<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1999 or
----------------------------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
------------------ ------------------
Commission file number 0-23719
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Wells Real Estate Fund X, L.P.
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(Exact name of registrant as specified in its charter)
Georgia 58-2250093
-------------------------------------- -------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
3885 Holcomb Bridge Road, Norcross, Georgia 30092
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
--------------
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund X,L.P.
-----------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1999
and December 31, 1998.........................................3
Statement of Income for the Three
Months ended March 31, 1999 and 1998..........................4
Statement of Partners' Capital for the Year
Ended December 31, 1998 and
for the Three Months Ended March 31, 1999.....................5
Statement of Cash Flows for the Three Months
Ended March 31, 1999 and 1998.................................6
Condensed Notes to Financial Statements........................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................9
PART II. OTHER INFORMATION.............................................19
2
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WELLS REAL ESTATE FUND X, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets March 31, 1999 December 31, 1998
------ -------------------- ----------------------
<S> <C> <C>
Investment in joint ventures (Note 2) $21,931,925 $22,127,276
Cash and Cash Equivalents 286,628 270,262
Due from affiliates 541,671 579,603
Deferred Project Costs 18,363 18,363
Organization cost, less accumulated
amortization of $6,250 in 1998 & $7,813 in 1999 17,187 18,750
Prepaid expenses and other assets 1,000 1,851
----------- -----------
Total assets $22,796,774 $23,016,105
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable $ 0 $ 3,500
Partnership distributions payable 536,088 532,000
----------- -----------
Total liabilities 536,088 535,500
----------- -----------
Partners' capital:
Limited Partners:
Class A - 2,116,099 18,384,737 18,227,829
Class B - 596,792 3,875,949 4,252,776
----------- -----------
Total partners' capital 22,260,686 22,480,605
----------- -----------
Total liabilities and partners' capital $22,796,774 $23,016,105
=========== ===========
</TABLE>
See accompanying condensed notes to financial statements
3
<PAGE>
WELLS REAL ESTATE FUND X, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999 March 31, 1998
---------------------- --------------------
<S> <C> <C>
Revenues:
Interest income $ 0 $168,665
Equity in income of joint venture 347,197 61,940
--------- --------
347,197 230,605
--------- --------
Expenses:
Computer costs 2,820 1,986
Partnership administration 19,116 11,308
Legal and accounting 7,958 4,771
Amortization of organization costs 1,562 1,562
--------- --------
31,456 19,627
--------- --------
Net income $ 315,741 $210,978
========= ========
Net income allocated to Class A Limited Partners $ 573,656 $305,844
Net loss allocated to Class B Limited Partners $(257,915) $(94,866)
Net income per weighted average
Class A Limited Partner Unit $ .27 $ .15
Net (loss) per weighted average
Class B Limited Partner Unit $ (.45) $ (.16)
Cash distribution per weighted average Class A $ .25 $ .12
Limited Partner Unit
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND X, L.P.
(a Georgia Public Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1998
AND THE THREE MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Limited Partners
--------------------------------------------------
Class A Class B Total
------- ------- General Partners'
Units Amount Units Amount Partners Capital
---------- ------------- --------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1997 2,116,099 $18,019,767 596,792 $5,054,935 338 $23,075,040
Net income (loss) 0 1,779,191 0 (728,524) (338) 1,050,329
Partnership distributions 0 (1,644,764) 0 0 0 (1,644,764)
Class A conversion elections 9,705 73,635 (9,705) (73,635) 0 0
--------- ----------- ------- ---------- ----- -----------
BALANCE,
December 31, 1998 2,125,804 $18,227,829 587,087 4,252,776 0 22,480,605
Net Income (loss) 0 573,656 0 (257,915) 0 315,741
Partnership distributions 0 (535,660) 0 0 0 (535,660)
Class A conversion elections 19,096 138,311 (19,096) (138,311) 0 0
Class B conversion elections (2,263) (19,399) 2,263 19,399 0 0
--------- ----------- ------- ---------- ----- -----------
BALANCE
March 31, 1999 2,142,637 $18,384,737 570,254 $3,875,949 0 $22,260,686
========= =========== ======= ========== ===== ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND X, L.P.
(a Georgia Public Limited Partnership)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------
March 31, 1999 March 31, 1998
--------------------- -------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 315,741 $ 210,978
Adjustments to reconcile net income (loss)
to net cash (used in) provided by operating activities:
Equity in income of joint ventures (347,197) (61,940)
Amortization of organization costs 1,562 1,562
Changes in assets and liabilities:
Decrease in prepaid expenses and other assets 851 (41,501)
Decrease in accounts payable (3,500) (0)
Decrease in due to affiliates 0 (103,539)
--------- -----------
Net cash (used in) provided by operating activities (32,543) 5,560
--------- -----------
Cash flows from investing activities:
Distributions received from joint ventures 580,481 0
Investment in joint ventures 0 (8,907,149)
Deferred project costs paid 0 0
--------- -----------
Net cash provided by (used in) investing activities 580,481 (8,907,149)
--------- -----------
Cash flows from financing activities:
Limited partners' contributions 0 0
Sales commissions paid (0) (242,388)
Distribution to Partners from accumulated earnings (531,993) (294,309)
--------- -----------
Net cash (used in) financing activities (531,993) (536,697)
--------- -----------
Net (decrease) increase in cash and cash equivalents 16,366 (9,438,286)
Cash and cash equivalents, beginning of year 270,262 18,404,232
--------- -----------
Cash and cash equivalents, end of period $ 286,628 $ 8,965,946
========= ===========
Supplemental disclosure of noncash investing activities:
Deferred project costs applied to joint venture
property $ 0 $ 454,266
========= ===========
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND X, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statements
March 31, 1999
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
-----------
Wells Real Estate Fund X, L.P. (the "Partnership") is a Georgia public
limited partnership having Leo F. Wells, III and Wells Partners, L.P., as
General Partners. The Partnership was formed on June 20, 1996, for the
purpose of acquiring, developing, owning, operating, improving, leasing,
and otherwise managing for investment purposes, income producing commercial
properties.
On December 31, 1996, the Partnership commenced a public offering of up to
$35,000,000 of limited partnership units ($10.00 per unit) pursuant to a
Registration Statement on Form S-11 filed under the Securities Act of 1933.
The Partnership commenced active operations on February 4, 1997, when it
received and accepted subscriptions for 125,000 units. An aggregate
requirement of $2,500,000 of offering proceeds was reached on February 25,
1997, thus allowing for the admission of New York and Pennsylvania
investors in the Partnership. The offering was terminated on December 30,
1997, at which time the Partnership had sold 2,116,099 Class A Status
Units, and 596,792 Class B Status Units, held by a total of 1,593 and 219
Class A & Class B Limited Partners, respectively, for total Limited Partner
capital contributions of $27,128,912. After payment of $1,085,157 in
acquisition and advisory fees and expenses, payment of $4,069,338 in
selling commissions and organization and offering expenses, and an
aggregate investment of $21,716,397 in the Fund X-XI Joint Venture and the
Fund IX-X-XI-REIT Joint Venture, as of March 31, 1999, the Partnership was
holding net offering proceeds of $258,018 available for investment in
properties.
As of March 31, 1999, the Partnership owned interests in properties through
its ownership in the following joint ventures: (i) Fund IX-X-XI-REIT
Associates, a joint venture among the Partnership, Wells Real Estate Fund
IX, L.P., Wells Real Estate Fund XI, L.P. and Wells Operating Partnership,
L.P. (the "Fund IX-X-XI-REIT Joint Venture"), and (ii) Fund X-XI
Associates, a joint venture among the Partnership and Wells Real Estate
Fund XI, L.P. (the "Fund X-XI Joint Venture"). Wells Operating
Partnership, L.P., ("Wells OP") is a Delaware Limited partnership having
Wells Real Estate Investment Trust, Inc. (the "Wells REIT"), a Maryland
corporation, as its general partner.
As of March 31, 1999, the Partnership owned interests in the following
properties through its ownership of the foregoing joint ventures: (i) a
three-story office building in Knoxville, Tennessee (the "ABB Building"),
which is owned by the Fund IX-X-XI-REIT
7
<PAGE>
Joint Venture, (ii) a two-story office building located in Louisville,
Boulder County, Colorado (the "Ohmeda Building"), which is owned by the
Fund IX-X-XI-REIT Joint Venture, (iii) a three-story office building
located in Broomfield, Boulder Colorado (the "360 Interlocken Building"),
which is owned by Fund IX-X-XI-REIT Joint Venture, (iv) a one-story
warehouse facility located in Ogden, Utah ("Iomega Building"), which is
owned by Fund IX-X-XI-REIT Joint Venture, (v) a one-story office building
located in Oklahoma City, Oklahoma (the "Lucent Technologies Building"),
which is owned by Fund IX-X-XI-REIT Joint Venture, (vi) a one-story office
and warehouse building located in Fountain Valley, California (the "Cort
Building "), which is owned by Wells / Orange County Associates (the "Cort
Joint Venture"), a joint venture between the Fund X-XI Joint Venture and
Wells Operating Partnership , L.P., and (vii) a two-story warehouse and
office building located in Fremont, California (the "Fairchild Building"),
which is owned by Wells/Fremont Joint Venture (the "Fremont Joint
Venture"), a joint venture between the Fund X-XI Joint Venture and Wells
Operating Partnership, L.P.
(b) Basis of Presentation
-------------------------
The financial statements of Wells Real Estate Fund X, L.P. (the
"Partnership") have been prepared in accordance with instructions to Form
10-Q and do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
These quarterly statements have not been examined by independent
accountants, but in the opinion of the General Partners, the statements for
the unaudited interim periods presented include all adjustments, which are
of a normal and recurring nature, necessary to present a fair presentation
of the results for such periods. For further information, refer to the
financial statements and footnotes included in the Partnership's Form 10-K
for the year ended December 31, 1998.
(2) Investment in Joint Ventures
----------------------------
The Partnership owns interests in seven office buildings as of March 31,
1999, through its ownership in the Fund IX-X-XI-REIT Joint Venture and the
Fund X-XI Joint Venture. The Partnership does not have control over the
operations of these Joint Ventures; however, it does exercise significant
influence. Accordingly, investment in joint ventures is recorded on the
equity method. For further information on investments in joint ventures,
see Form 10-K for the Partnership for the year ended December 31, 1998.
The following describes additional information about the properties in
which the Partnership owned an interest as of March 31, 1999.
Fund IX, Fund X, Fund XI and REIT Joint Venture
-----------------------------------------------
On June 11, 1998, Fund IX and Fund X Associates (the "Joint Venture"), a
joint venture between the Partnership and Wells Real Estate Fund IX, L.P.
("Wells Fund IX"), a Georgia public limited partnership was amended and
restated to admit the Wells Real Estate Fund XI, L.P. ("Wells Fund XI"), a
Georgia public limited partnership, and Wells Operating Partnership, L.P.
("Wells OP), a Delaware limited partnership. Wells Fund IX,
8
<PAGE>
Wells XI, Wells OP and the Wells REIT are all affiliates of the Partnership
and its General Partners.
The Joint Venture, which changed its name to the Fund IX-X-XI-REIT Joint
Venture, had previously acquired and owned the following three properties:
(i) the ABB Building located in Knoxville, Knox County, Tennessee, (ii) the
Ohmeda Building located in Louisville, Boulder County, Colorado, and (iii)
the 360 Interlocken Building located in Broomfield, Boulder County,
Colorado. On June 24, 1998, the Fund IX-X-XI-REIT Joint Venture purchased
the Lucent Technologies Building Located in Oklahoma City, Oklahoma County,
Oklahoma. On July 1, 1998, the Partnership contributed the Iomega Building
located in Ogden, Weber County, Utah to the Fund IX-X-XI-REIT Joint
Venture.
As of March 31, 1999, the Partnership had contributed $18,420,164 and held
an approximate 48.5% equity interest in the Fund IX-X-XI-REIT Joint
Venture. As of March 31, 1999, Wells Fund IX had an approximate 39% equity
interest, Wells Fund XI had a approximate 8.8% equity interest, and Wells
OP had an approximate 3.7% equity interest in the Fund IX-X-XI-REIT Joint
Venture.
Iomega Building
---------------
On March 22, 1999, the Fund IX-X-XI REIT Joint Venture purchased a 4.0 acre
tract of vacant land adjacent to the Iomega Building located in Ogden,
Utah. This site is intended to be additional parking and loading dock area
and will include at lease 400 new parking stalls and new site work for
truck maneuver space, in accordance with the requirements of the tenants
and the city of Ogden. The expected completion date of this project is
July 1, 1999. The tenant, Iomega Corporation, has agreed to extend the
term of its lease to April 30, 2009 and will pay as additional base rent an
amount equal to thirteen percent (13%) per annum, payable in monthly
installments of the direct and indirect cost of acquiring the property and
constructing the improvements. This additional base rent is due and
payable commencing on May 1, 1999.
The land was purchased at a cost of $212,000 excluding acquisitions costs.
It is anticipated that the total cost to complete the project will be
$612,689. The funds used to acquire the land and for the improvements are
being funded entirely out of capital contributions made by Wells Fund XI to
the Fund IX-X-XI-REIT Joint Venture in the amount of $851,000.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
- -------------------------------------------------------------------------
RESULTS OF OPERATION.
- ---------------------
The following discussion and analysis should be read in conjunction with the
accompanying financial statements of the Partnership and notes thereto. This
Report contains forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934,
including discussion and analysis of the financial condition of the Partnership,
anticipated capital expenditures required to complete certain projects, amounts
9
<PAGE>
of cash distributions anticipated to be distributed to Limited Partners in the
future and certain other matters. Readers of this Report should be aware that
there are various factors that could cause actual results to differ materially
from any forward-looking statement made in this Report, which include
construction costs which may exceed estimates, construction delays, lease-up
risks, inability to obtain new tenants upon expiration of existing leases, and
the potential need to fund tenant improvements or other capital expenditures out
of operating cash flow.
Results of Operations and Changes in Financial Conditions
- ---------------------------------------------------------
General
- -------
The Partnership commenced active operations on February 4, 1997, when it
received and accepted subscriptions for 125,000 units. An aggregate requirement
of $2,500,000 of offering proceeds was reached on February 25, 1997, thus
allowing for the admission of New York and Pennsylvania investors into the
Partnership. The offering was terminated on December 30, 1997. As of March 31,
1999, the Partnership had sold 2,116,099 Class A Status Units and 596,792 Class
B Status Units, held by a total of 1,593 and 219 Class A and Class B Limited
Partners respectively, for total Limited Partner contributions of $27,128,912.
After payment of $1,085,157 in acquisition and advisory fees, payment of
$4,069,338 in selling commissions and organization and offering expenses, the
investment of $18,420,164 in the Fund IX-X-XI-REIT Joint Venture, and the
investments of $3,296,233 in the Fund X-XI Joint Venture, as of March 31, 1999,
the Partnership was holding net offering proceeds of $258,018 available for
investment in properties.
As of March 31, 1999, developed properties owned by the Partnership were 99.7%
occupied as compared to 99.75% occupied at March 31, 1998. Gross revenues of
the Partnership increased to $347,197 from $230,605 for the three months ended
March 31, 1999 and 1998, respectively. The increase was primarily due to
earnings from joint ventures whereas in 1998 revenues consisted primarily of
interest income earned on funds held by the Partnership prior to the investment
in properties. Expenses of the partnership increased to $31,456 from $19,627
for the three months ended March 31, 1999 and 1998, respectively. The increase
was due largely to an increase in administrative salaries and legal expenses.
Net income per weighted average unit for Class A Limited Partners was $0.27 for
the three months ended March 31, 1999, as compared to $0.16 for the same period
in 1998.
Net loss per weighted average unit for Class B Limited Partners was $0.45 for
the three months ended March 31, 1999, and $0.16 for the same period in 1998.
The Partnership's distributions from net cash from operations accrued to Class A
unit holders for the first quarter of 1999 was $0.25 per weighted average unit
as compared to $0.12 in 1998.
10
<PAGE>
Year 2000 Compliance
- --------------------
The Partnership is presently reviewing the potential impact of Year 2000
compliance issues on its information systems and business operations. A full
assessment of Year 2000 compliance issues was begun in late 1997 and was
completed by March 31, 1999. Renovations and replacements of equipment have
been and are being made as warranted. The costs incurred by the Partnership and
its affiliates thus far for renovations and replacements have been immaterial.
Some testing of systems has begun and all testing is expected to be complete by
June 30, 1999.
As to the status of the Partnership's information technology systems, it is
presently believed that all major systems and software packages with the
exception of the accounting and property management package are Year 2000
compliant. The Partnership's affiliated entities are purchasing the upgrade for
the accounting and property management package system; however, it is not
expected to be available until the end of the second quarter of 1999. At the
present time, it is believed that all non-major information technology systems
are Year 2000 compliant. The cost to upgrade any non-compliant systems is
believed to be immaterial.
The Partnership is in the process of confirming with the Partnership's vendors,
including third-party service providers such as banks, that their systems will
be Year 2000 compliant. Based on the information received thus far, the primary
third-party service providers with which the Partnership has relationships have
confirmed their Year 2000 readiness.
The Partnership relies on computers and operating systems provided by equipment
manufacturers, and also on application software designed for use with its
accounting, property management and investment portfolio tracking. The
Partnership has preliminarily determined that any costs, problems or
uncertainties associated with the potential consequences of Year 2000 issues are
not expected to have a material impact on the future operations or financial
condition of the Partnership. The Partnership will perform due diligence as to
the Year 2000 readiness of each property owned by the Partnership and each
property contemplated for purchase by the Partnership.
The Partnership's reliance on embedded computer systems (i.e., microcontrollers)
is limited to facilities related matters, such as office security systems and
environmental control systems.
The Partnership is currently formulating contingency plans to cover any areas of
concern. Alternate means of operating the business are being developed in the
unlikely circumstance that the computer and phone systems are rendered
inoperable. An off-site facility from which the Partnership could operate is
being sought as well as alternate means of communication with key third-party
vendors. A written plan is being developed for testing and dispensation to each
staff member of the General Partner of the Partnership.
Management believes that the Partnership's risk of Year 2000 problems is
minimal. In the unlikely event there is a problem, the worst case scenarios
would include the risks that the elevator or security systems within the
Partnership's properties would fail or the key third-party vendors upon which
the Partnership relies would be unable to provide accurate investor information.
In the event that the elevator shuts down, the Partnership has devised a plan
for each building whereby the
11
<PAGE>
tenants will use the stairs until the elevators are fixed. In the event that the
security system shuts down, the Partnership has devised a plan for each building
to hire temporary on-site security guards. In the event that a third-party
vendor has Year 2000 problems relating to investor information, the Partnership
intends to perform a full system back-up of all investor information as of
December 31, 1999 so that the Partnership will have accurate hard-copy investor
information.
Liquidity and Capital Resources
- -------------------------------
The Partnership expects to continue to meet its short-term liquidity
requirements generally through net cash provided by operations which the
Partnership believes will continue to be adequate to meet both operating
requirements and distributions to limited partners. At this time, given the
nature of the joint venture in which the Partnership has invested, there are no
known improvements or renovations to the properties expected to be funded from
cash flow from operations.
The Partnership expects to make future real estate investments, directly or
through investments in joint ventures, from limited partners' capital
contributions. As of March 31, 1999, the Partnership was holding $258,018
available for investment in properties
12
<PAGE>
Property Operations
- -------------------
As of March 31, 1999, the Partnership owned interests in the following
operational properties:
The ABB Building/Fund IX-X-XI-REIT Joint Venture
- ------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 31, 1999 March 31, 1998
----------------------------------- -----------------------------------
<S> <C> <C>
Revenues:
Rental income $260,092 $190,986
Interest Income 15,060 0
-------- --------
275,152 190,986
-------- --------
Expenses:
Depreciation 134,100 91,094
Management & leasing expenses 21,386 25,282
Operating costs, net of reimbursements (11,607) 37,768
-------- --------
143,879 154,144
-------- --------
Net income $131,273 $ 36,842
======== ========
Occupied % 98.2% 67%
Partnership's ownership % in the
Fund IX-X-XI-REIT Joint Venture 48.5% 47.1%
Cash distribution to Partnership $129,466 $ 26,285
Net income allocated to the Partnership $ 64,617 $ 18,941
</TABLE>
ABB Environmental Systems, a subsidiary of ABB, Inc., occupied its leased space
of 56,012 rentable square feet comprising approximately 67% of the building in
December 1997. The initial term of the lease is 9 years and 11 months. ABB has
the option to extend the initial term of the lease for two consecutive five year
periods. The annual base rent payable during the initial term is $646,250
payable in equal monthly installments of $53,854 during the first five years and
$728,750 payable in equal monthly installments of $60,729 during the last four
years and 11 months of the initial term. The annual base rent for each extended
term will be at market rental rates. In addition to the base rent, ABB is
required to pay additional rent equal to its share of operating expenses during
the lease term. Another tenant has occupied 23,490 rental square feet bringing
the occupancy to 98%.
Wells Fund IX contributed an additional $79,566 towards the completion of this
project. It is currently anticipated that the total cost to complete the
project will be approximately $90,434, to the contributed by Wells Fund IX.
13
<PAGE>
Rental income increased in 1999 over 1998 due primarily to the increased
occupancy level of the property. Total expenses decreased due to an offset of
tenant reimbursements in operating costs, which resulted in a negative number.
Cash distributions for the quarter increased significantly in 1999 over the 1998
amount due to the increase in rental income.
The Ohmeda Building/Fund IX-X-XI-REIT Joint Venture
- ---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Two Months Ended
------------------- -----------------
March 31, 1999 March 31, 1998
------------------- -----------------
<S> <C> <C>
Revenues:
Rental income $256,829 $134,084
-------- --------
Expenses:
Depreciation 81,576 54,384
Management & leasing expenses 11,618 0
Operating costs, net of reimbursements 363 (699)
-------- --------
93,557 53,685
-------- --------
Net income $163,272 $ 80,399
======== ========
Occupied % 100% 100%
Partnership's ownership % in the
Fund IX-X-XI-REIT Joint Venture 48.5% 47.1%
Cash distribution to Partnership $117,727 $ 62,818
Net income allocated to the Partnership $ 80,377 $ 41,795
</TABLE>
On February 13, 1998, Fund IX-X-XI-REIT Joint Venture acquired a two story
office building containing approximately 106,750 rentable square feet on a 15-
acre tract of land located in Louisville, Boulder County, Colorado for a
purchase price of $10,325,000 excluding acquisition costs.
The entire Ohmeda building is currently under a net lease with Ohmeda, Inc. The
lease currently expires in January 2005. The monthly base rental payable under
the lease is $83,709.79 through January 31, 2003; $87,890.83 from February 1,
2003 through January 31, 2004; and $92,249.79 from February 1, 2004 through
January 31, 2005. Under the lease, Ohmeda is responsible for all utilities,
taxes, insurance and other operating costs with respect to the Ohmeda Building
under the term of the lease. In addition, Ohmeda shall pay a $21,000 per year
management fee for maintenance and administrative services of the Ohmeda
Building. The Fund IX-X-XI-REIT Joint Venture, as landlord, is responsible for
maintenance of the roof, exterior and structural walls, foundations, other
structural members and floor slab, provided that the landlord's obligation to
make repairs specifically excludes items of cosmetic and routine maintenance
such as the painting of walls.
14
<PAGE>
Since the Ohmeda Building was purchased in February 1998, comparative income and
expense figures are available for only two months of the prior quarter.
The 360 Interlocken Building/Fund IX-X-XI-REIT Joint Venture
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Three Month Ended One Month Ended
----------------- ---------------
March 31, 1999 March 31, 1998
-------------------------------- ---------------------------------
<S> <C> <C>
Revenues:
Rental income $206,522 $26,133
-------- -------
Expenses:
Depreciation 71,670 23,574
Management & leasing expenses 17,864 0
Operating costs, net of reimbursements (2,250) 0
-------- -------
87,284 23,574
-------- -------
Net income $119,238 $ 2,559
======== =======
Occupied % 100% 100%
Partnership's ownership % in the
Fund IX-X-XI-REIT Joint Venture 48.5% 47.1%
Cash distributed to Partnership $ 93,138 $12,315
Net income allocated to the Partnership $ 58,594 $ 1,206
</TABLE>
On March 20, 1998, the Fund IX-X-XI-REIT Joint Venture acquired a three-story
multi-tenant office building containing approximately 51,974 rentable square
feet on a 5.1 acre tract of land in Broomfield, Boulder County, Colorado for a
purchase price of $8,275,000, excluding acquisition costs.
The 360 Interlocken Building was completed in December 1996. The first floor
has multiple tenants and contains 15,599 rentable square feet; the second floor
is leased to ODS Technologies, L.P. and contains 17,146 rentable square feet;
and the third floor is leased to Transecon, Inc. and contains 19,229 rentable
square feet.
Since the 360 Interlocken Building was purchased in March 1998, comparable
income and expense figures for the quarter year are available for only one
month. Operating costs were negative for the first quarter due to tenant
reimbursements being greater than operating expenses. This also includes
reimbursement for management and leasing expenses.
15
<PAGE>
Lucent Technologies Building / Fund IX-X-XI-REIT Joint Venture
- --------------------------------------------------------------
<TABLE>
<CAPTION>
Three Month Ended
-------------------------------------
March 31, 1999
-------------------------------------
<S> <C>
Revenues:
Rental income $145,752
--------
Expenses:
Depreciation 45,801
Management & leasing expenses 5,370
Operating costs, net of reimbursements 3,014
--------
54,185
--------
Net income $ 91,567
========
Occupied % 100%
Partnership's ownership % in the
Fund IX-X-XI-REIT Joint Venture 48.5%
Cash distributed to Partnership $ 61,971
Net income allocated to the Partnership $ 45,091
</TABLE>
On June 24, 1998, Fund IX-X-XI-REIT Joint Venture acquired a one-story office
building containing approximately 57,186 rentable square feet on a 5.3 acre
tract of land in Oklahoma City, Oklahoma (the "Lucent Technologies Building")
for a purchase price of $5,504,276, excluding acquisitions cost.
The Lucent Technologies Building was completed in january 1998 with Lucent
Technologies occupying the entire building. Under the terms of the lease, the
tenant is responsible for most utilities, property taxes and other operating
expenses.
Since the Lucent Technologies Building was purchased by the IX-X-XI-REIT Joint
Venture in June 1998, comparable income and expense figures for the period are
not available.
16
<PAGE>
Iomega Building / Fund IX-X-XI-REIT Joint Venture
- -------------------------------------------------
<TABLE>
<CAPTION>
Three Month Ended
-------------------------------------
March 31, 1999
-------------------------------------
<S> <C>
Revenues:
Rental income $123,873
Expenses:
Depreciation 48,495
Management & leasing expenses 5,603
Operating costs, net of reimbursements (1,713)
--------
52,385
--------
Net income $ 71,488
========
Occupied % 100%
Partnership's ownership % in the
Fund IX-X-XI-REIT Joint Venture 48.5%
Cash distributed to Partnership $ 57,170
Net income allocated to the Partnership $ 35,205
</TABLE>
On April 1, 1998, the Partnership acquired a single story warehouse and office
building containing approximately 108,250 rentable square feet on a 8.0 acre
tract of land on Ogden, Weber County, Utah (the "Iomega Building") for a
purchase price of $5,025,000. The entire Iomega Building is under a net lease
with Iomega Corporation until July 31, 2006.
On July 1, 1998, the Partnership contributed the Iomega Building to the Fund IX-
X-XI-REIT Joint Venture. Since the Iomega Building was purchased in April, 1998
comparable income and expense figures are not available. Other operating
expenses were negative for the first quarter due to tenant reimbursements
reflected in this category. This also includes reimbursements from management
and leasing expense.
17
<PAGE>
Cort Building / Wells / Orange County Joint Venture
- ---------------------------------------------------
<TABLE>
<CAPTION>
Three Month Ended
-------------------------------------
March 31, 1999
-------------------------------------
<S> <C>
Revenues:
Rental income $198,885
--------
Expenses:
Depreciation 46,641
Management & leasing expenses 7,590
Other operating expenses 8,172
--------
62,403
--------
Net income $136,482
========
Occupied % 100%
Partnership's ownership % 35.1%
Cash distributed to Partnership $ 56,845
Net income allocated to the Partnership $ 44,592
</TABLE>
On July 31, 1998, the Cort Joint Venture acquired a one-story office and
warehouse building containing approximately 52,000 rentable square feet on a
3.65 acre tract of land in Fountain Valley, California (the "Cort Building") for
a purchase price of $6,400,000, excluding acquisitions costs.
The Cort Building is 100% occupied by one tenant with a 15-year lease term that
commenced on November 1, 1988 and expires on October 31, 2003. The monthly base
rent payable under the lease is $63,247 through April 30, 2001, at which time
the monthly base rent will be increased 10% to $69,574 for the remainder of the
lease term. The lease is a triple net lease, whereby the terms of the lease
require the tenant to reimburse the Cort Joint Venture of certain operating
expenses, as defined in the lease, related on the building.
Since the Cort Building was purchased in July 1988, comparable income and
expenses figures for the prior year are not available.
18
<PAGE>
Fairchild Building / Wells / Fremont Joint Venture
- --------------------------------------------------
<TABLE>
<CAPTION>
Three Month Ended
-------------------------------------
March 31, 1999
-------------------------------------
<S> <C>
Revenues:
Rental income $225,210
--------
Expenses:
Depreciation 71,382
Management & leasing expenses 9,324
Other operating expenses 1,000
--------
81,706
--------
Net income $143,504
========
Occupied % 100%
Partnership's ownership % 11.25%
Cash distributed to Partnership $ 26,235
Net income allocated to the Partnership $ 18,723
</TABLE>
On July 21, 1998, the Wells/Fremont Joint Venture acquired a two-story warehouse
and office building containing approximately 58,424 rentable square feet on a
3.05 acre tract of land in Fremont, California (the "Fairchild Building") for a
purchase price of $8,900,000 excluding acquisitions costs.
The building is 100% occupied by Fairchild Technologies, U.S.A., Inc. with a
lease expiration of November 30, 2004. The monthly base rent payable under the
lease is $68,128 with a 3% increase on each anniversary of the commencement
date. The lease is a triple net lease, whereby the terms of the lease require
the tenant to reimburse the landlord for certain operating expenses, as defined
in the lease, related to the building.
Since the Fairchild Building was purchased in July of 1998, comparable income
and expense figures for the prior year are not available.
19
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
Item 6(b). No reports on Form 8-K were filed during the first quarter of
1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WELLS REAL ESTATE FUND X, L.P.
(Registrant)
Dated: May 11, 1999 By: /s/ Leo F. Wells, III
----------------------------------
Leo F. Wells, III, as Individual
General Partner and as President
and Chief Financial
Officer of Wells Capital, Inc., the
General Partner of Wells Partners, L.P.
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 286,628
<SECURITIES> 21,931,925
<RECEIVABLES> 544,671
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 22,796,774
<DEPRECIATION> 0
<TOTAL-ASSETS> 22,796,774
<CURRENT-LIABILITIES> 536,088
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 22,260,686
<TOTAL-LIABILITY-AND-EQUITY> 22,796,774
<SALES> 0
<TOTAL-REVENUES> 347,197
<CGS> 0
<TOTAL-COSTS> 31,456
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 315,741
<INCOME-TAX> 315,741
<INCOME-CONTINUING> 315,741
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 315,741
<EPS-PRIMARY> .27
<EPS-DILUTED> 0
</TABLE>
