<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, 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 Identification No.)
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
(A Georgia Public Limited Partnership)
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets--September 30, 1999 and December 31, 1998 3
Consolidated Statements of Income (Loss) for the Three Months and Nine Months
Ended September 30, 1999 and 1998 4
Statements of Partners' Capital for the Nine Months Ended September 30, 1999 and
the Year Ended December 31, 1998 5
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1999
and 1998 6
Condensed Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Conditions and Results of
Operations 8
PART II. OTHER INFORMATION 17
</TABLE>
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<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------------ ------------------
<S> <C> <C>
ASSETS:
Real estate, at cost:
Land $ 2,894,193 $ 2,894,193
Building and improvements, less accumulated depreciation of
$7,376,639 in 1999 and $6,354,204 in 1998 11,567,581 12,305,562
------------------ ------------------
Total real estate assets 14,461,774 15,199,755
------------------ ------------------
Investment in joint ventures (Note 2) 6,307,630 6,500,083
Cash and cash equivalents 1,797,959 969,081
Due from affiliates 108,671 83,222
Deferred lease acquisition costs 108,139 57,590
Accounts receivable 310,665 230,510
Prepaid expenses and other assets 89,225 58,541
------------------ ------------------
8,722,289 7,899,027
------------------ ------------------
Total assets $ 23,184,063 $ 23,098,782
------------------ ------------------
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Accounts payable $ 77,723 $ 70,049
Due to affiliates 1,674,952 1,624,749
Refundable security deposits 88,013 56,709
Partnership distributions payable 325,205 4,843
Minority interest 104,747 108,853
------------------ ------------------
Total liabilities 2,270,640 1,865,203
------------------ ------------------
Partners' capital:
Limited partners:
Class A--98,716 units outstanding 20,913,423 21,233,579
Class B--42,568 units outstanding 0 0
------------------ ------------------
Total partners' capital 20,913,423 21,233,579
------------------ ------------------
Total liabilities and partners' capital $ 23,184,063 $ 23,098,782
------------------ ------------------
</TABLE>
See accompanying condensed notes to financial statements.
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<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, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Rental income $ 358,320 $ 375,298 $ 1,074,495 $ 1,134,875
Interest income 19,182 7,734 49,174 14,894
Equity in income of joint ventures (Note 2) 25,607 35,261 166,803 131,469
------------- ------------- ------------- -------------
403,109 418,293 1,290,472 1,281,238
------------- ------------- ------------- -------------
EXPENSES:
Management and leasing fees 32,139 31,742 94,548 104,170
Lease acquisition costs - 7,331 999 12,418
Operating costs--rental properties, net of tenant
reimbursements 173,920 250,276 388,946 520,788
Bad debt recovery (24,550) 0 (24,550) 0
Depreciation 254,544 257,479 763,330 767,891
Legal and accounting 200 1,097 12,881 18,604
Computer expense 3,359 2,325 8,040 6,173
Partnership administration 11,099 10,596 46,765 40,052
Minority interest (1,103) 331 (694) 3,424
------------- ------------- ------------- -------------
449,608 561,177 1,290,265 1,473,520
------------- ------------- ------------- -------------
Net (loss) income $ (46,499) $ (142,884) $ 207 $ (192,282)
------------- ------------- ------------- -------------
NET INCOME ALLOCATED TO GENERAL PARTNERS $ 0 $ 0 $ 0 $ 0
------------- ------------- ------------- -------------
NET (LOSS) INCOME ALLOCATED TO CLASS A LIMITED PARTNERS $ (46,499) $ (142,884) $ 207 $ (192,282)
------------- ------------- ------------- -------------
NET INCOME (LOSS) ALLOCATED TO CLASS B LIMITED PARTNERS $ 0 $ 0 $ 0 $ 0
------------- ------------- ------------- -------------
NET (LOSS) INCOME PER CLASS A LIMITED PARTNER UNIT $ (.47) $ (1.45) $ 0.00 $ (1.95)
------------- ------------- ------------- -------------
NET INCOME (LOSS) PER CLASS B LIMITED PARTNER UNIT $ 0.00 $ 0.00 $ 0.00 $ 0.00
------------- ------------- ------------- -------------
CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT $ 3.25 $ 0.00 $ 3.25 $ 0.00
------------- ------------- ------------- -------------
</TABLE>
See accompanying condensed notes to financial statements.
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<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
AND FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Limited Partners Total
---------------------------------------------------
Class A Class B 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)
----------- ----------- ----------- ----------- -----------
BALANCE, December 31, 1998 98,716 21,233,579 42,568 0 21,233,579
Net income 0 207 0 0 207
Partnership distributions 0 (320,363) 0 0 (320,363)
----------- ----------- ----------- ----------- -----------
BALANCE, September 30, 1999 98,716 $20,913,423 42,568 $ 0 $20,913,423
----------- ----------- ----------- ----------- -----------
</TABLE>
See accompanying condensed notes to financial statements.
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<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine Months Ended
-----------------------------
September 30, September 30,
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 207 $ (192,282)
------------- -------------
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of joint ventures (166,803) (131,469)
Minority interest (694) 3,424
Depreciation 763,330 767,891
Accrued management and leasing fees 50,897 79,689
Changes in assets and liabilities:
Accounts receivable (80,155) 103,450
Prepaids and other assets (69,474) (2,812)
Deferred income 0 (5,485)
Accounts payable and refundable security deposits 8,295 16,948
Due to affiliates 14,819 (20,015)
------------- -------------
Total adjustments 520,215 811,621
------------- -------------
Net cash provided by operating activities 520,422 619,339
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions received from joint ventures 333,805 315,815
Investment in real estate (25,349) (52,514)
------------- -------------
Net cash provided by investing activities 308,456 263,301
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partnership distributions paid 0 (174,816)
------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 828,878 707,824
CASH AND CASH EQUIVALENTS, beginning of year 969,081 128,199
------------- -------------
CASH AND CASH EQUIVALENTS, end of period $ 1,797,959 $ 836,023
------------- -------------
</TABLE>
See accompanying condensed notes to financial statements.
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<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONDENSED NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998 AND DECEMBER 31, 1998
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, L.P., 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 interest 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, and VII Joint Venture
As of September 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,
and VII Joint Venture. All of the foregoing properties were acquired on an
all-cash basis.
(b) Basis of Presentation
The financial statements of Wells Real Estate Fund I 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
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<PAGE>
the opinion of the general partners, the statements for the unaudited interim
periods presented include all adjustments, which are of a normal and
recurring nature, necessary to present a fair presentation of the results for
such periods. For further information, refer to the financial statements and
footnotes included in the Partnership's Form 10-K for the year ended December
31, 1998.
2. INVESTMENT IN JOINT VENTURES
The Partnership owned interests in nine properties as of September 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 ventures is recorded using
the equity method
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS 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 Section 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 statements made in this
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.
1. RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
(a) General
As of September 30, 1999 the properties owned by the Partnership were 77.2%
occupied. Revenues of the Partnership were $403,109 for the three months
ended September 30, 1999 as compared to $418,293 for the three months ended
September 30, 1998, and $1,290,472 for the nine months ended September 30,
1999, as compared to $1,281,238 for the same period in 1998. The increase
for the nine months ended September 30, 1999 over 1998 was due primarily to
increased interest income and an increase in equity from joint ventures as
occupancy and rental income increased at both Heritage Place and Cherokee
Commons. The increased revenue for the three-month period was due primarily
to increased interest income. Increased revenue at Heritage Place and
Cherokee Commons was offset by increased expenses at Cherokee Commons
resulting in a decrease in equity in joint ventures for the three months
ended September 30, 1999.
Expenses of the Partnership were $1,290,265 for the nine months ended
September 30, 1999, as compared to $1,473,520 for the nine months ended
September 30, 1998. The
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<PAGE>
decrease in expenses for 1999 over 1998 was due primarily to decreased
operating costs of the Partnership's properties.
Net cash provided by operating activities decreased from $619,339 for the
nine months ended September 30, 1998 to $520,422 at September 30, 1999 due
primarily to changes in receivables and payables.
The Partnership declared cash distributions to the Limited Partners holding
Class A units of $3.25 per Class A unit for the three months ended September
30, 1999. No cash distributions were made to the Limited Partners holding
Class B units or the General Partners for the nine months ended September 30,
1999 and 1998.
The Partnership's distributions payable for the third quarter of 1999 are
being 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 reserving all operating cash flow generated during the
first and second quarters of 1999 and 1998 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 September
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
reserved all distributions for 1998 and the first and second quarters of 1999
and applied such amounts to fund the reconfiguration of the interior of this
property.
The Partnership has recently made the decision to begin selling its
properties. At this time, four properties have been identified that will be
offered for sale within the next several months. The Partnership's goal is
to have all Fund I properties sold by the end of 2002. As the properties are
sold, all proceeds will be returned to the limited partners in accordance
with the Partnership's prospectus.
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 September 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 packages 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
noncompliant systems is believed to be immaterial.
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<PAGE>
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 conditions 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.
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 telephone 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
dispensed 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 elevators 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 elevators shut 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 systems shut
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.
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<PAGE>
2. PROPERTY OPERATIONS
As of September 30, 1999, the Partnership owned interest in the following
operational properties:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Paces Pavilion/Howell Mill Road Property- September 30, September 30, September 30, September 30,
Fund I 1999 1998 1999 1998
------------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 31,598 $ 16,418 $ 73,913 $ 62,628
------------- ------------- ------------- -------------
Expenses:
Depreciation 64,160 64,702 192,480 190,571
Management and leasing expenses 1,916 1,006 4,497 3,794
Other operating expenses 66,149 81,218 200,728 188,078
------------- ------------- ------------- -------------
132,225 146,926 397,705 382,443
------------- ------------- ------------- -------------
Net loss $ (100,627) $ (130,508) $ (323,792) $ (319,815)
============= ============= ============= =============
Occupied % 22% 12% 22% 12%
============= ============= ============= =============
Partnership's ownership % 100% 100% 100% 100%
============= ============= ============= =============
Cash generated to the Partnership $ 0 $ 0 $ 0 $ 0
============= ============= ============= =============
Net income generated to the Partnership $ (100,627) $ (130,508) $ (323,792) $ (319,815)
============= ============= ============= =============
</TABLE>
Rental revenues increased for the three months ended September 30, 1999 as
compared to the three months ended September 30, 1998 due to a tenant that
moved in during the second quarter of 1999. Operating expenses increased
significantly for the nine-month period ended September 30, 1999 due to a
tenant that moved out at the end of March 1998 and 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.
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<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Crowe's Crossing Property- September 30, September 30, September 30, September 30,
Fund I 1999 1998 1999 1998
- ------------------------------------------------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 183,866 $ 178,771 $ 533,946 $ 527,230
------------- ------------- ------------- -------------
Expenses:
Depreciation 104,172 104,413 312,866 313,175
Management and leasing expenses 15,840 20,557 46,445 58,341
Other operating expenses 28,970 66,959 37,680 28,517
------------- ------------- ------------- -------------
148,982 191,929 396,991 400,033
------------- ------------- ------------- -------------
Net income (loss) $ 34,884 $ (13,158) $ 136,955 $ 127,197
------------- ------------- ------------- -------------
Occupied % 87% 92% 87% 92%
------------- ------------- ------------- -------------
Partnership's ownership % 100% 100% 100% 100%
------------- ------------- ------------- -------------
Cash generated to the Partnership $ 152,792 $ 105,496 $ 438,381 $ 475,383
------------- ------------- ------------- -------------
Net income (loss) generated to the Partnership $ 34,884 $ (13,158) $ 136,955 $ 127,197
------------- ------------- ------------- -------------
</TABLE>
Rental income increased for the three-month period and nine-month period
ended September 30, 1999 due to rental renewal rates. Other operating
expenses increased for the nine months ended September 30, 1999 as compared
to the same period in 1998 due to significant 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. Other operating expenses decreased significantly for three-month
period due to additional HVAC repairs and landscaping supplies in 1998.
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<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Black Oak Plaza Property/ September 30, September 30, September 30, September 30,
Fund I 1999 1998 1999 1998
- --------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 78,555 $ 107,347 $ 291,811 $ 333,122
Interest income 200 0 710 0
------------- ------------- ------------- -------------
78,755 107,347 292,521 333,122
------------- ------------- ------------- -------------
Expenses:
Depreciation 66,383 66,829 199,892 200,037
Management and leasing expenses 1,719 10,708 22,991 36,581
Other operating expenses 27,323 62,842 35,539 210,969
------------- ------------- ------------- -------------
95,425 140,379 258,422 447,587
------------- ------------- ------------- -------------
Net (loss) income $ (16,670) $ (33,032) $ 34,099 $ (114,465)
------------- ------------- ------------- -------------
Occupied % 71% 73% 71% 73%
------------- ------------- ------------- -------------
Partnership's ownership % 100% 100% 100% 100%
------------- ------------- ------------- -------------
Cash generated to the Partnership $ 63,898 $ 49,449 $ 270,497 $ 119,240
------------- ------------- ------------- -------------
Net (loss) income generated to the Partnership $ (16,670) $ (33,032) $ 34,099 $ (114,465)
------------- ------------- ------------- -------------
</TABLE>
Rental income decreased from $107,347 for the three-month period ended
September 30, 1998 to $78,755 for the same period in 1999 and from $333,122
for the nine-month period ended September 30, 1998 to $291,811 for the same
period in 1999 due primarily to decreased occupancy.
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 following
year and the difference billed to the tenants. 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.
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<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Peachtree Place Property- September 30, September 30, September 30, September 30,
Wells Baker Associates 1999 1998 1999 1998
- ------------------------------------------------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 64,301 $ 72,763 $ 174,825 $ 211,895
Interest income (2) 0 14 16
------------- ------------- ------------- -------------
64,299 72,763 174,839 211,911
------------- ------------- ------------- -------------
Expenses:
Depreciation 19,829 22,510 58,092 65,084
Management and leasing expenses 4,149 5,826 13,099 16,896
Other operating expenses 34,011 41,134 96,744 95,860
------------- ------------- ------------- -------------
57,989 69,470 167,935 177,840
------------- ------------- ------------- -------------
Net income $ 6,310 $ 3,293 $ 6,904 $ 34,071
------------- ------------- ------------- -------------
Occupied % 85% 100% 85% 100%
------------- ------------- ------------- -------------
Partnership's ownership % 89.95% 89.95% 89.95% 89.95%
------------- ------------- ------------- -------------
Cash generated to the Partnership $ 23,396 $ 22,220 $ 42,960 $ 91,784
------------- ------------- ------------- -------------
Net income allocated to the Partnership $ 2,546 $ 2,962 $ 6,210 $ 30,647
------------- ------------- ------------- -------------
</TABLE>
Rental income decreased for the nine-month and three-month period ending
September 30, 1999 as compared to the same period for 1998, due to decreased
occupancy. Operating expenses increased from $95,860 in 1998 to $96,744 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 primarily to decreased
rental income.
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<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Heritage Place at Tucker Property/ September 30, September 30, September 30, September 30,
Fund I-Fund II Joint Venture 1999 1998 1999 1998
- -------------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 351,124 $ 301,785 $ 1,031,027 $ 913,672
Interest income 53 95 326 367
Other income 0 27,319 0 27,319
------------- ------------- ------------- -------------
351,177 329,199 1,031,353 941,358
------------- ------------- ------------- -------------
Expenses:
Depreciation 127,287 113,129 356,539 327,705
Management and leasing expenses 36,741 41,688 124,707 118,921
Other operating expenses 165,238 152,927 364,186 378,901
------------- ------------- ------------- -------------
329,266 307,744 845,432 825,527
------------- ------------- ------------- -------------
Net income $ 21,911 $ 21,455 $ 185,921 $ 115,831
------------- ------------- ------------- -------------
Occupied % 88% 82% 88% 82%
------------- ------------- ------------- -------------
Partnership's ownership % 55.1% 55.1% 55.1% 55.1%
------------- ------------- ------------- -------------
Cash distribution to the Partnership $ 60,846 $ 78,591 $ 204,440 $ 225,855
------------- ------------- ------------- -------------
Net income allocated to the Partnership $ 12,071 $ 10,166 $ 102,424 $ 62,158
------------- ------------- ------------- -------------
</TABLE>
Rental income increased in 1999 from 1998 due primarily to the increase in
occupancy from 82% to 88%. Other operating expenses increased for the three-
month period due to HVAC repairs and decreased from $378,801 to $364,186 for
the nine-month period ended September 30, 1999 due to a sewer pump and main
water line repair in 1998. Depreciation increased for the nine-month period
due to building repairs.
-15-
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Cherokee Property-Fund I, II, II-OW, September 30, September 30, September 30, September 30,
VI, and VII Joint Venture 1999 1998 1999 1998
- ------------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 238,923 $ 226,733 $ 703,538 $ 681,415
Interest income 8 2 47 43
------------- ------------- ------------- -------------
238,931 226,735 703,585 681,458
------------- ------------- ------------- -------------
Expenses:
Depreciation 111,379 111,285 332,906 332,412
Management and leasing expenses 22,863 18,478 73,992 62,966
Other operating expenses 48,342 20,630 28,699 25,680
------------- ------------- ------------- -------------
182,584 150,393 435,597 421,058
------------- ------------- ------------- -------------
Net income $ 56,347 $ 76,342 $ 267,988 $ 260,400
------------- ------------- ------------- -------------
Occupied % 97% 91% 97% 91%
------------- ------------- ------------- -------------
Partnership's ownership % 24% 24% 24% 24%
------------- ------------- ------------- -------------
Cash distribution to the Partnership $ 46,221 $ 50,732 $ 154,815 $ 153,348
------------- ------------- ------------- -------------
Net income allocated to the Partnership $ 13,536 $ 18,340 $ 64,379 $ 62,556
------------- ------------- ------------- -------------
</TABLE>
Rental income increased in 1999 over 1998 due to increased occupancy. The
increase in operating expenses for the three-month period ended September 30,
1999 was due to increased expenditures for tenant improvements, HVAC repairs,
and parking lot repairs.
-16-
<PAGE>
PART II. OTHER INFORMATION
ITEM 6 (b.) NO REPORTS ON FORM 8-K WERE FILED DURING THE THIRD 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: November 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,797,959
<SECURITIES> 6,307,630
<RECEIVABLES> 419,336
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 197,364
<PP&E> 21,838,413
<DEPRECIATION> 7,376,639
<TOTAL-ASSETS> 23,184,063
<CURRENT-LIABILITIES> 2,270,640
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,913,423
<TOTAL-LIABILITY-AND-EQUITY> 23,184,063
<SALES> 0
<TOTAL-REVENUES> 1,290,478
<CGS> 0
<TOTAL-COSTS> 1,290,265
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 207
<INCOME-TAX> 207
<INCOME-CONTINUING> 207
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 207
<EPS-BASIC> .0
<EPS-DILUTED> 0
</TABLE>
