<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 June 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
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Wells Real Estate Fund XII, L.P.
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(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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
Form 10-Q
---------
Wells Real Estate Fund XII, L.P.
--------------------------------
INDEX
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Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 2000
and December 31, 1999............................. 3
Statement of Income for the Three and Six
Months ended June 30, 2000 and 1999............... 4
Statement of Partners' Capital for the year ended
December 31, 1999 and the
Six Months Ended June 30, 2000.................... 5
Statement of Cash Flows for the Six Months
Ended June 30, 2000 and 1999...................... 6
Condensed Notes to Financial Statements............ 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations......................................... 10
PART II. OTHER INFORMATION............................................. 18
2
<PAGE>
WELLS REAL ESTATE FUND XII, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
Assets June 30, 2000 December 31, 1999
------ ------------- -----------------
Investment in joint ventures (Note 2) $12,444,919 $5,467,634
Cash and cash equivalents 2,104,323 2,584,734
Deferred project costs (Note 3) 85,968 107,051
Deferred offering costs (Note 4) 429,363 331,953
Due from affiliates 217,520 116,258
Prepaids and other assets 2,242 0
----------- ----------
Total assets $15,284,335 $8,607,630
=========== ==========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Sales commissions payable $ 3,525 $ 5,507
Due to affiliates (Note 5) 438,706 344,578
Partnership distribution payable 223,371 113,084
----------- ----------
Total liabilities 665,602 463,169
----------- ----------
Partners' capital:
Limited partners:
Cash Preferred 1,315,326 Units outstanding
at June 30, 2000 and 752,426 as of
December 31, 1999 11,566,743 6,602,953
Tax Preferred 368,755 Units outstanding
at June 30, 2000 and 184,393 as of
December 31, 1999 3,051,990 1,541,508
----------- ----------
Total partners' capital 14,618,733 8,144,461
----------- ----------
Total liabilities and partners' capital $15,284,335 $8,607,630
=========== ==========
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 Six Months One Month
Ended Ended Ended
June 30, 2000 June 30, 2000 June 30, 1999
------------- ------------- -------------
<S> <C> <C> <C>
Revenues:
Equity in income of joint
ventures (Note 2) $162,871 $ 250,008 $ 0
Interest income 51,462 98,538 0
-------- --------- -------
214,333 348,546 0
-------- --------- -------
Expenses:
Computer costs 3,035 6,105 800
Partnership administration 15,381 25,670 1,815
Legal and accounting 3,200 15,200 0
-------- --------- -------
21,616 46,975 2,615
-------- --------- -------
Net income $192,717 $ 301,571 $(2,615)
======== ========= =======
Net income allocated to General
Partners $ 0 $ 0 $ (26)
Net income allocated to Cash
Preferred Limited Partners $292,043 $ 448,008 $ 0
Net loss allocated to Tax Preferred
Limited Partners $(99,326) $(146,437) $(2,589)
Net income per weighted average
Cash Preferred Limited
Partner Unit $ 0.28 $ 0.43 $ 0.00
Net loss per weighted average Tax
Preferred Limited Partner Unit $ (0.36) $ (.53) $ (0.02)
Cash distribution per weighted
average Cash Preferred
Limited Partner Unit $ 0.21 $ 0.35 $ 0.00
</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 SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Limited Partners Total
------------------------------------------------
Cash Preferred Tax Preferred 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 0 448,008 0 (146,437) 0 301,571
Partnership distributions 0 0 (365,846) 0 0 0 (365,846)
Limited partner contributions 0 553,400 5,534,008 193,862 1,938,617 0 7,472,625
Sales commissions and discounts 0 0 (565,480) 0 (144,419) 0 (709,899)
Other offering expenses 0 0 (166,320) 0 (57,859) 0 (224,179)
Tax preferred conversions 0 9,500 79,420 (9,500) (79,420) 0 0
----- --------- ----------- ------- ---------- ----- -----------
BALANCE at June 30, 2000 $ 0 1,315,326 $11,566,743 368,755 $3,051,990 $ 0 $14,618,733
===== ========= =========== ======= ========== ===== ===========
</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>
Six Months One Month
Ended Ended
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 301,571 $ (2,615)
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of joint venture (205,008) 0
Changes in assets and liabilities:
Increase due to affiliates (3,283) 47,036
Increase in accounts receivable (2,242) 0
----------- ----------
Net cash provided by operating activities 46,038 44,421
----------- ----------
Cash flow from investing activities:
Investment in joint ventures (6,782,935) 0
Deferred project costs (261,542) (94,370)
Distribution received from joint ventures 237,021 0
----------- ----------
Net cash used in investing activities (6,807,456) (94,370)
----------- ----------
Cash flow from financing activities:
Limited partners' contributions 7,472,625 2,696,293
Sales commissions (711,881) (108,889)
Offering costs (224,179) (80,889)
Distribution to partners (255,558) 0
----------- ----------
Net cash provided by financing activities 6,281,007 2,506,515
----------- ----------
Net (decrease) increase in cash and cash
equivalents (480,411) 2,456,566
Cash and cash equivalents, beginning of year 2,584,734 600
----------- ----------
Cash and cash equivalents, end of period $ 2,104,323 $2,457,166
=========== ==========
Supplemental disclosure of noncash
investing activities:
Deferred project costs applied to joint
venture property $ 282,625 $ 0
=========== ==========
</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
June 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 June 30,
2000, the Partnership had sold 1,305,826 Cash Preferred Status Units, and
378,255 Tax Preferred Status Units, held by a total of 907and 60 Limited
Partners, respectively, for total Limited Partner capital contributions of
$16,840,811. After payment of $589,428 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 $6,782,935 in the Fund
XII-REIT Joint Venture, as of June 30, 2000, the Partnership was holding
net offering proceeds of $2,063,347 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 June 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
7
<PAGE>
Tredyffin Township, Chester County, Pennsylvania (the "Johnson Matthey
Building"), which is owned 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 June 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.
The following describes additional information about the properties in which the
Partnership owned an interest as of June 30, 2000.
Fund XII-REIT Joint Venture
---------------------------
On April 10, 2000, the Partnership 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 know as the Fund
XII-REIT Joint Venture Partnership (Fund XII-REIT Joint Venture).
As of June 30, 2000, the Partnership had contributed approximately $6,782,935
for an approximate 50% equity interest in the Fund XII-REIT Joint Venture. As
of June 30, 2000, Wells OP also held an approximate 50% equity interest in the
Fund XII-REIT Joint Venture.
8
<PAGE>
Siemens Building
----------------
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, 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 of time at 95% of the then current fair market
rental rate.
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 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, ventilation and air conditioning systems of the 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. 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
90th month of the term if Siemens (a) provides written notice of such
cancellation on or before the last day of the 78th month, and (b) pays a
cancellation fee to the Fund XII-REIT Joint Venture currently calculated to be
approximately $1,234,160.
For additional information regarding the Siemens Building, refer to the
Partnership's Supplement No. 5 dated July 25, 2000, to the Prospectus of Wells
Real Estate Fund XII, L.P. dated March 22, 1999, contained in Post-Effective
Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Fund
XII, L.P., which was filed with the Commission on July 25, 2000 (Commission File
No. 33-66657).
(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 acquisitions expenses paid as of June
30, 2000, amounted to $589,428 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 June 30, 2000 the Partnership had reimbursed the
Company for $505,224 in offering expenses which amounted to
approximately 3% of Limited Partners' capital contributions.
(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.
9
<PAGE>
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 June 30, 2000, the
Partnership had sold 1,305,826 Cash Preferred Status Units and 378,255 Tax
Preferred Status Units, held by a total of 907 and 60 Limited Partners
respectively, for total Limited Partner capital contributions of $16,840,811.
After payment of $589,428 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 $6,782,935 in the Fund XII-REIT Joint Venture, as
of June 30, 2000, the Partnership was holding net offering proceeds of
$2,063,347 available for investment in properties.
Results of Operations
---------------------
As of June 30, 2000, the properties owned by the Partnership were 100% occupied.
Gross revenues of the Partnership of $348,546 for the six months ended June 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 received no revenues for the period
ended June 30, 1999. Expenses of the Partnership were $46,975 for the six
months ended June 30, 2000 and consisted of administrative 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 not available.
Net income per weighted average unit for Cash Preferred Limited Partners was
$0.43 for the six months ended June 30, 2000. Net loss per weighted average
unit for Tax Preferred Limited Partners was $0.53 for the six months ended June
30, 2000.
10
<PAGE>
The Partnership's distributions from Net Cash from Operations accrued to Cash
Preferred Limited Partners for the second 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
second quarter distributions.
Net decrease in cash and cash equivalents is the result of raising $7,472,625 in
limited Partners' capital contributions before deducting commissions and
offering costs and the investment of $6,782,935 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 June 30, 2000, the Partnership was holding $2,063,347 of
net offering proceeds from Limited Partner capital contributions for investments
in additional properties. Since properties are acquired on an all-cash basis,
the Partnership has no permanent long-term liquidity requirements.
11
<PAGE>
Property Operations
-------------------
As of June 30, 2000, the Partnership owned interests in the following
operational properties:
EYBL CarTex Building/Wells Fund XI-XII-REIT Joint Venture
---------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Two Months Ended
------------------ ---------------- ----------------
June 30, 2000 June 30, 2000 June 30, 1999
------------- ------------- -------------
<S> <C> <C> <C>
Revenues:
Rental income $140,089 $280,178 $70,126
-------- -------- -------
Expenses:
Depreciation 49,900 99,801 33,268
Management & leasing expenses 5,496 11,217 10,849
Operating costs, net of reimbursements 9,174 19,014 0
-------- -------- -------
64,570 130,032 44,117
-------- -------- -------
Net income $ 75,519 $150,146 $26,009
======== ======== =======
Occupied % 100% 100% 100%
Partnership ownership % 17.1% 17.1% -
Cash distributed to the Partnership $ 19,863 $ 37,002 -
Net income allocated to the Partnership $ 12,905 $ 25,659 -
</TABLE>
On May 18, 1999, Wells Real Estate, LLC-SC I, a Georgia limited liability
company wholly owned by the Wells Fund XI-REIT Joint Venture (which later
admitted Wells Fund XII on June 21, 1999, 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 the purchase price of
$5,085,000, excluding acquisition costs.
Since acquisition of the property by Wells Fund XI-XII-REIT Joint Venture, the
property has remained 100% occupied and no significant changes have occurred to
its operations.
Since the EBYL CarTex Building was purchased in May of 1999, comparable income
and expense figures for the prior year are available for only two months.
12
<PAGE>
The Sprint Building / Fund XI-XII-REIT Joint Venture
----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 2000 June 30, 2000
------------------ ----------------
<S> <C> <C>
Revenues:
Rental income $265,997 $531,994
-------- --------
Expenses:
Depreciation 81,778 163,557
Management & leasing expenses 11,240 22,479
Operating costs, net of reimbursements 4,334 10,658
-------- --------
97,352 196,694
-------- --------
Net income $168,645 $335,300
======== ========
Occupied % 100% 100%
Partnership ownership % 17.1% 17.1%
Cash distributed to the Partnership $ 40,021 $ 79,701
Net income allocated to the Partnership $ 28,821 $ 57,301
</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, Kansas, (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.
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 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 Sprint Building was purchased in July, 1999, comparative income and
expense figures are not available for the prior year.
13
<PAGE>
The Johnson Matthey Building / Fund XI-XII-REIT Joint Venture
-------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 2000 June 30, 2000
------------------ ----------------
<S> <C> <C>
Revenues:
Rental income $214,474 $428,948
-------- --------
Expenses:
Depreciation 63,868 127,737
Management & leasing expenses 8,884 17,769
Operating costs, net of reimbursements 5,252 10,129
-------- --------
78,004 155,635
-------- --------
Net income $136,470 $273,313
======== ========
Occupied % 100% 100%
Partnership ownership % 17.1% 17.1%
Cash distributed to the Partnership $ 31,324 $ 62,713
Net income allocated to the Partnership $ 23,322 $ 46,707
</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, (the "Johnson Matthey Building"), 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. 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 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 are not available for the prior year.
14
<PAGE>
The Gartner Building / Fund XI-XII-REIT Joint Venture
-----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 2000 June 30, 2000
------------------ ----------------
<S> <C> <C>
Revenues:
Rental income $216,567 $420,808
-------- --------
Expenses:
Depreciation 77,622 155,245
Management & leasing expenses 9,086 19,248
Operating costs, net of reimbursements (4,482) (19,793)
-------- --------
82,226 154,700
-------- --------
Net income $134,341 $266,108
======== ========
Occupied % 100% 100%
Partnership ownership % 17.1% 17.1%
Cash distributed to the Partnership $ 32,989 $ 65,543
Net income allocated to the Partnership $ 22,958 $ 45,476
</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 located in Fort Meyers, Florida, (the "Gartner
Building"), 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 the closing. The lease currently expires on January 31,
2008. Gartner has the right to extend the Lease for two additional five year
periods of time.
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 XI-XII-REIT 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 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.
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<PAGE>
Since the Gartner Building was purchased in September, 1999, comparative income
and expense figures are not available for the prior year.
Siemens Building / Fund XII-REIT Joint Venture
----------------------------------------------
<TABLE>
<CAPTION>
Two Months Ended
June 30, 2000
----------------
<S> <C>
Revenues:
Rental income $222,575
--------
Expenses:
Depreciation 69,334
Management & leasing expenses 3,284
Operating costs, net of reimbursements 227
--------
72,845
--------
Net income $149,730
========
Occupied % 100%
Partnership ownership % 50%
Cash distributed to the Partnership $ 93,319
Net income allocated to the Partnership $ 74,865
</TABLE>
On May 10, 2000, the Fund XII-REIT Joint Venture acquired 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 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
16
<PAGE>
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.
17
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the second 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: August 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.
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