<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, 2000 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 0-27888
---------------------------------------------------------
WELLS REAL ESTATE FUND VIII, L.P.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Georgia 58-2126618
-------------------------------------------------------------- ---------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
6200 The Corners Pkwy., 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)
</TABLE>
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 VIII, L.P.
(A Georgia Public Limited Partnership)
INDEX
Page No.
----------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets--September 30, 2000 and December 31, 1999 3
Statements of Income for the Three Months and Nine Months
Ended September 30, 2000 and 1999 4
Statements of Partners' Capital for the Year Ended December
31, 1999 and the Nine Months Ended September 30, 2000 5
Statements of Cash Flows for the Nine Months Ended September
30, 2000 and 1999 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 18
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<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
BALANCE SHEETS
September 30, December 31,
2000 1999
------------- ------------
ASSETS:
Investment in joint ventures (Note 2) $23,456,935 $24,323,418
Cash and cash equivalents 32,669 100,902
Due from affiliates 595,722 535,876
------------- ------------
Total assets $24,085,326 $24,960,196
============= ============
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Accounts payable $ 2,500 $ 0
Partnership distributions payable 619,392 614,277
------------- ------------
Total liabilities 621,892 614,277
------------- ------------
Partners' capital:
Limited partners:
Class A--2,748,603 units and 2,728,425
units as of September 30, 2000 and
December 31, 1999, respectively 23,322,305 23,341,878
Class B--454,666 units and 474,844 units
as of September 30, 2000 and December
31, 1999, respectively 141,129 1,004,041
------------- ------------
Total partners' capital 23,463,434 24,345,919
------------- ------------
Total liabilities and partners'
capital $24,085,326 $24,960,196
============= ============
See accompanying condensed notes to financial statements.
-3-
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
--------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES:
Equity earnings of joint ventures
(Note 2) $ 317,249 $ 331,739 $1,051,791 $1,077,682
Interest income 6,607 1 6,610 3
--------------- ---------------- ---------------- ----------------
323,856 331,740 1,058,401 1,077,685
--------------- ---------------- ---------------- ----------------
EXPENSES:
Legal and accounting 584 200 16,791 18,452
Computer costs 2,354 2,559 8,847 7,240
Partnership administration 9,099 11,195 41,062 44,317
Amortization of organization costs 0 1,562 0 4,687
--------------- ---------------- ---------------- ----------------
12,037 15,516 66,700 74,696
--------------- ---------------- ---------------- ----------------
NET INCOME $ 311,819 $ 316,224 $ 991,701 $1,002,989
=============== ================ ================ ================
NET INCOME ALLOCATED TO CLASS A LIMITED
PARTNERS $ 618,091 $ 614,272 $1,873,738 $1,899,990
=============== ================ ================ ================
NET LOSS ALLOCATED TO CLASS B LIMITED
PARTNERS $(306,272) $(298,048) $ (882,037) $ (897,001)
=============== ================ ================ ================
NET INCOME PER CLASS A LIMITED PARTNER UNIT $ 0.21 $ 0.23 $ 0.67 $ 0.70
=============== ================ ================ ================
NET LOSS PER CLASS B LIMITED PARTNER UNIT $(0.60) $(0.60) $(1.83) $(1.82)
=============== ================ ================ ================
CASH DISTRIBUTION PER CLASS A LIMITED
PARTNER UNIT $ 0.23 $ 0.23 $ 0.69 $ 0.66
=============== ================ ================ ================
</TABLE>
See accompanying condensed notes to financial statements.
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<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1999
AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Limited Partners
-----------------------------------------------------
Class A Class B Total
--------------------------- ------------------------ Partners'
Units Amounts Units Amounts Capital
------------ ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1998 2,674,584 $23,113,046 528,685 $ 2,367,471 $25,480,517
Net income (loss) 0 2,481,559 0 (1,214,613) 1,266,946
Partnership distributions 0 (2,401,544) 0 0 (2,401,544)
Class B conversion elections 53,841 148,817 (53,841) (148,817) 0
------------ ------------ ---------- ----------- -----------
BALANCE, December 31, 1999 2,728,425 23,341,878 474,844 1,004,041 24,345,919
Net income (loss) 0 1,873,738 0 (882,037) 991,701
Partnership distributions 0 (1,874,186) 0 0 (1,874,186)
Class B conversion elections 20,178 (19,125) (20,178) 19,125 0
------------ ------------ ---------- ----------- -----------
BALANCE, September 30, 2000 2,748,603 $23,322,305 454,666 $ 141,129 $23,463,434
============ ============ ========== =========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
-5-
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
---------------------------------------
September 30, September 30,
2000 1999
------------------- ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 991,701 $ 1,002,989
Adjustments to reconcile net income to net cash used in
operating activities:
Equity in income of joint ventures (1,051,791) (1,077,682)
Amortization of organization costs 0 4,687
Changes in assets and liabilities:
Prepaid expenses and other assets 0 (1,820)
Accounts payable 2,500 0
------------------- ------------------
Net cash used in operating activities (57,590) (71,826)
------------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions received from joint ventures 1,858,428 1,948,380
------------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners from accumulated earnings (1,869,071) (1,770,423)
------------------- ------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (68,233) 106,131
CASH AND CASH EQUIVALENTS, beginning of year 100,902 8,792
------------------- ------------------
CASH AND CASH EQUIVALENTS, end of period $ 32,669 $ 114,923
=================== ==================
</TABLE>
See accompanying condensed notes to financial statements.
-6-
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
CONDENSED NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) General
Wells Real Estate Fund VIII, L.P. (the "Partnership") is a Georgia public
limited partnership having Leo 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 purposes income-producing commercial properties.
On January 6, 1995, the Partnership commenced a public offering of up to
$35,000,000 of limited partnership units ($10 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, 1997 when it
received and accepted subscriptions for 125,000 units. The offering was
terminated January 4, 1997 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.
The Partnership owns interest in the following properties through its equity
ownership in the following joint ventures: (i) Fund VII and Fund VIII
Associates, a joint venture between the Partnership and Wells Real Estate
Fund VII, L.P. (the "Fund VII-Fund VIII Joint Venture"); (ii) Fund VI, Fund
VII, and Fund VIII Associates, a joint venture among the Partnership and
Wells Real Estate Fund VI, L.P., and Wells Real Estate Fund VII, L.P. (the
"Fund VI-VII-VIII Joint Venture"); (iii) Fund VIII and Fund IX Associates, a
joint venture between the Partnership and Wells Real Estate Fund IX, L.P.
(the "Fund VIII-Fund IX Joint Venture"); and (iv) Fund VIII-IX-REIT Joint
Venture, a joint venture between Wells OP and the Fund VIII-IX Joint Venture.
As of September 30, 2000, the Partnership owned interests in the following
properties through its ownership in the foregoing joint ventures: (i) a
single-story retail/office building located in Clayton County, Georgia (the
"Hannover Center") and (ii) a two-story office building located in
Gainesville, Florida (the "CH2M Hill") which are owned by the Fund VII-Fund
VIII Joint Venture; (iii) a four-story office building located in
Jacksonville, Florida (the "BellSouth Building") and (iv) a retail shopping
center located in Clemmons, North Carolina (the "Tanglewood Commons") which
are owned by the Fund VI-VII-VIII Joint Venture; and (v) a four-story office
building located in Madison, Wisconsin (the "US Cellular Building"), (vi) a
one-story office building located in Farmers Branch, Texas (the "TCI
Building"), (vii) a two-story office building in Orange County, California
(the "Quest Building"), formerly the "Bake Parkway Building" previously owned
by Fund VIII-IX Joint Venture, which is now owned by the Fund VIII-IX-REIT
Joint Venture, and (viii) a two-story office building located in Boulder
County, Colorado (the "Cirrus Logic Building") which are owned by the Fund
VIII-Fund IX Joint Venture.
-7-
<PAGE>
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, 1999.
(b) Basis of Presentation
The financial statements of Wells Real Estate Fund VIII, L.P. 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 the year ended December 31, 1999.
2. INVESTMENT IN JOINT VENTURES
The Partnership owns interests in six office buildings and two retail centers
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. For further information, refer to the financial
statements and footnotes included in the Partnership's Form 10-K for the year
ended December 31, 1999.
On June 15, 2000, the Fund VIII-IX-REIT Joint Venture was formed between
Wells Operating Partnership, LP ("Wells OP"), a Delaware limited partnership
having Wells Real Estate Investment Trust, Inc. as general partner, and Fund
VIII and Fund IX Associates, a Georgia joint venture partnership between
Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P. (the
"Fund VIII-IX Joint Venture"). On July 1, 2000, the Fund VIII-IX Joint
Venture transferred its interest in the Bake Parkway Property into the Fund
VIII-IX-REIT Joint Venture. The Bake Parkway Building is a two-story office
building containing approximately 65,006 rentable square feet on a 4.4 acre
tract of land in Irvine, California.
A 42-month lease for the entire Bake Parkway Building has been signed by
Quest Software, Inc. Occupancy occurred on August 1, 2000. Quest is a
publicly traded corporation that provides software database management and
disaster recovery services for its clients.
Construction of tenant improvements regarding the Quest lease is anticipated
to cost approximately $1,250,000 and will be funded by Wells OP.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
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 Section 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,
-8-
<PAGE>
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.
1. RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
(a) General
As of September 30, 2000, the developed properties owned by the Partnership
were 98.2% occupied, as compared to 99.2% occupied as of September 30, 1999.
Gross revenues of the Partnership were $1,058,401 for the nine months ended
September 30, 2000 from $1,077,685 for the nine months ended September 30,
1999 due to a decrease in occupancy at the Hannover Center offset partially
by increases in common area maintenance billing to tenants in CH2M Hill
Property and Tanglewood Commons. Total administrative expenses decreased
slightly for the nine months period due primarily to decreases in
administrative salary and amortization costs.
Cash distributions per unit for Class A Limited Partners were $0.23 for both
the three months ended September 30, 2000 and September 30, 1999. No cash
distributions were made by the Partnership to the Limited Partners holding
Class B units or to the General Partner. The Partnership anticipates that
distributions will continue to be paid on a quarterly basis on a level at
least consistent with 1999.
Net cash provided by investing activities decreased to $1,858,428 for 2000
from $1,948,380 in 1999, due primarily to decreased distributions from joint
ventures. Net cash used in financing activities increased to $1,869,071 for
2000 from $1,770,423 for 1999 due to increased distributions to partners. As
a result, cash and cash equivalents decreased from $114,923 to $32,669 as of
September 30, 1999 and 2000, respectively.
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 operations.
-9-
<PAGE>
2. PROPERTY OPERATIONS
As of September 30, 2000 the Partnership owned interest in the following
operational properties:
CH2M Hill/Fund VII-Fund VIII Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------- -------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $144,034 $144,035 $432,104 $431,747
------------- ------------- ------------- -------------
Expenses:
Depreciation 65,941 66,077 197,822 202,902
Management and leasing expenses 26,197 17,890 73,099 65,886
Other operating expenses (2,159) 16,225 (31,842) 5,806
------------- ------------- ------------- -------------
89,979 100,192 239,079 274,594
------------- ------------- ------------- -------------
Net income $ 54,055 $ 43,843 $193,025 $157,153
============= ============= ============= =============
Occupied percentage 100% 100% 100% 100%
============= ============= ============= =============
Partnership's ownership percentage in the
Fund VII-Fund VIII Joint Venture 63.4% 63.4% 63.4% 63.4%
============= ============= ============= =============
Cash distribution to the Partnership $ 77,333 $ 70,967 $251,541 $229,197
============= ============= ============= =============
Net income allocated to the Partnership $ 34,245 $ 27,774 $122,280 $ 99,556
============= ============= ============= =============
</TABLE>
Rental income remained stable for the three months and nine months ended
September 30, 2000 as compared to the same period in 1999. Net income and
cash distributions to the Partnership increased for the three month and
nine month period, as compared to 1999, due to an increase in common area
maintenance billings to the tenants in 2000. 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.
Management and leasing fees reimbursement were included in other operating
expenses.
-10-
<PAGE>
The Hannover Center/Fund VII-Fund VIII Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- --------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 26,672 $ 53,354 $ 80,014 $165,847
------------ ----------- ------------ ------------
Expenses:
Depreciation 21,655 10,981 64,513 32,944
Management and leasing expenses 4,289 3,746 12,931 16,788
Other operating expenses 11,156 3,683 35,117 6,601
------------ ----------- ------------ ------------
37,100 18,410 112,561 56,333
------------ ----------- ------------ ------------
Net (loss) income $(10,428) $ 34,944 $ (32,547) $109,514
============ ============ ============ ============
Occupied percentage 50% 100% 50% 100%
============ ============ ============ ============
Partnership's ownership percentage in the
Fund VII-Fund VIII Joint Venture 63.4% 63.4% 63.4% 63.4%
============ ============ ============ ============
Cash distribution to the Partnership $ 7,547 $ 28,920 $ 15,281 $ 83,615
============ ============ ============ ============
Net (loss) income allocated to the
Partnership $ (6,607) $ 22,137 $ (20,619) $ 69,377
============ ============ ============ ============
</TABLE>
Rental income, net income, and cash distributions to the Partnership decreased
for the three months and nine months ended September 30, 2000, as compared to
the same periods in 1999, due to one tenant defaulted on the lease and moved out
at the end of 1999. The management team is currently taking legal action against
that tenant.
Depreciation expense increased for the three month and nine month periods, as
compared to 1999, due to additional capitalized tenant improvements. Operating
expense increased due to increases in landscaping supplies, sign maintenance,
and legal fees and decreases in common area maintenance billings to tenant in
2000 which is because of decreased occupancy.
-11-
<PAGE>
BellSouth Building/Fund VI-VII-VIII Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------- --------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $380,278 $380,278 $1,140,832 $1,140,832
Interest income 240 1,159 1,745 3,461
------------ ----------- ------------- -------------
380,518 381,437 1,142,577 1,144,293
------------ ----------- ------------- -------------
Expenses:
Depreciation 111,606 111,606 334,818 334,818
Management and leasing expenses 48,166 47,891 145,306 144,824
Other operating expenses 129,132 111,440 354,742 321,275
------------ ----------- ------------- -------------
288,904 270,937 834,866 800,917
------------ ----------- ------------- -------------
Net income $ 91,614 $110,500 $ 307,711 $ 343,376
============ =========== ============= =============
Occupied percentage 100% 100% 100% 100%
============ =========== ============= =============
Partnership's ownership percentage in the
Fund VI-VII-VIII Joint Venture 32.3% 32.3% 32.3% 32.3%
============ =========== ============= =============
Cash distribution to the Partnership $ 68,451 $ 74,761 $ 215,986 $ 227,725
============ =========== ============= =============
Net income allocated to the Partnership $ 29,642 $ 35,752 $ 99,559 $ 111,098
============ =========== ============= =============
</TABLE>
Net income and cash distributions have decreased for the three months and nine
months ended September 30, 2000 as compared to the same periods in 1999 due
primarily to increased janitorial expenses and expenses for an application of
water repellent on the building.
-12-
<PAGE>
Tanglewood Commons/Fund VI-VII-VIII Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $210,475 $192,850 $626,366 $579,169
Interest income 0 2,374 1,988 7,663
------------- ------------ ------------- -------------
210,475 195,224 628,354 586,832
------------ ----------- ------------ ------------
Expenses:
Depreciation 67,554 64,677 200,204 190,779
Management and leasing expenses 19,389 16,639 60,466 49,281
Other operating expenses 13,699 18,093 (32,553) 47,541
------------ ----------- ------------ ------------
100,642 99,409 228,117 287,601
------------ ----------- ------------ ------------
Net income $109,833 $ 95,815 $400,237 $299,231
============ =========== ============ ============
Occupied percentage 97% 91% 97% 91%
============ =========== ============ ============
Partnership's ownership percentage in the
Fund VI-VII-VIII Joint Venture 32.3% 32.3% 32.3% 32.3%
============ =========== ============ ============
Cash distribution to the Partnership $ 57,475 $ 52,317 $195,672 $159,608
============ =========== ============ ============
Net income allocated to the Partnership $ 35,536 $ 31,001 $129,495 $ 96,815
============ =========== ============ ============
</TABLE>
Rental income, net income, depreciation expenses, and management and leasing
fees have increased in 2000, as compared to 1999, due to increased occupancy at
the property.
Other operating expenses decreased due to monthly common area maintenance
billings to the tenants were increased in 2000 to offset 1999 underpayment.
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.
-13-
<PAGE>
The TCI Building/Fund VIII-Fund IX Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- --------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $113,794 $113,794 $341,383 $341,383
Interest income 11,300 5,756 26,640 19,415
------------ ----------- ------------ ------------
125,094 119,550 368,023 360,798
------------ ----------- ------------ ------------
Expenses:
Depreciation 41,647 41,648 124,945 124,945
Management and leasing expenses 4,586 4,435 13,186 13,070
Other operating expenses 1,646 997 9,106 8,162
------------ ----------- ------------ ------------
47,879 47,080 147,237 146,177
------------ ----------- ------------ ------------
Net income $ 77,215 $ 72,470 $220,786 $214,621
============ =========== ============ ============
Occupied percentage 100% 100% 100% 100%
============ =========== ============ ============
Partnership's ownership percentage in the
Fund VIII-Fund IX Joint Venture 54.8% 54.8% 54.8% 54.8%
============ =========== ============ ============
Cash distribution to the Partnership $ 61,685 $ 59,085 $179,104 $175,725
============ =========== ============ ============
Net income allocated to the Partnership $ 42,311 $ 39,711 $120,984 $117,605
============ =========== ============ ============
</TABLE>
Rental income and expenses are stable for 2000, as compared to 1999, due to the
stable occupancy rate and expenses. Net income and cash distributions have
increased in 2000, as compared to 1999, due primarily to increased interest
income.
-14-
<PAGE>
The Cirrus Logic Building/Fund VIII-Fund IX Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- --------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $184,539 $184,539 $553,617 $553,617
------------ ------------ ------------ ------------
Expenses:
Depreciation 72,765 72,765 218,295 218,295
Management and leasing expenses 11,264 10,314 33,791 30,654
Other operating expenses 29 (5,240) 4,852 (87,572)
------------ ----------- ------------ ------------
84,058 77,839 256,938 161,377
------------ ----------- ------------ ------------
Net income $100,481 $106,700 $296,679 $392,240
============ =========== ============ ============
Occupied percentage 100% 100% 100% 100%
============ =========== ============ ============
Partnership's ownership percentage in the
Fund VIII-Fund IX Joint Venture 54.8% 54.8% 54.8% 54.8%
============ =========== ============ ============
Cash distribution to the Partnership $ 86,385 $ 89,780 $256,520 $308,872
============ =========== ============ ============
Net income allocated to the Partnership $ 55,060 $ 58,468 $162,570 $214,935
============ =========== ============ ============
</TABLE>
Rental income, depreciation and management and leasing fees remain relatively
stable while other operating expenses increased for the nine months ended
September 30, 2000, as compared to the same period in 1999, due primarily to
differences in the annual adjustments for common area maintenance billing to the
tenant. 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. Property taxes increased substantially in 1998, but the
tenant was not billed until the annual adjustment was computed in the second
quarter of 1999.
-15-
<PAGE>
The U.S. Cellular One Building/Fund VIII-Fund IX Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------- --------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $320,519 $320,520 $961,557 $961,558
------------ ----------- ------------ ------------
Expenses:
Depreciation 150,414 150,414 451,242 451,238
Management and leasing expenses 35,268 31,870 105,216 97,605
Other operating expenses (8,854) 25,553 (64,793) 49,200
------------ ----------- ------------ ------------
176,828 207,837 491,665 598,043
------------ ----------- ------------ ------------
Net income $143,691 $112,683 $469,892 $363,515
============ =========== ============ ============
Occupied percentage 100% 100% 100% 100%
============ =========== ============ ============
Partnership's ownership percentage in the
Fund VIII-Fund IX Joint Venture 54.8% 54.8% 54.8% 54.8%
============ =========== ============ ============
Cash distribution to the Partnership $166,760 $140,162 $504,370 $434,439
============ =========== ============ ============
Net income allocated to the Partnership $ 78,738 $ 61,746 $257,485 $199,194
============ =========== ============ ============
</TABLE>
Net income increased in 2000, as compared to 1999, due to an increase in common
area maintenance reimbursements billed in 2000 to the tenants. Tenants are
billed an estimated amount for common area maintenance which is then reconciled
the following year and the difference is billed to the tenant. Monthly common
area maintenance billings to the tenants were increased in 2000 to offset 1999
underpayment. Management and lease fee reimbursement is included in other
operating expenses.
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<PAGE>
The Quest Building (formerly the Bake Parkway Building)/
Fund VIII-IX-REIT Joint Venture
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $162,369 $164,378 $491,127 $493,135
------------ ----------- ------------ ------------
Expenses:
Depreciation 46,368 53,917 154,203 161,752
Management and leasing expenses 0 6,196 0 18,706
Other operating expenses 21,177 3,619 8,370 4,074
------------ ----------- ------------ ------------
67,545 63,732 162,573 184,532
------------ ----------- ------------ ------------
Net income $ 94,824 $100,646 $328,554 $308,603
============ =========== ============ ============
Occupied percentage 100% 100% 100% 100%
============ =========== ============ ============
Partnership's ownership percentage 51.0% 54.8% 51.0% 54.8%
============ =========== ============ ============
Cash distribution to the Partnership $110,266 $ 94,451 $299,806 $283,991
============ =========== ============ ============
Net income allocated to the Partnership $ 48,324 $ 55,150 $180,037 $169,104
============ =========== ============ ============
</TABLE>
On June 15, 2000, the Fund VIII-IX-REIT Joint Venture was formed between Wells
OP and Fund VIII and Fund IX Associates, a Georgia joint venture partnership
between Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P.
(the "Fund VIII-IX Joint Venture"). Only July 1, 2000, the Fund VIII-IX Joint
Venture contributed its interest in the Bake Parkway Property to the Fund
VIII-IX-REIT Joint Venture. The Bake Parkway Building is a two-story office
building containing approximately 65,006 rentable square feet on a 4.4 acre
tract of land in Irvine, California.
A 42-month lease for the entire Bake Parkway Building has been signed by Quest
Software, Inc. Occupancy occurred on August 1, 2000. Quest is a publicly traded
corporation that provides software database management and disaster recovery
services for its clients.
Construction of tenant improvements required under the Quest lease is
anticipated to cost approximately $1,250,000 and will be funded by Wells OP.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 6 (b.) No reports on Form 8-K were filed during the third quarter of 2000.
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.
(Registrant)
Dated: November 10, 2000 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.
-18-
