2

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X]☒ Yes [ ]☐ No

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the proceeding twelve months (or for such shorter period that the Registrant was required to submit and post such files). [ X ]☒ Yes [ ]☐ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this

Form 10-K. [ ]

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

[ ]☐ Large Accelerated Filer       [ ]☐ Accelerated Filer        [X]☒ Non-Accelerated Filer          [ ]☐ Smaller Reporting Company

☐ Emerging Growth Company

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

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

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

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

Not Applicable

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

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

Not Applicable

                               (APPLICABLE(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

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

Not Applicable

DOCUMENTS INCORPORATED BY REFERENCE.

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

None

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PART I

ITEM 1. BUSINESS

Description of SB Partners (the “Registrant”)

The Registrant is a New York limited partnership formed to engage in acquiring, operating and holding for investment a varying portfolio of real estate interests. The Registrant's initial public offering was in 1971, the year it began operations. As of December 31, 2016,2019, the Registrant owns an industrial flex property in Maple Grove, Minnesota. In addition, the Registrant has a thirty percent interest in Sentinel Omaha, LLC (“Omaha”). Omaha is a real estate investment company which as of December 31, 2016 owned 142019 owns six multifamily properties in 10three markets. Omaha is an affiliate of the Registrant’s general partner.

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

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

Recent Developments and Real Estate Investment Factors

Due to the COVID-19 outbreak, Registrant and Omaha’s may be operating in a challenging and uncertain economic environment. Financial and real estate companies may be affected by liquidity, disparity of real estate values and financing issues. Should market conditions deteriorate, there is no assurance that such conditions will not result in decreased cash flows or ability to repay, refinance or extend Omaha’s debt when it comes due, which could result in the sale of investments at amounts less than the reported value at December 31, 2019.

Omaha’s portfolio consists exclusively of older multi-family properties located in secondary and tertiary markets. During 20162019 and 2018, physical and economic occupancy remained consistentstable at most of Omaha’s properties. However occupancyaverage net rental income increased at two large properties which rely on tenants from the local military base declined due to deployments during 2016. Capitalization ratesa slower rate of 1.8% for older properties in tertiary markets where Omaha owns most of its properties generally were consistent with the prior year.2019 and 1.7% for 2018 (see Item 2. Properties). All of Omaha’s property mortgages and bankmortgage loans pay interest based on floating interest rates. During the first half of 20162018 the floating rates on these loans increased slightly but increased at a faster pace during the second half of 2016 as short term LIBOR rates increased. Theand various bond index rates increased as their rates are based on one month LIBOR rate increased from an averageor bond index rates. During 2018, Omaha sold its garden apartment property in Asheville, North Carolina and its garden apartment property in Fresno, California. Net sales proceeds in each transaction were used to first pay selling expenses and retire each property’s related secured mortgage loan. Remaining net sales proceeds were used to retire Omaha’s unsecured loan and were used to retire Omaha’s secured mortgage loan encumbering its high rise apartment property located in Omaha, Nebraska to further pay down Omaha’s overall debt. Retirement of 42.55 basis pointsthe unsecured loan removed certain restrictions placed on Omaha by the lender including making distributions to its members including the Registrant. On October 16, 2018 Sentinel Omaha paid distributions to its members including $2,400,000 to Registrant. During 2018 Omaha also sold its high rise apartment property located in Omaha, Nebraska. Net sales proceeds were used to first pay selling expenses. Remaining net sales proceeds were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Columbus, Ohio to further pay down Omaha’s overall debt. During 2019, Omaha sold its garden apartment property located in Independence, Missouri. Net sales proceeds were used to first pay selling expenses and retire the property’s related secured mortgage loan. Also during January 20162019, Omaha sold its garden apartment property located in Columbus, Ohio. Net sales proceeds were used to an averagefirst pay selling expenses. Remaining net sales proceeds were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Charleston, South Carolina to further pay down Omaha’s overall debt.

On April 11, 2019, Sentinel Omaha paid a distribution to Registrant in the amount of 71.64 basis points during December 2016. During 2016$5,100,000. On April 16, 2019, the general partner declared a distribution of $400 per full unit for all partners holding units or participations on May 31, 2019. The distribution was paid on June 4, 2019. On May 31, 2019, Sentinel Omaha paid a distribution to Registrant in the amount of $3,300,000. The distribution was ableused to pay down a small portionaccrued investment management fees and accrued expenses, and to increase cash reserves of its unsecured bank loan. the Registrant.

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Omaha reports its investments in real estate properties on a fair value basis and for the year ended December 31, 20162019 Omaha reported an increase of $9,500,000 (4.3%) in the value of its portfolio over the same properties as of $16,197,000 over the year ended December 31, 2015.2018. The total real estate portfolio value of $378,460,000$230,900,000 as of December 31, 20162019 consists of the same properties which made up Omaha’s portfolio as of December 31, 2015. Omaha is precluded from making distributions to its investors until its unsecured loans are paid in full. As of December 31, 2015, barring any unforeseen downturn in2018 with the real estate and capital markets, Registrant anticipated Omaha had a more likely than not chance to continue to improve the operationsexception of the real estate assets, sell the assets at values sufficienttwo properties sold during 2019 as referred to pay off the underlying mortgages and after paying off the balance of the unsecured bank loan at maturity, make distributions to its investors thereby returning a portion of the original invested capital.above. Registrant as of the year ended December 31, 20152017 recognized a value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 20152017 less a 50%25% reserve for possible unforeseen disruptions in the property and capital markets. As a result of the overall small increase in Omaha’s real estate values in 2016 and the further pay down of its unsecured bank loan, Registrant is reducingreduced the reserve of Omaha’s equity value from 50%25% to 35%20% as of DecemberMarch 31, 2016.2018. The investment in a 30% non-controlling interest would still be valued at a discount due to the lack of control and liquidity.

As noted above, all of Omaha’s property mortgage loans use floating rates based on one month LIBOR rates plus the credit spread or based on various bond index rates. During 2019 the floating rates on Omaha loans decreased as short term LIBOR rates and bond index rates decreased. Fixed mortgage loan interest rates for multi-family properties of similar class and location as Omaha’s portfolio increased during 2018 from an approximate range of 4.35% to 4.50% in early 2018 to 5.05% to 5.10% near the end of 2018. Fixed mortgage loan interest rates decreased to an approximate range of 3.45% to 3.82% near the end of 2019. Although changes in fixed mortgage rates do not impact the operating cash flow of the Omaha properties directly, changes in fixed and floating rates on commercial mortgage debt can have an impact on capitalization rates and the sales prices Omaha may achieve in the future. Omaha anticipates the net operating income from its remaining portfolio to be flat during 2020 as compared to 2019.

Registrant’s has only one wholly owned property which is located in Maple Grove, MinnesotaMinnesota. It is 100% leased to a single tenant whose lease was scheduled to expire July 31, 2015. On February 12, 2015, Registrant and the tenant executed an extension of the lease toexpires October 31, 2019. However, tenant has on ongoing option to terminate the lease under certain conditions as set forth in the lease terms as amended. One of the conditions is the payment of an early termination penalty the calculation of which is based on the remaining time period in the lease. Another condition is the tenant must provide notice twelve months prior to the termination.2024. The tenant pays fixed base rent which increases approximately 3% each year. The tenant pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees. If the tenant defaulted the Registrant would have no internal source of funds until the space is released to a new tenant or Registrant receives distributions from Omaha.

Registrant’s total outstanding debt at December 31, 2017 consisted of a bank loan (“Loan”) with a bank (“Holder”) with a balance of $5,726,590. On October 4, 2018, Registrant and the Holder of the Loan executed a Discounted Payoff Agreement (“Payoff Agreement”) whereby Registrant made a one-time payment of $4,000,000 on October 19, 2018 to retire and fully satisfy the balance of the Loan of $5,693,876 at a discount. The source of funds to retire the Loan was a distribution from Sentinel Omaha, LLC of $2,400,000, cash escrow held by the Holder of approximately $510,000 and the remainder from partnership cash reserves to total $4,000,000. The payoff of $4,000,000 to satisfy the Loan is less than the outstanding balance of the Loan in the amount of $5,693,876. The difference of $1,693,876 was recorded as gain on extinguishment of debt. The Registrant has no other debt except normal trade accounts payable and a security deposit held for the tenant leasing the space at the Maple Grove property.

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

ITEM 1A. Risks Factors

This report on Form 10-K includes statements that constitute "forward looking statements" within the meaning of Section 27(A) of the Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934 and that are intended to come within the safe harbor protection provided by those sections. By their nature, all forward looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated

by the forward looking statements for a number of reasons, including, but not limited to, those risks described below:

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Covid-19

Due to the COVID-19 outbreak, Registrant and Omaha may be operating in a challenging and uncertain economic environment. Financial and real estate companies may be affected by liquidity, disparity of real estate values and financing issues. Should market conditions deteriorate, there is no assurance that such conditions will not result in decreased cash flows or ability to repay, refinance or extend Omaha’s debt when it comes due, which could result in the sale of investments at amounts less than the reported value at December 31, 2019.

General

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

Risks of Liability and Loss

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

Value and Non-liquidity of Real Estate

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

Potential Adverse Effect on Results of Operations Due to Operating Risks

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

Debt Servicing and Financing

Total outstanding debt at December 31, 2016 consists of a bank loan with a balance of $5,760,473. The loan matures on April 29, 2018. If the Registrant does not have funds on hand sufficient to repay its indebtedness at maturity, the Registrant may need to refinance such indebtedness with new debt financing or provide necessary funds through equity offering(s). The Registrant may be unable to obtain a loan which will be sufficient to retire the existing loan. If it is unable to refinance this indebtedness on acceptable terms, the Registrant may be forced to liquidate its remaining assets upon disadvantageous terms, which could result in losses to the Registrant and adversely affect the amount of cash reserves. If general economic conditions result in higher interest rates at a time when the Registrant must refinance its indebtedness, the Registrant's interest expense could increase, which would adversely affect the Registrant's results of operations and financial condition. The Registrant has no other debt except normal trade accounts payable, a security deposit held for the tenant leasing the space at the Maple Grove property and accrued investment management fees.

On April 29, 2011, the Holder (“Holder”) and Registrant executed a new Loan Agreement (“Loan Agreement”) related to Registrant’s $22,000,000 unsecured debt on the following terms:

Environmental Issues

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

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Competition

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

Tax Matters

There were no significant changes inOn December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act is a complex revision to U.S. federal income tax laws orwith various impacts on different categories of taxpayers and industries. The long term impact of the extent to which such legislation impactsAct on the overall economy, the real estate industry, the Registrant, orand the partners during the year ended December 31, 2016.Unit holders cannot be reliably predicted at this time. Unit holders are urged to consult their own tax advisors with respect to the tax consequences arising under the federal law (including the Act) and the laws of any state, municipality or other taxing jurisdiction, including tax consequences arising from such Unit holder'sholders own tax characteristics.

General

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

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

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.None.

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ITEM 2. PROPERTIES

The property owned by the Registrant as of December 31, 20162019 is as follows:

Additional information regarding propertiesproperties owned by the Registrant:

(a) For period of ownership.

(b) Property was purchased June 12, 2002.

(c)(c) Property was purchased on October 5, 2005.

(d)(d) Investment was purchased September 2007.

(e) Property was sold on September 17, 2015.

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

(g)(g) Average per apartment unit per annum. Gross potential rent, less concessions and vacancies, divided by the total

number of apartment units at the property. Amounts are annualized for periods of ownership of less than one year.

ITEM 3. LEGAL PROCEEDINGS

None

ITEM 4. MINE SAFETY DISCLOSURES

(Removed and Reserved).Not applicable.

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PART II

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

The transfer of Units or Participations (equivalent to one-half Unit) is subject to certain limitations, including the consent of the General Partner. There is no public market for the Units and it is not anticipated that any such public market will develop. The number of Unit holders as of December 31, 20162019 was 2,375.2,128.

At variousvarious times, the Registrant has generated and distributed cash to the Unit holders. Registrant paid a distribution during 2019 to Unit holders of record as of June 1, 2019 in the amount of $400 for each Unit owned. Registrant did not declare a distribution for 2016, 20152018 or 2014.2017. Cumulative distributions since inception have totaled $111,747,950.$114,849,350. However, there is no requirement to make such distributions nor can there be any assurance that future operations will generate cash available for distribution. In addition, while the obligations under the Loan Agreement are outstanding, Registrant is precluded from making distributions to its partners.

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ITEM 6. SELECTED FINANCIAL DATA

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

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

COMPANY OVERVIEW

The Registrant is a New York limited partnership formed to engage in acquiring, operating and holding for investment a varying portfolio of real estate interests. The Registrant's initial public offering was in 1971, the year it began operations. As of December 31, 2016,2019, the Registrant owned an industrial flex property in Maple Grove, Minnesota and the Registrant has a thirty percent interest in Sentinel Omaha, LLC. Omaha is a real estate investment company which as of December 31, 20162019 owns 14six multifamily properties in 10three markets. Omaha is an affiliate of the Registrant’s general partner.

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

The consolidated financialfinancial statements for the years ended December 31, 20162019, 2018 and 2017 reflect the operations of one industrial flex property located in Maple Grove, Minnesota as well as a 30% interest in Omaha. The consolidated financial statements for the years ended December 31, 2015 and 2014 reflect the operations of one warehouse distribution center located in Lino Lakes, Minnesota and one industrial flex property located in Maple Grove, Minnesota as well as a 30% interest in Omaha. Registrant’s property located in Lino Lakes, MN was encumbered by a $10,000,000 mortgage which was scheduled to mature on October 5, 2015. On September 17, 2015, Registrant completed the sale of the warehouse distribution property. Sales proceeds were used to pay selling expenses, retire the $10,000,000 mortgage encumbering the property and pay down a portion of the Registrant’s bank loan. Closing expenses includes a sale commission of $80,250 paid to an affiliate of the general partner. The assets and liabilities for this property for 2014 are reflected as assets and liabilities from discontinued operations in the accompanying consolidated balance sheet and the results of operations for 2015 and 2014 are reflected as income from discontinued operations in the accompanying consolidated statements of operations. See note 4 to the accompanying consolidated financial statements.

CRITICAL ACCOUNTING ESTIMATES

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

Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements. The summary should be read in conjunction with the more complete discussion of significant accounting policies included in Note 1 to the consolidated financial statements for the year ended December 31, 2016.2019.

Real Estate

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

Registrant’sRegistrant’s wholly owned property located in Maple Grove, Minnesota is leased 100% leased to a single tenant whose lease was scheduled to expire on July 31, 2015. On February 12, 2015, Registrant and the tenant executed an extension of the lease toexpires October 31, 2019. However, tenant has on ongoing option to terminate the lease under certain conditions as set forth in the lease terms as amended. One of the conditions is the payment of an early termination penalty the calculation of which is based on the remaining time period in the lease. Another condition is the tenant must provide notice twelve months prior to the termination.2024. The tenant pays fixed base rent which increases approximately 3% each year. The tenant pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees.

Sentinel OmahaOmaha LLC’s portfolio consists of 13six garden apartment properties and one high rise apartment property.properties. Leases are generally one year or less. Tenants generally pay fixed rent plus utilities used by tenant.

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

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Investment in Sentinel Omaha, LLC

The Registrant has a 30% non-controlling interest in Omaha that is accounted for on a fair value basis. DueDuring the twelve months ended December 31, 2018, Omaha sold its garden apartment property in Asheville, North Carolina, its garden apartment property in Fresno, California and its high rise apartment property located in Omaha, Nebraska. Net sales proceeds in each transaction were used to the global financial crisis, stagnant real estate marketfirst pay selling expenses and slowing economy, Omaha reported aretire each property’s related secured mortgage loan. Remaining net write-downsales proceeds were used to retire Omaha’s unsecured loan and were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Columbus, Ohio to further pay down Omaha’s debt. Retirement of the value ofunsecured loan removed certain restrictions placed on Omaha by the lender including making distributions to its real estate portfolio of approximately $100,852,000 during 2008members including Registrant. On October 16, 2018 Sentinel Omaha paid distributions totaling $8,000,000 to 2014.its members including $2,400,000 to Registrant. During 20152019, Omaha sold its garden apartment property located in Independence, Missouri. Net sales proceeds were used to first pay selling expenses and 2016 capitalization rates for older propertiesretire the property’s related secured mortgage loan. Also during 2019, Omaha sold its garden apartment property located in tertiary markets whereColumbus, Ohio. Net sales proceeds were used to first pay selling expenses. Remaining net sales proceeds were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Charleston, South Carolina to further pay down Omaha’s overall debt. During 2019, Omaha owns most ofpaid distributions totaling $28,000,000 to its properties, generally were lower than for the prior years. Physical and economic occupancy improved at the properties during 2015 and market rates increased during 2016. However, occupancy at two large properties which rely on tenants from a local military base declined duemembers including $8,400,000 to deployments during 2016. Job growth continued to improve but at a slow pace.Registrant. For the years 2015 and 2016, as real estate values recoveredyear ended December 31, 2019 Omaha reported an increase of $9,500,000 in the value of its portfolio over the same properties as of $72,315,000 and $16,197,000, respectively.

Omaha’sthe year ended December 31, 2018. The total real estate portfolio value of $378,460,000$230,900,000 as of December 31, 20162019 consists of the same properties which made up Omaha’s portfolio as of December 31, 2015. On September 30, 2013, Omaha executed an amendment and restatement2018 less the two properties sold during 2019. As of its unsecured loan to extend the term of the loan to December 31, 2017. The amendment and restatement, among other items, requires Omaha to make specific periodic principal payments on2018, the unsecured loan at scheduled dates through December 31, 2017. It also reduced the pay rate on a portion of the unsecured loan to a floating rate of 200 basis points over LIBOR while increasing the additional accrual rate on the same portion of the unsecured loan to 500 basis points over LIBOR. However, the aforementioned accrued interest will be forgiven if Omaha timely pays the above mentioned required principal payments, as defined in the amended loan agreement. During 2016 and 2015, Omaha paid $12,000,000 and $15,000,000, respectively to the holder of the unsecured loan in accordance with the amendment and restatement agreement. However, Omaha is still precluded from making distributions to its investors until its unsecured loan is paid in full. As a result of the aforementioned, Registrant did not anticipate receiving any distributions from Omaha during the foreseeable future and prior to 2015 had reserved 100% of the reported value of its investment in Omaha on its balance sheet.

On September 30, 2015, Omaha refinanced six properties which had been encumbered by a single secured credit facility with a high fixed interest rate. Previously, a refinancing of the secured credit facility would have required significant prepayment penalties which made a refinancing cost prohibitive. On September 30, 2015, the prepayment penalties were low enough that, combined with higher valuations, each property’s borrowing capacity was sufficient to support a new separate mortgage with enough combined proceeds to pay off the credit facility and the prepayment penalties. The six new mortgages have lower interest rates than the loan they replaced although the new interest rates are floating rates, which are subject to changes in the credit markets. Omaha is precluded from making distributions to its investors until its unsecured loan is paid in full. However, based on a review of the 2015 property operations and applying the terms of the new mortgages and barring any unforeseen downturn in the real estate and capital markets, Registrant anticipated Omaha has a more likely than not chance to improve the operations of the real estate assets, sell the assets at values sufficient to pay off the mortgages and after paying off the unsecured bank loan, make distributions to its investors for a portion of the original capital invested. Therefore, Registrant as of the year ended December 31, 2015Partnership had recognized a value in the Omaha investment equal to Registrant’sthe Partnership’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 20152018 less a 50%20% reserve. During 2016,The investment in a 30% non-controlling interest would still be valued at a discount due to the net operating income reported for Omaha’s properties continuedlack of control and liquidity. The Partnership continues to improve which led to an increase inreport a reserve on the real estate values.value of Omaha continued to make payments on its unsecured loan. However, Omaha’s mortgages and unsecured loan are encumbered with floating interest rates which started to increase near the endbooks of 2016. Omaha’s unsecured loan has a maturity date20% as of December 31, 2017. Omaha has one option to extend the maturity date to June 30, 2018. It is unlikely Omaha will be able to pay off the unsecured loan from net operating cash flow or refinancing proceeds. Omaha will have to sell some of the properties which will reduce the net cash flow which could be available for distribution to the investors after the unsecured loan is paid off. Registrant as of2019.

For the year ended December 31, 2016 has recognized a value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 2016 less a 35% reserve.

For the year ended December 31, 2016,2019, Omaha reported net investment income of approximately $16,379,734$10,495,319 of which the Registrant’s interest was $4,913,920.$3,148,596. In addition, Omaha reported net unrealized depreciation of real estate properties and interest rate protection agreements of $1,366,240 of which Registrant’s interest was $409,872 for 2019. Also Omaha reported net realized gain on the sale of two real estate properties of $13,634,547 of which the Registrant’s interest was $4,090,364.

For the year ended December 31, 2018, Omaha reported net investment income of $11,892,478 of which the Registrant’s interest was $3,567,718. In addition, Omaha reported net unrealized appreciation of real estate properties and interest rate protection agreements of $16,602,744$487,605 of which Registrant’s interest was $4,980,823$146,281 for 2016.2018. Also Omaha reported net realized gain on the sale of three real estate properties of $7,093,942 of which the Registrant’s interest was $2,128,183.

For the year ended December 31, 2015,2017, Omaha reported net investment income of $10,027,589$14,151,469 of which the Registrant’s interest was $3,008,277.$4,245,442. In addition, Omaha reported net unrealized appreciation of real estate properties mortgages, and interest rate protection agreements of $63,779,408 of which Registrant’s interest was $19,133,822 for 2015.

For the year ended December 31, 2014, Omaha reported net investment income of $10,028,642$44,074,122 of which the Registrant’s interest was $3,008,593. In addition, Registrant’s interest in$13,222,237. Also Omaha reported net realized loss on the net unrealized appreciationsale of three real estate properties mortgages, andof $20,492,141 of which the Registrant’s interest rate protection agreements was $2,072,009 for 2014.$6,147,642.

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

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

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

The three levels of fair value hierarchy are described below:

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

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

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

Estimated fair value calculations were prepared by Omaha's managementof the underlying assets of Omaha was determined utilizing Level 3 inputs.inputs based upon independent appraisals or utilizing Level 2 inputs based upon sales contracts or bona fide sales offers.

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

Revenue Recognition

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

Off-Balance Sheet Arrangements

None.None.

Recently Issued Accounting Pronouncements

In April 2015,August 2018, the Financial Accounting Standards Board (FASB)issued Accounting Standards Update (ASU) No. 2015-3,2018-13, SimplifyingFair Value Measurement (Topic 820): Disclosure Framework – Changes to the Presentation of Debt Issuance CostsDisclosure Requirements for Fair Value Measurement (ASU 2015-3), which changes the presentation of debt issuance costs in financial statements.2018-13). ASU 2015-3 requires an entity2018-13 is intended to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. ASU 2015-3improve fair value measurement disclosures by removing, modifying, and/or adding certain disclosures and is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2015. The new guidance will be applied retrospectively to each prior period presented.2019. The Partnership adopteddoes not expect the adoption of ASU 2015-3 on January 1, 2016, and it did not2018-13 to have a material impact on the Partnership’s consolidated financial statements and disclosures.

In February 2016, the FASB issued ASU No. 2016-2, Leases (ASU 2016-2), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-2 is effective for annual periods beginning after December 15, 2018, and requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application. The Partnership is currently evaluating the impact of adopting the new lease standard on its consolidated financial statements andor disclosures.

CONTRACTUAL OBLIGATIONS

AsPursuant to the original investment agreement, the Partnership may be called upon to contribute, in cash, an additional $3,720,000 to the capital of December 31, 2016,Omaha, as and when required, as determined by the Registrant’s contractual obligations consisted of a loan payable. Principal payments under the loan payable are due as follows:Manager.

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LIQUIDITY AND CAPITAL RESOURCES

As of December 31,, 2016, 2019, Registrant had cash and cash equivalents of approximately $1,327,000$988,000 as compared to approximately $1,207,000$338,000 as of December 31, 2015.2018. Cash and cash equivalents increased during the year ended December 31, 20162019 primarily due to rental incomedistributions received from the tenant leasing spaceOmaha combined with cash flow generated from operating activities at Registrant’s wholly owned property. This increase was partially offset by a distribution paid to the partners and payments of accrued investment management fees and accrued expenses, payments to replace the roof at Registrant’s wholly owned property less operating expenses,as well as partnership expenses paid and debt service obligations.paid.

As of December 31, 2016,2019, Registrant’s only consistent source of cash is rental income received from the tenant who leases 100% of the leasable space at Registrant’s wholly owned property in Maple Grove. The tenant reimburses Registrant for real estate taxes, insurance and most of the properties’property’s operating expenses leaving a significant portion of the base rent received available to pay capital improvements and partnership administrative expenses. A portion of any remaining annual cash flow is used to pay down the principal balance of Note B in accordance with the Loan Agreement while the remaining cash income is retained by Registrant as cash reserves. On May 16, 2016, the partnership paid $26,415 to the Holder to pay down a portion of the outstanding balance of Note B. As part of Registrant and the Holder restructuring the bank loan in 2011, Registrant set aside $500,000 in escrow to be held and used only to pay the costs to re-tenant the space at Registrant’s wholly owned property if Registrant’s tenant defaults on its lease or exercises its right to terminate the lease early or fails to renew.

Total outstanding debt at December 31, 2016 consisted of Note B at $5,760,473. Under the terms of the Bank Loan Agreement, once the A Note was paid off, interest on the B Note stopped accruing. The loan matures on April 29, 2018. If the Registrant does not have funds on hand sufficient to repay its indebtedness at maturity, the Registrant may need to refinance such indebtedness with new debt financing or provide necessary funds through equity offering(s). The Registrant may be unable to obtain a loan which will be sufficient to retire the existing loan. If it is unable to refinance this indebtedness on acceptable terms, the Registrant may be forced to liquidate its remaining assets upon disadvantageous terms, which could result in losses to the Registrant and adversely affect the amount of cash reserves. If general economic conditions result in higher interest rates at a time when the Registrant must refinance its indebtedness, the Registrant's interest expense could increase, which would adversely affect the Registrant's results of operations and financial condition. The Registrant has no other debt except normal trade accounts payable, a security deposit held for the tenant leasing the space at the Maple Grove property and accrued investment management fees.

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

Omaha reports its investments in real estate properties on a fair value basis and for 2016,the year ended December 31, 2019 Omaha reported an increase of $9,500,000 in the value of its portfolio over the same properties as of $16,197,000 over 2015.the year ended December 31, 2018. The total real estate portfolio value of $378,460,000$230,900,000 as of December 31, 20162019 consists of the same properties which made up Omaha’s portfolio as of December 31, 2015.2018 with the exception of the two properties sold during 2019. Although the remaining commercial property owned by the Registrant is 100% occupied, it is occupied by a single tenant. The nationalAccording to a report by CBRE, the Minneapolis industrial market improvedreported positive absorption, market rates remained steady and vacancy rates remained a low 4.4% in 2016 however2019. Registrant may still require a longer time period to replace the tenant at its property should a default occur or shouldocur and the tenant not renew its lease at the end of the lease term.space become vacant.

Registrant did notpays the General Partner and an affiliate of the General Partner fees for services performed. A portion of the fees during 2011 to 2018 were accrued while Registrant’s unsecured loan was outstanding. Since the unsecured loan had been retired in 2018, Registrant was allowed to pay the accrued fees and current fees. On April 11, 2019, Sentinel Omaha paid a distribution to Registrant in 2016. There is no requirementthe amount of $5,100,000. On April 16, 2019, the general partner declared a distribution of $400 per full unit for all partners holding units or participations on May 31, 2019. The distribution was paid on June 4, 2019. On May 31, 2019, Sentinel Omaha paid a distribution to make such distributions, nor can there be any assurance that future operations will generateRegistrant in the amount of $3,300,000. The distribution was used to pay accrued investment management fees and accrued expenses and to increase cash available for distribution. Whilereserves of the obligations under the Bank Loan Agreement are outstanding, the Registrant is precluded from making distributions to its Unit holders.

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

MANAGEMENT’SMANAGEMENT’S DISCUSSION OF RESULTS OF OPERATIONS 2016

2019 VS. 20152018

Total revenuesrevenues from operations increased $43,000$21,000 to approximately $1,059,000$1,131,000 in 20162019 from approximately $1,016,000$1,110,000 in 20152018 primarily due to higher rental income. Rental income increased due to a scheduled increase in base rent for the tenant at the Maple Grove property. Other income andincreased slightly due to an increase in real estate tax reimbursement while interest income increased slightly.decreased due to a decrease in cash reserves available for investment.

The Registrant reported a net loss from operations of approximately $532,000$574,000 in 2016,2019, an improvementincrease of $447,000the loss of $45,000 as compared to a net loss from operations of approximately $979,000$529,000 in 2015.2018. Net loss from operations consists of net income from the Maple Grove property combined with partnership income and expenses. The decreaseincrease of loss from operations was due to lower totalhigher operating expenses combined withpartially offset by higher total revenues. Total expenses from operations for 2016 decreased $404,0002019 increased $65,000 to approximately $1,591,000$1,705,000 from approximately $1,995,000$1,640,000 in 2015,2018, due to increases in investment fees, real estate taxes and administrative expenses partially offset by decreases in interestdepreciation expense, repairs and maintenance expense and deferred financing costs.

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Under the terms of the unsecured loan extension Omaha signed effective July 1, 2009, as extended and modified, Omaha is precluded from making distributions to its investors until its unsecured loan is paid. As a result of the aforementioned, Registrant did not anticipate receiving any distributions from Omaha during the foreseeable future and had reserved 100% of the reported value prior to 2015. Equity in net increase in net assets decreased $12,254,000 to an income of approximately $9,895,000 for 2016 compared to income of approximately $22,142,000 for 2015. Omaha reports its investments in real estate properties on a fair value basisbasis. During 2019, Omaha sold its garden apartment property located in Independence, Missouri. Net sales proceeds were used to first pay selling expenses and dueretire the property’s related secured mortgage loan. Also during 2019, Omaha sold its garden apartment property located in Columbus, Ohio. Net sales proceeds were used to first pay selling expenses. Remaining net sales proceeds were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Charleston, South Carolina to further pay down Omaha’s overall debt. During 2019, Omaha paid distributions totaling $28,000,000 to its members including $8,400,000 to Registrant. For the mortgage crisis, stagnant real estate market and slow economy, Omaha reported a significant write-down in the value of its real estate portfolio of approximately $100,852,000 during the yearsyear ended December 31, 2008 through 2014. For 2015 and 2016, as real estate values recovered,2019 Omaha reported an increase of $9,500,000 in the value of its portfolio of $72,315,000 and $16,197,000, respectively.

On September 30, 2015, Omaha refinanced sixover the same properties which had been encumbered by a single secured credit facility with a high fixed interest rate. Previously, a refinancing of the secured credit facility would have required significant prepayment penalties which made a refinancing cost prohibitive. On September 30, 2015, the prepayment penalties were low enough that combined with higher valuations, each property’s borrowing capacity was sufficient to support a new separate mortgage with enough combined proceeds to pay off the credit facility and the prepayment penalties. The six new mortgages have lower interest rates than the loan they replaced although the new interest rates are floating rates, subject to changes in the credit markets. Based on a review of the 2015 property operations and applying the terms of the new mortgages and barring any unforeseen downturn in the real estate and capital markets, Registrant anticipated Omaha has a more likely than not chance to improve the operations of the real estate assets, sell the assets at values sufficient to pay off the mortgages and after paying off the unsecured bank loan, make distributions to its investors for a portion of the original capital invested. Therefore, Registrant as of the year ended December 31, 2015 had recognized a2018. The total real estate portfolio value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet$230,900,000 as of December 31, 20152019 consists of the same properties which made up Omaha’s portfolio as of December 31, 2018 less a 50% reserve. During 2016,the two properties sold during 2019.

Equity in net income of investment increased $987,000 to an income of approximately $6,829,000 for 2019 compared to income of approximately $5,842,000 for 2018. Omaha anticipates the net operating income reported forfrom its remaining portfolio to be flat during 2020 as compared to 2019. All of Omaha’s properties continued to improve which led to an increase inproperty mortgage loans and banks loans use floating rates based on one month LIBOR rates plus the real estate values.credit spread or based on bond index rates. During 2019 the floating rates on Omaha continued to make payments on its unsecured loan. However, Omaha’s mortgagesloans decreased as short term LIBOR rates and unsecured loan are encumbered with floating interestbond index rates which started to increase near the end of 2016. Omaha’s unsecured loan has a maturity date of December 31, 2017. Omaha has one option to extend the maturity date to June 30, 2018. It is unlikely Omaha will be able to pay off the unsecured loan from net operating cash flow or refinancing proceeds. Omaha will have to sell some of the properties which will reduce the net cash flow which could be available for distribution to the investors after the unsecured loan is paid off. Registrant as of the year ended December 31, 2016 has recognized a value in the Omaha investment equal to Registrant’s 30% portion of the equity reported on Omaha’s balance sheet as of December 31, 2016 less a 35% reserve.

On September 17, 2015, Registrant completed the sale of its warehouse distribution property located in Lino Lakes, Minnesota. Sales proceeds were used to pay selling expenses, retire the $10,000,000 mortgage encumbering the property and pay down a portion of the Registrant’s bank loan. Closing expenses includes a sale commission of $80,250 paid to an affiliate of the general partner. The results of operations for the years ended December 31, 2015 and 2014 are reflected as income from discontinued operations in the accompanying consolidated statements of operations. Registrant has reported a gain on the sale of the property of $3,569,246 in the accompanying financial statements over the carrying value. See note 5 to the accompanying consolidated financial statements.decreased.

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

Eagle Lake Business Center IV (Maple Grove, Minnesota)

Total revenuesrevenues increased $41,000,$33,000, to approximately $1,056,000$1,127,000 in 20162019 compared with approximately $1,015,000$1,094,000 in 2015.2018. Net income, which includes deductions for depreciation, increased $50,000$58,000 to approximately $631,000$690,000 in 20162019 from approximately $581,000$632,000 in 2015.2018. The property has been 100% leased and occupied by the same single tenant for both years. The increase in total revenue was primarily due to higher rental income combined with higher other income. Rental income increased due to a scheduled increase in base rent for the tenant. Other income increased slightly from 20152018 to 2016.2019 due to an increase in real estate tax reimbursement. The increase in net income was due to the increase in revenues combined with athe decrease in operating expenses. The decrease in operating expenses was primarily due to decreases in repairs and maintenance of $13,000 and utilitiesdepreciation of $15,000. Depreciation and amortization increased $18,000 due to an increase in amortization of leasing commissions.$18,000.

According to a market report by CBRE,CBRE, the Minneapolis Metropolitan Statistical Area’s industrial market reported thatpositive absorption, market rates remained steady and vacancy rates for industrial space declined and rental rates increased. Net absorption of industrial space increasedremained a low 4.4% in 2016.2019.

Investments

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

On September 18, 2007, Omaha acquired all the outstanding common shares of America First Apartment Investors, Inc., a publicly held real estate investment trust, in a transaction valued at approximately $532 million, including the assumption of outstanding debt and excluding transactions costs. Omaha consisted of 31 wholly owned multifamily residential properties, a wholly owned commercial property and a wholly owned multifamily property that waswas under development. During 20162019, Omaha sold its garden apartment property located in Independence, Missouri. Net sales proceeds were used to first pay selling expenses and 2015,retire the property’s related secured mortgage loan. Also during 2019, Omaha did not purchase or sell anysold its garden apartment property located in Columbus, Ohio. Net sales proceeds were used to first pay selling expenses. Remaining net sales proceeds were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Charleston, South Carolina to further pay down Omaha’s overall debt. During 2019, Omaha paid distributions totaling $28,000,000 to its members including $8,400,000 to Registrant. For the year ended December 31, 2019 Omaha reported an increase of $9,500,000 in the value of its portfolio over the same properties in its portfolio.as of the year ended December 31, 2018. The total real estate portfolio value of $230,900,000 as of December 31, 2019 consists of the same properties which made up Omaha’s portfolio as of December 31, 2018 less the two properties sold during 2019.

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TotalOmaha reported total revenues for 2016 were2019 of approximately $44,266,000.$26,602,000. Net investment income before net unrealized appreciation was $16,379,000.$10,495,000. Major expenses included $6,538,000$3,101,000 of interest expense, $3,987,000$2,443,000 for repairs and maintenance, $5,768,000$3,429,000 for payroll and $4,284,000$2,789,000 for real estate taxes. In addition, Omaha reported a net unrealized depreciation based on the valuation of the remaining real estate assets and interest rate protection agreements of $1,366,000. Also Omaha reported net realized gain on the sale of two real estate properties of $13,635,000. For the year ended December 31, 2019, the Registrant’s equity interest in the income of Omaha was approximately $6,829,000.

MANAGEMENT’S DISCUSSION OF RESULTS OF OPERATIONS 2018 VS. 2017

Total revenues from operations increased $29,000 to approximately $1,110,000 in 2018 from approximately $1,081,000 in 2017 primarily due to higher rental income. Rental income increased due to a scheduled increase in base rent for the tenant at the Maple Grove property. Other income decreased slightly while interest income increased.

The Registrant reported a net loss from operations of approximately $529,000 in 2018, an increase of the loss of $13,000 as compared to a net loss from operations of approximately $516,000 in 2017. Net loss from operations consists of net income from the Maple Grove property combined with partnership income and expenses. The increase of loss from operations was due to higher operating expenses partially offset by higher total revenues. Total expenses from operations for 2018 increased $43,000 to approximately $1,640,000 from approximately $1,597,000 in 2017, due to increases in repairs and maintenance, depreciation, professional fees and investment fees partially offset by decreases administration and deferred financing costs.

Omaha reports its investments in real estate properties on a fair value basis and due to the global financial crisis, stagnant real estate market and slowing economy, Omaha reported a net write-down of the value of its real estate portfolio of approximately $100,852,000 during 2008 to 2014. For the years 2015 to 2017, as real estate values recovered Omaha reported an increase in the value of its portfolio of $122,327,000. During the twelve months ended December 31, 2018, Omaha sold its garden apartment property in Asheville, North Carolina, its garden apartment property in Fresno, California and its high rise apartment property located in Omaha, Nebraska. Net sales proceeds in each transaction were used to first pay selling expenses and retire each property’s related secured mortgage loan. Remaining net sales proceeds were used to retire Omaha’s unsecured loan and were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Columbus, Ohio to further pay down Omaha’s debt. Retirement of the unsecured loan removed certain restrictions placed on Omaha by the lender including making distributions. On October 16, 2018 Sentinel Omaha paid a distribution to Registrant in the amount of $2,400,000. For the year ended December 31, 2018 Omaha reported an increase of $8,325,000 in the value of its portfolio over the same properties as of the year ended December 31, 2017. The total real estate portfolio value of $290,500,000 as of December 31, 2018 consists of the same properties which made up Omaha’s portfolio as of December 31, 2017 less the three properties sold during 2018.

Equity in net income of investment decreased $5,478,000 to an income of approximately $5,842,000 for 2018 compared to income of approximately $11,320,000 for 2017. Under the terms of the unsecured loan extension Omaha signed effective July 1, 2009, as extended and modified, Omaha was precluded from making distributions to its investors until its unsecured loan is paid. As a result of the aforementioned, Registrant did not anticipate receiving any distributions from Omaha during the foreseeable future and had reserved 100% of the reported value prior to 2015. During 2016 and 2017, the net operating income reported for Omaha’s properties continued to improve which allowed Omaha to continue to make payments on its unsecured loan. The improvement in Omaha’s real estate values and operations allowed Registrant to reduce the reserve to 35% as of December 31, 2016 and to 25% as of December 31, 2017. Omaha’s mortgages and unsecured loan are encumbered with floating interest rates which started to increase near the end of 2016 and continued to increase during 2017 and 2018. Omaha’s unsecured loan had a balance of $20,359,322 as of December 31, 2017. During 2018, Omaha sold its garden apartment property in Asheville, North Carolina and its garden apartment property in Fresno, California. Net sales proceeds in each transaction were used to first pay selling expenses and retire each property’s related secured mortgage loan. Remaining net sales proceeds were used to retire Omaha’s unsecured loan and were used to retire Omaha’s secured mortgage loan encumbering its high rise apartment property located in Omaha, Nebraska to further pay down Omaha’s debt. Retirement of the unsecured loan removed certain restrictions placed on Omaha by the lender including making distributions.

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For the year ended December 31, 2018 Sentinel Omaha reported a 3.0% increase in real estate values. Omaha anticipates the net operating income from its remaining portfolio to be flat during 2019 as compared to 2018. As noted above, all of Omaha’s property mortgage loans and banks loans use floating rates based on one month LIBOR rates plus the credit spread.

As noted earlier, during 2018 the floating rates on Omaha loans increased as short term LIBOR rates increased. The one month LIBOR rate increased from an average of (0.7164%) during December 2016 to an average of (1.4925%) during December 2017 and an average of (2.4582%) during December 2018. Fixed mortgage interest rates for multi-family properties of similar class and location as Omaha’s portfolio also increased during 2017 from an approximate range of 4.10% to 4.15% in early 2017 to 4.35% to 4.50% near the end of 2017and further to an approximate range of 5.05% to 5.10% in December 2018. Mortgage interest rates may continue to increase in 2019 if the U.S. Federal Reserve continues a policy to increase the Federal Funds Rate. Although increases in fixed mortgage rates do not impact the operating cash flow of the Omaha properties directly, increases in fixed and floating rates on commercial mortgage debt can have a negative impact on capitalization rates and the sales prices Sentinel Omaha may achieve in the future. Since Omaha has in the past two years paid off the unsecured debt along with improving performance at the properties, the debt risk to the investment is estimated to be lower. The investment in a 30% non-controlling interest would still be valued at a discount due to the lack of control and liquidity. Registrant will continue to report a reserve on the value of Omaha on its books but due to Omaha paying off the unsecured debt in 2018 the reserve has been reduced to 20% as of March 31, 2018.

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

Eagle Lake Business Center IV (Maple Grove, Minnesota)

Total revenues increased $20,000, to approximately $1,094,000 in 2018 compared with approximately $1,074,000 in 2017. Net income, which includes deductions for depreciation, decreased $24,000 to approximately $632,000 in 2018 from approximately $656,000 in 2017. The property has been 100% leased and occupied by the same single tenant for both years. The increase in total revenue was primarily due to higher rental income. Rental income increased due to a scheduled increase in base rent for the tenant. Other income decreased slightly from 2017 to 2018. The decrease in net income was due to the increase in operating expenses partially offset by an increase in revenues. The increase in operating expenses was primarily due to increases in repairs and maintenance of $40,000 and depreciation of $7,000.

According to a report by CBRE the Minneapolis industrial market reported positive absorption and a minor increase in market rates in 2018.

Investments

During 2018 Omaha sold its garden apartment property located in Asheville, North Carolina, its garden apartment property located in Fresno, California and its high rise apartment property located in Omaha, Nebraska. Net sales proceeds in each transaction were used to first pay selling expenses and retire each property’s related secured mortgage loan. Remaining net sales proceeds were used to retire Omaha’s unsecured loan and were used to retire Omaha’s secured mortgage loan encumbering its garden apartment property located in Columbus, Ohio to further pay down Omaha’s overall debt.

Omaha reported total revenues for 2018 of approximately $33,786,000. Net investment income before net unrealized appreciation was $11,892,000. Major expenses included $5,273,000 of interest expense, $3,044,000 for repairs and maintenance, $4,319,000 for payroll and $3,640,000 for real estate taxes. In addition, Omaha reported a net unrealized appreciation based on the valuation of the remaining real estate assets and interest rate protection agreements of $16,603,000.$488,000. Also Omaha reported net realized gain on the sale of three real estate properties of $7,094,000. For the year ended December 31, 2016,2018, the Registrant’s equity interest in the income of Omaha was approximately $9,895,000.$5,842,000.

MANAGEMENT’S DISCUSSION OF RESULTS OF OPERATIONS 2015 VS. 2014

Total revenues from operations decreased $71,000 to approximately $1,016,000 in 2015 from approximately $1,087,000 in 2014 due to lower other income partially offset by higher rental income and interest income on short term investments. Real estate tax and operating expense reimbursements from the Maple Grove property were lower in 2015 due to the final determination of prior year operating costs charged to the tenant in 2014. Rental income increased due to a scheduled increase in base rent for the tenant at the Maple Grove property. The increase in interest income is due to higher cash funds available for short term investment during 2015.

The Registrant reported a net loss from operations of approximately $979,000 in 2015, an improvement of $104,000 as compared to a net loss from operations of approximately $1,083,000 in 2014. Net loss from operations consists of net income from the Maple Grove property combined with partnership income and expenses. The decrease of loss from operations was due to lower total expenses partially offset by lower total revenues. Total expenses from operations for 2015 decreased $175,000 to approximately $1,995,000 from approximately $2,170,000 in 2014, due to decreases in interest expense of $143,000, amortization costs of $19,000 and real estate operating expenses of $20,000. This decrease was partially offset by a decrease of depreciation expense of $12,000.

Equity in net increase in net assets from Omaha increased $17,061,000 to an income of approximately $22,142,000 for 2015 compared to income of approximately $5,081,000 for 2014.

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

Eagle Lake Business Center IV (Maple Grove, Minnesota)

Total revenues decreased $71,000, to approximately $1,015,000 in 2015 compared with approximately $1,086,000 in 2014. Net income, which includes deductions for depreciation, decreased $66,000 to approximately $581,000 in 2015 from approximately $647,000 in 2014. The property has been 100% leased and occupied by the same single tenant for both years. The decrease in total revenue was due to lower other income partially offset by higher rental income. Real estate tax and operating expense reimbursements were lower in 2015 due to the final determination of prior year operating costs charged to the tenant in 2014. Rental income increased due to a scheduled increase in base rent for the tenant. The decrease in net income was due to the decrease in revenues partially offset by a decrease in operating expenses. The decrease in operating expenses was primarily due to decreases in repairs and maintenance of $12,000, utilities of $5,000 and real estate tax expense of $5,000.

435 Park Court (Lino Lakes, Minnesota)

Total revenues decreased $457,000, to approximately $1,165,000 in 2015 compared with approximately $1,622,000 in 2014 due to the sale of the property on September 17, 2015. Income from discontinued operations increased $194,000 to approximately $401,000 in 2015 from approximately $207,000 in 2014. The property has been 100% leased and occupied by the same single tenant for both years. The increase in income from discontinued operations was primarily due to a decrease in depreciation expense. The Registrant stop recognizing depreciation expense at the end of 2014 when it classified the property as real estate held for sale.

Investments

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

Total revenues for 2015 were approximately $41,850,000. Net investment income before net unrealized depreciation and appreciation was $10,028,000. Major expenses included $10,858,000 of interest expense, $3,696,000 for repairs and maintenance, $5,399,000 for payroll and $4,412,000 for real estate taxes. In addition, Omaha reported a net unrealized appreciation based on the valuation of the remaining real estate assets, related mortgages, and interest rate protection agreements of $63,779,000. For the year 2015, the Registrant’s equity interest in the income of Omaha was approximately $22,142,000.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NONE

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ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements required by this item, together with the Report of Independent Registered Public Accounting Firm thereon, are contained herein on pages 23 through 3437 of this Annual Report on Form 10-K.

Supplementary financial information required by this item is contained herein on pages 3538 through 3639 of this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ONACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. 9A . CONTROLS AND PROCEDURES

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

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

Based on our evaluation under the frameworks described above, our management has concluded that our internal control over financial reporting was effectiveeffective as of December 31, 2016.2019.

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

ITEM 9B. OTHER INFORMATION

NONE

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PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

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

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

Mr. Streicker joined the General Partner in May 1976. He has been a Director since April 1984. He is Chairman of SHC and its parent company, The Sentinel Corporation.

Ms. Cassidy joined the General Partner in August 1982. She has been a Director of the General Partner since March 1988. She is President of SHC and its parent company, The Sentinel Corporation.

Mr. Tietjen joined the General Partner in 1990 and served as its Chief Accounting Officer until 2006 and Chief Financial Officer and Treasurer from 2004 to 2007. He is a certified public accountant with over 3335 years of real estate related financial, management, accounting and reporting experience.

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

Mr. Roth joined the General Partner in 1994 and serves as its treasurer. He is a certifiedcertified public accountant with over 3134 years of real estate related financial, accounting and reporting experience.

Mr. Zoeller joined the General Partner in 1994 and serves as its principal financial and accounting officer. He is a certified public accountant with over 3538 years of real estate related financial, accounting and reporting experience.

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ITEM 11. EXECUTIVE COMPENSATION

The Registrant has no executive officers or directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BBENEFICIALENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The General Partner, among other things, furnishes services and advice to the Registrant and is paid a variable annual fee for such services based on calculations prescribed in the Registrant's Partnership Agreement. For these services, the General Partner receives a management fee equal to 2% of the average amount of capital invested in real estate plus cumulative mortgage amortization payments, and 0.5% of capital not invested in real estate, as defined in the Partnership Agreement. The management fee amounted to $867,859, $875,788$1,007,137, $911,615 and $869,228$888,325 for the years ended December 31, 2016, 2015,2019, 2018, and 2014,2017, respectively. Of the amounts earned in 2016, 20152018 and 2014, $441,618, $449,5482017 $485,374 and $442,988,$462,086, respectively havehad been deferredaccrued while the obligations under the Loan Agreement areagreement were outstanding. The deferredaccrued amounts total $2,460,857totaled $3,408,317 and $2,019,239 and arewere included in accrued expenses on the balance sheet as of December 31, 20162018. Since the Loan has been retired, Registrant was allowed to pay the accrued fees and 2015, respectively.current fees. In addition, the General Partner is entitled to 25% of cash distributions in excess of the annual distribution preference, as defined in the Partnership Agreement. No such amounts were due for the years ended December 31, 2016, 20152019, 2018 or 2014.2017.

Certain affiliates of the General Partner oversee the management and operations of various real estate properties, including those owned by the Registrant. Services performed by these affiliates applicable to the Registrant's properties are billed at actual or allocated cost, or percentage of revenues. The costs of such services are believed to be competitive with charges for similar services provided by unrelated management companies. Fees charged by these affiliates totaled $53,242, $117,004 $56,734, $55,409 and $131,120$54,311 in 2016, 2015,2019, 2018, and 2014,2017, respectively.

Registrant’sRegistrant’s wholly owned property located in Maple Grove, Minnesota is 100% leased to a single tenant whose lease was scheduled to expire July 31, 2015.2019. On February 12, 2015,July 26, 2018, Registrant and the tenant executed an extension of the lease to October 31, 2019.2024. An affiliate of the General Partner was paid a leasing commission of $63,948$158,494 for the lease extension.

On September 17, 2015, Registrant completed the sale

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In 2012 an affiliate of the General Partner commenced maintaining and updating the investor database and preparing the tax K-1 forms and related schedules which previously had been prepared by an unaffiliated company. The fee charged by the affiliate for the similar service is lower than the fee previouslypreviously charged by the unaffiliated company. Fees charged for 2016, 20152019, 2018 and 20142017 were $54,000 each year.

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

In 2007 the Registrant made an investment of $37,200,000, representing a thirty percent ownership interest in Omaha. For the years 2016, 20152019, 2018 and 2014,2017, the Registrant’s equity interest in the net income of Omaha was approximately $9,895,000, $22,142,000$6,829,000, $5,842,000 and $5,081,000,$11,320,000, respectively.

In connection with the mortgage financing of certain properties, the respective lenders required the Registrant to place the assets and liabilities of these properties into single asset limited partnerships or land trusts which hold title to these properties. A trust company affiliated with the General Partner holds the general partner interest in each single asset limited partnership as trustee for the Registrant. An affiliate of the General Partner is also the trustee of the land trust. For its services, the affiliate was not paid an annual fee in 2016, 2015 or 2014.

Reference is made to Items 10 and 11, and Notes 3, 5, 6 7 and 119 in the consolidated financial statements.

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENTSCHEDULES

(a)     (1)     Financial statements - The Registrant's 2016 Annual Audited Consolidated Financial Statements are included in this Annual Report on Form 10-K.

  (2)     Financial statement schedules - See Index to Consolidated Financial Statement Schedules on page 22. All other financial statement schedules are inapplicable or the required subject matter is contained in the consolidated financial statements or notes thereto.

(b)     Exhibits -

Exhibit

 (b)     Exhibits -

101.INS ** XBRL Instance

101.SCH ** XBRL Taxonomy Extension Schema

101.CAL ** XBRL Taxonomy Extension Calculation

101.DEF ** XBRL Taxonomy Extension Definition

101.LAB ** XBRL Taxonomy Extension Labels

101.PRE ** XBRL Taxonomy Extension Presentation

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

ITEM 16. FORM 10-K SUMMARY

Not Applicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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

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Report of Independent Registered Public Accounting Firm

To the Partners

of SB Partners

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of SB Partners and subsidiaries (collectively, the “Partnership”) as of December 31, 20162019 and 2015, and2018, the related consolidated statements of operations, changes in partners’partners’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2016. 2019, and the related notes and the schedule of Real Estate and Accumulated Depreciation as of December 31, 2019 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audits included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’sPartnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, the Partnership changed its method of presenting debt issuance costs in 2016. The new method has been applied retrospectively to each prior period presented.

The supplemental schedule of Real Estate and Accumulated Depreciation as of December 31, 2016 has been subjected to audit procedures performed in conjunction with the audit of the Partnership’s consolidated financial statements. The supplemental schedule is the responsibility of the Partnership’s general partner. Our audit procedures included determining whether the supplemental schedule reconciles to the consolidated financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In our opinion, the supplemental schedule is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole.

/s/ Dworken, Hillman, LaMorte and Sterczala, P.C.PKF O'Connor Davies, LLP

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

Shelton, Connecticut

March 23, 2017 26, 2020

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26

See notes to consolidated financial statements

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