8-K 1 bblgen27.txt 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) October 6, 2008 AEI INCOME & GROWTH FUND 27 LLC (Exact name of registrant as specified in its charter) State of Delaware 333-144961 20-8657207 (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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 2 - Financial Information Item 2.01 Completion of Acquisition or Disposition of Assets. On October 6, 2008, the Company purchased a 33% interest in a Best Buy store in Lake Geneva, Wisconsin for $1,991,220 from Ryan Companies US, Inc., an unrelated third party. The property is leased to Best Buy Stores, L.P. under a Lease Agreement with a remaining primary term of 10.3 years. The Lease may be renewed by the tenant for up to four consecutive terms of five years each. The Lease requires an initial annual rent of $144,325 for the 33% interest, which will increase every five years by approximately 3.4%. The Lease is a net lease under which the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses of the property. The only exceptions are the Company is responsible for repairs to the structural components of the building, roof, and parking lot and replacement of HVAC, electrical, plumbing and other similar systems for the building. The remaining interests in the property were purchased by AEI Income & Growth Fund XXII Limited Partnership and AEI Income & Growth Fund 24 LLC, affiliates of the Company. The Company purchased the property with cash received from the sale of LLC Units. The store was constructed in 2008 and is a 30,376 square foot building situated on approximately 3.8 acres of land. The freestanding retail store is located at 700 North Edwards Boulevard, Lake Geneva, Wisconsin. Best Buy Stores, L.P., a wholly owned subsidiary of Best Buy, Inc. ("BBY"), owns the fixed assets, inventory and receivables associated with BBY stores located in the United States. As the parent company of the tenant, BBY does not guarantee the lease and is not responsible for any lease obligations. BBY, headquartered near Minneapolis, sells consumer electronics, home-office products, entertainment software, appliances and related services through more than 1,200 retail stores across the United States, throughout Canada, and in China. For the fiscal year ended March 1, 2008, Best Buy reported a net worth of approximately $4.5 billion, revenue of approximately $40.0 billion and net income of approximately $1.4 billion. Best Buy is a public company whose stock is traded on the New York Stock Exchange under the symbol BBY and files reports with the SEC that are available on-line at the SEC's web site (www.sec.gov). Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (a) Financial statements of businesses acquired - Because the property is leased to a single tenant on a long- term basis under a net lease that transfers substantially all of the operating costs to the tenant, we believe that financial information about the tenant is more relevant than financial statements of the property. Financial information of the tenant is presented in the last paragraph of Item 2.01. (b) Pro forma financial information - A limited number of pro forma adjustments are required to illustrate the effects of the above transaction on the Company's balance sheet and income statement. The following narrative description is furnished in lieu of the pro forma statements: Assuming the Company had acquired the property on June 5, 2008 (date the Company commenced operations after accepting the required minimum subscription proceeds of $1,500,000), the Company's Investments in Real Estate would have increased by $1,991,220 and its Current Assets (cash) would have decreased by $1,991,220. Rental Income for the Company would have increased from $37,681 to $48,104 for the period ended June 30, 2008 if the Company had owned the property during the period. Depreciation Expense would have increased by $2,945 for the period ended June 30, 2008. The net effect of these pro forma adjustments would have caused Net Loss to decrease from $11,367 to $3,889, which would have resulted in Net Income per LLC Unit outstanding of $0.05 for the period ended June 30, 2008. (c) Shell company transactions - Not Applicable. (d) Exhibits. Exhibit 10.1 - Assignment and Assumption of Purchase and Sale Agreement dated August 7, 2008 between the Company, AEI Income & Growth Fund XXII Limited Partnership, AEI Income & Growth Fund 24 LLC and AEI Fund Management, Inc. relating to the Property at 700 North Edwards Boulevard, Lake Geneva, Wisconsin. Exhibit 10.2 - Assignment and Assumption of Lease dated October 6, 2008 between the Company, AEI Income & Growth Fund XXII Limited Partnership, AEI Income & Growth Fund 24 LLC and Ryan Companies US, Inc. relating to the Property at 700 North Edwards Boulevard, Lake Geneva, Wisconsin. 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 27 LLC By: AEI Fund Management XXI, Inc. Its: Managing Member Date: October 10, 2008 /s/ Patrick W Keene By: Patrick W. Keene Its: Chief Financial Officer