<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, 1999 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
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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, 1999
and December 31, 1998................................. 3
Statements of Income for the Three Months and
Nine Months Ended September 30, 1999 and 1998......... 4
Statement of Partners' Capital
for the Year Ended December 31, 1998,
and the Nine Months Ended September 30, 1999.......... 5
Statements of Cash Flows for the Nine Months
Ended September 30, 1999 and 1998..................... 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........................................... 20
2
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WELLS REAL ESTATE FUND VI, L.P.
(a Georgia Public Limited Partnership)
Balance Sheets
<TABLE>
<CAPTION>
Assets September 30, 1999 December 31, 1998
------ ------------------ -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $18,118,993 $18,753,866
Cash and cash equivalents 167,324 145,888
Due from affiliates 449,177 427,734
Deferred project costs 307 888
Prepaid expenses and other assets 300 300
----------- -----------
Total assets $18,736,101 $19,328,676
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distribution payable $ 460,816 $ 427,995
----------- -----------
Partners' capital:
Class A - 2,191,470 units outstanding at
September 30, 1999, and 2,187,470 at
December 30, 1998 18,275,285 18,608,322
Class B - 308,530 units outstanding at
September 30, 1999, and 312,242 at
December 30,1998 0 292,359
----------- -----------
Total partners' capital 18,275,285 18,900,681
----------- -----------
Total liabilities and partners' capital $18,736,101 $19,328,676
=========== ===========
</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, 1999 Sept 30,1998 Sept 30, 1999 Sept 30, 1998
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Interest income $ 1,641 $ 2,701 $ 4,760 $ 9,293
Equity in income of joint ventures
(Note 2) 244,990 225,423 777,174 692,406
-------- --------- ---------- ----------
246,631 228,124 781,934 701,699
======== --------- ---------- ----------
Expenses:
Legal and accounting 199 473 19,054 14,974
Computer costs 2,559 2,341 7,240 6,195
Partnership administration 11,444 15,093 43,517 38,099
Amortization of organization costs 0 0 0 1,563
-------- --------- ---------- ----------
14,202 17,907 69,811 60,831
-------- --------- ---------- ----------
Net income $232,429 $ 210,217 $ 712,123 $ 640,868
======== ========= ========== ==========
Net income allocated to Class A Limited Partners $232,429 $ 438,480 $1,017,369 $1,328,398
Net loss allocated to Class B Limited Partners $ 0 $(228,263) $ (305,246) $ (687,530)
Net income per Class A Limited Partner Unit $ 0.11 $ 0.20 $ 0.47 $ 0.62
Net loss per Class B Limited Partner Unit $ 0 $ (0.74) $ (1.36) $ (2.10)
Cash distribution per Class A Limited
Partner Unit $ 0.21 $ 0.20 $ 0.61 $ 0.60
</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, 1998 AND THE NINE MONTHS ENDED
SEPTEMBER 30, 1999
<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, 1997 2,158,895 $18,525,190 341,105 $ 1,260,483 $ 0 $19,785,673
Net income (loss) 0 1,770,058 0 (914,270) 0 855,788
Partnership distributions 0 (1,740,780) 0 0 0 (1,740,780)
Class B conversion elections 28,862 53,854 (28,862) (53,854) 0 0
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, December 31, 1998 2,187,757 18,608,322 312,243 292,359 0 18,900,681
Net income (loss) 0 1,017,369 0 (305,246) 0 712,123
Partnership distributions 0 (1,337,519) 0 0 0 ( 1,337,519)
Class B conversion elections 3,713 (12,887) (3,713) 12,887 0 0
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, September 30, 1999 2,191,470 $18,275,285 308,530 $ 0 $ 0 $18,275,285
=========== =========== =========== =========== =========== ===========
</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, 1999 Sept 30, 1998
------------- -------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 712,123 $ 640,868
Adjustments to reconcile net earnings to net
cash used in operating activities:
Equity in income of joint venture (777,174) (692,406)
Amortization of organization costs 0 1,563
------------- -------------
Net cash used in
operating activities (65,051) (49,975)
------------- -------------
Cash flow from investing activities:
Distributions received from joint
ventures 1,405,127 1,357,495
Investment in joint ventures ( 13,942) ( 93,424)
------------- -------------
Net cash provided by investing
activities 1,391,185 1,264,071
------------- -------------
Cash flow from financing activities:
Partnership distributions paid (1,304,698) (1,307,297)
------------- -------------
Net increase (decrease) in cash and
cash equivalents 21,436 ( 93,201)
Cash and cash equivalents, beginning of year 145,888 268,337
------------- -------------
Cash and cash equivalents, end of period $ 167,324 $ 175,136
============= =============
Supplemental schedule of noncash investing
activities-deferred project costs applied
to investing activities $ 581 $ 0
------------- -------------
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND VI, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statement
(1) 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, 1999, 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, 1998.
(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, 1998.
(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, 1998.
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
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, 1999, the properties owned by the Partnership were 97%
occupied as compared to 95% occupied at September 30, 1998. Gross revenues
of the Partnership were $781,934 for the nine months ended September 30,
1999, as compared to $701,699 for the same period in 1998. The increase in
revenues is attributed primarily to increased earnings from joint ventures
caused by increased occupancy at Stockbridge Village II and III offset by
the reduction in interest income due to decreased funds available to earn
interest.
Expenses of the Partnership were $69,811 for 1999, as compared to $60,831
for 1998. The increase in expenses for 1999, as compared to 1998, was
primarily due to increased partnership administration expenses and
accounting fees.
Net income of the Partnership was $712,123 for the nine months ended
September 30, 1999, as compared to $640,868 for the same period in 1998.
The increase in net income for 1999, from 1998, is due primarily to
increased revenues offset by a increase in expenses as noted above.
Net cash used in operating activities increased from $49,975 in 1998 to
$65,051 in 1999. This increase was due primarily to increased expenses and
decreased interest income. Net cash provided by investing activities
increased for the nine months ended September 30, 1999, as compared to the
same period in 1998, due primarily to a decrease in investments in joint
ventures and an increase in joint venture distributions. Partnership
distributions also decreased slightly in 1999, as compared to 1998. These
changes produced cash and cash equivalents of $175,136 and $167,324 at
September 30, 1998, and 1999, respectively.
The Partnership made cash distributions to Limited Partners holding Class A
Units of $.21 for the three months ended September 30, 1999 as compared to
distributions of $.20 per Class A Unit for the same period in 1998. No cash
distributions 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.
Year 2000
---------
The Partnership is presently reviewing the potential impact of Year 2000
compliance issues on its information systems and business operations. A
full assessment of Year 2000 compliance issues was begun in late 1997 and
was completed by March 31, 1999. Renovations and replacements of equipment
have been and are being made as warranted. The costs incurred by the
Partnership and its affiliates thus far for renovations and replacements
have been immaterial. As of September 30, 1999, all testing of systems has
been completed.
9
<PAGE>
As to the status of the Partnerships' information technology systems, it is
presently believed that all major systems and software are Year 2000
compliant. At the present time, it is believed that all major non-
information technology systems are Year 2000 compliant. The cost to upgrade
any noncompliance systems is believed to be immaterial.
The Partnership has confirmed with the Partnership's vendors, including
third-party service providers such as banks, that their systems are Year
2000 compliant.
The Partnership relies on computers and operating systems provided by
equipment manufacturers, and also on application software designed for use
with its accounting, property management and investment portfolio tracking.
The Partnership has preliminary determined that any costs, problems or
uncertainties associated with the potential consequences of Year 2000
issues are not expected to have a material impact on the future operations
or financial condition of the Partnership. The Partnership will perform due
diligence as to the Year 2000 readiness of each property owned by the
Partnership and each property contemplated for purchase by the Partnership.
The Partnership's reliance on embedded computer systems (i.e.
microcontrollers) is limited to facilities related matters, such as office
security systems and environmental control systems.
The Partnership is currently formulating contingency plans to cover any
areas of concern. Alternate means of operating the business are being
developed in the unlikely circumstance that the computer and phone systems
are rendered inoperable. An off-site facility from which the Partnership
could operate is being sought as well as alternate means of communication
with key third-party vendors. A written plan is being developed for testing
and dispensation to each staff member of the General Partner of the
Partnership.
Management believes that the Partnership's risk of Year 2000 problems is
minimal. In the unlikely event there is a problem, the worst case scenarios
would include the risks that the elevator or security systems within the
Partnership's properties would fail or the key third-party vendors upon
which the Partnership relies would be unable to provide accurate investor
information. In the event that the elevator shuts down, the Partnership has
devised a plan for each building whereby the tenants will use the stairs
until the elevators are fixed. In the event that the security system shuts
down, the Partnership has devised a plan for each building to hire
temporary on-site security guards. In the event that a third-party vendor
has Year 2000 problems relating to investor information, the Partnership
intends to perform a full system back-up of all investor information as of
December 31, 1999, so that the Partnership will have accurate hard-copy
investor information.
10
<PAGE>
Property Operations
- -------------------
As of September 30, 1999, 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, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $179,374 $179,374 $538,124 $538,124
-------- -------- -------- --------
Expenses:
Depreciation 73,008 73,005 219,024 219,015
Management & leasing expenses 7,242 7,242 21,726 20,140
Other operating expenses 2,643 4,099 7,506 13,887
-------- -------- -------- --------
82,893 84,346 248,256 253,042
-------- -------- -------- --------
Net income $ 96,481 $ 95,028 $289,868 $285,082
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 53.6% 53.5% 53.6% 53.5%
Cash Distribution to Partnership $ 91,700 $ 90,742 $275,219 $271,379
Net Income Allocated to the
Partnership $ 51,691 $ 50,811 $155,235 $152,433
</TABLE>
Net income increased and expenses decreased for the nine months ended September
30, 1999, as compared to 1998, due primarily to an insurance reimbursement from
the tenant in 1999, which was recorded in the second quarter of 1999, in other
operating expenses.
The Partnership's ownership interest in the Fund V - Fund VI Joint Venture
increased due to additional funding by the Partnership in 1999, which caused an
increase in the Partnership's ownership interest in the Fund V - Fund VI Joint
Venture.
11
<PAGE>
Stockbridge Village II/Fund V - Fund VI Joint Venture
- -----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------- ----------------------------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $75,654 $59,070 $230,964 $176,958
------- ------- -------- --------
Expenses:
Depreciation 26,304 25,425 78,039 76,553
Management & leasing expenses 9,921 7,057 26,930 22,731
Other operating expenses 17,021 11,840 33,304 36,033
------- ------- -------- --------
53,246 44,322 138,273 135,317
------- ------- -------- --------
Net income $22,408 $14,748 $ 92,691 $ 41,641
======= ======= ======== ========
Occupied % 100% 72% 100% 72%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 53.6% 53.5% 53.6% 53.5%
Cash Distribution to Partnership $23,783 $20,546 $ 81,939 $ 60,396
Net Income Allocated to the
Partnership $12,005 $ 7,885 $ 49,645 $ 22,265
</TABLE>
Rental income, net income and cash distribution to the Partnership increased in
1999, as compared to 1998, due primarily to increased occupancy. The
Partnership's ownership percentage in the Fund V - Fund VI Joint Venture
increased due to additional fundings by the Partnership which caused an increase
in the Partnership's ownership interest in the Fund V - Fund VI Joint Venture.
12
<PAGE>
The Marathon Building/Fund V-VI-VII Joint Venture
- -------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ----------------------------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $243,182 $242,755 $728,690 $728,693
-------- -------- -------- --------
Expenses:
Depreciation 87,646 87,647 262,939 262,939
Management & leasing expenses 14,627 9,890 37,314 29,670
Other operating expenses 4,181 3,044 14,592 9,785
-------- -------- -------- --------
106,454 100,581 314,845 302,394
-------- -------- -------- --------
Net income $136,728 $142,174 $413,845 $426,299
======== ======== ======== ========
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 $ 94,586 $ 97,111 $285,633 $291,239
Net Income Allocated to the
Partnership $ 57,194 $ 59,421 $173,112 $178,321
</TABLE>
Rental income remained relatively stable for the nine months ended September
30, 1999 as compared to the nine months ended September 30, 1998.
The increase in management and leasing fees for the nine months ended September
30, 1999 was due to an under accrual of fees in 1998. The increase in
operating expenses was due primarily to increases in accounting and
administrative fees.
13
<PAGE>
Stockbridge Village III / Fund VI - Fund VII Joint Venture
----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $76,916 $59,652 $233,518 $178,405
------- ------- -------- --------
Expenses:
Depreciation 20,711 22,781 65,754 68,273
Management & leasing expenses 9,260 20,952 27,999 37,316
Other operating expenses 10,105 22,325 19,683 91,679
------- ------- -------- --------
40,076 66,058 113,436 197,268
------- ------- -------- --------
Net income (loss) $36,840 $(6,406) $120,082 $(18,863)
======= ======= ======== ========
Occupied % 100% 82% 100% 82%
Partnership's Ownership % in the
Fund VI - Fund VII Joint Venture 43.7% 43.4% 43.7% 43.4%
Cash Distribution to Partnership $27,376 $ 7,598 $ 80,913 $ 22,803
Net Income (Loss) Allocated to the
Partnership $16,100 $(2,758) $ 52,478 $ (8,127)
</TABLE>
Rental income, net income and cash distributions increased for the nine months
ended September 30, 1999, as compared to the nine months ended September 30,
1998, due primarily to increased occupancy at the property. Operating expenses
decreased as compared to the same period of 1998, due to bad debt expense
recorded in 1998. Management and leasing expenses decreased in 1999, due to a
writeoff in 1998 of leasing fees related to the bad debt expense.
The Partnership's ownership percentage in the Fund VI-Fund VII Joint Venture
increased to 43.7% for 1999, as compared to 43.4% in September 30, 1998, due to
additional fundings by the Partnership, which increased the Partnership's
ownership in the Fund VI-Fund VII Joint Venture.
14
<PAGE>
Holcomb Bridge Road Project / Fund II, III, VI, VII Joint Venture
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------- -----------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $213,028 $226,233 $670,852 $648,113
-------- -------- -------- --------
Expenses:
Depreciation 79,605 94,128 277,862 282,161
Management & leasing expenses 22,263 20,198 93,200 79,450
Other operating expenses 14,889 27,664 39,670 64,494
-------- -------- -------- --------
116,757 141,990 410,732 426,105
-------- -------- -------- --------
Net income $ 96,271 $ 84,243 $260,120 $222,008
======== ======== ======== ========
Occupied % 94% 100% 94% 100%
Partnership's Ownership % 26.9% 26.9% 26.9% 26.9%
Cash Distribution to Partnership $ 45,857 $ 50,834 $136,915 $143,617
Net Income Allocated to the
Partnership $ 25,858 $ 22,659 $ 69,868 $ 59,561
</TABLE>
Rental income has increased for the nine months ended September 30, 1999, as
compared to the nine months ended September 30, 1998, due primarily to an
underestimate of straight line rent adjustments in 1998. Expenses decreased due
to a decrease in 1999 property taxes.
15
<PAGE>
Stockbridge Village I Expansion / Fund VI - Fund VII Joint Venture
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------- ------------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $67,729 $73,471 $212,355 $219,153
------- ------- -------- --------
Expenses:
Depreciation 37,350 35,003 111,553 104,657
Management & leasing expenses 14,104 10,175 31,831 29,912
Other operating expenses 3,811 (529) 4,797 13,848
------- ------- -------- --------
55,265 44,649 148,181 148,417
------- ------- -------- --------
Net income $12,464 $28,822 $ 64,174 $ 70,736
======= ======= ======== ========
Occupied % 86% 79% 86% 79%
Partnership's Ownership % in the Fund VI-
Fund VII Joint Venture 43.7% 43.4% 43.7% 43.4%
Cash Distribution to Partnership $27,933 $27,263 $ 92,826 $ 72,218
Net Income Allocated to the
Partnership $ 5,447 $12,440 $ 28,045 $ 30,460
</TABLE>
Rental income decreased for the nine months ended September 30, 1999, as
compared to the nine months ended September 30, 1998, due primarily to an
overestimate of straight line rent adjustments in 1998. Expenses remained
relatively stable for the nine months ended September 30, 1999, as compared to
the nine months ended September 30, 1998.
Cash distributions to the Partnership increased due primarily to increased cash
revenue related to increased occupancy for the nine months ended September 30,
1999 as compared to the same period of 1998.
The Partnership's ownership percentage in the Fund VI - Fund VII Joint Venture
increased to 43.7% for 1999, as compared to 43.4% in September 30, 1998, due to
additional fundings by the Partnership, which increased the Partnership's
ownership in the Fund VI-Fund VII Joint Venture.
16
<PAGE>
BellSouth Building / Fund VI - Fund VII - Fund VIII Joint Venture
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------- -----------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $380,278 $380,278 $1,140,832 $1,140,832
Interest income 1,159 2,096 3,461 6,268
-------- -------- ---------- ----------
381,437 382,374 1,144,293 1,147,100
-------- -------- ---------- ----------
Expenses:
Depreciation 111,606 110,985 334,818 332,827
Management & leasing expenses 47,891 47,414 144,824 142,610
Other operating expenses 111,440 121,718 321,275 311,783
-------- -------- ---------- ----------
270,937 280,117 800,917 787,220
-------- -------- ---------- ----------
Net income $110,500 $102,257 $ 343,376 $ 359,880
======== ======== ========== ==========
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 $ 78,929 $ 75,893 $ 240,856 $ 245,826
Net Income Allocated to the Partnership $ 37,846 $ 35,023 $ 117,607 $ 123,260
</TABLE>
Net income and cash distributions for the nine months ended September 30,1999,
as compared to the same period in 1998 have decreased slightly due primarily to
increased expenditures in electricity and lighting replacement while net income
and cash distributions increased slightly for the three months ended September
30, 1999, as compared to the same period in 1998.
17
<PAGE>
Tanglewood Commons / Fund VI - VII - VIII Joint Venture
- -------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Eight Months Ended
------------------ ----------------- ------------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $192,850 $183,587 $579,169 $548,339
Interest income 2,374 4,345 7,663 14,070
-------- -------- -------- --------
195,224 187,932 586,832 562,409
-------- -------- -------- --------
Expenses:
Depreciation 64,677 61,235 190,779 182,721
Management & leasing expenses 16,639 14,953 49,281 44,804
Other operating expenses 18,093 19,150 47,541 24,380
-------- -------- -------- --------
99,409 95,338 287,601 251,905
-------- -------- -------- --------
Net income $ 95,815 $ 92,594 $299,231 $310,504
======== ======== ======== ========
Occupied % 91% 90% 91% 90%
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 $ 55,381 $ 52,296 $168,959 $167,992
Net Income Allocated to the
Partnership $ 32,817 $ 31,714 $102,488 $106,349
</TABLE>
Rental income, depreciation expense and management and leasing expenses have
increased in 1999, as compared to 1998, due to the increased occupancy at the
center for the nine months ended September 30, 1999. Other operating expenses
increased in 1999, over 1998, due primarily to a timing difference in billing
tenants for common area maintenance expenses. Tenants are billed an estimated
amount for the current year common area maintenance which is then reconciled the
following year and the difference billed to the tenant.
18
<PAGE>
Cherokee Commons/ Fund I, II, II-OW, VI, VII Joint Venture
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 1999 Sept 30, 1998 Sept 30, 1999 Sept 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $238,923 $226,733 $703,538 $681,415
Interest income 8 2 47 43
-------- -------- -------- --------
238,931 226,735 703,585 681,458
-------- -------- -------- --------
Expenses:
Depreciation 111,379 111,285 332,906 332,412
Management & leasing expenses 22,863 18,478 73,992 62,966
Other operating expenses 48,342 20,630 28,699 25,680
-------- -------- -------- --------
182,584 150,393 435,597 421,058
-------- -------- -------- --------
Net income $ 56,347 $ 76,342 $267,988 $260,400
======== ======== ======== ========
Occupied % 97% 91% 97% 91%
Partnership's Ownership % 10.7% 10.7% 10.7% 10.7%
Cash Distribution to Partnership $ 18,629 $ 20,348 $ 63,310 $ 63,224
Net Income Allocated to the
Partnership $ 6,034 $ 8,175 $ 28,696 $ 27,884
</TABLE>
Rental income increased in 1999 over 1998, due to increased occupancy. The
increase in operating expenses for the three month period ended September 30,
1999, was due to increased expenditures for tenant improvements, HVAC repairs
and parking lot repairs.
19
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the third quarter of
1999.
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, 1999 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.
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE>5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 167,324
<SECURITIES> 18,118,993
<RECEIVABLES> 449,177
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 607
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,736,101
<CURRENT-LIABILITIES> 460,816
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,275,285
<TOTAL-LIABILITY-AND-EQUITY> 18,736,101
<SALES> 0
<TOTAL-REVENUES> 781,934
<CGS> 0
<TOTAL-COSTS> 69,811
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 712,123
<INCOME-TAX> 712,123
<INCOME-CONTINUING> 712,123
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 712,123
<EPS-BASIC> .47
<EPS-DILUTED> 0
</TABLE>
