<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 0-22039
--------------------------------------------------------
Wells Real Estate Fund IX, L.P.
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2126622
------------------------------- -------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
6200 The Corners Parkway, Suite 250, 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 IX,L.P.
-----------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
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....................................................................... 9
PART II. OTHER INFORMATION......................................................................... 19
</TABLE>
2
<PAGE>
WELLS REAL ESTATE FUND IX, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets September 30, 2000 December 31, 1999
------ ------------------ -----------------
<S> <C> <C>
Investment in joint venture (Note 2) $ 26,426,871 $ 27,196,918
Cash and Cash equivalents 111,522 102,194
Due from affiliates 728,566 639,956
Deferred project costs 3,721 5,485
------------ -------------
Total assets $ 27,270,680 $ 27,944,553
============ =============
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distributions payable $ 715,533 $ 628,046
------------ -------------
Partners' capital:
Limited partners:
Class A-3,088,354 units outstanding as
of Sept. 30, 2000 and 3,072,322
units as of December 31, 1999 26,247,236 26,114,657
Class B-411,646 units outstanding as
of Sept 30, 2000 and 427,678
units as of December 31, 1999 307,911 1,201,850
------------ -------------
Total partners' capital 26,555,147 27,316,507
------------ -------------
Total liabilities and partners' capital $ 27,270,680 $ 27,944,553
============ =============
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND IX, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Equity in income of joint ventures
(Note 2) $ 450,486 $ 408,547 $ 1,375,203 $ 1,238,215
Interest income 4,818 0 4,818 0
---------- ---------- ----------- ------------
455,304 408,547 1,380,021 1,238,215
---------- ---------- ----------- ------------
Expenses:
Computer cost 2,354 2,559 8,447 7,240
Partnership administration 7,899 11,278 36,473 50,936
Legal and accounting fees 583 626 16,823 15,848
Amortization of organization costs 0 3,125 0 6,250
---------- ---------- ----------- ------------
10,836 17,588 61,743 80,274
---------- ---------- ----------- ------------
Net income $ 444,468 $ 390,959 $ 1,318,278 $ 1,157,941
========== ========== =========== ============
Net income allocated to Class A Limited
Partners $ 711,473 $ 693,905 $ 2,171,851 $ 2,068,171
Net (loss) allocated to Class B Limited
Partners $ (267,005) $ (302,946) $ (853,573) $ (910,230)
Net income per Class A Limited Partner
Unit $ 0.23 $ 0.23 $ 0.70 $ 0.68
Net (loss) per Class B Limited Partner Unit $ (0.65) $ (0.68) $ (2.07) $ (2.04)
Cash distribution per Class A Limited
Partner Unit $ 0.23 $ 0.23 $ 0.67 $ 0.68
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND IX, L.P.
(a Georgia Public Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
AND YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Limited Partners Total
----------------
Class A Class B Partners'
---------------------------- -------------------------
Units Amount Units Amount Capital
----- ------ ----- ------ -------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1998 2,989,875 $ 25,646,950 510,125 $ 2,879,510 $ 28,526,460
Net income (loss) 0 2,713,636 0 (1,223,305) 1,490,331
Partnership distributions 0 (2,700,284) 0 0 (2,700,284)
Class B conversion elections 82,447 454,355 (82,447) (454,355) 0
---------- ------------ ---------- ----------- ------------
BALANCE, December 31, 1999 3,072,322 $ 26,114,657 427,678 $ 1,201,850 $ 27,316,507
Net income (loss) 0 2,171,851 0 (853,573) 1,318,278
Partnership distributions 0 (2,079,638) 0 0 (2,079,638)
Class B conversion elections 16,874 47,519 (16,874) (47,519) 0
Class A conversion elections (842) (7,153) 842 7,153 0
---------- ------------ ---------- ----------- ------------
BALANCE, September 30, 2000 3,088,354 $ 26,247,236 411,646 $ 307,911 $ 26,551,147
========== ============ ========== =========== ============
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND IX, L.P.
(a Georgia Public Limited Partnership)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
September 30, 2000 September 30, 1999
------------------- ------------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 1,318,278 $ 1,157,941
Adjustments to reconcile net income to net
cash (used in) provided by operating
activities:
Equity in income of joint venture (1,375,203) (1,238,215)
Amortization of organization costs 0 6,250
Changes in assets and liabilities:
Prepaids and other assets 0 (3,872)
Accounts payable 0 (3,500)
------------- -------------
Net cash used in operating activities (56,925) (81,396)
------------- -------------
Cash flow from investing activities:
Investment in joint ventures (44,358) (82,515)
Distributions received from joint ventures 2,102,762 2,126,264
------------- -------------
Net cash provided by investing
activities 2,058,404 2,043,749
------------- -------------
Cash flow from financing activities:
Distributions to partners from
accumulated earning (1,992,151) (2,067,953)
------------- -------------
Net increase (decrease) in cash and cash equivalents 9,328 (105,600)
Cash and cash equivalents, beginning of year 102,194 326,022
------------- -------------
Cash and cash equivalents, end of period $ 111,522 $ 220,422
============= =============
Supplemental disclosure of noncash investing
activities: Deferred project costs applied to
joint venture activities $ 1,764 $ 3,624
============= =============
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND IX, L.P.
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statement
September 30, 2000
(1) Summary of Significant Accounting Policies
(a) General
-----------
Wells Real Estate Fund IX, 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, constructing, owning, operating,
improving, leasing, and otherwise managing for investment purposes income
producing commercial properties.
On January 5, 1996, 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 12, 1996, when it
received and accepted subscriptions for 125,000 units. An aggregate
requirement of $2,500,000 of offering proceeds was reached on February
26,1996, thus allowing for the admission of New York and Pennsylvania
investors in the Partnership. The offering was terminated on December 30,
1996, at which time the Partnership had sold 2,935,931 Class A Status
Units, and 564,069 Class B Status Units, held by a total of 1,841 and 257
Class A and Class B Limited Partners respectively, for total Limited
Partner capital contributions of $35,000,000. After payment of $1,400,000
in acquisition and advisory fees and expenses, payments of $5,254,603 in
selling commissions and organization and offering expenses, the investment
by the Partnership of $13,289,359 in the Fund VIII - Fund IX Joint Venture
and the investment by the Partnership of $14,982,434 in the Fund IX-X-XI-
REIT Joint Venture, as of September 30, 2000, the Partnership was holding
net offering proceeds of $73,604 available for investment in properties.
The Partnership owns interests in properties through equity ownership in
the following joint ventures: (i) Fund VIII and Fund IX Associates, a joint
venture between the Partnership and Wells Real Estate Fund VIII, L.P. (the
"Fund VIII -IX Joint Venture"), and (ii) Fund IX-X-XI-REIT Associates, a
joint venture among the Partnership, Wells Real Estate Fund X, L..P., Wells
Real Estate Fund XI, L.P. Wells Operating Partnership, L.P. ("Wells OP"), a
Delaware limited partnership having Wells Real Estate Investment Trust,
Inc. (the Wells REIT"), as its general partner, (the "Fund IX-X-XI-REIT
Joint Venture"); and (iii) the 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 of the foregoing joint ventures: (i) a
four-story office building in Madison, Wisconsin (the
7
<PAGE>
"US Cellular Office Building"), which is owned by the Fund VIII - IX Joint
Venture; (ii) a one-story office building in Farmer's Branch, Texas (the
"TCI Building"), which is owned by the Fund VIII - IX Joint Venture; (iii)
a three-story office building in Knoxville, Tennessee (the "Alstom Power-
Knoxville" formerly the "ABB Building"), which is owned by the Fund
IX-X-XI-REIT Joint Venture; (iv) 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; (v) a two-story office
building in Boulder County, Colorado (the "Cirrus Logic Building"), which
is owned by the Fund VIII - IX Joint Venture; (vi) a two-story office
building in Boulder County, Colorado (the "Ohmeda Building"), which is
owned by the Fund IX-X-XI-REIT Joint Venture; (vii) a three-story office
building located in Boulder County, Colorado (the "360 Interlocken
Building"), which is owned by the Fund IX-X-XI-REIT Joint Venture; (viii) a
one-story office building located in Oklahoma City, Oklahoma (the "Avaya"
formerly the "Lucent Technologies Building"), which is owned by the Fund
IX-X-XI-REIT Joint Venture; and (ix) a single-story warehouse and office
building located in Ogden, Weber County, Utah (the "Iomega Building"),
which is owned by the Fund IX-X-XI-REIT Joint Venture.
(b) Basis of Presentation
-------------------------
The financial statements of the Partnership have been prepared in
accordance with instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. These quarterly statements
have not been examined by independent accountants, but in the opinion of
the General Partners, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring
nature, necessary to present a fair presentation of the results for such
periods. For further information, refer to the financial statements and
footnotes included in the Partnership's Form 10-K for the year ended
December 31, 1999.
2) Investment in Joint Ventures
--------------------------------
The Partnership owns interests in nine properties as of September 30, 2000,
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 on investments in
joint ventures, see Form 10-K for the Partnership for the year ended
December 31, 1999.
The following describes additional information about certain properties in
which the Company owns an interest as of September 30, 2000.
Fund VIII-IX-REIT Joint Venture
-------------------------------
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"). On July 1, 2000, the Fund
VIII-IX Joint Venture contributed its interest in the Bake Parkway Property
to the Fund VIII-IX-REIT
8
<PAGE>
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.
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 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.
Results of Operations and Changes in Financial Conditions
---------------------------------------------------------
(a) General
-----------
As of September 30, 2000, the developed properties owned by the Partnership
were 100% occupied, whereas they were 99.8% occupied at September 30, 1999.
Gross revenues of the Partnership were $1,380,021 for the nine months ended
September 30, 2000, as compared to $1,238,215 for the nine months ended
September 30, 1999. The increase was attributable primarily to the equity
in income of joint venture due to the increase in gross revenues at the ABB
property which is now 100% occupied and income from the parking lot
expansion at the Iomega property. Expenses of the Partnership decreased to
$61,743 for the nine months ended September 30, 2000, as compared to
$80,274 for the same period in 1999, as a result of decreased costs
primarily in administrative salaries. As a result, net income of the
Partnership was $1,318,278 for the nine months ended September 30, 2000, as
compared to a net income of $1,157,941 for the nine months ended September
30, 1999.
The Partnership's net cash used in operating activities decreased to
$(56,925) for 2000, as compared to $(81,396) for 1999, which is due
primarily to the decrease in expenses. Net cash provided by investing
activities increased to $2,058,404 from $2,043,749 because of the decreased
investment in joint ventures. Net cash used in financing activities
decreased from $2,067,953 to $1,992,151 due to the
9
<PAGE>
distribution to partners from accumulated earnings. Cash and cash equivalents
decreased from $220,422 to $111,522 for the same period in 2000.
The Partnership's distributions per unit for Class A Unit holders for both the
third quarter of 2000, and 1999, was $0.23 per weighted average unit. No cash
distributions were made to the Limited Partners holding Class B Units or to the
General Partners. The Partnership currently anticipates that distributions will
continue to be paid on a quarterly basis on a level at least consistent with
1999 distributions.
The Partnership expects to continue to meet its short-term liquidity
requirements 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.
The Partnership expects to make future real estate investments, directly or
through investments in joint ventures, from limited partners' capital
contributions. As of September 30, 2000, the Partnership was holding $73,604
available for investment in properties.
Property Operations
-------------------
As of September 30, 2000, the Partnership owned interests in the following
operational properties
The TCI Building/Fund VIII - Fund IX Joint Venture
--------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 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 & 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 % 100% 100% 100% 100%
Partnership's Ownership % 45.2% 45.2% 45.2% 45.2%
Cash Distribution to Partnership $ 50,885 $ 48,740 $ 147,747 $ 144,960
Net income allocated to the
Partnership $ 34,904 $ 32,759 $ 99,802 $ 97,016
</TABLE>
Rental income and expenses are stable for 2000, as compared to 1999, due to the
stable occupancy rates and expenses. Net income and cash distributions have
increased in 2000, as compared to 1999, due primarily to increased interest
income.
10
<PAGE>
The Cirrus Logic Building/Fund VIII - Fund IX Joint Venture
-----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 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 & 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 % 100% 100% 100% 100%
Partnership's Ownership % 45.2% 45.2% 45.2% 45.2%
Cash distribution to Partnership $ 71,261 $ 74,063 $ 211,610 $ 254,797
Net income allocated to the
Partnership $ 45,421 $ 48,232 $ 134,109 $ 177,305
</TABLE>
Rental income, depreciation and management and leasing fees remained relatively
stable while other operating expenses decreased 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 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.
11
<PAGE>
U.S. Cellular Building/Fund VIII - Fund IX Joint Venture
--------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 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 & 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 % 100% 100% 100% 100%
Partnership's Ownership % 45.2% 45.2% 45.2% 45.2%
Cash Distribution to Partnership $ 137,564 $ 115,623 $ 416,068 $ 358,380
Net income allocated to the
Partnership $ 64,953 $ 50,937 $ 212,407 $ 164,321
</TABLE>
Net income increased in 2000, as compared to 1999, due to an increase in CAM
reimbursements billed to the tenants in 2000. 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.
12
<PAGE>
The Alston Power-Knoxville Building (formerly the ABB Building/Fund IX-X-XI-REIT
--------------------------------------------------------------------------------
Joint Venture)
--------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 288,969 $ 261,986 $ 895,551 $ 784,065
Interest income 19,871 15,024 53,575 46,765
---------- ---------- ---------- ----------
308,840 277,010 949,126 830,830
---------- ---------- ---------- ----------
Expenses:
Depreciation 98,454 135,499 295,362 403,699
Management & leasing expenses 36,277 32,260 112,232 93,666
Other operating expenses (26,544) (17,097) (69,178) (13,390)
---------- ---------- ---------- ----------
108,187 150,662 338,416 483,975
---------- ---------- ---------- ----------
Net income $ 200,653 $ 126,348 $ 610,710 $ 346,855
========== ========== ========== ==========
Occupied % 100% 98% 100% 98%
Partnership's Ownership % 39.12% 38.96% 39.12% 38.96%
Cash distribution to Partnership $ 116,696 $ 102,725 $ 353,126 $ 294,561
Net income allocated to the
Partnership $ 78,513 $ 49,217 $ 239,202 $ 135,938
</TABLE>
Rental income increased in 2000, over 1999, due primarily to the increased
occupancy level of the property. Total expenses decreased due to a decrease in
depreciation expense. This decrease resulted from an accelerated depreciation on
a tenant improvement for a short-term lease in 1999 for 23,092 square feet.
Other operating expenses are negative due to an offset of tenant reimbursements
in operating costs, as well as management and leasing fee reimbursements.
Tenants are billed an estimated amount for current year common area maintenance
which is then reconciled the following year and the difference billed to the
tenant. Net income and cash distributions increased in 2000, over 1999, due to a
combination of increased rental income and decreased operating expenses.
The Partnership's ownership interest in the Fund IX-X-XI-REIT Joint Venture
increased due to additional capital contributions made by the partnership to the
Joint Venture in the first quarter.
13
<PAGE>
The Avaya Building (formerly Lucent Technologies)/Fund IX-X-XI-REIT Joint
-------------------------------------------------------------------------
Venture
-------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30,1999
------------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 145,752 $ 145,752 $ 437,256 $ 437,256
---------- ---------- ---------- -----------
Expenses:
Depreciation 45,801 45,801 137,403 137,403
Management & leasing expenses 5,369 5,370 16,109 16,109
Other operating expenses 1,669 1,766 9,688 13,964
---------- ---------- ---------- -----------
52,839 52,937 163,200 167,476
---------- ---------- ---------- -----------
Net income $ 92,913 $ 92,815 $ 274,056 $ 269,780
========== ========== ========== ===========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 39.12% 38.96% 39.12% 38.96%
Cash distribution to Partnership $ 49,774 $ 49,512 $ 148,022 $ 145,972
Net income allocated to the
Partnership $ 36,356 $ 36,154 $ 107,339 $ 105,680
</TABLE>
Rental income, depreciation and management and leasing fees remained stable in
2000, as compared to 1999, while other operating expenses are slightly lower,
due primarily to a one-time charge for consulting fees in 1999, which did not
occur in 2000.
The Partnership's ownership interest in the Fund IX-X-XI-REIT Joint Venture
increased due to additional fundings by the Partnership to the Joint Venture in
the first quarter.
14
<PAGE>
The Ohmeda Building/Fund IX-X-XI-REIT Joint Venture
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 256,829 $ 256,829 $ 770,486 $ 770,486
----------- ----------- ----------- -----------
Expenses:
Depreciation 81,576 81,576 244,728 244,728
Management & leasing expenses 12,826 11,618 41,656 35,293
Other operating expenses (7,585) 3,899 73,410 (188)
----------- ----------- ----------- -----------
86,817 97,093 359,794 279,833
----------- ----------- ----------- -----------
Net income $ 170,012 $ 159,736 $ 410,692 $ 490,653
=========== =========== =========== ===========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 39.12% 38.9% 39.12% 38.9%
Cash distribution to Partnership $ 96,214 $ 91,777 $ 250,013 $ 281,352
Net income allocated to the
Partnership $ 66,524 $ 62,220 $ 160,856 $ 192,162
</TABLE>
Net income decreased in 2000, as compared to 1999, due to an overall increase in
expenses. Operating expenses increased significantly due in part to a
significant rise in real estate taxes which stemmed form the revaluation of the
property by Boulder County authorities in 1999. A later reduction in taxes due
to an appeal in 2000 was offset by a common area maintenance reimbursement
credit to the tenant.
Rental income remained stable for the three and nine months ended September 30,
2000, as compared to the same period in 1999. Total expenses decreased for the
three-month period ended September 30, 2000, as compared to the same period for
1999, due largely to other operating expenses being negative. This is due to an
offset of tenant reimbursements in operating costs, as well as management and
leasing fee reimbursements. Cash distributions and net income allocated to the
Partnership for the three month period ended September 30, 2000, increased
slightly as compared to 1999. The Partnership's ownership interest increased to
additional cash fundings to the IX-X-I-REIT Joint Venture in the first quarter.
15
<PAGE>
The 360 Interlocken Building/Fund IX-X-XI-REIT Joint Venture
------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 207,454 $ 207,791 $ 635,898 $ 622,070
----------- ----------- ----------- -----------
Expenses:
Depreciation 71,670 71,670 215,010 215,010
Management & leasing expenses 27,019 18,899 83,736 54,518
Other operating expenses, net of
reimbursements (2,165) (5,291) (54,699) 5,342
----------- ----------- ----------- -----------
96,524 85,278 244,047 274,870
----------- ----------- ----------- -----------
Net income $ 110,930 $ 122,513 $ 391,851 $ 347,200
=========== =========== =========== ===========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 39.12% 38.96% 39.12% 38.96%
Cash distribution to Partnership $ 71,657 $ 75,057 $ 238,967 $ 218,367
Net income allocated to the
Partnership $ 43,407 $ 47,720 $ 153,486 $ 135,914
</TABLE>
Rental income increased due to a tenant occupying additional space previously
leased to another tenant at a lower rate. Other operating expenses are negative
due to an offset of tenant reimbursements in operating costs, as well as
management and leasing fee reimbursement. Tenants are billed an estimated amount
for current year common area maintenance which is then reconciled the following
year and the difference billed to the tenants. Due to these CAM reimbursements,
management and leasing fees increased since these fees are charged only on
actual receipts received.
Cash distributions and net income allocated to the Partnership for the quarter
ended September 30, 2000, decreased in 2000, as compared to 1999, due to a
decrease in net income. The Partnership's ownership interest in the Fund IX-X-
XI-REIT Joint Venture increased due to additional capital contributions made by
the Partnership to the Joint Venture.
16
<PAGE>
The Iomega Building/Fund IX-X-XI-REIT Joint Venture
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 168,250 $ 150,009 $ 504,750 $ 397,755
----------- ----------- ----------- -----------
Expenses:
Depreciation 55,062 48,495 165,186 145,485
Management & leasing expenses 7,319 8,291 21,879 17,629
Other operating expenses 2,253 1,290 12,620 3,815
----------- ----------- ----------- -----------
64,634 58,076 199,685 166,929
----------- ----------- ----------- -----------
Net income $ 103,616 $ 91,933 $ 305,065 $ 230,826
=========== =========== =========== ===========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 39.12% 38.96% 39.12% 38.96%
Cash distribution to Partnership $ 60,197 $ 53,193 $ 178,502 $ 142,807
Net income allocated to the
Partnership $ 40,544 $ 35,812 $ 119,484 $ 90,380
</TABLE>
Rental income increased in 2000, as compared to 1999, due to the completion of
the parking lot complex in the second quarter of 1999. Total expenses increased
in 2000, over 1999, due to an increase in depreciation and real estate tax
expenses relating to the new parking lot. Cash distributions increased in 2000,
over 1999, due primarily to the increase in net income.
The Partnership's ownership interest in the Fund IX-X-XI-REIT Joint Venture
increased due to additional funding by the Partnership to the Joint Venture in
the first quarter.
17
<PAGE>
The Quest Building (formerly Bake Parkway) / Fund VIII-IX-REIT Joint Venture
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 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 & 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 % 100% 100% 100% 100%
Partnership's Ownership % 42.0% 45.2% 42.0% 45.2%
Cash Distribution to Partnership $ 74,318 $ 77,915 $ 247,318 $ 234,272
Net income allocated to the
Partnership $ 39,864 $ 45,496 $ 148,517 $ 139,499
</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"). On July 1, 2000, the Fund VIII-IX Joint
Venture contributed its interest in the Bake Parkway Property to the Fund
VIUII-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.
18
<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 IX, 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.
19
