SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Under Section 13 or 15(d)
Of The Securities Exchange Act Of 1934
For the Fiscal Year Ended: December 31, 1998
Commission file number: 0-17467
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
(Name of Small Business Issuer 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)
(651) 227-7333
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No
Check if disclosure of delinquent filers in response to Rule 405
of Regulation S-B is not contained in this Form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Issuer's revenues for year ended December 31, 1998 were
$1,692,635.
As of February 28, 1999, there were 21,942.89 Units of limited
partnership interest in the registrant outstanding and owned by
nonaffiliates of the registrant, which Units had an aggregate
market value (based solely on the price at which they were sold
since there is no ready market for such Units) of $21,942,890.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant has not incorporated any documents by reference
into this report.
Transitional Small Business Disclosure Format:
Yes No [X]
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
AEI Real Estate Fund XVII Limited Partnership (the
"Partnership" or the "Registrant") is a limited partnership which
was organized pursuant to the laws of the State of Minnesota on
February 2, 1988. The registrant is comprised of AEI Fund
Management XVII, Inc. (AFM) as Managing General Partner, Robert
P. Johnson as the Individual General Partner, and purchasers of
partnership units as Limited Partners. The Partnership offered
for sale up to $30,000,000 of limited partnership interests (the
"Units") (30,000 Units at $1,000 per Unit) pursuant to a
registration statement effective November 2, 1987. 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 November 1, 1988 when the one-year offering period
expired. The Partnership received subscriptions for 23,388.7
Limited Partnership Units ($23,388,700).
The Partnership was organized to acquire, initially on a
debt-free basis, existing and newly constructed commercial
properties located in the United States, to lease such properties
to tenants under triple net leases, to hold such properties and
to eventually sell such properties. From subscription proceeds,
the Partnership purchased twenty properties, including partial
interests in eight properties, totaling $20,026,239. The balance
of the subscription proceeds was applied to organization and
syndication costs, working capital reserves and distributions,
which represented a return of capital. The properties are all
commercial, single tenant buildings leased under triple net
leases.
The Partnership will hold its properties until the General
Partners determine that the sale or other disposition of the
properties is advantageous in view of the Partnership's
investment objectives. In deciding whether to sell properties,
the General Partners will consider factors such as potential
appreciation, net cash flow and income tax considerations. In
addition, certain lessees have been granted options to purchase
properties after a specified portion of the lease term has
elapsed. It is anticipated that the Partnership will sell its
properties within twelve years after acquisition. Prior to
commencing the liquidation of the Partnership, the General
Partners may reinvest the proceeds from the sale of properties in
additional properties, provided that sufficient proceeds are
distributed to the Limited Partners to pay federal and state
income taxes related to any taxable gain recognized as a result
of the sale. At any time prior to selling the properties, the
Partnership may mortgage one or more of its properties in amounts
not exceeding 50% of the fair market value of the property.
Leases
Although there are variations in the specific terms of the
leases, the following is a summary of the general terms of the
Partnership's leases. The properties are leased to various
tenants under triple net leases, which are classified as
operating leases. Under a triple net lease, the lessee is
responsible for all real estate taxes, insurance, maintenance,
repairs and operating expenses for the property. The initial
lease terms are for 10 to 20 years. The leases provide for base
annual rental payments, payable in monthly installments, and
contain rent clauses which entitle the Partnership to receive
additional rent in future years based on stated rent increases or
if gross receipts for the property exceed certain specified
amounts, among other conditions.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
Most of the leases provide the lessee with two to four
five-year renewal options subject to the same terms and
conditions as the initial lease. Certain lessees have been
granted options to purchase the property. Depending on the
lease, the purchase price is either determined by a formula, or
is the greater of the fair market value of the property or the
amount determined by a formula. In all cases, if the option were
to be exercised by the lessee, the purchase price would be
greater than the original cost of the property.
The Partnership owns a 65% interest in a 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. In December, 1998, the Partnership re-analyzed the
market conditions in the area and determined the fair value of
the Partnership's interest in the land declined to approximately
$175,000. In the fourth quarter of 1998, a charge to operations
for real estate impairment of $25,000 was recognized, which is
the difference between the book value at December 31, 1998 of
$200,000 and the estimated fair value of $175,000.
In June, 1996, the Partnership entered into an agreement
to sell the Danny's Family Car Wash in Phoenix, Arizona to the
lessee. On September 25, 1996, the sale closed with the
Partnership receiving net sale proceeds of $1,690,844 which
resulted in a net gain of $347,224. At the time of sale, the
cost and related accumulated depreciation was $1,688,271 and
$344,651, respectively.
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 at King's
Island 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.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
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.
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. 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 advanced funds to Champps
for the construction of a Champps Americana restaurant on the
site. Initially, the Partnership charged interest on the
advances at a rate of 7.0%. Effective June 20, 1998, the
interest rate was increased to 10.50%. On September 3, 1998,
after the development was completed, the Lease Agreement was
amended to require annual rental payments of $133,356. The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,289,135. 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.
ITEM 1. DESCRIPTION OF BUSINESS. (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.
Effective May 14, 1998, the annual rent was increased to $42,327.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to TLS for the construction of a
Timber Lodge Steakhouse restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of 7.5%.
Effective May 14, 1998, the interest rate was increased to
10.535%. On September 3, 1998, after the development was
completed, the Lease Agreement was amended to require annual
rental payments of $198,363. Total acquisition costs, including
the cost of the land, were $1,910,768.
On August 28, 1998, the Partnership purchased a 14%
interest in a parcel of land in Centerville, Ohio for $259,139.
The land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $18,140. Simultaneously with the purchase of the
land, the Partnership entered into a Development Financing
Agreement under which the Partnership will advance funds to ADC
for the construction of a Champps Americana restaurant on the
site. Through December 31, 1998, the Partnership had advanced
$161,848 for the construction of the property and was charging
interest on the advances at a rate of 7%. Effective December 25,
1998, the interest rate was increased to 10.5%. On January 27,
1999, after the development was completed, the Lease Agreement
was amended to require annual rental payments of approximately
$56,764. The Partnership's share of the total purchase price,
including the cost of the land, was approximately $550,000. The
Partnership has incurred net costs of $6,433 related to the
acquisition of the property. The costs have been capitalized and
will be allocated to land, building and equipment.
Major Tenants
During 1998, three of the Partnership's lessees each
contributed more than ten percent of the Partnership's total
rental revenue. The major tenants in aggregate contributed 59%
of the Partnership's total rental revenue in 1998. It is
anticipated that, based on the minimum rental payments required
under the leases, each major tenant will continue to contribute
more than ten percent of the Partnership's total rental revenue
in 1999 and future years. Any failure of these major tenants
could materially affect the Partnership's net income and cash
distributions.
Competition
The Partnership is a minor factor in the commercial real
estate business. There are numerous entities engaged in the
commercial real estate business which have greater financial
resources than the Partnership. At the time the Partnership
elects to dispose of its properties, the Partnership will be in
competition with other persons and entities to find buyers for
its properties.
Employees
The Partnership has no direct employees. Management
services are performed for the Partnership by AEI Fund
Management, Inc., an affiliate of AFM.
Year 2000 Compliance
The Year 2000 issue is the result of computer systems that
use two digits rather than four to define the applicable year,
which may prevent such systems from accurately processing dates
ending in the Year 2000 and beyond. This could result in
computer system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or receive electronic data, or to engage in routine business
activities.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. In 1998, AEI completed an
assessment of its computer hardware and software systems and has
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
The Partnership intends to monitor and communicate with
tenants regarding Year 2000 compliance, although there can be no
assurance that the systems of the various tenants will be Year
2000 compliant.
ITEM 2. DESCRIPTION OF PROPERTIES.
Investment Objectives
The Partnership's investment objectives were to acquire
existing or newly-developed commercial properties throughout the
United States that offer the potential for (i) preservation and
protection of the Partnership's capital; (ii) partially tax-
deferred cash distributions from operations which may increase
through rent participation clauses or mandated rent increases;
and (iii) long-term capital gains through appreciation in value
of the Partnership's properties realized upon sale. The
Partnership does not have a policy, and there is no limitation,
as to the amount or percentage of assets that may be invested in
any one property. However, to the extent possible, the General
Partners attempt to diversify the type and location of the
Partnership's properties.
Description of Properties
The Partnership's properties are all commercial, single
tenant buildings. All the properties were acquired on a debt-
free basis and are leased to various tenants under triple net
leases, which are classified as operating leases. The
Partnership holds an undivided fee simple interest in the
properties. At any time prior to selling the properties, the
Partnership may mortgage one or more of its properties in amounts
not exceeding 50% of the fair market value of the property.
The Partnership's properties are subject to the general
competitive conditions incident to the ownership of single tenant
investment real estate. Since each property is leased under a
long-term lease, there is little competition until the
Partnership decides to sell the property. At this time, the
Partnership will be competing with other real estate owners, on
both a national and local level, in attempting to find buyers for
the properties. In the event of a tenant default, the
Partnership would be competing with other real estate owners, who
have property vacancies, to attract a new tenant to lease the
property. The Partnership's tenants operate in industries that
are very competitive and can be affected by factors such as
changes in regional or local economies, seasonality and changes
in consumer preference.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
The following table is a summary of the properties that
the Partnership acquired and owned as of December 31, 1998.
<TABLE>
<CAPTION>
Total Property
Purchase Acquisition Annual Lease Annual Rent
Property Date Costs Lessee Payment Per Sq. Ft.
<S> <C> <C> <C> <C> <C>
Sports City Cafe Texas
Mesquite, TX Sports City
(65%) 2/12/88 $ 956,343 Cafe, Ltd. $ 58,500 $ 12.73
Cheddar's Restaurant
Indianapolis, IN
(50%) 2/16/88 $ 261,644 (1)
Jiffy Lube Auto Care Center
Dallas, TX Lone Star
(75%) 3/1/88 $ 454,624 Lubrication, Inc. $ 65,466 $ 32.70
Taco Cabana Restaurant Texas Taco
San Marcos, TX 11/15/88 $1,013,505 Cabana, L.P. $ 165,460 $ 44.49
Huntington
Denny's Restaurant Restaurants
Casa Grande, AZ 3/1/89 $ 721,420 Group, Inc. $ 108,950 $ 28.83
Children's World ARAMARK
Daycare Center Educational
St. Louis, MO 9/29/89 $ 950,627 Resources, Inc. $ 118,549 $ 16.21
Children's World ARAMARK
Daycare Center Educational
Merrimack, NH 9/29/89 $1,159,242 Resources, Inc. $ 145,137 $ 23.08
Children's World ARAMARK
Daycare Center Educational
Chino, CA 9/29/89 $1,305,518 Resources, Inc. $ 163,527 $ 22.97
Children's World ARAMARK
Daycare Center Educational
Palatine, IL 9/29/89 $ 801,098 Resources, Inc. $ 99,683 $ 16.14
Bennigan's Restaurant FFT
Cincinnati, OH 3/7/90 $1,898,768 Cincinnati, Ltd. $ 78,030 $ 11.35
Heartland
Cheddar's Restaurant Restaurant
Davenport, IA 11/4/91 $1,530,934 Corporation $ 244,227 $ 33.00
Timber Lodge
Steakhouse Restaurant
St. Cloud, MN Timber Lodge
(30.794%) 11/18/97 $ 493,492 Steakhouse, Inc. $ 51,537 $ 23.97
</TABLE>
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
<TABLE>
<CAPTION>
Total Property
Purchase Acquisition Annual Lease Annual Rent
Property Date Costs Lessee Payment Per Sq. Ft.
<S> <C> <C> <C> <C> <C>
TGI Friday's Restaurant
Greensburg, PA Ohio Valley
(60%) 12/10/97 $1,009,045 Bistros, Inc. $ 101,475 $ 37.50
Champps
Americana Restaurant Champps
Troy, MI Entertainment,
(26.05%) 9/3/98 $1,289,135 Inc. $ 133,356 $ 46.17
Timber Lodge
Steakhouse Restaurant Timber Lodge
Rochester, MN 9/3/98 $1,910,768 Steakhouse, Inc. $ 198,363 $ 28.41
Champps
Americana Restaurant
Centerville, OH
(land only) (2) Americana
(14%) 8/28/98 $ 259,139 Dining Corp. $ 18,140 $ 13.83
</TABLE>
(1) The property was destroyed by fire and the land is listed for
sale.
(2) The restaurant was under construction as of December 31,
1998.
The properties listed above with a partial ownership
percentage are owned with affiliates of the Partnership and/or
unrelated third parties. The remaining interest in the Jiffy
Lube, the Sports City Cafe and the Cheddar's restaurant is owned
by AEI Real Estate Fund XVI Limited Partnership. The remaining
interests in the Timber Lodge Steakhouse restaurant in St. Cloud,
Minnesota are owned by AEI Real Estate Fund XV Limited
Partnership, AEI Institutional Net Lease Fund '93 Limited
Partnership and an unrelated third party. The remaining interest
in the TGI Friday's restaurant is owned by AEI Income & Growth
Fund XXII Limited Partnership. The remaining interests in the
Champps Americana restaurant in Troy, Michigan 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. The remaining interests in the Champps
Americana restaurant in Centerville, Ohio are owned by AEI Real
Estate Fund XVIII Limited Partnership, AEI Income & Growth Fund
XXI Limited Partnership and AEI Income & Growth Fund XXII Limited
Partnership.
The Partnership accounts for properties owned as tenants-
in-common with affiliated Partnerships and/or unrelated third
parties using the proportionate consolidation method. Each
tenant-in-common owns a separate, undivided interest in the
properties. Any tenant-in-common that holds more than a 50%
interest does not control decisions over the other tenant-in-
common interests. The financial statements reflect only this
Partnership's percentage share of the properties' land, building
and equipment, liabilities, revenues and expenses.
The initial Lease terms are for 20 years except for the
Taco Cabana and TGI Friday's restaurants and the Children's World
daycare centers, which have Lease terms of 15 years, the Sports
City Cafe, which has a Lease term of 12 years and the Bennigan's
restaurant, which has a Lease term of 10 years. Most of the
Leases have renewal options which may extend the Lease term an
additional 10 to 20 years.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Pursuant to the Lease Agreements, the tenants are required
to provide proof of adequate insurance coverage on the properties
they occupy. The General Partners believe the properties are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.
For tax purposes, the Partnership's properties are
depreciated under the Modified Accelerated Cost Recovery System
(MACRS). The largest depreciable component of a property is the
building which is depreciated, using the straight-line method,
over 31.5 years or 40 years depending on the date when it was
placed in service. The remaining depreciable components of a
property are personal property and land improvements which are
depreciated, using an accelerated method, over 5 and 15 years,
respectively. Since the Partnership has tax-exempt Partners, the
Partnership is subject to the rules of Section 168(h)(6) of the
Internal Revenue Code which requires a percentage of the
properties' depreciable components to be depreciated over longer
lives using the straight-line method. In general the federal tax
basis of the properties for tax depreciation purposes is the same
as the basis for book depreciation purposes.
During the last five years or since the date of purchase,
if purchased after December 31, 1993, all properties were 100
percent occupied by the lessees noted except for the properties
discussed below. The BenniganOs restaurant was 100 percent
occupied by a prior lessee until January, 1994. The property was
re-leased to the current lessee in September 1995. The Sports
City Cafe was 100 percent occupied by a prior lessee until
December, 1995. The property was re-leased to the current lessee
on March 15, 1997. The CheddarOs property was 100 percent
occupied until January, 1996.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED SECURITY HOLDER MATTERS.
As of December 31, 1998, there were 1,986 holders of
record of the registrant's Limited Partnership Units. There is
no other class of security outstanding or authorized. The
registrant's Units are not a traded security in any market.
However, the Partnership may purchase Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the total number of Units
outstanding at the beginning of the year. 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 1998, fifty-one Limited Partners redeemed a total
of 608 Partnership Units for $445,180 in accordance with the
Partnership Agreement. In prior years, a total of forty-five
Limited Partners redeemed 832.9 Partnership Units for $491,343.
The redemptions increase the remaining Limited Partners'
ownership interest in the Partnership.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED SECURITY HOLDER MATTERS. (Continued)
Cash distributions of $14,478 and $13,403 were made to the
General Partners and $988,173 and $1,173,413 were made to the
Limited Partners in 1998 and 1997, respectively. The
distributions were made on a quarterly basis and represent Net
Cash Flow, as defined, except as discussed below. These
distributions should not be compared with dividends paid on
capital stock by corporations.
As part of the Limited Partner distributions discussed
above, the Partnership distributed $62,752 and $147,219 of
proceeds from property sales in 1998 and 1997, respectively. The
distributions reduced the Limited Partners' Adjusted Capital
Contributions.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Results of Operations
For the years ended December 31, 1998 and 1997 the
Partnership recognized rental income of $1,555,446 and
$1,296,002, respectively. During the same periods, the
Partnership earned investment income of $137,189 and $245,599,
respectively. In 1998, rental income increased as a result of
rent received from five 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.
The Partnership owns a 65% interest in a 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.
During the years ended December 31, 1998 and 1997, the
Partnership paid Partnership administration expenses to
affiliated parties of $262,114 and $261,987, 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 $46,076 and $88,002, 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 December 31, 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.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
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.
The Year 2000 issue is the result of computer systems that
use two digits rather than four to define the applicable year,
which may prevent such systems from accurately processing dates
ending in the Year 2000 and beyond. This could result in
computer system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or receive electronic data, or to engage in routine business
activities.
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. In 1998, AEI completed an
assessment of its computer hardware and software systems and has
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
The Partnership intends to monitor and communicate with
tenants regarding Year 2000 compliance, although there can be no
assurance that the systems of the various tenants will be Year
2000 compliant.
Liquidity and Capital Resources
During 1998, the Partnership's cash balance decreased
$2,334,538 mainly as a result of the reinvestment of net sale
proceeds in additional properties. Net cash provided by
operating activities increased from $1,102,237 in 1997 to
$1,360,480 in 1998 mainly as a result of an increase in income
and a decrease in expenses in 1998.
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. In 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 $3,133,862 and $1,995,998, respectively, to invest in
real properties (inclusive of acquisition expenses) as the
Partnership reinvested the cash generated from 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. 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. In December, 1998, the
Partnership re-analyzed the market conditions in the area and
determined the fair value of the Partnership's interest in the
land declined to approximately $175,000. In the fourth quarter
of 1998, a charge to operations for real estate impairment of
$25,000 was recognized, which is the difference between the book
value at December 31, 1998 of $200,000 and the estimated fair
value of $175,000.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
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 1998 and 1997, the Partnership distributed $63,386
and $148,706 of the net sale proceeds to the Limited and General
Partners which represented a return of capital of $2.82 and $6.44
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. 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 advanced funds to Champps
for the construction of a Champps Americana restaurant on the
site. Initially, the Partnership charged interest on the
advances at a rate of 7.0%. Effective June 20, 1998, the
interest rate was increased to 10.50%. On September 3, 1998,
after the development was completed, the Lease Agreement was
amended to require annual rental payments of $133,356. The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,289,135. 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.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (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.
Effective May 14, 1998, the annual rent was increased to $42,327.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to TLS for the construction of a
Timber Lodge Steakhouse restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of 7.5%.
Effective May 14, 1998, the interest rate was increased to
10.535%. On September 3, 1998, after the development was
completed, the Lease Agreement was amended to require annual
rental payments of $198,363. Total acquisition costs, including
the cost of the land, were $1,910,768.
On August 28, 1998, the Partnership purchased a 14%
interest in a parcel of land in Centerville, Ohio for $259,139.
The land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $18,140. Simultaneously with the purchase of the
land, the Partnership entered into a Development Financing
Agreement under which the Partnership will advance funds to ADC
for the construction of a Champps Americana restaurant on the
site. Through December 31, 1998, the Partnership had advanced
$161,848 for the construction of the property and was charging
interest on the advances at a rate of 7%. Effective December 25,
1998, the interest rate was increased to 10.5%. On January 27,
1999, after the development was completed, the Lease Agreement
was amended to require annual rental payments of approximately
$56,764. The Partnership's share of the total purchase price,
including the cost of the land, was approximately $550,000. The
Partnership has incurred net costs of $6,433 related to the
acquisition of the property. The costs have been capitalized and
will be allocated to land, building and equipment.
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. Beginning in 1998,
redemption payments were 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.
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.
During 1998, fifty-one Limited Partners redeemed a total
of 608 Partnership Units for $445,180 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
$491,343. 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.
ITEM 6. 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:
<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.
ITEM 7. FINANCIAL STATEMENTS.
See accompanying index to financial statements.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet as of December 31, 1998 and 1997
Statements for the Years Ended December 31, 1998 and 1997:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
REPORT OF INDEPENDENT AUDITORS
To the Partners:
AEI Real Estate Fund XVII Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI REAL
ESTATE FUND XVII LIMITED PARTNERSHIP (a Minnesota limited
partnership) as of December 31, 1998 and 1997 and the related
statements of income, cash flows and changes in partners' capital
for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of AEI Real Estate Fund XVII Limited Partnership as of December
31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended, in conformity with generally
accepted accounting principles.
/s/ Boulay, Heutmaker, Zibell & Co. P.L.L.P.
Minneapolis, Minnesota Boulay, Heutmaker, Zibell & Co. P.L.L.P.
January 27, 1999 Certified Public Accountants
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
1998 1997
CURRENT ASSETS:
Cash and Cash Equivalents $ 280,625 $ 2,615,163
Receivables 8,989 1,014
----------- -----------
Total Current Assets 289,614 2,616,177
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 4,933,769 4,416,278
Buildings and Equipment 10,819,889 8,975,829
Construction in Progress 161,848 46,997
Property Acquisition Costs 6,433 52,844
Accumulated Depreciation (2,870,126) (2,778,790)
----------- -----------
13,051,813 10,713,158
Real Estate Held for Sale 174,644 199,644
----------- -----------
Net Investments in Real Estate 13,226,457 10,912,802
----------- -----------
Total Assets $13,516,071 $13,528,979
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 29,499 $ 45,489
Distributions Payable 204,457 168,778
----------- -----------
Total Current Liabilities 233,956 214,267
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (68,591) (68,265)
Limited Partners, $1,000 Unit value;
30,000 Units authorized; 23,389 Units issued;
21,948 and 22,556 outstanding in
1998 and 1997, respectively 13,350,706 13,382,977
----------- -----------
Total Partners' Capital 13,282,115 13,314,712
----------- -----------
Total Liabilities and Partners' Capital $13,516,071 $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 YEARS ENDED DECEMBER 31
1998 1997
INCOME:
Rent $ 1,555,446 $ 1,296,002
Investment Income 137,189 245,599
----------- -----------
Total Income 1,692,635 1,541,601
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 262,114 261,987
Partnership Administration and Property
Management - Unrelated Parties 46,076 88,002
Depreciation 360,493 337,798
Real Estate Impairment 25,000 62,000
----------- -----------
Total Expenses 693,683 749,787
----------- -----------
OPERATING INCOME 998,952 791,814
GAIN ON SALE OF REAL ESTATE 416,282 0
----------- -----------
NET INCOME $ 1,415,234 $ 791,814
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 14,152 $ 7,918
Limited Partners 1,401,082 783,896
----------- -----------
$ 1,415,234 $ 791,814
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(22,269 and 22,828 weighted average Units outstanding
in 1998 and 1997, respectively) $ 62.92 $ 34.34
=========== ===========
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 YEARS ENDED DECEMBER 31
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,415,234 $ 791,814
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 360,493 337,798
Real Estate Impairment 25,000 62,000
Gain on Sale of Real Estate (416,282) 0
Increase in Receivables (7,975) (1,014)
Decrease in Payable to
AEI Fund Management, Inc. (15,990) (51,054)
Decrease in Security Deposit 0 (37,307)
----------- -----------
Total Adjustments (54,754) 310,423
----------- -----------
Net Cash Provided By
Operating Activities 1,360,480 1,102,237
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (3,133,862) (1,995,998)
Proceeds from Sale of Real Estate 850,996 315,229
----------- -----------
Net Cash Used For
Investing Activities (2,282,866) (1,680,769)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable 35,679 (264,571)
Distributions to Partners (998,154) (1,185,266)
Redemption Payments (449,677) (155,052)
----------- -----------
Net Cash Used For
Financing Activities (1,412,152) (1,604,889)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,334,538) (2,183,421)
CASH AND CASH EQUIVALENTS, beginning of period 2,615,163 4,798,584
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 280,625 $ 2,615,163
=========== ===========
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 YEARS ENDED DECEMBER 31
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 (11,853) (1,173,413) (1,185,266)
Redemption Payments (1,550) (153,502) (155,052) (364.40)
Net Income 7,918 783,896 791,814
--------- ----------- ----------- ----------
BALANCE, December 31, 1997 (68,265) 13,382,977 13,314,712 22,555.89
Distributions (9,981) (988,173) (998,154)
Redemption Payments (4,497) (445,180) (449,677) (608.00)
Net Income 14,152 1,401,082 1,415,234
--------- ----------- ----------- ----------
BALANCE, December 31, 1998 $ (68,591) $13,350,706 $13,282,115 21,947.89
========= =========== =========== ==========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(1) 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, l988 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.
Any Net Proceeds of Sale, as defined, from the sale or
financing of the Partnership's properties which the General
Partners determine to distribute will, after provisions for
debts and reserves, be paid in the following manner: (i)
first, 99% to the Limited Partners and l% to the General
Partners until the Limited Partners receive an amount equal
to: (a) their Adjusted Capital Contribution plus (b) an
amount equal to 6% of their Adjusted Capital Contribution
per annum, cumulative but not compounded, to the extent not
previously distributed from Net Cash Flow; (ii) next, 99% to
the Limited Partners and 1% to the General Partners until
the Limited Partners receive an amount equal to 14% of their
Adjusted Capital Contribution per annum, cumulative but not
compounded, to the extent not previously distributed; (iii)
next, to the General Partners until cumulative distributions
to the General Partners under Items (ii) and (iii) equal 15%
of cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(1) Organization - (Continued)
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of the Partnership's
property, will be allocated first in the same ratio in
which, and to the extent, Net Cash Flow is distributed to
the Partners for such year. Any additional profits will be
allocated 90% to the Limited Partners and 10% to the General
Partners. In the event no Net Cash Flow is distributed to
the Limited Partners, 90% of each item of Partnership
income, gain or credit for each respective year shall be
allocated to the Limited Partners, and 10% of each such item
shall be allocated to the General Partners. Net losses from
operations will be allocated 98% to the Limited Partners and
2% to the General Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of the Partnership's property will be
allocated in accordance with the Partnership Agreement as
follows: (i) first, to those partners with deficit balances
in their capital accounts in an amount equal to the sum of
such deficit balances; (ii) second, 99% to the Limited
Partners and 1% to the General Partners until the aggregate
balance in the Limited Partners' capital accounts equals the
sum of the Limited Partners' Adjusted Capital Contributions
plus an amount equal to 14% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, to the
General Partners until cumulative allocations to the General
Partners equal 15% of cumulative allocations. Any remaining
balance will be allocated 85% to the Limited Partners and
15% to the General Partners. Losses will be allocated 98%
to the Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(2) Summary of Significant Accounting Policies -
Financial Statement Presentation
The accounts of the Partnership are maintained on the
accrual basis of accounting for both federal income tax
purposes and financial reporting purposes.
Accounting Estimates
Management uses estimates and assumptions in preparing
these financial statements in accordance with generally
accepted accounting principles. Those estimates and
assumptions may affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses.
Actual results could differ from those estimates.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(2) Summary of Significant Accounting Policies - (Continued)
The Partnership regularly assesses whether market events
and conditions indicate that it is reasonably possible to
recover the carrying amounts of its investments in real
estate from future operations and sales. A change in
those market events and conditions could have a material
effect on the carrying amount of its real estate.
Cash Concentrations of Credit Risk
At times throughout the year, the Partnership's cash
deposited in financial institutions may exceed FDIC
insurance limits.
Statement of Cash Flows
For purposes of reporting cash flows, cash and cash
equivalents may include cash in checking, cash invested
in money market accounts, certificates of deposit,
federal agency notes and commercial paper with a term of
three months or less.
Income Taxes
The income or loss of the Partnership for federal income
tax reporting purposes is includable in the income tax
returns of the partners. Accordingly, no recognition has
been given to income taxes in the accompanying financial
statements.
The tax return, the qualification of the Partnership as
such for tax purposes, and the amount of distributable
Partnership income or loss are subject to examination by
federal and state taxing authorities. If such an
examination results in changes with respect to the
Partnership qualification or in changes to distributable
Partnership income or loss, the taxable income of the
partners would be adjusted accordingly.
Real Estate
The Partnership's real estate is leased under triple net
leases classified as operating leases. The Partnership
recognizes rental revenue on the accrual basis according
to the terms of the individual leases. For leases which
contain cost of living increases, the increases are
recognized in the year in which they are effective.
Real estate is recorded at the lower of cost or estimated
net realizable value. The Partnership compares the
carrying amount of its properties to the estimated future
cash flows expected to result from the property and its
eventual disposition. If the sum of the expected future
cash flows is less than the carrying amount of the
property, the Partnership recognizes an impairment loss
by the amount by which the carrying amount of the
property exceeds the fair value of the property.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(2) Summary of Significant Accounting Policies - (Continued)
The Partnership has capitalized as Investments in Real
Estate certain costs incurred in the review and
acquisition of the properties. The costs were allocated
to the land, buildings and equipment.
The buildings and equipment of the Partnership are
depreciated using the straight-line method for financial
reporting purposes based on estimated useful lives of 30
years and 10 years respectively.
The Partnership accounts for properties owned as tenants-
in-common with affiliated Partnerships and/or unrelated
third parties using the proportionate consolidation
method. Each tenant-in-common owns a separate, undivided
interest in the properties. Any tenant-in-common that
holds more than a 50% interest does not control decisions
over the other tenant-in-common interests. The financial
statements reflect only this Partnership's percentage
share of the properties' land, building and equipment,
liabilities, revenues and expenses.
(3) Related Party Transactions -
The Partnership owns a 65% interest in a Sports City Cafe, a
75% interest in a Jiffy Lube and a 50% interest in a parcel
of land in Indianapolis, Indiana. The remaining interests
in these properties are owned by AEI Real Estate Fund XVI
Limited Partnership, an affiliate of the Partnership. The
Partnership owns a 30.794% interest in a Timber Lodge
Steakhouse in St. Cloud, Minnesota. The remaining interests
in this property are owned by AEI Real Estate Fund XV
Limited Partnership and AEI Institutional Net Lease Fund '93
Limited Partnership, affiliates of the Partnership, and an
unrelated third party. The Partnership owns a 60% interest
in a TGI Friday's restaurant. The remaining interest in
this property is owned by AEI Income & Growth Fund XXII
Limited Partnership, an affiliate of the Partnership. The
Partnership owns a 26.05% interest in the Champps Americana
restaurant in Troy, Michigan. The remaining interests in
this 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. The Partnership
owns a 14% interest in the Champps Americana restaurant in
Centerville, Ohio. The remaining interests in this property
are owned by AEI Real Estate Fund XVIII Limited Partnership,
AEI Income & Growth Fund XXI Limited Partnership and AEI
Income & Growth Fund XXII Limited Partnership, affiliates of
the Partnership. The Partnership owned a 65.09% interest in
a Sizzler restaurant in Cincinnati, Ohio. The remaining
interests in this property were owned by AEI Real Estate
Fund XVI Limited Partnership and AEI Real Estate Fund XVIII
Limited Partnership.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(3) Related Party Transactions - (Continued)
AEI and AFM received the following compensation and
reimbursements for costs and expenses from the Partnership:
Total Incurred by the Partnership
for the Years Ended December 31
1998 1997
a.AEI and AFM are reimbursed for all costs
incurred in connection with managing the
Partnership's operations, maintaining the
Partnership's books and communicating
the results of operations to the Limited
Partners. $ 262,114 $ 261,987
======== ========
b.AEI and AFM are reimbursed for all direct
expenses they have paid on the Partnership's
behalf to third parties. These expenses included
printing costs, legal and filing fees, direct
administrative costs, outside audit and
accounting costs, taxes, insurance and other
property costs. $ 46,076 $ 88,002
======== ========
c.AEI is reimbursed for all property acquisition
costs incurred by it in acquiring properties on
behalf of the Partnership. The amounts are net
of financing and commitment fees and expense
reimbursements received by the Partnership from
the lessees in the amount of $116,678 and $47,998
for 1998 and 1997, respectively. $ (53,539) $ 80,376
======== ========
The payable to AEI Fund Management, Inc. represents the
balance due for the services described in 3a, b and c. This
balance is non-interest bearing and unsecured and is to be
paid in the normal course of business.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(4) Investments in Real Estate -
The Partnership leases its properties to various tenants
through triple net leases, which are classified as operating
leases. Under a triple net lease, the lessee is responsible
for all real estate taxes, insurance, maintenance, repairs
and operating expenses of the property. The initial Lease
terms are for 20 years except for the Taco Cabana and TGI
Friday's restaurants and the Children's Worlds daycare
centers, which have Lease terms of 15 years, the Sports City
Cafe, which has a Lease term of 12 years and the Bennigan's
restaurant, which has a Lease term of 10 years. Most of the
leases have renewal options which may extend the Lease term
an additional 10 to 20 years. The Leases contain rent
clauses which entitle the Partnership to receive additional
rent in future years based on stated rent increases or if
gross receipts for the property exceed certain specified
amounts, among other conditions. Certain lessees have been
granted options to purchase the property. Depending on the
lease, the purchase price is either determined by a formula,
or is the greater of the fair market value of the property
or the amount determined by a formula. In all cases, if the
option were to be exercised by the lessee, the purchase
price would be greater than the original cost of the
property.
The Partnership's properties are all commercial, single-
tenant buildings. The Sports City Cafe was constructed in
1984. All other properties, except for the Champps
Americana restaurant in Centerville, Ohio, were constructed
in the year they were acquired. The Partnership acquired
the Cheddar's restaurant in 1991. The Timber Lodge
Steakhouse in St. Cloud, Minnesota and TGI Friday's
restaurant were acquired in 1997. The Champps Americana
restaurant in Troy, Michigan and the Timber Lodge Steakhouse
in Rochester, Minnesota were acquired in 1998. The land for
the Champps Americana restaurant in Centerville, Ohio was
acquired in 1998 and construction of the restaurant was
completed in 1999. The remaining properties were acquired
during 1988 and 1989. There have been no costs capitalized
as improvements subsequent to the acquisitions.
The cost of the properties not held for sale and the related
accumulated depreciation at December 31, 1998 are as
follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
Sports City Cafe, Mesquite, TX $ 423,660 $ 532,683 $ 956,343 $ 237,244
Jiffy Lube, Dallas, TX 193,479 261,145 454,624 116,415
Taco Cabana, San Marcos, TX 279,727 733,778 1,013,505 334,602
Denny's, Casa Grande, AZ 216,812 504,608 721,420 197,369
Children's World,
St. Louis, MO 203,446 747,181 950,627 269,587
Children's World,
Merrimack, NH 282,530 876,712 1,159,242 307,933
Children's World, Chino, CA 357,793 947,725 1,305,518 341,855
Children's World,
Palatine, IL 135,945 665,153 801,098 236,187
Bennigan's, Cincinnati, OH 666,298 1,232,470 1,898,768 468,095
Cheddar's, Davenport, IA 524,026 1,006,908 1,530,934 296,928
Timber Lodge Steakhouse,
St. Cloud, MN 107,574 385,918 493,492 15,072
TGI Friday's, Greensburg, PA 445,546 563,499 1,009,045 20,287
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(4) Investments in Real Estate - (Continued)
Buildings and Accumulated
Property Land Equipment Total Depreciation
Champps Americana,
Troy, MI 416,519 872,616 1,289,135 10,098
Timberlodge Steakhouse,
Rochester, MN 421,275 1,489,493 1,910,768 18,454
Champps Americana,
Centerville, OH 259,139 0 259,139 0
---------- ----------- ----------- ---------
$4,933,769 $10,819,889 $15,753,658 $2,870,126
========== =========== =========== =========
The Partnership owns a 65% interest in a 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. 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. In December, 1998, the Partnership re-
analyzed the market conditions in the area and determined
the fair value of the Partnership's interest in the land
declined to approximately $175,000. In the fourth quarter
of 1998, a charge to operations for real estate impairment
of $25,000 was recognized, which is the difference between
the book value at December 31, 1998 of $200,000 and the
estimated fair value of $175,000.
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.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(4) Investments in Real Estate - (Continued)
During 1998 and 1997, the Partnership distributed $63,386
and $148,706 of the net sale proceeds to the Limited and
General Partners as part of their regular quarterly
distributions, which represented a return of capital of
$2.82 and $6.44 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.
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.
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 advanced funds to Champps for the construction
of a Champps Americana restaurant on the site. Initially,
the Partnership charged interest on the advances at a rate
of 7.0%. Effective June 20, 1998, the interest rate was
increased to 10.50%. On September 3, 1998, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $133,356. The
Partnership's share of the total acquisition costs,
including the cost of the land, was $1,289,135.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(4) 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. Effective May 14, 1998, the annual
rent was increased to $42,327. Simultaneously with the
purchase of the land, the Partnership entered into a
Development Financing Agreement under which the Partnership
advanced funds to TLS for the construction of a Timber Lodge
Steakhouse restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of
7.5%. Effective May 14, 1998, the interest rate was
increased to 10.535%. On September 3, 1998, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $198,363. Total
acquisition costs, including the cost of the land, were
$1,910,768.
On August 28, 1998, the Partnership purchased a 14% interest
in a parcel of land in Centerville, Ohio for $259,139. The
land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual
rental payments of $18,140. Simultaneously with the
purchase of the land, the Partnership entered into a
Development Financing Agreement under which the Partnership
will advance funds to ADC for the construction of a Champps
Americana restaurant on the site. Through December 31,
1998, the Partnership had advanced $161,848 for the
construction of the property and was charging interest on
the advances at a rate of 7%. Effective December 25, 1998,
the interest rate was increased to 10.5%. On January 27,
1999, after the development was completed, the Lease
Agreement was amended to require annual rental payments of
approximately $56,764. The Partnership's share of the total
purchase price, including the cost of the land, was
approximately $550,000. The Partnership has incurred net
costs of $6,433 related to the acquisition of the property.
The costs have been capitalized and will be allocated to
land, building and equipment.
The minimum future rentals on the Leases for years
subsequent to December 31, 1998 are as follows:
1999 $ 1,767,161
2000 1,787,631
2001 1,811,984
2002 1,842,036
2003 1,859,116
Thereafter 12,609,029
-----------
$21,676,957
===========
There were no contingent rents recognized in 1998 or 1997.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(5) Major Tenants -
The following schedule presents rent revenue from individual
tenants, or affiliated groups of tenants, who each
contributed more than ten percent of the Partnership's total
rent revenue for the years ended December 31:
1998 1997
Tenants Industry
ARAMARK Educational
Resources, Inc. Child Care $ 521,100 $ 510,955
Heartland Restaurant
Corporation Restaurant 235,617 226,554
Texas Taco Cabana L.P. Restaurant 162,122 157,080
---------- ----------
Aggregate rent revenue of major tenants $ 918,839 $ 894,589
========== ==========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 59% 69%
========== ==========
(6) Partners' Capital -
Cash distributions of $14,478 and $13,403 were made to the
General Partners and $988,173 and $1,173,413 were made to
the Limited Partners for the years ended December 31, 1998
and 1997, respectively. The Limited Partners' distributions
represent $44.37 and $51.40 per Limited Partnership Unit
outstanding using 22,269 and 22,828 weighted average Units
in 1998 and 1997. The distributions represent $42.82 and
$27.53 per Unit of Net Income and $1.55 and $23.87 and per
Unit of return of contributed capital in 1998 and 1997,
respectively.
As part of the Limited Partner distributions discussed
above, the Partnership distributed $62,752 and $147,219 of
proceeds from property sales in 1998 and 1997, respectively.
The distributions reduced the Limited Partners' Adjusted
Capital Contributions.
Distributions of Net Cash Flow to the General Partners
during 1998 and 1997 were subordinated to the Limited
Partners as required in the Partnership Agreement. As a
result, 99% of distributions and income were allocated to
the Limited Partners and 1% to the General Partners.
The Partnership may acquire Units from Limited Partners who
have tendered their Units to the Partnership. Such Units
may be acquired at a discount. The Partnership is not
obligated to purchase in any year more than 5% of the 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.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(6) Partners' Capital - (Continued)
During 1998, fifty-one Limited Partners redeemed a total of
608 Partnership Units for $445,180 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In 1997, fifteen
Limited Partners redeemed a total of 364.4 Partnership Units
for $153,502. The redemptions increase the remaining
Limited Partners' ownership interest in the Partnership.
After the effect of redemptions and the return of capital
from the sale of property, the Adjusted Capital
Contribution, as defined in the Partnership Agreement, is
$806.63 per original $1,000 invested.
(7) Income Taxes -
The following is a reconciliation of net income for
financial reporting purposes to income reported for federal
income tax purposes for the years ended December 31:
1998 1997
Net Income for Financial
Reporting Purposes $1,415,234 $ 791,814
Depreciation for Tax Purposes Under
Depreciation for Financial
Reporting Purposes 58,241 90,372
Property Expenses for Tax Purposes
Under Expenses for Financial
Reporting Purposes 464 25,371
Real Estate Impairment Loss
Not Recognized for Tax Purposes 25,000 62,000
Gain on Sale of Real Estate for
Tax Purposes Under Gain for
Financial Reporting Purposes (41,122) (516,399)
---------- ----------
Taxable Income to Partners $1,457,817 $ 453,158
========== ==========
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
(7) Income Taxes - (Continued)
The following is a reconciliation of Partners' capital for
financial reporting purposes to Partners' capital reported
for federal income tax purposes for the years ended December
31:
1998 1997
Partners' Capital for
Financial Reporting Purposes $13,282,115 $13,314,712
Adjusted Tax Basis of Investments
in Real Estate Over Net
Investments in Real Estate for
Financial Reporting Purposes 417,195 375,076
Property Expenses for Tax Purposes
Under Expenses for Financial
Reporting Purposes 37,909 37,445
Syndication Costs
Treated as Reduction of Capital
for Financial Reporting Purposes 3,149,157 3,149,157
----------- -----------
Partners' Capital for
Tax Reporting Purposes $16,886,376 $16,876,390
=========== ===========
(8) Fair Value of Financial Instruments -
The estimated fair values of the financial instruments, none
of which are held for trading purposes, are as follows at
December 31:
1998 1997
Carrying Fair Carrying Fair
Amount Value Amount Value
Cash $ 326 $ 326 $ 230 $ 230
Money Market Funds 280,299 280,299 2,614,933 2,614,933
--------- --------- --------- ---------
Total Cash and
Cash Equivalents $ 280,625 $ 280,625 $2,615,163 $2,615,163
========= ========= ========= =========
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The registrant is a limited partnership and has no
officers, directors, or direct employees. The General Partners
of the registrant are Robert P. Johnson and AFM. The General
Partners manage and control the Partnership's affairs and have
general responsibility and the ultimate authority in all matters
affecting the Partnership's business. The director and officers
of AFM are as follows:
Robert P. Johnson, age 54, is Chief Executive Officer,
President and Director and has held these positions since the
formation of AFM in July, 1987, and has been elected to continue
in these positions until December, 1999. From 1970 to the
present, he has been employed exclusively in the investment
industry, specializing in tax-advantaged limited partnership
investments. In that capacity, he has been involved in the
development, analysis, marketing and management of public and
private investment programs investing in net lease properties as
well as public and private investment programs investing in
energy development. Since 1971, Mr. Johnson has been the
president, a director and a registered principal of AEI
Securities, Inc. (formerly AEI Incorporated), which is registered
with the Securities and Exchange Commission as a securities
broker-dealer, is a member of the National Association of
Securities Dealers, Inc. (NASD) and is a member of the Security
Investors Protection Corporation (SIPC). Mr. Johnson has been
president, a director and the principal shareholder of AEI Fund
Management, Inc., a real estate management company founded by
him, since 1978. Mr. Johnson is currently a general partner or
principal of the general partner in seventeen other limited
partnerships.
Mark E. Larson, age 46, is Executive Vice President,
Treasurer and Chief Financial Officer and has been elected to
continue in these positions until December, 1999. Mr. Larson has
been Treasurer since the formation of AFM in July, 1987,
Executive Vice President since December, 1987 and Chief Financial
Officer since January, 1990. In January, 1993, Mr. Larson was
elected to serve as Secretary of AFM and will continue to serve
until December, 1999. Mr. Larson has been employed by AEI Fund
Management, Inc. and affiliated entities since 1985. From 1979
to 1985, Mr. Larson was with Apache Corporation as manager of
Program Accounting responsible for the accounting and reports for
approximately 46 public partnerships. Mr. Larson is responsible
for supervising the accounting functions of AFM and the
registrant.
ITEM 10. EXECUTIVE COMPENSATION.
The General Partner and affiliates are reimbursed at cost
for all services performed on behalf of the registrant and for
all third party expenses paid on behalf of the registrant. The
cost for services performed on behalf of the registrant is actual
time spent performing such services plus an overhead burden.
These services include organizing the registrant and arranging
for the offer and sale of Units, reviewing properties for
acquisition and rendering administrative and management services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth information pertaining to
the ownership of the Units by each person known by the
Partnership to beneficially own 5% or more of the Units, by each
General Partner, and by each officer or director of the Managing
General Partner as of February 28, 1999:
Name and Address Number of Percent
of Beneficial Owner Units Held of Class
AEI Fund Management XVII, Inc. 0 0%
1300 Minnesota World Trade Center
30 East 7th Street, St. Paul, Minnesota 55101
Robert P. Johnson 5 *
1300 Minnesota World Trade Center
30 East 7th Street, St. Paul, Minnesota 55101
Mark E. Larson 0 0%
1300 Minnesota World Trade Center
30 East 7th Street, St. Paul, Minnesota 55101
* Less than 1%
The persons set forth in the preceding table hold sole voting
power and power of disposition with respect to all of the Units
set forth opposite their names. The General Partners know of no
holders of more than 5% of the outstanding Units.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The registrant, AFM and its affiliates have common
management and utilize the same facilities. As a result, certain
administrative expenses are allocated among these related
entities. All of such activities and any other transactions
involving the affiliates of the General Partner of the registrant
are governed by, and are conducted in conformity with, the
limitations set forth in the Limited Partnership Agreement of the
registrant.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. (Continued)
The following table sets forth the forms of compensation,
distributions and cost reimbursements paid by the registrant to
the General Partners or their Affiliates in connection with the
operation of the Fund and its properties through the period from
inception through December 31, 1998.
Person or Entity Amount Incurred From
Receiving Form and Method Inception (February 10, 1988)
Compensation of Compensation To December 31, 1998
AEI Securities, Inc. Selling Commissions equal to 8% $2,338,870
(formerly AEI of proceeds plus a 2% nonaccountable
Incorporated) expense allowance, most of which was
reallowed to Participating Dealers.
General Partners and Reimbursement at Cost for other $ 815,886
Affiliates Organization and Offering Costs.
General Partners and Reimbursement at Cost for all $ 812,533
Affiliates Acquisition Expenses
General Partners 1% of Net Cash Flow in any fiscal $ 180,401
year until the Limited Partners have
received annual, non-cumulative
distributions of Net Cash Flow equal
to 10% of their Adjusted Capital
Contributions and 10% of any remaining
Net Cash Flow in such fiscal year.
General Partners and Reimbursement at Cost for all $2,887,662
Affiliates Administrative Expenses attributable
to the Fund, including all expenses
related to management and disposition
of the Fund's properties and all other
transfer agency, reporting, partner
relations and other administrative
functions.
General Partners 15% of distributions of Net Proceeds $ 57,423
of Sale other than distributions
necessary to restore Adjusted Capital
Contributions and provide a 6%
cumulative return to Limited Partners.
The General Partners will receive
only 1% of distributions of Net Proceeds
of Sale until the Limited Partners have
received an amount equal to: (a)their
Adjusted Capital Contributions, plus
(b) an amount equal to 14% of their
Adjusted Capital Contributions per annum,
cumulative but not compounded, less (c)
all previous cash distributions
to the Limited Partners.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. (Continued)
The limitations included in the Partnership Agreement
require that the cumulative reimbursements to the General
Partners and their affiliates for administrative expenses not
allowed under the NASAA Guidelines ("Guidelines") will not exceed
the sum of (i) the front-end fees allowed by the Guidelines less
the front-end fees paid, (ii) the cumulative property management
fees allowed but not paid, (iii) any real estate commission
allowed under the Guidelines, and (iv) 10% of Net Cash Flow less
the Net Cash Flow actually distributed. The reimbursements not
allowed under the Guidelines include a controlling person's
salary and fringe benefits, rent and depreciation. As of
December 31, 1998, the cumulative reimbursements to the General
Partners and their affiliates did not exceed these amounts.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.
A. Exhibits -
Description
3.1 Certificate of Limited
Partnership (incorporated by reference to
Exhibit 3.1 of the registrant's
Registration Statement on Form S-11 filed
with the Commission on July 30, 1987 [File
No. 33-16159]).
3.2 Limited Partnership
Agreement (incorporated by reference to
Exhibit 3.2 of the registrant's
Registration Statement on Form S-11 filed
with the Commission on July 30, 1987 [File
No. 33-16159]).
10.1 Assignment dated March 1,
1988 between the Partnership and Fund XVI
of the Net Lease Agreement dated July 23,
1987 assigned to Fund XVI by Westmoreland
Real Estate, Inc. (incorporated by
reference to Exhibit 10.4 of Form 10-K
filed with the Commission on July 28, 1992)
10.2 Net Lease Agreement dated
November 14, 1988 between the Partnership
and Taco Cabana, Inc. relating to the
property at 135 Long Street, San Marcos,
Texas (incorporated by reference to Exhibit
10.11 of Form 10-K filed with the
Commission on July 28, 1992).
10.3 Net Lease Agreement dated
September 29, 1989 between the Partnership
and Children's World Learning Centers, Inc.
relating to the property at 12790 Fee Fee
Road, St. Louis, Missouri (incorporated by
reference to Exhibit 10.15 of Form 10-K
filed with the Commission on July 28,
1992).
10.4 Net Lease Agreement dated
September 29, 1989 between the Partnership
and Children's World Learning Centers, Inc.
relating to the property at 325 Daniel
Webster Highway, Merrimack, New Hampshire
(incorporated by reference to Exhibit 10.16
of Form 10-K filed with the Commission on
July 28, 1992).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.5 Net Lease Agreement dated
September 29, 1989 between the Partnership
and Children's World Learning Centers, Inc.
relating to the property at 14635 Pipeline
Avenue South, Chino, California
(incorporated by reference to Exhibit 10.17
of Form 10-K filed with the Commission on
July 28, 1992).
10.6 Net Lease Agreement dated
September 29, 1989 between the Partnership
and Children's World Learning Centers, Inc.
relating to the property at 838 N. Quentin
Road, Palatine, Illinois (incorporated by
reference to Exhibit 10.18 of Form 10-K
filed with the Commission on July 28,
1992).
10.7 Net Lease Agreement dated
November 1, 1991 between the Partnership
and Heartland Restaurant Corporation
relating to the property at 1221 E.
Kimberly, Davenport, Iowa (incorporated by
reference to Exhibit 10.21 of Form 10-K
filed with the Commission on July 28,
1992).
10.8 Amendment to Lease dated
January 2, 1995 between the Partnership and
Huntington Restaurants Group, Inc. relating
to the property at 1851 E. Florence
Boulevard, Casa Grande, Arizona
(incorporated by reference to Exhibit 10.27
of Form 10-K filed with the Commission on
March 30, 1995).
10.9 Net Lease Agreement dated
September 21, 1995 between the Partnership
and FFT Cincinnati, Ltd. relating to the
property at 9035 Fields Ertel Road,
Cincinnati, Ohio (incorporated by reference
to Exhibit 10.2 of Form 10-QSB filed with
the Commission on November 2, 1995).
10.10 Net Lease Agreement
dated March 15, 1997 between the
Partnership, AEI Real Estate Fund XVI
Limited Partnership, and Texas Sports City
Cafe, Ltd. relating to the property at 3808
Towne Crossing Boulevard, Mesquite, Texas
(incorporated by reference to Exhibit 10.17
of Form 10-KSB filed with the Commission on
March 24, 1997).
10.11 Guarantee of Lease
dated March 15, 1997 between the
Partnership, AEI Real Estate Fund XVI
Limited Partnership, and Texas Sports City
Cafe, Ltd. relating to the property at 3808
Towne Crossing Boulevard, Mesquite, Texas
(incorporated by reference to Exhibit 10.18
of Form 10-KSB filed with the Commission on
March 24, 1997).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.12 Development Financing and Leasing
Commitment dated October 17, 1997 between
AEI Fund Management, Inc. and Timber Lodge
Steakhouse, Inc. relating to the sale and
leaseback of a Timber Lodge Steakhouse
restaurant at 7375 East State Street,
Rockford, Illinois (incorporated by
reference to Exhibit 10.1 of Form 10-QSB
filed with the Commission on November 7,
1997).
10.13 Assignment of Development
Financing and Leasing Commitment dated
October 21, 1997, between the Partnership
and AEI Fund Management, Inc. relating to
the sale and leaseback of a Timber Lodge
Steakhouse restaurant at 7375 East State
Street, Rockford, Illinois (incorporated by
reference to Exhibit 10.2 of Form 10-QSB
filed with the Commission on November 7,
1997).
10.14 Sale and Leaseback Financing
Commitment dated May 13, 1997 between AEI
Fund Management, Inc. and Ohio Valley
Bistros, Inc. relating to the sale and
leaseback of a TGI Friday's restaurant at
#1507, Rural Route #6, Greensburg,
Pennsylvania (incorporated by reference to
Exhibit 10.3 of Form 10-QSB filed with the
Commission on November 7, 1997).
10.15 Assignment of Sale and Leaseback
Financing Commitment dated November 7, 1997
between the Partnership and AEI Fund
Management, Inc. relating to the sale and
leaseback of a TGI Friday's restaurant at
#1507, Rural Route #6, Greensburg,
Pennsylvania (incorporated by reference to
Exhibit 10.4 of Form 10-QSB filed with the
Commission on November 7, 1997).
10.16 Assignment of Sale and
Leaseback Financing Commitment dated
November 17, 1997 between the Partnership
and AEI Fund Management, Inc. relating to
the sale and leaseback of a Timber Lodge
Steakhouse restaurant at 3590 Second Street
South, St. Cloud, Minnesota (incorporated
by reference to Exhibit 10.19 of Form 10-
KSB filed with the Commission on March 23,
1998).
10.17 Net Lease Agreement
dated November 18, 1997 between the
Partnership, AEI Real Estate Fund XV
Limited Partnership, AEI Institutional Net
Lease Fund '93 Limited Partnership and
Timber Lodge Steakhouse, Inc. relating to
the property at 3590 Second Street South,
St. Cloud, Minnesota (incorporated by
reference to Exhibit 10.20 of Form 10-KSB
filed with the Commission on March 23,
1998).
10.18 Net Lease Agreement
dated December 10, 1997 between the
Partnership, AEI Income & Growth Fund XXII
Limited Partnership and Ohio Valley
Bistros, Inc. relating to the property at
#1507, Rural Route #6, Greensburg,
Pennsylvania (incorporated by reference to
Exhibit 10.21 of Form 10-KSB filed with the
Commission on March 23, 1998).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.19 Development Financing
Agreement dated December 23, 1997 between
the Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, AEI
Real Estate Fund XVIII Limited Partnership,
AEI Real Estate Fund XV Limited Partnership
and Champps Entertainment, Inc. relating to
the property at 301 West Big Beaver Road,
Troy, Michigan (incorporated by reference
to Exhibit 10.22 of Form 10-KSB filed with
the Commission on March 23, 1998).
10.20 Net Lease Agreement
dated December 23, 1997 between the
Partnership, AEI Net Lease Income & Growth
Fund XIX Limited Partnership, AEI Real
Estate Fund XVIII Limited Partnership, AEI
Real Estate Fund XV Limited Partnership and
Champps Entertainment, Inc. relating to the
property at 301 West Big Beaver Road, Troy,
Michigan (incorporated by reference to
Exhibit 10.23 of Form 10-KSB filed with the
Commission on March 23, 1998).
10.21 Development Financing
Agreement dated January 15, 1998 between
the Partnership and Timber Lodge
Steakhouse, Inc. relating to the sale and
leaseback of a Timber Lodge Steakhouse
restaurant at 4140 Frontage Road Northwest,
Rochester, Minnesota (incorporated by
reference to Exhibit 10.24 of Form 10-KSB
filed with the Commission on March 23,
1998).
10.22 Net Lease Agreement
dated January 15, 1998 between the
Partnership and Timber Lodge Steakhouse,
Inc. relating to the property at 4140
Frontage Road Northwest, Rochester,
Minnesota (incorporated by reference to
Exhibit 10.25 of Form 10-KSB filed with the
Commission on March 23, 1998).
10.23 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 (incorporated by
reference to Exhibit 10.1 of Form 10-QSB
filed with the Commission on May 12, 1998).
10.24 First Amendment to Net Lease
Agreement dated September 3, 1998 between
the Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, AEI
Real Estate Fund XVIII Limited Partnership,
AEI Real Estate Fund XV Limited Partnership
and Champps Entertainment, Inc. relating to
the property at 301 West Big Beaver Road,
Troy, Michigan (incorporated by reference
to Exhibit 10.2 of Form 8-K filed with the
Commission on September 15, 1998).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.25 First Amendment to Net Lease
Agreement dated September 3, 1998 between
the Partnership and Timber Lodge
Steakhouse, Inc. relating to the property
at 4140 Frontage Road Northwest, Rochester,
Minnesota (incorporated by reference to
Exhibit 10.4 of Form 8-K filed with the
Commission on September 15, 1998).
10.26 Assignment of the Development
Financing Agreement and Net Lease Agreement
dated August 27, 1998 between the
Partnership, AEI Real Estate Fund XVIII
Limited Partnership, AEI Income & Growth
Fund XXI Limited Partnership, AEI Income &
Growth Fund XXII Limited Partnership, and
Americana Dining Corporation relating to
the property at 7880 Washington Village
Drive, Centerville, Ohio (incorporated by
reference to Exhibit 10.1 of Form 10-QSB
filed with the Commission on November 9,
1998).
10.27 Development Financing Agreement
dated June 29, 1998 between AEI Income &
Growth Fund XXII Limited Partnership and
Americana Dining Corporation relating to
the property at 7880 Washington Village
Drive, Centerville, Ohio (incorporated by
reference to Exhibit 10.2 of Form 10-QSB
filed with the Commission on November 9,
1998).
10.28 Net Lease Agreement dated June
29, 1998 between AEI Income & Growth Fund
XXII Limited Partnership and Americana
Dining Corporation relating to the property
at 7880 Washington Village Drive,
Centerville, Ohio (incorporated by
reference to Exhibit 10.3 of Form 10-QSB
filed with the Commission on November 9,
1998).
10.29 First Amendment to Net Lease
Agreement dated January 27, 1999 between
the Partnership, AEI Real Estate Fund XVIII
Limited Partnership, AEI Income & Growth
Fund XXI Limited Partnership, AEI Income &
Growth Fund XXII Limited Partnership and
Americana Dining Corp. relating to the
property at 7880 Washington Village Drive,
Centerville, Ohio.
27 Financial Data Schedule for
year ended December 31, 1998.
B. Reports on Form 8-K and Form 8-K/A - None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AEI REAL ESTATE FUND XVII
Limited Partnership
By: AEI Fund Management XVII, Inc.
Its Managing General Partner
March 15, 1999 By: /s/ Robert P. Johnson
Robert P. Johnson, President
and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name Title Date
/s/ Robert P. Johnson President (Principal Executive Officer) March 15, 1999
Robert P. Johnson and Sole Director of Managing General
Partner
/s/ Mark E. Larson Executive Vice President, Treasurer March 15, 1999
Mark E. Larson and Chief Financial Officer
(Principal Accounting Officer)
FIRST AMENDMENT TO NET LEASE AGREEMENT
THIS AMENDMENT TO NET LEASE AGREEMENT, made and entered
into effective as of the 27th day of January, 1999, by and
between AEI Income & Growth Fund XXII Limited Partnership, a
Minnesota limited partnership whose corporate general partner is
AEI Fund Management XXI, Inc., a Minnesota corporation ("Fund
XXII"); AEI Income & Growth Fund XXI Limited Partnership, a
Minnesota limited partnership whose corporate general partner is
AEI Fund Management XXI, Inc., a Minnesota corporation ("Fund
XXI"); AEI Real Estate Fund XVIII Limited Partnership, a
Minnesota limited partnership whose corporate general partner is
AEI Fund Management XVIII, Inc., a Minnesota corporation ("Fund
XVIII"); and AEI Real Estate Fund XVII Limited Partnership, a
Minnesota limited partnership whose corporate general partner is
AEI Fund Management XVII, Inc., a Minnesota corporation ("Fund
XVII"), all of whose principal business address is 1300 Minnesota
World Trade Center, 30 East Seventh Street, St. Paul, Minnesota
55101 (hereinafter collectively referred to as "Lessor"), and
Americana Dining Corp. (hereinafter referred to as "Lessee"),
whose principal business address is One Corporate Place, 55
Ferncroft Road, Danvers, MA 01923;
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of real
property and improvements located at Washington Village Drive,
Dayton, Ohio, and legally described in Exhibit "A", which is
attached hereto and incorporated herein by reference; and
WHEREAS, Lessee has constructed the building and
improvements (together the "Building") on the real property
described in Exhibit "A", which Building is described in the
plans and specifications heretofore submitted to Lessor; and
WHEREAS, Lessee and Lessor Fund XXII have entered into that
certain Net Lease Agreement dated June 29, 1998 (the "Lease")
providing for the lease of said real property and Building (said
real property and Building hereinafter referred to as the "Leased
Premises"), from Lessor upon the terms and conditions therein
provided in the Lease;
Whereas, effective as of August 27, 1998, Lessor Fund XXII
transferred for good value: a 25% undivided interest as tenant in
common in the Leased Premises and the Lease to Fund XXI; a 38%
undivided interest as tenant in common in the Leased Premises
and the Lease to Fund XVIII; and a 14% undivided interest as
tenant in common in the Leased Premises and the Lease to Fund
XVII.
NOW, THEREFORE, in consideration of the Rents, terms,
covenants, conditions, and agreements hereinafter described to be
paid, kept, and performed by Lessee, including the completion of
the Building and other improvements constituting the Leased
Premises, Lessee and Lessor do hereby agree to amend the Lease as
follows:
1. Article 2(A) and (B) of the Lease shall henceforth read as
follows:
ARTICLE 2. TERM
(A) The term of this Lease ("Term") shall be Twenty (20)
consecutive "Lease Years", as hereinafter defined, commencing
January 27th, 1999, plus the period commencing June 29, 1998
("Occupancy Date") through January 31, 1999 with the contemplated
initial term hereof ending on January 31, 2019.
(B) The first full Lease Year shall commence on the date of
this First Amendment and continue through January 31, 2000.
2. Article 4(A) of the Lease shall henceforth read as follows:
ARTICLE 4. RENT PAYMENTS
(A) Annual Rent Payable for the first and second Lease
Years: Lessee shall pay to Lessor an annual Base Rent of
$405,460.65, which amount shall be payable in advance on the
first day of each month in equal monthly installments of
$7,771.33 to Fund XXII, $8,447.10 to Fund XXI, $12,839.59 to Fund
XVIII, and $ 4,730.37 to Fund XVII. If the first day of the
first full Lease Year of the Lease Term is not the first day of a
calendar month, then the monthly Rent payable for that partial
month shall be a prorated portion of the equal monthly
installment of Base Rent.
Article 35 is hereby deleted in its entirety; Lessor and Lessee
agree that the referenced Development Financing Agreement is
terminated in accordance with its terms. All other terms and
conditions of the Lease shall remain in full force and effect.
Lessee has accepted delivery of the Leased Premises and has
entered into occupancy thereof.
Lessee has fully inspected the Premises and found the same to be
as required by the Lease, in good order and repair, and all
conditions under the Lease to be performed by the Lessor have
been satisfied.
As of this date, the Lessor is not in default under any of the
terms, conditions, provisions or agreements of the Lease and the
undersigned has no offsets, claims or defenses against the Lessor
with respect to the Lease.
This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have respectively signed
and sealed this Lease as of the day and year first above written.
LESSEE: Americana Dining Corp.,
By: /s/ Donna Depoian
Its: Secretary
Attest
/s/ Muriel Smith
Muriel Smith
Print Name
Attest
/s/ Cheryl N. Carver
Cheryl N Carver
Print Name
STATE OF MASSACHUSETTS)
)SS.
COUNTY OF ESSEX)
The foregoing instrument was acknowledged before me this
25th day of January 1999, by Donna Depoian, as Sectray of
Americana Dining Corp. on behalf of said company.
/s/ Donna M Luciano
Notary Public [notary seal]
[Remainder of page intentionally left blank]
LESSOR: AEI INCOME & GROWTH FUND XXII
LIMITED PARTNERSHIP
By: AEI Fund Management XXI, Inc.
Attest
/s/ Rick J Vitale By: /s/ Robert P Johnson
Rick J Vitale Robert P. Johnson, President
Print Name
Attest
/s/ Stacey R.E. Jones
Stacey R.E. Jones
Print Name
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me the 26th
day of January, 1999, by Robert P Johnson , the President of AEI
Fund Management XXI, Inc., a Minnesota corporation, corporate
general partner of AEI Income & Growth Fund XXII Limited
Partnership, on behalf of said limited partnership.
/s/ Barbara J Kochevar
Notary Public
[notary seal]
[Remainder of page intentionally left blank]
AEI INCOME & GROWTH FUND XXI
LIMITED PARTNERSHIP
By: AEI Fund Management XXI, Inc.
Attest
/s/ Rick J Vitale By: /s/ Robert P Johnson
Rick J Vitale Robert P. Johnson, President
Print Name
Attest
/s/ Stacey R.E. Jones
Stacey R.E. Jones
Print Name
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me the 26th
day of January, 1999, by Robert P Johnson , the President of AEI
Fund Management XXI, Inc., a Minnesota corporation, corporate
general partner of AEI Income & Growth Fund XXI Limited
Partnership, on behalf of said limited partnership.
[Remainder of page intentionally left blank]
AEI REAL ESTATE FUND XVIII
LIMITED PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
Attest
/s/ Rick J Vitale By:/s/ Robert P Johnson
Rick J Vitale Robert P. Johnson, President
Print Name
Attest
/s/ Stacey R.E. Jones
Stacey R.E. Jones
Print Name
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me the 26th
day of January, 1999, by Robert P Johnson , the President of AEI
Fund Management XVIII, Inc., a Minnesota corporation, corporate
general partner of AEI Real Estate Fund XVIII Limited
Partnership, on behalf of said limited partnership.
/s/ Barbars J Kochevar
Notary Public
[Remainder of page intentionally left blank]
AEI REAL ESTATE FUND XVII
LIMITED PARTNERSHIP
By: AEI Fund Management XVII, Inc.
Attest
/s/ Rick J Vitale By: /s/ Robert P Johnson
Rick J Vitale Robert P. Johnson, President
Print Name
Attest
/s/ Stacey R.E. Jones
Stacey R.E. Jones
Print Name
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me the 26th
day of January, 1999, by Robert P Johnson , the President of AEI
Fund Management XVII, Inc., a Minnesota corporation, corporate
general partner of AEI Real Estate Fund XVII Limited Partnership,
on behalf of said limited partnership.
/s/ Barbara J Kochevar
Notary Public
[Remainder of page intentionally left blank]
LAWYERS TITLE INSURANCE CORPORATION
EXHIBIT A 2507DC
MF 94-676-303
Situate in the Township of Washington, County of Montgomery and
State of Ohio and being Lot Numbered Twelve (12) Washington
Village Park, Section 12, as recorded in Plat Book 155, page 50
of the plat records of Montgomery County, Ohio ("Lot 12").
Together with a perpetual, nonexclusive easement for vehicular
ingress and egress on, over and across a certain 1.061 acre area,
more or less known as Lot Numbered Thirteen (13) Washington
Village Pare, Section Twelve, as recorded in Plat Book 156, Page
50 of the Plat Records of Montgomery County, Ohio ("Lot 13"), a
private roadway presently known as Jdrexel Park Lane ("Roadway
Easement Area"), to provde ingress and egress between the
Premises and the public roadways presently know as Washington
Village Drive and Lyons Road.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000819577
<NAME> AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 280,625
<SECURITIES> 0
<RECEIVABLES> 8,989
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 289,614
<PP&E> 16,096,583
<DEPRECIATION> (2,870,126)
<TOTAL-ASSETS> 13,516,071
<CURRENT-LIABILITIES> 233,956
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,282,115
<TOTAL-LIABILITY-AND-EQUITY> 13,516,071
<SALES> 0
<TOTAL-REVENUES> 1,692,635
<CGS> 0
<TOTAL-COSTS> 693,683
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,415,234
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,415,234
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,415,234
<EPS-PRIMARY> 62.92
<EPS-DILUTED> 62.92
</TABLE>
