SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: September 30, 2000
Commission file number: 0-29274
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)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of September 30, 2000 and December 31, 1999
Statements for the Periods ended September 30, 2000 and 1999:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II.Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,391,929 $ 2,412,278
Receivables 4,080 0
Short-Term Note Receivable 680,000 0
----------- -----------
Total Current Assets 2,076,009 2,412,278
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 6,186,440 5,933,670
Buildings and Equipment 10,902,068 10,818,262
Property Acquisition Costs 28,083 14,304
Accumulated Depreciation (1,393,792) (1,194,034)
----------- -----------
Net Investments in Real Estate 15,722,799 15,572,202
----------- -----------
Total Assets $17,798,808 $17,984,480
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 64,871 $ 20,786
Distributions Payable 390,738 390,738
----------- -----------
Total Current Liabilities 455,609 411,524
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (35,754) (33,456)
Limited Partners, $1,000 Unit Value;
24,000 Units authorized and issued;
23,548 outstanding 17,378,953 17,606,412
----------- -----------
Total Partners' Capital 17,343,199 17,572,956
----------- -----------
Total Liabilities and Partners' Capital $17,798,808 $17,984,480
=========== ===========
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
9/30/00 9/30/99 9/30/00 9/30/99
INCOME:
Rent $437,732 $465,581 $1,292,159 $1,420,395
Investment Income 39,911 7,444 95,510 14,045
-------- -------- ---------- ----------
Total Income 477,643 473,025 1,387,669 1,434,440
-------- -------- ---------- ----------
EXPENSES:
Partnership Administration -
Affiliates 69,897 57,109 201,130 175,086
Partnership Administration
and Property Management -
Unrelated Parties 15,904 22,472 62,395 66,748
Depreciation 116,351 127,276 353,409 384,696
-------- -------- ---------- ----------
Total Expenses 202,152 206,857 616,934 626,530
-------- -------- ---------- ----------
OPERATING INCOME 275,491 266,168 770,735 807,910
GAIN ON SALE OF REAL ESTATE 181,328 163,463 181,328 163,463
-------- -------- ---------- ----------
NET INCOME $456,819 $429,631 $ 952,063 $ 971,373
======== ======== ========== ==========
NET INCOME ALLOCATED:
General Partners $ 4,569 $ 4,296 $ 9,521 $ 9,714
Limited Partners 452,250 425,335 942,542 961,659
-------- -------- ---------- ----------
$456,819 $429,631 $ 952,063 $ 971,373
======== ======== ========== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(23,548 and 23,829 weighted
average Units outstanding in
2000 and 1999, respectively) $ 19.21 $ 17.85 $ 40.03 $ 40.36
======== ======== ========== ==========
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)
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 952,063 $ 971,373
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 353,409 384,696
Gain on Sale of Real Estate (181,328) (163,463)
(Increase) Decrease in Receivables (4,080) 16,052
Increase (Decrease) in Payable to
AEI Fund Management, Inc. 44,085 (20,835)
----------- -----------
Total Adjustments 212,086 216,450
----------- -----------
Net Cash Provided By
Operating Activities 1,164,149 1,187,823
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (1,335,340) (221,884)
Proceeds from Sale of Real Estate 332,662 657,632
----------- -----------
Net Cash Provided By (Used For)
Investing Activities (1,002,678) 435,748
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in Distributions Payable 0 (60,200)
Distributions to Partners (1,181,820) (1,212,501)
----------- -----------
Net Cash Used For
Financing Activities (1,181,820) (1,272,701)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (1,020,349) 350,870
CASH AND CASH EQUIVALENTS, beginning of period 2,412,278 557,646
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,391,929 $ 908,516
=========== ===========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
Note Receivable Acquired in Sale of Property $ 680,000
===========
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, 1998 $(30,953) $17,854,240 $17,823,287 23,828.87
Distributions (12,125) (1,200,376) (1,212,501)
Net Income 9,714 961,659 971,373
-------- ----------- ----------- ----------
BALANCE, September 30, 1999 $(33,364) $17,615,523 $17,582,159 23,828.87
======== =========== =========== ==========
BALANCE, December 31, 1999 $(33,456) $17,606,412 $17,572,956 23,548.50
Distributions (11,819) (1,170,001) (1,181,820)
Net Income 9,521 942,542 952,063
-------- ----------- ----------- ----------
BALANCE, September 30, 2000 $(35,754) $17,378,953 $17,343,199 23,548.50
======== =========== =========== ==========
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, 2000
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI 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. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the
Individual General Partner and an affiliate of AFM, AEI Fund
Management, Inc. (AEI), performs the administrative and
operating functions for the Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on April 14, 1995 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 31, 1997, the
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 operations,
any Net Cash Flow, as defined, which the General Partners
determine to distribute will be distributed 90% to the
Limited Partners and 10% to the General Partners; provided,
however, that such distributions to the General Partners
will be subordinated to the Limited Partners first receiving
an annual, noncumulative distribution of Net Cash Flow equal
to 10% of their Adjusted Capital Contribution, as defined,
and, provided further, that in no event will the General
Partners receive less than 1% of such Net Cash Flow per
annum. Distributions to Limited Partners will be made pro
rata by Units.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to
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 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 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.
(3) Short-Term Note Receivable -
On August 2, 2000, the Partnership received a Contract for
Deed from an affiliate of the buyer of the Media Play store
in Apple Valley, Minnesota. The Note bears interest at 9%
and is due December 2, 2000. The Note is secured by the
land, building and equipment. As of September 30, 2000, the
Partnership's share of outstanding principal due on the Note
is $680,000.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(4) Investments in Real Estate -
During the third and fourth quarters of 1999, the
Partnership sold 85.0382% of its interest in the Arby's
restaurant in four separate transactions to unrelated third
parties. The Partnership received total net sale proceeds
of $881,682 which resulted in a total net gain of $220,469.
The total cost and related accumulated depreciation of the
interest sold was $731,056 and $69,843, respectively.
On October 26, 1999, the Partnership sold the Caribou Coffee
store to an unrelated third party. The Partnership received
net sale proceeds of $1,553,867, which resulted in a net
gain of $301,764. At the time of sale, the cost and related
accumulated depreciation of the property was $1,310,597 and
$58,494, respectively.
On August 2, 2000, the Media Play store was sold to an
unrelated third party for $2,500,000. The sale agreement
required $500,000 in cash and a $2,000,000 contract for
deed, which bears interest at 9%. The contract for deed
assisted the buyer in closing on the property, prior to
obtaining long-term financing, and is due on December 2,
2000. The Partnership's share of the net sale proceeds was
$820,651, which resulted in a net gain of $129,813. At the
time of sale, the cost and related accumulated depreciation
was $833,860 and $143,022.
On September 28, 2000, the Partnership sold 3.3219% of its
interest in the Champps Americana restaurant in Schaumburg,
Illinois to an unrelated third party. The Partnership
received net sale proceeds of $192,011 which resulted in a
net gain of $51,515. The cost and related accumulated
depreciation of the interest sold was $151,124 and $10,628,
respectively.
Subsequent to September 30, 2000, the Partnership sold an
additional 2.9495% of its interest in the Champps Americana
restaurant in Schaumburg, Illinois to an unrelated third
party. The Partnership received net sale proceeds of
approximately $167,000 which resulted in a net gain of
approximately $43,000.
During the first nine months of 2000 and 1999, the
Partnership distributed $55,577 and $19,895 of the net sale
proceeds to the Limited and General Partners as part of
their regular quarterly distributions which represented a
return of capital of $2.34 and $0.83 per Limited Partnership
Unit, respectively. The remaining net sale proceeds will
either be reinvested in additional property or distributed
to the Partners in the future.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(4) Investments in Real Estate - (Continued)
On August 28, 1998, the Partnership purchased a 25% interest
in a parcel of land in Centerville, Ohio for $462,747. The
land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual
rental payments of $32,392. Effective December 25, 1998,
the annual rent was increased to $48,588. Simultaneously
with the purchase of the land, the Partnership entered into
a Development Financing Agreement under which the
Partnership advanced funds to ADC for the construction of a
Champps Americana restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of
7%. Effective December 25, 1998, the interest rate was
increased to 10.5%. On January 27, 1999, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $101,365. The
Partnership's share of the total acquisition costs,
including the cost of the land, was $984,426. The remaining
interests in the Fund property are owned by AEI Real Estate
Fund XVII Limited Partnership, AEI Real Estate Fund XVIII
Limited Partnership and AEI Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.
On March 8, 2000, the Partnership purchased a parcel of land
in Fort Wayne, Indiana for $549,000. The land is leased to
Tumbleweed, Inc. (TWI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$48,038. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership advanced funds to TWI for the
construction of a Tumbleweed restaurant on the site.
Initially, the Partnership charged interest on the advances
at a rate of 8.75%. Effective July 5, 2000, the interest
rate was increased to 9.875%. On September 11, 2000, after
the development was completed, the Lease Agreement was
amended to require annual rental payments of $132,621.
Total acquisition costs, including the cost of the land,
were $1,321,561.
The Partnership has incurred net costs of $28,083 relating
to the review of potential property acquisitions which have
been capitalized and will be allocated to properties
acquired in future periods.
(5) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the nine months ended September 30, 2000 and 1999, the
Partnership recognized rental income of $1,292,159 and
$1,420,395, respectively. During the same periods, the
Partnership earned investment income of $95,510 and $14,045,
respectively. In 2000, rental income decreased mainly as a
result of property sales in 1999. This decrease in rental income
was partially offset by additional rent received from one
property acquisition in 2000, rent increases on three properties
and by an increase in investment income earned on the sale
proceeds prior to the purchase of additional property.
During the nine months ended September 30, 2000 and 1999,
the Partnership paid Partnership administration expenses to
affiliated parties of $201,130 and $175,086, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $62,395 and $66,748, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs.
As of September 30, 2000, the Partnership's cash
distribution rate was 6.5% on an annualized basis. Distributions
of Net Cash Flow to the General Partners were subordinated to the
Limited Partners as required in the Partnership Agreement. As a
result, 99% of distributions and income were allocated to Limited
Partners and 1% to the General Partners.
Inflation has had a minimal effect on income from
operations. The Leases contain cost of living increases 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
During the nine months ended September 30, 2000, the
Partnership's cash balances decreased $1,020,349 mainly as a
result of cash used to purchase property which was partially
offset by cash generated from the sale of property. Net cash
provided by operating activities decreased from $1,187,823 in
1999 to $1,164,149 in 2000 as a result of a decrease in income
and an increase in expenses in 2000, which were partially offset
by net timing differences in the collection of payments from the
lessees and the payment of expenses.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the nine months ended
September 30, 2000 and 1999, the Partnership generated cash flow
from the sale of real estate of $332,662 and $657,632,
respectively. During the same periods, the Partnership expended
$1,335,340 and $221,884, respectively, to invest in real
properties (inclusive of acquisition expenses) as the Partnership
reinvested the cash generated from property sales.
During the third and fourth quarters of 1999, the
Partnership sold 85.0382% of its interest in the Arby's
restaurant in four separate transactions to unrelated third
parties. The Partnership received total net sale proceeds of
$881,682 which resulted in a total net gain of $220,469. The
total cost and related accumulated depreciation of the interest
sold was $731,056 and $69,843, respectively.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On October 26, 1999, the Partnership sold the Caribou
Coffee store to an unrelated third party. The Partnership
received net sale proceeds of $1,553,867, which resulted in a net
gain of $301,764. At the time of sale, the cost and related
accumulated depreciation of the property was $1,310,597 and
$58,494, respectively.
On August 2, 2000, the Media Play store was sold to an
unrelated third party for $2,500,000. The sale agreement
required $500,000 in cash and a $2,000,000 contract for deed,
which bears interest at 9%. The contract for deed assisted the
buyer in closing on the property, prior to obtaining long-term
financing, and is due on December 2, 2000. The Partnership's
share of the net sale proceeds was $820,651, which resulted in a
net gain of $129,813. At the time of sale, the cost and related
accumulated depreciation was $833,860 and $143,022.
On September 28, 2000, the Partnership sold 3.3219% of its
interest in the Champps Americana restaurant in Schaumburg,
Illinois to an unrelated third party. The Partnership received
net sale proceeds of $192,011 which resulted in a net gain of
$51,515. The cost and related accumulated depreciation of the
interest sold was $151,124 and $10,628, respectively.
Subsequent to September 30, 2000, the Partnership sold an
additional 2.9495% of its interest in the Champps Americana
restaurant in Schaumburg, Illinois to an unrelated third party.
The Partnership received net sale proceeds of approximately
$167,000 which resulted in a net gain of approximately $43,000.
During the first nine months of 2000 and 1999, the
Partnership distributed $55,577 and $19,895 of the net sale
proceeds to the Limited and General Partners as part of their
regular quarterly distributions which represented a return of
capital of $2.34 and $0.83 per Limited Partnership Unit,
respectively.
On August 28, 1998, the Partnership purchased a 25%
interest in a parcel of land in Centerville, Ohio for $462,747.
The land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $32,392. Effective December 25, 1998, the annual
rent was increased to $48,588. Simultaneously with the purchase
of the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to ADC for
the construction of a Champps Americana restaurant on the site.
Initially, the Partnership charged interest on the advances at a
rate of 7%. Effective December 25, 1998, the interest rate was
increased to 10.5%. On January 27, 1999, after the development
was completed, the Lease Agreement was amended to require annual
rental payments of $101,365. The Partnership's share of the
total acquisition costs, including the cost of the land, was
$984,426. The remaining interests in the Fund property are owned
by AEI Real Estate Fund XVII Limited Partnership, AEI Real Estate
Fund XVIII Limited Partnership and AEI Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.
On March 8, 2000, the Partnership purchased a parcel of
land in Fort Wayne, Indiana for $549,000. The land is leased to
Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $48,038.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to TWI for the construction of a
Tumbleweed restaurant on the site. Initially, the Partnership
charged interest on the advances at a rate of 8.75%. Effective
July 5, 2000, the interest rate was increased to 9.875%. On
September 11, 2000, after the development was completed, the
Lease Agreement was amended to require annual rental payments of
$132,621. Total acquisition costs, including the cost of the
land, were $1,321,561.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership declares
its regular quarterly distributions before the end of each
quarter and pays the distribution in the first week after the end
of each quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year. Effective April 1, 1999, the Partnership's distribution
rate was reduced from 7.0% to 6.5%. As a result, distributions
were higher during the first nine months of 1999 when compared to
the same period in 2000.
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, 2000, twelve Limited Partners redeemed a
total of 226.32 Partnership Units for $186,379 in accordance with
the Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, thirteen
Limited Partners redeemed a total of 451.47 Partnership Units for
$393,500. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must be evaluated in
the context of a number of factors that may affect the
Partnership's financial condition and results of operations,
including the following:
Market and economic conditions which affect the value
of the properties the Partnership owns and the cash
from rental income such properties generate;
the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
affects of these consequences for investors;
resolution by the General Partners of conflicts with
which they may be confronted;
the success of the General Partners of locating
properties with favorable risk return characteristics;
the effect of tenant defaults; and
the condition of the industries in which the tenants of
properties owned by the Partnership operate.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 First Amendment to Net Lease
Agreement dated September 11, 2000
between the Partnership and Tumbleweed,
Inc. relating to the property at 8607 US
Highway 24 West, Fort Wayne, Indiana.
10.2 Second Amendment to Net Lease
Agreement dated September 11, 2000
between the Partnership and Tumbleweed,
Inc. relating to the property at 8607 US
Highway 24 West, Fort Wayne, Indiana.
10.3 Purchase Agreement dated September
26, 2000 between the Partnership, Net
Lease Income & Growth Fund 84-A Limited
Partnership and Garden Ridge Development
LLC relating to the property at 955 Golf
Road, Schaumburg, Illinois.
10.4 Purchase Agreement dated October 12,
2000 between the Partnership and the Neal
Goldman Revocable Trust relating to the
property at 955 Golf Road, Schaumburg,
Illinois.
27 Financial Data Schedule for period
ended September 30, 2000.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: November 7, 2000 AEI 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)
