<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, 1998 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
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1998
and December 31, 1997............................................. 3
Statements of Income for the Three Months
Ended March 31, 1998
and 1997.......................................................... 4
Statement of Partners' Capital
for the Year Ended December 31, 1997,
and the Three Months Ended March 31, 1998......................... 5
Statements of Cash Flows for the Three Months
Ended March 31, 1998 and 1997..................................... 6
Condensed Notes to Financial Statements........................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations...................................................... 8
PART II. OTHER INFORMATION............................................... 19
2
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets March 31, 1998 December 31, 1997
------ -------------- -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $19,324,550 $19,479,915
Cash and cash equivalents 224,353 268,337
Due from affiliates 451,367 465,733
Deferred project costs 2,666 2,666
Organization costs, less accumulated
amortization of $31,250 in 1998 and
$29,687 in 1997 0 1,563
Prepaid expenses and other assets 300 300
----------- -----------
Total assets $20,003,236 $20,218,514
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distribution payable $ 437,428 $ 432,841
----------- -----------
Partners' capital:
Class A - 2,160,395 units outstanding 18,540,782 18,525,190
Class B - 339,605 units outstanding 1,025,026 1,260,483
----------- -----------
Total partners' capital 19,565,808 19,785,673
----------- -----------
Total liabilities and partners' capital $20,003,236 $20,218,514
=========== ===========
</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, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Interest income $ 3,595 $ 8,845
Equity in income of joint ventures
(Note 2) 230,564 200,178
--------- ---------
234,159 209,023
--------- ---------
Expenses:
Legal and accounting 4,771 8,594
Computer costs 2,017 2,493
Partnership administration 10,218 16,732
Amortization of organization
costs 1,563 1,563
--------- ---------
18,569 29,382
--------- ---------
Net income $ 215,590 $ 179,641
========= =========
Net income allocated to Class A
Limited Partners $ 445,504 $ 382,061
Net loss allocated to Class B
Limited Partners $(229,914) $(202,420)
Net income per Class A Limited
Partner Unit $ 0.21 $ 0.18
Net loss per Class B Limited Partner
Unit $ (0.68) $ (0.52)
Cash distribution per Class A
Limited Partner Unit $ 0.20 $ 0.17
</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, 1997 AND THE THREE MONTHS ENDED
MARCH 31, 1998
<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, 1996 2,113,257 $18,162,497 386,743 $2,382,594 $0 $20,545,091
Net income (loss) 0 1,677,826 0 (882,172) 0 795,654
Partnership
distributions 0 (1,555,072) 0 0 0 (1,555,072)
Class B conversion 45,638 239,939 (45,638) (239,939) 0 0
elections --------- ----------- ------- ---------- -- -----------
BALANCE, DECEMBER 31, 1997 2,158,895 18,525,190 341,105 1,260,483 0 19,785,673
--------- ----------- ------- ---------- -- -----------
Net income (loss) 0 445,504 0 (229,914) 0 215,590
Partnership
distributions 0 (435,455) 0 0 0 (435,455)
Class B conversion 1,500 5,543 (1,500) (5,543) 0 0
elections --------- ----------- ------- ---------- -- -----------
BALANCE, MARCH 31, 1998 2,160,395 $18,540,782 339,605 $1,025,026 $0 $19,565,808
========= =========== ======= ========== == ===========
</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, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 215,590 $ 179,641
Adjustments to reconcile net income to net
cash used in operating activities: (230,564) (200,178)
Equity in income of joint ventures
Amortization of organization costs 1,563 1,563
Changes in assets and liabilities:
Prepaids & other assets 0 800
Accounts payable 0 (4,500)
--------- ---------
Net cash used in operating
activities (13,411) (22,674)
--------- ---------
Cash flow from investing activities:
Distributions received from joint
ventures 458,233 335,877
Investment in joint ventures (57,938) (98,326)
--------- ---------
Net cash provided by investing
activities 400,295 237,551
--------- ---------
Cash flow from financing activities:
Partnership distributions paid (430,868) (330,572)
--------- ---------
Net decrease in cash
and cash equivalents (43,984) (115,695)
Cash and cash equivalents, beginning of year 268,337 589,082
--------- ---------
Cash and cash equivalents, end of period $ 224,353 $ 473,387
========= =========
Supplemental Schedule of noncash
investing activities - deferred
project costs applied to investing activities $ 0 $ 5,389
========= =========
</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) Summary of Significant Accounting Policies
------------------------------------------
(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 for
2,500,000 Limited Partnership 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 among
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 among 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 among
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 among 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").
As of March 31, 1998, the Partnership owned interests in the following
properties through its ownership in 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,
7
<PAGE>
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,
1997.
(b). 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, 1997.
(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
- -----------
Gross revenues of the Partnership were $234,159 for the quarter ended March 31,
1998, as compared to $209,023 for the quarter ended March 31, 1997. 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 $18,569 for 1998, as compared to $29,382 for
1997. The decrease in expenses for 1998, as compared to 1997, was primarily
due to decreased accounting fees and partnership administration expenses.
Net income of the Partnership was $215,590 for the three months ended March 31,
1998, as compared to $179,641 for the same period in 1997. The increase in net
income for 1998 from 1997 is due primarily to increased revenues and decreased
expenses as noted above.
Net cash used in operating activities decreased from $22,674 in 1997 to $13,411
in 1998. This decrease was due primarily to decreased expenses. Net cash
provided by investing activities increased for the three months ended March 31,
1998, as compared to the same period in 1997, due to a decreased in investments
in joint ventures and an increase in joint venture distributions. Partnership
distributions also increased in 1998, as compared to 1997. These changes
produced cash and cash equivalents of $473,387 and $224,353 at March 31, 1997
and 1998, respectively.
The Partnership made cash distributions of investment income to Limited Partners
holding Class A Units of $.20 for the three months ended March 31, 1998, as
compared to distributions of $.17 per Class A Unit for the same period in 1997.
No cash distributions of investment income were made to Limited Partners holding
Class B Units or to the General Partners.
Recent Accounting Pronouncements
- --------------------------------
Statement of Financial Accounting Standards (SFAF) No. 130, "Reporting
Comprehensive Income", requires certain transactions (e.g., unrealized
gains/losses on available for sale securities) that are not reflected in net
income to be displayed as other comprehensive income. The Statement also
requires an entity to report total comprehensive income (i.e., net income plus
other comprehensive income) for every period in which an income statement is
presented. SFAS No. 130 is effective for annual and interim periods beginning
after December 13, 1997. None of the transactions required to be reported in
other comprehensive income pertain to the Partnership; consequently, adoption of
this statement had no impact on the partnership's disclosures.
Effective April 3, 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-Up
Activities". SOP 98-5 is effective for fiscal years beginning after December
15, 1998, and initial application is required to be reported as a cumulative
effect of change in accounting principle. This SOP provides guidance on the
financial reporting of start-up costs and organization costs. It requires costs
of start-up
9
<PAGE>
activities and organization costs to be expenses as incurred. Adoption of this
Statement by the Partnership in the first quarter of 1999 may result in the
write-off of certain capitalized organization costs. Adoption of this Statement
is not expected to have a material impact on the Partnership's results of
operations and financial condition.
The General Partners have verified that all operational computer systems are
year 2000 compliant. This includes systems supporting accounting, property
management and investor services. Also, as part of this review, all building
control systems have been verified as compliant. The current line of business
applications are based on compliant operating systems and database servers. All
of these products are scheduled for additional upgrades before the year 2000.
Therefore, it is not anticipated that the year 2000 will have significant impact
on operations.
PROPERTY OPERATIONS
- -------------------
As of March 31, 1998, the Partnership owned interests in the following
operational properties
The Hartford Building/Fund V - Fund VI Joint Venture
----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------
March 31, 1998 March 31, 1997
--------------- --------------
<S> <C> <C>
Revenues:
Rental Income $179,375 $179,375
Expenses:
Depreciation 73,005 73,008
Management & leasing expenses 5,656 8,067
Other operating expenses 5,222 (17,255)
-------- --------
83,883 63,820
-------- --------
Net income $ 95,492 $115,555
======== ========
Occupied % 100% 100%
Partnership Ownership % 53.5% 53.0%
Cash Distribution to Partnership $ 90,143 $100,392
Net Income Allocated to the
Partnership $ 51,059 $ 60,977
</TABLE>
Net income decreased and expenses increased in 1998, as compared to 1997,
due primarily to an insurance reimbursement from the tenant in 1997, which
is recorded in 1997, in other operating expenses.
The Partnership's ownership interest in the Fund V - Fund VI Joint Venture
increased from 53.0% in 1997, to 53.5% in 1998, due to additional fundings
by the Partnership in
10
<PAGE>
1997, which increased the Partnership's ownership interest in the Fund V -
Fund VI Joint Venture.
Stockbridge Village II/Fund V - Fund VI Joint Venture
-----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental Income $58,944 $63,336
Expenses:
Depreciation 25,703 20,865
Management & leasing expenses 8,602 4,914
Other operating expenses 4,524 32,356
------- -------
38,829 58,135
------- -------
Net income $20,115 $ 5,201
======= =======
Occupied % 72% 66%
Partnership Ownership % 53.5% 53.0%
Cash Distribution to Partnership $23,565 $12,756
Net Income Allocated to the
Partnership $10,755 $ 2,747
</TABLE>
Other operating expenses decreased and net income increased in 1998, as
compared to 1997, due primarily to a bad debt reserve recorded in the first
quarter of 1997 for Glenn's Open Pit Bar-B-Que which had vacated 4,303
square feet of space as of April 1, 1997. 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 1998, as compared to 53.0% in 1997, due to additional
fundings by the Partnership which increased the Partnership'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, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental Income $242,754 $239,956
Expenses:
Depreciation 87,646 87,646
Management & leasing expenses 9,890 10,002
Other operating expenses 3,642 1,128
-------- --------
101,178 98,776
-------- --------
Net income $141,576 $141,180
======== ========
Occupied % 100% 100%
Partnership Ownership % 41.8% 41.8%
Cash Distribution to Partnership $ 96,861 $ 97,912
Net Income Allocated to the
Partnership $ 59,221 $ 59,056
</TABLE>
Rental income increase for the three months ended March 31, 1998, compared
to the same period of 1997, due to a correction of straight-line rent in
the first quarter of 1997. A small decrease in management and leasing fees
in first quarter 1998, over first quarter 1997 was offset by an increase in
operating expenses, primarily accounting and administrative fees. Cash
distributions to the Partnership and net income allocated to the
Partnership remained relatively stable for the three months ended March 31,
1998 and 1997.
12
<PAGE>
Stockbridge Village III / Fund VI - Fund VII Joint Venture
----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental Income $ 59,244 $68,573
Expenses:
Depreciation 22,714 21,452
Management & leasing expenses 8,231 7,483
Other operating expenses 33,217 13,473
-------- -------
64,162 42,408
-------- -------
Net (loss) income $ (4,918) $26,165
======== =======
Occupied % 82% 87%
Partnership Ownership % 43.0% 42.8%
Cash Distribution to Partnership $ 8,125 $26,877
Net (Loss) Income Allocated to the
Partnership $ (2,123) $14,975
</TABLE>
A net loss is reflected for first quarter of 1998, as compared to net
income of $26,165 for the same period in 1997. The loss was due to a
decrease in rental income and an increase in expenses which were the result
of Kenny Rogers Roasters, a restaurant, which vacated its leased space in
the first quarter of 1998. A bad debt reserve is being recorded, and the
receivable due from this tenant has been turned over to lawyers for
collection. Efforts are being made to re-lease this space.
The Partnership's ownership percentage in the Fund VI - Fund VII Joint
Venture increased to 43.0% for 1998, as compared to 42.8% in 1997, due to
additional fundings by the Partnership, which increased the Partnership's
ownership in the Fund VI - Fund VII Joint Venture.
13
<PAGE>
Holcomb Bridge Road Project / Fund II, III, VI,VII Joint Venture
----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental Income $213,235 $160,185
Expenses:
Depreciation 93,904 66,130
Management & leasing expenses 29,364 20,580
Other operating expenses 23,033 30,307
-------- --------
146,301 117,017
-------- --------
Net income $ 66,934 $ 43,168
======== ========
Occupied % 94% 63%
Partnership Ownership % 26.9% 26.0%
Cash Distribution to Partnership $ 45,935 $ 28,447
Net Income Allocated to the
Partnership $ 17,998 $ 11,232
</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, VII Joint Venture. Development is being completed on two
buildings containing a total of approximately 49,500 square feet of space.
As of March 31, 1998, fourteen tenants are occupying approximately 46,600
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, 1998, compared to the same quarter of 1997, are due
to the five additional tenants occupying the property in 1998, as compared
to the first quarter of 1997.
The Partnership's ownership percentage in the Fund II-III-VI-VII Joint
Venture increased to 26.9% in 1998, as compared to 26.0% in 1997, due to
additional funding by the Partnership.
14
<PAGE>
Stockbridge Village I Expansion / Fund VI - Fund VII Joint Venture
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental Income $71,087 $ 31,910
Expenses:
Depreciation 34,652 22,374
Management & leasing expenses 9,508 3,409
Other operating expenses 9,521 8,522
------- --------
53,681 34,305
------- --------
Net income (loss) $17,406 $ (2,395)
======= ========
Occupied % 79% 41%
Partnership Ownership % 43.0% 42.8%
Cash Distribution to Partnership $21,452 $ 4,530
Net Income (Loss) Allocated to the
Partnership $ 7,466 $ (1,024)
</TABLE>
Rental income, expenses and net income increased for the first quarter of
1998, as compared to the same period in 1997, due primarily to lease up
efforts and increased occupancy at this property. Negotiations are being
conducted to lease the remaining space.
The Partnership's ownership percentage in the Fund VI - Fund VII Joint
Venture increased to 43.0% for 1998, as compared to 42.8% in 1997, due to
additional funding by the Partnership which increased the Partnership's
ownership interest in the Fund VI - Fund VII Joint Venture.
15
<PAGE>
BellSouth Property / Fund VI - Fund VII - Fund VIII Joint Venture
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental Income $380,277 $379,050
Interest Income 2,074 1,976
-------- --------
382,351 381,026
-------- --------
Expenses:
Depreciation 110,889 110,889
Management & leasing expenses 47,815 45,173
Other operating expenses 87,410 83,967
-------- --------
246,114 240,029
-------- --------
Net income $136,237 $140,997
======== ========
Occupied % 100% 100%
Partnership Ownership % 34.3% 36.4%
Cash Distribution to Partnership $ 87,499 $ 93,688
Net Income Allocated to the
Partnership $ 46,662 $ 51,297
</TABLE>
Net income has decreased slightly due primarily to differences in the
annual adjustment for prior year common area maintenance billings to
tenants. Cash distributions and net income allocated to the Partnership
decreased in 1998, as compared to 1997, due primarily to additional funding
by Wells Fund VIII, which decreased the Partnership's ownership interest in
the Fund VI - VII - VIII Joint Venture.
16
<PAGE>
Tanglewood Commons / Fund VI - VII - VIII Joint Venture
-------------------------------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Two Months Ended
-------------------------- ------------------------
March 31, 1998 March 31, 1997
-------------- ---------------
<S> <C> <C>
Revenues:
Rental income $182,613 $49,534
Interest income 5,138 3,600
-------- -------
187,751 53,134
-------- -------
Expenses:
Depreciation 60,427 31,106
Management & leasing expenses 14,819 3,164
Other operating expenses 25,102 21,906
-------- -------
100,348 56,176
-------- -------
Net income (loss) $ 87,403 $(3,042)
======== =======
Occupied % 87% 70%
Partnership's Ownership % in the Fund VI -
Fund VII - Fund VIII Joint Venture 34.3% 36.4%
Cash Distribution to Partnership $ 50,132 $10,210
Net Income (Loss) Allocated to the
Partnership $ 29,936 $(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.
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 when all tenant
improvements are completed.
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 the complete prior year's period are not available.
17
<PAGE>
Interest income was generated from construction dollars, not as yet funded on
construction, being invested in interest bearing accounts.
Cherokee Commons/ Fund I, II, II-OW, VI, VII Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------
March 31, 1998 March 31, 1997
-------------- --------------
<S> <C> <C>
Revenues:
Rental income $228,977 $217,439
Interest income 22 18
-------- --------
228,999 217,457
-------- --------
Expenses:
Depreciation 110,563 107,525
Management & leasing expenses 25,751 31,541
Other operating expenses 3,131 24,119
-------- --------
139,445 163,185
-------- --------
Net income $ 89,554 $ 54,272
======== ========
Occupied % 91% 91%
Partnership's Ownership % in the Fund I,
II, II-OW, VI, VII Joint Venture 10.7% 10.7%
Cash Distribution to Partnership $ 20,156 $ 19,571
Net Income Allocated to the
Partnership $ 9,589 $ 5,811
</TABLE>
Rental income increased in 1998 over 1997 due primarily to a one time adjustment
made to the straight line rent schedule. Management and leasing expenses
decreased in 1998, as compared to 1997, due to decreased leasing commissions.
The decrease in operating expenses in 1998, as compared to 1997, are due to
decreased expenditures for tenant improvements, common area expenses, and legal
fees.
18
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the first quarter of
1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WELLS REAL ESTATE FUND VI, L.P.
(Registrant)
Dated: May 11, 1998 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 224,353
<SECURITIES> 19,324,550
<RECEIVABLES> 451,367
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 300
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,003,236
<CURRENT-LIABILITIES> 437,428
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,565,808
<TOTAL-LIABILITY-AND-EQUITY> 20,003,236
<SALES> 0
<TOTAL-REVENUES> 234,159
<CGS> 0
<TOTAL-COSTS> 18,569
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 215,590
<INCOME-TAX> 215,590
<INCOME-CONTINUING> 215,590
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 215,590
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0
</TABLE>
