<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, 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 _______
--------
1
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund VI, L.P.
-------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
Balance Sheets - September 30, 1998
and December 31, 1997......................................3
Statements of Income for the Three Months and
Nine Months Ended September 30, 1998
and 1997...................................................4
Statement of Partners' Capital
for the Year Ended December 31, 1997,
and the Nine Months Ended September 30, 1998...............5
Statements of Cash Flows for the Nine Months
Ended September 30, 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
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WELLS REAL ESTATE FUND VI, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets September 30, 1998 December 31, 1997
------ ------------------ -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $18,931,349 $19,479,915
Cash and cash equivalents 175,136 268,337
Due from affiliates 442,633 465,733
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 $19,552,084 $20,218,514
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distribution payable $ 440,163 $ 432,841
----------- -----------
Partners' capital:
Class A - 2,190,324 units outstanding 18,614,631 18,525,190
Class B - 309,676 units outstanding 497,290 1,260,483
----------- -----------
Total partners' capital 19,111,921 19,785,673
----------- -----------
Total liabilities and partners' capital $19,552,084 $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 Nine Months Ended
------------------ -----------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Revenues:
Interest income $ 2,701 $ 6,431 $ 9,293 $ 23,685
Equity in income of joint ventures
(Note 2) 225,423 215,860 692,406 606,551
--------- --------- ---------- ----------
228,124 222,291 701,699 630,236
--------- --------- ---------- ----------
Expenses:
Legal and accounting 473 1,483 14,974 16,587
Computer costs 2,341 3,069 6,195 7,213
Partnership administration 15,093 7,437 38,099 41,799
Amortization of organization costs 0 1,562 1,563 4,687
--------- --------- ---------- ----------
17,907 13,551 60,831 70,286
--------- --------- ---------- ----------
Net income $ 210,217 $ 208,740 $ 640,868 $ 559,950
========= ========= ========== ==========
Net loss allocated to General Partners $ 0 $ 0 $ 0 $ 0
Net income allocated to Class A Limited
Partners $ 438,480 $ 432,467 $1,328,398 $1,196,452
Net loss allocated to Class B Limited
Partners $(228,263) $(223,727) $ (687,530) $ (636,502)
Net income per Class A Limited Partner
Unit $ 0.20 $ 0.20 $ 0.62 $ 0.56
Net loss per Class B Limited Partner Unit $ (0.74) $ (0.65) $ (2.10) $ (1.75)
Cash distribution per Class A Limited
Partner Unit $ 0.20 $ 0.19 $ 0.60 $ 0.53
</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 NINE MONTHS ENDED
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
LIMITED PARTNERS TOTAL
----------------
CLASS A CLASS B 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 elections 45,638 239,939 (45,638) (239,939) 0 0
--------- ----------- ------- ---------- -- -----------
BALANCE, DECEMBER 31, 1997 2,158,895 18,525,190 341,105 1,260,483 0 19,785,673
--------- ----------- ------- ---------- -- -----------
Net income (loss) 0 1,328,398 0 (687,530) 0 640,868
Partnership distributions 0 (1,314,620) 0 0 0 (1,314,620)
Class B conversion elections 31,429 75,663 (31,429) ( 75,663) 0 0
--------- ----------- ------- ---------- -- -----------
BALANCE, SEPTEMBER 30, 1998 2,190,324 $18,614,631 309,676 $ 497,290 $0 $19,111,921
========= =========== ======= ========== == ===========
</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>
Nine Months Ended
--------------------
Sept 30, 1998 Sept 30, 1997
-------------- --------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 640,868 $ 559,950
Adjustments to reconcile net earnings to net
cash used in operating activities:
Equity in income of joint venture (692,406) (606,551)
Amortization of organization costs 1,563 4,687
Changes in assets and liabilities:
Prepaids and other assets 0 1,700
Accounts payable 0 (4,482)
----------- -----------
Net cash used in
operating activities (49,975) (44,696)
----------- -----------
Cash flow from investing activities:
Distributions received from joint
ventures 1,357,495 1,094,566
Investment in joint ventures (93,424) (181,719)
----------- -----------
Net cash provided by investing 1,264,071 912,847
activities ----------- -----------
Cash flow from financing activities:
Partnership distributions paid (1,307,297) (1,052,929)
----------- -----------
Net decrease in cash and cash
equivalents (93,201) (184,778)
Cash and cash equivalents, beginning of year 268,337 589,082
----------- -----------
Cash and cash equivalents, end of period $ 175,136 $ 404,304
=========== ===========
Supplemental schedule of noncash investing
activities-deferred project costs applied
to investing activities $ 0 $ 7,530
----------- -----------
</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
-----------
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 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").
As of September 30, 1998, 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
7
<PAGE>
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, 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. For further information, refer
to Form 10-K of the Partnership for the year ended December 31, 1997.
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, 1998, the properties owned by the Partnership were 95%
occupied. Gross revenues of the Partnership were $701,699 for the nine months
ended September 30, 1998, as compared to $630,236 for the nine months ended
September 30, 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 $60,831 for 1998, as compared to $70,286 for
1997. The decrease in expenses for 1998, as compared to 1997, was primarily due
to decreased partnership administration expenses, legal expenses and computer
expenses.
Net income of the Partnership was $640,868 for the nine months ended September
30, 1998, as compared to $559,950 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 increased from $44,696 in 1997 to $49,975
in 1998. This increase was due primarily to decreased interest income offset
partially by decreased expenses. Net cash provided by investing activities
increased for the nine months ended September 30, 1998, as compared to the same
period in 1997, due to a decrease 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 $404,304 and $175,136 at September 30, 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 September 30, 1998, as
compared to $.19 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.
The Partnership expects to continue to meet its short-term liquidity
requirements and budget demands generally through net cash provided by
operations which the Partnership believes will continue to be adequate to meet
both operating requirements and distributions to Limited Partners. At this time,
given the nature of the joint ventures in which the Partnership has invested,
there are no known improvements and renovations to the properties expected to be
funded from cash flow from operations.
The General Partners have verified that all operational computer systems are
year 2000 compliant. This included 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.
9
<PAGE>
Recent Accounting Pronouncements
- --------------------------------
Statement of Financial Accounting Standard (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.
PROPERTY OPERATIONS
- -------------------
As of September 30, 1998, 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, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $179,374 $179,374 $538,124 $538,124
-------- -------- -------- --------
Expenses:
Depreciation 73,005 73,005 219,015 219,015
Management & leasing expenses 7,242 7,772 20,140 23,014
Other operating expenses 4,099 (3,393) 13,887 (15,821)
-------- -------- -------- --------
84,346 77,384 253,042 226,208
-------- -------- -------- --------
Net income $ 95,028 $101,990 $285,082 $311,916
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 53.5% 53.5% 53.5% 53.5%
Cash Distribution to Partnership $ 90,742 $ 94,382 $271,379 $284,409
Net Income Allocated to the
Partnership $ 50,811 $ 54,505 $152,433 $165,539
</TABLE>
Net income decreased and expenses increased for the nine months ended September
30, 1998, as compared to 1997, due primarily to an insurance reimbursement from
the tenant in 1997, which was recorded in other operating expenses.
10
<PAGE>
Stockbridge Village II/Fund V - Fund VI Joint Venture
- -----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $59,070 $ 55,886 $176,958 $175,164
------- -------- -------- --------
Expenses:
Depreciation 25,425 24,580 76,553 68,272
Management & leasing expenses 7,057 11,860 22,731 23,214
Other operating expenses 11,840 21,522 36,033 113,768
------- -------- -------- --------
44,322 57,962 135,317 205,254
------- -------- -------- --------
Net income (loss) $14,748 $(2,076) $ 41,641 $(30,090)
======= ======== ======== ========
Occupied % 72% 72% 72% 72%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 53.5% 53.5% 53.5% 53.5%
Cash Distribution to Partnership $20,546 $ 11,603 $ 60,396 $ 17,551
Net Income (Loss) Allocated to the
Partnership $ 7,885 $(1,108) $ 22,265 $(15,980)
</TABLE>
Other operating expenses decreased and net income increased in 1998, as compared
to 1997, due primarily to a bad debt reserve recorded in 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.
11
<PAGE>
The Marathon Building/Fund V-VI-VII Joint Venture
- -------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $242,755 $242,754 $728,693 $725,465
-------- -------- -------- --------
Expenses:
Depreciation 87,647 87,647 262,939 262,939
Management & leasing expenses 9,890 9,889 29,670 29,781
Other operating expenses 3,044 3,174 9,785 7,937
-------- -------- -------- --------
100,581 100,710 302,394 300,657
-------- -------- -------- --------
Net income $142,174 $142,044 $426,299 $424,808
======== ======== ======== ========
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 $ 97,111 $ 97,056 $291,239 $291,832
Net Income Allocated to the
Partnership $ 59,421 $ 59,417 $178,321 $177,697
</TABLE>
Rental income increased slightly for the nine months ended September 30, 1998,
compared to the same period of 1997. Operating expenses increased slightly, due
primarily to accounting and administrative fees increasing, as compared to 1997.
Cash distributions to the Partnership and net income allocated to the
Partnership remained relatively stable for the nine months ended September 30,
1998 and 1997.
12
<PAGE>
Stockbridge Village III / Fund VI - Fund VII Joint Venture
----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $59,652 $71,127 $178,405 $211,088
------- ------- -------- --------
Expenses:
Depreciation 22,781 21,452 68,273 64,355
Management & leasing expenses 20,952 6,730 37,316 22,712
Other operating expenses 22,325 2,891 91,679 (2,467)
------- ------- -------- --------
66,058 31,073 197,268 84,600
------- ------- -------- --------
Net (loss) income $(6,406) $40,054 $(18,863) $126,488
======= ======= ======== ========
Occupied % 82% 87% 82% 87%
Partnership's Ownership % in the
Fund VI - Fund VII Joint Venture 43.4% 42.7% 43.4% 42.7%
Cash Distribution to Partnership $ 7,598 $26,538 $ 22,803 $ 81,640
Net (Loss) Income Allocated to the
Partnership $(2,758) $17,127 $ (8,127) $ 54,094
</TABLE>
A net loss is reflected for the nine months ended September 30, 1998, as
compared to net income of $126,488 for the same period in 1997. The loss was
due to a decrease in rental income and an increase in other operating 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
in other operating expenses, 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 43.4% for 1998, as compared to 42.7% in 1997, due to additional
funding by the Partnership, which increased the Partnership's ownership interest
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 Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $226,233 $181,877 $648,113 $477,974
-------- -------- -------- --------
Expenses:
Depreciation 94,128 84,509 282,161 220,621
Management & leasing expenses 20,198 26,156 79,450 69,219
Other operating expenses 27,664 48,870 64,494 92,810
-------- -------- -------- --------
141,990 159,535 426,105 382,650
-------- -------- -------- --------
Net income $ 84,243 $ 22,342 $222,008 $ 95,324
======== ======== ======== ========
Occupied % 100% 87% 100% 87%
Partnership's Ownership % in the Fund II,
III, VI, VII Joint Venture 26.9% 26.0% 26.9% 26.0%
Cash Distribution to Partnership $ 50,834 $ 24,703 $143,617 $ 79,871
Net Income Allocated to the
Partnership $ 22,659 $ 5,813 $ 59,561 $ 24,803
</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 has been completed on two buildings with a total
of approximately 49,500 square feet of space.
As of September 30, 1998, fourteen tenants are occupying approximately 49,500
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 and nine
months ended September 30, 1998, compared to the same quarter of 1997, are due
to the property being 100% occupied as of September 30, 1998, as compared to the
same period 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 fundings by the Partnership.
14
<PAGE>
Stockbridge Village I Expansion / Fund VI - Fund VII Joint Venture
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $73,471 $53,719 $219,153 $125,603
------- ------- -------- --------
Expenses:
Depreciation 35,003 29,297 104,657 75,425
Management & leasing expenses 10,175 7,223 29,912 15,709
Other operating expenses (529) 6,066 13,848 29,879
------- ------- -------- --------
44,649 42,586 148,417 121,013
------- ------- -------- --------
Net income $28,822 $11,133 $ 70,736 $ 4,590
======= ======= ======== ========
Occupied % 79% 73% 79% 73%
Partnership's Ownership % in the Fund VI-
Fund VII Joint Venture 43.4% 42.7% 43.4% 42.7%
Cash Distribution to Partnership $27,263 $16,314 $ 72,218 $ 28,045
Net Income Allocated to the
Partnership $12,440 $ 4,759 $ 30,460 $ 1,961
</TABLE>
Rental income, expenses and net income increased for the nine months ended
September 30, 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 43.4% for 1998, as compared to 42.7% 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 Building / Fund VI - Fund VII - Fund VIII Joint Venture
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $380,278 $350,461 $1,140,832 $1,137,024
Interest income 2,096 2,097 6,268 6,114
-------- -------- ---------- ----------
382,374 352,558 1,147,100 1,143,138
-------- -------- ---------- ----------
Expenses:
Depreciation 110,985 110,889 332,827 332,667
Management & leasing expenses 47,414 47,095 142,610 143,554
Other operating expenses 121,718 85,739 311,783 312,986
-------- -------- ---------- ----------
280,117 243,723 787,220 789,207
-------- -------- ---------- ----------
Net income $102,257 $108,835 $ 359,880 $ 353,931
======== ======== ========== ==========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the Fund VI-
Fund VII - Fund VIII Joint Venture 34.3% 34.3% 34.3% 34.3%
Cash Distribution to Partnership $ 75,893 $ 80,100 $ 245,826 $ 253,038
Net Income Allocated to the Partnership $ 35,023 $ 38,005 $ 123,260 $ 126,039
</TABLE>
Net income has increased slightly in 1998, as compared to 1997. Cash
distributions allocated to the Partnership decreased in 1998, as compared to
1997, due primarily to additional funding by Wells Fund VIII in early 1997,
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>
Three Months Ended Nine Months Ended Eight Months Ended
------------------------------ ---------------------- ----------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $183,587 $172,682 $548,339 $382,265
Interest income 4,345 3,890 14,070 10,275
-------- -------- -------- --------
187,932 176,572 562,409 392,540
-------- -------- -------- --------
Expenses:
Depreciation 61,235 53,435 182,721 135,686
Management & leasing expenses 14,953 13,390 44,804 26,727
Other operating expenses 19,150 20,740 24,380 72,352
-------- -------- -------- --------
95,338 87,565 251,905 234,765
-------- -------- -------- --------
Net income $ 92,594 $ 89,007 $310,504 $157,775
======== ======== ======== ========
Occupied % 90% 78% 90% 78%
Partnership's Ownership % in the Fund VI - Fund
VII - Fund VIII Joint Venture 34.3% 34.3% 34.3% 34.3%
Cash Distribution to Partnership $ 52,296 $ 46,261 $167,992 $ 83,120
Net Income Allocated to the
Partnership $ 31,714 $ 31,038 $106,349 $ 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.
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 nine months ended September 30, 1998 and 1997 are
not available. Income has increased for the three months ended September 30,
1998, as compared to the same period in 1997, due to increased occupancy at the
shopping center while expenses have increased due primarily to increased
depreciation.
17
<PAGE>
Cherokee Commons/ Fund I, II, II-OW, VI, VII Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ---------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
-------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $226,733 $215,367 $681,415 $648,779
Interest income 2 10 43 47
-------- -------- -------- --------
226,735 215,377 681,458 648,826
-------- -------- -------- --------
Expenses:
Depreciation 111,285 110,037 332,412 327,259
Management & leasing expenses 18,478 7,017 62,966 57,881
Other operating expenses 20,630 39,455 25,680 103,777
-------- -------- -------- --------
150,393 156,509 421,058 488,917
-------- -------- -------- --------
Net income $ 76,342 $ 58,868 $260,400 $159,909
======== ======== ======== ========
Occupied % 91% 93% 91% 93%
Partnership's Ownership % 10.7% 10.7% 10.7% 10.7%
Cash Distribution to Partnership $ 20,348 $ 8,475 $ 63,224 $ 44,638
Net Income Allocated to the
Partnership $ 8,175 $ 6,304 $ 27,884 $ 17,123
</TABLE>
Rental income increased in 1998 over 1997, due primarily to the one time
adjustment made in 1997, to the straight line rent schedule. The decrease in
operating expenses in 1998, as compared to 1997, are due to decreased
expenditures for tenant improvements, plumbing, 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 third 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: November 10, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 175,136
<SECURITIES> 18,931,349
<RECEIVABLES> 442,633
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,966
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,552,084
<CURRENT-LIABILITIES> 440,163
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,111,921
<TOTAL-LIABILITY-AND-EQUITY> 19,552,084
<SALES> 0
<TOTAL-REVENUES> 701,699
<CGS> 0
<TOTAL-COSTS> 60,831
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 640,868
<INCOME-TAX> 640,868
<INCOME-CONTINUING> 640,868
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 640,868
<EPS-PRIMARY> .62
<EPS-DILUTED> 0
</TABLE>
