UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported) July 15,2004
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
State of Minnesota 24003 41-1848181
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
30 East 7th Street, Suite 1300, St. Paul, Minnesota,55101
(Address of Principal Executive Offices)
(651) 227-7333
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On July 15, 2004, the Partnership purchased a 40%
interest in a Jared Jewelry store in Sugar Land, Texas for
$1,510,760 from Transugar Limited Partnership, an unrelated
third party. The property is leased to Sterling Jewelers
Inc. under a Lease Agreement with a remaining primary term
of 17.5 years, which may be renewed for up to two
consecutive terms of five years. The Lease requires annual
base rent of $116,290, which will increase every five years
by ten percent. The Lease is a triple net lease under which
the lessee is responsible for all real estate taxes,
insurance, maintenance, repairs and operating expenses of
the property. The remaining interest in the property was
purchased by AEI Accredited Investor Fund 2002 Limited
Partnership, an affiliate of the Partnership.
The Partnership purchased the property with cash
received from the sale of other property. The store was
constructed in 2001 and is a 5,856 square foot building on
approximately .89 acres. The freestanding retail store is
located at 16010 Kensington Drive in Sugar Land, which is a
suburb southwest of Houston.
Sterling Jewelers Inc. (Sterling) is the second
largest specialty retailer of fine jewelry in the United
States with over 1,000 stores, under the names Kay Jewelers,
Jared The Galleria Of Jewelry and a number of regional
names. For the fiscal year ended January 31, 2004, Sterling
reported a net worth of approximately $1.3 billion and net
income of approximately $133 million. Sterling is a
subsidiary of Signet US Holdings, Inc., which in turn is
wholly owned by Signet Group plc, whose shares are listed on
the London Stock Exchange and whose American Depositary
Shares are traded on the NASDAQ National Market under the
symbol SIGY.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired -
Because the property acquired is subject to a net
lease and represents less than 20% of the total
assets of the Partnership as of December 31, 2003,
no financial statements are required.
(b) Pro forma financial information - A limited number
of proforma adjustments are required to illustrate
the effects of the above transaction on the
Partnership's balance sheet and income statement.
The following narrative description is furnished
in lieu of the proforma statements:
Assuming the Partnership had acquired the property
on January 1, 2003, the Partnership's Investments
in Real Estate would have increased by $1,510,760
and its Current Assets (cash) would have decreased
by $1,510,760.
The Rental Income for the Partnership would have
increased from $802,156 to $918,446 for the year
ended December 31, 2003 and from $268,432 to
$297,504 for the three months ended March 31, 2004
if the Partnership had owned the property during
the periods.
Depreciation Expense would have increased by
$34,735 and $8,684 for the year ended December 31,
2003 and the three months ended March 31, 2004,
respectively.
The net effect of these proforma adjustments would
have caused Net Income to increase from $1,949,960
to $2,031,515 and from $590,002 to $610,390, which
would have resulted in Net Income of $121.29 and
$36.80 per Limited Partnership Unit outstanding
for the year ended December 31, 2003 and the three
months ended March 31, 2004, respectively.
(c) Exhibits -
Exhibit 10.1 - Assignment of Purchase Agreement
dated May 13, 2004 between the Partnership, AEI
Accredited Investor Fund 2002 Limited Partnership
and AEI Fund Management, Inc. relating to the
Property at 16010 Kensington Drive, Sugar Land,
Texas.
Exhibit 10.2 - Assignment and Assumption of Lease
dated July 15, 2004 between the Partnership, AEI
Accredited Investor Fund 2002 Limited Partnership
and Transugar Limited Partnership relating to the
Property at 16010 Kensington Drive, Sugar Land,
Texas.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
AEI INCOME & GROWTH FUND XXII
LIMITED PARTNERSHIP
By: AEI Fund Management XXI, Inc.
Its: Managing General Partner
Date: July 29, 2004 /s/ Patrick W Keene
By: Patrick W. Keene
Its: Chief Financial Officer