AEI Fund XXII Swings to Profit on Property Sale, Boosts Cash

TL;DR

**AEI Fund XXII just cashed in big on a property sale, boosting net income and liquidity – looks like a smart play to return capital and consolidate ownership.**

AI Summary

AEI Income & Growth Fund XXII Limited Partnership reported a significant turnaround in net income for the nine months ended September 30, 2025, reaching $236,353, a substantial improvement from a net loss of $31,701 in the same period of 2024. This positive shift was primarily driven by a $200,237 gain on the sale of its 65% interest in the Advance Auto Parts property in Indianapolis, Indiana, which closed on July 29, 2025, yielding net proceeds of $920,594. Rental income slightly decreased by 2.56% to $320,654 in 2025 from $329,070 in 2024, attributed to the property sale, partially offset by rent increases on two existing properties. Partnership administration expenses from affiliates decreased by 36.47% to $58,254, while expenses from unrelated parties increased by 5.47% to $62,783 due to timing of tax and audit services. The Partnership also repurchased 486.25 Limited Partnership Units for $269,139 on April 1, 2025, using net sales proceeds, which increased the remaining Limited Partners' ownership interest. Cash balances significantly increased by $653,928, reaching $1,568,774 as of September 30, 2025, compared to $914,846 at the beginning of the period.

Why It Matters

This filing reveals AEI Income & Growth Fund XXII's strategic move to divest an asset, generating a substantial gain and significantly improving its financial position. For investors, the $200,237 gain on sale and the resulting $236,353 net income demonstrate effective asset management and a return to profitability, which is crucial for a limited partnership focused on income and growth. The repurchase of 486.25 Limited Partnership Units for $269,139 also signals a commitment to enhancing value for remaining limited partners by increasing their ownership interest. In a competitive real estate market, the ability to execute profitable sales and manage expenses, despite a slight dip in rental income, positions the fund more favorably against peers.

Risk Assessment

Risk Level: medium — The Partnership's rental income decreased by 2.56% to $320,654 for the nine months ended September 30, 2025, primarily due to the sale of a property. While the gain on sale was significant, the reliance on property sales for substantial income rather than consistent rental growth introduces volatility. Furthermore, the filing notes that '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,' posing a future risk to recurring revenue streams.

Analyst Insight

Investors should monitor future rental income trends closely, as the recent profit was largely non-recurring from a property sale. Evaluate the fund's strategy for reinvesting the increased cash balance of $1,568,774 and how it plans to generate sustainable income and growth moving forward, especially given the decrease in total assets from $6,609,145 to $6,339,219.

Financial Highlights

revenue

$320,654

net Income

$236,353

eps

$17.69

cash Position

$1,568,774

revenue Growth

-2.56%

Revenue Breakdown

Key Numbers

• $236,353 — Net Income (Swung from a $31,701 net loss in 2024 for the nine months ended September 30)
• $200,237 — Gain on Sale of Real Estate (Primary driver of net income increase for the nine months ended September 30, 2025)
• $920,594 — Proceeds from Sale of Real Estate (Received from the sale of the Advance Auto Parts property on July 29, 2025)
• $1,568,774 — Cash, end of period (Increased by $653,928 from $914,846 at the beginning of the period)
• $320,654 — Rental Income (Decreased by 2.56% from $329,070 in 2024 for the nine months ended September 30)
• $58,254 — Partnership Administration – Affiliates (Decreased by 36.47% from $91,682 in 2024 for the nine months ended September 30)
• 486.25 — Repurchased Partnership Units (Repurchased on April 1, 2025, for $269,139)
• $17.69 — Net Income per Limited Partnership Unit (Significantly up from a loss of $2.67 in 2024 for the nine months ended September 30)
• $1,077,934 — Distributions Payable (Increased significantly from $69,220 at December 31, 2024)
• $5,206,130 — Total Partners' Capital (Decreased from $6,456,623 at December 31, 2024)

Key Players & Entities

• AEI Income & Growth Fund XXII Limited Partnership (company) — registrant
• AEI Fund Management, Inc. (company) — affiliate performing administrative and operating functions
• Advance Auto Parts (company) — tenant of sold property in Indianapolis
• Robert P. Johnson (person) — Individual General Partner (Estate of)
• Patricia Johnson (person) — majority interest owner of AEI Capital Corporation
• Securities and Exchange Commission (regulator) — governing body for filing
• $236,353 (dollar_amount) — Net Income for nine months ended September 30, 2025
• $200,237 (dollar_amount) — Gain on Sale of Real Estate
• $920,594 (dollar_amount) — Net proceeds from sale of Advance Auto Parts property
• $1,568,774 (dollar_amount) — Cash balance as of September 30, 2025

FAQ

Risk Factors

• Market and Economic Conditions [medium — market]: Market and economic conditions can affect property values and rental income generation. Higher interest rates and inflation in the U.S. and globally may impact tenants' ability to pay rent, potentially reducing net cash flow.
• Tenant Defaults [medium — operational]: The success of the Partnership is subject to the risk of tenant defaults, which would directly impact rental income and cash flow.
• Tax Consequences [low — financial]: Federal income tax consequences related to rental income, deductions, and gains on sales can affect the net returns for Limited Partners.
• Property Management [low — operational]: The allocation of expenses, particularly from affiliated parties, and the timing of services from unrelated parties can influence operating results.
• Real Estate Value Fluctuations [medium — market]: The Partnership's financial condition is tied to the value of its properties, which can be influenced by general real estate market trends and economic factors.

Industry Context

The real estate investment partnership operates within a market influenced by general economic conditions, interest rates, and inflation. Tenants' ability to pay rent is a critical factor, and the partnership seeks properties with favorable risk-return characteristics. Trends in the industries of its tenants also play a role in the partnership's performance.

Regulatory Implications

The partnership must comply with US GAAP for financial reporting. Tax consequences of real estate transactions and income are significant for partners. Management's use of estimates and assumptions in accounting policies requires careful judgment and can impact reported results.

What Investors Should Do

1. Monitor rental income trends and tenant occupancy rates.
2. Analyze the impact of the property sale on the partnership's portfolio diversification and future growth strategy.
3. Evaluate the sustainability of the current cash position and distribution policy.
4. Assess the impact of macroeconomic factors like inflation and interest rates on tenant stability and property valuations.

Key Dates

• 2025-07-29: Sale of 65% interest in Advance Auto Parts property — Generated a significant gain of $200,237 and net proceeds of $920,594, contributing to the substantial increase in net income and cash balance.
• 2025-04-01: Repurchase of 486.25 Limited Partnership Units — Used $269,139 of net sales proceeds to repurchase units, increasing the remaining Limited Partners' ownership interest.
• 2025-09-30: End of period balance sheet — Reported a strong cash position of $1,568,774, up from $914,846 at the beginning of the period.
• 2024-09-30: Prior period comparison — Reported a net loss of $31,701 for the nine months ended September 30, 2024, highlighting the significant turnaround in 2025.

Glossary

Limited Partnership Units

Units representing ownership stakes in a limited partnership, entitling holders to a share of profits and assets. (The repurchase of these units impacts the ownership structure and capital accounts of the partnership.)

Net Proceeds of Sale

The amount of money received from selling an asset after deducting all costs and expenses associated with the sale. (The net proceeds from the Advance Auto Parts property sale were a key driver of increased cash and net income.)

Partnership Administration Expenses

Costs incurred for the general management and administration of the partnership, including property management, reporting, and partner communications. (A decrease in these expenses contributed to improved net income.)

Net Cash Flow

The cash generated from a property's operations after deducting operating expenses. (This is a key metric for determining distributions to partners.)

Cost Basis

The original value of an asset for tax purposes, usually the purchase price, adjusted for factors like depreciation. (Used to calculate the gain or loss on the sale of the Advance Auto Parts property.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, AEI Income & Growth Fund XXII Limited Partnership reported a substantial turnaround, swinging from a net loss of $31,701 in the prior year to a net income of $236,353. This was primarily driven by a $200,237 gain on the sale of a property. Rental income saw a slight decrease of 2.56% to $320,654, attributed to the property sale. Partnership administration expenses from affiliates decreased significantly by 36.47%, while expenses from unrelated parties increased slightly due to timing. The partnership's cash position improved dramatically, increasing by $653,928 to $1,568,774.

Key Financial Figures

• $320,654 — Partnership recognized rental income of $320,654 and $329,070, respectively. In 2025, re
• $329,070 — ecognized rental income of $320,654 and $329,070, respectively. In 2025, rental income d
• $418,000 — ecognize rental income of approximately $418,000 in 2025. For the nine months ended Se
• $58,254 — ion expenses from affiliated parties of $58,254 and $91,682, respectively. These admini
• $91,682 — from affiliated parties of $58,254 and $91,682, respectively. These administration exp
• $62,783 — ment expenses from unrelated parties of $62,783 and $59,526, respectively. These expens
• $59,526 — s from unrelated parties of $62,783 and $59,526, respectively. These expenses represent
• $920,594 — e Partnership receiving net proceeds of $920,594, which resulted in a net gain of $200,2
• $200,237 — 20,594, which resulted in a net gain of $200,237. At the time of sale, the cost basis of
• $1,244,173 — nd related accumulated depreciation was $1,244,173 and $523,816, respectively. 11 ITEM
• $523,816 — mulated depreciation was $1,244,173 and $523,816, respectively. 11 ITEM 2. MANAGEMENT
• $16,840 — rtnership recognized interest income of $16,840 and $4,007, respectively. Interest inco
• $4,007 — cognized interest income of $16,840 and $4,007, respectively. Interest income increase
• $653,928 — e Partnership's cash balances increased $653,928 as a result of cash received from the s
• $59,916 — e Partnership's cash balances decreased $59,916 as a result of distributions paid to Pa

Filing Documents

• aei22-20250930.htm (10-Q) — 314KB
• ex2231-1.htm (EX-31.1) — 8KB
• ex2231-2.htm (EX-31.2) — 8KB
• ex2232.htm (EX-32) — 9KB
• 0001023458-25-000025.txt ( ) — 1289KB
• aei22-20250930.xsd (EX-101.SCH) — 13KB
• aei22-20250930_def.xml (EX-101.DEF) — 49KB
• aei22-20250930_lab.xml (EX-101.LAB) — 114KB
• aei22-20250930_pre.xml (EX-101.PRE) — 69KB
• aei22-20250930_cal.xml (EX-101.CAL) — 18KB
• aei22-20250930_htm.xml (XML) — 65KB

– Financial Information

Part I – Financial Information Item 1. Condensed Financial Statements (unaudited): Balance Sheets as of September 30, 2025 and December 31, 2024 3 Income 4 Cash Flows 5 Changes in Partners' Capital 6 Condensed Notes to Financial Statements 7 – 8 Item 2.

Management's Discussion and Analysis of Financial

Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 13 Item 4.

Controls and Procedures

Controls and Procedures 14

– Other Information

Part II – Other Information Item 1.

Legal Proceedings

Legal Proceedings 15 Item 1A.

Risk Factors

Risk Factors 15 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15 Item 3. Defaults Upon Senior Securities 15 Item 4. Mine Safety Disclosures 15 Item 5. Other Information 15 Item 6. Exhibits 16

Signatures

Signatures 16 2 AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP BALANCE SHEETS ASSETS September 30, December 31, 2025 2024 (unaudited) Current Assets: Cash $ 1,568,774 $ 914,846 Real Estate Investments: Land 1,215,151 1,753,065 Buildings 3,777,826 4,484,085 Acquired Intangible Lease Assets 804,382 804,382 Real Estate Held for Investment, at Cost 5,797,359 7,041,532 Accumulated Depreciation and Amortization ( 1,026,914 ) ( 1,347,233 ) Real Estate Held for Investment, Net 4,770,445 5,694,299 Total Assets $ 6,339,219 $ 6,609,145 LIABILITIES AND PARTNERS' CAPITAL Current Liabilities: Payable to AEI Fund Management, Inc. $ 20,339 $ 32,946 Distributions Payable 1,077,934 69,220 Unearned Rent 34,816 50,356 Total Current Liabilities 1,133,089 152,522 Partners' Capital (Deficit): General Partner 1,687 ( 13,646 ) Limited Partners – 24,000 Units authorized; 11,263.12 and 11,749.37 Units issued and outstanding as of 9/30/2025 and 12/31/2024, respectively 5,204,443 6,470,269 Total Partners' Capital 5,206,130 6,456,623 Total Liabilities and Partners' Capital $ 6,339,219 $ 6,609,145 The accompanying Condensed Notes to Financial Statements are an integral part of these statements. 3 AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP (unaudited) Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Rental Income $ 100,811 $ 110,031 $ 320,654 $ 329,070 Expenses: Partnership Administration – Affiliates 20,527 26,878 58,254 91,682 Partnership Administration and Property Management – Unrelated Parties 7,686 9,983 62,783 59,526 Depreciation and Amortization 55,407 71,189 180,341 213,570 Total Expenses 83,620 108,050 301,378 364,778 Operating Income (Loss) 17,191 1,981 19,276 ( 35,708 ) Other Income: Ga

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This section contains "forward-looking statements" which represent management's expectations or beliefs concerning future events, including statements regarding anticipated application of cash, expected returns from rental income, growth in revenue, the sufficiency of cash to meet operating expenses, rates of distribution, and other matters. These, and other forward-looking statements, should be evaluated in the context of a number of factors that may affect the Partnership's financial condition and results of operations, including the following: — Market and economic conditions which affect the value of the properties the Partnership owns and the cash from rental income such properties generate; — the federal income tax consequences of rental income, deductions, gain on sales and other items and the effects of these consequences for the Partners; — resolution by the General Partner of conflicts with which they may be confronted; — the success of the General Partner of locating properties with favorable risk return characteristics; — the effect of tenant defaults; and — the condition of the industries in which the tenants of properties owned by the Partnership operate. Application of Critical Accounting Policies The Partnership's financial statements have been prepared in accordance with US GAAP. Preparing the financial statements requires management to use judgment in the application of these accounting policies, including making estimates and assumptions. These judgments will affect the reported amounts of the Partnership's assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and will affect the reported amounts of revenue and expenses during the reporting periods. It is possible that the carrying amount of the Partnership's assets and liabilities, or the results of repo

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods. The above market and below market lease values will be capitalized as intangible lease assets or liabilities. Above market lease values will be amortized on a straight-line basis as an adjustment of rental income over the remaining term of the respective leases. Below market lease values will be amortized on a straight-line basis as an adjustment of rental income over the remaining term of the respective leases, including any bargain renewal periods. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market and below market in-place lease values relating to that lease would be recorded as an adjustment to rental income. The fair values of in-place leases will include estimated direct costs associated with obtaining a new tenant, and opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease. Direct costs associated with obtaining a new tenant may include commissions, tenant improvements, and other direct costs and are estimated, in part, by management's consideration of current market costs to execute a similar lease. These direct costs will be included in intangible lease assets on the balance sheet and will be amortized on a straight-line basis to expense over the remaining term of the respective leases. The value of opportunity costs will be calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absor

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) Allocation of Expenses AEI Fund Management, Inc. allocates expenses to each of the funds they manage primarily on the basis of the number of hours devoted by their employees to each fund's affairs. They also allocate expenses at the end of each month that are not directly related to a fund's operations based upon the number of investors in the fund and the fund's capitalization relative to other funds they manage. The Partnership reimburses these expenses subject to detailed limitations contained in the Partnership Agreement. Factors Which May Influence Results of Operations The Partnership is not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues and investment property value. However, due to current economic factors, higher interest rates, and inflation in the U.S. and globally, our tenants and operating partners may be impacted. Results of Operations For the nine months ended September 30, 2025 and 2024, the Partnership recognized rental income of $320,654 and $329,070, respectively. In 2025, rental income decreased due to one property that was sold in July 2025, which was partially offset by two existing properties with rent increases. Based on the scheduled rent for the properties owned as of October 31, 2025, the Partnership expects to recognize rental income of approximately $418,000 in 2025. For the nine months ended September 30, 2025 and 2024, the Partnership incurred Partnership administration expenses from affiliated parties of $58,254 and $91,682, respectively. These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communicating with the Limited Partners. These expenses were lower in 2025, when compared to 2024, mainly due to a d

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) For the nine months ended September 30, 2025 and 2024, the Partnership recognized interest income of $16,840 and $4,007, respectively. Interest income increased during the nine-month period ended September, 30 2025, due to higher average cash balances compared to the same period in 2024. Management believes inflation has not significantly affected income from operations. Leases may contain rent increases, based on the increase in the Consumer Price Index over a specified period, which will result in an increase in rental income over the term of the leases. Inflation also may cause the real estate to appreciate in value. However, 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 and subsequently reduce the Net Cash Flow available for distributions. Liquidity and Capital Resources During the nine months ended September 30, 2025, the Partnership's cash balances increased $653,928 as a result of cash received from the sale of real estate and cash received from operations, which was partially offset by distributions paid to Partners and cash used to repurchase Units in excess of cash generated from operating activities. During the nine months ended September 30, 2024, the Partnership's cash balances decreased $59,916 as a result of distributions paid to Partners in excess of cash generated from operating activities. Net cash provided by operating activities increased from $182,337 in 2024 to $211,466 in 2025 as a result of a decrease in Partnership administration expenses in 2025, which was partially offset by a decrease in rental income. The major components of the Partnership's cash flow from investing activities are investments in real estate and proceeds from the sale of real estate. During the nine months ended September 30, 2025, the Partnership generated cash flow from the sale of real estate

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) The Partnership may repurchase Units from Limited Partners who have tendered their Units to the Partnership. Such Units may be acquired at a discount. The Partnership will not be obligated to purchase in any year any number of Units that, when aggregated with all other transfers of Units that have occurred since the beginning of the same calendar year (excluding Permitted Transfers as defined in the Partnership Agreement), would exceed 5% of the total number of Units outstanding on January 1 of such year. In no event shall the Partnership be obligated to purchase Units if, in the sole discretion of the Managing General Partner, such purchase would impair the capital or operation of the Partnership. On April 1, 2025, the Partnership repurchased a total of 486.25 Units for $269,139 from 21 Limited Partners in accordance with the Partnership Agreement. The Partnership acquired these Units using net sales proceeds. The repurchase increases the remaining Limited Partners' ownership interest in the Partnership. As a result of this repurchase and pursuant to the Partnership Agreement, the General Partner received distributions of $2,719 in 2025. During the nine months ended September 30, 2024, the Partnership did not repurchase any Units from the Limited Partners. 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. Off-Balance Sheet Arrangements As of September 30, 2025 and December 31, 2024, the Partnership had no material off-balance sheet arrangements that had or are reasonably likely to have current or future effects on its financial condition, results of operations, liquidity or capital resources.

QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for a smaller reporting company. 13

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES. (a) Disclosure Controls and Procedures. Under the supervision and with the participation of management, including its President and Chief Financial Officer, the Managing General Partner of the Partnership evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")). Based upon that evaluation, the President and Chief Financial Officer of the Managing General Partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is record

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