AEI Fund 25 Net Income Soars 284% on Strategic Property Sales

TL;DR

**AEI Fund 25 is cashing out big on property sales, boosting investor payouts, but watch for future income stability as the portfolio shrinks.**

AI Summary

AEI Income & Growth Fund 25 LLC reported a significant increase in net income for the nine months ended September 30, 2025, reaching $1,831,542, a substantial rise from $476,695 in the same period of 2024. This surge was primarily driven by a substantial gain on the sale of real estate, totaling $1,346,244 in 2025 compared to just $711 in 2024. The company completed two key property sales in 2025: a 60% interest in Jared Jewelry in Auburn Hills, Michigan, yielding $2,018,418 in net proceeds and a $1,238,455 gain, and a 35% interest in Advance Auto Parts in Indianapolis, Indiana, generating $495,698 in net proceeds and a $107,789 gain. Despite these sales, rental income slightly decreased to $1,206,128 in 2025 from $1,233,800 in 2024, though partially offset by rent increases on other properties. Total assets increased to $16,033,361 as of September 30, 2025, from $15,901,236 at December 31, 2024, largely due to a rise in cash to $3,509,383 from $1,697,116. The company also repurchased 1,194.77 Limited Member Units for $608,740 in April 2025, increasing remaining members' ownership.

Why It Matters

This filing reveals AEI Income & Growth Fund 25 LLC's strategy of divesting properties to realize significant gains, which directly impacts investor returns. The substantial increase in net income and distributions per LLC Unit ($79.76 in 2025 vs. $21.88 in 2024) signals a strong return of capital to limited members, making the fund potentially attractive for income-focused investors. However, the slight decline in rental income suggests a shrinking asset base, which could pose a challenge for long-term sustainable income generation. In a competitive real estate market, the ability to execute profitable sales demonstrates effective asset management, but investors should monitor future acquisition strategies to ensure continued growth.

Risk Assessment

Risk Level: medium — The company's reliance on property sales for significant gains ($1,346,244 in 2025) introduces market risk, as future sales may not yield similar profits, especially given the preliminary agreement to sell the Jared Jewelry in Aurora, Illinois, which is non-binding. While cash increased to $3,509,383, the decrease in real estate held for investment, net, from $14,204,120 to $12,523,978, indicates a shrinking income-generating asset base, which could impact future rental income and distributions.

Analyst Insight

Investors should analyze the sustainability of distributions given the reliance on asset sales rather than organic rental income growth. Consider if the fund's strategy aligns with long-term income objectives or if it's primarily a liquidation play. Monitor future property acquisitions or sales to gauge the fund's evolving portfolio and income potential.

Financial Highlights

debt To Equity

N/A

revenue

$1,256,546

operating Margin

N/A

total Assets

$16,033,361

total Debt

N/A

net Income

$1,831,542

eps

N/A

gross Margin

N/A

cash Position

$3,509,383

revenue Growth

-1.4%

Revenue Breakdown

Key Numbers

• $1,831,542 — Net Income for nine months ended Sept 30, 2025 (Increased from $476,695 in 2024, a 284% increase.)
• $1,346,244 — Gain on Sale of Real Estate for nine months ended Sept 30, 2025 (Significantly higher than $711 in 2024, driving net income growth.)
• $1,206,128 — Rental Income for nine months ended Sept 30, 2025 (Decreased from $1,233,800 in 2024 due to property sales.)
• $3,509,383 — Cash as of September 30, 2025 (Increased from $1,697,116 at December 31, 2024.)
• $2,932,453 — Total Distributions Declared for nine months ended Sept 30, 2025 (Increased from $835,671 in 2024.)
• $79.76 — Limited Members' declared distributions per LLC Unit for nine months ended Sept 30, 2025 (Increased from $21.88 in 2024.)
• 1,194.77 — Limited Member Units repurchased on April 1, 2025 (Repurchased for $608,740, increasing remaining members' ownership.)
• $12,523,978 — Real Estate Held for Investment, Net as of September 30, 2025 (Decreased from $14,204,120 at December 31, 2024, reflecting property sales.)
• $2,018,418 — Net proceeds from sale of Jared Jewelry in Auburn Hills, Michigan (Resulted in a net gain of $1,238,455.)
• $495,698 — Net proceeds from sale of Advance Auto Parts in Indianapolis, Indiana (Resulted in a net gain of $107,789.)

Key Players & Entities

• AEI Income & Growth Fund 25 LLC (company) — registrant
• AEI Fund Management XXI, Inc. (company) — Managing Member
• AEI Fund Management, Inc. (company) — affiliate performing administrative functions
• Robert P. Johnson (person) — previous CEO and sole director of AFM
• Jared Jewelry in Auburn Hills, Michigan (company) — property sold by AEI Fund 25 LLC
• Advance Auto Parts in Indianapolis, Indiana (company) — property sold by AEI Fund 25 LLC
• Premier Diagnostic Imaging Center in Terre Haute, Indiana (company) — property sold by AEI Fund 25 LLC
• Jared Jewelry in Aurora, Illinois (company) — property under preliminary agreement for sale
• Patricia Johnson (person) — majority interest owner of AEI Capital Corporation
• Credit Trust fbo of Patricia Johnson (company) — majority interest owner of AEI Capital Corporation

FAQ

Risk Factors

• Market and Economic Conditions [medium — market]: Market and economic conditions affect property values and rental income generation. National economic conditions are the primary external factor impacting revenues and investment property values.
• Tenant Defaults [medium — operational]: The success of the company is dependent on its tenants' ability to pay rent. Tenant defaults can negatively impact cash flow and distributions.
• Inflation and Interest Rates [medium — financial]: Higher interest rates and inflation can impact tenants' operating margins, potentially impairing their ability to pay rent. Inflation may also affect property appreciation.
• Property Management and Allocation of Expenses [low — operational]: Expenses are allocated by AEI Fund Management based on hours, number of investors, and fund capitalization. Reimbursement is subject to limitations in the Operating Agreement.
• Tax Consequences [low — legal]: Federal income tax consequences of rental income, gains on sales, and other items can affect the net returns for Members.
• Managing Member Conflicts [low — operational]: Resolution of conflicts by the Managing Member can impact the company's financial condition and results of operations.
• Tenant Industry Conditions [medium — market]: The condition of the industries in which the company's tenants operate can affect their ability to meet lease obligations.

Industry Context

The company operates within the real estate investment sector, specifically focusing on income-generating properties. Key trends include the impact of national economic conditions, inflation, and interest rates on property values and rental income. The ability to secure favorable lease terms and manage tenant industries effectively are crucial for sustained performance.

Regulatory Implications

The company must adhere to US GAAP for financial reporting. Tax implications of property sales and rental income are significant for members. Compliance with operating agreement terms regarding expense allocation and distributions is also critical.

What Investors Should Do

1. Monitor rental income trends and property sales strategy.
2. Analyze the impact of increased cash position and unit repurchases.
3. Evaluate the company's exposure to market and economic risks.

Key Dates

• 2025-01-01: Agreement to sell 60% interest in Jared Jewelry — Initiated a significant transaction that generated substantial proceeds and a gain.
• 2025-03-31: Closed sale of 60% interest in Jared Jewelry — Realized $2,018,418 in net proceeds and a $1,238,455 gain, significantly boosting net income.
• 2025-04-01: Repurchased 1,194.77 Limited Member Units — Used $608,740 in cash, increasing remaining members' ownership stake.
• 2025-07-29: Closed sale of 35% interest in Advance Auto Parts — Generated $495,698 in net proceeds and a $107,789 gain.
• 2024-01-02: Closed sale of Premier Diagnostic Imaging Center — Generated $406,688 in net proceeds with a minimal gain of $711.

Glossary

US GAAP

United States Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting. (Ensures the financial statements are prepared according to established accounting standards.)

Above Market and Below Market In-Place Leases

Intangible assets or liabilities recorded when a property is acquired, representing the difference between contractual lease payments and estimated market rental rates. (Affects the reported rental income over the life of the leases.)

Intangible Lease Assets

Costs associated with obtaining a new tenant, such as commissions and tenant improvements, capitalized and amortized over the lease term. (Impacts reported expenses related to leasing activities.)

Limited Member Units

Ownership interests in the LLC held by investors. (Repurchases of these units affect ownership percentages and cash flow available for distributions.)

Net Proceeds

The amount of cash received from a sale after deducting any selling expenses. (Key figure in evaluating the financial outcome of property sales.)

Accumulated Depreciation

The total depreciation expense recognized for an asset since it was acquired. (Reduces the book value of fixed assets on the balance sheet.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, AEI Income & Growth Fund 25 LLC reported a substantial increase in net income to $1,831,542 from $476,695 in the prior year, primarily due to significant gains from real estate sales. While rental income saw a slight decrease from $1,233,800 to $1,206,128, this was offset by a large gain on sale of real estate ($1,346,244 vs $711). Total assets increased marginally to $16,033,361 from $15,901,236, driven by a significant rise in cash reserves from $1,697,116 to $3,509,383. The company also repurchased member units, increasing remaining ownership.

Key Financial Figures

• $939 — naging Member received distributions of $939 in the second quarter of 2024. (7) Fa
• $1,206,128 — the Company recognized rental income of $1,206,128 and $1,233,800, respectively. Rental in
• $1,233,800 — ognized rental income of $1,206,128 and $1,233,800, respectively. Rental income decreased
• $1,592,000 — ecognize rental income of approximately $1,592,000 in 2025. For the nine months ended Se
• $138,910 — ion expenses from affiliated parties of $138,910 and $180,029, respectively. These admin
• $180,029 — from affiliated parties of $138,910 and $180,029, respectively. These administration exp
• $167,376 — ment expenses from unrelated parties of $167,376 and $83,434, respectively. These expens
• $83,434 — from unrelated parties of $167,376 and $83,434, respectively. These expenses represent
• $406,688 — a. The Company received net proceeds of $406,688, which 12 resulted in a net gain of
• $711 — , which 12 resulted in a net gain of $711. At the time of sale, the cost and rela
• $1,248,000 — nd related accumulated depreciation was $1,248,000 and $842,023, respectively. ITEM 2. M
• $842,023 — mulated depreciation was $1,248,000 and $842,023, respectively. ITEM 2. MANAGEMENT'S D
• $2,018,418 — h the Company receiving net proceeds of $2,018,418, which resulted in a net gain of $1,238
• $1,238,455 — 18,418, which resulted in a net gain of $1,238,455. At the time of sale, the cost and rela
• $2,199,067 — nd related accumulated depreciation was $2,199,067 and $1,419,104, respectively. On July

Filing Documents

• aei25-20250930.htm (10-Q) — 335KB
• ex2531-1.htm (EX-31.1) — 8KB
• ex2531-2.htm (EX-31.2) — 8KB
• ex2532.htm (EX-32) — 9KB
• 0001185198-25-000016.txt ( ) — 1307KB
• aei25-20250930.xsd (EX-101.SCH) — 13KB
• aei25-20250930_def.xml (EX-101.DEF) — 49KB
• aei25-20250930_lab.xml (EX-101.LAB) — 113KB
• aei25-20250930_pre.xml (EX-101.PRE) — 69KB
• aei25-20250930_cal.xml (EX-101.CAL) — 19KB
• aei25-20250930_htm.xml (XML) — 70KB

– 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 Members' Equity 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 25 LLC BALANCE SHEETS ASSETS September 30, December 31, 2025 2024 (unaudited) Current Assets: Cash $ 3,509,383 $ 1,697,116 Real Estate Investments: Land 5,157,640 5,868,790 Buildings 13,163,135 15,321,028 Acquired Intangible Lease Assets 2,178,056 2,178,056 Real Estate Held for Investment, at Cost 20,498,831 23,367,874 Accumulated Depreciation and Amortization ( 7,974,853 ) ( 9,163,754 ) Real Estate Held for Investment, Net 12,523,978 14,204,120 Total Assets $ 16,033,361 $ 15,901,236 LIABILITIES AND MEMBERS' EQUITY Current Liabilities: Payable to AEI Fund Management, Inc. $ 202,279 $ 151,147 Distributions Payable 2,092,203 278,351 Unearned Rent 44,690 61,749 Total Current Liabilities 2,339,172 491,247 Members' Equity: Managing Member 13,081 ( 803 ) Limited Members – 50,000 Units authorized; 35,791.59 and 36,986.36 Units issued and outstanding as of 9/30/2025 and 12/31/2024, respectively 13,681,108 15,410,792 Total Members' Equity 13,694,189 15,409,989 Total Liabilities and Members' Equity $ 16,033,361 $ 15,901,236 The accompanying Condensed Notes to Financial Statements are an integral part of these statements. 3 AEI INCOME & GROWTH FUND 25 LLC (unaudited) Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Rental Income $ 386,868 $ 426,786 $ 1,206,128 $ 1,233,800 Expenses: LLC Administration – Affiliates 47,509 50,264 138,910 180,029 LLC Administration and Property Management – Unrelated Parties 60,044 12,580 167,376 83,434 Depreciation and Amortization 152,653 174,231 465,562 528,440 Total Expenses 260,206 237,075 771,848 791,903 Operating Income 126,662 189,711 434,280 441,897 Other Income: Gain on Sale of Real Estate 107,789 0 1,

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 Company's financial condition and results of operations, including the following: — Market and economic conditions which affect the value of the properties the Company 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 Members; — resolution by the Managing Member of conflicts with which they may be confronted; — the success of the Managing Member 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 Company operate. Application of Critical Accounting Policies The Company'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 Company'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 Company's assets and liabilities, or the results of reported operations, would be aff

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 Company reimburses these expenses subject to detailed limitations contained in the Operating Agreement. Factors Which May Influence Results of Operations The Company 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 the 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 Company recognized rental income of $1,206,128 and $1,233,800, respectively. Rental income decreased due to the sale of two properties in 2025. This decrease was partially offset by rent increases to multiple properties. Based on the scheduled rent for the properties owned as of October 31, 2025, the Company expects to recognize rental income of approximately $1,592,000 in 2025. For the nine months ended September 30, 2025 and 2024, the Company incurred LLC administration expenses from affiliated parties of $138,910 and $180,029, respectively. These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communicating with the Limited Members. These expenses were lower in 2025, when compared to 2024, mainly due to a decrease in property related man

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) In January 2025, the Partnership entered into an agreement to sell its 60% interest in the Jared Jewelry in Auburn Hills, Michigan to an unrelated third party. On March 31, 2025, the sale closed with the Company receiving net proceeds of $2,018,418, which resulted in a net gain of $1,238,455. At the time of sale, the cost and related accumulated depreciation was $2,199,067 and $1,419,104, respectively. On July 29, 2025, the Company closed the sale of its 35% interest in the Advance Auto Parts in Indianapolis, Indiana to an unrelated third party. The Company received net proceeds of $495,698, which resulted in a net gain of $107,789. At the time of the sale, the cost and related accumulated depreciation was $669,976 and $282,067, respectively. For the nine months ended September 30, 2025 and 2024, the Company recognized interest income of $50,418 and $34,087, 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, 2025, the Company's cash balances increased $ 1,812,267 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 Members and cash used to repurchase Units. During the nine months ended September 30, 2024, the Company's cash balances increased $416,723 due to cash received from the sale of real estate and ca

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) The Company's primary use of cash flow, other than investment in real estate, is distribution payments to Members and cash used to repurchase Units. The Company declares its regular quarterly distributions before the end of each quarter and pays the distribution in the first week after the end of each quarter. The Company attempts to maintain a stable distribution rate from quarter to quarter. The Company may repurchase tendered Units on April 1st and October 1st of each year subject to limitations. For the nine months ended September 30, 2025 and 2024, the Company declared distributions of $2,932,453 and $835,671, respectively. Pursuant to the Operating Agreement, distributions of Net Cash Flow are to be allocated 97% to the Limited Members and 3% to the Managing Member. Distributions of Net Proceeds of Sale are to be allocated 99% to the Limited Members and 1% to the Managing Member. The Limited Members were allocated declared distributions of $2,886,602 and $810,600 and the Managing Member was allocated declared distributions of $45,851 and $25,071 for the periods ended September 30, 2025 and 2024, respectively. The Company may repurchase Units from Limited Members who have tendered their Units to the Company. Such Units may be acquired at a discount. The Company will not be obligated to purchase in any year more than 2% of the total number of Units outstanding on January 1 of such year. In no event shall the Company be obligated to purchase Units if, in the sole discretion of the Managing Member, such purchase would impair the capital or operation of the Company. On April 1, 2025, the Company repurchased a total of 1,194.77 Units for $608,740 from 37 Limited Members in accordance with

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