<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, 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 Identification Number)
incorporation or organization)
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 Balance Sheets--June 30, 2000 and December 31, 1999 3
Consolidated Statements of (Loss) Income for Three Months and
Six Months Ended June 30, 2000 and 1999 4
Statement of Partners' Capital for the Six Months Ended
June 30, 2000 and the Year Ended December 31, 1999 5
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2000 and 1999 6
Condensed Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
PART II. OTHER INFORMATION 16
</TABLE>
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<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
----------- ------------
2000 1999
----------- ------------
<S> <C> <C>
ASSETS:
Real estate, at cost:
Land $ 2,894,193 $ 2,894,193
Building and improvements, less accumulated depreciation of
$8,387,866 in 2000 and $7,888,750 in 1999 10,813,941 11,313,057
----------- -----------
Total real estate assets 13,708,134 14,207,250
----------- -----------
Investment in joint ventures (Note 2) 6,040,430 6,200,073
Cash and cash equivalents 1,832,013 1,670,343
Due from affiliates 177,392 145,762
Deferred lease acquisition costs 121,168 131,071
Accounts receivable 166,310 275,220
Prepaid expenses and other assets 96,422 91,457
----------- -----------
8,433,735 8,513,926
----------- -----------
Total assets $22,141,869 $22,721,176
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Accounts payable $ 91,473 $ 23,004
Due to affiliates 1,725,469 1,686,651
Refundable security deposits 88,558 93,112
Partnership distribution payable 354,305 328,511
Minority interest 98,646 102,727
----------- -----------
Total liabilities 2,358,451 2,234,005
----------- -----------
Partners' capital:
Limited partners:
Class A--98,716 units outstanding 19,783,418 20,487,171
Class B--42,568 units outstanding 0 0
----------- -----------
Total partners' capital 19,783,418 20,487,171
----------- -----------
Total liabilities and partners' capital $22,141,869 $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 Six Months Ended
-------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
REVENUES:
Rental income $384,183 $360,676 $ 777,978 $716,175
Interest income 24,983 18,045 47,693 29,992
Equity in income of joint ventures (Note 2) 70,259 63,383 136,178 141,196
-------- -------- ---------- --------
479,425 442,104 961,849 887,363
-------- -------- ---------- --------
EXPENSES:
Management and leasing fees 44,310 31,636 83,808 62,409
Lease acquisition costs 147 570 3,965 999
Operating costs--rental properties, net of
tenant reimbursements 180,717 14,867 334,468 215,026
Depreciation 256,446 254,411 511,875 508,876
Legal and accounting 17,143 7,497 29,479 12,681
Computer expenses 3,025 2,246 4,893 4,681
Partnership administration 27,951 15,423 40,047 35,666
Minority interest 118 314 612 409
-------- -------- ---------- --------
529,857 326,964 1,009,147 840,657
-------- -------- ---------- --------
NET (LOSS) INCOME $(50,432) $115,140 $ (47,298) $ 46,706
======== ======== ========== ========
NET INCOME ALLOCATED TO GENERAL PARTNERS $ 0 $ 0 $ 0 $ 0
======== ======== ========== ========
NET (LOSS) INCOME ALLOCATED TO CLASS A LIMITED PARTNERS $(50,432) $115,140 $ (47,298) $ 46,706
======== ======== ========== ========
NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS $ 0 $ 0 $ 0 $ 0
======== ======== ========== ========
NET (LOSS) INCOME PER CLASS A LIMITED PARTNER UNIT $ (.51) $ 1.17 $ (.48) $ .47
======== ======== ========== ========
NET LOSS PER CLASS B LIMITED PARTNER UNIT $ 0 $ 0 $ 0 $ 0
======== ======== ========== ========
CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT $3.52 $ 0 $6.65 $ 0
======== ======== ========== ========
</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 SIX MONTHS ENDED JUNE 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 distribution 0 (644,504) 0 0 (644,504)
------ ----------- ------ -- -----------
BALANCE, December 31, 1999 98,716 20,487,171 42,568 0 20,487,171
Net loss 0 (47,298) 0 0 (47,298)
Partnership distributions 0 (656,455) 0 0 (656,455)
------ ----------- ------ -- -----------
BALANCE, June 30, 2000 98,716 $19,783,418 42,568 $0 $19,783,418
====== =========== ====== == ===========
</TABLE>
See accompanying condensed notes to financial statements.
-5-
<PAGE>
WELLS REAL ESTATE FUND I
(A Georgia Public Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
----------------------
June 30, June 30,
--------- ----------
2000 1999
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (47,298) $ 46,706
---------- ----------
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Equity in income of joint ventures (136,178) (141,195)
Minority interest 612 409
Depreciation 511,875 508,876
Accrued management and leasing fees 38,206 32,256
Changes in assets and liabilities:
Accounts receivable 108,909 (76,447)
Prepaids and other assets (4,965) (61,524)
Accounts payable and refundable security deposits 68,469 34,403
Due to affiliates 38,818 9,430
---------- ----------
Total adjustments 625,746 306,118
---------- ----------
Net cash provided by operating activities 578,448 352,824
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions received from joint ventures 264,195 231,686
Investment in real estate (24,518) (22,645)
---------- ----------
Net cash provided by investing activities 239,677 209,041
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partnership distributions paid (656,455) 0
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 161,670 561,865
CASH AND CASH EQUIVALENTS, beginning of year 1,670,343 969,081
---------- ----------
CASH AND CASH EQUIVALENTS, end of period $1,832,013 $1,530,946
========== ==========
</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 June 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 June 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 June 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 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
-7-
<PAGE>
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 June 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 $961,849 for the six months ended June 30,
2000 as compared to $887,363 for the six months ended June 30, 1999. The
increase for 2000 over 1999 was due primarily to increased rental income from
all the properties owned by the Partnership and to increased interest income.
Expenses of the Partnership were $1,009,147 for the period ended June 30,
2000, as compared to $840,657 for the six months ended June 30, 1999. The
increase in expenses for 2000 over 1999 was due primarily to increased
operating costs of the Partnership's properties, primarily Crowe's Crossing
and Black Oak Plaza. As a result, there was a net loss of $47,298 for the six
months ended June 30, 2000, as compared to a net income of $46,706 for the
same period of 1999.
The Partnership made cash distributions of $3.52 to the Limited Partners
holding Class A Units for the three months ended June 30, 2000. There were no
cash distributions to the Limited Partners holding Class A Units for the
three 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
three months ended June 30, 2000 and 1999. The Partnership's distributions
payable for the second 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.
-8-
<PAGE>
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 June 30, 2000 the building is only 19.6% 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, five properties are being marketed for sale. The Partnership
has one of the two Peachtree Place buildings under contract for sale with
closing expected in September of this year. 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. As
the properties are sold, 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.
-9-
<PAGE>
2. PROPERTY OPERATIONS
As of June 30, 2000, the Partnership owned interest in the following
properties:
Paces Pavilion/Howell Mill Road Property
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 27,157 $ 25,889 $ 54,315 $ 42,315
--------- -------- --------- ---------
Expenses:
Depreciation 64,161 64,160 128,322 128,320
Management and leasing expenses 1,651 1,575 3,301 2,581
Other operating expenses 65,487 52,114 122,428 134,579
--------- -------- --------- ---------
131,299 117,849 254,051 265,480
--------- -------- --------- ---------
Net loss $(104,142) $(91,960) $(199,736) $(223,165)
========= ======== ========= =========
Occupied percentage 19.6% 21.8% 19.6% 21.8%
========= ======== ========= =========
Partnership's ownership percentage 100% 100% 100% 100%
========= ======== ========= =========
Cash generated to the Partnership $ 0 $ 0 $ 0 $ 0
========= ======== ========= =========
Net loss generated to the Partnership $(104,142) $(91,960) $(199,736) $(223,165)
========= ======== ========= =========
</TABLE>
Rental revenues increased for the six months ended June 30, 2000, as compared to
the six months ended June 30, 1999, due to an increase in existing tenant
renewals at a higher rate. Operating expenses decreased, for the six months
period ended June 30, 2000, due to a decrease in association dues for the
property.
Currently, there are three 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
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $205,979 $171,423 $395,940 $350,080
-------- -------- -------- --------
Expenses:
Depreciation 104,441 104,281 208,882 208,694
Management and leasing expenses 25,380 16,077 45,860 30,605
Other operating expenses 49,571 (65,154) 97,022 8,710
-------- -------- -------- --------
179,392 55,204 351,764 248,009
-------- -------- -------- --------
Net loss $ 26,587 $116,219 $ 44,176 $102,071
======== ======== ======== ========
Occupied percentage 95.7% 87.5% 95.7% 87.5%
======== ======== ======== ========
Partnership's ownership percentage 100% 100% 100% 100%
======== ======== ======== ========
Cash generated to the Partnership $148,347 $221,740 $285,501 $285,589
======== ======== ======== ========
Net generated to the Partnership $ 26,587 $116,219 $ 44,176 $102,071
======== ======== ======== ========
</TABLE>
Rental income and management and leasing fees increased for the six months ended
June 30, 2000, as compared to the same period in 1999, due primarily to
increased occupancy. Other operating expenses increased due to increased common
area maintenance billings to tenants in 1999. The common area maintenance
billings were under accrued in 1998. 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 remained stable. Net income decreased due to an increase in
operating expenses and management and leasing expenses.
-11-
<PAGE>
Black Oak Plaza Property
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 98,123 $106,409 $207,533 $213,256
Interest Income 297 192 526 510
-------- -------- -------- --------
98,420 106,601 208,059 213,766
-------- -------- -------- --------
Expenses:
Depreciation 66,694 66,680 133,388 133,509
Management and leasing expenses 11,629 9,844 23,550 21,272
Other operating expenses 40,538 (5,794) 55,993 8,216
-------- -------- -------- --------
118,861 70,730 212,931 162,997
-------- -------- -------- --------
Net (loss) income $(20,441) $ 35,871 $ (4,872) $ 50,769
======== ======== ======== ========
Occupied percentage 70% 70% 70% 70%
======== ======== ======== ========
Partnership's ownership percentage 100% 100% 100% 100%
======== ======== ======== ========
Cash generated to the Partnership $ 58,859 $110,822 $114,688 $206,599
======== ======== ======== ========
Net (loss) income generated to the
Partnership $(20,441) $ 35,871 $ (4,872) $ 50,769
======== ======== ======== ========
</TABLE>
Rental income and management and leasing expenses remained relatively the same
for the six months ended June 30, 2000. Other operating expenses increased to
$55,993 from $8,216 for the same period in 1999 due primarily to a decrease in
billings 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 the 1999, due to an increase in the other operating expenses noted
above.
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<PAGE>
Peachtree Place Property--Wells-Baker
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $55,448 $57,465 $120,191 $110,524
Interest Income 9 8 17 16
------- ------- -------- --------
55,457 57,473 120,208 110,540
------- ------- -------- --------
Expenses:
Depreciation 21,150 19,290 41,283 38,263
Management and leasing expenses 7,839 4,710 15,063 8,950
Other operating expenses 25,289 33,824 57,771 62,733
------- ------- -------- --------
54,278 57,824 114,117 109,946
------- ------- -------- --------
Net income (loss) $ 1,179 $ (351) $ 6,091 $ 594
======= ======= ======== ========
Occupied percentage 87.1% 85.2% 87.1% 85.2%
======= ======= ======== ========
Partnership's ownership percentage 89.95% 89.95% 89.95% 89.95%
======= ======= ======== ========
Cash generated to the Partnership $25,397 $ 7,476 $ 42,001 $ 13,520
======= ======= ======== ========
Net income (loss) generated to the
Partnership $ 1,061 $ 1,964 $ 5,479 $ 2,814
======= ======= ======== ========
</TABLE>
Rent income decreased for the quarter ending June 30, 2000, as compared to the
same period for 1999, due to tenant moved out in June 2000. Management and
leasing expenses increased for the quarter ending June 30, 2000, as compared to
the same period for 1999, due to increased occupancy. Operating expenses
decreased slightly in 2000, as compared to 1999, due to lower HVAC and plumbing
repairs. Cash distributions and net income increased in 2000, as compared to
1999, due to increased rental income and lower operating expenses.
-13-
<PAGE>
Heritage Place at Tucker Property/Fund I-Fund II Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $350,916 $343,044 $688,060 $679,903
Interest Income 207 137 349 273
-------- -------- -------- --------
351,123 343,181 688,409 680,176
-------- -------- -------- --------
Expenses:
Depreciation 123,226 120,456 245,562 229,252
Management and leasing expenses 31,803 43,482 60,381 87,966
Other operating expenses 113,712 103,404 242,751 198,948
-------- -------- -------- --------
268,741 267,342 548,694 516,166
-------- -------- -------- --------
Net income $ 82,382 $ 75,839 $139,715 $164,010
======== ======== ======== ========
Occupied percentage 88.3% 91% 88.3% 91%
======== ======== ======== ========
Partnership's ownership percentage 55.1% 55.1% 55.1% 55.1%
======== ======== ======== ========
Cash distributed to the Partnership $121,071 $ 54,213 $174,362 $143,594
======== ======== ======== ========
Net income allocated to the Partnership $ 45,392 $ 41,779 $ 76,983 $ 90,353
======== ======== ======== ========
</TABLE>
Rental income increased in 2000, as compared to 1999, even though there was a
decrease in the occupancy level of the property. This was due to existing
tenant renewals at a higher rate. Total expenses increased in 2000, as compared
to 1999, due primarily to increased depreciation expense on additional
capitalized tenant improvements, property taxes and repairs to the air condition
system. Management and leasing expenses decreased in 2000, as compared to 1999,
due to a decrease in leasing commissions and lease acquisition fees.
-14-
<PAGE>
Cherokee Commons/Fund I, II, II-OW, VI, and VII Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $240,192 $237,232 $483,053 $464,615
Interest Income 40 19 47 39
-------- -------- -------- --------
240,232 237,251 483,100 464,654
-------- -------- -------- --------
Expenses:
Depreciation 110,563 111,415 221,125 221,527
Management and leasing expenses 19,938 26,135 36,293 51,129
Other operating expenses 9,183 9,772 (20,785) (19,643)
-------- -------- -------- --------
136,684 147,322 236,633 253,013
-------- -------- -------- --------
Net income $103,548 $ 89,929 $246,467 $211,641
======== ======== ======== ========
Occupied percentage 97.1% 95.9% 97.1% 95.9%
======== ======== ======== ========
Partnership's ownership percentage 24% 24% 24% 24%
======== ======== ======== ========
Cash distributed to the Partnership $ 56,380 $ 49,512 $121,463 $108,595
======== ======== ======== ========
Net income allocated to the Partnership $ 24,875 $ 21,604 $ 59,209 $ 50,843
======== ======== ======== ========
</TABLE>
Rental income increased in 2000, as compared to 1999, due to increased occupancy
and increased rental renewal rates. Management and leasing expenses decreased
in 2000, as compared to 1999, due to increased leasing commissions for 1999 and
a catch-up of 1998 management fees in 1999. Other operating expenses remain
negative for the six month period ended June 30, 2000 and 1999 due to the
billing of common area maintenance to tenants. 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.
-15-
<PAGE>
PART II. OTHER INFORMATION
ITEM 6 (b.) No reports on Form 8-K were filed during the second 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: August 11, 2000 By: /s/ Leo F. Wells, III
---------------------
Leo F. Wells, III, as Individual
General Partner and as President
and Chief Financial Officer
of Wells Capital, Inc.
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