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EX-31.2 - AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIPex31-217.txt
EX-31.1 - AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIPex31-117.txt
EX-32 - AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIPex32-17.txt

                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM 10-Q

        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

       For the quarterly period ended:  September 30, 2009

               Commission File Number:  000-17467

            AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
     (Exact name of registrant as specified in its charter)

      State of Minnesota                   41-1603719
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)        Identification No.)

    30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
             (Address of principal executive offices)

                          (651) 227-7333
                 (Registrant's telephone number)

                        Not Applicable
 (Former name, former address and former fiscal year, if changed
                       since last report)

Indicate  by check mark whether the registrant (1) has 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.      [X] Yes  [ ] No

Indicate  by  check  mark  whether the registrant  has  submitted
electronically  and posted on its corporate  Web  site,  if  any,
every  Interactive Data File required to be submitted and  posted
pursuant  to Rule 405 of Regulation S-T (232.405 of this chapter)
during  the preceding 12 months (or for such shorter period  that
the registrant was required to submit and post such files).
                                        [ ] Yes   [ ] No

Indicate  by  check  mark  whether  the  registrant  is  a  large
accelerated filer, an accelerated filer, a non-accelerated filer,
or  a  smaller reporting company.  See the definitions of  "large
accelerated  filer," "accelerated filer" and  "smaller  reporting
company" in Rule 12b-2 of the Exchange Act.

  Large accelerated filer             Accelerated filer

  Non-accelerated filer               Smaller reporting company  [X]

Indicate by check mark whether the registrant is a shell  company
(as defined in Rule 12b-2 of the Exchange Act).   [ ] Yes  [X] No


          AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP

                              INDEX


Part I - Financial Information

 Item 1.Financial Statements (unaudited):

        Statement of Net Assets Available for Liquidation
           as of September 30, 2009 and December 31, 2008

        Statement of Liquidating Activities for the
           Periods ended September 30, 2009 and 2008

        Notes to Financial Statements

 Item 2.Management's Discussion and Analysis  of  Financial Condition
           and Results of Operations

 Item 3.Quantitative and Qualitative Disclosures About Market Risk

 Item 4.Controls and Procedures

Part II - Other Information

 Item 1.Legal Proceedings

 Item 1A. Risk Factors

 Item 2.Unregistered Sales of Equity Securities and  Use  of Proceeds

 Item 3. Defaults Upon Senior Securities

 Item 4. Submission of Matters to a Vote of Security  Holders

 Item 5. Other Information

 Item 6. Exhibits

Signatures


AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP STATEMENT OF NET ASSETS AVAILABLE FOR LIQUIDATION SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 2009 2008 ASSETS: Cash $ 742,999 $ 803,284 Investments in Real Estate 805,000 1,260,000 ----------- ----------- Total Assets 1,547,999 2,063,284 ----------- ----------- LIABILITIES: Payable to AEI Fund Management, Inc. 10,667 9,497 Real Estate Taxes Payable 30,291 13,798 Distributions Payable 35,364 41,619 ----------- ----------- Total Liabilities 76,322 64,914 ----------- ----------- NET ASSETS (PARTNERS' CAPITAL) IN LIQUIDATION, including 19,557 Limited Partnership Units outstanding $ 1,471,677 $ 1,998,370 =========== =========== The accompanying Notes to Financial Statements are an integral part of this statement.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP STATEMENT OF LIQUIDATING ACTIVITIES FOR THE PERIODS ENDED SEPTEMBER 30 Three Months Ended Nine Months Ended 9/30/09 9/30/08 9/30/09 9/30/08 SOURCES OF ADDITIONAL CASH: Rent $ 28,503 $ 28,503 $ 85,510 $ 93,374 Real Estate Tax Reimbursements 21,248 21,249 63,745 63,745 Interest Income 1,836 4,077 5,807 14,812 ---------- ---------- ---------- ---------- Total Sources of Additional Cash 51,587 53,829 155,062 171,931 ---------- ---------- ---------- ---------- USES OF ADDITIONAL CASH: Partnership Administration - Affiliates 13,070 10,089 42,596 43,261 Partnership Administration and Property Management - Unrelated Parties 1,929 2,911 13,152 15,008 Real Estate Taxes Paid 0 0 47,252 42,681 Distributions Paid to Partners 35,364 42,630 112,347 125,869 ---------- ---------- ---------- ---------- Total Uses of Additional Cash 50,363 55,630 215,347 226,819 ---------- ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS IN LIQUIDATION BEFORE ADJUSTMENTS 1,224 (1,801) (60,285) (54,888) ---------- ---------- ---------- ---------- ADJUSTMENTS OF ESTIMATED VALUES: Change in Net Realizable values of: Real Estate (323,000) (175,000) (455,000) (175,000) Payable to AEI Fund Management, Inc. (1,597) (4,265) (1,170) (1,288) Real Estate Taxes Payable (21,248) (21,249) (16,493) (21,064) Distributions Payable 0 1,515 6,255 0 Unearned Rent 0 (9,501) 0 (9,501) ---------- ---------- ---------- ---------- Total Adjustment of Estimated Values (345,845) (208,500) (466,408) (206,853) ---------- ---------- ---------- ---------- DECREASE IN NET ASSETS IN LIQUIDATION (344,621) (210,301) (526,693) (261,741) BEGINNING NET ASSETS IN LIQUIDATION 1,816,298 2,238,528 1,998,370 2,289,968 ---------- ---------- ---------- ---------- ENDING NET ASSETS IN LIQUIDATION $1,471,677 $2,028,227 $1,471,677 $2,028,227 ========== ========== ========== ========== 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, 2009 (1) The condensed statements included herein have been prepared by the registrant, 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 registrant 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 registrant's latest annual report on Form 10-K. (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 director of AFM, serves as the Individual General Partner. AFM is a wholly owned subsidiary of AEI Capital Corporation of which Mr. Johnson is the majority shareholder. AEI Fund Management, Inc. ("AEI"), an affiliate of AFM, performs the administrative and operating functions for the Partnership. The terms of the Partnership offering called for a subscription price of $1,000 per Limited Partnership Unit, payable on acceptance of the offer. The Partnership commenced operations on February 10, l988 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. 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 (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 contribution. AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Continued) (2) Organization - (Continued) In September 2007, the Managing General Partner solicited by mail a proxy statement seeking the consent of the Limited Partners, as required by Section 6.1 of the Partnership Agreement, to initiate the final disposition, liquidation and distribution of all of the Partnership's properties and assets within the next year. On October 16, 2007, the proposal was approved with a majority of Units voted in favor of the proposal. As a result, the Managing General Partner will proceed with the planned liquidation of the Partnership. At this time, the Partnership anticipates that it will sell its remaining property and liquidate prior to December 31, 2010. Financial Statement Presentation Because liquidation was anticipated, the Partnership changed its basis of accounting after September 30, 2005, from the going concern basis to the liquidation basis. Effective October 1, 2005, the Partnership measures its assets and liabilities at the amounts of cash expected in liquidation and reports changes in estimates when they are known. The accounts of the Partnership are maintained on the accrual basis of accounting for both federal income tax purposes and financial reporting purposes. (3) Investments in Real Estate - Effective with the decision to liquidate, the carrying amounts of assets and liabilities were adjusted from their historical bases to the amounts of cash expected from their realization and settlement. Because of the expected short liquidation period, the effects of discounting would not be significant and have been ignored. At September 30, 2009 and December 31, 2008, the estimated real estate values were based upon comparable sales of similar properties. It is reasonably possible that the amounts expected to be realized in the liquidation process may change in the near term. On June 26, 2006, Timber Lodge Steakhouse, Inc. ("TLS"), the tenant of the Timber Lodge restaurants filed for Chapter 11 bankruptcy reorganization. In September 2006, TLS submitted a written proposal requesting rent concessions. In February 2007, the Partnership and other owners of the properties signed Lease amendments to reduce the annual rent by 15% for the Rochester property and 10% for the St. Cloud property. As a result of these amendments, TLS submitted a request to the bankruptcy court to assume the Leases. The request was approved by the court. Through June 30, 2008, TLS paid all rent due under the Leases as amended. AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Continued) (3) Investments in Real Estate - (Continued) In August 2008, TLS completed an asset sale to Timberlodge Steakhouse Acquisition, LLC ("TSA"), a subsidiary of Taher Food Management, a Minneapolis-based food services company. After the asset sale, TLS reported to its creditors that it was insolvent and would be unable to pay amounts owed to unsecured creditors. As a result, the Partnership will not be able to collect the July rent for the properties. In exchange for a rent reduction of approximately 12%, TSA entered into Lease amendments, effective August 1, 2008, for both properties and assumed the responsibilities of the tenant. At September 30, 2008, based on the Lease amendments and an analysis of market conditions in the area, the Partnership recognized a $175,000 adjustment to decrease the estimated net realizable value of the properties. At June 30, 2009, based on an analysis of market conditions in the area, the Partnership recognized a $132,000 adjustment to decrease the estimated net realizable value of the properties. In September 2009, the tenant asked for a further rent reduction of 25% on both properties. After reviewing the tenant's financial statements and restaurant performance, the Partnership has agreed to the reduction, but only for one year. Based on the tenant's financial information and additional analysis of market conditions in the area, the Partnership recognized an additional $323,000 adjustment to decrease the estimated net realizable value of the properties at September 30, 2009. During the first nine months of 2009 and 2008, the Partnership distributed net sale proceeds of $72,727 and $98,081 to the Limited and General Partners as part of their quarterly distributions, which represented a return of capital of $3.69 and $4.96 per Limited Partnership Unit, respectively. The proceeds were generated from sales completed prior to 2007. (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) Subsequent Events - The Partnership has evaluated subsequent events through November 10, 2009, the date which the financial statements were available to be issued. Subsequent events, if any, were disclosed in the appropriate note in the Notes to Financial Statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This section contains "forward-looking statements" 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, the sufficiency of cash to meet operating expenses, rates of distribution, and other matters. These, and other forward- looking statements, should 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 effects of these consequences for the Partners; resolution by the General Partners of conflicts with which they may be confronted; the effect of tenant defaults; and the condition of the industries in which the tenants of properties owned by the Partnership operate. Application of Critical Accounting Policies The preparation of the Partnership's financial statements requires management to make estimates and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management evaluates these estimates on an ongoing basis, including those related to the carrying value of real estate and the allocation by AEI Fund Management, Inc. of expenses to the Partnership as opposed to other funds they manage. Effective October 1, 2005, the Partnership adopted the liquidation basis of accounting because the General Partners anticipated the liquidation of the Partnership during 2006. The timetable for final disposition of the assets was delayed when the tenant in two of the Partnership's remaining properties filed for Chapter 11 bankruptcy reorganization on June 26, 2006. While the tenant was in bankruptcy, the General Partners believed it would have been difficult to find a buyer that would have paid a fair value for the properties. In 2008, the tenant again experienced financial difficulties which made it harder to sell the properties. The General Partners now anticipate liquidation to occur during 2010. In accordance with the liquidation basis of accounting, assets are recorded at their estimated net realizable value (the amount of cash expected to be received) and liabilities are recorded at the amount estimated to be paid to creditors and Partners. At September 30, 2009, the estimated real estate values were based upon comparable sales of similar properties. Any changes in these estimates could cause material changes in the net assets in liquidation. AEI Fund Management, Inc. allocates expenses to each of the funds they manage primarily on the basis of the number of hours devoted by their employees to each fund's affairs. They also allocate expenses at the end of each month that are not directly related to a fund's operations based upon the number of investors in the fund and the fund's capitalization relative to other funds they manage. The Partnership reimburses these expenses subject to detailed limitations contained in the Partnership Agreement. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) Management of the Partnership has discussed the development and selection of the above accounting estimates and the management discussion and analysis disclosures regarding them with the managing partner of the Partnership. Results of Operations For the nine months ended September 30, 2009 and 2008, while in the liquidation phase, the Partnership recognized rental income of $85,510 and $93,374, respectively. In 2009, rental income decreased due to lease amendments that reduced the rent for the Timber Lodge restaurants as discussed below. During the same periods, the Partnership recognized interest income of $5,807 and $14,812, respectively. Interest income decreased due to lower money market interest rates in 2009, when compared to 2008. The tenant of the Timber Lodge restaurants is making additional monthly payments to fund a real estate tax escrow account. During the nine months ended September 30, 2009 and 2008, the Partnership received payments of $63,745. In May 2009 and 2008, the Partnership paid $47,252 and $42,681, respectively, to the taxing authorities for real estate taxes due for the first half of 2009 and 2008. The Partnership will hold the remaining funds until future real estate taxes are due and then pay them directly to the taxing authorities. The real estate tax payable represents the balance of the tenant's real estate tax payments that have not been paid to the taxing authorities. For the nine months ended September 30, 2009 and 2008, while in the liquidation phase, the Partnership incurred Partnership administration expenses from affiliated parties of $43,766 and $44,549, respectively. These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communicating with the Limited Partners. During the same periods, the Partnership incurred Partnership administration and property management expenses from unrelated parties of $13,152 and $15,008, respectively. These expenses represent direct payments to third parties for legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs. On June 26, 2006, Timber Lodge Steakhouse, Inc. ("TLS"), the tenant of the Timber Lodge restaurants filed for Chapter 11 bankruptcy reorganization. In September 2006, TLS submitted a written proposal requesting rent concessions. In February 2007, the Partnership and other owners of the properties signed Lease amendments to reduce the annual rent by 15% for the Rochester property and 10% for the St. Cloud property. As a result of these amendments, TLS submitted a request to the bankruptcy court to assume the Leases. The request was approved by the court. Through June 30, 2008, TLS paid all rent due under the Leases as amended. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) In August 2008, TLS completed an asset sale to Timberlodge Steakhouse Acquisition, LLC ("TSA"), a subsidiary of Taher Food Management, a Minneapolis-based food services company. After the asset sale, TLS reported to its creditors that it was insolvent and would be unable to pay amounts owed to unsecured creditors. As a result, the Partnership will not be able to collect the July rent for the properties. In exchange for a rent reduction of approximately 12%, TSA entered into Lease amendments, effective August 1, 2008, for both properties and assumed the responsibilities of the tenant. At September 30, 2008, based on the Lease amendments and an analysis of market conditions in the area, the Partnership recognized a $175,000 adjustment to decrease the estimated net realizable value of the properties. At June 30, 2009, based on an analysis of market conditions in the area, the Partnership recognized a $132,000 adjustment to decrease the estimated net realizable value of the properties. In September 2009, the tenant asked for a further rent reduction of 25% on both properties. After reviewing the tenant's financial statements and restaurant performance, the Partnership has agreed to the reduction, but only for one year. Based on the tenant's financial information and additional analysis of market conditions in the area, the Partnership recognized an additional $323,000 adjustment to decrease the estimated net realizable value of the properties at September 30, 2009. For the nine months ended September 30, 2009 and 2008, the Partnership recognized adjustments of estimated values of ($466,408) and ($206,853), respectively, resulting from adopting the liquidation basis of accounting and recording its assets at estimated net realizable value and liabilities at the amount estimated to be paid. Management believes inflation has not significantly affected income from operations. Leases may contain rent increases, based on the increase in the Consumer Price Index over a specified period, which will result in an increase in rental income over the term of the leases. Inflation also may cause the real estate to appreciate in value. However, inflation and changing prices may have an adverse impact on the operating margins of the properties' tenants, which could impair their ability to pay rent and subsequently reduce the Net Cash Flow available for distributions. Liquidity and Capital Resources On October 16, 2007, the Limited Partners approved a proposal to initiate the final disposition, liquidation and distribution of all of the Partnership's properties and assets. As a result, the Managing General Partner is proceeding with the planned liquidation of the Partnership. At this time, the Partnership anticipates that it will sell its remaining property and liquidate prior to December 31, 2010. During the nine months ended September 30, 2009, while in the liquidation phase, the Partnership's Net Assets in Liquidation decreased $526,693 as a result of decreases in the estimated net realizable values of property and distributions paid to the Partners in excess of cash generated from operating activities. During the nine months ended September 30, 2008, while in the liquidation phase, the Partnership's Net Assets in Liquidation decreased $261,741 as a result of a decrease in the estimated net realizable value of property and distributions paid to the Partners in excess of cash generated from operating activities. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) The Partnership's primary use of cash flow is distribution 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. For the nine months ended September 30, 2009 and 2008, the Partnership declared distributions of $106,092 and $125,869, respectively. The Limited Partners received distributions of $102,032 and $122,111 and the General Partners received distributions of $4,060 and $3,758 for the periods, respectively. During the first nine months of 2009 and 2008, the Partnership distributed net sale proceeds of $72,727 and $98,081 to the Limited and General Partners as part of their quarterly distributions, which represented a return of capital of $3.69 and $4.96 per Limited Partnership Unit, respectively. The proceeds were generated from sales completed prior to 2007. The continuing rent payments from the properties, together with the Partnership's cash reserve, should be adequate to fund continuing distributions and meet other Partnership obligations. The Economy and Market Conditions The impact of conditions in the current economy, including the turmoil in the credit markets, has adversely affected many real estate companies. However, the absence of mortgage financing on the Partnership's properties eliminates the risks of foreclosure and debt-refinancing that can negatively impact the value and distributions of leveraged real estate companies. Nevertheless, a prolonged economic downturn may adversely affect the operations of the Partnership's tenant and its cash flows. If the tenant were to default on its lease obligations, the Partnership's income would decrease, its distributions would likely be reduced and the value of its properties might decline. Beginning in the fourth quarter of 2008, general economic conditions caused the volume of property sales to slow dramatically for all real estate sellers. These conditions may make it more difficult for the Partnership to sell its remaining properties at acceptable prices, which it must do in order to complete its liquidation. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for a smaller reporting company. ITEM 4. CONTROLS AND PROCEDURES. (a) Disclosure Controls and Procedures. Under the supervision and with the participation of management, including its President and Chief Financial Officer, the Managing General Partner of the Partnership evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")). Based upon that evaluation, the President and Chief Financial Officer of the Managing General Partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to management, including the President and Chief Financial Officer of the Managing General Partner, in a manner that allows timely decisions regarding required disclosure. (b) Changes in Internal Control Over Financial Reporting. During the most recent period covered by this report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 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 1A. RISK FACTORS. Not required for a smaller reporting company. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. (a) None. (b) Not applicable. (c) Pursuant to Section 7.7 of the Partnership Agreement, as amended, each Limited Partner has the right to present Units to the Partnership for purchase by submitting notice to the Managing General Partner. The purchase price of the Units is equal to 90% of the net asset value per Unit as determined by the Managing General Partner in accordance with the provisions of the Partnership Agreement. Units tendered to the Partnership are redeemed at the purchase price established for the quarter in which the Partnership received a notice at least 60 days prior to the repurchase dates of January 1st, April 1st, July 1st and October 1st subject to the following limitations. 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 the period covered by this report, the Partnership did not purchase any Units. 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. 31.1 Certification of Chief Executive Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of Chief Executive Officer and Chief Financial Officer of General Partner pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 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 thereunto duly authorized. Dated: November 10, 2009 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/ PATRICK W KEENE Patrick W. Keene Chief Financial Officer (Principal Accounting Officer