SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: June 30, 1998
Commission file number: 0-14089
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Delaware 93-0926134
(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)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
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 preceding 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
Transitional Small Business Disclosure Format:
Yes No [X]
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of June 30, 1998 and December 31, 1997
Statements for the Periods ended June 30, 1998 and 1997:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
BALANCE SHEET
JUNE 30, 1998 AND DECEMBER 31, 1997
(Unaudited)
ASSETS
1998 1997
CURRENT ASSETS:
Cash and Cash Equivalents $ 511,032 $ 939,969
Receivables 22,250 15,446
----------- -----------
Total Current Assets 533,282 955,415
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 2,036,860 2,036,860
Buildings and Equipment 3,686,945 3,686,945
Construction in Progress 454,224 46,997
Property Acquisition Costs 54,470 67,523
Accumulated Depreciation (1,179,561) (1,120,795)
----------- -----------
Net Investments in Real Estate 5,052,938 4,717,530
----------- -----------
Total Assets $ 5,586,220 $ 5,672,945
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 18,698 $ 32,430
Distributions Payable 116,905 116,671
Deferred Income 29,473 15,480
----------- -----------
Total Current Liabilities 165,076 164,581
----------- -----------
DEFERRED INCOME - Net Of Current Portion 132,876 140,617
PARTNERS' CAPITAL (DEFICIT):
General Partners (10,578) (9,783)
Limited Partners, $1,000 Unit value;
7,500 Units authorized and issued;
7,337 Units outstanding 5,298,846 5,377,530
----------- -----------
Total Partners' Capital 5,288,268 5,367,747
----------- -----------
Total Liabilities and Partners' Capital $ 5,586,220 $ 5,672,945
=========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Three Months Ended Six Months Ended
6/30/98 6/30/97 6/30/98 6/30/97
INCOME:
Rent $ 144,442 $ 127,758 $ 286,698 $ 263,379
Investment Income 14,286 32,153 27,382 64,961
--------- --------- --------- ---------
Total Income 158,728 159,911 314,080 328,340
--------- --------- --------- ---------
EXPENSES:
Partnership Administration -
Affiliates 26,896 28,987 53,870 53,525
Partnership Administration
and Property Management -
Unrelated Parties 6,868 5,237 20,316 13,738
Depreciation 28,405 30,633 58,766 66,302
--------- --------- --------- ---------
Total Expenses 62,169 64,857 132,952 133,565
--------- --------- --------- ---------
OPERATING INCOME 96,559 95,054 181,128 194,775
GAIN ON SALE OF REAL ESTATE 0 0 0 655,641
--------- --------- --------- ---------
NET INCOME $ 96,559 $ 95,054 $ 181,128 $ 850,416
========= ========= ========= =========
NET INCOME ALLOCATED:
General Partners $ 966 $ 951 $ 1,811 $ 8,504
Limited Partners 95,593 94,103 179,317 841,912
--------- --------- --------- ---------
$ 96,559 $ 95,054 $ 181,128 $ 850,416
========= ========= ========= =========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(7,337 and 7,354 weighted average
Units outstanding in 1998 and 1997,
respectively) $ 13.03 $ 12.79 $ 24.44 $ 114.48
========= ========= ========= =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 181,128 $ 850,416
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 58,766 66,302
Gain on Sale of Real Estate 0 (655,641)
(Increase) Decrease in Receivables (6,804) 9,945
Decrease in Payable to
AEI Fund Management, Inc. (13,732) (9,579)
Increase in Deferred Income 6,252 6,184
----------- -----------
Total Adjustments 44,482 (582,789)
----------- -----------
Net Cash Provided By
Operating Activities 225,610 267,627
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (394,174) 0
Proceeds from Sale of Real Estate 0 298,342
Payments Received on Note Receivable 0 1,003,000
----------- -----------
Net Cash Provided By (Used For)
Investing Activities (394,174) 1,301,342
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 234 202,008
Distributions to Partners (260,607) (470,950)
----------- -----------
Net Cash Used For
Financing Activities (260,373) (268,942)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (428,937) 1,300,027
CASH AND CASH EQUIVALENTS, beginning of period 939,969 884,120
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 511,032 $ 2,184,147
=========== ===========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
Note Receivable Acquired in Sale of Property $ 0 $ 1,003,000
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1996 $ (12,195) $ 5,138,732 $ 5,126,537 7,353.55
Distributions (4,710) (466,240) (470,950)
Net Income 8,504 841,912 850,416
--------- ----------- ----------- ----------
BALANCE, June 30, 1997 $ (8,401) $ 5,514,404 $ 5,506,003 7,353.55
========= =========== =========== ==========
BALANCE, December 31, 1997 $ (9,783) $ 5,377,530 $ 5,367,747 7,336.55
Distributions (2,606) (258,001) (260,607)
Net Income 1,811 179,317 181,128
--------- ----------- ----------- ----------
BALANCE, June 30, 1998 $ (10,578) $ 5,298,846 $ 5,288,268 7,336.55
========= =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, 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 generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
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
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Real Estate Fund XV 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 October 3, 1986 when minimum
subscriptions of 1,300 Limited Partnership Units
($1,300,000) were accepted. On December 30, 1986, the
Partnership's offering terminated 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.
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
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 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 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.
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.
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
On January 24, 1997, the Partnership sold the Children's
World daycare center in Moreno Valley, California, to an
unrelated third party. The Partnership recognized net sale
proceeds of $1,301,342, which resulted in a net gain of
$655,641. At the time of sale, the cost and related
accumulated depreciation of the property was $963,717 and
$318,016, respectively. As part of the sale proceeds, the
Partnership received a Promissory Note for $1,003,000. The
Note bears interest at a 10% rate. On April 23, 1997, the
Partnership received the principal balance and outstanding
accrued interest on the Note. Investment income earned on
the Note was $24,456.
In June, 1997, the Partnership distributed $202,020 of the
net sale proceeds to the Limited and General Partners which
represented a return of capital of $27.20 per Limited
Partnership Unit. The majority of the remaining proceeds
will be reinvested in additional property.
On November 18, 1997, the Partnership purchased a 30.794%
interest in a Timber Lodge Steakhouse in St. Cloud,
Minnesota for $510,635. The property is leased to Timber
Lodge Steakhouse, Inc. under a Lease Agreement with a
primary term of 20 years and annual rental payments of
$51,537. The remaining interests in the property are owned
by AEI Real Estate Fund XVII Limited Partnership and AEI
Institutional Net Lease Fund '93 Limited Partnership,
affiliates of the Partnership.
On December 23, 1997, the Partnership purchased a 26.05%
interest in a parcel of land in Troy, Michigan for $393,620.
The land is leased to Champps Entertainment, Inc. (Champps)
under a Lease Agreement with a primary term of 20 years and
annual rental payments of $27,553. Effective June 20, 1998,
the annual rent was increased to $41,330. Simultaneously
with the purchase of the land, the Partnership entered into
a Development Financing Agreement under which the
Partnership will advance funds to Champps for the
construction of a Champps Americana restaurant on the site.
Through June 30, 1998, the Partnership had advanced $454,224
for the construction of the property and was charging
interest on the advances at a rate of 7%. Effective June
20, 1998, the interest rate was increased to 10.50%. The
Partnership's share of the total purchase price, including
the cost of the land, will be approximately $1,172,250.
After the construction is complete, the Lease Agreement will
be amended to require annual rental payments of
approximately $123,000. The Partnership has incurred net
costs of $54,470 related to the acquisition of the property.
The costs have been capitalized and will be allocated to
land, building and equipment. The remaining interests in
the property are owned by AEI Real Estate Fund XVII Limited
Partnership, AEI Real Estate Fund XVIII Limited Partnership
and AEI Net Lease Income & Growth Fund XIX Limited
Partnership, affiliates of the Partnership.
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
The Partnership owns a 44.9042% interest in a restaurant in
Waco, Texas, which was previously closed. In June 1995, the
Partnership re-leased the restaurant to Tex-Mex Cocina of
Waco, L.C. The Lease Agreement had a primary term of
eighteen months with an annual rental payment of $24,248.
The Partnership could also receive additional rent if gross
receipts from the property exceeded certain specified
amounts. In December, 1997, the lessee elected not to
exercise the renewal option in the lease. The restaurant
was closed and is listed for sale or lease. While the
property is vacant, the Partnership is responsible for the
real estate taxes and other costs required to maintain the
property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of
the Partnership's interest in the Waco property was
approximately $314,400. In the fourth quarter of 1997, a
charge to operations for real estate impairment of $80,300
was recognized, which is the difference between the book
value at December 31, 1997 of $394,700 and the estimated
fair value of $314,400. The charge was recorded against the
cost of the land and building.
(4) Payable to AEI Fund Management -
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.
(5) Deferred Income -
In June, 1994, Fuddruckers, Inc., the restaurant concept's
franchisor, acquired the operations of the Fuddruckers
restaurant in St. Louis, Missouri, and assumed the lease
obligations from the original lessee. As part of the
agreement, the Partnership amended the Lease to reduce the
annual base rent from $163,550 to $138,246. The Partnership
could receive additional rent in the future if 10% of gross
receipts from the property exceed the base rent. In
consideration for the lease assumption and amendment, the
Partnership received a lump sum payment from the original
lessee of $210,277. The lump sum payment will be recognized
as income over the remainder of the Lease term, which
expires January 31, 2008, using the straight line method.
As of June 30, 1998 and December 31, 1997, the Partnership
has recognized $61,920 and $54,180, respectively, of this
payment as income. At June 30, 1998, the remaining deferred
income of $13,993 was prepaid rent related to certain other
Partnership properties.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the six months ended June 30, 1998 and 1997, the
Partnership recognized rental income of $286,698 and $263,379,
respectively. During the same periods, the Partnership earned
investment income of $27,382 and $64,961, respectively. In 1998,
rental income increased as a result of the reinvestment of net
sale proceeds in additional properties discussed below. The
increase in rental income was partially offset by a decrease in
rental income from the property in Waco, Texas and a decrease in
investment income earned on the net proceeds prior to the
purchase of the additional properties.
The Partnership owns a 44.9042% interest in a restaurant
in Waco, Texas, which was previously closed. In June 1995, the
Partnership re-leased the restaurant to Tex-Mex Cocina of Waco,
L.C. The Lease Agreement had a primary term of eighteen months
with an annual rental payment of $24,248. The Partnership could
also receive additional rent if gross receipts from the property
exceeded certain specified amounts. In December, 1997, the
lessee elected not to exercise the renewal option in the lease.
The restaurant was closed and is listed for sale or lease. While
the property is vacant, the Partnership is responsible for the
real estate taxes and other costs required to maintain the
property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of the
Partnership's interest in the Waco property was approximately
$314,400. In the fourth quarter of 1997, a charge to operations
for real estate impairment of $80,300 was recognized, which is
the difference between the book value at December 31, 1997 of
$394,700 and the estimated fair value of $314,400. The charge
was recorded against the cost of the land and building.
During the six months ended June 30, 1998 and 1997, the
Partnership paid Partnership administration expenses to
affiliated parties of $53,870 and $53,525, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $20,316 and $13,738, 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. The increase
in expenses in 1998, when compared to 1997, is mainly due to
expenses incurred in 1998 related to the Waco property.
As of June 30, 1998, the Partnership's annualized cash
distribution rate was 7.5%, 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 terms 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.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. AEI is currently analyzing its
computer hardware and software systems to determine what, if any,
resources need to be dedicated regarding Year 2000 issues. The
Partnership does not anticipate any significant operational
impact or incurring material costs as a result of AEI becoming
Year 2000 compliant.
Liquidity and Capital Resources
During the six months ended June 30, 1998, the
Partnership's cash balances decreased $428,937 mainly as a result
of the reinvestment of net sale proceeds in an additional
property. Net cash provided by operating activities decreased
from $267,627 in 1997 to $225,610 in 1998 mainly as a result of a
decrease in income and an increase in expenses in 1998 and net
timing differences in the collection of payments from the lessees
and the payment of expenses.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the six months ended June
30, 1997, the Partnership generated cash flow from the sale of
real estate of $1,301,342. During the six months ended June 30,
1998, the Partnership expended $394,174 to invest in real
properties (inclusive of acquisition expenses) as the Partnership
reinvested the cash generated from the property sales.
On January 24, 1997, the Partnership sold the Children's
World daycare center in Moreno Valley, California, to an
unrelated third party. The Partnership recognized net sale
proceeds of $1,301,342, which resulted in a net gain of $655,641.
At the time of sale, the cost and related accumulated
depreciation of the property was $963,717 and $318,016,
respectively. As part of the sale proceeds, the Partnership
received a Promissory Note for $1,003,000. The Note bears
interest at a 10% rate. On April 23, 1997, the Partnership
received the principal balance and outstanding accrued interest
on the Note. Investment income earned on the Note was $24,456.
In June, 1997, the Partnership distributed $202,020 of the
net sale proceeds to the Limited and General Partners which
represented a return of capital of $27.20 per Limited Partnership
Unit. The majority of the remaining proceeds will be reinvested
in additional property.
On November 18, 1997, the Partnership purchased a 30.794%
interest in a Timber Lodge Steakhouse in St. Cloud, Minnesota for
$510,635. The property is leased to Timber Lodge Steakhouse,
Inc. under a Lease Agreement with a primary term of 20 years and
annual rental payments of $51,537. The remaining interests in
the property are owned by AEI Real Estate Fund XVII Limited
Partnership and AEI Institutional Net Lease Fund '93 Limited
Partnership, affiliates of the Partnership.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On December 23, 1997, the Partnership purchased a 26.05%
interest in a parcel of land in Troy, Michigan for $393,620. The
land is leased to Champps Entertainment, Inc. (Champps) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $27,553. Effective June 20, 1998, the annual rent
was increased to $41,330. Simultaneously with the purchase of
the land, the Partnership entered into a Development Financing
Agreement under which the Partnership will advance funds to
Champps for the construction of a Champps Americana restaurant on
the site. Through June 30, 1998, the Partnership had advanced
$454,224 for the construction of the property and was charging
interest on the advances at a rate of 7%. Effective June 20,
1998, the interest rate was increased to 10.50%. The
Partnership's share of the total purchase price, including the
cost of the land, will be approximately $1,172,250. After the
construction is complete, the Lease Agreement will be amended to
require annual rental payments of approximately $123,000. The
Partnership has incurred net costs of $54,470 related to the
acquisition of the property. The costs have been capitalized and
will be allocated to land, building and equipment. The remaining
interests in the property are owned by AEI Real Estate Fund XVII
Limited Partnership, AEI Real Estate Fund XVIII Limited
Partnership and AEI Net Lease Income & Growth Fund XIX Limited
Partnership, affiliates of the Partnership.
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. In June, 1997, the Partnership distributed net sale
proceeds of $202,020 to the Partners as part of their regular
quarterly distribution. As a result, distributions during the
first six months of 1997 were higher than in 1998.
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. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1997, two Limited Partners redeemed a total of 17
Partnership Units for $8,618 in accordance with the Partnership
Agreement. The Partnership acquired these Units using Net Cash
Flow from operations. In prior years, a total of nineteen
Limited Partners redeemed 146.5 Units for $106,842. The
redemptions increase the remaining Limited Partners' ownership in
the Partnership.
The continuing rent payments from the properties, together
with cash generated from the property sales, should be adequate
to fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
PART II - OTHER INFORMATION
(Continued)
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
27 Financial Data Schedule for period
ended June 30, 1998.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: August 3, 1998 AEI Real Estate Fund XV
Limited Partnership
By: AEI Fund Management 86-A, Inc.
Its: Managing General Partner
By: /s/ Robert P Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000793631
<NAME> AEI REAL ESTATE FUND XV LTD PARTNERSHIP
<S> <C>
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