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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant[_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
WELLS REAL ESTATE FUND I
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(Name of Registrant as Specified in its Charter)
__________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Party:
(4) Date Filed:
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______________________________________
WELLS REAL ESTATE FUND I
6200 The Corners Parkway, Suite 250
Norcross, Georgia 30092
June __, 2000
______________________________________
CONSENT SOLICITATION STATEMENT
TO THE LIMITED PARTNERS OF WELLS REAL ESTATE FUND I
Dear Limited Partner:
This statement is being mailed to the limited partners of Wells Real Estate
Fund I on or about June __, 2000 in order to solicit your consent to amend
Section 9.3 of the Restated and Amended Certificate and Agreement of Limited
Partnership of Wells Real Estate Fund I dated July 30, 1984 relating to the
distribution of net sale proceeds upon the sale of real estate properties by the
partnership.
As recently announced to the limited partners, the general partners of the
partnership have been actively marketing for sale certain of the real estate
properties owned by the partnership and believe that they are in the final
stages of negotiating a contract for one of the partnership's properties. In
connection with the initial implementation of the process of the marketing for
sale of these real estate properties, the general partners have undertaken an
analysis of the partnership's properties and all other aspects of the
partnership's operations having an impact on the property sale and liquidation
process. During their review of the partnership agreement, the general partners
determined that the method for distributing the net sale proceeds to the limited
partners upon the sale of a property is unfair and inequitable to the limited
partners holding Class B Units. Before the general partners proceed any further
in the marketing and sale of partnership properties and the distribution of the
proceeds therefrom to the limited partners, the general partners desire to
obtain your consent to amend the partnership agreement to change and clarify the
manner in which net sale proceeds are allocated and distributed between limited
partners holding Class A Units and limited partners holding Class B Units as
follows:
. First, limited partners holding Class B Units will receive distributions
of net sale proceeds in an amount necessary to provide them with cash
distributions on a per unit basis equal to all cash distributions
previously paid to limited partners holding Class A Units on a per unit
basis.
. Second, net sale proceeds, to the extent available, shall be distributed
to each limited partner on a per unit basis until each such limited
partner receives distributions equal to the sum of the purchase price
paid for his units plus an amount equal to a 15% annual return on his
invested capital (as adjusted for an additional incentive of 1% for
early investors), less all prior distributions made to such limited
partner.
. Finally, any remaining net sale proceeds shall be distributed 85% to the
limited partners and 15% to the general partners.
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In the event that a majority of the limited partners vote in favor of this
amendment to the partnership agreement, Wells Management Company, Inc. Wells
Management an affiliate of the general partners, has agreed to forgive all
property management fees owed by the partnership for property management
services performed by Wells Management, the balance of which is currently
estimated to be $2,400,000 and which continue to accrue on a monthly basis
during the term of the partnership.
Limited partners of the partnership of record as of May 15, 2000, are
entitled to vote on this matter. No matter how many units of the partnership
you own, the general partners recommend that you vote in favor of approving the
amendment to the partnership agreement by checking the "YES" box on the Consent
Form enclosed.
Please review the information contained in this statement carefully, and
complete, sign and return the enclosed Consent Form as quickly as possible. A
postage-paid return envelope has been included for your convenience. Executed
Consent Forms must be received by August 31, 2000, which is the date the Consent
Form will expire unless consents from limited partners owning of record more
than 50% of the outstanding units in the partnership have been received prior to
such date.
The information contained in this statement is accurate only as of the date
above and the general partners undertake no obligation to update any information
contained in this statement after the date hereof.
If you have any questions about the enclosed material, please call Wells
Investor Services Department at _________________.
Very truly yours,
WELLS REAL ESTATE FUND I
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Proposed Amendment to the Partnership Agreement
Explanation of Proposed Amendment
During the fourth quarter of 1999, the general partners began analyzing the
effects on the limited partners of selling the real estate properties owned by
the partnership. Upon their review of the partnership agreement, the general
partners determined that the method for allocating and distributing the net sale
proceeds to the limited partners upon the sale of a property is unfair and
inequitable to the limited partners holding Class B Units. Currently, the
partnership agreement provides for net sale proceeds to be distributed to the
partners in accordance with the positive balances in their tax capital accounts.
Since the limited partners holding Class B Units have very small or no balances
in their capital accounts, they would receive little, if any, distributions of
net sale proceeds upon the sale of a building. Accordingly, upon a sale of one
of the partnership's properties, the vast majority of the net sale proceeds
received would be distributed to the limited partners holding Class A Units.
Given that the limited partners holding Class B Units have not yet received any
distributions of cash from operations of the partnership, the distribution of
substantially all of the net sale proceeds to the limited partners holding Class
A Units would substantially frustrate the intent of the general partners upon
forming the partnership and would, in the opinion of the general partners, be
unfair to the limited partners holding Class B Units.
The general partners have always intended to distribute the net sale
proceeds in an equitable manner such that the distribution of net sale proceeds
would not be unfair to the limited partners holding Class B Units and recommend
that you vote for this proposed amendment providing that limited partners
holding Class B Units receive cash distributions upon the sale of a property
sufficient to equal the amount of distributions previously made to limited
partners holding Class A Units. If the limited partners vote to approve the
amendment to the partnership agreement proposed in this statement, net sale
proceeds would be distributed in the following manner:
. First, limited partners holding Class B Units will receive distributions
of net sale proceeds in an amount necessary to provide them with cash
distributions on a per unit basis equal to all cash distributions
previously paid to limited partners holding Class A Units on a per unit
basis.
. Second, net sale proceeds, to the extent available, shall be distributed
to each limited partner on a per unit basis until each such limited
partner receives distributions equal to the sum of the purchase price
paid for his units plus an amount equal to a 15% annual return on his
invested capital (as adjusted for an additional incentive of 1% for
limited partners who subscribed for their units on or before December
31, 1984), less all prior distributions made to such limited partner.
. Finally, any remaining net sale proceeds shall be distributed 85% to the
limited partners and 15% to the general partners.
The general partners believe that amending the partnership agreement in
accordance with this statement is the most fair and equitable method for
distributing net sale proceeds. The general partners are not required to offer
the partnership's properties for sale at any stated time. However, if a majority
of the limited partners of the partnership vote in favor of the amendment to the
partnership agreement proposed in this statement, the general partners agree to
continue with the process of marketing the real estate properties owned by the
partnership for sale and to use their best efforts to sell all such properties
and distribute the net sale proceeds received therefrom by December 31, 2002.
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The general partners will receive no economic benefit from the approval of
this proposed amendment to the partnership agreement. Moreover, in the event
that a majority of the limited partners of the partnership vote in favor of this
amendment, the general partners agree to cause Wells Management Company, Inc.
(Wells Management), an affiliate of the general partners, to forgive all
property management fees owed by the partnership for property management
services performed by Wells Management, the balance of which is currently
estimated to be $2,400,000 and which continue to accrue on a monthly basis
during the term of the partnership. If Wells Management does not agree to
forgive this partnership obligation, the first monies received by the
partnership upon the sale of a partnership property would be required to be paid
to Wells Management as reimbursement for its deferred property management fees
prior to making any distributions to limited partners thereby reducing the
amount of net sale proceeds remaining to be distributed to the limited partners.
In order to effectuate the most fair and equitable method of distributing
net sale proceeds upon the sale of the partnership's properties, as originally
contemplated by the general partners upon formation of the partnership, the
general partners request that you vote to amend the partnership agreement as
described in this statement.
Text of Proposed Amendment to the Partnership Agreement
In order to make the allocation and distribution of net sale proceeds more
fair and equitable among the limited partners, the general partners propose that
Section 9.3 of the partnership agreement be deleted in its entirety and the
following provision be inserted in lieu thereof:
9.3 Net Sale Proceeds. Except as otherwise provided for in Section 9.4
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hereof in connection with a dissolution and liquidation of the
Partnership, and except for the potential reinvestment of Net Sale
Proceeds as provided in Section 11.3(g) hereof, Net Sale Proceeds, to
the extent available, shall be distributed as follows and in the
following order of priority: (a) first, to each Limited Partner
holding Class B Units, in proportion to and to the extent of, the
amount, if any, necessary to give each Limited Partner holding Class B
Units an amount of Net Sale Proceeds equal to the excess Cash
Available for Distribution received prior to the Sale Date by each
Limited Partner holding Class A Units under Section 9.1(a)(i) hereof,
assuming said Limited Partners had purchased an equivalent number of
Units on the same date; (b) then, to the Limited Partners until each
Limited Partner has received Partnership distributions in an amount
equal to the sum of his Capital Contribution, plus an amount equal to
his Cumulative Distribution, less the sum of all prior distributions
made to such Limited Partner; and (c) finally, eighty-five percent
(85%) thereof to the Limited Partners and fifteen percent (15%)
thereof to the General Partners. "Cumulative Distribution" means an
amount equal to a cumulative (but not compounded) fifteen percent
(15%) per annum, plus the Early Investment Incentive Bonus, if
applicable, on a Partner's Adjusted Capital Contribution for the
period commencing on the last day of the month in which the capital
was received by the Partnership and ending on the date as of which
such distribution is completed. "Early Investment Incentive Bonus"
means an extra one percent (1%) added to the calculation of the
Cumulative Distribution and is applicable to those Limited Partners
who subscribed to the Partnership on or before December 31, 1984.
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Effect of Approval of the Proposed Amendment to the Partnership Agreement
In the event that the proposed amendment to the partnership agreement is
approved by holders of a majority of the outstanding units of the partnership,
the allocation and distribution of net sale proceeds will not be made based upon
the positive balances in the capital accounts of the partners. Instead, the
allocation and distribution of net sale proceeds will be made in the following
priority:
. First, limited partners holding Class B Units will receive distributions
of net sale proceeds in an amount necessary to provide them with cash
distributions on a per unit basis equal to all cash distributions
previously paid to limited partners holding Class A Units on a per unit
basis.
. Second, net sale proceeds, to the extent available, shall be distributed
to each limited partner on a per unit basis until each such limited
partner receives distributions equal to the sum of the purchase price
paid for his units plus a 15% annual return on his invested capital (as
adjusted for the 1% early investment incentive bonus for limited
partners who subscribed for their units on or before December 31, 1984),
less all prior distributions made to such limited partner.
. Finally, any remaining net sale proceeds shall be distributed 85% to the
limited partners and 15% to the general partners.
Recommendation of the General Partners with Respect to the Proposed Amendment to
the Partnership Agreement
The general partners recommend that the limited partners vote in favor of
the proposed amendment to the partnership agreement. If a majority of the
limited partners of the partnership vote in favor of the amendment, the general
partners agree to continue with the process of marketing the real estate
properties owned by the partnership for sale and to use their best efforts to
sell all such properties and distribute the net sale proceeds received therefrom
by December 31, 2002.
The general partners will receive no economic benefit as a result of the
approval of the proposed amendment to the partnership agreement by the limited
partners. Moreover, in the event that a majority of the limited partners of the
partnership vote in favor of the amendment, the general partners agree to cause
Wells Management, an affiliate of the general partners, to forgive all property
management fees owed by the partnership with respect to these properties which
is currently estimated to be $2,400,000 and which obligation continues to accrue
on a monthly basis as property management services are performed by Wells
Management.
Required Approval of Limited Partners
Pursuant to the provisions of Section 22.3 of the partnership agreement,
the partnership agreement may be amended with the affirmative vote or written
consent of limited partners owning of record more than 50% of the then
outstanding units in the partnership. Accordingly, the consent of holders of at
least 72,055 of the 141,284 outstanding units in the partnership of record as of
May 15, 2000 are required to authorize and approve the amendment to the
partnership agreement proposed hereby.
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PROXY
WELLS REAL ESTATE FUND I
CONSENT TO AMENDMENT TO PARTNERSHIP AGREEMENT
OF WELLS REAL ESTATE FUND I
PLEASE COMPLETE AND RETURN BY JULY 15, 2000
The undersigned Limited Partner, having received the Consent Solicitation
Statement (the "Statement") requesting consent to the proposed amendment to
Section 9.3 (the "Proposed Amendment") of the Restated and Amended Certificate
and Agreement of Limited Partnership dated July 30, 1984 (the "Partnership
Agreement"), as described therein, does hereby vote all units held of record by
the undersigned Limited Partner as follows:
This proxy when properly executed will be voted in the manner directed
herein by the undersigned Limited Partner. If an executed proxy is returned but
no direction is made, this proxy will be voted for the Proposed Amendment. This
Consent shall expire on August 31, 2000, unless Consents representing a
sufficient vote of the units to adopt the Proposed Amendment have been received
by that date. This Consent must be signed and dated.
(Continued on Reverse Side)
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(Continued From Other Side)
THE GENERAL PARTNERS RECOMMEND THAT YOU VOTE
"FOR" THE PROPOSED AMENDMENT AS DESCRIBED IN THE STATEMENT
Proposal to approve the Proposed Amendment to Section 9.3 of the
Partnership Agreement of Wells Real Estate Fund I as described in the
Statement.
[_] FOR [_] AGAINST [_] ABSTAIN
Date:______________________ ____________________________________
Signature
Date:______________________ ____________________________________
Signature
[Insert ID Label]
Please sign exactly as name appears on this proxy. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
