<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, 1999 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
incorporation or organization) Identification Number)
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, 1999
and December 31, 1998.................................. 3
Consolidated Statements of Income (Loss) for Three
Months and Six Months Ended June 30, 1999 and 1998..... 4
Statements of Partners' Capital for the Six Months
Ended June 30, 1999 and the Year Ended
December 31, 1998...................................... 5
Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 1999 and 1998............ 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.............................................. 17
2
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Assets June 30, 1999 December 31, 1998
------ ------------- -----------------
<S> <C> <C>
Real Estate, at cost
Land $ 2,894,193 $ 2,894,193
Building and improvements, less
accumulated depreciation of $7,888,750
in 1999 and $7,379,963 in 1998 11,819,421 12,305,562
----------- -----------
Total real estate assets 14,713,614 15,199,755
----------- -----------
Investment in joint ventures (Note 2) 6,389,089 6,500,083
Cash and cash equivalents 1,530,946 969,081
Due from affiliates 103,724 83,222
Deferred lease acquisition costs 107,907 57,590
Accounts receivable 306,957 230,510
Prepaid expenses and other assets 83,365 58,541
----------- -----------
8,521,988 7,899,027
----------- -----------
Total assets $23,235,602 $23,098,782
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable $ 101,181 $ 70,049
Due to affiliates 1,657,414 1,624,749
Refundable security deposits 84,803 56,709
Partnership distribution payable 4,843 4,843
Minority interest 107,077 108,853
----------- -----------
Total liabilities 1,955,318 1,865,203
----------- -----------
Partners' capital
Limited partners:
Class A - 98,716 Units Outstanding 21,280,284 21,233,579
Class B - 42,568 Units Outstanding 0 0
----------- -----------
Total partners' capital 21,280,284 21,233,579
----------- -----------
Total liabilities and partners' capital $23,235,602 $23,098,782
=========== ===========
</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 (LOSS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------- -------------------------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $360,676 $371,745 $716,175 $759,577
Interest income 18,045 4,839 29,992 7,160
Equity in income (loss) of Joint
Ventures (Note 2) 63,383 52,093 141,196 96,208
-------- -------- -------- --------
442,104 428,677 887,363 862,945
-------- -------- -------- --------
Expenses:
Management and leasing fees 31,636 37,605 62,409 72,428
Lease acquisition costs 570 1,045 999 5,087
Operating costs-rental properties
net of tenant reimbursements 14,867 69,051 215,026 270,512
Depreciation 254,411 255,408 508,786 510,412
Legal and accounting 7,497 12,628 12,681 17,507
Computer expense 2,246 1,838 4,681 3,848
Partnership administration 15,423 16,878 35,666 29,456
Minority interest 314 868 409 3,093
-------- -------- -------- --------
326,964 395,321 840,657 912,343
-------- -------- -------- --------
Net income (loss) $115,140 $ 33,356 $ 46,706 $(49,398)
======== ======== ======== ========
Net income allocated to
General Partners $ 0 $ 0 $ 0 $ 0
Net income (loss) allocated to
Class A Limited Partners $115,140 $ 33,356 $ 46,706 $(49,398)
Net loss allocated to Class B
Limited Partners $ 0 $ 0 $ 0 $ 0
Net income (loss) per Class A
Limited Partner Unit $ 1.17 $ .34 $ .47 $ (.50)
Net loss per Class B Limited
Partner Unit $ 0 $ 0 $ 0 $ 0
Cash distribution per Class A
Limited Partner Unit $ 0 $ 0 $ 0 $ 0
</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, 1998 AND SIX MONTHS ENDED
JUNE 30, 1999
<TABLE>
<CAPTION>
Limited Partners
--------------------------------------
Class A Class B Total
--------------------- --------------- Partners'
Units Amounts Units Amounts Capital
------ ------------- ------ ------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1997 98,716 $21,571,254 42,568 $0 $21,571,254
Net (loss) 0 (337,675) 0 0 (337,675)
Partnership distributions 0 0 0 0 0
------ ----------- ------ -- -----------
BALANCE, December 31, 1998 98,716 21,233,579 42,568 0 21,233,579
Net income 0 46,706 0 0 46,706
------ ----------- ------ -- -----------
BALANCE, June 30, 1999 98,716 $21,280,285 42,568 $0 $21,280,285
====== =========== ====== == ===========
</TABLE>
See accompanying condensed notes to consolidated 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, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 46,706 $ (49,398)
---------- ---------
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Equity in income of joint ventures (141,195) (96,208)
Minority interest 409 3,093
Depreciation 508,786 510,412
Accrued management and leasing fees 32,256 64,156
Changes in assets and liabilities:
Accounts receivable (76,447) 45,577
Prepaids and other assets (61,524) (559)
Deferred income 0 (5,485)
Accounts payable and refundable security
deposits 34,403 (6,426)
Due to affiliates 9,430 (12,952)
---------- ---------
Total adjustments 306,118 501,608
---------- ---------
Net cash provided by operating activities 352,824 452,210
---------- ---------
Cash flow from investing activities:
Distributions received from joint ventures 231,686 179,019
Investment in real estate (22,645) (105,418)
---------- ---------
Net cash provided by investing activities 209,041 73,601
---------- ---------
Cash flow from financing activities:
Partnership distributions paid (0) (180,671)
---------- ---------
Net increase in cash and cash equivalents 561,865 345,140
Cash and cash equivalents, beginning of year 969,081 128,199
---------- ---------
Cash and cash equivalents, end of period $1,530,946 $ 473,339
========== =========
</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, 1999 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
7
<PAGE>
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 consolidated financial statements and footnotes
included in the Partnership's Form 10-K for the year ended December 31,
1998.
(2) Investment in Joint Venture
---------------------------
The Partnership owned interests in six properties as of June 30, 1999
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
- -------
As of June 30, 1999 the properties owned by the Partnership were 77.6% occupied.
Revenues of the Partnership were $442,104 for the three months ended June 30,
1999 as compared to $428,677 for the three months ended June 30, 1998, and
$887,363 for the six months ended June 30, 1999, as compared to $862,945 for the
same period in 1998. The increase for 1999 over 1998 was due primarily to an
increase in equity from joint ventures as occupancy and rental income increased
at both Heritage Place and Cherokee Commons.
Expenses of the Partnership were $840,657 for the six months ended June 30,
1999, as compared to $912,343 for the six months ended June 30, 1998. The
decrease in expenses for 1999 over 1998 was due primarily to decreased operating
costs of the Partnership's properties.
8
<PAGE>
Net cash provided by operating activities decreased from $452,210 for the six
months ended June 30, 1998, to $352,824 at June 30, 1999, due primarily to a
increase in net income.
There were no cash distributions to the Limited Partners holding Class A Units
for the six months ended June 30, 1999. No cash distributions were made to the
Limited Partners holding Class B units or to the General Partners for the six
months ended June 30, 1999 and 1998. As a result, cash and cash equivalents
increased from $473,339 in 1998 to $1,530,946 in 1999.
The Partnership is reserving all operating cash flow generated during the first
and second quarters of 1999 which would otherwise be available for distribution
to Limited Partners to fund the proposed reconfiguration of the interior of the
Paces Pavilion Building. The lease with Hospital Corporation of America (HCA)
expired December 31, 1996 and as of June 30, 1999, the building is only 21.8%
leased. Management has hired an outside firm and hopes to enter into leases in
the near future. It is anticipated that the cost to refit the interior of the
building will be approximately $1.2 million. Therefore, to meet these
requirements, the Partnership expects to reserve all distributions for 1998 and
1999 and apply such amounts to fund the reconfiguration of the interior of this
property.
Year 2000
- ---------
The Partnership is presently reviewing the potential impact of Year 2000
compliance issues on its information systems and business operations. A full
assessment of Year 2000 compliance issues was begun in late 1997 and was
completed by March 31, 1999. Renovations and replacements of equipment have
been and are being made as warranted. The costs incurred by the Partnership and
its affiliates thus far for renovations and replacements have been immaterial.
As of June 30, 1999 all testing of systems has been completed.
As to the status of the Partnership's information technology systems, it is
presently believed that all major systems and software are Year 2000 compliant.
At the present time, it is believed that all major non-information technology
systems are Year 2000 compliant. The cost to upgrade any non-compliant systems
is believed to be immaterial.
The Partnership has confirmed with the Partnership's vendors, including third-
party service providers such as banks, that their systems are Year 2000
compliant.
The Partnership relies on computers and operating systems provided by equipment
manufacturers, and also on application software designed for use with its
accounting, property management and investment portfolio tracking. The
Partnership has preliminarily determined that any costs, problems or
uncertainties associated with the potential consequences of Year 2000 issues are
not expected to have a material impact on the future operations or financial
condition of the Partnership. The Partnership will perform due diligence as to
the Year 2000 readiness of each property owned by the Partnership and each
property contemplated for purchase by the Partnership.
The Partnership's reliance on embedded computer systems (i.e., microcontrollers)
is limited to facilities related matters, such as office security systems and
environmental control systems.
9
<PAGE>
The Partnership is currently formulating contingency plans to cover any areas of
concern. Alternate means of operating the business are being developed in the
unlikely circumstance that the computer and phone systems are rendered
inoperable. An off-site facility from which the Partnership could operate is
being sought as well as alternate means of communication with key third-party
vendors. A written plan is being developed for testing and dispensation to each
staff member of the General Partner of the Partnership.
Management believes that the Partnership's risk of Year 2000 problems is
minimal. In the unlikely event there is a problem, the worst case scenarios
would include the risks that the elevator or security systems within the
Partnership's properties would fail or the key third-party vendors upon which
the Partnership relies would be unable to provide accurate investor information.
In the event that the elevator shuts down, the Partnership has devised a plan
for each building whereby the tenants will use the stairs until the elevators
are fixed. In the event that the security system shuts down, the Partnership
has devised a plan for each building to hire temporary on-site security guards.
In the event that a third-party vendor has Year 2000 problems relating to
investor information, the Partnership intends to perform a full system back-up
of all investor information as of December 31, 1999 so that the Partnership will
have accurate hard-copy investor information.
10
<PAGE>
Property Operations
- -------------------
As of June 30, 1999, 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, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 25,889 $ 16,426 $ 42,315 $ 46,210
-------- --------- --------- ---------
Expenses:
Depreciation 64,160 62,935 128,320 125,869
Management & leasing expenses 1,575 1,007 2,581 2,788
Other operating expenses 52,114 55,876 134,579 106,860
-------- --------- --------- ---------
117,849 119,818 265,480 235,517
-------- --------- --------- ---------
Net loss $(91,960) $(103,392) $(223,165) $(189,307)
======== ========= ========= =========
Occupied % 21.8% 12.56% 21.8% 12.56%
Partnership's Ownership % 100% 100% 100% 100%
Cash generated to Partnership $ 0 $ 0 $ 0 $ 0
Net loss generated to the
Partnership $(91,960) $(103,392) $(223,165) $(189,307)
</TABLE>
Rental revenues increased for the three months ended June 30, 1999, as compared
to the six months ended June 30, 1998, due to a tenant that moved in during the
second quarter of 1999. Operating expenses increased significantly for the six
months period ended June 30, 1999, due to property taxes, insurance, and common
area maintenance expenses previously paid for by a major tenant that is no
longer leasing space.
Currently, there are five tenants occupying the premises. Management has hired
an outside firm to help with the leasing of the building.
11
<PAGE>
Crowe's Crossing Property - Fund I
- ----------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $171,423 $173,573 $350,080 $348,459
-------- -------- -------- --------
Expenses:
Depreciation 104,281 104,414 208,694 208,762
Management & leasing expenses 16,077 19,815 30,605 37,784
Other operating expenses (65,154) (74,209) 8,710 (38,442)
-------- -------- -------- --------
55,204 50,020 248,009 208,104
-------- -------- -------- --------
Net income $116,219 $123,553 $102,071 $140,355
======== ======== ======== ========
Occupied % 87.5% 90.5% 87.5% 90.5%
Partnership's Ownership % 100% 100% 100% 100%
Cash generated to Partnership $221,740 $242,432 $285,589 $369,887
Net income generated to the
Partnership $116,219 $123,553 $102,071 $140,355
</TABLE>
Other operating expenses increased for the six months ended as compared to 1998,
due to significantly HVAC and plumbing repairs, and tenant allowance. In 1998 a
recovery of bad debt of approximately $13,000 and water billings of
approximately $12,000 to tenants lowered operating expenses. Cash generated to
the Partnership and net income decreased due to the increase in operating
expenses.
Other operating expenses increased for the three month period ended June 30,
1999 due to HVAC and plumbing repairs and legal fees offset by bad debt recovery
of $23,500 and common area maintenance billings. Tenants are billed an estimated
amount for the current year common area maintenance which is then reconciled the
second quarter of the following year and the difference billed to the tenant.
12
<PAGE>
Black Oak Plaza Property - Fund I
- ---------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $106,409 $110,662 $213,256 $225,775
Interest income 192 0 510 0
-------- -------- -------- --------
106,601 110,662 213,766 225,775
-------- -------- -------- --------
Expenses:
Depreciation 66,680 66,773 133,509 133,208
Management & leasing expenses 9,844 12,257 21,272 25,873
Other operating expenses (5,794) 52,549 8,216 148,127
-------- -------- -------- --------
70,730 131,579 162,997 307,208
-------- -------- -------- --------
Net income (loss) $ 35,871 $(20,917) $ 50,769 $(81,433)
======== ======== ======== ========
Occupied % 70% 70% 70% 70%
Partnership's Ownership % 100% 100% 100% 100%
Cash generated to Partnership $110,822 $ 68,547 $206,599 $ 69,791
Net income (loss) generated to the
Partnership $ 35,871 $(20,917) $ 50,769 $(81,433)
</TABLE>
Rental income decreased from $110,662 for the three month period ended June 30,
1998 to $106,409 for the same period in 1999 and from $225,775 for the six month
period ended June 30, 1998 to $213,256 for the same period in 1999 due primarily
to decreased renewal rental rates.
Other operating expenses decreased in 1999, as compared to 1998, due primarily
to increases in billings of common area maintenance, decreases in parking lot
repairs and legal fees. Tenants are billed an estimated amount for the current
year common area maintenance which is then reconciled the second quarter of the
following year and the difference billed to the tenant. Cash generated to the
Partnership and net income allocated to the Partnership increased in 1999, as
compared to 1998, due primarily to the decrease in expense noted above.
13
<PAGE>
Peachtree Place Property - Fund I and Wells & Associates Joint Venture
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $57,465 $71,083 $110,524 $139,132
Interest income 8 8 16 16
------- ------- -------- --------
57,473 71,091 110,540 139,148
Expenses:
Depreciation 19,290 21,287 38,263 42,574
Management & leasing expenses 4,710 5,571 8,950 11,070
Other operating expenses 33,824 35,596 62,733 54,726
------- ------- -------- --------
57,824 62,454 109,946 108,370
------- ------- -------- --------
Net income (loss) $ (351) $ 8,637 $ 594 $ 30,778
======= ======= ======== ========
Occupied % 85.2% 100% 85.2% 100%
Partnership's Ownership % 89.95% 89.95% 89.95% 89.95%
Cash distribution to the Partnership $ 7,476 $28,049 $ 13,520 $ 69,564
Net income (loss) allocated to the
Partnership $ 1,964 $ 7,770 $ 2,814 $ 27,685
</TABLE>
Rental income decreased for the quarter ending June 30, 1999, as compared to the
same period for 1998, due to decreased occupancy. Operating expenses increased
from $54,726 in 1998 to $62,733 in 1999, due to bad debt recovery of $7,000 in
the first quarter of 1998 as compared to only $300 in the first quarter of 1999.
Cash distributions and net income decreased in 1999, as compared to 1998, due to
increased operating expenses and decreased rental income.
14
<PAGE>
Heritage Place at Tucker Property/Fund I - Fund II Joint Venture
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $343,044 $311,526 $679,903 $611,887
Interest income 137 135 273 272
-------- -------- -------- --------
343,181 311,661 680,176 612,159
Expenses:
Depreciation 120,456 107,288 229,252 214,576
Management & leasing expenses 43,482 34,645 87,966 77,233
Other operating expenses 103,404 116,379 198,948 225,974
-------- -------- -------- --------
267,342 258,312 516,166 517,783
-------- -------- -------- --------
Net income (loss) $ 75,839 $ 53,349 $164,010 $ 94,376
======== ======== ======== ========
Occupied % 91.0% 82.0% 91.0% 82.0%
Partnership Ownership % 55.09% 55.09% 55.09% 55.09%
Cash distributed to the Partnership $ 54,213 $ 81,824 $143,594 $147,264
Net income (loss) allocated to the
Partnership $ 41,779 $ 29,390 $ 90,353 $ 51,992
</TABLE>
Rental income increased in 1999 from 1998, due primarily to the increase in
occupancy from 82% to 91%. Depreciation, management and leasing expenses
increased over prior year to date, due to increased occupancy. Other operating
expenses decreased primarily due to prior year adjustments for common area
maintenance billings to tenants. Tenants are billed an estimated amount for the
current year common area maintenance which is then reconciled the second quarter
of the following year and the difference billed to the tenant.
15
<PAGE>
Cherokee Property - Fund I, II, II-OW, VI, VII Joint Venture
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------- -------------------------------
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $237,232 $225,705 $464,615 $454,682
Interest income 19 19 39 41
-------- -------- -------- --------
237,251 225,724 464,654 454,723
Expenses:
Depreciation 111,415 110,564 221,527 221,127
Management & leasing expenses 26,135 18,737 51,129 44,488
Other operating expenses 9,772 1,919 (19,643) 5,050
-------- -------- -------- --------
147,322 131,220 253,013 270,665
-------- -------- -------- --------
Net income $ 89,929 $ 94,504 $211,641 $184,058
======== ======== ======== ========
Occupied % 95.9% 91.0% 95.9% 91.0%
Partnership Ownership % 24.0% 24.0% 24.0% 24.0%
Cash distributed to the
Partnership $ 49,512 $ 54,972 $108,595 $104,083
Net income allocated to the
Partnership $ 21,604 $ 22,703 $ 50,843 $ 44,216
</TABLE>
Rental income increased in 1999 over 1998, due to increased occupancy. The
decrease in operating expenses for the six month period ended June 30, 1999, as
compared to the same period in 1998 was due to common area maintenance
reimbursement billings. Tenants are billed an estimated amount for the current
year common area maintenance which is then reconciled the second quarter of the
following year and the difference billed to the tenant. The increase in
operating expenses for the three month period ended June 30, 1998 was due to
increased expenditures for tenant improvements, HVAC repairs and a partial
demolition of a tenant suite.
16
<PAGE>
PART II - OTHER INFORMATION
----------------------------
Item 6(b). No reports on Form 8-K were filed during the second quarter of 1999
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 10, 1999 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.
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,530,946
<SECURITIES> 6,389,089
<RECEIVABLES> 410,681
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 191,272
<PP&E> 22,602,364
<DEPRECIATION> 7,379,963
<TOTAL-ASSETS> 23,235,602
<CURRENT-LIABILITIES> 1,955,318
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 21,280,284
<TOTAL-LIABILITY-AND-EQUITY> 23,235,602
<SALES> 0
<TOTAL-REVENUES> 887,363
<CGS> 0
<TOTAL-COSTS> 840,657
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 46,706
<INCOME-TAX> 46,706
<INCOME-CONTINUING> 46,706
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,706
<EPS-BASIC> .47
<EPS-DILUTED> 0
</TABLE>
