PROPERTY CO-TENANCY
                       OWNERSHIP AGREEMENT
            (Timber Lodge Steakhouse - Rochester, MN)


THIS CO-TENANCY AGREEMENT,

Made and entered into as of the 27 day of September, 2000, by and
between  Garden Ridge Development LLC (hereinafter called "Garden
Ridge"),  and  AEI  Real  Estate Fund  XVII  Limited  Partnership
(hereinafter  called "Fund XVII"). Garden Ridge, Fund  XVII  (and
any  other  Owner  in Fee where the context so  indicates)  being
hereinafter   sometimes  collectively  called  "Co-Tenants"   and
referred to in the neuter gender).

WITNESSETH:

WHEREAS,  Fund XVII presently owns an undivided 76.8102% interest
in  and to, and Garden Ridge presently owns an undivided 13.1073%
interest  in  and  to, and  Thomas A. Park and Jennie  Lou  Park,
married  as  joint  tenants presently own an  undivided  10.0825%
interest  in  and to the land situated in the City of  Rochester,
County  of  Olmsted,  and  State of MN, (legally  described  upon
Exhibit A attached hereto and hereby made a part hereof)  and  in
and  to  the  improvements  located thereon  (hereinafter  called
"Premises");

WHEREAS,  The  parties  hereto wish to provide  for  the  orderly
operation  and  management  of  the  Premises  and  Garden  Ridge
interest by Fund XVII; the continued leasing of space within  the
Premises;  for the distribution of income from and  the  pro-rata
sharing in expenses of the Premises.

NOW  THEREFORE, in consideration of the purchase by Garden Ridge.
13.1073% of an undivided interest in and to the Premises, for  at
least   One   Dollar   ($1.00)  and  other  good   and   valuable
consideration by the parties hereto to one another in hand  paid,
the receipt and sufficiency of which are hereby acknowledged, and
of  the mutual covenants and agreements herein contained,  it  is
hereby agreed by and between the parties hereto, as follows:

  1. The  operation   and  management  of  the  Premises  shall  be
     delegated to Fund XVII, or its designated agent, successors or
     assigns. Provided, however, if Fund XVII shall sell all of its
     interest  in  the Premises, the duties and obligations of Fund
     XVII respecting management of the Premises as set forth herein,
     including  but  not  limited  to paragraphs 2, 3, and 4 hereof,
     shall  be  exercised  by  the  holder or holders of a majority
     undivided   co-tenancy  interest   in the  Premises. Except as
     hereinafter expressly provided to the contrary,  each  of  the
     parties  hereto agrees to be bound  by the decisions  of  Fund
     XVII with  respect   to   all  administrative, operational and
     management  matters  of  the property comprising the Premises,
     including but not limited to the  management  of the net lease
     agreement  for  the  Premises.   Garden  Ridge  hereto  hereby
     designates und XVII as its sole and exclusive  agent  to  deal
     with, and Fund XVII retains the sole right  to  deal with, any
     property agent or tenant and to negotiate and  enter  into, on
     terms  and    provisions  satisfactory to Fund XVII,  monitor,
     execute and  enforce  the terms of leases of space within  the
     Premises, including but not limited to any amendments,consents
     to assignment, sublet, releases or modifications to leases  or
     guarantees of lease or easements affecting  the Premises,   on
     behalf




Co-Tenant Initial: /s/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN




     of  Garden  Ridge. As long as Fund XVII owns an interest  in
     the Premises, only Fund XVII may obligate Garden Ridge trust
     with respect to any expense for the Premises.

As  further set forth in paragraph 2 hereof, Fund XVII agrees  to
require  any  lessee of the Premises to name Garden Ridge  as  an
insured  or additional insured in all insurance policies provided
for,  or  contemplated by, any lease on the Premises.  Fund  XVII
shall  use  its  best efforts to obtain endorsements  adding  Co-
Tenants   to  said  policies  from  lessee  within  30  days   of
commencement  of  this agreement. In any event, Fund  XVII  shall
distribute  any insurance proceeds it may receive, to the  extent
consistent  with any lease on the Premises, to the Co-Tenants  in
proportion to their respective ownership of the Premises.

2.    Income and expenses shall be allocated among the Co-Tenants
in  proportion to their respective share(s) of ownership.  Shares
of  net income shall be pro-rated for any partial calendar  years
included within the term of this Agreement. Fund XVII may  offset
against,  pay to itself and deduct from any payment due to  under
this  Agreement,  and  may pay to itself  the  amount  of  Garden
Ridge's  share  of any reasonable expenses of the Premises  which
are not paid by Garden Ridges to Fund XVII or its assigns, within
ten  (10)  days after demand by Fund XVII. In the event there  is
insufficient operating income from which to deduct Garden Ridge's
unpaid share of operating expenses, Fund XVII may pursue any  and
all legal remedies for collection.

Operating  Expenses  shall include all normal operating  expense,
including  but not limited to: maintenance, utilities,  supplies,
labor, management, advertising and promotional expenses, salaries
and wages of rental and management personnel, leasing commissions
to  third  parties, a monthly accrual to pay insurance  premiums,
real  estate taxes, installments of special assessments  and  for
structural repairs and replacements, management fees, legal  fees
and accounting fees, but excluding all operating expenses paid by
tenant under terms of any lease agreement of the Premises.

Garden Ridges has no requirement to, but has, nonetheless elected
to  retain,  and agrees to annually reimburse, Fund XVII  in  the
amount of $910.00 for the expenses, direct and indirect, incurred
by  Fund XVII in providing Garden Ridge with quarterly accounting
and  distributions of Garden Ridge's share of net income and  for
tracking,  reporting  and  assessing the  calculation  of  Garden
Ridge's  share of operating expenses incurred from the  Premises.
This  invoice  amount shall be pro-rated for  partial  years  and
Garden  Ridge  authorizes Fund XVII to deduct  such  amount  from
Garden  Ridge's share of revenue from the Premises. Garden  Ridge
may   terminate  this  agreement  in  this  paragraph  respecting
accounting  and distributions at any time and attempt to  collect
its  share  of  rental income directly from the tenant;  however,
enforcement of all other provisions of the lease remains the sole
right  of Fund XVII pursuant to Section 1 hereof.  Fund XVII  may
terminate its obligation under this paragraph upon 30 days notice
to  Garden  Ridge  prior to the end of each  anniversary  hereof,
unless agreed in writing to the contrary.

2. Full, accurate and complete books of account shall be kept in
   accordance  with  generally accepted accounting principles at
   Fund XVII's principal  office,  and each Co-Tenant shall have
   access to such books and may inspect and copy any part thereof
   during normal business hours. Within ninety (90) days after the
   end of  each  calendar year during the term hereof, Fund XVII
   shall prepare an accurate income statement for the ownership of
   the Premises for said calendar




Co-Tenant Initial: /s/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN




     year and shall furnish copies of the same to all Co-Tenants.
     Quarterly,  as its share, Garden Ridge shall be entitled  to
     receive   13.1073%  of  all  items  of  income  and  expense
     generated by the Premises.  Upon receipt of said accounting,
     if  the payments received by each Co-Tenant pursuant to this
     Paragraph  3  do  not equal, in the aggregate,  the  amounts
     which each are entitled to receive proportional to its share
     of  ownership with respect to said calendar year pursuant to
     Paragraph 2 hereof, an appropriate adjustment shall be  made
     so  that each Co-Tenant receives the amount to which  it  is
     entitled.

4.    If  Net Income from the Premises is less than $0.00  (i.e.,
the  Premises  operates  at a loss), or if capital  improvements,
repairs, and/or replacements, for which adequate reserves do  not
exist,  need  to  be made to the Premises, the  Co-Tenants,  upon
receipt  of  a  written request therefore from Fund XVII,  shall,
within  fifteen (15) business days after receipt of notice,  make
payment to Fund XVII sufficient to pay said net operating  losses
and  to provide necessary operating capital for the premises  and
to   pay   for   said   capital  improvements,   repairs   and/or
replacements, all in proportion to their undivided  interests  in
and to the Premises.

5.    Co-Tenants  may, at any time, sell, finance,  or  otherwise
create  a lien upon their interest in the Premises but only  upon
their  interest  and not upon any part of the interest  held,  or
owned, by any other Co-Tenant.  All Co-Tenants reserve the  right
to escrow proceeds from a sale of their interests in the Premises
to obtain tax deferral by the purchase of replacement property.

6.    If any Co-Tenant shall be in default with respect to any of
its  obligations hereunder, and if said default is not  corrected
within  thirty  (30)  days after receipt by said  defaulting  Co-
Tenant  of written notice of said default, or within a reasonable
period  if  said default does not consist solely of a failure  to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.

7.    This Co-Tenancy agreement shall continue in full force  and
effect  and shall bind and inure to the benefit of the  Co-Tenant
and  their respective heirs, executors, administrators,  personal
representatives, successors and permitted assigns  until  January
15,  2028,  or upon the sale of the entire Premises in accordance
with  the  terms hereof and proper disbursement of  the  proceeds
thereof,   whichever  shall  first  occur.   Unless  specifically
identified  as  a  personal contract right or obligation  herein,
this  agreement shall run with any interest in the  Property  and
with  the  title thereto. Once any person, party  or  entity  has
ceased  to  have an interest in fee in any portion of the  Entire
Property,  it  shall not be bound by, subject to or benefit  from
the  terms  hereof;  but  its  heirs, executors,  administrators,
personal representatives, successors or assigns, as the case  may
be, shall be substituted for it hereunder.

8.    Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be  given
to  all known Co-Tenants and deemed given or served in accordance
with  the  provisions  of  this  Agreement,  if  said  notice  or
elections addressed as follows;



Co-Tenant Initial: /s/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN






If to Fund XVII:

AEI Real Estate Fund XVII Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota  55101

If to Garden Ridge Development LLC:
Nancy Lindstrom
8280 W 160th Street
Rosemount, MN  55068

Each mailed notice or election shall be deemed to have been given
to,  or served upon, the party to which addressed on the date the
same  is  deposited in the United States certified  mail,  return
receipt  requested,  postage prepaid, or given  to  a  nationally
recognized  courier  service guaranteeing overnight  delivery  as
properly addressed in the manner above provided. Any party hereto
may  change  its address for the service of notice  hereunder  by
delivering  written notice of said change to  the  other  parties
hereunder, in the manner above specified, at least ten (10)  days
prior to the effective date of said change.

9.    This  Agreement shall not create any partnership  or  joint
venture  among or between the Co-Tenants or any of them, and  the
only  relationship  among  and between the  Co-Tenants  hereunder
shall  be  that  of owners of the premises as tenants  in  common
subject to the terms hereof.

10.    The  unenforceability or invalidity of  any  provision  or
provisions  of  this Agreement as to any person or  circumstances
shall  not render that provision, nor any other provision hereof,
unenforceable or invalid as to any other person or circumstances,
and  all  provisions hereof, in all other respects, shall  remain
valid and enforceable.

11.   In  the  event  any litigation arises between  the  parties
hereto  relating  to  this Agreement, or any  of  the  provisions
hereof, the party prevailing in such action shall be entitled  to
receive  from the losing party, in addition to all other  relief,
remedies  and  damages  to  which it is otherwise  entitled,  all
reasonable  costs  and expenses, including reasonable  attorneys'
fees,  incurred by the prevailing party in connection  with  said
litigation.

IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.



Co-Tenant Initial: /s/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN






Garden Ridge Development LLC
By: /s/ Nancy Lindstrom
        Nancy Lindstrom,
        Chief Financial Manager


Garden Ridge Development LLC
By: /s/ C. Pete Eisele
        C. Pete Eisele
        Chief Manager


STATE OF MINNESOTA)
                              ) ss
COUNTY OF DAKOTA)

I,  a Notary Public in and for the state and county of aforesaid,
hereby  certify  there  appeared  before  me  this  26th  day  of
September,   2000,                  ,   Nancy  Lindstrom,   Chief
Financial  Manager  and C. Pete Eisele, Chief Manager  of  Garden
Ridge Development LLC , a corporation, who executed the foregoing
instrument in said capacity.

                         /s/ Tarell A Friedley
                               Notary Public



                                             [notary seal]


          WITNESS:

          /s/ Heather A Garcia

              Heather A Garcia
               (Print Name)








Co-Tenant Initial: /s/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN












Fund XVII:  AEI Real Estate Fund XVII Limited Partnership

            By: AEI Fund Management XVII, Inc., its corporate general
                partner

            By: /s/ Robert P Johnson
                    Robert P. Johnson, President


          WITNESS:

          /s/ Jill Rayburn

          Jill Rayburn
          (Print Name)


State of Minnesota )
                                   ) ss.
County of Ramsey  )

I,  a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 27 day of September,
2000,  Robert P. Johnson, President of AEI Fund Management  XVII,
Inc.,  corporate  general partner of AEI Real  Estate  Fund  XVII
Limited Partnership who executed the foregoing instrument in said
capacity  and  on  behalf of the corporation in its  capacity  as
corporate general partner, on behalf of said limited partnership.

                              /s/ Heather A Garcia
                                   Notary Public


[notary seal]




Co-Tenant Initial:
Co-Tenancy Agreement for Timber Lodge-Rochester, MN





                              EXHIBIT "A"

An undivided 13.1073% tenant in common interest in:

Lot  2,  Block 1, Commonweal First Subdivision, in  the  City  of
Rochester,   Olmsted  County,  Minnesota,  together  with   Cross
Easement Agreement dated December 30, 1996, recorded January  23,
1997, as Document No. 744314.