<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 September 30, 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
--- ---
<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 - September 30, 1997
and December 31, 1996 ..........................................................3
Statements of Income for the Three Months and
Nine Months Ended September 30, 1997
and 1996 .......................................................................4
Statement of Partners' Capital
for the Year Ended December 31, 1996,
and the Nine Months Ended September 30, 1997....................................5
Statements of Cash Flows for the Nine Months
Ended September 30, 1997 and 1996...............................................6
Condensed Notes to Financial Statements..........................................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.......................................................................8
PART II. OTHER INFORMATION .....................................................................19
</TABLE>
2
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
Balance Sheets
<TABLE>
<CAPTION>
Assets September 30, 1997 December 31, 1996
------ ------------------ -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $19,562,488 $19,930,833
Cash and cash equivalents 404,304 589,082
Due from affiliates 405,458 335,878
Deferred project costs 6,627 14,157
Organization costs, less accumulated
amortization of $28,125 in 1997 and
$23,437 in 1996 3,125 7,813
Prepaid expenses and other assets 700 2,400
----------- -----------
Total assets $20,382,702 $20,880,163
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable $ 18 $ 4,500
Partnership distribution payable 399,874 330,572
----------- -----------
Total liabilities 399,892 335,072
----------- -----------
Partners' capital:
Class A - 2,153,895 units outstanding 18,450,221 18,162,497
Class B - 346,105 units outstanding 1,532,589 2,382,594
----------- -----------
Total partners' capital 19,982,810 20,545,091
----------- -----------
Total liabilities and partners' capital $20,382,702 $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 Nine Months Ended
------------------ -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30,1996
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Interest income $ 6,431 $ 10,311 $ 23,685 $ 57,173
Equity in income of joint ventures
(Note 2) 215,860 150,203 606,551 413,468
------------- ------------- ------------- ------------
222,291 160,514 630,236 470,641
------------- ------------- ------------- ------------
Expenses:
Legal and accounting 1,483 763 16,587 20,850
Computer costs 3,069 1,403 7,213 3,315
Partnership administration 7,437 12,109 41,799 40,213
Amortization of organization costs 1,562 1,562 4,687 4,687
------------- ------------- ------------- ------------
13,551 15,837 70,286 69,065
------------- ------------- ------------- ------------
Net income $ 208,740 $ 144,677 $ 559,950 $ 401,576
============= ============= ============= ============
Net loss allocated to General Partners $ 0 $ 0 $ 0 $ 0
Net income allocated to Class A Limited
Partners $ 432,467 $ 358,439 $ 1,196,452 $ 876,111
Net loss allocated to Class B Limited
Partners $ (223,727) $ (213,762) $ (636,502) $ (474,535)
Net income per Class A Limited Partner
Unit $ 0.20 $ 0.17 $ 0.56 $ 0.42
Net loss per Class B Limited Partner Unit $ (0.65) $ (0.54) $ (1.75) $ (1.16)
Cash distribution per Class A Limited
Partner Unit $ 0.19 $ 0.12 $ 0.53 $ 0.40
</TABLE>
See accompanying condensed notes to financial statements.
<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 NINE MONTHS ENDED
SEPTEMBER 30, 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 1,196,452 0 (636,502) 0 559,950
Partnership distributions 0 (1,122,231) 0 0 0 (1,122,231)
Class B conversion elections 40,638 213,503 (40,638) (213,503) 0 0
--------- ---------- ---------- --------- --------- ----------
BALANCE,September 30, 1997 2,153,895 $ 18,450,221 346,105 $ 1,532,589 $ 0 $ 19,982,810
========= ========== ========== ========= ========= ==========
</TABLE>
See accompanying condensed notes to financial statements.
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
Sept 30, 1997 Sept 30, 1996
---------------- -----------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 559,950 $ 401,576
Adjustments to reconcile net earnings to net
cash used in operating activities:
Equity in income of joint venture (606,551) (413,468)
Amortization of organization costs 4,687 4,687
Changes in assets and liabilities:
Due from affiliates 0 5,194
Prepaids and other assets 1,700 3,500
Accounts payable (4,482) (4,000)
-------------- ---------------
Net cash used in
operating activities (44,696) (2,511)
Cash flow from investing activities:
Distributions received from joint
ventures 1,094,566 779,983
Investment in joint ventures (181,719) (234,924)
-------------- ---------------
Net cash provided by investing
activities 912,847 545,059
Cash flow from financing activities:
Partnership distributions paid (1,052,929) (922,962)
Net decrease in cash and cash equivalents (184,778) (380,414)
Cash and cash equivalents, beginning of year 589,082 967,347
-------------- ---------------
Cash and cash equivalents, end of period $ 404,304 $ 586,933
============== ===============
Supplemental schedule of noncash
investing activities-deferred project
costs applied to investing activities $ 7,530 $ 21,305
-------------- ---------------
</TABLE>
See accompanying condensed notes to financial statements.
<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
-----------
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 1,933,218
Class A and 566,782 Class B Limited Partnership Units.
The Partnership owns interests in 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 Real Estate 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, Fund II and Fund III Associates, 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, Wells
Real Estate Fund II, Wells Real Estate Fund II-OW, and Wells Real Estate
Fund VII, L.P. (the "Fund I,II,II-OW,VI,VII Joint Venture").
7
<PAGE>
As of September 30, 1997, the Partnership owned interests 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")
which are owned by the Fund VI - Fund VII Joint Venture; (v) a shopping center
expansion located in Clayton County, Georgia (the Stockbridge Village I
Expansion") which is 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; and (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 is 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 interests 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.
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.
8
<PAGE>
Results of Operations and Changes in Financial Conditions
- ---------------------------------------------------------
(a) General
- -----------
As of September 30, 1997, the developed properties owned by the Partnership were
93% occupied, as compared to 92% occupied as of September 30, 1996.
Gross revenues of the Partnership were $630,236 for the nine months ended
September 30, 1997, as compared to $470,641 for the same period in 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 $70,286 for the nine months ended September 30,
1997, as compared to $69,065 for the same period in 1996. The increase in
expenses for 1997, as compared to 1996, was primarily due to increased
expenditures in partnership administration and computer costs offset partially
by decreased accounting and legal fees.
Net income of the Partnership was $559,950 for the nine months ended September
30, 1997, as compared to $401,576 for the same period in 1996. The increase in
net income for 1997 from 1996 is due primarily to increased revenues offset
partially by increased expenses as noted in the prior paragraphs.
Net cash used in operating activities increased from $2,511 in 1996 to $44,696
in 1997. This increase was due primarily to decreased interest income in net
earnings. Net cash provided by investing activities increased for the nine
months ended September 30, 1997 as compared to the same period in 1996 due
primarily to an increase in distributions received from joint ventures.
Increased distributions received from the joint ventures was offset by increased
Partnership distributions paid. These changes produced decreased cash and cash
equivalents of $380,414 and $184,778 at September 30, 1996 and 1997,
respectively.
The Partnership made cash distributions to Limited Partners holding Class A
Units of $.19 for the three months ended September 30, 1997 as compared to $.12
per Class A Unit for the same period in 1996. No cash distributions of
investment income were made to Limited Partners holding Class B Units or to the
General Partners.
The Partnership's distributions paid through the third quarter of 1997, have
been paid from cash flow from operations and distributions received from its
equity investments in joint ventures, and the Partnership anticipates that
distributions will continue to be paid on a quarterly basis from such sources.
The Partnership expects to make future real estate investments, directly or
through investments in joint ventures, from Limited Partners' contributions. It
is anticipated that the Partnership will contribute approximately $85,000 to the
Fund V - Fund VI Joint Venture for the completion of the Stockbridge Village II
Property, from Limited Partners' remaining contributions.
9
<PAGE>
The Partnership is unaware of any known demands, commitments, events or capital
expenditures other than that which is required from the normal operations of its
properties that will result in the Partnership's liquidity increasing or
decreasing in a material way. The Partnership expects to meet liquidity
requirements and budget demands through cash flow from operations.
Since properties are acquired on all-cash basis, the Partnership has no
permanent long-term liquidity requirements.
Property Operations
- -------------------
As of September 30, 1997, the Partnership owned interests in the following
operational properties
The Hartford Building/Fund V - Fund VI Joint Venture
- ----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $ 179,374 $ 179,374 $ 538,124 $ 538,124
Expenses:
Depreciation 73,005 73,008 219,015 219,024
Management & leasing expenses 7,772 7,175 23,014 21,525
Other operating expenses (3,393) 3,380 (15,821) 11,204
--------- --------- --------- ---------
77,384 83,563 226,208 251,753
--------- --------- --------- ---------
Net income $ 101,990 $ 95,811 $ 311,916 $ 286,371
========= ========= ========= =========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 53.5% 52.5% 53.5% 52.5%
Cash Distribution to Partnership $ 94,382 $ 89,478 $ 284,409 $ 267,670
Net Income Allocated to the
Partnership $ 54,505 $ 50,302 $ 165,539 $ 150,235
</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's
expenses.
The Partnership's ownership interest in the Fund V - Fund VI Joint Venture
increased from 52.5% in 1996, to 53.5% in 1997, due to additional fundings by
the Partnership in 1997 which increased the Partnership's ownership interest and
decreased Wells Fund V's ownership interest in the Fund V - Fund VI Joint
Venture.
10
<PAGE>
Stockbridge Village II/Fund V - Fund VI Joint Venture
- -----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $ 55,886 $ 50,056 $ 175,164 $ 146,573
Expenses:
Depreciation 24,580 19,811 68,272 59,333
Management & leasing expenses 11,860 4,549 23,214 14,528
Other operating expenses 21,522 24,862 113,768 63,660
--------- --------- --------- ---------
57,962 49,222 205,254 137,521
--------- --------- --------- ---------
Net (loss) income $ (2,076) $ 834 $ (30,090) $ 9,052
========= ========= ========= ==========
Occupied % 73% 61% 73% 61%
Partnership's Ownership % in the
Fund V-Fund VI Joint Venture 53.5% 52.5% 53.5% 52.5%
Cash Distribution to Partnership $ 11,603 $ 10,026 $ 17,551 $ 31,920
Net(Loss)Income Allocated to
the Partnership $ (1,107) $ 433 $ (15,979) $ 4,743
</TABLE>
Rental income increased in 1997, as compared to the same period in 1996, due
primarily to two new tenants occupying 6,049 square feet in 1997. Net income has
decreased in 1997, as compared to 1996, due primarily to a bad debt reserve for
Glenn's Open Pit Bar-B-Que which has vacated 4,303 square feet of space as of
April 1, 1997. The receivable from this tenant has 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 53.5% for 1997, as compared to 52.5% in 1996, due to additional
fundings by the Partnership to Stockbridge Village II which increased the
Partnership's ownership interest 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 Nine Months Ended
------------------ -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $242,754 $242,755 $725,465 $728,263
Expenses:
Depreciation 87,647 87,647 262,939 262,939
Management & leasing expenses 9,889 9,710 29,781 29,130
Other operating expenses 3,174 1,531 7,937 10,381
-------- -------- -------- --------
100,710 98,888 300,657 302,450
-------- -------- -------- --------
Net income $142,044 $143,867 $424,808 $425,813
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V-VI-VII Joint Venture 41.8% 41.8% 41.8% 41.8%
Cash Distribution to Partnership $ 97,056 $ 90,716 $291,832 $269,728
Net Income Allocated to the
Partnership $ 59,417 $ 60,180 $177,697 $178,117
</TABLE>
Rental income remained relatively stable for the nine months ended September 30,
1997, compared to the same period of 1996. A small increase in management and
leasing fees was offset by a decrease in operating expenses, primarily
accounting and administrative fees. Cash distributions to the Partnership
increased for the nine months ended September 30, 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 Nine Months Ended
------------------ -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $ 71,127 $ 68,558 $ 211,088 $ 187,790
Expenses:
Depreciation 21,452 21,400 64,355 63,078
Management & leasing expenses 6,730 16,387 22,712 37,273
Other operating expenses 2,891 8,696 (2,467) 44,551
--------- --------- --------- ---------
31,073 46,483 84,600 144,902
--------- --------- --------- ---------
Net income $ 40,054 $ 22,075 $ 126,488 $ 42,888
========= ========= ========= =========
Occupied % 87% 87% 87% 87%
Partnership's Ownership % in the
Fund VI - Fund VII Joint Venture 42.7% 42.8% 42.7% 42.8%
Cash Distribution to Partnership $ 26,538 $ 23,122 $ 81,640 $ 45,004
Net Income Allocated to the
Partnership $ 17,127 $ 9,443 $ 54,094 $ 18,392
</TABLE>
Rental income increased in 1997, as compared to 1996, due to an adjustment to
straight line rent in 1997 regarding 1996. Net income increased for the nine
months ended September 30, 1997, as compared to the same period in 1996, due
primarily to the increased rental income and decreased expenses as a result of
timing differences in the billing of tenant CAM charges.
The Partnership's ownership percentage in the Fund VI - Fund VII Joint Venture
decreased to 42.7% for 1997, as compared to 42.8% in 1996, due to additional
funding by Wells Fund VII in 1997.
13
<PAGE>
Holcomb Bridge Road Project / Fund II, III, VI,VII Joint Venture
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Six Months Ended
------------------ ----------------- -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 181,877 $ 82,869 $ 477,974 $ 136,044
Expenses:
Depreciation 84,509 54,939 220,621 138,881
Management & leasing expenses 26,156 8,530 69,219 14,610
Other operating expenses 48,870 22,279 92,810 70,012
--------- --------- --------- ---------
159,535 85,748 382,650 223,503
--------- --------- --------- ---------
Net income (loss) $ 22,342 $ (2,879) $ 95,324 $ (87,459)
========= ========= ========= =========
Occupied % 87.1% 53.6% 87.1% 53.6%
Partnership's Ownership % in the Fund II,
III, VI, VII Joint Venture 26.0% 26.0% 26.0% 26.0%
Cash Distribution to Partnership $ 24,703 $ 6,426 $ 79,871 $ 6,.426
Net Income (Loss) Allocated to the
Partnership $ 5,813 $ (898) $ 24,803 $ (18,075)
</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,
VII Joint Venture. Development is being completed on two buildings containing a
total of approximately 49,500 square feet of space. Approximately 3,500 square
feet is currently under construction for which leases have been signed. Efforts
are continuing to lease the remaining space of approximately 2,900 square feet.
As of September 30, 1997, thirteen tenants are occupying approximately 43,100
square feet of space in the retail and office building under leases of varying
lengths. Operating expenses increased for the three month period ended September
30, 1997, as compared to September 30, 1996, due to increased occupancy at the
property. Increases in revenues, expenses and net income for the nine months
ended September 30, 1997, compared to the nine months ended September 30, 1996,
are also due to increased occupancy at the property.
14
<PAGE>
Stockbridge Village I Expansion / Fund VI - Fund VII Joint Venture
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Six Months Ended
------------------ ----------------- ----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 53,719 $ 5,994 $ 125,603 $ 7,003
Expenses:
Depreciation 29,297 19,107 75,425 31,845
Management & leasing expenses 7,223 822 15,709 977
Other operating expenses 6,066 9,037 29,879 15,713
--------- --------- --------- ---------
42,586 28,966 121,013 48,535
--------- --------- --------- ---------
Net income (loss) $ 11,133 $ (22,972) $ 4,590 $ (41,532)
========= ========= ========= =========
Occupied % 81% 19% 81% 19%
Partnership's Ownership % in the Fund VI-
Fund VII Joint Venture 42.7% 42.8% 42.7% 42.8%
Cash Distribution to Partnership $ 16,314 $ 0 $ 28,045 $ 0
Net Income (Loss) Allocated to the
Partnership $ 4,759 $ (9,829) $ 1,961 $ (17,790)
</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 occupies a 4,000 square foot restaurant. Nine additional tenants
are occupying an additional 14,400 square feet at the property as of September
30, 1997. Negotiations are being conducted to lease the remaining space.
It is anticipated that no additional funding by the Partnership or Wells Fund
VII will be required to complete tenant buildout.
The Partnership's ownership percentage in the Fund VI - Fund VII Joint Venture
decreased to 42.7% for 1997, as compared to 42.8% in 1996, due to additional
funding by Wells Fund VII in 1997.
15
<PAGE>
BellSouth Property / Fund VI - Fund VII - Fund VIII Joint Venture
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Five Months Ended
------------------ ----------------- -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 350,461 $ 364,732 $1,137,024 $ 511,472
Interest income 2,097 1,366 6,114 58,000
---------- ---------- ---------- ----------
352,558 366,098 1,143,138 569,472
---------- ---------- ---------- ----------
Expenses:
Depreciation 110,889 109,116 332,667 186,092
Management & leasing expenses 47,095 39,597 143,554 57,525
Other operating expenses 85,739 147,446 312,986 213,407
---------- ---------- ---------- ----------
243,723 296,159 789,207 457,024
---------- ---------- ---------- ----------
Net income $ 108,835 $ 69,939 $ 353,931 $ 112,448
========== ========== ========== ==========
Occupied % 100% 96% 100% 96%
Partnership's Ownership % in the Fund VI-
Fund VII - Fund VIII Joint Venture 34.3% 39.2% 34.3% 39.2%
Cash Distribution to Partnership $ 80,100 $ 25,820 $ 253,038 $ 79,971
Net Income Allocated to the Partnership $ 38,005 $ 28,857 $ 126,039 $ 47,500
</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 year-to-date income and
expense figures are not available. The Partnership's ownership percentage in the
Fund VI - Fund VII - Fund VIII Joint Venture decreased to 34.3% for 1997, as
compared to 39.2% in 1996, due to additional funding by Wells Fund VIII in 1997.
16
<PAGE>
Tanglewood Commons / Fund VI - VII - VIII Joint Venture
- -------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Eight Months Ended
------------------ ------------------
Sept 30, 1997 Sept 30, 1997
------------- -------------
<S> <C> <C>
Revenues:
Rental income $172,682 $382,265
Interest income 3,890 10,275
-------- --------
176,572 392,540
-------- --------
Expenses:
Depreciation 53,435 135,686
Management & leasing expenses 13,390 26,727
Other operating expenses 20,740 72,352
-------- --------
87,565 234,765
-------- --------
Net income $ 89,007 $157,775
======== ========
Occupied % 78% 78%
Partnership's Ownership % in the Fund VI - Fund
VII - Fund VIII Joint Venture 34.3% 34.3%
Cash Distribution to Partnership $ 46,261 $ 83,120
Net Income Allocated to the
Partnership $ 31,038 $ 55,274
</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 costs 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. It is
anticipated that Wells Fund VIII will fund approximately $200,000 needed to
compete contruction of Tanglewood Commons.
A strip shopping center containing approximately 67,320 gross square feet opened
on the site on February 26, 1997.
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 the prior year are not available.
17
<PAGE>
Cherokee Commons/ Fund I, II, II-OW, VI, VII Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $215,367 $219,956 $648,779 $666,564
Interest income 10 18 47 55
-------- -------- -------- --------
215,377 219,974 648,826 666,619
-------- -------- -------- --------
Expenses:
Depreciation 110,037 107,607 327,259 322,251
Management & leasing expenses 7,017 12,101 57,881 38,011
Other operating expenses 39,455 38,084 103,777 133,588
-------- -------- -------- --------
156,509 157,792 488,917 493,850
-------- -------- -------- --------
Net income $ 58,868 $ 62,182 $159,909 $172,769
======== ======== ======== ========
Occupied % 93% 95% 93%
95%
Partnership's Ownership % 10.7% 10.7% 10.7% 10.7%
Cash Distribution to Partnership $ 8,475 $ 18,722 $ 44,638 $ 53,585
Net Income Allocated to the
Partnership $ 6,304 $ 6,658 $ 17,123 $ 18,500
</TABLE>
Rental income decreased in 1997, as compared to 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.
18
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the third 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: November 10, 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
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 404,304
<SECURITIES> 19,562,488
<RECEIVABLES> 405,458
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 700
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,382,702
<CURRENT-LIABILITIES> 399,892
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,982,810
<TOTAL-LIABILITY-AND-EQUITY> 20,382,702
<SALES> 0
<TOTAL-REVENUES> 630,236
<CGS> 0
<TOTAL-COSTS> 70,286
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 559,950
<INCOME-TAX> 559,950
<INCOME-CONTINUING> 559,950
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 559,950
<EPS-PRIMARY> .56
<EPS-DILUTED> 0
</TABLE>
