10-Q: AEI Income & Growth Fund XXI Q1 2026 Financial Update

AEI Income & Growth Fund XXI reports Q1 2026 net income of $47,209 as it continues its final liquidation process.

Summary

• Net income for the three months ended March 31, 2026, was $47,209, compared to $879,343 in the same period of 2025, which included a significant gain on a property sale.
• Rental income for Q1 2026 was $223,896, down from $249,991 in Q1 2025 due to the sale of a property.
• The Partnership is currently in the final liquidation process, disposing of assets as per the Partnership Agreement.
• Cash balance as of March 31, 2026, stood at $571,495.
• Distributions declared for Q1 2026 totaled $165,698.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral report; the fund is performing as expected for a vehicle in its final liquidation phase, with no major surprises or operational disruptions.

Positives

• The Partnership maintains a stable distribution policy for its partners.
• Successful execution of a lease extension for the Dollar Tree store in Cincinnati, Ohio, through January 2031.
• Operating expenses from unrelated parties decreased in 2026 due to the ongoing liquidation process.

Negatives

• Net income significantly declined year-over-year, primarily due to the absence of one-time gains from property sales recorded in 2025.
• Rental income decreased due to the reduction in the property portfolio.
• Cash balance decreased by $40,322 during the quarter as distributions exceeded cash generated from operations.

Risks

• Market and economic conditions impacting property values and rental income.
• Potential tenant defaults affecting cash flow.
• Inflationary pressures impacting tenant operating margins and their ability to pay rent.
• Risks associated with the final liquidation process and the ability to dispose of remaining assets at favorable prices.

Future Outlook

The Partnership expects to recognize rental income of approximately $896,000 in 2026 based on properties owned as of April 30, 2026. The Partnership is in the final liquidation process and intends to dispose of its remaining assets.

Management Comments

• The Managing General Partner has decided to begin the final liquidation process by disposing of its assets in accordance with the terms of the Partnership Agreement.
• Management believes inflation has not significantly affected income from operations but notes potential adverse impacts on tenant operating margins.

Industry Context

StockSavvy.ai notes that this fund is in a 'harvest' or 'wind-down' phase, which is common for older real estate limited partnerships. The focus is on asset liquidation rather than growth, making it less sensitive to broader commercial real estate market expansion trends and more sensitive to individual asset exit valuations.

Comparison to Industry Standards

• The fund's strategy of liquidating assets is consistent with the lifecycle of finite-life real estate investment vehicles.
• The reliance on internal management for property administration is standard for smaller, non-traded real estate partnerships.

Management Changes

Corporate Governance

Legal Proceedings

• None.

Related Party Transactions

• The Partnership pays administrative and operating fees to AEI Fund Management, Inc., an affiliate.

Stakeholder Impact

• Limited partners should expect continued distributions as assets are liquidated.
• The liquidation process implies a finite timeline for the investment.

Next Steps

• Continue the final liquidation process by disposing of remaining assets.
• Distribute remaining proceeds to partners upon asset sales.
• Manage existing property leases, including the Dollar Tree store.

Key Dates

Recommendation

The fund is in a controlled liquidation phase. Investors should hold for the final distribution of proceeds as assets are sold, as there is no growth strategy to justify a buy, and the liquidation process is already underway.

Keywords

AEI Income & Growth Fund XXI, Real Estate, Liquidation, Commercial Property, Partnership, 10-Q