AEI INCOME & GROWTH FUND XXI LTD PARTNERSHIP

Description of Properties

The Partnership's properties are commercial, single tenant buildings. The properties were acquired on a debt-free basis and are leased to tenants under net leases, classified as operating leases. The Partnership holds an undivided fee simple interest in the properties.

The Partnership's properties are subject to the general competitive conditions incident to the ownership of single tenant investment real estate. Since each property is leased under a long‑term lease, there is little competition until the Partnership decides to sell the property. At this time, the Partnership will be competing with other real estate owners, on both a national and local level, in attempting to find buyers for the properties. In the event of a tenant default, the Partnership would be competing with other real estate owners, who have property vacancies, to attract a new tenant to lease the property. The Partnership's tenants operate in industries that are competitive and can be affected by factors such as changes in regional or local economies, seasonality and changes in consumer preference.

The following table is a summary of the properties that the Partnership acquired and owned as of December 31, 2025.

Property · Purchase Date · Original Property Cost · Tenant · Annual Lease Payment · Annual Rent Per Sq. Ft.

Best Buy Store Eau Claire, WI · 1/31/08 · 7,057,096 · Best Buy Stores, L.P. · 548,801 · 11.58

Dollar Tree Cincinnati, OH · 2/3/16 · 1,809,915 · (1) · Dollar Tree Stores, Inc. · 122,169 · 12.28

Advance Auto Chelsea, AL · 5/14/21 · 1,760,000 · Advance Auto Parts Inc. · 110,000 · 16.15

Memorial Hospital Diamondhead, MS (40%) · 3/22/22 · 1,580,000 · Memorial Hospital at Gulfport, Inc. · 108,590 · 9.28

(1) Does not include acquisition costs that were expensed.

The property listed above with a partial ownership percentage is owned with the following affiliated entity with common ownership: Memorial Hospital in Diamondhead, Mississippi (AEI Net Lease Income Fund 36 LP).

The Partnership accounts for properties owned as tenants-in-common with affiliated entities and/or unrelated third parties using the proportionate consolidation method. Each tenant-in-common owns a separate, undivided interest in the properties. Any tenant-in-common that holds more than a 50% interest does not control decisions over the other tenant-in-common interests. The financial statements reflect only this Partnership's percentage share of the properties' land, building, intangible assets, liabilities, revenues and expenses.

At the time the properties were acquired, the remaining primary lease terms varied from 10 to 18 years. The leases provide the tenants with two to four five-year renewal options subject to the same terms and conditions as the primary term. The lease for the Dollar Tree store in Cincinnati, Ohio was extended to end on January 31, 2031.

Pursuant to the lease agreements, the tenants are required to provide proof of adequate insurance coverage on the properties they occupy. The General Partners believe the properties are adequately covered by insurance and consider the properties to be well-maintained and sufficient for the Partnership's operations.

For tax purposes, the Partnership's properties are depreciated under the Modified Accelerated Cost Recovery System (MACRS). The largest depreciable component of a property is the building which is depreciated using the straight-line method over 39 years. The remaining depreciable component of a property is land improvements which are depreciated using an accelerated method over 15 years. Since the Partnership has tax-exempt Partners, the Partnership is subject to the rules of Section 168(h)(6) of the Internal Revenue Code which requires a percentage of the properties' depreciable components to be depreciated over longer lives using the straight-line method. In general, the federal tax basis of the properties for tax depreciation purposes equals the book depreciable cost of the properties plus the amortizable cost of the related intangible lease assets, except for properties purchased during 2009 through 2017. For those properties, acquisition expenses that were expensed for book purposes were capitalized and added to the basis of the property for tax depreciation purposes.

At December 31, 2025, all properties listed above were 100% occupied.