10-Q: AEI Income & Growth Fund XXII: Q3 2026 Financials Show Liquidation Phase

AEI Income & Growth Fund XXII Limited Partnership reports a decrease in rental income and net income for the nine months ended September 30, 2026, as it progresses through its final liquidation process.

Summary

• The Partnership's rental income for the nine months ended September 30, 2026, was $290,729, a decrease from $320,654 in the same period of 2025, primarily due to the sale of a property in July 2025.
• Operating income for the nine months ended September 30, 2026, was $23,223, an increase from $19,276 in 2025.
• Net income for the nine months ended September 30, 2026, was $29,303, a significant decrease from $236,353 in 2025, largely impacted by the absence of a large gain on sale of real estate in the prior year.
• Cash balances decreased by $4,112 during the nine months ended September 30, 2026, due to distributions exceeding operating cash flow.
• The Partnership is in the final liquidation process, with management focused on disposing of assets.
• Partners' capital decreased to $4,869,131 as of September 30, 2026, from $5,031,293 as of December 31, 2025.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a neutral to slightly negative score due to declining revenues and net income, alongside a clear indication of the partnership entering its final liquidation phase, which limits future growth potential.

Positives

• Operating income increased to $23,223 for the nine months ended September 30, 2026, from $19,276 in the prior year.
• Partnership administration expenses from affiliated parties decreased to $47,614 from $58,254.
• Partnership administration and property management expenses from unrelated parties decreased to $53,678 from $62,783, reflecting the fund's liquidation phase.
• The Partnership expects to recognize approximately $389,000 in rental income for the full year 2026, based on scheduled rents.
• Management believes inflation has not significantly affected income from operations.

Negatives

• Rental income decreased to $290,729 for the nine months ended September 30, 2026, from $320,654 in the prior year.
• Net income for the nine months ended September 30, 2026, was $29,303, a substantial drop from $236,353 in the same period of 2025.
• Cash balances decreased by $4,112 during the nine months ended September 30, 2026.
• Distributions declared decreased significantly to $191,465 for the nine months ended September 30, 2026, from $1,214,988 in the prior year.
• The Partnership is undergoing final liquidation, indicating a lack of future growth prospects.

Risks

• Market and economic conditions affecting property values and rental income.
• Federal income tax consequences of rental income, deductions, and sales.
• Resolution of conflicts by the General Partner.
• The success of the General Partner in locating properties with favorable risk-return characteristics.
• The effect of tenant defaults.
• The condition of industries in which tenants operate.
• Potential impairment of assets if carrying value exceeds net realizable value.

Future Outlook

The Partnership is in the final liquidation process, with management focused on disposing of assets. The continuing rent payments from properties, along with cash generated from property sales, are expected to be adequate to fund continuing distributions and meet other obligations.

Management Comments

• Management believes inflation has not significantly affected income from operations.
• Management evaluates accounting estimates on an ongoing basis, including the carrying value of properties and potential impairment.
• The Managing General Partner has decided to begin the final liquidation process by disposing of its assets.

Industry Context

StockSavvy.ai notes that the real estate investment partnership is in a liquidation phase, which is a common lifecycle stage for such entities. This phase typically involves divesting assets and distributing proceeds to partners, leading to declining revenues and a focus on capital preservation rather than growth.

Management Changes

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.

Related Party Transactions

• Payable to AEI Fund Management, Inc. represents the balance due for administrative and operating services, which is non-interest bearing and unsecured.

Stakeholder Impact

• Limited Partners will receive distributions as assets are sold and the Partnership liquidates.
• Shareholders' investment value is tied to the liquidation process and asset disposition.
• Creditors' claims will be met from available cash and asset sale proceeds.

Next Steps

• Continue asset disposition as part of the final liquidation process.
• Fund continuing distributions and meet other Partnership obligations.

Key Dates

Keywords

Real Estate, Partnership, Liquidation, Rental Income, Financial Statements, Distributions, Property Management, Cash Flow