<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
[Fee Required]
For the fiscal year ended December 31, 1999 or
----------------------------------------------------
[_] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
[No Fee Required]
For the transition period from__________________________ to ____________________
Commission file number 0-21580
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Wells Real Estate Fund V, L. P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1936904
- ----------------------------------- -----------------------------------------
State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6200 The Corners Pkwy, Ste 250 Norcross, Georgia 30092
- ------------------------------------------------ ---------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
---------------------------
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of exchange on which registered
- ------------------------------------- ---------------------------------------
NONE NONE
Securities registered pursuant to Section 12 (g) of the Act:
Class A Unit
- --------------------------------------------------------------------------------
(Title of Class)
Class B Unit
- --------------------------------------------------------------------------------
(Title of Class)
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
--
Aggregate market value of the voting stock held by non-affiliates: Not
--------------
Applicable
- ----------
1
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PART I
------
ITEM 1. BUSINESS
- ------------------
General
Wells Real Estate Fund V, L.P. (the "Partnership") is a Georgia public limited
partnership having Leo F. Wells, III and Wells Partners, L.P., a non-public
limited partnership as General Partners. The Partnership was formed on October
25, 1990, for the purpose of acquiring, developing, owning, operating,
improving, leasing, and otherwise managing for investment purposes income
producing commercial or industrial properties.
On March 6, 1992, 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 filed under the Securities Act of 1933. The
Partnership did not commence active operations until it received and accepted
subscriptions for a minimum of 125,000 units on April 27, 1992. The offering
was terminated on March 3, 1993, at which time the Partnership had sold
1,520,967 Class A Units and 179,635 Class B Units representing $17,006,020 of
capital contributions by investors who were admitted to the Partnership as
Limited Partners.
The Partnership owns interests in properties through its equity ownership in the
following joint ventures; (i) Fund IV and Fund V Associates, a joint venture
between the Partnership and Wells Real Estate Fund IV, L.P. (the "Fund IV - Fund
V Joint Venture"); (ii) Fund V and Fund VI Associates, a joint venture between
the Partnership and Wells Real Estate Fund VI, L.P. (the "Fund V - Fund VI Joint
Venture"); and (iii) Fund V, Fund VI, and Fund VII Associates, a joint venture
between the Partnership, Wells Real Estate Fund VI, L.P. and Wells Real Estate
Fund VII, L.P. (the "Fund V-VI-VII Joint Venture").
As of December 31, 1999, the Partnership owned interests in the following
properties through its ownership of the foregoing joint ventures: (i) a four-
story office building located in Jacksonville, Florida ("IBM Jacksonville"),
which is owned by the Fund IV - Fund V Joint Venture; (ii) two substantially
identical two-story office buildings located in Clayton County, Georgia (the
"Village Overlook Project"), which are owned by the Fund IV - Fund V Joint
Venture; (iii) a four-story office building located in metropolitan Hartford,
Connecticut (the "Hartford Building"), which is owned by the Fund V - Fund VI
Joint Venture; (iv) two retail buildings located in Clayton County, Georgia
("Stockbridge Village II"), which are owned by the Fund V - Fund VI Joint
Venture; and (v) a three-story office building located in Appleton, Wisconsin
(the "Marathon Building"), which is owned by the Fund V-VI-VII Joint Venture.
All of the foregoing properties were acquired on an all cash basis.
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
2
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investor relations for the Partnership. See Item 11 - "Compensation of General
Partners and Affiliates" for a summary of the fees paid to the General Partners
and their affiliates during the fiscal year ended December 31, 1999.
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
of the registrant, the properties are adequately insured.
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.
ITEM 2. PROPERTIES.
- --------------------
The Partnership owns interest in five properties through its investment in joint
ventures of which four are office buildings and one is a retail building. 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. As of December 31, 1999, these
properties were 91% occupied, as compared to 94% at December 31, 1998 and 95% at
December 31, 1997.
[The Remainder of Page Left Intentionally Blank]
3
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The following table shows lease expirations during each of the next ten years
for all leases as of December 31, 1999, assuming no exercise of renewal options
or termination rights:
<TABLE>
<CAPTION>
Partnerships
Year of Number of Annualized Share of Percentage of Percentage of
Lease Leases Square Gross Base Annualized Total Square Total Annualized
Expiration Expiring Feet Expiring Rent(1) Gross Base Rent(1) Feet Expiring Base Rent
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2000 5 8,399 149,299 93,207 3.0% 3.8%
2001 1 23,869 441,576 275,676 8.6% 11.1%
2002 2 3,712 62,760 36,504 1.3% 1.6%
2003(2) 4 142,062 1,819,408 1,009,804 51.0% 45.7%
2004 4 14,564 345,996 194,907 5.2% 8.7%
2005 2 5,195 100,212 62,562 1.9% 2.5%
2006(3) 2 80,969 1,059,167 200,795 29.0% 26.6%
2007 0 0 0 0 0.0% 0.0%
2008 0 0 0 0 0.0% 0.0%
2009 0 0 0 0 0.0% 0.0%
- ----------------------------------------------------------------------------------------------------------------
20 278,770 3,978,418 1,873,455 100.0% 100.0%
</TABLE>
(1) Average monthly gross rent over the life of the lease, annualized.
(2) Expiration of IBM with 68,100 square feet at the Insurance Company at the
Hartford Building with Jacksonville Property and of Hartford Fire 71,000
square feet.
(3) Expiration of Marathon with 76,000 square feet at the Marathon Property.
The following describes the properties in which the Partnership owns an interest
as of December 31, 1999:
Fund IV - Fund V Joint Venture
- ------------------------------
On April 14, 1992, the Partnership and Wells Real Estate Fund IV, L.P. ("Wells
Fund IV"), a Georgia public limited partnership affiliated with the Partnership
through common general partners, entered into a joint venture agreement known as
Fund IV and Fund V Associates (the "Fund IV - Fund V Joint Venture"). The
investment objectives of Wells Fund IV are substantially identical to those of
the Partnership. As of December 31, 1999, the Partnership had contributed
approximately $8,032,509, and Wells Fund IV had contributed approximately
$4,820,355 to the Fund IV -Fund V Joint Venture. The Partnership holds an
approximate 62% equity interest, and Wells Fund IV holds an approximate 38%
equity interest in the Fund IV - Fund V Joint Venture. The Partnership owns
interests in the following two properties through the Fund IV - Fund V Joint
Venture:
4
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The Jacksonville Property
- -------------------------
On June 8, 1992, the Fund IV-Fund V Joint Venture acquired 5.676 acres of real
property located in Jacksonville, Florida at a purchase price of $1,360,000 for
the purpose of developing, constructing, and operating a four-story office
building containing approximately 87,600 square feet (the "Jacksonville
Property"). As of December 31, 1999, the Partnership contributed $5,000,116,
and Wells Fund IV contributed $3,463,064 to the Fund IV-Fund V Joint Venture to
fund the acquisition and development of the Jacksonville Project.
The Jacksonville Property is 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 7 years and commenced
in March, 1994. The annual base rent payable under the CTI lease is $325,965.
The occupancy rates for the Jacksonville Project at year end were 94% in 1999
and 1998 and 100% in 1997. The average effective annual rental per square foot
at the Jacksonville Property was $16.80 for 1999, $16.69 for 1998, $16.71 for
1997, 1996, and 1995.
The Village Overlook Property (formerly the Medical Center Property)
- --------------------------------------------------------------------
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 "Village Overlook
Property"). As of December 31, 1999, the Partnership had contributed $3,032,393,
and Wells Fund IV had contributed $1,357,291 to the Fund IV - Fund V Joint
Venture for the acquisition and development of the Village Overlook Property.
Occupancy decreased in 1999 to 62%, as compared to 92% in 1998 (on both
buildings) due to the fact that one major tenant, Georgia Baptist, who occupied
approximately 50% of the space did not renew their lease which expired May 31,
1999. Two new tenants have signed leases for a total of 7,332 rentable square
feet of space and moved in October 1, 1999. All efforts are being made by the
Partnership to lease the remaining 10,515 square feet of vacant space.
The occupancy rate for the Village Overlook Property at year end was 62% in
1999, 92% in 1998 and 81% in 1997. The average effective annual rental per
square foot at the Village Overlook Property was $ 12.75 for 1999, $13.46 for
1998, $10.93 for 1997, $11.83 for 1996 and $10.43 for 1995.
5
<PAGE>
Fund V - Fund VI Joint Venture
- ------------------------------
On December 27, 1993, The Partnership and Wells Real Estate Fund VI, L.P.
("Wells Fund VI"), a Georgia public limited partnership affiliated with the
Partnership through common general partners, entered into a joint venture
agreement known as Fund V and Fund VI Associates (the "Fund V - Fund VI Joint
Venture"). The investment objectives of Wells Fund VI are substantially
identical to those of the Partnership. As of December 31, 1999, the Partnership
had contributed approximately $4,544,601, and Wells Fund VI had contributed
approximately $5,329,541 to the Fund V - Fund VI Joint Venture. The Partnership
currently holds an approximately 46% equity interest, and Wells Fund VI holds an
approximately 54% equity interest in the Fund V - Fund VI Joint Venture. The
Partnership owns interests in the following two properties through the Fund V -
Fund VI Joint Venture:
The Hartford Building
- ---------------------
On December 29, 1993, the Fund V - Fund VI Joint Venture purchased the Hartford
Building, a four-story office building containing approximately 71,000 rentable
square feet from Hartford Accident and Indemnity Company for a purchase price
$6,900,000. The Hartford Building is located on 5.56 acres of land in
Southington, Hartford County, Connecticut. The funds used by the Fund V - Fund
VI Joint Venture to acquire the Hartford Building were derived from capital
contributions made by the Partnership and Wells Fund VI totaling $3,508,797 and
$3,432,707, respectively, for total capital contributions to the Fund V - Fund
VI Joint Venture of $6,941,504.
The entire building is leased to Hartford Fire Insurance Company ("Hartford")
for a period of nine years and eleven months commencing December 29, 1993. The
annual base rent during the initial term is $458,400 payable in equal monthly
installments of $38,200 for the first three months, and $724,200 payable in
equal monthly installments of $60,350 commencing April 1, 1994 and continuing
through the expiration of the initial term of the lease. Hartford also has the
option to extend the initial term of the lease for two consecutive five year
periods. Under the terms of its lease, Hartford is responsible for property
taxes, operating expenses, general repair and maintenance work and a pro rata
share of capital expenditures based upon the number of years remaining in the
lease.
The occupancy rate for the Hartford Building at year end was 100% for the years
ended December 31, 1999, 1998 and 1997. The average effective annual rental per
square foot at the Hartford Building was $10.11 for 1999, 1998, 1997, 1996 and
1995.
Stockbridge Village II
- ----------------------
On November 12, 1993, the Partnership purchased 2.46 acres of real property
located in Clayton County, Georgia for $1,022,634. On July 1, 1994, the
Partnership contributed the property as a capital contribution to the Fund V -
Fund VI Joint Venture.
Construction of a 5,400 square foot retail building was completed in November,
1994. Construction of a second retail building containing approximately 10,423
square feet was
6
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completed in June, 1995. The entire first building was leased by Apple
Restaurants, Inc. for nine years and eleven months beginning in December, 1994.
The annual base rent under the lease is $125,982 until December 15, 1999, at
which time the annual base rent increases to $137,700.
The total construction cost of Stockbridge Village II was approximately
$2,933,000. As of December 31, 1999, the Partnership contributed $1,035,804 and
Wells Fund VI had contributed $1,896,834 to the Fund V - Fund VI Joint Venture
for the acquisition and development of Stockbridge Village II.
The occupancy rate for the Stockbridge Village II Property at year end was 100%
for 1999 and 72% for 1998 and 1997. The average effective annual rental per
square foot at the Stockbridge Village II was $19.66 for 1999, $14.90 for 1998
and $14.88 for 1997, $12.43 for 1996 and $10.41 for 1995.
Fund V - VI - VII Joint Venture
- -------------------------------
On September 8, 1994, the Partnership, Wells Fund VI and Wells Real Estate Fund
VII, L. P. ("Wells Fund VII"), Georgia public limited partnerships affiliated
with the Partnership through common general partners, entered into a joint
venture agreement known as Fund V, Fund VI, and Fund VII Associates (the "Fund
V-VI-VII Joint Venture"). The Partnership holds an approximate 16% equity
interest in the following property through the Fund V-VI-VII Joint Venture:
The Marathon Building
- ---------------------
On September 16, 1994, the Fund V-VI-VII Joint Venture purchased a three-story
office building containing approximately 76,000 square feet, located on
approximately 6.2 acres of land in Appleton, Wisconsin (the "Marathon Building")
for a purchase price of $8,250,000, excluding acquisition costs.
The funds used by the Fund V-VI-VII Joint Venture to acquire the Marathon
Building were derived from capital contributions made by the Partnership, Wells
Fund VI and Wells Fund VII totaling $1,337,505, $3,470,958, and $3,470,958,
respectively, for total contributions to the Fund V-VI-VII Joint Venture of
$8,279,421 including acquisition costs.
The entire Marathon Building is leased to Jaakko Poyry Fluor Daniel for a period
of approximately twelve years, with options to extend the lease for two
additional five-year periods. The annual base rent under the lease is $910,000.
The current lease expires December 31, 2006. The lease agreement is a net lease
in that the tenant is primarily responsible for the operating expenses,
including real estate taxes.
The occupancy rate for the Marathon Building at year end was 100% for 1999,
1998, and 1997. The average effective annual rental per square foot in the
Marathon Building was $12.78 for 1999 and 1998 and $12.74 for 1997 and $12.78
for 1996 and 1995.
7
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ITEM 3. LEGAL PROCEEDINGS.
- --------------------------
There were no material pending legal proceedings or proceedings known to be
contemplated by governmental authorities involving the Partnership during 1999.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- -------------------------------------------------------------
No matters were submitted to a vote of the Limited Partners for the year of
1999.
[Remainder of page left intentionally blank]
8
<PAGE>
PART II
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Item 5. MARKET FOR PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER MATTERS.
- ----------------------------------------------------------------------------
As of February 29, 2000, the Partnership had 1,566,416 outstanding Class A Units
held by a total of 1,608 Limited Partners and 134,186 outstanding Class B Units
held by a total of 76 Limited Partners. The capital contribution per unit is
$10.00. There is no established public trading market for the Partnership's
limited partnership units, and it is not anticipated that a public trading
market for the units will develop. Under the Partnership Agreement, the General
Partners have the right to prohibit transfers of units.
The General Partners have estimated the investment value of properties held by
the Partnership, as of December 31, 1999, to be $11.77 per Class A Unit and
$15.94 per Class B Unit based on market conditions existing in early December,
1999. This value was confirmed as reasonable by an independent MAI appraiser,
David L. Beal Company, although no actual MAI appraisal was performed due to the
inordinate expense involved with such an undertaking. The valuation does not
include any fractional interest valuation.
Cash available for distribution to the Limited Partners is distributed on a
quarterly basis unless Limited Partners select to have their cash distributions
paid monthly. Under the Partnership Agreement, distributions are allocated first
to the Limited Partners holding Class A Units until they have received cash
distributions in each fiscal year of the Partnership equal to 10% of their
adjusted capital contribution. After this preference is satisfied, the General
Partners will receive an amount of Net Cash from Operations equal to one-tenth
of the total amount of Net Cash from Operations distributed. Net Cash From
Operations, as defined in the Partnership Agreement to mean Cash Flow, less
adequate cash reserves for other obligations of the Partnership for which there
is no provision, but are initially allocated none of the depreciation,
amortization, cost recovery and interest expense. These items are allocated to
Class B Unit holders until their capital account balances have been reduced to
zero. Therefore, the Limited Partners holding Class A Units will receive 90% of
Net Cash from Operations, and the General Partners will receive 10%. No Net
Cash from Operations will be distributed to Limited Partners holding Class B
Units. Cash distributions made to the Limited Partners holding Class A Units for
the two most recent fiscal years were as follows:
<TABLE>
<CAPTION>
Per Class A Unit
----------------
Distributions For Total Cash Investment Return of
Quarter Ended Distribution Income Capital
------------------------------------------------------------
<S> <C> <C> <C>
March 31, 1998 $289,025 $0.09 $0.10
June 30, 1998 $300,005 $0.14 $0.05
Sept. 30, 1998 $296,796 $0.08 $0.11
Dec. 31, 1998 $273,913 $0.09 $0.09
March 31, 1999 $283,810 $0.09 $0.09
June 30, 1999 $302,348 $0.14 $0.06
Sept. 30, 1999 $300,596 $0.07 $0.12
Dec. 31, 1999 $304,213 $0.10 $0.09
</TABLE>
9
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The fourth quarter distribution was accrued for accounting purposes in 1999, and
was not actually paid to the limited partners holding Class A units until
February 2000. Even though there is no guarantee, the General Partners
anticipate that cash distributions to Limited Partners holding Class A units
will continue in 2000 at a level at least comparable with 1999 cash
distributions on an annual basis.
ITEM 6. SELECTED FINANCIAL DATA.
- ---------------------------------
The Partnership commenced the offering on March 6, 1992, but did not commence
active operations until it received and accepted subscriptions for a minimum of
125,000 units on April 27, 1992.
The following sets forth a summary of the selected financial data for the fiscal
years ended December 31, 1999, 1998, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total assets $12,499,237 $13,038,503 $13,586,464 $14,092,081 $14,597,710
Total revenues 706,291 708,264 633,247 590,839 764,624
Net income 625,679 622,106 559,801 505,650 689,639
Net income/(loss) allocated
to General Partners 0 0 0 0 0
Net income allocated to
Class A Limited Partners 625,679 622,106 559,801 1,095,296 1,124,203
Net loss allocated to
Class B Limited Partners 0 0 0 (589,646) (434,564)
Net income per weighted
average (1) Class A
Limited Partner Unit .40 .40 .36 .71 .73
Net loss per weighted
average (1) Class B
Limited Partner Unit 0 0 0 (3.78) (2.72)
Cash Distributions per
weighted average (1)
Class A Limited Partner
Unit:
Investment Income .40 .40 .60 .65 .66
Return of Capital .36 .35 .11 .00 .00
</TABLE>
(1) The weighted average unit is calculated by averaging units over the period
they are outstanding during the time units are still being purchased or
converted by Limited Partners in the Partnership.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
- -------------------------------------------------------------------------
RESULTS OF OPERATION.
- ---------------------
The following discussion and analysis should be read in conjunction with the
selected financial data and the accompanying financial statements of the
Partnership and notes thereto. This Report
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contains forward-looking statements, within the meaning of Section 27A of the
Securities Act of 1933 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 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.
Results of Operations and Changes in Financial Conditions
- ---------------------------------------------------------
General
- -------
Gross revenues of the Partnership were $706,291 for the year ended December 31,
1999, as compared to $708,264 for the year ended December 31, 1998 and $633,247
for the year ended December 31, 1997. Interest income decreased from 1997 to
1998 and 1999 due to a greater amount of investor funds invested in interest
bearing accounts in 1997 than in 1998 and 1999. Gross revenues increased for
the years ended 1999 and 1998, as compared to 1997, due primarily to increased
equity in income from the joint ventures, due primarily to increased occupancy
at Stockbridge Village II.
Expenses of the Partnership were $80,612 for the year ended December 31, 1999,
$86,158 for the year ended December 31, 1998 and $73,446 for the year ended
December 31, 1997. Expenses varied due primarily to fluctuations in partnership
administration expenses.
The Partnership made cash distributions to the Limited Partners holding Class A
Units of $.76 per Class A Unit for the year ended December 31, 1999, $.75 per
Class A Unit for the year ended December 31, 1998 and $.71 per Class A Unit for
the year ended December 31, 1997. No cash distributions were made to the
Limited Partners holding Class B Units. Distributions accrued for the fourth
quarter of 1999 were paid in February, 2000.
Property Operations
- -------------------
As of December 31, 1999, the Partnership's ownership interest in Fund IV-Fund V
Joint Venture was 62.4%, in Fund V-Fund VI Joint Venture 46.4% and in Fund V-VI-
VII Joint Venture 16.5%.
As of December 31, 1999, the Partnership owned interests through interests in
joint ventures in the following operational properties:
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The Jacksonville Property/Fund IV-Fund V Joint Venture
- ------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31
------------------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rental income $1,471,572 $1,461,916 $1,464,097
---------- ---------- ----------
Expenses
Depreciation 319,508 318,096 318,100
Management & leasing expenses 205,987 190,928 184,623
Other operating expenses 363,344 401,622 431,278
---------- ---------- ----------
888,839 910,646 934,001
---------- ---------- ----------
Net income $ 582,733 $ 551,270 $ 530,096
========== ========== ==========
Occupied % 94% 94% 100%
Partnership's Ownership % 62.4% 62.4% 62.4%
Cash Distribution to the Partnership $ 602,381 $ 506,517 $ 503,015
Net Income Allocated to the
Partnership $ 363,773 $ 343,868 $ 329,540
</TABLE>
Rental income increased slightly in 1999 as compared to 1998 and 1997 due to
rental income for three months from a temporary tenant. Expenses decreased in
1999 as compared to 1998 due primarily to savings in various building operating
expenses. Cash distributions increased in 1999 as compared to 1998 and 1997 due
to the distribution of cash previously held in reserve. These reserves were
held to cover necessary tenant improvements which did not materialize. Net
income increased in 1999, as compared to 1998 and 1997 levels, due primarily to
savings in operating expenses.
The Jacksonville Property incurred property taxes of $182,936 for 1999, $188,333
for 1998, and $180,405 for 1997.
For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2. For additional information on tenants,
etc. refer to Item 2, Properties, Page 3.
12
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Village Overlook Properties/Fund IV-Fund V Joint Venture
- --------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31
-----------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rental income $454,971 $480,419 $387,453
Interest income 10,436 12,908 9,193
-------- -------- --------
465,407 493,327 396,646
-------- -------- --------
Expenses
Depreciation 181,448 178,095 166,939
Management & leasing expenses 54,363 61,950 55,591
Other operating expenses 211,837 170,664 187,339
-------- -------- --------
447,648 410,709 409,869
-------- -------- --------
Net income (loss) $ 17,759 $ 82,618 $(13,223)
======== ======== ========
Occupied % 62% 92% 81%
Partnership's Ownership % 62.4% 62.4% 62.4%
Cash Distribution to the Partnership $ 99,578 $181,881 $121,661
Net Income (Loss) Allocated to the
Partnership $ 11,087 $ 51,542 $ (8,247)
</TABLE>
Rental income for the Village Overlook Properties decreased in 1999 as compared
to 1998, due to a decrease in occupancy level. Occupancy decreased in 1999 to
62%, as compared to 92% in 1998 (on both buildings) due to the fact that one
major tenant, Georgia Baptist, who occupied approximately 50% of the space did
not renew their lease, which expired May 31, 1999. Two new tenants have signed
leases for a total of 7,332 rentable square feet of space and moved in October
1, 1999. All efforts are being made by the Partnership to lease the remaining
10,515 square feet of vacant space.
Operating expenses increased in 1999, as compared to 1998 and 1997, due
primarily to the resurfacing of the parking lot as well as the repairs of the
HVAC system in the buildings. Cash distributions allocated to the Partnership
decreased in 1999, compared to prior year levels due primarily to the loss in
revenue and the increase in operating expenses experienced in these properties.
The Village Overlook Properties incurred property taxes of $35,002 for 1999,
$36,862 for 1998 and $35,691 for 1997.
For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2. For additions information on tenants,
etc. refer to Item 2, Properties, Page 3.
13
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The Hartford Building - Fund V - Fund VI Joint Venture
- ------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31
------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rental income $717,499 $717,499 $717,499
-------- -------- --------
Expenses
Depreciation 292,031 292,032 292,031
Management & leasing expenses 28,968 27,719 30,189
Other operating expenses 11,282 10,530 (9,983)
-------- -------- --------
332,281 330,281 312,237
-------- -------- --------
Net income $385,218 $387,218 $405,262
======== ======== ========
Occupied % 100% 100% 100%
Partnership's Ownership % 46.4% 46.5% 46.5%
Cash Distribution to the Partnership $317,598 $318,379 $329,507
Net Income Allocated to the
Partnership $178,879 $180,142 $189,813
</TABLE>
Net income decreased and expenses increased in 1999 and 1998, as compared to
1997, due primarily to an insurance reimbursement received in 1997 from the
tenant for prior year's expenses.
The Partnership's ownership in the Fund V-Fund VI Joint Venture decreased from
46.5% in 1997 and 1998, to 46.4% in 1999 due to additional fundings by Wells
Fund VI, which increased Wells Fund VI's ownership interest and decreased the
Partnership's ownership interest in the Fund V - Fund VI Joint Venture.
Cash distributions and net income allocated to the Partnership decreased in 1999
and 1998 as compared to 1997 due to the insurance reimbursement discussed above
and the decreased ownership in the joint venture.
Real estate taxes and all operational expenses for the building are the
responsibility of the tenant.
For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2. For additional information on tenants,
etc. refer to Item 2, Properties, Page 3. For more detailed financial
information regarding the historical operations of The Hartford Building refer
to the Financial Statements, as of December 31, 1999, 1998 and 1997 regarding
The Hartford Building commencing at page F-25 of this Annual Report on Form 10-
K.
14
<PAGE>
Stockbridge Village II - Fund V - Fund VI Joint Venture
- -------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31
-----------------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rental income $311,112 $235,776 $235,508
-------- -------- --------
Expenses
Depreciation 104,962 101,971 96,357
Management & leasing expenses 36,199 29,648 35,423
Other operating expenses 43,637 32,156 62,725
-------- -------- --------
184,798 163,775 194,505
-------- -------- --------
Net income $126,314 $ 72,001 $ 41,003
======== ======== ========
Occupied % 100% 72% 72%
Partnership's Ownership % 46.4% 46.5% 46.5%
Cash Distribution to the Partnership $ 98,998 $ 77,808 $ 60,871
Net Income Allocated to the
Partnership $ 58,648 $ 33,488 $ 18,970
</TABLE>
Net income and cash distributions allocated to the Partnership are greater in
1999, as compared to 1998 and 1997, due primarily to increase occupancy.
Expenses increased in 1999, as compared to 1998 due to increased occupancy.
The Partnership's ownership percentage in the Fund V - Fund VI Joint Venture
decreased to 46.4% in 1999 as compared to 46.5% in 1998 and 1997 due to
additional investments by Wells Fund VI which decreased the Partnership's
ownership interest in the Fund V-Fund VI Joint Venture.
The Stockbridge Village II Project incurred property taxes of $24,121 for 1999,
$23,508 for 1998 and $25,491 for 1997.
For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2. For additional information on tenants,
etc., refer to Item 2, Properties, Page 3.
15
<PAGE>
The Marathon Building/Fund V-VI-VII Joint Venture
- -------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31
--------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rental income $971,051 $971,447 $968,219
-------- -------- --------
Expenses
Depreciation 350,585 350,585 350,585
Management & leasing expenses 39,659 34,632 39,671
Other operating expenses 19,441 12,261 11,905
-------- -------- --------
409,685 397,478 402,161
-------- -------- --------
Net income $561,366 $573,969 $566,058
======== ======== ========
Occupied % 100% 100% 100%
Partnership's Ownership % 16.5% 16.5% 16.5%
Cash Distribution to the Partnership $151,521 $153,446 $152,896
Net Income Allocated to the
Partnership $ 92,401 $ 94,475 $ 93,173
</TABLE>
Real estate taxes and all operational expenses for the building are the
responsibility of the tenant.
Rental income remained relatively stable in 1999, 1998 and 1997. Management and
leasing fees increased, as compared to 1998, due to an underaccrual of fees in
1998. Operating expenses increased slightly due primarily to increases in
accounting and administrative fees.
Cash distribution to the Partnership and net income allocated to Partnership
remained relatively stable for 1999.
For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, page 2. For additional information on tenants,
etc., refer to Item 2, Properties, Page 3.
Liquidity and Capital Reserves
- ------------------------------
During its offering, which terminated on March 3, 1993, the Partnership raised a
total $17,006,020 in capital through the sale of 1,700,602 units. No additional
units will be sold by the Partnership. As of December 31, 1999, the Partnership
incurred $3,145,282 in commission fees, acquisition fees, organization and
offering costs; invested $13,844,687 in properties; reserved $16,051 as working
capital reserves.
16
<PAGE>
Pursuant to the terms of the Partnership Agreement, the Partnership is required
to maintain working capital reserves in an amount equal to the cash operating
expenses required to operate the Partnership for a six-month period not the be
reduced below 1% of Limited Partners' capital contributions. As set forth above,
in order to fund tenant improvements of approximately $154,009 the General
Partners have used a portion of the Partnership's working capital reserves to
reduce the balance below this minimum amount, rather than funding out of
operating cash flow. The General Partners anticipated that the remaining $16,051
in working capital reserves will be sufficient to meet its future needs.
The Partnership's net cash used in operating activities increased from $66,556
for the year ended December 31, 1997 to $77,135 for the year ended December 31,
1998 to $83,383 for the year ended December 31, 1999 primarily due to decreases
in interest income in 1999 and 1998 and changes in accounts payable. Net cash
provided by investing activities fluctuated from $966,869 in 1997 and $1,223,796
in 1998 and $1,201,675 in 1999, primarily due to changes in investments in joint
ventures and increases in distributions received from joint ventures. Cash used
in financing activities remained relatively stable for 1999 and 1998, but were
lower in 1997.
The Partnership's distributions paid and payable through the fourth quarter of
1999 have been paid from net cash from operations and from a return of capital.
The Partnership anticipates that distributions will continue to be paid on a
quarterly basis from such sources.
The Partnership is unaware of any known demands, commitments, events or capital
expenditures other than that which is required for the normal operations of its
properties that will result in the Partnership's liquidity increasing or
decreasing in any material way. The Partnership expects to meet liquidity
requirements and budget demands through cash flow from operations.
Inflation
- ---------
The real estate market has not been affected significantly by inflation in the
past three years due to the relatively low inflation rate. There are provisions
in the majority of tenant leases executed by the Partnership to protect the
Partnership from the impact of inflation. Most leases contain common area
maintenance charges, real estate tax and insurance reimbursements on a per
square foot basis, or in some cases, annual reimbursement of operating expenses
above a certain per square foot allowance. These provisions should reduce the
Partnership's exposure to increases in costs and operating expenses resulting
from inflation. In addition, a number of the Partnership's leases are for terms
of less than five years which may permit the Partnership to replace existing
leases with new leases at higher base rental rates if the existing leases are
below market rate. There is no assurance, however, that the Partnership would be
able to replace existing leases with new leases at higher base rentals.
Year 2000
- ---------
The Partnership made the transition into the year 2000 without any information
systems, business operations or facilities related system problems. Management
believes that there are no other Y2K related issues that may require disclosure.
17
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
- ----------------------------------------------------
The Financial Statements of the Registrant and supplementary data are detailed
under Item 14(a) and filed as part of the report on the pages indicated.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- -----------------------------------------------------------------------
FINANCIAL DISCLOSURE.
- --------------------
There were no disagreements with the Partnership's accountants or other
reportable events during 1999.
PART III
--------
ITEM 10. GENERAL PARTNERS OF THE PARTNERSHIP.
- --------------------------------------------
Wells Partners, L.P. Wells Partners, L.P. is a private Georgia limited
-------------------
partnership formed on October 25, 1990. The sole General Partner of Wells
Partners, L.P. is Wells Capital, Inc., a Georgia corporation. The executive
offices of Wells Capital, Inc. are located at 6200 The Corners Parkway, Suite
250, Norcross, Georgia 30092.
Leo F. Wells, III. Mr. Wells is a resident of Atlanta, Georgia, is 56
-----------------
years of age and holds a Bachelor of Business Administration Degree in Economics
from the University of Georgia. Mr. Wells is the President and sole Director of
Capital. Mr. Wells is the President of Wells & Associates, Inc., a real estate
brokerage and investment company formed in 1976 and incorporated in 1978, for
which he serves as principal broker. Mr. Wells is also currently the sole
Director and President of Wells Management Company, Inc., a property management
company he founded in 1983. In addition, Mr. Wells is the President and Chairman
of the Board of Wells Investment Securities, Inc., Wells & Associates, Inc., and
Wells Management Company, Inc. which are affiliates of the General Partners.
From 1980 to February 1985, Mr. Wells served as vice-president of Hill-Johnson,
Inc., a Georgia corporation engaged in the construction business. From 1973 to
1976, he was associated with Sax Gaskin Real Estate Company and from 1970 to
1973, he was a real estate salesman and property manager for Roy D. Warren &
Company, an Atlanta real estate company.
18
<PAGE>
Item 11. COMPENSATION OF GENERAL PARTNERS AND AFFILIATES.
- --------------------------------------------------------
The following table summarizes the compensation and fees paid to the General
Partners and their affiliates during the year ended December 31, 1999.
CASH COMPENSATION TABLE
(A) (B) (C)
Name of individual or Capacities in which served
number in group -Form of Compensation Cash Compensation
- --------------------- -------------------------- -----------------
Wells Management Property Manager- $173,723 (1)
Company, Inc. Management and Leasing
Fees
(1) The majority of these fees are not paid directly by the Partnership but are
paid by the joint venture entities which own properties for which the
property management and leasing services relate and include management and
leasing fees which were accrued for accounting purposes in 1999 but not
actually paid until January, 2000.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- -----------------------------------------------------------------------
No Limited Partner is known by the Partnership to own beneficially more than 5%
of the outstanding units of the Partnership.
Set forth below is the security ownership of management as of February 28, 2000.
(1) (2) (3) (4)
Amount and Nature
Name and Address of of Beneficial
Title of Class Beneficial Owner Ownership Percent of Class
- -------------- ------------------- ------------------ ----------------
Class A Units Leo F. Wells, III 508.82 units (IRA, less than 1%
401(k) Plan)
No arrangements exist which would, upon implementation, result in a change in
control of the Partnership.
19
<PAGE>
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- -------------------------------------------------------
The compensation and fees paid or to be paid by the Partnership to the General
Partners and their affiliates in connection with the operation of the
Partnership are as follows:
Interest in Partnership Cash Flow and Net Sale Proceeds. The General Partners
- -------------------------------------------------------
will receive a subordinated participation in net cash flow from operations equal
to 10% of net cash flow after the Limited Partners have received preferential
distributions equal to 10% of their adjusted capital contribution. The General
Partners will also receive a subordinated participation in net sale proceeds and
net financing proceeds equal to 20% of residual proceeds available for
distribution after the Limited Partners holding Class B Units have received a
return of their adjusted capital contribution plus a 15% cumulative return on
their adjusted capital contribution; provided, however, that in no event shall
the General Partners receive in the aggregate in excess of 15% of net sale
proceeds and net financing proceeds remaining after payments to Limited Partners
from such proceeds of amounts equal to the sum of their adjusted capital
contributions plus a 6% cumulative return on their adjusted capital
contributions. The General Partners have received no distribution from cash flow
or net sales proceeds in 1999.
Property Management and Leasing Fees. Wells Management Company, Inc., an
- ------------------------------------
affiliate of the General Partners, will receive compensation for supervising the
management of the Partnership properties equal to the lesser of: (A)(i) 3% of
gross revenues for management and 3% of the gross revenues for leasing
(aggregate maximum of 6%) plus a separate one-time fee for initial rent-up or
leasing-up of newly constructed properties in an amount not to exceed the fee
customarily charged in arm's length transactions by others rendering similar
services in the same geographic area for similar properties; and (ii) in the
case of industrial and commercial properties which are leased on a long-term
basis (ten or more years), 1% of the gross revenues except for initial leasing
fees equal to 3% of the gross revenues over the first five years of the lease
term; or (B) the amounts charged by unaffiliated persons rendering comparable
services in the same geographic area. Wells Management Company, Inc. accrued
$173,723 in cash compensation for the year ended December 31, 1999.
Real Estate Commissions. In connection with the sale of Partnership properties,
- -----------------------
the General Partners or their affiliates may receive commissions not exceeding
the lesser of (A) 50% of the commissions customarily charged by other brokers in
arm's-length transactions involving comparable properties in the same geographic
area or (B) 3% of the gross sales price of the property, and provided that
payments of such commissions will be made only after Limited Partners have
received prior distributions totaling 100% of their capital contributions plus a
6% cumulative return on their adjusted capital contributions. During 1999, no
real estate commissions were paid to the General Partners or their affiliates.
20
<PAGE>
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
- --------------------------------------------------------------------------
(a)1. The Financial Statements are contained on pages F-2 through F-24 of this
Annual Report on Form 10-K, and the list of the Financial Statements
contained herein is set forth on page F-1, which is hereby incorporated by
reference.
(a)2. Financial Statement Schedule III
Information with respect to this item begins on Page S-1 of this Annual
Report on Form 10-K.
(a)3. The Exhibits filed in response to Item 601 of Regulation S-K are listed on
the Exhibit Index attached hereto.
(b) No reports on Form 8-K were filed with the Commission during the fourth
quarter of 1999.
(c) The Exhibits filed in response to Item 601 of Regulation S-K are listed on
the Exhibit Index attached hereto.
(d) See (a) 2.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized this 27th day of March,
2000.
Wells Real Estate Fund V, L.P.
(Registrant)
By: /s/ Leo F. Wells, III
---------------------------------------------
Leo F. Wells, III
Leo F. Wells, III, Individual General Partner
and as President and Chief Financial Officer
of Wells Capital, Inc., the General Partner
of Wells Partners, L.P.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacity as and on the date indicated.
Signature Title
- --------- -----
/s/ Leo F. Wells, III Individual General Partner, March 27, 2000.
- ---------------------
Leo F. Wells, III President and Sole Director
of Wells Capital, Inc. the
General Partner of Wells
Partners, L.P.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRARS WHICH HAVE NOT BEEN REGISTERED PURSUANT TO
SECTION 12 OF THE ACT.
No annual report or proxy material relating to an annual or other meeting
of security holders has been sent to security holders.
22
<PAGE>
INDEX TO THE FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Financial Statements Page
- -------------------- ----
<S> <C>
Independent Auditors' Reports F-2
Balance Sheets as of December 31, 1999 and 1998 F-3
Statements of Income for the Years Ended December
31, 1999, 1998 and 1997 F-4
Statements of Partners' Capital for the Years Ended
December 31, 1999, 1998 and 1997 F-5
Statements of Cash Flows for the Years Ended
December 31, 1999, 1998, 1997 F-6
Notes to Financial Statements for December 31, 1999
1998 and 1997 F-7
Audited Financial Statements - The Hartford Building F-25
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Wells Real Estate Fund V, L.P.:
We have audited the accompanying balance sheets of WELLS REAL ESTATE FUND V,
L.P. (a Georgia public limited partnership) as of December 31, 1999 and 1998 and
the related statements of income, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1999. These financial
statements and the schedule referred to below are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements and
schedule are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wells Real Estate Fund V, L.P.
as of December 31, 1999 and 1998 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule III--Real Estate Investments
and Accumulated Depreciation as of December 31, 1999 is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
January 20, 2000
F-2
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(A Georgia Public Limited Partnership)
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
INVESTMENT IN JOINT VENTURES $12,178,473 $12,673,831
CASH AND CASH EQUIVALENTS 21,620 63,998
DUE FROM AFFILIATES 299,144 300,674
----------- -----------
Total assets $12,499,237 $13,038,503
=========== ===========
</TABLE>
LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES:
Accounts payable and accrued expenses $ 0 $ 4,274
Partnership distributions payable 304,213 273,916
----------- -----------
Total liabilities 304,213 278,190
----------- -----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
Limited partners:
Class A--1,566,416 units and 1,559,021 units as of
December 31,1999 and 1998, respectively 12,195,024 12,760,313
Class B--134,186 units and 141,581 units as of
December 31,1999 and 1998, respectively 0 0
----------- -----------
Total partners' capital 12,195,024 12,760,313
----------- -----------
Total liabilities and partners' capital $12,499,237 $13,038,503
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-3
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
REVENUES:
Equity in income of joint ventures $704,788 $703,515 $623,249
Interest income 1,503 4,749 9,998
-------- -------- --------
706,291 708,264 633,247
-------- -------- --------
EXPENSES:
Partnership administration 52,130 60,292 42,496
Legal and accounting 18,496 17,900 20,937
Amortization of organization costs 0 0 1,042
Computer costs 9,986 7,966 8,971
-------- -------- --------
80,612 86,158 73,446
-------- -------- --------
NET INCOME $625,679 $622,106 $559,801
======== ======== ========
NET INCOME ALLOCATED TO CLASS A
LIMITED PARTNERS $625,679 $622,106 $559,801
======== ======== ========
NET INCOME PER WEIGHTED AVERAGE
CLASS A LIMITED PARTNER UNIT $ 0.40 $ 0.40 $ 0.36
======== ======== ========
CASH DISTRIBUTION PER WEIGHTED
AVERAGE CLASS A LIMITED PARTNER UNIT $ 0.76 $ 0.75 $ 0.71
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
Limited Partners Total
------------------------------------------
Class A Class B Partners'
---------------------- -----------------
Units Amount Units Amount Capital
--------- ----------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1996 1,546,416 $13,840,570 154,186 $ 0 $13,840,570
Net income 0 559,801 0 0 559,801
Class B conversion elections 5,000 0 (5,000) 0 0
Partnership distributions 0 (1,102,425) 0 0 (1,102,425)
--------- ----------- ------- ------- -----------
BALANCE, December 31, 1997 1,551,416 13,297,946 149,186 0 13,297,946
Net income 0 622,106 0 0 622,106
Class B conversion elections 7,605 0 (7,605) 0 0
Partnership distributions 0 (1,159,739) 0 0 (1,159,739)
--------- ----------- ------- ------- -----------
BALANCE, December 31, 1998 1,559,021 12,760,313 141,581 0 12,760,313
Net income 0 625,679 0 0 625,679
Partnership distributions 0 (1,190,968) 0 0 (1,190,968)
Class B conversion elections 7,395 0 (7,395) 0 0
--------- ----------- ------- ------- -----------
BALANCE, December 31, 1999 1,566,416 $12,195,024 134,186 $ 0 $12,195,024
========= =========== ======= ======= ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 625,679 $ 622,106 $ 559,801
----------- ----------- -----------
Adjustments to reconcile net income to net cash used in operating
activities: (704,788) (703,515) (623,249)
Equity in income of joint ventures
Amortization of organization costs 0 0 1,042
Changes in assets and liabilities:
Other assets 0 0 350
Accounts payable and accrued expenses (4,274) 4,274 (4,500)
----------- ----------- -----------
Total adjustments (709,062) (699,241) (626,357)
----------- ----------- -----------
Net cash used in operating activities (83,383) (77,135) (66,556)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in joint ventures (69,929) (19,270) (154,131)
Distributions received from joint ventures 1,271,605 1,243,066 1,121,000
----------- ----------- -----------
Net cash provided by investing activities 1,201,676 1,223,796 966,869
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners in excess of accumulated earnings (556,194) (539,448) 0
Distributions to partners from accumulated earnings (604,477) (634,893) (1,060,918)
----------- ----------- -----------
Net cash used in financing activities (1,160,671) (1,174,341) (1,060,918)
----------- ----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (42,378) (27,680) (160,605)
CASH AND CASH EQUIVALENTS, beginning of year 63,998 91,678 252,283
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of year $ 21,620 $ 63,998 $ 91,678
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Deferred project costs contributed to joint venture $ 0 $ 0 $ 5,843
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(A Georgia Public Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998, AND 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business
Wells Real Estate Fund V, L.P. (the "Partnership") is a public limited
partnership organized on October 25, 1990 under the laws of the state of
Georgia. The general partners are Leo F. Wells, III and Wells Partners,
L.P. ("Wells Partners"), a Georgia nonpublic limited partnership. The
Partnership has two classes of limited partnership interests, Class A and
Class B units. Class B limited partners shall have a one-time right to
elect to have all of their units treated as Class A units. Limited partners
may vote to, among other things, (a) amend the partnership agreement,
subject to certain limitations, (b) change the business purpose or
investment objectives of the Partnership, and (c) remove a general partner.
A majority vote on any of the above described matters will bind the
Partnership, without the concurrence of the general partners. Each limited
partnership unit has equal voting rights, regardless of class.
The Partnership was formed to acquire and operate commercial real
properties, including properties which are to be developed, are currently
under development or construction, are newly constructed, or have operating
histories. The Partnership owns an interest in the following properties
through joint ventures between the Partnership and other Wells Real Estate
Funds: (i) the Jacksonville IBM Building, a four-story office building
located in Jacksonville, Florida, (ii) the Village Overlook Project
(formerly known as the "Medical Center Project"), two substantially
identical two-story buildings located in Clayton County, Georgia, (iii) the
Stockbridge Village II property, two retail buildings located in Clayton
County, Georgia, (iv) the Hartford Building, a four-story office building
located in Southington, Connecticut, and (v) the Marathon Building, a
three-story office building located in Appleton, Wisconsin.
Use of Estimates and Factors Affecting the Partnership
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The carrying values of real estate are based on management's current intent
to hold the real estate assets as long-term investments. The success of the
Partnership's future operations and the ability to realize the 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 it is taking will enable
the Partnership to realize its investment in its assets.
F-7
<PAGE>
Income Taxes
The Partnership is not subject to federal or state income taxes, and
therefore, none have been provided for in the accompanying financial
statements. The partners are required to include their respective shares of
profits and losses in their individual income tax returns.
Distribution of Net Cash From Operations
Cash available for distribution, as defined by the partnership agreement,
is distributed to limited partners quarterly. In accordance with the
partnership agreement, distributions are paid first to limited partners
holding Class A units until they have received a 10% per annum return on
their adjusted capital contributions, as defined. Cash available for
distribution is then paid first to the general partners until they have
received an amount equal to 10% of distributions. Any remaining cash
available for distribution is split between the limited partners holding
Class A units and the general partners on a basis of 90% and 10%,
respectively. No distributions will be made to the limited partners holding
Class B units.
Distribution of Sales Proceeds
Upon sales of properties, the net sales proceeds are distributed in the
following order:
. To limited partners on a per unit basis until all limited
partners have received 100% of their adjusted capital
contributions, as defined
. To limited partners holding Class B units on a per unit basis
until they receive an amount equal to the net cash available for
distribution received by the limited partners holding Class A
units
. To all limited partners on a per unit basis until they receive a
cumulative 10% per annum return on their adjusted capital
contributions, as defined
. To limited partners holding Class B units on a per unit basis
until they receive a cumulative 15% per annum return on their
adjusted capital contributions, as defined
. To all limited partners until they receive an amount equal to
their respective cumulative distributions, as defined
. To all the general partners until they have received 100% of
their capital contribution, as defined
. Thereafter, 80% to the limited partners and 20% to the general
partners
Allocation of Net Income, Net Loss, and Gain on Sale
Net income is defined as net income recognized by the Partnership,
excluding deductions for depreciation, and amortization. Net income, as
defined, of the Partnership will be allocated each year in the same
proportions that net cash from operations is distributed to the partners.
To the extent the Partnership's net income in any year exceeds net cash
from operations, it will be allocated 99% to the limited partners and 1% to
the general partners.
F-8
<PAGE>
Net loss, depreciation, and amortization deductions for each fiscal year
will be allocated as follows: (a) 99% to the limited partners holding Class
B units and 1% to the general partners until their capital accounts are
reduced to zero, (b) then to any partner having a positive balance in his
capital account in an amount not to exceed such positive balance, and (c)
thereafter to the general partners.
Gain on the sale or exchange of the Partnership's properties will be
allocated generally in the same manner that the net proceeds from such sale
are distributed to partners after the following allocations are made, if
applicable: (a) allocations made pursuant to a qualified income offset
provision in the partnership agreement, (b) allocations to partners having
negative capital accounts until all negative capital accounts have been
restored to zero, and (c) allocations to Class B limited partners in
amounts equal to deductions for depreciation and amortization previously
allocated to them with respect to the specific partnership property sold,
but not in excess of the amount of gain on sale recognized by the
Partnership with respect to the sale of such property.
Investment in Joint Ventures
Basis of Presentation. The Partnership does not have control over the
operations of the joint ventures; however, it does exercise significant
influence. Accordingly, investments in joint ventures are recorded using
the equity method of accounting.
Real Estate Assets. Real estate assets held by the joint ventures are
stated at cost less accumulated depreciation. Major improvements and
betterments are capitalized when they extend the useful life of the related
asset. All repairs and maintenance are expensed as incurred.
Management continually monitors events and changes in circumstances which
could indicate that carrying amounts of real estate assets may not be
recoverable. When events or changes in circumstances are present which
indicate that the carrying amounts of real estate assets may not be
recoverable, management assesses the recoverability of real estate assets
by determining whether the carrying value of such real estate assets will
be recovered through the future cash flows expected from the use of the
asset and its eventual disposition. Management has determined that there
has been no impairment in the carrying value of real estate assets held by
the joint ventures as of December 31, 1999.
Depreciation for buildings and improvements is calculated using the
straight-line method over 25 years.
Revenue Recognition. All leases on real estate assets held by the joint
ventures are classified as operating leases, and the related rental income
is recognized on a straight-line basis over the terms of the respective
leases.
Partners' Distributions and Allocations of Profit and Loss. Cash available
for distribution and allocations of profit and loss to the Partnership by
the joint ventures are made in accordance with the terms of the individual
joint venture agreements. Generally, these items are allocated in
proportion to the partners' respective ownership interests. Cash is paid
from the joint ventures to the Partnership quarterly.
Deferred Lease Acquisition Costs. Costs incurred to procure operating
leases are capitalized and amortized on a straight-line basis over the
terms of the related leases.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Partnership considers
all highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents. Cash equivalents
F-9
<PAGE>
include cash and short-term investments. Short-term investments are stated
at cost, which approximates fair value, and consist of investments in money
market accounts.
Per Unit Data
Net income per unit with respect to the Partnership for the years ended
December 31, 1999, 1998, and 1997 is computed based on the average number
of units outstanding during the period.
2. RELATED-PARTY TRANSACTIONS
Due from affiliates at December 31, 1999 and 1998 represents the
Partnership's share of cash to be distributed from its joint venture
investments for the fourth quarters of 1999 and 1998, as follows:
<TABLE>
<CAPTION>
1999 1998
-------- ---------
<S> <C> <C>
Fund IV and V Associates $168,172 $154,358
Fund V and VI Associates 91,847 107,472
Fund V, VI, and VII Associates 39,125 38,844
-------- --------
$299,144 $300,674
======== ========
</TABLE>
The Partnership entered into a property management agreement with Wells
Management Company, Inc. ("Wells Management"), an affiliate of the general
partners. In consideration for supervising the management of the
Partnership's properties, the Partnership will generally pay Wells
Management management and leasing fees equal to (a) 3% of the gross
revenues for management and 3% of the gross revenues for leasing (aggregate
maximum of 6%) plus a separate fee for the one-time initial lease-up of
newly constructed properties in an amount not to exceed the fee customarily
charged in arm's-length transactions by others rendering similar services
in the same geographic area for similar properties or (b) in the case of
commercial properties which are leased on a long-term net basis (ten or
more years), 1% of the gross revenues except for initial leasing fees equal
to 3% of the gross revenues over the first five years of the lease term.
The Partnership incurred management and leasing fees and lease acquisition
costs, at the joint venture level, of $173,723, $109,011, and $111,690 for
the years ended December 31, 1999, 1998, and 1997, respectively, which were
paid to Wells Management.
The Company performs certain administrative services for the Partnership,
such as accounting and other partnership administration, and incurs the
related expenses. Such expenses are allocated among the various Wells Real
Estate Funds based on time spent on each fund by individual administrative
personnel. In the opinion of management, such allocation is a reasonable
estimation of such expenses.
The general partners are also general partners of other Wells Real Estate
Funds. As such, there may exist conflicts of interest where the general
partners in the capacity as general partners of other Wells Real Estate
Funds may be in competition with the Partnership for tenants in similar
geographic markets.
F-10
<PAGE>
3. INVESTMENT IN JOINT VENTURES
The Partnership's investment and percentage ownership in joint ventures at
December 31, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
1999 1999
----------------------------- ---------------------------
Amount Percent Amount Percent
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Fund IV and V Associates $ 7,031,998 62% $ 7,289,167 62%
Fund V and VI Associates 3,980,699 46 4,159,768 47
Fund V, VI, and VII Associates 1,165,776 16 1,224,896 16
----------- -----------
$12,178,473 $12,673,831
=========== ===========
</TABLE>
The following is a rollforward of the Partnership's investment in the joint
ventures for the years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Investment in joint ventures, beginning of year $12,673,831 $13,189,076
Equity in income of joint ventures 704,788 703,515
Contributions to joint ventures 69,929 19,270
Distributions from joint ventures (1,270,075) (1,238,030)
----------- -----------
Investment in joint ventures, end of year $12,178,473 $12,673,831
=========== ===========
</TABLE>
Fund IV and V Associates
On April 14, 1992, the Partnership entered into a joint venture agreement
with Wells Real Estate Fund IV, L.P. The joint venture, Fund IV and V
Associates, was formed for the purpose of investing in commercial real
properties. During 1992, Fund IV and V Associates purchased a parcel of
land on which the Medical Center Project was developed. During 1992, the
joint venture also purchased a second parcel of land in Jacksonville,
Florida, on which the Jacksonville IBM Building was developed.
F-11
<PAGE>
Following are the financial statements of Fund IV and V Associates:
Fund IV and V Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998
Assets
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Real estate assets, at cost:
Land $2,011,534 $ 2,011,534
Building and improvements, less accumulated depreciation of 8,849,644 9,236,550
$2,685,018 in 1999 and $2,184,062 in 1998 1,656 0
----------- -----------
Construction in progress 10,862,834 11,248,084
Total real estate assets 267,120 265,196
Cash and cash equivalents 300,128 364,021
Accounts receivable 174,225 113,101
----------- -----------
Prepaid expenses and other assets $11,604,307 $11,990,402
Total assets =========== ===========
Liabilities and Partners' Capital
Liabilities:
Accounts payable
Partnership distributions payable $ 49,680 $ 54,732
244,397 222,267
Due to affiliates 45,598 36,809
----------- -----------
Total liabilities 339,675 313,808
Partners' capital: ----------- -----------
Wells Real Estate Fund IV 4,232,634 4,387,427
Wells Real Estate Fund V 7,031,998 7,289,167
----------- -----------
Total partners' capital 11,264,632 11,676,594
----------- -----------
Total liabilities and partners' capital $11,604,307 $11,990,402
=========== ===========
</TABLE>
F-12
<PAGE>
Fund IV and V Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Rental income $1,926,543 $1,942,336 $1,851,550
Interest income 10,436 12,908 9,193
Other income 360 360 355
---------- ---------- ----------
1,937,339 1,955,604 1,861,098
Expenses: ---------- ---------- ----------
Operating costs, net of reimbursements 509,617 511,595 559,646
Depreciation 500,956 496,191 485,039
Management and leasing fees 260,350 253,238 240,214
Property administration 65,924 43,329 45,083
Legal and accounting 0 17,363 14,243
---------- ---------- ----------
1,336,847 1,321,716 1,344,225
---------- ---------- ----------
Net income $ 600,492 $ 633,888 $ 516,873
========== ========== ==========
Net income allocated to Wells Real Estate Fund IV $ 225,632 $ 238,478 $ 195,580
========== ========== ==========
Net income allocated to Wells Real Estate Fund V $ 374,860 $ 395,410 $ 321,293
========== ========== ==========
</TABLE>
F-13
<PAGE>
Fund IV and V Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
Wells Real Wells Real Total
Estate Estate Partners'
Fund IV Fund V Capital
--------------- ------------- ------------
<S> <C> <C> <C>
Balance, December 31, 1996 $4,748,276 $7,706,294 $12,454,570
Net income 195,580 321,293 516,873
Partnership contributions 0 159,974 159,974
Partnership distributions (379,800) (624,676) (1,004,476)
---------- ---------- -----------
Balance, December 31, 1997 4,564,056 7,562,885 12,126,941
Net income 238,478 395,410 633,888
Partnership contributions 0 19,270 19,270
Partnership distributions (415,107) (688,398) (1,103,505)
---------- ---------- -----------
Balance, December 31, 1998 4,387,427 7,289,167 11,676,594
Net income 225,632 374,860 600,492
Partnership contributions 42,091 69,929 112,020
Partnership distributions (422,516) (701,958) (1,124,474)
---------- ---------- -----------
Balance, December 31, 1999 $4,232,634 $7,031,998 $11,264,632
========== ========== ===========
</TABLE>
F-14
<PAGE>
Fund IV and V Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 600,492 $ 633,888 $ 516,873
----------- ----------- -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 500,956 496,191 485,039
Changes in assets and liabilities:
Accounts receivable 63,893 (57,757) (8,789)
Prepaid expenses and other assets (61,124) 13,862 613
Accounts payable (5,052) 10,791 4,362
Due to affiliates 8,789 6,401 (92)
----------- ----------- -----------
Total adjustments 507,462 469,488 481,133
----------- ----------- -----------
Net cash provided by operating activities 1,107,954 1,103,376 998,006
----------- ----------- -----------
Cash flows from investing activities:
Investment in real estate (115,706) 0 (167,891)
----------- ----------- -----------
Cash flows from financing activities:
Contributions from joint venture partners 112,020 19,270 159,974
Distributions to joint venture partners (1,102,344) (1,072,372) (1,004,995)
----------- ----------- -----------
Net cash used in financing activities (990,324) (1,053,102) (845,021)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents 1,924 50,274 (14,906)
Cash and cash equivalents, beginning of year 265,196 214,922 229,828
----------- ----------- -----------
Cash and cash equivalents, end of year $ 267,120 $ 265,196 $ 214,922
=========== =========== ===========
</TABLE>
Fund V and VI Associates
On December 27, 1993, the Partnership entered into a joint venture agreement
with Wells Real Estate Fund VI, L.P. ("Fund VI"). The joint venture, Fund V and
VI Associates, was formed for the purpose of investing in commercial real
properties. In December 1993, the joint venture purchased a 71,000-square-foot,
four-story office building known as the Hartford Building in Southington,
Connecticut. On June 26, 1994, the Partnership contributed its interest in a
parcel of land, the Stockbridge Village II property, to the joint venture. The
Stockbridge Village II property consists of two separate restaurants and began
operations during 1995.
F-15
<PAGE>
Following are the financial statements for Fund V and VI Associates:
Fund V and VI Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998
<TABLE>
<CAPTION>
Assets
1999 1998
---------- ----------
<S> <C> <C>
Real estate assets, at cost:
Land $1,622,733 $1,622,733
Building and improvements, less accumulated depreciation of
$1,975,721 in 1999 and $1,578,728 in 1998 6,807,975 7,186,970
Construction in progress 0 9,763
---------- ----------
Total real estate assets 8,430,708 8,819,466
Cash and cash equivalents 177,657 213,183
Accounts receivable 135,229 96,830
Prepaid expenses and other assets 55,274 49,599
---------- ----------
Total assets $8,798,868 $9,179,078
========== ==========
Liabilities and Partners' Capital
Liabilities:
Accounts payable $ 18,294 $ 16,477
Partnership distributions payable 200,259 206,141
Due to affiliates 1,775 6,809
---------- ----------
Total liabilities 220,328 229,427
---------- ----------
Partners' capital:
Wells Real Estate Fund V 3,980,699 4,159,768
Wells Real Estate Fund VI 4,597,841 4,789,883
---------- ----------
Total partners' capital 8,578,540 8,949,651
---------- ----------
Total liabilities and partners' capital $8,798,868 $9,179,078
========== ==========
</TABLE>
F-16
<PAGE>
Fund V and VI Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
---------- -------- --------
<S> <C> <C> <C>
Revenues:
Rental income $1,028,611 $953,275 $953,007
---------- -------- --------
Expenses:
Depreciation 396,993 394,003 388,387
Operating costs, net of reimbursements 30,325 19,566 39,492
Management and leasing fees 65,167 57,368 65,612
Legal and accounting 7,400 9,107 24,941
Partnership administration 17,194 14,012 10,425
Bad debt recovery 0 0 (22,115)
---------- -------- --------
517,079 494,056 506,742
---------- -------- --------
Net income $ 511,532 $459,219 $446,265
========== ======== ========
Net income allocated to Wells Real Estate Fund V $ 237,527 $213,630 $208,783
========== ======== ========
Net income allocated to Wells Real Estate Fund VI $ 274,005 $245,589 $237,482
========== ======== ========
</TABLE>
Fund V and VI Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
Wells Real Wells Real Total
Estate Estate Partners'
Fund V Fund VI Capital
--------------- --------------- ---------------
<S> <C> <C> <C>
Balance, December 31, 1996 $4,523,919 $5,006,236 $9,530,155
Net income 208,783 237,482 446,265
Partnership contributions 0 190,197 190,197
Partnership distributions (390,378) (443,939) (834,317)
--------------- --------------- ---------------
Balance, December 31, 1997 4,342,324 4,989,976 9,332,300
Net income 213,630 245,589 459,219
Partnership contributions 0 9,762 9,762
Partnership distributions (396,186) (455,444) (851,630)
--------------- --------------- ---------------
Balance, December 31, 1998 4,159,768 4,789,883 8,949,651
Net income 237,527 274,005 511,532
Partnership contributions 0 14,524 14,524
Partnership distributions (416,596) (480,571) (897,167)
--------------- --------------- ---------------
Balance, December 31, 1999 $3,980,699 $4,597,841 $8,578,540
=============== =============== ===============
</TABLE>
F-17
<PAGE>
Fund V and VI Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 511,532 $ 459,219 $ 446,265
--------- --------- ---------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 396,993 394,003 388,387
Changes in assets and liabilities:
Accounts receivable (38,399) 13,052 10,140
Prepaid expenses and other assets (5,675) 6,403 (1,033)
Accounts payable 1,817 9,084 (7,867)
Due to affiliates (5,034) (2,848) 4,120
--------- --------- ---------
Total adjustments 349,702 419,694 393,747
--------- --------- ---------
Net cash provided by operating activities 861,234 878,913 840,012
--------- --------- ---------
Cash flows from investing activities:
Investment in real estate (8,235) 0 (185,123)
--------- --------- ---------
Cash flows from financing activities:
Contributions from joint venture partners 14,524 0 190,197
Distributions to joint venture partners (903,049) (911,028) (757,231)
--------- --------- ---------
Net cash used in financing activities (888,525) (911,028) (567,034)
--------- --------- ---------
Net (decrease) increase in cash and cash equivalents (35,526) (32,115) 87,855
Cash and cash equivalents, beginning of year 213,183 245,298 157,443
--------- --------- ---------
Cash and cash equivalents, end of year $ 177,657 $ 213,183 $ 245,298
========= ========= =========
</TABLE>
Fund V, VI, and VII Associates
On September 8, 1994, the Partnership entered into a joint venture agreement
with Fund VI and Wells Real Estate Fund VII, L.P. The joint venture, Fund V,
VI, and VII Associates, was formed for the purpose of investing in commercial
real properties. In September 1994, Fund V, VI, and VII Associates purchased a
75,000-square-foot, three-story office building known as the Marathon Building
in Appleton, Wisconsin.
F-18
<PAGE>
Following are the financial statements for Fund V, VI, and VII Associates:
Fund V, VI, and VII Associates
(A Georgia Joint Venture)
Balance Sheets
December 31, 1999 and 1998
Assets
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Real estate assets, at cost:
Land $ 314,591 $ 314,591
Building and improvements, less accumulated depreciation of
$1,706,784 in 1999 and $1,356,199 in 1998 6,661,120 7,011,705
---------- ----------
Total real estate assets 6,975,711 7,326,296
Cash and cash equivalents 235,250 235,991
Due from affiliates 2,450 0
Accounts receivable 112,645 121,594
---------- ----------
Total assets $7,326,056 $7,683,881
========== ==========
Liabilities and Partners' Capital
Liabilities:
Partnership distributions payable $ 237,700 $ 235,990
Due to affiliates 4,506 4,864
---------- ----------
Total liabilities 242,206 240,854
---------- ----------
Partners' capital:
Wells Real Estate Fund V 1,165,776 1,224,896
Wells Real Estate Fund VI 2,963,015 3,113,259
Wells Real Estate Fund VII 2,955,059 3,104,872
---------- ----------
Total partners' capital 7,083,850 7,443,027
---------- ----------
Total liabilities and partners' capital $7,326,056 $7,683,881
========== ==========
</TABLE>
F-19
<PAGE>
Fund V, VI, and VII Associates
(A Georgia Joint Venture)
Statements of Income
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Rental income $971,051 $971,447 $968,219
-------- -------- --------
Expenses:
Depreciation 350,585 350,585 350,585
Management and leasing fees 39,659 34,632 39,671
Legal and accounting 5,750 3,450 5,690
Partnership administration 12,302 7,439 3,878
Computer costs 0 0 107
Operating costs 1,389 1,372 2,230
-------- -------- --------
409,685 397,478 402,161
-------- -------- --------
Net income $561,366 $573,969 $566,058
======== ======== ========
Net income allocated to Wells Real Estate Fund V $ 92,401 $ 94,475 $ 93,173
======== ======== ========
Net income allocated to Wells Real Estate Fund VI $234,819 $240,091 $236,782
======== ======== ========
Net income allocated to Wells Real Estate Fund VII $234,146 $239,403 $236,103
======== ======== ========
</TABLE>
Fund V, VI, and VII Associates
(A Georgia Joint Venture)
Statements of Partners' Capital
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
Wells Real Wells Real Wells Real Total
Estate Estate Estate Partners'
Fund V Fund VI Fund VII Capital
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 $1,343,590 $3,414,896 $3,405,643 $8,164,129
Net income 93,173 236,782 236,103 566,058
Partnership distributions (152,896) (388,557) (387,442) (928,895)
---------- ---------- ---------- ----------
Balance, December 31, 1997 1,283,867 3,263,121 3,254,304 7,801,292
Net income 94,475 240,091 239,403 573,969
Partnership distributions (153,446) (389,953) (388,835) (932,234)
---------- ---------- ---------- ----------
Balance, December 31, 1998 1,224,896 3,113,259 3,104,872 7,443,027
Net income 92,401 234,819 234,146 561,366
Partnership distributions (151,521) (385,063) (383,959) (920,543)
---------- ---------- ---------- ----------
Balance, December 31, 1999 $1,165,776 $2,963,015 $2,955,059 $7,083,850
========== ========== ========== ==========
</TABLE>
F-20
<PAGE>
Fund V, VI, and VII Associates
(A Georgia Joint Venture)
Statements of Cash Flows
for the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 561,366 $ 573,969 $ 566,058
--------- --------- ---------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 350,585 350,585 350,585
Changes in assets and liabilities:
Accounts receivable 8,949 8,983 11,781
Due from affiliates (2,450) 0 0
Due to affiliates (358) (1,302) 471
--------- --------- ---------
Total adjustments 356,726 358,266 362,837
--------- --------- ---------
Net cash provided by operating activities 918,092 932,235 928,895
Cash flows from financing activities:
Distributions to joint venture partners (918,833) (927,476) (911,808)
--------- --------- ---------
Net (decrease) increase in cash and cash equivalents (741) 4,759 17,087
Cash and cash equivalents, beginning of year 235,991 231,232 214,145
--------- --------- ---------
Cash and cash equivalents, end of year $ 235,250 $ 235,991 $ 231,232
========= ========= =========
</TABLE>
4. INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL
The Partnership's income tax basis net income for the years ended December 31,
1999, 1998, and 1997 is calculated as follows:
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- --------
<S> <C> <C> <C>
Financial statement net income $ 625,679 $ 622,106 $559,801
Increase (decrease) in net in incoming resulting from:
Depreciation expense for financial reporting purposes in excess 221,979 222,422 211,900
of amounts for income tax purposes
Expenses deductible when paid for income tax purposes, 7,334 3,802 593
accrued for financial reporting purposes
Rental income accrued for financial reporting purposes in
excess of amounts for income tax purposes 26,053 (38,119) (8,808)
--------- --------- --------
Income tax basis net income $ 881,045 $ 810,211 $763,486
========= ========= ========
</TABLE>
F-21
<PAGE>
The Partnership's income tax basis partners' capital at December 31, 1999, 1998,
and 1997 is computed as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Financial statement partners' capital $ 12,195,024 $ 12,760,313 $ 13,297,946
Increase (decrease) in partners' capital resulting from:
Depreciation expense for financial reporting 909,584 687,605 465,183
purposes in excess of amounts for income tax
purposes
Capitalization of syndication costs for income tax 2,178,700 2,178,700 2,178,700
purposes, which are accounted for as cost of
capital for financial reporting purposes
Accumulated rental income accrued for financial (256,584) (282,637) (244,518)
reporting purposes in excess of amounts for
income tax purposes
Accumulated expenses deductible when paid for
income tax purposes, accrued for financial
reporting purposes 33,320 25,986 22,184
Partnership's distributions payable 304,213 273,916 288,518
------------ ------------ ------------
Income tax basis partners' capital $ 15,364,257 $ 15,643,883 $ 16,008,013
============ ============ ============
</TABLE>
5. RENTAL INCOME
The future minimum rental income due from the Partnership's respective ownership
interests in joint ventures under noncancelable operating leases at December 31,
1999 is as follows:
Year ending December 31:
2000 $1,905,312
2001 1,311,977
2002 1,256,217
2003 754,424
2004 411,087
Thereafter 477,719
----------
$6,116,736
==========
Four tenants contributed approximately 30%, 26%, 13%, and 12% of rental income.
In addition, two tenants will contribute approximately 38% and 19% of future
minimum rental income.
The future minimum rental income due Fund IV and V Associates under
noncancelable operating leases at December 31, 1999 is as follows:
Year ending December 31:
2000 $2,027,709
2001 1,612,110
2002 1,522,088
2003 722,833
2004 237,892
Thereafter 97,599
----------
$6,220,231
==========
<PAGE>
Two tenants contributed approximately 57% and 22% of rental income. In addition,
one tenant will contribute approximately 60% of future minimum rental income.
The future minimum rental income due Fund V and VI Associates under
noncancelable operating leases, at December 31, 1999 is as follows:
Year ending December 31:
2000 $1,030,399
2001 310,837
2002 308,241
2003 302,166
2004 214,692
Thereafter 195,862
----------
$2,362,197
==========
Two tenants contributed approximately 77% and 13% of rental income for the year
ended December 31, 1999. In addition, four tenants will contribute approximately
31%, 28%, 27%, and 12% of future minimum rental income.
The future minimum rental income due Fund V, VI, and VII Associates under
noncancelable operating leases at December 31, 1999 is as follows:
Year ending December 31:
2000 $ 980,000
2001 980,000
2002 990,000
2003 990,000
2004 990,000
Thereafter 1,980,000
----------
$6,910,000
==========
One tenant contributed 100% of rental income for the year ended December 31,
1999 and will contribute 100% of future minimum rental income.
F-23
<PAGE>
6. QUARTERLY RESULTS (UNAUDITED)
Presented below is a summary of the unaudited quarterly financial
information for the years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 Quarters Ended
------------------------------------------------------------------
March 31 June 30 September 30 December 31
------------- ------------- ---------------- --------------
<S> <C> <C> <C> <C>
Revenues $170,473 $234,627 $122,775 $178,416
Net income 143,243 211,969 109,255 161,212
Net income allocated to Class A limited
partners 143,243 211,969 109,255 161,212
Net income per weighted average Class A
limited partner unit $ 0.09 $ 0.14 $ 0.07 $ 0.10
Cash distribution per weighted average Class A
limited partner unit 0.18 0.20 0.19 0.19
1998 Quarters Ended
------------------------------------------------------------------
March 31 June 30 September 30 December 31
------------- ------------- ---------------- --------------
Revenues $169,877 $239,997 $142,278 $156,112
Net income 152,796 216,868 124,121 128,321
Net income allocated to Class A limited partners 152,796 216,868 124,121 128,321
Net income per weighted average Class A
limited partner unit $ 0.10 $ 0.14 $ 0.08 $ 0.08
Cash distribution per weighted average Class A
limited partner unit 0.19 0.19 0.19 0.18
</TABLE>
7. COMMITMENTS AND CONTINGENCIES
Management, after consultation with legal counsel, is not aware of any
significant litigation or claims against the Partnership or the Company. In
the normal course of business, the Partnership or the Company may become
subject to such litigation or claims.
F-24
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Wells Real Estate Fund V, L.P. and
Wells Real Estate Fund VI, L.P.:
We have audited the accompanying balance sheets of THE HARTFORD BUILDING as of
December 31, 1999 and 1998 and the related statements of income, partners'
capital, and cash flows for each of the three years in the period ended December
31, 1999. These financial statements are the responsibility of the building's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Hartford Building as of
December 31, 1999 and 1998 and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States.
Atlanta, Georgia
January 20, 2000
F-25
<PAGE>
THE HARTFORD BUILDING
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS
1999 1998
---------- ----------
<S> <C> <C>
REAL ESTATE ASSETS:
Land $ 528,042 $ 528,042
Building and improvements, less accumulated depreciation
of $1,544,791 in 1999 and $1,252,760 in 1998 5,257,650 5,549,681
---------- ----------
Total real estate assets 5,785,692 6,077,723
CASH AND CASH EQUIVALENTS 177,657 213,181
ACCOUNTS RECEIVABLE 26,245 32,948
---------- ----------
Total assets $5,989,594 $6,323,852
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Distributions payable partners $ 200,259 $ 176,828
Due to affiliate 190,615 36,354
---------- ----------
Total liabilities 390,874 213,182
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 4)
PARTNERS' CAPITAL:
Wells Real Estate Fund V, L.P. 2,950,666 3,188,522
Wells Real Estate Fund VI, L.P. 2,648,054 2,922,148
---------- ----------
Total partners' capital 5,598,720 6,110,670
---------- ----------
Total liabilities and partners' capital $5,989,594 $6,323,852
========== ==========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-26
<PAGE>
THE HARTFORD BUILDING
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
REVENUES:
Rental income $717,499 $717,499 $717,499
-------- -------- --------
EXPENSES:
Depreciation 292,031 292,031 292,031
Operating costs, net of reimbursements 7,582 6,030 (19,184)
Management and leasing fees 28,968 27,719 30,189
Legal and accounting 3,700 4,500 9,201
-------- -------- --------
332,281 330,280 312,237
-------- -------- --------
NET INCOME $385,218 $387,219 $405,262
======== ======== ========
NET INCOME ALLOCATED TO WELLS REAL ESTATE FUND V, L.P. $178,741 $180,142 $189,812
======== ======== ========
NET INCOME ALLOCATED TO WELLS REAL ESTATE FUND VI, L.P. $206,477 $207,077 $215,450
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-27
<PAGE>
THE HARTFORD BUILDING
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
Wells Real Wells Real Total
Estate Estate Partners'
Fund V, L.P. Fund VI, L.P. Capital
-------------- --------------- -------------
<S> <C> <C> <C>
BALANCE, December 31, 1996 $3,466,241 $3,240,038 $6,706,279
Net income 189,812 215,450 405,262
Distributions (329,294) (374,431) (703,725)
---------- ---------- ----------
BALANCE, December 31, 1997 3,326,759 3,081,057 6,407,816
Net income 180,142 207,077 387,219
Distributions (318,379) (365,986) (684,365)
---------- ---------- ----------
BALANCE, December 31, 1998 3,188,522 2,922,148 6,110,670
Net income 178,741 206,477 385,218
Distributions (416,597) (480,571) (897,168)
---------- ---------- ----------
BALANCE, December 31, 1999 $2,950,666 $2,648,054 $5,598,720
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-28
<PAGE>
THE HARTFORD BUILDING
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
--------- ---------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 385,218 $ 387,219 $ 405,262
--------- ---------- ---------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 292,031 292,031 292,031
Changes in assets and liabilities:
Accounts receivable 6,703 6,700 6,700
Due to affiliate 154,261 (42,560) 90,681
--------- ---------- ---------
Total adjustments 452,995 256,171 389,412
--------- ---------- ---------
Net cash provided by operating activities 838,213 643,390 794,674
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to partners (873,737) (675,507) (706,819)
--------- ---------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (35,524) (32,117) 87,855
CASH AND CASH EQUIVALENTS, beginning of year 213,181 245,298 157,443
--------- ---------- ---------
CASH AND CASH EQUIVALENTS, end of year $ 177,657 $ 213,181 $ 245,298
========= ========== =========
</TABLE>
The accompanying notes are an integral part of these statements.
F-29
<PAGE>
THE HARTFORD BUILDING
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998, AND 1997
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business
The Hartford Building ("Hartford") is a four-story office building located
in Southington, Connecticut. The building is owned by Fund V and Fund VI
Associates, a joint venture between Wells Real Estate Fund V, L.P. ("Fund
V") and Wells Real Estate Fund VI, L.P. ("Fund VI"). Fund V own 46% of
Hartford and Fund VI owns 54% of Hartford at December 31, 1999 and 1998.
Allocation of net income and distributions are made in accordance with
ownership percentages.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Income Taxes
Hartford is not deemed to be a taxable entity for federal income tax
purposes.
Real Estate Assets
Real estate assets are stated at cost, less accumulated depreciation. Major
improvements and betterments are capitalized when they extend the useful
life of the related asset. All repairs and maintenance are expensed as
incurred.
Management continually monitors events and changes in circumstances which
could indicate that carrying amounts of real estate assets may not be
recoverable. When events or changes in circumstances are present which
indicate that the carrying amounts of real estate assets may not be
recoverable, management assesses the recoverability of real estate assets by
determining whether the carrying value of such real estate assets will be
recovered through the future cash flows expected from the use of the asset
and its eventual disposition. Management has determined that there has been
no impairment in the carrying value of Hartford as of December 31, 1999.
Depreciation is calculated using the straight-line method over 25 years.
Revenue Recognition
The lease on Hartford is classified as an operating lease, and the related
rental income is recognized on a straight-line basis over the term of the
lease.
F-30
<PAGE>
Cash and Cash Equivalents
For the purposes of the statements of cash flows, Hartford considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents. Cash equivalents include cash and
short-term investments. Short-term investments are stated at cost, which
approximates fair value, and consist of investments in money market
accounts.
2. RENTAL INCOME
The future minimum rental income due to Hartford under noncancelable
operating leases at December 31, 1999 is as follows:
Year ending December 31:
2000 $ 724,200
2001 724,200
2002 724,200
2003 663,850
----------
$2,836,450
==========
One tenant contributed 100% of rental income for the year ended December 31,
1999 and represents 100% of the future minimum rental income above.
3. RELATED-PARTY TRANSACTIONS
Fund V and Fund VI Associates entered into a property management agreement
with Wells Management Company, Inc. ("Wells Management"), an affiliate of
Fund V and Fund VI Associates. In consideration for supervising the
management of Hartford, Fund V and Fund VI Associates will generally pay
Wells Management management and leasing fees equal to (a) 3% of the gross
revenues for management and 3% of the gross revenues for leasing (aggregate
maximum of 6%) plus a separate fee for the one-time initial lease-up of
newly constructed properties in an amount not to exceed the fee customarily
charged in arm's-length transactions by others rendering similar services in
the same geographic area for similar properties or (b) in the case of
commercial properties which are leased on a long-term net basis (ten or more
years), 1% of the gross revenues except for initial leasing fees equal to 3%
of the gross revenues over the first five years of the lease term.
Hartford incurred management and leasing fees of $28,968, $27,719, and
$30,189 for the years ended December 31, 1999, 1998, and 1997, respectively,
which were paid to Wells Management.
4. COMMITMENTS AND CONTINGENCIES
Management, after consultation with legal counsel, is not aware of any
significant litigation or claims against Hartford and its partners. In the
normal course of business, Hartford and its partners may become subject to
such litigation or claims.
F-31
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(A Georgia Public Limited Partnership)
SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Initial Cost Costs of
-------------------------
Buildings and Capitalized
Description Ownership Encumbrances Land Improvements Improvements
- -------------------------------- --------- ------------ ---------- ------------- ------------
<S> <C> <C> <C> <C> <C>
MEDICAL CENTER PROJECT (a) 62% None $ 479,386 $ 0 $ 4,028,426
JACKSONVILLE IBM BUILDING (b) 62 None 1,384,751 0 7,653,356
HARTFORD BUILDING (c) 46 None 528,042 6,775,574 26,867
STOCKBRIDGE VILLAGE II (d) 46 None 1,095,219 0 1,980,727
MARATHON BUILDING (e) 16 None 314,591 8,367,904 0
---------- ------------- ------------
Total $3,801,989 $ 15,143,478 $ 13,689,376
========== ============= ============
<CAPTION>
Gross Amount at Which Carried at December 31, 1999
------------------------------------------------------------
Buildings and Construction Accumulated Date of
Description Land Improvements in Progress Total Depreciation Construction
- -------------------------------- ----------- ------------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
MEDICAL CENTER PROJECT (a) $ 512,344 $ 3,993,812 $ 1,656 $ 4,507,812 $ 913,602 1992
JACKSONVILLE IBM BUILDING (b) 1,499,190 7,538,917 0 9,038,107 1,771,419 1992
HARTFORD BUILDING (c) 528,042 6,802,441 0 7,330,483 1,544,791 1981
STOCKBRIDGE VILLAGE II (d) 1,094,691 1,981,255 0 3,075,946 430,929 1994
MARATHON BUILDING (e) 314,591 8,367,904 0 8,682,495 1,706,784 1991
----------- ------------- ------------ ----------- ------------
Total $ 3,948,858 $ 28,684,329 $ 1,656 $32,634,843 $ 6,367,525
=========== ============= ============ =========== ============
<CAPTION>
Life on Which
Date Depreciation
Description Acquired Is Computed (f)
- -------------------------------- -------- ---------------
<S> <C> <C>
MEDICAL CENTER PROJECT (a) 09/14/92 20 to 25 years
JACKSONVILLE IBM BUILDING (b) 06/08/92 20 to 25 years
HARTFORD BUILDING (c) 12/29/93 20 to 25 years
STOCKBRIDGE VILLAGE II (d) 11/12/93 20 to 25 years
MARATHON BUILDING (e) 09/16/94 20 to 25 years
Total
</TABLE>
(a) The Medical Center Project consists of a 17,847-square-foot
medical building completed in March 1993 and a nearly
identical medical office building completed in April 1994.
It is owned by Fund IV and V Associates.
(b) The Jacksonville IBM Building is a four-story,
88,600-square-foot office building located in Jacksonville,
Florida. It is owned by Fund IV and V Associates.
(c) The Hartford Building is a four-story, 71,000-square-foot
building located in Southington, Connecticut. It is owned by
Fund V and VI Associates.
(d) Stockbridge Village II consists of two retail buildings
located in Clayton County, Georgia. It is owned by Fund V
and VI Associates.
(e) The Marathon Building is a three-story, 75,000-square-foot
building located in Appleton, Wisconsin. It is owned by a
joint venture, Fund V, VI, and VII Associates.
(f) Depreciation lives used for buildings were 40 years through
September 1995, changed to 25 years thereafter. Depreciation
lives used for land improvements are 20 years.
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(A Georgia Public Limited Partnership)
SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
Accumulated
Cost Depreciation
----------- ------------
BALANCE AT DECEMBER 31, 1996 $32,160,983 $ 2,654,198
1997 additions 353,015 1,224,012
----------- ------------
BALANCE AT DECEMBER 31, 1997 32,513,998 3,878,210
1998 (deductions) additions (1,163) 1,167,191
----------- ------------
BALANCE AT DECEMBER 31, 1998 32,512,835 5,045,401
1999 additions 122,008 1,322,124
----------- ------------
BALANCE AT DECEMBER 31, 1999 $32,634,843 $ 6,367,525
=========== ============
<PAGE>
EXHIBIT INDEX
-------------
(Wells Real Estate Fund V, L.P.)
The following documents are filed as exhibits to this report. Those
exhibits previously filed and incorporated herein by reference are identified
below by an asterisk. For each such asterisked exhibit, there is shown below the
description of the previous filing. Exhibits which are not required for this
report are omitted.
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*4(a) Agreement of Limited Partnership of Wells N/A
Real Estate Fund V, L.P. (Exhibit 4(a) to
Registration Statement of Wells Real Estate
Fund IV, L.P. and Wells Real Estate Fund
V, L.P., File No. 33-37830)
*4(b) First Amendment to Agreement of Limited N/A
Partnership of Wells Real Estate Fund V,
L.P. (Exhibit 4(e) to Post-Effective
Amendment No. 6 to Registration Statement
of Wells Real Estate Fund IV, L.P. and
Wells Real Estate Fund V, L.P., File
No. 33-37830)
*4(c) Certificate of Limited Partnership of Wells N/A
Real Estate Fund V, L.P. (Exhibit 4(c) to
Registration Statement of Wells Real Estate
Fund IV, L.P. and Wells Real Estate Fund V,
L.P., File No. 33-37830)
*10(a) Management Agreement between Wells Real N/A
Estate Fund V, L.P. and Wells Management
Company, Inc. (Exhibit 10(c) to Registration
Statement of Wells Real Estate Fund IV, L.P.
and Wells Real Estate Fund V, L.P., File
No. 33-37830)
*10(b) Leasing and Tenant Coordinating Agreement N/A
between Wells Real Estate Fund V, L.P. and
Wells Management Company, Inc. (Exhibit 10(b)
to Registration Statement of Wells Real
Estate Fund IV, L.P. and Wells Real Estate
Fund V, L.P., File No. 33-37830)
<PAGE>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*10(c) Custodial Agency Agreement between Wells N/A
Real Estate Fund V, L.P. and NationsBank
of Georgia, N.A. (Exhibit 10(f) to
Registration Statement of Wells Real
Estate Fund IV, L.P. and Wells Real
Estate Fund V, L.P., File No. 33-37830)
*10(d) Fund IV and Fund V Associates Joint Venture N/A
Agreement dated April 14, 1992 (Exhibit 10(n)
to Post-Effective Amendment No. 7 to
Registration Statement of Wells Real Estate
Fund IV, L.P. and Wells Real Estate Fund V,
L.P., File No. 33-37830)
*10(e) Agreement for the Purchase and Sale of Real N/A
Property with GL National, Inc. (Exhibit 10(o)
to Post-Effective Amendment No. 7 to
Registration Statement of Wells Real Estate
Fund IV, L.P. and Wells Real Estate Fund V,
L.P., File No. 33-37830)
*10(f) Lease with International Business Machines N/A
Corporation (Exhibit 10(p) to Post-Effective
Amendment No. 7 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells
Real Estate Fund V, L.P., File No. 33-37830)
*10(g) Lease with ROLM Company (Exhibit 10(q) to N/A
Post-Effective Amendment No. 7 to Registration
Statement of Wells Real Estate Fund IV, L.P.
and Wells Real Estate Fund V, L.P., File
No. 33-37830)
*10(h) Construction Agreement with McDevitt & Street N/A
Company (Exhibit 10(r) to Post-Effective
Amendment No. 7 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells
Real Estate Fund V, L.P., File No. 33-37830)
<PAGE>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*10(i) Development Agreement with ADEVCO Corporation N/A
(Exhibit 10(s) to Post-Effective Amendment
No. 7 to Registration Statement of Wells
Real Estate Fund IV, L.P. and Wells Real Estate
Fund V, L.P., File No. 33-37830)
*10(j) Guaranty of Development Agreement by David M. N/A
Kraxberger (Exhibit 10(t) to Post-Effective
Amendment No. 7 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells
Real Estate Fund V, L.P., File No. 33-37830)
*10(k) Architect Agreement with Mayes, Sudderth & N/A
Etheredge, Inc. (Exhibit 10(u) to Post-
Effective Amendment No. 7 to Registration
Statement of Wells Real Estate Fund IV, L.P.
and Wells Real Estate Fund V, L.P., File
No. 33-37830)
*10(l) Architect Agreement with Peter C. Sutton, N/A
A.I.A. (Exhibit 10(v) to Post-Effective
Amendment No. 7 to Registration Statement
of Wells Real Estate Fund IV, L.P. and
Wells Real Estate Fund V, L.P., File
No. 33-37830)
*10(m) First Amendment to Joint Venture Agreement N/A
of Fund IV and V Associates dated September 9,
1992 (Exhibit 10(w) to Post-Effective
Amendment No. 8 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells
Real Estate Fund V, L.P., File No. 33-37830)
*10(n) Option Agreement for the Purchase and Sale of N/A
Real Property (Exhibit 10(x) to Post-Effective
Amendment No. 8 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells Real
Estate Fund V, L.P., File No. 33-37830)
<PAGE>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*10(o) First Amendment to Option Agreement for the N/A
Purchase and Sale of Real Property (Exhibit
10(y) to Post-Effective Amendment No. 8 to
Registration Statement of Wells Real Estate
Fund IV, L.P. and Wells Real Estate Fund V,
L.P., File No. 33-37830)
*10(p) Partial Assignment and Assumption of Option N/A
Agreement for the Purchase and Sale of Real
Property (Exhibit 10(z) to Post-Effective
Amendment No. 8 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells
Real Estate Fund V, L.P., File No. 33-37830)
*10(q) Lease Agreement with the Executive Committee N/A
of the Baptist Convention of the State of
Georgia, d/b/a Georgia Baptist Health Care
System (Exhibit 10(aa) to Post-Effective
Amendment No. 8 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells
Real Estate Fund V, L.P., File No. 33-37830)
*10(r) Construction Contract with Cecil N. Brown N/A
Co., Inc. (Exhibit 10(bb) to Post-Effective
Amendment No. 8 to Registration Statement of
Wells Real Estate Fund IV, L.P. and Wells
Real Estate Fund V, L.P., File No. 33-37830)
*10(s) Agreement for the Purchase and Sale of Real N/A
Property with 675 Industrial Park, Ltd.
dated September 29, 1993 (Exhibit to Form
10-K of Wells Real Estate Fund V, L.P. for
the fiscal year ended December 31, 1993,
File No. 0-21580)
*10(t) Fund V and Fund VI Associates Joint Venture N/A
Agreement dated December 27, 1993 (Exhibit
10(g) to Post-Effective Amendment No. 1 to
Registration Statement of Wells Real Estate
Fund VI, L.P. and Wells Real Estate Fund
VII, L.P., File No. 33-55908)
<PAGE>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*10(u) Sale and Purchase Agreement dated November N/A
17, 1993, with Hartford Accident and
Indemnity Company (Exhibit 10(h) to
Post-Effective Amendment No. 1 to
Registration Statement of Wells Real
Estate Fund VI, L.P. and Wells Real
Estate Fund VII, L.P., File No. 33-55908)
*10(v) Lease with Hartford Fire Insurance Company N/A
December 29, 1993 (Exhibit 10(i) to
Post-Effective Amendment No. 1 to
Registration Statement of Wells Real
Estate Fund VI, L.P. and Wells Real
Estate Fund VII, L.P., File No. 33-55908)
*10(w) Amended and Restated Custodial Agency N/A
Agreement dated April 1, 1994, between
Wells Real Estate Fund V, L.P. and
NationsBank of Georgia, N.A. (Exhibit to
Form 10-K of Wells Real Estate Fund V,
L.P. for the fiscal year ended December 31,
1994, File No. 0-21580)
*10(x) First Amendment to Joint Venture Agreement N/A
of Fund V and Fund VI Associates dated
July 1, 1994 (Exhibit to Form 10-K of
Wells Real Estate Fund V, L.P. for the
fiscal year ended December 31, 1994,
File No. 0-21580)
*10(y) Land and Building Lease Agreement dated N/A
March 29, 1994, between Apple Restaurants,
Inc. and NationsBank of Georgia, N.A., as
Agent for Wells Real Estate Fund V, L.P.
(Exhibit to Form 10-K of Wells Real Estate
Fund V, L.P. for the fiscal year ended
December 31, 1994, File No. 0-21580)
<PAGE>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*10(z) Building Lease Agreement dated September 9, N/A
1994, between Glenn's Open-Pit Bar-B-Que,
Inc. and NationsBank of Georgia, N.A., as
Agent for Fund V and Fund VI Associates
(Exhibit to Form 10-K of Wells Real Estate
Fund V, L.P. for the fiscal year ended
December 31, 1994, File No. 0-21580)
*10(aa) Joint Venture Agreement of Fund V, Fund VI N/A
and Fund VII Associates dated September 8, 1994,
among Wells Real Estate Fund V, L.P., Wells
Real Estate Fund VI, L.P. and Wells Real Estate
Fund VII, L.P. (Exhibit 10(j) to Post-Effective
Amendment No. 6 to Registration Statement of
Wells Real Estate Fund VI, L.P. and Wells Real
Estate Fund VII, L.P., File No. 33-55908)
*10(bb) Agreement for the Purchase and Sale of Property N/A
dated August 24, 1994, between Interglobia Inc. -
Appleton and NationsBank of Georgia, N.A., as
Agent for Fund V and Fund VI Associates (Exhibit
10(k) to Post-Effective Amendment No. 6 to
Registration Statement of Wells Real Estate
Fund VI, L.P. and Wells Real Estate Fund VII,
L.P., File No. 33-55908)
*10(cc) Assignment and Assumption of Agreement for N/A
the Purchase and Sale of Real Property dated
September 9, 1994, between NationsBank of
Georgia, N.A., as Agent for Fund V and
Fund VI Associates, and NationsBank of
Georgia, N.A., as Agent for Fund V, Fund VI
and Fund VII Associates (Exhibit 10(l) to
Post-Effective Amendment No. 6 to Registration
Statement of Wells Real Estate Fund VI, L.P.
and Wells Real Estate Fund VII, L.P.,
File No. 33-55908)
<PAGE>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*10(dd) Building Lease dated February 14, 1991, between N/A
Interglobia Inc. - Appleton and Marathon
Engineers/Architects/Planners, Inc. (included
as part of Exhibit D to Exhibit 10(k) to
Post-Effective Amendment No. 6 to Registration
Statement of Wells Real Estate Fund VI, L.P.
and Wells Real Estate Fund VII, L.P.,
File No. 33-55908)
*10(ee) Limited Guaranty of Lease dated January 1, N/A
1993, by J. P. Finance OY and Fluor
Daniel, Inc. for the benefit of Interglobia
Inc. - Appleton (included as Exhibit B to
Assignment, Assumption and Amendment of
Lease referred to as Exhibit 10(ff) below,
which is included as part of Exhibit D to
Exhibit 10(k) to Post-Effective Amendment
No. 6 to Registration Statement of Wells
Real Estate Fund VI, L.P. and Wells Real
Estate Fund VII, L.P., File No. 33-55908)
*10(ff) Assignment, Assumption and Amendment of N/A
Lease dated January 1, 1993, among
Interglobia Inc. - Appleton, Marathon
Engineers/Architects/Planners, Inc. and
Jaakko Poyry Fluor Daniel (included as
part of Exhibit D to Exhibit 10(k) to
Post-Effective Amendment No. 6 to
Registration Statement of Wells Real
Estate Fund VI, L.P. and Wells Real
Estate Fund VII, L.P., File No. 33-55908)
*10(gg) Second Amendment to Building lease dated N/A
August 15, 1994, between Interglobia Inc. -
Appleton and Jaakko Poyry Fluor Daniel
(successor-in-interest to Marathon
Engineers/Architects/Planners, Inc.)
(included as Exhibit D-1 to Exhibit 10(k)
to Post-Effective Amendment No. 6 to
Registration Statement of Wells Real
Estate Fund VI, L.P. and Wells Real
Estate Fund VII, L.P., File No. 33-55908)
<PAGE>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
*10(hh) Assignment and Assumption of Lease dated N/A
September 6, 1994, between Interglobia
Inc. - Appleton and NationsBank of Georgia,
N.A., as Agent for Fund V, Fund VI and
Fund VII Associates (Exhibit 10(q) to
Post-Effective Amendment No. 6 to
Registration Statement of Wells Real Estate
Fund VI, L.P. and Wells Real Estate Fund
VII, L.P., File No. 33-55908)
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