<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1997 or
----------------------------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from__________________to__________________
Commission file number 0-23656
---------------------------------------------------------
Wells Real Estate Fund VI, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2022628
-------------------------------------- -------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
3885 Holcomb Bridge Road, Norcross, Georgia 30092
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
--------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
1
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund VI, L.P.
-------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1997
and December 31, 1996.................................... 3
Statements of Income for the Three Months
Ended March 31, 1997 and 1996............................ 4
Statement of Partners' Capital for the
Year Ended December 31, 1996, and
the Three Months Ended March 31, 1997.................... 5
Statements of Cash Flows for the Three Months
Ended March 31, 1997 and 1996............................ 6
Condensed Notes to Financial Statements.................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................................. 9
PART II. OTHER INFORMATION.......................................... 19
</TABLE>
2
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets March 31, 1997 December 31, 1996
------ -------------- -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $19,847,105 $19,930,833
Cash and cash equivalents 473,387 589,082
Due from affiliates 387,592 335,878
Deferred project costs 8,798 14,157
Organization costs, less accumulated
amortization of $25,000 in 1997 and
$23,437 in 1996 6,250 7,813
Prepaid expenses and other assets 1,600 2,400
----------- -----------
Total assets $20,724,732 $20,880,163
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable $ 0 $ 4,500
Partnership distribution payable 359,617 330,572
----------- -----------
Total liabilities 359,617 335,072
----------- -----------
Partners' capital:
Class A - 2,069,177 units outstanding 18,184,941 18,162,497
Class B - 430,823 units outstanding 2,180,174 2,382,594
----------- -----------
Total partners' capital 20,365,115 20,545,091
----------- -----------
Total liabilities and
partners' capital $20,724,732 $20,880,163
=========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
-------------------
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Revenues:
Interest income $ 8,845 $ 32,116
Equity in income of joint
ventures (Note 2) 200,178 147,676
--------- ---------
209,023 179,792
--------- ---------
Expenses:
Legal and accounting 8,594 2,901
Computer costs 2,493 906
Partnership administration 16,732 13,661
Amortization of organization costs 1,563 1,563
--------- ---------
29,382 19,031
--------- ---------
Net income $ 179,641 $ 160,761
========= =========
Net income allocated to Class A
Limited Partners $ 382,061 $ 277,507
Net loss allocated to Class B Limited
Partners $(202,420) $(116,746)
Net income per Class A Limited
Partner Unit $ 0.18 $ 0.13
Net loss per Class B Limited Partner $ (0.52) $ (0.27)
Cash distribution per Class A Limited
Partner Unit $ 0.17 $ 0.15
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE THREE MONTHS ENDED
MARCH 31, 1997
<TABLE>
<CAPTION>
LIMITED PARTNERS
----------------
CLASS A CLASS B TOTAL
---------------------- --------------------- GENERAL PARTNERS'
UNITS AMOUNT UNITS AMOUNT PARTNERS CAPITAL
--------- ----------- -------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 2,048,356 $17,637,686 451,644 $3,506,575 $0 $21,144,261
Net income (loss) 0 1,234,717 0 (645,664) 0 589,053
Partnership distributions 0 (1,188,223) 0 0 0 (1,188,223)
Class B conversion elections 64,901 478,317 (64,901) (478,317) 0 0
--------- ----------- ------- ---------- -- -----------
BALANCE, DECEMBER 31, 1996 2,113,257 18,162,497 386,743 2,382,594 0 20,545,091
--------- ----------- ------- ---------- -- -----------
Net income (loss) 0 382,061 0 (202,420) 0 179,641
Partnership distributions 0 (359,617) 0 0 0 (359,617)
--------- ----------- ------- ---------- -- -----------
BALANCE, March 31, 1997 2,113,257 $18,184,941 386,743 $2,180,174 $0 $20,365,115
========= =========== ======= ========== == ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 31, 1997 March 31, 1996
--------------- ---------------
<S> <C> <C>
Cash flow from operating activities:
Net earnings $ 179,641 $ 160,761
Adjustments to reconcile net earnings
to net cash used in operating
activities:
Equity in earnings of joint venture (200,178) (147,676)
Distributions received from joint
ventures 335,877 269,970
Partnership distributions paid (330,572) (328,726)
Amortization of organization costs 1,563 1,563
Changes in assets and liabilities:
Due from affiliates 0 (839)
Prepaids and other assets 800 2,394
Accounts payable (4,500) (4,000)
--------- ---------
Net cash used in operating
activities (17,369) (46,553)
--------- ---------
Cash flow from investing activities:
Investment in joint ventures (98,326) 0
--------- ---------
Net decrease in cash and cash
equivalents (115,695) (46,553)
Cash and cash equivalents, beginning
of year 589,082 967,347
--------- ---------
Cash and cash equivalents, end of period $ 473,387 $ 920,794
========= =========
Supplemental schedule of noncash
investing activities-deferred project
costs applied to investing activities $ 5,359 $ 0
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statement
(1) Basis of Presentation
---------------------
The financial statements of Wells Real Estate Fund VI, L.P. ( the "Partnership")
have been prepared in accordance with instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. These quarterly
statements have not been examined by independent accountants, but in the opinion
of the General Partners, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring nature,
necessary to present a fair presentation of the results for such periods. For
further information, refer to the financial statements and footnotes included in
the Partnership's Form 10-K for year ended December 31, 1996.
(a) General
- -----------
Wells Real Estate Fund VI, L.P. (the "Partnership") is a Georgia public limited
partnership having Leo F. Wells, III and Wells Partners, L.P., as General
Partners. The Partnership was formed on December 1, 1992, for the purpose of
acquiring, developing, owning, operating, improving, leasing, and otherwise
managing for investment purposes income producing commercial properties.
On April 5, 1993, the Partnership commenced a public offering of its limited
partnership units pursuant to a Registration Statement on Form S-11 filed under
the Securities Act of 1933. The Partnership terminated its offering on April 4,
1994, and received gross proceeds of $25,000,000 representing subscriptions from
2,500,000 Limited Partners units, composed of two classes of limited partnership
interests, Class A and Class B limited partnership units.
The Partnership owns an interest in the following properties through its equity
ownership in the following joint ventures: Fund V and Fund VI Associates, a
joint venture between the Partnership and Wells Real Estate Fund V, L.P. ( the
"Fund V - Fund VI Joint Venture"); (ii) Fund V, Fund VI, and Fund VII
Associates, a joint venture between the Partnership, Wells Fund V, L.P. and
Wells Real Estate Fund VII, L.P. (the "Fund V-VI-VII Joint Venture"); (iii) Fund
VI and Fund VII Associates, a joint venture between the Partnership and Wells
Real Estate Fund VII, L.P. (the "Fund VI-VII Joint Venture"); (iv) Fund II, Fund
III, Fund VI and Fund VII associates, a joint venture between the Partnership,
Wells Real Estate Fund II, L.P., Wells Real Estate Fund III, L.P., and Wells
Real Estate Fund VII, L.P., (the "Fund II-III-VI-VII Joint Venture"); (v) Fund
VI, Fund VII and Fund VIII Associates, a joint venture between the Partnership,
Wells Real Estate Fund VII, L.P. and Wells Real Estate Fund VIII, L.P. (the
"Fund VI-VII-VIII Joint Venture") and (vi) Fund I, II, II-OW, VI, VII
Associates, a joint venture between the Partnership, Wells Real Estate Fund I,
L.P., Wells Real Estate Fund II, L.P., Wells Real Estate Fund II-OW, L.P. and
Wells Real Estate Fund VII, L.P. (the "Fund I-II-II-OW-VI-VII Joint Venture").
7
<PAGE>
As of March 31, 1997, the Partnership owned interest in the following properties
through its ownership of the foregoing joint ventures: (I) a four story office
building located in Hartford, Connecticut (the "Hartford Building") and (ii) two
retail buildings located in Clayton county, Georgia (the "Stockbridge Village
II") which are owned by the Fund V - Fund VI Joint Venture; (iii) a three-story
office building located in Appleton Wisconsin (the "Marathon Building") which is
owned by the Fund V-VI-VII Joint Venture; (iv) two retail buildings located in
Clayton County, Georgia (the "Stockbridge Village III"), and (v) a shopping
center expansion located in Clayton County, Georgia (the "Stockbridge Village I
Expansion") which are owned by the Fund VI-Fund VII Joint Venture; (vi) an
office/retail center located in Roswell, Georgia (the "880 Holcomb Bridge")
which is owned by the Fund II-III-VI-VII Joint Venture; (vii) a four story
office building located in Jacksonville, Florida (the "BellSouth Property") and
(viii) a shopping center located in Clemmons, North Carolina (the "Tanglewood
Commons") which are owned by the Fund VI-VII-VIII Joint Venture; and (ix) a
retail shopping center located in Cherokee County, Georgia (the "Cherokee
Commons") which is owned by the Fund I-II-II-OW-VI-VII Joint Venture. All of
the foregoing properties were acquired on an all cash basis. For further
information regarding these joint ventures and properties, refer to the
Partnership's Form 10-K for the year ended December 31, 1996.
(2) Investment in Joint Ventures
----------------------------
The Partnership owns interest in nine properties through its investment in
joint ventures of which three are office buildings and six are retail buildings.
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.
The following describes additional information about the properties in which the
Partnership owns an interest as of March 31, 1997:
Tanglewood Commons Shopping Center
- ----------------------------------
On May 31, 1995, the Fund VI-VII-VIII Joint Venture purchased a 14.683 acre
tract of real property located in Clemmons, Forsyth County, North Carolina. The
land purchase costs were funded by a capital contribution made by the
Partnership. Total cost and expenses to be incurred by the Fund VI-VII-VIII
Joint Venture for the acquisition, development, construction and completion of
the shopping center are anticipated to be approximately $8,700,000.
The Fund VI-VII-VIII Joint Venture developed a large strip shopping center
building containing approximately 81,000 gross square feet which opened on
February 26, 1997 on a 12.48 acre tract. The remaining 2.2 acre portion of the
property will remain in a vegetative or natural state.
In February 1997, Harris Teeter, Inc., a regional supermarket chain, occupied
its leased space of 46,120 square feet with an initial term of 20 years. The
annual base rent during the initial term is $488,250. In addition, Harris
Teeter has agreed to pay percentage rents equal to one percent of the amount by
which Harris Teeter's gross sales exceed $35,000,000 for any lease year.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS.
- --------------
The following discussion and analysis should be read in conjunction with the
selected financial data and the accompanying financial statements of the
Partnership and notes thereto. This Report contains forward-looking statements,
within the meaning of Section 27A of the Securities Act of 1933 and 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 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
- ---------------------------------------------------------
(a) General
- -----------
Gross revenues of the Partnerships were $209,023 for the quarter ended March
31, 1997, as compared to $179,792 for the quarter ended March 31, 1996. The
increase in revenues is attributed primarily to funds invested in joint
ventures, which increased the income generated from the joint ventures which
offset the reduction in interest income due to decreased funds available to earn
interest.
Expenses of the Partnership were $29,382 for 1997, as compared to $19,031 for
1996. The increase in expenses for 1997, as compared to 1996, was primarily
due to increased accounting fees and partnership administration expenses.
Net income of the Partnership was $179,641 for the three months ended March 31,
1997, as compared to $160,761 for the same period in 1996. The increase in net
income for 1997 from 1996 is due primarily to increased revenues, partially
offset by increased expenses as noted in the prior paragraph.
Net cash used in operating activities decreased from $46,553 in 1996 to $17,369
in 1997. This decreased was due primarily to increased distributions received
from joint ventures offset by decreased interest income. Net cash used in
investing activities increased for the three months ended March 31, 1997 as
compared to the same period in 1996 due to an increase in investments in joint
ventures. These changes produced decreased cash and cash equivalents of $46,553
and $115,695 at March 31, 1996 and 1997, respectively.
The Partnership made cash distributions of investment income to Limited
Partners holding Class A Units of $.15 for the three months ended March 31,
1996 as compared to $.17 per Class A Unit for 1997. No cash distributions of
investment income were made to Limited Partners holding Class B Units.
9
<PAGE>
PROPERTY OPERATIONS
- -------------------
As of March 31, 1997, the Partnership owned interests in the following
operational properties:
The Hartford Building/Fund V - Fund VI Joint Ventures
- -----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31
----------------------------
1997 1996
------- --------
<S> <C> <C>
Revenues:
Rental Income $179,375 $179,375
Expenses:
Depreciation 73,008 73,008
Management & leasing expenses 8,067 7,175
Other operating expenses (17,255) 3,175
-------- --------
63,820 83,358
-------- --------
Net income $115,555 $ 96,017
======== ========
Occupied % 100% 100%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 53.0% 52.4%
Cash Distribution to Partnership $100,392 $ 89,482
Net Income Allocated to the
Partnership $ 60,977 $ 50,353
</TABLE>
Net income increased and expenses decreased in 1997, as compared to 1996, due
primarily to an insurance reimbursement from the tenant for prior year expenses.
The Partnership's ownership in the Fund V - Fund VI Joint Venture increased from
52.4% in 1996, to 53.0% in 1997, due to additional fundings by the Partnership
in 1997, which increased the Partnership's ownership interest in the Joint
Venture.
10
<PAGE>
Stockbridge Village II/Fund V - Fund VI Joint Venture
- -----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1996
------- -------
<S> <C> <C>
Revenues:
Rental Income $63,336 $46,461
Expenses:
Depreciation 20,865 19,761
Management & leasing expenses 4,914 4,597
Other operating expenses 32,356 19,175
------- -------
58,135 43,533
------- -------
Net income $ 5,201 $ 2,928
======= =======
Occupied % 66% 61%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 53.0% 52.4%
Cash Distribution to Partnership $12,756 $11,451
Net Income Allocated to the
Partnership $ 2,747 $ 1,536
</TABLE>
Rental income, expenses and net income are greater in the first quarter of 1997,
as compared to the same period in 1996, due primarily to a new tenant occupying
4,969 square feet in February that increased rental revenue. The increase in
expenses was due primarily to a bad debt reserve for Glenn's Open Pit Bar-B-Que
which has vacated 4,303 square feet as of April 1, 1997, and the receivables for
this tenant have been turned over to lawyers for collection. Efforts are being
made to re-lease the space.
The Partnership's ownership percentage in the Fund V - Fund VI Joint Venture
increased to 53.0% for 1997, as compared to 52.4% in 1996, due to an additional
investment by the Partnership which increased the Partnership's and decreased
Wells Fund V's ownership interest in the Fund V - Fund VI Joint Venture.
11
<PAGE>
The Marathon Building/Fund V-VI-VII Joint Venture
- -------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1996
-------- --------
<S> <C> <C>
Revenues:
Rental Income $239,956 $242,754
Expenses:
Depreciation 87,646 87,646
Management & leasing expenses 10,002 9,710
Other operating expenses 1,128 3,698
-------- --------
98,776 101,054
-------- --------
Net income $141,180 $141,700
======== ========
Occupied % 100% 100%
Partnership's Ownership % in the
Fund V - VI - VII Joint Venture 41.8% 41.8%
Cash Distribution to Partnership $ 97,912 $ 89,810
Net Income Allocated to the
Partnership $ 59,056 $ 59,273
</TABLE>
Rental income decreased for the three months ended March 31, 1997, compared to
the same period of 1996, due to a one-time adjustment of straight-line rent for
the partial month of September, 1994. A small increase in management and
leasing fees in first quarter, 1997, over the first quarter, 1996, was offset by
a decrease in operating expense, primarily accounting and administrative fees.
Cash distributions to the Partnership increased for the three months ended March
31, 1997, compared to 1996, due to the scheduled increase in rent which became
effective January 1, 1997.
12
<PAGE>
Stockbridge Village III / Fund VI - Fund VII Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
------- -------
<S> <C> <C>
Revenues:
Rental Income $68,573 $56,924
Expenses:
Depreciation 21,452 20,377
Management & leasing expenses 7,483 3,977
Other operating expenses 13,473 17,990
------- -------
42,408 42,344
------- -------
Net income $26,165 $14,580
------- -------
Occupied % 87% 77%
Partnership's Ownership % in the
Fund VI-Fund VII Joint Venture 42.8% 43.1%
Cash Distribution to Partnership $20,085 $12,414
Net Income Allocated to the
Partnership $11,190 $ 6,275
</TABLE>
In April 1994, the Partnership purchased 3.27 acres of land located in Clayton
County, Georgia. On December 9, 1994, the Partnership contributed the
Stockbridge Village III property ("Stockbridge Village III") as a capital
contribution to the Fund VI - Fund VII Joint Venture.
Construction was completed on a 3,200 square foot restaurant in March, 1995.
This retail building is leased to Kenny Rogers Roasters, a restaurant, for a
term of nine years and eleven months. The initial base rent is $82,320 with an
increase in the fifth year to $87,600 annually.
The second multi-tenant retail building containing approximately 15,000 square
feet was completed in October, 1995. Damon's Clubhouse, a restaurant, occupied
approximately 6,732 square feet in October. The Damon's lease is for a term of
nine years and eleven months with initial base rent of $102,375 for five years
and increasing to $115,375 for the remainder of the lease. Four additional
tenants occupied approximately 5,850 square feet as of March 31, 1997.
The Partnership's ownership percentage in the Fund VI - Fund VII Joint Venture
decreased to 42.8% for 1997, as compared to 43.1% in 1996, due to additional
fundings by Wells Fund VII, which decreased the Partnership's ownership in the
Fund VI - Fund VII Joint Venture.
13
<PAGE>
Cherokee Commons/Fund I, II, II-OW, VI, VII Joint Venture
- ---------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31
-----------------------------
1997 1996
-------- --------
<S> <C> <C>
Revenues:
Rental Income $217,439 $222,621
Interest Income 18 19
-------- --------
269,648 222,640
Expenses:
Depreciation 107,525 107,183
Management & leasing expenses 31,541 12,634
Other operating expenses 24,119 48,872
-------- --------
215,376 168,689
-------- --------
Net income $ 54,272 $ 53,951
======== ========
Occupied % 91% 95%
Partnership's Ownership % 10.7% 10.7%
Cash Distribution to Partnership $ 19,571 $ 16,488
Net Income Allocated to the
Partnership $ 5,811 $ 5,777
</TABLE>
Rental income decreased in 1997, over 1996 levels, due primarily to the decrease
in occupancy. Management and leasing expenses increased in 1997, as compared to
1996, due to the one-time payments of lease acquisition fees. Operating expenses
decreased due primarily to a timing difference in billings to tenants for
property taxes.
14
<PAGE>
Stockbridge Village I Expansion / Fund VI - Fund VII Joint Venture
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1997
-------------------
<S> <C>
Revenues:
Rental Income $31,910
Expenses:
Depreciation 22,374
Management & leasing expenses 3,409
Other operating expenses 8,522
-------
34,305
-------
Net loss $(2,395)
=======
Occupied % 41%
Partnership's Ownership % in the Fund
VI - Fund VII Joint Venture 42.8%
Cash Distribution to Partnership $ 4,530
Net Loss Allocated to the
Partnership $(1,024)
</TABLE>
On June 7, 1995, the Fund VI - Fund VII Joint Venture purchased 3.38 acres of
real property located in Clayton County, Georgia. The Stockbridge Village I
Expansion consists of a multi-tenant shopping center containing approximately
29,000 square feet. The majority of construction was completed in April, 1996.
Cici's Pizza has occupied a 4,000 square foot restaurant. The term of the lease
is for nine years and eleven months commencing April, 1997. The initial base
rent is $48,000. In the third year, annual base rent will increase to $50,000,
in the sixth year to $52,000, and the ninth year to $56,000. Five additional
tenants have occupied 8,000 square feet at the property as of March 31, 1997.
Negotiations are being conducted to lease the remaining space.
Since this property commences operations during the second quarter of 1996,
there is not comparable financial information for the first quarter of the prior
year. It is anticipated that no additional funding by the Partnership or Wells
Fund VII will be required to complete tenant build-out.
15
<PAGE>
880 Holcomb Bridge Road / Fund II, III, VI,VII Joint Venture
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1996
-------- --------
<S> <C> <C>
Revenues:
Rental Income $160,185 $ 9,421
Expenses:
Depreciation 66,130 6,120
Management & leasing expenses 20,580 1,051
Other operating expenses 30,307 18,839
-------- --------
117,017 26,010
-------- --------
Net income (loss) $ 43,168 $(16,589)
======== ========
Occupied % 63% 21%
Partnership's Ownership % in the Fund
II, III, VI, VIII Joint Venture 26.0% 19.5%
Cash Distribution to Partnership $ 28,447 $ 0
Net Income (Loss) Allocated to the
Partnership $ 11,232 $ (3,232)
</TABLE>
In January 1995, the Fund II - Fund III Joint Venture contributed 4.3 acres of
land and land improvements at 880 Holcomb Bridge Road to the Fund II, III, VI
and VII Joint Venture. Development is being completed on two buildings with a
total of 49,500 square feet.
As of March 31, 1997, nine tenants are occupying approximately 31,140 square
feet of space in the retail and office building under leases of varying lengths.
Increases in revenues, expenses and net income for the quarter ended March 31,
1997, as compared to the same quarter of 1996, are due to the rental income from
the additional tenants, and the operation of the property for a full three
months.
16
<PAGE>
BellSouth Property / Fund VI - Fund VII - Fund VIII Joint Venture
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
For the Three Months
Ended March 31, 1997
---------------------
<S> <C>
Revenues:
Rental income $379,050
Interest income 1,976
--------
381,026
--------
Expenses:
Depreciation 110,889
Management & leasing expenses 45,173
Other operating expenses 83,967
--------
240,029
--------
Net income $140,997
========
Occupied % 100%
Partnership's Ownership % in the
Fund VI - Fund VII - Fund VIII
Joint Venture 36.4%
Cash Distribution to Partnership $ 93,688
Net Income Allocated to Partnership $ 51,297
</TABLE>
On April 25, 1995, the Fund VI - Fund VII - Fund VIII Joint Venture purchased
5.55 acres of land located in Jacksonville, Florida. In May 1996, the 92,964
square foot office building was completed, with BellSouth Advertising and
Publishing Corporation occupying approximately 66,333 square feet and American
Express occupying approximately 22,607 square feet. An additional approximate
2,900 square feet was occupied by BellSouth commencing in December 1996,
bringing occupancy to 100%.
Interest income was generated from construction dollars, not as yet funded on
construction, being invested in interest bearing accounts.
Since the building opened in May, 1996, comparative income and expense figures
are not available for the first quarter of 1996.
17
<PAGE>
Tanglewood Commons / Fund VI - VII - VIII Joint Venture
- -------------------------------------------------------
<TABLE>
<CAPTION>
For the Two Months
Ended March 31, 1997
--------------------
<S> <C>
Revenues:
Rental income $49,534
Interest income 3,600
-------
53,134
-------
Expenses:
Depreciation 31,106
Management & leasing expenses 3,164
Other operating expenses 21,906
-------
56,176
-------
Net loss $(3,042)
=======
Occupied % 70%
Partnership's Ownership % in the
Fund VI - Fund VII - Fund VIII
Joint Venture 36.4%
Cash Distribution to Partnership $10,210
Net Loss Allocated to Partnership $(1,107)
</TABLE>
On May 31, 1995, the Fund VI-VII-VIII Joint Venture purchased a 14.683 acre
tract of real property located in Clemmons, Forsyth County, North Carolina. The
land purchase costs were funded by a capital contribution made by the
Partnership. Total cost and expenses to be incurred by the Fund VI-VII-VIII
Joint Venture for the acquisition, development, construction and completion of
the shopping center are anticipated to be approximately $8,700,000.
The Fund VI-VII-VIII Joint Venture developed a large strip shopping center
building containing approximately 67,320 gross square feet which opened on
February 26, 1997, on a 12.48 acre tract. The remaining 2.2 acre portion of the
property will remain in a vegetative or natural state.
In February, 1997, Harris Teeter, Inc., a regional supermarket chain, occupied
its leased space of 46,120 square feet with an initial term of 20 years. The
annual base rent during the initial term is $488,250. In addition, Harris
Teeter has agreed to pay percentage rent equal to one percent of the amount by
which Harris Teeter gross sales exceed $35,000,000 for any lease year. Since
this property commenced operations in February, 1997, comparable income and
expense figures for prior years are not available.
Interest income was generated from construction dollars, not as yet funded on
construction, being invested in interest bearing accounts.
18
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the first quarter of 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
WELLS REAL ESTATE FUND VI, L.P.
(Registrant)
Dated: May 12, 1997 By: /s/ Leo F. Wells, III
----------------------------------
Leo F. Wells, III, as Individual
General Partner and as President,
Sole Director and Chief Financial
Officer of Wells Capital, Inc., the
General Partner of Wells Partners, L.P.
19
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