<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 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)
Georgia 58-2126618
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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)
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
<TABLE>
<CAPTION>
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Balance Sheets--June 30, 2000 and December 31, 1999 3
Statements of Income for the Three and Six Months Ended June 30, 2000
and 1999 4
Statements of Partners' Capital for the Year Ended December 31, 1999
and the Six Months Ended June 30, 2000 5
Statements of Cash Flows for the Six Months Ended June 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
</TABLE>
-2-
<PAGE>
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
June 30, December 31,
2000 1999
----------- -----------
<S> <C> <C>
ASSETS:
Investment in joint ventures (Note 2) $23,755,407 $24,323,418
Cash and cash equivalents 16,416 100,902
Due from affiliates 632,369 535,876
----------- -----------
Total assets $24,404,192 $24,960,196
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Partnership distributions payable $ 634,284 $ 614,277
----------- -----------
Partners' capital:
Limited partners:
Class A--2,734,381 units and 2,728,425 units as of
June 30, 2000 and December 31, 1999, respectively 23,373,184 23,341,878
Class B--468,888 units and 474,844 units as of June 30,
2000 and December 31, 1999, respectively 396,724 1,004,041
----------- -----------
Total partners' capital 23,769,908 24,345,919
----------- -----------
Total liabilities and partners' capital $24,404,192 $24,960,196
=========== ===========
</TABLE>
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>
Three Months Ended Six Months Ended
--------------------- -----------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Equity earnings of joint ventures
(Note 2) $ 363,606 $ 414,856 $ 734,542 $ 745,943
Interest income 2 2 3 2
--------- --------- ---------- ----------
363,608 414,858 734,545 745,945
--------- --------- ---------- ----------
EXPENSES:
Legal and accounting 3,457 8,720 16,207 18,252
Computer costs 3,426 2,246 6,493 4,681
Partnership administration 21,501 13,804 31,963 33,122
Amortization of organization costs 0 1,563 0 3,125
--------- --------- ---------- ----------
28,384 26,333 54,663 59,180
--------- --------- ---------- ----------
NET INCOME $ 335,224 $ 388,525 $ 679,882 $ 686,765
========= ========= ========== ==========
NET INCOME ALLOCATED TO
CLASS A LIMITED PARTNERS $ 639,561 $ 688,038 $1,255,647 $1,285,718
========= ========= ========== ==========
NET LOSS ALLOCATED TO
CLASS B LIMITED PARTNERS $(304,337) $(299,513) $ (575,765) $ (598,953)
========= ========= ========== ==========
NET INCOME PER CLASS A LIMITED
PARTNER UNIT $ 0.23 $ 0.25 $ 0.46 $ 0.47
========= ========= ========== ==========
NET LOSS PER CLASS B LIMITED
PARTNER UNIT $ (0.65) $ (0.62) $ (1.23) $ (1.22)
========= ========= ========== ==========
CASH DISTRIBUTION PER
CLASS A LIMITED PARTNER
UNIT $ 0.23 $ 0.22 $ 0.46 $ 0.43
========= ========= ========== ==========
</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, 1999
AND THE SIX MONTHS ENDED June 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 1,255,647 0 (575,765) 679,882
Partnership distributions 0 (1,255,893) 0 0 (1,255,893)
Class B conversion elections 5,956 (6,536) (5,956) 6,536 0
--------- ---------- ------- ----------- -----------
BALANCE, June 30, 2000 2,734,381 $23,335,096 468,888 $ 434,812 $23,769,908
========= =========== ======= =========== ===========
</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>
Six Months Ended
-------------------------
June 30, June 30
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 679,882 $ 686,765
Adjustments to reconcile net income to net cash used in
operating activities:
Equity in income of joint ventures (734,542) (745,943)
Amortization of organization costs 0 3,125
Changes in assets and liabilities:
Prepaid expenses and other assets 0 (4,140)
----------- -----------
Net cash used in operating activities (54,660) (60,193)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions received from joint ventures 1,206,060 1,307,150
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners from accumulated earnings (1,235,886) (1,172,461)
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (84,486) 74,496
CASH AND CASH EQUIVALENTS, beginning of year 100,902 8,792
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 16,416 $ 83,288
=========== ===========
</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
JUNE 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"); and (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").
As of June 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 located in Orange County,
California (the "Bake Parkway Building"), 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.
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.
-7-
<PAGE>
(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.
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, 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 June 30, 2000, the developed properties owned by the Partnership
were 98.2% occupied, as compared to 99.2% occupied as of June 30, 1999.
Gross revenues of the Partnership were $734,545 for the six months ended
June 30, 2000 from $745,945 for the six months ended June 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 six months period due primarily to decreases in
administrative salary and amortization costs, but increased for the three
month period due to increases in printing fees and other professional
fees.
-8-
<PAGE>
Cash distributions per unit for Class A Limited Partners were $0.23 for
the three months ended June 30, 2000 as compared to $0.22 for the three
months ended June 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 $1,206,060 for 2000
from $1,307,150 in 1999, due primarily to decreased distributions from
joint ventures. Net cash used in financing activities increased to
$1,235,886 for 2000 from $1,172,461 for 1999 due to increased distributions
to 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 operations.
Subsequent Event
On June 15, 2000, the Fund VIII-IX-REIT Joint Venture was formed between
Wells Operating Partnership, LP ("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"). 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. 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.
-9-
<PAGE>
2. PROPERTY OPERATIONS
As of June 30, 2000 the Partnership owned interest in the following
operational properties:
CH2M Hill/Fund VII-Fund VIII Joint Venture
<TABLE>
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $144,035 $143,856 $288,070 $287,712
-------- -------- -------- --------
Expenses:
Depreciation 65,940 67,879 131,881 136,824
Management and leasing expenses 22,915 21,115 46,902 47,995
Other operating expenses (8,262) (27,771) (29,683) (10,417)
-------- -------- -------- --------
80,593 61,223 149,100 174,402
-------- -------- -------- --------
Net income $ 63,442 $ 82,633 $138,970 $113,310
======== ========= ======== ========
Occupied percentage 100% 100% 100% 100%
======== ========= ======== ========
Partnership's ownership percentage in
the Fund VII-VIII Joint Venture 63.4% 63.4% 63.4% 63.4%
======== ========= ======== ========
Cash distributed to the Partnership $ 83,275 $ 96,718 $174,208 $158,230
======== ========= ======== ========
Net income allocated to the Partnership $ 40,178 $ 52,348 $ 88,036 $ 71,781
======== ========= ======== ========
</TABLE>
Rental income remained relatively stable for the three months and six months
ended June 30, 2000 as compared to the same period last year. Net income and
cash distributions to the Partnership increased for the six months period, as
compared to 1999, due to an increase in common area maintenance reimbursements
billed in 2000 to the tenants. Management and leasing fees reimbursement were
included in other operating 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.
-10-
<PAGE>
The Hannover Center/Fund VII-Fund VIII Joint Venture
<TABLE>
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 26,698 $56,346 $ 53,342 $112,493
-------- ------- -------- --------
Expenses:
Depreciation 21,654 10,982 42,858 21,963
Management and leasing expenses 4,282 5,583 8,642 13,042
Other operating expenses 13,564 (499) 23,961 2,918
-------- ------- -------- --------
39,500 16,066 75,461 37,923
-------- ------- -------- --------
Net (loss) income $(12,802) $40,280 $(22,119) $ 74,570
======== ======= ======== ========
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 distributed to the Partnership $ 7,734 $28,981 $ 7,734 $ 54,695
======== ======= ======== ========
Net (loss) income allocated to the
Partnership $ (8,110) $25,518 $(14,012) $ 47,240
======== ======= ======== ========
</TABLE>
Rental income and net income decreased for the three months and six months ended
June 30, 2000, as compared to the same period in 1999, due to one tenant who
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 both the three months and six months ended
June 30, 2000 due to additional capitalized tenant improvement. Management and
leasing fees decreased due to decreases in rental income. Management and
leasing fees are charges based on rental income received. Operating expenses
increased due to increases in legal fees.
-11-
<PAGE>
BellSouth Building/Fund VI-VII-VIII Joint Venture
<TABLE>
Three Months Ended Six Months Ended
-------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $380,277 $380,277 $760,554 $760,554
Interest income 215 1,160 1,505 2,302
-------- -------- -------- --------
380,492 381,437 762,059 762,856
-------- -------- -------- --------
Expenses:
Depreciation 111,606 111,606 223,212 223,212
Management and leasing expenses 48,974 49,041 97,140 96,933
Other operating expenses 121,277 106,051 225,610 209,835
-------- -------- -------- --------
281,857 266,698 545,962 529,980
-------- -------- -------- --------
Net income $ 98,635 $114,739 $216,097 $232,876
======== ======== ======== ========
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 distributed to the Partnership $ 70,733 $ 75,932 $147,535 $152,964
======== ======== ======== ========
Net income allocated to the Partnership $ 31,918 $ 37,123 $ 69,917 $ 75,346
======== ======== ======== ========
</TABLE>
Net income has decreased slightly for the three months and six months ended June
30, 2000, as compared to the same period in 1999, due primarily to increased
expenditures in water/sewer, landscaping supplies, janitorial contract, and
janitorial supplies.
-12-
<PAGE>
Tanglewood Commons/Fund VI-VII-VIII Joint Venture
<TABLE>
Three Months Ended Six Months Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Rental income $210,402 $193,288 $415,891 $386,319
Interest income 0 2,353 1,988 5,289
--------- -------- -------- --------
210,402 195,641 417,879 391,608
--------- -------- -------- --------
Expenses:
Depreciation 67,554 64,677 132,650 126,102
Management and leasing expenses 23,302 17,537 41,077 32,642
Other operating expenses (20,542) 10,367 (46,252) 29,448
--------- -------- -------- --------
70,314 92,581 127,475 188,192
--------- -------- -------- --------
Net income $140,088 $103,060 $290,404 $203,416
======== ======== ======== ========
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 distributed to the Partnership $ 67,188 $ 54,660 $138,197 $107,291
======== ======== ======== ========
Net income allocated to the Partnership $ 45,332 $ 33,344 $ 93,959 $ 65,814
======== ======== ======== ========
</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>
Three Months Ended Six Months Ended
------------------- ------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $113,795 $113,795 $227,589 $227,589
Interest income 6,500 4,738 15,340 13,659
-------- -------- -------- --------
120,295 118,533 242,929 241,248
-------- -------- -------- --------
Expenses:
Depreciation 41,650 41,649 83,298 83,297
Management and leasing expenses 4,300 4,335 8,600 8,635
Other operating expenses 3,238 3,033 7,460 7,165
-------- -------- -------- --------
49,188 49,017 99,358 99,097
-------- -------- -------- --------
Net income $ 71,107 $ 69,516 $143,571 $142,151
======== ======== ======== ========
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 distributed to the Partnership $ 58,338 $ 57,465 $117,419 $116,640
======== ======== ======== ========
Net income allocated to the Partnership $ 38,964 $ 38,092 $ 78,673 $ 77,894
======== ======== ======== ========
</TABLE>
Rental income, net income, and cash distributions are stable for 2000, as
compared to 1999, due to the stable occupancy rate and expenses.
-14-
<PAGE>
The Bake Parkway Building/Fund VIII-Fund IX Joint Venture
<TABLE>
Three Months Ended Six Months Ended
-------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $164,379 $164,378 $328,758 $328,757
-------- -------- -------- --------
Expenses:
Depreciation 53,917 53,917 107,835 107,835
Management and leasing expenses 0 6,197 0 12,510
Other operating expenses (10,172) (3,588) (19,442) 455
-------- -------- -------- --------
43,745 56,526 88,393 120,800
-------- -------- -------- --------
Net income $120,634 $107,852 $240,365 $207,957
======== ======== ======== ========
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 distributed to the Partnership $104,806 $ 98,400 $209,715 $189,540
======== ======== ======== ========
Net income allocated to the Partnership $ 66,103 $ 59,100 $131,712 $113,954
======== ======== ======== ========
</TABLE>
Matsushita Avionics and the Fund VIII-Fund IX Joint Venture entered into a lease
and guaranty termination agreement dated February 18, 1999. Matsushita Avionics
vacated its current space in January 2000 and was relieved of any of its
obligations under the existing lease. In consideration for the Fund VIII-Fund
IX Joint Venture releasing Matsushita Avionics from its obligations under the
existing lease and thereby allowing Wells Operating Partnership, L.P. ("Wells
OP") to enter into the Matsushita lease with Matsushita Avionics, Wells OP
entered into a rental income guaranty agreement dated as of February 18, 1999,
whereby Wells OP guaranteed the Fund VIII-Fund IX Joint Venture that it will
receive rental income on the existing building at least equal to the rent and
building expenses over the remaining term of the Matsushita lease.
Operating expenses are negative due to actual expenses being lower than Wells OP
operating expense reimbursements in 2000 which is based on budget and will be
reconciled later this year. Management and leasing expense will not be paid
until the building is re-leased and occupied.
-15-
<PAGE>
The Cirrus Logic Building/Fund VIII-Fund IX Joint Venture
<TABLE>
Three Months Ended Six Months Ended
-------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $184,539 $184,539 $369,078 $369,078
-------- -------- -------- --------
Expenses:
Depreciation 72,765 72,765 145,530 145,530
Management and leasing expenses 12,213 11,501 22,527 20,340
Other operating expenses 5,122 (87,942) 4,843 (82,332)
-------- -------- -------- --------
90,100 (3,676) 172,900 83,538
-------- -------- -------- --------
Net income $ 94,439 $188,215 $196,198 $285,540
======== ======== ======== ========
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 distributed to the Partnership $ 83,062 $134,449 $170,135 $219,092
======== ======== ======== ========
Net income allocated to the Partnership $ 51,749 $103,135 $107,510 $156,466
======== ======== ======== ========
</TABLE>
Rental income, depreciation and management and leasing fees remain relatively
stable while other operating expenses increased for the six months ended June
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.
-16-
<PAGE>
The Cellular One Building/Fund VIII-Fund IX Joint Venture
<TABLE>
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income $320,519 $320,519 $641,038 $641,038
-------- -------- -------- --------
Expenses:
Depreciation 150,414 150,446 300,828 300,824
Management and leasing expenses 35,450 30,548 69,948 65,735
Other operating expenses (43,223) 18,722 (55,939) 23,647
-------- -------- -------- --------
142,641 199,716 314,837 390,206
-------- -------- -------- --------
Net income $177,878 $120,803 $326,201 $250,832
======== ======== ======== ========
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 distributed to the Partnership $256,334 $144,628 $337,610 $294,277
======== ======== ======== ========
Net income allocated to the Partnership $ 97,471 $ 66,196 $178,747 $137,448
======== ======== ======== ========
</TABLE>
Net income increased in 2000, as compared to 1999, due to an increase in CAM
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.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 6 (b.) No reports on Form 8-K were filed during the second 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: August 11, 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.
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