<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 0-22039
--------------------------------------------------------
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
-----
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Item 1. Financial Statements
Balance Sheets - June 30, 2000
and December 31, 1999................................... 3
Statements of Income for the Three Months 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.............................................. 19
</TABLE>
2
<PAGE>
WELLS REAL ESTATE FUND IX, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets June 30, 2000 December 31, 1999
------------------------------------ ------------------------------------ ---------------------------
<S> <C> <C>
Investment in joint ventures $ 26,704,952 $ 27,196,918
(Note 2)
Cash and Cash equivalents 75,719 102,194
Due from affiliates 732,160 639,956
Deferred project costs 3,721 5,485
------------ ------------
Total assets $ 27,516,552 $ 27,944,553
============ ============
Liabilities and Partners' Capital
------------------------------------
Liabilities:
Partnership distributions payable $ 691,693 628,046
------------ ------------
Total liabilities 691,693 628,046
------------ ------------
Partners' capital:
Limited partners:
Class A-3,079,291 units outstanding as
of June 30, 2000 and 3,072,322
units as of December 31, 1999 26,224,498 26,114,657
Class B-420,709 units outstanding as
of June 30, 2000 and 427,678
units as of December 31, 1999 600,361 1,201,850
------------ ------------
Total partners' capital 26,824,859 27,316,507
------------ ------------
Total liabilities and partners'
capital $ 27,516,552 $ 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 Six Months Ended
-------------------------------------- --------------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Revenues:
Equity in income of joint ventures
(Note 2) 462,850 420,584 924,717 829,668
--------- --------- ---------- ----------
Expenses:
Computer cost 3,026 2,247 6,093 4,681
Partnership administration 20,147 20,499 28,574 39,658
Legal and accounting fees 3,459 9,518 16,240 15,222
Amortization of organization costs 0 1,562 0 3,125
--------- --------- ---------- ----------
26,632 33,826 50,907 62,686
--------- --------- ---------- ----------
Net income $ 436,218 $ 386,758 $ 873,810 $ 766,982
========= ========= ========== ==========
Net income allocated to Class A Limited
Partners $ 731,164 $ 689,221 $1,460,378 $1,374,266
Net (loss) allocated to Class B Limited
Partners $(294,946) $(302,463) $ (586,568) $ (607,284)
Net income per Class A Limited Partner
Unit $ 0.24 $ 0.23 $ 0.48 $ 0.45
Net (loss) per Class B Limited Partner
Unit $ (0.70) $ (0.66) $ (1.39) $ (1.32)
Cash distribution per Class A Limited
Partner Unit $ 0.23 $ 0.23 $ 0.45 $ 0.45
</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 YEAR ENDED DECEMBER 31, 1999 AND
SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Limited Partners
-------------------------------------------------------------------------------
Class A Class B Total
------------------------------------- ---------------------------------------- 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 1,460,378 0 (586,568) 873,810
Partnership distributions 0 (1,365,458) 0 0 (1,365,458)
Class B conversion elections 6,969 14,921 (6,969) (14,921) 0
--------- ----------- ------- ----------- ------------
BALANCE, June 30, 2000 3,079,291 $26,224,498 420,709 $ 600,361 $ 26,824,859
========= =========== ======= =========== ============
</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>
Six Months Ended
-----------------------------------------------------------------------
June 30, 2000 June 30, 1999
----------------------------------- ----------------------------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 873,810 $ 766,983
Adjustments to reconcile net income to net
cash used in by operating activities: (924,717) (829,668)
Equity in income of joint venture
Amortization of organization costs 0 3,125
Changes in assets and liabilities:
Prepaids and other assets 0 (3,872)
Decrease in accounts payable 0 (3,500)
------------ -----------
Net cash used in operating activities (50,907) (61,590)
------------ -----------
Cash flow from investing activities:
Investment in joint venture (44,358) (82,515)
Distributions received from joint ventures 1,370,601 1,426,106
------------ -----------
Net cash provided by investing activities 1,326,243 1,343,591
------------ -----------
Cash flow from financing activities:
Distributions to partners from
accumulated earning (1,301,811) (1,374,044)
------------ -----------
Net (decrease) in cash and cash equivalents (26,475) (97,386)
Cash and cash equivalents, beginning of year 102,194 326,022
------------ -----------
Cash and cash equivalents, end of period $ 75,719 $ 228,636
============ ===========
Supplemental disclosure of noncash investing
activities: Deferred project costs
applied to joint venture activities $ 1,764 $ 3,623
============ ===========
</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
June 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 June 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. and 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").
As of June 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 "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 "ABB Building"), which is owned by the Fund IX-X-XI-REIT Joint Venture;
(iv) a two-story office building in Irvine,
7
<PAGE>
California (the "Bake Parkway Building"), which is owned by the Fund VIII - IX
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
"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 June 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.
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.
8
<PAGE>
Results of Operations and Changes in Financial Conditions
---------------------------------------------------------
(a) General
-----------
As of June 30, 2000, the developed properties owned by the Partnership were 100%
occupied, whereas they were 99.8% occupied at June 30, 1999. Gross revenues of
the Partnership were $924,717 for the six months ended June 30, 2000, as
compared to $829,668 for the six months ended June 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 $50,907 for the six months ended June 30, 2000, as
compared to $62,686 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 $873,810 for the six months ended June 30, 2000, as compared to a net income
of $766,982 for the six months ended June 30, 1999.
The Partnership's net cash used in operating activities decreased to $(50,907)
for 2000, as compared to $(61,590) for 1999, which is due primarily to the
decrease in expenses. Net cash provided by investing activities decreased to
$1,326,243 from $1,343,591 because of the decreased distributions received from
joint ventures. Net cash used in financing activities decreased from $1,301,811
to $1,374,044 due to the distribution to partners from accumulated earnings.
Cash and cash equivalents decreased from $228,636 to $75,719 for the same period
in 2000.
The Partnership's distributions per unit for Class A Unit holders for the second
quarter of 2000 was $0.23 per weighted average unit compared to $0.23 for the
same period in 1999. 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 June 30, 2000, the Partnership was holding $73,604
available for investment in properties.
Subsequent Event
----------------
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 the Partnership and Wells Real Estate Fund VIII, L.P. On July 1, 2000,
the Fund VIII-Fund IX Joint Venture transferred its interest in the Bake Parkway
Property, (formerly the "Matsushita Building"), 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.
9
<PAGE>
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 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.
Property Operations
-------------------
As of June 30, 2000, the Partnership owned interests in the following
operational properties
The TCI Building/Fund VIII - IX Joint Venture
---------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 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 & 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 % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund VIII - Fund IX Joint Venture 45.2% 45.2% 45.2% 45.2%
Cash Distribution to Partnership $ 48,124 $ 47,405 $ 96,862 $ 96,220
Net income allocated to the
Partnership $ 32,143 $ 31,424 $ 64,899 $ 64,257
</TABLE>
Rental income, net income, and cash distributions are stable for 2000, as
compared to 1999, due to the stable occupancy rate and expenses.
10
<PAGE>
The Bake Parkway Building (formerly the "Matsushita Building")/Fund VIII - IX
-----------------------------------------------------------------------------
Joint Venture
-------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 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 & 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 % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund VIII - Fund IX Joint Venture 45.2% 45.2% 45.2% 45.2%
Cash Distribution to Partnership $ 86,458 $ 81,173 $173,000 $156,357
Net income allocated to the
Partnership $ 54,531 $ 48,752 $108,653 $ 94,003
</TABLE>
Matsushita Avionics and the Fund VIII-IX Joint Venture have 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-IX
Joint Venture releasing Matsushita Avionics from its obligations under the
existing lease and thereby allowing 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-IX Joint Venture that it will receive rental income on the existing
building at least equal to the rent and building expenses that the Fund VIII-IX
Joint Venture would have received 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.
11
<PAGE>
The Cirrus Logic Building/Fund VIII - IX Joint Venture
------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 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 & leasing expenses 12,213 11,501 22,527 20,340
Other operating expenses 5,122 (87,942) 4,843 (82,322)
-------- -------- -------- --------
90,100 (3,676) 172,900 83,538
-------- -------- -------- --------
Net income $ 94,439 $188,215 $196,198 $285,540
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund VIII - Fund IX Joint Venture 45.2% 45.2% 45.2% 45.2%
Cash distribution to Partnership $ 68,520 $110,909 $140,349 $180,734
Net income allocated to the
Partnership $ 42,690 $ 85,080 $ 88,688 $129,074
</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 adjustment 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.
12
<PAGE>
The Cellular One Building/Fund VIII - IX Joint Venture
------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 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 & 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 % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund VIII - Fund IX Joint Venture 45.2% 45.2% 45.2% 45.2%
Cash distribution to Partnership $145,932 $119,309 $278,504 $242,757
Net income allocated to the
Partnership $ 80,407 $ 54,607 $147,454 $113,384
</TABLE>
Net income increased in 2000, as compared to 1999, due to a common area
maintenance reimbursement billed in 2000 to the tenants. 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. Monthly
common area maintenance billings to the tenants were increased in 2000 to offset
1999 underpayments.
13
<PAGE>
The ABB Building/Fund IX-X-XI-REIT Joint Venture
------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $291,417 $261,987 $606,582 $522,079
Interest income 15,976 16,681 33,704 31,741
-------- -------- -------- --------
307,393 278,668 640,286 553,820
-------- -------- -------- --------
Expenses:
Depreciation 98,454 134,100 196,908 268,200
Management & leasing expenses 23,395 29,504 75,955 61,406
Other operating expenses (9,264) 25,829 (42,634) 3,707
-------- -------- -------- --------
112,585 189,433 230,229 333,313
-------- -------- -------- --------
Net income $194,808 $ 89,235 $410,057 $220,507
======== ======== ======== ========
Occupied % 100% 98.28% 100% 98.28%
Partnership's Ownership % 39.16% 38.96% 39.16% 38.96%
Cash distribution to Partnership $114,920 $ 87,752 $236,430 $191,837
Net income allocated to the
Partnership $ 76,321 $ 34,772 $160,689 $ 86,721
</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 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 the 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 expenses.
The Partnership's ownership interest increased due to the contribution of
additional cash fundings to the IX-X-XI-REIT Joint Venture in the first quarter
of 2000.
14
<PAGE>
The Ohmeda Building/Fund IX-X-XI-REIT Joint Venture
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $256,828 $256,829 $513,657 $513,657
-------- -------- -------- --------
Expenses:
Depreciation 81,576 81,576 163,152 163,152
Management & leasing expenses 11,829 12,058 28,830 23,675
Other operating expenses 53,401 (4,450) 80,995 (4,087)
-------- -------- -------- --------
146,806 89,184 272,977 182,740
-------- -------- -------- --------
Net income $110,022 $167,645 $240,680 $330,917
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund IX-X-XI REIT Joint Venture 39.16% 38.96% 39.16% 38.96%
Cash distribution to Partnership $ 72,846 $ 94,888 $153,799 $189,536
Net income allocated to the
Partnership $ 43,119 $ 65,322 $ 94,332 $129,942
</TABLE>
Net income decreased in 2000, as compared to 1999, due to an overall increase in
expenses. Operating expenses increased significantly due to the rise in real
estate taxes, which stemmed from 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.
Cash distributions have decreased largely because of the decrease in net income.
The Partnership's ownership interest increased due to additional cash fundings
to the IX-X-XI-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 Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $222,255 $207,758 $428,444 $414,279
-------- -------- -------- --------
Expenses:
Depreciation 71,670 71,670 143,340 143,340
Management & leasing expenses 35,810 17,755 56,717 35,619
Other operating expenses (35,614) 12,884 (52,534) 10,633
-------- -------- -------- --------
71,866 102,309 147,523 189,592
-------- -------- -------- --------
Net income $150,389 $105,449 $280,921 $224,687
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund IX-X-XI -REIT Joint Venture 39.16% 38.96% 39.16% 38.96%
Cash distribution to Partnership $ 87,526 $ 64,433 $167,310 $143,311
Net income allocated to the
Partnership $ 58,917 $ 41,088 $110,079 $ 88,194
</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 June 30, 2000, increased in 2000 over 1999, due to an increase in net
income. 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.
16
<PAGE>
The Lucent Technologies Building/Fund IX-X-XI-REIT Joint Venture
----------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $145,752 $145,752 $291,504 $291,504
-------- -------- -------- --------
Expenses:
Depreciation 45,801 45,801 91,602 91,602
Management & leasing expenses 5,370 5,370 10,740 10,739
Other operating expenses 4,538 9,184 8,019 12,198
-------- -------- -------- --------
55,709 60,355 110,361 114,539
-------- -------- -------- --------
Net income $ 90,043 $ 85,397 $181,143 $176,965
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % 39.16% 38.96% 39.16% 38.96%
Cash distribution to Partnership $ 48,684 $ 46,638 $ 98,248 $ 96,459
Net income allocated to the
Partnership $ 35,277 $ 33,275 $ 70,983 $ 69,526
</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.
17
<PAGE>
The Iomega Building/Fund IX-X-XI-REIT Joint Venture
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $168,250 $123,873 $336,500 $247,746
-------- -------- -------- --------
Expenses:
Depreciation 55,062 48,495 110,124 96,990
Management & leasing expenses 7,280 3,735 14,560 9,338
Other operating expenses 5,219 4,238 10,367 2,525
-------- -------- -------- --------
67,561 56,468 135,051 108,853
-------- -------- -------- --------
Net income $100,689 $ 67,405 $201,449 $138,893
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund IX-X-XI-REIT Joint Venture 39.16% 38.96% 39.16% 38.97%
Cash distribution to Partnership $ 59,125 $ 43,652 $118,305 $ 89,614
Net income allocated to the
Partnership $ 39,447 $ 26,265 $ 78,940 $ 54,568
</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.
18
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 6 (b). No reports 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 IX, 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.
19
