AEI Income & Growth Fund XXI Files Q3 2024 10-Q

TL;DR

AEI Income & Growth Fund XXI filed its 10-Q for Q3 2024. All systems go.

AI Summary

AEI Income & Growth Fund XXI Limited Partnership filed its 10-Q for the quarterly period ended September 30, 2024. The company, incorporated in Minnesota, operates in the Real Estate sector. Its principal executive offices are located at 30 East 7th Street, Suite 1300, St. Paul, Minnesota.

Why It Matters

This filing provides investors with an update on the financial performance and operational status of AEI Income & Growth Fund XXI Limited Partnership for the third quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing with no immediately apparent significant financial distress or major operational changes indicated.

Key Players & Entities

• AEI INCOME & GROWTH FUND XXI LTD PARTNERSHIP (company) — Filer
• September 30, 2024 (date) — Quarterly period end date
• 30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101 (location) — Principal executive offices
• 41-1789725 (identifier) — IRS Employer Identification No.
• 000-29274 (identifier) — Commission File Number

FAQ

Key Financial Figures

• $749,550 — Partnership recognized rental income of $749,550 and $747,581, respectively. In 2024, re
• $747,581 — ecognized rental income of $749,550 and $747,581, respectively. In 2024, rental income i
• $1,000,000 — ecognize rental income of approximately $1,000,000 in 2024. 11 ITEM 2. MANAGEMENT'S DIS
• $121,129 — ion expenses from affiliated parties of $121,129 and $123,220, respectively. These admin
• $123,220 — from affiliated parties of $121,129 and $123,220, respectively. These administration exp
• $69,150 — ment expenses from unrelated parties of $69,150 and $69,849, respectively. These expens
• $69,849 — s from unrelated parties of $69,150 and $69,849, respectively. These expenses represent
• $2,695 — rtnership recognized interest income of $2,695 and $2,199, respectively. Management
• $2,199 — ecognized interest income of $2,695 and $2,199, respectively. Management believes in
• $14,143 — e Partnership's cash balances increased $14,143 and $11,863, respectively, as a result
• $11,863 — p's cash balances increased $14,143 and $11,863, respectively, as a result of cash gene
• $531,562 — by operating activities increased from $531,562 in 2023 to $533,842 in 2024 as a result
• $533,842 — ties increased from $531,562 in 2023 to $533,842 in 2024 as a result of an increase in t
• $519,699 — e Partnership declared distributions of $519,699, which were distributed 99% to the Limi
• $514,503 — ere allocated declared distributions of $514,503 and the General Partners were allocated

Filing Documents

• aei21-20240930.htm (10-Q) — 305KB
• ex2131-1.htm (EX-31.1) — 8KB
• ex2131-2.htm (EX-31.2) — 8KB
• ex2132.htm (EX-32) — 8KB
• 0000931755-24-000010.txt ( ) — 1206KB
• aei21-20240930.xsd (EX-101.SCH) — 11KB
• aei21-20240930_def.xml (EX-101.DEF) — 46KB
• aei21-20240930_lab.xml (EX-101.LAB) — 100KB
• aei21-20240930_pre.xml (EX-101.PRE) — 62KB
• aei21-20240930_cal.xml (EX-101.CAL) — 16KB
• aei21-20240930_htm.xml (XML) — 66KB

– Financial Information

Part I – Financial Information Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited): Balance Sheets as of September 30, 2024 and December 31, 2023 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 XXI LIMITED PARTNERSHIP BALANCE SHEETS ASSETS September 30, December 31, 2024 2023 (unaudited) Current Assets: Cash $ 194,703 $ 180,560 Real Estate Investments: Land 3,447,796 3,447,796 Buildings 9,825,615 9,825,615 Acquired Intangible Lease Assets 864,490 864,490 Real Estate Held for Investment, at Cost 14,137,901 14,137,901 Accumulated Depreciation and Amortization ( 4,193,185 ) ( 3,808,959 ) Real Estate Held for Investment, Net 9,944,716 10,328,942 Total Assets $ 10,139,419 $ 10,509,502 LIABILITIES AND PARTNERS' CAPITAL Current Liabilities: Payable to AEI Fund Management, Inc. $ 79,164 $ 101,262 Distributions Payable 173,233 173,233 Unearned Rent 56 0 Total Current Liabilities 252,453 274,495 Long-term Liabilities: Acquired Below-Market Lease Intangibles, Net 10,809 16,891 Partners' Capital : General Partners 4,682 8,101 Limited Partners – 24,000 Units authorized; 17,076.71 Units issued and outstanding as of 9/30/2024 and 12/31/2023 9,871,475 10,210,015 Total Partners' Capital 9,876,157 10,218,116 Total Liabilities and Partners' Capital $ 10,139,419 $ 10,509,502 The accompanying Condensed Notes to Financial Statements are an integral part of these statements. 3 AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP (unaudited) Three Months Ended September 30 Nine Months Ended September 30 2024 2023 2024 2023 Rental Income $ 250,044 $ 249,582 $ 749,550 $ 747,581 Expenses: Partnership Administration – Affiliates 35,681 38,348 121,129 123,220 Partnership Administration and Property Management – Unrelated Parties 6,749 16,837 69,150 69,849 Depreciation and Amortization 128,075 128,075 384,226 384,226 Total Expenses 170,505 183,260 574,505 577,295 Operating Income 79,539 66,322

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 Partners of conflicts with which they may be confronted; — the success of the General Partners 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 re

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) Allocation of Purchase Price of Acquired Properties Upon acquisition of real properties, the Partnership records them in the financial statements at cost. The purchase price is allocated to tangible assets, consisting of land and building, and to identified intangible assets and liabilities, which may include the value of above market and below market in-place leases. The allocation of the purchase price is based upon the relative fair value of each component of the property. Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management's assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset. 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 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

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) Carrying Value of Properties Properties are carried at original cost, less accumulated depreciation and amortization. The Partnership tests long-lived assets for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable. For properties the Partnership will hold and operate, management determines whether impairment has occurred by comparing the property's probability-weighted future undiscounted cash flows to its current carrying value. For properties held for sale, management determines whether impairment has occurred by comparing the property's estimated fair value less cost to sell to its current carrying value. If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value. Changes in these assumptions or analysis may cause material changes in the carrying value of the properties. 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 US and globally, our tenants and opera

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) For the nine months ended September 30, 2024 and 2023, the Partnership incurred Partnership administration expenses from affiliated parties of $121,129 and $123,220, respectively. These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communicating with the Limited Partners. During the same periods, the Partnership incurred Partnership administration and property management expenses from unrelated parties of $69,150 and $69,849, respectively. These expenses represent direct payments to third parties for legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs. For the nine months ended September 30, 2024 and 2023, the Partnership recognized interest income of $2,695 and $2,199, respectively. 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, 2024 and 2023, the Partnership's cash balances increased $14,143 and $11,863, respectively, as a result of cash generated from operating activities in excess of distributions paid to Partners. Net cash provided by operating activities increased from $531,562 in 2023 to $533,842 in 2024 as a result of an increase in total rental income and a decrease in Partnership administration and property management expenses. The Partners

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) For the nine months ended September 30, 2024 and 2023, the Partnership declared distributions of $519,699, which were distributed 99% to the Limited Partners and 1% to the General Partners. The Limited Partners were allocated declared distributions of $514,503 and the General Partners were allocated declared distributions of $5,196 for the periods ended September 30, 2024 and 2023. 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. During the nine months ended September 30, 2024 and 2023, 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, 2024 and December 31, 2023, 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 recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to management, including the President and Chief Financial Officer of the Managing General Partner, in a manner that allows timely decisions regarding required disclosure. (b) Changes in Internal Control Over Financial Reporting. During the most recent period covered by this report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 14

– OTHER INFORMATION

PART II – OTHER INFORMATION

LEGAL PROCEEDINGS

ITEM 1. 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.

RISK FACTORS

ITEM 1A. RISK FACTORS . Not required for a smaller reporting company.

UNREGISTERED SALES OF EQUITY SECURITIES & USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES & USE OF PROCEEDS. (a) None. (b) Not applicable. (c) Pursuant to Section 7.7 of the Partnership Agreement, as amended, each Limited Partner has the right to present Units to the Partnership for purchase by submitting notice to the Managing General Partner during January or July of each year. The purchase price of the Units is equal to 95% of the net asset value per Unit, as of the first business day of January or July of each year, as determined by the Managing General Partner in accordance with the provisions of the Partnership Agreement. Units tendered to the Partnership during January and July may be repurchased on April 1 st and October 1 st , respectively, of each year subject to the following limitations. The Partnership will not be obligated to purchase in any year more than 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. During the period covered by this report, the Partnership did not purchase any Units.

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable.

OTHER INFORMATION

ITEM 5. OTHER INFORMATION. None. 15

EXHIBITS

ITEM 6. EXHIBITS. 31.1 Certification of President of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of President and Chief Financial Officer of General Partner pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: November 12, 2024 AEI Income & Growth Fund XXI Limited Partnership By: AEI Fund Management XXI, Inc. Its: Managing General Partner By: /s/ Marni J. Nygard Marni J. Nygard President (Principal Executive Officer) By: /s/ Keith E. Petersen Keith E. Petersen Chief Financial Officer (Principal Accounting Officer) 16

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