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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 28, 2000
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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
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(State or other jurisdiction of incorporation)
0-30287 58-2438242
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(Commission File Number) (IRS Employer 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 or former address, if changed since last report)
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Item 2. Acquisition of Assets
The AT&T Call Center Buildings
Purchase of the AT&T Call Center Buildings. On December 28, 2000, the Wells Fund
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XII - REIT Joint Venture Partnership ("Fund XII-REIT Joint Venture") a joint
venture between Wells Real Estate Fund XII, L.P. (the "Registrant") and Wells
Operating Partnership, L.P. ("Wells OP"), the operating partnership for Wells
Real Estate Investment Trust, Inc. ("Wells REIT"), acquired a one-story office
building and a two-story office building containing an aggregate of
approximately 128,500 rentable square feet located at 3201 Quail Springs
Parkway, Oklahoma City, Oklahoma (the "AT&T Call Center Buildings"). The Fund
XII-REIT Joint Venture purchased the AT&T Call Center Buildings from OKC Real
Estate Investments, Inc. ("OKC") pursuant to that certain Agreement for the
Purchase and Sale of Property between OKC and Wells Capital, Inc. ("Wells
Capital"). OKC is not in any way affiliated with Wells Fund XII or its general
partners or other affiliates.
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 $15,300,000 for the AT&T
Call Center Buildings and incurred additional acquisition expenses in connection
with the purchase of the AT&T Call Center Buildings, including attorneys' fees,
recording fees and other closing costs, of approximately $27,554.
Wells Fund XII made a capital contribution of $8,591,000 and Wells OP made
a capital contribution of $6,736,554 to the Fund XII-REIT Joint Venture to fund
their respective shares of the acquisition costs for the AT&T Call Center
Buildings.
Description of the AT&T Call Center Buildings and the Site. As set forth above,
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the AT&T Call Center Buildings consist of a one-story office building and a two-
story office building containing approximately 50,000 and 78,500 rentable square
feet, respectively, on a 11.34 acre tract of land. Construction on the
buildings was completed in April 1998 and December 2000, respectively. The two
adjacent buildings are connected by a mutual hallway. Both buildings are
constructed using a steel frame with steel beams on a concrete slab with
concrete footings. The exterior walls are made of tilt-up concrete panels with
punched openings around the perimeter. The windows consist of tempered glass in
aluminum frames. The interior walls consist of gypsum board covered with semi-
gloss enamel paint. In addition, the two-story office building contains a fully
equipped cafeteria and an elevator. There are approximately 775 paved surface
parking spaces at the site.
The AT&T Call Center Buildings are located in the Quail Springs Office Park
North in Oklahoma City, Oklahoma. Quail Springs Office Park North is located in
the northwest sector of Oklahoma City, approximately 8 to 11 miles northwest of
the central business district. Oklahoma City is known for its competitive real
estate prices, available space for business, supportive governmental services,
good labor quality and diversified economic base. The city's largest employers
include the State of Oklahoma, Avaya, Inc., Southwestern Bell Telephone and
General Motors Corporation.
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An independent appraisal of the AT&T Call Center Buildings was prepared by
Isaacs & Associates, real estate appraisers and consultants, as of July 14,
2000, pursuant to which the market value of the land and the leased fee interest
subject to the AT&T lease and the Jordan lease (described below) was estimated
to be $15,400,000, in cash or terms equivalent to cash. This value estimate was
based upon a number of assumptions, including that the AT&T Call Center
Buildings will continue operating at a stabilized level with tenants 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 prior to the
closing evidencing that the condition of the land and the AT&T Call Center
Buildings were satisfactory.
The AT&T Lease. The entire 78,500 rentable square feet of the two-story office
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building and 25,000 rentable square feet of the one-story office building are
currently under a net lease agreement with AT&T Corp. ("AT&T"). The landlord's
interest in the AT&T lease was assigned to the Fund XII-REIT Joint Venture at
the closing. The AT&T lease commenced on April 1, 2000, and the initial term
expires on November 30, 2010. AT&T has the right to extend the AT&T lease for
two additional five-year periods of time at the then-current fair market rental
rate upon delivering written notice within 240 days prior to lease expiration.
AT&T is among the world's leading voice and data communications companies,
serving consumers, businesses and governments worldwide. AT&T has one of the
largest digital wireless networks in North America and is one of the leading
suppliers of data and internet services for businesses. In addition, AT&T
offers outsourcing, consulting and networking-integration to large businesses
and is one of the largest direct internet access service providers for consumers
in the United States. During fiscal year 1999, AT&T had net income of
approximately $3.43 billion on revenues of over $62.39 billion.
The base rent payable for the initial lease term of the AT&T lease is as
follows:
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Lease Months Annual Rent Rentable Square Feet/Year
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Months 1 to 8* $ 300,000 $12.00
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Months 9 to 35 $1,242,000 $12.00
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Months 36 to 65 $1,293,750 $12.50
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Months 66 to 95 $1,345,500 $13.00
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Months 96 to 125 $1,397,250 $13.50
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*For occupancy of 25,000 square feet of the one-story office building only.
Under the AT&T lease, AT&T 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 its
portion of the AT&T Call Center Buildings. In addition, AT&T is responsible for
all routine
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maintenance and repairs to its portion of the AT&T Call Center Buildings. The
Fund XII-REIT Joint Venture, as landlord, will be 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
AT&T Call Center Buildings. AT&T must obtain written consent from the Fund XII-
REIT Joint Venture before making any alterations to the premises in excess of
$10,000.
AT&T has a right of first offer to lease the remainder of the space in the
one-story office building currently occupied by Jordan Associates, Inc.
("Jordan"), as described below, if Jordan vacates the premises.
The Jordan Lease. Jordan currently occupies the remaining 25,000 rentable
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square feet contained in the one-story office building under a net lease
agreement. The landlord's interest in the Jordan lease was also assigned to the
Fund XII-REIT Joint Venture at the closing. The Jordan lease commenced on April
1, 1998, and the initial term expires on March 31, 2008. Jordan has the right
to extend the Jordan lease for one additional five-year period of time at the
then-current fair market rental rate upon delivering written notice within 240
days prior to expiration of the initial lease term.
Jordan provides businesses with advertising and related services including
public relations, research, direct marketing and sales promotion. Through this
corporate office and other offices in Tulsa, St. Louis, Indianapolis and Wausau,
Wisconsin, Jordan provides services to major clients such as Bank One, Oklahoma,
N.A., BlueCross & BlueShield of Oklahoma, Kraft Food Services, Inc., Logix
Communications and the American Dental Association. Jordan employs
approximately 100 employees and has been in business for over 35 years.
The base rent payable for the initial lease term of the Jordan lease is as
follows:
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Lease Months Annual Rent Rentable Square Feet/Year
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Months 1 to 60 $294,500 $11.78
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Months 61 to 120 $332,000 $13.28
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Under the Jordan lease, Jordan 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 its
portion of the one-story building. In addition, Jordan is responsible for all
routine maintenance and repairs to its portion of the one-story building. The
Fund XII-REIT Joint Venture, as landlord, will be 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
AT&T Call Center Buildings. Jordan must obtain written consent from the Fund
XII-REIT Joint Venture before making alterations to the premises.
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Property Management Fees. Wells Management Company, Inc. ("Wells Management"),
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an affiliate of the Registrant, has been retained to manage and lease the AT&T
Call Center Buildings. 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 AT&T Call Center Buildings, subject to certain limitations.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements. Since it is impracticable to provide the
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required financial statements for the acquired real properties described in this
report at the time of this filing, and no financial statements (audited or
unaudited) are available at this time, the Registrant hereby confirms that the
required financial statements will be filed by amendment to this Form 8-K on or
before March 13, 2001, which date is within the 60-day period allowed to file
such amendment.
(b) Pro Forma Financial Information. See Paragraph (a) above.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WELLS REAL ESTATE FUND XII, L.P.
Registrant
By: /s/ Leo F. Wells
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Leo F. Wells, III, as General Partner
and as President and sole Director of
Wells Capital, Inc., the General
Partner of Wells Partners, L.P.,
General Partner
Date: January 10, 2001
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