<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 March 31, 1996 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 0-20103
--------------------------------------------------------
Wells Real Estate Fund IV, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1915128
- ------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3885 Holcomb Bridge Road, Norcross, Georgia 30092
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
----------------------------
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
-------- ---------
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund IV, L.P.
-------------------------------
INDEX
-----
Page No.
--------
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1996
and December 31, 1995.................................. 3
Statements of Income for the Three Months
Ended March 31, 1996 and 1995.......................... 4
Statement of Partners' Capital for the Year Ended
December 31, 1995 and the Three Months Ended
March 31, 1996......................................... 5
Statements of Cash Flows for the Three
Months Ended March 31, 1996 and 1995.................... 6
Condensed Notes to Financial Statements................. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................................. 12
PART II. OTHER INFORMATION................................................ 17
2
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A Georgia Public Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1996
-------------- -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $10,943,486 $11,047,207
Cash and case equivalents 145,011 148,494
Due from affiliates 212,175 211,281
Other Assets 0 1,042
----------- -----------
$11,300,672 $11,408,024
=========== ===========
</TABLE>
LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<CAPTION>
LIABILITIES:
<S> <C> <C>
Accounts payable and accrued expenses $ 0 $ 0
Partnership distributions payable 220,743 223,131
----------- -----------
Total Liabilities $ 220,743 $ 223,131
=========== ===========
PARTNERS' CAPITAL:
Limited partners;
Class A - 1,322,909 units outstanding 11,079,929 11,184,893
Class B - 38,551 units outstanding 0 0
Total partners' capital 11,079,929 11,184,893
----------- -----------
Total liabilities and partners' capital $11,300,672 $11,408,024
=========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
March 31, 1996 March, 31, 1995
-------------- ---------------
<S> <C> <C>
REVENUES: $133,455 $182,694
Equity in income of joint ventures (Note 2) 2,559 3,089
-------- --------
Interest Income 136,014 185,783
-------- --------
EXPENSES:
Legal and accounting 3,391 6,289
Computer costs 787 2,967
Partnership Administration 15,146 12,025
Amortization 1,042 1,562
-------- --------
20,366 22,843
-------- --------
NET INCOME $115,648 $162,940
======== ========
NET INCOME ALLOCATED TO CLASS A
LIMITED PARTNERS $115,648 $162,940
======== ========
NET LOSS ALLOCATED TO CLASS B
LIMITED PARTNERS $ 0 $ 0
======== ========
NET INCOME PER CLASS A
LIMITED PARTNER UNIT $0.09 $ 0.12
======== ========
NET LOSS PER CLASS B
LIMITED PARTNER UNIT $ 0 $ 0
======== ========
CASH DISTRIBUTION PER CLASS A
LIMITED PARTNER UNTIL $0.17 $ 0.17
======== ========
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1995
AND THREE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
Limited Partners
------------------------------------------------
Class A Class B
------- ------- Total
Partners'
Units Amounts Units Amounts Capital
----- ------- ----- ------ ---------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994 1,322,909 $11,497,678 38,551 $0 $11,497,678
Net Income 0 623,867 0 0 623,867
Partnership distributions 0 (936,652) 0 0 (936,652)
--------- ----------- ------ -- -----------
BALANCE, December 31, 1995 1,332,909 $11,184,893 38,551 $0 $11,184,893
========= =========== ====== == ===========
Net Income 0 115,648 0 0 115,648
Partnership distributions 0 (220,612) 0 0 (220,612)
--------- ----------- ------ -- -----------
BALANCE, March 31, 1996 1,322,909 $11,079,929 38,551 0 $11,079,929
========= =========== ====== == ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 115,649 $ 162,940
--------- ---------
Adjustments to reconcile net income to net cash
used in operating activities:
Equity in income of joint ventures (133,455) (182,694)
Distributions received from joint ventures 236,281 224,199
Distributions to partners from accumulated
Earnings (223,000) (209,058)
Amortization 1,042 1,563
Changes in assets and liabilities:
Prepaids and other Assets 0 0
Accounts Payable 0 (500)
--------- ---------
Total Adjustments (119,132) (166,490)
--------- ---------
Net cash used in
operating activities (3,483) (3,550)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in joint ventures 0 (13,541)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,483) (17,091)
--------- ---------
CASH AND CASH EQUIVALENTS, beginning of year 148,494 165,648
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 145,011 $ 148,557
========= =========
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING ACTIVITIES: $ 0 $ 1,068
========= =========
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND IV, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statements
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
-------
Wells Real Estate Fund IV, L.P. (the "Partnership") is a Georgia
public limited partnership having Leo F. Wells, III and Wells
Partners, L.P., as General Partners. The Partnership was formed on
October 25, 1990, for the purpose of acquiring, developing,
constructing, owning, operating, improving, leasing and otherwise
managing for investment purposes income-producing commercial or
industrial properties.
On March 4, 1991, the Partnership commenced an offering of up to
$25,000,000 of Class A or Class B limited partnership units ($10.00
per unit) pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933. The Partnership did not commence active
operations until it received and accepted subscriptions for 125,000
units which occurred on May 13, 1991. The offering was terminated on
February 29, 1992, at which time the Partnership had obtained total
contributions of $13,614,652 representing subscriptions from 1,285
Limited Partners.
As of March 31, 1996, the Partnership owned interests in the following
properties: (i) the Stockbridge Village Shopping Center, a retail
shopping center located in Stockbridge, Georgia, southeast of Atlanta
(ii) the G.E. Office Building, a two-story office building located in
Richmond, Virginia; (iii) The Medical Center Project, two
substantially identical two-story office buildings located in Clayton
County, Georgia; and (iv) The Jacksonville Project, a four-story
office building located in Jacksonville, Florida. All of the
foregoing properties were acquired on an all cash basis.
7
<PAGE>
(b) Basis of Presentation
---------------------
The financial statements of Wells Real Estate Fund IV, L.P. (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 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, 1995.
(c) Employees
---------
The Partnership has no direct employees. The employees of Wells
Capital, Inc., the sole general partner of Wells Partners, L.P., a
General Partner of the Partnership, perform a full range of real
estate services including leasing and property management, accounting,
asset management and investor relations for the Partnership.
(d) Insurance
---------
Wells Management Company, Inc., an affiliate of the General Partners,
carries comprehensive liability and extended coverage with respect to
all the properties owned directly or indirectly by the Partnership.
In the opinion of management, the properties are adequately insured.
(e) Competition
-----------
The Partnership will experience competition for tenants from owners
and managers of competing projects which may include the General
Partners and their affiliates. As a result, the Partnership may be
required to provide free rent, reduced charges for tenant improvements
and other inducements, all of which may have an adverse impact on
results of operations. At the time the Partnership elects to dispose
of its properties, the Partnership will also be in competition with
sellers of similar properties to locate suitable purchasers for its
properties.
(2) Investment in Joint Ventures
----------------------------
The following describes the properties in which the Partnership owns an
interest as of March 31, 1996. 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.
8
<PAGE>
Fund III - Fund IV Joint Ventures
- ---------------------------------
On March 27, 1991, the Partnership and Wells Real Estate Fund III, L.P. ("Wells
Fund III"), a Georgia public limited partnership having Leo F. Wells, III and
Wells Capital, Inc., a Georgia corporation, as General Partners, formed a joint
venture known as Fund III and Fund IV Associates (the "Fund III-Fund IV Joint
Venture"). The investment objectives of Wells Fund III are substantially
identical to those of the Partnership. The Partnership holds an approximate
42.7% of equity interest in the Fund III-Fund IV Joint Venture which owns and
operates a multi-tenant retail center and an office building. As of March 31,
1996, the Partnership had contributed $6,131,677 and Wells Fund III had
contributed $8,119,603 for a total cost of $14,251,280 to the Fund III-Fund IV
Joint Venture. The Partnership owns interests in the following two properties
through the Fund III-Fund IV Joint Venture:
The Stockbridge Village Shopping Center
- ---------------------------------------
On April 4, 1991, the Fund III-Fund IV Joint Venture purchased 13.62 acres of
real property located in Clayton County, Georgia for the purchase price of
$3,057,729, including acquisition costs, for the purpose of developing,
constructing and operating a shopping center known as the Stockbridge Village
Shopping Center (the "Stockbridge Property"). The Stockbridge Property consists
of a multi-tenant shopping center containing approximately 113,011 square feet
of which approximately 64,097 square feet is occupied by the Kroger Company, a
retail grocery chain. This is the only tenant which occupies more than ten
percent of the rentable square feet. The lease with Kroger Company is for an
initial term of 20 years commencing November 14, 1991, with an option to extend
for four consecutive five year periods. The annual base rent payable under the
Kroger lease during the initial term is $492,692. The remaining 48,914 square
feet is comprised of 12 separate retail spaces and a 3 free standing retail
buildings. As of March 31, 1996, the Partnership had contributed a total of
$5,067,132 and Wells Fund III had contributed a total of $4,515,042 to fund the
total costs of approximately $9,562,000 to fund the acquisition and development
of the Stockbridge Property.
The occupancy rates at the Stockbridge Property for the quarters ended March 31
were 93% in 1996, 100% in 1995, 99% in 1994, 100% in 1993, and 87% in 1992. The
average effective annual rental per square foot at the Stockbridge Property was
$9.50 for 1996, $10.16 for 1995, $10.26 for 1994, $9.13 for 1993, and $7.34 for
1992.
The G.E. Building/Richmond
- --------------------------
The G.E. Building is a two-story office building containing approximately 43,000
square feet located in Richmond, Virginia which was acquired by the Fund III-
Fund IV Joint Venture on July 1, 1992, for a purchase price of $4,687,600. As
of March 31, 1996, a total of $4,689,106 had been incurred for the acquisition
of the G.E. Building. Of this amount, the Partnership contributed $1,084,545
and Wells Fund III contributed $3,604,561 to the Fund III-Fund IV Joint Venture.
9
<PAGE>
The entire G.E. Building is currently under a net lease to General Electric
("G.E."), a corporate office for the lighting division. The annual base rent
payable is currently $530,742 with annual base increases of 2%. The G.E. lease
expires March 31, 2000, with an option to extend the lease for one additional
five-year period.
The occupancy rate at the G.E. Building for the quarters ended March 31 was 100%
for 1996, 1995, 1994, 1993 and 1992. The average effective annual rental per
square foot at the G.E. Building is $12.27 for 1996, 1995, 1994, 1993, and
1992.
Fund IV-Fund V Joint Venture
- ----------------------------
On April 14, 1992, the Partnership and Wells Real Estate Fund V, L.P. ("Wells
Fund V"), a Georgia public limited partnership affiliated with the Partnership
through common general partners, formed a joint venture known as Fund IV and
Fund V Associates (the "Fund IV-Fund V Joint Venture"). The investment
objectives of Wells Fund V are substantially identical to those of the
Partnership. The Partnership holds an approximate 38% equity interest in the
Fund IV-Fund V Joint Venture which owns and operates two office buildings. As
of March 31, 1996, the Partnership had contributed $4,736,173 and Wells Fund V
had contributed $7,719,249 for a total costs of $12,455,422 to the Fund IV-Fund
V Joint Venture. The Partnership owns interests in the following two properties
through the Fund IV-Fund V Joint Venture:
The Jacksonville Project
- ------------------------
On June 8, 1992, the Fund IV-Fund V Joint Venture acquired 5.676 acres of real
property located in Jacksonville, Florida for a purchase price of $1,360,000
for development of the Jacksonville Project. The Jacksonville Project consists
of a four-story office building containing approximately 88,600 square feet
leased primarily by International Business Machines Corporation ("IBM"), a
computer sales and service corporation, and Customized Transportation, Inc.
("CTI"), a division of CSX Railroad, a transportation corporation.
The initial term of the IBM lease containing 68,100 square feet is 9 years and
11 months and commenced upon completion of the building in June 1993, with an
option to extend the initial lease for two consecutive five-year periods. The
annual base rent payable under the IBM lease during the initial term is
$1,122,478 payable in equal monthly installments of $93,540. IBM is also
required to pay additional rent equal to its share of operating expenses during
the lease term.
The term of the CTI lease containing 11,780 square feet is five years and
commenced in March, 1994. The annual base rent payable under the CTI lease is
$325,965.
The occupancy rates at the Jacksonville Project were 100% in 1996, 1995 and
1994, and 85% in 1993, the first year of occupancy. The average effective
annual rental per square foot at the Jacksonville Project was $16.71 for 1996,
$16.53 for 1995, $16.22 for 1994 and $16.38 for 1993.
10
<PAGE>
The Medical Center Project
- --------------------------
On September 14, 1992, the Fund IV-Fund V Joint Venture acquired 2.655 acres of
real property in Stockbridge, Georgia for $440,000 for the purpose of
constructing two substantially identical two-story office buildings containing
approximately 17,847 rentable square feet each ( the "Medical Center Project").
As of March 31, 1996, the Partnership had contributed $1,296,226 and Wells Fund
V had contributed $2,757,540 to the Fund IV-Fund V Joint Venture for the
acquisition and development of the Medical Center Project. It is currently
anticipated that an additional approximately $146,000 will be required for the
completion of the Medical Center Project. Wells Fund V has reserve funds for
this purpose, with any excess costs which may be required to be funded out of
operating cash flow.
Construction on the first building was completed in March, 1993, and the
building shell of the second building was completed in April, 1994. Georgia
Baptist, a medical health care and urgent care facility, has leased
approximately 14,669 square feet in the first building for a term of six years
and has the option to extend the initial term of the lease for one five-year
period. The base rent payable per square foot ranges from $16.00 per month
during the first year to $18.50 during the sixth year. In addition, Georgia
Baptist has leased approximately 3,376 square feet in the second building for a
term of five years at an annual rental rate of $55,704, increasing to $57,392 in
the fourth year and $59,080 in the fifth year.
The occupancy rate at the Medical Center Project for the quarters ended March 31
was 68% in 1996, 79% in 1995, 69% in 1994 and 47% in 1993, the first year of
occupancy. The average effective annual rental per square foot at the Medical
Center Project was $11.87 for 1996, $10.43 for 1995, $7.59 for 1994 and $11.25
for 1993.
11
<PAGE>
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 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 of Operations and Changes in Financial Conditions
- ---------------------------------------------------------
General
- -------
Gross revenues of the Partnership were $136,014 for the three months ended March
31, 1996, as compared to $185,783 for the three months ended March 31, 1995.
This decrease in gross revenues was due to decreased equity in income of joint
ventures, which was primarily due to increased depreciation expense. The
decrease in income from 1995 to 1996 was due to primarily to increased
depreciation expense for the joint ventures from 1995 to 1996 due to a change in
the estimated useful lives of buildings and improvements from 40 years to 25
years.
Expenses of the Partnership remained relatively stable for the quarters ended
March 31, 1996 and 1995.
The Partnership's net cash used in operating activities remained relatively
stable for 1996 and 1995. Net cash used in investing activities decreased to
zero in 1996 due to all funds available for investing having been invested in
prior years. Cash and cash equivalents remained relatively stable for the
periods ending March 31, 1996 and 1995. The Partnership distributes cash
available less reserves, and as a result, the level of cash remains stable.
The Partnership made cash distributions to the Limited Partners holding Class A
Units of $.17 per unit for the three months ended March 31, 1996 and 1995. No
cash distributions were made to the Limited Partners holding Class B Units or to
the General Partners.
Property Operations
- -------------------
As of March 31, 1996, the Partnership owned interests in the following
operational properties through its joint ventures:
12
<PAGE>
<TABLE>
<CAPTION>
The Stockbridge Village Shopping Center
- -----------------------------------------
Three Months Ended March 31
----------------------------
1996 1995
----------------------
<S> <C> <C>
Revenues:
Rental income $268,455 $269,535
Interest Income 3,613 4,480
-------- --------
$272,068 $301,015
Expenses:
Depreciation 84,748 55,296
Management and leasing expenses 27,154 28,821
Other expenses 25,392 11,379
-------- --------
137,294 95,496
-------- --------
Net income $134,774 $205,519
-------- --------
Occupied % 93% 100%
Partnership's Ownership % in Property 42.7% 42.7%
Cash Distributed to the Property $ 98,705 $115,143
Net Income Allocated to the Partnership $ 57,526 $ 87,722
</TABLE>
Rental income decreased to $268,455 for 1996, as compared to $296,535 in 1995,
due to decreased occupancy resulting from the early termination of a lease for
8,025 square feet. Expenses of the property increased from $95,496 in 1995 to
$137,294 in 1996 due primarily to the increase in depreciation expenses as a
result of the change in the estimated useful lives of buildings and improvements
as previously discussed under the "General" section of "Results of Operations
and Changes in Financial Condition" and timing differences in billing tenant
expense reimbursement.
13
<PAGE>
<TABLE>
<CAPTION>
The G.E. Building/Richmond
- --------------------------
Three Months Ended March 31
----------------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues:
Rental income $131,856 $131,856
Expenses:
Depreciation 49,053 28,160
Management and leasing expenses 9,965 9,965
Other operating expenses 3,020 3,007
-------- --------
62,038 41,132
-------- --------
Net income $ 69,818 $ 90,724
-------- --------
Occupied % 100% 100%
Partnership's Ownership % in Property 42.7% 42.7%
Cash Distributed to the Property $ 50,281 $ 49,317
Net Income Allocated to the Partnership $ 29,801 $ 38,724
</TABLE>
Rental income remained constant for 1996 and 1995. Total expenses increased in
1995, due to the increase in depreciation expense as a result of the change in
the estimate useful lives of buildings and improvements as previously discussed
under the "General" section of "Results of Operations and Changes in Financial
Condition".
14
<PAGE>
<TABLE>
<CAPTION>
The Jacksonville Project
- ------------------------
Three Months Ended March 31
-----------------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues:
Rental income $365,992 $378,807
Expenses:
Depreciation 79,296 47,484
Management and leasing expenses 43,976 45,386
Other operating expenses 120,280 134,837
-------- --------
243,552 227,707
-------- --------
Net income $122,440 $155,100
-------- --------
Occupied % 100% 100%
Partnership's Ownership % in Property 38.1% 38.3%
Cash Distributed to the Property $ 73,338 $ 75,350
Net Income Allocated to the Partnership $ 46,680 $ 58,036
</TABLE>
Rental income has decreased in 1996 as compared to 1995 due to an overstatement
of rental income in 1995 which was corrected in the third quarter of 1995.
Expenses increased for the three months ended March 31, 1996 as compared to 1995
due primarily to increased depreciation due to the change in the estimated
useful lives of buildings and improvements as previously discussed under the
"General" section of "Results of Operations and Changes in Financial Condition".
The increase in depreciation was partially offset by savings in various
operating expenses. Cash distributions remained relatively stable for 1996 and
1995. Cash fundings to the Joint Venture for construction were contributed by
the Wells Fund V which decreased the Partnership's ownership interest and
increased Wells Fund V's ownership interest in the Fund IV-Fund V Joint Venture.
15
<PAGE>
<TABLE>
<CAPTION>
The Medical Center Project
- --------------------------
Three Months Ended March 31
----------------------------
1996 1995
----------------------------
<S> <C> <C>
Revenues:
Rental income $105,186 $85,848
Interest income 3,076 3,393
Expenses:
Depreciation 39,882 24,477
Management and leasing expenses 11,042 10,884
Other operating expenses 58,787 58,529
-------- -------
109,711 93,890
-------- -------
Net loss $ (1,449) $(4,649)
-------- -------
Occupied % 68% 79%
Partnership's Ownership % in Property 38.1% 38.3%
Cash Distributed to the Property $ 14,852 $ 5,761
Net Loss Allocated to the Partnership $ (552) $(1,788)
</TABLE>
Revenue income increased in 1996 over 1995 due to increased lease up at the
Medical Center Project. Expenses have increased in 1996 over 1995 levels due
primarily to lease up of the buildings and the increase in depreciation expenses
due to the change in the estimated useful lives of buildings and improvements as
previously discussed under the "General" section of "Results of Operations and
Changes in Financial Condition".
Cash distributions and net income allocated to the Partnership have increased
over prior year levels due primarily to the lease up of the project but offset
slightly by the decrease in ownership in the Joint Venture. Cash fundings to
the Joint Venture for construction were contributed by the Wells Fund V which
increase its ownership and decreased the Partnership's ownership in the Fund IV
- - Fund V Joint Venture.
16
<PAGE>
PART II - OTHER INFORMATION
Item 6(b). No reports on Form 8-K were filed during the first quarter of 1996.
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.
Dated: May 13, 1996 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., the General Partner of Wells Partners, L.P.
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 145,011
<SECURITIES> 10,943,486
<RECEIVABLES> 212,175
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,300,672
<CURRENT-LIABILITIES> 220,743
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11,079,929
<TOTAL-LIABILITY-AND-EQUITY> 11,300,672
<SALES> 0
<TOTAL-REVENUES> 136,014
<CGS> 0
<TOTAL-COSTS> 20,366
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 115,648
<INCOME-TAX> 115,648
<INCOME-CONTINUING> 115,648
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 115,648
<EPS-PRIMARY> .09
<EPS-DILUTED> 0
</TABLE>
