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, 1999
Commission file number: 0-18289
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
(Name of Small Business Issuer in its Charter)
State of Minnesota 41-1622463
(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, 1999 were
$1,929,636.
As of February 29, 2000, there were 20,625.48 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 $20,625,480.
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 XVIII Limited Partnership (the
"Partnership" or the "Registrant") is a limited partnership which
was organized pursuant to the laws of the State of Minnesota on
September 20, 1988. The registrant is comprised of AEI Fund
Management XVIII, 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 December 5, 1988. The
Partnership commenced operations on February 15, 1989 when
minimum subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The Partnership's offering
terminated December 4, 1990 when the extended offering period
expired. The Partnership received subscriptions for 22,783.05
Limited Partnership Units ($22,783,050).
The Partnership was organized to acquire, initially on a
debt-free basis, existing and newly constructed commercial
properties located in the United States and Canada, 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-one
properties, including partial interests in five properties,
totaling $18,868,379. 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 aggregate purchase price of all
Partnership properties.
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 14 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.
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.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
On July 21, 1998, the Partnership sold its 93.2478%
interest in the Sizzler restaurant in Springboro, Ohio to an
unrelated third party. The Partnership received net sale
proceeds of $350,635, which resulted in a net loss on the sale of
$22,345.
In October, 1999, the Partnership abandoned a Rally's
property in order to avoid ongoing expenses. In the third
quarter of 1999, the Partnership recorded a real estate
impairment of $125,531, which is equal to the net book value of
the abandoned property. Additionally, in the fourth quarter of
1999, the Partnership recorded a real estate impairment of
$124,188, which is equal to the net book value of the remaining
Rally's, due to the uncertainty of retaining a tenant in the
property.
On November 18, 1998, the Partnership leased the
Brownsville property to Sergio Gonzalez under a Lease Agreement
with a primary term of two years and annual rental payments of
$37,200. The property is now operated as a Taco Fiesta
restaurant.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Slidell, Louisiana, filed
for reorganization. GCR is continuing to make the lease payments
to the Partnership under the supervision of the bankruptcy court
while they develop a reorganization plan. If the Lease is
assumed, GCR must comply with all Lease terms and any unpaid rent
must be paid. If the Lease is rejected, GCR will be required to
return possession of the property to the Partnership and past due
amounts will be dismissed and the Partnership will be responsible
for re-leasing the property. At December 31, 1999, GCR owed
$7,100 for rent due prior to the date of the filing for
reorganization. An analysis of the operating statements of this
property indicate that it is generating profits. It is
management's belief that the Lease will be assumed by GCR and
that, ultimately, the property will be purchased by a different
operator, approved by the bankruptcy court, at a price exceeding
the property's book value.
Through December 31, 1997, the Partnership sold 94.1709%
of the Applebee's restaurant in Destin, Florida in seven separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $1,413,627 which resulted in
a total net gain of $481,379. The total cost and related
accumulated depreciation of the interests sold was $1,053,565 and
$121,317, respectively. For the year ended December 31, 1997,
the net gain was $320,171.
Through December 31, 1997, the Partnership sold 90.6301%
of a Taco Cabana restaurant in San Antonio, Texas in seven
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,520,182 which
resulted in a total net gain of $562,654. The total cost and
related accumulated depreciation of the interests sold was
$1,043,983 and $86,455, respectively. For the year ended
December 31, 1997, the net gain was $355,897.
Through December 31, 1997, the Partnership sold 77.4842%
of its interest in the Tractor Supply Company in Bristol,
Virginia in seven separate transactions to unrelated third
parties. The Partnership received total net sale proceeds of
$1,189,572 which resulted in a total net gain of $217,301. The
total cost and related accumulated depreciation of the interests
sold was $997,602 and $25,331, respectively. For the year ended
December 31, 1997, the net gain was $179,517.
During 1997, the Partnership sold 26.0312% of its interest
in the Champps Americana restaurant in Columbus, Ohio in three
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $807,777 which
resulted in a total net gain of $151,139. The total cost and
related accumulated depreciation of the interests sold was
$667,813 and $11,175, respectively.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
During 1999, the Partnership sold its interest in the
HomeTown Buffet restaurant in three separate transactions to
unrelated third parties. The Partnership received total net sale
proceeds of $423,600 which resulted in a total net gain of
$146,588. The total cost and related accumulated depreciation of
the interest sold was $303,733 and $26,721, respectively.
On July 30, 1997, the Partnership purchased a Fuddruckers
restaurant in Thornton, Colorado for $1,405,771. The property is
leased to Fuddruckers, Inc. under a Lease Agreement with a
primary term of 20 years and annual rental payments of $148,387.
On December 23, 1997, the Partnership purchased a 23.95%
interest in a parcel of land in Troy, Michigan for $361,889. The
land is leased to Champps Operating Corporation. (Champps) under
a Lease Agreement with a primary term of 20 years and annual
rental payments of $25,332. Effective June 20, 1998, the annual
rent was increased to $37,998. 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 $122,605. The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,192,496. The remaining interests in the
property are owned by AEI Real Estate Fund XV Limited
Partnership, AEI Real Estate Fund XVII Limited Partnership and
AEI Net Lease Income & Growth Fund XIX Limited Partnership,
affiliates of the Partnership.
In January, 1998, the Partnership entered into an
agreement to purchase a 45% interest in a Tumbleweed restaurant
in Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $216,915. The land is leased
to Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $18,438.
Effective August 10, 1998, the annual rent was increased to
$22,234. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership advanced funds to TWI for the construction
of a Tumbleweed restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of 8.5%.
Effective August 10, 1998, the interest rate was increased to
10.25%. On November 20, 1998, after the development was
completed, the Lease Agreement was amended to require annual
rental payments of $57,314. The Partnership's share of the total
acquisition costs, including the cost of the land, was $573,831.
The remaining interests in the property are owned by the
Individual General Partner and AEI Net Lease Income & Growth Fund
XIX Limited Partnership.
In April, 1998, the Partnership entered into an agreement
to purchase a Tumbleweed restaurant in Columbus, Ohio. On May 1,
1998, the Partnership purchased the land for $503,832. The land
is leased to TWI under a Lease Agreement with a primary term of
15 years and annual rental payments of $42,826. Effective August
28, 1998, the annual rent was increased to $51,643.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to TWI for the construction of a
Tumbleweed restaurant on the site. Initially, the Partnership
charged interest on the advances at a rate of 8.5%. Effective
August 28, 1998, the interest rate was increased to 10.25%. On
December 28, 1998, after the development was completed, the
Partnership assigned, for diversification purposes, 60% of its
interest in the property to an affiliated Partnership and the
Lease Agreement was amended to require annual rental payments of
$55,401. The Partnership's share of the total acquisition costs,
including the cost of the land, was $554,269. The remaining
interest in the property is owned by AEI Net Lease Income &
Growth Fund XIX Limited Partnership.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
In April, 1998, the Partnership entered into an Agreement
to purchase an Old Country Buffet restaurant to be constructed in
Northlake, Illinois. On May 18, 1998, the Partnership purchased
the land for $330,000. The Partnership charged interest on the
land at a rate of 10% until September 27, 1998. On September 28,
1998, the tenant began paying annual rent of $130,000. On
September 30, 1998, the Partnership advanced $370,000 for the
construction of the property. On December 29, 1998, after the
construction was completed, the Partnership paid $639,000 of
additional construction costs. The total acquisition cost was
$1,350,804. The property is leased to OCB Realty Co. under a
Lease Agreement with a primary term of 20 years.
On August 28, 1998, the Partnership purchased a 38%
interest in a parcel of land in Centerville, Ohio for $703,376.
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 $49,236. Effective December 25, 1998, the annual
rent was increased to $73,854. 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. Initially, the Partnership charged 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 $154,075. The Partnership's
share of the total acquisition costs, including the cost of the
land, were $1,502,252. The remaining interests in the property
are owned by AEI Real Estate Fund XVII Limited Partnership, AEI
Income & Growth Fund XXI Limited Partnership and AEI Income &
Growth Fund XXII Limited Partnership, affiliates of the
Partnership.
Major Tenants
During 1999, four of the Partnership's lessees each
contributed more than ten percent of the Partnership's total
rental revenue. The major tenants in aggregate contributed 69%
of the Partnership's total rental revenue in 1999. 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 2000 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
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 is not aware of any issues related to Year 2000
non compliance with AEI systems or the systems of the various
tenants.
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 and Canada 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 aggregate purchase price of all
Partnership properties.
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.
The following table is a summary of the properties that
the Partnership acquired and owned as of December 31, 1999.
Total Property Annual Annual
Purchase Acquisition Lease Rent Per
Property Date Costs Lessee Payment Sq. Ft.
Children's World ARAMARK
Daycare Center Educational
Phoenix, AZ 9/29/89 $ 883,486 Resources, Inc. $117,640 $15.56
Pasta Fair Restaurant Pasta Fair of
Belleview, FL 4/11/90 $ 932,862 Belleview, Inc. $ 60,000 $ 9.84
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Total Property Annual Annual
Purchase Acquisition Lease Rent Per
Property Date Costs Lessee Payment Sq. Ft.
Children's World ARAMARK
Daycare Center Educational
Blue Springs, MO 6/27/90 $ 791,271 Resources, Inc. $ 99,617 $12.45
Children's World ARAMARK
Daycare Center Educational
Lenexa, KS 9/13/90 $ 983,527 Resources, Inc. $124,940 $15.59
Taco Cabana Restaurant Texas Taco
San Antonio, TX 12/29/90 $1,406,426 Cabana L.P. $208,584 $76.18
Cheddar's Restaurant Heartland
Clive, IA 1/22/91 $1,392,248 Restaurant Corp. $219,324 $30.46
Children's World ARAMARK
Daycare Center Educational
Westerville, OH 6/21/91 $ 990,261 Resources, Inc. $123,238 $15.44
Taco Cabana Restaurant
San Antonio, TX Texas Taco
(9.3699%) 7/19/91 $ 107,933 Cabana L.P. $ 16,371 $39.04
Taco Fiesta Restaurant
Brownsville, TX 8/9/91 $ 799,938 Sergio Gonzalez $ 37,200 $13.78
Applebee's Restaurant
Destin, FL
(5.8291%) 11/1/91 $ 65,215 T.S.S.O., Inc. $ 9,142 $32.60
Children's World ARAMARK
Daycare Center Educational
Columbus, OH 8/10/92 $1,019,202 Resources, Inc. $124,260 $14.07
Rally's Restaurant Red Line San
San Antonio, TX 12/7/92 $ 308,997 Antonio One, LTD $ 15,000 $25.86
Applebee's Restaurant
Slidell, LA Gulf Coast
(27%) 5/5/93 $ 280,018 Restaurants, Inc. $ 44,093 $35.65
Tractor Supply Company Store
Bristol, VA Tractor Supply
(7.5158%) 4/10/96 $ 96,765 Company, Inc. $ 10,719 $ 7.61
Champps Americana
Restaurant Americana
Columbus, OH Dining
(6.1688%) 8/29/96 $ 158,257 Corporation $ 18,477 $36.66
Fuddruckers Restaurant
Thornton, CO 7/30/97 $1,405,771 Fuddruckers, Inc. $148,387 $29.81
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Total Property Annual Annual
Purchase Acquisition Lease Rent Per
Property Date Costs Lessee Payment Sq. Ft.
Champps Americana
Restaurant Champps
Troy, MI Operating
(23.95%) 9/3/98 $1,192,496 Corporation $122,605 $46.16
Tumbleweed Restaurant
Chillicothe, OH Tumbleweed,
(45.0%) 11/20/98 $ 573,831 Inc. $ 58,460 $23.69
Tumbleweed Restaurant
Columbus, OH Tumbleweed,
(40.0%) 12/28/98 $ 554,269 Inc. $ 55,401 $25.26
Old Country Buffet
Restaurant OCB
North Lake, IL 12/29/98 $1,350,804 Restaurant Co. $130,000 $14.46
Champps Americana
Restaurant
Centerville, OH Americana
(38.0%) 1/27/99 $1,502,252 Dining Corp. $154,075 $43.28
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
Applebee's restaurant in Slidell, Louisiana is owned by AEI Real
Estate fund XVI Limited Partnership. The remaining interests in
the Champps Americana restaurant in Columbus, Ohio are owned by
AEI Income & Growth Fund XXI Limited Partnership and unrelated
third parties. The remaining interests in the Taco Cabana
restaurant in San Antonio, Texas, the Applebee's restaurant in
Destin, Florida, and the Tractor Supply Company store are owned
by unrelated third parties. 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
XVII Limited Partnership and AEI Net Lease Income & Growth Fund
XIX Limited Partnership. The remaining interests in the
Tumbleweed restaurant in Chillicothe, Ohio are owned by the
Individual General Partner and AEI Net Lease Income & Growth Fund
XIX Limited Partnership. The remaining interest in the
Tumbleweed restaurant in Columbus, Ohio is owned by 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 XVII 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.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
The initial Lease terms are for 20 years except for the
Taco Cabana restaurants in San Antonio, Texas, the Rally's
restaurant, the Tumbleweed restaurants, and the Children's World
daycare centers, which have Lease terms of 15 years and the
Tractor Supply Company store, which has a Lease term of 14 years.
The Leases have renewal options which may extend the Lease term
an additional 10 years, except for the Champps Americana,
Applebee's in Slidell, Louisiana, Fuddruckers and Rally's
restaurants which have renewal options that may extend the Lease
term an additional 15 years and the Old Country Buffet restaurant
which has a renewal option that may extend the Lease term an
additional 20 years.
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 39 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 except for
properties whose book value was reduced by a real estate
impairment loss pursuant to Financial Accounting Standards Board
Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of." The real
estate impairment loss, which was recorded against the book cost
of the land and depreciable property, was not recognized for tax
purposes.
During the last five years, or since the date of purchase
if purchased after December 31, 1994, all properties were 100
percent occupied by the lessees noted, with the exception of the
Taco Cabana restaurant in Brownsville, Texas which was 100%
occupied until January, 1997 and was vacant until November, 1998.
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, 1999, there were 1,544 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 acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the total number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1999, twenty-one Limited Partners redeemed a total
of 285.0 Partnership Units for $226,233 in accordance with the
Partnership Agreement. In prior years, a total of 120 Limited
Partners redeemed 1,872.32 Partnership Units for $1,490,675 in
accordance with the Partnership Agreement. The redemptions
increase the remaining Limited Partners' ownership interest in
the Partnership.
Cash distributions of $15,809 and $14,039 were made to the
General Partners and $1,338,889 and $927,959 were made to the
Limited Partners in 1999 and 1998, respectively. The
distributions were made on a quarterly basis and represent Net
Cash Flow, as defined. These distributions should not be
compared with dividends paid on capital stock by corporations.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Results of Operations
For the years ended December 31, 1999 and 1998, the
Partnership recognized rental income of $1,900,559 and
$1,542,916, respectively. During the same periods, the
Partnership earned investment income of $29,077 and $204,997,
respectively. In 1999, rental income increased as a result of
additional rent received from five property acquisitions in 1998
and 1999, rent increases on eleven properties and rent received
from re-leasing the Brownsville property. These increases in
rental income were partially offset by a decrease in rental
income due to the property sales discussed below, and a decrease
in investment income earned on net sale proceeds prior to the
purchase of the additional properties.
In October, 1999, the Partnership abandoned a Rally's
property in order to avoid ongoing expenses. In the third
quarter of 1999, the Partnership recorded a real estate
impairment of $125,531, which is equal to the net book value of
the abandoned property. Additionally, in the fourth quarter of
1999, the Partnership recorded a real estate impairment of
$124,188, which is equal to the net book value of the remaining
Rally's, due to the uncertainty of retaining a tenant in the
property. The abandonment and impairment of the two properties
did not have a material effect on the Partnership's cash flow or
financial statements.
In 1997, the Partnership took possession of the Taco
Cabana restaurant in Brownsville, Texas and listed it for sale or
re-lease. The Partnership was scheduled to receive, but did not
collect, $99,388 in rent in 1998. This amount was not accrued
for financial reporting purposes. While the property was vacant,
the Partnership was responsible for real estate taxes and other
costs required to maintain the property.
On November 18, 1998, the Partnership leased the
Brownsville property to Sergio Gonzalez under a Lease Agreement
with a primary term of two years and annual rental payments of
$37,200. The property is now operated as a Taco Fiesta
restaurant.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Slidell, Louisiana, filed
for reorganization. GCR is continuing to make the lease payments
to the Partnership under the supervision of the bankruptcy court
while they develop a reorganization plan. If the Lease is
assumed, GCR must comply with all Lease terms and any unpaid rent
must be paid. If the Lease is rejected, GCR will be required to
return possession of the property to the Partnership and past due
amounts will be dismissed and the Partnership will be responsible
for re-leasing the property. At December 31, 1999, GCR owed
$7,100 for rent due prior to the date of the filing for
reorganization. An analysis of the operating statements of this
property indicate that it is generating profits. It is
management's belief that the Lease will be assumed by GCR and
that, ultimately, the property will be purchased by a different
operator, approved by the bankruptcy court, at a price exceeding
the property's book value.
During the years ended December 31, 1999 and 1998, the
Partnership paid Partnership administration expenses to
affiliated parties of $220,942 and $240,525, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $32,591 and $59,440, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs. The decrease
in these expenses in 1999, when compared to 1998, is the result
of expenses incurred in 1998 related to the Sizzler and
Brownsville property situations discussed above.
As of December 31, 1999, the Partnership's annualized cash
distribution rate was 6.5%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants due to inflation and real sales growth, will result
in an increase in rental income over the 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
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 is not aware of any issues related to Year 2000
non compliance with AEI systems or the systems of the various
tenants.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Liquidity and Capital Resources
During 1999, the Partnership's cash balances increased
$361,995 as the Partnership distributed less cash to the Partners
than it generated from operating activities. Net cash provided
by operating activities increased from $1,421,055 in 1998 to
$1,710,293 in 1999 mainly as a result of an increase in income
and a decrease in expenses in 1999 and net timing differences in
the collection of payments from the lessees and the payment of
expenses.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. In 1999 and 1998, the Partnership
generated cash flow from the sale of real estate of $423,600 and
$350,635, respectively. During the same periods, the Partnership
expended $337,666 and $4,334,115, respectively, to invest in real
properties (inclusive of acquisition expenses) as the Partnership
reinvested the cash generated from property sales.
On December 23, 1997, the Partnership purchased a 23.95%
interest in a parcel of land in Troy, Michigan for $361,889. The
land is leased to Champps Operating Corporation (Champps) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $25,332. Effective June 20, 1998, the annual rent
was increased to $37,998. 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 $122,605. The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,192,496. The remaining interests in the
property are owned by AEI Real Estate Fund XV Limited
Partnership, AEI Real Estate Fund XVII Limited Partnership and
AEI Net Lease Income & Growth Fund XIX Limited Partnership,
affiliates of the Partnership.
In January, 1998, the Partnership entered into an
agreement to purchase a 45% interest in a Tumbleweed restaurant
in Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $216,915. The land is leased
to Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $18,438.
Effective August 10, 1998, the annual rent was increased to
$22,234. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership advanced funds to TWI for the construction
of a Tumbleweed restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of 8.5%.
Effective August 10, 1998, the interest rate was increased to
10.25%. On November 20, 1998, after the development was
completed, the Lease Agreement was amended to require annual
rental payments of $57,314. The Partnership's share of the total
acquisition costs, including the cost of the land, was $573,831.
The remaining interests in the property are owned by the
Individual General Partner and AEI Net Lease Income & Growth Fund
XIX Limited Partnership.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
In April, 1998, the Partnership entered into an agreement
to purchase a Tumbleweed restaurant in Columbus, Ohio. On May 1,
1998, the Partnership purchased the land for $503,832. The land
is leased to TWI under a Lease Agreement with a primary term of
15 years and annual rental payments of $42,826. Effective August
28, 1998, the annual rent was increased to $51,643.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to TWI for the construction of a
Tumbleweed restaurant on the site. Initially, the Partnership
charged interest on the advances at a rate of 8.5%. Effective
August 28, 1998, the interest rate was increased to 10.25%. On
December 28, 1998, after the development was completed, the
Partnership assigned, for diversification purposes, 60% of its
interest in the property to an affiliated Partnership and the
Lease Agreement was amended to require annual rental payments of
$55,401. The Partnership's share of the total acquisition costs,
including the cost of the land, was $554,269. The remaining
interest in the property is owned by AEI Net Lease Income &
Growth Fund XIX Limited Partnership.
In April, 1998, the Partnership entered into an Agreement
to purchase an Old Country Buffet restaurant to be constructed in
Northlake, Illinois. On May 18, 1998, the Partnership purchased
the land for $330,000. The Partnership charged interest on the
land at a rate of 10% until September 27, 1998. On September 28,
1998, the tenant began paying annual rent of $130,000. On
September 30, 1998, the Partnership advanced $370,000 for the
construction of the property. On December 29, 1998, after the
construction was completed, the Partnership paid $639,000 of
additional construction costs. The total acquisition cost was
$1,350,804. The property is leased to OCB Realty Co. under a
Lease Agreement with a primary term of 20 years.
On August 28, 1998, the Partnership purchased a 38%
interest in a parcel of land in Centerville, Ohio for $703,376.
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 $49,236. Effective December 25, 1998, the annual
rent was increased to $73,854. 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. Initially, the Partnership charged 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 $154,075. The Partnership's
share of the total acquisition costs, including the cost of the
land, were $1,502,252. The remaining interests in the property
are owned by AEI Real Estate Fund XVII Limited Partnership, AEI
Income & Growth Fund XXI Limited Partnership and AEI Income &
Growth Fund XXII Limited Partnership, affiliates of the
Partnership.
On July 21, 1998, the Partnership sold its 93.2478%
interest in the Sizzler restaurant in Springboro, Ohio to an
unrelated third party. The Partnership received net sale
proceeds of $350,635, which resulted in a net loss on the sale of
$22,345.
During 1999, the Partnership sold its interest in the
HomeTown Buffet restaurant in three separate transactions to
unrelated third parties. The Partnership received total net sale
proceeds of $423,600 which resulted in a total net gain of
$146,588. The total cost and related accumulated depreciation of
the interests sold was $303,733 and $26,721, respectively.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership declares
its regular quarterly distributions before the end of each
quarter and pays the distribution in the first week after the end
of each quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Prior to 1998,
redemption payments were paid to redeeming Partners in the fourth
quarter of each year. Beginning in 1998, redemption payments
will be 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 1999, twenty-one Limited Partners redeemed a total
of 285.0 Partnership Units for $226,233 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
120 Limited Partners redeemed 1,872.32 Partnership Units for
$1,490,675. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
ITEM 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 XVIII LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet as of December 31, 1999 and 1998
Statements for the Years Ended December 31, 1999 and 1998:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
REPORT OF INDEPENDENT AUDITORS
To the Partners:
AEI Real Estate Fund XVIII Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI Real
Estate Fund XVIII Limited Partnership (a Minnesota limited
partnership) as of December 31, 1999 and 1998 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 XVIII Limited Partnership as of December
31, 1999 and 1998 and the results of its operations and its cash
flows for the years then ended, in conformity with generally
accepted accounting principles.
Minneapolis, Minnesota Boulay, Heutmaker, Zibell & Co. P.L.L.P.
January 25, 2000 Certified Public Accountants
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 673,082 $ 311,087
Receivables 19,852 52,928
----------- -----------
Total Current Assets 692,934 364,015
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 5,384,757 5,491,552
Buildings and Equipment 10,934,684 10,652,675
Construction in Progress 0 439,301
Property Acquisition Costs 407 22,316
Accumulated Depreciation (2,458,655) (2,159,173)
----------- -----------
Net Investments in Real Estate 13,861,193 14,446,671
----------- -----------
Total Assets $14,554,127 $14,810,686
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 5,516 $ 16,768
Distributions Payable 341,984 195,285
Security Deposit 12,500 12,500
Unearned Rent 17,366 5,000
----------- -----------
Total Current Liabilities 377,366 229,553
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (53,696) (49,653)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 22,783 Issued;
20,625 and 20,910 outstanding in 1999
and 1998, respectively 14,230,457 14,630,786
----------- -----------
Total Partners' Capital 14,176,761 14,581,133
----------- -----------
Total Liabilities and Partners' Capital $14,554,127 $14,810,686
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 3l
1999 1998
INCOME:
Rent $ 1,900,559 $ 1,542,916
Investment Income 29,077 204,997
----------- -----------
Total Income 1,929,636 1,747,913
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 220,942 240,525
Partnership Administration and Property
Management - Unrelated Parties 32,591 59,440
Depreciation 396,413 305,219
Real Estate Impairment 249,719 0
----------- -----------
Total Expenses 899,665 605,184
----------- -----------
OPERATING INCOME 1,029,971 1,142,729
GAIN (LOSS) ON SALE OF REAL ESTATE 146,588 (22,345)
----------- -----------
NET INCOME $ 1,176,559 $ 1,120,384
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 11,766 $ 11,204
Limited Partners 1,164,793 1,109,180
----------- -----------
$ 1,176,559 $ 1,120,384
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(20,767 and 21,211 weighted average Units outstanding
in 1999 and 1998, respectively) $ 56.09 $ 52.29
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 3l
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,176,559 $ 1,120,384
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 396,413 305,219
Real Estate Impairment 249,719 0
(Gain) Loss on Sale of Real Estate (146,588) 22,345
(Increase) Decrease in Receivables 33,076 (32,381)
Decrease in Payable to
AEI Fund Management, Inc. (11,252) (7,012)
Increase in Security Deposit 0 12,500
Increase in Unearned Rent 12,366 0
----------- -----------
Total Adjustments 533,734 300,671
----------- -----------
Net Cash Provided By
Operating Activities 1,710,293 1,421,055
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (337,666) (4,334,115)
Proceeds from Sale of Real Estate 423,600 350,635
----------- -----------
Net Cash Provided By (Used For)
Investing Activities 85,934 (3,983,480)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 146,699 64,131
Distributions to Partners (1,352,413) (937,332)
Redemption Payments (228,518) (466,570)
----------- -----------
Net Cash Used For
Financing Activities (1,434,232) (1,339,771)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 361,995 (3,902,196)
CASH AND CASH EQUIVALENTS, beginning of period 311,087 4,213,283
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 673,082 $ 311,087
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 3l
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1997 $(46,818) $14,911,469 $14,864,651 21,487.28
Distributions (9,373) (927,959) (937,332)
Redemption Payments (4,666) (461,904) (466,570) (576.80)
Net Income 11,204 1,109,180 1,120,384
-------- ----------- ----------- -----------
BALANCE, December 31, 1998 (49,653) 14,630,786 14,581,133 20,910.48
Distributions (13,524) (1,338,889) (1,352,413)
Redemption Payments (2,285) (226,233) (228,518) (285.00)
Net Income 11,766 1,164,793 1,176,559
-------- ----------- ---------- -----------
BALANCE, December 31, 1999 $(53,696) $14,230,457 $14,176,761 20,625.48
======== =========== ========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Organization -
AEI Real Estate Fund XVIII Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVIII, Inc. (AFM), the Managing
General Partner. Robert P. Johnson, the President and sole
shareholder of AFM, serves as the Individual General Partner
and an affiliate of AFM, AEI Fund Management, Inc. (AEI),
performs the administrative and operating functions for the
Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on February 15, 1989 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The offering terminated
December 4, 1990 when the extended offering period expired.
The Partnership received subscriptions for 22,783.05 Limited
Partnership Units ($22,783,050).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$22,783,050, and $1,000, respectively. During operations,
any Net Cash Flow, as defined, which the General Partners
determine to distribute will be distributed 90% to the
Limited Partners and 10% to the General Partners; provided,
however, that such distributions to the General Partners
will be subordinated to the Limited Partners first receiving
an annual, noncumulative distribution of Net Cash Flow equal
to 10% of their Adjusted Capital Contribution, as defined,
and, provided further, that in no event will the General
Partners receive less than 1% of such Net Cash Flow per
annum. Distributions to Limited Partners will be made pro
rata by Units.
Any Net Proceeds of Sale as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 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 XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Organization - (Continued)
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Partners for
such year. Any additional profits will be allocated 90% to
the Limited Partners and 10% to the General Partners. In the
event no Net Cash Flow is distributed to the Limited
Partners, 90% of each item of income, gain or credit for
each respective year shall be allocated to the Limited
Partners, and 10% of each such item shall be allocated to
the General Partners. Net losses from operations will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Partnership Agreement as follows: (i)
first, to those partners with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Partners
and 1% to the General Partners until the aggregate balance
in the Limited Partners' capital accounts equals the sum of
the Limited Partners' Adjusted Capital Contributions plus an
amount equal to 14% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, to the General Partners
until cumulative allocations to the General Partners equal
15% of cumulative allocations. Any remaining balance will
be allocated 85% to the Limited Partners and 15% to the
General Partners. Losses will be allocated 98% to the
Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(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 XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(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.
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.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(2) Summary of Significant Accounting Policies - (Continued)
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 27% interest in an Applebee's
restaurant in Slidell, Louisiana. The remaining interest in
this property is owned by AEI Real Estate Fund XVI Limited
Partnership, an affiliate of the Partnership. As of
December 31, 1999, the Partnership owns a 6.1688% interest
in the Champps Americana restaurant in Columbus, Ohio. The
remaining interests in this property are owned by AEI Income
& Growth Fund XXI Limited Partnership, an affiliate of the
Partnership, and unrelated third parties. The Partnership
owns a 23.95% 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 XVII Limited Partnership and AEI Net
Lease Income & Growth Fund XIX Limited Partnership,
affiliates of the Partnership. The Partnership owns a 45.0%
interest in the Tumbleweed restaurant in Chillicothe, Ohio.
The remaining interests in this property are owned by the
Individual General Partner and AEI Net Lease Income & Growth
Fund XIX Limited Partnership. The Partnership owns a 40.0%
interest in the Tumbleweed restaurant in Columbus, Ohio.
The remaining interest in this property is owned by AEI Net
Lease Income & Growth Fund XIX Limited Partnership. The
Partnership owns a 38.0% interest in the Champps Americana
restaurant in Centerville, Ohio. The remaining interests in
the property are owned by AEI Real Estate Fund XVII 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 93.2478% interest in the Sizzler restaurant in
Springboro, Ohio. The remaining interest in the property
was owned by AEI Real Estate Fund 86-A Limited Partnership,
an affiliate of the Partnership. The Partnership owned a
24% interest in a HomeTown Buffet restaurant. The remaining
interests in this property are owned by AEI Net Lease Income
& Growth Fund XIX Limited Partnership and unrelated third
parties. AEI Institutional Net Lease Fund '93 Limited
Partnership, an affiliate of the Partnership, owned a 15.8%
interest in this property until December 4, 1998 when its
interest was sold to an unrelated third party. During 1999,
the Partnership sold its interest in the property to
unrelated third parties.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(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
1999 1998
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. $ 220,942 $ 240,525
======== ========
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. $ 32,591 $ 59,440
======== ========
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 $28,975 and $141,994
for 1999 and 1998, respectively. $ (16,097) $ (43,809)
======== ========
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 XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(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
restaurants in San Antonio, Texas, the Rally's restaurant,
the Tumbleweed restaurants, and the Children's World daycare
centers, which have Lease terms of 15 years and the Tractor
Supply Company store which has a Lease term of 14 years.
The Leases have renewal options which may extend the Lease
term an additional 10 years, except for the Champps
Americana, Applebee's in Slidell, Louisiana, Fuddruckers and
Rally's restaurants which have renewal options that may
extend the Lease term an additional 15 years and the Old
Country Buffet restaurant which has a renewal option that
may extend the Lease term an additional 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 Children's World in Phoenix, Arizona
was constructed in 1988 and acquired in 1989. One of the
Taco Cabana restaurants in San Antonio, Texas was
constructed in 1984, renovated in 1991 and acquired by the
Partnership after the renovation. The Rally's restaurant
and the Children's World in Columbus, Ohio were constructed
and acquired in 1992. The Applebee's in Slidell, Louisiana
was constructed in 1991 and acquired in 1993. The Tractor
Supply Company store and Champps Americana restaurant in
Columbus, Ohio were constructed and acquired in 1996. The
Fuddruckers restaurant was constructed and acquired in 1997.
The Champps Americana in Troy, Michigan, the Old Country
Buffet, and the Tumbleweed restaurants were constructed and
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 constructed and acquired in either
1990 or 1991. There have been no costs capitalized as
improvements subsequent to the acquisitions.
For those properties in the table below which do not have
land costs, the lessee has entered into land leases with
unrelated third parties. The cost of the properties and
related accumulated depreciation at December 31, 1999 are as
follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
Children's World, Phoenix, AZ $ 259,467 $ 624,019 $ 883,486 $ 246,318
Pasta Fair Restaurant,
Belleview, FL 251,593 681,269 932,862 220,466
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
Buildings and Accumulated
Property Land Equipment Total Depreciation
Children's World,
Blue Springs, MO 162,290 628,981 791,271 223,783
Children's World, Lenexa, KS 185,788 797,739 983,527 274,371
Taco Cabana, San Antonio, TX 871,844 534,582 1,406,426 178,581
Cheddar's, Clive, IA 379,249 1,012,999 1,392,248 351,653
Children's World,
Westerville, OH 157,848 832,413 990,261 261,495
Taco Cabana, San Antonio, TX 61,004 46,929 107,933 12,919
Taco Fiesta, Brownsville, TX 294,450 265,888 560,338 108,343
Applebee's, Destin, FL 30,239 34,976 65,215 11,864
Children's World,
Columbus, OH 157,569 861,633 1,019,202 232,965
Rally's, San Antonio, TX 0 72,209 72,209 72,209
Applebee's, Slidell, LA 104,613 175,405 280,018 38,979
Tractor Supply Company,
Bristol, VA 31,092 65,673 96,765 8,787
Champps Americana,
Columbus, OH 53,296 104,961 158,257 12,392
Fuddruckers, Thornton, CO 444,692 961,079 1,405,771 80,431
Champps Americana, Troy, MI 385,295 807,201 1,192,496 37,365
Tumbleweed, Chillicothe, OH 234,796 339,035 573,831 13,600
Tumbleweed, Columbus, OH 216,467 337,802 554,269 12,225
Old Country Buffet,
Northlake, IL 342,896 1,007,908 1,350,804 34,997
Champps Americana,
Centerville, OH 760,269 741,983 1,502,252 24,912
---------- ----------- ----------- ---------
$5,384,757 $10,934,684 $16,319,441 $2,458,655
========== =========== =========== =========
In October, 1999, the Partnership abandoned a Rally's
property in order to avoid ongoing expenses. In the third
quarter of 1999, the Partnership recorded a real estate
impairment of $125,531, which is equal to the net book value
of the abandoned property. Additionally, in the fourth
quarter of 1999, the Partnership recorded a real estate
impairment of $124,188, which is equal to the net book value
of the remaining Rally's, due to the uncertainty of
retaining a tenant in the property. The abandonment and
impairment of the two properties did not have a material
effect on the Partnership's cash flow or financial
statements.
In 1997, the Partnership took possession of the Taco Cabana
restaurant in Brownsville, Texas and listed it for sale or
re-lease. The Partnership was scheduled to receive, but did
not collect, $99,388 in rent in 1998. This amount was not
accrued for financial reporting purposes. While the
property was vacant, the Partnership was responsible for
real estate taxes and other costs required to maintain the
property.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
On November 18, 1998, the Partnership re-leased the
Brownsville property to Sergio Gonzalez under a Lease
Agreement with a primary term of two years and annual rental
payments of $37,200. The property is now operated as a Taco
Fiesta restaurant.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Slidell, Louisiana,
filed for reorganization. GCR is continuing to make the
lease payments to the Partnership under the supervision of
the bankruptcy court while they develop a reorganization
plan. If the Lease is assumed, GCR must comply with all
Lease terms and any unpaid rent must be paid. If the Lease
is rejected, GCR will be required to return possession of
the property to the Partnership and past due amounts will be
dismissed and the Partnership will be responsible for re-
leasing the property. At December 31, 1999, GCR owed $7,100
for rent due prior to the date of the filing for
reorganization. An analysis of the operating statements of
this property indicate that it is generating profits. It is
management's belief that the Lease will be assumed by GCR
and that, ultimately, the property will be purchased by a
different operator, approved by the bankruptcy court, at a
price exceeding the property's book value.
The Partnership owns a 5.8291% interest in the Applebee's
restaurant in Destin, Florida. Prior to 1998, the
Partnership sold 94.1709% of the property to unrelated third
parties, who own the property with the Partnership as
tenants-in-common.
The Partnership owns a 9.3699% interest in the Taco Cabana
restaurant in San Antonio, Texas. Prior to 1998, the
Partnership sold 90.6301% of the property to unrelated third
parties, who own the property with the Partnership as
tenants-in-common.
The Partnership owns a 7.5158% interest in the Tractor
Supply Company store. Prior to 1998, the Partnership sold
77.4842% of the property to unrelated third parties, who own
the property with the Partnership as tenants-in-common.
On July 21, 1998, the Partnership sold its 93.2478% interest
in the Sizzler restaurant in Springboro, Ohio to an
unrelated third party. The Partnership received net sale
proceeds of $350,635, which resulted in a net loss on the
sale of $22,345.
During 1999, the Partnership sold its interest in the
HomeTown Buffet restaurant in three separate transactions to
unrelated third parties. The Partnership received total net
sale proceeds of $432,600 which resulted in a total net gain
of $146,588. The total cost and related accumulated
depreciation of the interests sold was $303,733 and $26,721,
respectively.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
On December 23, 1997, the Partnership purchased a 23.95%
interest in a parcel of land in Troy, Michigan for $361,889.
The land is leased to Champps Operating Corporation
(Champps) under a Lease Agreement with a primary term of 20
years and annual rental payments of $25,332. Effective June
20, 1998, the annual rent was increased to $37,998.
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
$122,605. The Partnership's share of the total acquisition
costs, including the cost of the land, was $1,192,496.
In January, 1998, the Partnership entered into an agreement
to purchase a 45% interest in a Tumbleweed restaurant in
Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $216,915. The land is
leased to Tumbleweed, Inc. (TWI) under a Lease Agreement
with a primary term of 15 years and annual rental payments
of $18,438. Effective August 10, 1998, the annual rent was
increased to $22,234. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership advanced
funds to TWI for the construction of a Tumbleweed restaurant
on the site. Initially, the Partnership charged interest on
the advances at a rate of 8.5%. Effective August 10, 1998,
the interest rate was increased to 10.25%. On November 20,
1998, after the development was completed, the Lease
Agreement was amended to require annual rental payments of
$57,314. The Partnership's share of the total acquisition
costs, including the cost of the land, was $573,831.
In April, 1998, the Partnership entered into an agreement to
purchase a Tumbleweed restaurant in Columbus, Ohio. On May
1, 1998, the Partnership purchased the land for $503,832.
The land is leased to TWI under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$42,826. Effective August 28, 1998, the annual rent was
increased to $51,643. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership advanced
funds to TWI for the construction of a Tumbleweed restaurant
on the site. Initially, the Partnership charged interest on
the advances at a rate of 8.5%. Effective August 28, 1998,
the interest rate was increased to 10.25%. On December 28,
1998, after the development was completed, the Partnership
assigned, for diversification purposes, 60% of its interest
in the property to an affiliated Partnership and the Lease
Agreement was amended to require annual rental payments of
$55,401. The Partnership's share of the total acquisition
costs, including the cost of the land, was $554,269.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
In April, 1998, the Partnership entered into an Agreement to
purchase an Old Country Buffet restaurant to be constructed
in Northlake, Illinois. On May 18, 1998, the Partnership
purchased the land for $330,000. The Partnership charged
interest on the land at a rate of 10% until September 27,
1998. On September 28, 1998, the tenant began paying annual
rent of $130,000. On September 30, 1998, the Partnership
advanced $370,000 for the construction of the property. On
December 29, 1998, after the construction was completed, the
Partnership paid $639,000 of additional construction costs.
The total acquisition cost was $1,350,804. The property is
leased to OCB Realty Co. under a Lease Agreement with a
primary term of 20 years.
On August 28, 1998, the Partnership purchased a 38% interest
in a parcel of land in Centerville, Ohio for $703,376. 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 $49,236. Effective December 25, 1998,
the annual rent was increased to $73,854. 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. Initially,
the Partnership charged 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 $154,075. The
Partnership's share of the total acquisition costs,
including the cost of the land, were $1,502,252.
The minimum future rentals on the Leases for years
subsequent to December 31, 1999 are as follows:
2000 $ 1,888,559
2001 1,865,612
2002 1,877,199
2003 1,889,232
2004 1,885,319
Thereafter 13,027,673
----------
$22,433,594
==========
In 1999 and 1998, the Partnership recognized contingent
rents of $19,908 and $19,110, respectively.
(5) Security Deposit -
In November, 1998, the Partnership received a deposit from
the tenant of the Taco Fiesta restaurant as security for
future rent payments. The funds are invested in a short-
term money market account and will be refunded, without
interest, to the tenant, upon termination of the Lease,
provided there is no default in the Lease Agreement.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(6) 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:
1999 1998
Tenants Industry
ARAMARK Educational
Resources, Inc. Child Care $ 582,892 $ 574,781
Champps Americana Group Restaurant 288,833 0
Texas Taco Cabana L.P. Restaurant 224,677 219,658
Heartland Restaurant Corp. Restaurant 218,621 210,212
---------- ----------
Aggregate rent revenue of major tenants $1,315,023 $1,004,651
========== ==========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 69% 65%
========== ==========
(7) Partners' Capital -
Cash distributions of $15,809 and $14,039 were made to the
General Partners and $1,338,889 and $927,959 were made to
the Limited Partners for the years ended December 31, 1999
and 1998, respectively. The Limited Partners' distributions
represent $64.47 and $43.75 per Limited Partnership Unit
outstanding using 20,767 and 21,211 weighted average Units
in 1999 and 1998, respectively. The distributions represent
$45.12 and $30.40 per Unit of Net Income, and $19.35 and
$13.35 per Unit of return of contributed capital in 1999 and
1998, respectively.
Distributions of Net Cash Flow to the General Partners
during 1999 and 1998 were subordinated to the Limited
Partners as required in the Partnership Agreement. As a
result, 99% of distributions 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 XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(7) Partners' Capital - (Continued)
During 1999, twenty-one Limited Partners redeemed a total of
285.0 Partnership Units for $226,233 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In 1998, forty-two
Limited Partners redeemed a total of 576.8 Partnership Units
for $461,904. The redemptions increase the remaining
Limited Partners' ownership interest in the Partnership.
After the effect of redemptions and the return of capital
from the sale of property, the Adjusted Capital
Contribution, as defined in the Partnership Agreement, is
$1,043.20 per original $1,000 invested.
(8) 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:
1999 1998
Net Income for Financial
Reporting Purposes $1,176,559 $1,120,384
Depreciation for Tax Purposes
Under Depreciation for Financial
Reporting Purposes 42,559 15,567
Amortization of Start-Up and
Organization Costs 0 (1,239)
Income Accrued for Tax Purposes
Over Income for Financial
Reporting Purposes 12,366 0
Property Expenses for Tax Purposes
Under Expenses for Financial
Reporting Purposes 0 3,164
Real Estate Impairment Loss
Not Recognized for Tax Purposes 124,188 0
Gain on Sale of Real Estate for
Tax Purposes Under Gain for
Financial Reporting Purposes (99,858) 0
Loss on Sale of Real Estate for
Tax Purposes Over Loss for
Financial Reporting Purposes 0 (660,526)
---------- -----------
Taxable Income to Partners $1,255,814 $ 477,350
========== ===========
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(8) 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:
1999 1998
Partners' Capital for
Financial Reporting Purposes $14,176,761 $14,581,133
Adjusted Tax Basis of Investments
in Real Estate Over Net
Investments in Real Estate
for Financial Reporting Purposes 611,931 545,042
Capitalized Start-Up Costs
Under Section 195 397,387 397,387
Amortization of Start-Up and
Organization Costs (403,387) (403,387)
Income Accrued for Tax Purposes Over
Income for Financial
Reporting Purposes 17,366 5,000
Organization and Syndication Costs
Treated as Reduction of Capital
for Financial Reporting Purposes 3,342,442 3,342,442
---------- -----------
Partners' Capital for
Tax Reporting Purposes $18,142,500 $18,467,617
========== ===========
(9) 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:
1999 1998
Carrying Fair Carrying Fair
Amount Value Amount Value
Cash $ 676 $ 676 $ 534 $ 534
Money Market Funds 672,406 672,406 310,553 310,553
--------- --------- --------- --------
Total Cash and
Cash Equivalents $ 673,082 $ 673,082 $ 311,087 $ 311,087
========= ========= ========= =======
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 55, is Chief Executive Officer,
President and Director and has held these positions since the
formation of AFM in September, 1988, and has been elected to
continue in these positions until December, 2000. 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 fifteen other limited
partnerships.
Mark E. Larson, age 47, is Executive Vice President,
Treasurer and Chief Financial Officer and has been elected to
continue in these position until December, 2000. Mr. Larson has
been executive Vice President and Treasurer since the formation
of AFM in September, 1988 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,
2000. 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 29, 2000:
Name and Address Number of Percent
of Beneficial Owner Units Held of Class
AEI Fund Management XVIII, Inc. 0 0%
1300 Minnesota World Trade Center
30 East 7th Street, St. Paul, Minnesota 55101
Robert P. Johnson 0 0%
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
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 for the period from
inception through December 31, 1999.
Amount Incurred
Person or Entity From Inception
Receiving Form and Method (September 20, 1988) to
Compensation of Compensation December 31, 1999
AEI Securities, Inc. Selling Commissions equal to 7% $2,278,305
(formerly AEI of proceeds plus a 3% nonaccountable
Incorporated) expense allowance, most of which was
reallowed to Participating Dealers.
General Partners and Reimbursement at Cost for other $1,064,137
Affiliates Organization and Offering Costs.
General Partners and Reimbursement at Cost for all $ 535,046
Affiliates Acquisition Expenses
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. (Continued)
Amount Incurred
Person or Entity From Inception
Receiving Form and Method (September 20, 1988) to
Compensation of Compensation December 31, 1999
General Partners 1% of Net Cash Flow in any fiscal $ 158,065
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 $2,705,378
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 $ 12,793
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 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.
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, 1999, the cumulative reimbursements to the General
Partners and their affiliates did not exceed those 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 September 26, 1988 [File No.
33-24419]).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
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
September 26, 1988 [File No. 33-24419]).
10.1 Net Lease Agreement dated
September 28, 1989 between the Partnership
and Children's World Learning Centers, Inc.
relating to the property at 4120 E. Ranch
Circle Drive, Phoenix, Arizona (incorporated
by reference to Exhibit 10.2 of Post-
Effective Amendment No. 1 to the registrant's
Registration Statement on Form S-11 filed
with the Commission on April 14, 1990 [File
No. 33-24419]).
10.2 Net Lease Agreement dated June
26, 1990 between the Partnership and
Children's World Learning Centers, Inc.
relating to the property at 2100 North
Highway 7, Blue Springs, Missouri
(incorporated by reference to Exhibit 10.6 of
Form 10-K filed with the Commission on July
27, 1992).
10.3 Net Lease Agreement dated
September 13, 1990 between the Partnership
and Children's World Learning Centers, Inc.
relating to the property at 8555 Monrovia
Street, Lenexa, Kansas (incorporated by
reference to Exhibit 10.8 of Form 10-K filed
with the Commission on July 27, 1992).
10.4 Net Lease Agreement dated
December 29, 1990 between the Partnership and
Taco Cabana, Inc. relating to the property at
7339 San Pedro Avenue, San Antonio, Texas
(incorporated by reference to Exhibit 10.9 of
Form 10-K filed with the Commission on July
27, 1992).
10.5 Net Lease Agreement dated
January 22, 1991 between the Partnership and
Heartland Restaurant Corporation relating to
the property at 1301 N.W. 114th Street,
Clive, Iowa (incorporated by reference to
Exhibit 10.10 of Form 10-K filed with the
Commission on July 27, 1992).
10.6 Net Lease Agreement dated June
20, 1991 between the Partnership and
Children's World Learning Centers, Inc.
relating to the property at 1231 Sunbury
Road, Westerville, Ohio (incorporated by
reference to Exhibit 10.12 of Form 10-K filed
with the Commission on July 27, 1992).
10.7 Net Lease Agreement dated July
19, 1991 between the Partnership and Taco
Cabana, Inc. relating to the property at 6867
Highway 90 West, San Antonio, Texas
(incorporated by reference to Exhibit 10.13
of Form 10-K filed with the Commission on
July 27, 1992).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
10.8 Net Lease Agreement dated
October 31, 1991 between the Partnership and
T.S.S.O., Inc. relating to the property at
5701 Emerald Coast Parkway, Destin, Florida
(incorporated by reference to Exhibit 10.15
of Form 10-K filed with the Commission on
July 27, 1992).
10.9 Net Lease Agreement dated
December 10, 1991 between the Partnership and
Pasta Fair of Belleview, Inc. relating to the
property at 10401 Highway 441, Belleview,
Florida (incorporated by reference to Exhibit
10.16 of Form 10-K filed with the Commission
on July 27, 1992).
10.10 Net Lease Agreement dated
July 28, 1992 between the Partnership and
Children's World Learning Centers, Inc.
relating to the property at 4885 Cherry
Bottom Road, Columbus, Ohio (incorporated by
reference to Exhibit 10.17 of Form 10-K filed
with the Commission on March 29, 1993).
10.11 Net Lease Agreement dated
December 7, 1992 between the Partnership and
Red Line San Antonio One, Ltd. relating to
the property at 4606 Rittiman Road, San
Antonio, Texas (incorporated by reference to
Exhibit 10.20 of Form 10-K filed with the
Commission on March 29, 1993).
10.12 Net Lease Agreement dated
May 5, 1993 between the Partnership and GC
Slidell, Inc. relating to the property at 850
I-10 Service Road, Slidell, Louisiana
(incorporated by reference to Exhibit 10.22
of Form 10-K filed with the Commission on
March 29, 1994).
10.13 Co-Tenancy Agreement
dated June 17, 1994 between the Partnership
and Nicoletta Trust relating to the property
at 5701 Emerald Coast Parkway, Destin,
Florida (incorporated by reference to Exhibit
10.24 of Form 10-KSB filed with the
Commission on March 30, 1995).
10.14 Amendment of Lease dated
January 25, 1996 between the Partnership, AEI
Net Lease Income & Growth Fund XIX Limited
Partnership, Red Line San Antonio One, Ltd.
and Red Line Burgers, Inc. relating to the
properties at 529 Fair Avenue, and 4606
Rittiman Road, San Antonio, Texas
(incorporated by reference to Exhibit 10.26
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.15 Net Lease Agreement dated
April 10, 1996 between the Partnership,
Robert P. Johnson and Tractor Supply Company
relating to the property at Old Airport Road
and I-81, Bristol, Virginia (incorporated by
reference to Exhibit 10.2 of Form 8-K filed
with the Commission on April 17, 1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
10.16 Net Lease Agreement dated
August 29, 1996 between the Partnership, AEI
Income & Growth Fund XXI Limited Partnership
and Americana Dining Corporation relating to
the property at 161 E. Campus View Boulevard,
Columbus, Ohio (incorporated by reference to
Exhibit 10.3 of Form 8-K filed with the
Commission on September 12, 1996).
10.17 Property Co-Tenancy
Ownership Agreement dated August 5, 1996
between the Partnership and Carolyn W.
Davidson relating to the property at 6867
Highway 90 West, San Antonio, Texas
(incorporated by reference to Exhibit 10.2 of
Form 10-QSB filed with the Commission on
November 14, 1996).
10.18 Property Co-Tenancy
Ownership Agreement dated September 12, 1996
between the Partnership, Robert P. Johnson,
and Joyce R. Scott relating to the property
at Old Airport Road and I-81, Bristol,
Virginia (incorporated by reference to
Exhibit 10.4 of Form 10-QSB filed with the
Commission on November 14, 1996).
10.19 Property Co-Tenancy
Ownership Agreement dated October 15, 1996
between the Partnership, Robert P. Johnson,
and Arel D. and Louise B. Middleton relating
to the property at Old Airport Road and I-81,
Bristol, Virginia (incorporated by reference
to Exhibit 10.7 of Form 10-QSB filed with the
Commission on November 14, 1996).
10.20 Property Co-Tenancy
Ownership Agreement dated October 15, 1996
between the Partnership and Arel D. and
Louise B. Middleton relating to the property
at 6867 Highway 90 West, San Antonio, Texas
(incorporated by reference to Exhibit 10.8 of
Form 10-QSB filed with the Commission on
November 14, 1996).
10.21 Property Co-Tenancy
Ownership Agreement dated December 16, 1996
between the Partnership and the Hesson Family
Living Trust relating to the property at 6867
Highway 90 West, San Antonio, Texas
(incorporated by reference to Exhibit 10.34
of Form 10-KSB filed with the Commission on
March 17, 1997).
10.22 Property Co-Tenancy
Agreement dated December 30, 1996 between the
Partnership and John Pasini and Elvia Pasini
relating to the property at 5701 Emerald
Coast Parkway, Destin, Florida (incorporated
by reference to Exhibit 10.38 of Form 10-KSB
filed with the Commission on March 17, 1997).
10.23 Property Co-Tenancy
Agreement dated December 30, 1996 between the
Partnership and Kent T. Wood and Kimberly
Pasini Wood relating to the property at 5701
Emerald Coast Parkway, Destin, Florida
(incorporated by reference to Exhibit 10.39
of Form 10-KSB filed with the Commission on
March 17, 1997).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
10.24 Property Co-Tenancy
Agreement dated January 2, 1997 between the
Partnership and William E. Mason and Hazel
Mason relating to the property at Old Airport
Road and I-81, Bristol, Virginia
(incorporated by reference to Exhibit 10.40
of Form 10-KSB filed with the Commission on
March 17, 1997).
10.25 Property Co-Tenancy
Ownership Agreement dated February 28, 1997
between the Partnership and Anton Kuster, Jr.
relating to the property at 6867 Highway 90
West, San Antonio, Texas (incorporated by
reference to Exhibit 10.42 of Form 10-KSB
filed with the Commission on March 17, 1997).
10.26 Property Co-Tenancy Ownership
Agreement dated March 10, 1997 between the
Partnership and the Thomas W. Adamson Family
Limited Partnership relating to the property
at Old Airport Road and I-81, Bristol,
Virginia (incorporated by reference to
Exhibit 10.2 of Form 10-QSB filed with the
Commission on May 13, 1997).
10.27 Property Co-Tenancy Ownership
Agreement dated March 10, 1997 between the
Partnership and the Thomas W. Adamson Family
Limited Partnership relating to the property
at 5701 Emerald Coast Parkway, Destin,
Florida (incorporated by reference to Exhibit
10.4 of Form 10-QSB filed with the Commission
on May 13, 1997).
10.28 Property Co-Tenancy Ownership
Agreement dated March 10, 1997 between the
Partnership and the Thomas W. Adamson Family
Limited Partnership relating to the property
at 161 E. Campus View Boulevard, Columbus,
Ohio (incorporated by reference to Exhibit
10.6 of Form 10-QSB filed with the Commission
on May 13, 1997).
10.29 Property Co-Tenancy Ownership
Agreement dated March 21, 1997 between the
Partnership and the Thomas W. Adamson Family
Limited Partnership relating to the property
at Old Airport Road and I-81, Bristol,
Virginia (incorporated by reference to
Exhibit 10.8 of Form 10-QSB filed with the
Commission on May 13, 1997).
10.30 Property Co-Tenancy Ownership
Agreement dated March 21, 1997 between the
Partnership and the Thomas W. Adamson Family
Limited Partnership relating to the property
at 5701 Emerald Coast Parkway, Destin,
Florida (incorporated by reference to Exhibit
10.11 of Form 10-QSB filed with the
Commission on May 13, 1997).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
10.31 Property Co-Tenancy Ownership
Agreement dated March 21, 1997 between the
Partnership and the Thomas W. Adamson Family
Limited Partnership relating to the property
at 161 E. Campus View Boulevard, Columbus,
Ohio (incorporated by reference to Exhibit
10.14 of Form 10-QSB filed with the
Commission on May 13, 1997).
10.32 Property Co-Tenancy Ownership
Agreement dated July 28, 1997 between the
Partnership and Calderwood Investments
Limited Partnership relating to the property
at 161 E. Campus View Boulevard, Columbus,
Ohio (incorporated by reference to Exhibit
10.5 of Form 10-QSB filed with the Commission
on August 5, 1997).
10.33 Net Lease Agreement dated July 30,
1977 between the Partnership and Fuddruckers,
Inc. relating to the property at 12020
Pennsylvania Street, Thornton, Colorado
(incorporated by reference to Exhibit 10.6 of
Form 10-QSB filed with the Commission on
August 5, 1997).
10.34 Property Co-Tenancy Ownership
Agreement dated September 9, 1997 between the
Partnership and Truong Hoang, Trustee and
Thanh Do, Trustee of the Hoang-Do Family
Living Trust relating to the property at 5701
Emerald Coast Parkway, Destin, Florida
(incorporated by reference to Exhibit 10.3 of
Form 10-QSB filed with the Commission on
November 4, 1997).
10.35 Property Co-Tenancy Ownership
Agreement dated September 22, 1997 between
the Partnership and Stanley E. LaCorte
relating to the property at 5701 Emerald
Coast Parkway, Destin, Florida (incorporated
by reference to Exhibit 10.5 of Form 10-QSB
filed with the Commission on November 4,
1997).
10.36 Property Co-Tenancy Ownership
Agreement dated September 25, 1997 between
the Partnership and Nick DeVito, Inc.
relating to the property at 6867 Highway 90
West, San Antonio, Texas (incorporated by
reference to Exhibit 10.6 of Form 10-QSB
filed with the Commission on November 4,
1997).
10.37 Property Co-Tenancy Ownership
Agreement dated October 9, 1997 between the
Partnership and Reginald O. Hill, Trustee of
the Reginald O. Hill Trust dated 5/25/95 and
Donna Jean Hill, Trustee of the Donna Jean
Hill Trust dated 5/25/95 relating to the
property at 6867 Highway 90 West, San
Antonio, Texas (incorporated by reference to
Exhibit 10.9 of Form 10-QSB filed with the
Commission on November 4, 1997).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
10.38 Property Co-Tenancy Ownership
Agreement dated October 24, 1997 between the
Partnership and Anthony Drago, Trustee, U/A
DTD 8/19/80, FBO Anthony and Sydelle Drago
Family Trust relating to the property at 6867
Highway 90 West, San Antonio, Texas
(incorporated by reference to Exhibit 10.10
of Form 10-QSB filed with the Commission on
November 4, 1997).
10.39 Property Co-Tenancy
Ownership Agreement dated November 5, 1997
between the Partnership and Ernest E. Ainslie
and Marion B. Ainslie, Trustees of the
Ainslie Living Trust relating to the property
at Old Airport Road and I-81, Bristol,
Virginia (incorporated by reference to
Exhibit 10.71 of Form 10-KSB filed with the
Commission on March 23, 1998).
10.40 Property Co-Tenancy
Ownership Agreement dated November 21, 1997
between the Partnership and the Helen W.
Rehwaldt, Trustee, Deerwood Revocable Trust
relating to the property at Old Airport Road
and I-81, Bristol, Virginia (incorporated by
reference to Exhibit 10.73 of Form 10-KSB
filed with the Commission on March 23, 1998).
10.41 Net Lease Agreement dated
December 23, 1997 between the Partnership,
AEI Real Estate Fund XV Limited Partnership,
AEI Net Lease Income & Growth Fund XIX
Limited Partnership, AEI Real Estate Fund
XVII Limited Partnership and Champps
Entertainment, Inc. relating to the property
at 301 West Big Beaver Road, Troy, Michigan
(incorporated by reference to Exhibit 10.75
of Form 10-KSB filed with the Commission on
March 23, 1998).
10.42 Development Financing Agreement
dated April 13, 1998 between the Partnership,
AEI Net Lease Income & Growth Fund XIX
Limited Partnership, Robert P. Johnson, and
Tumbleweed, LLC relating to the property at
1150 North Bridge Street, Chillicothe, Ohio
(incorporated by reference to Exhibit 10.1 of
Form 10-QSB filed with the Commission on May
8, 1998).
10.43 Net Lease Agreement dated April 13,
1998 between the Partnership, AEI Net Lease
Income & Growth Fund XIX Limited Partnership,
Robert P. Johnson, and Tumbleweed, LLC
relating to the property at 1150 North Bridge
Street, Chillicothe, Ohio (incorporated by
reference to Exhibit 10.2 of Form 10-QSB
filed with the Commission on May 8, 1998).
10.44 Purchase Agreement dated April 17,
1998 between the Partnership and the Alpha
Group, LLC relating to the property at North
Avenue & Wolf Road, Northlake, Illinois
(incorporated by reference to Exhibit 10.3 of
Form 10-QSB filed with the Commission on May
8, 1998).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
10.45 Development Financing and Leasing
Commitment dated April 24, 1998 between the
Partnership and Tumbleweed, LLC relating to
the property at 6959 East Broad Street,
Columbus, Ohio (incorporated by reference to
Exhibit 10.4 of Form 10-QSB filed with the
Commission on May 8, 1998).
10.46 Development Financing Agreement
dated May 1, 1998 between the Partnership and
Tumbleweed, LLC relating to the property at
6959 East Broad Street, Columbus, Ohio
(incorporated by reference to Exhibit 10.5 of
Form 10-QSB filed with the Commission on May
8, 1998).
10.47 Net Lease Agreement dated May 1,
1998 between the Partnership and Tumbleweed,
LLC relating to the property at 6959 East
Broad Street, Columbus, Ohio (incorporated by
reference to Exhibit 10.6 of Form 10-QSB
filed with the Commission on May 8, 1998).
10.48 Purchase Agreement dated May 12,
1998 between the Partnership, AEI Real Estate
Fund 86-A Limited Partnership and Unlimited
Development, P.L.L. relating to the property
at 950 W. Central Avenue, Springboro, Ohio
(incorporated by reference to Exhibit 10.1 of
Form 10-QSB filed with the Commission on July
31, 1998).
10.49 Assignment of Lease dated May 18,
1998 between the Partnership and Alpha Group,
LLC relating to the property at North Avenue
and Wolf Road, Northlake, Illinois
(incorporated by reference to Exhibit 10.2 of
Form 10-QSB filed with the Commission on July
31, 1998).
10.50 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 XVII 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 10.1 of Form 10-QSB filed with the
Commission on November 9, 1998).
10.51 Assignment of the
Development Financing Agreement and Net Lease
Agreement dated August 27, 1998 between the
Partnership, AEI Real Estate Fund XVII
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 10.2 of Form 10-QSB filed with the
Commission on November 9, 1998).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.(Continued)
A. Exhibits -
Description
10.52 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 10.3 of Form 10-QSB
filed with the Commission on November 9,
1998).
10.53 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 10.4 of Form 10-QSB filed with the
Commission on November 9, 1998).
10.54 Net Lease Agreement dated
November 18, 1998 between the Partnership and
Sergio Gonzalez relating to the property at
54 South Expressway, Brownsville, Texas
(incorporated by reference to Exhibit 10.69
of Form 10-KSB filed with the Commission on
March 15, 1999).
10.55 First Amendment to Net
Lease Agreement dated November 20, 1998
between the Partnership, AEI Net Lease Income
& Growth Fund XIX Limited Partnership, Robert
P. Johnson and Tumbleweed, LLC relating to
the property at 1150 North Bridge Street,
Chillicothe, Ohio (incorporated by reference
to Exhibit 10.70 of Form 10-KSB filed with
the Commission on March 15, 1999).
10.56 Purchase Agreement for
Fee Simple Undivided Interest and Assignment
of Net Lease Agreement dated December 28,
1998 between the Partnership and AEI Net
Lease Income & Growth Fund XIX Limited
Partnership relating to the property at 6959
East Broad Street, Columbus, Ohio
(incorporated by reference to Exhibit 10.71
of Form 10-KSB filed with the Commission on
March 15, 1999).
10.57 First Amendment to Net
Lease Agreement dated December 28, 1998
between the Partnership, AEI Net Lease Income
& Growth Fund XIX Limited Partnership and
Tumbleweed, LLC relating to the property at
6959 East Broad Street, Columbus, Ohio
(incorporated by reference to Exhibit 10.72
of Form 10-KSB filed with the Commission on
March 15, 1999).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A. (Continued)
A. Exhibits -
Description
10.58 First Amendment to Net
Lease Agreement dated January 27, 1999
between the Partnership, AEI Real Estate Fund
XVII 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 (incorporated by reference
to Exhibit 10.73 of Form 10-KSB filed with
the Commission on March 15, 1999).
10.59 Purchase Agreement dated
February 23, 1999 between the Partnership and
the Linda L. Landes Family Trust relating to
the property at 330 South Wilmot Road,
Tucson, Arizona (incorporated by reference to
Exhibit 10.74 of Form 10-KSB filed with the
Commission on March 15, 1999).
10.60 Purchase Agreement dated
February 24, 1999 between the Partnership and
the Sherrill L. Hossom Family Trust relating
to the property at 330 South Wilmot Road,
Tucson, Arizona (incorporated by reference to
Exhibit 10.75 of Form 10-KSB filed with the
Commission on March 15, 1999).
10.61 Purchase Agreement dated
February 27, 1999 between the Partnership,
AEI Net Lease Income & Growth Fund XIX
Limited Partnership and Terry Harsha, Sr. and
Janet Sue Harsha relating to the property at
330 South Wilmot Road, Tucson, Arizona
(incorporated by reference to Exhibit 10.76
of Form 10-KSB filed with the Commission on
March 15, 1999).
27 Financial Data Schedule for
year ended December 31, 1999.
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 XVIII
Limited Partnership
By: AEI Fund Management XVIII, Inc.
Its Managing General Partner
March 10, 2000 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 10, 2000
Robert P. Johnson and Sole Director of Managing General
Partner
/s/ Mark E. Larson Executive Vice President, Treasurer March 10, 2000
Mark E. Larson and Chief Financial Officer
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000840459
<NAME> AEI REAL ESTATE FUND XVIII LTD PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 673,082
<SECURITIES> 0
<RECEIVABLES> 19,852
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 692,934
<PP&E> 16,319,848
<DEPRECIATION> (2,458,655)
<TOTAL-ASSETS> 14,554,127
<CURRENT-LIABILITIES> 377,366
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,176,761
<TOTAL-LIABILITY-AND-EQUITY> 14,554,127
<SALES> 0
<TOTAL-REVENUES> 1,929,636
<CGS> 0
<TOTAL-COSTS> 899,665
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,176,559
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,176,559
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,176,559
<EPS-BASIC> 56.09
<EPS-DILUTED> 56.09
</TABLE>
