<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark one)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 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
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets - September 30, 1997
and December 31, 1996................................................ 3
Consolidated Statements of Income for Three Months and
Nine Months Ended September 30, 1997 and 1996........................ 4
Statements of Partners' Capital
for the Nine months Ended September 30, 1997
and the Year Ended December 31, 1996................................. 5
Consolidated Statements of Cash Flows for
the Nine months Ended September 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
</TABLE>
2
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Assets September 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 $6,117,879 in 1997 and
$5,369,635 in 1996 13,559,313 14,176,266
------------- --------------
Total real estate assets 16,453,506 17,070,459
------------- --------------
Investments in joint ventures (Note 2) 6,901,651 7,117,920
Cash and cash equivalents 262,625 204,176
Due from affiliates 122,268 111,552
Deferred lease acquisition costs 46,761 35,808
Accounts receivable 308,986 363,662
Prepaid expenses and other assets 64,716 65,309
------------- --------------
7,707,007 7,898,427
------------- --------------
Total assets $ 24,160,513 $ 24,968,886
============= ==============
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable $ 224,429 $ 131,340
Due to affiliates 1,501,167 1,412,572
Refundable security deposits 62,395 62,876
Partnership distribution payable 312,660 285,687
------------- --------------
Total liabilities 2,100,651 1,892,475
------------- --------------
Minority interest 120,889 128,619
Partners' capital:
Limited Partners:
Class A - 98,716 Units Outstanding 20,686,412 21,583,091
Class B - 42,568 Units Outstanding 1,252,561 1,364,701
------------- --------------
Total partners' capital 21,938,973 22,947,792
------------- --------------
Total liabilities and partners' capital $ 24,160,513 $ 24,968,886
============= ==============
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------------- ----------------------------------------
September 30, 1997 September 30, 1996 September 30, 1997 September 30,1996
------------------ ------------------ ------------------ -----------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 395,118 $ 471,296 $ 1,145,165 $ 1,417,808
Interest income 1,365 3,071 7,105 11,311
Equity in income of
Joint Ventures (Note 3) 81,989 26,141 85,167 61,119
----------- ----------- ----------- -----------
478,472 500,508 1,237,437 1,490,238
----------- ----------- ----------- -----------
Expenses:
Management and leasing fees 25,677 26,185 96,397 82,528
Leasing acquisition costs 5,070 10,333 14,854 30,118
Operating costs - rental
properties, net of tenant
reimbursements 257,694 201,819 424,708 510,080
Bad debt recovery (2,374) 259 (5,377) (6,386)
Depreciation 243,536 257,677 751,749 770,981
Legal and accounting 14,144 378 17,381 28,304
Computer expense 3,068 1,403 7,162 3,433
Partnership administration 11,549 18,918 40,545 72,802
Minority interest 1,233 1,300 2,158 3,304
----------- ----------- ----------- -----------
559,597 518,272 1,349,577 1,495,164
----------- ----------- ----------- -----------
Net income (loss) $ (81,125) $ (17,764) $ (112,140) $ (4,926)
=========== =========== =========== ===========
Net income allocated to General
Partners $ 0 $ 0 $ 0 $ 0
Net (loss) income allocated to
Class A Limited Partners $ (566,570) $ 339,074 $ 0 $ 1,063,805
Net income (loss) allocated to
Class B Limited Partners $ 485,445 $ (356,838) $ (112,140) $(1,068,731)
Net (loss) income per Class A
Limited Partner Unit $ (5.74) $ 3.43 $ 0 $ 10.77
Net income (loss) per Class B
Limited Partner Unit $ 11.45 $ (8.39) $ (2.63) $ (25.11)
Cash distribution per Class A
Limited Partner Unit $ 3.12 $ 3.05 $ 9.08 $ 9.98
</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 NINE MONTHS ENDED
SEPTEMBER 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 0 0 (112,140) (112,140)
Partnership distributions 0 (896,679) 0 0 (896,679)
----------- -------------- ---------- ------------- -------------
BALANCE, September 30, 1997 98,716 $ 20,686,412 42,568 $ 1,252,561 $ 21,938,973
=========== ============= ========== ============= ============
</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>
Nine Months Ended
-----------------
September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (112,140) $ (4,926)
--------------- ---------------
Adjustments to reconcile net loss to net
cash provided by operating activities:
Equity in income of joint ventures (85,167) (61,119)
Minority interest 2,158 3,304
Depreciation 751,749 770,981
Accrued management and leasing fees 91,894 82,528
Changes in assets and liabilities:
Accounts receivable 54,677 (18,879)
Prepaids and other assets (10,361) (29,811)
Deferred income 7,485 0
Accounts payable and refundable security
deposits 85,124 25,107
Due to affiliates (13,187) 18,228
--------------- --------------
Total adjustments 884,372 790,339
-------------- --------------
Net cash provided by operating activities 772,232 785,413
-------------- --------------
Cash flow from investing activities:
Distribution received from joint ventures 290,720 387,979
Investment in real estate (134,797) (165,419)
--------------- ---------------
Net cash provided by investing
activities 155,923 222,560
-------------- --------------
Cash flow from financing activities:
Partnership distributions paid (939,706) (1,108,239)
-------------- ---------------
Net decrease in cash and cash equivalents (11,551) (100,266)
Cash and cash equivalents, beginning of year 204,176 323,786
-------------- --------------
Cash and cash equivalents, end of period $ 192,625 $ 223,520
============== ==============
</TABLE>
See accompanying condensed notes to 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 interests in the following joint ventures: i)
Wells-Baker Associates, a joint venture between the Partnership and Wells &
Associates, (ii) Fund I-Fund II Tucker, and (iii) the Fund I, II, II-OW,
VI, VII Joint Venture
As of September 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
the 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
have not been examined by independent accountants, but in the opinion of
the General Partners, the statements for the unaudited
7
<PAGE>
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 Ventures
----------------------------
The Partnership owned interests in six properties as of September 30, 1997,
directly or through investment in the joint ventures described above. 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
- -------
As of September 30, 1997, the developed properties owned by the Partnership were
77.56% occupied, as compared to 83.81% occupied as of September 30, 1996.
Revenues of the Partnership were $478,472 for the three-month period ended
September 30, 1997, as compared to $500,508 for the three months ended September
30, 1996, and $1,237,437 for the nine months ended September 30, 1997, as
compared to $1,490,238 for the same period in 1996. The decrease in revenues in
1997, as compared to 1996, was due to a decrease in rental income partially
offset by a slight increase in income from the joint ventures. 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
increased due to a sizable increase in net income at the Tucker Property and
just a slight decrease in net income at the Cherokee Property.
8
<PAGE>
Expenses of the Partnership were $559,597 for the three-month period ending
September 30, 1997, as compared to $518,272 for the three months ended September
30, 1996, and $1,349,577 for the nine months ended September 30, 1997, as
compared to $1,495,164 for September 30, 1996. The decrease in expenses for the
nine months ended September 30, 1997, as compared to 1996, was due primarily to
decreased repairs and maintenance and timing differences in CAM billings to
tenants; however, the increase in expenses for the three months ended September
30, 1997, over the 1996 expenses, was primarily due to the accrual of common
area expenses for nine months for the Paces Pavilion Condominium Association in
the third quarter of 1997.
Net cash provided by operating activities decreased from $785,413 in 1996 to
$772,232 at September 30, 1997, due primarily to the decrease in net income for
1997 as compared to 1996. Net cash provided by investing activities decreased
from $222,560 in 1996 to $155,923 in 1997 due to a decrease in distributions
from joint ventures. As a result, cash and cash equivalents decreased from
$223,520 in 1996 to $192,625 in 1997.
The Partnership's cash distributions to the Limited Partners holding Class A
Units was $9.08 per Unit for nine months ended September 30, 1997, as compared
to $9.98 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 nine
months ended September 30, 1997 and 1996. As set forth herein, the Paces
Pavilion was vacated effective December 31, 1996, and is currently only 27.8%
occupied. The Partnership is actively seeking replacement tenants for occupancy
of the remainder of the space at Paces Pavilion; however, in the event that
replacement tenants require significant tenant improvements and renovations to
the space to be leased, it is anticipated that such amounts may be funded from
cash distributions of the Partnership which would otherwise have been
distributed to the Limited Partners. In such event, cash distributions to
Limited Partners hold Class A Units may be reduced or suspended pending funding
of amounts required for any such tenant improvements or renovations.
9
<PAGE>
Property Operations
- -------------------
As of September 30, 1997, the Partnership owned interests in the following
properties:
Paces Pavilion/Howell Mill Road Property - Fund I
- -------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------------- ------------------------------------------
September 30, 1997 September 30, 1996 September 30, 1997 September 30, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 36,729 $ 136,287 $ 101,183 $ 408,862
Expenses:
Depreciation 53,679 62,929 188,803 188,788
Management and leasing
expenses 7,664 8,178 12,044 24,533
Other operating expenses 133,271 3,297 184,241 15,719
----------- ----------- ----------- -----------
194,614 74,404 385,088 229,040
----------- ----------- ----------- -----------
Net (loss) income $ (157,885) $ 61,883 $ (283,905) $ 179,822
=========== =========== =========== ===========
Occupied % 27.8% 100% 27.8% 100%
Partnership's Ownership % 100% 100% 100% 100%
Cash generated to the
Partnership $ 0 $ 132,991 $ 0 $ 393,143
Net (loss) income allocated
to the Partnership $ (157,885) $ 61,883 $ (283,905) $ 179,822
</TABLE>
Rental income decreased from $408,862 in 1996 to $101,183 in 1997 due to
decreased tenant occupancy after HCA vacated the premises effective December 31,
1996. Management and leasing fees decreased in 1997 to $12,044 from $24,533 in
1996 due to lowered tenant occupancy. Other operating expenses increased to
$184,241 in 1997 over $15,719 in 1996 primarily due to accrued common area
expenses of $108,000 for nine months payable to the Paces Pavilion Condominium
Association, which was not billed until the third quarter of 1997.
As of September 30, 1997, capital improvements and renovations totaling $57,490
have been incurred at Paces Pavilion in preparation for re-leasing the space
formerly occupied by HCA. Currently, there are four tenants occupying 27.8% of
the premises. Management is actively seeking replacement tenants for the
remaining space at Paces Pavilion.
10
<PAGE>
Crowe's Crossing Property - Fund I
- ----------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------------------- -----------------------------------------
September 30, 1997 September 30, 1996 September 30, 1997 September 30, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 178,403 $ 162,625 $ 525,821 $ 497,899
Expenses:
Depreciation 104,817 99,904 312,445 299,730
Management and leasing
expenses 12,835 7,480 53,261 25,249
Other operating expenses 49,890 98,217 44,225 277,432
--------- --------- --------- ---------
167,542 205,601 409,931 602,411
--------- --------- --------- ---------
Net (loss) income $ 10,861 $ (42,976) $ 115,890 $(104,512)
========= ========= ========= =========
Occupied % 86.5% 84.1% 86.5% 84.1%
Partnership's Ownership % 100% 100% 100% 100%
Cash generated to the
Partnership $ 117,337 $ 57,098 $ 482,205 $ 183,041
Net (loss) income allocated
to the Partnership $ 10,861 $ (42,976) $ 115,890 $(104,512)
</TABLE>
Rental income increased for the nine month period ended September 30, 1997,
compared to the same period in 1996, due primarily to increased occupancy at the
property. Net income increased for the three month and nine month periods ended
September 30, 1997, compared to 1996, due primarily to the decrease in operating
expenses which was due to billing of CAM reimbursements for 1995 and 1996 to
Kroger in second quarter of 1997. The decrease in operating expenses for the
three month period ended September 30, 1997, compared to 1996, was primarily due
to expenditures of approximately $25,000 for plumbing and air conditioning
repairs at the property during the third quarter of 1996. Cash generated to the
Partnership increased for the three and nine month periods ended September 30,
1997, compared to the same periods ended September 30, 1996, due primarily to
the increased rental income and tenant reimbursements.
11
<PAGE>
Black Oak Plaza Property - Fund I
- ---------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------------------- -----------------------------------------
September 30, 1997 September 30, 1996 September 30, 1997 September 30, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 111,817 $ 101,873 $ 332,933 $ 304,215
Interest income 0 28 15 109
--------- --------- --------- ---------
111,817 101,901 332,948 304,324
--------- --------- --------- ---------
Expenses:
Depreciation 63,284 73,139 188,958 217,865
Management and leasing
expenses 8,461 8,523 28,406 26,057
Other operating expenses 56,468 66,665 106,264 113,984
--------- --------- --------- ---------
128,213 148,327 323,628 357,906
--------- --------- --------- ---------
Net (loss) income $ (16,396) $ (46,426) $ 9,320 $ (53,582)
========= ========= ========= =========
Occupied % 77% 74% 77% 74%
Partnership's Ownership % 100% 100% 100% 100%
Cash generated to the
Partnership $ 0 $ 0 $ 144,547 $ 55,172
Net (loss) income allocated
to the Partnership $ (16,396) $ (46,426) $ 9,320 $ (53,582)
</TABLE>
Rental income for the three months and nine months ended September 30, 1997, has
increased, as compared to the three months and nine months ended September 30,
1996, due primarily to increased occupancy at the property. Depreciation
decreased for the three and nine months ended September 30, 1997, as compared to
the three and nine months ended September 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 three 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. Cash generated to the Partnership increased for the nine months ended
September 30, 1997, as compared to the same period in 1996, due primarily to
decreased capital expenditures and operating expenses of approximately $54,000,
and the increase in rental revenues.
12
<PAGE>
Peachtree Place Property - Fund I and Wells & Associates Joint Venture
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------------- ---------------------------------------
September 30, 1997 September 30, 1996 September 30, 1997 September 30, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 68,171 $ 70,511 $185,229 $206,832
Interest income 7 7 22 22
-------- -------- -------- --------
68,178 70,518 185,251 206,854
-------- -------- -------- --------
Expenses:
Depreciation 21,764 21,705 61,543 64,598
Management and leasing
expenses 5,645 5,523 17,539 16,365
Other operating expenses 28,414 33,899 84,612 96,557
-------- -------- -------- --------
55,823 61,127 163,694 177,520
-------- -------- -------- --------
Net income $ 12,355 $ 9,391 $ 21,557 $ 29,334
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 89.95% 89.95% 89.95% 89.95%
Cash generated to the
Partnership $ 39,349 $ 31,723 $ 88,574 $ 78,959
Net income allocated
to the Partnership $ 11,113 $ 8,447 $ 19,391 $ 26,386
</TABLE>
Rental income decreased for both the three months and nine months ending
September 30, 1997, as compared to the same periods for 1996, since the property
did not become 100% occupied until September 15, 1997. During the same quarter,
in 1996, the property was at 100% occupancy for the entire period. Operating
expenses decreased from $96,557 in 1996 to $84,612 in 1997 due primarily to a
decrease in property taxes and insurance. 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 Nine Months Ended
--------------------------------------- ---------------------------------------
September 30, 1997 September 30, 1996 September 30, 1997 September 30, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 267,363 $ 262,134 $ 796,694 $ 804,135
Interest income 762 122 1,024 501
Other income 83,027 0 83,027 0
---------- ---------- ---------- ----------
351,152 262,256 880,745 804,636
---------- ---------- ---------- ----------
Expenses:
Depreciation 106,541 105,280 308,306 313,508
Management and leasing
expenses 22,723 27,454 87,055 89,838
Other operating expenses 98,732 109,108 400,520 365,608
---------- ---------- ---------- ----------
227,996 241,842 795,881 768,954
---------- ---------- ---------- ----------
Net income $ 123,156 $ 20,414 $ 84,864 $ 35,682
========== ========== ========== ==========
Occupied % 77% 75% 77% 75%
Partnership's Ownership % 55.09% 55.09% 55.09% 55.09%
Cash distribution to the
Partnership $ 93,122 $ 76,171 $ 189,875 $ 223,597
Net income allocated to the
Partnership $ 67,847 $ 11,246 $ 46,752 $ 19,657
</TABLE>
Rental income decreased for the nine months ended September 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 landscaping and other repairs and
maintenance. Other income in 1997 represents insurance payments on the 1996 fire
damage. Net income of the property increased 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 Nine Months Ended
---------------------------------------- ---------------------------------------
September 30, 1997 September 30, 1996 September 30, 1997 September 30, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 215,367 $ 219,956 $ 648,779 $ 666,564
Interest income 10 18 47 55
---------- ---------- ---------- ----------
215,377 219,974 648,826 666,619
Expenses:
Depreciation 110,037 107,607 327,259 322,251
Management and leasing
expenses 7,017 12,101 57,881 38,011
Other operating expenses 39,455 38,084 103,777 133,588
---------- ---------- ---------- ----------
156,509 157,792 488,917 493,850
---------- ---------- ---------- ----------
Net income $ 58,868 $ 62,182 $ 159,909 $ 172,769
========== ========== ========== ==========
Occupied % 93% 95% 93% 95%
Partnership's Ownership % 24.0% 24.0% 24.0% 24.0%
Cash distribution to the
Partnership $ 29,145 $ 49,920 $ 111,561 $ 144,210
Net income allocated to the
Partnership $ 14,142 $ 14,938 $ 38,415 $ 41,504
</TABLE>
Rental income decreased in 1997, as compared to 1996 levels, due primarily to
the decrease in occupancy. Management and leasing expenses increased in 1997, as
compared to 1996, due to the one-time payment 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 third 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: November 10, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 262,625
<SECURITIES> 6,901,651
<RECEIVABLES> 431,254
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 111,477
<PP&E> 22,571,385
<DEPRECIATION> 6,117,879
<TOTAL-ASSETS> 24,160,513
<CURRENT-LIABILITIES> 2,221,540
<BONDS> 0
0
0
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<CGS> 0
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<INCOME-PRETAX> (112,140)
<INCOME-TAX> (112,140)
<INCOME-CONTINUING> (112,140)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (112,140)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
