Attached files
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: March 31, 2010
Commission File Number: 000-18289
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
State of Minnesota 41-1622463
(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 XVIII LIMITED PARTNERSHIP
INDEX
Part I - Financial Information
Item 1. Financial Statements:
Statement of Net Assets Available for Liquidation
as of March 31, 2010 and December 31, 2009
Statement of Liquidating Activities for the
Three Months ended March 31, 2010 and 2009
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 5. Other Information
Item 6. Exhibits
Signatures
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF NET ASSETS AVAILABLE FOR LIQUIDATION
MARCH 31, 2010 AND DECEMBER 31, 2009
2010 2009
ASSETS:
Cash $ 800,072 $ 850,895
Investments in Real Estate 620,600 648,600
----------- -----------
Total Assets 1,420,672 1,499,495
----------- -----------
LIABILITIES:
Payable to AEI Fund Management, Inc. 6,686 11,739
Distributions Payable 42,929 42,929
Unearned Rent 35 4,494
----------- -----------
Total Liabilities 49,650 59,162
----------- -----------
NET ASSETS (PARTNERS' CAPITAL) IN LIQUIDATION,
including 18,957 Limited Partnership Units
outstanding $ 1,371,022 $ 1,440,333
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF LIQUIDATING ACTIVITIES
FOR THE THREE MONTHS ENDED MARCH 31
2010 2009
SOURCES OF ADDITIONAL CASH:
Rent $ 14,090 $ 28,496
Interest Income 2,016 2,242
---------- ----------
Total Sources of Additional Cash 16,106 30,738
---------- ----------
USES OF ADDITIONAL CASH:
Partnership Administration - Affiliates 13,164 17,217
Partnership Administration and Property
Management - Unrelated Parties 10,836 1,782
Distributions Paid to Partners 42,929 51,512
---------- ----------
Total Uses of Additional Cash 66,929 70,511
---------- ----------
DECREASE IN NET ASSETS IN LIQUIDATION
BEFORE ADJUSTMENTS (50,823) (39,773)
---------- ----------
ADJUSTMENTS OF ESTIMATED VALUES:
Change in Net Realizable Values of:
Real Estate (28,000) 0
Payable to AEI Fund Management, Inc. 5,053 (7,201)
Distributions Payable 0 8,583
Unearned Rent 4,459 (1,976)
---------- ----------
Total Adjustment of Estimated Values (18,488) (594)
---------- ----------
DECREASE IN NET ASSETS IN LIQUIDATION (69,311) (40,367)
BEGINNING NET ASSETS IN LIQUIDATION 1,440,333 1,851,073
---------- ----------
ENDING NET ASSETS IN LIQUIDATION $1,371,022 $1,810,706
========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2010
(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 XVIII Limited Partnership
("Partnership") was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XVIII, 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 15, 1989 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The offering terminated
December 4, 1990 when the extended offering period expired.
The Partnership received subscriptions for 22,783.05 Limited
Partnership Units. Under the terms of the Limited
Partnership Agreement, the Limited Partners and General
Partners contributed funds of $22,783,050, 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 XVIII 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 l% 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 XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
In January 2009, 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 February 24, 2009, the
proposal was approved with a majority of Units voted in
favor of the proposal. 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.
Financial Statement Presentation
Because liquidation was anticipated, the Partnership
changed its basis of accounting after September 30, 2007,
from the going concern basis to the liquidation basis.
Effective October 1, 2007, 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 March 31, 2010, the
estimated real estate values were based upon a verbal
agreement to sell one property and comparable sales of
similar properties for the other three properties. At
December 31, 2009, 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 October 5, 2009, the Partnership sold its remaining
9.3699% interest in the Taco Cabana restaurant in San
Antonio, Texas to the tenant. The Partnership received net
sale proceeds of $158,406. At the time of sale, the
estimated net realizable value was $158,000. At June 30,
2009, based on the signed purchase agreement, the
Partnership recognized an $18,000 adjustment to decrease the
estimated net realizable value of the property.
During the first three months of 2010 and 2009, the
Partnership distributed net sale proceeds of $41,311 and
$40,367 to the Limited and General Partners as part of their
quarterly distributions, which represented a return of
capital of $2.16 and $2.11 per Limited Partnership Unit,
respectively.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
In March 2009, Tumbleweed, Inc., the tenant of the
Tumbleweed restaurant in Chillicothe, Ohio filed for Chapter
11 bankruptcy reorganization. In July 2009, the tenant
contacted the Partnership and offered to assume the Lease
and extend the Lease term five years in exchange for a 15%
rent reduction for a five-year period beginning on September
1, 2009. The Partnership accepted this offer and agreed to
a Lease Amendment, which was subject to court approval of
the tenant's Plan of Reorganization. In December 2009, the
bankruptcy court approved the Plan of Reorganization. Under
the Plan, Tumbleweed assumed the Lease for this property and
the Lease amendment became effective. On September 1, 2014,
the rent will revert to the original amount due under the
Lease. As of the date of this report, Tumbleweed has
complied with all Lease terms. At June 30, 2009, based on
the proposed rent reduction and an analysis of market
conditions in the area, the Partnership recognized a
$110,000 adjustment to decrease the estimated net realizable
value of the property.
In April 2010, the Partnership signed a non-binding letter
of intent to sell the Tumbleweed restaurant in Chillicothe,
Ohio to an unrelated third party. The sale is subject to
contingencies, including the negotiation of a written
purchase agreement, and may not be completed. If the sale
is completed, the Partnership expects to receive net
proceeds of approximately $480,000. If the sale is not
completed, the Partnership will seek another buyer for the
property and may not be able to negotiate a purchase
agreement with similar economic terms. Based on this verbal
agreement, the Partnership recognized a $28,000 adjustment
to decrease the estimated net realizable value of the
property at March 31, 2010.
(4) Payable to AEI Fund Management, Inc. -
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 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, 2007, the Partnership adopted the
liquidation basis of accounting because the General Partners
anticipated the liquidation of the Partnership during 2008. 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 March
31, 2010, the estimated real estate values were based upon a
verbal agreement to sell one property and comparable sales of
similar properties for the other three properties. Any changes
in these estimates may 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.
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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Results of Operations
For the three months ended March 31, 2010 and 2009, while
in the liquidation phase, the Partnership recognized rental
income of $18,549 and $26,520, respectively. In 2010, rental
income decreased mainly as a result of a property sale. During
the same periods, the Partnership recognized interest income of
$2,016 and $2,242, respectively.
For the three months ended March 31, 2010 and 2009, while
in the liquidation phase, the Partnership incurred Partnership
administration expenses from affiliated parties of $13,164 and
$17,217, respectively. These administration expenses include
costs associated with the management of the properties,
processing distributions, reporting requirements and
communicating with the Limited Partners. As the Partnership's
asset base decreases due to property sales, it is allocated a
smaller share of expenses that are allocated by AEI Fund
Management, Inc. based on the relative assets of the funds under
management. During the same periods, the Partnership incurred
Partnership administration and property management expenses from
unrelated parties of $5,783 and $8,983, 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.
In March 2009, Tumbleweed, Inc., the tenant of the
Tumbleweed restaurant in Chillicothe, Ohio filed for Chapter 11
bankruptcy reorganization. In July 2009, the tenant contacted
the Partnership and offered to assume the Lease and extend the
Lease term five years in exchange for a 15% rent reduction for a
five-year period beginning on September 1, 2009. The Partnership
accepted this offer and agreed to a Lease Amendment, which was
subject to court approval of the tenant's Plan of Reorganization.
In December 2009, the bankruptcy court approved the Plan of
Reorganization. Under the Plan, Tumbleweed assumed the Lease for
this property and the Lease amendment became effective. On
September 1, 2014, the rent will revert to the original amount
due under the Lease. As of the date of this report, Tumbleweed
has complied with all Lease terms. At June 30, 2009, based on
the proposed rent reduction and an analysis of market conditions
in the area, the Partnership recognized a $110,000 adjustment to
decrease the estimated net realizable value of the property.
In April 2010, the Partnership signed a non-binding letter
of intent to sell the Tumbleweed restaurant in Chillicothe, Ohio
to an unrelated third party. The sale is subject to
contingencies, including the negotiation of a written purchase
agreement, and may not be completed. If the sale is completed,
the Partnership expects to receive net proceeds of approximately
$480,000. If the sale is not completed, the Partnership will
seek another buyer for the property and may not be able to
negotiate a purchase agreement with similar economic terms.
Based on this verbal agreement, the Partnership recognized a
$28,000 adjustment to decrease the estimated net realizable value
of the property at March 31, 2010.
For the three months ended March 31, 2010 and 2009, the
Partnership recognized adjustments of estimated values of
($18,488) and ($594), respectively, resulting from the
application of the liquidation basis of accounting and recording
its assets at estimated net realizable value and liabilities at
the amount estimated to be paid.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
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
In January 2009, 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 February 24, 2009, the proposal was
approved with a majority of Units voted in favor of the proposal.
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 three months ended March 31, 2010, while in the
liquidation phase, the Partnership's Net Assets in Liquidation
decreased $69,311 as a result of a decrease in the estimated net
realizable value of a property and distributions paid to the
Partners in excess of cash generated from operating activities.
During the three months ended March 31, 2009, while in the
liquidation phase, the Partnership's Net Assets in Liquidation
decreased $40,367 as a result of distributions paid to the
Partners in excess of cash generated from operating activities.
On October 5, 2009, the Partnership sold its remaining
9.3699% interest in the Taco Cabana restaurant in San Antonio,
Texas to the tenant. The Partnership received net sale proceeds
of $158,406. At the time of sale, the estimated net realizable
value was $158,000. At June 30, 2009, based on the signed
purchase agreement, the Partnership recognized an $18,000
adjustment to decrease the estimated net realizable value of the
property.
One of the Partnership's primary uses of cash 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 three months ended March 31, 2010 and 2009, the
Partnership declared distributions of $42,929 for each period,
which were distributed 99% to the Limited Partners and 1% to the
General Partners. The Limited Partners received distributions of
$42,500 and the General Partners received distributions of $429
for each period. During the first three months of 2010 and 2009,
the Partnership distributed net sale proceeds of $41,311 and
$40,367 to the Limited and General Partners as part of their
quarterly distributions, which represented a return of capital of
$2.16 and $2.11 per Limited Partnership Unit, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The rent from the Partnership's four remaining properties
plus the interest earned on its cash reserve may not be
sufficient to pay the Partnership's administrative expenses and
the property management expenses related to the properties. To
the extent these expenses are greater than income, the
Partnership will need to use a portion of its cash reserve to pay
these expenses until the properties are sold and the Partnership
is liquidated. Future distributions declared, if any, prior to
the final liquidating distribution, will likely be paid from the
cash reserve. The cash reserve should be adequate to meet the
Partnership's 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 investment funds. 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 investment
funds. Nevertheless, a prolonged economic downturn may adversely
affect the operations of the Partnership's tenants and their cash
flows. If a 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 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: May 12, 2010 AEI Real Estate Fund XVIII
Limited Partnership
By: AEI Fund Management XVIII, 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
