SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: March 31, 2000
Commission file number: 0-18289
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified 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)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of March 31, 2000 and December 31, 1999
Statements for the Periods ended March 31, 2000 and 1999:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II.Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
BALANCE SHEET
MARCH 31, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
CURRENT ASSETS:
Cash and Cash Equivalents $ 850,265 $ 673,082
Receivables 22,426 19,852
----------- -----------
Total Current Assets 872,691 692,934
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 5,384,757 5,384,757
Buildings and Equipment 10,934,684 10,934,684
Property Acquisition Costs 407 407
Accumulated Depreciation (2,554,505) (2,458,655)
----------- -----------
Net Investments in Real Estate 13,765,343 13,861,193
----------- -----------
Total Assets $14,638,034 $14,554,127
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 38,264 $ 5,516
Distributions Payable 368,295 341,984
Security Deposit 12,500 12,500
Unearned Rent 102,830 17,366
----------- -----------
Total Current Liabilities 521,889 377,366
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (54,303) (53,696)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 22,783 Issued;
20,625 outstanding 14,170,448 14,230,457
----------- -----------
Total Partners' Capital 14,116,145 14,176,761
----------- -----------
Total Liabilities and Partners' Capital $14,638,034 $14,554,127
=========== ===========
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 PERIODS ENDED MARCH 31
(Unaudited)
2000 1999
INCOME:
Rent $ 483,095 $ 470,972
Investment Income 8,917 8,478
----------- -----------
Total Income 492,012 479,450
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 64,507 63,761
Partnership Administration and Property
Management - Unrelated Parties 11,927 18,043
Depreciation 95,850 99,581
----------- -----------
Total Expenses 172,284 181,385
----------- -----------
OPERATING INCOME 319,728 298,065
GAIN ON SALE OF REAL ESTATE 0 146,588
----------- -----------
NET INCOME $ 319,728 $ 444,653
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 3,197 $ 4,447
Limited Partners 316,531 440,206
----------- -----------
$ 319,728 $ 444,653
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(20,625 and 20,910 weighted average Units
outstanding in 2000 and 1999, respectively) $ 15.35 $ 21.05
=========== ===========
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 PERIODS ENDED MARCH 31
(Unaudited)
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 319,728 $ 444,653
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 95,850 99,581
Gain on Sale of Real Estate 0 (146,588)
(Increase) Decrease in Receivables (2,574) 33,988
Increase in Payable to
AEI Fund Management, Inc. 32,748 20,089
Increase in Unearned Rent 85,464 59,976
----------- -----------
Total Adjustments 211,488 67,046
----------- -----------
Net Cash Provided By
Operating Activities 531,216 511,699
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate 0 (337,666)
Proceeds from Sale of Real Estate 0 423,600
----------- -----------
Net Cash Provided By
Investing Activities 0 85,934
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 26,311 146,717
Distributions to Partners (380,344) (353,264)
----------- -----------
Net Cash Used For
Financing Activities (354,033) (206,547)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 177,183 391,086
CASH AND CASH EQUIVALENTS, beginning of period 673,082 311,087
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 850,265 $ 702,173
=========== ===========
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 PERIODS ENDED MARCH 31
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1998 $(49,653) $14,630,786 $14,581,133 20,910.48
Distributions (3,533) (349,731) (353,264)
Net Income 4,447 440,206 444,653
--------- ----------- ----------- ----------
BALANCE, March 31, 1999 $(48,739) $14,721,261 $14,672,522 20,910.48
========= =========== =========== ==========
BALANCE, December 31, 1999 $(53,696) $14,230,457 $14,176,761 20,625.48
Distributions (3,804) (376,540) (380,344)
Net Income 3,197 316,531 319,728
--------- ----------- ----------- ----------
BALANCE, March 31, 2000 $(54,303) $14,170,448 $14,116,145 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
MARCH 31, 2000
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Real Estate Fund 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.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to 6%
of their Adjusted Capital Contribution per annum, cumulative
but not compounded, to the extent not previously distributed
from Net Cash Flow; (ii) next, 99% to the Limited Partners
and 1% to the General Partners until the Limited Partners
receive an amount equal to 14% of their Adjusted Capital
Contribution per annum, cumulative but not compounded, to
the extent not previously distributed; (iii) next, to the
General Partners until cumulative distributions to the
General Partners under Items (ii) and (iii) equal 15% of
cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Partners for
such year. Any additional profits will be allocated 90% to
the Limited Partners and 10% to the General Partners. In
the event no Net Cash Flow is distributed to the Limited
Partners, 90% of each item of income, gain or credit for
each respective year shall be allocated to the Limited
Partners, and 10% of each such item shall be allocated to
the General Partners. Net losses from operations will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Partnership Agreement as follows: (i)
first, to those Partners with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Partners
and 1% to the General Partners until the aggregate balance
in the Limited Partners' capital accounts equals the sum of
the Limited Partners' Adjusted Capital Contributions plus an
amount equal to 14% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, to the General Partners
until cumulative allocations to the General Partners equal
15% of cumulative allocations. Any remaining balance will
be allocated 85% to the Limited Partners and 15% to the
General Partners. Losses will be allocated 98% to the
Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
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 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 March 31, 2000, 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.
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.
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.
In April, 2000, the Partnership entered into an Agreement to
sell the Pasta Fair restaurant in Belleview, Florida to an
affiliate of the lessee. The gross proceeds will be
approximately $740,000 which will result in a net gain of
approximately $36,000.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(4) Payable to AEI Fund Management -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the three months ended March 31, 2000 and 1999, the
Partnership recognized rental income of $483,095 and $470,972,
respectively. During the same periods, the Partnership earned
investment income of $8,917 and $8,478, respectively. In 2000,
rental income increased as a result of additional rent received
from one property acquisition in 1999 and rent increases on
thirteen properties. These increases in rental income were
partially offset by a decrease in rental income due to the
property sales discussed below.
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 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 March 31, 2000, 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 three months ended March 31, 2000 and 1999, the
Partnership paid Partnership administration expenses to
affiliated parties of $64,507 and $63,761, 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 $11,927 and $18,043, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
As of March 31, 2000, the Partnership's annualized cash
distribution rate was 7.0%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants due to inflation and real sales growth, will result
in an increase in rental income over the term of the Leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
Liquidity and Capital Resources
During the three months ended March 31, 2000, the
Partnership's cash balances increased $177,183 as the Partnership
distributed less cash to the Partners than it generated from
operating activities. Net cash provided by operating activities
increased from $511,699 in 1999 to $531,216 in 2000 mainly as a
result of an increase in income in 2000.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the three months ended
March 31, 1999, the Partnership generated cash flow from the sale
of real estate of $423,600. During the same period, the
Partnership expended $337,666 to invest in real properties
(inclusive of acquisition expenses) as the Partnership reinvested
cash generated from property sales.
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.
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.
In April, 2000, the Partnership entered into an Agreement
to sell the Pasta Fair restaurant in Belleview, Florida to an
affiliate of the lessee. The gross proceeds will be
approximately $740,000 which will result in a net gain of
approximately $36,000.
ITEM 2.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. Redemption payments
are paid to redeeming Partners on a quarterly basis. Effective
January 1, 2000, the Partnership's distribution rate was
increased from 6.5% to 7.0%. As a result, distributions were
higher during the first three months of 2000, when compared to
the same period in 1999.
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
On April 1, 2000, sixteen Limited Partners redeemed a
total of 249.25 Partnership Units for $217,397 in accordance with
the Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
141 Limited Partners redeemed 2,157.32 Partnership Units for
$1,716,908 in accordance with the Partnership Agreement. The
redemptions increase the remaining Limited Partners' ownership
interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must be evaluated in
the context of a number of factors that may affect the
Partnership's financial condition and results of operations,
including the following:
<BULLET> Market and economic conditions which affect
the value of the properties the Partnership owns and
the cash from rental income such properties generate;
<BULLET> the federal income tax consequences of rental
income, deductions, gain on sales and other items and
the affects of these consequences for investors;
<BULLET> resolution by the General Partners of
conflicts with which they may be confronted;
<BULLET> the success of the General Partners of
locating properties with favorable risk return
characteristics;
<BULLET> the effect of tenant defaults; and
<BULLET> the condition of the industries in which the
tenants of properties owned by the Partnership operate.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II - OTHER INFORMATION
(Continued)
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated April 27,
2000 between the Partnership and Paul
D'Alto, Trustee relating to the property
at 10401 Highway 441, Belleview, Florida.
27 Financial Data Schedule for period
ended March 31, 2000.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: May 5, 2000 AEI Real Estate Fund XVIII
Limited Partnership
By: AEI Fund Management XVIII, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
PURCHASE AGREEMENT
10401 SE Highway 441
Belleview, FL
This AGREEMENT, entered into effective as of the 27th of April,
2000.
l. PARTIES. Seller is AEI Real Estate Fund XVIII Limited
Partnership ("Seller"). Seller holds an undivided 100% interest
in the fee title to that certain real property legally described
in the attached Exhibit "A" (the "Property"). Buyer is Paul
D'Alto, Trustee, and/or its assigns ("Buyer"). Seller wishes to
sell and Buyer wishes to buy the Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
is legally described on Exhibit "A" attached hereto, subject to
all easements, covenants, conditions, restrictions and agreements
of record that do not affect marketability of title ("Permitted
Exceptions"), subject to the provisions of Buyer review of title
as set forth below in paragraph 8.
3. PURCHASE PRICE. The purchase price for this Property is
$740,000 cash based on the following terms:
4. TERMS. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $10,000
in cash or good funds (the "First Payment") to First
American Title Insurance Company, Attn: Belinda Stephenson,
216 NE First Avenue, Ocala, FL 34470 ("Escrowee"). The
First Payment will be credited against the purchase price
when and if escrow closes and the sale is completed, or
otherwise disbursed pursuant to the terms of this Agreement.
After the expiration of the Review Period as defined in
paragraph 6 below, the First Payment held for the account of
Seller shall become non-refundable.
(b) Buyer will pay the balance of purchase price for the
Property, $730,000 in cash or good funds (the "Second
Payment"), at closing to the Escrowee who shall close the
transaction according to the terms hereof.
5. CLOSING DATE. Escrow shall close on or before the thirtieth
day after the Inspection and Feasibility Study Period is
completed.
6. DUE DILIGENCE. Buyer will have until the expiration of the
ninetieth day after delivery of the signed "Agreement" (the
"Inspection and Feasibility Study Period"), to conduct all of its
inspections and due diligence and satisfy itself regarding title
to the Property, and to inspect the Property. Buyer agrees to
indemnify and hold harmless for any loss or damage to the
Property or persons caused by Buyer or its agents arising out of
such physical inspections of the Property. Buyer expressly
acknowledges that the sale of the Property as provided for herein
is made on an "AS IS" basis, and such provision shall survive
closing.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice by certified mail,
return receipt requested, or by personal delivery to Seller and
escrow holder before the expiration of the Inspection and
Feasibility Study Period or Inspection Period as defined in
Section 16. Such notice shall be deemed effective only upon
receipt by Seller. If this Agreement is not canceled as set forth
herein, the First Payment shall be non-refundable unless Seller
shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section or Section 16, except for any title insurance and/or
escrow cancellation fees of the escrowee which will be paid by
the Buyer, and any liabilities under sections 15(a)(iii) and
16(b) of this Agreement (which will survive), Buyer (after
execution of such documents reasonably requested by Seller to
evidence the termination hereof) shall be returned its First
Payment, and Buyer will have absolutely no rights, claims or
interest of any type in connection with the Property or this
transaction, regardless of any alleged conduct by Seller or
anyone else.
Unless Seller shall be in default of any obligation
hereunder, or this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to have canceled this Agreement and
relinquish all rights in and to the Property. If this Agreement
is not canceled and the Second Payment is made when required, all
of Buyer's conditions and contingencies will be deemed satisfied.
7. ESCROW. Escrow shall be opened by Buyer and the First Payment
shall be deposited by Buyer with Escrowee. A copy of this
Agreement will be delivered to the escrow holder and will serve
as escrow instructions together with the escrow holder's standard
instructions and any additional instructions required by the
escrow holder to clarify its rights and duties. The parties
agree to sign these additional instructions of the Escrowee, if
any. If there is any conflict between these other instructions
and this Agreement, this Agreement will control. Escrow will be
opened upon acceptance of this Agreement by Seller.
8. TITLE. Closing will be conditioned on the commitment of a
nationally recognized title company selected by Buyer to issue an
Owner's policy of title insurance, dated as of the close of
escrow, in an amount equal to the purchase price, insuring that
Buyer will own marketable and insurable fee simple title to the
Property subject only to: the Permitted Exceptions as defined in
paragraph 2 above; current real property taxes and assessments;
and survey exceptions.
Buyer shall be allowed until the expiration of the
"Inspection and Feasibility Study Period" for examination and the
making of any objections to marketability of title thereto, or
that an exception to title adversely affects the use of the
Property, said objections to be made in writing or deemed waived.
If any objections are so made, the Seller shall be allowed sixty
(60) days to make such title marketable or cure Buyer's
objections, or in the alternative to obtain a commitment for
insurable title insuring over Buyer's objections. If Seller
shall decide to make no efforts to make title marketable, or is
unable to make title marketable or obtain insurable title, (after
execution by Buyer of such documents reasonably requested by
Seller to evidence the termination hereof) Buyer's First Payment
shall be returned and this agreement shall be null and void and
of no further force and effect.
Pending correction of title, the payments hereunder required
shall be postponed, but upon correction of title and within ten
(10) days after written notice of correction to the Buyer, the
parties shall perform this agreement according to its terms.
If Buyer shall make no written objection to Seller within
the Review Period setting forth Buyer's objections to the status
of title, Buyer shall have been deemed to have waived any such
objections.
9. CLOSING COSTS. Seller will pay the deed stamp taxes, if any,
and one-half of escrow fees attributable to the closing services
for this transaction. Seller shall pay for the cost of issuing
the title commitment. Seller will pay the cost of the title
insurance premium for an Owner's policy (if desired by Buyer).
Buyer will pay all recording fees, one-half of the escrow fees,
the costs of an update to the Survey in Seller's possession (if
an update is required by Buyer). Each party will pay its own
attorneys' fees and costs to document and close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
Seller represents that to the best of its knowledge, all real
estate taxes and assessments due and payable in all years prior
to the year of Closing have been paid in full. All real estate
taxes and special assessments due and payable in the years
following the year in which closing occurs shall otherwise be the
responsibility of Buyer. The parties acknowledge and agree that
the tenant of the property is responsible for payment of taxes
and has been submitting payments monthly to Seller to be held in
a tax escrow account. Funds in the tax escrow account will be
turned over to the Buyer at closing and Buyer will then be
responsible for all tax payments past, current and future.
11. SELLER'S REPRESENTATION AND AGREEMENTS.
Seller represents and warrants as of this date that:
(i) The Property is subject to a Net Lease Agreement dated
December 10, 1991.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property that have not been disclosed to
Buyer.
(iii) It is not aware of any contracts affecting this
Property and potentially or actually binding on Buyer after
the closing date.
(iv) Seller has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
12. DISCLOSURES.
(a) Seller has been an absentee landlord. Consequently,
Seller has little, if any, knowledge of the physical
characteristics of the Property.
Accordingly, except as otherwise specifically stated in the
Agreement, Seller hereby specifically disclaims any
warranty, guaranty, or representation, oral or written,
past, present, or future of, as to, or concerning (i) the
nature and condition of the Property, including, without
limitation, the water, soil, and geology, and the
suitability thereof and of the Property for any and all
activities and uses which Buyer may elect to conduct
thereon; (ii) except for the warranty of title contained in
the Deed to be delivered by Seller at the closing, the
nature and extent of any right of way, lease, possession,
lien, encumbrance, license, reservation, condition, or
otherwise, and (iii) the compliance of the Property or its
operation with any laws, ordinances, or regulations of any
government or other body.
(b) This Agreement is subject to an inspection contingency
as set forth in Section 16. Buyer acknowledges and agrees
that Buyer is not relying upon any representation or
warranties made by Seller or Seller's Agent.
(c) Buyer acknowledges that, having been given the
opportunity to inspect the Property, Buyer is relying solely
on its own investigation of the Property and not on any
information provided by Seller or to be provided except as
set forth herein. Buyer expressly acknowledges that, in
consideration of the agreements of the Seller herein, except
as otherwise specified herein, Seller makes no Warranty or
representation, express or implied, or arising by operation
of law, including, but not limited to, any warranty or
condition, habitability, tenantability, suitability for
commercial purposes, merchantability, profitability, or
fitness for a particular purpose, in respect of the
Property.
(d) BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY IN
ITS THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER HAS
NO OBLIGATION TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS
THEREON, OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ALSO
AGREES THAT SELLER WILL HAVE NO LIABILITY OF ANY TYPE,
DIRECT OR INDIRECT, TO BUYER OR BUYER'S SUCCESSORS, ASSIGNS,
LENDERS OR AFFILIATES IN CONNECTION WITH ANY HAZARDOUS,
TOXIC, DANGEROUS, FLAMMABLE, EXPLOSIVE OR CHEMICAL
SUBSTANCES OF ANY TYPE (WHETHER OR NOT DEFINED AS SUCH UNDER
ANY APPLICABLE LAWS) ON OR IN CONNECTION WITH THE PROPERTY
EITHER BEFORE OR AFTER THE CLOSING DATE.
The provisions (a) through (d) shall survive closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into escrow
an executed limited warranty deed subject to Permitted
Exceptions conveying insurable title of the Property to
Buyer. At Closing, Seller shall deliver to Buyer a standard
Seller's Affidavit regarding liens and judgments, to be
limited to the best of Seller's knowledge and belief.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign and
deliver to the escrow holder any other documents reasonably
required by the escrow holder to close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the official
records of the county where the Property is located; cause the
title company to commit to issue the title policy;
immediately deliver to Seller the portion of the purchase price
deposited into escrow by cashier's check or wire transfer (less
debits and prorations, if any); deliver to Seller and Buyer a
signed counterpart of the escrow holder's certified closing
statement and take all other actions necessary to close escrow.
14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies (First, and if made, the
final Payments) heretofore paid by the Buyer. Seller shall
retain all remedies available to Seller at law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, performed
all of its other obligations and satisfied all conditions under
this Agreement, and unconditionally notifies Seller that it
stands ready to tender full performance, purchase the Property
and close escrow as per this Agreement. Provided, however, that
in no event shall Seller be liable for any consequential,
punitive or speculative damages arising out of any default by
Seller hereunder.
15. BUYER'S REPRESENTATIONS AND WARRANTIES.
a. Buyer represents and warrants to Seller as follows:
(i) Buyer has all requisite power and authority to consummate
the transaction contemplated by this Agreement and has by
proper proceedings duly authorized the execution and delivery of
this Agreement and the consummation of the transaction
contemplated hereby.
(ii) To Buyer's knowledge, neither the execution and delivery of
this Agreement nor the consummation of the transaction
contemplated hereby will violate or be in conflict with (a) any
applicable provisions of law, (b) any order of any court or other
agency of government having jurisdiction hereof, or (c) any
agreement or instrument to which Buyer is a party or by which
Buyer is bound.
(iii)Buyer agrees to indemnify and hold Seller harmless from
any and all claim of any persons or entities claiming a brokerage
or other fee arising out of representation of Buyer.
16. PROPERTY INSPECTION AND ENVIRONMENTAL.
(a) Seller shall provide Buyer access to the Property from
time to time for the purpose of conducting inspections
thereof including mechanical, structural, electrical and
other physical inspections. Buyer has until ninety (90) days
after the signing of the agreement by Seller to complete
such physical inspection (the "Inspection and Feasibility
Study").
(b) Buyer shall indemnify, defend, and hold harmless Seller
from and against any and all losses, claims, causes of
action, liabilities, and costs to the extent caused by the
actions of Buyer, its agents, employees, contractors, or
invitees, during any such entry upon the Property. The
foregoing duty of indemnification shall include the duty to
pay all reasonable attorney's fees incurred by the Seller in
responding to or defending any such claims or proceedings.
(c) Buyer shall pay for any Phase I Environmental studies it
wants to be performed on the Property. If Buyer desires a
Phase I Environmental, Buyer shall obtain and review the
same within ninety (90) days from the date this agreement is
signed by Seller. If the Phase I Environmental report does
not meet hazardous material standards as required by the
ruling state and Federal agencies, the Buyer may terminate
this Agreement within said ninety (90) day period and
receive a full refund of the Earnest Money. However, if
Buyer terminates, Buyer prior to termination will provide
Seller with copies of all reports and test results Buyer had
performed on the Property.
17. DAMAGES, DESTRUCTION AND EMINENT DOMAIN.
(a) If, prior to closing, the Property or any part thereof
be destroyed or further damaged by fire, the elements, or
any cause, due to events occurring subsequent to the date of
this Agreement to the extent that the cost of repair exceeds
$20,000, this Agreement shall become null and void, at
Buyer's option exercised, if at all, by written notice to
Seller within ten (10) days after Buyer has received written
notice from Seller of said destruction or damage. Seller,
however, shall have the right to adjust or settle any
insured loss until (i) all contingencies set forth in
Paragraph 6 hereof have been satisfied, or waived; and (ii)
any period provided for above in this Subparagraph 17a for
Buyer to elect to terminate this Agreement has expired or
Buyer has, by written notice to Seller, waived Buyer's right
to terminate this Agreement. If Buyer elects to proceed and
to consummate the purchase despite said damage or
destruction, there shall be no reduction in or abatement of
the purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to all insurance
proceeds resulting from said damage or destruction to the
extent that the same are payable with respect to damage to
the Property.
If the cost of repair is less than $20,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds in relation to the
Property.
(b) If, prior to closing, the Property, or any part thereof,
is taken (other than as disclosed in writing to Buyer prior
to the date of this Agreement) by eminent domain, this
Agreement shall become null and void, at Buyer's option. If
Buyer elects to proceed and to consummate the purchase
despite said taking, there shall be no reduction in, or
abatement of, the purchase price, and Seller shall assign to
Buyer all the Seller's right, title, and interest in and to
any award made, or to be made, in the condemnation
proceeding in relation to the Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 17(a) or 17(b), the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
18. SELLER'S AND BUYER'S BROKERS. The Buyer is not represented
by a broker in this transaction. The Seller is not represented by
a broker in this transaction. Both parties represent and warrant
that no other broker has been involved on behalf of the
warranting party, and both parties agree to indemnify the other
and hold harmless from any claim through or on behalf of such
other party.
19. CANCELLATION If any party elects to cancel this Contract
because of any breach by another party, the party electing to
cancel shall deliver to escrow agent a notice containing the
address of the party in breach and stating that this Contract
shall be canceled unless the breach is cured within 13 days
following the delivery of the notice to the escrow agent. Within
three days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall be
required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent, this
Contract shall be canceled.
20. MISCELLANEOUS.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed through no fault of
Seller, by the thirtieth day after the completion of the
Inspection and Feasibility Study Period, Seller may either,
at its election, extend the closing date, exercise any
remedy available to it by law, including but not limited to
terminating this Agreement.
(c) Funds to be deposited or paid by Buyer will be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101-4901
If to Buyer:
Paul D'Alto, Trustee
When accepted, this offer will be a binding agreement for valid
and sufficient consideration which will bind and benefit Buyer,
Seller and their respective successors and assigns. Buyer is
submitting this offer by signing a copy of this offer and
delivering it to Seller, and delivering a copy of this Agreement
signed by Buyer and the $10,000.00 First Payment to Escrowee;
Escrowee shall sign below acknowledging receipt of this Agreement
signed by Buyer and the First Payment, which, will be deposited
in to escrow by Escrowee. Seller has five (5) business days
after receipt of the executed offer, and acknowledgment of
receipt of the First Payment by Escrowee within which to accept
this offer; if not accepted by Seller, Escrowee shall immediately
return the First Payment to Buyer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER:
Paul D'Alto, Trustee
By: /s/ Paul D'Alto Trustee
Its: Paul D'Alto
SELLER:
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP, a Minnesota
limited partnership.
By: AEI Fund Management XVIII, Inc., its corporate general
partner
By:/s/ Robert P Johnson
Robert P. Johnson, President
ESCROWEE:
The Title Company hereby acknowledges receipt of a fully
executed copy of this Agreement and the First Payment referred to
in the Agreement on April 17, 2000, and agrees to accept, hold,
deliver and disburse the First Payment and Second Payment,
together with all interest accrued thereon and received by the
Title Company, strictly in accordance with the terms and
provisions of this Agreement. In performing any of its duties
hereunder, the Title Company shall not incur any liability to
anyone for any damages, losses or expenses, except for
negligence, willful default or breach of trust, and it shall
accordingly not incur any liability with respect (i) to any
action taken or omitted in good faith upon advice of its counsel,
or (ii) to any action taken or omitted in reliance upon any
instrument, including any written notice or instruction provided
for in this Agreement, not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which
the Title Company shall in good faith believe to be genuine, to
have been signed or presented by a proper person or persons and
to conform with the provisions of this Agreement. Seller and
Buyer hereby agree to indemnify and hold harmless the Title
Company against any and all losses, claims, damages, liabilities
and expenses, imposed upon the Title Company or incurred by the
Title Company in connection with its acceptance or the
performance of its duties hereunder, including any litigation
arising from this Agreement or involving the subject matter
hereof, unless such losses, claims, damages, liabilities and
expenses arise out of Title Company's negligence, willful default
or breach of trust. In the event of a dispute between Seller and
Buyer sufficient in the discretion of the Title Company to
justify its doing so, the Title Company shall be entitled to
tender into the registry of the District Court of Marion County,
Florida, all money or property in its hands under this Agreement,
together with such legal pleadings as it deems appropriate, and
thereupon be discharged from all further duties and liabilities
under this Agreement. Seller and Buyer shall bear all costs and
expenses of such legal proceedings.
First American Title Insurance Company
By:/s/ L Stephenson
Its: Closing Officer
EXHIBIT "A"
Commence at the Southeast corner of the SE 1/2 of the NE 1/2 of
Section 26, Township 16 South, Range 22 East, marion County,
Florida; thence N 89 52' 48"W. along the South line of said SE
1/2 of the NE 1/4 , 91.28 feet to a point on the easterly right-
of-way line of U.S. Highway No. 441, (200.00' wide); thence N.26
43' 44" W. along said right-of-way line 278.88 feet for the Point
of Beginning; thence continue N.26 43' 44"W. along, said right-of-
way line 121.25 feet; thence continue N 26 43' 44" W. along said
right-of-way line 184.04 feet; thence N.63 16' 16"E. 46.43 feet;
thence East 58.89 feet; thene S 78 05'26" E., 67.84 feet; thence
south 170.00 feet; thence East 2.41 feet; thence S.26 43' 44" E.
parallel with the easterly right-of-way line of U.S. Highway No.
441 (200 feet wide), 122.66 feet; thence West 87.00 feet to the
Point of Beginning, together with the rights conferred in that
certain Declaration of Easement recorded in Official Records Book
1298, Page 91, Public Records of Marion County, Florida.
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