<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, 1998 or
-------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act 1934
For the transition period from ____________________ to _____________________
Commission file number 0-18407
---------------------------------------------
Wells Real Estate Fund III, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1800833
- ------------------------------- -----------------------------------
(State or other jurisdiction (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
------- --------
1
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund III, L.P.
--------------------------------
INDEX
-----
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 1998
and December 31, 1997........................................... 3
Statements of Income for the Six Months
Ended June 30, 1998 and 1997.................................... 4
Statement of Partner's Capital for the
Six Months Ended June 30, 1998
and the Year Ended December 31, 1997............................ 5
Statements of Cash Flows for the Six
Months Ended June 30, 1998 and 1997............................. 6
Condensed Notes to Financial Statements.......................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations...................................................... 8
PART II. OTHER INFORMATION............................................... 16
2
<PAGE>
WELLS REAL ESTATE FUND III, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
BALANCE SHEETS
Assets June 30, 1998 December 31, 1997
- ------ ------------- ------------------
Real estate, at cost:
Land $ 576,350 $ 576,350
Building and improvements, less accumulated
depreciation of $811,098 in 1998 and $771,521
in 1997 2,714,927 2,794,080
Construction in progress 34,615 0
----------- -----------
Total real estate 3,325,892 3,370,430
----------- -----------
Cash and cash equivalents 122,431 216,961
Investment in joint ventures (Note 2) 12,489,655 12,807,576
Due from affiliates 332,363 316,089
Accounts receivable 52,997 62,621
Prepaid expenses and other assets 30,306 17,990
----------- -----------
Total assets $16,353,644 $16,791,667
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable $ 21,961 $ 7,535
Partnership distributions payable 396,315 396,991
Due to affiliates 8,313 3,436
----------- -----------
Total liabilities 426,589 407,962
----------- -----------
Partners' capital:
General Partners 0 0
Limited Partners:
Class A - 19,635,965 units outstanding 15,927,055 16,383,705
Class B - 2,544,540 units outstanding 0 0
----------- -----------
Total partners' capital 15,927,055 16,383,705
----------- -----------
Total liabilities and partners' capital $16,353,644 $16,791,667
=========== ===========
See accompanying condensed notes to financial statements
3
<PAGE>
WELLS REAL ESTATE FUND III, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- --------------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
Revenues:
<S> <C> <C> <C> <C>
Rental income (note 2) $139,893 $147,935 $277,658 $295,612
Equity in earnings of joint
ventures (Note 2) 145,157 46,007 262,420 90,880
Interest income 390 3,009 1,019 10,168
-------- -------- -------- --------
285,440 196,951 541,097 396,660
Expenses:
Management & leasing fees 10,983 28,507 19,766 37,615
Operating costs-rental property 48,244 25,917 94,601 81,111
Depreciation 39,577 41,428 79,154 82,855
Legal & accounting 9,148 11,057 13,919 22,674
Computer costs 1,838 1,651 3,848 4,957
Partnership administration 13,061 12,974 21,490 27,626
-------- -------- -------- --------
122,851 121,534 232,778 256,838
-------- -------- -------- --------
Net income $162,589 $ 75,417 $308,319 $139,822
======== ======== ======== ========
Net income allocated to
General Partners $ 0 $ 0 $ 0 $ 0
Net income allocated to Class
A Limited Partners $162,589 $ 75,417 $308,319 $139,822
Net loss allocated to Class B
Limited Partners $ 0 $ 0 $ 0 $ 0
Net income per Class A Limited
Partner Unit $ .01 $ 0.00 $ 0.02 $ 0.01
Net loss per Class B
Limited Partner Unit $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Cash distribution per Class A
Limited Partner Unit $ 0.02 $ 0.00 $ 0.04 $ 0.00
</TABLE>
See accompanying condensed notes to financial statements
4
<PAGE>
WELLS REAL ESTATE FUND III, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE SIX MONTHS ENDED
JUNE 30, 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, 1996 19,635,965 $16,743,131 2,544,540 $0 $16,743,131
Net income 0 385,224 0 0 385,224
Partnership distributions 0 (744,650) 0 0 (744,650)
---------- ----------- --------- -- -----------
BALANCE, DECEMBER 31, 1997 19,635,965 16,383,705 2,544,540 0 16,383,705
Net income 0 308,319 0 0 308,319
Partnership distributions 0 (764,969) 0 0 (764,969)
---------- ----------- --------- -- -----------
BALANCE, JUNE 30, 1998 19,635,965 $15,927,055 2,544,540 $0 $15,927,055
========== =========== ========= == ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND III, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
-------------------------------------------
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 308,319 $ 139,822
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of joint ventures (262,420) (90,880)
Depreciation 79,154 82,855
Changes in assets and liabilities:
Accounts receivable 13,927 (7,809)
Prepaids and other assets (12,316) 1,101
Accounts payable 14,426 4,292
Due to affiliates 4,877 6,731
--------- ---------
Net cash provided by operating activities 145,967 136,112
--------- ---------
Cash flow from investing activities:
Investment in joint ventures (79,491) (532,855)
Distributions received from joint ventures 604,639 433,515
--------- ---------
Net cash provided by investing activities 525,148 (89,340)
Cash flow from financing activities:
Partnership distribution paid (765,645) (320,761)
--------- ---------
Net decrease in cash and cash equivalents (94,530) (273,989)
Cash and cash equivalents, beginning of year 216,961 342,318
--------- ---------
Cash and cash equivalents, end of period $ 122,431 $ 68,329
========= =========
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND III, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statements
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
------------
Wells Real Estate Fund III, L.P. (the "Partnership") is a Georgia public
limited partnership having Leo F. Wells, III and Wells Capital, Inc., a
Georgia corporation, as General Partners. The Partnership was formed on
July 31, 1988, for the purpose of acquiring, developing, constructing,
owning, operating, improving, leasing and otherwise managing for investment
purposes income-producing commercial properties.
On October 24, 1988, 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 October 23, 1990, and received gross proceeds of $22,206,319
representing subscriptions from 2,700 Limited Partners, composed of two
classes of limited partnership interests, Class A and Class B limited
partnership units.
The Partnership owns interests in properties through equity ownership in
the following joint ventures: (i) The Fund II - Fund III Joint Venture,
(ii) The Fund II, III, VI and VII Associates Joint Venture and (iii) The
Fund III - Fund IV Joint Venture.
As of June 30, 1998, the Partnership owned interest in the following
properties: (i) the Greenville Property, an office building in Greenville,
North Carolina, owned directly by the Partnership, (ii) Boeing at the
Atrium, an office building in Houston, Texas, owned directly by Fund II -
Fund III Joint Venture, (iii) the Brookwood Grill, a restaurant located in
Roswell, Georgia, owned by The Fund II - Fund III Joint Venture, (iv) the
Stockbridge Village Shopping Center, a retail shopping center located in
Stockbridge, Georgia, southeast of Atlanta, owned by Fund III - Fund IV
Joint Venture, (v) the G.E. Office Building located in Richmond, Virginia,
owned by Fund III - Fund IV Joint Venture, and (vi) the Holcomb Bridge Road
Property, an office/retail center in Roswell, Georgia, owned by Fund II,
III, 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 III, L.P. 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
7
<PAGE>
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, 1997.
(2) Investment 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 joint ventures is recorded on the equity method.
For a description of the joint ventures and properties owned by the
Partnership, please refer to the Partnership's Form 10-K for the year ended
December 31, 1997.
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, with the meaning of
Section 27A of the Securities Act of 1993 and 21E of the Securities
Exchange Act of 1934, including discussion and analysis of the financial
condition of the Partnership, anticipated capital expenditures required to
complete certain projects, amounts of cash distributions anticipated to be
distributed to Limited Partners in the future and certain other matters.
Readers of this Report should be aware that there are various factors that
could cause actual results to differ materially from any forward-looking
statement made in the Report, which include construction costs which may
exceed estimates, construction delays, lease-up risks, inability to obtain
new tenants upon the expiration of existing leases, and the potential need
to fund tenant improvements or other capital expenditures out of operating
cash flow.
Results in Operations and Changes in Financial Conditions
---------------------------------------------------------
General
-------
As of June 30, 1998, the properties owned by the Partnership were 97.5%
occupied. Gross revenues of the Partnership were $541,097 for the six
months ended June 30, 1998, as compared to $396,660 for the six months
ended June 30, 1997. The increase for 1998 over 1997 was due to increased
income from joint ventures, primarily due to occupancy increases at Boeing
at the Atrium and the 880 Holcomb Bridge Road Property in Roswell, Georgia.
8
<PAGE>
Expenses of the Partnership decreased from $256,838 for the six months
ended June 30, 1997, to $232,778 for the six months ended June 30, 1998.
The decrease in expenses was due primarily to decreased operating costs,
legal and accounting expenses, and computer costs.
Net cash provided by operating activities increased for the six months
ended due primarily to an increase in accounts payable.
Net cash provided by investing activities increased from $(89,340) in 1997
to $525,148 in 1998, due to increased distribution from joint ventures. As
a result cash and cash equivalents increased for the six months ended June
30, 1998, as compared to the same period of 1997.
The Partnership's distributions paid and payable through the second quarter
of 1998 have been 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 unaware of any know demands, commitments, events or
capital expenditures other than that which is required for the normal
operations of its properties or the properties in which it owns a joint
venture interest that will result in the Partnership's liquidity increasing
or decreasing in any material way.
The General Partners have verified that all operational computer systems
are year 2000 compliant. This includes systems supporting accounting,
property management and investor services. Also, as part of this review,
all building control systems have been verified as compliant. The current
line of business applications are based on compliant operating systems and
database servers. All of these products are scheduled for additional
upgrades before the year 2000. Therefore, it is not anticipated that the
year 2000 will have significant impact on operations.
RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income", requires certain transactions (e.g., unrealized
gains/losses on available for sale securities) that are not reflected in
net income to be displayed as other comprehensive income. The Statement
also requires an entity to report total comprehensive income (i.e., net
income plus other comprehensive income) for every period in which an income
statement is presented. SFAS No. 130 is effective for annual and interim
periods beginning after December 15, 1997. None of the transactions
required to be reported in other comprehensive income pertain to the
Partnership; consequently, adoption of this Statement had no impact on the
partnership's disclosures.
9
<PAGE>
PROPERTY OPERATIONS
- -------------------
As of June 30, 1998, the Partnership owned interests in the following
properties:
The Greenville Property - Fund III
- ----------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- -----------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- -------------- -------------- -------------
Revenues:
<S> <C> <C> <C> <C>
Rental income $139,893 $147,935 $277,658 $295,612
Expenses:
Depreciation 39,577 28,507 79,154 82,855
Management & leasing expenses 19,995 41,428 36,969 37,615
Other operating expenses 39,232 25,917 77,398 81,111
-------- -------- -------- --------
98,804 95,852 193,521 201,581
-------- -------- -------- --------
Net income $ 41,089 $ 52,083 $ 84,137 $ 94,031
======== ======== ======== ========
Occupied % 92.0% 100.0% 92.0% 100.0%
Partnership Ownership % 100.0% 100.0% 100.0% 100.0%
Cash generated to the Partnership $ 90,209 $ 95,477 $181,791 $180,940
Net income generated to the
Partnership $ 41,089 $ 52,083 $ 84,137 $ 94,031
</TABLE>
Rental income and net income decreased from 1997 to 1998, due to the decline in
occupancy from 100% to 92%.
10
<PAGE>
Boeing at the Atrium/Fund II and Fund III Joint Venture
- -------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- -------------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- -------------- -------------- -------------
Revenues:
<S> <C> <C> <C> <C>
Rental income $367,536 $ 189,696 $ 735,072 $ 189,696
Interest income 13,280 100 13,280 2,617
-------- --------- --------- ---------
380,816 189,796 748,352 192,313
-------- --------- --------- ---------
Expenses:
Depreciation 216,930 168,643 433,860 337,285
Management & leasing expenses 44,679 29,010 89,167 29,010
Other operating expenses 183,393 191,232 341,824 289,199
-------- --------- --------- ---------
445,002 388,885 864,851 655,494
-------- --------- --------- ---------
Net (loss) $ (64,186) $(199,089) $(116,499) $(463,181)
========= ========= ========= =========
Occupied % 100.0% 100.0% 100.0% 100.0%
Partnership Ownership % 38.7% 38.7% 38.7% 38.7%
Cash distributed to the Partnership $ 66,712 $ 0 $ 138,019 $ 0
Net loss allocated to the $(24,840) $ (77,047) $ (45,085) $(167,895)
Partnership
</TABLE>
Rental income increased for the three months and six months ended June 30, 1998,
compared to the same period in 1997, due to the vacancy of the Atrium for the
first four and a half months of 1997.
Depreciation, management and leasing, and other expenses have increased in 1998
compared to 1997 with the occupancy of the building by Boeing. Cash generated
to the Partnership increased, due primarily to the increase in rental revenues
and reimbursement of tenant improvements of approximately $12,000 received from
Boeing.
11
<PAGE>
The Brookwood Grill Property/Fund II and Fund III Joint Venture
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- -----------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- -------------- -------------- -------------
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 56,037 $56,187 $112,375 $112,731
Equity in income of joint venture 16,943 7,498 33,074 18,355
-------- ------- -------- --------
72,980 63,685 145,449 131,086
Expenses:
Depreciation 13,503 13,503 27,006 27,006
Management & leasing expenses 6,492 7,284 13,525 14,045
Other operating expenses (23,721) 13,872 (18,492) 16,131
-------- ------- -------- --------
(3,726) 34,659 22,039 57,182
-------- ------- -------- --------
Net income $ 76,706 $29,026 $123,410 $ 73,904
======== ======= ======== ========
Occupied % 100.0% 100.0% 100.0% 100.0%
Partnership Ownership % 37.6% 37.6% 37.6% 37.6%
Cash distributed to the Partnership $ 46,112 $26,215 $ 80,925 $ 54,675
Net income allocated to the
Partnership $ 28,880 $10,928 $ 46,464 $ 27,825
</TABLE>
Although rental income remained stable, total revenues increased for the three
and six month periods ended June 30, 1998, as compared to the same periods in
1997, due to the increased equity in income from the Fund II, III, VI, and VII
Joint Venture, as the Holcomb Bridge Property became 100% occupied. Operating
expenses decreased for the three months ended June 30, 1998, as compared to the
same period in 1997, due primarily to the billing of reimbursements during the
second quarter in 1998, as compared to billing in the first quarter of 1997.
Year-to-date operating expenses decreased in 1998, as compared to 1997, due
primarily to a change in method of billing water reimbursements to the tenant
which will result in the tenant being charged for a greater share of the total
bill.
12
<PAGE>
Holcomb Bridge Road Property/Fund II, III, VI, VII Joint Venture
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- -----------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- -------------- ------------- -------------
Revenues:
<S> <C> <C> <C> <C>
Rental income $208,645 $135,912 $421,880 $296,097
Expenses:
Depreciation 94,129 69,982 188,033 136,112
Management & leasing expenses 29,888 22,483 59,252 43,063
Other operating expenses 13,797 13,633 26,830 43,940
-------- -------- -------- --------
137,814 106,098 284,115 223,115
-------- -------- -------- --------
Net income $ 70,831 $ 29,814 $137,765 $ 72,982
======== ======== ======== ========
Occupied % 100.0% 72.7% 100.0% 72.7%
Partnership Ownership % 11.57% 9.50% 11.57% 9.50%
Cash distributed to the Fund II-
Fund III Joint Venture* $ 41,990 $ 25,828 $ 83,158 $ 53,324
Net income allocated to the
Fund II-Fund III Joint Venture* $ 16,943 $ 7,498 $ 33,074 $ 18,355
</TABLE>
*The Partnership holds a 37.65% ownership in the Fund II-Fund III Joint Venture.
In January 1995, the Fund II-Fund III Joint Venture contributed 4.3 acres of
land and land improvements at 880 Holcomb Bridge Road to the Fund II, III, VI,
VII Joint Venture. Development has been completed on two buildings with a total
of approximately 49,500 square feet.
As of June 30, 1998, fourteen tenants are occupying approximately 49,500 square
feet of space in the retail and office building under leases of varying lengths.
Increases in revenues, expenses and net income for the quarter and six months
ended June 30, 1998, compared to the same quarter of 1997, are due to the
property being 100% occupied as of June 30, 1998, as compared to the same period
of 1997.
13
<PAGE>
The G.E. Building/Richmond-Fund III-Fund IV Joint Venture
- ---------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- ------------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- -------------- -------------- -------------
Revenues:
<S> <C> <C> <C> <C>
Rental income $131,856 $131,856 $263,712 $263,712
Expenses:
Depreciation 49,053 49,056 98,106 98,112
Management & leasing expenses 10,095 9,965 20,109 19,930
Other operating expenses 97 289 15,552 3,692
-------- -------- -------- --------
59,245 59,310 133,767 121,734
-------- -------- -------- --------
Net income $ 72,611 $ 72,546 $129,945 $141,978
======== ======== ======== ========
Occupied % 100.0% 100.0% 100.0% 100.0%
Partnership Ownership % 57.3% 57.3% 57.3% 57.3%
Cash distributed to the Partnership $ 73,494 $ 71,941 $136,743 $140,684
Net income allocated to the
Partnership $ 41,618 $ 41,581 $ 74,480 $ 81,377
</TABLE>
Rental income remained constant for 1998 and 1997. Net income and cash
distributions generated from the G.E. Building decreased for the six months
ended June 30, 1998, as compared to the same period in 1997, due to increased
expenses in the first quarter of 1998 for extraordinary roof repairs.
14
<PAGE>
The Stockbridge Village Shopping Center Property/Fund III-Fund IV Joint Venture
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- -----------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- -------------- -------------- -------------
Revenues:
<S> <C> <C> <C> <C>
Rental income $300,521 $274,300 $585,885 $548,037
Interest income 1,965 2,474 3,930 6,117
-------- -------- -------- --------
302,486 276,774 589,815 554,154
-------- -------- -------- --------
Expenses:
Depreciation 86,120 84,747 170,867 169,494
Management & leasing expenses 26,360 25,101 54,823 55,437
Other operating expenses 16,925 43,845 38,633 68,263
-------- -------- -------- --------
129,405 153,693 264,323 293,194
-------- -------- -------- --------
Net income $173,081 $123,081 $325,492 $260,960
======== ======== ======== ========
Occupied % 97% 93% 97% 93%
Partnership Ownership % 57.3% 57.3% 57.3% 57.3%
Cash distributed to the Partnership $146,046 $122,863 $269,528 $256,230
Net income allocated to the
Partnership $ 99,498 $ 70,545 $186,561 $149,573
</TABLE>
Rental income increased for the three and six months ended June 30, 1998, as
compared to the same periods in 1997, due to increased rental renewal rates and
increased occupancy. Expenses of the property decreased from $293,194 in 1997
to $264,323 in 1998, due primarily to differences in the annual adjustment for
prior year common area maintenance billings to tenants.
15
<PAGE>
PART II - OTHER INFORMATION
----------------------------
Item 6(b). No reports on Form 8-K were filed during the second quarter of 1998.
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 III, L.P.
(Registrant)
Dated: August 10, 1998 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.
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 122,431
<SECURITIES> 12,489,655
<RECEIVABLES> 385,360
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,306
<PP&E> 4,136,990
<DEPRECIATION> 811,098
<TOTAL-ASSETS> 16,353,644
<CURRENT-LIABILITIES> 426,589
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 15,927,055
<TOTAL-LIABILITY-AND-EQUITY> 16,353,644
<SALES> 0
<TOTAL-REVENUES> 54,097
<CGS> 0
<TOTAL-COSTS> 232,778
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 308,319
<INCOME-TAX> 308,319
<INCOME-CONTINUING> 308,319
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 308,319
<EPS-PRIMARY> 0.2
<EPS-DILUTED> 0
</TABLE>
