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: March 31, 1998
Commission file number: 0-17467
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1603719
(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 XVII LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of March 31, 1998 and December 31, 1997
Statements for the Periods ended March 31, 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 XVII LIMITED PARTNERSHIP
BALANCE SHEET
MARCH 31, 1998 AND DECEMBER 31, 1997
(Unaudited)
ASSETS
1998 1997
CURRENT ASSETS:
Cash and Cash Equivalents $ 3,090,444 $ 2,615,163
Receivables 16,076 1,014
----------- -----------
Total Current Assets 3,106,520 2,616,177
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 4,637,235 4,416,278
Buildings and Equipment 8,457,780 8,975,829
Construction in Progress 194,815 46,997
Property Acquisition Costs 28,454 52,844
Accumulated Depreciation (2,596,689) (2,778,790)
----------- -----------
10,721,595 10,713,158
Real Estate Held for Sale 199,644 199,644
----------- -----------
Net Investments in Real Estate 10,921,239 10,912,802
----------- -----------
Total Assets $14,027,759 $13,528,979
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 28,187 $ 45,489
Distributions Payable 306,205 168,778
Unearned Rent 62,051 0
----------- -----------
Total Current Liabilities 396,443 214,267
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (65,099) (68,265)
Limited Partners, $1,000 Unit value;
30,000 Units authorized; 23,389 Units issued;
22,556 Units outstanding 13,696,415 13,382,977
----------- -----------
Total Partners' Capital 13,631,316 13,314,712
----------- -----------
Total Liabilities and Partners' Capital $14,027,759 $13,528,979
=========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
1998 1997
INCOME:
Rent $ 372,487 $ 308,113
Investment Income 37,448 60,772
----------- -----------
Total Income 409,935 368,885
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 66,321 58,861
Partnership Administration and Property
Management - Unrelated Parties 22,533 27,325
Depreciation 87,056 83,977
----------- -----------
Total Expenses 175,910 170,163
----------- -----------
OPERATING INCOME 234,025 198,722
GAIN ON SALE OF REAL ESTATE 416,282 0
----------- -----------
NET INCOME $ 650,307 $ 198,722
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 6,503 $ 1,988
Limited Partners 643,804 196,734
----------- -----------
$ 650,307 $ 198,722
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(22,556 and 22,920 weighted average Units
outstanding in 1998 and 1997) $ 28.54 $ 8.58
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 650,307 $ 198,723
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 87,056 83,976
Gain on Sale of Real Estate (416,282) 0
Increase in Receivables (15,062) (357)
Decrease in Payable to
AEI Fund Management, Inc. (17,302) (66,205)
Decrease in Security Deposit 0 (37,307)
Increase in Unearned Rent 62,051 53,345
----------- -----------
Total Adjustments (299,539) 33,452
----------- -----------
Net Cash Provided By
Operating Activities 350,768 232,175
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (530,207) 0
Proceeds from Sale of Real Estate 850,996 315,229
----------- -----------
Net Cash Provided By
Investing Activities 320,789 315,229
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable 137,427 (125,539)
Distributions to Partners (333,703) (339,609)
----------- -----------
Net Cash Used For
Financing Activities (196,276) (465,148)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 475,281 82,256
CASH AND CASH EQUIVALENTS, beginning of period 2,615,163 4,798,584
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 3,090,444 $ 4,880,840
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1996 $ (62,780) $13,925,996 $13,863,216 22,920.29
Distributions (3,396) (336,213) (339,609)
Net Income 1,988 196,734 198,722
--------- ----------- ----------- -----------
BALANCE, March 31, 1997 $ (64,188) $13,786,517 $13,722,329 22,920.29
========= =========== =========== ===========
BALANCE, December 31, 1997 $ (68,265) $13,382,977 $13,314,712 22,555.89
Distributions (3,337) (330,366) (333,703)
Net Income 6,503 643,804 650,307
--------- ----------- ----------- -----------
BALANCE, March 31, 1998 $ (65,099) $13,696,415 $13,631,316 22,555.89
========= =========== =========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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 XVII Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVII, 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 February 10, 1988 when minimum
subscriptions of 2,000 Limited Partnership Units
($2,000,000) were accepted. The Partnership's offering
terminated on November 1, 1988 when the one-year offering
period expired. The Partnership received subscriptions for
23,388.7 Limited Partnership Units ($23,388,700).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$23,388,700 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 XVII 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 XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
The Partnership owns a 65% interest in a J.T. McCord's
restaurant in Mesquite, Texas. In December, 1995, the
Partnership took possession of the property after the lessee
was unable to perform under the terms of the Lease. In
July, 1996, the Partnership entered into an agreement to
sell the property to an unrelated third party. In
September, 1996, the Agreement was terminated by the
purchaser. The property was listed for sale or lease until
March, 1997 when it was re-leased to Texas Sports City Cafe,
Ltd. under a triple net lease agreement with a primary term
of 12 years which may be renewed for up to two consecutive
five-year periods. The Partnership's share of the annual
base rent is $32,500 for the first lease year and $58,500
for the second lease year, with rent increases in each
subsequent lease year of either three percent of the prior
year's rent or three percent of gross receipts in years two
and three and six percent of gross receipts thereafter, to
the extent they exceed the base rent. While the property
was being re-leased, the Partnership was responsible for the
real estate taxes and other costs required to maintain the
property.
In January, 1996, the Cheddar's restaurant in Indianapolis,
Indiana was destroyed by a fire. The Partnership reached an
agreement with the tenant and insurance company which called
for termination of the Lease, demolition of the building and
payment to the Partnership of $407,282 for the building and
equipment and $49,688 for lost rent. The property will not
be rebuilt and the Partnership listed the land for sale.
The Partnership recognized net disposition proceeds of
$406,892 which resulted in a net gain of $78,290. At the
time of disposition, the cost and related accumulated
depreciation was $512,433 and $183,831, respectively. 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 land was approximately
$200,000. In the fourth quarter of 1997, a charge to
operations for real estate impairment of $62,000 was
recognized, which is the difference between the book value
at December 31, 1997 of $261,644 and the estimated fair
value of $200,000.
The Partnership owned a 65.09% interest in the Sizzler
restaurant at the King's Island Theme Park near Cincinnati,
Ohio. In January, 1994, the Partnership closed the
restaurant and listed it for sale or lease. On January 23,
1997, the Partnership sold its interest in the property to
an unrelated third party. The Partnership received net
sales proceeds of $315,229, which resulted in a net loss of
$503,600, which was recognized as a real estate impairment
in the fourth quarter of 1996. Prior to the sale, the
Partnership was responsible for the real estate taxes and
other costs required to maintain the property.
On February 20, 1998, the Partnership sold the am/pm Mini
Market in Carson City, Nevada to an unrelated third party.
The Partnership received net sale proceeds of $850,996,
which resulted in a net gain of $416,282. At the time of
sale, the cost and related accumulated depreciation was
$703,871 and $269,157, respectively.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
During the first three months of 1998 and 1997, the
Partnership distributed $12,622 and $56,910 of the net sale
proceeds to the Limited and General Partners which
represented a return of capital of $0.55 and $2.46 per
Limited Partnership Unit, respectively. In June, 1997, the
Managing General Partner filed a proxy statement to propose
an Amendment to the Limited Partnership Agreement that would
allow the Partnership to reinvest the majority of the sales
proceeds in additional properties. The Amendment passed
with a majority of Units voting in favor of the Amendment.
In October, 1997, the Partnership entered into a Development
Financing Commitment under which the Partnership would
advance funds for the construction of a Timber Lodge
Steakhouse restaurant in Rockford, Illinois. The purchase
price was approximately $1,620,000. The property would have
been leased to Timber Lodge Steakhouse, Inc. under a Lease
Agreement with a primary term of 20 years and annual rental
payments of approximately $174,000. In January, 1998, the
Commitment was terminated by mutual agreement of the
parties.
On November 18, 1997, the Partnership purchased a 30.794%
interest in a Timber Lodge Steakhouse in St. Cloud,
Minnesota for $493,492. 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 XV Limited Partnership and AEI
Institutional Net Lease Fund '93 Limited Partnership,
affiliates of the Partnership.
On December 10, 1997, the Partnership purchased a 60.0%
interest in a TGI Friday's restaurant in Greensburg,
Pennsylvania for $1,009,045. The property is leased to Ohio
Valley Bistros, Inc. under a Lease Agreement with a primary
term of 15 years and annual rental payments of $101,475.
The remaining interest in the property was purchased by AEI
Income & Growth Fund XXII Limited Partnership, an affiliate
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. 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 March 31,
1998, the Partnership had advanced $126,842 for the
construction of the property and was charging interest on
the advances at a rate of 7%. 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
remaining interests in the property are owned by AEI Real
Estate Fund XV 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 XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
On January 15, 1998, the Partnership purchased a parcel of
land in Rochester, Minnesota for $406,778. The land is
leased to Timber Lodge Steakhouse, Inc. (TLS) under a Lease
Agreement with a primary term of 20 years and annual rental
payments of $30,133. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership will advance
funds to TLS for the construction of a Timber Lodge
Steakhouse restaurant on the site. Through March 31, 1998,
the Partnership had advanced $67,973 for the construction of
the property and was charging interest on the advances at a
rate of 7.5%. The total purchase price, including the cost
of the land, will be approximately $1,860,000. After the
construction is complete, the Lease Agreement will be
amended to require annual rental payments of approximately
$196,000.
During 1997 and the first three months of 1998, the
Partnership incurred net costs of $55,986 relating to the
review of potential property acquisitions. Of these costs,
$27,532 have been capitalized and allocated to land,
building and equipment. The remaining costs of $28,454 have
been capitalized and will be allocated to property
acquisitions 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the three months ended March 31, 1998 and 1997, the
Partnership recognized rental income of $372,487 and $308,113,
respectively. During the same periods, the Partnership earned
investment income of $37,448 and $60,772, respectively. In 1998,
rental income increased as a result of rent received from four
property acquisitions in 1997 and 1998, rent received from re-
leasing the restaurant in Mesquite, Texas, and rent increases on
nine properties. These increases in rental income were partially
offset by a decrease in rent due to a property sale in 1998 and a
decrease in investment income earned on the net proceeds prior to
the purchase of the additional properties.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Partnership owns a 65% interest in a J.T. McCord's
restaurant in Mesquite, Texas. In December, 1995, the
Partnership took possession of the property after the lessee was
unable to perform under the terms of the Lease. In July, 1996,
the Partnership entered into an agreement to sell the property to
an unrelated third party. In September, 1996, the Agreement was
terminated by the purchaser. The property was listed for sale or
lease until March, 1997 when it was re-leased to Texas Sports
City Cafe, Ltd. under a triple net lease agreement with a primary
term of 12 years which may be renewed for up to two consecutive
five-year periods. The Partnership's share of the annual base
rent is $32,500 for the first lease year and $58,500 for the
second lease year, with rent increases in each subsequent lease
year of either three percent of the prior year's rent or three
percent of gross receipts in years two and three and six percent
of gross receipts thereafter, to the extent they exceed the base
rent. While the property was being re-leased, the Partnership
was responsible for the real estate taxes and other costs
required to maintain the property.
The Partnership owned a 65.09% interest in the Sizzler
restaurant at the King's Island Theme Park near Cincinnati, Ohio.
In January, 1994, the Partnership closed the restaurant and
listed it for sale or lease. On January 23, 1997, the
Partnership sold its interest in the property to an unrelated
third party. The Partnership received net sales proceeds of
$315,229, which resulted in a net loss of $503,600, which was
recognized as a real estate impairment in the fourth quarter of
1996. Prior to the sale, the Partnership was responsible for the
real estate taxes and other costs required to maintain the
property.
During the three months ended March 31, 1998 and 1997, the
Partnership paid Partnership administration expenses to
affiliated parties of $66,321 and $58,861, 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 $22,533 and $27,325, 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.
As of March 31, 1998, the Partnership's annualized cash
distribution rate was 7.44%, 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.
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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Liquidity and Capital Resources
During the three months ended March 31, 1998, the
Partnership's cash balances increased $475,281 mainly as a result
of the sale of the am/pm Mini Market property discussed below.
Net cash provided by operating activities increased from $232,175
in 1997 to $350,768 in 1998 as a result of an increase in income
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. For the three months ended March
31, 1998 and 1997, the Partnership generated cash flow from the
sale of real estate of $850,996 and $315,229, respectively.
During the same periods, the Partnership expended $530,207 and $-
0-, respectively, to invest in real properties (inclusive of
acquisition expenses) as the Partnership reinvested the cash
generated from the property sales.
In January, 1996, the Cheddar's restaurant in
Indianapolis, Indiana was destroyed by a fire. The Partnership
reached an agreement with the tenant and insurance company which
called for termination of the Lease, demolition of the building
and payment to the Partnership of $407,282 for the building and
equipment and $49,688 for lost rent. The property will not be
rebuilt and the Partnership listed the land for sale. The
Partnership recognized net disposition proceeds of $406,892 which
resulted in a net gain of $78,290. At the time of disposition,
the cost and related accumulated depreciation was $512,433 and
$183,831, respectively. 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 land was
approximately $200,000. In the fourth quarter of 1997, a charge
to operations for real estate impairment of $62,000 was
recognized, which is the difference between the book value at
December 31, 1997 of $261,644 and the estimated fair value of
$200,000.
On February 20, 1998, the Partnership sold the am/pm Mini
Market in Carson City, Nevada to an unrelated third party. The
Partnership received net sale proceeds of $850,996, which
resulted in a net gain of $416,282. At the time of sale, the
cost and related accumulated depreciation was $703,871 and
$269,157, respectively.
During the first three months of 1998 and 1997, the
Partnership distributed $12,622 and $56,910 of the net sale
proceeds to the Limited and General Partners which represented a
return of capital of $0.55 and $2.46 per Limited Partnership
Unit, respectively. In June, 1997, the Managing General Partner
filed a proxy statement to propose an Amendment to the Limited
Partnership Agreement that would allow the Partnership to
reinvest the majority of the sales proceeds in additional
properties. The Amendment passed with a majority of Units voting
in favor of the Amendment.
In October, 1997, the Partnership entered into a
Development Financing Commitment under which the Partnership
would advance funds for the construction of a Timber Lodge
Steakhouse restaurant in Rockford, Illinois. The purchase price
was approximately $1,620,000. The property would have been
leased to Timber Lodge Steakhouse, Inc. under a Lease Agreement
with a primary term of 20 years and annual rental payments of
approximately $174,000. In January, 1998, the Commitment was
terminated by mutual agreement of the parties.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On November 18, 1997, the Partnership purchased a 30.794%
interest in a Timber Lodge Steakhouse in St. Cloud, Minnesota for
$493,492. 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 XV Limited
Partnership and AEI Institutional Net Lease Fund '93 Limited
Partnership, affiliates of the Partnership.
On December 10, 1997, the Partnership purchased a 60.0%
interest in a TGI Friday's restaurant in Greensburg, Pennsylvania
for $1,009,045. The property is leased to Ohio Valley Bistros,
Inc. under a Lease Agreement with a primary term of 15 years and
annual rental payments of $101,475. The remaining interest in
the property was purchased by AEI Income & Growth Fund XXII
Limited Partnership, an affiliate 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. 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 March 31, 1998, the Partnership had advanced
$126,842 for the construction of the property and was charging
interest on the advances at a rate of 7%. 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 remaining
interests in the property are owned by AEI Real Estate Fund XV
Limited Partnership, AEI Real Estate Fund XVIII Limited
Partnership and AEI Net Lease Income & Growth Fund XIX Limited
Partnership, affiliates of the Partnership.
On January 15, 1998, the Partnership purchased a parcel of
land in Rochester, Minnesota for $406,778. The land is leased to
Timber Lodge Steakhouse, Inc. (TLS) under a Lease Agreement with
a primary term of 20 years and annual rental payments of $30,133.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership will advance funds to TLS for the construction of a
Timber Lodge Steakhouse restaurant on the site. Through March
31, 1998, the Partnership had advanced $67,973 for the
construction of the property and was charging interest on the
advance at a rate of 7.5%. The total purchase price, including
the cost of the land, will be approximately $1,860,000. After
the construction is complete, the Lease Agreement will be amended
to require annual rental payments of approximately $196,000.
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 on a quarterly basis. The
redemption payments generally are funded with cash that would
normally be paid as part of the regular quarterly distributions.
As a result, total distributions and distributions payable have
fluctuated from year to year due to cash used to fund redemption
payments.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
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 April 1, 1998, fourteen Limited Partners redeemed a
total of 137.20 Units for $99,154 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
forty-five Limited Partners redeemed 832.9 Partnership Units for
$491,344. The redemptions increase the remaining Limited
Partners' ownership interest 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.
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:
<bullet> Market and economic conditions which affect the value
of the properties the Partnership owns and the cash
from rental income such properties generate;
<bullet> the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
affects of these consequences for investors;
<bullet> resolution by the General Partners of conflicts with
which they may be confronted;
<bullet> the success of the General Partners of locating
properties with favorable risk return characteristics;
<bullet> the effect of tenant defaults; and
<bullet> 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.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated December
17, 1997 between the Partnership and
Atlantic Richfield Company relating to
the property at 2707 U.S. Highway 50
East, Carson City, Nevada.
27 Financial Data Schedule for period
ended March 31, 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: May 12, 1998 AEI Real Estate Fund XVII
Limited Partnership
By: AEI Fund Management XVII, 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)
REAL ESTATE PURCHASE AND SALE AGREEMENT
This Real Estate Purchase and Sale Agreement (this
"Agreement"), dated December 17, 1997, is by and between AEI Real
Estate Fund XVII Limited Partnership, a Minnesota limited
partnership ("Seller"), and Atlantic Richfield Company, a
Delaware corporation ("Buyer").
RECITALS
A. Seller is the owner of the real estate (the "Realty")
in the County of Washoe, State of Nevada, described in Exhibit
"A" attached hereto.
B. The Realty and certain equipment located on the Realty
are subject to a Net Lease Agreement dated November 9, 1988,
between Seller, as landlord, and B. Wells O'Brien & Co., a Nevada
corporation ("Tenant"), as tenant. (The Net Lease Agreement will
be referred to below as the "Lease.")
C. Concurrently with the execution of this Agreement,
Tenant and ARCO Products Company, a division of Buyer, intend to
execute a Business Purchase and Sale Agreement (the "Business
Agreement"). The Business Agreement covers ARCO Products
Company's purchase from Tenant of certain furnishings, fixtures,
equipment, inventory and supplies located at the Realty
(collectively, the "Business Property"). The Business Agreement
provides that the purchase and sale of the Business Property will
be consummated through an escrow (the "Business Escrow ") with
Western Title Company, 6490 South McCarran Blvd., Building F,
Suite 46, Reno, Nevada 89509.
D. The Business Agreement also provides for the Tenant's
assigning its interest under the Lease to Buyer at the closing of
the Business Escrow.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. PURCHASE AND SALE. Subject to the terms herein, Seller
agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, the Realty.
2. DEFINITION OF REALTY. For purposes of this Agreement,
the term "Realty" shall be deemed to include the real property
described on Exhibit "A" attached hereto, together with (a) all
equipment and other items affixed to such real property in such a
manner as to constitute fixtures that pass with title to such
real property and (b) those items of equipment that are leased by
Seller to Tenant under the Lease.
3. PURCHASE PRICE. The purchase price for the Realty
shall be $856,250.00. The purchase price includes improvements,
benefits and appurtenances to the Realty. The conveyance of the
Realty shall be by Grant, Bargain, Sale Deed (the "Deed"), free
of encumbrances, except those accepted by Buyer in writing. The
assignment of the Access Leasehold Interest shall also be free of
encumbrances, except those accepted by Buyer in writing.
4. ESCROW. The escrow (the "Escrow") shall be with
Commonwealth Land Title Company, 888 W. 6th Street, Los Angeles,
California 90017, Attention: Mai Ly Marsh, Escrow Officer
("Escrow Holder"). Following the execution of this Agreement by
Seller and Buyer, Buyer shall open the Escrow. Escrow shall be
deemed opened on the date that this Agreement is executed by
Escrow Holder. Buyer and Seller shall each pay one-half (1/2) of
the Escrow fee.
5. CONTINGENCIES TO CLOSING. Buyer shall not be
obligated to close until the following contingencies have been
satisfied or waived by Buyer:
A. ACQUISITION OF TENANT'S BUSINESS. The Business
Escrow is ready to close.
B. TITLE. Title to the Realty to be conveyed
to Buyer is satisfactory to Buyer, and Commonwealth Land Title
Insurance Company (the "Title Company") is committed to issue to
Buyer an A.L.T.A. owner's extended coverage policy of title
insurance, insuring Buyer's title in a condition satisfactory to
Buyer.
C. ASSIGNMENT OF LANDLORD'S LEASE. Seller shall
have executed, acknowledged and delivered to Escrow Holder an
assignment (the "Landlord's Lease Assignment") to Buyer of
Seller's interest as lessor in and to the Lease. The Landlord's
Lease Assignment shall be in the form of Exhibit "B" attached
hereto. Escrow Holder shall record the Landlord's Lease
Assignment as part of the close of Escrow.
D. TERMINATION OF FINANCING STATEMENT. Seller shall
have executed and delivered to Escrow Holder a termination (the
"UCC-1 Termination") of the Financing Statement that was filed on
November 9, 1988, as Document No. 78217 in the Official Records
of Carson City, Nevada, which names Seller as the secured party
and Tenant as the debtor.
E. TERMINATION OF THE LEASE. Tenant shall have
executed, acknowledged and delivered to Escrow Holder an
assignment (the "Tenant's Lease Assignment") to Buyer of Tenant's
interest as lessee in and to the Lease, in the form required
under the Business Agreement. Escrow Holder shall record the
Tenant's Lease Assignment as a part of the close of Escrow.
F. SELLER'S OBLIGATIONS. Buyer is satisfied, in its
sole discretion, that Seller has fulfilled all of its obligations
under this Agreement that are to be performed before closing.
6. CLOSING. Closing shall occur simultaneously with the
closing of the Business Escrow, provided that the contingencies
set forth in Provision 5 above have all been satisfied or waived
by Buyer, or will be satisfied or waived by Buyer at closing, and
the parties have satisfied all of their obligations set forth in
this Agreement or will do so at closing.
7. FAILURE TO CLOSE. If for any reason other than
the default of Buyer, closing does not occur, Buyer may cancel
this Agreement and the Escrow, and Buyer shall be entitled to
receive back any payments placed into Escrow or paid to Seller.
Buyer shall not be obligated to litigate to satisfy any of the
contingencies set forth in Provision 5 above. Seller shall not be
obligated to clear any matters affecting title to the Realty,
except for (i) termination of the Financing Statement that is the
subject of the UCC-1 Termination, and (ii) any monetary
encumbrances that Seller has placed on title.
8. TITLE INSURANCE COSTS. Title insurance shall be
paid by Seller.
9. PRORATIONS; COSTS. Items of expense (including
taxes) and income pertaining to the Realty shall be prorated to
the date of closing. Taxes shall be prorated based on the latest
available tax statements. If not previously paid, Escrow Holder
shall pay to the appropriate taxing authority the semi-annual
installment of the current fiscal year's taxes applicable to the
six (6) month period during which the closing occurs, whether or
not then due. Any credits or additional taxes imposed after
closing shall be applied to Buyer's account outside of Escrow.
For purposes of this Agreement, closing shall be the date that
the Deed and the documents contemplated by Provisions 5.C through
E above are accepted by the County Recorder's Office for
recording or filing, as applicable. Buyer shall pay the cost of
recording and filing the documents described in the immediately
preceding sentence. Seller shall pay real estate transfer taxes.
Assessments, including but not limited to public improvements,
and all monetary liens, whether private or governmental, shall be
extinguished, at Seller's expense, by Escrow Holder at closing,
except real estate taxes not yet payable, which shall be prorated
as aforesaid. All prorations shall be based on a thirty (30) day
month.
10. TITLE AND POSSESSION. Title and vacant
possession shall pass at closing.
11. SELLER'S REPRESENTATIONS AND COVENANTS.
A. REPRESENTATIONS AND WARRANTIES. Seller makes the
following representations and warranties to Buyer as of the date
of this Agreement and as of the close of Escrow.
(1) LEGAL PARCEL. To the best of Seller's
knowledge, the Realty constitutes a legal parcel that has been
subdivided in compliance with all applicable laws, ordinances,
and other requirements of the State of Nevada and local
governmental authorities.
(2) CORPORATE EXISTENCE. Seller is a limited
partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware. The persons signing on
behalf of Seller have the full right, power and authority to bind
Seller under this Agreement, and the transactions contemplated by
this Agreement have been duly authorized by all necessary
partnership action of Seller and all necessary corporate action
of Seller's sole general partner.
(3) LEGALITY OF CONTRACT. Neither the execution
and delivery of this Agreement by Seller, nor Seller's incurring
of the obligations set forth herein, nor the consummation of the
transactions contemplated herein, nor Seller's compliance with
the terms of this Agreement will (a) conflict with or result in a
breach of any of the terms, conditions or provisions of, or
constitute a default (or an event which, with the giving of
notice or the passage of time, would constitute a default) under,
any law, regulation, ordinance, judgment, order or decree to
which Seller or the Realty is subject, or any contract, agreement
or instrument to which Seller is a party or by which Seller or
the Realty may be bound, or (b) require the consent or approval
of any governmental entity or other third party.
(4) NO LITIGATION. To the best of Seller's
knowledge, there is no litigation, condemnation or administrative
enforcement proceeding pending or threatened against or
concerning the Realty, nor any litigation or other legal
proceedings pending or threatened against Seller that might, if
successful, interfere with the consummation of the transactions
contemplated herein.
(5) ENVIRONMENTAL CONDITION. To the best of
Seller's knowledge, the Realty and the operation of the Realty
are in compliance with all federal, state and local laws relating
to the use, disposal, storage and release of hazardous or toxic
materials; and no such materials exist on, in or under any
portions of the Realty.
(6) AUTHENTICITY OF DOCUMENTS. Seller has
delivered to Buyer a true and complete copy of the Lease. The
Lease has not been amended or modified prior to the date of this
Agreement, except as described in this Agreement; and the Lease
shall not be amended or modified prior to the close of Escrow.
(7) RIGHT OF POSSESSION. To the best of
Seller's knowledge, other than the Lease, there are no leases,
options to convey or other rights of possession affecting the
Realty.
(8) NO DEFAULT. Seller is not in default under
the Lease; and Seller shall remain in compliance thereunder until
the close of Escrow.
B. SELLER'S KNOWLEDGE. Where any of these
representations and warranties are stated to be "to the best of
Seller's knowledge," such limitation shall mean that such
representations and warranties are made without independent
investigation of the matters stated therein and are based solely
on the current, actual knowledge of Seller's employees, agents
and consultants. Buyer understands that Seller is not actively
engaged in the operation, management and/or marketing of the
Realty as of the date of this Agreement.
C. NO OTHER REPRESENTATIONS AND WARRANTIES. Except
as expressly set forth in this Provision 11, Seller makes no
representations or warranties of any kind, express or implied,
written or oral, as to the physical condition of the Realty; the
uses of the Realty or any limitations thereon, including without
limitation zoning, environmental or other laws, regulations or
governmental requirements; the utilities or other physical
equipment or fixtures on the Realty; the condition of the soils
or groundwaters of the Realty; the presence or absence of toxic
materials or hazardous substances on or under the Realty; or any
other matter bearing on the use, value or condition of the
Realty. Buyer specifically acknowledges that it is acquiring the
Realty in an "as is" condition, in reliance upon its own
inspection and investigation of the Realty, but subject to the
truth, completeness and accuracy of Seller's representations and
warranties made above in this Provision 11.
D. EFFECT OF THE LEASE. Buyer acknowledges that if
Buyer waives the contingency set forth in Provision 5.A and
proceeds to close the Escrow under this Agreement without closing
the Business Escrow, Buyer will be acquiring the Realty subject
to Tenant's interest under the Lease.
12. NOTICES. Notices relating to this transaction
shall be in writing and shall be deemed given when personally
delivered, or when deposited with the U.S. Postal Service,
certified mail, postage prepaid or when deposited with a common
carrier, freight prepaid, addressed as provided below or in
accordance with subsequently provided written instructions, or
when sent by electronic facsimile. Notices to Seller shall be
sent to:
AEI Real Estate Fund XVII Limited Partnership
c/o AEI Fund Management, Inc.
1300 Minnesota World Trade Center
50 East Seventh Street
St. Paul, MN 55101
Facsimile: (612) 227-7705
and to Buyer at:
Atlantic Richfield Company
4 Centerpointe Drive
La Palma, CA 90623
Attn: J. J. Coffey
Assistant Vice President
Facsimile: (714) 670-5439
13. ESCROW INSTRUCTIONS. This Agreement shall also
constitute Escrow instructions.
14. CONDEMNATION. In the event of issuance, before
closing, of notice of a partial or total condemnation of the
Realty, Buyer may cancel this Agreement and the Escrow. In such
case, Buyer shall be entitled to receive back any payments
placed into Escrow or paid to Seller. If, however, Buyer
nevertheless decides to close, Buyer shall notify Seller, and
Seller shall execute an assignment in a form acceptable to Buyer,
assigning to Buyer Seller's rights to all compensation on account
of such condemnation. Such assignment shall be delivered to
Buyer through Escrow at closing. For purposes of this provision,
"condemnation" includes rights of inverse condemnation.
15. ENTIRE AGREEMENT; AMENDMENTS. This Agreement
and the Exhibit(s) hereto contain the whole agreement of the
parties with respect to the subject matter hereof. There are no
understandings except as provided herein. Any oral promise or
inducement is void. No amendment can be made to this Agreement
except in a writing executed by the parties hereto and delivered
to Escrow Holder.
16. NO MERGER. The representations, warranties,
covenants and disclaimers shall not merge but shall survive
closing hereunder.
17. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT.
Buyer shall comply with the Foreign Investment In Real Property
Tax Act (the "Act") by either:
A. WITHHOLDING FUNDS. If Seller is a foreign
person or entity, as defined in the Act, withholding at closing
ten percent (10%) of the Provision 3 purchase price and
transmitting such withheld sum in accordance with law; or
B. AFFIDAVIT. Obtaining an affidavit from
Seller that Seller is not a foreign person or entity and
obtaining Seller's taxpayer identification number; or
C. OTHER PROOF. Obtaining proof of other
exemption from the Act.
18. FURTHER ASSURANCES. Each of the parties hereto shall,
without further consideration, execute and deliver such other
documents and take such other actions as may reasonably be
requested by the other party hereto in order to effectuate the
provisions of this Agreement, including the transfer of title to
the Realty to Buyer.
19. SUCCESSORS AND ASSIGNS. The rights and obligations of
Buyer and Seller shall continue to the benefit of, and be binding
upon, their respective successors and assigns.
20. SELLER'S AUTHORITY. Within ten (10) days after
Seller's execution and delivery of this Agreement, Seller shall
provide Buyer with a copy of its governing documents (for
example, Articles of Incorporation, By-Laws, Agreement of
Partnership, Limited Liability Company Operating Agreement, or
Declaration of Trust), authorizing action (for example,
corporate resolutions, consent of partners, or consent of
members), and any other documents necessary to enable Buyer and
the Title Company to ascertain that the individual signing this
Agreement on behalf of Seller is authorized to legally bind
Seller.
21. BUSINESS AGREEMENT. Buyer shall have the right to
terminate this Agreement and the Escrow, if Buyer and Tenant do
not enter into the Business Agreement or if, after they enter
into the Business Agreement, the Business Agreement is terminated
by Buyer or Tenant for any reason. If Buyer so terminates this
Agreement, Buyer shall be entitled to receive back any payments
placed into Escrow or paid to Seller.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first set forth above.
SELLER:
AEI REAL ESTATE FUND XVII
LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI FUND MANAGEMENT XVII, INC.,
a Minnesota corporation, its
corporate general partner
By: /s/ Robert P Johnson
Robert P Johnson President
Printed Name and Title
Seller's Tax I.D.
# 41-1603719
Seller's Telephone #(612) 227-7333
BUYER:
ATLANTIC RICHFIELD COMPANY,
a Delaware corporation
By: /s/ J J Coffey
J. J. Coffey
Assistant Vice President
Received and acknowledged this 30th
day of January, 1998.
Commonwealth Land Title Company
By: /s/ Lee A. Mellin
Lee A Mellin
Printed Name and Title
LEGAL DESCRIPTION OF THE REALTY
The Realty comprises all of that real property located at the
northeast corner of Lassen Drive and U.S. Highway 50 East that is
commonly known as 2707 U.S. Highway 50 East, in Carson City,
County of Washoe, State of Nevada, containing approximately
27,185 square feet with approximately 123 feet of frontage on
Lassen Drive, and approximately 170 feet of frontage on U.S.
Highway 50 East. The Realty is legally described as follows:
A certain parcel of land situate within the Southeast 1/4,
Southeast 1/4 of Section 9, Township 15 North, Range 20 East,
M.D.B. & M., Carson City, Nevada, particularly described as
follows:
Commencing at the Southwest corner of Parcel "C" of that certain
parcel map for H.S. SERVICE CORP., recorded in Book 3 of Maps,
Page 665, file No. 80913, Official Recorder of Carson City,
Nevada, as shown and located thereon; thence North 0 40' 5" East
123.00 feet; thence along a curve to the right which is tangent
to the last course, which has a radius of 20 feet, which has a
central angle of 71 37' 14" an arc distance of 25.00 feet; thence
North 72 17' 19" East 169.98 feet; thence South 0 40' 5" 195.58
feet; thence North 89 19' 55" West 175 feet to the True Point of
Beginning.
EXHIBIT A
FORM OF ASSIGNMENT OF LANDLORD'S LEASE INTEREST
Order No.: CC23448-TO
Escrow No.: 18457
AFTER RECORDING, RETURN TO:
ARCO Products Company
4 Centerpointe Drive, LPR 6-162
La Palma, California 90623-1066
Attn: Richard D. Dreyfus, Real Estate FOR RECORDER'S USE
Department
Site No. 06380
ASSIGNMENT OF LANDLORD'S LEASE INTEREST
This Assignment of Landlord's Lease Interest (this
"Assignment") dated February 17, 1998, is entered into by
AEI Real Estate Fund XVII Limited Partnership, a Minnesota
limited partnership ("Seller"), and Atlantic Richfield
Company, a Delaware corporation ("Buyer").
RECITALS
A. Seller is the landlord under a Net Lease
Agreement dated November 4, 1998, with B Wells O'Brien & Co.,
a Nevada corporation, as tenant ("Tenant"). (The Net Lease
Agreement will be referred to below as the "Lease." The
interest of the landlord under the Lease is referred to
below as the "Lease Interest.")
B. The Lease covers the real property in Carson City,
Nevada, that is described in Exhibit "A" attached hereto ( the
"Realty"), together with certain improvements and equipment
described in the Lease.
C. The Lease was made a matter of public record by the
Memorandum of Lease recorded on November 9, 1998, as Document No.
78216 in the Official Records of Carson City, Nevada.
D. In connection with the signing of this Assignment,
Seller will convey the Realty to Buyer.
E. By this Assignment, Seller and Buyer wish to effect the
assignment and assumption of the Lease Interest.
AGREEMENT
THEREFORE, Seller and Buyer agree as follows:
EXHIBIT B
1. EFFECTIVE TIME. This Assignment will become effective
when it is recorded in the Official Records of Carson City,
Nevada (the "Effective Time").
2. ASSIGNMENT. Seller assigns to Buyer all the right,
title, and interest in and to the Lease Interest. The assigned
rights include, without limitation, the balance at the Effective
Time of all deposits that Tenant has paid to Seller under the
terms of the Lease.
3. ASSUMPTION. Buyer accepts the assignment from Seller.
Buyer shall perform the obligations that the landlord under the
Lease is required to perform after the Effective Time.
4. INDEMNIFICATION.
(a) Seller shall indemnify and defend Buyer against
all claims, liabilities, losses, damages, obligations, costs, and
expenses (including without limitation reasonable attorneys'
fees) that relate to the Lease Interest and arise from any event
that occurred, or any obligation that accrued, before the Effective
Time.
(b) Buyer shall indemnify and defend Seller against
all claims, liabilities, losses, damages, obligations, costs, and
expenses (including without limitation reasonable attorneys'
fees) that relate to the Lease Interest and arise from any event
that occurs, or any obligation that accrues, after the Effective
Time.
5. GOVERNING LAW. This Assignment is governed by the laws
of the State of Nevada, without regard to conflict-of-law principles.
6. SUCCESSORS. This Assignment is binding on the
successors in interest of each party.
7. FURTHER ACTS. Each party shall do all things that the
other party reasonably requests to carry out the purpose of this
Assignment.
8. COUNTERPARTS. This Assignment may be signed by the
parties in counterparts. The signature pages from the
counterparts may be attached to one counterpart, and that
counterpart may be recorded.
SELLER: BUYER:
AEI REAL ESTATE FUND XVII ATLANTIC RICHFIELD COMPANY,
LIMITED PARTNERSHIP, a a Delaware corporation
Minnesota limited partnership
By:AEI FUND MANAGEMENT XVII, By: /s/ J.J. Coffey
INC., a Minnesota corporation J.J. Coffey
its corporate general partner Assistant Vice President
By: /s/ Robert P Johnson
Pres
Robert P Johnson
Printed Name and Title Attest: /s/ Daniel J Rolf
Assistant Secretary
(ATTACH NOTARY ACKNOWLEDGMENTS)
EXHIBIT A
LEGAL DESCRIPTION OF REALTY
[Legal description to be completed before this document is
signed.]
A certain parcel of land situate within the Southeast 1/4, Southeast
1/4 of Section 9, Tonwship 15 North, Range 20 East, M.D.B. & M., Carson
City, Nevada, particularly described as follows:
COMMENCING at the Southwest corner of Parcel "C" of the certain
parcel map for H.S. Service Corp., recorded in Book 3 of Maps,
Map No. 665, File No. 80913, Official Records of Carson City,
Nevada as shown and located thereon:
Thence North 0 deg 40' 05" East 313.18 feet to the TRUE POINT OF
BEGINNING, thence North 0 deg. 40' 05" East 123.00 feet, thence along
a curve to the right which is tangent to the last course, which has
a radius of 20 feet, which has a central angle of 71 deg. 37' 14"
an arc distance of 25.00 feet, thence North 72 deg 17' 19" East
169.98 feet, thence South 0 deg 40' 05" West 195.58 feet, thence
North 89 deg 19' 55" West 175.00 feet to the TRUE POINT OF BEGINNING.
Assesor's Parcel No. 08-312-09
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000819577
<NAME> AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,090,444
<SECURITIES> 0
<RECEIVABLES> 16,076
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,106,520
<PP&E> 13,517,928
<DEPRECIATION> (2,596,689)
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0
0
<COMMON> 0
<OTHER-SE> 13,631,316
<TOTAL-LIABILITY-AND-EQUITY> 14,027,759
<SALES> 0
<TOTAL-REVENUES> 409,935
<CGS> 0
<TOTAL-COSTS> 175,910
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 650,307
<INCOME-TAX> 0
<INCOME-CONTINUING> 650,307
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 650,307
<EPS-PRIMARY> 28.54
<EPS-DILUTED> 28.54
</TABLE>
