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

                            FORM 10-Q

        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

       For the quarterly period ended:  September 30, 2008

               Commission File Number:  000-18289


            AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
      (Exact name of registrant as specified in its charter)


     State of Minnesota                    41-1622463
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)        Identification No.)


    30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
             (Address of principal executive offices)

                          (651) 227-7333
                 (Registrant's telephone number)

                        Not Applicable
 (Former name, former address and former fiscal year, if changed
                       since last report)

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.            [X] Yes     No

Indicate  by  check  mark  whether  the  registrant  is  a  large
accelerated filer, an accelerated filer, a non-accelerated filer,
or  a  smaller reporting company.  See the definitions of  "large
accelerated  filer," "accelerated filer" and  "smaller  reporting
company" in Rule 12b-2 of the Exchange Act.

   Large accelerated filer          Accelerated filer

   Non-accelerated filer            Smaller reporting company  [X]

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



         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP

                              INDEX

Part I - Financial Information

 Item 1.Financial Statements:

        Statement of Net Assets Available for Liquidation
          as of September 30, 2008 and December 31, 2007

        Statement of Liquidating Activities for the
          Periods ended September 30, 2008

        Statements for the Periods ended September 30, 2007:

           Income

           Cash Flows

           Changes in Partners' Capital

        Notes to Financial Statements

 Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations

 Item 3. Quantitative and Qualitative Disclosures About Market Risk

 Item 4T. Controls and Procedures

Part II - Other Information

 Item 1. Legal Proceedings

 Item 1A.Risk Factors

 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 Item 3. Defaults Upon Senior Securities

 Item 4. Submission of Matters to a Vote of Security Holders

 Item 5. Other Information

 Item 6. Exhibits

         Signatures

<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
        STATEMENT OF NET ASSETS AVAILABLE FOR LIQUIDATION
            SEPTEMBER 30, 2008 AND DECEMBER 31, 2007




                                                   2008           2007

ASSETS:
  Cash and Cash Equivalents                    $ 1,392,312    $   904,400
  Receivables                                        6,500          6,500
  Investments in Real Estate                     1,074,400      4,656,400
                                                -----------    -----------
          Total Assets                           2,473,212      5,567,300
                                                -----------    -----------

LIABILITIES:
  Payable to AEI Fund Management, Inc.              11,538         24,536
  Distributions Payable                            564,136        115,890
  Unearned Rent                                      1,820         21,945
                                                -----------    -----------
          Total Liabilities                        577,494        162,371
                                                -----------    -----------
NET ASSETS (PARTNERS' CAPITAL) IN LIQUIDATION,
  including 18,957 Limited Partnership
  Units outstanding                            $ 1,895,718    $ 5,404,929
                                                ===========    ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
               STATEMENT OF LIQUIDATING ACTIVITIES
            FOR THE PERIODS ENDED SEPTEMBER 30, 2008



                                             Three Months     Nine Months
                                                 Ended           Ended

SOURCES OF ADDITIONAL CASH:
  Rent                                       $    26,019      $    96,354
  Interest Income                                  6,331           25,575
  Proceeds from Sale of Real Estate              549,943        3,602,373
                                              -----------      -----------
      Total Sources of Additional Cash           582,293        3,724,302
                                              -----------      -----------

USES OF ADDITIONAL CASH:
  Partnership Administration - Affiliates         13,411           52,825
  Partnership Administration and Property
     Management - Unrelated Parties                    0           61,814
  Distributions to Partners                       59,092        3,121,751
                                              -----------      -----------
      Total Uses of Additional Cash               72,503        3,236,390
                                              -----------      -----------
INCREASE IN NET ASSETS IN LIQUIDATION
   BEFORE ADJUSTMENTS                            509,790          487,912
                                              -----------      -----------
ADJUSTMENTS OF ESTIMATED VALUES:
  Increase (Decrease) in Net Realizable values of:
   Payable to AEI Fund Management, Inc.           (4,879)          12,998
   Distributions Payable                        (505,044)        (448,246)
   Unearned Rent                                      84           20,125
   Net Realizable Value of Real Estate Sold     (550,000)      (3,582,000)
                                              -----------      -----------
       Total Adjustment of Estimated Values   (1,059,839)      (3,997,123)
                                              -----------      -----------

DECREASE IN NET ASSETS IN LIQUIDATION           (550,049)      (3,509,211)

BEGINNING NET ASSETS IN LIQUIDATION            2,445,767        5,404,929
                                              -----------      -----------
ENDING NET ASSETS IN LIQUIDATION             $ 1,895,718      $ 1,895,718
                                              ===========      ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                       STATEMENT OF INCOME
            FOR THE PERIODS ENDED SEPTEMBER 30, 2007



                                               Three Months     Nine Months
                                                   Ended           Ended

INCOME FROM DISCONTINUED OPERATIONS:
   Rental Income                                $ 105,291        $ 414,287
   Partnership Administration - Affiliates        (23,626)         (79,128)
   Partnership Administration and Property
      Management - Unrelated Parties              (20,465)         (41,167)
   Depreciation                                   (17,381)         (61,985)
   Gain on Sale of Real Estate                     57,037          252,126
                                                 ---------        ---------
      Total Income from Discontinued Operations   100,856          484,133
                                                 ---------        ---------
OTHER INCOME:
   Interest Income                                 28,926           57,656
                                                 ---------        ---------
NET INCOME                                      $ 129,782        $ 541,789
                                                 =========        =========

NET INCOME ALLOCATED:
   General Partners                             $   4,984        $   9,104
   Limited Partners                               124,798          532,685
                                                 ---------        ---------
                                                $ 129,782        $ 541,789
                                                 =========        =========

NET INCOME PER LIMITED PARTNERSHIP UNIT         $    6.58        $   28.10
                                                 =========        =========

Weighted Average Units Outstanding                 18,957           18,957
                                                 =========        =========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                     STATEMENT OF CASH FLOWS
          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007




CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                           $   541,789

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                            61,985
     Gain on Sale of Real Estate                           (252,126)
     Increase in Receivables                                 (6,500)
     Increase in Payable to
        AEI Fund Management, Inc.                            24,681
     Decrease in Unearned Rent                               (8,464)
                                                         -----------
        Total Adjustments                                  (180,424)
                                                         -----------
        Net Cash Provided By
           Operating Activities                             361,365
                                                         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from Sale of Real Estate                      1,947,905
                                                         -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                       (851,283)
   Distributions to Partners                             (2,162,591)
                                                         -----------
        Net Cash Used For
           Financing Activities                          (3,013,874)
                                                         -----------
NET DECREASE IN CASH
   AND CASH EQUIVALENTS                                    (704,604)

CASH AND CASH EQUIVALENTS, beginning of period            3,208,225
                                                         -----------
CASH AND CASH EQUIVALENTS, end of period                $ 2,503,621
                                                         ===========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
            STATEMENT OF CHANGES IN PARTNERS' CAPITAL
             FOR THE NINE MONTHS ENDED SEPTEMBER 30




                                                                  Limited
                                                                Partnership
                             General     Limited                   Units
                             Partners    Partners     Total     Outstanding


BALANCE, December 31, 2006  $ 15,006   $ 4,501,863  $ 4,516,869   18,957.13

  Distributions              (21,626)   (2,140,965)  (2,162,591)

  Net Income                   9,104       532,685      541,789
                             --------   -----------  -----------  ----------
BALANCE, September 30, 2007 $  2,484   $ 2,893,583  $ 2,896,067   18,957.13
                             ========   ===========  ===========  ==========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                       SEPTEMBER 30, 2008

(1)  The  condensed  statements included herein have been  prepared
     by  the  registrant, without audit, pursuant to the rules  and
     regulations  of  the Securities and Exchange  Commission,  and
     reflect   all  adjustments  which  are,  in  the  opinion   of
     management,  necessary to a fair statement of the  results  of
     operations for the interim period, on a basis consistent  with
     the  annual audited statements.  The adjustments made to these
     condensed   statements  consist  only  of   normal   recurring
     adjustments.   Certain information, accounting  policies,  and
     footnote    disclosures   normally   included   in   financial
     statements  prepared  in  accordance with  generally  accepted
     accounting principles have been condensed or omitted  pursuant
     to   such  rules  and  regulations,  although  the  registrant
     believes  that  the  disclosures  are  adequate  to  make  the
     information  presented not misleading.  It is  suggested  that
     these  condensed financial statements be read  in  conjunction
     with  the  financial statements and the summary of significant
     accounting  policies  and  notes  thereto  included   in   the
     registrant's latest annual report on Form 10-KSB.

(2)  Organization -

     AEI    Real    Estate   Fund   XVIII   Limited   Partnership
     ("Partnership")  was formed to acquire and lease  commercial
     properties   to   operating  tenants.    The   Partnership's
     operations  are managed by AEI Fund Management  XVIII,  Inc.
     ("AFM"),  the Managing General Partner.  Robert P.  Johnson,
     the  President  and  sole director of  AFM,  serves  as  the
     Individual   General  Partner.   AFM  is  a   wholly   owned
     subsidiary  of AEI Capital Corporation of which Mr.  Johnson
     is  the  majority  shareholder.  AEI Fund  Management,  Inc.
     ("AEI"),  an  affiliate of AFM, performs the  administrative
     and operating functions for the Partnership.

     The   terms  of  the  Partnership  offering  called  for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced  operations  on February  15,  1989  when  minimum
     subscriptions    of   1,500   Limited   Partnership    Units
     ($1,500,000)   were   accepted.   The  offering   terminated
     December  4, 1990 when the extended offering period expired.
     The Partnership received subscriptions for 22,783.05 Limited
     Partnership   Units.   Under  the  terms  of   the   Limited
     Partnership  Agreement,  the Limited  Partners  and  General
     Partners  contributed  funds  of  $22,783,050,  and  $1,000,
     respectively.

     During operations, any Net Cash Flow, as defined, which  the
     General Partners determine to distribute will be distributed
     90% to the Limited Partners and 10% to the General Partners;
     provided,  however, that such distributions to  the  General
     Partners will be subordinated to the Limited Partners  first
     receiving an annual, noncumulative distribution of Net  Cash
     Flow equal to 10% of their Adjusted Capital Contribution, as
     defined,  and, provided further, that in no event  will  the
     General Partners receive less than 1% of such Net Cash  Flow
     per  annum. Distributions to Limited Partners will  be  made
     pro rata by Units.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(2)  Organization - (Continued)

     Any  Net  Proceeds  of Sale as defined,  from  the  sale  or
     financing of properties which the General Partners determine
     to distribute will, after provisions for debts and reserves,
     be  paid  in  the following manner:  (i) first, 99%  to  the
     Limited  Partners and l% to the General Partners  until  the
     Limited  Partners  receive an amount  equal  to:  (a)  their
     Adjusted Capital Contribution plus (b) an amount equal to 6%
     of their Adjusted Capital Contribution per annum, cumulative
     but not compounded, to the extent not previously distributed
     from  Net  Cash Flow; (ii) next, 99% to the Limited Partners
     and  1%  to the General Partners until the Limited  Partners
     receive  an  amount equal to 14% of their  Adjusted  Capital
     Contribution  per annum, cumulative but not  compounded,  to
     the  extent not previously distributed; (iii) next,  to  the
     General  Partners  until  cumulative  distributions  to  the
     General  Partners under Items (ii) and (iii)  equal  15%  of
     cumulative  distributions to all Partners under  Items  (ii)
     and (iii).  Any remaining balance will be distributed 85% to
     the  Limited  Partners  and  15% to  the  General  Partners.
     Distributions to the Limited Partners will be made pro  rata
     by Units.

     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing  or  other  disposition  of  property,  will  be
     allocated  first  in the same ratio in  which,  and  to  the
     extent,  Net  Cash Flow is distributed to the  Partners  for
     such year.  Any additional profits will be allocated 90%  to
     the Limited Partners and 10% to the General Partners. In the
     event  no  Net  Cash  Flow  is distributed  to  the  Limited
     Partners,  90%  of each item of income, gain or  credit  for
     each  respective  year  shall be allocated  to  the  Limited
     Partners,  and 10% of each such item shall be  allocated  to
     the  General Partners.  Net losses from operations  will  be
     allocated 98% to the Limited Partners and 2% to the  General
     Partners.

     For  tax purposes, profits arising from the sale, financing,
     or  other  disposition  of property  will  be  allocated  in
     accordance  with the Partnership Agreement as  follows:  (i)
     first,  to  those  partners with deficit balances  in  their
     capital  accounts  in an amount equal to  the  sum  of  such
     deficit  balances; (ii) second, 99% to the Limited  Partners
     and  1%  to the General Partners until the aggregate balance
     in  the Limited Partners' capital accounts equals the sum of
     the Limited Partners' Adjusted Capital Contributions plus an
     amount  equal to 14% of their Adjusted Capital Contributions
     per  annum, cumulative but not compounded, to the extent not
     previously  allocated; (iii) third, to the General  Partners
     until  cumulative allocations to the General Partners  equal
     15%  of cumulative allocations.  Any remaining balance  will
     be  allocated  85% to the Limited Partners and  15%  to  the
     General  Partners.   Losses will be  allocated  98%  to  the
     Limited Partners and 2% to the General Partners.

     The  General Partners are not required to currently  fund  a
     deficit   capital   balance.   Upon   liquidation   of   the
     Partnership or withdrawal by a General Partner, the  General
     Partners will contribute to the Partnership an amount  equal
     to  the  lesser  of  the deficit balances in  their  capital
     accounts  or  1%  of  total Limited  Partners'  and  General
     Partners' capital contributions.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(2)  Organization - (Continued)

     In  the fourth quarter of 2008, the Managing General Partner
     plans  to  solicit  by  mail a proxy statement  seeking  the
     consent of the Limited Partners, as required by Section  6.1
     of   the  Partnership  Agreement,  to  initiate  the   final
     disposition,  liquidation and distribution  of  all  of  the
     Partnership's  properties and assets within the  next  year.
     If  a majority of the voting Units are voted in favor of the
     proposal, the Managing General Partner will proceed with the
     planned  liquidation of the Partnership.  If the Partnership
     sells  its  remaining  property  in  2009,  the  Partnership
     anticipates liquidation to occur by December 31, 2009.

     Financial Statement Presentation

       Because   liquidation  was  anticipated,  the  Partnership
       changed its basis of accounting after September 30,  2007,
       from  the  going  concern basis to the liquidation  basis.
       Effective  October 1, 2007, the Partnership  measures  its
       assets and liabilities at the amounts of cash expected  in
       liquidation  and  reports changes in estimates  when  they
       are   known.    The   accounts  of  the  Partnership   are
       maintained  on  the accrual basis of accounting  for  both
       federal   income  tax  purposes  and  financial  reporting
       purposes.

(3)  Reclassification -

     Certain  items  related to discontinued  operations  in  the
     prior  period's financial statements have been  reclassified
     to  conform  to  2008 presentation.  These reclassifications
     had  no  effect  on Partners' capital, net  income  or  cash
     flows.

(4)  Investments in Real Estate -

     Effective  with  the  decision to  liquidate,  the  carrying
     amounts  of assets and liabilities were adjusted from  their
     historical bases to the amounts of cash expected from  their
     realization  and settlement.  Because of the expected  short
     liquidation period, the effects of discounting would not  be
     significant  and have been ignored.  At December  31,  2007,
     the  estimated real estate values were based upon comparable
     sales  of  similar  properties, a  subsequent  sale  of  one
     property  and a signed purchase agreement for one  property.
     The  adjustment  increased Investments  in  Real  Estate  by
     $2,529,841.   At  September  30, 2008,  the  estimated  real
     estate  values were based upon comparable sales  of  similar
     properties.    It  is reasonably possible that  the  amounts
     expected  to  be  realized  in the liquidation  process  may
     change in the near term.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(4)  Investments in Real Estate - (Continued)

     During  the first nine months of 2007, the Partnership  sold
     38.8529%  of the Eckerd drug store in Auburn, New  York,  in
     nine separate transactions, to unrelated third parties.  The
     Partnership  received total net sale proceeds of $1,947,905,
     which  resulted  in a net gain of $252,126.   The  cost  and
     related  accumulated depreciation of the interests sold  was
     $1,777,236 and $81,457, respectively.

     During the fourth quarter of 2007, the Partnership sold  its
     remaining  4.2781%  interest in the  Eckerd  drug  store  in
     Auburn,   New  York  to  an  unrelated  third  party.    The
     Partnership  received net sale proceeds  of  $212,731.   The
     cost  and  related accumulated depreciation of the  interest
     sold was $195,691 and $8,969, respectively.

     On  June 30, 2007, the Lease term expired for the KinderCare
     daycare  center  in  Blue  Springs,  Missouri.   The  tenant
     reviewed their operations at the property and decided not to
     enter  into  an agreement to extend the term of  the  Lease.
     The  Partnership listed the property for sale  with  a  real
     estate  broker in the Blue Springs area.  While the property
     was  vacant, the Partnership was responsible for real estate
     taxes  and  other  costs  associated  with  maintaining  the
     property.

     On  July  23,  2008,  the Partnership  sold  the  KinderCare
     daycare  center  in Blue Springs, Missouri to  an  unrelated
     third party.  The Partnership received net sale proceeds  of
     $549,943.  At the time of sale, the estimated net realizable
     value was $550,000.

     On  January  25,  2008, the Partnership sold the  KinderCare
     daycare  center  in Westerville, Ohio to an unrelated  third
     party.   The  Partnership  received  net  sale  proceeds  of
     $1,423,596.   At  the  time  of  sale,  the  estimated   net
     realizable value was $1,415,000.

     On  March  12,  2008,  the Partnership sold  the  KinderCare
     daycare  center  in  Columbus, Ohio to  an  unrelated  third
     party.   The  Partnership  received  net  sale  proceeds  of
     $1,628,834.   At  the  time  of  sale,  the  estimated   net
     realizable value was $1,617,000.

     During  the  first  nine  months  of  2008  and  2007,   the
     Partnership distributed net sale proceeds of $3,529,584  and
     $1,810,943  to the Limited and General Partners as  part  of
     their quarterly distributions, which represented a return of
     capital of $184.33 and $94.58 per Limited Partnership  Unit,
     respectively.

(5)  Payable to AEI Fund Management, Inc. -

     AEI  Fund  Management, Inc. performs the administrative  and
     operating functions for the Partnership.  The payable to AEI
     Fund   Management  represents  the  balance  due  for  those
     services.    This  balance  is  non-interest   bearing   and
     unsecured  and  is  to  be  paid in  the  normal  course  of
     business.


ITEM 2. MANAGEMENT'S  DISCUSSION  AND  ANALYSIS   OF   FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS.

        This  section contains "forward looking statements" which
represent management's expectations or beliefs concerning  future
events, including statements regarding anticipated application of
cash, expected returns from rental income, growth in revenue, the
sufficiency  of  cash  to  meet  operating  expenses,  rates   of
distribution,  and  other  matters.   These,  and  other  forward
looking  statements,  should be evaluated in  the  context  of  a
number  of  factors  that may affect the Partnership's  financial
condition and results of operations, including the following:

    Market  and  economic conditions which affect the  value
    of  the  properties the Partnership owns and  the  cash
    from rental income such properties generate;

    the  federal  income tax consequences of rental  income,
    deductions,  gain  on  sales and other  items  and  the
    effects of these consequences for the Partners;

    resolution  by  the General Partners of  conflicts  with
    which they may be confronted;

    the effect of tenant defaults; and

    the  condition of the industries in which the  tenants  of
    properties owned by the Partnership operate.

The Application of Critical Accounting Policies

        The preparation of the Partnership's financial statements
requires  management to make estimates and assumptions  that  may
affect the reported amounts of assets, liabilities, revenues  and
expenses,  and  related  disclosure  of  contingent  assets   and
liabilities. Management evaluates these estimates on  an  ongoing
basis,  including  those related to the carrying  value  of  real
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of
expenses  to  the  Partnership as opposed  to  other  funds  they
manage.

        Through  September  30, 2007, the  Partnership  purchased
properties and recorded them in the financial statements at  cost
(including  capitalized acquisition expenses).   The  Partnership
tested  long-lived  assets  for  recoverability  when  events  or
changes  in circumstances indicated that the carrying  value  may
not  have been recoverable.  For properties the Partnership would
hold   and  operate,  management  determined  whether  impairment
occurred  by  comparing the property's probability-weighted  cash
flows  to its then carrying value.  For properties held for sale,
management  determined whether impairment occurred  by  comparing
the  property's  estimated fair value less cost to  sell  to  its
current  carrying value.  If the carrying value was greater  than
the  realizable value, an impairment loss was recorded to  reduce
the carrying value of the property to its realizable value.

       Effective  October  1, 2007, the Partnership  adopted  the
liquidation basis of accounting because, pending the approval  of
the   Limited  Partners,  the  General  Partners  anticipate  the
liquidation  of the Partnership during 2009.  In accordance  with
the liquidation basis of accounting, assets are recorded at their
estimated net realizable value (the amount of cash expected to be
received) and liabilities are recorded at the amount estimated to
be  paid  to creditors and Partners.  At September 30, 2008,  the
estimated real estate values were based upon comparable sales  of
similar  properties.   Any changes in these estimates  may  cause
material changes in the net assets in liquidation.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        AEI  Fund Management, Inc. allocates expenses to each  of
the  funds  they manage primarily on the basis of the  number  of
hours  devoted  by their employees to each fund's affairs.   They
also  allocate  expenses at the end of each month  that  are  not
directly related to a fund's operations based upon the number  of
investors  in the fund and the fund's capitalization relative  to
other  funds  they  manage.   The  Partnership  reimburses  these
expenses  subject  to  detailed  limitations  contained  in   the
Partnership Agreement.

         Management   of  the  Partnership  has   discussed   the
development  and selection of the above accounting estimates  and
the management discussion and analysis disclosures regarding them
with the managing partner of the Partnership.

Results of Operations

        For  the  nine months ended September 30, 2008 and  2007,
while  in  the liquidation and operating phases, the  Partnership
recognized  rental income of $116,479 and $414,287, respectively.
In  2008,  rental income decreased mainly as a result of property
sales.   During  the  same  periods, the  Partnership  recognized
interest  income of $25,575 and $57,656, respectively.   Interest
income decreased mainly due to lower money market rates in  2008,
when compared to the same period in 2007.

        For  the  nine months ended September 30, 2008 and  2007,
while  in  the liquidation and operating phases, the  Partnership
incurred  Partnership  administration  expenses  from  affiliated
parties   of   $53,002   and   $79,128,   respectively.     These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners.  As  the
Partnership's asset base decreases due to property sales,  it  is
allocated a smaller share of expenses that are allocated  by  AEI
Fund  Management, Inc. based on the relative assets of the  funds
under  management.   During  the same  periods,  the  Partnership
incurred   Partnership  administration  and  property  management
expenses   from  unrelated  parties  of  $48,639   and   $41,167,
respectively.  These expenses represent direct payments to  third
parties  for legal and filing fees, direct administrative  costs,
outside  audit costs, taxes, insurance and other property  costs.
The increase in these expenses in 2008, when compared to 2007, is
the result of expenses incurred in 2008 related to the KinderCare
daycare center in Blue Springs, Missouri.

         At   September  30,  2008,  the  Partnership  recognized
adjustments  of  estimated values of ($3,997,123) resulting  from
adopting  the  liquidation basis of accounting and recording  its
assets  at estimated net realizable value and liabilities at  the
amount estimated to be paid.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   Leases  may contain rent increases,  based  on  the
increase  in  the  Consumer Price Index over a specified  period,
which  will result in an increase in rental income over the  term
of  the  leases.   Inflation also may cause the  real  estate  to
appreciate in value.  However, inflation and changing prices  may
have   an  adverse  impact  on  the  operating  margins  of   the
properties' tenants, which could impair their ability to pay rent
and   subsequently  reduce  the  Net  Cash  Flow  available   for
distributions.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

Liquidity and Capital Resources

        In  the  fourth  quarter of 2008,  the  Managing  General
Partner  plans to solicit by mail a proxy statement  seeking  the
consent  of the Limited Partners, as required by Section  6.1  of
the  Partnership  Agreement, to initiate the  final  disposition,
liquidation   and  distribution  of  all  of  the   Partnership's
properties and assets within the next year.  If a majority of the
voting  Units  are voted in favor of the proposal,  the  Managing
General Partner will proceed with the planned liquidation of  the
Partnership.  If the Partnership sells its remaining property  in
2009,  the  Partnership  anticipates  liquidation  to  occur   by
December 31, 2009.

        During the nine months ended September 30, 2008, while in
the   liquidation  phase,  the  Partnership's   Net   Assets   in
Liquidation decreased $3,509,211 as a result of distributions  of
net  sale proceeds to the Partners.  During the nine months ended
September   30,   2007,  while  in  the  operating   phase,   the
Partnership's  cash balances decreased $704,604 as  a  result  of
distributions  paid to the Partners in excess of  cash  generated
from operating and investing activities.

       During the first nine months of 2007, the Partnership sold
38.8529%  of the Eckerd drug store in Auburn, New York,  in  nine
separate   transactions,  to  unrelated   third   parties.    The
Partnership received total net sale proceeds of $1,947,905, which
resulted  in  a  net  gain of $252,126.   The  cost  and  related
accumulated depreciation of the interests sold was $1,777,236 and
$81,457, respectively.

        During  the fourth quarter of 2007, the Partnership  sold
its  remaining  4.2781%  interest in the  Eckerd  drug  store  in
Auburn,  New  York to an unrelated third party.  The  Partnership
received  net  sale proceeds of $212,731.  The cost  and  related
accumulated  depreciation of the interest sold was  $195,691  and
$8,969, respectively.

        On  June  30,  2007,  the  Lease  term  expired  for  the
KinderCare daycare center in Blue Springs, Missouri.  The  tenant
reviewed  their  operations at the property and  decided  not  to
enter  into  an agreement to extend the term of the  Lease.   The
Partnership  listed  the property for sale  with  a  real  estate
broker  in the Blue Springs area.  While the property was vacant,
the  Partnership was responsible for real estate taxes and  other
costs associated with maintaining the property.

        On  July  23,  2008, the Partnership sold the  KinderCare
daycare  center  in Blue Springs, Missouri to an unrelated  third
party.   The Partnership received net sale proceeds of  $549,943.
At  the  time  of  sale, the estimated net realizable  value  was
$550,000.

        On  January 25, 2008, the Partnership sold the KinderCare
daycare center in Westerville, Ohio to an unrelated third  party.
The Partnership received net sale proceeds of $1,423,596.  At the
time of sale, the estimated net realizable value was $1,415,000.

        On  March  12, 2008, the Partnership sold the  KinderCare
daycare  center  in Columbus, Ohio to an unrelated  third  party.
The Partnership received net sale proceeds of $1,628,834.  At the
time of sale, the estimated net realizable value was $1,617,000.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

       The Partnership's primary use of cash flow is distribution
payments  to  Partners.   The Partnership  declares  its  regular
quarterly distributions before the end of each quarter  and  pays
the distribution in the first week after the end of each quarter.
The  Partnership attempts to maintain a stable distribution  rate
from quarter to quarter.

       For the nine months ended September 30, 2008 and 2007, the
Partnership  declared distributions of $3,569,997 and $2,162,591,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions  of  $3,534,297  and  $2,140,965  and  the  General
Partners  received distributions of $35,700 and $21,626  for  the
periods,   respectively.   In  September  2007,  the  Partnership
declared   a  special  distribution  of  net  sale  proceeds   of
$1,717,172.    In  March  and  September  2008,  the  Partnership
declared special distributions of net sale proceeds of $2,828,283
and    $505,051,   respectively,   which   resulted   in   higher
distributions in 2008.

        During  the  first  nine months of  2008  and  2007,  the
Partnership  distributed  net sale  proceeds  of  $3,529,584  and
$1,810,943 to the Limited and General Partners as part  of  their
quarterly distributions, which represented a return of capital of
$184.33 and $94.58 per Limited Partnership Unit, respectively.

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund   continuing   distributions  and  meet  other   Partnership
obligations.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

       Not applicable.

ITEM 4T.CONTROLS AND PROCEDURES.

       (a)  Disclosure Controls and Procedures.

        Under  the  supervision  and with  the  participation  of
management, including its President and Chief Financial  Officer,
the  Managing  General Partner of the Partnership  evaluated  the
effectiveness  of  the  design and operation  of  our  disclosure
controls  and procedures (as defined in Rule 13a-15(e) under  the
Securities  Exchange  Act of 1934 (the "Exchange  Act")).   Based
upon  that evaluation, the President and Chief Financial  Officer
of  the Managing General Partner concluded that, as of the end of
the  period  covered by this report, our disclosure controls  and
procedures  were effective in ensuring that information  required
to be disclosed by us in the reports that we file or submit under
the  Exchange Act is recorded, processed, summarized and reported
within  the time periods specified in applicable rules and  forms
and  that  such  information is accumulated and  communicated  to
management,  including the President and Chief Financial  Officer
of  the  Managing General Partner, in a manner that allows timely
decisions regarding required disclosure.

       (b)  Changes in Internal Control Over Financial Reporting.

        During  the  most recent period covered by  this  report,
there  has  been no change in our internal control over financial
reporting  (as defined in Rule 13a-15(f) under the Exchange  Act)
that  has  materially  affected,  or  is  reasonably  likely   to
materially affect, our internal control over financial reporting.


                   PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS.

        There are no material pending legal proceedings to  which
the Partnership is a party or of which the Partnership's property
is subject.

ITEM 1A. RISK FACTORS.

       Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

       (a) None.

       (b) Not applicable.

        (c) Pursuant to Section 7.7 of the Partnership Agreement,
as  amended, each Limited Partner has the right to present  Units
to  the  Partnership  for purchase by submitting  notice  to  the
Managing  General Partner.  The purchase price of  the  Units  is
equal to 90% of the net asset value per Unit as determined by the
Managing General Partner in accordance with the provisions of the
Partnership  Agreement.  Units tendered to  the  Partnership  are
redeemed  at  the purchase price established for the  quarter  in
which the Partnership received a notice at least 60 days prior to
the  repurchase  dates of January 1st, April 1st,  July  1st  and
October   1st   subject  to  the  following   limitations.    The
Partnership is not obligated to purchase in any year more than 5%
of  the number of Units outstanding at the beginning of the year.
In  no event shall the Partnership be obligated to purchase Units
if,  in the sole discretion of the Managing General Partner, such
purchase   would   impair  the  capital  or  operation   of   the
Partnership.   During  the period covered  by  this  report,  the
Partnership did not purchase any Units.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES.

      None.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      None

ITEM 5.OTHER INFORMATION.

      None.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS

    31.1  Certification  of Chief Executive  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    31.2  Certification  of Chief Financial  Officer  of  General
    Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    32    Certification  of  Chief Executive  Officer  and  Chief
    Financial Officer of General Partner pursuant to Section  906
    of the Sarbanes-Oxley Act of 2002.



                           SIGNATURES

        Pursuant  to the requirements of the Securities  Exchange
Act  of  1934, the registrant has duly caused this report  to  be
signed   on   its  behalf  by  the  undersigned  thereunto   duly
authorized.


Dated:  November 7, 2008      AEI Real Estate Fund XVIII
                              Limited Partnership
                              By: AEI Fund Management  XVIII, Inc.
                              Its: Managing General Partner



                              By: ROBERT P JOHNSON
                                  ROBERT P JOHNSON
                                  President
                                  (Principal Executive Officer)



                              By: PATRICK W KEENE
                                  PATRICK W KEENE
                                  Chief Financial Officer
                                  (Principal Accounting Officer)