SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: March 31, 2001
Commission file number: 0-16555
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1571166
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of March 31, 2001 and December 31, 2000
Statements for the Periods ended March 31, 2001 and 2000:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II.Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
BALANCE SHEET
MARCH 31, 2001 AND DECEMBER 31, 2000
(Unaudited)
ASSETS
2001 2000
CURRENT ASSETS:
Cash and Cash Equivalents $ 2,661,100 $ 2,839,759
Receivables 0 10,525
----------- -----------
Total Current Assets 2,661,100 2,850,284
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 1,825,154 1,825,154
Buildings and Equipment 3,961,868 3,961,868
Accumulated Depreciation (1,995,117) (1,966,858)
----------- -----------
3,791,905 3,820,164
Real Estate Held for Sale 50,000 50,000
----------- -----------
Net Investments in Real Estate 3,841,905 3,870,164
----------- -----------
Total Assets $ 6,503,005 $ 6,720,448
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 95,494 $ 124,238
Distributions Payable 228,893 228,893
Deferred Income 48,123 26,982
----------- -----------
Total Current Liabilities 372,510 380,113
----------- -----------
DEFERRED INCOME - Net of Current Portion 67,376 70,349
PARTNERS' CAPITAL (DEFICIT):
General Partners (68,566) (66,498)
Limited Partners, $1,000 Unit value;
15,000 Units authorized and issued;
13,371 Units outstanding 6,131,685 6,336,484
----------- -----------
Total Partners' Capital 6,063,119 6,269,986
----------- -----------
Total Liabilities and Partners' Capital $ 6,503,005 $ 6,720,448
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
2001 2000
INCOME:
Rent $ 116,097 $ 217,497
Investment Income 34,905 17,416
----------- -----------
Total Income 151,002 234,913
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 51,249 51,153
Partnership Administration and Property
Management - Unrelated Parties 25,021 20,291
Depreciation 28,259 38,816
----------- -----------
Total Expenses 104,529 110,260
----------- -----------
OPERATING INCOME 46,473 124,653
GAIN ON SALE OF REAL ESTATE 0 279,242
----------- -----------
NET INCOME $ 46,473 $ 403,895
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 465 $ 4,039
Limited Partners 46,008 399,856
----------- -----------
$ 46,473 $ 403,895
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(13,371 and 13,468 weighted average Units
outstanding in 2001 and 2000, respectively) $ 3.44 $ 29.69
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 46,473 $ 403,895
Adjustments to Reconcile Net Income
To Net Cash Provided by Operating Activities:
Depreciation 28,259 38,816
Gain on Sale of Real Estate 0 (279,242)
Decrease in Receivables 10,525 11,700
Decrease in Payable to
AEI Fund Management, Inc. (28,744) (28,577)
Increase in Deferred Income 18,168 8,130
----------- -----------
Total Adjustments 28,208 (249,173)
----------- -----------
Net Cash Provided By
Operating Activities 74,681 154,722
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Real Estate 0 1,473,999
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 0 266,614
Distributions to Partners (253,340) (413,134)
----------- -----------
Net Cash Used For
Financing Activities (253,340) (146,520)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (178,659) 1,482,201
CASH AND CASH EQUIVALENTS, beginning of period 2,839,759 355,246
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 2,661,100 $ 1,837,447
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1999 $(61,303) $ 6,850,810 $ 6,789,507 13,468.15
Distributions (4,131) (409,003) (413,134)
Net Income 4,039 399,856 403,895
--------- ----------- ----------- -----------
BALANCE, March 31, 2000 $(61,395) $ 6,841,663 $ 6,780,268 13,468.15
========= =========== =========== ===========
BALANCE, December 31, 2000 $(66,498) $ 6,336,484 $ 6,269,986 13,370.65
Distributions (2,533) (250,807) (253,340)
Net Income 465 46,008 46,473
--------- ----------- ----------- -----------
BALANCE, March 31, 2001 $(68,566) $ 6,131,685 $ 6,063,119 13,370.65
========= =========== =========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Real Estate Fund XVI Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVI, Inc. (AFM), the Managing General
Partner. Robert P. Johnson, the President and sole
shareholder of AFM, serves as the Individual General Partner
and an affiliate of AFM, AEI Fund Management, Inc. (AEI),
performs the administrative and operating functions for the
Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on February 6, 1987 when minimum
subscriptions of 2,000 Limited Partnership Units
($2,000,000) were accepted. The offering terminated on
November 6, 1987 when the maximum subscription limit of
15,000 Limited Partnership Units ($15,000,000) was reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$15,000,000 and $1,000, respectively. During operations,
any Net Cash Flow, as defined, which the General Partners
determine to distribute will be distributed 90% to the
Limited Partners and 10% to the General Partners; provided,
however, that such distributions to the General Partners
will be subordinated to the Limited Partners first receiving
an annual, noncumulative distribution of Net Cash Flow equal
to 10% of their Adjusted Capital Contribution, as defined,
and, provided further, that in no event will the General
Partners receive less than 1% of such Net Cash Flow per
annum. Distributions to Limited Partners will be made pro
rata by Units.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to 6%
of their Adjusted Capital Contribution per annum, cumulative
but not compounded, to the extent not previously distributed
from Net Cash Flow; (ii) next, 99% to the Limited Partners
and 1% to the General Partners until the Limited Partners
receive an amount equal to 14% of their Adjusted Capital
Contribution per annum, cumulative but not compounded, to
the extent not previously distributed; (iii) next, to the
General Partners until cumulative distributions to the
General Partners under Items (ii) and (iii) equal 15% of
cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Partners for
such year. Any additional profits will be allocated 90% to
the Limited Partners and 10% to the General Partners. In
the event no Net Cash Flow is distributed to the Limited
Partners, 90% of each item of income, gain or credit for
each respective year shall be allocated to the Limited
Partners, and 10% of each such item shall be allocated to
the General Partners. Net losses from operations will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Partnership Agreement as follows: (i)
first, to those Partners with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Partners
and 1% to the General Partners until the aggregate balance
in the Limited Partners' capital accounts equals the sum of
the Limited Partners' Adjusted Capital Contributions plus an
amount equal to 14% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, to the General Partners
until cumulative allocations to the General Partners equal
15% of cumulative allocations. Any remaining balance will
be allocated 85% to the Limited Partners and 15% to the
General Partners. Losses will be allocated 98% to the
Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the Partnership
or withdrawal by a General Partner, the General Partners
will contribute to the Partnership an amount equal to the
lesser of the deficit balances in their capital accounts or
1% of total Limited Partners' and General Partners' capital
contributions.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
In November, 1999, the Partnership entered into an agreement
to sell the Caribou Coffee store in Atlanta, Georgia to an
unrelated third party. On February 2, 2000, the sale closed
with the Partnership receiving net sale proceeds of
$1,468,504, which resulted in a net gain of $273,747. At
the time of sale, the cost and related accumulated
depreciation was $1,247,571 and $52,814, respectively.
In January, 2000, Texas Sports City Cafe, Ltd. (Texas), the
lessee of the Sports City Cafe, notified the Partnership
that they were discontinuing the restaurant operations. The
Partnership negotiated to sell the property for $900,000 to
an unrelated third party, who assumed the restaurant
operations from Texas. On July 28, 2000, the sale closed
with the Partnership receiving net sale proceeds of
$311,882, which resulted in a net gain of $628. At the time
of sale, the cost and related accumulated depreciation was
$450,109 and $138,855, respectively.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Slidell, Louisiana,
filed for reorganization. GCR continued to make the lease
payments to the Partnership under the supervision of the
bankruptcy court. A reorganization plan was accepted by the
Bankruptcy Court, which provided for the Lease to be assumed
by GCR and assigned to another operator who purchased the
Partnership's share of the property. The reorganization
plan also provided for the Partnership to collect all rents
outstanding under the terms of the Lease. On October 25,
2000, the sale closed with the Partnership receiving net
sale proceeds of $960,230, which resulted in a net gain of
$330,013. At the time of sale, the cost and related
accumulated depreciation was $746,464 and $116,247,
respectively.
In November, 2000, the Partnership sold 9,576 square feet of
land from the Fuddruckers' property in Omaha, Nebraska,
pursuant to a Right-Of-Way Agreement with the City of Omaha
Public Works. The Partnership received net proceeds of
$216,593, which resulted in a gain of $168,838. The
original cost of the parcel of land was $47,755. The
Partnership believes the City of Omaha has undervalued the
land and is currently negotiating to receive additional
proceeds.
During the three months ended March 31, 2001 and 2000, the
Partnership distributed $181,581 and $252,525 of net sale
proceeds to the Limited and General Partners, which
represented a return of capital of $13.44 and $18.56 per
Limited Partnership Unit, respectively. The remainder of
the sale proceeds will be distributed in future periods.
In August, 2000, Renaissant Development Corp. (RDC), the
lessee of the Applebee's restaurant in Victoria, Texas filed
for reorganization. RDC closed the restaurant, rejected the
Lease and returned possession of the property to the
Partnership. As a result, the Partnership did not collect
scheduled rent of $40,800 for the first three months of 2001
and $68,000 in 2000. These amounts were not accrued for
financial reporting purposes. The Partnership has listed
the property for sale or lease. While the property is
vacant, the Partnership is responsible for real estate taxes
and other costs required to maintain the property.
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
As of December 31, 2000, based on an analysis of market
conditions in the area, it was determined the fair value of
the Victoria property was approximately $800,000. In the
fourth quarter of 2000, a charge to operations for real
estate impairment of $353,062 was recognized, which is the
difference between the book value at December 31, 2000 of
$1,153,062 and the estimated fair value of $800,000. The
charge was recorded against the cost of the building and
equipment.
In January, 1996, the Cheddar's restaurant in Indianapolis,
Indiana was destroyed by a fire. The property will not be
rebuilt and the Partnership listed the land for sale. As of
December 31, 2000, based on an analysis of market conditions
in the area, it was determined the fair value of the
Partnership's interest in the land was approximately
$50,000. In the fourth quarter of 2000, a charge to
operations for real estate impairment of $124,747 was
recognized, which is the difference between the book value
at December 31, 2000 of $174,747 and the estimated fair
value of $50,000.
(4) Payable to AEI Fund Management -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
(5) Deferred Income -
In June, 1994, Fuddruckers, Inc., the restaurant concept's
franchisor, acquired the operations of the Fuddruckers
restaurant in Omaha, Nebraska and assumed the lease
obligations from the original lessee. As part of the
agreement, the Partnership amended the Lease to reduce the
base rent from $167,699 to $145,081. The Partnership could
receive additional rent in the future if 10% of gross
receipts from the property exceed the base rent. In
consideration for the lease assumption and amendment, the
Partnership received a lump sum payment from the original
lessee of $159,539. The lump sum payment will be recognized
as income over the remainder of the Lease term, which
expires on November 30, 2007, using the straight line
method.
As of March 31, 2001 and December 31, 2000, the Partnership
had recognized $80,271 and $77,298 of the payment as income.
At March 31, 2001, the remaining deferred income of $36,231
was prepaid rent related to certain other Partnership
properties.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the three months ended March 31, 2001 and 2000, the
Partnership recognized rental income of $116,097 and $217,497,
respectively. During the same periods, the Partnership earned
investment income of $34,905 and $17,416, respectively. In 2001,
rental income decreased mainly as a result of the loss of rent
from the Applebee's in Victoria, Texas and the property sales
discussed below. The decrease in rental income was partially
offset by additional investment income earned on the net proceeds
from the property sales.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Slidell, Louisiana, filed
for reorganization. GCR continued to make the lease payments to
the Partnership under the supervision of the bankruptcy court. A
reorganization plan was accepted by the Bankruptcy Court, which
provided for the Lease to be assumed by GCR and assigned to
another operator who purchased the Partnership's share of the
property. The reorganization plan also provided for the
Partnership to collect all rents outstanding under the terms of
the Lease. On October 25, 2000, the sale closed with the
Partnership receiving net sale proceeds of $960,230, which
resulted in a net gain of $330,013. At the time of sale, the
cost and related accumulated depreciation was $746,464 and
$116,247, respectively.
In August, 2000, Renaissant Development Corp. (RDC), the
lessee of the Applebee's restaurant in Victoria, Texas filed for
reorganization. RDC closed the restaurant, rejected the Lease
and returned possession of the property to the Partnership. As a
result, the Partnership did not collect scheduled rent of $40,800
for the first three months of 2001 and $68,000 in 2000. These
amounts were not accrued for financial reporting purposes. The
Partnership has listed the property for sale or lease. While the
property is vacant, the Partnership is responsible for real
estate taxes and other costs required to maintain the property.
As of December 31, 2000, based on an analysis of market
conditions in the area, it was determined the fair value of the
Victoria property was approximately $800,000. In the fourth
quarter of 2000, a charge to operations for real estate
impairment of $353,062 was recognized, which is the difference
between the book value at December 31, 2000 of $1,153,062 and the
estimated fair value of $800,000. The charge was recorded
against the cost of the building and equipment.
In January, 1996, the Cheddar's restaurant in
Indianapolis, Indiana was destroyed by a fire. The property will
not be rebuilt and the Partnership listed the land for sale. As
of December 31, 2000, based on an analysis of market conditions
in the area, it was determined the fair value of the
Partnership's interest in the land was approximately $50,000. In
the fourth quarter of 2000, a charge to operations for real
estate impairment of $124,747 was recognized, which is the
difference between the book value at December 31, 2000 of
$174,747 and the estimated fair value of $50,000.
During the three months ended March 31, 2001 and 2000, the
Partnership paid Partnership administration expenses to
affiliated parties of $51,249 and $51,153, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $25,021 and $20,291, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
As of March 31, 2001, the Partnership's annualized cash
distribution rate was 9.3%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants, due to inflation and real sales growth, will result
in an increase in rental income over the term of the leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
Liquidity and Capital Resources
During the three months ended March 31, 2001, the
Partnership's cash balances decreased $178,659 as a result of
distributions made in excess of cash generated from operating
activities. Net Cash provided by operating activities decreased
from $154,722 in 2000 to $74,681 in 2001 as a result of a
decrease in income and an increase in Partnership administration
expenses in 2001.
In the first three months of 2000, net cash provided by
investing activities was $1,473,999 which represented cash flow
generated from the sale of real estate.
In November, 1999, the Partnership entered into an
agreement to sell the Caribou Coffee store in Atlanta, Georgia to
an unrelated third party. On February 2, 2000, the sale closed
with the Partnership receiving net sale proceeds of $1,468,504,
which resulted in a net gain of $273,747. At the time of sale,
the cost and related accumulated depreciation was $1,247,571 and
$52,814, respectively.
In January, 2000, Texas Sports City Cafe, Ltd. (Texas),
the lessee of the Sports City Cafe, notified the Partnership that
they were discontinuing the restaurant operations. The
Partnership negotiated to sell the property for $900,000 to an
unrelated third party, who assumed the restaurant operations from
Texas. On July 28, 2000, the sale closed with the Partnership
receiving net sale proceeds of $311,882, which resulted in a net
gain of $628. At the time of sale, the cost and related
accumulated depreciation was $450,109 and $138,855, respectively.
In November, 2000, the Partnership sold 9,576 square feet
of land from the Fuddruckers' property in Omaha, Nebraska,
pursuant to a Right-Of-Way Agreement with the City of Omaha
Public Works. The Partnership received net proceeds of $216,593,
which resulted in a gain of $168,838. The original cost of the
parcel of land was $47,755. The Partnership believes the City of
Omaha has undervalued the land and is currently negotiating to
receive additional proceeds.
During the three months ended March 31, 2001 and 2000, the
Partnership distributed $181,581 and $252,525 of net sale
proceeds to the Limited and General Partners, which represented a
return of capital of $13.44 and $18.56 per Limited Partnership
Unit, respectively. The remainder of the sale proceeds will be
distributed in future periods.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership 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 Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year.
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the 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 2000, sixteen Limited Partners redeemed a total of
97.5 Partnership Units for $37,740 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
149 Limited Partners redeemed 1,531.85 Partnership Units for
$1,051,054. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
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.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws 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, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must 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
affects of these consequences for investors;
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.
PART II - OTHER INFORMATION
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.
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - None.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: May 10, 2001 AEI Real Estate Fund XVI
Limited Partnership
By: AEI Fund Management XVI, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)