10-Q: AEI Income & Growth Fund XXI Reports Stable Rental Income and Cash Flow in Q3 2024

AEI Income & Growth Fund XXI Limited Partnership reports a slight increase in rental income and stable cash flow for the nine months ended September 30, 2024.

Summary

• AEI Income & Growth Fund XXI Limited Partnership reported its financial results for the quarter ended September 30, 2024.
• The partnership's total assets were $10,139,419 as of September 30, 2024, compared to $10,509,502 at the end of 2023.
• Rental income for the nine months ended September 30, 2024, was $749,550, a slight increase from $747,581 in the same period of 2023.
• Net income for the nine months ended September 30, 2024, was $177,740, compared to $172,485 for the same period in 2023.
• The partnership's cash balance increased by $14,143 during the nine months ended September 30, 2024.
• Distributions of $519,699 were paid to partners during the nine months ended September 30, 2024, with $514,503 allocated to Limited Partners and $5,196 to General Partners.
• The partnership expects to recognize approximately $1,000,000 in rental income for the full year 2024.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the slight increase in income and stable cash flow, but there are some concerns about the decrease in total assets and partners' capital. The outlook is stable, but the partnership is subject to external economic factors.

Positives

• The partnership experienced a slight increase in rental income year-over-year.
• Net income for the nine-month period increased compared to the previous year.
• Cash flow from operations remains positive and sufficient to cover distributions.
• The partnership maintains a stable distribution rate from quarter to quarter.
• The partnership has no material off-balance sheet arrangements.

Negatives

• Total assets decreased from $10,509,502 at the end of 2023 to $10,139,419 as of September 30, 2024.
• Partners' capital decreased from $10,218,116 at the end of 2023 to $9,876,157 as of September 30, 2024.
• The partnership did not repurchase any units from limited partners during the reporting period.

Risks

• The partnership is subject to market and economic conditions that affect property values and rental income.
• Tenant defaults could negatively impact the partnership's financial performance.
• Inflation and changing prices may adversely affect tenants' ability to pay rent.
• Higher interest rates could impact the partnership's tenants and operating partners.
• The partnership's future performance is dependent on the general partners' ability to locate properties with favorable risk-return characteristics.

Future Outlook

The partnership expects to recognize approximately $1,000,000 in rental income for the full year 2024. The partnership believes that continuing rent payments and potential property sales should be adequate to fund distributions and meet obligations.

Management Comments

• Management believes inflation has not significantly affected income from operations.
• Management evaluates accounting estimates on an ongoing basis.
• Management believes the disclosures are adequate to make the information presented not misleading.

Industry Context

The report reflects the performance of a real estate limited partnership, which is influenced by broader economic conditions, interest rates, and inflation. The partnership's focus on commercial properties and lease agreements is typical of this type of investment vehicle.

Comparison to Industry Standards

• The partnership's performance is consistent with other real estate partnerships focused on income generation.
• The reported rental income and cash flow are within expected ranges for similar commercial property portfolios.
• The partnership's distribution policy of maintaining a stable rate is a common practice in the industry.
• The partnership's focus on long-term leases and stable tenants is a typical strategy for managing risk in the real estate sector.
• The partnership's use of fair value accounting for acquired properties is in line with industry standards.

Related Party Transactions

• The partnership has a payable to AEI Fund Management, Inc. for administrative and operating services.
• AEI Fund Management, Inc. allocates expenses to the partnership based on employee hours and other factors.

Stakeholder Impact

• Shareholders will receive distributions based on the partnership's performance.
• Employees of AEI Fund Management, Inc. are involved in the management of the partnership.
• Tenants of the properties are impacted by economic conditions and their ability to pay rent.
• Creditors are not significantly impacted as the partnership has no material off-balance sheet arrangements.

Next Steps

• The partnership will continue to manage its properties and distribute income to partners.
• The partnership will continue to evaluate potential property sales.
• The partnership will continue to monitor economic conditions and their impact on tenants.

Key Dates

Keywords

real estate, rental income, limited partnership, financial results, distributions, commercial properties, property management, depreciation, amortization