SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: September 30, 2000
Commission file number: 0-18289
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 September 30, 2000 and December 31, 1999
Statements for the Periods ended September 30, 2000 and 1999:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II.Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
CURRENT ASSETS:
Cash and Cash Equivalents $ 930,689 $ 673,082
Receivables 27,829 19,852
----------- -----------
Total Current Assets 958,518 692,934
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 5,504,366 5,384,757
Buildings and Equipment 10,253,416 10,934,684
Construction in Progress 19,661 0
Property Acquisition Costs 0 407
Accumulated Depreciation (2,507,554) (2,458,655)
----------- -----------
Net Investments in Real Estate 13,269,889 13,861,193
----------- -----------
Total Assets $14,228,407 $14,554,127
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 37,651 $ 5,516
Distributions Payable 368,735 341,984
Security Deposit 12,500 12,500
Unearned Rent 63,883 17,366
----------- -----------
Total Current Liabilities 482,769 377,366
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (58,007) (53,696)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 22,783 Issued;
20,317 and 20,625 outstanding in 2000
and 1999, respectively 13,803,645 14,230,457
----------- -----------
Total Partners' Capital 13,745,638 14,176,761
----------- -----------
Total Liabilities and Partners' Capital $14,228,407 $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 SEPTEMBER 30
(Unaudited)
Three Months Ended Nine Months Ended
9/30/00 9/30/99 9/30/00 9/30/99
INCOME:
Rent $472,751 $471,589 $1,421,311 $1,426,130
Investment Income 12,647 5,848 34,685 21,555
-------- -------- ---------- ----------
Total Income 485,398 477,437 1,455,996 1,447,685
-------- -------- ---------- ----------
EXPENSES:
Partnership Administration -
Affiliates 70,935 55,337 198,772 182,151
Partnership Administration
and Property Management -
Unrelated Parties 8,983 9,716 24,066 32,457
Depreciation 89,019 99,814 277,881 299,209
Real Estate Impairment 0 125,531 0 125,531
-------- -------- ---------- ----------
Total Expenses 168,937 290,398 500,719 639,348
-------- -------- ---------- ----------
OPERATING INCOME 316,461 187,039 955,277 808,337
GAIN ON SALE OF REAL ESTATE 0 0 26,670 146,588
-------- -------- ---------- ----------
NET INCOME $316,461 $187,039 $ 981,947 $ 954,925
======== ======== ========== ==========
NET INCOME ALLOCATED:
General Partners $ 3,165 $ 1,870 $ 9,819 $ 9,549
Limited Partners 313,296 185,169 972,128 945,376
-------- -------- ---------- ----------
$316,461 $187,039 $ 981,947 $ 954,925
======== ======== ========== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(20,317, 20,625, 20,440 and
20,815 weighted average Units
outstanding for the periods,
respectively) $ 15.42 $ 8.98 $ 47.56 $ 45.42
======== ======== ========== ==========
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 SEPTEMBER 30
(Unaudited)
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 981,947 $ 954,925
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 277,881 299,209
Real Estate Impairment 0 125,531
Gain on Sale of Real Estate (26,670) (146,588)
(Increase) Decrease in Receivables (7,977) 40,843
Increase in Payable to
AEI Fund Management, Inc. 32,135 17,675
Increase in Unearned Rent 46,517 48,624
----------- -----------
Total Adjustments 321,886 385,294
----------- -----------
Net Cash Provided By
Operating Activities 1,303,833 1,340,219
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (390,457) (337,666)
Proceeds from Sale of Real Estate 730,550 423,600
----------- -----------
Net Cash Provided By
Investing Activities 340,093 85,934
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 26,751 102,810
Distributions to Partners (1,141,041) (999,241)
Redemption Payments (272,029) (228,518)
----------- -----------
Net Cash Used For
Financing Activities (1,386,319) (1,124,949)
----------- -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 257,607 301,204
CASH AND CASH EQUIVALENTS, beginning of period 673,082 311,087
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 930,689 $ 612,291
=========== ===========
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 SEPTEMBER 30
(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 (9,993) (989,248) (999,241)
Redemption Payments (2,285) (226,233) (228,518) (285.00)
Net Income 9,549 945,376 954,925
-------- ----------- ----------- -----------
BALANCE, September 30, 1999 $(52,382) $14,360,681 $14,308,299 20,625.48
======== =========== =========== ===========
BALANCE, December 31, 1999 $(53,696) $14,230,457 $14,176,761 20,625.48
Distributions (11,410) (1,129,631) (1,141,041)
Redemption Payments (2,720) (269,309) (272,029) (308.25)
Net Income 9,819 972,128 981,947
-------- ----------- ----------- -----------
BALANCE, September 30, 2000 $(58,007) $13,803,645 $13,745,638 20,317.23
======== =========== =========== ===========
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
SEPTEMBER 30, 2000
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Real Estate Fund 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
SEPTEMBER 30, 2000
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to 6%
of their Adjusted Capital Contribution per annum, cumulative
but not compounded, to the extent not previously distributed
from Net Cash Flow; (ii) next, 99% to the Limited Partners
and 1% to the General Partners until the Limited Partners
receive an amount equal to 14% of their Adjusted Capital
Contribution per annum, cumulative but not compounded, to
the extent not previously distributed; (iii) next, to the
General Partners until cumulative distributions to the
General Partners under Items (ii) and (iii) equal 15% of
cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Partners for
such year. Any additional profits will be allocated 90% to
the Limited Partners and 10% to the General Partners. In
the event no Net Cash Flow is distributed to the Limited
Partners, 90% of each item of income, gain or credit for
each respective year shall be allocated to the Limited
Partners, and 10% of each such item shall be allocated to
the General Partners. Net losses from operations will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Partnership Agreement as follows: (i)
first, to those Partners with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Partners
and 1% to the General Partners until the aggregate balance
in the Limited Partners' capital accounts equals the sum of
the Limited Partners' Adjusted Capital Contributions plus an
amount equal to 14% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, to the General Partners
until cumulative allocations to the General Partners equal
15% of cumulative allocations. Any remaining balance will
be allocated 85% to the Limited Partners and 15% to the
General Partners. Losses will be allocated 98% to the
Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 continued to make the lease
payments to the Partnership under the supervision of the
bankruptcy court. A reorganization plan was accepted by the
bankruptcy court which provides for the Lease to be assumed
by GCR and assigned to another operator who will purchase
the Partnership's share of the property. The reorganization
plan also provides for the Partnership to collect all rents
outstanding under the terms of the Lease. On October 25,
2000, the sale closed with the Partnership receiving net
sale proceeds of approximately $350,000, which resulted in a
net gain of approximately $113,000.
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.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(3) Investments in Real Estate - (Continued)
On June 30, 2000, the Partnership purchased a 24% interest
in a parcel of land in Alpharetta, Georgia for $385,920.
The land is leased to Razzoo's, Inc. (RI) under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $32,803. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership will advance
funds to RI for the construction of a Razzoo's restaurant on
the site. Through September 30, 2000, the Partnership had
advanced $19,661 for the construction of the property and
was charging interest on the advances at a rate of 8.5%.
The Partnership's share of the total purchase price,
including the cost of the land, will be approximately
$919,200. After the construction is complete, the Lease
Agreement will be amended to require annual rental payments
of approximately $89,600. The remaining interests in the
property are owned by AEI Net Lease Income & Growth Fund XIX
Limited Partnership, AEI Income & Growth Fund 23 LLC and AEI
Private Net Lease Millennium Fund 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. On May 10, 2000, the sale closed
with the Partnership receiving net sale proceeds of $730,550
which resulted in a net gain of $26,670. At the time of
sale, the cost and related accumulated depreciation was
$932,862 and $228,982, respectively.
(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 nine months ended September 30, 2000 and 1999, the
Partnership recognized rental income of $1,421,311 and
$1,426,130, respectively. During the same periods, the
Partnership earned investment income of $34,685 and $21,555,
respectively. In 2000, rental income decreased mainly as a
result of the property sales discussed below. This decrease in
rental income was offset by additional rent received from two
property acquisitions in 1999 and 2000, rent increases on
fourteen properties and additional investment income earned on
the net proceeds from the property sales.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
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 continued to make the lease payments to
the Partnership under the supervision of the bankruptcy court. A
reorganization plan was accepted by the bankruptcy court which
provides for the Lease to be assumed by GCR and assigned to
another operator who will purchase the Partnership's share of the
property. The reorganization plan also provides for the
Partnership to collect all rents outstanding under the terms of
the Lease. On October 25, 2000, the sale closed with the
Partnership receiving net sale proceeds of approximately
$350,000, which resulted in a net gain of approximately $113,000.
During the nine months ended September 30, 2000 and 1999,
the Partnership paid Partnership administration expenses to
affiliated parties of $198,772 and $182,151, 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 $24,066 and $32,457, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs.
As of September 30, 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 nine months ended September 30, 2000, the
Partnership's cash balances increased $257,607 mainly as the
result of cash generated from the sale of property, which was
partially offset by cash used to purchase an additional property.
Net cash provided by operating activities decreased from
$1,340,219 in 1999 to $1,303,833 in 2000 mainly as a result of
net timing differences in the collection of payments from the
lessees and the payment of expenses.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
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 nine months ended
September 30, 2000 and 1999, the Partnership generated cash flow
from the sale of real estate of $730,550 and $423,600,
respectively. During the same periods, the Partnership expended
$390,457 and $337,666, respectively, 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.
On June 30, 2000, the Partnership purchased a 24% interest
in a parcel of land in Alpharetta, Georgia for $385,920. The
land is leased to Razzoo's, Inc. (RI) under a Lease Agreement
with a primary term of 15 years and annual rental payments of
$32,803. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership will advance funds to RI for the
construction of a Razzoo's restaurant on the site. Through
September 30, 2000, the Partnership had advanced $19,661 for the
construction of the property and was charging interest on the
advances at a rate of 8.5%. The Partnership's share of the total
purchase price, including the cost of the land, will be
approximately $919,200. After the construction is complete, the
Lease Agreement will be amended to require annual rental payments
of approximately $89,600. The remaining interests in the
property are owned by AEI Net Lease Income & Growth Fund XIX
Limited Partnership, AEI Income and Growth Fund 23 LLC and AEI
Private Net Lease Millennium Fund 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. On May 10, 2000, the sale closed with
the Partnership receiving net sale proceeds of $730,550 which
resulted in a net gain of $26,670. At the time of sale, the cost
and related accumulated depreciation was $932,862 and $228,982,
respectively.
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 nine 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. On July 1, 2000, six Limited Partners
redeemed a total of 59.0 Partnership Units for $51,912. On
October 1, 2000, four Limited Partners redeemed a total of 95.67
Partnership Units for $84,485. 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:
Market and economic conditions which affect the value
of the properties the Partnership owns and the cash
from rental income such properties generate;
the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
affects of these consequences for investors;
resolution by the General Partners of conflicts with
which they may be confronted;
the success of the General Partners of locating
properties with favorable risk return characteristics;
the effect of tenant defaults; and
the condition of the industries in which the tenants of
properties owned by the Partnership operate.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II - OTHER INFORMATION
(Continued)
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Asset Purchase Agreement dated
September 18, 2000 between the
Partnership, AEI Real Estate Fund XVI
Limited Partnership and Southern River
Restaurants LLC relating to the property
at 850 I-10 Service Road, Slidell,
Louisiana.
27 Financial Data Schedule for period
ended September 30, 2000.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: November 7, 2000 AEI Real Estate Fund 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)
