<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1996 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 33-83852 (1933 Act)
---------------------------------------------
Wells Real Estate Fund VIII, L.P.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2126618
- -------------------------------------- -----------------
(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
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<PAGE>
Form 10-Q
---------
Wells Real Estate Fund VIII,L.P.
--------------------------------
INDEX
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Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1996
and December 31, 1995..................................... 3
Statements of Income for the Three
Months Ended March 31, 1996 and 1995...................... 4
Statement of Partners' Capital
for the Year Ended December 31, 1995,
and the Three Months Ended March 31, 1996................. 5
Statements of Cash Flows for the Three Months
Ended March 31, 1996 and 1995............................. 6
Condensed Notes to Financial Statements................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................................ 13
PART II. OTHER INFORMATION................................................. 16
2
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets March 31, 1996 December 31, 1995
------ -------------- -----------------
<S> <C> <C>
Investment in joint ventures (Note 5) $ 6,079,412 $ 5,786,364
Cash and cash equivalents (Note 1) 20,387,791 19,441,918
Due from affiliates (Note 4) 83,025 23,852
Deferred project costs (Note 2) 870,149 816,147
Deferred offering costs (Note 3) 0 96,972
Organization costs, less accumulated
amortization of $6,250 in December
1995 and $7,812 in March 1996 23,438 25,000
Prepaid expenses and other assets 74,000 64,000
----------- -----------
Total assets $27,517,815 $26,254,253
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Accounts payable and accrued expenses $ 2,451 $ 5,450
Sales commissions payable 367 180,404
Partnership distribution payable 278,065 295,926
Due to affiliates 1,275 139,775
----------- -----------
Total liabilities 282,158 621,555
----------- -----------
Commitments and Contingencies (Note 9)
Partners' capital:
General partners 0 297
Limited partners:
Class A 22,290,683 20,902,202
Class B 4,944,874 4,730,099
Original limited partner 100 100
----------- -----------
Total Partners' capital 27,235,657 25,632,698
----------- -----------
Total liabilities and Partners'
Capital $27,517,815 $26,254,253
=========== ===========
See accompanying condensed notes to financial statements.
</TABLE>
3
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 31, 1996 March 31, 1995
--------------- ---------------
<S> <C> <C>
Revenues:
Equity in earnings of joint ventures (Note 2) $ 63,591 $ 0
Interest Income 230,817 3,000
------- -------
$294,408 $ 3,000
-------- -------
Expenses:
Legal and accounting 4,519 1,000
Computer costs 1,006 2,753
Amortization of organization costs 1,562 0
Administrative Salaries 8,475 4,037
Office Expense 2,591 1,266
Postage 4,609 161
Taxes and licenses 15 15
Other 4,033 0
-------- -------
26,810 9,232
-------- -------
Net income (loss) $267,598 $(6,232)
======== =======
Net loss allocated to General Partners $ (297) $ (62)
Net earnings allocated to Class A Limited Partners $317,233 $ 0
Net loss allocated to Class B Limited Partners $(49,338) $(6,170)
Net income per Class A weighted average Limited
Partner Unit $ 0.12 $ 0
Net loss per weighted average Class B Limited
Partner Unit $ (0.09) $ (0.15)
Cash distribution per Class A Limited Partner
Unit $ 0.11 $ 0
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1995 AND THREE MONTHS ENDED
MARCH 31, 1996
<TABLE>
<CAPTION>
LIMITED PARTNERS'
---------------------------------------
CLASS A CLASS B TOTAL
------- ------- GENERAL PARTNERS'
ORIGINAL UNITS AMOUNT UNITS AMOUNT PARTNERS CAPITAL
--------- --------- ----------- ------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 $100 0 $ 0 0 $ 0 $ 500 $ 600
Net income (loss) 0 0 294,221 0 (20,104) (203) 273,914
Limited Partnership con-
tributions 0 2,456,287 24,562,868 558,167 5,581,674 0 30,144,542
Partnership distributions 0 0 (295,926) 0 0 0 (295,926)
Sales commissions
& discounts 0 0 (2,456,287) 0 (558,168) 0 (3,014,455)
Other offering expenses 0 0 (1,202,674) 0 (273,303) 0 (1,475,977)
---- --------- ----------- ------- ---------- ----- -----------
BALANCE, DECEMBER 31, 1995 $100 2,456,287 $20,902,202 558,167 $4,730,099 $ 297 $25,632,698
==== ========= =========== ------- ---------- ----- -----------
Net income (loss) 0 0 267,598 0 0 0 267,598
Limited Partnership
contributions 0 158,747 1,572,471 31,068 325,676 0 1,898,147
Partnership distributions 0 0 (278,064) 0 0 0 (278,064)
Sales commissions
& discounts 0 0 (157,247) 0 (32,568) 0 (189,815)
Other offering expenses 0 0 (16,277) 0 (78,333) (297) (94,907)
---- --------- ----------- ------- ---------- -----------
BALANCE, MARCH 31, 1996 $100 2,615,034 $22,290,683 589,235 $4,944,874 $ 0 $27,235,657
==== ========= =========== ======= ========== ===== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A GEORGIA PUBLIC LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months Ended
-------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Cash flow from operating activities:
Net income (loss) $ 267,598 $ (6,232)
Adjustments to reconcile net earnings to net
cash used in operating activities:
Equity in income of joint venture (63,591) 0
Distributions received from joint ventures 14,322 0
Distributions to partners from
accumulated earnings (295,925) 0
Amortization of organization costs 1,562 0
Changes in assets and liabilities:
Prepaids and other assets (10,000) (3,000)
Organization costs
Accounts payable (3,000) 5,331
Due to affiliates (42,527) 15,500
----------- ----------
Total adjustments
Net cash provided by (used in) operating activities (131,561) 11,599
------------ ----------
Cash flow from investing activities:
Investment in joint ventures (289,518)
Deferred Project Costs Paid (66,435) (127,440)
----------- ----------
Net cash used in investing activities (355,953) (127,440)
----------- ----------
Cash flows from financing activities:
Limited partners' contributions 1,898,147 3,641,156
Sales commissions paid (369,852) (289,700)
Offering costs paid (94,907) (182,058)
----------- ----------
Net cash provided by financing activities 1,433,388 3,169,398
----------- ----------
Net increase in cash and cash equivalents 945,874 3,053,557
Cash and cash equivalents, beginning of year 19,441,918 600
----------- ----------
Cash and cash equivalents, end of period $20,387,792 $3,054,157
=========== ==========
Supplemental disclosure of noncash
investing activities:
Deferred project costs applied to
joint venture property $ 12,433 $ 0
</TABLE>
6
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statement
March 31, 1996
(1) Summary of Significant Account Policies
---------------------------------------
(a) General
-------
Wells Real Estate Fund VIII, 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 August 15, 1994, for the purpose
of acquiring, developing, owning, operating, improving, leasing, and otherwise
managing for investment purposed income producing commercial or industrial
properties.
On January 6, 1995, the Partnership commenced a public offering of up to
$35,000,000 of limited partnership units ($10.00 per unit) pursuant to a
Registration Statement on Form S-11 filed under the Securities Act of 1933. The
Partnership commenced active operations on February 24, 1995, when it received
and accepted subscriptions for 125,000 units. The offering was terminated on
January 5, 1996, at which time the Partnership had sold 2,613,534 Class A Status
Units, and 590,735 Class B Status Units, held by a total of 1,939 and 302
Limited Partners respectively, for total Limited Partner capital contributions
of $32,042,689. After payment of $1,121,494 in Acquisition and Advisory Fees,
payment of $4,806,403 in selling commissions and organization and offering
expenses, the investment by the Partnership of $3,852,732 in the Fund VII - Fund
VIII Joint Venture and $2,000,000 in the Fund VI-VII-VIII Joint Venture, as of
March 31, 1996, the Partnership was holding net offering proceeds of $20,262,060
available for investment in properties.
As of March 31, 1996, the Partnership owned interests in three properties
through ownership in joint ventures, an office building in Gainesville, Florida,
an office building under construction in Jacksonville, Florida, and a retail
shopping center under construction in Clemmons, North Carolina.
(b) Employees
---------
The Partnership has no direct employees. The employees of Wells Capital,
Inc., a sole general partner of Wells Partners, L.P., a General Partner of the
Partnership, perform a full range of real estate services including leasing and
property management, accounting, asset management and investor relations for the
Partnership.
7
<PAGE>
(c) Insurance
---------
Wells Management Company, Inc., an affiliate of the General Partners,
carries comprehensive liability and extended coverage with respect to all the
properties owned directly or indirectly by the Partnership. In the opinion of
management of the registrant, the properties are adequately insured.
(d) Competition
-----------
The Partnership will experience competition for tenants from owners and
managers of competing projects which may include the General Partners and their
affiliates. As a result, the Partnership may be required to provide free rent,
reduced charges for tenant improvements and other inducements, all of which may
have an adverse impact on results of operations. At the time the Partnership
elects to dispose of its properties, the Partnership will also be in competition
with sellers of similar properties to locate suitable purchasers for its
properties.
(e) Basis of Presentation
---------------------
The financial statements of Wells Real Estate Fund VIII, 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 Forn 10-K for the year ended December
31, 1995.
(f) Partnership Distributions
- -----------------------------
Net Cash From Operations, as defined in the Partnership Agreement, will be
distributed first to Limited Partners holding Class A Status Units on a per Unit
basis until they have received a 10% annual return on their Net Capital
Contributions, as defined in the Partnership Agreement. Further distributions
of Net Cash From Operations will be make to the General Partners until they
receive distributions equal to 10% of the total amount of Net Cash From
Operations distributed. Thereafter, the Limited Partners holding Class A Status
Units will receive 90% of Net Cash From Operations and the General Partners will
receive 10%. No Net Cash From Operations will be distributed to Limited
Partners holding Class B Status Units.
(g) Income Taxes
- ----------------
The Partnership has not requested a ruling from the Internal Revenue Service to
the effect that it will be treated as a partnership and not an association
taxable as a corporation for Federal income tax purposes. The Partnership
requested an opinion of counsel as to its tax status, but such opinion is not
binding upon the Internal Revenue Service.
8
<PAGE>
(h) Statement of Cash Flows
- ---------------------------
For the purpose of the statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. Cash equivalents include cash and short-
term investments.
2) Investment in Joint Venture
---------------------------
The Partnership owns interests in two office buildings and one retail shopping
center through its ownership in joint ventures. 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. The office building in Gainesville, Florida was completed and
occupied, at a rate of 93.7%, in mid-December, 1995. An office building in
Jacksonville, Florida and a retail shopping center in Clemmons, North Carolina
are still under construction. As of March 31, 1996, the Partnership still had
approximately $20,200,000 to invest in properties.
The following describes the properties in which the Partnership owns an interest
as of March 31, 1996:
FUND VII - FUND VIII JOINT VENTURE
- ----------------------------------
On February 10, 1995, the Partnership and Wells Real Estate Fund VII, L.P.
("Wells Fund VII"), a Georgia public limited partnership affiliated with the
Partnership through common general partners, entered into a Joint Venture
Agreement know as Fund VII and Fund VIII Associates (the "Fund VII - Fund VIII
Joint Venture"). The investment objectives of Wells Fund VII are substantially
identical to those of the Partnership. The Partnership holds an approximate 79%
equity interest in the Fund VII - Fund VIII Joint Venture, which owns and
operates an office building as described below. As of March 31, 1996, the
Partnership had contributed $3,852,732 and Wells Fund VII had contributed
$1,021,923 for a total cost of $4,874,655 to the Fund VII -Fund VIII Joint
Venture for the acquisition and development of the property.
Gainesville Property
- --------------------
Wells Fund VII made an initial contribution to the Fund VII - Fund VIII Joint
Venture of $677,534, which constituted the total purchase price and all other
acquisition and development costs expended by the Fund VII - Fund VIII Joint
Venture for the purchase of a 5.0 acre parcel of land in Gainesville, Alachua
County, Florida. An agreement was signed with ADEVCO Corporation to supervise,
manage and coordinate the planning, design, construction and completion of a
62,975 square foot office building, containing 61,468 rentable square feet.
Integra Construction, Inc. acted as the general contractor, and Smallwood,
Reynolds, Stewart, Stewart and Associates, Inc. as the architect. Construction
was completed in December, 1995. It is anticipated that the initial cost of the
building will be approximately $4,900,000 after the remaining unoccupied tenant
space is completed. The occupancy rate as of March 31, 1996 was 93.5%
9
<PAGE>
A 9 year, 11 month lease to occupy 57,457 square feet has been signed with CH2M
Hill, Engineers, Planners, Economists, Scientists, with an option to extend for
an additional five year period. The annual base rent during the initial term
from 1996 through 1997 is $530,313 payable in equal monthly installments of
$44,193. The annual rent for the extended term will be at market rate.
Assuming no options or termination rights, the lease with CH2M Hill will expire
in the year 2005.
As of March 31, 1996, the Partnership had contributed $3,852,732 and Wells Fund
VII had contributed $1,021,923 to the Fund VII - Fund VIII Joint Venture toward
the completion of this project. As of March 31, 1996, the Partnership's equity
interest in the Fund VII - Fund VIII Joint Venture was approximately 79% and
Wells Fund VII's equity interest in the Fund VII - Fund VIII Joint Venture was
approximately 21%. Although the ultimate percentages of ownership in this
property have not yet been finalized, it is currently anticipated that the
remaining costs of approximately $25,500 to complete the project will be
contributed by the Partnership, in which event, upon completion, the Partnership
will own an approximately 79.2% equity interest in the Fund VII - Fund VII Joint
Venture. The Partnership has reserved sufficient funds for this purpose.
FUND VI - VII - VIII JOINT VENTURE
- ----------------------------------
On April 17, 1995, the Partnership, Wells Fund VII and Wells Real Estate Fund
VI, L.P. ("Wells Fund VI"), a Georgia public limited partnership, affiliated
with the Partnership through common general partners, entered into a Joint
Venture Agreement known as the Fund VI, Fund VII, and Fund VIII Associates (the
"Fund VI-VII-VIII Joint Venture"). The investment objectives of Wells Fund VI
are substantially identical to those of the Partnership. As of March 31, 1996,
the Partnership had contributed approximately $2,000,000 for an approximately
13% equity interest in the Fund VI-VII-VIII Joint Venture, which is developing
an office building in Jacksonville, Florida and a multi-tenant retail center in
Clemmons, North Carolina. As of March 31, 1996, Wells Fund VI had contributed
$6,567,688 for an equity interest in the Fund VI-VII-VIII Joint Venture of
approximately 44% , and Wells Fund VII contributed approximately $6,432,312 for
an equity interest in the Fund VI-VII-VIII Joint Venture of approximately 43%.
The total cost to complete both properties is anticipated to be approximately
$17,700,000. Although the ultimate percentages of equity interest in the Fund
VI-VII-VIII Joint Venture have not yet been finally determined, it is
anticipated that the Partnership will contribute the remaining cost of
approximately $2,700,000 needed to complete construction of both projects, in
which event the ultimate equity interests in the Fund VI-VII-VIII Joint Venture
of the Partnership, Wells Fund VI and Wells Fund VII would be approximately 27%,
37%, and 36%, respectively. The Partnership has reserved sufficient funds for
this purpose.
Bell South Property
- -------------------
On April 25, 1995, the Fund VI-VII-VIII Joint Venture purchased a 5.55 acre of
parcel of land in Jacksonville, Florida for a total of $1,245,059 including
closing costs. The land purchase and future construction costs were funded by
capital contributions of $3,500,000 by Wells Fund VI, $3,500,000 by Wells Fund
VII and $2,000,000 by the Partnership.
10
<PAGE>
An agreement was signed with ADEVCO Corporation to supervise, manage and
coordinate the planning, design, construction and completion of a 92,964 square
foot office buildings. McDevitt Street Bovis, Inc. is acting as the general
contractor, and Mayes, Sudderth & Etheridge, Inc. as the architects.
Constructions is anticipated to be completed May, 1996, for a total cost of
approximately $9,000,000, with an expected move-in by Bell South on June 1,
1996.
BellSouth has executed a lease for 66,333 square feet with a term of nine years
and eleven months and an option to extend for an additional five-year period.
The annual base rent during the initial term is $1,016,789 payable in equal
monthly installments of $84,732 during the first five years and $1,116,853
payable in equal monthly installments of $93,071 for the balance of the initial
lease term. The annual rent for the extended term will be at the market rate.
11
<PAGE>
Tanglewood Commons Shopping Center
- ----------------------------------
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 Wells Fund VI.
As of March 31, 1996, Wells Fund VI had contributed $3,067,688 and Wells Fund
VII contributed $2,932,312 to the development of this project. The Partnership
has not yet contributed.
The Fund VI-VII-VIII Joint Venture will develop and construct one large strip
shopping center building containing approximately 81,000 gross square feet on a
12.48 acre tract. The remaining 2.2 acre portion of the property well remain in
a vegetative or natural state.
Total cost 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. An agreement was signed with
Norcom Development, Inc. to supervise, manage and coordinate the planning,
design and construction of the property. Shaak Design Group, Inc. has been
signed as the general contractor, and John S. Clark and Company as the
architect. Ground breaking began in March, 1996.
Harris Teeter, Inc., a regional supermarket chain, executed a lease for a
minimum of 45,000 square feet with an initial term of 20 years. The annul base
rent during the initial term is $488,250. In addition, Harris Teeter has agreed
to pay percentage rents equal to one percent of the amount by which Harris
Teeter's gross sales exceed $35,000,000 for any lease year.
(3) Deferred Project Costs
----------------------
The Partnership pays Acquisitions and Advisory Fees to the General Partners for
acquisition and advisory services. These payments, as provided by the
Partnership Agreement, may not exceed 5% of the Limited Partners' capital
contributions. Acquisition and Advisory Fees paid as of March 31, 1996,
amounted to $1,121,494 and represented approximately 3.5% of the Limited
Partners' capital contributions received. These fees are allocated to specific
properties as they are purchased.
(4) Deferred Offering Costs
-----------------------
Wells Capital, Inc. (the "Company"), the general partner of Wells Partners,
L.P., pays all the offering expenses for the Partnership. The Company may be
reimbursed by the Partnership to extent that such offering expenses do not
exceed 5% of total Limited Partners' capital contributions. As of March 31,
1996, the Partnership had reimbursed the Company for $1,602,134 in offering
expenses, which amounted to approximately 5% of Limited Partners' capital
contributions.
12
<PAGE>
(5) Due To Affiliates
-----------------
Due to Affiliates consists of Acquisition and Advisory Fees, deferred offering
costs, and other operating expenses paid by the Company on behalf of the
Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
----------------------------------------------------------------
RESULTS OF OPERATION.
- ---------------------
The following discussion and analysis should be read in conjunction with 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
form 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.
RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
- ---------------------------------------------------------
(a) General
-------
The Partnership commenced active operations on February 24, 1995, when it
received and accepted subscriptions for 125,000 units. The offering was
terminated on January 5, 1996, at which time the Partnership had sold 2,613,534
Class A Status Units and 590,735 Class B Status Units, held by a total of 1,939
and 302 Limited Partners respectively, for total Limited Partner contributions
of $32,042,689. After payment of $1,121,494 in Acquisition and Advisory Fees,
payment of $4,806,403 in selling commissions and organization and offering
expenses, the investment by the Partnership of $3,563,214 in the Fund VII - Fund
VIII Joint Venture and $2,000,000 in the Fund VI-VII-VIII Joint Venture, as of
March 31, 1996, the Partnership was holding net offering proceeds of $20,262,060
available for investment in properties.
It is anticipated that an additional investment in the Fund VII - Fund VIII
Joint Venture of approximately $25,500 will be required to complete the
Gainesville Property and that an additional investment in the Fund VI-VII-VIII
Joint Venture of approximately $2,700,000 will be required to complete both the
BellSouth Property and the Tanglewood Commons Shopping Center Property. It is
anticipated that the Partnership will contribute approximately $2,700,000 to the
Fund VI-VII-VIII Joint Venture for completion of these projects. Accordingly,
the Partnership has reserved $2,725,500 out of its net offering proceeds of
$20,262,060 available for investment in properties for these purposes.
13
<PAGE>
Gross revenues of the Partnership of $294,408 for the three months ended March
31, 1996, and $3,000 for the three months ended March 31, 1995, were
attributable primarily to interest income earned on funds held by the
Partnership prior to the investment in joint ventures. The equity in income of
joint ventures of $63,591 for the three months ended March 31, 1996, is
primarily the result of CH2M Hill occupying the Gainesville Property for the
entire first quarter. Expenses of the Partnership increased to $26,810 as
compared to $9,232 respectively for the three months ended March 31, 1996 and
1995, as the result of increased activity primarily in accounting, office, and
partnership administrative costs as the Partnership enters its second year of
operations. Net income of the Partnership was $267,598 for the three months
ended March 31, 1996, as compared to a net loss of $6,232 for the first three
months of operations ended March 31, 1995.
For the three months ended March 31, 1996, net income allocated per weighted
average unit to Class A Limited Partners was $0.12, net loss allocated per
weighted average unit to Class B Limited partners was $0.09 and net loss
allocated to General Partners was $0.00 for 1996 as compared to $0.00, $0.15,
and $62.0, respectively , for 1995.
The Partnership's net cash used by operating activities of $131,561 is due
primarily to interest earned on funds held by the Partnership prior to
investment in properties offset by distributions paid to Limited Partners. Net
cash used in investing activities of $355,953 is primarily the result of an
additional investment of $289,518 in the Fund VII - Fund VIII Joint Venture.
Net cash provided by financing activities is primarily the result of raising
$1,898,147 in Limited Partners contributions before deducting commissions and
offering expenses, and therefore, increasing cash and cash equivalents to
$20,387,792 as of March 31, 1996. The net increase in cash and cash equivalents
from $600 of General Partners' contributions at the beginning of the year to
$3,054,157 as of March 31, 1995 was the result of raising $3,641,156 in Limited
Partners' contributions before deducting commissions and offering expenses.
The Partnership's distributions from Net Cash From Operations accrued to Class A
Unit holders for the first quarter of 1996 was $0.11 per weight average unit
which will be paid in May, 1996.
14
<PAGE>
PROPERTY OPERATIONS
- -------------------
As of March 31, 1996, the Partnership owned interests in the following
operational property:
Gainesville Property/Fund VII - Fund VIII Joint Venture
- -------------------------------------------------------
For the Three Months
Ended March 31, 1996
---------------------
Revenues:
Rental Income $136,542
Expenses:
Depreciation 54,337
Management & leasing expenses 13,398
Other operating expenses (651)
--------
$ 67,084
--------
Net income $ 69,458
========
Occupied % 93.5%
Partnership's Ownership % 79.0%
Cash Distribution to Partnership
$ 63,756
Net Income Allocated to the
Partnership $ 54,853
In February, 1995, the Fund VII - Fund VIII Joint Venture acquired a 5.0 acre of
land located in Gainesville, Alachua County, Florida for the purpose of
constructing a 62,975 square foot (61,468 rentable square feet) office building.
A 9 year, 11 month lease to occupy 57,457 square feet was signed by CH2M Hill.
The annual base rent is $530,313 payable in equal monthly installments of
$44,193. The average effective annual rental rate at the CH2M Hill property was
$9.22 per square foot. CH2M Hill occupied their portion of the building in mid-
December, 1995, and therefore, no comparative financial information is
available.
15
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the first quarter of
1996.
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 VIII, L.P.
Dated: May 13, 1996 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.
16
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