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: September 30,2000
Commission file number: 0-16555
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1571166
(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)
(651) 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 XVI LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of September 30, 2000 and December 31, 1999
Statements for the Periods ended September 30, 2000 and 1999:
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 XVI LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,763,270 $ 355,246
Receivables 28,078 35,184
----------- -----------
Total Current Assets 1,791,348 390,430
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 2,151,788 2,773,203
Buildings and Equipment 4,782,515 5,408,671
Accumulated Depreciation (2,049,326) (1,989,271)
----------- -----------
4,884,977 6,192,603
Real Estate Held for Sale 174,747 486,001
----------- -----------
Net Investments in Real Estate 5,059,724 6,678,604
----------- -----------
Total Assets $ 6,851,072 $ 7,069,034
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 49,480 $ 54,536
Distributions Payable 228,626 130,858
Deferred Income 22,995 11,892
----------- -----------
Total Current Liabilities 301,101 197,286
----------- -----------
DEFERRED INCOME - Net of Current Portion 73,322 82,241
PARTNERS' CAPITAL (DEFICIT):
General Partners (64,432) (61,303)
Limited Partners, $1,000 Unit value;
15,000 Units authorized and issued;
13,468 outstanding 6,541,081 6,850,810
----------- -----------
Total Partners' Capital 6,476,649 6,789,507
----------- -----------
Total Liabilities and Partners' Capital $ 6,851,072 $ 7,069,034
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Three Months Ended Nine Months Ended
9/30/00 9/30/99 9/30/00 9/30/99
INCOME:
Rent $186,244 $234,474 $595,070 $841,627
Investment Income 25,915 3,757 66,545 8,025
-------- -------- -------- --------
Total Income 212,159 238,231 661,615 849,652
-------- -------- -------- --------
EXPENSES:
Partnership Administration-
Affiliates 60,783 43,706 156,264 140,929
Partnership Administration
and Property Management -
Unrelated Parties 27,142 5,471 59,919 24,524
Depreciation 37,027 44,498 112,869 139,688
-------- -------- -------- --------
Total Expenses 124,952 93,675 329,052 305,141
-------- -------- -------- --------
OPERATING INCOME 87,207 144,556 332,563 544,511
GAIN ON SALE OF REAL ESTATE 628 0 274,375 183,775
-------- -------- -------- --------
NET INCOME $ 87,835 $144,556 $606,938 $728,286
======== ======== ======== ========
NET INCOME ALLOCATED:
General Partners $ 877 $ 1,446 $ 6,069 $ 7,283
Limited Partners 86,958 143,110 600,869 721,003
-------- -------- -------- --------
$ 87,835 $144,556 $606,938 $728,286
======== ======== ======== ========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(13,468 and 13,606 weighted average
Units outstanding in 2000 and 1999,
respectively) $ 6.46 $ 10.52 $ 44.62 $ 52.99
======== ======== ======== ========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 606,938 $ 728,286
Adjustments to Reconcile Net Income
To Net Cash Provided by Operating Activities:
Depreciation 112,869 139,688
Gain on Sale of Real Estate (274,375) (183,775)
Decrease in Receivables 7,106 16,506
Decrease in Payable to
AEI Fund Management, Inc. (5,056) (21,778)
Increase (Decrease) in Deferred Income 2,184 (100,845)
----------- -----------
Total Adjustments (157,272) (150,204)
----------- -----------
Net Cash Provided By
Operating Activities 449,666 578,082
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Real Estate 1,780,386 921,742
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable 97,768 (7,463)
Distributions to Partners (919,796) (1,211,848)
----------- -----------
Net Cash Used For
Financing Activities (822,028) (1,219,311)
----------- -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 1,408,024 280,513
CASH AND CASH EQUIVALENTS, beginning of period 355,246 78,013
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,763,270 $ 358,526
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1998 $(55,381) $7,437,075 $7,381,694 13,606.15
Distributions (12,118) (1,199,730) (1,211,848)
Net Income 7,283 721,003 728,286
-------- ---------- ---------- ----------
BALANCE, September 30, 1999 $(60,216) $6,958,348 $6,898,132 13,606.15
======== ========== ========== ==========
BALANCE, December 31, 1999 $(61,303) $6,850,810 $6,789,507 13,468.15
Distributions (9,198) (910,598) (919,796)
Net Income 6,069 600,869 606,938
-------- ---------- ---------- ----------
BALANCE, September 30, 2000 $(64,432) $6,541,081 $6,476,649 13,468.15
======== ========== ========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 XVI Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVI, Inc. (AFM), the Managing General
Partner. Robert P. Johnson, the President and sole
shareholder of AFM, serves as the Individual General Partner
and 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 February 6, 1987 when minimum
subscriptions of 2,000 Limited Partnership Units
($2,000,000) were accepted. The offering terminated on
November 6, 1987 when the maximum subscription limit of
15,000 Limited Partnership Units ($15,000,000) was reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$15,000,000 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.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(2) Organization - (Continued)
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 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 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 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 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 XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(3) Investments in Real Estate -
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Slidell, Louisiana,
filed for reorganization. GCR continued to make the lease
payments to the Partnership under the supervision of the
bankruptcy court. A reorganization plan was accepted by the
Bankruptcy Court, which provides for the Lease to be assumed
by GCR and assigned to another operator who will purchase
the Partnership's share of the property. The reorganization
plan also provides for the Partnership to collect all rents
outstanding under the terms of the Lease. On October 25,
2000, the sale closed with the Partnership receiving net
sale proceeds of approximately $960,000, which resulted in a
net gain of approximately $330,000.
In January, 2000, Texas Sports City Cafe, Ltd. (Texas), the
lessee of the Sports City Cafe, notified the Partnership
that they were discontinuing the restaurant operations. The
Partnership began negotiating to sell the property for
$900,000 to an unrelated third party, who assumed the
restaurant operations from Texas. The Partnership's share
of the gross sale proceeds was $315,000. In the fourth
quarter of 1999, a charge to operations of $70,000 was
recognized for real estate impairment, which was the
difference between the book value at December 31, 1999 of
$381,254 and the estimated net proceeds from the sale. The
charge was recorded against the cost of the building. The
land and building were classified as Real Estate Held for
Sale.
On July 28, 2000, the sale closed with the Partnership
receiving net sale proceeds of $311,882, which resulted in a
net gain of $628. At the time of sale, the cost and related
accumulated depreciation was $450,109 and $138,855,
respectively.
In February, 1999, the Partnership entered into an agreement
to sell the Fuddruckers restaurant in St. Louis, Missouri to
an unrelated third party. On June 16, 1999, the sale closed
with the Partnership receiving net sale proceeds of $763,611
which resulted in a net gain of $178,334. At the time of
sale, the cost and related accumulated depreciation was
$761,053 and $175,776, respectively.
In March, 1999, the Partnership entered into an agreement to
sell the Waco property to an unrelated third party. On May
10, 1999, the sale closed with the Partnership receiving net
sale proceeds of $158,131 which resulted in a net gain of
$5,441. At the time of sale, the cost and related
accumulated depreciation was $353,285 and $200,595,
respectively.
In November, 1999, the Partnership entered into an agreement
to sell the Caribou Coffee store in Atlanta, Georgia to an
unrelated third party. On February 2, 2000, the sale closed
with the Partnership receiving net sale proceeds of
$1,468,504, which resulted in a net gain of $273,747. At
the time of sale, the cost and related accumulated
depreciation was $1,247,571 and $52,814, respectively.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(3) Investments in Real Estate - (Continued)
In August, 2000, Renaissant Development Corp. (RDC), the
lessee of the Applebee's restaurant in Victoria, Texas filed
for reorganization. RDC has closed the restaurant and the
Partnership anticipates that the Lease will be rejected and
that possession of the property will be returned to the
Partnership. At September 30, 2000, the Partnership has not
collected $27,200 in rent from RDC, of which $8,774 has not
been accrued due to the uncertainty of collection. The
amount of $18,426, which has been accrued, represents the
rent from the date which RDC filed for reorganization
through September 30, 2000.
During the first nine months of 2000 and 1999, the
Partnership distributed $442,414 and $757,576 of net sale
proceeds to the Limited Partners and General Partners, which
represented a return of capital of $32.52 and $55.12 per
Limited Partnership Unit, respectively. The remainder of
the sale proceeds will be distributed in future periods.
(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
restaurants in St. Louis, Missouri and Omaha, Nebraska, and
assumed the lease obligations from the original lessee. As
part of the agreement, the Partnership amended the Leases to
reduce the base rent from the current annual rent of
$109,033 to $92,164 for the St. Louis property and $167,699
to $145,081 for the Omaha property. The Partnership could
receive additional rent in the future if 10% of gross
receipts from the properties exceed the base rent. In
consideration for the lease assumption and amendment, the
Partnership received lump sum payments from the original
lessee of $140,184 for the St. Louis property and $159,539
for the Omaha property. The lump sum payments will be
recognized as income over the remainder of the Lease terms
which expire January 31, 2008 and November 30, 2007,
respectively, using the straight line method.
As of March 31, 1999, the Partnership had recognized $49,020
of the payment for the St. Louis property as income. On
June 16, 1999, the Partnership sold the St. Louis property
and the Lease Agreement was terminated. As a result, the
Partnership recognized the balance of the deferred income
related to that property of $91,164 in the second quarter of
1999.
As of September 30, 2000 and December 31, 1999, the
Partnership had recognized $74,325 and $65,406 of the
payment for the Omaha property as income. The remaining
deferred income of $11,103 was prepaid rent related to
certain other Partnership properties.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the nine months ended September 30, 2000 and 1999, the
Partnership recognized rental income of $595,070 and $841,627,
respectively. During the same periods, the Partnership earned
investment income of $66,545 and $8,025, respectively. In 1999,
rental income was higher due to deferred income recognized as a
result of the sale of the Fuddruckers restaurant in St. Louis,
Missouri, discussed below. In addition, in 2000, regular rental
income decreased as a result of the property sales discussed
below. The decrease in rental income was partially offset by
additional investment income earned on the net proceeds from the
property sales.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Slidell, Louisiana, filed
for reorganization. GCR continued to make the lease payments to
the Partnership under the supervision of the bankruptcy court. A
reorganization plan was accepted by the Bankruptcy Court, which
provides for the Lease to be assumed by GCR and assigned to
another operator who will purchase the Partnership's share of the
property. The reorganization plan also provides for the
Partnership to collect all rents outstanding under the terms of
the Lease. On October 25, 2000, the sale closed with the
Partnership receiving net sale proceeds of approximately
$960,000, which resulted in a net gain of approximately $330,000.
In January, 2000, Texas Sports City Cafe, Ltd. (Texas),
the lessee of the Sports City Cafe, notified the Partnership that
they were discontinuing the restaurant operations. The
Partnership began negotiating to sell the property for $900,000
to an unrelated third party, who assumed the restaurant
operations from Texas. The Partnership's share of the gross sale
proceeds was $315,000. In the fourth quarter of 1999, a charge
to operations of $70,000 was recognized for real estate
impairment, which was the difference between the book value at
December 31, 1999 of $381,254 and the estimated net proceeds from
the sale. The charge was recorded against the cost of the
building. The land and building were classified as Real Estate
Held for Sale.
On July 28, 2000, the sale closed with the Partnership
receiving net sale proceeds of $311,882, which resulted in a net
gain of $628. At the time of sale, the cost and related
accumulated depreciation was $450,109 and $138,855, respectively.
In August, 2000, Renaissant Development Corp. (RDC), the
lessee of the Applebee's restaurant in Victoria, Texas filed for
reorganization. RDC has closed the restaurant and the
Partnership anticipates that the Lease will be rejected and that
possession of the property will be returned to the Partnership.
At September 30, 2000, the Partnership has not collected $27,200
in rent from RDC, of which $8,774 has not been accrued due to the
uncertainty of collection. The amount of $18,426, which has been
accrued, represents the rent from the date which RDC filed for
reorganization through September 30, 2000.
During the nine months ended September 30, 2000 and 1999,
the Partnership paid Partnership administration expenses to
affiliated parties of $156,264 and $140,929, 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 $59,919 and $24,524, 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.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
As of September 30, 2000, the Partnership's annualized
cash distribution rate was 9% 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
During the nine months ended September 30, 2000, the
Partnership's cash balances increased $1,408,024 mainly as a
result of cash generated from the sale of property. Net cash
provided by operating activities decreased from $578,082 in 1999
to $449,666 in 2000 as a result of a decrease in income and an
increase in expenses in 2000, which was partially offset by net
timing differences in the collection of payments from the lessees
and the payment of expenses.
In the first nine months of 2000 and 1999, net cash
provided by investing activities was $1,780,386 and $921,742,
respectively, which represented cash flow generated from the sale
of real estate.
In February, 1999, the Partnership entered into an
agreement to sell the Fuddruckers restaurant in St. Louis,
Missouri to an unrelated third party. On June 16, 1999, the sale
closed with the Partnership receiving net sale proceeds of
$763,611 which resulted in a net gain of $178,334. At the time
of sale, the cost and related accumulated depreciation was
$761,053 and $175,776, respectively.
In June, 1994, the Partnership received a lump sum payment
of $140,184 as compensation for certain modifications made to the
St. Louis Fuddruckers Lease. The lump sum payment was recognized
as income over the Lease term using the straight line method. As
a result of the sale, the Lease Agreement was terminated and the
Partnership recognized the balance of the deferred income of
$91,164 in the second quarter of 1999.
In March, 1999, the Partnership entered into an agreement
to sell the Waco property to an unrelated third party. On May
10, 1999, the sale closed with the Partnership receiving net sale
proceeds of $158,131 which resulted in a net gain of $5,441. At
the time of sale, the cost and related accumulated depreciation
was $353,285 and $200,595, respectively.
In November, 1999, the Partnership entered into an
agreement to sell the Caribou Coffee store in Atlanta, Georgia to
an unrelated third party. On February 2, 2000, the sale closed
with the Partnership receiving net sale proceeds of $1,468,504,
which resulted in a net gain of $273,747. At the time of sale,
the cost and related accumulated depreciation was $1,247,571 and
$52,814, respectively.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
During the first nine months of 2000 and 1999, the
Partnership distributed $442,414 and $757,576 of net sale
proceeds to the Limited Partners and General Partners, which
represented a return of capital of $32.52 and $55.12 per Limited
Partnership Unit, respectively. The remainder of the sale
proceeds will be distributed in future periods.
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 the first nine months of 2000, distributions were lower
when compared to the same period in 1999 because more sales
proceeds were distributed in 1999.
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 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.
On October 1, 2000, sixteen Limited Partners redeemed a
total of 97.5 Partnership Units for $37,740 in accordance with
the Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
149 Limited Partners redeemed 1,531.85 Partnership Units for
$1,051,053. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must be evaluated in
the context of a number of factors that may affect the
Partnership's financial condition and results of operations,
including the following:
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
affects of these consequences for investors;
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.
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.
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.
PART II - OTHER INFORMATION
(Continued)
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Asset Purchase Agreement dated
September 18, 2000 between the
Partnership, AEI Real Estate Fund XVIII
Limited Partnership, and Southern River
Restaurants LLC relating to the property
at 850 I-10 Service Road, Slidell,
Louisiana.
27 Financial Data Schedule for period
ended September 30, 2000.
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: November 7, 2000 AEI Real Estate Fund XVI
Limited Partnership
By: AEI Fund Management XVI, 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)
