AEI INCOME & GROWTH FUND XXII LTD PARTNERSHIP

What they do

The Partnership owns interests in commercial properties leased to tenants under net leases, where tenants pay real estate taxes, insurance, maintenance, repairs and operating expenses. Leases had remaining primary terms of 8 to 20 years at acquisition, with two to five five-year renewal options, and provide base annual rent plus stated rent increases. The Partnership has no direct employees; management services are performed by AEI Fund Management, Inc., an affiliate of the general partner.

Revenue drivers

• Rental income from net-leased properties — Substantially all revenue: $417,382 in 2025 and $440,126 in 2024. Rental income fell in 2025 due to the July 2025 sale of the Advance Auto store interest, partly offset by rent increases on two properties.
• Major tenants (concentration) — Three tenants each contributed more than 10% of total rental income in 2025 and in aggregate contributed 100%; two are expected to remain above 10% in 2026, and Advance Auto Parts (Indianapolis) ceased being a major tenant after its 2025 sale.
• Interest income — Interest income was $19,082 in 2025 versus $5,944 in 2024. The 10-Q notes a decrease in interest income in the first half of 2026.

Recent performance

2025 rental income was $417,382, down from $440,126 in 2024, primarily because of the July 2025 sale of the 65% interest in the Advance Auto store in Indianapolis. That sale generated net proceeds of $920,594 and a net gain of $200,237, while the December 2024 sale of the St. Vincent Clinic in Lonoke, Arkansas produced net proceeds of $661,301 and a $32,817 gain. Net income rose to $241,738 in 2025 from $16,521 in 2024, and operating cash flow increased to $306,492 from $291,413. In the six months ended June 30, 2026, cash used in operations was $81,924 versus $127,493 a year earlier, with no acquisitions or property sales in either period and the cash balance declining $20,151.

Strategy

The Managing General Partner has decided to begin the final liquidation process, disposing of the Partnership's assets under the Partnership Agreement; Section 12.1(f) permits liquidation upon sale of all or substantially all assets. No property acquisitions or sales were completed in the first half of 2026. The Partnership declares quarterly distributions, targeting a stable rate, and may repurchase tendered Units on April 1 and October 1 subject to an annual 5% cap. Distributions were $129,362 in the first half of 2026 versus $137,054 in the first half of 2025, allocated 97% to Limited Partners and 3% to the General Partner for Net Cash Flow.

Risks

• Liquidation and wind-down uncertainty — The Partnership is in the process of disposing of assets, so future rental income and distributions depend on the timing and proceeds of remaining property sales.
• Tenant concentration — Two tenants are expected to account for more than 10% of rental income each in 2026, and failure of these tenants could materially affect net income and cash distributions.
• Declining rental income — Rental income fell to $417,382 in 2025 from $440,126 in 2024 after a property sale, and the Partnership expects only about $420,000 in 2026 based on scheduled rent.
• Macroeconomic and tenant credit conditions — Management notes higher interest rates and inflation in the U.S. and globally may impact tenants and operating partners, potentially impairing their ability to pay rent.

Outlook

Based on scheduled rent for properties owned as of February 28, 2026, the Partnership expects to recognize rental income of approximately $420,000 in 2026. Management states that continuing rent payments plus cash generated from property sales should be adequate to fund distributions and meet obligations on a short-term and long-term basis. The Partnership faces competition for buyers as it seeks to dispose of its remaining properties.