<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, 1997 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 0-14463
---------------------------------------------------------
Wells Real Estate Fund I
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1565512
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
3885 Holcomb Bridge Road, 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 I
------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets - June 30, 1997
and December 31, 1996.............................. 3
Consolidated Statements of Income for
Three Months and Six Months Ended
June 30, 1997 and 1996............................. 4
Statements of Partners' Capital
for the Six months Ended June 30, 1997
and the Year Ended December 31, 1996............... 5
Consolidated Statements of Cash Flows for
the Six months Ended June 30, 1997 and 1996........ 6
Condensed Notes to Consolidated
Financial Statements............................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.......................................... 8
PART II. OTHER INFORMATION........................................... 16
2
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Assets June 30, 1997 December 31, 1996
--------------- ------------- -----------------
<S> <C> <C>
Real Estate, at cost
Land $ 2,894,193 $ 2,894,193
Building and improvements, less
accumulated depreciation of $5,874,335
in 1997 and $4,904,477 in 1996 13,731,397 14,176,266
----------- -----------
Total real estate assets 16,625,590 17,070,459
----------- -----------
Investments in joint ventures (Note 2) 6,941,930 7,117,920
Cash and cash equivalents 380,683 204,176
Due from affiliates 179,169 111,552
Deferred lease acquisition costs 44,048 35,808
Accounts receivable 188,608 363,662
Prepaid expenses and other assets 64,041 65,309
----------- -----------
7,798,479 7,898,427
----------- -----------
Total assets $24,424,069 $24,968,886
=========== ===========
Liabilities and Partners' Capital
--------------------------------------
Liabilities:
Accounts payable $ 138,128 $ 131,340
Due to affiliates 1,472,016 1,412,572
Refundable security deposits 60,403 62,876
Partnership distribution payable 312,651 285,687
----------- -----------
Total liabilities 1,983,198 1,892,475
----------- -----------
Minority interest 112,273 128,619
Partners' capital
Limited partners:
Class A - 98,716 Units Outstanding 21,561,482 21,583,091
Class B - 42,568 Units Outstanding 767,116 1,364,701
----------- -----------
Total partners' capital 22,328,598 22,947,792
----------- -----------
Total liabilities and partners' capital $24,424,069 $24,968,886
=========== ===========
</TABLE>
See accompanying condensed notes to consolidated financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------------------- ---------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
------------------ ------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 369,203 $ 480,421 $ 750,047 $ 946,512
Interest income 3,349 3,444 5,740 8,240
Equity in income of Joint
Ventures (Note 3) (2,549) 2,959 3,178 34,978
--------- --------- --------- ---------
370,003 486,824 758,965 989,730
--------- --------- --------- ---------
Expenses:
Management and leasing fees 40,190 26,259 70,720 56,343
Lease acquisition costs 4,914 9,954 9,784 19,785
Operating costs-rental properties
net of tenant reimbursements (16,248) 168,536 167,014 308,261
Bad debt recovery (2,697) (6,645) (3,003) (6,645)
Depreciation 254,536 257,289 508,213 513,304
Legal and accounting (346) 20,840 3,237 27,926
Computer expense 1,650 1,007 4,094 2,030
Partnership administration 12,735 26,059 28,996 53,884
Minority interest (764) 1,241 925 2,004
--------- --------- --------- ---------
293,970 504,540 789,980 976,892
--------- --------- --------- ---------
Net income (loss) $ 76,033 $ (17,716) $ (31,015) $ 12,838
========= ========= ========= =========
Net income allocated to
General Partners $ 0 $ 0 $ 0 $ 0
Net income allocated to Class
A Limited Partners $ 325,324 $ 339,201 $ 566,570 $ 724,731
Net loss allocated to Class B
Limited Partners $(249,293) $(356,917) $(597,585) $(711,893)
Net income per Class A Limited
Partner Unit $ 3.30 $ 3.44 $ 5.74 $ 7.34
Net income per Class B Limited
Partner Unit $ (5.86) $ (8.38) $ (14.08) $ (16.72)
Cash distribution per Class A
Limited Partner Unit $ 3.13 $ 3.39 $ 5.96 $ 6.93
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND SIX MONTHS ENDED
JUNE 30, 1997
<TABLE>
<CAPTION>
Limited Partners
------------------------------------------
Class A Class B Total
-------------------- -------------------- Partners'
Units Amounts Units Amounts Capital
------ ------------ ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1995 98,716 $21,442,415 42,568 $ 2,679,435 $24,121,850
Net income (loss) 0 1,416,538 0 (1,314,734) 101,804
Partnership distributions 0 (1,275,862) 0 0 (1,275,862)
------ ----------- ------ ----------- -----------
BALANCE, December 31, 1996 98,716 $21,583,091 42,568 $ 1,364,701 $22,947,792
Net income (loss) 0 $ 566,570 0 $ (597,585) $ (31,015)
Partnership distributions 0 (588,179) 0 0 (588,179)
------ ----------- ------ ----------- -----------
BALANCE, June 30, 1997 98,716 $21,561,482 42,568 $ 767,116 $22,328,598
</TABLE>
See accompanying condensed notes to financial statements
5
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
----------------------------------------
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Cash flow from operating activities:
Net (loss) income $ (31,015) $ 12,838
--------- ---------
Adjustments to reconcile net (loss) income
to net cash provided by
operating activities:
Equity in income of joint ventures (3,178) (34,978)
Minority interest 1,271 2,004
Depreciation 508,205 513,304
Accrued management and leasing fees 67,687 56,343
Changes in assets and liabilities:
Accounts receivable 86,107 (15,170)
Prepaids and other assets (6,972) (12,085)
Accounts payable and refundable
security deposits 4,316 18,544
Due to affiliates (25,861) 12,649
--------- ---------
Total adjustments 631,575 540,611
Net cash provided by
operating activities 600,560 553,449
--------- ---------
Cash flow from investing activities:
Distribution received from joint ventures 200,500 260,491
Investment in real estate (63,337) (119,323)
--------- ---------
Net cash provided by investing activities 137,163 141,168
--------- ---------
Cash flow from financing activities:
Partnership distributions paid (561,216) (770,043)
Net decrease in cash and cash equivalents 176,507 (75,426)
Cash and cash equivalents, beginning of year 204,176 323,786
--------- ---------
Cash and cash equivalents, end of period $ 380,683 $ 248,360
========= =========
</TABLE>
See accompanying condensed notes to consolidated financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
Condensed Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
------------
Wells Real Estate Fund I (the "Partnership") is a Georgia public limited
partnership having Leo F. Wells, III and Wells Capital, Inc., a Georgia
corporation, as General Partners. The Partnership was formed on April 26,
1984, for the purpose of acquiring, developing, constructing, owning,
operating, improving, leasing and otherwise managing for investment
purposes income-producing commercial properties.
On September 6, 1984, the Partnership commenced a public offering of its
limited partnership units pursuant to a Registration Statement filed on
Form S-11 under the Securities Act of 1933. The Partnership terminated its
offering on September 5, 1986, and received gross proceeds of $35,321,000
representing subscriptions from 4,895 Limited Partners, composed of two
classes of limited partnership interest, Class A and Class B limited
partnership units.
The Partnership owns an interests in the following joint ventures:
(i) Wells-Baker Associates, a joint venture between Fund I and Wells &
Associates, (ii) Fund I-Fund II Tucker and (iii) Fund I, II, II-OW, VI, VII
Joint Venture.
As of June 30, 1997, the Partnership owned directly or through its
ownership in joint ventures, interests in the following properties:
(i) Paces Pavilion/The Howell Mill Road Property, a medical office building
located in Atlanta, Georgia, owned directly by the Partnership, (ii) The
Crowe's Crossing Property, a shopping center located in DeKalb County,
Georgia, owned by the Partnership, (iii) The Black Oak Plaza Property, a
shopping center located in Knoxville, Tennessee, owned by the Partnership,
(iv) The Peachtree Place Property, two commercial office buildings located
in Atlanta, Georgia, owned by Wells-Baker Associates, (v) The Tucker
Property, a retail shopping and commercial office complex located in
Tucker, Georgia, owned by Fund I-Fund II Tucker and (vi) The Cherokee
Property, a shopping center located in Cherokee County, Georgia, owned by
Fund I, II, II-OW, VI, VII Joint Venture. All of the foregoing properties
were acquired on an all cash basis.
(b) Basis of Presentation
---------------------------
The consolidated 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
7
<PAGE>
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 consolidated financial
statements and footnotes included in the Partnership's Form 10-K for the
year ended December 31, 1996.
(2) Investment in Joint Venture
---------------------------
The Partnership owned interests in six properties as of June 30, 1997,
through investment or directly. The Partnership does not have control over
the operations of the joint ventures; however, it does exercise significant
influence. Accordingly, investment in the joint venture is recorded on the
equity method.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS.
- --------------
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 the Report, which include
construction costs which may exceed estimates, construction delays, lease-up
risks, inability to obtain new tenants upon the expiration of existing leases,
and the potential need to fund tenant improvements or other capital expenditures
out of operating cash flow.
Results of Operations and Changes in Financial Conditions
- ---------------------------------------------------------
General
- -------
Revenues of the Partnership were $370,003 for the period ended June 30, 1997, as
compared to $486,824 for the three months ended June 30, 1996, and $758,965 for
the six months ended June 30, 1997, as compared to $989,730 for the same period
in 1996. The decrease for 1997 over 1996 was due primarily to decreased income
from the joint ventures and decreased rental income. Rental income was
decreased due to lowered occupancy rates at Paces Pavilion after the move-out of
HCA from the premises in December of 1996. Income from the joint ventures was
decreased due to increased and lowered occupancy resulted in decreased rental
income at the Tucker and Cherokee properties.
8
<PAGE>
Expenses of the Partnership were $293,970 for the period ending June 30, 1997,
as compared to $504,540 for the three months ended June 30, 1996, and $789,980
for the six months ended June 30, 1997, as compared to $976,892 for June 30,
1996. The decrease in expenses for 1997 as compared to 1996 was due primarily
to decreased repairs and maintenance and timing differences in CAM billings to
tenants; however, approximately $30,000 was written off to bad debt at Crowe's
Crossing further increasing the Partnership's expenses.
Net cash provided by operating activities increased from $553,449 in 1996 to
$600,560 at June 30, 1997, due primarily to the increase in accounts receivable
and decreased expenses offset partially by decreased rental revenues. Net cash
provided by investing activities decreased from $141,168 in 1996 to $137,163 in
1997 due to a decrease in capital expenditures made in 1997. As a result, cash
and cash equivalents increased from $248,360 in 1996 to $380,683 in 1997.
The Partnership's cash distributions to the Limited Partners holding Class A
Units was $5.96 per Unit for three months ended June 30, 1997, as compared to
$6.93 for the same period in 1996. No cash distributions were made to the
Limited Partners holding Class B Units or to the General Partners for the three
months ended June 30, 1997 and 1996.
The Partnership's distributions paid and payable through the second quarter of
1997 have been paid from net cash from operations and from distributions
received from its investments in joint ventures, and the Partnership anticipates
that distributions will continue to be paid on a quarterly basis from such
sources. The Partnership expects to meet liquidity requirements and budget
demands through cash flows.
The Partnership is unaware of any known demands, commitments, events or capital
expenditures other than that which is required for the normal operations of its
properties or the properties in which it owns a joint venture interest that will
result in the Partnership's liquidity increasing or decreasing in any material
way.
9
<PAGE>
PROPERTY OPERATIONS
- -------------------
As of June 30, 1997, the Partnership owned interests in the following
properties:
Paces Pavilion/Howell Mill Road Property - Fund I
- ---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------- -------------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 35,480 $136,288 $ 64,454 $272,575
Expenses:
Depreciation 67,562 62,929 135,124 125,859
Management & leasing expenses 2,190 8,178 4,380 16,355
Other operating expenses 25,829 10,715 50,970 12,423
-------- -------- -------- --------
95,581 81,822 190,474 154,637
-------- -------- -------- --------
Net income $(74,205) $ 54,466 $138,966 $117,938
======== ======== ======== ========
Occupied % 28% 100% 28% 100%
Partnership's Ownership % 100% 100% 100% 100%
Cash distribution to Partnership $ (4,453) $125,573 $ 538 $260,152
Net income allocated to the
Partnership $(74,205) $ 54,466 $138,966 $117,938
</TABLE>
Rental income decreased from $272,575 in 1996 to $64,454 in 1997 due to
decreased tenant occupancy after HCA vacated the premises at December 31, 1996.
Management and leasing fees decreased in 1997 to $4,380 from $16,355 in 1996 due
to lowered tenant occupancy. Other operating expenses increased to $50,970 in
1997 over $12,423 in 1996 primarily due to increased repairs and maintenance
costs.
As of June 30, 1997, capital improvements and renovations totaling $51,912 have
been incurred at Paces Pavilion in preparation for re-leasing the formerly HCA
occupied space. Currently, there are five tenants occupying the premises.
Management is actively seeking replacement tenants.
10
<PAGE>
Crowe's Crossing Property- Fund I
- ---------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------- -------------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 175,781 $176,089 $347,418 $335,274
Expenses:
Depreciation 104,015 99,904 207,628 199,826
Management & leasing expenses 24,815 7,023 40,426 17,769
Other operating expenses (131,844) 105,222 (5,665) 179,215
--------- -------- -------- --------
(3,014) 212,149 242,389 396,810
--------- -------- -------- --------
Net income (loss) $ 178,795 $(36,060) $150,029 $(61,536)
========= ======== ======== ========
Occupied % 88.0% 82.4% 88.0% 82.4%
Partnership's Ownership % 100% 100% 100% 100%
Cash distribution to Partnership $ 312,642 $ 51,162 $364,868 $125,943
Net income (loss) allocated to the
Partnership $ 178,795 $(36,060) $105,029 $(61,536)
</TABLE>
Rental income remained relatively stable for the three months ended June 30,
1997 and 1996. The increase in rental income for the six months ended June 30,
1997, as compared to the same period in 1996, is primarily due to the rental
increases and increased occupancy in the first quarter of 1997. The decrease in
other operating expenses for the three months ended June 30, 1996, compared to
the three months ended June 30, 1997, is due to the billing of reimbursements
for 1995 and 1996 to Kroger, a major tenant at the center. Net income and cash
generated to the Partnership for three and six months ended June 30, 1997,
increased as compared to the three and six months ended June 30, 1996, due
primarily to the billing of reimbursements noted above.
11
<PAGE>
Black Oak Plaza Property - Fund I
- ---------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------- -------------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $109,901 $99,531 $221,116 $202,342
Interest income 3 37 15 81
-------- ------- -------- --------
109,904 99,568 221,131 202,423
Expenses:
Depreciation 63,061 72,751 125,674 144,726
Management & leasing expenses 9,930 8,850 19,945 17,534
Other operating expenses 43,560 16,822 49,796 47,319
-------- ------- -------- --------
116,551 98,423 195,415 209,579
-------- ------- -------- --------
Net (loss) income $ (6,647) $ 1,145 $ 25,716 $ (7,156)
======== ======= ======== ========
Occupied % 74% 72% 74% 72%
Partnership's Ownership % 100% 100% 100% 100%
Cash distribution to Partnership $ 52,367 $61,862 $149,416 $ 84,646
Net (loss) income allocated to the
Partnership $ (6,647) $ 1,145 $ 25,716 $ (7,156)
</TABLE>
Rental income for the three months and six months ended June 30, 1997, has
increased as compared to the three months and six months ended June 30, 1996,
due to scheduled rental increases at the property. Depreciation decreased for
the three and six months ended June 30, 1997, as compared to the three and six
months ended June 30, 1996, due to an overstatement of depreciation expenses in
the second quarter of 1996, which was adjusted in the final quarter of that
year. The increase in management and leasing expenses in the first and second
quarters of 1997, compared to the same quarters of 1996, is due to the payment
of lease acquisition fees for new tenants in February and March of 1997. Other
operating expenses increased in the three months ended June 30, 1997, compared
to the same period in 1996, due to timing differences in billing of CAM
reimbursements. Cash generated to the Partnership increased for the six months
ended June 30, 1997, as compared to the same period in 1996 due primarily to
decreased capital expenditures of approximately $53,000.
12
<PAGE>
Peachtree Place Property - Fund I and Wells & Associates Joint Venture
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------- -------------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $65,335 $68,514 $134,352 $136,321
Interest income 8 8 15 15
------- ------- -------- --------
65,343 68,522 134,367 136,336
Expenses:
Depreciation 19,889 21,705 39,779 42,893
Management & leasing expenses 6,240 5,349 11,894 10,842
Other operating expenses 46,821 29,118 73,492 62,658
------- ------- -------- --------
72,950 56,172 125,165 116,393
------- ------- -------- --------
Net (loss) income $(7,607) $12,350 $ 9,202 $ 19,943
======= ======= ======== ========
Occupied % 95% 100% 95% 100%
Partnership's Ownership % 89.95% 89.95% 89.95% 89.95%
Cash distribution to the Partnership $11,374 $34,295 $ 49,225 $ 47,236
Net income allocated to the
Partnership $(6,842) $11,109 $ 8,278 $ 17,939
</TABLE>
Rental income decreased for both the three months and six months for the quarter
ending June 30, 1997, as compared to the same period for 1996, due to decreased
tenant occupancy. Operating expenses increased from $62,658 in 1996 to $73,492
in 1997 due to the write-off of bad debt in the second quarter of 1997.
Management and leasing expenses were relatively stable for 1997 and 1996.
13
<PAGE>
Heritage Place at Tucker Property/Fund I - Fund II Joint Venture
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------- -------------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $267,465 $255,854 $529,331 $542,001
Interest income 133 127 262 379
-------- -------- -------- --------
267,598 255,981 529,593 542,380
Expenses:
Depreciation 104,097 104,428 201,765 208,228
Management & leasing expenses 44,142 30,297 64,332 62,384
Other operating expenses 144,379 140,584 301,787 256,500
-------- -------- -------- --------
292,618 275,309 567,884 527,112
-------- -------- -------- --------
Net (loss) income $(25,020) $(19,328) $(38,291) $ 15,268
======== ======== ======== ========
Occupied % 75.0% 75.0% 75.0% 75.0%
Partnership Ownership % 55.09% 55.09% 55.09% 55.09%
Cash distributed to the Partnership $ 52,736 $ 57,028 $ 96,753 $147,426
Net (loss) income allocated to the
Partnership $(13,783) $(10,648) $(21,094) $ 8,411
</TABLE>
Rental income decreased for the six months ended June 30, 1997, as compared to
the same period in 1996, due primarily to decreased rental income in the first
quarter 1997 and billing of a lease cancellation charge and late payment charges
in 1996 of approximately $6,200. Operating expenses increased in 1997 over 1996
due to increases in utilities, landscaping, and other repairs and maintenance.
The decrease in depreciation expenses for 1997 as compared to 1996 is due to the
loss of property which resulted from the fire in September 1996. Net income of
the property decreased in 1997 as compared to 1996 for the reasons noted above.
14
<PAGE>
Cherokee Property - Fund I, II, II-OW, VI, VII Joint Venture
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------- -------------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $215,973 $223,987 $433,412 $446,608
Interest income 19 18 37 37
-------- -------- -------- --------
215,992 224,005 433,449 446,645
Expenses:
Depreciation 109,697 107,461 217,222 214,644
Management & leasing expenses 19,323 13,276 50,864 25,910
Other operating expenses 40,203 46,632 64,322 95,504
-------- -------- -------- --------
169,223 167,369 332,408 336,058
-------- -------- -------- --------
Net income $ 46,769 $ 56,636 $101,041 $110,587
======== ======== ======== ========
Occupied % 92.0% 95.0% 92.0% 95.0%
Partnership Ownership % 24.0% 24. 0% 24.0% 24.0%
Cash distributed to the Partnership $ 37,485 $ 49,196 $ 82,416 $ 94,290
Net income allocated to the
Partnership $ 11,236 $ 13,606 $ 24,273 $ 26,566
</TABLE>
Rental income decreased in 1997 over 1996 levels due primarily to the decrease
in occupancy. Management and leasing expenses increased in 1997, as compared to
1996, due to one-time payments of lease acquisition fees. Operating expenses
decreased primarily due to a timing difference in billings to tenants for
property taxes.
15
<PAGE>
PART II - OTHER INFORMATION
----------------------------
Item 6(b). No reports on Form 8-K were filed during the second quarter of 1997.
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 I
(Registrant)
Dated: August 8, 1997 By: /s/Leo F. Wells, III
--------------------
Leo F. Wells, III, as Individual
General Partner and as President,
Sole Director and Chief Financial
Officer of Wells Capital, Inc.
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 380,683
<SECURITIES> 6,941,930
<RECEIVABLES> 367,777
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 64,041
<PP&E> 22,499,925
<DEPRECIATION> 5,874,335
<TOTAL-ASSETS> 24,424,069
<CURRENT-LIABILITIES> 2,095,471
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 22,328,598
<TOTAL-LIABILITY-AND-EQUITY> 24,424,069
<SALES> 0
<TOTAL-REVENUES> 758,965
<CGS> 0
<TOTAL-COSTS> 789,980
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (31,015)
<INCOME-TAX> (31,015)
<INCOME-CONTINUING> (31,015)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (31,015)
<EPS-PRIMARY> 5.74
<EPS-DILUTED> 0
</TABLE>