September 20, 2005
Mail Stop 4561
Robert P. Johnson
President
AEI Income & Growth Fund 26 LLC
1300 Wells Fargo Place
30 East Seventh Street
St. Paul, MN 55101
Re: AEI Income & Growth Fund 26 LLC
Registration Statement on Form SB-2/A-1
Draft Response Provided August 25, 2005
Registration No. 333-125266
Dear Mr. Johnson:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
The following comments refer to your letter to the staff
dated
August 25, 2005.
General
1. Refer to previous comment 1. We note that the shares sold
under
the dividend reinvestment plan are being offered under a separate
plan of distribution, that the company will not pay selling
commissions and other expenses on the sale of those shares and
thus
will receive different proceeds for the sale of shares under the
dividend reinvestment program. Under these facts, it appears that
the offering of the dividend reinvestment plan shares are distinct
from the offering of the limited partnership units and should be
separately identified as such in your disclosure. Please revise
the
cover page to disclose the maximum number of shares you may offer
under the dividend reinvestment plan and to clarify that the table
of
proceeds assumes all shares are sold in the primary offering and
that
DRIP shares are not subject to commissions and expenses. Please
also
revise the table on the cover of the registration statement.
Sales Literature
2. In response to previous comment 8, please tell us the basis for
your belief that the NCREIF statistics are an appropriate measure
for
performance of real estate investments as it compares to your fund
specifically. For example, tell us specifically how the type of
real
estate investments, objectives, and strategies of AEI Fund 26
compare
with those of the entities tracked on the NCREIF index. Also, if
you
intend to include the NCREIF statistics, please expand to include
a
complete picture of performance of the index rather than
disclosing
the results for only one particular year.
Public Fund Composite Historical Distribution Summary
3. We note your response to previous comment 10. By aggregating
the
annual distributions of all funds, the chart presents a more
stable
presentation of annual distributions than were received by
investors
in many of your funds. Please revise the chart to better reflect
the
variability in distributions in each of your funds or,
alternatively,
delete the chart.
4. We note your response that the information in the chart was not
derived from the prior performance tables. All material
information
presented in sales literature should be contained in, or derived
from, the information included in the prospectus. Please revise
accordingly.
5. We note your response that the chart does not reflect
distributions that were a return of capital or liquidating
distributions. However, we also note from the chart itself that
the
distributions include profits from the sale of properties. Please
advise us why it is appropriate to include profits from property
sales in the table when losses on property sales, if any, do not
appear to be reflected in the table.
6. Please revise your risk factor disclosure to remove any
mitigating
language such as the statement that some of the programs sponsored
by
AEI Fund Management have returned more than an investor`s original
contribution to capital.
* * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Thomas Flinn, Accounting Examiner, at 202-
551-
3469 or Cicely Lucky, Accounting Branch Chief, at 202-551-3413 if
you have questions regarding comments on the financial statements
and
related matters. Please contact Charito A. Mittelman at 202-551-
3402
or me at 202-551-3852 with any other questions.
Sincerely,
Michael McTiernan
Special Counsel
cc: Thomas O. Martin, Esq. (via facsimile)
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Robert P. Johnson
AEI Income & Growth Fund 26 LLC
September 20, 2005
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