10-Q: AEI Income & Growth Fund XXI LP Reports Strong Q1 2025 Results Driven by Property Sale

AEI Income & Growth Fund XXI Limited Partnership reports a significant increase in net income for the quarter ended March 31, 2025, primarily due to a gain on the sale of real estate.

Summary

• AEI Income & Growth Fund XXI Limited Partnership reported its financial results for the quarter ended March 31, 2025.
• Net income for the quarter was $879,343, a substantial increase compared to $54,609 for the same period in 2024.
• This increase is primarily attributed to a gain of $825,611 from the sale of a property.
• Rental income slightly increased to $249,991 from $249,753 in the prior year.
• The Partnership sold its 40% interest in Jared Jewelry in Auburn Hills, Michigan, for net proceeds of $1,345,607.
• Distributions of $173,233 were declared, with $171,501 allocated to Limited Partners and $1,732 to General Partners.
• The Partnership's cash balance increased by $1,370,231 due to the property sale.
• The Partnership expects to recognize approximately $922,000 in rental income in 2025 based on scheduled rents as of April 30, 2025.

Sentiment

Score: 8

Explanation: The sentiment is positive due to the significant increase in net income and cash flow resulting from the property sale. The report also highlights stable rental income and effective disclosure controls.

Positives

• Significant increase in net income due to the sale of a property.
• Successful sale of a property generating substantial cash proceeds.
• Slight increase in rental income.
• Increase in cash balance.
• Effective disclosure controls and procedures are in place.

Risks

• Market and economic conditions could affect property values and rental income.
• Federal income tax consequences could impact partners.
• Potential conflicts involving the General Partners.
• Risk of tenant defaults.
• Condition of industries in which tenants operate could affect their ability to pay rent.
• Inflation and higher interest rates may impact tenants' operating margins and ability to pay rent.

Future Outlook

Based on scheduled rents as of April 30, 2025, the Partnership expects to recognize approximately $922,000 in rental income in 2025; 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.

Industry Context

The report acknowledges the impact of national economic conditions, higher interest rates, and inflation on the real estate market and tenants' ability to pay rent, reflecting broader industry concerns.

Comparison to Industry Standards

• It is difficult to compare the results to industry standards without knowing the specific types of commercial properties held by the partnership and their geographic locations.
• However, the sale of a property at a gain suggests effective asset management.
• The partnership's focus on maintaining a stable distribution rate is a common practice among income-oriented real estate investment vehicles.

Related Party Transactions

• AEI Fund Management, Inc., an affiliate, performs administrative and operating functions for the Partnership, and a payable balance exists for these services.

Stakeholder Impact

• The increased net income and cash flow are positive for Limited Partners, potentially leading to higher distributions.
• The sale of property and management of the Partnership's assets impact the value of the investment for all partners.

Key Dates

Keywords

real estate, limited partnership, financial results, property sale, rental income, distributions, net income, AEI Income & Growth Fund XXI