<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 September 30, 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 0-30287
--------------------
Wells Real Estate Fund XII, L.P.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2438242
------------------------------- ----------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
6200 The Corners Parkway, Suite 250, Norcross, Georgia 30092
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
--------------
________________________________________________________________________________
(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 XII, L.P.
--------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - September 30, 2000
and December 31, 1999.............................. 3
Statement of Income for the Three Months and Nine
Months ended September 30, 2000 and 1999........... 4
Statement of Partners' Capital for the year ended
December 31, 1999 and the Nine Months
Ended September 30, 2000........................... 5
Statement of Cash Flows for the Nine Months
Ended September 30, 2000........................... 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............................................ 16
</TABLE>
2
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets September 30, 2000 December 31, 1999
------ ------------------ -----------------
<S> <C> <C>
Investment in joint venture (Note 2) $12,706,040 $5,467,634
Cash and cash equivalents 5,073,706 2,584,734
Deferred project costs (Note 3) 205,134 107,051
Deferred offering costs (Note 4) 477,878 331,953
Due from affiliates 282,725 116,258
Prepaids and other assets 1,533 0
----------- ----------
Total assets $18,747,016 $8,607,630
=========== ==========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Sales commissions payable $ 51,360 $ 5,507
Due to affiliates (Note 5) 505,186 344,578
Partnership distribution payable 300,901 113,084
----------- ----------
Total liabilities 857,447 463,169
----------- ----------
Partners' capital:
Limited partners:
Cash Preferred 1,606,286 Units outstanding
at September 30, 2000 and 752,426 as of
December 31,1999 14,161,023 6,602,953
Tax Preferred 455,566 Units outstanding
at September 30, 2000 and 184,393 as of
December 31, 1999 3,728,546 1,541,508
----------- ----------
Total partners' capital 17,889,569 8,144,461
----------- ----------
Total liabilities and partners' capital $18,747,016 $8,607,630
=========== ==========
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
(a Georgia Public Limited Partnership)
STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Four Months Ended
------------------------------ ----------------- ------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
-------------- -------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Revenues:
Equity in income of joint ventures $217,483 $ 41,721 $ 467,491 $ 41,721
Interest income 61,081 19,946 159,619 19,946
-------- -------- --------- --------
278,564 61,667 627,110 61,667
Expenses:
Computer costs 2,357 6,304 8,462 6,034
Partnership administration 9,670 1,623 35,340 2,423
Legal and accounting 300 8,224 15,500 10,039
-------- -------- --------- --------
12,327 15,881 59,302 18,496
-------- -------- --------- --------
Net income $266,737 $ 45,786 $ 567,808 $ 43,171
======== ======== ========= ========
Net loss allocated to General Partners $ 0 $ (231) $ 0 $ (257)
Net income allocated to Cash Preferred
Limited Partners $349,597 $ 68,910 $ 797,605 $ 68,910
Net loss allocated to Tax Preferred
Limited Partners $(83,360) $(22,893) $(229,797) $(25,482)
Net income per weighted average Cash
Preferred Limited Partner Unit $ 0.29 $ 0.28 $ 0.66 $ 0.28
Net loss per weighted average Tax
Preferred Limited Partner Unit $ (0.26) $ (0.21) $ (0.71) $ (0.24)
Cash distribution per weighted average
Cash Preferred Limited Partner Unit $ 0.21 $ 0.26 $ 0.51 $ 0.26
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
(a Georgia Public Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Limited Partners
------------------------------------------------
Cash Preferred Tax Preferred Total
------------------------ ---------------------- General Partners'
Original Units Amounts Units Amounts Partners Capital
-------- --------- ------------- -------- ------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1998 $ 100 0 $ 0 0 $ 0 $ 500 $ 600
Net income (loss) 0 0 195,244 0 (71,927) (500) 122,817
Partnership distributions 0 0 (176,018) 0 0 0 (176,018)
Limited partner contributions 0 752,426 7,524,260 184,393 1,843,926 0 9,368,186
Sales commissions and discounts 0 0 (714,805) 0 (175,173) 0 (889,978)
Other offering expenses 0 0 (225,728) 0 (55,318) 0 (281,046)
Return of capital (100) 0 0 0 0 0 (100)
----- --------- ----------- ------- ---------- ----- -----------
BALANCE at December 31, 1999 $ 0 752,426 $ 6,602,953 184,393 $1,541,508 $ 0 $ 8,144,461
Net income (loss) 0 0 797,605 0 (229,797) 0 567,808
Partnership distributions 0 0 (666,741) 0 0 0 (666,741)
Limited partner contributions 0 843,560 8,435,597 281,473 2,814,735 0 11,250,332
Sales commissions and discounts 0 0 (841,131) 0 (227,650) 0 (1,068,781)
Other offering expenses 0 0 (253,368) 0 (84,142) 0 (337,510)
Tax preferred conversions 0 10,300 86,108 (10,300) (86,108) 0 0
----- --------- ----------- ------- ---------- ----- -----------
BALANCE at Sept 30, 2000 $ 0 1,606,286 $14,161,023 455,566 $3,728,546 $ 0 $17,889,569
===== ========= =========== ======= ========== ===== ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
(a Georgia Public Limited Partnership)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------------------------------
September 30, 2000 September 30, 1999
----------------------- ----------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 567,808 $ 43,171
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of joint venture (467,491) (41,721)
Changes in assets and liabilities:
Increase in accounts receivable (1,533) 0
Increase due to affiliates 14,682 15,441
----------- -----------
Net cash provided by operating activities 113,466 16,890
----------- -----------
Cash flow from investing activities:
Investment in joint ventures 454,541 (246,775)
Deferred project costs (393,762) (5,300,000)
Distribution received from joint venture (7,096,245) 0
----------- -----------
Net cash used in investing activities (7,035,466) (5,546,775)
----------- -----------
Cash flow from financing activities:
Limited partners' contributions 11,250,332 7,050,726
Sales commissions (1,022,928) (642,420)
Offering costs (377,510) (211,522)
Distribution to partners (478,924) 0
-----------
Return of original limited partner investment 0 (100)
----------- -----------
Net cash provided by financing activities 9,410,970 6,196,684
----------- -----------
Net increase in cash and cash equivalents 2,488,972 666,799
Cash and cash equivalents, beginning of year 2,584,734 600
----------- -----------
Cash and cash equivalents, end of period $ 5,073,706 $ 667,399
=========== ===========
Supplemental disclosure of noncash
investing activities:
Deferred project costs applied to joint venture
property $ 295,679 $ 220,835
=========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statements
September 30, 2000
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
------------
Wells Real Estate Fund XII, 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 September 15, 1998, for
the purpose of acquiring, developing, owning, operating, improving,
leasing, and otherwise managing for investment purposes, income producing
commercial properties.
On March 22, 1999, the Partnership commenced a public offering of up to
$70,000,000 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 June 1, 1999, when it
received and accepted subscriptions for 125,000 units. As of September 30,
2000, the Partnership had sold 1,595,986 Cash Preferred Status Units, and
465,866 Tax Preferred Status Units, held by a total of 907and 60 Limited
Partners, respectively, for total Limited Partner capital contributions of
$20,618,517. After payment of $721,648 in acquisition and advisory fees
and acquisition expenses, the payment of $2,105,101 in selling commissions
and organization and offering expenses, the investment of $5,300,000 in the
Fund XI-XII-REIT Joint Venture, and the investment of $7,096,245 in the
Fund XII-REIT Joint Venture, as of September 30, 2000, the Partnership was
holding net offering proceeds of $4,923,309 available for investment in
properties.
The Partnership owns its interest in properties through equity ownership in
the following joint ventures: (i) Fund XI-XII-REIT Associates (the "Fund
XI-XII-REIT Joint Venture"), a joint venture among the Partnership, Wells
Real Estate Fund XI, L.P. and Wells Operating Partnership, L.P. ("Wells
OP"), a Delaware limited partnership having Wells Real Estate Investment
Trust, Inc. (the "Wells REIT"), as its General Partner; and (ii) the Fund
XII-REIT Joint Venture, a joint venture among the Partnership and Wells OP,
(the "Fund XII-REIT Joint Venture").
As of September 30, 2000, the Partnership owned interests in the following
properties through its ownership of the foregoing ventures: (i) a two-story
manufacturing and office building located in Fountain Inn, South Carolina
(the "EBYL Cartex Building", which is owned by the Fund XI-XII-REIT Joint
Venture; (ii) a three-story office building located in Leawood, Johnson
County, Kansas (the "Sprint Building"), which is owned by the Fund XI-XII-
REIT Joint Venture); (iii) a one-story office building and warehouse
located in Tredyffin Township, Chester County, Pennsylvania (the "Johnson
Matthey Building"), which is owned
7
<PAGE>
by the Fund XI-XII-REIT Joint Venture; (iv) a two story office building
located in Ft. Myers, Lee County, Florida, (the "Gartner Building"), which
is owned by the Fund XI-XII-REIT Joint Venture; and (v) a three-story
office building located in Troy, Oakland County, Michigan, (the "Siemens
Building"), which is owned by the Fund XII-REIT Joint Venture.
(b) Basis of Presentation
-------------------------
The financial statements of 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) Investment in Joint Venture
---------------------------
The Partnership owns interests in five office buildings, as of September
30, 2000, through its ownership of joint ventures. The Partnership does
not have control over the operations of the joint ventures; however, it
does exercise significant influence. Accordingly, investments in joint
ventures is recorded on the equity method. For further information on
investments in joint ventures, refer to the Partnership's Form 10-K for the
year ended December 31, 1999, and the footnotes to the financial statements
contained therein.
3. Deferred Project Costs
----------------------
The Partnership pays acquisition and advisory fees and acquisition expenses
to the General Partners for acquisition and advisory services and expenses.
These payments, as provided by the Partnership Agreement, may not exceed
3.5% of the Limited Partners' capital contributions. Acquisition and
advisory fees and acquisition expenses paid, as of September 30, 2000,
amounted to $721,648 and represented approximately 3.5% of the Limited
Partners' capital contributions received. These fees are allocated to
specific properties as they are purchased.
4. Deferred Offering Costs
-----------------------
Wells Capital, Inc. (the "Company"), the general partner of Wells Partners,
L.P., pays all the offering expenses for the Partnership. The Company may
be reimbursed by the Partnership to the extent that such offering expenses
do not exceed 3% of total Limited Partners' capital contributions. As of
September 30, 2000, the Partnership had reimbursed the Company for $618,556
in offering expenses, which amounted to approximately 3% of Limited
Partners' capital contributions.
8
<PAGE>
5. Due to affiliates
-----------------
Due to Affiliates consists of acquisition and advisory fees and acquisition
expenses, deferred offering costs, and other operating expenses paid by the
Company on behalf of the Partnership.
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 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.
The Partnership commenced active operations on June 1, 1999, when it
received and accepted subscriptions for 125,000 units. As of September 30,
2000, the Partnership had sold 1,595,986 Cash Preferred Status Units and
465,866 Tax Preferred Status Units, held by a total of 907 and 60 Limited
Partners respectively, for total Limited Partner capital contributions of
$20,618,517. After payment of 721,648 in acquisition and advisory fees and
acquisition expenses, the payment of $2,577,315 in selling commissions and
organization and offering expenses, the investment of $5,300,000 in the
Fund XI-XII-REIT Joint Venture and the investment of $7,096,245 in the Fund
XII-REIT Joint Venture, as of September 30, 2000, the Partnership was
holding net offering proceeds of $4,923,309 available for investment in
properties.
Results of Operations
---------------------
As of September 30, 2000, the properties owned by the Partnership were 100%
occupied. Gross revenues of the Partnership of $627,110 for the nine
months ended September 30, 2000 were attributable primarily to interest
income earned on funds held by the Partnership prior to the investment in
properties and an increase in equity in income of joint ventures. The
Partnership earned gross revenues of $61,667 for the four months ended
September 30, 1999, which were attributable primarily to interest income.
Expenses of the Partnership were $59,302 for the nine months ended
September 30, 2000, as compared to $18,496 for the four months ended
September 30, 1999, and consisted primarily of administrative
9
<PAGE>
salaries as well as accounting and legal expenses and computer costs. Since
the Partnership began active operations on June 1, 1999, comparable income
and expense figures for prior year are available for only four months.
Net income per weighted average unit for Cash Preferred Limited Partners
was $0.66 for the nine months ended September 30, 2000. Net loss per
weighted average unit for Tax Preferred Limited Partners was $0.71 for the
nine months ended September 30, 2000.
The Partnership's distributions from Net Cash from Operations accrued to
Cash Preferred Limited Partners for the third quarter of 2000 was $0.21 per
weighted average unit. The Partnership currently anticipates that
distributions will continue to be paid on a quarterly basis on a level at
least consistent with the third quarter distributions.
Net increase in cash and cash equivalents is the result of raising
$11,250,332 in Limited Partners' capital contributions before deducting
commissions and offering costs and the investment of $7,096,245 in the Fund
XII-REIT Joint Venture. 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 and property in which the
Partnership has invested, there are no known improvements or renovations to
the properties expected to be funded form cash flow from operations.
The Partnership expect to make future real estate investments, directly or
through investments in Joint Ventures from Limited Partners capital
contributions. As of September 30, 2000, the Partnership was holding
$4,923,309 of net offering proceeds available for investments in additional
properties. Since properties are acquired on an all-cash basis, the
Partnership has no permanent long-term liquidity requirements.
10
<PAGE>
Property Operations
-------------------
As of September 30, 2000, the Partnership owned interests in the following
operational properties:
EYBL CarTex Building / Fund XI-XII-REIT Joint Venture
-----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Five Months Ended
------------------------------ ------------------ -------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 September 30, 1999
-------------- -------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $142,207 $140,048 $422,385 $210,173
-------- -------- -------- --------
Expenses:
Depreciation 49,902 49,902 149,702 83,170
Management & leasing expenses 16,197 3,814 27,415 14,663
Operating costs, net of reimbursements 3,416 5,165 16,163 5,165
-------- -------- -------- --------
69,515 58,881 193,280 102,998
-------- -------- -------- --------
Net income $ 72,692 $ 81,167 $229,105 $107,175
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership ownership % 17.1% 17.1% 17.1% 17.1%
Cash distributed to the Partnership $ 20,447 $ 13,709 $ 57,449 $ 13,709
Net income allocated to the Partnership $ 13,493 $ 9,402 $ 39,153 $ 9,402
</TABLE>
On May 18, 1999, Wells Real Estate, LLC - SC I ("Wells LLC"), a Georgia limited
liability compant wholly owned by the Wells Fund XI-REIT Joint Venture (which
later admitted the Partnership as a joint venture partner and changed its name
to the Fund XI- Fund XII - REIT Joint Venture, acquire 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.
Since the EYBL CarTex Building was purchased in May, 1999, comparative income
and expense figures for the prior year's period ended September 30, 1999 covered
only five months. Accordingly, the prior year's period is not comparable to the
nine month period ended September 30, 2000.
Rental income increased slightly for the three months ended September 30, 2000,
as compared to the same period in 1999. Total expenses increased for the three
month period ended September 30, 2000, as compared to the same period for 1999,
due to leasing commission paid to an outside broker pursuant to the terms of the
purchase agreement.
11
<PAGE>
The Sprint Building / Fund X-XII-REIT Joint Venture
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Three Months Ended
------------------------------ ------------------ -------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 September 30, 1999
-------------- -------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $265,997 $264,654 $797,991 $264,654
-------- -------- -------- --------
Expenses:
Depreciation 81,779 81,776 245,336 81,776
Management & leasing expenses 11,239 7,493 33,718 7,493
Operating costs, net of reimbursements 3,306 1,283 13,964 1,283
-------- -------- -------- --------
96,324 90,552 293,018 90,552
-------- -------- -------- --------
Net income $169,673 $174,102 $504,973 $174,102
-------- -------- ======== ========
Occupied % 100% 100% 100% 100%
Partnership ownership % 17.1% 17.1% 17.1% 17.1%
Cash distributed to the Partnership $ 40,196 $ 27,443 $119,897 $ 27,443
Net income allocated to the Partnership $ 28,994 $ 19,966 $ 86,296 $ 19,966
</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.
Since the acquisition of the property by Fund XI-XII-REIT Joint Venture, the
property has remained 100% occupied, and no significant changes have occurred.
Since the Sprint Building was purchased in July, 1999, comparative income and
expense for the prior year's period ended September 30, 1999, covered only three
months. Accordingly, the prior year's period is not comparable to the nine
month period ended September 30, 2000.
Rental income increased slightly for the three months ended September 30, 2000,
as compared to the same period in 1999. Total expenses increased for the three
month period ended September 30, 2000, as compared to the same period for 1999,
due largely to the increase in management and leasing as well as other operating
expenses. Cash distributions and net income allocated to the Partnership for
the three month period decreased for the period ended September 30, 2000, as
compared to the same period for 1999, due to a decrease in net income.
12
<PAGE>
Johnson Matthey Building / Fund XI-XII-REIT Joint Venture
---------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Two Months Ended Nine Months Ended
September 30, 1999 September 30, 1999 September 30, 2000
--------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
Revenues:
Rental income $219,349 $123,566 $648,297
-------- -------- --------
Expenses:
Depreciation 63,869 42,567 191,606
Management & leasing expenses 9,230 0 27,089
Operating costs, net of reimbursements (1,535) 470 8,594
-------- -------- --------
71,564 43,037 227,289
-------- -------- --------
Net income $147,785 $ 80,529 $421,008
======== ======== ========
Occupied % 100% 100% 100%
Partnership ownership % 17.1% 17.1% 17.1%
Cash distributed to the Partnership $ 33,242 $ 17,210 $ 95,955
Net income allocated to the Partnership $ 25,239 $ 11,221 $ 71,946
</TABLE>
On August 17, 1999, the Fund XI-XII-REIT Joint acquired a research and
development office and warehouse building containing approximately 130,000
rentable square feet on a 10 acre tract of land located in Tredyffrim Township,
Chester County, Pennsylvania, for a purchase price of $8,000,000, excluding
acquisition costs. The entire Johnson Mathey Building is currently under a net
lease with Johnson Matthey, which was assigned to the XI-XII-REIT Joint Venture
at closing.
Other operating expenses are negative for the three months ending September 30,
2000, due to the receipt of the annual reimbursement of insurance expenses in
this quarter.
Since the acquisition of the property by Fund XI-XII-REIT Joint Venture, the
property has remained 100% occupied, and no significant changes have occurred to
its operations.
Since the Johnson Matthey Building was purchased in August 1999, comparative
income and expense figures for the prior year's period ended September 30, 1999,
covered only two months. Accordingly, the prior year's period is not comparable
to the nine month period ended September 30, 2000.
13
<PAGE>
The Gartner Building / Fund XI-XII-REIT Joint Venture
-----------------------------------------------------
<TABLE>
<CAPTION>
Three Month Ended One Month Ended Nine Month Ended
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000
----------------------- -------------------------- -------------------------
<S> <C> <C> <C>
Revenues:
Rental income $216,567 $32,502 $637,375
Expenses:
Depreciation 77,653 25,874 232,868
Management & leasing expenses 9,970 0 29,218
Operating costs, net of reimbursements (7,603) 0 (27,396)
-------- ------- --------
79,990 25,874 234,690
-------- ------- --------
Net income $136,577 $ 6,628 $402,685
======== ======= ========
Occupied % 100% 100% 100%
Partnership ownership % 17.1% 17.1% 17.1%
Cash distributed to the Partnership $ 33,376 $ 3,123 $ 98,919
Net income allocated to the Partnership $ 23,339 $ 1,133 $ 68,816
</TABLE>
On September 20, 1999, The Wells 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 located in Fort Meyers, 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, which was assigned to the Fund XI-XII-
REIT Joint Venture at the closing.
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 the first
quarter of 2000.
Since the acquisition of the property by Fund XI-XII-REIT Joint Venture, the
property has remained 100% occupied, and no significant changes have occurred to
its operations.
Since the Gartner Building was purchased in September, 1999, comparative income
and expense figures for the prior year's period covered only one month.
Accordingly, the prior year's period is not comparable to the nine month period
ended September 30, 2000.
14
<PAGE>
Siemens Building / Fund XII-REIT Joint Venture
----------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Five Months Ended
Sept 30, 2000 Sept 30, 2000
---------------------------- ------------------------
<S> <C> <C>
Revenues:
Rental income $376,103 $598,678
Expenses:
Depreciation 106,736 176,070
Management & leasing expenses 14,736 18,020
Operating costs, net of reimbursements 1,805 2,032
-------- --------
123,277 196,122
-------- --------
Net income $252,826 $402,556
======== ========
Occupied % 100% 100%
Partnership ownership % 50% 50%
Cash distributed to the Partnership $155,462 $248,781
Net income allocated to the Partnership $126,413 $201,279
</TABLE>
On May 10, 2000, the Fund XII-REIT Joint Venture acquired the Siemens Building,
a three-story office building containing approximately 77,054 rentable square
feet on a 5.3 acre tract of land located in Troy, Oakland County, Michigan, (the
"Siemens Building"), for a purchase price of $14,265,000, excluding acquisition
costs. The entire Siemens Building is currently under a net lease agreement
with Siemens, which was assigned to the Fund XII-REIT Joint Venture at closing.
The lease currently expires on August 31, 2010, and Siemens has the right to
extend the lease for two additional five year periods.
The monthly lease rent payable under the Siemens lease for the remainder of the
lease term is $109,160 for year 1; $111,857 for year 2; $114,554 for year 3;
$117,251 for year 4; $119,947 for year 5; $122,644 for year 6; $125,341 for year
7; $128,038 for year 8; $130,735 for year 9; and $133,432 for year 10 and the
first six months of year 11. Under the lease, Siemens is required to pay as
additional monthly rent all real estate taxes, special assessments, utilities,
taxes insurance and other operating costs with respect to the Siemens Building.
In addition, Siemens is responsible for all routine maintenance and repairs to
its portion of the Siemens Building. The Fund XII-REIT Joint Venture, as
landlord, is responsible for the repair and replacement of the roof, structure
and foundation.
Since the Siemens Building was purchased in May, 2000, comparative income and
expense figures are not available for the prior year.
15
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the third 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 XII, L.P.
(Registrant)
Dated: November 10, 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.
16
