1990, the Partnership acquired a 20% interest
in a Cheddar's restaurant in Columbus, Ohio. The property was
leased back to the seller under a 20-year non-cancelable triple
net Lease Agreement with an annual rental payment of $40,147.
Total property acquisition costs were $306,711. The restaurant
contains 7,320 square feet and is located on a 68,000 square foot
lot.
On August 24, 1990, the Partnership acquired a 6.7522%
interest in a Sizzler restaurant in Springboro, Ohio. The
property was leased back to the seller under a 20-year non-
cancelable triple net Lease Agreement with an annual rental
payment of $11,139. Total property acquisition costs were
$89,097. The restaurant contains 6,970 square feet and is
located on a 62,497 square foot lot. The remaining interest in
these properties was acquired by AEI Real Estate Fund XVIII
Limited Partnership, an affiliate of the Partnership.
In November, 1992, after reviewing the operating results
of the lessee, the Partnership agreed to amend the Lease
Agreement of the Sizzler restaurant. As of November, 1993, the
lessee was in default under the amended Lease Agreement. After
reviewing the lessee's operating results, the Partnership
determined that the lessee would be unable to operate the
restaurants in a manner capable of maximizing the restaurant's
sales. Consequently, at the direction of the Partnership, a
multi-unit restaurant operator assumed operation of this
restaurant while the Partnership reviewed the available options.
In June, 1994, the Partnership closed the restaurant and listed
it for sale or lease. While the property is being re-leased, the
Partnership is responsible for the real estate taxes and other
costs required to maintain the property.
On March 10, 1987, the Partnership acquired a Perkins
restaurant located in Kearney, Nebraska. The Partnership
purchased the land and building for $936,064. On April 22, 1991,
the Partnership sold the property and received net sales proceeds
of $980,993 which resulted in a net gain of $188,579. A portion
of the net proceeds was used to acquire an interest in one
additional property.
On July 31, 1991, the Partnership acquired a 61.7638%
interest in a Taco Cabana restaurant in Houston, Texas. The
property was leased back to the seller under a 15-year non-
cancelable triple net Lease Agreement with a current annual
rental payment of $115,984. Total property acquisition costs
were $859,159. The restaurant contains approximately 2,700
square feet and is located on a 47,474 square foot lot. The
remaining interest in this property was acquired by AEI Net Lease
Income & Growth Fund XIX Limited Partnership, an affiliate of the
Partnership.
For the properties owned jointly with affiliated
Partnerships, each Partnership owns a separate, undivided
interest in the properties. No specific agreement or commitment
exists between the Partnerships as to the management of their
respective interests in the property, and the Partnership that
holds more than a 50% interest does not control decisions over
the other Partnership's interest.
All the properties were acquired on a debt-free basis with
cash from subscription proceeds. The Partnership holds an
undivided fee simple interest in the properties. The properties
are leased to the tenants through non-cancelable triple net
leases, which are classified as operating leases. Under a triple
net lease, the lessee is responsible for all real estate taxes,
insurance, maintenance, repairs and operating expenses of the
property. Pursuant to the Lease Agreements, the tenants are
required to provide proof of adequate insurance coverage on the
properties they occupy. The General Partners believe the
properties are adequately covered by insurance.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED SECURITY HOLDER MATTERS.
As of December 31, 1994, there were 957 holders of record
of the registrant's Limited Partnership Units. There is no other
class of security outstanding or authorized. The registrant's
Units are not a traded security in any market. However, the
Partnership may purchase Units from Limited Partners who have
tendered their Units to the Partnership. Such Units may be
acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the total number of Units
outstanding at the beginning of the year and in no event,
obligated to purchase Units if such purchase would impair the
capital or operation of the Partnership.
During 1994, three Limited Partners redeemed a total of 9
Partnership Units for $6,282 in accordance with the Partnership
Agreement. In prior years, a total of twenty-six Limited
Partners redeemed 215 Partnership Units for $170,765. The
redemptions increase the remaining Limited Partners' ownership
interest in the Partnership.
Cash distributions of $5,745 and $5,296 were made to the
General Partners and $562,502 and $505,622 were made to the
Limited Partners in 1994 and 1993, respectively. The
distributions were made on a quarterly basis and represent Net
Cash Flow, as defined, except as discussed below. These
distributions should not be compared with dividends paid on
capital stock by corporations.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Results of Operations
The Partnership's rental income is derived from long-term,
triple net lease agreements on the Partnership's properties. For
the years ended December 31, 1994 and 1993, the Partnership
recognized rental income of $688,888 and $682,544, respectively.
The increase in rental income resulted from scheduled rent
increases of $15,823 for the Taco Cabana and Delisi's
restaurants. In addition, the Partnership's percentage rent from
the Applebee's restaurant and am/pm convenience store increased
$2,760. These increases were partially offset by a reduction in
rental income from the office building property.
Effective May 1, 1992, the Partnership replaced the
original tenant in the office building in Kearney, Nebraska, with
a new tenant who, in March, 1993, filed for reorganization. The
Partnership obtained possession of the property and listed the
property for sale or lease. The Partnership received rent of
$975 per month through March, 1994, from a tenant who was sub-
leasing part of the building from the new tenant. Since March
1994, the Partnership has received no rent from the property.
The total amount of rent not collected in 1994 and 1993 was
$59,081 and $49,160, respectively. These amounts were not
accrued for financial reporting purposes.
During the years ended December 31, 1994 and 1993, the
Partnership incurred Partnership administration and management
expenses from unrelated parties of $71,029 and $65,251,
respectively. These expenses represent direct payments to third
parties for legal and filing fees, direct administrative costs,
outside audit and accounting costs, taxes, insurance and other
property costs. During the same periods, administration and
management expenses paid to affiliated parties were $125,257 and
$123,728, respectively. The Partnership administration expenses
incurred from affiliates include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners.
As of December 31, 1994, the Partnership's annualized cash
distribution rate was 7.66%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants, due to inflation and real sales growth, will result
in an increase in rental income over the term of the leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
Liquidity and Capital Resources
The Partnership's cash balances decreased $10,357 from
December 31, 1993 to December 31, 1994, as the Partnership
distributed slightly more cash to investors than it generated
from operating and financing activities. Net cash provided by
operating activities increased from $479,866 in 1993 to $501,743
in 1994. Net cash income before depreciation was approximately
the same in both years. The increase in net cash provided by
operating activities was due to net timing differences in the
collection of payments from the lessees of the Partnership's
properties.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership declares
its regular quarterly distributions before the end of each
quarter and pays the distribution in the first week after the end
of each quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year. The redemption payments generally are funded with cash
that would normally be paid as part of the regular quarterly
distributions. As a result, distributions have fluctuated from
year to year due to cash used to fund redemption payments. This
is the reason why distributions to Partners were higher in 1994
when compared to 1993.
In January, 1994, the Partnership established a $100,000
unsecured line of credit at Fidelity Bank of Edina, Minnesota.
On January 5, 1995 the line of credit was increased to $150,000.
Since cash receipts and expenses fluctuate, the line of credit
was established to assist in maintaining a stable quarterly
distribution rate. The line of credit bears interest at the
prime rate (8.5% on December 31, 1994) plus one percent on the
outstanding balance, which is due on demand, but in any event no
later than January 5, 1996. As of December 31, 1994, $35,000 was
due on the line of credit. Total interest expense for 1994 was
$2,553.
In March, 1995, the lessee of the Applebee's restaurant in
Fort Myers, Florida, exercised an option in the Lease Agreement
to purchase the property. The purchase price will be
approximately $1,660,000, which will result in a net gain of
approximately $690,000. The majority of the Partnership's other
Lease Agreements contain options that allow the lessees to
purchase the property. Depending on the Lease Agreement, the
purchase price is either determined by a formula, or is the
greater of the fair market value of the property or the amount
determined by a formula. In all cases, if the option were to be
exercised by the lessee, the purchase price would be greater than
the original cost of the property.
The continuing rent payments from the properties, together
with cash generated from this sale, should be more than adequate
to fund continuing distributions, repay advances under the credit
line and meet other Partnership obligations on both a short-term
and long-term basis.
The Partnership may purchase Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the total number of Units
outstanding at the beginning of the year and in no event,
obligated to purchase Units if such purchase would impair the
capital or operation of the Partnership.
During 1994, three Limited Partners redeemed a total of 9
Partnership Units for $6,282 in accordance with the Partnership
Agreement. The Partnership acquired these Units using Net Cash
Flow from operations. In prior years, a total of twenty-six
Limited Partners redeemed 215 Partnership Units for $170,765.
The redemptions increase the remaining Limited Partners'
ownership interest in the Partnership.
ITEM 7. FINANCIAL STATEMENTS.
See accompanying index to financial statements.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report
Balance Sheet as of December 31, 1994 and 1993
Statements for the Years Ended December 31, 1994 and 1993:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Partners:
AEI Real Estate Fund 86-A Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI REAL
ESTATE FUND 86-A LIMITED PARTNERSHIP (a Delaware limited
partnership) as of December 31, 1994 and 1993 and the related
statements of income, cash flows and changes in partners' capital
for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of AEI Real Estate Fund 86-A Limited Partnership as of December
31, 1994 and 1993, and the results of its operations and its cash
flows for the years then ended, in conformity with generally
accepted accounting principles.
Minneapolis, Minnesota Boulay, Heutmaker, Zibell & Co. P.L.L.P.
February 6, 1995 Certified Public Accountants
<PAGE>
<TABLE>
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
<CAPTION>
1994 1993
<S> <C> <C>
CURRENT ASSETS:
Cash $ 9,802 $ 20,159
Receivables 11,604 18,515
---------- ----------
Total Current Assets 21,406 38,674
---------- ----------
INVESTMENTS IN REAL ESTATE:
Land 2,458,967 2,458,967
Buildings and Equipment 3,793,449 3,793,449
Accumulated Depreciation (1,139,101) (975,712)
---------- ----------
Net Investments in Real Estate 5,113,315 5,276,704
---------- ----------
Total Assets $ 5,134,721 $ 5,315,378
========== ==========
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL
<S> <C> <C>
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 20,662 $ 20,423
Distributions Payable 128,894 101,465
Security Deposit 5,000 5,000
Line of Credit 35,000 0
---------- ----------
Total Current Liabilities 189,556 126,888
---------- ----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (13,701) (11,268)
Limited Partners, $1,000 Unit value;
7,500 Units authorized and issued;
7,276 and 7,285 outstanding in 1994
and 1993, respectively 4,958,866 5,199,758
---------- ----------
Total Partners' Capital 4,945,165 5,188,490
---------- ----------
Total Liabilities and Partners' Capital $ 5,134,721 $ 5,315,378
========== ==========
<FN>
The accompanying notes to financial statements are an integral
part of this statement.
</TABLE>
<PAGE>
<TABLE>
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 3l
<CAPTION>
1994 1993
<S> <C> <C>
INCOME:
Rent $ 688,888 $ 682,544
Investment Income 1,991 2,320
--------- ---------
Total Income 690,879 684,864
--------- ---------
EXPENSES:
Partnership Administration - Affiliates 125,257 123,728
Partnership Administration and Property
Management - Unrelated Parties 71,029 65,251
Depreciation 163,389 163,389
--------- ---------
Total Expenses 359,675 352,368
--------- ---------
NET INCOME $ 331,204 $ 332,496
========= =========
NET INCOME ALLOCATED:
General Partners $ 3,312 $ 3,325
Limited Partners 327,892 329,171
--------- ---------
$ 331,204 $ 332,496
========= =========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(7,283 and 7,304 weighted average Units outstanding
in 1994 and 1993, respectively) $ 45.02 $ 45.07
========= =========
<FN>
The accompanying notes to financial statements are an integral
part of this statement.
</TABLE>
<PAGE>
<TABLE>
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
<CAPTION>
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 331,204 $ 332,496
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 163,389 163,389
(Increase) Decrease in Receivables 6,911 (7,037)
Increase in Payable to
AEI Fund Management, Inc. 239 45
Decrease In Unearned Rent 0 (9,027)
--------- ---------
Total Adjustments 170,539 147,370
--------- ---------
Net Cash Provided By
Operating Activities 501,743 479,866
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 27,429 3,277
Distributions to Partners (568,184) (510,729)
Redemption Payments (6,345) (18,882)
Increase in Line of Credit 35,000 0
--------- ---------
Net Cash Used For
Financing Activities (512,100) (526,334)
--------- ---------
NET DECREASE IN CASH (10,357) (46,468)
CASH, beginning of period 20,159 66,627
--------- ---------
CASH, end of period $ 9,802 $ 20,159
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid During the Year $ 2,553 $ 0
========= =========
<FN>
The accompanying notes to financial statements are an integral
part of this statement.
</TABLE>
<PAGE>
<TABLE>
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
<S> <C> <C> <C> <C>
BALANCE, December 31, 1992 $ (9,297) $5,394,902 $5,385,605 7,310.80
Distributions (5,107) (505,622) (510,729)
Redemption Payments (189) (18,693) (18,882) (25.55)
Net Income 3,325 329,171 332,496
--------- --------- --------- ---------
BALANCE, December 31, 1993 (11,268) 5,199,758 5,188,490 7,285.25
Distributions (5,682) (562,502) (568,184)
Redemption Payments (63) (6,282) (6,345) (9.00)
Net Income 3,312 327,892 331,204
--------- --------- --------- ---------
BALANCE, December 31, 1994 $ (13,701) $4,958,866 $4,945,165 7,276.25
========= ========= ========= =========
<FN>
The accompanying notes to financial statements are an integral
part of this statement.
</TABLE>
<PAGE>
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(1) Organization -
AEI Real Estate Fund 86-A Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management 86-A, Inc. (AFM), the Managing
General Partner of the Partnership. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the
Individual General Partner of the Partnership. An affiliate
of AFM, AEI Fund Management, Inc. (AEI), performs the
administrative and operating functions for the Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on April 2, 1986 when minimum
subscriptions of 1,300 Limited Partnership Units
($1,300,000) were accepted. The Partnership's offering
terminated on July 9, 1986 when the maximum subscription
limit of 7,500 Limited Partnership Units ($7,500,000) was
reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$7,500,000 and $1,000, respectively. During the operation
of the Partnership, 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 the Partnership's 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 l% to the General
Partners until the Limited Partners receive an amount equal
to: (a) their Adjusted Capital Contribution plus (b) an
amount equal to 6% of their Adjusted Capital Contribution
per annum, cumulative but not compounded, to the extent not
previously distributed from Net Cash Flow; (ii) next, 99% to
the Limited Partners and 1% to the General Partners until
the Limited Partners receive an amount equal to 14% of their
Adjusted Capital Contribution per annum, cumulative but not
compounded, to the extent not previously distributed; (iii)
next, to the General Partners until cumulative distributions
to the General Partners under Items (ii) and (iii) equal 15%
of cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(1) Organization - (Continued)
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of the Partnership's
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 90% to the Limited Partners and 10% to the General
Partners. In the event no Net Cash Flow is distributed to
the Limited Partners, 90% of each item of Partnership
income, gain or credit for each respective year shall be
allocated to the Limited Partners, and 10% of each such item
shall be allocated to the General Partners. Net losses from
operations will be allocated 98% to the Limited Partners and
2% to the General Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of the Partnership's 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 14% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, to the
General Partners until cumulative allocations to the General
Partners equal 15% of cumulative allocations. Any remaining
balance will be allocated 85% to the Limited Partners and
15% 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.
(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.
Cash Concentrations of Credit Risk
At times throughout the year, the Partnership's cash
deposited in financial institutions may exceed FDIC
insurance limits.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(2) Summary of Significant Accounting Policies - (Continued)
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. Accordingly, no recognition has
been given to income taxes in the accompanying financial
statements.
The tax return, the qualification of the Partnership as
such for tax purposes, 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 with respect to the
Partnership qualification or in changes to distributable
Partnership income or loss, the taxable income of the
partners would be adjusted accordingly.
Real Estate
The Partnership's real estate is leased under long-term
triple net leases classified as operating leases. The
Partnership recognizes rental revenue on the accrual
basis according to the terms of the individual leases.
For leases which contain cost of living increases, the
increases are recognized in the year in which they are
effective.
Real estate is recorded at the lower of cost or net
realizable value. The Financial Accounting Standards
Board has issued Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of" which is effective for the
Partnership's fiscal year ended December 31, 1996. The
Partnership regularly reviews the carrying value of its
properties and will reduce properties to their net
realizable value as needed. Adoption of Statement 121 is
not expected to have a material effect on the
Partnership's operations.
The Partnership has capitalized as Investments in Real
Estate certain costs incurred in the review and
acquisition of the properties. The costs were allocated
to the land, buildings and equipment.
The buildings and equipment of the Partnership are
depreciated using the straight-line method for financial
reporting purposes based on estimated useful lives of 30
years and 10 years respectively.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(3) Related Party Transactions -
On June 7, 1990, the Partnership acquired a 20% interest in
the Cheddar's restaurant. On August 24, 1990, the
Partnership acquired a 6.7522% interest in the Sizzler
restaurant. The remaining interest in these properties are
owned by AEI Real Estate Fund XVIII Limited Partnership, an
affiliate of the Partnership. On July 31, 1991, the
Partnership acquired a 61.7638% interest in the Taco Cabana
restaurant. The remaining interest in this property is
owned by AEI Net Lease Income & Growth Fund XIX Limited
Partnership, an affiliate of the Partnership.
Each Partnership owns a separate, undivided interest in the
properties. No specific agreement or commitment exists
between the Partnerships as to the management of their
respective interest in the properties, and the Partnership
that holds more than a 50% interest does not control
decisions over the other Partnership's interest. The
financial statements reflect only this Partnership's
percentage share of the properties' land, building and
equipment, liabilities, revenues and expenses.
AFM and AEI received the following compensation and
reimbursements for costs and expenses from the Partnership:
Total Incurred by the Partnership
for the Years Ended December 3l
1994 1993
a.AEI and AFM are reimbursed for all costs
incurred in connection with managing the
Partnership's operations, maintaining the
Partnership's books and communicating
the results of operations to the Limited
Partners. $ 125,257 $ 123,728
========= =========
b.AEI and AFM are reimbursed for all direct
expenses they have paid on the Partnership's
behalf to third parties. These expenses included
printing costs, legal and filing fees, direct
administrative costs, outside audit and
accounting costs, taxes, insurance and other
property costs. $ 71,029 $ 65,251
========= =========
The payable to AEI Fund Management, Inc. represents the
balance due for the services described in 3a and b. This
balance is non-interest bearing and unsecured and is to be
paid in the normal course of business.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(4) Investments in Real Estate -
The Partnership leases its properties to various tenants
through non-cancelable triple net leases, which are
classified as operating leases. Under a triple net lease,
the lessee is responsible for all real estate taxes,
insurance, maintenance, repairs and operating expenses of
the property. The initial Lease terms are for 20 years
except for the Taco Cabana and Auto Max properties which are
15 years. The Leases have renewal options which may extend
the lease term an additional 10 years. The Leases contain
rent clauses which entitle the Partnership to receive
additional rent in future years based on stated rent
increases or if gross receipts for the property exceed
certain specified amounts, among other conditions.
The Partnership's properties are all commercial, single-
tenant properties with the exception of the Kearney Office
Building. The Kearney office building and warehouse were
constructed in 1978 and 1981, respectively. The building
was remodeled in 1986. The Applebee's was completed in
1988. The Cheddar's and Sizzler restaurants were
constructed and acquired in 1990. The Taco Cabana
restaurant was constructed and acquired in 1991. All the
remaining buildings were constructed in 1987. The Kearney
office building was acquired in 1986 and the Applebee's was
acquired in 1988. All the remaining properties were
acquired during 1987. There have been no costs capitalized
as improvements subsequent to the acquisitions.
The cost of the properties and related accumulated
depreciation at December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Buildings and Accumulated
Property Land Equipment Total Depreciation
<S> <C> <C> <C> <C>
Office Building, Kearney, NE $ 64,498 $ 370,125 $ 434,623 $ 105,663
Auto Max, Bloomington, MN 361,269 477,480 838,749 137,594
DeLisi's, Brooklyn Park, MN 317,355 651,603 968,958 220,041
Auto Max, Coon Rapids, MN 382,263 413,555 795,818 117,208
am/pm Mini Market,
Carson City, NV 135,760 644,136 779,896 274,678
Applebee's, Fort Myers, FL 520,028 659,377 1,179,405 202,285
Cheddar's, Columbus, OH 128,666 178,045 306,711 32,215
Sizzler, Springboro, OH 24,181 64,916 89,097 11,354
Taco Cabana, Houston, TX 524,947 334,212 859,159 38,063
---------- ---------- ---------- ----------
$2,458,967 $3,793,449 $6,252,416 $1,139,101
========== ========== ========== ==========
</TABLE>
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(4) Investments in Real Estate - (Continued)
Effective May 1, 1992, the Partnership replaced the original
tenant in the office building in Kearney, Nebraska, with a
new tenant who, in March, 1993, filed for reorganization.
The Partnership obtained possession of the property and
listed the property for sale or lease. The Partnership
received rent of $975 per month through March, 1994, from a
tenant, who was sub-leasing part of the building from the
new tenant. The total amount of rent not collected in 1994
and 1993 was $59,081 and $49,160, respectively. These
amounts were not accrued for financial reporting purposes.
In March, 1995, the lessee of the Applebee's restaurant in
Fort Myers, Florida, exercised an option in the Lease
Agreement to purchase the property. The purchase price will
be approximately $1,660,000, which will result in a net gain
of approximately $690,000.
The minimum future rentals on the non-cancelable Leases for
years subsequent to December 31, 1994 are as follows:
1995 $ 670,440
1996 672,078
1997 651,065
1998 641,479
1999 643,322
Thereafter 4,463,662
--------------
$7,742,046
========
In 1994 and 1993, the Partnership recognized contingent
rents of $18,581 and $18,142, respectively.
(5) Security Deposit -
In April, 1992, the Partnership received a deposit from the
tenant of the DeLisi's Italian Restaurant as security for
future rent payments. The funds are invested in a short
term money market account and will be refunded at the end of
the Lease, without interest, to the tenant provided there is
no default in the Lease Agreement.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(6) Line of Credit -
In January, 1994, the Partnership established a $100,000
unsecured line of credit at Fidelity Bank of Edina,
Minnesota. On January 5, 1995 the line of credit was
increased to $150,000. The line of credit bears interest at
the prime rate (8.5% on December 31, 1994) plus one percent
on the outstanding balance, which is due on demand, but in
any event no later than January 5, 1996. The line of credit
was established to provide short-term financing to cover any
temporary cash deficits. As of December 31, 1994, $35,000
was due on the line of credit. Total interest expense for
1994 was $2,553.
(7) Major Tenants -
The Partnership leases real property to tenants who are
franchisees or franchisors throughout the United States
primarily in the fast food, casual dining and automotive
maintenance industries.
Tenants who individually generate
10% or more of total rent revenue: 1994 1993
Tenant A $ 156,863 $ 152,914
Tenant B 113,728 109,905
Tenant C 110,750 111,938
Tenant D 110,400 110,400
Tenant E 72,000 60,000
--------- ---------
Aggregate rent revenue of major tenants $ 563,741 $ 545,157
========= =========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 82% 80%
========= =========
(8) Partners' Capital -
Cash distributions of $5,745 and $5,296 were made to the
General Partners and $562,502 and $505,622 were made to the
Limited Partners for the years ended December 31, 1994 and
1993, respectively. The Limited Partners' distributions
represent $77.23 and $69.23 per Limited Partnership Unit
outstanding using 7,283 and 7,304 weighted average Units in
1994 and 1993, respectively. The distributions represent
$44.16 and $42.50 per Unit of Net Income and $33.07 and
$26.73 per Unit of return of contributed capital in 1994 and
1993, respectively.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(8) Partners' Capital - (Continued)
Distributions of Net Cash Flow to the General Partners
during 1994 and 1993 were subordinated to the Limited
Partners as required in the Partnership Agreement. As a
result, 99% of distributions and income were allocated to
the Limited Partners and 1% to the General Partners.
The Partnership may acquire Units from Limited Partners who
have tendered their Units to the Partnership. Such Units
may be acquired at a discount. The Partnership is not
obligated to purchase in any year more than 5% of the total
number of Units outstanding at the beginning of the year and
in no event, obligated to purchase Units if such purchase
would impair the capital or operation of the Partnership.
During 1994, three Limited Partners redeemed a total of 9
Partnership Units for $6,282 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In 1993, six Limited
Partners redeemed a total of 26 Partnership Units for
$18,693. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
After the effect of redemptions and the return of capital
from the sale of property, the Adjusted Capital
Contribution, as defined in the Partnership Agreement, is
$1,009.55 per original $1,000 invested.
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(9) 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:
1994 1993
Net Income For Financial
Reporting Purposes $ 331,204 $ 332,496
Depreciation for Tax Purposes
Under Depreciation For Financial
Reporting Purposes 49,908 44,887
Amortization of Start-Up and
Organization Costs 0 (1,077)
Income Accrued for Tax Purposes
Under Income For Financial
Reporting Purposes 0 (9,027)
Property Expenses For Tax Purposes
Under Expenses For Financial Reporting
Purposes 37,134 43,266
--------- ---------
Taxable Income to Partners $ 418,246 $ 410,545
========= =========
AEI REAL ESTATE FUND 86-A LIMITED PARTNERSHlP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
(9) Income Taxes - (Continued)
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:
1994 1993
Partners' Capital For
Financial Reporting Purposes $ 4,945,165 $ 5,188,490
Depreciation For Tax Purposes Over
Depreciation For Financial
Reporting Purposes (77,736) (127,644)
Capitalized Start-Up Costs
Under Section 195 273,183 273,183
Amortization of Start-Up and
Organization Costs (280,829) (280,829)
Property Expenses For Tax Purposes
Under Expense For Financial Reporting
Purposes 92,066 54,931
Gain on Sale of Real Estate For Tax
Purposes Over Gain For Financial
Reporting Purposes 76,401 76,401
Organization and Syndication Costs
Treated as Reduction of Capital
For Financial Reporting Purposes 1,093,184 1,093,184
--------- ---------
Partners' Capital For
Tax Reporting Purposes $ 6,121,434 $ 6,277,716
========= =========
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The registrant is a limited partnership and has no
officers, directors, or direct employees. The General Partners
of the registrant are Robert P. Johnson and AFM. The General
Partners manage and control the Partnership's affairs and have
general responsibility and the ultimate authority in all matters
affecting the Partnership's business. The director and officers
of AFM are as follows:
Robert P. Johnson, age 50, is Chief Executive Officer,
President and Director and has held these positions since the
formation of AFM in December, 1985, and has been elected to
continue in these positions until March, 1996. From 1970 to the
present, he has been employed exclusively in the investment
industry, specializing in tax-advantaged limited partnership
investments. In that capacity, he has been involved in the
development, analysis, marketing and management of public and
private investment programs investing in net lease properties as
well as public and private investment programs investing in
energy development. Since 1971, Mr. Johnson has been the
president, a director and a registered principal of AEI
Incorporated, which is registered with the Securities and
Exchange Commission as a securities broker-dealer, is a member of
the National Association of Securities Dealers, Inc. (NASD) and
is a member of the Security Investors Protection Corporation
(SIPC). Mr. Johnson has been president, a director and the
principal shareholder of AEI Fund Management, Inc., a real estate
management company founded by him, since 1978. Mr. Johnson is
currently a general partner or principal of the general partner
in fourteen other limited partnerships.
Mark E. Larson, age 42, is Executive Vice
President,Treasurer and Chief Financial Officer and has been
elected to continue in these positions until March, 1996. Mr.
Larson has been Treasurer and Executive Vice President since
December, 1987 and Chief Financial Officer since January, 1990.
In January 1993 Mr. Larson was elected to serve as Secretary of
AFM and will continue to serve until March, 1996. Mr. Larson has
been employed by AEI Fund Management, Inc. and affiliated
entities since 1985. From 1979 to 1985, Mr. Larson was with
Apache Corporation as manager of Program Accounting responsible
for the accounting and reports for approximately 45 public
partnerships. Mr. Larson is responsible for supervising the
accounting functions of AFM and the registrant.
ITEM 10. EXECUTIVE COMPENSATION.
The General Partner and affiliates are reimbursed at cost
for all services performed on behalf of the registrant and for
all third party expenses paid on behalf of the registrant. The
cost for services performed on behalf of the registrant is actual
time spent performing such services plus an overhead burden.
These services include organizing the registrant and arranging
for the offer and sale of Units, reviewing properties for
acquisition and rendering administrative and management services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
AFM, the Managing General Partner of the registrant, and
Robert P. Johnson, its Individual General Partner, contributed
$1,000 in total for their interest in the registrant. See Item 1
for a discussion of their share of the registrant's profits and
losses. During 1989, AFM purchased 23 Limited Partnership Units
(less than 1% of the Units outstanding) from certain Limited
Partners.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The registrant, AFM and its affiliates have common
management and utilize the same facilities. As a result, certain
administrative expenses are allocated among these related
entities. All of such activities and any other transactions
involving the affiliates of the General Partner of the registrant
are governed by, and are conducted in conformity with, the
limitations set forth in the Limited Partnership Agreement of the
registrant. Reference is made to Note 3 on pages 17 and 18, and
is incorporated herein by reference, for details of related party
transactions.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.
A. Exhibits - None
B. Reports on Form 8-K and Form 8-K/A - None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AEI REAL ESTATE FUND 86-A
Limited Partnership
By: AEI Fund Management 86-A, Inc.
Its Managing General Partner
November 30, 1995 By: /s/ Robert P. Johnson
Robert P. Johnson, President and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name Title Date
/s/ Robert P. Johnson President
Robert P. Johnson (Principal Executive Officer) November 30, 1995
and Sole Director of Managing
General Partner
/s/ Mark E. Larson Executive Vice President,
Mark E. Larson Treasurer and Chief November 30, 1995
Financial Officer
