<PAGE>
FILED PURSUANT TO
RULE 424 (B) (3)
REGISTRATION NO: 333-66657
WELLS REAL ESTATE FUND XII, L.P.
SUPPLEMENT NO. 4 DATED MAY 24, 2000 TO THE PROSPECTUS
DATED MARCH 22, 1999
This document supplements, and should be read in conjunction with, the
prospectus of Wells Real Estate Fund XII, L.P. dated March 22, 1999, as
supplemented and amended by Supplement No. 1 dated September 1, 1999, Supplement
No. 2 dated October 10, 1999 and Supplement No. 3 dated April 25, 2000. When
we refer to the "prospectus" in this supplement, we are also referring to any
and all supplements to the prospectus. Unless otherwise defined in this
supplement, capitalized terms used in this supplement shall have the same
meanings as set forth in the prospectus.
The purpose of this supplement is to describe the following:
(1) The status of the offering of units of limited partnership interest in
Wells Real Estate Fund XII, L.P. (Wells Fund XII);
(2) The Joint Venture Partnership Agreement entered into between Wells
Fund XII and Wells Operating Partnership, L.P. (Wells OP);
(3) The acquisition of an office building in Troy, Michigan leased to
Siemens Automotive Corporation (Siemens Building);
(4) Revisions to the "Plan of Distribution" section of the prospectus;
(5) Revisions to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the prospectus; and
(6) Unaudited Pro Forma Balance Sheet of Wells Fund XII.
Status of the Offering
Pursuant to the prospectus, the offering of units in Wells Fund XII
commenced on March 22, 1999. Wells Fund XII began operations on June 1, 1999,
upon the acceptance of subscriptions for the minimum offering of $1,250,000
(125,000 units). As of May 22, 2000, Wells Fund XII had raised a total of
$15,722,660 in offering proceeds (1,572,266 units), comprised of $12,390,535
raised from the sale of cash preferred units (1,239,054 cash preferred units)
and $3,332,125 raised from the sale of tax preferred units (333,212 tax
preferred units).
Fund XII-REIT Joint Venture
On April 10, 2000, Wells Fund XII and Wells OP, the operating partnership
for Wells Real Estate Investment Trust, Inc., entered into a Joint Venture
Partnership Agreement for the purpose of acquiring, owning, leasing, operating
and managing real properties. The joint venture partnership is known as the
Wells Fund XII-REIT Joint Venture Partnership (Fund XII-REIT Joint Venture). All
income, loss, profit, net cash flow, resale gain and sale proceeds of the Fund
XII-REIT Joint Venture are to be allocated and distributed between the parties
based upon their respective capital contributions to the joint venture.
Wells OP is acting as the initial Administrative Venturer of the Fund XII-
REIT Joint Venture and, as such, is responsible for establishing policies and
operating procedures with respect to the business
1
<PAGE>
and affairs of the joint venture. However, approval of Wells Fund XII will be
required for all major decisions or actions which will materially affect the
joint venture or its real properties.
The Siemens Building
Purchase of the Siemens Building. On May 10, 2000, the Fund XII-REIT Joint
- --------------------------------
Venture acquired the Siemens Building, a three story office building with
approximately 77,054 rentable square feet located at 4685 Investment Drive, in
Troy, Oakland County, Michigan. The Fund XII-REIT Joint Venture purchased the
Siemens Building from Troy Development #1, LLC, a Colorado limited liability
company (Troy), pursuant to that certain Agreement for the Purchase and Sale of
Property between Troy and Wells Capital, Inc. (Wells Capital).
Wells Capital, the original purchaser under the agreement, assigned its
rights under the agreement to the Fund XII-REIT Joint Venture at closing. The
Fund XII-REIT Joint Venture paid a purchase price of $14,265,000 for the Siemens
Building and incurred additional acquisition expenses in connection with the
purchase of the Siemens Building, including attorneys' fees, recording fees and
other closing costs, of approximately $27,489. The Fund XII-REIT Joint Venture
received a credit at the closing in the amount of $1,954,516 to be used to pay
the remainder of the tenant improvement allowance required under the terms of
the Siemens lease, which became an obligation of the Fund XII-REIT Joint
Venture, as landlord, upon the assignment of the Siemens lease at closing.
Wells Fund XII contributed $6,168,986 and Wells OP contributed $6,168,986
to the Fund XII-REIT Joint Venture for their respective shares of the
acquisition costs for the Siemens Building. Additionally, Wells Fund XII and
Wells OP will contribute on an equal basis an aggregate amount of up to
$1,954,516 to the Fund XII-REIT Joint Venture in order to fund the tenant
improvement allowance as such costs are incurred by the tenant. As of May 22,
2000, each of Wells Fund XII and Wells OP owned a 50% equity percentage interest
in the Fund XII-REIT Joint Venture.
Description of the Building and the Site. As set forth above, the Siemens
- ----------------------------------------
Building, which was completed in May 2000, is a three story office building
containing approximately 77,054 rentable square feet on a 5.3 acre tract of
land. The Siemens Building consists of 51,509 square feet on the first two
floors and 25,545 square feet on the third floor. The building is constructed
using a fireproof steel frame with steel beams and steel deck on a concrete slab
with concrete footings. The exterior walls are a combination of brick and
tinted glass panels. The common areas consist of granite tile flooring in the
lobby and commercial grade carpeting in the corridors. There are 322 paved
surface parking spaces at the site.
An independent appraisal of the Siemens Building was prepared by CB Richard
Ellis, Inc., real estate appraisers, as of May 1, 2000, pursuant to which the
market value of the land and the leased fee interest subject to the Siemens
lease (described below) was estimated to be $14,550,000, in cash or terms
equivalent to cash. This value estimate was based upon a number of assumptions,
including that the Siemens Building will continue operating at a stabilized
level with Siemens Automotive Corporation (Siemens) occupying 100% of the
rentable area, and is not necessarily an accurate reflection of the fair market
value of the property or the net proceeds which would result from an immediate
sale of this property. The Fund XII-REIT Joint Venture also obtained an
environmental report and an engineering inspection report from NTH Consultants,
Ltd. prior to the closing evidencing that the condition of the land and the
Siemens Building were satisfactory.
The Siemens Building is located in Troy, Michigan, which is part of the
Detroit Metropolitan Statistical Area (MSA). This six-county region, consisting
of Lapeer, Macomb, Monroe, Oakland, St. Clair and Wayne Counties, covers
approximately 3,900 square miles in southeastern Michigan along the
2
<PAGE>
shores of Lake Erie, Lake St. Clair and the Detroit River which connects the two
lakes. The Detroit MSA is well known for its manufacturing market with heavy
emphasis on the automobile industry. As the headquarters for General Motors,
DaimlerChrysler and Ford, Detroit's economy has historically been dependent on
the condition of this specific industry. The Siemens Building is located in the
heart of "Automation Alley" close to Siemens' customers and a skilled, high-tech
work force.
The Lease. The entire 77,054 rentable square feet of the Siemens Building is
- ---------
currently under a net lease agreement with Siemens. The landlord's interest in
the Siemens lease was assigned to the Fund XII-REIT Joint Venture at the
closing. The Siemens lease commenced on March 3, 2000, and the initial term
expires on August 31, 2010. Siemens has the right to extend the Siemens lease
for two additional five year periods of time at 95% of the then current fair
market rental rate.
Siemens is a subsidiary of Siemens Corporation USA, a domestic corporation
which conducts the American operations of Siemens AG, the world's second largest
manufacturer of electronic capital goods. Siemens, part of the worldwide
Automotive Systems Group of Siemens AG, is a supplier of advanced electronic and
electrical products and systems to automobile manufacturers. Siemens' products
include powertrains, safety and chassis systems, body electronic systems and
electric motor drives. During the fiscal year 1999, Siemens had net income of
$17.3 million on revenues of over $813 million and a net worth of over $66.7
million.
The monthly rent payable for the initial lease year of the Siemens lease is
$109,160. During the first six months of that initial lease year, however,
Siemens will only occupy the first two floors of the Siemens Building and will
be paying monthly base rent of $72,971. During that period of time, Troy, the
seller of the Siemens Building, is obligated to pay the remaining $36,189 of
monthly base rent as a rental guaranty. Troy has placed $172,000 in an escrow
account to partially satisfy this rental guaranty, out of which the $36,189
difference will automatically be paid to the Fund XII-REIT Joint Venture on a
monthly basis. After the first six months of the initial lease year, Siemens
will occupy the entire building and pay the full base rent.
The base rent payable for the initial lease term is as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------
Lease Year Annual Rent Monthly Rent
-------------------------------------------------------------
<S> <C> <C>
Year 1 $1,309,918 $109,160
-------------------------------------------------------------
Year 2 $1,342,281 $111,857
-------------------------------------------------------------
Year 3 $1,374,643 $114,554
-------------------------------------------------------------
Year 4 $1,407,006 $117,251
-------------------------------------------------------------
Year 5 $1,439,369 $119,947
-------------------------------------------------------------
Year 6 $1,471,731 $122,644
-------------------------------------------------------------
Year 7 $1,504,094 $125,341
-------------------------------------------------------------
Year 8 $1,536,457 $128,038
-------------------------------------------------------------
Year 9 $1,568,819 $130,735
-------------------------------------------------------------
Year 10 and first $1,601,182 $133,432
6 months of Year 11
-------------------------------------------------------------
</TABLE>
Under the Siemens lease, Siemens is required to pay as additional monthly
rent its gas, water and electricity costs and all operating expenses, including,
but not limited to, garbage and waste disposal, telephone, sprinkler service,
janitorial service, security, insurance premiums, all taxes, assessments and
other governmental levies and such other operating expenses with respect to the
Siemens Building. In addition, Siemens is responsible for all routine
maintenance and repairs to its portion of the Siemens Building. Siemens is
responsible for maintaining the common and service areas and the central
heating,
3
<PAGE>
ventilation and air conditioning systems of the Siemens Building. The Fund XII-
REIT Joint Venture, as landlord, is responsible for the repair and replacement
of the roof, foundation, load bearing items, exterior surface walls, plumbing,
pipes, conduits and electrical, mechanical and plumbing systems of the Siemens
Building. Siemens must obtain written consent from the Fund XII-REIT Joint
Venture before making any alterations to the premises in excess of $100,000 in
the aggregate within any 12 month period.
Under the terms of the Siemens lease, the Fund XII-REIT Joint Venture is
required to reimburse Siemens for tenant improvement costs in the amount of
$1,954,516. As described above, the Fund XII-REIT Joint Venture received a
credit at closing in an amount equal to this tenant improvement allowance.
Siemens has a one-time right to cancel the Siemens lease effective after
the 90/th/ month of the lease term if Siemens (a) provides written notice of
such cancellation on or before the last day of the 78/th/ month, and (b) pays a
cancellation fee to the Fund XII-REIT Joint Venture currently calculated to be
approximately $1,234,160.
Property Management Fees. Wells Management Company, Inc. (Wells Management), an
- ------------------------
affiliate of the general partners, has been retained to manage and lease the
Seimens Building. The Fund XII-REIT Joint Venture will pay management and
leasing fees to Wells Management in the amount of 4.5% of gross revenues from
the Siemens Building.
Plan of Distribution
The information contained on pages 122 and 123 in the "Plan of
Distribution" section of the prospectus is revised as of the date of this
supplement by the deletion of the last three paragraphs in that section and the
insertion of the following paragraphs in lieu thereof:
In addition, subscribers for units may agree with their participating
broker-dealers and the Dealer Manager to have sales commissions due with
respect to the purchase of their units paid over a six year period pursuant
to a deferred commission option. Investors electing the deferred
commission option will be required to pay a total of $9.40 per unit
purchased upon subscription, rather than $10.00 per unit, with respect to
which $0.10 per unit will be payable as commissions due upon subscription.
For the period of six years following subscription, or longer if required
to satisfy the outstanding commission obligation, $0.10 per unit will be
paid on an annual basis by the partnership as deferred commissions with
respect to units sold pursuant to the deferred commission option, which
amounts will be deducted from and paid out of distributions of net cash
from operations otherwise payable to investors holding such units. The net
proceeds to the partnership will not be affected by the election of the
deferred commission option. Under this arrangement, an investor electing
the deferred commission option will pay a 1% commission upon subscription
rather than a 7% commission and, thereafter, for the next six years, or
longer if required to satisfy the outstanding commission obligation, an
amount equal to a 1% commission per year will be deducted from and paid by
the partnership out of net cash from operations otherwise distributable to
such investor. (See "Distributions and Allocations - Distributions of Net
Cash From Operations.")
Investors who want to elect the deferred commission option must make
the election on their Subscription Agreement Signature Page, the form of
which is included as Exhibit "B" to the prospectus. Election of the
deferred commission option on the Subscription Agreement shall authorize
the general partners to withhold cash distributions otherwise payable to
such investor for the purpose of paying commissions due under the deferred
commission option. Such cash distributions may be pledged by the Dealer
Manager or the general partners or their affiliates to
4
<PAGE>
secure one or more loans, the proceeds of which would be used to satisfy
sales commission obligations.
Each investor purchasing units pursuant to the deferred commission
option must elect upon subscription to have a sufficient number of units
treated as cash preferred units, as determined in the discretion of the
general partners, to generate at least the amount of net cash from
operations distributable with respect to such units needed to satisfy the
deferred commission obligations each year with respect to the total number
of units purchased. In addition, investors electing the deferred
commission option will have limited rights to elect to have the status of
their units changed from cash preferred units to tax preferred units during
the initial six years following subscription, or longer if required, since
investors owning units purchased pursuant to the deferred commission option
must, at all times, own a sufficient number of units designated as cash
preferred units to generate enough net cash from operations to allow the
partnership to satisfy the deferred commission obligations with respect to
the total number of units purchased. (See "Description of the Units -
Election of Cash Preferred Units or Tax Preferred Units.") Further,
taxable participants electing the deferred commission option will incur tax
liability for partnership income allocated to them with respect to their
units even though distributions of net cash from operations otherwise
distributable to such investors will instead be paid to third parties to
satisfy the deferred commission obligations. (See "Risk Factors - Federal
Income Tax Risks.")
Management's Discussion and Analysis of Financial Condition and Results of
Operation
The information contained on page 76 in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section of the
prospectus is revised as of the date of this supplement by the deletion of the
first paragraph of that section and the insertion of the following paragraphs in
lieu thereof:
Wells Fund XII commenced operations on June 1, 1999, upon the
acceptance of subscriptions for the minimum offering of $1,250,000 (125,000
units). As of May 22, 2000, Wells Fund XII had raised a total of
$15,722,660 in offering proceeds (1,572,266 units).
As of May 22, 2000, Wells Fund XII had paid $550,293 in acquisition
and advisory fees and acquisition expenses, had paid $1,965,333 in selling
commissions and organizational and offering expenses, had invested
$11,468,986 in properties by virtue of capital contributions to joint
ventures and was holding net offering proceeds of $1,738,048 available
for investment in additional properties.
Financial Statements
The pro forma balance sheet of Wells Fund XII, as of March 31, 2000, which
is included in this supplement, has not been audited.
5
<PAGE>
INDEX TO PRO FORMA BALANCE SHEET
Siemens Building
Pro Forma Balance Sheet. Page
----------------------- ----
Summary of Unaudited Pro Forma Balance Sheet 7
Pro Forma Balance Sheet as of March 31, 2000 8
6
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
UNAUDITED PRO FORMA BALANCE SHEET
The following unaudited pro forma balance sheet as of March 31, 2000 has been
prepared to give effect to the acquisition of the Siemens Building by the Wells
Fund XII-REIT Joint Venture (a joint venture between the Wells Operating
Partnership, L.P. and Wells Real Estate Fund XII, L.P.) as if the acquisition
occurred as of March 31, 2000.
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.
This unaudited pro forma balance sheet is prepared for informational purposes
only and is 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.
As of March 31, 2000, the date of the accompanying pro forma balance sheet,
Wells Real Estate Fund XII, L.P. held cash of $4,682,895. The additional cash
used to purchase the Siemens Building, including deferred project costs paid to
Wells Capital, Inc. (an affiliate of Wells Real Estate Fund XII, L.P.), was
raised by selling additional limited partner units subsequent to March 31, 2000,
but prior to the acquisition date of May 10, 2000. This balance is reflected in
due to affiliates in the accompanying pro forma balance sheet.
7
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
PRO FORMA BALANCE SHEET
MARCH 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
Wells Real
Estate Pro Forma Pro Forma
Fund XII, L.P. Adjustments Total
--------------- ---------------- -------------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 4,682,895 $(4,682,895)(a) $ 0
INVESTMENT IN JOINT VENTURES 5,434,008 6,426,048 (b) 11,860,056
DEFERRED PROJECT COSTS 209,412 (209,412)(c) 0
DEFERRED OFFERING COSTS 381,943 0 381,943
DUE FROM AFFILIATES 120,764 0 120,764
PREPAIDS AND OTHER ASSETS 400,000 (400,000)(a) 0
------------- ---------------- -------------
Total assets $11,229,022 $ 1,133,741 $12,362,763
============= ================ =============
LIABILITIES AND PARTNERS' CAPITAL
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 10,058 $ 0 $ 10,058
PARTNERSHIP DISTRIBUTION PAYABLE 142,481 0 142,481
DUE TO AFFILIATES 406,631 1,086,091(a) 1,540,372
47,650(b)
------------- ---------------- -------------
Total liabilities 559,170 1,133,741 1,692,911
------------- ---------------- -------------
PARTNERS' CAPITAL:
Limited partners:
Cash preferred--979,747 units outstanding 8,602,965 0 8,602,965
Tax preferred--249,530 units outstanding 2,066,887 0 2,066,887
------------- ---------------- -------------
Total partners capital 10,669,852 0 10,669,852
------------- ---------------- -------------
Total liabilities and partners capital $11,229,022 $ 1,133,741 $12,362,763
============= ================ =============
</TABLE>
(a) Reflects Wells Real Estate Fund XII, L.P.'s portion of the
purchase price.
(b) Reflects Wells Real Estate Fund XII, L.P.'s contribution to the
Wells Fund XII-REIT Joint Venture.
(c) Reflects deferred project costs contributed to the Wells Fund
XII-REIT Joint Venture at approximately 4.17% of the purchase
price.
8
