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: September 30, 2000
Commission file number: 0-17467
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1603719
(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 XVII LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of September 30, 2000 and December 31, 1999
Statements for the Periods ended September 30, 2000 and 1999:
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 XVII LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,376,431 $ 785,486
Receivables 21,417 0
----------- -----------
Total Current Assets 1,397,848 785,486
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 4,606,124 4,482,806
Buildings and Equipment 10,044,373 10,389,784
Construction in Progress 40,253 0
Accumulated Depreciation (3,236,567) (3,004,630)
----------- -----------
11,454,183 11,867,960
Real Estate Held for Sale 174,644 753,296
----------- -----------
Net Investments in Real Estate 11,628,827 12,621,256
----------- -----------
Total Assets $13,026,675 $13,406,742
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 51,958 $ 40,494
Distributions Payable 290,405 268,512
Unearned Rent 50,518 0
----------- -----------
Total Current Liabilities 392,881 309,006
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (75,074) (70,434)
Limited Partners, $1,000 Unit value;
30,000 Units authorized; 23,389 Units issued;
21,060 and 21,658 Units outstanding
in 2000 and 1999, respectively 12,708,868 13,168,170
----------- -----------
Total Partners' Capital 12,633,794 13,097,736
----------- -----------
Total Liabilities and Partners' Capital $13,026,675 $13,406,742
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Three Months Ended Nine Months Ended
9/30/00 9/30/99 9/30/00 9/30/99
INCOME:
Rent $ 441,010 $ 449,071 $1,345,943 $1,344,422
Investment Income 13,028 2,084 29,750 9,171
--------- --------- ---------- ----------
Total Income 454,038 451,155 1,375,693 1,353,593
--------- --------- ---------- ----------
EXPENSES:
Partnership Administration -
Affiliates 77,560 61,525 213,856 194,788
Partnership Administration
and Property Management -
Unrelated Parties 6,286 7,742 47,190 29,635
Depreciation 83,538 101,425 256,986 304,691
--------- --------- ---------- ----------
Total Expenses 167,384 170,692 518,032 529,114
--------- --------- ---------- ----------
OPERATING INCOME 286,654 280,463 857,661 824,479
GAIN ON SALE OF REAL ESTATE 91,119 0 91,119 0
--------- --------- ---------- ----------
NET INCOME $ 377,773 $ 280,463 $ 948,780 $ 824,479
========= ========= ========== ==========
NET INCOME ALLOCATED:
General Partners $ 3,778 $ 2,805 $ 9,487 $ 8,245
Limited Partners 373,995 277,658 939,293 816,234
--------- --------- ---------- ----------
$ 377,773 $ 280,463 $ 948,780 $ 824,479
========= ========= ========== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(21,060, 21,658, 21,342 and
21,850, weighted average
Units outstanding for the
periods, respectively) $ 17.76 $ 12.82 $ 44.01 $ 37.36
========= ========= ========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 948,780 $ 824,479
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 256,986 304,691
Gain on Sale of Real Estate (91,119) 0
(Increase) Decrease in Receivables (21,417) 8,989
Increase (Decrease) in Payable to
AEI Fund Management, Inc. 11,464 (8,990)
Increase in Unearned Rent 50,518 49,364
----------- -----------
Total Adjustments 206,432 354,054
----------- -----------
Net Cash Provided By
Operating Activities 1,155,212 1,178,533
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (261,264) (124,258)
Proceeds from Sale of Real Estate 1,087,826 0
----------- -----------
Net Cash Provided By (Used For)
Investing Activities 826,562 (124,258)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable 21,893 (40,586)
Distributions to Partners (938,841) (721,443)
Redemption Payments (473,881) (226,610)
----------- -----------
Net Cash Used For
Financing Activities (1,390,829) (988,639)
----------- -----------
NET INCREASE IN
CASH AND CASH EQUIVALENTS 590,945 65,636
CASH AND CASH EQUIVALENTS, beginning of period 785,486 280,625
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,376,431 $ 346,261
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1998 $(68,591) $13,350,706 $13,282,115 21,947.89
Distributions (7,214) (714,229) (721,443)
Redemption Payments (2,266) (224,344) (226,610) (290.00)
Net Income 8,245 816,234 824,479
-------- ----------- ----------- ----------
BALANCE, September 30, 1999 $(69,826) $13,228,367 $13,158,541 21,657.89
======== =========== =========== ==========
BALANCE, December 31, 1999 $(70,434) $13,168,170 $13,097,736 21,657.89
Distributions (9,388) (929,453) (938,841)
Redemption Payments (4,739) (469,142) (473,881) 598.33
Net Income 9,487 939,293 948,780
-------- ----------- ----------- ----------
BALANCE, September 30, 2000 $(75,074) $12,708,868 $12,633,794 21,059.56
======== =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 XVII Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVII, 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 10, 1988 when minimum
subscriptions of 2,000 Limited Partnership Units
($2,000,000) were accepted. The offering terminated on
November 1, 1988 when the one-year offering period expired.
The Partnership received subscriptions for 23,388.7 Limited
Partnership Units ($23,388,700).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$23,388,700 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 XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(3) Investments in Real Estate -
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 began negotiating to sell the property for
$900,000 to an unrelated third party, who assumed the
restaurant operations from Texas. The Partnership's share
of the gross sale proceeds was $585,000. In the fourth
quarter of 1999, a charge to operations of $125,000 was
recognized for real estate impairment, which was the
difference between the book value at December 31, 1999 of
$703,652 and the estimated net proceeds from the sale. The
charge was recorded against the cost of the building. The
land and building were classified as Real Estate Held for
Sale.
On July 28, 2000, the sale closed with the Partnership
receiving net sale proceeds of $579,215, which resulted in a
net gain of $563. At the time of sale, the cost and related
accumulated depreciation was $831,343 and $252,691,
respectively.
On August 28, 1998, the Partnership purchased a 14% interest
in a parcel of land in Centerville, Ohio for $259,139. The
land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual
rental payments of $18,140. Effective December 25, 1998,
the annual rent was increased to $27,209. Simultaneously
with the purchase of the land, the Partnership entered into
a Development Financing Agreement under which the
Partnership advanced funds to ADC for the construction of a
Champps Americana restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of
7.0%. Effective December 25, 1998, the interest rate was
increased to 10.5%. On January 27, 1999, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $56,764. The
Partnership's share of the total purchase price, including
the cost of the land, was $551,677. The remaining interests
in the property are owned by AEI Real Estate Fund XVIII
Limited Partnership, AEI Income & Growth Fund XXI Limited
Partnership and AEI Income & Growth Fund XXII Limited
Partnership, affiliates of the Partnership.
On May 8, 2000, the Partnership purchased a 17% interest in
a parcel of land in Austin, Texas for $231,200. The land is
leased to Razzoo's, Inc. (RI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$19,652. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership will advance funds to RI for the
construction of a Razzoo's restaurant on the site. Through
September 30, 2000, the Partnership had advanced $40,253 for
the construction of the property and was charging interest
on the advances at a rate of 8.5%. The Partnership's share
of the total purchase price, including the cost of the land,
will be approximately $583,100. After the construction is
complete, the Lease Agreement will be amended to require
annual rental payments of approximately $57,000. The
remaining interests in the property are owned by AEI Real
Estate Fund XV Limited Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, and AEI Income & Growth
Fund XXII Limited Partnership, affiliates of the
Partnership.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Continued)
(3) Investments in Real Estate - (Continued)
In the fourth quarter of 1999, the Partnership sold 13.5573%
of its interest in the Timber Lodge Steakhouse in St. Cloud,
Minnesota, in two separate transactions to unrelated third
parties. The Partnership received total net sale proceeds
of $258,624, which resulted in a total net gain of $53,582.
The total cost and related accumulated depreciation of the
interests sold was $217,264 and $12,222, respectively.
In the third quarter of 2000, the Partnership sold 23.1898%
of the Timber Lodge Steakhouse in Rochester, Minnesota in
two separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $508,611
which resulted in a total net gain of $90,556. The total
cost and related accumulated depreciation of the interest
sold was $443,103 and $25,048, respectively.
On October 6, 2000, the Partnership sold an additional
15.2418% of its interest in the Timber Lodge Steakhouse in
St. Cloud, Minnesota to an unrelated third party. The
Partnership received net sale proceeds of approximately
$289,000, which resulted in a net gain of approximately
$64,000. The majority of the net sales proceeds will be
reinvested in additional property in the future.
(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.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the nine months ended September 30, 2000 and 1999, the
Partnership recognized rental income of $1,345,943 and
$1,344,422, respectively. During the same periods, the
Partnership earned investment income of $29,750 and $9,171,
respectively. In 2000, rental income increased as a result of
additional rent received from two property acquisitions in 1999
and 2000 and rent increases on ten properties. These increases
in rental income were partially offset by a decrease in rental
income due to the property sales discussed below. In 2000,
additional investment income was earned on the net proceeds from
property sales.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
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 began negotiating to sell the property for $900,000
to an unrelated third party, who assumed the restaurant
operations from Texas. The Partnership's share of the gross sale
proceeds was $585,000. In the fourth quarter of 1999, a charge
to operations of $125,000 was recognized for real estate
impairment, which was the difference between the book value at
December 31, 1999 of $703,652 and the estimated net proceeds from
the sale. The charge was recorded against the cost of the
building. The land and building were classified as Real Estate
Held for Sale.
On July 28, 2000, the sale closed with the Partnership
receiving net sale proceeds of $579,215, which resulted in a net
gain of $563. At the time of sale, the cost and related
accumulated depreciation was $831,343 and $252,691, respectively.
During the nine months ended September 30, 2000 and 1999,
the Partnership paid Partnership administration expenses to
affiliated parties of $213,856 and $194,788, 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 $47,190 and $29,635, 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.
As of September 30, 2000, the Partnership's annualized
cash distribution rate was 7%, 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 nine months ended September 30, 2000, the
Partnership's cash balances increased $590,945 mainly as a result
of cash generated from the sale of property, which was partially
offset by cash used to purchase additional property and
distributions made in excess of cash generated from operating
activities. Net cash provided by operating activities decreased
from $1,178,533 in 1999 to $1,155,212 in 2000 due to an increase
in expenses in 2000 and net timing differences in the collection
of payments from the lessees and the payment of expenses, which
were partially offset by an increase in income in 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the nine months ended
September 30, 2000 and 1999, the Partnership generated cash flow
from the sale of real estate of $1,087,826 and $-0-,
respectively. During the same periods, the Partnership expended
$261,264 and $124,258, respectively, to invest in real properties
(inclusive of acquisition expenses) as the Partnership reinvested
the cash generated from property sales.
On August 28, 1998, the Partnership purchased a 14%
interest in a parcel of land in Centerville, Ohio for $259,139.
The land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $18,140. Effective December 25, 1998, the annual
rent was increased to $27,209. Simultaneously with the purchase
of the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to ADC for
the construction of a Champps Americana restaurant on the site.
Initially, the Partnership charged interest on the advances at a
rate of 7.0%. Effective December 25, 1998, the interest rate was
increased to 10.5%. On January 27, 1999, after the development
was completed, the Lease Agreement was amended to require annual
rental payments of $56,764. The Partnership's share of the total
purchase price, including the cost of the land, was $551,677.
The remaining interests in the property are owned by AEI Real
Estate Fund XVIII Limited Partnership, AEI Income & Growth Fund
XXI Limited Partnership and AEI Income & Growth Fund XXII Limited
Partnership, affiliates of the Partnership.
On May 8, 2000, the Partnership purchased a 17% interest
in a parcel of land in Austin, Texas for $231,200. The land is
leased to Razzoo's, Inc. (RI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of $19,652.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership will advance funds to RI for the construction of a
Razzoo's restaurant on the site. Through September 30, 2000, the
Partnership had advanced $40,253 for the construction of the
property and was charging interest on the advances at a rate of
8.5%. The Partnership's share of the total purchase price,
including the cost of the land, will be approximately $583,100.
After the construction is complete, the Lease Agreement will be
amended to require annual rental payments of approximately
$57,000. The remaining interests in the property are owned by
AEI Real Estate Fund XV Limited Partnership, AEI Net Lease Income
& Growth Fund XIX Limited Partnership, and AEI Income & Growth
Fund XXII Limited Partnership, affiliates of the Partnership.
In the fourth quarter of 1999, the Partnership sold
13.5573% of its interest in the Timber Lodge Steakhouse in St.
Cloud, Minnesota, in two separate transactions to unrelated third
parties. The Partnership received total net sale proceeds of
$258,624, which resulted in a total net gain of $53,582. The
total cost and related accumulated depreciation of the interests
sold was $217,264 and $12,222, respectively.
In the third quarter of 2000, the Partnership sold
23.1898% of the Timber Lodge Steakhouse in Rochester, Minnesota
in two separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $508,611 which
resulted in a total net gain of $90,556. The total cost and
related accumulated depreciation of the interest sold was
$443,103 and $25,048, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On October 6, 2000, the Partnership sold an additional
15.2418% of its interest in the Timber Lodge Steakhouse in St.
Cloud, Minnesota to an unrelated third party. The Partnership
received net sale proceeds of approximately $289,000, which
resulted in a net gain of approximately $64,000. The majority of
the net sales proceeds will be reinvested in additional property
in the future.
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 on a quarterly basis. Effective
January 1, 2000, the Partnership's distribution rate was
increased from 6.5% to 7.0%. As a result, distributions were
higher during the first nine months of 2000, when compared to the
same period in 1999.
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.
On April 1, 2000, thirty-one Limited Partners redeemed a
total of 349 Partnership Units for $272,807 in accordance with
the Partnership Agreement. On July 1, 2000, twenty Limited
Partners redeemed a total of 249.33 Partnership Units for
$196,335. On October 1, 2000, eleven Limited Partners redeemed a
total of 115.2 Partnership Units for $91,622. The Partnership
acquired these Units using Net Cash Flow from operations. In
prior years, a total of 117 Limited Partners redeemed 1,730.9
Partnership Units for $1,160,868. 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
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.
PART II - OTHER INFORMATION
(Continued)
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated September 26,
2000, between the Partnership and Garden
Ridge Development LLC relating to the
property at 4140 West Frontage Road, Highway
52N, Rochester, Minnesota.
10.2 Property Co-Tenancy Ownership Agreement
dated September 27, 2000 between the
Partnership and Garden Ridge Development LLC
relating to the property at 4140 West
Frontage Road, Highway 52N, Rochester,
Minnesota.
10.3 Purchase Agreement dated October 4,
2000, between the Partnership and The Rynda
Family Limited Partnership relating to the
property at 3950 Second Street South, St.
Cloud, Minnesota.
10.4 Property Co-Tenancy Ownership Agreement
dated October 6, 2000 between the Partnership
and The Rynda Family Limited Partnership
relating to the property at 3950 Second
Street South, St. Cloud, Minnesota.
27 Financial Data Schedule for period ended
September 30, 2000.
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: October 29, 2000 AEI Real Estate Fund XVII
Limited Partnership
By: AEI Fund Management XVII, 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)