SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
(Name of Registrant as Specified in its Charter)
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Registrant)
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AEI REAL ESTATE FUND XVI
1300 Wells Fargo Place
30 East 7th Street
St. Paul, Minnesota 55101
CONSENT STATEMENT
To Liquidate the Partnership
This Consent Statement is being mailed to investors on or
about March 9, 2004. To be counted, a properly signed consent
form must be received by the managing general partner at 1300
Wells Fargo Place, 30 East 7th Street, St. Paul, Minnesota 55101,
on or before April 9, 2004.
INTRODUCTION
AEI Fund Management XVI, Inc. (the "Managing General
Partner") the managing general partner of AEI Real Estate Fund
XVI Limited Partnership (the "Partnership"), is soliciting the
consent of limited partners ("Investors") to initiate the final
disposition, liquidation and distribution of all of the
Partnership's properties and assets within the next year (the
"Liquidation Proposal").
The proposal is intended to allow the Managing General
Partner to prepare the Partnership for, and to complete, final
liquidation of the Partnership's properties and distribution of
proceeds to investors. The Prospectus of the Partnership
indicated that management anticipated that such liquidation would
commence approximately 8 to 12 years after properties were
purchased. The final investment of subscription proceeds into the
Partnership's original properties was accomplished May 6, 1988.
The Managing General Partner recommends a vote "FOR" the proposed
Liquidation Proposal.
REASONS FOR AND EFFECTS OF THE PROPOSAL
The Liquidation Proposal
The proposal to commence the liquidation of the
Partnership's properties within the next year is a requirement of
the Partnership Agreement. Section 6.1 of the Partnership
Agreement requires that the Managing General Partner obtain the
prior consent of holders of a majority of the outstanding units
prior to liquidation or sale of substantially all of the assets
of the Partnership. The Managing General Partner believes that
commencement of liquidation activities at this time is consistent
with the original objectives of the Partnership.
At December 31, 2003, the Partnership owned interests in two
properties, as summarized below. These properties are leased to
single tenants, none of who are affiliated with the Managing
General Partner, through triple-net leases. The following
information is as of December 31, 2003:
Property Acquisition Cost Annual Rental Payments
Children's World $729,486 $121,020
Jiffy Lube 154,892 25,095
In 1987, the Partnership acquired an 83.6514% interest in a
Children's World daycare center located in Sterling Heights,
Michigan. The Partnership has reached a verbal agreement to sell
the property to an unrelated third party. The Partnership and
third party are in the process of negotiating a written purchase
agreement. The sale is subject to contingencies, including the
completion of the purchase agreement and the buyer's due
diligence, and may not be completed. If the sale is completed,
the Partnership expects to receive net sale proceeds of
approximately $925,000, which will result in a net book gain
(after depreciation) of approximately $535,000.
In 1987, the Partnership acquired a 25% interest in a Jiffy
Lube located in Dallas, Texas. On February 23, 2004, the
Partnership sold the property to an unrelated third party. The
Partnership received net sale proceeds of approximately $80,000,
which resulted in a net book loss (after depreciation) of
approximately $20,000.
IN THE EVENT THAT INVESTORS APPROVE THE LIQUIDATION
PROPOSAL, THE MANAGING GENERAL PARTNER WILL INITIATE THE
DISPOSITION OF THE PARTNERSHIP'S REMAINING PROPERTIES. Upon the
disposition of these properties, the Partnership intends to wind
up its affairs, liquidate and distribute sales proceeds to
partners.
UNIT OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth information about the number
of Units owned by each person known by the Partnership who
beneficially own 5% or more of the Units, by each General
Partner, and by each officer or director of AEI Fund Management
XVI, Inc. as of December 31, 2003:
Name and Address Number of Percent
of Beneficial Owner Units Held of Class
AEI Fund Management XVI, Inc. 2 *
30 East 7th Street, Suite 1300
St. Paul, Minnesota 55101
Robert P. Johnson 0 0%
30 East 7th Street, Suite 1300
St. Paul, Minnesota 55101
Patrick W. Keene 0 0%
30 East 7th Street, Suite 1300
St. Paul, Minnesota 55101
*Less than 1%
The persons set forth in the preceding table hold sole voting
power and power of disposition with respect to all of the Units
set forth opposite their names. To the best of the Managing
General Partner's knowledge, there is no beneficial owner holding
five percent or more of the Voting Units, including the Managing
General Partner.
VOTING UNITS AND VOTES REQUIRED FOR APPROVAL
Voting by the Investors on the Proposals is based upon
Partnership units ("Voting Units"). As of January 1, 2004, there
were 13,046.88333 Voting Units outstanding. Each Voting Unit is
entitled to one vote. Fractions of Voting Units will be included
in the total.
To the best of the Managing General Partner's knowledge,
there is no beneficial owner holding five percent or more of the
Voting Units including the Managing General Partner.
Pursuant to the Partnership Agreement, in order for the
Liquidation Proposal to be approved, a majority of the Voting
Units must be voted in favor of the proposal. Because an
abstention would not be counted as a vote for the proposal, it
would have the effect of a vote against the proposal. The
Managing General Partner recommends a vote For the proposal and
intends to vote 2.0 Units controlled by it in favor of the
proposal.
PROCEDURES FOR VOTING
Accompanying this Consent Statement is a Consent Form for
each Investor with respect to his/her unit ownership in the
Partnership. By checking the appropriate box, each Investor can
indicate whether he/she votes FOR or AGAINST or ABSTAINS as to
the Proposal. IF ANY INVESTOR RETURNS A CONSENT FORM DULY SIGNED
WITHOUT CHECKING ANY BOX, HE/SHE WILL BE DEEMED TO HAVE VOTED FOR
THE LIQUIDATION PROPOSAL.
An investor who votes against, or abstains, does not have
appraisal or similar rights under Minnesota law.
The Managing General Partner has fixed the close of business
on January 1, 2004 as the record date for the determination of
the Investors entitled to vote on the Proposals; the close of
business on April 9, 2004 as the date by which Consent Forms must
be received by the Managing General Partner in order to be
counted; and April 12, 2004 as the date on which the consents are
to be counted. An Investor may revoke his/her/its consent at any
time prior to April 9, 2004, provided written revocation is
received by the Managing General Partner prior to that date.
The cost of solicitation of consents of the Investors will
be borne by the Partnership. The solicitations will be made by
the mails. This Consent Statement was first mailed to Investors
on or about March 9, 2004. Staff of the Managing General Partner
will be available by telephone to answer any questions concerning
this Consent.
BY ORDER OF THE BOARD OF DIRECTORS
OF AEI FUND MANAGEMENT XVI, INC.
Robert P. Johnson, President
IMPORTANT IMPORTANT
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
CONSENT OF LIMITED PARTNERS
This consent is solicited by the Board
of Directors of AEI Fund Management XVI, Inc.,
The Managing General Partner
The undersigned, a Limited Partner of AEI Real Estate Fund
XVI (the "Partnership"), hereby consents (unless otherwise
directed below) to the proposal identified below to initiate the
final disposition, liquidation and distribution of all of the
Partnership's properties and assets within the next year (the
"Liquidation Proposal"), as more fully described in the
accompanying Consent Statement (the "Proposal"). By voting for
the Proposal, the undersigned hereby appoints AEI Fund Management
XVI, Inc. as his/her/its attorney-in-fact with power to sign and
acknowledge on its behalf any instrument that may be necessary to
evidence any termination of the Partnership's Certificate of
Limited Partnership.
Please date and sign this Consent below and return it in the
enclosed, postage paid envelope. To be counted, this Consent must
be received not later than the close of business on April 9,
2004.
Adoption of the Liquidation Proposal
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Partnership Units held by the signing Limited Partner
will be voted as directed. They will be voted "FOR" the
Liquidation Proposal if no box is checked.
Please sign exactly as your name appears below. When
Partnership Units are held by joint tenants, both owners should
sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a corporation,
please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS CONSENT.
Dated: , 2004
Signature (if held jointly)