SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: September 30,2000
Commission file number: 0-19838
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified 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)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of September 30, 2000 and December 31, 1999
Statements for the Periods ended September 30, 2000 and 1999:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II.Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,483,201 $ 835,832
Receivables 29,806 27,373
Short-Term Note Receivable 660,000 0
----------- -----------
Total Current Assets 2,173,007 863,205
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 5,643,690 5,764,703
Buildings and Equipment 9,122,206 10,185,520
Construction in Progress 43,889 0
Property Acquisition Costs 0 5,269
Accumulated Depreciation (1,656,513) (1,578,302)
----------- -----------
Net Investments in Real Estate 13,153,272 14,377,190
----------- -----------
Total Assets $15,326,279 $15,240,395
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 80,487 $ 23,346
Distributions Payable 362,883 362,702
----------- -----------
Total Current Liabilities 443,370 386,048
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (32,727) (33,013)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 21,152 Units issued;
20,651 outstanding 14,915,636 14,887,360
----------- -----------
Total Partners' Capital 14,882,909 14,854,347
----------- -----------
Total Liabilities and Partners' Capital $15,326,279 $15,240,395
=========== ===========
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 INCOME
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Three Months Ended Nine Months Ended
9/30/00 9/30/99 9/30/00 9/30/99
INCOME:
Rent $ 475,743 $ 452,318 $ 1,415,664 $ 1,386,182
Investment Income 28,208 19,415 50,180 43,701
--------- --------- ----------- -----------
Total Income 503,951 471,733 1,465,844 1,429,883
--------- --------- ----------- -----------
EXPENSES:
Partnership Administration -
Affiliates 75,631 57,326 199,575 187,718
Partnership Administration
and Property Management -
Unrelated Parties 21,866 28,285 67,661 75,594
Depreciation 81,807 83,572 256,602 253,769
--------- --------- ----------- -----------
Total Expenses 179,304 169,183 523,838 517,081
--------- --------- ----------- -----------
OPERATING INCOME 324,647 302,550 942,006 912,802
GAIN ON SALE OF REAL ESTATE 183,639 0 222,173 271,956
--------- --------- ----------- -----------
NET INCOME $ 508,286 $ 302,550 $ 1,164,179 $ 1,184,758
========= ========= =========== ===========
NET INCOME ALLOCATED:
General Partners $ 5,083 $ 3,026 $ 11,642 $ 11,848
Limited Partners 503,203 299,524 1,152,537 1,172,910
--------- --------- ----------- -----------
$ 508,286 $ 302,550 $ 1,164,179 $ 1,184,758
========= ========= =========== ===========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(20,651 and 20,768 weighted average
Units outstanding in 2000 and 1999,
respectively) $ 24.37 $ 14.43 $ 55.81 $ 56.48
========= ========= =========== ===========
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 PERIODS ENDED SEPTEMBER 30
(Unaudited)
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,164,179 $ 1,184,758
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 256,602 253,769
Gain on Sale of Real Estate (222,173) (271,956)
(Increase) Decrease in Receivables (2,433) 349
Increase in Payable to
AEI Fund Management, Inc. 57,141 34,638
----------- -----------
Total Adjustments 89,137 16,800
----------- -----------
Net Cash Provided By
Operating Activities 1,253,316 1,201,558
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (461,727) (803,548)
Proceeds from Sale of Real Estate 991,216 801,641
----------- -----------
Net Cash Provided By (Used For)
Investing Activities 529,489 (1,907)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable 181 (4,312)
Distributions to Partners (1,135,617) (1,135,646)
----------- -----------
Net Cash Used For
Financing Activities (1,135,436) (1,139,958)
----------- -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 647,369 59,693
CASH AND CASH EQUIVALENTS, beginning of period 835,832 884,555
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,483,201 $ 944,248
=========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:
Note Receivable Acquired in Sale of Property $ 660,000
===========
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 PERIODS ENDED SEPTEMBER 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1998 $(32,375) $14,950,621 $14,918,246 20,767.92
Distributions (11,356) (1,124,290) (1,135,646)
Net Income 11,848 1,172,910 1,184,758
-------- ----------- ----------- ----------
BALANCE, September 30, 1999 $(31,883) $14,999,241 $14,967,358 20,767.92
======== =========== =========== ==========
BALANCE, December 31, 1999 $(33,013) $14,887,360 $14,854,347 20,651.42
Distributions (11,356) (1,124,261) (1,135,617)
Net Income 11,642 1,152,537 1,164,179
-------- ----------- ----------- ----------
BALANCE, September 30, 2000 $(32,727) $14,915,636 $14,882,909 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
SEPTEMBER 30, 2000
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI 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.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to
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.
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.
(3) Short-Term Note Receivable -
On August 2, 2000, the Partnership received a Contract for
Deed from an affiliate of the buyer of the Media Play store
in Apple Valley, Minnesota. The Note bears interest at 9%
and is due December 2, 2000. The Note is secured by the
land, building and equipment. As of September 30, 2000, the
Partnership's share of outstanding principal due on the Note
is $660,000.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(4) Investments in Real Estate -
Through December 31, 1999, the Partnership sold 57.9926% of
its interest in 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 nine months ended September 30, 1999,
the net gain was $271,956.
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.
During the six months ended September 30, 2000, the
Partnership sold 44.4225% of its interest in the Marie
Callender's restaurant in five separate transactions to
unrelated third parties. The Partnership received total net
sale proceeds of $853,753, which resulted in a total net
gain of $104,899. The total cost and related accumulated
depreciation of the interests sold was $760,769 and $11,915,
respectively.
On May 8, 2000, the Partnership purchased a 13% interest in
a parcel of land in Austin, Texas for $176,800. The land is
leased to Razzoo's, Inc. (RI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$15,028. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership will advance funds to RI for the
construction of a Razzoo's restaurant on the site. Through
September 30, 2000, the Partnership had advanced $30,782 for
the construction of the property and was charging interest
on the advances at a rate of 8.5%. The Partnership's share
of the total purchase price, including the cost of the land,
will be approximately $445,900. After the construction is
complete, the Lease Agreement will be amended to require
annual rental payments of approximately $43,000. 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 Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(4) Investments in Real Estate - (Continued)
On June 30, 2000, the Partnership purchased a 16% interest
in a parcel of land in Alpharetta, Georgia for $257,280.
The land is leased to Razzoo's, Inc. (RI) under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $21,869. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership will advance
funds to RI for the construction of a Razzoo's restaurant on
the site. Through September 30, 2000, the Partnership had
advanced $13,107 for the construction of the property and
was charging interest on the advances at a rate of 8.5%.
The Partnership's share of the total purchase price,
including the cost of the land, will be approximately
$612,800. After the construction is complete, the Lease
Agreement will be amended to require annual rental payments
of approximately $60,000. The remaining interests in the
property are owned by AEI Real Estate Fund XVIII Limited
Partnership, AEI Income & Growth Fund 23 LLC, and AEI
Private Net Lease Millennium Fund Limited Partnership,
affiliates of the Partnership.
On August 2, 2000, the Media Play store was sold to an
unrelated third party for $2,500,000. The sale agreement
required $500,000 in cash and a $2,000,000 contract for
deed, which bears interest at 9%. The contract for deed
assisted the buyer in closing on the property, prior to
obtaining long-term financing, and is due on December 2,
2000. The Partnership's share of the net sale proceeds was
$796,514, which resulted in a net gain of $116,325. At the
time of sale, the cost and related accumulated depreciation
was $794,267 and $114,078.
In 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 was 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. On July 5, 2000, the remaining Red Line Burger
property was sold to an unrelated third party. The
Partnership received net sale proceeds of $949, which
resulted in a net gain of $949. The abandonment and sale of
the two properties did not have a material effect on the
Partnership's cash flow or financial statements.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Covington, Louisiana,
filed for reorganization. GCR continued to make the lease
payments to the Partnership under the supervision of the
bankruptcy court. A reorganization plan was accepted by the
bankruptcy court which provides for the Lease to be assumed
by GCR and assigned to another operator who will purchase
the property. The reorganization plan also provides for the
Partnership to collect all rents outstanding under the terms
of the Lease. On October 25, 2000, the sale closed with the
Partnership receiving net sale proceeds of approximately
$1,100,000, which resulted in a net gain of approximately
$200,000.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(5) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the nine months ended September 30, 2000 and 1999, the
Partnership recognized rental income of $1,415,664 and
$1,386,182, respectively. During the same periods, the
Partnership earned investment income of $50,180 and $43,701,
respectively. In 2000, rental income increased mainly as a
result of additional rent received from three property
acquisitions in 2000 and 1999 and rent increases on twelve
properties. These increases in rental income were partially
offset by a decrease in rental income due to property sales
discussed below.
In 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 was 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. On July
5, 2000, the remaining Red Line Burger property was sold to an
unrelated third party. The Partnership received net sale
proceeds of $949, which resulted in a net gain of $949. The
abandonment and sale of the two properties did not have a
material effect on the Partnership's cash flow or financial
statements.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Covington, Louisiana,
filed for reorganization. GCR continued to make the lease
payments to the Partnership under the supervision of the
bankruptcy court. A reorganization plan was accepted by the
bankruptcy court which provides for the Lease to be assumed by
GCR and assigned to another operator who will purchase the
property. The reorganization plan also provides for the
Partnership to collect all rents outstanding under the terms of
the Lease. On October 25, 2000, the sale closed with the
Partnership receiving net sale proceeds of approximately
$1,100,000, which resulted in a net gain of approximately
$200,000.
During the nine months ended September 30, 2000 and 1999,
the Partnership paid Partnership administration expenses to
affiliated parties of $199,575 and $187,718, 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 $67,661 and $75,594, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
As of September 30, 2000, the Partnership's annualized
cash distribution rate was 7.5%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants due to inflation and real sales growth, will result
in an increase in rental income over the term of the leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
Liquidity and Capital Resources
During the nine months ended September 30, 2000, the
Partnership's cash balances increased $647,369 as a result of
cash generated from the sale of property and the Partnership
distributed less cash to the Partners than it generated from
operating activities. These increases were partially offset by
net cash used to purchase additional property. Net cash provided
by operating activities increased from $1,201,558 in 1999 to
$1,253,316 in 2000 mainly as the result of an increase in total
income in 2000 and net timing differences in the collection of
payments from the lessees and the payment of expenses.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the nine months ended
September 30, 2000 and 1999, the Partnership generated cash flow
from the sale of real estate of $991,216 and $801,641,
respectively. During the same periods, the Partnership expended
$461,727 and $803,548, respectively, to invest in real properties
(inclusive of acquisition expenses), as the Partnership
reinvested cash generated from property sales.
Through December 31, 1999, the Partnership sold 57.9926%
of its interest in 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 nine months
ended September 30, 1999, the net gain was $271,956.
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.
During the six months ended September 30, 2000, the
Partnership sold 44.4225% of its interest in the Marie
Callender's restaurant in five separate transactions to unrelated
third parties. The Partnership received total net sale proceeds
of $853,753, which resulted in a total net gain of $104,899. The
total cost and related accumulated depreciation of the interests
sold was $760,769 and $11,915, respectively.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On August 2, 2000, the Media Play store was sold to an
unrelated third party for $2,500,000. The sale agreement
required $500,000 in cash and a $2,000,000 contract for deed,
which bears interest at 9%. The contract for deed assisted the
buyer in closing on the property, prior to obtaining long-term
financing, and is due on December 2, 2000. The Partnership's
share of the net sale proceeds was $796,514, which resulted in a
net gain of $116,325. At the time of sale, the cost and related
accumulated depreciation was $794,267 and $114,078.
On May 8, 2000, the Partnership purchased a 13% interest
in a parcel of land in Austin, Texas for $176,800. The land is
leased to Razzoo's, Inc. (RI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of $15,028.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership will advance funds to RI for the construction of a
Razzoo's restaurant on the site. Through September 30, 2000, the
Partnership had advanced $30,782 for the construction of the
property and was charging interest on the advances at a rate of
8.5%. The Partnership's share of the total purchase price,
including the cost of the land, will be approximately $445,900.
After the construction is complete, the Lease Agreement will be
amended to require annual rental payments of approximately
$43,000. 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 Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.
On June 30, 2000, the Partnership purchased a 16% interest
in a parcel of land in Alpharetta, Georgia for $257,280. The
land is leased to Razzoo's, Inc. (RI) under a Lease Agreement
with a primary term of 15 years and annual rental payments of
$21,869. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership will advance funds to RI for the
construction of a Razzoo's restaurant on the site. Through
September 30, 2000, the Partnership had advanced $13,107 for the
construction of the property and was charging interest on the
advances at a rate of 8.5%. The Partnership's share of the total
purchase price, including the cost of the land, will be
approximately $612,800. After the construction is complete, the
Lease Agreement will be amended to require annual rental payments
of approximately $60,000. The remaining interests in the
property are owned by AEI Real Estate Fund XVIII Limited
Partnership, AEI Income & Growth Fund 23 LLC, and AEI Private Net
Lease Millennium Fund Limited Partnership, affiliates 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.
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.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On October 1, 2000, fifteen Limited Partners redeemed a
total of 128.5 Partnership Units for $80,384 in accordance with
the Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
thirty-three Limited Partners redeemed 500.5 Partnership Units
for $362,316. 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:
Market and economic conditions which affect the value
of the properties the Partnership owns and the cash
from rental income such properties generate;
the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
affects of these consequences for investors;
resolution by the General Partners of conflicts with
which they may be confronted;
the success of the General Partners of locating
properties with favorable risk return characteristics;
the effect of tenant defaults; and
the condition of the industries in which the tenants of
properties owned by the Partnership operate.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2.CHANGES IN SECURITIES
None.
PART II - OTHER INFORMATION
(Continued)
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated July 10,
2000, between the Partnership, AEI Income
& Growth Fund XXII Limited Partnership
and Shigemi Miya Family Protection Trust
relating to the property at 530 North
Stephanie Street, Henderson, Nevada.
10.2 Purchase Agreement dated August 10,
2000 between the Partnership and
Cheeseman Family Revocable Living Trust
relating to the property at 530 North
Stephanie Street, Henderson, Nevada.
10.3 Property Co-Tenancy Ownership
Agreement dated August 21, 2000 between
the Partnership and Cheeseman Family
Revocable Living Trust relating to the
property at 530 North Stephanie Street,
Henderson, Nevada.
10.4 Property Co-Tenancy Ownership
Agreement dated August 21, 2000 between
the Partnership and Shigemi Miya Family
Protection Trust relating to the property
at 530 North Stephanie Street, Henderson,
Nevada.
10.5 Asset Purchase Agreement dated
September 18, 2000 between the
Partnership and Southern River
Restaurants, LLC relating to the property
at Highway 190 and I-12, Covington,
Louisiana.
27 Financial Data Schedule for period
ended September 30, 2000.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: November 7, 2000 AEI Net Lease Income & Growth Fund XIX
Limited Partnership
By: AEI Fund Management XIX, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
