<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, 2000 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 0-25731
---------------------------------------------------------
WELLS REAL ESTATE FUND XI, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Georgia 58-2250094
- ------------------------------------------------ ---------------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer Identification Number)
organization)
6200 The Corners Pkwy., Norcross, Georgia 30092
- ------------------------------------------------ ---------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
---------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
(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 XI, L.P.
(A Georgia Public Limited Partnership)
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets--March 31, 2000 and December 31, 1999 3
Statement of Income for the Three Months ended March 31, 2000
and 1999 4
Statement of Partners' Capital for the Year Ended December 31, 1999
and the Three Months Ended March 31, 2000 5
Statement of Cash Flows for the Three Months Ended March 31, 2000
and 1999 6
Condensed Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 8
PART II. OTHER INFORMATION 21
</TABLE>
-2-
<PAGE>
WELLS REAL ESTATE FUND XI, L.P.
(A Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------ -----------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 35,552 $ 22,351
Investment in joint ventures (Note 2) 13,998,255 14,093,790
Due from affiliates 332,946 314,099
Prepaid expenses and other assets 10,560 10,560
----------- -----------
Total assets $14,377,313 $14,440,800
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Due to affiliates $ 65,000 $ 65,000
Partnership distributions payable 300,803 275,737
----------- -----------
Total liabilities 365,803 340,737
----------- -----------
Partners' capital:
Limited partners:
Class A--1,337,656 units outstanding at March 31, 2000 and
1,336,906 units at December 31, 1999 11,844,148 11,804,940
Class B--315,624 units outstanding at March 31, 2000 and
316,374 units at December 31, 1999 2,167,362 2,295,123
----------- -----------
Total partners' capital 14,011,510 14,100,063
----------- -----------
Total liabilities and partners' capital $14,377,313 $14,440,800
=========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
-3-
<PAGE>
WELLS REAL ESTATE FUND XI, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
March 31, March 31,
2000 1999
----------- -----------
<S> <C> <C>
REVENUES:
Equity in income of joint ventures $ 237,447 $ 88,677
Interest income 0 71,822
--------- --------
237,447 160,499
--------- --------
EXPENSES:
Accounting and legal 12,782 14,210
Partnership administration 9,349 17,068
Computer cost 3,067 1,664
Amortization 0 1,562
--------- --------
25,198 34,504
--------- --------
NET INCOME $ 212,249 $125,995
========= ========
NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS $ 334,569 $174,372
========= ========
NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS $(122,320) $(48,377)
========= ========
NET INCOME PER CLASS A WEIGHTED AVERAGE LIMITED PARTNER UNIT $ 0.25 $ 0.13
========= ========
NET LOSS PER CLASS B WEIGHTED AVERAGE LIMITED PARTNER UNIT $ (0.39) $ (0.14)
========= ========
CASH DISTRIBUTION PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT $ 0.23 $ 0.15
========= ========
</TABLE>
See accompanying condensed notes to financial statements.
-4-
<PAGE>
WELLS REAL ESTATE FUND XI, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1999
AND THE THREE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Limited Partners
--------------------------------------------------
Class A Class B
------------------------- -----------------------
Original Units Amounts Units Amounts Capital
---------- ---------- ------------ -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, $ 100 1,302,942 $11,439,315 350,338 $2,961,011 $14,400,426
1998
Net income (loss) 0 0 1,009,368 0 (378,840) 630,528
Partnership distributions 0 0 (930,791) 0 0 (930,791)
Class B conversion 0 33,964 287,048 (33,964) (287,048) 0
Return of capital (100) 0 0 0 0 (100)
----- --------- ----------- -------- ---------- -----------
BALANCE, December 31, 0 1,336,906 11,804,940 316,374 2,295,123 14,100,063
1999
Net income (loss) 0 0 334,569 0 (122,320) 212,249
Partnership distributions 0 0 (300,802) 0 0 (300,802)
Class B conversions 0 750 5,441 (750) (5,441) 0
----- --------- ----------- ------- ---------- -----------
BALANCE, March 31, 2000 $ 0 1,337,656 $11,844,148 315,624 $2,167,362 $14,011,510
===== ========= =========== ======= ========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
-5-
<PAGE>
WELLS REAL ESTATE FUND XI, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
March 31, March 31,
2000 1999
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 212,249 $ 125,995
Adjustments to reconcile net income to net cash used in operating
activities:
Equity in income of joint venture (237,447) (88,677)
Changes in assets and liabilities:
Amortization of organization costs 0 1,562
Decrease in account payable 0 (214,609)
(Decrease) increase due to affiliates 0 3,606
--------- -----------
Net cash used in operating activities (25,198) (172,123)
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions received from joint ventures 314,135 125,827
Investment in joint venture 0 (851,000)
--------- -----------
Net cash provided by (used in) investing activities 314,135 (725,173)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to Partners from accumulated earnings (275,736) (141,007)
--------- -----------
Net cash used in financing activities (275,736) (141,007)
--------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 13,201 (1,129,448)
CASH AND CASH EQUIVALENTS, beginning of year 22,351 9,292,800
--------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 35,552 $ 8,163,352
========= ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
Deferred project costs applied to joint venture property $ 0 $ 35,417
========= ===========
</TABLE>
See accompanying condensed notes to financial statements.
-6-
<PAGE>
WELLS REAL ESTATE FUND XI, L.P.
(A Georgia Public Limited Partnership)
CONDENSED NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) General
Wells Real Estate Fund XI, 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, 1997, the Partnership commenced a public offering of up to
$35,000,000 of limited partnership units ($10 per unit) pursuant to a
Registration Statement on Form S-11 filed under the Securities Act of 1933.
The Partnership commenced active operations on March 3, 1998 when it
received and accepted subscriptions for 125,000 units. The offer terminated
on December 31, 1998 at which time the Partnership had sold 1,314,906 Class
A Status Units, and 338,374 Class B Status Units, held by a total of 1,250
and 95 Class A and Class B Limited Partners, respectively, for total
Limited Partner capital contributions of $16,532,802. As of March 31, 2000,
the Partnership had paid a total of $578,648 in acquisition and advisory
fees and expenses, $2,066,600 in selling commissions and organization and
offering expenses, invested $3,357,436 in the Fund IX-X-XI-REIT Joint
Venture, $2,398,767 in the Fund X-XI Joint Venture, and $8,131,351 in the
Fund XI-XII-REIT Joint Venture.
The Partnership owns interests in properties through equity ownership in
the following joint ventures: (i) the Fund X and Fund XI Joint Venture, a
joint venture between the Partnership and Wells Real Estate Fund X, L.P.
(the "Fund X-XI Joint Venture"); (ii) the Fund IX-X-XI-REIT Joint Venture,
a joint venture among the Partnership and Wells Real Estate Fund IX, L.P.,
Wells Real Estate Fund X, L.P., and Wells Operating Partnership, L.P.
("Wells OP"), a Delaware limited partnership having Wells Real Estate
Investment Trust, Inc., as general partner (the "Fund IX-X-XI-REIT Joint
Venture"); and (iii) the Fund XI-XII-REIT Joint Venture, a joint venture
among the Partnership and Wells Real Estate Fund XII, L.P., and Wells OP
(the "Fund XI-XII-REIT Joint Venture").
As of March 31, 2000, 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 Joint Venture; (ii) a two-story
office building located in 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, Colorado (the "360
Interlocken Building"), which is owned by the Fund IX-X-XI-REIT Joint
Venture; (iv) a one-story office building in Oklahoma City, Oklahoma (the
"Lucent Technologies Building"), which is owned by the Fund IX-X-XI-REIT
Joint Venture; (v) a single-story warehouse and office building located in
Ogden, Weber County, Utah (the "Iomega Building"), which is owned by the
Fund IX-X-XI-REIT Joint Venture; (vi) a two-story office building located
in Fremont, California (the "Fairchild Building"), which is owned
-7-
<PAGE>
by Wells/Fremont Associates (the "Fremont Joint Venture"), a joint venture
between the Fund X-XI Joint Venture and Wells OP; (vii) 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 OP; (viii) a two-story manufacturing and office building located in
Fountain Inn, South Carolina (the "EYBL CarTex Building"), which is owned
by Fund XI-XII-REIT Joint Venture; (ix) a three-story office building
located in Leawood, Johnson County, Kansas (the "Sprint Building"), which
is owned by Fund XI-XII-REIT Joint Venture; (x) a one-story office building
and warehouse located in Tredyffin Township, Chester County, Pennsylvania
(the "Johnson Matthey Building"), which is owned by Fund XI-XII-REIT Joint
Venture; and (xi) a two-story office building located in Ft. Myers, Lee
County, Florida (the "Gartner Building"), which is owned by Fund XI-XII-
REIT Joint Venture.
(b) Basis of Presentation
The financial statements of Wells Real Estate Fund XI, 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, 1999.
2. INVESTMENTS IN JOINT VENTURES
The Partnership owns interests in eleven properties as of March 31, 2000
through its ownership in joint ventures. The Partnership does not have
control over the operations of the joint venture; however, it does exercise
significant influence. Accordingly, investments in joint ventures are
recorded using the equity method. For further information on investments in
joint ventures, see Form 10-K for the Partnership for the year ended
December 31, 1999.
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 Section 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 of cash distributions anticipated to be
distributed to the 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 statements made in this report, which include construction
costs which may exceed estimates, construction delays, lease-up risks,
inability to obtain new tenants upon the expiration of existing leases, and
the potential need to fund tenant improvements or other capital
expenditures out of operating cash flow.
-8-
<PAGE>
1. RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
As of March 31, 2000, the properties owned by the Partnership were 100%
occupied as compared to 99.8% occupied at March 31, 1999. Gross revenues of
the Partnership increased to $237,447 from $160,499 for the three months
ended March 31, 2000 and 1999, respectively. The increase was attributable
primarily to increase in equity in income of joint ventures as the
Partnership invested in four additional joint venture properties. Expenses
of the Partnership were $25,198 for the three months ended March 31, 2000,
as compared to $34,504 for the same period in 1999. The decrease was due to
a decrease in administrative salaries as well as amortization expenses.
The Partnership's net cash used in operating activities was $25,198 for
2000 as compared to $172,123 for 1999 which is due primarily to changes in
liabilities. Net cash provided by (used in) investing activities increased
to $314,135 from ($725,173) as investing in joint ventures decreased. Net
cash used in financing activities increased from $141,007 to $275,736 due
to increased distributions to partners from accumulated earnings. Cash and
cash equivalents decreased from $8,163,352 as of March 31, 1999 to $35,552
for the same period in 2000.
Net income per weighted average unit for Class A Limited Partners was $.25
and $.13 for the three months ended March 31, 2000 and 1999, respectively.
Net loss per weighted average unit for Class B Limited Partners was $.39
for the three months ended March 31, 2000 as compared to $.14 for the same
period in 1999.
The Partnership's distributions from net cash from operations accrued to
Class A unit holders for the first quarter of 2000 was $.23 per weighted
average unit, as compared to $.15 for the same period in 1999.
The Partnership currently anticipates that distributions will continue to
be paid on a quarterly basis on a level at least consistent with 2000
distributions.
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 ventures 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.
-9-
<PAGE>
2. PROPERTY OPERATIONS
As of March 31, 2000, 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, March 31,
2000 1999
--------- ---------
<S> <C> <C>
Revenues:
Rental income $315,165 $260,092
Interest income 17,728 15,060
-------- --------
332,893 275,152
-------- --------
Expenses:
Depreciation 98,454 134,100
Management and leasing expenses 25,253 21,386
Other operating expenses (6,063) (11,607)
-------- --------
117,644 143,879
-------- --------
Net income $215,249 $131,273
======== ========
Occupied percentage 100% 98%
======== ========
Partnership's ownership percentage 8.86% 8.84%
======== ========
Cash distributions to the Partnership $ 27,475 $ 19,507
======== ========
Net income allocated to the Partnership $ 19,077 $ 9,722
======== ========
</TABLE>
Net income increased in 2000, over 1999, due primarily to the increased
occupancy level of the property. Total expenses decreased due to a decrease in
depreciation expense. Other operating expenses are negative due to an offset of
tenant reimbursements in operating costs, as well as management and leasing fee
reimbursements. Tenants are billed an estimated amount for the current year
common area maintenance which is then reconciled the following year and the
difference billed to the tenant. Cash distributions increased in 2000, over
1999, due to a combination of increased rental income and decreased expenses.
The Partnership's ownership percentage increased due to the contribution of
additional cash by the Partnership to the Fund IX-X-XI-REIT Joint Venture in the
second quarter of 1999. Wells Fund IX made additional cash contributions in the
first quarter of 2000 to the Fund IX-X-XI-REIT Joint Venture.
It is currently anticipated that the total cost to complete the necessary tenant
improvements estimated to be approximately $50,000 will be contributed by Fund
X. This tenant improvement relates to 23,992 rentable square feet of additional
space leased by ABB after a former tenant, The Associates, vacated the space.
-10-
<PAGE>
The Lucent Technologies Building/Fund IX-X-XI-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
March 31, March 31,
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Rental income $145,752 $ 145,752
------------- -------------
Expenses:
Depreciation 45,801 45,801
Management and leasing expenses 5,370 5,370
Other operating expenses 3,481 3,014
------------- -------------
54,652 54,185
------------- -------------
Net income $ 91,100 $ 91,567
============= =============
Occupied percentage 100% 100%
============= =============
Partnership's ownership percentage 8.86% 8.84%
============= =============
Cash distributions to the Partnership $ 11,201 $ 9,286
============= =============
Net income allocated to the Partnership $ 8,074 $ 6,747
============= =============
</TABLE>
Rental income, net income and distributions remained relatively stable as
compared to 1999 due to the stable occupancy rate. The Partnership's ownership
interest in the Fund IX-X-XI-REIT Joint Venture increased due to additional
capital contributions made by the Partnership to the Joint Venture in the second
quarter of 1999. Wells Fund IX made additional cash contributions in the first
quarter of 2000 to the Fund IX-X-XI-REIT Joint Venture.
-11-
<PAGE>
The Ohmeda Building/Fund IX-X-XI-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
March 31, March 31,
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Rental income $256,829 $ 256,829
------------- -------------
Expenses:
Depreciation 81,576 81,576
Management and leasing expenses 17,001 11,618
Other operating expenses 27,594 363
------------- -------------
126,171 93,557
------------- -------------
Net income $130,658 $ 163,272
============= =============
Occupied percentage 100% 100%
============= ============
Partnership's ownership percentage 8.86% 8.84%
============= =============
Cash distributions to the Partnership $ 18,304 $ 17,690
============= =============
Net income allocated to the Partnership $ 11,580 $ 12,073
============= =============
</TABLE>
Net income decreased in 2000, as compared to 1999, due to an overall increase in
expenses. Operating expenses increased significantly due to the rise in real
estate taxes which stemmed from the revaluation of the property by Boulder
County authorities in 1999. Cash distributions have increased largely because of
the decrease in net income. The Partnership's ownership percentage increased due
to additional capital contributions made by the Partnership to the IX-X-XI-REIT
Joint Venture in the second quarter of 1999. Wells Fund IX made additional cash
contributions in the first quarter of 2000 to the Fund IX-X-XI-REIT Joint
Venture.
-12-
<PAGE>
The 360 Interlocken Building/Fund IX-X-XI-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
March 31, March 31,
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Rental income $ 206,189 $ 206,522
-------------- --------------
Expenses:
Depreciation 71,670 71,670
Management and leasing expenses 20,907 17,864
Other operating expenses, net of reimbursements (16,920) (2,250)
-------------- --------------
75,657 87,284
-------------- --------------
Net income $ 130,532 $ 119,238
============== ==============
Occupied percentage 100% 100%
============== ==============
Partnership's ownership percentage 8.86% 8.84%
============== ==============
Cash distributions to the Partnership $ 18,040 $ 14,212
============== ==============
Net income allocated to the Partnership $ 11,566 $ 9,017
============== ==============
</TABLE>
Net income increased in 2000, as compared to 1999, due to an increase in CAM
reimbursement billed in 2000 to the tenants. Other operating expenses are
negative due to an offset of tenant reimbursements in operating costs, as well
as management and leasing fee reimbursement. Tenants are billed an estimated
amount for current year common area maintenance, which is then reconciled the
following year and the difference billed to the tenants.
Cash distributions and net income allocated to the Partnership for the quarter
increased in 2000, over 1999, due to an increase in net income. The
Partnership's ownership interest in the Fund IX-X-XI-REIT Joint Venture
increased due to additional capital contributions made by the Partnership to the
Joint Venture in the second quarter of 1999. Wells Fund IX made additional cash
contributions in the first quarter of 2000 to the Fund IX-X-XI-REIT Joint
Venture.
-13-
<PAGE>
The Iomega Building/Fund IX-X-XI-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
March 31, March 31,
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Rental income $ 168,250 $ 123,873
------------- -------------
Expenses:
Depreciation 55,062 48,495
Management and leasing expenses 7,280 5,603
Other operating expenses 5,148 (1,713)
------------- -------------
67,490 52,385
------------- -------------
Net income $ 100,760 $ 71,488
============= =============
Occupied percentage 100% 100%
============= =============
Partnership's ownership percentage 8.86% 8.84%
============= =============
Cash distributions to the Partnership $ 13,381 $ 8,566
============= =============
Net income allocated to the Partnership $ 8,930 $ 5,263
============= =============
</TABLE>
Rental income increased in 2000, as compared to 1999, due to the completion of
the parking lot complex in the second quarter of 1999. Total expenses increased
in 2000 over 1999 due to an increase in depreciation and real estate tax
expenses relating to the new parking lot. Cash distributions increased in 2000,
over 1999, due primarily to the increase in net income. The Partnership's
ownership interest in the Fund IX-X-XI-REIT Joint Venture increased due to
additional capital contributions made by the Partnership to the Joint Venture in
the second quarter of 1999. Wells Fund IX made additional cash contributions in
the first quarter of 2000 to the Fund IX-X-XI-REIT Joint Venture.
-14-
<PAGE>
Fairchild Building/Wells/Fremont Joint Venture
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
March 31, March 31,
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Rental income $ 225,195 $ 225,210
-------------- -------------
Expenses:
Depreciation 71,382 71,382
Management and leasing expenses 9,175 9,324
Other operating expenses 3,770 1,000
-------------- -------------
84,327 81,706
-------------- -------------
Net income $ 140,868 $ 143,504
============== =============
Occupied percentage 100% 100%
============== =============
Partnership's ownership percentage 9.7% 9.7%
============== =============
Cash distributions to the Partnership $ 19,899 $ 19,576
============== =============
Net income allocated to the Partnership $ 13,480 $ 13,913
============== =============
</TABLE>
Rental income, depreciation, and management and leasing expenses remained stable
in 2000, as compared to 1999, while other operating expenses are slightly higher
due primarily to increased expenditures for accounting fees.
-15-
<PAGE>
Cort Building/Wells/Orange County Joint Venture
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
March 31, March 31,
2000 1999
-------------- --------------
<S> <C> <C>
Revenues:
Rental income $ 198,885 $ 198,885
-------------- --------------
Expenses:
Depreciation 46,641 46,641
Management and leasing expenses 7,590 7,590
Other operating expenses 11,171 8,172
-------------- --------------
65,402 62,403
-------------- --------------
Net income $ 133,483 $ 136,482
============== ==============
Occupied percentage 100% 100%
============== ==============
Partnership's ownership percentage 23.5% 23.5%
============== ==============
Cash distributions to the Partnership $ 40,238 $ 41,166
============== ==============
Net income allocated to the Partnership $ 31,413 $ 32,118
============== ==============
</TABLE>
Rental income, depreciation, and management and leasing expenses remained stable
in 2000, as compared to 1999, while other operating expenses are slightly higher
due to increased expenditures for travel and taxes.
-16-
<PAGE>
EYBL CarTex Building/Wells Fund XI-XII-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 2000
--------------------
<S> <C>
Revenues:
Rental income $ 140,089
--------------------
Expenses:
Depreciation 49,901
Management and leasing expenses 5,721
Other operating expenses 9,840
--------------------
65,462
--------------------
Net income $ 74,627
====================
Occupied percentage 100%
====================
Partnership's ownership percentage 26.1%
====================
Cash distributions to the Partnership $ 26,224
====================
Net income allocated to the Partnership $ 19,514
====================
</TABLE>
On May 18, 1999, Wells Real Estate, LLC-SC I ("Wells LLC"), a Georgia limited
liability company wholly owned by the Wells Fund XI-XII-REIT Joint Venture
(which later admitted Wells Fund XII and changed its name to the Fund XI-XII-
REIT Joint Venture), acquired a manufacturing and office building containing
169,510 square feet located in Fountain Inn, unincorporated Greenville County,
South Carolina (the "EYBL CarTex Building"), for a purchase price of $5,085,000,
excluding acquisitions costs.
The building is 100% occupied by EYBL CarTex, Inc. with a lease expiration of
February 2008. The monthly base rent payable under the lease is $42,377.50 with
an increase to $45,905.95 in the fifth year, $49,440.42 in the seventh year, and
$50,853.00 in the ninth year. 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 EYBL CarTex Building was purchased in May of 1999, comparable income
and expense figures for the prior year are not available.
-17-
<PAGE>
The Sprint Building/Fund XI-XII-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 2000
--------------------
<S> <C>
Revenues:
Rental income $ 265,997
--------------------
Expenses:
Depreciation 81,779
Management and leasing expenses 11,239
Operating costs, net of reimbursements 6,324
--------------------
99,342
--------------------
Net income $ 166,655
====================
Occupied percentage 100%
====================
Partnership's ownership percentage 26.1%
====================
Cash distributions to the Partnership $ 60,715
====================
Net income allocated to the Partnership $ 43,577
====================
</TABLE>
On July 2, 1999, the Fund XI-XII-REIT Joint Venture acquired a three-story
office building with approximately 68,900 rentable square feet located in
Leawood, Johnson County (the "Sprint Building"), for the purchase price of
$9,546,210.
The entire Sprint Building is currently under a net lease with Sprint
Communications, Inc. and expires on May 18, 2007. Sprint has the option under
its lease to extend the initial term for two consecutive five-year periods. The
annual lease rent payable during the first five years of the initial term is
$999,050 in equal monthly installments of $83,254. The annual base rent during
the last five years of the lease is $1,102,400 in equal monthly installments of
$91,867. Under the lease, Sprint is responsible for all routine maintenance and
repairs. The Fund XI-XII-REIT Joint Venture, as landlord, is responsible for
repair and replacement of the exterior, roof, foundation, and structure.
Since the Sprint Building was purchased in July 1999, comparative income and
expense figures are not available for the prior year.
-18-
<PAGE>
Johnson Matthey Building/Fund XI-XII-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 2000
--------------------
<S> <C>
Revenues:
Rental income $ 214,474
--------------------
Expenses:
Depreciation 63,869
Management and leasing experiences 8,885
Operating costs, net of reimbursements 4,877
--------------------
77,631
--------------------
Net income $ 136,843
====================
Occupied percentage 100%
====================
Partnership's ownership percentage 26.1%
====================
Cash distributions to the Partnership $ 48,027
====================
Net income allocated to the Partnership $ 35,782
====================
</TABLE>
On August 17, 1999, the Fund XI-XII-REIT Joint Venture acquired a research and
development office and warehouse building containing approximately 130,000
rentable square feet on a ten-acre tract of land located in the Tredyffrin
Township, Chester County, Pennsylvania, for a purchase price of $8,000,000,
excluding acquisition costs. The entire Johnson Matthey Building is currently
under a net lease with Johnson Matthey, and was assigned to the Fund XI-XII-REIT
Joint Venture at closing. The lease currently expires in June 2007, and Johnson
Matthey has the right to extend the lease for two additional three-year periods
of time. The monthly base rent payable under the Johnson Matthey lease for the
remainder of the lease term is $65,812.50 through June 30, 2000, $67,437.50
through June 30, 2001, $69,062.50 through June 30, 2002, $71,229.17 through June
30, 2003, $72,854.17 through June 30, 2004, $74,750.00 through June 30, 2005,
$76,375.00 through June 30, 2006, and $78,270.84 through June 30, 2007. Under
the lease, Johnson Matthey is required to pay as additional rent all real estate
taxes, special assessments, utilities, taxes, insurance, and other operating
costs with respect to the Johnson Matthey Building during the term of the lease.
In addition, Johnson Matthey is responsible for all routine maintenance and
repairs to the Johnson Matthey Building. The Fund XI-XII-REIT Joint Venture, as
landlord, is responsible for maintenance of the footings and foundations and the
structural steel columns and girders associated with the building.
Since the Johnson Matthey Building was purchased in August 1999, comparative
income and expense figures are not available for the prior year.
-19-
<PAGE>
The Gartner Building/Fund XI-XII-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 2000
--------------------
<S> <C>
Revenues:
Rental income $ 204,241
--------------------
Expenses:
Depreciation 77,623
Management and leasing expenses 10,162
Other operating expenses (15,311)
--------------------
72,474
--------------------
Net income $ 131,767
====================
Occupied percentage 100%
====================
Partnership's ownership percentage 26.1%
====================
Cash distributions to the Partnership $ 49,811
====================
Net income allocated to the Partnership $ 34,454
====================
</TABLE>
On September 20, 1999, the Fund XI-XII-REIT Joint Venture acquired a two-story
office building containing approximately 62,400 rentable square feet located on
a 4.9-acre tract of land in Ft. Myers, Florida, for a purchase price of
$8,320,000, excluding acquisition costs.
The entire 62,400 rentable square feet of the Gartner Building is currently
under a net lease agreement with Gartner and was assigned to the Fund XI-XII-
REIT Joint Venture at closing. The lease currently expires on January 31, 2008.
Gartner has the right to extend its lease for two additional five-year periods
of time.
The monthly base rent payable under the Gartner Lease for the remainder of the
lease term is $53,566.50 through January 31, 2000, $65,886.83 through January
31, 2001, $67,534.00 through January 31, 2002, $69,222.35 through January 31,
2003; $70,952.89 through January 31, 2004, $72,726.74 through January 31, 2005,
$74,544.92 through January 31, 2006, $76,408.54 through January 31, 2007, and
$78,318.71 through January 31, 2008.
Under the lease, Gartner is required to pay as additional rent all real estate
taxes, special assessments, utilities, taxes, insurance, and other operating
costs with respect to the Gartner Building during the term of the lease. In
addition, Gartner is responsible for all routine maintenance and repairs to the
Gartner Building. The Joint Venture, as landlord, is responsible for repair and
replacement of the roof, structure, and paved parking areas.
Other operating expenses are negative due to an offset of tenant reimbursements
in operating costs both for the first quarter of 2000 as well as the fourth
quarter of 1999. Since the building was purchased in September of 1999 the
Partnership could not estimate the amount to be billed for 1999 until first
quarter of 2000.
Since the Gartner Building was purchased in September 1999, comparative income
and expense figures are not available for the prior year.
-20-
<PAGE>
PART II. OTHER INFORMATION
ITEM 6 (b.) No reports on Form 8-K were filed during the first quarter of 2000.
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 XI, L.P.
(Registrant)
Dated: May 11, 2000 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.
-21-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 35,552
<SECURITIES> 13,998,255
<RECEIVABLES> 332,946
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,560
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,377,313
<CURRENT-LIABILITIES> 365,803
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,011,510
<TOTAL-LIABILITY-AND-EQUITY> 14,377,313
<SALES> 0
<TOTAL-REVENUES> 237,447
<CGS> 0
<TOTAL-COSTS> 25,198
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 212,249
<INCOME-TAX> 212,249
<INCOME-CONTINUING> 212,249
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 212,249
<EPS-BASIC> .25
<EPS-DILUTED> 0
</TABLE>
