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: June 30, 1996
Commission file number: 33-85076C
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1789725
(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)
(612) 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 INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of June 30, 1996 and December 31, 1995
Statements for the Periods ended June 30, 1996 and 1995:
Operations
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 INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
BALANCE SHEET
JUNE 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
ASSETS
1996 1995
CURRENT ASSETS:
Cash and Cash Equivalents $ 9,446,073 $ 8,367,460
Receivables 11,595 15,311
----------- -----------
Total Current Assets 9,457,668 8,382,771
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 1,910,545 751,086
Building and Equipment 3,834,771 1,417,078
Property Acquisition Costs 86,120 17,905
Accumulated Depreciation (65,397) (11,687)
----------- -----------
Net Investments in Real Estate 5,766,039 2,174,382
----------- -----------
Total Assets $15,223,707 $10,557,153
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 107,161 $ 70,805
Distributions Payable 322,034 199,829
Unearned Rent 31,998 0
----------- -----------
Total Current Liabilities 461,193 270,634
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (8,206) (4,832)
Limited Partners, $1,000 Unit value;
24,000 Units authorized; 17,875 and 12,290
Units issued and outstanding in 1996 and
1995, respectively 14,770,720 10,291,351
----------- -----------
Total Partners' Capital 14,762,514 10,286,519
----------- -----------
Total Liabilities and Partners' Capital $15,223,707 $10,557,153
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Second Quarter Ended Six Months Ended
6/30/96 6/30/95 6/30/96 6/30/95
INCOME:
Rent $ 150,441 $ 6,693 $ 208,919 $ 6,693
Investment Income 104,079 35,653 221,936 35,658
--------- --------- --------- ---------
Total Income 254,520 42,346 430,855 42,351
--------- --------- --------- ---------
EXPENSES:
Partnership Administration-
Affiliates 48,553 37,719 106,795 53,798
Partnership Administration
and Property Management-
Unrelated Parties 9,153 951 16,987 2,503
Depreciation 38,944 1,181 53,710 1,181
--------- --------- --------- ---------
Total Expenses 96,650 39,851 177,492 57,482
--------- --------- --------- ---------
NET INCOME (LOSS) $ 157,870 $ 2,495 $ 253,363 $ (15,131)
========= ========= ========= =========
NET INCOME (LOSS) ALLOCATED:
General Partners $ 1,579 $ 25 $ 2,534 $ (151)
Limited Partners 156,291 2,470 250,829 (14,980)
--------- --------- --------- ---------
$ 157,870 $ 2,495 $ 253,363 $ (15,131)
========= ========= ========= =========
NET INCOME (LOSS) PER
LIMITED PARTNERSHIP UNIT
(16,124, 3,576, 14,676 and
3,576 weighted average Units
outstanding for the periods,
respectively) $ 9.69 $ .68 $ 17.09 $ (4.19)
========= ========= ========= =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 253,363 $ (15,131)
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 53,710 1,181
Decrease in Receivables 3,716 0
Increase in Payable to AEI Fund Management, Inc. 36,356 39,413
Increase in Unearned Rent 31,998 0
----------- -----------
Total Adjustments 125,780 40,594
----------- -----------
Net Cash Provided By
Operating Activities 379,143 25,463
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (3,645,367) (768,171)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital Contributions from Limited Partners 5,585,526 5,135,834
Organization and Syndication Costs (772,076) (770,375)
Increase in Distributions Payable 122,205 59,955
Distributions to Partners (590,818) (59,955)
----------- -----------
Net Cash Provided By
Financing Activities 4,344,837 4,365,459
----------- -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 1,078,613 3,622,751
CASH AND CASH EQUIVALENTS,
beginning of period 8,367,460 986
----------- -----------
CASH AND CASH EQUIVALENTS,
end of period $ 9,446,073 $ 3,623,737
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1994 $ (1,915) $ 0 $ (1,915) 0
Capital Contributions 0 5,135,834 5,135,834 5,135.83
Organization and
Syndication Costs (60) (770,315) (770,375)
Distributions (600) (59,355) (59,955)
Net Loss (151) (14,980) (15,131)
-------- ----------- ----------- ----------
BALANCE, June 30, 1995 $ (2,726) $ 4,291,184 $ 4,288,458 5,135.83
======== =========== =========== ==========
BALANCE, December 31, 1995 $ (4,832) $10,291,351 $10,286,519 12,289.81
Capital Contributions 0 5,585,526 5,585,526 5,585.52
Organization and
Syndication Costs 0 (772,076) (772,076)
Distributions (5,908) (584,910) (590,818)
Net Income 2,534 250,829 253,363
-------- ----------- ----------- ----------
BALANCE, June 30, 1996 $ (8,206) $14,770,720 $14,762,514 17,875.33
======== =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(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 Income & Growth Fund XXI Limited Partnership
(Partnership) was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XXI, Inc.
(AFM), the Managing General Partner of the Partnership.
Robert P. Johnson, the President and sole shareholder of
AFM, serves as the Individual General Partner of the
Partnership. An affiliate of AFM, AEI Fund Management,
Inc., 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. Under the terms of the
Restated Limited Partnership Agreement, 24,000 Limited
Partnership Units are available for subscription which, if
fully subscribed, will result in contributed Limited
Partners' capital of $24,000,000. The Partnership commenced
operations on April 14, 1995 when minimum subscriptions of
1,500 Limited Partnership Units ($1,500,000) were accepted.
At June 30, 1996, 17,875.332 Units ($17,875,332) were
subscribed and accepted by the Partnership. The General
Partners have contributed capital of $1,000. The Managing
General Partner has extended the offering of Units to the
earlier of completion of sale of all Units or January 31,
1997.
During the operation of the Partnership, 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 INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of the Partnership's 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 10% 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 the Partnership's
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 99% to the Limited Partners and 1% to the General
Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of the Partnership's 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 10% 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.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
In 1995, the Partnership elected early adoption of the
Statement of Financial Accounting Standards No. 121,
"Accounting for Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of." This standard requires the
Partnership to compare 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 Statement requires the
Partnership to recognize an impairment loss by the amount by
which the carrying amount of the property exceeds the fair
value of the property. Adoption of this Statement is not
expected to have a material effect on the Partnership's
financial statements.
The Partnership leases its properties to various tenants
through non-cancelable 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 20 years except
for the Media Play store which has a Lease term of 18 years.
The Leases contain renewal options which may extend the
Lease term an additional 10 years for the Arby's, an
additional 20 years for the Media Play store and an
additional 25 years for the Garden Ridge store. The Leases
contain rent clauses which entitle the Partnership to
receive additional rent in future years based on stated rent
increases. 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 cost of the property and related
accumulated depreciation at June 30, 1996 are as follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
Arby's
Montgomery, AL $ 328,310 $ 425,794 $ 754,104 $ 18,451
Media Play
Apple Valley, MN 422,776 991,284 1,414,060 22,769
Garden Ridge
Pineville, NC 1,159,459 2,417,693 3,577,152 24,177
----------- ----------- ----------- ----------
$ 1,910,545 $ 3,834,771 $ 5,745,316 $ 65,397
=========== =========== =========== ==========
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
On March 28, 1996, the Partnership purchased a 40.75%
interest in a Garden Ridge store in Pineville, North
Carolina for $3,577,152. The property is leased to Garden
Ridge, Inc. under a Lease Agreement with a primary term of
20 years and annual rental payments of $383,973. The
remaining interest in the property was purchased by AEI Net
Lease Income & Growth Fund XIX Limited Partnership and AEI
Net Lease Income & Growth Fund XX Limited Partnership,
affiliates of the Partnership.
In November, 1995, the Partnership entered into an Agreement
to purchase approximately a 60% interest in a Champps
Americana restaurant in Columbus, Ohio. The purchase price
for the entire property will be approximately $2,200,000.
The property will be leased to Americana Dining Corporation
under a Lease Agreement with a primary term of 20 years and
annual rental payments of approximately $151,000. AEI Real
Estate Fund XVIII Limited Partnership, an affiliate of the
Partnership, is expected to acquire the remaining interest.
In August, 1996, the Partnership entered into an agreement
to purchase a Denny's restaurant in Covington, Louisiana.
The purchase price will be approximately $1,111,000. The
property will be leased to Huntington Restaurants Group,
Inc. under a Lease Agreement with a primary term of 20 years
and annual rental payments of approximately $125,000.
In August, 1996, the Partnership entered into an agreement
to purchase a Caribou Coffee store in Charlotte, North
Carolina. The purchase price will be approximately
$1,368,000. The property will be leased to Caribou Coffee
Company, Inc. under a Lease Agreement with a primary term of
18 years and annual rental payments of approximately
$157,000.
The Partnership has incurred net costs of $111,400 relating
to the review of potential property acquisitions. Of these
costs, $25,280 have been capitalized and allocated to land,
building and equipment. The remaining costs of $86,120 have
been capitalized and will be allocated to property
acquisitions in future periods.
(4) 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
The Partnership's rental income is derived from long-term,
triple net lease agreements on the Partnership's properties. For
the periods ended June 30, 1996 and 1995, the Partnership
recognized rental income of $208,919 and $6,693, respectively.
During the same periods, the Partnership also earned $221,936 and
$35,658, respectively, in investment income from subscriptions
proceeds which were invested in short-term money market accounts,
commercial paper and federal agency notes. This investment
income constituted 52% and 84%, respectively, of total income for
the period. The percentage of total income represented by
investment income declines as subscription proceeds are invested
in properties.
The annual rent from the three properties acquired is
$602,540. Since the properties are leased under a triple-net
lease, the Partnership has not incurred, and does not expect to
incur, expenses associated with the operation or maintenance of
property and the rental income represents the cash flow generated
by the property to the Partnership.
During the periods ended June 30, 1996 and 1995, the
Partnership paid Partnership administration expenses to
affiliated parties of $106,795 and $53,798, respectively. These
administration expenses include initial start-up costs and
expenses associated with processing distributions, reporting
requirements and correspondence to the Limited Partners. The
administrative expenses decrease after completion of the offering
and acquisition phases of the Partnership's operations. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $16,987 and $2,503, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, insurance and other property costs.
The Partnership distributes all of its net income during
the offering and acquisition phases, and if net income after
deductions for depreciation is not sufficient to fund the
distributions, the Partnership may distribute other available
cash that constitutes capital for accounting purposes.
As of June 30, 1996, the Partnership's cash distribution
rate was 8.0% on an annualized basis. 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 were allocated to Limited Partners and 1% to
the General Partners.
Since the Partnership has only recently purchased its real
estate, 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
The Partnership's primary sources of cash will be proceeds
from the sale of Units, investment income, rental income and
proceeds from the sale of property. Its primary uses of cash
will be investment in real properties, payment of expenses
involved in the sale of units, the organization of the
Partnership, the management of properties, the administration of
the Partnership, and the payment of distributions.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Partnership Agreement requires that no more than 15%
of the proceeds from the sale of Units be applied to expenses
involved in the sale of Units (including Commissions) and that
such expenses, together with acquisition expenses, not exceed 20%
of the proceeds from the sale of Units. As set forth under the
caption "Estimated Use of Proceeds" of the Prospectus, the
General Partners anticipate that 14% of such proceeds will be
applied to cover organization and offering expenses if the
maximum proceeds are obtained. To the extent organization and
offering expenses actually incurred exceed 15% of proceeds, they
are borne by the General Partners.
The Partnership Agreement requires that all proceeds from
the sale of Units be invested or committed to investment in
properties by the later of two years after the date of the
Prospectus or six months after termination of the offer and sale
of Units. While the Partnership is purchasing properties, cash
flow from investing activities (investment in real property) will
remain negative and will constitute the principal use of the
Partnership's available cash flow.
Before the acquisition of properties, cash flow from
operating activities is not significant. Net income, after
adjustment for depreciation, is lower during the first few years
of operations as administrative expenses remain high and a large
amount of the Partnership's assets remain invested on a short-
term basis in lower-yielding cash equivalents. Net income will
become the largest component of cash flow from operating
activities and the largest component of cash flow after the
completion of the acquisition phase.
During the offering of Units, the Partnership's primary
source of cash flow will be from the sale of Limited Partnership
Units. The Partnership offered for sale up to $24,000,000 of
limited partnership interests (the "Units") (24,000 Units at
$1,000 per Unit) pursuant to a registration statement effective
February 1, 1995. From February 1, 1995 to April 14, 1995, the
minimum number of Limited Partnership Units (1,500) needed to
form the Partnership were sold and on April 14, 1995, a total of
2,937.444 Units ($2,937,444) were transferred into the
Partnership. Through June 30, 1996, the Partnership raised a
total of $17,875,332 from the sale of 17,875.332 Units. The
Managing General Partner has extended the offering of Units to
the earlier of completion of sale of all Units or January 31,
1997. From subscription proceeds, the Partnership paid
organization and syndication costs (which constitute a reduction
of capital) of $2,487,729.
On March 28, 1996, the Partnership purchased a 40.75%
interest in a Garden Ridge store in Pineville, North Carolina for
$3,577,152. The property is leased to Garden Ridge, Inc. under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $383,973. The remaining interest in the property was
purchased by AEI Net Lease Income & Growth Fund XIX Limited
Partnership and AEI Net Lease Income & Growth Fund XX Limited
Partnership, affiliates of the Partnership.
In November, 1995, the Partnership entered into an
Agreement to purchase approximately a 60% interest in a Champps
Americana restaurant in Columbus, Ohio. The purchase price for
the entire property will be approximately $2,200,000. The
property will be leased to Americana Dining Corporation under a
Lease Agreement with a primary term of 20 years and annual rental
payments of approximately $151,000. AEI Real Estate Fund XVIII
Limited Partnership, an affiliate of the Partnership, is expected
to acquire the remaining interest.
In August, 1996, the Partnership entered into an agreement
to purchase a Denny's restaurant in Covington, Louisiana. The
purchase price will be approximately $1,111,000. The property
will be leased to Huntington Restaurants Group, Inc. under a
Lease Agreement with a primary term of 20 years and annual rental
payments of approximately $125,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
In August, 1996, the Partnership entered into an agreement
to purchase a Caribou Coffee store in Charlotte, North Carolina.
The purchase price will be approximately $1,368,000. The
property will be leased to Caribou Coffee Company, Inc. under a
Lease Agreement with a primary term of 18 years and annual rental
payments of approximately $157,000.
After completion of the acquisition phase, 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.
Beginning in 1996, the Partnership may purchase 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.
Until capital is invested in properties, the Partnership
will remain extremely liquid. At June 30, 1996, $9,457,668 or
62% of the Partnership's assets were in cash or cash equivalents
(including accrued interest receivable). After completion of
property acquisitions, the Partnership will attempt to maintain a
cash reserve of only approximately 1% of subscription proceeds.
Because properties are purchased for cash and leased under triple-
net leases, this is considered adequate to satisfy most
contingencies.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II - OTHER INFORMATION
(Continued)
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Construction Loan Commitment dated
March 29, 1996 between AEI Fund
Management, Inc. and Huntington
Restaurants Group, Inc. relating to the
construction of a Denny's restaurant in
Covington, Louisiana (incorporated by
reference to Exhibit 10.11 of Post-
Effective Amendment #8 to Form SB-2
Registration Statement filed with the
Commission on August 14, 1996).
10.2 Purchase and Leaseback Commitment
dated March 29, 1996 between AEI Fund
Management, Inc. and Huntington
Restaurants Group, Inc. relating to the
sale and leaseback of a Denny's
restaurant in Covington, Louisiana
(incorporated by reference to Exhibit
10.12 of Post-Effective Amendment #8 to
Form SB-2 Registration Statement filed
with the Commission on August 14, 1996).
10.3 Assignment of Construction Loan
Commitment and Sale and Leaseback
Financing Commitment dated August 8,
1996, concerning those documents with
Huntington Restaurants Group, Inc. and
AEI Fund Management, Inc., to the
Partnership, relating to the sale and
leaseback of a Denny's restaurant in
Covington, Louisiana (incorporated by
reference to Exhibit 10.13 of Post-
Effective Amendment #8 to Form SB-2
Registration Statement filed with the
Commission on August 14, 1996).
10.4 Construction Loan Commitment dated
June 28, 1996 between AEI Fund
Management, Inc. and Caribou Coffee
Company, Inc. relating to the
construction of a Caribou Coffee store
at East Boulevard and Garden Terrace in
Charlotte, North Carolina (incorporated
by reference to Exhibit 10.14 of Post-
Effective Amendment #8 to Form SB-2
Registration Statement filed with the
Commission on August 14, 1996).
10.5 Sale and Leaseback Financing
Commitment dated June 28, 1996 between
AEI Fund Management, Inc. and Caribou
Coffee Company, Inc. relating to the
sale and leaseback of a Caribou Coffee
store at East Boulevard and Garden
Terrace in Charlotte, North Carolina
(incorporated by reference to Exhibit
10.15 of Post-Effective Amendment #8 to
Form SB-2 Registration Statement filed
with the Commission on August 14, 1996).
PART II - OTHER INFORMATION
(Continued)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - (Continued)
Description
10.6 Assignment of Construction Loan
Commitment and Sale and Leaseback
Financing Commitment dated August 8,
1996, concerning those documents with
Caribou Coffee store and AEI Fund
Management, Inc. to the Partnership,
relating to the sale and leaseback of a
Caribou Coffee store at East Boulevard
and Garden Terrace in Charlotte, North
Carolina (incorporated by reference to
Exhibit 10.16 of Post-Effective
Amendment #8 to Form SB-2 Registration
Statement filed with the Commission on
August 14, 1996).
27 Financial Data Schedule for period
ended June 30, 1996.
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: August 14, 1996 AEI Income & Growth Fund XXI
Limited Partnership
By: AEI Fund Management XXI, 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)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000931755
<NAME> AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,446,073
<SECURITIES> 0
<RECEIVABLES> 11,595
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,457,668
<PP&E> 5,831,436
<DEPRECIATION> (65,397)
<TOTAL-ASSETS> 15,223,707
<CURRENT-LIABILITIES> 461,193
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,762,514
<TOTAL-LIABILITY-AND-EQUITY> 15,223,707
<SALES> 0
<TOTAL-REVENUES> 430,855
<CGS> 0
<TOTAL-COSTS> 177,492
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 253,363
<INCOME-TAX> 0
<INCOME-CONTINUING> 253,363
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 253,363
<EPS-PRIMARY> 17.09
<EPS-DILUTED> 17.09
</TABLE>
