<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 June 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
-------- -------
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund VI, L.P.
-------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 1998
and December 31, 1997................................... 3
Statements of Income for the Three Months and
Six Months Ended June 30, 1998
and 1997................................................ 4
Statement of Partners' Capital
for the Year Ended December 31, 1997,
and the Six Months Ended June 30, 1998.................. 5
Statements of Cash Flows for the Six Months
Ended June 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
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets June 30, 1998 December 31, 1997
------ ------------- -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $19,113,074 $19,479,915
Cash and cash equivalents 215,093 268,337
Due from affiliates 452,196 465,733
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 $19,783,329 $20,218,514
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distribution payable $ 443,298 $ 432,841
----------- -----------
Partners' capital:
Class A - 2,160,395 units outstanding 18,544,358 18,525,190
Class B 339,605 units outstanding 795,673 1,260,483
----------- -----------
Total partners' capital 19,340,031 19,785,673
----------- -----------
Total liabilities and partners' capital $19,783,329 $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 Six Months Ended
------------------------------ -----------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Equity in earnings of joint
ventures (Note 2) $ 236,419 $ 190,513 $ 466,983 $ 390,691
Interest income 2,997 8,409 6,592 17,254
--------- --------- --------- ---------
239,416 198,922 473,575 407,945
--------- --------- --------- ---------
Expenses:
Legal and accounting 9,730 6,510 14,501 15,104
Computer costs 1,837 1,651 3,854 4,144
Partnership administration 12,788 17,630 23,006 34,362
Amortization of organization costs 0 1,562 1,563 3,125
--------- --------- --------- ---------
24,355 27,353 42,924 56,735
--------- --------- --------- ---------
Net income $ 215,061 $ 171,569 $ 430,651 $ 351,210
========= ========= ========= =========
Net loss allocated to General Partners 0 0 0 0
Net income allocated to
Class A Limited Partners $ 444,414 $ 381,924 $ 889,918 $ 763,985
Net loss allocated to Class
B Limited Partners $(229,353) $(210,355) $(459,267) $(412,775)
Net income per Class A
Limited Partner Unit $ 0.21 $ 0.18 $ 0.42 $ 0.36
Net loss per Class B Limited
Partner Unit $ (0.68) $ (0.58) $ (1.36) $ (1.10)
Cash distribution per Class A
Limited Partner Unit $ 0.20 $ 0.17 $ 0.40 $ 0.34
</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 SIX MONTHS ENDED
JUNE 30, 1998
<TABLE>
<CAPTION>
LIMITED PARTNERS
------------------------------------------------
CLASS A CLASS B TOTAL
------------------------ ---------------------- GENERAL PARTNERS'
UNITS AMOUNTS UNITS AMOUNTS 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) 0 889,918 0 (459,267) 0 430,651
Partnership distributions 0 (876,293) 0 0 0 (876,293)
Class B conversion elections 1,500 5,543 (1,500) (5,543) 0 0
--------- ----------- ------- ---------- -- -----------
BALANCE,
JUNE 30, 1998 2,160,395 $18,544,358 339,605 $ 795,673 $0 $19,340,031
========= =========== ======= ========== == ===========
</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>
For the Six Months Ended
------------------------------
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 430,651 $ 351,210
Adjustments to reconcile net income to
net cash used in operating activities: (466,983) (390,691)
Equity in income of joint venture
Amortization of organization costs 1,563 3,125
Changes in assets and liabilities:
Prepaid expenses and other assets 0 1,100
Accounts payable 0 (3,577)
--------- ---------
Net cash used in operating activities (34,769) (38,833)
--------- ---------
Cash flow from investing activities:
Distributions received from joint ventures 905,299 723,471
Investment in joint ventures (57,938) (98,326)
--------- ---------
Net cash provided by investing activities 847,361 625,145
--------- ---------
Cash flow from financing activities:
Partnership distributions paid (865,836) (690,188)
--------- ---------
Net decrease cash and cash equivalents (53,244) (103,876)
Cash and cash equivalents, beginning of year 268,337 589,082
--------- ---------
Cash and cash equivalents, end of period $ 215,093 $ 485,206
========= =========
Supplemental schedule of noncash
investing activities:
Deferred project costs applied to
investing activities $ 0 $ 5,630
========= =========
</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 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: (i) 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 June 30, 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 "Holcomb Bridge Road Property") which is
7
<PAGE>
owned by the Fund II-III-VI-VII Joint Venture; and (vii) a four story
office building located in Jacksonville, Florida (the "BellSouth Building")
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 June 30, 1998, the properties owned by the Partnership were 94%
occupied. Gross revenues of the Partnership were $473,575 for the six
months ended June 30, 1998, as compared to $407,945 for the six months
ended June 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 $42,924 for 1998, as compared to $56,735
for 1997. The decrease in expenses for 1998, as compared to 1997, was
primarily due to decreased partnership administration expenses.
Net income of the Partnership was $430,651 for the six months ended June
30, 1998, as compared to $351,210 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 $38,833 in 1997 to
$34,769 in 1998. This decrease was due primarily to decreased expenses
offset partially by decreased interest income. Net cash provided by
investing activities increased for the six months ended June 30, 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 $485,206 and $215,093 at June 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 June 30,
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.
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 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.
9
<PAGE>
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.
PROPERTY OPERATIONS
-------------------
As of June 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 Six Months Ended
------------------------------ -----------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $179,375 $179,375 $358,750 $358,750
Expenses:
Depreciation 73,005 73,002 146,010 146,010
Management & leasing expenses 7,242 7,175 12,898 15,242
Other operating expenses 4,566 4,827 9,788 (12,428)
-------- -------- -------- --------
84,813 85,004 168,696 148,824
-------- -------- -------- --------
Net income $ 94,562 $ 94,371 $190,054 $209,926
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V - VI Joint Venture 53.5% 53.0% 53.5% 53.0%
Cash distribution to Partnership $ 90,494 $ 89,635 $180,637 $190,027
Net income allocated to the
Partnership $ 50,562 $ 50,057 $101,622 $111,034
</TABLE>
Net income decreased and expenses increased for the six months ended June
30, 1998, as compared to 1997, due primarily to an insurance reimbursement
from the tenant in 1997, which is recorded in the first quarter of 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 1998, which increased the Partnership'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 Six Months Ended
----------------------------- -----------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $58,944 $ 55,942 $117,888 $119,278
Expenses:
Depreciation 25,425 22,827 51,128 43,692
Management & leasing expenses 7,072 6,440 15,674 11,354
Other operating expenses 19,669 59,890 24,193 92,246
------- -------- -------- --------
52,166 89,157 90,995 147,292
------- -------- -------- --------
Net income (loss) $ 6,778 $(33,215) $ 26,893 $(28,014)
======= ======== ======== ========
Occupied % 72% 66% 72% 66%
Partnership's Ownership % in the
Fund V Fund VI Joint Venture 53.5% 53.0% 53.5% 53.0%
Cash distribution to Partnership $16,285 $ (6,808) $ 39,850 $ 5,948
Net income (loss) allocated to the
Partnership $ 3,624 $(17,619) $ 14,380 $(14,872)
</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.
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 Six Months Ended
------------------------------ ------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $243,184 $242,755 $485,938 $482,711
Expenses:
Depreciation 87,646 87,646 175,292 175,292
Management & leasing expenses 9,890 9,890 19,780 19,892
Other operating expenses 3,099 3,635 6,741 4,763
-------- -------- -------- --------
100,635 101,171 201,813 199,947
-------- -------- -------- --------
Net income $142,549 $141,584 $284,125 $282,764
======== ======== ======== ========
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 $ 97,267 $ 96,864 $194,128 $194,776
Net income allocated to the
Partnership $ 59,629 $ 59,224 $118,850 $118,280
</TABLE>
Rental income increased for the six months ended June 30, 1998, compared to
the same period of 1997, due to a correction of straight-line rent in the
first quarter 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 six months ended June 30,
1998 and 1997.
12
<PAGE>
Stockbridge Village III/Fund VI-Fund VII Joint Venture
------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ -----------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $59,509 $ 71,388 $118,753 $139,961
Expenses:
Depreciation 22,778 21,451 45,492 42,903
Management & leasing expenses 8,133 8,499 16,364 15,982
Other operating expenses 36,137 (18,831) 69,354 (5,358)
------- -------- -------- --------
67,048 11,119 131,210 53,527
------- -------- -------- --------
Net (loss) income $(7,539) $ 60,269 $(12,457) $ 86,434
======= ======== ======== ========
Occupied % 82% 87% 82% 87%
Partnership's Ownership % in the
Fund VI-Fund VII Joint Venture 43.1% 42.8% 43.1% 42.8%
Cash distribution to Partnership $ 7,080 $ 35,017 $ 15,205 $ 55,102
Net (loss) income allocated to the
Partnership $(3,246) $ 25,777 $ (5,369) $ 36,967
</TABLE>
A net loss is reflected for the six months ended June 30, 1998, as compared
to net income of $86,434 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, 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 43.1% 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 Property/Fund II, III, VI, VII Joint Venture
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $208,645 $135,912 $421,880 $296,097
Expenses:
Depreciation 94,129 69,982 188,033 136,112
Management & leasing expenses 29,888 22,483 59,252 43,063
Other operating expenses 13,797 13,633 36,830 43,940
-------- -------- -------- --------
137,814 106,098 284,115 223,115
-------- -------- -------- --------
Net income $ 70,831 $ 29,814 $137,765 $ 72,982
======== ======== ======== ========
Occupied % 100.0% 72.7% 100.0% 72.7%
Partnership Ownership % 26.4% 26.0% 26.4% 26.0%
Cash distributed to the Partnership $ 46,848 $ 26,721 $ 92,783 $ 55,168
Net income allocated to the
Partnership $ 18,904 $ 7,758 $ 36,902 $ 18,990
</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
with a total of approximately 49,500 square feet.
As of June 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 six months ended June 30, 1998, compared to the same quarter of
1997, are due to the property being 100% occupied as of June 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 26.4% 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 Six Months Ended
------------------------------ -----------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $74,595 $39,974 $145,682 $71,884
Expenses:
Depreciation 35,002 23,754 69,654 46,128
Management & leasing expenses 10,229 5,077 19,737 8,486
Other operating expenses 4,856 15,291 14,377 23,813
------- ------- -------- -------
50,087 44,122 103,768 78,427
------- ------- -------- -------
Net income (loss) $24,508 $(4,148) $ 41,914 $(6,543)
======= ======= ======== =======
Occupied % 79% 49% 79% 49%
Partnership Ownership % 43.1% 42.8% 43.1% 42.8%
Cash distributed to the Partnership $23,503 $ 7,201 $ 44,955 $11,731
Net income (loss) allocated to the
Partnership $10,554 $(1,774) $ 18,020 $(2,798)
</TABLE>
Rental income, expenses and net income increased for the six months ended
June 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 43.1% 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>
Bell South Building / Fund VI - Fund VII - Fund VIII Joint Venture
------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $380,277 $407,513 $760,554 $786,563
Interest income 2,098 2,041 4,172 4,017
-------- -------- -------- --------
382,375 409,554 764,726 790,580
-------- -------- -------- --------
Expenses:
Depreciation 110,953 110,889 221,842 221,778
Management & leasing expenses 47,381 51,286 95,196 96,459
Other operating expenses 102,655 143,280 190,065 227,247
-------- -------- -------- --------
260,989 305,455 507,103 545,484
-------- -------- -------- --------
Net income $121,386 $104,099 $257,623 $245,096
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund VI - Fund VII - Fund VIII
Joint Venture 34.3% 35.3% 34.3% 35.3%
Cash distribution to Partnership $ 82,434 $ 79,250 $169,933 $172,938
Net income allocated to the
Partnership $ 41,575 $ 36,737 $ 88,237 $ 88,034
</TABLE>
Net income has increased slightly due primarily to differences in the
annual adjustment for prior year common area maintenance billings to
tenants. Cash distributions 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>
Three Months Ended Six Months Ended Five Months Ended
------------------------------ ---------------- -----------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $182,139 $160,049 $364,752 $209,583
Interest income 4,587 2,785 9,725 6,385
-------- -------- -------- --------
186,726 162,834 374,477 215,968
-------- -------- -------- --------
Expenses:
Depreciation 61,059 51,145 121,486 82,251
Management & leasing expenses 15,032 10,173 29,851 13,337
Other operating expenses (19,872) 29,706 5,230 51,612
-------- -------- -------- --------
56,219 91,024 156,567 147,200
-------- -------- -------- --------
Net income $130,507 $ 71,810 $217,910 $ 68,768
======== ======== ======== ========
Occupied % 87% 78% 87% 78%
Partnership's Ownership % in the
Fund VI-VII-VIII Joint Venture 34.3% 35.3% 34.3% 35.3%
Cash distribution to Partnership $ 65,564 $ 26,649 $115,696 $ 36,859
Net income allocated to the
Partnership $ 44,699 $ 25,343 $ 74,635 $ 24,236
</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 six months ended June 30, 1998 and 1997
are not available. Income has increased for the three months ended June 30,
1998, as compared to the same period in 1997, due to increased occupancy at
the shopping center while expenses have decreased due primarily to
differences in the annual adjustment for prior year common area maintenance
billings to tenants.
17
<PAGE>
Cherokee Commons/ Fund I, II, II-OW, VI, VII Joint Venture
----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- -----------------------------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $225,705 $215,973 $454,682 $433,412
Interest income 19 19 41 37
-------- -------- -------- --------
225,724 215,992 454,723 433,449
Expenses:
Depreciation 110,564 109,697 221,127 217,222
Management & leasing expenses 18,737 19,323 44,488 50,864
Other operating expenses 1,919 40,203 5,050 64,322
-------- -------- -------- --------
131,220 169,223 270,665 332,408
-------- -------- -------- --------
Net income $ 94,504 $ 46,769 $184,058 $101,041
======== ======== ======== ========
Occupied % 91% 92% 91% 92%
Partnership Ownership % 10.7% 10.7% 10.7% 10.7%
Cash distributed to the Partnership $ 22,720 $ 16,592 $ 42,876 $ 36,163
Net income allocated to the
Partnership $ 10,120 $ 5,008 $ 19,709 $ 10,819
</TABLE>
Rental income increased in 1998 over 1997, due primarily to the one time
adjustment made in 1997 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 second 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: August 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 215,093
<SECURITIES> 19,113,074
<RECEIVABLES> 452,196
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 300
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,783,329
<CURRENT-LIABILITIES> 443,298
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,340,031
<TOTAL-LIABILITY-AND-EQUITY> 19,783,329
<SALES> 0
<TOTAL-REVENUES> 473,575
<CGS> 0
<TOTAL-COSTS> 42,924
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 430,651
<INCOME-TAX> 430,651
<INCOME-CONTINUING> 430,651
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 430,651
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0
</TABLE>
