<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, 2000 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)
6200 The Corners Pkwy., 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, 2000 and December 31, 1999 3
Consolidated Statements of Operations for the Three Months and Nine Months Ended
September 30, 2000 and 1999 4
Consolidated Statements of Partners' Capital for the Nine Months Ended September 30,
2000 and the Year Ended December 31, 1999 5
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2000 6
and 1999
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>
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<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---------------- ---------------
<S> <C> <C>
ASSETS:
Real estate, at cost:
Land $ 2,776,544 $ 2,894,193
Building and improvements, less accumulated
depreciation of $8,387,866 in 2000 and $7,888,750 in 1999 10,244,799 11,313,057
---------------- ---------------
Total real estate assets 13,021,343 14,207,250
---------------- ---------------
Investment in joint ventures (Note 2) 5,933,768 6,200,073
Cash and cash equivalents 2,475,292 1,670,343
Due from affiliates 194,182 145,762
Deferred lease acquisition costs 146,465 131,071
Accounts receivable 160,415 275,220
Prepaid expenses and other assets 106,504 91,457
---------------- ---------------
9,016,626 8,513,926
---------------- ---------------
Total assets $22,037,969 $22,721,176
================ ===============
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Accounts payable $ 121,225 $ 23,004
Due to affiliates 1,736,845 1,686,651
Refundable security deposits 101,618 93,112
Partnership distribution payable 375,032 328,511
Minority interest 51,826 102,727
---------------- ---------------
Total liabilities 2,386,546 2,234,005
---------------- ---------------
Partners' capital:
Limited partners:
Class A--98,716 units outstanding 19,651,423 20,487,171
Class B--42,568 units outstanding 0 0
---------------- ---------------
Total partners' capital 19,651,423 20,487,171
---------------- ---------------
Total liabilities and partners' capital $22,037,969 $22,721,176
================ ===============
</TABLE>
See accompanying condensed notes to consolidated financial statements.
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<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Rental income $ 373,340 $ 358,320 $ 1,151,318 $ 1,074,495
Interest income 31,367 19,182 79,060 49,174
Equity in income of joint ventures (Note 2) 48,636 25,607 184,814 166,803
Gain on sale of property 268,103 0 268,103 0
------------- ------------- ------------- -------------
721,446 403,109 1,683,295 1,290,472
------------- ------------- ------------- -------------
EXPENSES:
Management and leasing fees 38,500 32,139 122,308 94,548
Lease acquisition costs 3,034 0 6,999 999
Operating costs--rental properties, net of tenant 164,052 173,920 498,520 388,946
reimbursements
Bad debt recovery (6,580) (24,550) (6,580) (24,550)
Depreciation 263,423 254,544 775,298 763,330
Legal and accounting 4,553 200 34,032 12,881
Computer expenses 2,354 3,359 7,247 8,040
Partnership administration 24,848 11,099 64,895 46,765
Minority interest (13,945) (1,103) (13,333) (694)
------------- ------------- ------------- -------------
483,257 449,608 1,492,404 1,290,265
------------- ------------- ------------- -------------
NET (LOSS) INCOME $ 238,189 $ (46,499) $ 190,891 $ 207
============= ============= ============= =============
NET INCOME ALLOCATED TO GENERAL PARTNERS $ 0 $ 0 $ 0 $ 0
============= ============= ============= =============
NET (LOSS) INCOME ALLOCATED TO CLASS A LIMITED
PARTNERS $ 238,189 $ (46,499) $ 190,891 $ 207
============= ============= ============= =============
NET INCOME ALLOCATED TO CLASS B LIMITED PARTNERS $ 0 $ 0 $ 0 $ 0
============= ============= ============= =============
NET (LOSS) INCOME PER CLASS A LIMITED PARTNER UNIT $ 2.40 $ (.47) $ 1.93 $ 0.00
============= ============= ============= =============
NET INCOME PER CLASS B LIMITED PARTNER UNIT $ 0.00 $ 0.00 $ 0.00 $ 0.00
============= ============= ============= =============
CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT $ 3.75 $ 3.25 $ 10.40 $ 3.25
============= ============= ============= =============
</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 PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1999
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Limited Partners
-----------------------------------------------------------
Class A Class B Total
------------------------------ -------------------------- Partners'
Units Amounts Units Amounts Capital
----------- ----------------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1998 98,716 $ 21,233,579 42,568 $ 0 $ 21,233,579
Net loss 0 (101,904) 0 0 (101,904)
Partnership distributions 0 (644,504) 0 0 (644,504)
----------- ----------------- ----------- ----------- --------------
BALANCE, December 31, 1999 98,716 20,487,171 42,568 0 20,487,171
Net income 0 190,891 0 0 190,891
Partnership distributions 0 (1,026,639) 0 0 (1,026,639)
----------- ----------------- ----------- ----------- --------------
BALANCE, September 30, 2000 98,716 $ 19,651,423 42,568 $ 0 $ 19,651,423
=========== ================= =========== =========== ==============
</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>
Nine Months Ended
-------------------------------------
September 30, September 30,
2000 1999
---------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 190,891 $ 207
---------------- ---------------
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in income of joint ventures (184,814) (166,803)
Minority interest 13,333 (694)
Gain on sale of property (268,103) 0
Depreciation 775,298 763,330
Accrued management and leasing fees 51,703 50,897
Changes in assets and liabilities:
Accounts receivable 114,805 (80,155)
Prepaids and other assets (15,047) (69,474)
Accounts payable and refundable security deposits 98,222 8,295
Due to affiliates 50,194 14,819
---------------- ---------------
Total adjustments 635,591 520,215
---------------- ---------------
Net cash provided by operating activities 826,482 520,422
---------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions received from joint ventures 402,702 333,805
Sale proceeds received from joint venture 633,694 0
Investment in real estate (31,290) (25,349)
---------------- ---------------
Net cash provided by investing activities 1,005,106 308,456
---------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partnership distributions paid (1,026,639) 0
---------------- ---------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 804,949 828,878
CASH AND CASH EQUIVALENTS, beginning of year 1,670,343 969,081
---------------- ---------------
CASH AND CASH EQUIVALENTS, end of period $ 2,475,292 $1,797,959
================ ===============
</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 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, 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 interests, Class A and Class B limited
partnership units.
The Partnership owns equity interest in the following joint ventures: (i)
Wells-Baker Associates, a joint venture between Fund I and Wells &
Associates Joint Venture, (ii) Fund I-Fund II Tucker; and (iii) Fund I, II,
II-OW, VI, and VII.
As of September 30, 2000, 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 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 Fund I and Wells & Associates; (v) Heritage
Place at Tucker Property, a retail shopping and commercial office complex
located in Tucker, Georgia, owned by Fund I-Fund II Tucker; and (vi) The
Cherokee Commons, 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 consolidated financial statements include the financials of the
Partnership and Wells-Baker. The Partnership's interest in Wells-Baker was
approximately 90% at September 30, 2000 and December 31, 1999. All
significant intercompany balances have been eliminated in consolidation.
Minority interest represents the interest of Wells and Associates, Inc., an
affiliate of the general partners, in Wells-Baker. At September 30, 2000
and 1999, Wells and Associates, Inc.'s interest in Wells-Baker was
approximately 10%.
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
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<PAGE>
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
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, 1999.
2. INVESTMENT IN JOINT VENTURES
The Partnership owned interests in two properties as of September 30, 2000,
through its investments in joint ventures. 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. Wells-Baker is consolidated
with the Partnership since the ownership is 89.95%
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 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
General
Revenues of the Partnership were $1,683,295 for the nine months ended
September 30, 2000 as compared to $1,290,472 for the nine months ended
September 30, 1999. The increase for 2000 over 1999 was due primarily to
the sale of 3875 Peachtree Place which is one of the commercial office
buildings owned by the Wells-Baker Joint Venture.
Expenses of the Partnership were $1,492,404 for the nine months ended
September 30, 2000, as compared to $1,290,265 for the nine months ended
September 30, 1999. The increase in expenses for 2000 over 1999 was due
primarily to increased operating costs of the Partnership's properties,
primarily decreased common area maintenance reimbursements at Crowe's
Crossing and Black Oak Plaza. As a result of increased revenues, net income
for both the three months and nine months ended September 30, 2000
increased as compared to the same periods of 1999.
Net cash provided by operating activities increased from $520,422 for the
nine months ended September 30, 1999 as compared to $826,482 for the same
period in 2000. This increase was due primarily to an increase in net
income. Net cash provided by investing activities increased for the nine
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<PAGE>
months ended September 30, 2000, as compared to the same period in 1999,
due to an increase in joint venture distributions and the sale of 3875
Peachtree Place by Wells-Baker joint venture. Partnership distributions
also increased in 2000 as compared to 1999. These changes produced cash and
cash equivalents of $1,797,959 and $2,475,292 at September 30, 1999 and
2000, respectively.
The Partnership made cash distributions of $3.75 to the Limited Partners
holding Class A units for the three months ended September 30, 2000, as
compared to $3.25 for the three months ended September 30, 1999. No cash
distributions were made to the Limited Partners holding Class B units or to
the General Partners for the three months ended September 30, 2000 and
1999. The Partnership's distributions payable for the third quarter of 2000
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 had reserved all operating cash flow generated during the
first and second quarters of 1999 and all of 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, 2000 the building is only 21.1% 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 will apply such amounts to fund the reconfiguration of
the interior of this property.
At this time, three properties are being marketed for sale. CB Richard
Ellis is marketing the sale of Cherokee Commons and Crowe's Crossing. The
marketing piece is being broadly distributed to investors throughout the
country. The Heritage Place at Tucker property is being marketed by The
First Fidelity Companies. To maximize the disposition value, the retail is
being separated and a condominium created for the office buildings. The
legal and site work should be complete so that this property can be
marketed to investors in early fall. The Partnership's goal is to have all
properties sold by the end of 2002. All proceeds will be returned to the
Limited Partners in accordance with the Partnership's prospectus.
Management estimates that the fair market value of each of the properties
exceeds the carrying value of the corresponding real estate assets;
consequently, no impairment loss has been recorded. In the event that the
net sales proceeds are less than the carrying value of the property sold,
the Partnership would recognize a loss on the sale. Management is not
contractually or financially obligated to sell any of its properties, and
it is management's current intent to fully realize the Partnership's
investment in real estate. The success of the Partnership's future
operations and the ability to realize investment in its assets will be
dependent on the Partnership's ability to maintain rental rates, occupancy,
and an appropriate level of operating expenses in future years. Management
believes that the steps that it is taking will enable the Partnership to
realize its investment in its assets.
Wells-Baker joint venture sold one of its commercial office buildings, 3875
Peachtree Place, on August 31, 2000, for $772,915. The net proceeds of the
sale were $704,495, of which the Partnership received $633,694. None of the
net proceeds from the sale has been distributed to the Limited Partners,
pending final results of the outstanding proxy solicitations described in
Item 4 hereof.
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<PAGE>
2. PROPERTY OPERATIONS
As of September 30, 2000, the Partnership owned interest in the following
properties:
Paces Pavilion-Howell Mill Road Property/Fund I
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 33,035 $ 31,598 $ 87,350 $ 73,913
------------- ------------- ------------- -------------
Expenses:
Depreciation 64,161 64,160 192,483 192,480
Management and leasing expenses 4,464 1,916 7,765 4,487
Other operating expenses 54,082 66,149 176,510 200,728
------------- ------------- ------------- -------------
122,707 132,225 376,758 397,705
------------- ------------- ------------- -------------
Net loss $ (89,672) $ (100,627) $ (289,408) $ (323,792)
============= ============= ============= =============
Occupied percentage 21% 22% 21% 22%
============= ============= ============= =============
Partnership's ownership percentage 100% 100% 100% 100%
============= ============= ============= =============
Cash generated to the Partnership $ 0 $ 0 $ 0 $ 0
============= ============= ============= =============
Net loss generated to the Partnership $ (89,672) $ (100,627) $ (289,408) $ (323,792)
============= ============= ============= =============
</TABLE>
Rental revenues increased for the nine months ended September 30, 2000, as
compared to the nine months ended September 30, 1999, due to an increase in
existing tenant renewing at a higher rate. Operating expenses decreased,
for the nine month period ended September 30, 2000, due to a decrease in
association dues for the property.
Currently, there are four tenants occupying the premises. Management has
hired an outside firm to engage a tenant for the 26,000 square feet of the
32,000 square foot building and hopes to enter into a lease for this space
in the near future.
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<PAGE>
Crowe's Crossing Property/Fund I
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 192,040 $ 183,866 $ 587,980 $ 533,946
------------- ------------- ------------- -------------
Expenses:
Depreciation 104,441 104,172 313,323 312,866
Management and leasing expenses 20,451 15,840 66,311 46,445
Other operating expenses 56,610 28,970 153,632 37,680
------------- ------------- ------------- -------------
181,502 148,982 533,266 396,991
------------- ------------- ------------- -------------
Net (loss) income $ 10,538 $ 34,884 $ 54,714 $ 136,955
============= ============= ============= =============
Occupied percentage 96% 87% 96% 87%
============= ============= ============= =============
Partnership's ownership percentage 100% 100% 100% 100%
============= ============= ============= =============
Cash generated to the Partnership $ 124,148 $ 152,792 $ 409,649 $ 438,381
============= ============= ============= =============
Net income generated to the Partnership $ 10,538 $ 34,884 $ 54,714 $ 136,955
============= ============= ============= =============
</TABLE>
Rental income and management and leasing fees increased for the nine months
ended September 30, 2000, as compared to the same period in 1999, due
primarily to increased occupancy. Other operating expenses increased due
primarily to a decrease in billing of common area maintenance. The common
area maintenance billings were under accrued in 1998. Other operating
expenses increased for the three months ended September 30, 2000 due to an
increase in property taxes and security. Tenants are billed an estimated
amount for the current year common area maintenance which is then reconcile
in the following year and the difference billed to the tenant. Net income
decreased due to an increase in operating expenses and management and
leasing expenses.
This property is currently being marketed for sale by CB Richard Ellis. The
marketing piece is being broadly distributed to investors throughout the
country. The Partnership's goal is to have this property sold by the end of
2002.
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<PAGE>
Black Oak Plaza Property/Fund I
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 100,307 $ 78,555 $ 307,840 $ 291,811
Interest Income 338 200 764 710
------------- ------------- ------------- -------------
100,545 78,755 308,604 292,521
------------- ------------- ------------- -------------
Expenses:
Depreciation 66,693 66,383 200,081 199,892
Management and leasing expenses (1,562) 1,719 21,988 22,991
Other operating expenses 27,617 27,323 83,610 35,539
------------- ------------- ------------- -------------
92,748 95,425 305,679 258,422
------------- ------------- ------------- -------------
Net income (loss) $ 7,797 $ (16,670) $ 2,925 $ 34,099
============= ============= ============= =============
Occupied percentage 70% 71% 70% 71%
============= ============= ============= =============
Partnership's ownership percentage 100% 100% 100% 100%
============= ============= ============= =============
Cash generated to the Partnership $ 79,848 $ 63,898 $ 194,536 $ 270,497
============= ============= ============= =============
Net income (loss) generated to the
Partnership $ 7,797 $ (16,670) $ 2,925 $ 34,099
============= ============= ============= =============
</TABLE>
Rental income increased for the three months ended September 30, 2000, as
compared to the same period in 1999, due to an increase in existing tenants
renewing at a higher rate and new tenants moving in late third quarter
1999. Other operating expenses increased to $83,610 from $35,539 for the
same period in 1999, due primarily to a decrease in billing of common area
maintenance. Tenants are billed an estimated amount for the current year
common area maintenance which is then reconciled in the following year and
the difference billed to the tenant. Cash generated to the Partnership and
net income generated to the Partnership decreased in 2000 as compared to
1999, due to an increase in the other operating expenses noted above.
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<PAGE>
Peachtree Place Property--Wells-Baker Associates
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 47,956 $ 64,301 $ 168,147 $ 174,825
Interest Income 346 (2) 363 14
Gain on sale of building 268,103 0 268,103 0
------------- ------------- ------------- -------------
316,405 64,299 436,613 174,839
------------- ------------- ------------- -------------
Expenses:
Depreciation 28,128 19,829 69,411 58,092
Management and leasing expenses 5,210 4,149 20,273 13,099
Other operating expenses 34,614 34,011 92,385 96,744
------------- ------------- ------------- -------------
67,952 57,989 182,069 167,935
------------- ------------- ------------- -------------
Net income $ 248,453 $ 6,310 $ 254,544 $ 6,904
============= ============= ============= =============
Occupied percentage 87% 85% 87% 85%
============= ============= ============= =============
Partnership's ownership percentage 89.95% 89.95% 89.95% 89.95%
============= ============= ============= =============
Cash generated to the Partnership from
operations (exclusive of net proceeds
from sale of building) $ 8,841 $ 23,396 $ 50,842 $ 42,960
============= ============= ============= =============
Net income generated to the Partnership $ 223,483 $ 2,546 $ 228,962 $ 6,210
============= ============= ============= =============
</TABLE>
Wells-Baker Joint Venture sold one of its commercial office buildings, 3875
Peachtree Place, on August 31, 2000, for $772,915. The net proceeds of the
sale were $704,496.
Rental income decreased for the quarter ending September 30, 2000, as
compared to the same period for 1999, due to the sale of 3875 Peachtree
Place, which is one of the commercial office buildings owned by Wells-
Baker. Management and leasing expenses increased for the quarter ending
September 30, 2000, as compared to the same period for 1999, due to
increased leasing commissions relating to the remaining building. Net
income increased in 2000, as compared to 1999, due to the aforementioned
sale.
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<PAGE>
Heritage Place at Tucker/Tucker Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 341,100 $ 351,124 $ 1,029,160 $ 1,031,027
Interest Income 187 53 536 326
------------- ------------- ------------- -------------
341,287 351,177 1,029,696 1,031,353
------------- ------------- ------------- -------------
Expenses:
Depreciation 123,119 127,287 368,681 356,539
Management and leasing expenses 32,737 36,741 93,118 124,707
Other operating expenses 122,566 165,238 365,317 364,186
------------- ------------- ------------- -------------
278,422 329,266 827,116 845,432
------------- ------------- ------------- -------------
Net income $ 62,865 $ 21,911 $ 202,580 $ 185,921
============= ============= ============= =============
Occupied percentage 88% 88% 88% 88%
============= ============= ============= =============
Partnership's ownership percentage 55.1% 55.1% 55.1% 55.1%
============= ============= ============= =============
Cash distribution to the Partnership $ 112,246 $ 60,846 $ 286,607 $ 204,440
============= ============= ============= =============
Net income allocated to the Partnership $ 34,632 $ 12,071 $ 111,601 $ 102,424
============= ============= ============= =============
</TABLE>
Rental income remained relatively stable in 2000 as compared to 1999. Total
expenses decreased in 2000, as compared to 1999, due to a decrease in
management and leasing expenses in 2000. The decrease in management and
leasing expenses was due to a decrease in leasing commissions and lease
acquisition fees. As a result, net income increased for the three months
and nine months ended September 30, 2000 as compared to the same periods in
1999.
This property is currently being marketed for sale by The First Fidelity
Companies. To maximize the disposition value, the management team is
separating the retail and creating a condominium for the office buildings.
The legal and site work should be complete so that the management team can
market this property to investors in early fall. The Partnership's goal is
to have this property sold by the end of 2002.
-14-
<PAGE>
Cherokee Commons/Fund I, II, II-OW, VI, and VII Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 249,102 $ 238,923 $ 713,717 $ 703,538
Interest Income 32 8 71 47
------------- ------------- ------------- -------------
249,134 238,931 713,788 703,585
------------- ------------- ------------- -------------
Expenses:
Depreciation 110,562 111,379 331,687 332,906
Management and leasing expenses 10,360 22,863 46,653 73,992
Other operating expenses 51,473 48,342 30,688 28,699
------------- ------------- ------------- -------------
172,395 182,584 409,028 435,597
------------- ------------- ------------- -------------
Net income $ 76,739 $ 56,347 $ 304,760 $ 267,988
============= ============= ============= =============
Occupied percentage 97% 97% 97% 97%
============= ============= ============= =============
Partnership's ownership percentage 24% 24% 24% 24%
============= ============= ============= =============
Cash distribution to the Partnership $ 43,051 $ 46,221 $ 164,515 $ 154,815
============= ============= ============= =============
Net income allocated to the Partnership $ 14,004 $ 13,536 $ 73,212 $ 64,379
============= ============= ============= =============
</TABLE>
Rental income increased for the three months and nine months ended
September 30, 2000, as compared to the same periods in 1999, due to
increased rental renewal rates. Management and leasing expenses decreased
in 2000, as compared to 1999, due to increased leasing commissions for 1999
and a an adjustment of 1998 management fees in 1999. Other operating
expenses remained relatively stable for the nine months ended September 30,
2000, as compared to the same period in 1999. Net income increased for the
three months and the nine months ended September 30, 2000, as compared to
the same periods in 1999, due to the lower management and leasing expenses.
The property is currently being marketed for sale by CB Richard Ellis. The
marketing piece is being broadly distributed to investors throughout the
country. The Partnership's goal is to have this property sold by the end of
2002.
-15-
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders.
(a) On approximately August 25, 2000, the Registrant mailed an Amended
and Restated Consent Solicitation Statement (the "Consent
Solicitation") to the Limited Partners of Wells Real Estate Fund I.
(b) N/A.
(c) The Consent Solicitation was mailed to solicit the consent of each
Class A Limited Partner to amendments to the Partnership Agreement to
change and clarify the manner in which net sale proceeds will be
allocated and distributed among the Class A Limited Partners and the
Class B Limited Partners in accordance with the original intent of
the General Partners. This Consent Solicitation is still being
conducted by the General Partners.
ITEM 6 (b.) No reports on Form 8-K were filed during the third quarter of
2000.
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, 2000 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-
