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, 1997
Commission file number: 0-29274
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 September 30, 1997 and December 31, 1996
Statements for the Periods ended September 30, 1997 and 1996:
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 INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
ASSETS
1997 1996
CURRENT ASSETS:
Cash and Cash Equivalents $ 4,726,867 $ 10,729,033
Receivables 125,589 41,672
------------ ------------
Total Current Assets 4,852,456 10,770,705
------------ ------------
INVESTMENTS IN REAL ESTATE:
Land 6,674,998 2,541,511
Buildings and Equipment 6,304,833 5,079,924
Construction in Progress 1,986,803 0
Construction Advances 0 1,621,870
Property Acquisition Costs 292,562 245,726
Accumulated Depreciation (338,122) (162,645)
------------ ------------
Net Investments in Real Estate 14,921,074 9,326,386
------------ ------------
Total Assets $ 19,773,530 $ 20,097,091
============ ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 71,084 $ 132,900
Distributions Payable 481,275 429,668
Unearned Rent 55,971 0
------------ ------------
Total Current Liabilities 608,330 562,568
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partners (17,235) (9,754)
Limited Partners, $1,000 Unit Value;
24,000 Units authorized; 24,000 and 23,563
Units issued and outstanding in 1997 and
1996, respectively 19,182,435 19,544,277
------------ ------------
Total Partners' Capital 19,165,200 19,534,523
------------ -----------
Total Liabilities and Partners' Capital $ 19,773,530 $ 20,097,091
============ ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Three Months Ended Nine Months Ended
9/30/97 9/30/96 9/30/97 9/30/96
INCOME:
Rent $ 282,333 $ 168,116 $ 698,606 $ 377,035
Investment Income 100,539 126,602 399,667 348,538
---------- ---------- ---------- ----------
Total Income 382,872 294,718 1,098,273 725,573
---------- ---------- ---------- ----------
EXPENSES:
Partnership Administration -
Affiliates 58,760 80,814 173,033 187,609
Partnership Administration
and Property Management -
Unrelated Parties 30,073 2,664 82,729 19,651
Depreciation 65,756 43,360 181,593 97,070
---------- ---------- ---------- ----------
Total Expenses 154,589 126,838 437,355 304,330
---------- ---------- ---------- ----------
OPERATING INCOME 228,283 167,880 660,918 421,243
GAIN ON SALE OF REAL ESTATE 42,582 0 42,582 0
---------- ---------- ---------- ----------
NET INCOME $ 270,865 $ 167,880 $ 703,500 $ 421,243
========== ========== ========== ==========
NET INCOME ALLOCATED:
General Partners $ 2,709 $ 1,678 $ 7,035 $ 4,212
Limited Partners 268,156 166,202 696,465 417,031
---------- ---------- ---------- ----------
$ 270,865 $ 167,880 $ 703,500 $ 421,243
========== ========== ========== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(24,000, 18,870, 23,952 and
16,084 weighted average Units
outstanding for the periods,
respectively) $ 11.17 $ 8.81 $ 29.08 $ 25.93
========== ========== ========== ==========
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 SEPTEMBER 30
(Unaudited)
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 703,500 $ 421,243
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 181,593 97,070
Gain on Sale of Real Estate (42,582) 0
Increase in Receivables (83,917) (24,758)
Increase (Decrease) in Payable to
AEI Fund Management, Inc. (61,816) 67,452
Increase in Unearned Rent 55,971 31,998
----------- -----------
Total Adjustments 49,249 171,762
----------- -----------
Net Cash Provided By
Operating Activities 752,749 593,005
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (5,959,321) (6,694,293)
Proceeds from Sale of Real Estate 225,622 0
----------- -----------
Net Cash Used For
Investing Activities (5,733,699) (6,694,293)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital Contributions from Limited Partners 436,651 8,202,697
Organization and Syndication Costs (57,869) (1,115,818)
Increase in Distributions Payable 51,607 178,171
Distributions to Partners (1,451,605) (971,458)
----------- -----------
Net Cash Provided By (Used For)
Financing Activities (1,021,216) 6,293,592
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (6,002,166) 192,304
CASH AND CASH EQUIVALENTS, beginning of period 10,729,033 8,367,460
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 4,726,867 $ 8,559,764
=========== ===========
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 SEPTEMBER 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1995 $ (4,832) $10,291,351 $10,286,519 12,289.81
Capital Contributions 0 8,202,697 8,202,697 8,202.69
Organization and
Syndication Costs 0 (1,115,818) (1,115,818)
Distributions (9,714) (961,744) (971,458)
Net Income 4,212 417,031 421,243
--------- ----------- ----------- ---------
BALANCE, September 30, 1996 $ (10,334) $16,833,517 $16,823,183 20,492.50
========= =========== =========== =========
BALANCE, December 31, 1996 $ (9,754) $19,544,277 $19,534,523 23,563.35
Capital Contributions 0 436,651 436,651 436.65
Organization and
Syndication Costs 0 (57,869) (57,869)
Distributions (14,516) (1,437,089) (1,451,605)
Net Income 7,035 696,465 703,500
--------- ----------- ----------- ---------
BALANCE, September 30, 1997 $ (17,235) $19,182,435 $19,165,200 24,000.00
========= =========== =========== =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(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. The Partnership
commenced operations on April 14, 1995 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 31, 1997, the
Partnership offering terminated when the maximum
subscription limit of 24,000 Limited Partnership Units
($24,000,000) was reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$24,000,000 and $1,000, respectively. 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
PartnersO capital contributions.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
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
Caribou Coffee, which is 18 years. The Leases contain
renewal options which may extend the Lease term an
additional 10 years for the Arby's and Caribou Coffee
restaurants, an additional 15 years for the Champps
Americana and Denny's restaurants, 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 September 30, 1997 are as
follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
Arby's
Montgomery, AL $ 328,310 $ 425,794 $ 754,104 $ 39,741
Media Play
Apple Valley, MN 422,776 991,284 1,414,060 75,313
Garden Ridge
Pineville, NC 1,181,253 2,463,138 3,644,391 147,788
Champps Americana
Columbus, OH 545,470 1,074,254 1,619,724 52,374
Denny's
Covington, LA 522,264 756,775 1,279,039 18,656
Caribou Coffee
Charlotte, NC 691,855 593,588 1,285,443 4,250
Champps Americana
San Antonio, TX 1,032,299 0 1,032,299 0
Champps Americana
Schaumburg, IL 876,387 0 876,387 0
Champps Americana
Livonia, MI 1,074,384 0 1,074,384 0
----------- ----------- ----------- -----------
$ 6,674,998 $ 6,304,833 $12,979,831 $ 338,122
=========== =========== =========== ===========
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
On December 21, 1995, the Partnership purchased a 34.0%
interest in a Media Play retail store in Apple Valley,
Minnesota for $1,414,060. 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
$139,587. 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 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 is equal to
approximately two years' rent. The Partnership's share of
such payment was $272,000. Under the Agreement, MGI
remained in possession of the property and performed all of
its obligations under the net lease agreement through
January 31, 1997 at which time it vacated the property and
made it available for re-let to another tenant. MGI was
responsible for all maintenance and management costs of the
property through January31, 1997 after which date the
Partnership became responsible for its share of expenses
associated with the property until it is re-let or sold. A
specialist in commercial property leasing has been retained
to locate a new tenant for the property.
On March 28, 1996, the Partnership purchased a 40.75%
interest in a Garden Ridge store in Pineville, North
Carolina for $3,644,391. The property is leased to Garden
Ridge, L.P. 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.
On August 29, 1996, the Partnership purchased a 67.8%
interest in a Champps Americana restaurant in Columbus, Ohio
for $1,808,880. The property is leased to Americana Dining
Corporation under a Lease Agreement with a primary term of
20 years and annual rental payments of $191,259. The
remaining interest in the property was purchased by AEI Real
Estate Fund XVIII Limited Partnership, an affiliate of the
Partnership.
On March 14, 1997, the Partnership purchased a parcel of
land in San Antonio, Texas for $1,032,299. The land is
leased to Champps Americana, Inc. (Champps) under a Lease
Agreement with a primary term of 20 years and annual rental
payments of $83,451. Effective September 9, 1997, the
annual rent was increased to $128,156. The Partnership also
entered into a Development Financing Agreement under which
the Partnership will advance funds to Champps for the
construction of a Champps Americana restaurant on the site.
Through September 30, 1997, the Partnership had advanced
$1,172,890 for the construction of the property and was
charging interest on the advances at a rate of 7.0%.
Effective September 9, 1997, the Partnership began charging
interest on the Note at the rate of 10.75%. The total
purchase price, including the cost of the land, will be
approximately $2,804,000. After the construction is
complete, the Lease Agreement will be amended to require
annual rental payments of approximately $300,000.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
On March 19, 1997, the Partnership purchased a Denny's
restaurant in Covington, Louisiana for $1,279,039. The
property is leased to Huntington Restaurants Group, Inc.
under a Lease Agreement with a primary term of 20 years and
annual rental payments of $141,243.
On April 21, 1997, the Partnership purchased a 49.6%
interest in a parcel of land in Schaumburg, Illinois for
$876,387. The land is leased to Champps under a Lease
Agreement with a primary term of 20 years and annual rental
payments of $66,906. The Partnership also entered into a
Development Financing Agreement under which the Partnership
will advance funds to Champps for the construction of a
Champps Americana restaurant on the site. Through September
30, 1997, the Partnership had advanced $212,034 for the
construction of the property and was charging interest on
the advances at a rate of 7.0%. The Partnership's share of
the total purchase price, including the cost of the land,
will be approximately $2,128,000. After the construction is
complete, the Lease Agreement will be amended to require
annual rental payments of approximately $229,000. The
remaining interests in the property are owned by AEI Income
& Growth Fund XX Limited Partnership and Net Lease Income &
Growth Fund 84-A Limited Partnership, affiliates of the
Partnership.
On July 8, 1997, the Partnership purchased a parcel of land
in Livonia, Michigan for $1,074,384. The land is leased to
Champps under a Lease Agreement with a primary term of 20
years and annual rental payments of $75,207. The
Partnership also entered into a Development Financing
Agreement under which the Partnership will advance funds to
Champps for the construction of a Champps Americana
restaurant on the site. Through September 30, 1997, the
Partnership had advanced $362,611 for the construction of
the property and was charging interest on the advances at a
rate of 7.0%. The total purchase price, including the cost
of the land, will be approximately $3,970,000. After the
construction is complete, the Lease Agreement will be
amended to require annual rental payments of approximately
$427,000.
On July 31, 1997, the Partnership purchased a 93.1% interest
in a Caribou Coffee store in Charlotte, North Carolina for
$1,285,443. The property is leased to Caribou Coffee
Company, Inc. under a Lease Agreement with a primary term of
18 years and annual rental payments of $146,438. The
remaining interest in the property is owned by AEI
Institutional Net Lease Fund '93, an affiliate of the
Partnership.
The Partnership has incurred net costs of $464,785 relating
to the review of potential property acquisitions. Of these
costs, $172,223 have been capitalized and allocated to land,
building and equipment. The remaining costs of $292,562
have been capitalized and will be allocated to property
acquisitions in future periods.
On September 30, 1997, the Partnership sold a 7.0899%
interest in the Champps Americana restaurant in Columbus,
Ohio to an unrelated third party. The Partnership received
net sale proceeds of $225,622 which resulted in a net gain
of $42,582. The total cost and related accumulated
depreciation of the interest sold was $189,156 and $6,116,
respectively.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
During the first nine months of 1997, the Partnership
distributed net sale proceeds of $190,810 to the Limited and
General Partners as part of their regular quarterly
distributions which represented a return of capital of $7.87
per Limited Partnership Unit. The remaining net sale
proceeds will either be reinvested in additional properties
or distributed to the Partners in the future.
(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
For the nine months ended September 30, 1997 and 1996, the
Partnership recognized rental income of $698,606 and $377,035,
respectively. During the same periods, the Partnership earned
$399,667 and $348,538, 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 36% and 48%, respectively, of total
income for the periods. The percentage of total income
represented by investment income declines as subscription
proceeds are invested in properties.
Musicland Group, Inc. (MGI), the lessee of the Media Play
retail store in Apple Valley, Minnesota has recently experienced
financial difficulties and has aggressively been 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 $272,000. Under the
Agreement, MGI remained in possession of the property and
performed all of its obligations under the net lease agreement
through January 31, 1997 at which time it vacated the property
and made it available for re-let to another tenant. MGI was
responsible for all maintenance and management costs of the
property through January 31, 1997 after which date the
Partnership became responsible for its share of expenses
associated with the property until it is re-let or sold. A
specialist in commercial property leasing has been retained to
locate a new tenant for the property. In 1997, the Partnership
received $93,058 less in rent than in 1996 from Media Play.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
During the nine months ended September 30, 1997 and 1996,
the Partnership paid Partnership administration expenses to
affiliated parties of $173,033 and $187,609, 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 $82,729 and $19,651, 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 increase
in these expenses in 1997, when compared to 1996, is the result
of expenses incurred in 1997 related to the Media Play situation
discussed above.
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 September 30, 1997, 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. The Leases contain cost of living increases to rent
which 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 are proceeds
from the sale of Units, investment income, rental income and
proceeds from the sale of property. Its primary uses of cash are
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.
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.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
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 February1, 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. On January 31, 1997, the Partnership offering
terminated when the maximum subscription limit of 24,000 Limited
Partnership Units ($24,000,000) was reached. From subscription
proceeds, the Partnership paid organization and syndication costs
(which constitute a reduction of capital) of $3,306,859.
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.
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.
On March 28, 1996, the Partnership purchased a 40.75%
interest in a Garden Ridge store in Pineville, North Carolina for
$3,644,391. The property is leased to Garden Ridge, L.P. 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.
On August 29, 1996, the Partnership purchased a 67.8%
interest in a Champps Americana restaurant in Columbus, Ohio for
$1,808,880. The property is leased to Americana Dining
Corporation under a Lease Agreement with a primary term of 20
years and annual rental payments of $191,259. The remaining
interest in the property was purchased by AEI Real Estate Fund
XVIII Limited Partnership, an affiliate of the Partnership.
On March 14, 1997, the Partnership purchased a parcel of
land in San Antonio, Texas for $1,032,299. The land is leased to
Champps Americana, Inc. (Champps) under a Lease Agreement with a
primary term of 20 years and annual rental payments of $83,451.
Effective September 9, 1997, the annual rent was increased to
$128,156. The Partnership also entered into a Development
Financing Agreement under which the Partnership will advance
funds to Champps for the construction of a Champps Americana
restaurant on the site. Through September 30, 1997, the
Partnership had advanced $1,172,890 for the construction of the
property and was charging interest on the advances at a rate of
7.0%. Effective September 9, 1997, the Partnership began
charging interest on the Note at the rate of 10.75%. The total
purchase price, including the cost of the land, will be
approximately $2,804,000. After the construction is complete,
the Lease Agreement will be amended to require annual rental
payments of approximately $300,000.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On March 19, 1997, the Partnership purchased a Denny's
restaurant in Covington, Louisiana for $1,279,039. The property
is leased to Huntington Restaurants Group, Inc. under a Lease
Agreement with a primary term of 20 years and annual rental
payments of $141,243.
On April 21, 1997, the Partnership purchased a 49.6%
interest in a parcel of land in Schaumburg, Illinois for
$876,387. The land is leased to Champps under a Lease Agreement
with a primary term of 20 years and annual rental payments of
$66,906. The Partnership also entered into a Development
Financing Agreement under which the Partnership will advance
funds to Champps for the construction of a Champps Americana
restaurant on the site. Through September 30, 1997, the
Partnership had advanced $212,034 for the construction of the
property and was charging interest on the advances at a rate of
7.0%. The Partnership's share of the total purchase price,
including the cost of the land, will be approximately $2,128,000.
After the construction is complete, the Lease Agreement will be
amended to require annual rental payments of approximately
$229,000. The remaining interests in the property are owned by
AEI Income & Growth Fund XX Limited Partnership and Net Lease
Income & Growth Fund 84-A Limited Partnership, affiliates of the
Partnership.
On July 8, 1997, the Partnership purchased a parcel of
land in Livonia, Michigan for $1,074,384. The land is leased to
Champps under a Lease Agreement with a primary term of 20 years
and annual rental payments of $75,207. The Partnership also
entered into a Development Financing Agreement under which the
Partnership will advance funds to Champps for the construction of
a Champps Americana restaurant on the site. Through September
30, 1997, the Partnership had advanced $362,611 for the
construction of the property and was charging interest on the
advances at a rate of 7.0%. The total purchase price, including
the cost of the land, will be approximately $3,970,000. After
the construction is complete, the Lease Agreement will be amended
to require annual rental payments of approximately $427,000.
On July 31, 1997, the Partnership purchased a 93.1%
interest in a Caribou Coffee store in Charlotte, North Carolina
for $1,285,443. The property is leased to Caribou Coffee
Company, Inc. under a Lease Agreement with a primary term of 18
years and annual rental payments of $146,438. The remaining
interest in the property is owned by AEI Institutional Net Lease
Fund '93, an affiliate of the Partnership.
On September 30, 1997, the Partnership sold a 7.0899%
interest in the Champps Americana restaurant in Columbus, Ohio to
an unrelated third party. The Partnership received net sale
proceeds of $225,622 which resulted in a net gain of $42,582.
The total cost and related accumulated depreciation of the
interest sold was $189,156 and $6,116, respectively.
During the first nine months of 1997, the Partnership
distributed net sale proceeds of $190,810 to the Limited and
General Partners as part of their regular quarterly distributions
which represented a return of capital of $7.87 per Limited
Partnership Unit. The remaining net sale proceeds will either be
reinvested in additional properties or distributed to the
Partners in the future.
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.
ITEM 2.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.
On October 1, 1997, three Limited Partners redeemed a
total of 171.1 Partnership Units for $154,021 in accordance with
the Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. The redemptions increase
the remaining Limited Partners' ownership interest in the
Partnership.
Until capital is invested in properties, the Partnership
will remain extremely liquid. At September 30, 1997, $4,756,838
or 24% 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
ITEM 5.OTHER INFORMATION
None.
PART II - OTHER INFORMATION
(Continued)
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated September
16, 1997 between the Partnership and
Richard J. Abbott and Marjory T. Abbott
relating to the property at 161 E. Campus
View Boulevard, Columbus, Ohio.
27 Financial Data Schedule for period
ended September 30, 1997.
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 4, 1997 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)
PURCHASE AGREEMENT
Champps Restaurant - Columbus, OH
This AGREEMENT, entered into effective as of the 16 of September,
1997 .
l. Parties. Seller is AEI Income & Growth Fund XXI Limited
Partnership which owns an undivided 67.80% interest in the fee
title to that certain real property legally described in the
attached Exhibit "A" (the "Entire Property") Buyer is Richard J.
Abbott and Marjory T. Abbott, husband and wife as joint tenants,
("Buyer"). Seller wishes to sell and Buyer wishes to buy a
portion as Tenant in Common of Seller's interest in the Entire
Property.
2. Property. The Property to be sold to Buyer in this transaction
consists of an undivided 7.0899 percentage interest (hereinafter,
simply the "Property") as Tenant in Common in the Entire
Property.
3. Purchase Price . The purchase price for this percentage
interest in the Entire Property is $250,000 all cash.
4. Terms. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $5,000
to Seller (which shall be deposited into escrow according to
the terms hereof) (the "First Payment"). The First Payment
will be credited against the purchase price when and if
escrow closes and the sale is completed.
(b) Buyer will deposit the balance of the purchase price,
$245,000 (the "Second Payment") into escrow in sufficient
time to allow escrow to close on the closing date.
5. Closing Date. Escrow shall close on or before September 30,
1997.
6. Due Diligence. Buyer will have until the expiration of the
fifth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Entire Property or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) Copies of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) Copies of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
It is a contingency upon Seller's obligations hereunder that
two (2) copies of Co-Tenancy Agreement in the form attached
hereto duly executed by Buyer and Seller and dated on escrow
closing date be delivered to the Seller on the closing date.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
the Review Period. Such notice shall be deemed effective only
upon receipt by Seller. If this Agreement is not cancelled as
set forth above, the First Payment shall be non-refundable unless
Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under sections 15(a) of this agreement (which will
survive), Buyer (after execution of such documents reasonably
requested by Seller to evidence the termination hereof) shall be
returned its First Payment, and Buyer will have absolutely no
rights, claims or interest of any type in connection with the
Property or this transaction, regardless of any alleged conduct
by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to have canceled this Agreement and
relinquish all rights in and to the Property unless Buyer makes
the Second Payment when required. If this Agreement is not
canceled and the Second Payment is made when required, all of
Buyer's conditions and contingencies will be deemed satisfied.
7. Escrow. Escrow shall be opened by Seller and funds deposited
in escrow upon acceptance of this agreement by both parties. The
escrow holder will be a nationally-recognized escrow company
selected by Seller. A copy of this Agreement will be delivered to
the escrow holder and will serve as escrow instructions together
with the escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its rights
and duties (and the parties agree to sign these additional
instructions). If there is any conflict between these other
instructions and this Agreement, this Agreement will control.
8. Title. Closing will be conditioned on the agreement of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease definded in paragraph 11 below;
and other items of record disclosed to Buyer during the Review
Period.
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to make title marketable, or is unable to make title
marketable or obtain insurable title, (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof) Buyer's First Payment shall be returned and
this Agreement shall be null and void and of no further force and
effect.
Pending correction of title, the payments hereunder required
shall be postponed, but upon correction of title and within ten
(10) days after written notice of correction to the Buyer, the
parties shall perform this Agreement according to its terms.
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
9. Closing Costs. Seller will pay one-half of escrow fees,
the cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. Real Estate Taxes, Special Assessments and Prorations.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, all
real estate taxes and installments of special assessments
due and payable in all years prior to the year of Closing
have been paid in full. Unpaid real estate taxes and unpaid
levied and pending special assessments existing on the date
of Closing shall be the responsibility of Buyer and Seller
in proportion to their respective Tenant in Common
interests, pro-rated, however, to the date of closing for
the period prior to closing, which shall be the
responsibility of Seller if Tenant shall not pay the same.
Seller and Buyer shall likewise pay all taxes due and
payable in the year after Closing and any unpaid
installments of special assessments payable therewith and
thereafter, if such unpaid levied and pending special
assessments and real estate taxes are not paid by any tenant
of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate share
of all operating expenses of the Entire Property incurred on
and after the date of closing.
11. Seller's Representation and Agreements.
(a) Seller represents and warrants as of this date that:
(i) Except for the lease in existence between AEI Income &
Growth Fund XXI Limited Partnership and AEI Real Estate Fund
XVIII Limited Partnership and Americana Dining Corporation,
dated August 29, 1996, Seller is not aware of any leases of
the Property. The above referenced lease agreement also has
a first right of refusal in favor of the Tenant as set forth
in Article 34 of said lease agreement, which right shall
apply to any attempted disposition of the Property by Buyer
after this transaction.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as set
forth in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts that would materially affect the Property and be
binding on Buyer after the Closing Date without Buyer's
prior consent, which will not be unreasonably withheld.
However, Buyer acknowledges that Seller retains the right
both prior to and after the Closing Date to freely transfer
all or a portion of Seller's remaining undivided interest in
the Entire Property, provided such sale shall not encumber
the Property being purchased by
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
Buyer in violation of the terms hereof or the contemplated
Co-Tenancy Agreement.
12. Disclosures.
(a) To the best of Seller's knowledge: there are now, and
at the Closing there will be, no material, physical or
mechanical defects of the Property, including, without
limitation, the plumbing, heating, air conditioning,
ventilating, electrical systems, and all such items are in
good operating condition and repair and in compliance with
all applicable governmental , zoning and land use laws,
ordinances, regulations and requirements.
(b) To the best of Seller's knowledge: the use and
operation of the Property now is, and at the time of Closing
will be, in full compliance with applicable building codes,
safety, fire, zoning, and land use laws, and other
applicable local, state and federal laws, ordinances,
regulations and requirements.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent Buyer from using and operating the Property after
the Closing in the manner in which the Property has been
used and operated prior to the date of this Agreement.
(d) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and groundwater conditions. To the
best of Seller's knowledge: there is no proceeding or
inquiry by any governmental authority with respect to the
presence of Hazardous Materials on the Property or the
migration of Hazardous Materials from or to other property.
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Property arising out of Seller's negligence or intentional
misconduct in violation of applicable state or federal law
or regulation.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
thereon or to perform any other act regarding the Property,
except as expressly provided herein.
(f) Buyer acknowledges that, having been given the
opportunity to inspect the Property and such financial
information on the Lessee and Guarantors of the Lease as
Buyer or its advisors shall request, Buyer is relying solely
on its own investigation of the Property and not on any
information provided by Seller or to be provided except as
set forth herein. Buyer further acknowledges that the
information provided and to be provided by Seller with
respect to the Property and to the Lessee and Guarantors of
Lease was obtained from a variety of sources and Seller
neither (a) has made independent investigation or
verification of such information, or (b) makes any
representations as to the accuracy or completeness of such
information. The sale of the Property as provided for
herein is made on an "AS IS" basis, and Buyer expressly
acknowledges that, in consideration of the agreements of
Seller herein, except as otherwise specified herein, Seller
makes no Warranty or representation, Express or Implied, or
arising by operation of law, including, but not limited to,
any warranty or condition, habitability, tenantability,
suitability for commercial purposes, merchantability, or
fitness for a particular purpose, in respect of the
Property.
The provisions (d) - (f) above shall survive closing.
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
13. Closing.
(a) Before the closing date, Seller will deposit into
escrow an executed limited warranty deed conveying insurable
title of the Property to Buyer, subject to the encumbrances
contained in paragraph 8 above.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign and
deliver to the escrow holder any other documents reasonably
required by the escrow holder to close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
title policy; immediately deliver to Seller the portion of
the purchase price deposited into escrow by cashier's check
or wire transfer (less debits and prorations, if any);
deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all
other actions necessary to close escrow.
14. Defaults. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. Seller shall retain all remedies available to Seller at
law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, deposited
the balance of the Second Payment for the purchase price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, and unconditionally notified
Seller that it stands ready to tender full performance, purchase
the Property and close escrow as per this Agreement, regardless
of any alleged default or misconduct by Seller. Provided,
however, that in no event shall Seller be liable for any actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. Buyer's Representations and Warranties.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
16. Damages, Destruction and Eminent Domain.
(a) If, prior to closing, the Property or any part thereof
should be destroyed or further damaged by fire, the
elements, or any cause, due to events occurring subsequent
to the date of this Agreement to the extent that the cost of
repair exceeds $10,000.00, this Agreement shall become null
and void, at Buyer's option exercised, if at all, by written
notice to Seller within ten (10) days after Buyer has
received written notice from Seller of said destruction or
damage. Seller, however, shall have the right to adjust or
settle any insured loss until (i) all contingencies set
forth in Paragraph 6 hereof have been satisfied, or waived;
and (ii) any ten-day period provided for above in this
Subparagraph 16a for Buyer to elect to terminate this
Agreement has expired or Buyer has, by written notice to
Seller, waived Buyer's right to terminate this Agreement.
If Buyer elects to proceed and to consummate the purchase
despite said damage or destruction, there shall be no
reduction in or abatement of the purchase price, and Seller
shall assign to Buyer the Seller's right, title, and
interest in and to all insurance proceeds (pro-rata in
relation to the Entire Property) resulting from said damage
or destruction to the extent that the same are payable with
respect to damage to the Property, subject to rights of any
Tenant of the Entire Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
17. Buyer's 1031 Tax Free Exchange.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to Realty Exchange
Corporation who will act as Accommodator to perfect the 1031
exchange by preparing an agreement of exchange of Real Property
whereby Realty Exchange Corporation will be an independent third
party purchasing the ownership interest in subject property from
Seller and selling the ownership interest in subject property to
Buyer under the same terms and conditions as documented in this
Purchase Agreement. Buyer asks the Seller, and Seller agrees to
cooperate in the perfection of such an exchange
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
if at no additional cost or expense to Seller or delay in time.
Buyer hereby indemnifies and holds Seller harmless from any
claims and/or actions resulting from said exchange. Pursuant to
the direction of Realty Exchange Corporation, Seller will deed
the property to Buyer.
18. Cancellation
If any party elects to cancel this Contract because of any
breach by another party or because escrow fails to close by
the agreed date, the party electing to cancel shall deliver
to escrow agent a notice containing the address of the party
in breach and stating that this Contract shall be cancelled
unless the breach is cured within 13 days following the
delivery of the notice to the escrow agent. Within three
days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall
be required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
19. Miscellaneous.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed by September 30, 1997,
through no fault of Seller, Seller may either, at its
election, extend the closing date or exercise any remedy
available to it by law, including terminating this
Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
If to Buyer:
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller. Seller has five (5) business days from
receipt within which to accept this offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: Richard J. Abbott and Marjory T. Abbott
By: /s/ Richard J Abbott
Richard J. Abbott
WITNESS:
/s/ Kimberlee Price
Kimberlee Price
(Print Name)
WITNESS:
/s/ Robert Wiley
Robert Wiley
(Print Name)
By: /s/ Marjory T Abbott
Marjory T. Abbott
WITNESS:
/s/ Robert Wiley
Robert Wiley
(Print Name)
WITNESS:
/s/ Kimberlee Price
Kimberlee Price
(Print Name)
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
SELLER: AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP a Minnesota
limited partnership
By: AEI Fund Management XXI Inc., its corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
WITNESS:
/s/ Dawn E Campbell
Dawn E Campbell
(Print Name)
WITNESS:
/s/ Jennifer Seck
Jennifer Seck
(Print Name)
Buyer Initial: /s/ RJA
Purchase Agreement for Champps - Columbus, OH
LEGAL DESCRIPTION
Situated in the State of Ohio, County of Franklin, City of
Columbus, being located in Section 2, Township 2, Range 18,
United States Military Lands, and being part of a 43. 161
acre tract of land (Parcel No. 610-146452) conveyed to Forty-
One Corporation (the Grantor), by deed of record in Official
Record 15500 A-G, all references being to records in the
Recorder's Office, Franklin County Ohio, and being more
particularly described as follows:
Beginning for reference at the intersection of North High
Street (US 23) and East Campus View Boulevard (80.00 feet in
width) as shown in Plat Book 60, Page 26:
thence S 86 49' 53" E, along the centerline of said East
Campus View Boulevard, a distance of 900.00 feet to a point
of curvature,
thence along the centerline of said East Campus View
Boulevard, with a curve tot he left having a radius of
1350.00 feet, a chord bearing of N 89 27' 50" E, and a chord
distance of 174.45 feet to the intersection with centerline
of High Cross Boulevard (80.00 feet in width);
thence S 1 53'32" E, along the centerline of said High cross
Boulevard a distance of 74.72 feet to a point;
thence N 88 06'28" E, a distance of 40.00 feet to an iron
pin set in the easterly right of way line of said High Cross
Boulevard, said point being the True Point of Beginning of
herein described tract;
thence along the easterly right of way line of said High
Cross Boulevard, with a curve to the right, having a radius
of 40.00 feet, a chord bearing of N 40 23'34" E, and a chord
distance of 53.83 feet to an iron pin set in the southerly
right of way line of said East Campus View Boulevard;
thence along the southerly right of way line of said East
Campus View Boulevard and the northerly line of herein
described tract, with a curve to the left, having a radius
of 1390.00 feet, a chord bearing of N 82 25'24" E, and a
chord distance of 12.36 feet to an iron pin set;
thence N 82 10' 07" E, along the southerly right of way line
of said East Campus View boulevard and the northerly line of
herein described tract, a distance of 209.28 feet to an iron
pin set at the northeasterly corner of herein described
tract;
thence s 7 49' 49" E, along the easterly line of herein
described tract, a distance of 312.60 feet to an iron pin
set at the southeasterly corner of herein described tract;
thence S 82 10'11" W, along the southerly line of herein
described tract, a distance of 318.01 feet to an iron pin
set in the easterly right of way line of said High Cross
Boulevard at the southwesterly corner of herein described
tract;
thence along the easterly right of way line of said High
Cross Boulevard and the westerly line of herein described
tract, with a curve to the right, having a radius of 2960.00
feet, a chord bearing of N 9 21' 59" E, and a chord distance
of 10/.64 feet to an iron pin set;
thence N 9 28'10" E, along the easterly right of way line of
said High Cross Boulevard and the westerly line of herein
described tract a distance of 89.24 feet to an iron pin set;
thence along the easterly right of way line of said High
Cross Boulevard and the westerly line of herein described
tract, with a curve to the left, having a radius of 390.00
feet, a chord bearing at N 3 47' 19" E, and a chord distance
of 77.21 feet to an iron pin set;
thence N 53' 32" W, along the easterly right of way line of
said High Cross Boulevard and the westerly line of herein
described tract a distance of 106/36 feet to the True Point
of Beginning containing 2,005 acres, more or less, and
subject to any rights of way, easements, and restrictions of
record.
The Basis of Bearing in this description is the centerline
of East Campus View Boulevard, being S 86 49' 53" E, as
shown in Plat Book 61, Page 79, Recorder's Office, Franklin
County, Ohio.
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<CIK> 0000931755
<NAME> AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,726,867
<SECURITIES> 0
<RECEIVABLES> 125,589
<ALLOWANCES> 0
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<CURRENT-ASSETS> 4,852,456
<PP&E> 15,259,196
<DEPRECIATION> (338,122)
<TOTAL-ASSETS> 19,773,530
<CURRENT-LIABILITIES> 608,330
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,165,200
<TOTAL-LIABILITY-AND-EQUITY> 19,773,530
<SALES> 0
<TOTAL-REVENUES> 1,098,273
<CGS> 0
<TOTAL-COSTS> 437,355
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 703,500
<INCOME-TAX> 0
<INCOME-CONTINUING> 703,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 703,500
<EPS-PRIMARY> 29.08
<EPS-DILUTED> 29.08
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