SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

SB Partners – ‘PRE 14C’ for 9/22/22

On:  Thursday, 9/22/22, at 10:15am ET   ·   For:  9/22/22   ·   Accession #:  1437749-22-22893   ·   File #:  0-08952

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 9/22/22  SB Partners                       PRE 14C     9/22/22    1:1.2M                                   RDG Filings/FA

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14C     Preliminary Proxy Info Statement                    HTML   1.28M 

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

SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
 

Check the appropriate box:

SB PARTNERS

(Name of Registrant As Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

SB PARTNERS
8 Wright Street, Suite 107

Westport, CT 06880

P.O. Box 647

Attn: Accounting

Wilton, CT 06897-0647

NOTICE OF UNIT HOLDER ACTION BY WRITTEN CONSENT

                        , 2022

To the Unit Holders and Limited Partners of SB Partners:

On behalf of the general partner, SB Partners Real Estate Corporation (the “General Partner”), of SB Partners, a New York limited partnership (the “Partnership” or the “Fund”), the Partnership is delivering this notice and the accompanying information statement (the “Information Statement”) to inform our limited partners (the “Limited Partners” and as holders of Units of Limited Partnership, the “Unit Holders” and together with the General Partner, the “Partners”) that the General Partner has authorized and, SRE Clearing Services Corporation, an affiliate of the General Partner and holder of over 50% of our Units of Limited Partnership (the “Units”) that are held by Limited Partners, approved by written consent, in lieu of a meeting of Unit Holders, the dissolution and liquidation of the Partnership as detailed below under “The Dissolution”.

The Dissolution

We are informing you regarding the details of the proposed Plan of Dissolution now that the Partnership has completed the sale of its last real estate property, our Eagle Lake Business Center IV, an industrial flex property located in Maple Grove, Minnesota. Following the sale, the Partnership’s assets consist principally of cash and cash equivalents, and an equity interest in a liquidating real estate investment company. The General Partner will file a certificate of cancellation with the relevant authorities of the State of New York, (the “Certificate of Cancellation”), thereby dissolving the Partnership under state law and commencing the process of winding up the Partnership, which will include several steps, including: liquidating any remaining assets; paying creditors, including Partners who are creditors, and expenses of the Partnership; establishing a reserve, to the extent deemed reasonably necessary by the General Partner, for the payment of contingent or unforeseen future liabilities or obligations of the Partnership; and distributing available cash to the Partners in accordance with the Partnership’s governing documents and applicable law.

Once the wind-up has been completed, the General Partner will file a Form 15 Certification and Notice of Termination of Registration with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which will suspend the Partnership’s obligation to file periodic or current reports under the Exchange Act.

For further details regarding the Dissolution, including fees payable and other benefits to the General Partner in connection with the Dissolution, see the section of this Information Statement entitled “Dissolution” beginning on page 6.

For further information regarding the Dissolution, the General Partner urges you to read the accompanying Information Statement carefully and completely. If you have questions about the Dissolution or would like additional copies of the Information Statement, please contact: SB Partners, 8 Wright Street, Suite 107, Westport, CT 06880, Mailing: P.O. Box 647, Wilton, CT 06897-0647, Attention: Accounting, Telephone: (203) 283-9593, E-mail: sbpartnersclose@sentinelcorp.com.

The Information Statement is being furnished to the holders of the Units pursuant to Section 14(c) of the Exchange Act, and the rules thereunder solely for the purpose of informing our Limited Partners of the approval of the Plan of Dissolution before it takes effect. In accordance with Rule 14c-2 under the Exchange Act, we plan to take steps to implement the Plan of Dissolution 20 calendar days following the date this Notice and the accompanying Information Statement are first mailed to Limited Partners, or as soon thereafter as is reasonably practicable.

We elected to utilize the written consent process to eliminate the costs and management time involved in holding a meeting and obtaining proxies and to effect the transaction described above as early as practicable in an effort to accomplish the purposes described in the accompanying Information Statement.

IMPORTANT NOTICE:
NO VOTE OR OTHER ACTION OF THE PARTNERSHIP’S UNITHOLDERS IS REQUIRED IN CONNECTION WITH THE INFORMATION STATEMENT.

WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY

You have the right to receive this Notice and the accompanying Information Statement if you were a Limited Partner of record of the Partnership at the close of business on                  , 2022.

PRELIMINARY INFORMATION STATEMENT – SUBJECT TO COMPLETION

DATED SEPTEMBER 22^nd, 2022

SB PARTNERS
8 Wright Street, Suite 107

Westport, CT 06880

P.O. Box 647

Attn: Accounting

Wilton, CT 06897-0647

INFORMATION STATEMENT

NO VOTE OR OTHER ACTION OF THE PARTNERSHIP’S UNIT HOLDERS IS REQUIRED IN

CONNECTION WITH THIS INFORMATION STATEMENT.

WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY

General

On behalf of the General Partner of the Partnership, the Partnership is delivering this Information Statement to inform our Limited Partners that the General Partner has authorized and, SRE Clearing Services Corporation, an affiliate of the General Partner and the holder of over 50% of the Units that are held by Limited Partners, has approved by written consent, in lieu of a meeting of Unit Holders, the dissolution and liquidation of the Partnership as detailed below under “The Dissolution”.

This Information Statement is being sent on or about                 , 2022 to the Partnership’s Limited Partners of record as of                   , 2022 (the “Record Date”).

We will pay the costs of preparing and sending out the enclosed Notice and this Information Statement.

INFORMATION ABOUT THE DISSOLUTION

What is the purpose of the Information Statement?

The General Partner has authorized and a Limited Partner with the requisite majority voting power has approved the proposed dissolution of the Partnership.

We are informing you regarding the proposed Plan of Dissolution now that the Partnership has completed the sale of its last real estate property, our Eagle Lake Business Center IV, an industrial flex property located in Maple Grove, Minnesota. Following the sale, the Partnership’s assets consist principally of cash and cash equivalents and an equity interest in a liquidating real estate investment company. The General Partner will file a certificate of cancellation with the relevant authorities of the State of New York, (the “Certificate of Cancellation”), thereby dissolving the Partnership under state law and commencing the process of winding up the Partnership which will include several steps, including: liquidating any remaining assets; paying creditors, including Partners who are creditors, and expenses of the Partnership; establishing a reserve, to the extent deemed reasonably necessary by the General Partner, for the payment of contingent or unforeseen future liabilities or obligations of the Partnership; and distributing available cash to the Partners in accordance with the Partnership’s governing documents and applicable law.

Once the wind-up has been completed, the General Partner will file a Form 15 Certification and Notice of Termination of Registration with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which will suspend the Partnership’s obligation to file periodic or current reports under the Exchange Act. For further details regarding the Dissolution, including fees payable and other benefits to the General Partner in connection with the Dissolution, see the section of this Information Statement entitled “Dissolution” beginning on page 6.

Why was the Plan of Dissolution proposed?

The General Partner has been disposing of assets and distributing cash to Limited Partners in anticipation of proposing a dissolution and liquidation of the Partnership. Now that the last real estate property has been sold, the General Partner determined that the dissolution of the Partnership is in the best interest of the Partnership and the Partners for a number of reasons, including:

The General Partner also considered potentially negative factors in its deliberations concerning the Plan of Dissolution, including the following:

What will I receive in the liquidation?

We have sold the Partnership’s remaining Property - Eagle Lake Business Center IV, an industrial flex property in Maple Grove, Minnesota. The net proceeds, after provisioning for expenses and reserves, along with other available cash and liquidating distributions from Sentinel Omaha, LLC, will be distributed to the Limited Partners in accordance with the Plan of Dissolution.

When will I receive my liquidating distributions?

The General Partner expects to distribute approximately $            of available cash to the Limited Partners after retaining adequate reserves, as determined in the reasonable discretion of the General Partner, as soon as practicable following the filing of the Certificate of Cancellation. Such distribution will be made during the wind up of the Partnership upon the liquidation of its remaining asset, an interest in Sentinel Omaha, LLC, which has liquidated its last real estate property and which the Partnership expects will pursue its dissolution and liquidation in the short-term. We expect our liquidation in accordance with the Plan of Dissolution to be completed on or before December 31, 2022.

The actual amounts and times of the liquidating distribution(s) will be determined by the General Partner. If you transfer your Units during the liquidation, the right to receive liquidating distributions will transfer with those Units.

What are the U.S. federal income tax consequences of the liquidation?

A summary of certain material tax consequences of the Plan of Dissolution begins at page 8 of this Information Statement. You should consult your own tax advisor for a full understanding of the particular tax consequences of the liquidation to you.

Will there be a proxy process to approve the Dissolution?

No, the General Partner and the Partnership will not conduct a proxy process to approve the Dissolution of the Partnership, as the Dissolution has already been authorized by the General Partner and approved by SRE Clearing Services Corporation, an affiliate of the General Partner which holds over 50% of the Units of the Partnership that are held by Limited Partners, in accordance with Section 4 of the Partnership Agreement.

Will you incur expenses in distributing this Information Statement?

The Partnership will bear the expenses of preparing and sending out the enclosed Notice and this Information Statement.

Whom should I contact with other questions?

If you have additional questions about this Information Statement or would like additional copies of this Information Statement or the enclosed Notice, please contact: SB Partners, 8 Wright Street, Suite 107, Westport, CT 06880, Mailing: P.O. Box 647, Wilton, CT 06897-0647, Attention: Accounting, Telephone: (203) 283-9593, E-mail: sbpartnersclose@sentinelcorp.com.

RISK FACTORS

In addition to general risks and the other information contained in this Information Statement, you should carefully consider the following risk factors in the process of evaluating the Dissolution.

RISKS ASSOCIATED WITH THE DISSOLUTION

Estimates regarding the amount of liquidating distributions and when we will make them are based on several assumptions, which may turn out to be incorrect in certain respects. Amounts available for distribution to Limited Partners depend on several factors, including actual proceeds from the realization of the Partnership’s remaining asset and liquidating distributions from Sentinel Omaha, LLC and any related expenses incurred therewith, general administrative expenses of the Partnership, including fees paid to the General Partner, and reserves for the payment of anticipated liabilities that may be incurred by the Partnership. Accordingly, the actual amount of liquidating distributions we pay to you may be more or less than we estimate in this Information Statement. Additionally, any liquidating distributions may be paid later than we estimate. Beyond general risks to our business, other risk factors could cause actual payments to come later or be less than we anticipate, or might impose other issues related to the Dissolution, as set forth below.

The realization of our remaining asset is not controlled by the Partnership.

The realization of our remaining asset, an interest in Sentinel Omaha, LLC, is not in the Partnership’s control. While the Partnership expects Sentinel Omaha will pursue its dissolution and liquidation in the short-term, no assurance can be provided that we will realize liquidation proceeds on or before December 31, 2022, the date that we expect to complete our liquidation in accordance with the Plan of Dissolution.

If we underestimate the costs of liquidation or any other unanticipated costs, our liquidating distributions may be adversely impacted.

Pursuing the Plan of Dissolution may entail costs related to the liquidation and wind up process, and other expenses may arise in this process, as well, which we may fail to account for or estimate accurately. The General Partner may elect to acquire one or more insurance and / or indemnification policies covering unknown or contingent claims against us, which would entail payment of a premium not yet known to us. Additionally, the General Partner may elect to establish a reserve fund to pay any potential contingent claims. In this process, we may underestimate such costs in calculating projections, and if this happens, actual net liquidation value may be lower than what we anticipated. Further, if creditors’ claims exceed what we expect, or the General Partner decides to acquire one or more insurance and / or indemnification policies covering unknown or contingent claims against us, this may delay or reduce our liquidating distributions. Additionally, the establishment of the reserve fund may cause liquidating distributions to our Limited Partners to be delayed or reduced.

Under the Plan of Dissolution’s terms, the General Partner is granted broad authority to wind up the affairs of the Partnership.

The General Partner will have broad discretion to make decisions with respect to the liquidation and wind up of the Partnership and therefore the ultimate timing of the completion of the liquidation process will be in the control of the General Partner.

TAX RISK FACTORS

U.S. federal income tax considerations will materially affect the economic consequences of the transactions contemplated by the Plan of Dissolution.

The income tax consequences of the transactions to be effectuated pursuant to the Plan of Dissolution are complex and subject to many uncertainties. Changes in the income tax laws and regulations may have a materially adverse impact on the Partnership’s financial results and its ability to make liquidating distributions to the Limited Partners. Any such changes may have a materially adverse impact on a Limited Partner and in certain instances may apply retroactively. In addition, the IRS may challenge the allocations of items of income, gain, loss and deduction among the Limited Partners. Any reallocation of such items by the IRS may have a materially adverse impact on a Limited Partner. The Partnership has not obtained a legal opinion or ruling from any tax authority regarding the tax treatment of the Plan of Dissolution or any tax aspects of the Partnership or its operations.

A Limited Partner may be required to pay taxes in an amount that exceeds the amount of cash, if any, actually distributed to such Limited Partner pursuant to the Plan of Dissolution.

In general, a partnership does not pay tax on its income. However, the partners of a partnership are, in general, subject to tax on their respective shares of the partnership’s income whether they actually receive any distributions from the partnership. It is possible that a Limited Partner may be required to pay taxes in an amount that exceeds the amount of cash, if any, actually distributed to such Limited Partner pursuant to the Plan of Dissolution, or prior to the amount of cash, if any, actually distributed to such Limited Partner pursuant to the Plan of Dissolution.

DISSOLUTION

Approval of the Plan of Dissolution

We are informing you regarding the details of our proposed Plan of Dissolution, a copy of which is attached as Annex A and incorporated here by reference. The Partnership has completed the sale of its last real estate property, our Eagle Lake Business Center IV, an industrial flex property located in Maple Grove, Minnesota (the “Property”). Following the sale, the Partnership’s assets consist principally of cash and cash equivalents and an equity interest in a liquidating real estate investment company. The General Partner will file a certificate of cancellation with the relevant authorities of the State of New York, (the “Certificate of Cancellation”), thereby dissolving the Partnership under state law and commencing the process of winding up the Partnership which will include several steps, including: liquidating any remaining assets; paying creditors, including Partners who are creditors, and expenses of the Partnership; establishing a reserve, to the extent deemed reasonably necessary by the General Partner, for the payment of contingent or unforeseen future liabilities or obligations of the Partnership; and distributing available cash to the Partners in accordance with the Partnership’s governing documents and applicable law.

Once the wind-up has been completed, the General Partner will file a Form 15 Certification and Notice of Termination of Registration with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which will suspend the Partnership’s obligation to file periodic or current reports under the Exchange Act

Vote Required for the Dissolution

Pursuant to Sections 4 and 22 of the Partnership Agreement, the dissolution and liquidation of the Partnership requires the affirmative decision of the General Partner and the concurrence of Limited Partners holding more than 50% of the Units which are held by Limited Partners.

Appraisal Rights and Partnership Records

Neither New York law nor any governing document of the Partnership provides any right for Limited Partners to have their respective Units appraised or redeemed in connection with or as a result of the implementation of the Dissolution. Therefore, while the Dissolution is subject to approval by the Limited Partners, a Limited Partner, whether or not it has voted on the Dissolution, will have no right to have its Units redeemed for cash.

Reporting Requirements and Form 15

The Partnership must comply with various requirements to file periodic and current reports pursuant to the Exchange Act, regardless of whether the Plan of Dissolution is adopted through approval of the Dissolution. Once the wind-up has been completed, the General Partner will file a Form 15 Certification and Notice of Termination of Registration with the SEC, which will suspend the Partnership’s obligation to file periodic or current reports under the Exchange Act. While the Form 15 will take effect 90 days after filing, the Partnership’s duty to file periodic and current reports under the Exchange Act will be suspended immediately after the Form 15 filing.

The Information Statement is being furnished to the holders of the Units pursuant to Section 14(c) of the Exchange Act and the rules thereunder solely for the purpose of informing our Limited Partners of the approval of the Plan of Dissolution before it takes effect. In accordance with Rule 14c-2 under the Exchange Act, we plan to implement the Plan of Dissolution 20 calendar days following the date this Notice and the accompanying Information Statement are first mailed to our Limited Partners, or as soon thereafter as is reasonably practicable.

DECISION OF GENERAL PARTNER

The General Partner has been disposing of assets and distributing cash to Limited Partners in anticipation of proposing a dissolution and liquidation of the Partnership. Now that the last real estate property has been sold, the General Partner determined that the dissolution of the Partnership is in the best interest of the Partnership and the Partners.

Reasons for the Dissolution

The General Partner considered the following reasons that weigh in favor of the Dissolution:

The General Partner also considered potentially negative factors in its deliberations concerning the Dissolution, including the following:

Alternatives to the Dissolution

The General Partner also considered alternatives to the Dissolution, including continuing to hold the Property. However, the General Partner believes these alternatives are not in the best interest of the Partnership due to regulatory and administrative costs.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Partnership is a limited partnership duly formed pursuant to the New York Revised Limited Partnership Act, as amended, of the State of New York. The General Partner, SB Partners Real Estate Corporation, is vested with full authority as to the general management and supervision of business and the other affairs of the Partnership, subject to certain constraints in the Partnership Agreement.

Limited Partners have no right to participate in the management of the Partnership and have limited voting rights with respect to certain matters of fundamental significance.

The following table presents information regarding the beneficial ownership of our Units by each person known to us to beneficially own more than 5% of our outstanding Units as of December 31, 2021.

_________________________________________

RELATED PARTY TRANSACTIONS

Fiduciary Duties of the General Partner

The General Partner has fiduciary duties to the Partnership that go beyond the specific duties and obligations imposed upon it under the Partnership Agreement. The General Partner, in handling the affairs of the Partnership, is expected to exercise good faith, to use care and prudence, and to act with an undivided duty of loyalty to the Limited Partners.

As discussed in detail under “Decision of General Partner,” after consideration of the Dissolution, the General Partner determined that the dissolution of the Partnership is in the best interest of the Partnership and the Partners.

LACK OF INDEPENDENT REPRESENTATION

The General Partner has not retained an independent representative to act on behalf of the Limited Partners in connection with its decision to authorize the Dissolution and the Plan of Dissolution. No group of the Limited Partners was empowered to negotiate the terms and conditions of the Dissolution or of the Plan of Dissolution, or to determine what procedures should be in place to safeguard the rights and interests of the Limited Partners. The General Partner and certain of its affiliates have been the parties responsible for structuring all the terms and conditions of the Dissolution and of the Plan of Dissolution.

Given that substantially all of the Partnerships assets had been previously liquidated or realized, the General Partner did not believe it was necessary to engage an independent representative to represent the interests of the Limited Partners in order to advance the interests of the Limited Partners.

CERTAIN MATERIAL U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE PLAN OF DISSOLUTION

EACH TAXPAYER SHOULD SEEK ADVICE REGARDING THE TAX CONSEQUENCES OF THE DISSOLUTION OF THE PARTNERSHIP BASED ON ITS PARTICULAR CIRCUMSTANCES FROM HIS OR HER OWN INDEPENDENT TAX ADVISOR.

The following summary discusses certain material U.S. federal income tax consequences of the Plan of Dissolution to a Limited Partner who holds their Units as a capital asset within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). It is not intended to be an exhaustive discussion of all possible tax consequences which may arise from the Plan of Dissolution and the transactions contemplated thereby, and it should be understood that special rules which are not discussed herein may apply in certain situations and to certain types of taxpayers. The discussion is primarily based upon the current provisions of the Code, Treasury regulations promulgated under the Code (“Treasury Regulations”), and reported judicial and administrative rulings, pronouncements and decisions in effect as of the date of this Information Statement, all of which are subject to change, retroactively or prospectively, and to possibly differing interpretations. Any such change could affect the validity of this discussion.

The discussion does not address (i) U.S. federal taxes other than income taxes (such as U.S. federal estate and gift tax laws), or (ii) any state, local or non-U.S. taxes. In addition, this discussion does not purport to address all U.S. federal income tax consequences that may be relevant to you in light of your particular circumstances. Your tax treatment may vary depending upon your particular situation. The discussion below does not address the U.S. federal income tax consequences of the Plan of Dissolution to all categories of taxpayers, including taxpayers subject to special treatment under U.S. federal income tax laws, such as, without limitation, financial institutions, insurance companies, dealers in securities, tax-exempt entities (except to the extent discussed below), Non-U.S. Limited Partners (each defined below) (except to the extent discussed below), regulated investment companies, and Limited Partners that are classified as partnerships for U.S. federal income tax purposes.

We did not obtain an opinion of legal counsel and we did not request a ruling from the Internal Revenue Service (the “IRS”) or other tax authority on the U.S. federal, state or local tax consequences relevant to the Plan of Dissolution. No assurance can be given that the IRS or any state or local taxing authority would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below.

THE DISCUSSION BELOW IS NOT TAX ADVICE. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR U.S. FEDERAL, STATE, LOCAL, NON-U.S. AND OTHER TAX CONSEQUENCES TO YOU OF THE LIQUIDATION AND DISSOLUTION.

U.S. Federal Income Tax Consequences to the Partnership

As a partnership, the Partnership itself generally will not be subject to U.S. federal income tax with respect to the sale of the Property and any liquidating distributions. If the Partnership were to be regarded as an association taxable as a corporation, certain tax consequences that are materially adverse to the Partnership and the Limited Partners would likely result. The remaining discussion assumes that the Partnership has been and will continue to be properly classified as a partnership for U.S. federal income tax purposes.

Allocations of Income, Gain, Loss and Deduction

Each Limited Partner is required to take into account in computing its U.S. federal income tax liability its allocable share of the Partnership’s income, gain, loss and deduction (whether or not there is a corresponding distribution made by the Partnership to the Limited Partner), including such items attributable to the sale of the Property. Items of the Partnership’s income, gain, loss and deduction attributable to the sale of the Property will be allocated among the Limited Partners pursuant to the Partnership Agreement.

A Limited Partner’s ability to deduct their share of the Partnership’s losses and expenses attributable to the sale of the Property, if any, may be limited under one or more provisions of the Code, including basis limitations, passive activity loss limitations, “at risk” loss limitations, and general limitations imposed on the deductibility of capital losses. You should consult your own tax advisor as to the manner in which such limitations may impact your ability to deduct any losses of the Partnership.

Liquidating Distributions to U.S. Unit Holders and U.S. Limited Partners

If a partnership or an entity treated as a partnership for U.S. federal income tax purposes holds our Units, the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. A partner of a partnership holding our Units should consult its own tax advisor regarding the U.S. federal income tax consequences to the partner of the Plan of Dissolution and the transactions contemplated thereby.

In general, no gain will be recognized by a U.S. Limited Partner with respect to a distribution in liquidation of their Units unless the amount of cash distributed exceeds the U.S. Unit Holder’s or U.S. Limited Partner’s adjusted tax basis for their Units immediately before the liquidating distribution (including the sale of the Property and adjustments reflecting operations in the year of liquidation). In the event that the amount of cash distributed exceeds the U.S. Limited Partner’s adjusted tax basis for their Units, such distribution will generally be taxable to the U.S. Limited Partner as capital gain (See the section “Capital Gains; Net Investment Income” below).

A loss may be recognized by a U.S. Limited Partner with respect to a liquidating distribution only to the extent that the cash distributable to the U.S. Limited Partner is less than the adjusted tax basis in his or her Units.

Capital Gains; Net Investment Income

Under current law, an individual or other non-corporate taxpayer is generally subject under federal income tax law to a maximum 20% rate of tax on net capital gains from the disposition of certain capital assets held more than 12 months. Net capital gains from dispositions of property held for one year or less are generally taxed at the same rate as ordinary income (currently, the maximum federal ordinary income tax rate applicable to individuals is 37%). A corporate taxpayer’s net capital gains (regardless of how the property was held) are generally taxed at the ordinary corporate income tax rate (currently, the maximum federal corporate rate is 21%).

Under current law, individuals (other than non-resident aliens) will be subject to an additional 3.8% tax on the lesser of (i) their “net investment income” (generally, interest, dividends, annuities, royalties, rents and capital gains) and (ii) the excess of their adjusted gross income over a threshold amount of $250,000 in the case of a taxpayer filing a joint return or a surviving spouse, $125,000 in the case of a married taxpayer filing a separate return, and $200,000 in all other cases, including single individuals. A similar 3.8% tax will be imposed on certain trusts and estates.

Tax-Exempt U.S. Unit Holders and Tax-Exempt U.S. Limited Partners

Generally, subject to certain exceptions, the sale of the Property and the liquidating distributions made by the Partnership to tax-exempt U.S. Limited Partners will not be “unrelated business taxable income” within the meaning of the Code (“UBTI”) unless and to the extent income or gain is derived from “debt-financed property” (which is property acquired or held by the Partnership with “acquisition indebtedness”). Tax-exempt Limited Partners should consult with their own tax advisors regarding the specific tax consequences to them which may result from sale of the Property and the liquidation of the Partnership, including application of the UBTI rules and the rules related to “debt-financed property”.

Non-U.S. Unit Holders and Non-U.S. Limited Partners

For purposes of this discussion, a “Non-U.S. Person” is a person that is not a U.S. Person. A “Non-U.S. Limited Partner” is a Limited Partner who is a Non-U.S. Person.

Non-U.S. Limited Partners may be subject to U.S. tax rules that differ significantly from those summarized above. For example, the Partnership may be required to withhold tax on a Non-U.S. Limited Partner’s allocable share of certain tax items of the Partnership that are attributable to a sale of a U.S. business, including any income or gain attributable to the sale of the Property, and a Non-U.S. Limited Partner could be required to file U.S. tax returns in connection therewith. The Partnership intends to comply with any withholding obligations it may be subject to and such withholding may reduce the amount otherwise distributable to a Non-U.S. Limited Partner. Non-U.S. Limited Partners should consult with their own tax advisors regarding the specific U.S. tax consequences to them as a result of the liquidation of the Partnership.

Alternative Minimum Tax

Individuals, trusts, estates and corporate taxpayers could be subject to an alternative minimum tax (“AMT”) if the AMT exceeds the income tax otherwise payable by the taxpayer for the year. The AMT calculations are complex, and the Unit Holders and Limited Partners should consult their own tax advisors to determine whether the Plan of Dissolution and the transactions contemplated thereby might create or increase their AMT liability.

U.S. State and Local Income Tax

You may be subject to state or local taxes with respect to liquidating distributions received from the Partnership. The state or local tax treatment of liquidating distributions received from the Partnership may differ from the U.S. federal income tax treatment described above. If we transfer assets to a liquidating trust, you may be required to file income tax returns in states or localities in which the liquidating trust owns properties. You should consult your tax advisors regarding such taxes.

NO VOTE REQUIRED

The General Partner and the Partnership are not seeking consents, authorizations or proxies from you. The Dissolution was authorized by the General Partner and approved by SRE Clearing Services Corporation, an affiliate of the General Partner and a Limited Partner holding over 50% of our outstanding Units that are held by the Limited Partners, in accordance with Section 4 of the Partnership Agreement. The Dissolution will not be implemented until 20 calendar days following the date this Notice and the accompanying Information Statement are first mailed to our Unit Holders and Limited Partners, or as soon thereafter as is reasonably practicable.

ADDITIONAL INFORMATION

A copy of the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (without exhibits), as filed with the Securities and Exchange Commission (“SEC”) and a copy of the Partnership’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022 (without exhibits), as filed with the SEC, are attached hereto as Annex B and Annex C, respectively.

ANNEX A

Plan of Dissolution

PLAN OF DISSOLUTION

OF

SB PARTNERS

This Plan of Dissolution (the “Plan”) of SB Partners, a New York limited partnership (the “Partnership”), has been approved by SB Partners Real Estate Corporation, the Partnership’s general partner, and SRE Clearing Services Corporation, a limited partner that holds 52.3% of the Units of Limited Partnership that are held by the Partnership’s limited partners, having determined that such action is advisable and in the best interests of the Partnership and its partners. Commencing on            , 2022, the Partnership has provided limited partners with written notice of such action taken by written consent and an accompanying information statement, as filed under Schedule 14C pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As of the Effective Date (defined below), the Partnership shall commence a process of voluntarily dissolution and liquidation as set forth below in accordance with the requirements of the New York Revised Limited Partnership Act, codified in the Consolidated Laws of New York, Chapter 29, Article 8-A, as the same may be amended from time to time (the “Act”).

ANNEX B

Annual Report on Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

FORM 10-K - ANNUAL REPORT PURSUANT TO SECTION 13

OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act from their obligations under those sections. ☐ Yes ☒ No

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. ☒ Yes ☐ No

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the proceeding twelve months (or for such shorter period that the Registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

NOTE: If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form.

Not Applicable

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12,13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

Not Applicable

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Not Applicable

DOCUMENTS INCORPORATED BY REFERENCE.

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g. annual report to security holders for fiscal year ended December 24, 1980).

None

PART I

ITEM 1. BUSINESS

Description of SB Partners (the “Registrant”)

The Registrant is a New York limited partnership formed to engage in acquiring, operating and holding for investment a varying portfolio of real estate interests. The Registrant's initial public offering was in 1971, the year it began operations. As of December 31, 2021, the Registrant owns an industrial flex property in Maple Grove, Minnesota. In addition, the Registrant has a thirty percent interest in Sentinel Omaha, LLC (“Omaha”). Omaha is a real estate investment company which as of December 31, 2021 owns one multifamily property in Nashville, Tennessee. Omaha is an affiliate of the Registrant’s general partner.

The principal objectives of the Registrant are, first, to obtain capital appreciation through equity investments in real estate; second, to generate cash available for distribution, a portion of which may not be currently taxable; and third, to the extent still permitted under the Internal Revenue Code of 1986, as amended, to generate tax losses which may offset the limited partners' income from the Registrant and certain other sources.

The Registrant’s filings with the Securities and Exchange Commission (the “SEC”) are available on the SEC’s Website at www.sec.gov and type in 0000087047 for the Registrant’s CIK.

COVID -19

The continuation of the COVID-19 pandemic may affect market conditions in which the Registrant and Omaha operates creating a challenging and uncertain economic environment. Financial and real estate companies may be affected by liquidity, disparity of real estate values and financing issues. There is no assurance that such conditions will not result in decreased cash flows which could result in the sale of investments at amounts less than the reported values at December 31, 2021.

Recent Developments and Real Estate Investment Factors

Omaha’s portfolio consists exclusively of older multi-family properties located in secondary and tertiary markets. During 2021 and 2020, physical and economic occupancy remained stable at most of Omaha’s properties. Rent collections were steady during 2021 while lower during the second half of 2020 due to delinquencies from residents negatively impacted by the Covid 19 pandemic economic downturn. Average net rental income increased at Omaha’s remaining property at a rate of 4.5% for 2021 vs. a slight decrease of 0.01% for 2020 (see Item 2 Properties).  Apartment rental rates increased significantly nationally during 2021.

During December 2020, Omaha sold one of its garden apartment properties located in Nashville, Tennessee for a sale price of $58,760,000. Net sales proceeds were used to first pay selling expenses and retire each property’s related secured mortgage loan. A portion of the remaining net sales proceeds were used to retire Omaha’s secured mortgage loan encumbering another garden apartment property located in Nashville, Tennessee in February 2021 to further pay down Omaha’s overall debt. The remaining portion of the sales proceeds were used to pay a distribution of $36,000,000 to its investors. Registrants 30% allocation of the distribution was $10,800,000.

During April 2021, Omaha sold its garden apartment property located in Charleston, South Carolina for a sale price of $47,250,000. Net sales proceeds were used to first pay selling expenses. The remaining net sales proceeds were reserved to retire Omaha’s secured mortgage loan encumbering a garden apartment property located in Nashville, Tennessee and to retire Omaha’s secured mortgage loan encumbering a garden apartment property located in Aurora, Illinois to payoff Omaha’s long term debt.

During August 2021, Omaha sold one of its garden apartment properties located in Nashville (Antioch), Tennessee for a sales price of $77,234,663. Net sales proceeds were used to first pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution of $73,000,000 to its investors. The Registrant’s 30% allocation of the distribution was $21,900,000.

During November 2021, Omaha sold its garden apartment property located in Aurora, Illinois for a sale price of $34,500,000. Net sales proceeds were used to first pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution of $52,600,000 to its investors. The Registrant’s 30% allocation

of the distribution was $15,780,000.

During December 2021, Omaha sold one of its garden apartment properties located in Nashville (Gallatin), Tennessee for a sale price of $33,300,000. Net sales proceeds were used to pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution to its investors during March 2022.

During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022. Net sales proceeds were used to pay selling expenses. The remaining portion of the sales proceeds were used, along with sales proceeds from the sale of the Omaha property located in Nashville (Gallatin), Tennessee, to pay a distribution to its investors during March 2022 less a cash reserve. Omaha paid a distribution in March 2022 of $90,000,000 to its investors. The Registrant’s 30% allocation of the distribution was $27,000,000.  In March 2022, Registrant declared a distribution of $3,300 for a full unit for all partners holding units or participations on March 21, 2022.  The distribution will be paid in late May 2022.

Omaha reports its investment in its remaining real estate property on a fair value basis based on the sale price of a sale contract Omaha executed in November 2021 less an estimate for selling expenses. For the year ended December 31, 2021 Omaha reported an increase of $19,776,500 (53.4%) in the value of its remaining property vs. December 31, 2020. During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022. The total real estate portfolio value of $56,777,000 as of December 31, 2021 consists of the same property which made up Omaha’s portfolio as of December 31, 2020 with the exception of the properties sold during 2021 as referred to above. During 2021 Omaha paid off all of its long term debt. Registrant as of the year ended December 31, 2021 recognized a value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 2021 without any reserve. As of December 31, 2021 Omaha owns only one real estate asset which is unencumbered plus Omaha has sufficient cash reserves. Registrant as of the year ended December 31, 2020 recognized a value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 2020 less a 20% reserve for possible unforeseen disruptions in the property and capital markets. The investment in a 30% non-controlling interest was valued at a discount due to the lack of control and liquidity.

Registrant has only one wholly owned property which is located in Maple Grove, Minnesota. It is 100% leased to a single tenant whose lease expires October 31, 2024. The tenant pays fixed base rent which increases approximately 3% each year. The tenant pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees. If the tenant defaulted the Registrant would have no internal source of new funds until the space is released to a new tenant or Registrant receives additional distributions from Omaha. On February 28, 2022, the tenant and Registrant executed the Sixth Amendment (“Amendment”) to the lease. The Amendment extends the term of the lease from October 31, 2024 to October 31, 2031. The Amendment reduces the fixed monthly base rent stipulated in the fifth amendment from November 1, 2021 to October 31, 2024 as follows:

From November 1, 2021 to October 31, 2022, $71,222 per month to $62,859 per month.

From November 1, 2022 to October 31, 2023, $73,359 per month to $64,745 per month.

From November 1, 2023 to October 31, 2024, $75,560 per month to $66,688 per month.

Monthly base rent for the extended term increases approximately 3% per annum. Registrant has agreed to provide a tenant improvement allowance of $175,000 for HVAC replacements. Tenant has a one time right to extend the lease an additional five years. Registrant has agreed to pay for a leasing commission to the tenant’s broker. In addition, an affiliate of the Registrant will earn a landlord leasing commission in accordance with the property management agreement. All the other relevant terms of the lease remain the same.

The Registrant has no other debt except normal trade accounts payable and a security deposit held for the tenant leasing the space at the Maple Grove property.

(Please refer to Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations.)

ITEM 1A. Risks Factors

This report on Form 10-K includes statements that constitute "forward looking statements" within the meaning of Section 27(A) of the Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934 and that are intended to come within the safe harbor protection provided by those sections. By their nature, all forward looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated by the forward looking statements for a number of reasons, including, but not limited to, those risks described below:

Covid-19

The continuation of the COVID-19 pandemic may affect market conditions in which the Registrant and Omaha operates creating a challenging and uncertain economic environment. Financial and real estate companies may be affected by liquidity, disparity of real estate values and financing issues. There is no assurance that such conditions will not result in decreased cash flows which could result in the sale of investments at amounts less than the reported values at December 31, 2021. 

General

The Registrant's investments consist of direct or indirect investments in real property and as such will be subject to varying degrees of risk generally incident to the ownership of real estate assets. The underlying value of the Registrant's direct real property and the Registrant's financial condition will be dependent upon its ability to operate the property in a manner sufficient to maintain or increase revenues and to generate sufficient income in excess of ownership and operating expenses. The underlying value of the Registrant's real estate investment will be dependent upon the investment’s managing partner’s ability to operate its remaining property in a manner sufficient to maintain or increase revenues and to generate sufficient income in excess of ownership and operating expenses. Income from the wholly owned property and the properties of the investments may be adversely affected by changes in national and local economic conditions such as oversupply of industrial flex space or apartments in the Registrant's markets, the attractiveness of the properties to tenants, changes in interest rates and in the availability, cost and terms of mortgage financing, the ongoing need for capital improvements, particularly in older structures, changes in real estate tax rates, adverse changes in governmental rules and fiscal policies, adverse changes in zoning laws, civil unrest, acts of God, including natural disasters (which may result in uninsured losses), and other factors which are beyond the control of the Registrant. If the Registrant were unable to promptly renew the leases of a significant number of tenants, re-lease vacant spaces or, if the rental rates upon such renewal or re-letting were significantly lower than expected rates, the Registrant's results of operations, financial condition and ability to make distributions to Unit holders may be adversely affected.

Risks of Liability and Loss

The development and ownership of real estate may result in liability to third parties due to conditions existing on a property which may result in injury. In addition, real estate may suffer a loss in value due to casualties such as fire or natural disaster. Such liability or loss may be uninsurable in some circumstances, such as a loss caused by the presence of mold or may exceed the limits of insurance maintained at typical amounts for the type and condition of the property. Real estate may also be taken, in whole or in part, by public authorities for public purposes in eminent domain proceedings. Awards resulting from such proceedings may not adequately compensate the Registrant for the value lost.

Value and Non-liquidity of Real Estate

Real estate investments are relatively non-liquid. The Registrant's ability to vary its portfolio in response to changes in economic and other conditions will therefore be limited. If the Registrant must sell an investment, there can be no assurance that it will be able to dispose of the investment in the time period it desires or that the sales price of the investment will recoup or exceed the amount of the Registrant's cost of the investment.

Potential Adverse Effect on Results of Operations Due to Operating Risks

The Registrant's real estate investments are subject to operating risks common to real estate in general, any and all of which may adversely affect occupancy or rental rates.

Environmental Issues

Under various federal, state and local environmental laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on such property. These laws often impose environmental liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of such substances, or the failure to properly remediate their presence, may adversely affect the owner's or operator's ability to sell or rent the property or to borrow using the property as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of such substances at a disposal or treatment facility, whether or not such facility is owned or operated by such person. Certain third parties may seek recovery from owners or operators of such properties or persons who arranged for the disposal or treatment of hazardous or toxic substances and, therefore, are potentially liable for removal or remediation costs, as well as certain other related costs, including governmental fines and injuries to persons and property.

Competition

The Registrant competes for tenants with many other real estate owners. The success of the Registrant in attracting tenants for its property will depend upon its ability to maintain its property and its attractiveness to tenants, new property developments, local conditions, and changing demographic trends. The Registrant's property is located in a developed area that includes other, similar properties. The number of competitive properties in a particular area could have a material effect on the Registrant's ability to lease industrial flex space and on the rents charged at such property.

General

Efforts required in complying with federal, state and local environmental regulations may have and may continue to have an adverse effect on the Registrant's operations in the future, although such costs have not historically been significant in amount.

The Registrant considers itself to be engaged in only one industry segment, real estate investment, and therefore information regarding industry segments is not applicable and has not been provided.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The property owned by the Registrant as of December 31, 2021 is as follows:

Additional information regarding properties owned by the Registrant:

(a) For period of ownership.

(b) Property was purchased June 12, 2002.

(c) Investment was purchased September 2007.

(d) Average per square foot per annum. Base rent plus operating expense reimbursements from tenant, divided by the total number of square feet at the property. Expense reimbursements include only expenses paid by Registrant in accordance with the terms of each lease. Reimbursements by the tenant include real estate taxes, insurance and certain operating expenses. Amounts are annualized for periods of ownership of less than one year.

(e) Average per apartment unit per annum. Gross potential rent, less concessions and vacancies, divided by the total number of apartment units at the property. Amounts are annualized for periods of ownership of less than one year.

ITEM 3. LEGAL PROCEEDINGS

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S UNITS OF PARTNERSHIP INTEREST AND RELATED UNITHOLDER MATTERS

The transfer of Units or Participations (equivalent to one-half Unit) is subject to certain limitations, including the consent of the General Partner. There is no public market for the Units and it is not anticipated that any such public market will develop. The number of Unit holders as of December 31, 2021 was 2,033.

At various times, the Registrant has generated and distributed cash to the Unit holders. Registrant paid a distribution during 2019 to Unit holders of record as of June 1, 2019 in the amount of $400 for each Unit owned. Registrant did not declare a distribution for 2020. Registrant paid a distribution during 2021 to Unit holders of record as of February 1, 2021 in the amount of $1,300 for each Unit owned. Registrant also paid a distribution during 2021 to Unit holders of record as of November 8, 2021 in the amount of $4,700 for each Unit owned. Cumulative distributions since inception have totaled $161,370,350. However, there is no requirement to make such distributions nor can there be any assurance that future operations will generate cash available for distribution.  In March 2022, Registrant declared a distribution of $3,300 for a full unit for all partners holding units or participations on March 21, 2022.  The distribution will be paid in late May 2022.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected financial data regarding the Registrant's financial condition and results of operations determined in accordance with accounting principles generally accepted in the United States of America. This data should be read in conjunction with the Audited Consolidated Financial Statements and Notes thereto, and Management's Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this annual report on Form 10‑K.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

COMPANY OVERVIEW

The Registrant is a New York limited partnership formed to engage in acquiring, operating and holding for investment a varying portfolio of real estate interests. The Registrant's initial public offering was in 1971, the year it began operations. As of December 31, 2021, the Registrant owned an industrial flex property in Maple Grove, Minnesota and the Registrant has a thirty percent interest in Sentinel Omaha, LLC. Omaha is a real estate investment company which as of December 31, 2021 owns one multifamily property located in Nashville, Tennessee. Omaha is an affiliate of the Registrant’s general partner.

The principal objectives of the Registrant are, first, to obtain capital appreciation through equity investments in real estate; second, to generate cash available for distribution, a portion of which may not be currently taxable; and third, to the extent still permitted under the Internal Revenue Code of 1986, as amended, to generate tax losses which may offset the limited partners' income from the Registrant and certain other sources.

The consolidated financial statements for the years ended December 31, 2021, 2020 and 2019 reflect the operations of one industrial flex property located in Maple Grove, Minnesota as well as a 30% interest in Omaha.

CRITICAL ACCOUNTING ESTIMATES

In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements. The summary should be read in conjunction with the more complete discussion of significant accounting policies included in Note 1 to the consolidated financial statements for the year ended December 31, 2021.

Real Estate

Real estate is carried at cost, net of accumulated depreciation and amortization. Maintenance and repairs are charged to operations as incurred. Depreciation requires an estimate by management of the useful life of each property as well as an allocation of the costs associated with a property to its various components. If Registrant does not allocate these costs appropriately or incorrectly estimates the useful lives of its real estate, depreciation expense may be misstated.

Registrant’s wholly owned property located in Maple Grove, Minnesota is leased 100% to a single tenant whose lease expires October 31, 2024. The tenant pays fixed base rent which increases approximately 3% each year. The tenant pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees. On February 28, 2022, the tenant and Registrant executed the Sixth Amendment (“Amendment”) to the lease. The Amendment extends the term of the lease from October 31, 2024 to October 31, 2031. The Amendment reduces the fixed monthly base rent stipulated in the fifth amendment from November 1, 2021 to October 31, 2024 as follows:

From November 1, 2021 to October 31, 2022, $71,222 per month to $62,859 per month.

From November 1, 2022 to October 31, 2023, $73,359 per month to $64,745 per month.

From November 1, 2023 to October 31, 2024, $75,560 per month to $66,688 per month.

Monthly base rent for the extended term increases approximately 3% per annum. Registrant has agreed to provide a tenant improvement allowance of $175,000 for HVAC replacements. Tenant has a one time right to extend the lease an additional five years. Registrant has agreed to pay for a leasing commission to the tenant’s broker. In addition, an affiliate of the Registrant will earn a landlord leasing commission in accordance with the property management agreement. All the other relevant terms of the lease remain the same.

Sentinel Omaha LLC’s portfolio as of December 31, 2021 consists of one garden apartment property located in Nashville, Tennessee. Leases are generally one year or less. Tenants generally pay fixed rent plus utilities used by tenant.

Registrant's property is regularly evaluated for impairment. Impairment is determined by calculating the sum of the estimated undiscounted future cash flows including the projected undiscounted future net proceeds from the sale of the property. In the event such sum is less than the net carrying value of the property, the property will be written down to estimated fair value. If Registrant incorrectly estimates the value of the asset or the undiscounted cash flows, the impairment charges may be different from those, if any, in the consolidated financial statements.

Investment in Sentinel Omaha, LLC

The Registrant has a 30% non-controlling interest in Omaha that is accounted for on a fair value basis. During December 2020, Omaha sold one of its garden apartment properties located in Nashville, Tennessee for a sale price of $58,760,000. Net sales proceeds were used to first pay selling expenses and retire each property’s related secured mortgage loan. A portion of the remaining net sales proceeds were used to retire Omaha’s secured mortgage loan encumbering another garden apartment property located in Nashville, Tennessee in February 2021 to further pay down Omaha’s overall debt. The remaining portion of the sales proceeds were used to pay a distribution of $36,000,000 to its investors. Registrants 30% allocation of the distribution was $10,800,000.

During April 2021, Omaha sold its garden apartment property located in Charleston, South Carolina for a sale prices of $47,250,000. Net sales proceeds were used to first pay selling expenses. The remaining net sales proceeds have been reserved to retire Omaha’s secured mortgage loan encumbering a garden apartment property located in Nashville, Tennessee and to retire Omaha’s secured mortgage loan encumbering a garden apartment property located in Aurora, Illinois to payoff Omaha’s long term debt.

During August 2021, Omaha sold one of its garden apartment properties located in Nashville (Antioch), Tennessee for a sales price of $77,234,663. Net sales proceeds were used to first pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution of $73,000,000 to its investors. The Registrant’s 30% allocation of the distribution was $21,900,000.

During November 2021, Omaha sold its garden apartment property located in Aurora, Illinois for a sale price of $34,500,000. Net sales proceeds were used to first pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution of $52,600,000 to its investors. The Registrant’s 30% allocation

of the distribution was $15,780,000.

During December 2021, Omaha sold one of its garden apartment properties located in Nashville (Gallatin), Tennessee for a sale price of $33,300,000. Net sales proceeds were used to pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution to its investors during March 2022.

During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022. Net sales proceeds were used to pay selling expenses. The remaining portion of the sales proceeds were used, along with sales proceeds from the sale of the Omaha property located in Nashville (Gallatin), Tennessee, to pay a distribution to its investors during March 2022 less a cash reserve. Omaha paid a distribution in March 2022 of $90,000,000 to its investors. The Registrant’s 30% allocation of the distribution was $27,000,000.  In March 2022, Registrant declared a distribution of $3,300 for a full unit for all partners holding units or participations on March 21, 2022.  The distribution will be paid in late May 2022.

Omaha reports its investment in its remaining real estate property on a fair value basis based on the sale price of a sale contract Omaha executed in November 2021 less an estimate for selling expenses. For the year ended December 31, 2021 Omaha reported an increase of $19,776,500 (53.4%) in the value of its remaining property vs. December 31, 2020. During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022. The total real estate portfolio value of $56,777,000 as of December 31, 2021 consists of the same property which made up Omaha’s portfolio as of December 31, 2020 with the exception of the properties sold during 2021 as referred to above. During 2021 Omaha paid off all of its long term debt. Registrant as of the year ended December 31, 2021 recognized a value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 2021 without any reserve. As of December 31, 2021 Omaha owns only one real estate asset which is unencumbered plus Omaha has sufficient cash reserves. Registrant as of the year ended December 31, 2020 recognized a value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 2020 less a 20% reserve for possible unforeseen disruptions in the property and capital markets. The investment in a 30% non-controlling interest was valued at a discount due to the lack of control and liquidity.

For the year ended December 31, 2021, Omaha reported net investment income of $5,706,768 of which the Registrant’s interest was $1,712,030. In addition, Omaha reported net unrealized depreciation of real estate properties and interest rate protection agreements of $15,712,933 of which Registrant’s interest was $4,713,880 for 2021. Also Omaha reported net realized gain on the sale of a real estate property of $74,181,286 of which the Registrant’s interest was 22,254,386.

For the year ended December 31, 2020, Omaha reported net investment income of $10,586,967 of which the Registrant’s interest was $3,176,007. In addition, Omaha reported net unrealized depreciation of real estate properties and interest rate protection agreements of $8,286,294 of which Registrant’s interest was $2,485,888 for 2020. Also Omaha reported net realized gain on the sale of a real estate property of $23,157,727 of which the Registrant’s interest was $6,947,318.

For the year ended December 31, 2019, Omaha reported net investment income of $10,495,319 of which the Registrant’s interest was $3,148,596. In addition, Omaha reported net unrealized depreciation of real estate properties and interest rate protection agreements of $1,366,240 of which Registrant’s interest was $409,872 for 2019. Also Omaha reported net realized gain on the sale of two real estate properties of $13,634,547 of which the Registrant’s interest was $4,090,364.

Determination of the fair value of Omaha involves numerous estimates and subjective judgments that are subject to change in response to current and future economic and market conditions, including, among other things, demand for residential apartments, competition, and operating cost levels such as labor, energy costs, real estate taxes and market interest rates. Judgments regarding these factors are not subject to precise quantification or verification and may change from time to time as economic and market factors change.

The accounting guidance for fair value measurements establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in determining fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level of input that is significant to the fair value measurement.

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value is calculated based on the assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

The three levels of fair value hierarchy are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities;

Level 2 - Quoted prices in active markets for similar assets and liabilities or quoted prices in less active dealer or broker markets;

Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and are unobservable.

Estimated fair value of the remaining real estate investment of Omaha was determined utilizing Level 2 inputs based upon an executed sale contract.

Further, the investment in Omaha is not consolidated because other investors have substantive ownership and participative rights regarding Omaha’s operations and therefore control does not vest in the Registrant. Were the Registrant deemed to control Omaha, it would have to be consolidated and therefore would impact the financial statements and related ratios.

Revenue Recognition

Rental income is recognized when earned pursuant to the terms of the leases. Base rents and reimbursement of the tenants' share of certain operating expenses are generally recognized when due from tenants. Before Registrant can recognize revenue, it is required to assess, among other things, its collectability. Registrant continually analyzes the collectability of its revenue and will reserve against its revenue if conditions warrant such action.

Off-Balance Sheet Arrangements

None.

Recently Issued Accounting Pronouncements

None.

CONTRACTUAL OBLIGATIONS

Pursuant to the original investment agreement, Registrant may be called upon to contribute, in cash, an additional $3,720,000 to the capital of Omaha, as and when required, as determined by the Manager.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2021, Registrant had cash and cash equivalents of approximately $2,110,000 as compared to approximately $549,000 as of December 31, 2020. Cash and cash equivalents increased during the year ended December 31, 2021 primarily due to distributions received from Omaha combined with cash flow generated from operating activities at Registrant’s wholly owned property. This increase was partially offset by partnership expenses paid and distributions paid to the partners.

As of December 31, 2021, Registrant’s only consistent source of cash is rental income received from the tenant who leases 100% of the leasable space at Registrant’s wholly owned property in Maple Grove. The tenant reimburses Registrant for real estate taxes, insurance and most of the property’s operating expenses leaving a significant portion of the base rent received available to pay capital improvements and partnership administrative expenses.

Inflation and changing prices during the current period did not significantly affect the markets in which the Registrant conducts its business, or the Registrant’s business overall.

Omaha reports its investment in its remaining real estate property on a fair value basis based on the sale price of a sale contract Omaha executed in November 2021 less an estimate for selling expenses. For the year ended December 31, 2021 Omaha reported an increase of $19,776,500 (53.4%) in the value of its remaining property vs. December 31, 2020. During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022. The total real estate portfolio value of $56,777,000 as of December 31, 2021 consists of the same property which made up Omaha’s portfolio as of December 31, 2020 with the exception of the properties sold during 2021 as referred to above. During 2021 Omaha paid off all of its long term debt. Although the remaining commercial property owned by the Registrant is 100% occupied, it is occupied by a single tenant. According to a report by CBRE, the Minneapolis industrial market reported positive absorption, market rates remained steady and vacancy rates remained a low 4.4% in 2021. Registrant may still require a longer time period to replace the tenant at its property should a default occur and the space become vacant.

Registrant anticipates cash flow generated from the property located in Maple Grove and current cash reserves will be sufficient to pay ongoing operating and capital improvement costs, other working capital requirements of the Registrant and current fees due to the General Partner and its affiliate. The Registrant has no debt except normal trade accounts payable and a security deposit held for the tenant at Registrant’s wholly owned property.

During 2020, Omaha sold one of its garden apartment properties located in Nashville, Tennessee for a sale price of $58,760,000. Net sales proceeds were used to first pay selling expenses and retire the property’s related secured mortgage loan. A portion of the remaining net sales proceeds were used in 2021 to retire Omaha’s secured mortgage loan encumbering one of its other garden apartment properties located in Nashville, Tennessee to further pay down Omaha’s debt. The rest of the remaining proceeds were used to pay a distribution to Omaha’s investors in 2021, including $10,800,000 to Registrant. In January 2021, Registrant declared a distribution of $1,300 for a full unit for all partners holding units or participations on February 1, 2021. The distribution was paid on February 28, 2021.

During April 2021, Omaha sold its garden apartment property located in Charleston, South Carolina for a sale prices of $47,250,000. Net sales proceeds were used to first pay selling expenses. The remaining net sales proceeds have been reserved to retire Omaha’s secured mortgage loan encumbering a garden apartment property located in Nashville, Tennessee and to retire Omaha’s secured mortgage loan encumbering a garden apartment property located in Aurora, Illinois to payoff Omaha’s long term debt.

During August 2021, Omaha sold one of its garden apartment properties located in Nashville (Antioch), Tennessee for a sales price of $77,234,663. Net sales proceeds were used to first pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution of $73,000,000 to its investors. The Registrant’s 30% allocation of the distribution was $21,900,000.

During November 2021, Omaha sold its garden apartment property located in Aurora, Illinois for a sale price of $34,500,000. Net sales proceeds were used to first pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution of $52,600,000 to its investors. The Registrant’s 30% allocation of the distribution was $15,780,000.

During December 2021, Omaha sold one of its garden apartment properties located in Nashville (Gallatin), Tennessee for a sale price of $33,300,000. Net sales proceeds were used to pay selling expenses. The remaining portion of the sales proceeds were used to pay a distribution to its investors during March 2022.

During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022. Net sales proceeds were used to pay selling expenses. The remaining portion of the sales proceeds were used, along with sales proceeds from the sale of the Omaha property located in Nashville (Gallatin), Tennessee, to pay a distribution to its investors during March 2022 lwess a cash reserve. Omaha paid a distribution in March 2022 of $90,000,000 to its investors. The Registrant’s 30% allocation of the distribution was $27,000,000. In March 2022, Registrant declared a distribution of $3,300 for a full unit for all partners holding units or participations on March 21, 2022.  The distribution will be paid in late May 2022.

MANAGEMENT’S DISCUSSION OF RESULTS OF OPERATIONS

2021 VS. 2020

Total revenues from operations increased $42,000 to approximately $1,222,000 in 2021 from approximately $1,180,000 in 2020 primarily due to higher rental income. Rental income increased due to a scheduled increase in base rent for the tenant at the Maple Grove property. Other income increased due to an increase in real estate tax reimbursement while interest income decreased due to a decrease in cash reserves available for investment.

The Registrant reported a net loss from operations of approximately $561,000 in 2021, a decrease of the loss of $19,000 as compared to a net loss from operations of approximately $580,000 in 2020. Net loss from operations consists of net income from the Maple Grove property combined with partnership income and expenses. The decrease of loss from operations was due to higher total revenues partially offset by higher operating expenses. Total expenses from operations for 2021 increased $22,000 to approximately $1,782,000 from approximately $1,760,000 in 2020, due to increases in professional fees, real estate taxes, utilities and repairs and maintenance expense. This was partially offset by a decrease in management fees.

Omaha reports its investments in real estate properties on a fair value basis. During 2021, Omaha sold four of its garden apartment properties as previously described. Net sales proceeds were used to first pay selling expenses and retire Omaha’s long term debt and make a distribution to Omaha’s investors. For the year ended December 31, 2021 Omaha reported an increase of $19,776,500 (53.4%) in the value of its remaining property vs. December 31, 2020. During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022. The total real estate portfolio value of $56,777,000 as of December 31, 2021 consists of the same property which made up Omaha’s portfolio as of December 31, 2020 with the exception of the properties sold during 2021 as referred to above.

Equity in net income of investment increased $11,614,000 to an income of approximately $19,251,000 for 2021 compared to income of approximately $7,637,000 for 2020. During November 2021, Omaha executed a contract to sell its remaining property for a sale price of $57,350,000. The sale was completed on January 13, 2022.

For additional analysis, please refer to the discussions of the individual properties below.

Eagle Lake Business Center IV (Maple Grove, Minnesota)

Total revenues increased $32,000, to approximately $1,209,000 in 2021 compared with approximately $1,177,000 in 2020. Net income, which includes deductions for depreciation, increased $13,000 to approximately $725,000 in 2021 from approximately $712,000 in 2020. The property has been 100% leased and occupied by the same single tenant for both years. The increase in total revenue was due to higher rental income combined with higher other income. Rental income increased due to a scheduled increase in base rent for the tenant. Other income increased from 2020 to 2021 due to an increase in real estate tax reimbursement. The increase in net income was due to the increase in revenues partially offset by an increase in operating expenses. The increase in operating expenses was primarily due to increases in real estate taxes of $5,000 and utilities of $8,000.

According to a report by CBRE, the Minneapolis industrial market reported positive absorption, market rates remained steady and vacancy rates remained a low 4.4% in 2021.

Investments

During 2007, the Registrant made a total investment in the amount of $37,200,000 in Omaha representing a thirty percent ownership interest. The Registrant’s investment in Omaha is accounted for at fair value.

On September 18, 2007, Omaha acquired all the outstanding common shares of America First Apartment Investors, Inc., a publicly held real estate investment trust, in a transaction valued at approximately $532 million, including the assumption of outstanding debt and excluding transactions costs. Omaha consisted of 31 wholly owned multifamily residential properties, a wholly owned commercial property and a wholly owned multifamily property that was under development. During 2021, Omaha sold four of its garden apartment properties as previously described. Net sales proceeds were used to first pay selling expenses and retire Omaha’s long term debt and make a distribution to Omaha’s investors. The total real estate portfolio value of $56,777,000 as of December 31, 2021 consists of the same property which made up Omaha’s portfolio as of December 31, 2020 with the exception of the properties sold during 2021 as referred to above.

Omaha reported total revenues for 2021 of approximately $13,663,000. Net investment income before net unrealized appreciation and realized gain was $5,707,000. Major expenses included $216,000 of interest expense, $1,365,000 for repairs and maintenance, $2,120,000 for payroll and $1,618,000 for real estate taxes. In addition, Omaha reported a net unrealized depreciation based on the valuation of the remaining real estate asset and interest rate protection agreements of $15,713,000. Also Omaha reported a realized gain on the sale of four real estate properties of $74,181,000. For the year ended December 31, 2021, the Registrant’s equity interest in the income of Omaha was approximately $19,251,000.

2020 VS. 2019

Total revenues from operations increased $49,000 to approximately $1,180,000 in 2020 from approximately $1,131,000 in 2019 primarily due to higher rental income. Rental income increased due to a scheduled increase in base rent for the tenant at the Maple Grove property. Other income increased due to an increase in real estate tax reimbursement while interest income decreased due to a decrease in cash reserves available for investment.

The Registrant reported a net loss from operations of approximately $580,000 in 2020, an increase of the loss of $6,000 as compared to a net loss from operations of approximately $574,000 in 2019. Net loss from operations consists of net income from the Maple Grove property combined with partnership income and expenses. The increase of loss from operations was due to higher operating expenses partially offset by higher total revenues. Total expenses from operations for 2020 increased $55,000 to approximately $1,760,000 from approximately $1,705,000 in 2019, due to increases in investment fees, real estate taxes, depreciation and administrative expenses partially offset by decreases in repairs and maintenance expense.

Omaha reports its investments in real estate properties on a fair value basis. During 2020, Omaha sold one of its garden apartment properties located in Nashville, Tennessee. Net sales proceeds were used to first pay selling expenses and retire the property’s related secured mortgage loan. Remaining net sales proceeds were used in 2021 to retire Omaha’s secured mortgage loan encumbering another of its garden apartment properties located in Nashville, Tennessee to further pay down Omaha’s debt and make a distribution to Omaha’s investors. For the year ended December 31, 2020 Omaha reported an increase of $6,900,000 in the value of its portfolio over the same properties as of the year ended December 31, 2020. The total real estate portfolio value of $190,600,000 as of December 31, 2020 consists of the same properties which made up Omaha’s portfolio as of December 31, 2019 less the property sold during 2020.

Equity in net income of investment increased $808,000 to an income of approximately $7,637,000 for 2020 compared to income of approximately $6,829,000 for 2019. Omaha anticipates the net operating income from its remaining portfolio to be flat during 2020 as compared to 2019. All of Omaha’s property mortgage loans and banks loans use floating rates based on the SIFMA Bond Index rate plus the credit spread. During March 2020 the floating rates on Omaha loans increased significantly for approximately three weeks as the SIFMA bond index rate spiked upward in initial response to the extreme uncertainty in the Covid 19 pandemic. However by mid-April the SIFMA bond index rate had declined to .21% and has remained in a range of .08% to .21% during the rest of 2020

For additional analysis, please refer to the discussions of the individual properties below.

Eagle Lake Business Center IV (Maple Grove, Minnesota)

Total revenues increased $50,000, to approximately $1,177,000 in 2020 compared with approximately $1,127,000 in 2019. Net income, which includes deductions for depreciation, increased $22,000 to approximately $712,000 in 2020 from approximately $690,000 in 2019. The property has been 100% leased and occupied by the same single tenant for both years. The increase in total revenue was due to higher rental income combined with higher other income. Rental income increased due to a scheduled increase in base rent for the tenant. Other income increased from 2019 to 2020 due to an increase in real estate tax reimbursement. The increase in net income was due to the increase in revenues partially offset by an increase in operating expenses. The increase in operating expenses was primarily due to increases in real estate taxes of $12,000 and depreciation of $18,000.

According to a report by CBRE, the Minneapolis industrial market reported positive absorption, market rates remained steady and vacancy rates remained a low 4.7% in 2020.

Investments

During 2007, the Registrant made a total investment in the amount of $37,200,000 in Omaha representing a thirty percent ownership interest. The Registrant’s investment in Omaha is accounted for at fair value.

On September 18, 2007, Omaha acquired all the outstanding common shares of America First Apartment Investors, Inc., a publicly held real estate investment trust, in a transaction valued at approximately $532 million, including the assumption of outstanding debt and excluding transactions costs. Omaha consisted of 31 wholly owned multifamily residential properties, a wholly owned commercial property and a wholly owned multifamily property that was under development. During 2020, Omaha sold one of its garden apartment properties located in Nashville, Tennessee. Net sales proceeds were used to first pay selling expenses and retire the property’s related secured mortgage loan. Remaining net sales proceeds were used in 2021 to retire Omaha’s secured mortgage loan encumbering another of its garden apartment properties located in Nashville, Tennessee to further pay down Omaha’s debt and make a distribution to Omaha’s investors. For the year ended December 31, 2020 Omaha reported an increase of $6,900,000 in the value of its portfolio over the same properties as of the year ended December 31, 2020. The total real estate portfolio value of $190,600,000 as of December 31, 2020 consists of the same properties which made up Omaha’s portfolio as of December 31, 2019 less the property sold during 2020.

Omaha reported total revenues for 2020 of approximately $24,239,000. Net investment income before net unrealized appreciation and realized gain was $10,587,000. Major expenses included $1,280,000 of interest expense, $1,999,000 for repairs and maintenance, $3,186,000 for payroll and $3,154,000 for real estate taxes. In addition, Omaha reported a net unrealized depreciation based on the valuation of the remaining real estate assets and interest rate protection agreements of $8,286,000. Also Omaha reported a realized gain on the sale of one real estate property of $23,158,000. For the year ended December 31, 2020, the Registrant’s equity interest in the income of Omaha was approximately $7,637,000.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NONE

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements required by this item, together with the Report of Independent Registered Public Accounting Firm thereon, are contained herein on pages 23 through 36 of this Annual Report on Form 10-K.

Supplementary financial information required by this item is contained herein on pages 37 through 38 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Registrant’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our evaluation of internal control over financial reporting includes using the COSO 2013 framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission, to identify the risks and control objectives related to the evaluation of our control environment.

Based on our evaluation under the frameworks described above, our management has concluded that our internal control over financial reporting was effective as of December 31, 2021.

This Annual Report does not include an attestation report of the Registrant’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Registrant’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit Registrant to provide only management’s report in this Annual Report.

ITEM 9B. OTHER INFORMATION

NONE

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant has no executive officers or directors. All of its business affairs are handled by its General Partner, SB Partners Real Estate Corporation (the "General Partner").

The directors and executive officers of the General Partner are elected by Sentinel Holdings Corporation ("SHC") as its sole shareholder to serve until their successors are duly elected and qualified. The limited partners of the Registrant are not entitled to vote in their election.

The directors and executive officers of the General Partner who are active in the Registrant's operations are:

Mr. Streicker joined the General Partner in 2003 and serves as a Director. He is President of the parent company, The Sentinel Corporation.

Mr. Roth joined the General Partner in 1994 and serves as its President and Director. He is a certified public accountant with over 35 years of real estate related financial, accounting and reporting experience.

Mr. Tietjen joined the General Partner in 1990 and served as its Chief Accounting Officer until 2006 and Chief Financial Officer and Treasurer from 2004 to 2007. He is a certified public accountant with over 36 years of real estate related financial, management, accounting and reporting experience.

Mr. Zoeller joined the General Partner in 1994 and serves as its principal financial and accounting officer. He is a certified public accountant with over 39 years of real estate related financial, accounting and reporting experience.

Mr. Cawley joined the General Partner in 1994. He is the regional manager responsible for commercial property transactions and management.

Mr. Stein joined the General Partner in 2002 and had served as its assistant controller from 2002 to 2007.

ITEM 11. EXECUTIVE COMPENSATION

The Registrant has no executive officers or directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The General Partner, among other things, furnishes services and advice to the Registrant and is paid a variable annual fee for such services based on calculations prescribed in the Registrant's Partnership Agreement. For these services, the General Partner receives a management fee equal to 2% of the average amount of capital invested in real estate plus cumulative mortgage amortization payments, and 0.5% of capital not invested in real estate, as defined in the Partnership Agreement. The management fee amounted to $996,741, $1,018,617 and $1,007,137 for the years ended December 31, 2021, 2020, and 2019, respectively. In addition, the General Partner is entitled to 25% of cash distributions in excess of the annual distribution preference, as defined in the Partnership Agreement. No such amounts were due for the years ended December 31, 2021, 2020 or 2019.

Certain affiliates of the General Partner oversee the management and operations of various real estate properties, including those owned by the Registrant. Services performed by these affiliates applicable to the Registrant's properties are billed at actual or allocated cost, or percentage of revenues. The costs of such services are believed to be competitive with charges for similar services provided by unrelated management companies. Fees charged by these affiliates totaled $59,800, $58,587 and $56,734 in 2021, 2020, and 2019, respectively.

In 2012 an affiliate of the General Partner commenced maintaining and updating the investor database and preparing the tax K-1 forms and related schedules which previously had been prepared by an unaffiliated company. The fee charged by the affiliate for the similar service is lower than the fee previously charged by the unaffiliated company. Fees charged for 2021, 2020 and 2019 were $54,000 each year.

During 2019 the Registrant had the roof of its wholly owned property located in Maple Grove, Minnesota replaced. In accordance with the management agreement, an affiliate of the General Partner was paid a construction supervision fee for the supervision of the capital project in the amount of $16,547.

In 2007 the Registrant made an investment of $37,200,000, representing a thirty percent ownership interest in Omaha. For the years 2021, 2020 and 2019, the Registrant’s equity interest in the net income of Omaha was approximately $19,251,000, $7,637,000 and $6,829,000, respectively.

Reference is made to Items 10 and 11, and Notes 3, 5, 6 and 9 in the consolidated financial statements.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 **XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

ITEM 16. FORM 10-K SUMMARY

Not Applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Report of Independent Registered Public Accounting Firm

To the Partners

SB Partners

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of SB Partners and subsidiaries (collectively, the “Partnership”) as of December 31, 2021 and 2020, the related consolidated statements of operations, changes in partners’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the schedule of Real Estate and Accumulated Depreciation as of December 31, 2021 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Partnership’s general partner. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by the general partner, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the general partner and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements.  We determined that there were no critical audit matters.

/s/ PKF O’Connor Davies, LLP

Shelton, Connecticut

PCAOB ID: 127

March 29, 2022

We have served as the Partnership’s auditor since 2006.