10-K: AEI Income & Growth Fund XXI Reports Stable Rental Income in 2024 Annual Filing

AEI Income & Growth Fund XXI Limited Partnership reports a slight increase in rental income and stable financial condition in its annual report for the year ended December 31, 2024.

Summary

• AEI Income & Growth Fund XXI Limited Partnership, a Minnesota limited partnership, filed its annual report on Form 10-K for the fiscal year ended December 31, 2024.
• The Partnership was formed in 1994 to acquire and lease commercial properties.
• As of December 31, 2024, the Partnership owned interests in five commercial properties with a total cost of $14,057,497.
• Rental income for 2024 was $999,825, a slight increase from $997,334 in 2023 due to rent increases on two properties.
• The Partnership anticipates rental income of approximately $1,002,000 in 2025.
• Distributions of $692,933 were declared, with $686,004 allocated to Limited Partners and $6,929 to General Partners.
• The estimated value of the Partnership's Units was $767 per Unit as of December 31, 2024.
• The Partnership did not repurchase any Units during 2024.
• The Managing General Partner will continue the operations of the Partnership for an additional 60 months at which time it will ask the Limited Partners to vote on the same two proposals.
• The Partnership has no direct employees; management services are performed by AEI Fund Management, Inc.

Sentiment

Score: 7

Explanation: The document presents a stable financial picture with slight growth in rental income. While there are risks associated with tenant concentration and competition, the overall tone is cautiously optimistic.

Positives

• Rental income saw a slight increase in 2024.
• The Partnership's cash balance increased by $59,499 during the year.
• The Partnership anticipates a slight increase in rental income in 2025.
• All properties were 100% occupied as of December 31, 2024.
• The Partnership's disclosure controls and procedures were effective as of the end of the period covered by the report.

Negatives

• The Partnership is a minor factor in the commercial real estate business and faces competition from entities with greater financial resources.
• The Partnership's properties are subject to general competitive conditions incident to the ownership of single tenant investment real estate.
• The Partnership has no direct employees and relies on an affiliated management company.
• The Partnership's Units are not a traded security in any market.

Risks

• The Partnership's net income and cash distributions could be materially affected by the failure of any of its major tenants.
• The Partnership is subject to risks from cybersecurity threats, which may materially affect the Management Company.
• Market and economic conditions may affect the value of the properties the Partnership owns and the cash from rental income such properties generate.
• Tenant defaults could negatively impact the Partnership's financial performance.
• Inflation and changing prices may have an adverse impact on the operating margins of the properties' tenants, which could impair their ability to pay rent.

Future Outlook

The Partnership expects to recognize rental income of approximately $1,002,000 in 2025 based on scheduled rent for the properties owned as of February 28, 2025.

Management Comments

• The Management Company believes the people who work for the Company are its most important resources and are critical to its continued success.
• Management believes inflation has not significantly affected income from operations.

Industry Context

The Partnership operates in the commercial real estate business, which is highly competitive. The Partnership is a minor factor in the industry and competes with entities that have greater financial resources.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• Without specific benchmarks for similar limited partnerships investing in net-leased commercial properties, a comprehensive assessment is difficult.
• Comparable companies would include other REITs or limited partnerships focused on single-tenant net lease properties, but their performance metrics would need to be adjusted for size and investment strategy.

Related Party Transactions

• The Partnership owns percentage interests in properties as tenants-in-common with affiliated entities.
• AEI received reimbursements for costs and expenses from the Partnership for managing operations and properties, maintaining books, and communicating with Limited Partners.

Stakeholder Impact

• The Partnership's performance directly impacts the distributions received by Limited Partners and General Partners.
• The financial health of the Partnership's tenants affects its ability to generate rental income and maintain distributions.
• The Partnership's activities have a limited impact on the broader commercial real estate market due to its relatively small size.

Next Steps

• The Managing General Partner will continue the operations of the Partnership for an additional 60 months.
• The Managing General Partner will ask the Limited Partners to vote on the same two proposals (continue the Partnership or initiate liquidation) in 60 months.

Key Dates

Keywords

real estate, limited partnership, rental income, commercial properties, net leases, distributions, financial report, AEI Income & Growth Fund XXI