<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 4, 1999
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Wells Real Estate Investment Trust, Inc.
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(Exact name of registrant as specified in its charter)
Maryland
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(State or other jurisdiction of incorporation)
333-32099 58-2328421
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(Commission File Number) (IRS Employer 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 or former address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Wells Real Estate Investment Trust, Inc. (the "Registrant") hereby amends
its Current Report on Form 8-K, dated February 15, 1999 to provide the required
financial statements of the Registrant relating to the acquisition by the
Registrant of the Vanguard Cellular Building located in Harrisburg, Dauphin
County, Pennsylvania, as described in such Current Report.
Item 7. Financial Statements and Exhibits.
(a) Audited Financial Statements. The following audited financial
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statements of the Registrant relating to the real property acquired are
submitted at the end of this Amendment No. 1 to Current Report and are filed
herewith and incorporated herein by reference:
Page
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Report of Independent Public Accountants I-1
Statement of Revenues Over Certain Operating
Expenses for the Period from Inception (November 16, 1998)
to December 31, 1998 I-2
Notes to Statement of Revenues Over Certain Operating
Expenses for the Period from Inception (November 16, 1998)
to December 31, 1998 I-3
(b) Pro Forma Financial Information. The following unaudited pro forma
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financial statements of the Registrant relating to the real property acquired
are submitted at the end of this Amendment No. 1 to Current Report and are filed
herewith and incorporated herein by reference:
Page
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Summary of Unaudited Pro Forma Financial
Statements I-5
Pro Forma Balance Sheet as of December 31,
1998 (Unaudited) I-6
Pro Forma Income Statement for Period from Inception
(November 16, 1998) to December 31, 1998 (Unaudited) I-7
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment No. 1 to Current Report to be signed
on its behalf by the undersigned hereunto duly authorized.
WELLS REAL ESTATE INVESTMENT TRUST, INC.
Registrant
By: /s/ Brian M. Conlon
-----------------------------------
Brian M. Conlon
Executive Vice President
Date: April 12, 1999
3
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Wells Real Estate Investment Trust, Inc.:
We have audited the accompanying statement of revenues over certain operating
expenses for the VANGUARD CELLULAR BUILDING for the period from inception
(November 16, 1998) to December 31, 1998. This financial statement is the
responsibility of management. Our responsibility is to express an opinion on
this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Vanguard
Cellular Building after acquisition by Wells Operating Partnership, L.P. (on
behalf of Wells Real Estate Investment Trust, Inc.). The accompanying statement
of revenues over certain operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Vanguard
Cellular Building's revenues and expenses.
In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Vanguard Cellular Building for the period from inception
(November 16, 1998) to December 31, 1998 in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 26, 1999
I-1
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VANGUARD CELLULAR BUILDING
STATEMENT OF REVENUES OVER CERTAIN
OPERATING EXPENSES
FOR THE PERIOD FROM INCEPTION
(NOVEMBER 16, 1998) TO DECEMBER 31, 1998
<TABLE>
<S> <C>
RENTAL REVENUES $171,855
OPERATING EXPENSES, NET OF REIMBURSEMENTS 0
--------
REVENUES OVER CERTAIN OPERATING EXPENSES $171,855
--------
</TABLE>
The accompanying notes are an integral part of this statement.
I-2
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VANGUARD CELLULAR BUILDING
NOTES TO STATEMENT OF REVENUES
OVER CERTAIN OPERATING EXPENSES
FOR THE PERIOD FROM INCEPTION
(NOVEMBER 16, 1998) TO DECEMBER 31, 1998
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Description of Real Estate Property Acquired
On February 4, 1999, Wells Operating Partnership, L.P. ("Wells OP"), a
Delaware limited partnership, formed to acquire and hold real estate
properties on behalf of Wells Real Estate Investment Trust, Inc. (the
"Registrant"), acquired a four-story office building (the "Vanguard Cellular
Building") containing approximately 81,859 rentable square feet, for the
price of $12,291,200 plus acquisition expenses, including legal fees, of
approximately $240,900. Wells OP paid $6,382,100 in cash and obtained a loan
in the amount of $6,450,000 from NationsBank, N. A. (the "NationsBank Loan").
As of February 4, 1999, $6,150,000 was outstanding on the NationsBank Loan.
The NationsBank Loan gives Wells OP the option of extending the term of the
loan after the initial six months. The interest rate for the initial six
months of the NationsBank Loan is fixed at 7%. On August 1, 1999, Wells OP
may extend the NationsBank Loan at a rate of LIBOR plus 200 basis points for
up to 29 additional months. During the term of the extension, Wells OP is
required to make quarterly principal installments in an amount equal to one-
ninth of the outstanding principal balance as of October 1, 1999. The
NationsBank Loan is secured by a first mortgage against the Vanguard Cellular
Building. Legal fees, loan origination costs, and appraisal fees incurred
from obtaining the NationsBank Loan totaled approximately $29,000.
The Vanguard Cellular Building is 100% occupied by one tenant with a ten-year
lease term that commenced on November 16, 1998 and expires on November 15,
2008. Construction of the building was completed in November 1998. Under
the terms of the lease agreement, monthly base rent payable is subject to
escalations of 2% per annum and certain lease inception discounts. The lease
is a triple net lease, whereby the terms require the tenant to reimburse
Wells OP for certain operating expenses, as defined in the lease, related to
the building. All of the operating expenses for the period from lease
inception (November 16, 1998) to December 31, 1998 have been passed through
to the tenant.
I-3
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Rental Revenues
Rental income from the lease is recognized on a straight-line basis over the
life of the lease.
2. BASIS OF ACCOUNTING
The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statement excludes certain historical expenses, such as interest,
depreciation, and management fees, not comparable to the operations of the
Vanguard Cellular Building after acquisition by Wells OP.
I-4
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WELLS REAL ESTATE INVESTMENT TRUST, INC.
(Unaudited Pro Forma Financial Statements)
The following unaudited pro forma balance sheet as of December 31, 1998 and the
pro forma statement of income for the year ended December 31, 1998 have been
prepared to give effect to Wells Real Estate Investment Trust, Inc.'s
acquisition (through Wells Operating Partnership, L.P.) of the Vanguard Cellular
Building as if it had occurred as of December 31, 1998 with respect to the
balance sheet and on November 16, 1998 (lease inception date) with respect to
the income statement. Wells Operating Partnership, L.P. is a Delaware limited
partnership that was organized to own and operate properties on behalf of the
Wells Real Estate Investment Trust, Inc. Wells Real Estate Investment Trust,
Inc. is the general partner of the Wells Operating Partnership, L.P.
These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisition been consummated at
the beginning of the period presented.
I-5
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WELLS REAL ESTATE INVESTMENT TRUST, INC.
PRO FORMA BALANCE SHEET
DECEMBER 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Wells
Real Estate
Investment Pro Forma
Trust, Inc. Adjustments Total
----------- ----------- -----
ASSETS:
<S> <C> <C> <C>
Cash $ 7,979,403 $ (6,382,100)(a) $ 1,597,329
Due to affiliate 262,345 0 262,345
Investment in JV 11,568,677 0 11,568,677
Prepaid and other assets 504,807 0 504,807
Deferred project costs 335,420 (265,896)(b) 69,498
Deferred offering costs 548,729 0 548,729
Loan origination costs, net 0 29,205 29,205
Tenant receivable 35,512 0 35,512
Land 1,520,834 689,584(a)(b) 2,210,418
Building, net 20,076,846 12,079,207(a)(b) 32,156,053
----------- ------------ -----------
Total assets $42,832,573 $ 6,150,000 $48,982,573
----------- ------------ -----------
LIABILITIES:
Notes payable $14,059,930 $ 6,150,000(a) $20,209,930
Due to affiliates 554,953 0 554,953
Partnership distribution payable 408,176 0 408,176
Accounts payable 84,941 0 84,941
Commission payable 102,886 0 102,886
Minority interest 200,000 0 200,000
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TotaL Liabilities 15,410,886 6,150,000 21,560,886
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SHAREHOLDERS' EQUITY:
Common stock 31,541 0 31,541
Additional paid-in capital 27,056,112 0 27,056,112
Retained earnings 334,034 0 334,034
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Total shareholders' equity 27,421,687 0 27,421,687
----------- ------------ -----------
Total liabilities and shareholders' equity $42,832,573 $ 6,150,000 $48,982,573
=========== ============ ===========
</TABLE>
(a) Reflects Wells Real Estate Investment Trust Inc.'s purchase
price related to the Vanguard Cellular Building.
(b) Reflects the deferred project costs allocated to the Vanguard
Cellular Building.
I-6
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WELLS REAL ESTATE INVESTMENT TRUST, INC.
PRO FORMA INCOME STATEMENT
FOR THE YEAR ENDED
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Wells
Real Estate
Investment Pro Forma
Trust, Inc. Adjustments Total
----------- ----------- -----
REVENUE:
<S> <C> <C> <C>
Rental income $ 20,994 $171,855(a) $192,849
Equity in earnings of investment in joint ventures 263,315 0 263,315
Interest income 110,869 0 110,869
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Total revenue 395,178 171,855 567,033
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EXPENSES:
Legal and accounting 19,552 0 19,552
Management and leasing fees 0 1,167 1,167
Partnership administration 17,861 0 17,861
Computer costs 616 0 616
Other operating 23,114 0 23,114
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Total operating expenses 61,143 1,167 62,310
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NET OPERATING INCOME 334,035 170,688 504,723
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DEPRECIATION EXPENSE 0 60,896(b) 60,896
AMORTIZATION EXPENSE 0 1,217 1,217
INTEREST EXPENSE 0 54,255(c) 54,255
-------- -------- --------
Net income $334,035 $ 54,320 $388,355
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</TABLE>
(a) Rental income recognized on a straight-line basis.
(b) Depreciation expense on the Vanguard Cellular Building based on
the straight-line method and a 25 year life.
(c) Interest expense on the $6,150,000 note payable which bears
interest at 7%.
I-7
