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: 0-19838
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
(Name of Small Business Issuer in its Charter)
State of Minnesota 41-1677062
(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
$1,913,647.
As of February 29, 2000, there were 20,651.42 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 $20,651,420.
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 Net Lease Income & Growth Fund XIX 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 14, 1990. The registrant is comprised of
AEI Fund Management XIX, 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 February 5,
1991. The Partnership commenced operations on May 31, 1991 when
minimum subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The Partnership's offering
terminated February 5, 1993 when the extended offering period
expired. The Partnership received subscriptions for 21,151.928
Limited Partnership Units ($21,151,928).
The Partnership was organized to acquire existing and
newly constructed commercial properties located in the United
States, to lease such properties to tenants under triple net
leases, to hold such properties and to eventually sell such
properties. From subscription proceeds, the Partnership
purchased nineteen properties, including partial interests in
four properties, totaling $16,994,880. 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's properties were purchased with
subscription proceeds without any indebtedness. The Partnership
will not finance properties in the future to obtain proceeds for
new property acquisitions. If it is required to do so, the
Partnership may incur short-term indebtedness, which may be
secured by a portion of the Partnership's properties, to finance
the day-to-day cash flow requirements of the Partnership
(including cash flow necessary to repurchase Units). The amount
of borrowings that may be secured by the Partnership's properties
is limited in the aggregate to 20% of the purchase price of all
Partnership properties. The Partnership will not incur
borrowings prior to application of the proceeds from sale of the
Units, will not incur borrowings to pay distributions, and will
not incur borrowings while there is cash available for
distributions.
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 may be granted options to purchase
properties after a specified portion of the lease term has
elapsed. The Partnership expects to sell some or all of its
properties prior to its final liquidation and to reinvest the
proceeds from such sales in additional properties. The
Partnership reserves the right, at the discretion of the General
Partners, to either distribute proceeds from the sale of
properties to the Partners or to reinvest such proceeds 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. It is anticipated that the Partnership will
commence liquidation through the sale of its remaining properties
within twelve years after acquisition, although final liquidation
may be delayed by a number of circumstances, including market
conditions and seller financing of properties.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
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 15 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 lessees with two to five 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.
Through December 31, 1997, the Partnership sold 90.9037%
of the Applebee's restaurant in Temple Terrace, Florida, in seven
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,296,015 which
resulted in a total net gain of $369,433. The total cost and
related accumulated depreciation of the interests sold was
$961,992 and $35,410, respectively. For the year ended December
31, 1997, the net gain was $61,611.
Through December 31, 1999, the Partnership sold 57.9926%
of the HomeTown Buffet restaurant in Tucson, Arizona, in five
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,002,998 which
resulted in a total net gain of $316,215. The total cost and
related accumulated depreciation of the interests sold was
$746,589 and $59,806, respectively. For the year ended December
31, 1999, the net gain was $271,956.
On December 18, 1997, the Partnership purchased a Party
City retail store in Gainesville, Georgia for $1,435,309. The
property is leased to Party City of Atlanta, Inc. under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $150,752.
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%. Effective June 20, 1998, the interest
rate was increased to 10.5%. 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 $1,181,185. 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 Real Estate
Fund XVIII Limited Partnership, affiliates of the Partnership.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
In January, 1998, the Partnership entered into an
Agreement to purchase a 40% interest in a Tumbleweed restaurant
in Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $192,813. The land is leased
to Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $16,389.
Effective August 10, 1998, the annual rent was increased to
$19,763. 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 $50,946. The Partnership's share of the total
acquisition costs, including the cost of the land was $505,225.
The remaining interests in the property are owned by the
Individual General Partner and AEI Real Estate Fund XVIII Limited
Partnership.
Pursuant to the Partnership Agreement, Net Sale Proceeds
may be reinvested in additional properties until a date five
years after the date on which the offer and sale of Units
terminated. This period expired on February 5, 1998. In
October, 1998, the Managing General Partner solicited by mail a
proxy statement to propose an Amendment to the Limited
Partnership Agreement that would allow the Partnership to
reinvest the majority of net sale proceeds in additional
properties. The Amendment passed with a majority of Units voting
in favor of the Amendment.
On December 28, 1998, the Partnership purchased a 60.0%
interest in a Tumbleweed restaurant in Columbus, Ohio for
$823,496. The property is leased to TWI under a Lease Agreement
with a primary term of 15 years and annual rental payments of
$83,102. The remaining interest in the property is owned by AEI
Real Estate Fund XVIII Limited Partnership.
On September 28, 1999, the Partnership purchased a 47%
interest in a Marie Callender's restaurant in Henderson, Nevada
for $804,911. The property is leased to Marie Callender Pie
Shops, Inc. under a Lease Agreement with a primary term of 15
years and annual rental payments of $75,905. The remaining
interest in the property is owned by AEI Income & Growth Fund
XXII Limited Partnership, an affiliate of the Partnership.
As of December 31, 1997, based on an analysis of market
conditions, it was determined the fair value of the Partnership's
interest in the Media Play retail store was approximately
$726,000. In the fourth quarter of 1997, a charge to operations
for real estate impairment of $595,100 was recognized, which is
the difference between the book value at December 31, 1997 of
$1,321,100 and the estimated market value of $726,000. The
charge was recorded against the cost of the land, building and
equipment. Also, in the fourth quarter of 1997, the Partnership
recorded a real estate impairment on the three Red Line Burgers
of $715,384, which equaled the net book value of the properties
at December 31, 1997. The charge was recorded against the cost
of the buildings and equipment. In addition, in both the second
quarter of 1998 and the third quarter of 1999, the Partnership
elected to abandon one of the properties in order to avoid
ongoing expenses. In addition, on February 14, 1997, the two
Rally's properties were sold for $500,000, which resulted in a
net gain of $16,092.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Covington, 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 $27,373 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 any adjustments to the Lease will
be immaterial to the Partnership, 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.
Major Tenants
During 1999, three of the Partnership's lessees each
contributed more than ten percent of the Partnership's total
rental revenue. The major tenants in aggregate contributed 48%
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. In addition, three business concepts,
Taco Cabana and Applebee's restaurants and Garden Ridge retail
store, each accounted for more than ten percent of the
Partnership's total rental revenue during 1999. It is
anticipated that these business concepts will continue to account
for more than ten percent of the Partnership's total rental
revenue in 2000 and future years. Any failure of these major
tenants or business concepts 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.
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 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. 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.
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.
Taco Cabana Restaurant
Houston, TX Texas Taco
(38.2362%) 7/31/91 $ 547,322 Cabana L.P. $ 84,047 $59.10
Taco Cabana Restaurant Texas Taco
San Antonio, TX 3/16/92 $1,147,274 Cabana L.P. $188,498 $69.30
Taco Cabana Restaurant
Waco, TX Texas Food
(2.4058%) 5/1/92 $ 19,720 Concepts $ 2,919 $43.93
Applebee's Restaurant
Aurora, CO RCI
(3.3979%) 12/22/92 $ 44,782 West, Inc. $ 6,482 $41.48
Red Line Burgers Restaurant
Corpus Christi, TX 4/2/93 $ 280,378 (1)
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Total Property Annual Annual
Purchase Acquisition Lease Rent Per
Property Date Costs Lessee Payment Sq. Ft.
Applebee's Restaurant Gourmet
Crestwood, MO 4/14/93 $ 803,418 Systems, Inc. $116,936 $23.31
Applebee's Restaurant
Crestview Hills, KY Thomas
(1.1054%) 6/15/93 $ 14,039 and King, Inc. $ 2,035 $33.79
HomeTown Buffet Restaurant
Tucson, AZ Summit Family
(2.2074%) 6/16/93 $ 28,418 Restaurants, Inc. $ 4,106 $19.33
Applebee's Restaurant Gulf Coast
Covington, LA 6/23/93 $1,099,085 Restaurants, Inc. $169,988 $31.29
Applebee's Restaurant
Temple Terrace, FL Casual Restaurant
(9.0963%) 10/1/93 $ 96,262 Concepts II, Inc. $ 14,855 $35.20
Applebee's Restaurant WCM
Beaverton, OR 12/2/93 $1,760,079 Oregon, L.L.C. $246,000 $49.20
Denny's Apple Investment
Apple Valley, CA 5/2/94 $1,177,655 Group, Inc. $176,815 $34.10
Media Play Retail Store
Apple Valley, MN
(33.0%) 12/21/95 $1,389,367 (1)
Garden Ridge Retail Store
Pineville, NC Garden
(40.75%) 3/28/96 $3,615,378 Ridge L.P. $383,973 $ 6.65
Party City Retail Store Party City of
Gainesville, GA 12/18/97 $1,435,309 Atlanta, Inc. $150,752 $14.32
Champps
Americana Restaurant Champps
Troy, MI Operating
(23.95%) 9/3/98 $1,181,185 Corporation $122,605 $46.16
Tumbleweed Restaurant
Chillicothe, OH
(40.0%) 11/20/98 $ 505,225 Tumbleweed, Inc. $ 51,964 $23.69
Tumbleweed Restaurant
Columbus, OH
(60.0%) 12/28/98 $ 823,496 Tumbleweed, Inc. $ 83,102 $25.26
Marie Callender's Restaurant Marie
Henderson, NV Callender
(47.0%) 9/28/99 $ 804,911 Pie Shops, Inc. $ 75,905 $26.85
(1) The property is vacant and listed for sale or lease.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
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 Taco
Cabana restaurant in Houston, Texas is owned by AEI Real Estate
Fund 86-A Limited Partnership. The remaining interests in the
Media Play and Garden Ridge retail stores are owned by AEI Net
Lease Income & Growth Fund XX and AEI Income & Growth Fund XXI
Limited Partnerships. The remaining interests in the Champps
Americana restaurant are owned by AEI Real Estate Fund XV Limited
Partnership, AEI Real Estate Fund XVII Limited Partnership and
AEI Real Estate Fund XVIII Limited Partnership. The remaining
interests in the Tumbleweed restaurant in Chillicothe, Ohio are
owned by the Individual General Partner and AEI Real Estate Fund
XVIII Limited Partnership. The remaining interest in the
Tumbleweed restaurant in Columbus, Ohio is owned by AEI Real
Estate Fund XVIII Limited Partnership. The remaining interest in
the Marie Callender's restaurant is owned by AEI Income & Growth
Fund XXII Limited Partnership. The remaining interests in the
HomeTown Buffet restaurant, the Taco Cabana restaurant in Waco,
Texas, and the Applebee's restaurants in Aurora, Colorado,
Crestview Hills, Kentucky and Temple Terrace, Florida are owned
by unrelated third parties.
The Partnership accounts for properties owned as tenants-
in-common with affiliated Partnerships and/or unrelated third
parties using the proportionate consolidation method. Each
tenant-in-common owns a separate, undivided interest in the
properties. Any tenant-in-common that holds more than a 50%
interest does not control decisions over the other tenant-in-
common interests. The financial statements reflect only this
Partnership's percentage share of the properties' land, building
and equipment, liabilities, revenues and expenses.
The initial Lease terms are for 20 years except for the
Marie Callender's, Tumbleweed and Taco Cabana restaurants, and
the Party City retail store, which have lease terms of 15 years.
The Leases contain renewal options which may extend the Lease
term an additional 15 years, except for the Tumbleweed and Taco
Cabana restaurants, the Applebee's restaurants in Aurora,
Colorado and Temple Terrace, Florida, and the Denny's and
HomeTown Buffet restaurants which have renewal options that may
extend the Lease term an additional 10 years and the Garden Ridge
retail store which has renewal options that may extend the Lease
term an additional 25 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.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
During the last five years or since the date of purchase,
if purchased after December 31, 1994, all properties were 100
percent occupied except for the Media Play retail store which was
100 percent occupied until January, 1997.
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 1,477 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, nine Limited Partners redeemed a total of
116.5 Partnership Units for $77,316 in accordance with the
Partnership Agreement. In prior years, a total of twenty-four
Limited Partners redeemed 384 Partnership Units for $285,000.
The redemptions increase the remaining Limited Partners'
ownership interest in the Partnership.
Cash distributions of $15,922 and $16,790 were made to the
General Partners and $1,499,044 and $1,516,383 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, except as discussed below. These
distributions should not be compared with dividends paid on
capital stock by corporations.
As part of the Limited Partner distributions discussed
above, the Partnership distributed $219,894 of proceeds from
property sales in 1998. The distributions reduced the Limited
Partners' Adjusted Capital Contributions.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Results of Operations
For the years ended December 31, 1999 and 1998, the
Partnership recognized rental income of $1,859,258 and
$1,677,876, respectively. During the same periods, the
Partnership earned investment income of $54,389 and $171,031,
respectively. In 1999, rental income increased as a result of
rent received from four property acquisitions in 1998 and 1999,
and rent increases on ten properties. The increase in rental
income was partially offset by a decrease in investment income
earned on net sale proceeds prior to the purchase of the
additional properties.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Musicland Group, Inc. (MGI), the lessee of the Media Play
retail store in Apple Valley, Minnesota experienced financial
difficulties and was aggressively restructuring its organization.
As part of the restructuring, the Partnership and MGI reached an
agreement in December, 1996 in which MGI would buy out and
terminate the Lease Agreement by making a payment of $800,000,
which is equal to approximately two years' rent. The
Partnership's share of such payment was $264,000. A specialist
in commercial property leasing has been retained to locate a new
tenant for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and other
costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of the
Partnership's interest in the Media Play was approximately
$726,000. In the fourth quarter of 1997, a charge to operations
for real estate impairment of $595,100 was recognized, which is
the difference between the book value at December 31, 1997 of
$1,321,100 and the estimated market value of $726,000. The
charge was recorded against the cost of the land, building and
equipment.
In both the second quarter of 1998 and the third quarter
of 1999, the Partnership abandoned a Red Line Burger property in
order to avoid ongoing expenses. The remaining Red Line Burger
property is vacant and listed for sale or lease. The Partnership
recorded a real estate impairment, equal to the net book value of
the properties in 1997. The abandonment of the 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 Covington, 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 $27,373 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 any adjustments to the Lease will
be immaterial to the Partnership, 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 $225,879 and $267,665, 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 $90,059 and $124,410, 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 Media Play and Red
Line Burger situations discussed above.
As of December 31, 1999, the Partnership's annualized cash
distribution rate was 7.5%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners are subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants due to inflation and real sales growth, will result
in an increase in rental income over the term of the leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
The Year 2000 issue is the result of computer systems that
use two-digits rather than four to define the applicable year,
which may prevent such systems from accurately processing dates
ending in the Year 2000 and beyond. This could result in
computer system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or receive electronic data, or to engage in routine business
activities.
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. In 1998, AEI completed an
assessment of its computer hardware and software systems and
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.
Liquidity and Capital Resources
During the year ended December 31, 1999, the Partnership's
cash balances decreased $48,723 as the Partnership distributed
more cash to the Partners than it generated from operating
activities. Net cash provided by operating activities increased
from $1,483,926 in 1998 to $1,556,208 in 1999 as the result of an
increase in income and a decrease in expenses in 1999, which were
partially offset by 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. During the year ended December 31,
1999, the Partnership generated cash flow from the sale of real
estate of $801,641. During the years ended December 31, 1999 and
1998, the Partnership expended $810,180 and $2,055,579,
respectively, to invest in real properties (inclusive of
acquisition expenses), as the Partnership continued to reinvest
the cash generated from property sales.
Through December 31, 1999, the Partnership sold 57.9926%
of the HomeTown Buffet restaurant in Tucson, Arizona, in five
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,002,998 which
resulted in a total net gain of $316,215. The total cost and
related accumulated depreciation of the interests sold was
$746,589 and $59,806, respectively. For the year ended December
31, 1999, the net gain was $271,956.
During 1998, the Partnership distributed $222,115 of the
net sale proceeds to the Limited and General Partners as part of
their regular quarterly distributions which represented a return
of capital of $10.55 per Limited Partnership Unit. The remaining
net sale proceeds will either be reinvested in additional
properties or distributed to the Partners in the future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (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%. Effective June 20, 1998, the interest
rate was increased to 10.5%. 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 $1,181,185. 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 Real Estate
Fund XVIII Limited Partnership, affiliates of the Partnership.
In January, 1998, the Partnership entered into an
Agreement to purchase a 40% interest in a Tumbleweed restaurant
in Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $192,813. The land is leased
to Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $16,389.
Effective August 10, 1998, the annual rent was increased to
$19,763. 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 $50,946. The Partnership's share of the total
acquisition costs, including the cost of the land was $505,225.
The remaining interests in the property are owned by the
Individual General Partner and AEI Real Estate Fund XVIII Limited
Partnership.
Pursuant to the Partnership Agreement, Net Sale Proceeds
may be reinvested in additional properties until a date five
years after the date on which the offer and sale of Units
terminated. This period expired on February 5, 1998. In
October, 1998, the Managing General Partner solicited by mail a
proxy statement to propose an Amendment to the Limited
Partnership Agreement that would allow the Partnership to
reinvest the majority of net sale proceeds in additional
properties. The Amendment passed with a majority of Units voting
in favor of the Amendment.
On December 28, 1998, the Partnership purchased a 60.0%
interest in a Tumbleweed restaurant in Columbus, Ohio for
$823,496. The property is leased to TWI under a Lease Agreement
with a primary term of 15 years and annual rental payments of
$83,102. The remaining interest in the property is owned by AEI
Real Estate Fund XVIII Limited Partnership.
On September 28, 1999, the Partnership purchased a 47%
interest in a Marie Callender's restaurant in Henderson, Nevada
for $804,911. The property is leased to Marie Callender Pie
Shops, Inc. under a Lease Agreement with a primary term of 15
years and annual rental payments of $75,905. The remaining
interest in the property is owned by AEI Income & Growth Fund
XXII Limited Partnership, an affiliate of the Partnership.
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 in the fourth quarter of each
year.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During, 1999, nine Limited Partners redeemed a total of
116.5 Partnership Units for $77,316 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
twenty-four Limited Partners redeemed 384 Partnership Units for
$285,000. 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.
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 NET LEASE INCOME & GROWTH FUND XIX 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:
Operations
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
REPORT OF INDEPENDENT AUDITORS
To the Partners:
AEI Net Lease Income & Growth Fund XIX Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI Net
Lease Income & Growth Fund XIX Limited Partnership (a Minnesota
limited partnership) as of December 31, 1999 and 1998 and the
related statements of operations, 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 Net Lease Income & Growth Fund XIX 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 NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 835,832 $ 884,555
Receivables 27,373 27,722
----------- -----------
Total Current Assets 863,205 912,277
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 5,764,703 5,746,501
Buildings and Equipment 10,185,520 10,038,667
Property Acquisition Costs 5,269 0
Accumulated Depreciation (1,578,302) (1,347,191)
----------- -----------
Net Investments in Real Estate 14,377,190 14,437,977
----------- -----------
Total Assets $15,240,395 $15,350,254
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 23,346 $ 65,196
Distributions Payable 362,702 366,812
----------- -----------
Total Current Liabilities 386,048 432,008
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (33,013) (32,375)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 21,152 Units issued;
20,651 and 20,768 Units outstanding in
1999 and 1998, respectively 14,887,360 14,950,621
----------- -----------
Total Partners' Capital 14,854,347 14,918,246
----------- -----------
Total Liabilities and Partners' Capital $15,240,395 $15,350,254
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31
1999 1998
INCOME:
Rent $ 1,859,258 $ 1,677,876
Investment Income 54,389 171,031
----------- -----------
Total Income 1,913,647 1,848,907
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 225,879 267,665
Partnership Administration and Property
Management - Unrelated Parties 90,059 124,410
Depreciation 341,282 298,712
----------- -----------
Total Expenses 657,220 690,787
----------- -----------
OPERATING INCOME 1,256,427 1,158,120
GAIN ON SALE OF REAL ESTATE 271,956 0
----------- -----------
NET INCOME $ 1,528,383 $ 1,158,120
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 15,284 $ 11,581
Limited Partners 1,513,099 1,146,539
----------- -----------
$ 1,528,383 $ 1,158,120
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(20,739 and 20,923 weighted average Units
outstanding in 1999 and 1998, respectively.) $ 72.96 $ 54.80
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,528,383 $ 1,158,120
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 341,282 298,712
Gain on Sale of Real Estate (271,956) 0
Decrease in Receivables 349 13,154
Increase (Decrease) in Payable to
AEI Fund Management, Inc. (41,850) 13,940
----------- -----------
Total Adjustments 27,825 325,806
----------- -----------
Net Cash Provided By
Operating Activities 1,556,208 1,483,926
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (810,180) (2,055,579)
Proceeds from Sale of Real Estate 801,641 0
Payments Received on Long-Term Notes Receivable 0 1,492,795
----------- -----------
Net Cash Used For
Investing Activities (8,539) (562,784)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable (4,110) 29,186
Distributions to Partners (1,514,185) (1,531,700)
Redemption Payments (78,097) (147,248)
----------- -----------
Net Cash Used For
Financing Activities (1,596,392) (1,649,762)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (48,723) (728,620)
CASH AND CASH EQUIVALENTS, beginning of period 884,555 1,613,175
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 835,832 $ 884,555
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1997 $ (27,166) $15,466,240 $15,439,074 20,974.63
Distributions (15,317) (1,516,383) (1,531,700)
Redemption Payments (1,473) (145,775) (147,248) (206.71)
Net Income 11,581 1,146,539 1,158,120
--------- ----------- ----------- -----------
BALANCE, December 31, 1998 (32,375) 14,950,621 14,918,246 20,767.92
Distributions (15,141) (1,499,044) (1,514,185)
Redemption Payments (781) (77,316) (78,097) (116.50)
Net Income 15,284 1,513,099 1,528,383
--------- ----------- ----------- -----------
BALANCE, December 31, 1999 $ (33,013) $14,887,360 $14,854,347 20,651.42
========= =========== =========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Organization -
AEI Net Lease Income & Growth Fund XIX Limited Partnership
(Partnership) was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XIX, 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 May 31, 1991 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The offering terminated
February 5, 1993 when the extended offering period expired.
The Partnership received subscriptions for 21,151.928
Limited Partnership Units ($21,151,928).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$21,151,928, 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 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
12% of their Adjusted Capital Contribution per annum,
cumulative but not compounded, to the extent not previously
distributed from Net Cash Flow; (ii) any remaining balance
will be distributed 90% to the Limited Partners and 10% 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 in the
same ratio as the last dollar of Net Cash Flow is
distributed. Net losses from operations will be allocated
98% to the Limited Partners and 2% to the General Partners.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Organization - (Continued)
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 12% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, the balance of any
remaining gain will then be allocated 90% to the Limited
Partners and 10% 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.
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.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(2) Summary of Significant Accounting Policies - (Continued)
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.
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.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(2) Summary of Significant Accounting Policies - (Continued)
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 38.2362% interest in a Taco Cabana
restaurant in Houston, Texas. The remaining interest in the
property is owned by AEI Real Estate Fund 86-A Limited
Partnership, an affiliate of the Partnership. The
Partnership owns a 3.3979% interest in an Applebee's
restaurant in Aurora, Colorado. The remaining interests in
this property are owned by unrelated third parties. AEI
Institutional Net Lease Fund '93 Limited Partnership, an
affiliate of the Partnership, owned a 9.3385% interest in
this property until January 20, 1998 when its interest was
sold to an unrelated third party. The Partnership owns a
2.2074% interest in a HomeTown Buffet restaurant. The
remaining interests in this property are owned by unrelated
third parties. AEI Real Estate Fund XVIII Limited
Partnership, an affiliate of the Partnership, owned a 24.0%
interest in this property until the interest was sold, in a
series of transactions, to unrelated third parties in 1999.
AEI Institutional Net Lease Fund '93 Limited Partnership
owned a 15.8% interest in this property until December 4,
1998 when its interest was sold to an unrelated third party.
The Partnership owns a 33.0% interest in a Media Play retail
store and a 40.75% interest in a Garden Ridge retail store.
The remaining interests in these properties are owned by AEI
Net Lease Income & Growth Fund XX Limited Partnership and
AEI Income & Growth Fund XXI Limited Partnership, affiliates
of the Partnership. The Partnership owns a 23.95% interest
in the Champps Americana restaurant. 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 Real Estate Fund XVIII Limited
Partnership, affiliates of the Partnership. The Partnership
owns a 40.0% interest in a Tumbleweed restaurant in
Chillicothe, Ohio. The remaining interests in this property
are owned by the Individual General Partner and AEI Real
Estate Fund XVIII Limited Partnership. The Partnership owns
a 60.0% interest in a Tumbleweed restaurant in Columbus,
Ohio. The remaining interest in this property is owned by
AEI Real Estate Fund XVIII Limited Partnership. The
Partnership owns a 47.0% interest in a Marie Callender's
restaurant. The remaining interest in this property is
owned by AEI Income & Growth Fund XXII Limited Partnership,
an affiliate of the Partnership.
AEI NET LEASE INCOME & GROWTH FUND XIX 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. $ 225,879 $ 267,665
======== ========
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 and outside audit and
accounting costs, taxes, insurance and other
property costs. $ 90,059 $ 124,410
======== ========
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 $21,385 and $64,640
for 1999 and 1998, respectively. $ 1,780 $ (50,818)
======== ========
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 NET LEASE INCOME & GROWTH FUND XIX 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 Marie Callender's,
Tumbleweed and Taco Cabana restaurants, and the Party City
retail store, which have lease terms of 15 years. The
Leases contain renewal options which may extend the Lease
term an additional 15 years, except for the Tumbleweed and
Taco Cabana restaurants, the Applebee's restaurants in
Aurora, Colorado and Temple Terrace, Florida, and the
Denny's and HomeTown Buffet restaurants which have renewal
options that may extend the Lease term an additional 10
years and the Garden Ridge retail store which has renewal
options that may extend the Lease term an additional 25
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 Taco Cabana restaurant in Houston,
Texas was constructed in 1987 and acquired in 1991. The
Denny's restaurant was constructed and acquired in 1994.
The Media Play retail store was constructed and acquired in
1995. The Garden Ridge retail store was constructed and
acquired in 1996. The Party City retail store was
constructed and acquired in 1997. The Champps Americana and
Tumbleweed restaurants were constructed and acquired in
1998. The Marie Callender's restaurant was constructed in
1998, and acquired in 1999. The remaining properties were
constructed and acquired in either 1992 or 1993. There have
been no costs capitalized as improvements subsequent to the
acquisitions.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
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
Taco Cabana, Houston, TX $ 334,414 $ 212,908 $ 547,322 $ 59,733
Taco Cabana, San Antonio, TX 598,533 548,741 1,147,274 148,300
Taco Cabana, Waco, TX 7,788 11,932 19,720 3,139
Applebee's, Aurora, CO 15,969 28,813 44,782 7,408
Red Line Burger,
Corpus Christi, TX 0 52,398 52,398 52,398
Applebee's, Crestwood, MO 0 803,418 803,418 189,813
Applebee's,
Crestview Hills, KY 4,490 9,549 14,039 2,186
HomeTown Buffet, Tucson, AZ 15,314 13,104 28,418 2,857
Applebee's, Covington, LA 358,521 740,564 1,099,085 177,158
Applebee's,
Temple Terrace, FL 44,568 51,694 96,262 11,993
Applebee's, Beaverton, OR 636,972 1,123,107 1,760,079 241,875
Denny's, Apple Valley, CA 461,013 716,642 1,177,655 142,547
Media Play, Apple Valley, MN 230,305 563,962 794,267 103,735
Garden Ridge, Pineville, NC 1,171,849 2,443,529 3,615,378 305,441
Party City, Gainesville, GA 642,964 792,345 1,435,309 58,630
Champps Americana, Troy, MI 381,640 799,545 1,181,185 37,010
Tumbleweed, Chillicothe, OH 206,725 298,500 505,225 11,974
Tumbleweed, Columbus, OH 321,614 501,882 823,496 18,164
Marie Callender's,
Henderson, NV 332,024 472,887 804,911 3,941
---------- ----------- ----------- ---------
$5,764,703 $10,185,520 $15,950,223 $1,578,302
========== =========== =========== =========
Through December 31, 1999, the Partnership sold 57.9926% of
the HomeTown Buffet restaurant in Tucson, Arizona, in five
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,002,998
which resulted in a total net gain of $316,215. The total
cost and related accumulated depreciation of the interests
sold was $746,589 and $59,806, respectively. For the year
ended December 31, 1999, the net gain was $271,956.
The Partnership owns a 9.0963% interest in the Applebee's
restaurant in Temple Terrace, Florida. Prior to 1998, the
Partnership sold 90.9037% of the property to unrelated third
parties, who own the property with the Partnership as
tenants-in-common.
The Partnership owns a 2.4058% interest in the Taco Cabana
restaurant in Waco, Texas. Prior to 1996, the Partnership
sold 97.5942% of the property to unrelated third parties,
who own the property with the Partnership as tenants-in-
common.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
The Partnership owns a 1.1054% interest in the Applebee's
restaurant in Crestview Hills, Kentucky. Prior to 1997, the
Partnership sold 98.8946% of the property to unrelated third
parties, who own the property with the Partnership as
tenants-in-common.
During 1998, the Partnership distributed $222,115 of net
sale proceeds to the Limited and General Partners as part of
their regular quarterly distributions which represented a
return of capital of $10.55 per Limited Partnership Unit.
The remaining net sale proceeds will either be reinvested in
additional properties or distributed to the Partners in the
future.
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%. Effective June 20, 1998, the
interest rate was increased to 10.5%. 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 $1,181,185.
In January, 1998, the Partnership entered into an Agreement
to purchase a 40% interest in a Tumbleweed restaurant in
Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $192,813. The land is
leased to Tumbleweed, Inc. (TWI) under a Lease Agreement
with a primary term of 15 years and annual rental payments
of $16,389. Effective August 10, 1998, the annual rent was
increased to $19,763. 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
$50,946. The Partnership's share of the total acquisition
costs, including the cost of the land was $505,225.
Pursuant to the Partnership Agreement, Net Sale Proceeds may
be reinvested in additional properties until a date five
years after the date on which the offer and sale of Units
terminated. This period expired on February 5, 1998. In
October, 1998, the Managing General Partner solicited by
mail a proxy statement to propose an Amendment to the
Limited Partnership Agreement that would allow the
Partnership to reinvest the majority of net sale proceeds in
additional properties. The Amendment passed with a majority
of Units voting in favor of the Amendment.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
On December 28, 1998, the Partnership purchased a 60.0%
interest in a Tumbleweed restaurant in Columbus, Ohio for
$823,496. The property is leased to TWI under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $83,102.
On September 28, 1999, the Partnership purchased a 47%
interest in a Marie Callender's restaurant in Henderson,
Nevada for $804,911. The property is leased to Marie
Callender Pie Shops, Inc. under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$75,905.
On December 21, 1995, the Partnership purchased a 33.0%
interest in a Media Play retail store in Apple Valley,
Minnesota for $1,389,367. The property was leased to The
Musicland Group, Inc. (MGI) under a Lease Agreement with a
primary term of 18 years and annual rental payments of
$135,482.
In December, 1996, the Partnership and MGI reached an
agreement in which MGI would buy out and terminate the Lease
Agreement by making a payment of $800,000, which was equal
to approximately two years' rent. The Partnership's share
of such payment was $264,000. A specialist in commercial
property leasing has been retained to locate a new tenant
for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and
other costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of
the Partnership's interest in the Media Play was
approximately $726,000. In the fourth quarter of 1997, a
charge to operations for real estate impairment of $595,100
was recognized, which is the difference between the book
value at December 31, 1997 of $1,321,100 and the estimated
market value of $726,000. The charge was recorded against
the cost of the land, building and equipment.
In both the second quarter of 1998 and the third quarter of
1999, the Partnership abandoned a Red Line Burger property
in order to avoid ongoing expenses. The remaining Red Line
Burger property is vacant and listed for sale or lease. The
Partnership recorded a real estate impairment, equal to the
net book value of the properties in 1997. The abandonment
of the properties did not have a material effect on the
Partnership's cash flow or financial statements.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Covington, 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
$27,373 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 any adjustments to the Lease will be immaterial to
the Partnership, 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 minimum future rentals on the Leases for years
subsequent to December 31, 1999 are as follows:
2000 $ 1,905,844
2001 1,932,161
2002 1,965,857
2003 1,994,236
2004 2,030,885
Thereafter 19,142,726
-----------
$28,971,709
===========
There were no contingent rents recognized in 1999 or 1998.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(5) Major Tenants -
The following schedule presents rent revenue from individual
tenants, or affiliated groups of tenants, who each
contributed more than ten percent of the Partnership's total
rent revenue for the years ended December 31:
1999 1998
Tenants Industry
Garden Ridge L.P. Retail $ 383,973 $ 383,973
Texas Taco Cabana L.P. Restaurant 269,947 263,150
WCM Oregon, L.L.C. Restaurant 246,000 237,681
Apple Investment
Group, Inc. Restaurant N/A 168,910
---------- ---------
Aggregate rent revenue of major tenants $ 899,920 $1,053,714
========== ==========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 48% 63%
========== ==========
(6) Partners' Capital -
Cash distributions of $15,922 and $16,790 were made to the
General Partners and $1,499,044 and $1,516,383 were made to
the Limited Partners for the years ended December 31, 1999
and 1998, respectively. The Limited Partners' distributions
represent $72.28 and $72.47 per Limited Partnership Unit
outstanding using 20,739 and 20,923 weighted average Units
in 1999 and 1998, respectively. The distributions represent
$69.22 and $47.78 per Unit of Net Income and $3.06 and
$24.69 per Unit of return of contributed capital in 1999 and
1998, respectively.
As part of the Limited Partner distributions discussed
above, the Partnership distributed $219,894 of proceeds from
property sales in 1998. The distributions reduced the
Limited Partners' Adjusted Capital Contributions.
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 and income were allocated to
the Limited Partners and 1% to the General Partners.
The Partnership may acquire Units from Limited Partners who
have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated
to purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall
the Partnership be obligated to purchase Units if, in the
sole discretion of the Managing General Partner, such
purchase would impair the capital or operation of the
Partnership.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(6) Partners' Capital - (Continued)
During 1999, nine Limited Partners redeemed a total of 116.5
Partnership Units for $77,316 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In 1998, eight Limited
Partners redeemed a total of 206.7 Partnership Units for
$145,775. 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
$967.87 per original $1,000 invested.
(7) Income Taxes -
The following is a reconciliation of net income for
financial reporting purposes to income reported for federal
income tax purposes for the years ended December 31:
1999 1998
Net Income for Financial
Reporting Purposes $1,528,383 $1,158,120
Depreciation for Tax Purposes (Over)
Under Depreciation for Financial
Reporting Purposes 10,621 (6,841)
Amortization of Start-Up and
Organization Costs (1,869) (25,130)
Gain (Loss) on Sale of Real Estate for
Tax Purposes Under Gain
for Financial Reporting Purposes (230,373) (238,075)
----------- -----------
Taxable Income to Partners $1,306,762 $ 888,074
=========== ===========
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(7) Income Taxes - (Continued)
The following is a reconciliation of Partners' capital for
financial reporting purposes to Partners' capital reported
for federal income tax purposes for the years ended December
31:
1999 1998
Partners' Capital for
Financial Reporting Purposes $14,854,347 $14,918,246
Adjusted Tax Basis of Investments
in Real Estate Over Net Investments
in Real Estate for Financial
Reporting Purposes 831,198 1,050,950
Capitalized Start-Up Costs
Under Section 195 258,641 258,641
Amortization of Start-Up and
Organization Costs (264,641) (262,772)
Organization and Syndication Costs
Treated as Reduction of Capital
For Financial Reporting Purposes 3,018,278 3,018,278
----------- -----------
Partners' Capital for
Tax Reporting Purposes $18,697,823 $18,983,343
=========== ===========
(8) Fair Value of Financial Instruments -
The estimated fair values of the financial instruments, none
of which are held for trading purposes, for the years ended
December 31:
1999 1998
Carrying Fair Carrying Fair
Amount Value Amount Value
Cash $ 706 $ 706 $ 309 $ 309
Money Market Funds 835,126 835,126 884,246 884,246
-------- -------- -------- --------
Total Cash and
Cash Equivalents $ 835,832 $ 835,832 $ 884,555 $ 884,555
======== ======== ======== ========
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, 1990, and has been elected to
continue in these positions until December, 2000. From 1970 to
the present, he had 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 held these
positions since the formation of AFM in September, 1990, and has
been elected to continue in these positions until December, 2000.
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 XIX, 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.
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.
Person or Entity Amount Incurred From
Receiving Form and Method Inception (September 14, 1990)
Compensation of Compensation To December 31, 1999
AEI Securities, Inc. Selling Commissions equal to 7% $2,115,193
(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 $ 903,786
Affiliates Organization and Offering Costs.
General Partners and Reimbursement at Cost for all $ 563,127
Affiliates Acquisition Expenses
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.(Continued)
Person or Entity Amount Incurred From
Receiving Form and Method Inception (September 14, 1990)
Compensation of Compensation To December 31, 1999
General Partners 1% of Net Cash Flow in any fiscal $ 128,811
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 $2,117,427
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 1% of distributions of Net Proceeds $ 11,758
of Sale until Limited Partners have
received an amount equal to (a) their
Adjusted Capital Contributions, plus
(b) an amount equal to 12% of their
Adjusted Capital Contributions per annum,
cumulative but not compounded, to the
extent not previously distributed.
10% of distributions of Net Proceeds
of Sale there-after.
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 these amounts.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 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 October 10, 1990
[File No. 33-37239]).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 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 October 10, 1990
[File No. 33-37239]).
10.1 Net Lease Agreement dated
March 16, 1992 between the Partnership and
Taco Cabana, Inc. relating to the property
at 6040 Bandera Road, San Antonio, Texas
(incorporated by reference to Exhibit 10.1
of Post-Effective Amendment No. 1 to the
registrant's Registration Statement on Form
S-11 filed with the Commission on June 15,
1992 [File No. 33-37239]).
10.2 Net Lease Agreement dated
July 31, 1991 between the Partnership and
Taco Cabana, Inc. relating to the property
at 700 North Loop West IH-610, Houston,
Texas (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 June
15, 1992 [File No. 33-37239]).
10.3 Net Lease Agreement dated
May 1, 1992 between the Partnership and
Taco Cabana, Inc. relating to the property
at 825 South 6th Street, Waco, Texas
(incorporated by reference to Exhibit 10.3
of Post-Effective Amendment No. 1 to the
registrant's Registration Statement on Form
S-11 filed with the Commission on June 15,
1992 [File No. 33-37239]).
10.4 Net Lease Agreement dated
December 22, 1992 between the Partnership
and RCI West, Inc. relating to the property
at East Iliff Avenue and Blackhawk Street,
Aurora, Colorado (incorporated by reference
to Exhibit 10.6 of Form 10-K filed with the
Commission on March 29, 1993).
10.5 Co-Tenancy Agreement dated
December 30, 1992 between the Partnership
and Bruce R. Logan relating to the property
at East Iliff Avenue and Blackhawk Street,
Aurora, Colorado (incorporated by reference
to Exhibit 10.7 of Form 10-K filed with the
Commission on March 29, 1993).
10.6 Co-Tenancy Agreement dated
January 28, 1993 between the Partnership
and Frederick G. and Nicole A. Hamer
relating to the property at East Iliff
Avenue and Blackhawk Street, Aurora,
Colorado (incorporated by reference to
Exhibit 10.8 of Form 10-K filed with the
Commission on March 29, 1993).
10.7 Net Lease Agreement dated
April 2, 1993 between the Partnership and
Red Line Burgers, Inc. relating to the
property at 4989 Ayers Street, Corpus
Christi, Texas. (incorporated by reference
to Exhibit 10.17 of Form 10-K filed with
the Commission on March 29, 1994)
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.8 Net Lease Agreement dated
April 14, 1993 between the Partnership and
Apple Partners Limited Partnership relating
to the property at 9041-E Watson Road,
Crestwood, Missouri (incorporated by
reference to Exhibit 10.18 of Form 10-K
filed with the Commission on March 29,
1994).
10.9 Co-Tenancy Agreement dated
April 29, 1993 between the Partnership and
Charles Kimball relating to the property at
825 South 6th Street, Waco, Texas
(incorporated by reference to Exhibit 10.19
of Form 10-K filed with the Commission on
March 29, 1994).
10.10 Net Lease Agreement
dated June 15, 1993 between the Partnership
and Thomas and King, Inc. relating to the
property at Turkeyfoot at I-275, Crestview
Hills, Kentucky (incorporated by reference
to Exhibit 10.20 of Form 10-K filed with
the Commission on March 29, 1994).
10.11 Net Lease Agreement
dated June 16, 1993 between the Partnership
and JB's Restaurants, Inc. relating to the
property at 330 South Wilmot Road, Tucson,
Arizona (incorporated by reference to
Exhibit 10.21 of Form 10-K filed with the
Commission on March 29, 1994).
10.12 Net Lease Agreement
dated June 23, 1993 between the Partnership
and GC Covington, Inc. relating to the
property at Highway 190 and I-12,
Covington, Louisiana (incorporated by
reference to Exhibit 10.22 of Form 10-K
filed with the Commission on March 29,
1994).
10.13 Net Lease Agreement
dated September 30, 1993 between the
Partnership and Casual Restaurant Concepts
II, Inc. relating to the property at
Terrace Walk Shopping Plaza, 56th Street
and Fowler Avenue, Temple Terrace, Florida
(incorporated by reference to Exhibit 10.28
of Form 10-K filed with the Commission on
March 29, 1994).
10.14 Net Lease Agreement
dated December 2, 1993 between the
Partnership and Apple Partners Limited
Partnership relating to the property at
1220 N.W. 185th Avenue, Beaverton, Oregon
(incorporated by reference to Exhibit 10.31
of Form 10-K filed with the Commission on
March 29, 1994).
10.15 Co-Tenancy Agreement
dated January 11, 1994 between the
Partnership and the Lee Revocable Trust
relating to the property at Terrace Walk
Shopping Plaza, 56th Street and Fowler
Avenue, Temple Terrace, Florida
(incorporated by reference to Exhibit 10.32
of Form 10-K filed with the Commission on
March 29, 1994).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.16 Co-Tenancy Agreement
dated March 31, 1994 between the
Partnership and Robert E. Miller relating
to the property at 5779 East Fowler Avenue,
Temple Terrace, Florida (incorporated by
reference to Exhibit 10.30 of Form 10-KSB
filed with the Commission on March 30,
1995).
10.17 Amendment to Co-Tenancy
Agreement dated April 8, 1994 between the
Partnership and Bruce R. Logan relating to
the property at East Iliff Avenue and
Blackhawk Street, Aurora, Colorado
(incorporated by reference to Exhibit 10.31
of Form 10-KSB filed with the Commission on
March 30, 1995).
10.18 Net Lease Agreement
dated April 28, 1994 between the
Partnership and Apple Investment Group,
Inc. relating to the property at Bear
Valley Road and Apple Valley Road, Apple
Valley, California (incorporated by
reference to Exhibit 10.33 of Form 10-KSB
filed with the Commission on March 30,
1995).
10.19 Co-Tenancy Agreement
dated May 25, 1994 between the Partnership
and the Tilson Trust relating to the
property at 30 Crestview Hills Mall Road,
Crestview Hills, Kentucky (incorporated by
reference to Exhibit 10.36 of Form 10-KSB
filed with the Commission on March 30,
1995).
10.20 Co-Tenancy Agreement
dated June 27, 1994 between the Partnership
and Bruce R. Logan relating to the property
at 825 South 6th Street, Waco, Texas
(incorporated by reference to Exhibit 10.40
of Form 10-KSB filed with the Commission on
March 30, 1995).
10.21 Co-Tenancy Agreement
dated July 7, 1994 between the Partnership
and Richard Bagot relating to the property
at 825 South 6th Street, Waco, Texas
(incorporated by reference to Exhibit 10.43
of Form 10-KSB filed with the Commission on
March 30, 1995).
10.22 Co-Tenancy Agreement
dated July 15, 1994 between the Partnership
and Richard Bagot relating to the property
at 30 Crestview Hills Mall Road, Crestview
Hills, Kentucky (incorporated by reference
to Exhibit 10.44 of Form 10-KSB filed with
the Commission on March 30, 1995).
10.23 Co-Tenancy Agreement
dated September 9, 1994 between the
Partnership and Patricia J. Grant relating
to the property at East Iliff Avenue and
Blackhawk Street, Aurora, Colorado
(incorporated by reference to Exhibit 10.48
of Form 10-KSB filed with the Commission on
March 30, 1995).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.24 Co-Tenancy Agreement
dated September 9, 1994 between the
Partnership and The Potloff Living Trust
relating to the property at 30 Crestview
Hills Mall Road, Crestview Hills, Kentucky
(incorporated by reference to Exhibit 10.49
of Form 10-KSB filed with the Commission on
March 30, 1995).
10.25 Co-Tenancy Agreement
dated January 12, 1994 between the
Partnership and the William W. and Jean E.
Herich Family Trust relating to the
property at 825 South 6th Street, Waco,
Texas (incorporated by reference to Exhibit
10.52 of Form 10-KSB filed with the
Commission on March 30, 1995).
10.26 Property Co-Tenancy
Ownership Agreement dated March 31, 1995
between the Partnership and The William W.
and Jean E. Herich Family Trust relating to
the property at East Iliff Avenue and
Blackhawk Street, Aurora, Colorado
(incorporated by reference to Exhibit 10.49
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.27 Property Co-Tenancy
Ownership Agreement dated June 15, 1995
between the Partnership and Scott L.
Skogman relating to the property at East
Iliff Avenue and Blackhawk Street, Aurora,
Colorado (incorporated by reference to
Exhibit 10.54 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.28 Property Co-Tenancy
Ownership Agreement dated June 16, 1995
between the Partnership and Scott L.
Skogman relating to the property at 825
South 6th Street, Waco, Texas (incorporated
by reference to Exhibit 10.55 of Form
10-KSB filed with the Commission on March
21, 1996).
10.29 Property Co-Tenancy
Ownership Agreement dated June 16, 1995
between the Partnership and Frank P. Scalzo
relating to the property at East Iliff
Avenue and Blackhawk Street, Aurora,
Colorado (incorporated by reference to
Exhibit 10.56 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.30 Property Co-Tenancy
Ownership Agreement dated July 14, 1995
between the Partnership and Menzel Polzin
Partners relating to the property at 30
Crestview Hills Mall Road, Crestview Hills,
Kentucky (incorporated by reference to
Exhibit 10.58 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.31 Property Co-Tenancy
Ownership Agreement dated September 28,
1995 between the Partnership and Patricia
S. Marshall relating to the property at
Terrace Walk Shopping Plaza, 56th Street
and Fowler Avenue, Temple Terrace, Florida
(incorporated by reference to Exhibit 10.61
of Form 10-KSB filed with the Commission on
March 21, 1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.32 Property Co-Tenancy
Ownership Agreement dated December 7, 1995
between the Partnership and The Joan Koller
Trust relating to the property at Terrace
Walk Shopping Plaza, 56th Street and Fowler
Avenue, Temple Terrace, Florida
(incorporated by reference to Exhibit 10.66
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.33 Property Co-Tenancy
Ownership Agreement dated December 8, 1995
between the Partnership and The Joan Koller
Trust relating to the property at 30
Crestview Hills Mall Road, Crestview Hills,
Kentucky (incorporated by reference to
Exhibit 10.67 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.34 Property Co-Tenancy
Ownership Agreement dated December 8, 1995
between the Partnership and The Nicoletta
Trust relating to the property at 30
Crestview Hills Mall Road, Crestview Hills,
Kentucky (incorporated by reference to
Exhibit 10.68 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.35 Net Lease Agreement
dated August 2, 1995, between TKC X, LLC
and Garden Ridge, Inc. relating to the
property at 11415 Carolina Place Parkway,
Pineville, North Carolina (incorporated by
reference to Exhibit 10.1 of Form 8-K filed
with the Commission on April 10, 1996).
10.36 First Amendment to
Lease Agreement dated March 1, 1996 between
TKC X, LLC and Garden Ridge, L.P. relating
to the property at 11415 Carolina Place
Parkway, Pineville, North Carolina
(incorporated by reference to Exhibit 10.3
of Form 8-K filed with the Commission on
April 10, 1996).
10.37 Assignment and
Assumption of Lease dated March 28, 1996
between the Partnership, AEI Income &
Growth Fund XXI Limited Partnership, AEI
Net Lease Income & Growth Fund XX Limited
Partnership, and TKC X, LLC relating to the
property at 11415 Carolina Place Parkway,
Pineville, North Carolina (incorporated by
reference to Exhibit 10.4 of Form 8-K filed
with the Commission on April 10, 1996).
10.38 Property Co-Tenancy
Ownership Agreement dated April 5, 1996
between the Partnership, Larry Z. White and
Mary J. White relating to the property at
330 South Wilmot Road, Tucson, Arizona
(incorporated by reference to Exhibit 10.2
of Form 10-QSB filed with the Commission on
May 13, 1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.39 Property Co-Tenancy
Ownership Agreement dated April 26, 1996
between the Partnership and the
Gummersheimer Living Trust relating to the
property at 30 Crestview Hills Mall Road,
Crestview Hills, Kentucky (incorporated by
reference to Exhibit 10.4 of Form 10-QSB
filed with the Commission on May 13, 1996).
10.40 Property Co-Tenancy
Ownership Agreement dated May 15, 1996
between the Partnership and Marshall
Kilduff relating to the property at 30
Crestview Hills Mall Road, Crestview Hills,
Kentucky (incorporated by reference to
Exhibit 10.2 of Form 10-QSB filed with the
Commission on August 12, 1996).
10.41 Property Co-Tenancy
Ownership Agreement dated June 7, 1996
between the Partnership and Janet Y.
Thompson relating to the property at
Terrace Walk Shopping Plaza, 56th Street
and Fowler Avenue, Temple Terrace, Florida
(incorporated by reference to Exhibit 10.4
of Form 10-QSB filed with the Commission on
August 12, 1996).
10.42 Property Co-Tenancy
Ownership Agreement dated October 17, 1996
between the Partnership and Mark A. Benson
Living Trust relating to the property at 30
Crestview Hills Mall Road, Crestview Hills,
Kentucky (incorporated by reference to
Exhibit 10.2 of Form 10-QSB filed with the
Commission on November 14, 1996).
10.43 Property Co-Tenancy
Agreement dated November 15, 1996 between
the Partnership and Teresa E. and William
H. Balster relating to the property at
Terrace Walk Shopping Plaza, 56th Street
and Fowler Avenue, Temple Terrace, Florida
(incorporated by reference to Exhibit 10.91
of Form 10-KSB filed with the Commission on
March 26, 1997).
10.44 Property Co-Tenancy
Ownership Agreement dated January 2, 1997
between the Partnership and William E.
Mason and Hazel Mason relating to the
property at Terrace Walk Shopping Plaza,
56th Street and Fowler Avenue, Temple
Terrace, Florida (incorporated by reference
to Exhibit 10.93 of Form 10-KSB filed with
the Commission on March 26, 1997).
10.45 Net Lease Agreement
dated December 18, 1997 between the
Partnership and Party City of Atlanta, Inc.
relating to the property at 679 Dawsonville
Highway, Gainesville, Georgia (incorporated
by reference to Exhibit 10.60 of Form 10-
KSB filed with the Commission on March 23,
1998).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.46 Net Lease Agreement
dated December 23, 1997 between the
Partnership, AEI Real Estate Fund XV
Limited Partnership, AEI Real Estate Fund
XVIII 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 10.62 of Form 10-KSB filed with the
Commission on March 23, 1998).
10.47 Development Financing Agreement
dated April 13, 1998 between the
Partnership, AEI Real Estate Fund XVIII
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 12, 1998).
10.48 Net Lease Agreement dated April
13, 1998 between the Partnership, AEI Real
Estate Fund XVIII 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 12, 1998).
10.49 First Amendment to Net Lease
Agreement dated September 3, 1998 between
the Partnership, AEI Real Estate Fund XVII
Limited Partnership, AEI Real Estate Fund
XVIII Limited Partnership, AEI Real Estate
Fund XV Limited Partnership and Champps
Entertainment, Inc. relating to the
property at 301 West Big Beaver Road, Troy,
Michigan (incorporated by reference to
Exhibit 10.1 of Form 10-QSB filed with the
Commission on November 9, 1998).
10.50 First Amendment to Net
Lease Agreement dated November 20, 1998
between the Partnership, AEI Real Estate
Fund XVIII Limited Partnership, Robert P.
Johnson and Tumbleweed, LLC relating to the
property at 1150 North Bridge Street,
Chillicothe, Ohio (incorporated by
reference to Exhibit 10.53 of Form 10-KSB
filed with the Commission on March 12,
1999).
10.51 Purchase Agreement for
Fee Simple Undivided Interest and
Assignment of Net Lease Agreement dated
December 28, 1998 between the Partnership
and AEI Real Estate Fund XVIII Limited
Partnership relating to the property at
6959 East Broad Street, Columbus, Ohio
(incorporated by reference to Exhibit 10.54
of Form 10-KSB filed with the Commission on
March 12, 1999).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.52 First Amendment to Net
Lease Agreement dated December 28, 1998
between the Partnership, AEI Real Estate
Fund XVIII Limited Partnership and
Tumbleweed, LLC relating to the property at
6959 East Broad Street, Columbus, Ohio
(incorporated by reference to Exhibit 10.55
of Form 10-KSB filed with the Commission on
March 12, 1999).
10.53 Purchase Agreement
dated February 27, 1999 between the
Partnership, AEI Real Estate Fund XVIII
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 10.1 of Form 10-QSB filed with the
Commission on May 7, 1999).
10.54 Property Co-Tenancy
Ownership Agreement dated March 5, 1999
between the Partnership, AEI Real Estate
Fund XVIII 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 10.2 of Form 10-QSB filed with
the Commission on May 7, 1999).
10.55 Purchase Agreement
dated March 25, 1999 between the
Partnership and the Eugene M. Hamilton
Family Revocable Trust relating to the
property at 330 South Wilmot Road, Tucson,
Arizona(incorporated by reference to
Exhibit 10.3 of Form 10-QSB filed with the
Commission on May 7, 1999).
10.56 Purchase Agreement
dated March 25, 1999 between the
Partnership and the Tom S. Obata relating
to the property at 330 South Wilmot Road,
Tucson, Arizona(incorporated by reference
to Exhibit 10.4 of Form 10-QSB filed with
the Commission on May 7, 1999).
10.57 Property Co-Tenancy
Ownership Agreement dated March 29, 1999
between the Partnership and the Eugene M.
Hamilton Family Revocable Trust relating to
the property at 330 South Wilmot Road,
Tucson, Arizona(incorporated by reference
to Exhibit 10.5 of Form 10-QSB filed with
the Commission on May 7, 1999).
10.58 Property Co-Tenancy
Ownership Agreement dated March 31, 1999
between the Partnership and Tom S. Obata
relating to the property at 300 South
Wilmot Road, Tucson, Arizona (incorporated
by reference to Exhibit 10.6 of Form 10-QSB
filed with the Commission on May 7, 1999).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.59 Purchase Agreement
dated June 1, 1999 between the Partnership
and John F. Comer & Kitty R. Comer relating
to the property at 330 South Wilmot Road,
Tucson, Arizona (incorporated by reference
to Exhibit 10.1 of Form 10-QSB filed with
the Commission on July 30, 1999).
10.60 Sale and Purchase
Agreement and Escrow Instructions dated
June 2, 1999 between AEI Fund Management,
Inc. and Marie Callender Pie Shops, Inc.
relating to the property at 530 North
Stephanie Street, Henderson, Nevada
(incorporated by reference to Exhibit 10.2
of Form 10-QSB filed with the Commission on
July 30, 1999).
10.61 Property Co-Tenancy
Ownership Agreement dated June 17, 1999
between the Partnership and John F. Comer
and Kitty R. Comer relating to the property
at 330 South Wilmot Road, Tucson, Arizona
(incorporated by reference to Exhibit 10.3
of Form 10-QSB filed with the Commission on
July 30, 1999).
10.62 First Amendment to Sale
and Purchase Agreement and Escrow
Instructions dated July 8, 1999 between AEI
Fund Management, Inc. and Marie Callender
Pie Shops, Inc. relating to the property at
530 North Stephanie Street, Henderson,
Nevada (incorporated by reference to
Exhibit 10.4 of Form 10-QSB filed with the
Commission on July 30, 1999).
10.63 Assignment of Purchase
and Sale Agreement and Escrow Instructions
dated July 23, 1999 between the
Partnership, AEI Income & Growth Fund XXII
Limited Partnership and AEI Fund
Management, Inc. and Marie Callender Pie
Shops, Inc. relating to the property at 530
North Stephanie Street, Henderson, Nevada
(incorporated by reference to Exhibit 10.5
of Form 10-QSB filed with the Commission on
July 30, 1999).
10.64 Lease Agreement dated
September 28, 1999 between the Partnership,
AEI Income & Growth Fund XXII Limited
Partnership and Marie Callender Pie Shops,
Inc. relating to the property at 530 North
Stephanie Street, Henderson, Nevada
(incorporated by reference to Exhibit 10.1
of Form 10-QSB filed with the Commission on
November 8, 1999).
27 Financial Data Schedule for
period ended December 31, 1999.
B. Reports on Form 8-K and 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 NET LEASE INCOME & GROWTH FUND XIX
Limited Partnership
By: AEI Fund Management XIX, 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)
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<NAME> AEI NET LEASE INCOME & GROWTH FUND XIX LTD PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 835,832
<SECURITIES> 0
<RECEIVABLES> 27,373
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 863,205
<PP&E> 15,955,492
<DEPRECIATION> (1,578,302)
<TOTAL-ASSETS> 15,240,395
<CURRENT-LIABILITIES> 386,048
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,854,347
<TOTAL-LIABILITY-AND-EQUITY> 15,240,395
<SALES> 0
<TOTAL-REVENUES> 1,913,647
<CGS> 0
<TOTAL-COSTS> 657,220
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,528,383
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,528,383
<DISCONTINUED> 0
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