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

                           FORM 10-QSB

           Quarterly Report Under Section 13 or 15(d)
             of The Securities Exchange Act of 1934

             For the Quarter Ended:  March 31, 2005

                Commission file number:  0-18289


            AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer 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
                   (Issuer's telephone number)


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

Check  whether  the issuer (1) 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 [X]   No

         Transitional Small Business Disclosure Format:

                          Yes       No [X]


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP


                              INDEX




PART I.Financial Information

 Item 1. Balance Sheet as of March 31, 2005 and December 31, 2004

         Statements for the Periods ended March 31, 2005 and 2004:

            Income

            Cash Flows

            Changes in Partners' Capital

         Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

 Item 3. Controls and Procedures

PART II. Other Information

 Item 1. Legal Proceedings

 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
                          BALANCE SHEET
              MARCH 31, 2005 AND DECEMBER 31, 2004

                           (Unaudited)

                             ASSETS

                                                   2005            2004
CURRENT ASSETS:
  Cash and Cash Equivalents                    $ 1,531,893     $ 1,122,394
  Receivables                                       44,454          44,454
                                                -----------     -----------
      Total Current Assets                       1,576,347       1,166,848
                                                -----------     -----------
INVESTMENTS IN REAL ESTATE:
  Land                                           4,661,701       4,661,701
  Buildings and Equipment                       10,167,608      10,167,608
  Accumulated Depreciation                      (2,093,612)     (2,009,390)
                                                -----------     -----------
                                                12,735,697      12,819,919
  Real Estate Held for Sale                      1,205,177       1,805,177
                                                -----------     -----------
      Net Investments in Real Estate            13,940,874      14,625,096
                                                -----------     -----------
           Total  Assets                       $15,517,221     $15,791,944
                                                ===========     ===========

                          LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.         $    99,601     $    49,770
  Distributions Payable                            366,181         670,042
  Unearned Rent                                    114,404          21,041
                                                -----------     -----------
      Total Current Liabilities                    580,186         740,853
                                                -----------     -----------
PARTNERS' CAPITAL:
  General Partners                                  32,446          33,588
  Limited Partners, $1,000 per Unit;
   30,000 Units authorized; 22,783 Issued;
   19,259 and 19,344 Units outstanding in
   2005 and 2004, respectively                  14,904,589      15,017,503
                                                -----------     -----------
      Total Partners' Capital                   14,937,035      15,051,091
                                                -----------     -----------
        Total Liabilities and Partners'Capital $15,517,221     $15,791,944
                                                ===========     ===========

 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 MARCH 31

                           (Unaudited)

                                                   2005           2004

RENTAL INCOME                                  $   377,967    $   278,279

EXPENSES:
   Partnership  Administration  -  Affiliates       54,651         49,321
   Partnership Administration and Property
      Management - Unrelated Parties                12,734          9,721
   Depreciation                                     84,222         59,492
                                                -----------    -----------
        Total Expenses                             151,607        118,534
                                                -----------    -----------

OPERATING INCOME                                   226,360        159,745

OTHER INCOME:
   Interest Income                                   4,167         13,922
                                                -----------    -----------

INCOME FROM CONTINUING OPERATIONS                  230,527        173,667

Income from Discontinued Operations                112,027      1,307,024
                                                -----------    -----------
NET INCOME                                     $   342,554    $ 1,480,691
                                                ===========    ===========
NET INCOME ALLOCATED:
   General Partners                            $     3,425    $    14,807
   Limited Partners                                339,129      1,465,884
                                                -----------    -----------
                                               $   342,554    $ 1,480,691
                                                ===========    ===========
INCOME PER LIMITED PARTNERSHIP UNIT:
   Continuing Operations                       $     11.85    $      8.84
   Discontinued Operations                            5.76          66.53
                                                -----------    -----------
         Total                                 $     17.61    $     75.37
                                                ===========    ===========
Weighted Average Units Outstanding                  19,259         19,448
                                                ===========    ===========

 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 PERIODS ENDED MARCH 31

                           (Unaudited)

                                                       2005          2004
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net  Income                                    $   342,554   $ 1,480,691

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                       84,222        59,751
     Gain on Sale of Real Estate                       (48,425)   (1,223,369)
     Increase in Payable to
        AEI Fund Management, Inc.                       49,831        42,177
     Increase in Unearned Rent                          93,363        56,623
                                                    -----------   -----------
        Total Adjustments                              178,991    (1,064,818)
                                                    -----------   -----------
        Net Cash Provided By
            Operating Activities                       521,545       415,873
                                                    -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                                0    (2,054,677)
   Proceeds from Sale of Real Estate                   648,425     2,131,025
                                                    -----------   -----------
        Net Cash Provided By
            Investing Activities                       648,425        76,348
                                                    -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                  (303,861)     (854,700)
   Distributions to Partners                          (378,370)     (354,138)
   Redemption Payments                                 (78,240)      (65,279)
                                                    -----------   -----------
        Net Cash Used For
            Financing Activities                      (760,471)   (1,274,117)
                                                    -----------   -----------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                409,499      (781,896)

CASH  AND  CASH EQUIVALENTS, beginning of period     1,122,394     5,776,605
                                                    -----------   -----------
CASH AND CASH EQUIVALENTS, end of period           $ 1,531,893   $ 4,994,709
                                                    ===========   ===========

 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 PERIODS ENDED MARCH 31

                           (Unaudited)


                                                                   Limited
                                                                 Partnership
                             General      Limited                   Units
                             Partners     Partners     Total     Outstanding


BALANCE, December 31, 2003  $ 28,251   $14,489,094   $14,517,345   19,522.58

  Distributions               (3,541)     (350,597)     (354,138)

  Redemption Payments           (653)      (64,626)      (65,279)     (74.70)

  Net Income                  14,807     1,465,884     1,480,691
                             --------   -----------   ----------- -----------
BALANCE, March 31, 2004     $ 38,864   $15,539,755   $15,578,619   19,447.88
                             ========   ===========   =========== ===========


BALANCE, December 31, 2004  $ 33,588   $15,017,503   $15,051,091   19,344.38

  Distributions               (3,784)     (374,586)     (378,370)

  Redemption Payments           (783)      (77,457)      (78,240)     (85.75)

  Net Income                   3,425       339,129       342,554
                             --------   -----------   ----------- -----------
BALANCE, March 31, 2005     $32,446    $14,904,589   $14,937,035   19,258.63
                             ========   ===========   =========== ===========

 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
                         MARCH 31, 2005

                           (Unaudited)

(1)  The  condensed  statements included herein have been  prepared
     by  the Partnership, 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  Partnership
     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
     Partnership'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  call   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)

(3)  Reclassification -

     Certain items in the prior year's financial statements  have
     been  reclassified  to conform to 2005 presentation.   These
     reclassifications  had no effect on Partners'  capital,  net
     income or cash flows.

(4)  Investments in Real Estate -

     On  February  5,  2004,  the  Partnership  purchased  a  50%
     interest in a Jared Jewelry store in Lakewood, Colorado  for
     $2,017,633.   The  property is leased to  Sterling  Jewelers
     Inc. under a Lease Agreement with a primary term of 20 years
     and  annual  rental  payments of  $155,219.   The  remaining
     interest  in  the property was purchased by  AEI  Net  Lease
     Income  &  Growth Fund XIX Limited Partnership, an affiliate
     of the Partnership.

     On  April 30, 2004, the Partnership purchased a 50% interest
     in  an  Applebee's restaurant in Stow, Ohio for  $1,575,755.
     The  property  is  leased to Apple Ohio LLC  under  a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments  of  $120,043.   The  remaining  interest  in   the
     property was purchased by AEI Net Lease Income & Growth Fund
     XIX Limited Partnership.

     On May 10, 2004, the Partnership purchased a 50% interest in
     an  Eckerd  drug  store in Auburn, New York for  $2,287,133.
     The  property is leased to Eckerd Corporation under a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments  of  $184,753.   The  remaining  interest  in   the
     property was purchased by AEI Net Lease Income & Growth Fund
     XIX Limited Partnership.

     In February 2004, Garden Ridge, L.P. (GR), the lessee of the
     Garden  Ridge  retail store in Woodlands, Texas,  filed  for
     Chapter 11 bankruptcy reorganization.  In press releases, GR
     reported rejecting the leases of nine of 44 stores and it is
     attempting to renegotiate lease terms for its other  stores.
     The Woodlands store was not identified as one of the nine to
     be  closed.  GR entered into negotiations with the  property
     owners to arrive at an agreement to modify rental terms that
     would  induce GR to affirm the Lease for this property.   GR
     and  the  property  owners subsequently agreed  to  a  lease
     amendment to reduce the annual rent by 23% to $175,968, with
     a  10%  rent  increase  on January 1, 2008.   The  amendment
     provides for additional rental payments if the store's sales
     exceed certain stated amounts.  The amendment also calls for
     the  owners to waive rent for one month during the first six
     months  following  the bankruptcy court's approval  of  GR's
     affirmation   of  the  Lease.   The  lease   amendment   and
     confirmation  of GR's plan of reorganization  have  not  yet
     been approved by the court.

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

(4)  Investments in Real Estate - (Continued)

     With  the exception of February 2004, GR has made all rental
     payments  due  under  its  current lease.   The  Partnership
     expects to continue to receive all scheduled rents in future
     months unless the Lease is rejected by GR.  If the Lease  is
     affirmed,  GR  will be obligated to comply  with  all  Lease
     terms  as  amended.  As part of the lease amendment,  if  GR
     pays  the  rent  for February 2004, it will be  entitled  to
     credit  an equal amount against any installment of rent  due
     after  the  Lease is affirmed.  If GR does  not  affirm  the
     Lease and the Lease is rejected, the rent for February  will
     be  considered  a  pre-petition  unsecured  obligation  that
     would,  together  with  the  Partnership's  other  allowable
     damage claims, be paid pursuant to a court-confirmed plan of
     reorganization  on  a  prorata basis  with  other  unsecured
     claims  to the extent funds are available.  If the Lease  is
     rejected, GR would be required to return possession  of  the
     property  to  the Partnership and the Partnership  would  be
     responsible for real estate taxes and other costs associated
     with maintaining the property.

(5)  Payable to AEI Fund Management -

     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.

(6)  Discontinued Operations -

     In  October 2003, the Partnership entered into an  agreement
     to  sell  the  Cheddar's restaurant in  Clive,  Iowa  to  an
     unrelated third party.  On January 6, 2004, the sale  closed
     with   the  Partnership  receiving  net  sale  proceeds   of
     $2,131,025, which resulted in a net gain of $1,223,369.   At
     December  31,  2003,  the property was  classified  as  Real
     Estate Held for Sale with a book value of $907,656.

     In  July  2003,  the  lessee of the Razzoo's  restaurant  in
     Alpharetta,  Georgia notified the Partnership  that  it  was
     experiencing financial difficulty stemming from  lower  than
     expected  sales and that it might not be able to pay  future
     rents.   In late 2003, the lessee closed the restaurant  and
     said  that it no longer intended to operate a restaurant  at
     the  site.  The Partnership and the lessee entered  into  an
     agreement,  effective  November 1, 2004,  to  terminate  the
     lease   and  return  possession  of  the  property  to   the
     Partnership.   Rents  were  current  through  the  date   of
     termination.  As part of the agreement, the Partnership  was
     reimbursed for certain expenses it incurred related to legal
     action  it  pursued in connection with this situation.   The
     Partnership listed the property for sale with a real  estate
     broker  in  the  Alpharetta area.  While  the  property  was
     vacant,  the  Partnership was responsible  for  real  estate
     taxes and other costs required to maintain the property.

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

(6)  Discontinued Operations - (Continued)

     Based  on an analysis of market conditions in the area,  the
     Partnership   determined  the  property  was   impaired   in
     accordance  with the requirements of Statement of  Financial
     Accounting  Standards No. 144, Accounting for the Impairment
     or  Disposal  of  Long-Lived Assets.  As a  result,  in  the
     fourth  quarter of 2003, a charge to discontinued operations
     for real estate impairment of $252,399 was recognized, which
     was  the  difference between the book value at December  31,
     2003  of  $852,399 and the estimated fair value of $600,000.
     The  charge  was  recorded against the  cost  of  the  land,
     building  and equipment.  At December 31, 2004, the property
     was classified as Real Estate Held for Sale.

     In  December 2004, the Partnership entered into an agreement
     to  sell  the  property in Alpharetta to an unrelated  third
     party.   On  March  29,  2005,  the  sale  closed  with  the
     Partnership  receiving net sale proceeds of $648,425,  which
     resulted in a net gain of $48,425.

     In  May  2003, the Partnership entered into an agreement  to
     sell  a Taco Cabana restaurant in San Antonio, Texas to  the
     lessee.   The agreement has been extended several  times  to
     enable  the  lessee  to  complete their  due  diligence  and
     certain negotiations with adjacent land owners.  The sale is
     subject to contingencies and may not be completed.   If  the
     sale  is  completed, the Partnership expects to receive  net
     proceeds of approximately $1,637,000, which will result in a
     net  gain  of approximately $479,000.  If this sale  is  not
     completed,  it is likely the Partnership will  seek  another
     buyer  for  the property and may not be able to negotiate  a
     similar  purchase agreement.  At March 31, 2005 and December
     31,  2004,  the property was classified as Real Estate  Held
     for Sale with a book value of $1,157,654.  During this time,
     the  lessee is continuing to pay rent and is complying  with
     the lease obligations.

     During  the  first  three  months  of  2005  and  2004,  the
     Partnership  distributed $58,074 and $102,244  of  net  sale
     proceeds  to  the Limited and General Partners  as  part  of
     their quarterly distributions, which represented a return of
     capital  of  $2.99  and $5.20 per Limited Partnership  Unit,
     respectively.  The Partnership anticipates the remaining net
     sale  proceeds  will  either  be  reinvested  in  additional
     property or distributed to the Partners in the future.


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

(6)  Discontinued Operations - (Continued)

     The financial results for these properties are reflected  as
     Discontinued   Operations  in  the  accompanying   financial
     statements.   The following are the results of  discontinued
     operations for the three months ended March 31:

                                                 2005        2004

     Rental Income                            $  65,917   $    89,150
     Property Management Expenses                (2,315)       (5,236)
     Depreciation                                     0          (259)
     Gain on Disposal of Real Estate             48,425     1,223,369
                                               ---------   -----------
          Income from Discontinued Operations $ 112,027   $ 1,307,024
                                               =========   ===========

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        The Management's Discussion and Analysis contains various
"forward  looking  statements"  within  the  meaning  of  federal
securities  laws  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, taxation levels, the sufficiency  of
cash to meet operating expenses, rates of distribution, and other
matters.  These, and other forward looking statements made by the
Partnership,  must 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
    affects of these consequences for the Partners;

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

    the success of the General Partners of locating properties
    with favorable risk return characteristics;

    the effect of tenant defaults; and

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


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

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.

        The Partnership purchases properties and records them  in
the  financial  statements  at the lower  of  cost  or  estimated
realizable   value.   The  Partnership  initially   records   the
properties  at cost (including capitalized acquisition expenses).
The Partnership is required to periodically evaluate the carrying
value  of properties to determine whether their realizable  value
has  declined.   For  properties the Partnership  will  hold  and
operate, management determines whether impairment has occurred by
comparing the property's probability-weighted cash flows  to  its
current carrying value.  For properties held for sale, management
determines  whether  impairment has  occurred  by  comparing  the
property's estimated fair value less cost to sell to its  current
carrying  value.   If  the carrying value  is  greater  than  the
realizable  value, an impairment loss is recorded to  reduce  the
carrying value of the property to its realizable value.  A change
in  these assumptions or analysis could cause material changes in
the carrying value of the properties.

       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 three months ended March 31, 2005 and 2004,  the
Partnership  recognized rental income from continuing  operations
of  $377,967 and $278,279, respectively.  In 2005, rental  income
increased  mainly  due  to additional rent  received  from  three
property  acquisitions  in  2004  and  rent  increases  on   five
properties.

        For  the three months ended March 31, 2005 and 2004,  the
Partnership  incurred  Partnership administration  expenses  from
affiliated  parties of $54,651 and $49,321, respectively.   These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners.   During
the   same   periods,   the  Partnership   incurred   Partnership
administration  and property management expenses  from  unrelated
parties  of  $12,734  and $9,721, 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.


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

        In February 2004, Garden Ridge, L.P. (GR), the lessee  of
the  Garden  Ridge  retail store in Woodlands, Texas,  filed  for
Chapter  11  bankruptcy reorganization.  In  press  releases,  GR
reported  rejecting the leases of nine of 44  stores  and  it  is
attempting to renegotiate lease terms for its other stores.   The
Woodlands  store  was not identified as one of  the  nine  to  be
closed.  GR entered into negotiations with the property owners to
arrive  at an agreement to modify rental terms that would  induce
GR  to  affirm the Lease for this property.  GR and the  property
owners  subsequently agreed to a lease amendment  to  reduce  the
annual  rent  by  23% to $175,968, with a 10%  rent  increase  on
January  1,  2008.  The amendment provides for additional  rental
payments if the store's sales exceed certain stated amounts.  The
amendment  also calls for the owners to waive rent for one  month
during  the  first  six months following the  bankruptcy  court's
approval  of GR's affirmation of the Lease.  The lease  amendment
and confirmation of GR's plan of reorganization have not yet been
approved by the court.

        With  the  exception of February 2004, GR  has  made  all
rental  payments  due under its current lease.   The  Partnership
expects  to  continue to receive all scheduled  rents  in  future
months  unless  the Lease is rejected by GR.   If  the  Lease  is
affirmed, GR will be obligated to comply with all Lease terms  as
amended.  As part of the lease amendment, if GR pays the rent for
February  2004,  it will be entitled to credit  an  equal  amount
against  any installment of rent due after the Lease is affirmed.
If  GR  does not affirm the Lease and the Lease is rejected,  the
rent  for  February  will be considered a pre-petition  unsecured
obligation  that  would,  together with the  Partnership's  other
allowable  damage  claims, be paid pursuant to a  court-confirmed
plan  of  reorganization on a prorata basis with other  unsecured
claims  to  the  extent funds are available.   If  the  Lease  is
rejected,  GR  would  be  required to return  possession  of  the
property  to  the  Partnership  and  the  Partnership  would   be
responsible for real estate taxes and other costs associated with
maintaining the property.

        For  the three months ended March 31, 2005 and 2004,  the
Partnership  recognized interest income of  $4,167  and  $13,922,
respectively.   In  2005, interest income decreased  due  to  the
Partnership having less money invested in a money market  account
due to property acquisitions.

        In  accordance  with  Statement of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived  Assets,  upon  complete disposal  of  a  property  or
classification of a property as Real Estate Held  for  Sale,  the
Partnership  includes  the operating  results  and  sale  of  the
property   in   discontinued  operations.    In   addition,   the
Partnership reclassifies the prior periods operating results  and
any  partial  sales  of the property to discontinued  operations.
For  the  three  months  ended March 31,  2005,  the  Partnership
recognized  income  from  discontinued  operations  of  $112,027,
representing rental income less property management expenses  and
depreciation  of $63,602 and gain on disposal of real  estate  of
$48,425.   For  the  three  months  ended  March  31,  2004,  the
Partnership  recognized  income from discontinued  operations  of
$1,307,024,  representing rental income less property  management
expenses  of  $83,655  and gain on disposal  of  real  estate  of
$1,223,369.

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

       In October 2003, the Partnership entered into an agreement
to  sell  the Cheddar's restaurant in Clive, Iowa to an unrelated
third  party.   On  January 6, 2004, the  sale  closed  with  the
Partnership  receiving  net sale proceeds  of  $2,131,025,  which
resulted in a net gain of $1,223,369.  At December 31, 2003,  the
property was classified as Real Estate Held for Sale with a  book
value of $907,656.

        In  July  2003, the lessee of the Razzoo's restaurant  in
Alpharetta,  Georgia  notified  the  Partnership  that   it   was
experiencing  financial  difficulty  stemming  from  lower   than
expected sales and that it might not be able to pay future rents.
In  late 2003, the lessee closed the restaurant and said that  it
no  longer  intended to operate a restaurant at  the  site.   The
Partnership  and the lessee entered into an agreement,  effective
November 1, 2004, to terminate the lease and return possession of
the  property to the Partnership.  Rents were current through the
date  of  termination.  As part of the agreement, the Partnership
was  reimbursed for certain expenses it incurred related to legal
action  it  pursued in connection with this situation.  Following
an  analysis  of the lessee's business at this location  and  its
financial condition, and its intent to no longer operate at  this
site,  the Partnership determined that the best course of  action
was to negotiate a settlement with the lessee and take possession
of   the   property.   With  possession  of  the  property,   the
Partnership  can now move forward with selling the  property  and
reinvesting  the  proceeds from the sale in  replacement  income-
producing property.  The Partnership listed the property for sale
with  a  real  estate broker in the Alpharetta area.   While  the
property  was  vacant, the Partnership was responsible  for  real
estate taxes and other costs required to maintain the property.

       Based on an analysis of market conditions in the area, the
Partnership  determined the property was impaired  in  accordance
with  the  requirements  of  Statement  of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived Assets.  As a result, in the fourth quarter of 2003, a
charge  to discontinued operations for real estate impairment  of
$252,399  was  recognized, which was the difference  between  the
book  value  at  December 31, 2003 of $852,399 and the  estimated
fair value of $600,000.  The charge was recorded against the cost
of  the land, building and equipment.  At December 31, 2004,  the
property was classified as Real Estate Held for Sale.

         In  December  2004,  the  Partnership  entered  into  an
agreement  to  sell the property in Alpharetta  to  an  unrelated
third  party.   On  March  29, 2005, the  sale  closed  with  the
Partnership  receiving  net  sale  proceeds  of  $648,425,  which
resulted in a net gain of $48,425.

        In May 2003, the Partnership entered into an agreement to
sell  a  Taco  Cabana  restaurant in San Antonio,  Texas  to  the
lessee.  The agreement has been extended several times to  enable
the   lessee   to  complete  their  due  diligence  and   certain
negotiations with adjacent land owners.  The sale is  subject  to
contingencies  and  may  not  be  completed.   If  the  sale   is
completed,  the  Partnership expects to receive net  proceeds  of
approximately  $1,637,000, which will result in  a  net  gain  of
approximately  $479,000.  If this sale is not  completed,  it  is
likely  the Partnership will seek another buyer for the  property
and  may  not be able to negotiate a similar purchase  agreement.
At  March  31,  2005  and  December 31, 2004,  the  property  was
classified  as  Real Estate Held for Sale with a  book  value  of
$1,157,654.   During this time, the lessee is continuing  to  pay
rent and is complying with the lease obligations.

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

        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.   In addition, leases may contain  rent  clauses
which  entitle  the  Partnership to receive  additional  rent  in
future  years  if gross receipts for the property exceed  certain
specified  amounts.  Increases in sales volumes of  the  tenants,
due to inflation and real sales growth, may 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.

Liquidity and Capital Resources

        During  the  three  months  ended  March  31,  2005,  the
Partnership's  cash balances increased $409,499 as  a  result  of
cash  generated  from the sale of property, which  was  partially
offset  by distributions paid to the Partners in excess  of  cash
generated  from  operating activities.  During the  three  months
ended  March 31, 2004, the Partnership's cash balances  decreased
$781,896  as  a  result  of cash used to  purchase  property  and
distributions  paid to the Partners in excess of  cash  generated
from  operating activities, which were partially offset  by  cash
generated from the sale of property.

        Net  cash provided by operating activities increased from
$415,873  in 2004 to $521,545 in 2005 as a result of an  increase
in  total  rental  and  interest income in 2005  and  net  timing
differences  in the collection of payments from the  lessees  and
the  payment  of  expenses, which were  partially  offset  by  an
increase  in  Partnership administration and property  management
expenses in 2005.

        The  major components of the Partnership's cash flow from
investing activities are investments in real estate and  proceeds
from  the  sale  of real estate.  During the three  months  ended
March 31, 2005 and 2004, the Partnership generated cash flow from
the sale of real estate of $648,425 and $2,131,025, respectively.
During  the  three months ended March 31, 2004,  the  Partnership
expended  $2,054,677 to invest in real properties  (inclusive  of
acquisition   expenses)  as  the  Partnership   reinvested   cash
generated from property sales.

        On  February  5,  2004, the Partnership purchased  a  50%
interest  in  a  Jared  Jewelry store in Lakewood,  Colorado  for
$2,017,633.   The  property is leased to Sterling  Jewelers  Inc.
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental payments of $155,219.  The remaining  interest  in
the  property was purchased by AEI Net Lease Income & Growth Fund
XIX Limited Partnership, an affiliate of the Partnership.

        On  April  30,  2004,  the Partnership  purchased  a  50%
interest   in  an  Applebee's  restaurant  in  Stow,   Ohio   for
$1,575,755.   The property is leased to Apple Ohio  LLC  under  a
Lease Agreement with a primary term of 20 years and annual rental
payments of $120,043.  The remaining interest in the property was
purchased  by  AEI  Net Lease Income & Growth  Fund  XIX  Limited
Partnership.

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

        On May 10, 2004, the Partnership purchased a 50% interest
in  an Eckerd drug store in Auburn, New York for $2,287,133.  The
property  is leased to Eckerd Corporation under a Lease Agreement
with  a  primary term of 20 years and annual rental  payments  of
$184,753.   The remaining interest in the property was  purchased
by AEI Net Lease Income & Growth Fund XIX Limited Partnership.

        The  Partnership's primary use of cash flow,  other  than
investment   in  real  estate,  is  distribution  and  redemption
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.   Redemption  payments  are  paid  to
redeeming Partners on a quarterly basis.

        For  the three months ended March 31, 2005 and 2004,  the
Partnership  declared  distributions of  $378,370  and  $354,138,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions  of $374,586 and $350,597 and the General  Partners
received  distributions  of $3,784 and $3,541  for  the  periods,
respectively.   In  December  2004, the  Partnership  declared  a
special  distribution  of $303,030 of net  sale  proceeds,  which
resulted in a higher distribution payable at December 31, 2004.

        During  the  first  three months of 2005  and  2004,  the
Partnership distributed $58,074 and $102,244 of net sale proceeds
to  the  Limited and General Partners as part of their  quarterly
distributions, which represented a return of capital of $2.99 and
$5.20   per   Limited   Partnership  Unit,   respectively.    The
Partnership  anticipates the remaining  net  sale  proceeds  will
either be reinvested in additional property or distributed to the
Partners in the future.

        The  Partnership may acquire Units from Limited  Partners
who have tendered their Units to the Partnership.  Such Units may
be  acquired at a discount.  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.

        On  January 1, 2005, twelve Limited Partners  redeemed  a
total  of 85.75 Partnership Units for $77,457 in accordance  with
the  Partnership  Agreement.  On January 1,  2004,  nine  Limited
Partners  redeemed a total of 74.7 Partnership Units for $64,626.
The  Partnership acquired these Units using Net  Cash  Flow  from
operations.   In  prior  years, a total of 245  Limited  Partners
redeemed   3,260.47  Partnership  Units  for   $2,700,638.    The
redemptions  increase the remaining Limited  Partners'  ownership
interest  in  the  Partnership.  As a result of these  redemption
payments  and pursuant to the Partnership Agreement, the  General
Partners  received distributions of $783 and  $653  in  2005  and
2004, 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 on both a short-term and long-term basis.

ITEM 3.   CONTROLS AND PROCEDURES.

       (a) Evaluation of 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  its  disclosure
controls  and procedures (as defined in Rule 13a-14(c) under  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,  the
disclosure  controls  and  procedures  of  the  Partnership   are
adequately  designed to ensure that information  required  to  be
disclosed  by  us  in  the reports we file or  submit  under  the
Exchange  Act  is recorded, processed, summarized  and  reported,
within the time periods specified in applicable rules and forms.

       (b)  Changes in internal controls

         There   were   no  significant  changes  made   in   the
Partnership's  internal controls during the  most  recent  period
covered  by  this  report that have materially affected,  or  are
reasonably   likely  to  materially  affect,  the   Partnership's
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  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
        PROCEEDS

        (a)  During  the  period  covered  by  this  report,  the
Partnership  did  not  sell any equity securities  that  are  not
registered under the Securities Act of 1933.

       (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 of the Units 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.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
        PROCEEDS (Continued)

      Small Business Issuer Purchases of Equity Securities
                                                              Maximum Number
                                          Total Number of     of Units that
                                          Units Purchased     May Yet Be
                 Total Number Average     as Part of Publicly Purchased Under
                 of Units     Price Paid  Announced Plans     the Plans or
   Period        Purchased    per Unit    or Programs         Programs

1/1/05 to 1/31/05   85.75      $903.29      3,524.42(1)            (2)

2/1/05 to 2/28/05     --          --             --                --

3/1/05 to 3/31/05     --          --             --                --

  (1) The  Partnership's  repurchase plan is  mandated  by  the
      Partnership Agreement as included in the prospectus related to
      the original offering of the Units.

  (2) The Partnership Agreement contains annual limitations on
      repurchases  described in the paragraph above and has no
      expiration date.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None.

ITEM 5.OTHER INFORMATION

      None.

ITEM 6.EXHIBITS

                           Description

    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

        In  accordance with the requirements of the Exchange Act,
the  registrant caused this report to be signed on its behalf  by
the undersigned, thereunto duly authorized.


Dated: May 6, 2005         AEI Real Estate Fund XVIII
                           Limited Partnership
                           By: AEI Fund Management XVIII, Inc.
                           Its: Managing General Partner



                           By: /s/ Robert P Johnson
                                   Robert P. Johnson
                                   President
                                   (Principal Executive Officer)



                           By: /s/ Patrick W Keene
                                   Patrick W. Keene
                                   Chief Financial Officer
                                   (Principal Accounting Officer)