AEI Income & Growth Fund XXI Limited Partnership

Overview

AEI Income & Growth Fund XXI Limited Partnership is a Minnesota limited partnership formed on August 22, 1994 to acquire and hold commercial properties in the United States, lease them to tenants under net leases, and eventually sell the properties. The Partnership originally offered up to $24 million of limited partnership interests (24,000 units at $1,000 per unit) and began operations on April 14, 1995. The offering terminated January 31, 1997 when the $24 million cap was reached.

Properties are commercial, single-tenant, net-leased buildings acquired debt-free. The Partnership may incur short-term indebtedness secured by properties for day-to-day cash needs, but not to fund new acquisitions. Total borrowings secured by properties are limited to 10% of the aggregate purchase price of all properties.

The Partnership generally holds properties until the General Partners determine disposition is advantageous. The General Partners may sell some or all properties prior to final liquidation and may reinvest sale proceeds in additional properties, while distributing sufficient proceeds to Limited Partners to cover taxes on any recognized gains.

Structure and management

• Managing General Partner: AEI Fund Management XXI, Inc. (affiliate of AFM)
• General Partner: Estate of Robert P. Johnson (Individual GP)
• The Partnership has no direct employees; management services are provided by AEI Fund Management, Inc. (affiliate of AFM).
• The Management Company maintains a cybersecurity program overseen by the Audit Committee and has operations controls, cost controls, and a code of conduct.

Portfolio — Key figures (as of December 31, 2025)

• Properties owned: 4
• Total cost of properties: $12,591,449
• Occupancy: 100% occupied as of 12/31/2025
• 2025 rental income (four properties): $889,560
  • Four major tenants collectively contributed 97% of total rental income in 2025 (each tenant >10% of total rent)
• Dispositions in 2025:
  • Net sale proceeds: $1,345,607
  • Net gain on sale: $825,611

Major tenants and 2025 rent

• Best Buy Store, Eau Claire, WI — $548,801 (rent per sq ft: $11.58)
• Dollar Tree Stores, Inc., Cincinnati, OH — $122,169 (rent per sq ft: $12.28)
• Advance Auto Parts Inc., Chelsea, AL — $110,000 (rent per sq ft: $16.15)
• Memorial Hospital at Gulfport, Inc., Diamondhead, MS — $108,590 (rent per sq ft: $9.28)

Ownership specifics

• Memorial Hospital (Diamondhead, MS) is held 40% as part of a tenancy-in-common arrangement with affiliated entities, including AEI Net Lease Income Fund 36 LP. The Partnership accounts for tenants-in-common interests using proportionate consolidation. The 40% ownership excludes acquisition costs that were expensed.
• The Cincinnati Dollar Tree entry shows annual rent of $122,169; a negative symbol appears in the underlying table.

Acquisition history (selected)

• Best Buy Store, Eau Claire, WI — acquired 1/31/2008; cost $7,057,096; annual rent $548,801; rent per sq ft $11.58
• Dollar Tree Stores, Inc., Cincinnati, OH — acquired 2/3/2016; cost $1,809,915; annual rent $122,169; rent per sq ft $12.28
• Advance Auto Parts Inc., Chelsea, AL — acquired 5/14/2021; cost $1,760,000; annual rent $110,000; rent per sq ft $16.15
• Memorial Hospital at Gulfport (Diamondhead), MS — acquired 3/22/2022; cost $1,580,000; annual rent $108,590; rent per sq ft $9.28

Acquisition costs for certain properties were expensed for book purposes and are excluded from the purchase cost shown.

Tax and depreciation

• Properties are depreciated for tax purposes under MACRS. Buildings are depreciated over 39 years (straight-line) and land improvements over 15 years (accelerated method).
• Because the Partnership has tax-exempt Partners, Section 168(h)(6) rules apply and require a portion of depreciable components to be depreciated over longer lives using straight-line depreciation.
• Tax basis generally equals book depreciable cost plus the amortizable cost of related intangible lease assets. For properties acquired from 2009–2017, acquisition costs that were expensed for book purposes were added to tax basis.

Investment strategy and liquidation

The General Partners consider potential appreciation, net cash flow, and tax consequences when evaluating sales. The Partnership expects to sell some or all properties before final liquidation and may reinvest proceeds in additional properties while distributing sufficient proceeds to Limited Partners to cover taxes on recognized gains. Under Section 12.1(f) of the Partnership Agreement, the Managing General Partner can liquidate the Partnership upon sale or disposition of all or substantially all assets.

Other notes

• The Partnership began operations with a mortgage-free initial portfolio. Future borrowings are permitted only for short-term needs and are limited to 10% of the aggregate purchase price of all properties.
• The Partnership is not subject to a specific diversification requirement by percentage per property, but the General Partners generally seek diversification by tenant and geography where possible.