ITEM 1. BUSINESS
General
Wells Real Estate Fund VIII, L.P. (the "Partnership") is a Georgia public limited partnership having Leo F. Wells, III and Wells Partners, L.P., a Georgia non-public limited partnership, 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 or industrial properties.
On January 6, 1995, the Partnership commenced a public offering of up to $35,000,000 of limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership commenced active operations on February 24, 1995, when it received and accepted subscriptions for 125,000 units. The offering was terminated on January 5, 1996, and received gross proceeds of $32,042,689 representing subscriptions from 3,204,269 Limited Partners units, composed of two classes of limited partnership interests, Class A and Class B limited partnership units.
The Partnership owns interests in properties through 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, 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"); (iv) Fund VIII-IX-REIT Joint Venture, a joint venture between Wells OP and the Fund VIII-IX Joint Venture.
As of December 31, 2000, the Partnership owned interests in the following properties through its ownership of 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 Property") 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 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 "Quest Building"), formerly the "Bake Parkway Building" previously owned by the Fund VIII-IX Joint Venture, which is now owned by the Fund VIII-IX-REIT Joint Venture; and (viii) a two-story office building located in Boulder County, Colorado (the "Cirrus Logic Building") which are owned by the Fund VIII-Fund IX Joint Venture.
Employees
The Partnership has no direct employees. The employees of Wells Capital, Inc., the sole general partner of Wells Partners, L.P., a General Partner of the Partnership, perform a full range of real estate services including leasing and property management, accounting, asset management and investor relations for the Partnership. See Item 11 "Compensation of General Partners and Affiliates," for a summary of the fees paid to the General Partners and their affiliates during the fiscal year ended December 31, 2000.
Insurance
Wells Management Company, Inc., an affiliate of the General Partners, carries comprehensive liability and extended coverage with respect to all the properties owned directly or indirectly by the Partnership. In the opinion of management of the registrant, the properties are adequately insured.
Competition
The Partnership will experience competition for tenants from owners and managers of competing projects which may include the General Partners and their affiliates. As a result, the Partnership may be required to provide free rent, reduced charges for tenant improvements and other inducements, all of which may have an adverse impact on results of operations. At the time the Partnership elects to dispose of its properties, the Partnership will also be in competition with sellers of similar properties to locate suitable purchasers for its properties.
ITEM 2.
ITEM 2. PROPERTIES
The Partnership owns interests in eight properties through its investment in joint ventures of which six are office buildings and two are retail buildings. 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. As of December 31, 2000, these properties were 100% occupied as compared to 99% occupied as of December 31, 1999 and 1998.
The following table shows lease expirations during each of the next ten years for all leases as of December 31, 2000, assuming no exercise of renewal options or termination rights:
(1) Average monthly gross rent over the life of the lease, annualized. (2) Expiration of 57,457 square feet CH2M Hill lease, Gainesville, Florida. (3) Expiration of 69,424 square feet BellSouth lease, Jacksonville, Florida. (4) Expiration of US Cellular lease, Madison, Wisconsin.
The following describes the properties in which the Partnership owns an interest as of December 31, 2000:
Fund VII--Fund VIII Joint Venture
On February 10, 1995, the Partnership and Wells Real Estate Fund VII, L.P. ("Wells Fund VII"), a Georgia public limited partnership affiliated with the Partnership through common general partners, entered into a Joint Venture Agreement known as Fund VII and Fund VIII Associates (the "Fund VII--Fund VIII Joint Venture"). The investment objectives of Wells Fund VII are substantially identical to those of the Partnership. The Partnership holds an approximate 63% equity interest and Wells Fund VII holds an approximate 37% equity interest in the Fund VII--Fund VIII Joint Venture which owns and operates an office building and a retail/office building as described below. As of December 31, 2000, the Partnership had contributed $4,267,621 and Wells Fund VII had contributed $2,474,725 for a total cost of $6,742,346 to the Fund VII--Fund VIII Joint Venture for the acquisition and development of the property.
The Hannover Center
On April 1996, Wells Fund VII contributed 1.01 acres of land located in Clayton County, Georgia and improvements thereon valued at $512,000 to the Fund VII--Fund VIII Joint Venture for the development of a 12,080 square foot, single story combination retail/office building. As of December 31, 2000, Wells Fund VII had funded approximately $1,437,801 for the development of the Hannover property in addition to the cost of the land, and the Partnership had contributed $190,311 to the joint venture for the development of the property.
A five-year lease has been signed with Mattress King, a mattress sale store, to occupy 6,020 square feet. The annual base rent for the first three years is $88,795, and for the last two years is $91,805. The lease will expire in 2006. Two additional tenants leased the remaining space at the property with leases to expire in 2003.
The average effective annual rental per square foot at the Hannover Property was $9.15 for 2000, $15.97 for 1999, $10.05 for 1998, and $8.92 for 1997. The occupancy as of December 31, 2000, 1999, and 1998 was 100%.
CH2M Hill at Gainesville
Wells Fund VII made an initial contribution to the Fund VII--Fund VIII Joint Venture of $677,534, which constituted the total purchase price and all other acquisition and development costs expended by the Fund VII--Fund VIII Joint Venture for the purchase of a 5.0 acre parcel of land in Gainesville, Alachua County, Florida. Construction of a 62,975 square foot office building, containing 61,468 rentable square feet was completed in December 1995. The average effective annual rental per square foot at the Gainesville Property was $9.37 for 2000 and 1999, $9.19 for 1998, $8.63 for 1997, and $8.69 for 1996. The occupancy rate at year end for 2000, 1999, and 1998 was 100%.
A 9 year, 11 month lease, to occupy 57,457 square feet has been signed with CH2M Hill, Engineers, Planners, Economists, Scientists, with an option to extend for an additional five year period. The annual base rent during the initial term is $530,313 payable in equal monthly installments of $44,193. The annual rent for the extended term will be at market rate. Assuming no options or termination rights, the lease with CH2M Hill will expire in the year 2005.
As of December 31, 2000, the Partnership had contributed $4,077,310, and Wells Fund VII had contributed $1,036,923 to the Fund VII--Fund VIII Joint Venture toward the completion of this project.
Fund VI-VII-VIII Joint Venture
On April 17, 1995, the Partnership, Wells Fund VII and Wells Real Estate Fund VI, L.P. ("Wells Fund VI") a Georgia public limited partnership, affiliated with the Partnership through common general partners, formed a joint venture known as the Fund VI, Fund VII, and Fund VIII Associates (the "Fund VI-VII-VIII Joint Venture"). The investment objectives of Wells Fund VI are substantially identical to those of the Partnership. As of December 31, 2000, the Partnership had contributed approximately $5,700,000 for an approximately 32.3% equity interest in the Fund VI-VII-VIII Joint Venture which owns an office building in Jacksonville, Florida and a multi-tenant retail center in Clemmons, North Carolina. As of December 31, 2000, Wells Fund VI had contributed $6,067,688 for an equity interest in the Fund VI-VII-VIII Joint Venture of approximately 34.3%, and Wells Fund VII contributed approximately $5,932,312 for an equity interest in the Fund VI-VII-VIII Joint Venture of approximately 33.4%, for a total of $17,700,000 to the Fund VI-VII-VIII Joint Venture for the acquisition and development of the property.
BellSouth Property
On April 25, 1995, the Fund VI-VII-VIII Joint Venture purchased a 5.55 acre parcel of land in Jacksonville, Florida for a total of $1,245,059 including closing costs. In May
1996, the 92,964 square foot office building was completed with BellSouth Advertising and Publishing Corporation, a subsidiary of BellSouth Company, occupying approximately 66,333 square feet and American Express Travel Related Services Company, Inc. occupying approximately 22,607 square feet. BellSouth occupied an additional 3,901 square feet in December 1996. The land purchase and construction costs, totaling approximately $9 million, were funded by capital contributions of $2,000,000 by the Partnership, $3,500,000 by Wells Fund VI and $3,500,000 by Wells Fund VII.
The BellSouth lease is for a term of nine years and eleven months with an option to extend for an additional five-year period at market rate. The annual base rent during the initial term is $1,094,426 during the first five years and $1,202,034 for the balance of the initial lease term. The American Express lease is for a term of five years at an annual base rent of $369,851. BellSouth and American Express are required to pay additional rent equal to their share of operating expenses during their respective lease terms.
The average effective annual rental per square foot at the BellSouth property was $16.36 for 2000, 1999, and 1998, $16.40 for 1997 and $14.15 for 1996, the first year of occupancy. The occupancy rate at year end was 100% for 2000, 1999, and 1998.
Tanglewood Commons Shopping Center
On May 31, 1995, the Fund VI-VII-VIII Joint Venture purchased a 14.683 acre tract of real property located in Clemmons, Forsyth County, North Carolina. The land purchase costs were funded by a capital contribution made by Wells Fund VI. As of December 31, 2000, Fund VI had contributed $2,567,688, and Fund VII had contributed $2,432,312 and the Partnership had contributed $3,700,000 for the development of this project.
The Fund VI-VII-VIII Joint Venture developed and constructed one large strip shopping center building containing approximately 67,320 gross square feet on a 12.48 acre tract. The remaining 2.2 acre portion of the property consists of four outparcels which have been graded and are held for future development or resale.
Total costs and expenses incurred by the Fund VI-VII-VIII Joint Venture for the acquisition, development, construction and completion of the shopping center are approximately $8,700,000. Construction of the project began in March, 1996, and was substantially completed in the first quarter of 1997.
Harris Teeter, Inc., a regional supermarket chain, executed a lease for a minimum of 45,000 square feet with an initial term of 20 years with extension options of four successive five year periods with the same terms as the initial lease. The annual base rent during the initial term is $488,250. In addition, Harris Teeter has agreed to pay percentage rents equal to one percent of the amount by which Harris Teeter's gross sales exceed $35,000,000 for any lease year.
The average effective annual rental per square foot at Tanglewood Commons was $12.53 for 2000, $11.48 for 1999, $10.96 for 1998 and $9.12 for 1997, the first year of occupancy. The occupancy rate at year end was 100% for 2000 and 91% for 1999 and 1998.
Fund VIII-Fund IX Joint Venture
On June 10, 1996, the Partnership and Wells Real Estate Fund IX, L.P. ("Wells Fund IX"), a Georgia public limited partnership, affiliated with the Partnership through common general partners, formed a joint venture known as Fund VIII and Fund IX Associates (the "Fund VIII-Fund IX Joint Venture"). The investment objectives of Wells Fund IX are substantially identical to those of the Partnership. As of December 31, 2000, the Partnership had contributed $15,987,323 for an approximately 55% equity interest, and Wells Fund IX had contributed $13,289,358 for an approximately 45% equity interest in the Fund VIII-Fund IX Joint Venture.
US Cellular Building
On June 17, 1996, the Fund VIII-Fund IX Joint Venture purchased a 7.09 acre tract of real property in Madison, Dane County, Wisconsin for a total cost of $859,255 including closing costs. Construction has been completed on a four-story office building containing approximately 101,727 rentable square feet (the "US Cellular Building").
In June 1997, US Cellular, a subsidiary of BellSouth Corporation, occupied its leased space of 76,276 rentable square feet comprising approximately 75% of the building. The initial term of the lease is 9 years and 11 months beginning in June 1997, with the option to extend the initial term of the lease for two consecutive five year periods. The annual base rent payable during the initial term is $902,418 payable in equal monthly installments of $75,201 during the first five years and $1,016,822 payable in equal monthly installments of $84,735 during the last 4 years and 11 months of the initial term. The annual base rent for each extended term will be at market rental rate. US Cellular is required to pay additional rent equal to its share of operating expenses during the lease term.
The land purchase and construction costs have been funded by capital contributions of $6,573,342 by the Partnership and $3,912,444 by Wells Fund IX for a total cost of approximately $10,500,000.
The average effective annual rental per square foot at the US Cellular Building was $12.60 for 2000, 1999, and 1998 and $8.87 for 1997, the first year of occupancy. The occupancy rate at year end was 100% in 2000, 1999, and 1998.
The TCI Building
On October 10, 1996, the Fund VIII-Fund IX Joint Venture purchased a one-story office building containing approximately 40,000 rentable square feet, located on approximately 4.864 acres of land in Farmer's Branch, Dallas County, Texas for a purchase price of $4,450,000 excluding acquisition costs (the "TCI Building").
The funds used by the Fund VIII-Fund IX Joint Venture to acquire the TCI Building were derived from capital contributions made by the Partnership and Wells Fund IX totaling $2,238,170 and $2,236,530, respectively, for total contributions to the Fund VIII-Fund IX Joint Venture of $4,474,700, including acquisition costs. The Partnership currently owns an approximate 55% equity interest in the Fund VIII-Fund IX Joint Venture.
The TCI Building is leased to TCI Valwood Limited Partnership I for a period of fifteen years, with options to extend the lease for three consecutive five-year periods. The annual base rent is $430,001 during the first five years, $454,001 during the next five years and $482,001 during the last five years. The TCI lease commenced on July 19, 1996 and was assigned by the seller to the Fund VIII--Fund IX Joint Venture on October 10, 1996. The lease agreement is a net lease in that the tenant is responsible for the operating expenses including real estate taxes.
The occupancy rate at the TCI Building at year end was 100% for 2000, 1999, and 1998. The average effective rental per square foot in the TCI Building is $11.38 for 2000, 1999, 1998, 1997, and 1996.
The Cirrus Logic Building
On February 20, 1997, the Fund VIII-Fund IX Joint Venture acquired a 4.26 acre tract of real property in Broomfield, Colorado, located in Boulder County in the Denver/Boulder metropolitan area (the "Denver Property"). A two-story office building containing approximately 49,460 rentable square feet has been constructed on the Denver Property (the "Cirrus Logic Building"). The Denver Property is part of the Interlocken Business Park, a 963-acre business development for advanced technology and research/development oriented companies.
The purchase price paid for the Cirrus Logic Building was $7,029,000 excluding acquisition costs. Construction of the Cirrus Logic Building was substantially completed in March 1997 with Cirrus Logic, Inc. occupying the entire building.
The lease, as well as Cirrus Logic's obligation to pay rent, commenced on the date upon which Cirrus Logic took occupancy of the building. The lease with Cirrus Logic provides for a term of 15 years from the commencement date. Cirrus Logic has the option to renew the lease for two additional terms of five years each. The base rental payable during any such extended term would be 95% of the then current market rental rate for comparable office buildings in the Boulder County area. The annual initial base rent payable by Cirrus Logic under its lease is $677,755. The base annual rent will be increased by 10% beginning with the sixth year of the lease and will be increased another 10% beginning with the eleventh year of the lease.
Under its lease, Cirrus Logic is responsible for all utilities, cleaning taxes and other operating expenses and for maintaining property and liability insurance on the Cirrus Logic Building. The Fund VIII-Fund IX Joint Venture shall maintain for its own benefit liability insurance for the Cirrus Logic Building as well as insurance for fire, vandalism and malicious mischief.
The funds used by the Fund VIII-Fund IX Joint Venture to acquire the Cirrus Logic Building were derived entirely from capital contributions made to the Fund VIII-Fund IX Joint Venture by the Partnership and Wells Fund IX. The Partnership and Wells Fund IX each made capital contributions of approximately $3,555,495 and $3,532,275, respectively, to Fund the purchase of the property, for total capital contributions to the Fund VIII-Fund IX Joint Venture with respect to the Cirrus Logic Building of approximately $7,087,770.
The average effective rental rate per square foot at the Cirrus Logic Building was $14.92 for 2000, 1999, and 1998 and $13.25 for 1997, the first year of occupancy. The occupancy rate at year end was 100% for 2000, 1999 ,and 1998.
Fund VIII-Fund IX-REIT Joint Venture
On January 10, 1997, the Fund VIII-Fund IX Joint Venture acquired a two-story office building containing approximately 65,006 rentable square feet on a 4.4 acre tract of land located at 15253 Bake Parkway, in the Irvine Spectrum planned business community in metropolitan Orange County, California (the "Quest Building"), formerly the Bake Parkway Building. The total consideration paid for the building was $7,193,000 excluding acquisition expenses.
The funds used by the Fund VIII-Fund IX Joint Venture to acquire the Quest Building were derived entirely from capital contributions made to the Fund VIII-Fund IX Joint Venture by the Partnership and Wells Fund IX. The Partnership and Wells Fund IX made capital contributions of approximately $3,620,316 and $3,608,109, respectively, to fund the purchase of the building, for total capital contributions to the Fund VIII-Fund IX Joint Venture with respect to the Quest Building of approximately $7,228,425.
On February 18, 1999, Wells OP entered into a Rental Income Guaranty Agreement with 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. ("VIII-IX Joint Venture"), whereby Wells OP guaranteed the VIII-IX Joint Venture that it would receive rental income on the Quest Building previously leased to Matsushita Avionics at least equal to the rental and building expenses that the VIII-IX Joint Venture would have received over the remaining term of its original lease with Matsushita Avionics. Wells OP had paid approximately $543,000 in rental income guaranty payments to the VIII-IX Joint Venture through December 31, 2000, but has since ceased making such payments since the Bake Parkway Building is now fully leased to Quest.
On June 15, 2000, the Fund VIII-IX-REIT Joint Venture was formed between Wells OP and Fund VIII and Fund IX Associates. On July 1, 2000, the Fund VIII-IX Joint Venture contributed its interest in the Bake Parkway Property to the Fund VIII-IX-REIT Joint Venture. At December 31, 2000, the Partnership held an equity interest in the VIII-IX Joint Venture of 46.2%.
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 cost approximately $1,231,000 and loans funded by Wells OP.
The average effective rental per square foot at the Quest Building is $13.72 for 2000, $10.11 for 1999, and $10.32 for 1998. The occupancy rate at year end was 100% in 2000, 1999, 1998, and 1997.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
There were no material pending legal proceedings or proceedings known to be contemplated by governmental authorities involving the Partnership during 2000.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Limited Partners for the year of 2000.
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PART II
ITEM 5.
ITEM 5. MARKET FOR PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER MATTERS.
As of February 28, 2001, the Partnership had 2,764,087 outstanding Class A Units held by a total of 2,020 Limited Partners and 439,182 outstanding Class B Units held by a total of 243 Limited Partners. The capital contribution per unit is $10.00. There is no established public trading for the Partnership's limited partnership units, and it is not anticipated that a public trading market for the units will develop. Under the Partnership Agreement, the General Partners have the right to prohibit transfers of units.
The General Partners have estimated the investment value of properties held by the Partnership, as of December 31, 2000, to be $11.15 per Class A Unit and $14.88 per Class B Units based on market conditions existing in early December 2000. The methodology used for this valuation was to estimate the amount a holder of Partnership Units would receive if the Partnership's properties were all sold in the ordinary course of business as of December 31, 2000, and the proceeds from such sales (without reduction for selling expenses), together with Partnership funds held as of such date, were distributed in a liquidation of the Partnership. The value was confirmed as reasonable by an independent MAI appraiser, David L. Beal Company, although no actual MAI appraisal was performed due to the inordinate expense involved with such an undertaking. The valuation does not include any fractional interest valuation.
Class A Status Limited Partners are entitled to a distribution from Net Cash from Operations, as defined in the Partnership Agreement to mean cash flow, less adequate cash reserves for other obligations of the Partnership for which there is no provision, on a per Unit basis until they have received distributions in each fiscal year of the Partnership equal to 10% of their adjusted capital contributions. After this preference is satisfied, the General Partners will receive an amount of Net Cash From Operations equal to 10% of the total amount of Net Cash From Operations distributed. Thereafter, the Limited Partners holding Class A Units will receive 90% of Net Cash From Operations and the General Partners will receive 10%. No Net Cash from Operations will be distributed to Limited Partners holding Class B Units. Holders of Class A Units will, except in limited circumstances, be allocated none of the Partnership's net loss, depreciation, amortization and cost recovery deductions. These deductions will be allocated to the Class B Units, until their capital account balances have been reduced to zero. No distributions have been made to the General Partner as of December 31, 2000.
Cash distributions made to Class A Limited Partners during the two most recent fiscal years were as follows:
The fourth quarter distribution was accrued for accounting purposes in 2000, and was not actually paid to Limited Partners until February 2001. Although there is no assurance, the General Partners anticipate that cash distributions to Limited Partners holding Class A Units will continue in 2001 at a level at least comparable with 2000 cash distributions on an annual basis.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The following sets forth a summary of the selected financial data for the fiscal years ended December 31, 2000, 1999, 1998, 1997, and 1996:
(1) The weighted average unit is calculated by averaging units over the period they are outstanding during the time units are still being purchased or converted by Limited Partners in the Partnership.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONs
The following discussion and analysis should be read in conjunction with the selected financial data and 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 the 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
General
Gross revenues of the Partnership were $1,373,795 for the year ended December 31, 2000, as compared to $1,360,497 for the year ended December 31, 1999 and $1,362,513 for the year ended December 31, 1998. This increase was attributable primarily to increased interest income earned on funds held by the Partnership. Expenses of the Partnership were $85,732 for 2000, as compared to $93,551 in 1999 and $93,342 in 1998. These changes were due primarily to a decrease in partnership administrative costs and legal and accounting fees. As a result, net income of the Partnership increased to $1,288,063 for the year ended December 31, 2000, as compared to $1,266,946 for the year ended December 31, 1999 and $1,269,171 for the year ended December 31, 1998.
The Partnership made cash distributions of investment income to Limited Partners holding Class A units of $0.89 per Class A unit for the year ended December 31, 2000, $0.88 per Class A unit for the year ended December 31, 1999, and $0.86 per Class A unit for the year ended December 31, 1998. The General Partners anticipate distributions per unit will continue to increase for limited partners holding Class A units in 2001. Distributions accrued for the fourth quarter of 2000 to the Limited Partners holding Class A units were paid in February 2001. No cash distributions were made to Limited Partners holding Class B units.
Property Operations
The Partnership's ownership interest in the Fund VII-Fund VIII Joint Venture is 63%, in the Fund VI-VII-VIII Joint Venture is 32%, in the Fund VIII-Fund IX Joint Venture is 55%, and in the Fund VIII-IX-REIT Joint Venture is 46%.
As of December 31, 2000, the Partnership owned equity through interests in Joint Ventures in the following operational properties:
CH2M Hill at Gainesville/Fund VII-Fund VIII Joint Venture
Rental income remained relatively stable in 2000, as compared to 1999 and 1998. Management and leasing expenses were higher in 1999 due to a change in estimates of leasing fees. Other operating expenses decreased in 2000 due primarily to an increase of 2000 monthly common area maintenance billing to 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. Management and leasing fee reimbursement were included in other operating expenses.
The CH2M Hill Property incurred property taxes of $81,509 for 2000, $81,703 for 1999, and $79,407 for 1998.
For comments on the general competitive conditions to which the property may be subject, see Item 1, Business, page 2. For additional information on tenants, etc. refer to Item 2, Properties, Page 3.
The Hannover Center/Fund VII-Fund VIII Joint Venture
Rental income decreased in 2000, as compared to 1999 and 1998, due to a partial year occupancy in 2000. Net income and cash distributions to the Partnership decreased in 2000, as compared to 1999 and 1998, due to one tenant defaulting on the lease and moving out at the end of 1999. The management team is currently taking legal action against that tenant. Depreciation increased in 2000 due to a write-off of tenant improvement on the defaulted tenant. Other operating expenses increased in 2000 due primarily to an uncollectable accounts receivable recorded in this year.
Cash distribution to the Partnership was lower in 1998, as compared to 1999, due to a $44,000 in construction being funded by operating cash in 1998.
The Hannover Property incurred property taxes of $12,967 for 2000, $12,995 for 1999, and $12,668 for 1998.
For comments on the general competitive conditions to which the property may be subject, see Item 1, Business, page 2. For additional information on the property, tenants, etc. refer to Item 2, Properties, page 3.
BellSouth Property / Fund VI-VII-VIII Joint Venture
Rental income, depreciation, and management and leasing expenses have remained relatively stable in 2000, 1999 and 1998, while other operating expenses increased, as compared to 1999, due primarily to increased janitorial expenses and expenses for an application of water repellent on the building. As a result, net income and cash distribution to the Partnership decreased in 2000.
The BellSouth Property incurred property taxes of $168,751 for 2000, $166,706 for 1999, and $171,629 for 1998.
For comments on the general competitive conditions to which the property may be subject, see Item 1, Business, page 2. For additional information on the property, tenants, etc. refer to Item 2, Properties, page 3.
Tanglewood Commons/Fund VI-VII-VIII Joint Venture
Rental income, depreciation, and management and leasing expenses increased in 2000, as compared to 1999 and 1998, 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 under billing. 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. As a result, net income and cash distribution to the Partnership increased.
The Tanglewood Commons Property incurred property taxes of $54,005 for 2000, $53,259 for 1999, and $52,229 for 1998.
For comments on the general competitive conditions to which the property may be subject, see Item 1, Business, page 2. For additional information on the property, tenants, etc., refer to Item 2, Properties, page 3.
The TCI Building--Fund VIII-Fund IX Joint Venture
Rental income and expenses remained constant. Total revenue and net income increased in 2000, due to fluctuations in interest rates.
Real estate taxes and primarily all operational expenses for the building are the responsibility of the tenant.
For comments on the general competitive conditions to which the property may be subject, see Item 1, Business, page 2. For additional information on tenants, etc. refer to Item 2, Properties, page 3.
The Quest Building (formerly the Bake Parkway Building)/ 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 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 cost approximately $1,231,000 and was funded by Wells OP.
Rental income and management and leasing fees have increased in 2000, as compared to 1999 and 1998, due to the increased rental rate on the Quest lease. Depreciation has increased due to the tenant improvement placed in service in 2000. Other operating expenses increased in 2000 due primarily to a write-off of prior year straight-line rent related to a prior tenant.
The Cirrus Logic Building/Fund VIII-Fund IX Joint Venture
Rental income, depreciation, and management and leasing fees remained relatively stable while other operating expenses increased for the year ended December 31, 2000, as compared to the same period in 1999, due primarily to an adjustment for common area maintenance billing to the tenants. Tenants are billed an estimated amount for the current year common area maintenance which is then reconciled in the following year and the difference billed to the tenants. The decrease in other operating expenses from 1998 to 1999 was due to an adjustment for property taxes billed to tenants. Management fees reimbursed by the tenant are also included in other operating expenses.
The building incurred property taxes of $231,696 for 2000, $215,174 for 1999, and $101,229 for 1998.
For comments on the general competitive conditions to which the property may be subject, see Item 1, Business, page 2. For additional information on tenants, etc. refer to Item 2, Properties, page 3.
The US Cellular Building/Fund VIII-Fund IX Joint Venture
Net income increased for the year ended December 31, 2000, as compared to 1999, due to an increase in common area maintenance reimbursements billed to tenants due to a large credit for 1998 that was applied to the tenants in 1999 but not in 2000. Net income decreased for the year ended December 31, 1999, as compared to 1998, due to a decrease in common area maintenance reimbursements billed to tenants in 1999, due to overbilling of property tax in 1998. The credit for 1998 was approximately $100,000 and was credited to the tenants in 1999. Tenants are billed an estimated amount for the current year common area maintenance which is then reconciled in the following year and the difference billed to the tenant. Management fee reimbursement is also included in operating costs. The building incurred property taxes of $47,654 for 2000, $49,173 for 1999, and $50,825 for 1998.
For comments on the general competitive conditions to which the property may be subject, see Item 1, Business, page 2. For additional information on tenants, etc. refer to Item 2, Properties, page 3.
Liquidity and Capital Resources
During its offering, which terminated on January 5, 1996 the Partnership raised a total of $32,042,689 in capital through the sale of 3,204,269 Units. No additional units will be sold by the Partnership. As of December 31, 2000, the Partnership incurred $6,087,744 in acquisition and advisory fees, selling commissions and organizational and offering expenses, a repurchase of $8,000 limited partnership units, and investment by the Partnership of $25,954,945 in Joint Ventures.
The Partnership's net cash used in operating activities decreased to $68,968, in 2000, as compared to $87,298 in 1999, due primarily to increased net income and an increase in accounts payable. Net cash provided by investing activities of $2,474,151 in 2000 is primarily the result of distributions received from the joint ventures. Net cash used in financing activities has increased due primarily to increased Partnership distributions.
The Partnership's distributions paid and payable through the fourth quarter of 2000 have been paid from net cash from operations and a return of capital. The Partnership anticipates that distributions will continue to be paid on a quarterly basis from such sources. No cash distributions were paid to Class B unitholders for 2000. The Partnership expects to meet liquidity requirements and budget demands through cash flow from operations.
Since properties are acquired on an all-cash basis, the Partnership has no permanent long-term liquidity requirements.
Inflation
Real estate has not been affected significantly by inflation in the past three years due to the relatively low inflation rate. There are provisions in the majority of tenant leases executed by the Partnership to protect the Partnership from the impact of inflation. Most leases contain common area maintenance charges ("CAM charges"), real estate tax and insurance reimbursements on a per square foot bases, or in some cases, annual reimbursement of operating expenses above a certain per square foot allowance. These provisions should reduce the Partnership's exposure to increases in costs and operating expenses resulting from inflation.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements of the Registrant and supplementary data are detailed under Item 14(a) and filed as part of the report on the pages indicated.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no disagreements with the Partnership's accountants or other reportable events during 2000.
PART III
ITEM 10.
ITEM 10. GENERAL PARTNERS OF THE PARTNERSHIP
Wells Partners, L.P.
Wells Partners, L.P. is a private Georgia limited partnership formed on October 25, 1990. The sole General Partner of Wells Partners, L.P. is Wells Capital, Inc., a Georgia Corporation. The executive offices of Wells Capital, Inc. are located at 6200 The Corners Parkway, Norcross, Georgia 30092.
Leo F. Wells, III.
Mr. Wells is a resident of Atlanta, Georgia, is 57 years of age and holds a Bachelor of Business Administration Degree in Economics from the University of Georgia. Mr. Wells is the President and sole Director of Wells Capital. Mr. Wells is the President of Wells & Associates, Inc., a real estate brokerage and investment company formed in 1976 and incorporated in 1978, for which he serves as principal broker. Mr. Wells is also currently the sole Director and President of Wells Management Company, Inc., a property management company he founded in 1983. In addition, Mr. Wells is the President and Chairman of the Board of Wells Investment Securities, Inc., Wells & Associates, Inc., and Wells Management Company, Inc. which are affiliates of the General Partners. From 1980 to February 1985, Mr. Wells served as Vice-President of Hill-Johnson, Inc., a Georgia corporation engaged in the construction business. From 1973 to 1976, he was associated with Sax Gaskin Real Estate Company and from 1970 to 1973, he was a real estate salesman and property manager for Roy D. Warren & Company, an Atlanta real estate company.
ITEM 11.
ITEM 11. COMPENSATION OF GENERAL PARTNERS AND AFFILIATES
The following table summarizes the compensation and fees paid to the General Partners and their affiliates during the year ended December 31, 2000:
(1) The majority of these fees are not paid directly by the Partnership but are paid by the joint venture entities which own properties to which the property management and leasing services relate and include management and leasing fees.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
No Limited Partner is known by the Partnership to own beneficially more than 5% of the outstanding units of the Partnership.
Set forth below is the security ownership of management as of December 31, 2000.
No arrangements exist which would, upon implementation, result in a change in control of the Partnership.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following are compensation and fees paid or to be paid by the Partnership to the General Partners and their affiliates in connection with the operation of the Partnership.
Interest in Partnership Cash Flow and Net Sale Proceeds
The General Partners will receive a subordinated participation in net cash flow from operations equal to 10% of net cash flow after the Limited Partners holding Class A Status Units have received preferential distributions equal to 10% of their adjusted capital accounts in each fiscal year. The General Partners will also receive a subordinated participation in net sales proceeds and net financing proceeds equal to 20% of residual proceeds available for distribution after Limited Partners holding Class A Status Units have received a return of their adjusted capital contributions plus a 10% cumulative return on their adjusted capital contributions and Limited Partners holding Class B Units have received a return of their adjusted capital contributions plus a 15% cumulative return on their adjusted capital contributions; provided, however, that in no event shall the General Partners receive in the aggregate in excess of 15% of net sales proceeds and net financing proceeds remaining after payments to Limited Partners from such proceeds of amounts equal to the sum of their adjusted capital contributions plus a 6% cumulative return on their adjusted capital contributions. The General Partners did not receive any distributions from net cash flow from operations or net sales proceeds for the year ended December 31, 2000.
Property Management and Leasing Fees
Wells Management Company, Inc., an affiliate of the General Partners, will receive compensation for supervising the management of the Partnership properties equal to the lessor of (A) (i) 3% of the gross revenues for management and 3% of the gross revenues for leasing (aggregate maximum of 6%) plus a separate one-time fee for initial rent-up or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm's-length transactions by others rendering similar services in the same geographic area for similar properties; and (ii) in the case of industrial and commercial properties which are leased on a long-term basis (ten or more years), 1% of the gross revenues except for initial leasing fees equal to 3% of the gross revenues over the first five years of the lease term; or (B) the amounts charged by unaffiliated persons rendering comparable services in the same geographic area. Wells Management Company, Inc. received $246,937 in cash compensation for the year ended December 31, 2000.
Real Estate Commissions
In connection with the sale of Partnership properties, the General Partners or their affiliates may receive commissions not exceeding the lesser of (A) 50% of the commissions customarily charged by other brokers in arm's-length transactions involving comparable properties in the same geographic area or (B) 3% of the gross sales price of the property, and provided that payments of such commissions will be made only after Limited Partners have received prior distributions totaling 100% of their capital contributions plus a 6% cumulative return on their adjusted capital contributions. No real estate commissions were paid to the General Partners or affiliates for the year ended December 31, 2000.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. The financial statements are contained on pages through of this Annual Report on Form 10-K, and the list of the financial statements contained herein is set forth on page, which is hereby incorporated by reference.
(a)2. The Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.
(b) No reports on Form 8-K were filed with the commission for the year of 2000.
(c) The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.
(d) See (a) 2 above.
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SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 27th day of March 2001.
Wells Real Estate Fund VIII, L.P. (Registrant)
By: /s/ Leo F. Wells, III ---------------------------------- Leo F. Wells, III Individual General Partner and as President and Chief Financial Officer of Wells Capital, Inc., the Corporate General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity as and on the date indicated.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRARS WHICH HAVE NOT BEEN REGISTERED PURSUANT TO SECTION 12 OF THE ACT.
No annual report or proxy material relating to an annual or other meeting of security holders has been sent to security holders.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Wells Real Estate Fund VIII, L.P.:
We have audited the accompanying balance sheets of WELLS REAL ESTATE FUND VIII, L.P. (a Georgia public limited partnership) as of December 31, 2000 and 1999 and the related statements of income, partners' capital, and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wells Real Estate Fund VIII, L.P. as of December 31, 2000 and 1999 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
Atlanta, Georgia January 30, 2001
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
The accompanying notes are an integral part of these balance sheets.
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
The accompanying notes are an integral part of these statements.
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
The accompanying notes are an integral part of these statements.
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
The accompanying notes are an integral part of these statements.
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000, 1999, AND 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business
Wells Real Estate Fund VIII, L.P. (the "Partnership") is a public limited partnership organized on August 15, 1994 under the laws of the state of Georgia. The general partners are Leo F. Wells, III and Wells Partners L.P. ("Wells Partners"), a Georgia nonpublic limited partnership. The Partnership has two classes of limited partnership interests, Class A and Class B units. Limited partners shall have the right to change their prior elections to have some or all of their units treated as Class A units or Class B units one time during each quarterly accounting period. Limited partners may vote to, among other things, (a) amend the partnership agreement, subject to certain limitations, (b) change the business purpose or investment objectives of the Partnership, and (c) remove a general partner. A majority vote on any of the above described matters will bind the Partnership, without the concurrence of the general partners. Each limited partnership unit has equal voting rights, regardless of class.
The Partnership was formed to acquire and operate commercial real properties, including properties which are either to be developed, currently under development or construction, newly constructed, or have operating histories. The Partnership owns an interest in the following properties through joint ventures between the Partnership and other Wells Real Estate Funds: (i) an office building in Jacksonville, Florida (the "BellSouth property"); (ii) a retail shopping center in Clemmons, Forsyth County, North Carolina; (iii) an office building in Gainesville, Florida; (iv) a retail office building located in Stockbridge, Georgia; (v) an office building in Madison, Wisconsin (the "U.S. Cellular Building"); (vi) an office building in Farmers Branch, Texas (the "Dallas property"); (vii) a two-story office building in Boulder County, Colorado (the "Cirrus Logic Building"); (viii) a two-story office building in Orange County, California (the "Quest Building," formerly the "Matsushita Building").
Use of Estimates and Factors Affecting the Partnership
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The carrying values of real estate are based on management's current intent to hold the real estate assets as long-term investments. The success of the Partnership's future operations and the ability to realize the investment in its assets will be dependent on the Partnership's ability to maintain rental rates, occupancy, and an appropriate level of operating expenses in future years. Management believes that the steps it is taking will enable the Partnership to realize its investment in its assets.
Income Taxes
The Partnership is not subject to federal or state income taxes, and therefore, none have been provided for in the accompanying financial statements. The partners are required to include their respective shares of profits and losses in their individual income tax returns.
Distributions of Net Cash From Operations
Cash available for distribution, as defined by the partnership agreement, is distributed to the limited partners quarterly. In accordance with the partnership agreement, such distributions are paid first to limited partners holding Class A units until they have received a 10% per annum return on their net capital contributions, as defined. Then, such distributions are paid to the general partners until they have received 10% of the total amount distributed thus far. Any remaining cash available for distribution is split between the limited partners holding Class A units and the general partners on a basis of 90% and 10%, respectively. No distributions will be made to the limited partners holding Class B units.
Distribution of Sales Proceeds
Upon sales of properties, the net sales proceeds are distributed in the following order:
. To limited partners holding units, which at any time have been treated as Class B units, until they receive an amount necessary to equal the net cash available for distribution received by the limited partners holding Class A units
. To limited partners on a per unit basis until each limited partner has received 100% of their net capital contributions, as defined
. To limited partners on a per unit basis until they receive a cumulative 10% per annum return on their net capital contributions, as defined
. To limited partners on a per unit basis until they receive an amount equal to their preferential limited partners return (defined as the sum of a 10% per annum cumulative return on net capital contributions for all periods during which the units were treated as Class A units and a 15% per annum cumulative return on net capital contributions for all periods during which the units were treated as Class B units)
. To the general partners until they have received 100% of their capital contributions; in the event that limited partners have received aggregate cash distributions from the Partnership over the life of their investment in excess of a return of their net capital contributions plus their preferential partner return, then the general partners shall receive an additional sum equal to 25% of such excess
. Thereafter, 80% to the limited partners on a per unit basis and 20% to the general partners
Allocation of Net Income, Net Loss, and Gain on Sale
Net income is defined as net income recognized by the Partnership, excluding deductions for depreciation and amortization. Net income, as defined, of the Partnership will be allocated each year in the same proportions that net cash from operations is distributed to the partners. To the extent the Partnership's net income in any year exceeds net cash from operations, it will be allocated 99% to the limited partners holding Class A units and 1% to the general partners.
Net loss, depreciation, and amortization deductions for each fiscal year will be allocated as follows: (a) 99% to the limited partners holding Class B units and 1% to the general partners until their capital accounts are reduced to zero, (b) then to any partner having a positive balance in his capital account in an amount not to exceed such positive balance, and (c) thereafter to the general partners.
Gain on the sale or exchange of the Partnership's properties will be allocated generally in the same manner that the net proceeds from such sale are distributed to partners after the following allocations are made, if applicable: (a) allocations made pursuant to the qualified income offset provisions of the partnership agreement, (b) allocations to partners having negative capital accounts until all negative capital accounts have been restored to zero, and (c) allocations to limited partners holding Class B units
in amounts equal to the deductions for depreciation and amortization previously allocated to them with respect to the specific partnership property sold, but not in excess of the amount of gain on sale recognized by the Partnership with respect to the sale of such property.
Investment in Joint Ventures
Basis of Presentation
The Partnership does not have control over the operations of the joint ventures; however, it does exercise significant influence. Accordingly, investments in joint ventures are recorded using the equity method of accounting.
Real Estate Assets
Real estate assets held by the joint ventures are stated at cost less accumulated depreciation. Major improvements and betterments are capitalized when they extend the useful life of the related asset. All repairs and maintenance are expensed as incurred.
Management continually monitors events and changes in circumstances which could indicate that carrying amounts of real estate assets may not be recoverable. When events or changes in circumstances are present that indicate the carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of real estate assets by determining whether the carrying value of such real estate assets will be recovered through the future cash flows expected from the use of the asset and its eventual disposition. Management has determined that there has been no impairment in the carrying value of real estate assets held by the joint ventures as of December 31, 2000.
Depreciation for buildings and improvements is calculated using the straight-line method over 25 years. Tenant improvements are amortized over the life of the related lease or the life of the asset, whichever is shorter.
Revenue Recognition
All leases on real estate assets held by the joint ventures are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the respective leases.
Partners' Distributions and Allocations of Profit and Loss
Cash available for distribution and allocations of profit and loss to the Partnership by the joint ventures are made in accordance with the terms of the individual joint venture agreements. Generally, these items are allocated in proportion to the partners' respective ownership interests. Cash is paid from the joint ventures to the Partnership quarterly.
Deferred Lease Acquisition Costs
Costs incurred to procure operating leases are capitalized and amortized on a straight-line basis over the terms of the related leases.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Partnership considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value, and consist of investments in money market accounts.
Per Unit Data
Net income (loss) per unit with respect to the Partnership for the years ended December 31, 2000, 1999, and 1998 is computed based on the weighted average number of units outstanding during the period.
Reclassifications
Certain prior year items have been reclassified to conform with the current year financial statement presentation.
2. RELATED-PARTY TRANSACTIONS
Due from affiliates at December 31, 2000 and 1999 represents the Partnership's share of cash distributed from its joint venture investments for the fourth quarters of 2000 and 1999:
The Partnership entered into a property management agreement with Wells Management, Inc. ("Wells Management"), an affiliate of the general partners. In consideration for supervising the management of the Partnership's properties, the Partnership will generally pay Wells Management management and leasing fees equal to (a) 3% of the gross revenues for management and 3% of the gross revenues for leasing (aggregate maximum of 6%) plus a separate fee for the one-time initial lease-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm's-length transactions by others rendering similar services in the same geographic area for similar properties or (b) in the case of commercial properties, which are leased on a long-term net basis (ten or more years), 1% of the gross revenues except for initial leasing fees equal to 3% of the gross revenues over the first five years of the lease term.
The Partnership incurred management and leasing fees and lease acquisition costs, at the joint venture level, of $246,937, $238,682, and $200,145 for the years ended December 31, 2000, 1999, and 1998, respectively, which were paid to Wells Management.
Wells Capital, Inc. (the "Company") performs certain administrative services for the Partnership, such as accounting and other partnership administration, and incurs the related expenses. Such expenses are allocated among the various Wells Real Estate Funds based on time spent on each fund by individual administrative personnel. In the opinion of management, such allocation is a reasonable estimation of such expenses.
The general partners are also general partners of other Wells Real Estate Funds. As such, there may exist conflicts of interest where the general partners in the capacity as general partners of other Wells Real Estate Funds may be in competition with the Partnership for tenants in similar geographic markets.
3. INVESTMENT IN JOINT VENTURES
The Partnership's investment and percentage ownership in joint ventures at December 31, 2000 and 1999 are summarized as follows:
The following is a rollforward of the Partnership's investment in the joint ventures for the years ended December 31, 2000 and 1999:
Fund VI, VII, and VIII Associates
On April 17, 1995, the Partnership entered into a joint venture with Wells Real Estate Fund VI, L.P. ("Fund VI") and Wells Real Estate Fund VII, L.P. ("Fund VII"). The joint venture, Fund VI, VII, and VIII Associates, was formed to acquire, develop, operate, and sell real properties. On April 25, 1995, the joint venture purchased a 5.55-acre parcel of land in Jacksonville, Florida. A 92,964-square-foot office building, known as the BellSouth property, was completed and commenced operations in 1996. On May 31, 1995, the joint venture purchased a 14.683-acre parcel of land located in Clemmons, Forsyth County, North Carolina. A retail shopping center was developed and was substantially complete at December 31, 1997.
During 1996, Fund VI and Fund VII each withdrew $500,000 from the joint venture in order to contribute needed funds to Fund II, III, VI, and VII Associates. In addition, deferred project costs related to Fund VI and Fund VII of $23,160 and $21,739, respectively, were unapplied when the contributions were withdrawn. During 1996, the Partnership made an additional contribution of $2,815,965, which included $115,965 of deferred project costs that were applied. Ownership percentages were recomputed accordingly.
Following are the financial statements for Fund VI, VII, and VIII Associates:
Fund VI, VII, and VIII Associates (A Georgia Joint Venture) Balance Sheets December 31, 2000 and 1999
Fund VI, VII, and VIII Associates (A Georgia Joint Venture) Statements of Income for the Years Ended December 31, 2000, 1999, and 1998
Fund VI, VII, and VIII Associates (A Georgia Joint Venture) Statements of Partners' Capital for the Years Ended December 31, 2000, 1999, and 1998
Fund VI, VII, and VIII Associates (A Georgia Joint Venture) Statements of Cash Flows for the Years Ended December 31, 2000, 1999, and 1998
Fund VII and VIII Associates
On February 10, 1995, the Partnership entered into a joint venture agreement with Fund VII. The joint venture, Fund VII and VIII Associates, was formed to acquire, develop, operate, and sell real properties. During 1995, the joint venture purchased a five acre parcel of land in Gainesville, Alachua County, Florida. A 62,975-square-foot office building was constructed and began operations during 1995. In April 1996, Fund VII contributed 1.01 acres of land located in Stockbridge, Georgia, and improvements thereon to the joint venture for the development of a 12,000-square-foot, single-story combination retail/office building. The building was completed and commenced operations in 1996.
The following are the financial statements for Fund VII and VIII Associates:
Fund VII and VIII Associates (A Georgia Joint Venture) Balance Sheets December 31, 2000 and 1999
Fund VII and VIII Associates (A Georgia Joint Venture) Statements of Income for the Years Ended December 31, 2000, 1999, and 1998
Fund VII And VIII Associates (A Georgia Joint Venture) Statements of Partners' Capital for the Years Ended December 31, 2000, 1999, and 1998
Fund VII and VIII Associates (A Georgia Joint Venture) Statements of Cash Flows for the Years Ended December 31, 2000, 1999, and 1998
Fund VIII and IX Associates
On June 10, 1996, the Partnership entered into a joint venture with Wells Real Estate Fund IX, L.P ("Wells Fund IX"). The joint venture, Fund VIII and IX Associates, was formed to acquire, develop, operate, and sell real properties. On June 19, 1996, the joint venture purchased a 7.09-acre parcel of land in Madison, Wisconsin. The parcel was developed and commenced operations as the U.S. Cellular Building in 1997. On October 10, 1996, the joint venture purchased a 40,000-square-foot, one-story office building, known as the Dallas property, in Farmers Branch, Texas. On January 10, 1997, the joint venture purchased a 63,417-square-foot, two-story office building, known as the Matsushita Building, in Orange County, California. On February 20, 1997, the joint venture purchased a two-story partially completed office building, known as the Cirrus Logic Building, in Boulder County, Colorado. Construction of the 49,460-square-foot building was completed and commenced operations in 1997.
During 1998, the Partnership purchased a portion of Wells Fund IX's joint venture interest for $1,100,000. In addition, the related deferred project costs of $56,101 were transferred from Wells Fund IX to the Partnership. In addition, the Partnership contributed $518,450 in 1998 to Fund VIII and IX Associates, which included $32,352 of deferred project costs that were applied. Ownership percentage interests were recomputed accordingly.
On June 15, 2000, Fund VIII and IX Associated entered into a joint venture with Wells Operating Partnership, L.P. (the "Operating Partnership"), a Delaware limited partnership having Wells Real Estate Investment Trust, Inc. ("Wells REIT"), a Maryland corporation, as its general partner. The joint venture, Fund VIII, IX, and REIT Joint Venture, was formed to acquire, develop, operate, and sell real properties. On July 1, 2000, Fund VIII and IX contributed, at cost, the Quest building (formerly the Matsushita
Building) to the joint venture. The Quest 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.
Following are the financial statements for Fund VIII and IX Associates:
Fund VIII and IX Associates (A Georgia Joint Venture) Balance Sheets December 31, 2000 and 1999
Fund VIII and IX Associates (A Georgia Joint Venture) Statements of Income for the Years Ended December 31, 2000, 1999, and 1998
Fund VIII and IX Associates (A Georgia Joint Venture) Statements of Partners' Capital for the Years Ended December 31, 2000, 1999, and 1998
Fund VIII and IX Associates (A Georgia Joint Venture) Statements of Cash Flows for the Years Ended December 31, 2000, 1999, and 1998
Fund VIII, IX, and REIT Joint Venture
On June 15, 2000, Fund VIII and IX Associates entered into a joint venture with Wells Operating Partnership, L.P. (the "Operating Partnership"), a Delaware limited partnership having Wells Real Estate Investment Trust, Inc. ("Wells REIT"), a Maryland corporation, as its general partner. The joint venture, Fund VIII, IX, and REIT Joint Venture, was formed to acquire, develop, operate, and sell real properties.
On July 1, 2000, Fund VIII and IX contributed the Quest Building (formerly the Matsushita Building) to the joint venture. Fund VIII, IX, and REIT Joint Venture recorded the net assets of the Quest Building at an amount equal to the respective historical net book values. Wells REIT contributed $1,282,111 to the Fund VIII, IX, and REIT Joint Venture during 2000. The Quest Building is a two-story office building containing approximately 65,006 rentable square feet on a 4.4 acre trace of land in Irvine, California.
Following are the financial statements for Fund VIII, IX, and REIT Joint Venture:
Fund VIII, IX, and REIT Joint Venture (A Georgia Joint Venture) Balance Sheet December 31, 2000
Fund VIII, IX, and REIT Joint Venture (A Georgia Joint Venture) Statement of Income for the Six Months Ended December 31, 2000
Fund VIII, IX, and REIT Joint Venture (A Georgia Joint Venture) Statement of Partners' Capital for the Six Months Ended December 31, 2000
Fund VIII, IX, and REIT Joint Venture (A Georgia Joint Venture) Statement of Cash Flows for the Six Months Ended December 31, 2000
4. INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL
The Partnership's income tax basis net income for the years ended December 31, 2000, 1999, and 1998 is calculated as follows:
The Partnership's income tax basis partners' capital at December 31, 2000, 1999, and 1998 is computed as follows:
5. RENTAL INCOME
The future minimum rental income due from the Partnership's respective ownership interests in joint ventures under noncancelable operating leases at December 31, 2000 is as follows:
Year ending December 31: 2001 $ 7,113,213 2002 5,957,025 2003 5,037,100 2004 4,327,310 2005 4,125,627 Thereafter 8,467,199 ---------------- $ 35,027,474 ================
Four tenants contributed approximately 19%, 15%, 14%, and 11% of rental income. In addition, two tenants will contribute approximately 13% and 10% of future minimum rental income.
The future minimum rental income due Fund VI, VII, and VIII Associates under noncancelable operating leases at December 31, 2000 is as follows:
Year ending December 31: 2001 $ 2,145,470 2002 1,971,001 2003 1,890,449 2004 1,754,853 2005 1,688,144 Thereafter 6,379,813 ---------------- $ 15,829,730 ================
Three tenants contributed approximately 46%, 23%, and 16% of rental income for the year ended December 31, 2000. In addition, two tenants will contribute approximately 55% and 40% of future minimum rental income.
The future minimum rental income due Fund VII and VIII Associates under noncancelable operating leases at December 31, 2000 is as follows:
Year ending December 31: 2001 $ 7,218,650 2002 5,328,605 2003 4,141,250 2004 3,950,473 2005 3,744,288 Thereafter 2,195,735 ---------------- $ 26,579,001 ================
One tenant contributed approximately 10% of rental income for the year ended December 31, 2000. In addition, two tenants will contribute approximately 77% and 11% of future minimum rental income.
The future minimum rental income due Fund VIII and IX Associates under noncancelable operating leases as of December 31, 2000 is as follows:
Year ending December 31: 2001 $ 2,332,892 2002 2,464,900 2003 2,205,354 2004 2,205,354 2005 2,205,354 Thereafter 9,142,772 ---------------- $ 20,556,626 ================
Five tenants contributed approximately 32%, 26%, 24%, 15%, and 12% of rental income for the year ended December 31, 2000. In addition, three tenants will contribute approximately 42%, 31%, and 24% of future minimum rental income.
Future minimum rental income due from Fund VIII, IX, and REIT Joint Venture under noncancelable operating leases at December 31, 2000 is as follows:
Year ending December 31: 2001 $ 1,234,309 2002 1,287,119 2003 1,287,119 2004 107,260 ---------------- $ 3,915,807 ================
Two tenants contributed 52% and 48% of rental income for the year ended December 31, 2000. In addition, one tenant will contribute 100% of future minimum rental income.
6. QUARTERLY RESULTS (UNAUDITED)
Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2000 and 1999:
(a) The totals of the four quarterly amounts for the year ended December 31, 2000 do not equal the totals for the year. This difference results from the use of a weighted average to compute the number of units outstanding for each quarter and the year.
(a) The totals of the four quarterly amounts for the year ended December 31, 1999 do not equal the totals for the year. This difference results from the use of a weighted average to compute the number of units outstanding for each quarter and the year.
7. COMMITMENTS AND CONTINGENCIES
Management, after consultation with legal counsel, is not aware of any significant litigation or claims against the Partnership or the Company. In the normal course of business, the Partnership or the Company may become subject to such litigation or claims.
EXHIBIT INDEX -------------
(Wells Real Estate Fund VIII, L.P.)
The following documents are filed as exhibits to this report. Those exhibits previously filed and incorporated herein by reference are identified below by an asterisk. For each such asterisked exhibit, there is shown below the description of the previous filing. Exhibits which are not required for this report are omitted.
Exhibit Number Description of Document - ------ -----------------------
*3(a) Amended and Restated Agreement of Limited Partnership of Wells Real Estate Fund VIII, L.P. dated January 6, 1995 (Exhibit to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1995, File No. 0-27888)
*3(b) Certificate of Limited Partnership of Wells Real Estate Fund VIII, L.P. (Exhibit 3(b) to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund VIII, L.P., File No. 33-83852)
*10(a) Management Agreement dated January 6, 1995, between Wells Real Estate Fund VIII, L.P. and Wells Management Company, Inc. (Exhibit to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1995, File No. 0-27888)
*10(b) Leasing and Tenant Coordinating Agreement dated January 6, 1995, between Wells Real Estate Fund VIII, L.P. and Wells Management Company, Inc. (Exhibit to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1995, File No. 0-27888)
*10(c) Custodial Agency Agreement dated November 15, 1994, between Wells Real Estate Fund VIII, L.P. and NationsBank of Georgia, N.A. (Exhibit to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1995, File No. 0- 27888)
*10(d) Fund VII and Fund VIII Associates Joint Venture Agreement dated February 10, 1995 (Exhibit 10(g) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(e) Agreement for the Purchase and Sale of Real Property dated March 31, 1994 (Exhibit 10(h) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(f) Letter Agreement amending Agreement for the Purchase and Sale of Real Property dated July 27, 1994 (Exhibit 10(i) to Post- Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(g) Letter Agreement amending Agreement for the Purchase and Sale of Real Property dated October 27, 1994 (Exhibit 10(j) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(h) Letter Agreement between NationsBank of Georgia, N.A., as Agent for Wells Real Estate Fund VII, L.P., as Landlord, and CH2M Hill, Inc., as Tenant (Exhibit 10(k) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(i) First Amendment to Lease Agreement between NationsBank of Georgia, N.A., as Agent for Wells Real Estate Fund VII, L.P., as Landlord, and CH2M Hill, Inc., as Tenant (Exhibit 10(l) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(j) Second Amendment to Lease Agreement between NationsBank of Georgia, N.A., as Agent for Wells Real Estate Fund VII, L.P., as Landlord, and CH2M Hill, Inc, as Tenant (Exhibit 10(m) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(k) Development Agreement between Wells Real Estate Fund VII, L.P. and ADEVCO Corporation (Exhibit 10(n) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(l) Owner-Contractor Agreement between Wells Real Estate Fund VII, L.P., as Owner, and Integra Construction, Inc., as Contractor (Exhibit 10(o) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(m) Architect's Agreement between Wells Real Estate Fund VII, L.P., as Owner, and Smallwood, Reynolds, Stewart, Stewart & Associates, Inc., as Architect (Exhibit 10(p) to Post- Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(n) Joint Venture Agreement of Fund VI, Fund VII and Fund VIII Associates dated April 17, 1995 (Exhibit 10(q) to Post- Effective Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(o) Agreement for the Purchase and Sale of Real Property dated February 13, 1995, between G.L. National, Inc. and Wells Capital, Inc. (Exhibit 10(r) to Post-Effective Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33- 83852)
*10(p) Agreement to Lease dated February 15, 1995, between NationsBank of Georgia, N.A., as Agent for Wells Real Estate Fund VII, L.P., and BellSouth Advertising & Publishing Corporation (Exhibit 10(s) to Post-Effective Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33- 83852)
*10(q) Development Agreement dated April 25, 1995, between Fund VI, Fund VII and Fund VIII Associates and ADEVCO Corporation (Exhibit 10(t) to Post-Effective Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(r) Owner-Contractor Agreement dated April 24, 1995, between Fund VI, Fund VII and Fund VIII Associates, as Owner, and McDevitt Street Bovis, Inc., as Contractor (Exhibit 10(u) to Post- Effective Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(s) Architect's Agreement dated February 15, 1995, between Wells Real Estate Fund VII, L.P., as Owner, and Mayes, Suddereth & Etheredge, Inc., as Architect (Exhibit 10(v) to Post-Effective Amendment No. 3 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(t) First Amendment to Joint Venture Agreement of Fund VI, Fund VII and Fund VIII Associates dated May 30, 1995 (Exhibit 10(w) to Post-Effective Amendment No. 4 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(u) Real Estate Purchase Agreement dated April 13, 1995 (Exhibit 10(x) to Post-Effective Amendment No. 4 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(v) Lease Agreement dated February 27, 1995, between NationsBank of Georgia, N.A., as Agent for Wells Real Estate Fund VII, L.P., and Harris Teeter, Inc. (Exhibit 10(y) to Post-Effective Amendment No. 4 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(w) Development Agreement dated May 31, 1995, between Fund VI, Fund VII and Fund VIII Associates and Norcom Development, Inc. (Exhibit 10(z) to Post-Effective Amendment No. 4 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(x) First Amendment to Joint Venture Agreement of Fund VII and Fund VIII Associates dated April 1, 1996 (Exhibit 10(nn) to Form 10-K of Wells Real Estate Fund VII, L.P. for the fiscal year ended December 31, 1996, File No. 0-25606)
*10(y) Lease Agreement with Moovies, Inc. dated May 20, 1996 (Exhibit 10(oo) to Form 10-K of Wells Real Estate Fund VII, L.P. for the fiscal year ended December 31, 1996, File No. 0-25606)
*10(z) Joint Venture Agreement of Fund VIII and Fund IX Associates dated June 10, 1996 (Exhibit 10(aa) to Post-Effective Amendment No. 11 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(aa) Agreement for the Purchase and Sale of Real Property dated April 23, 1996, between American Family Mutual Insurance Company and Wells Capital, Inc. (Exhibit 10(bb) to Post- Effective Amendment No. 11 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(bb) Agreement to Lease dated June 18, 1996, between Fund VIII and IX Associates and Westel-Milwaukee, Inc., d/b/a Cellular One (Exhibit 10(cc) to Post-Effective Amendment No. 11 to Form S- 11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(cc) Development Agreement dated June 18, 1996, between Fund VIII and Fund IX Associates and ADEVCO Corporation (Exhibit 10(dd) to Post-Effective Amendment No. 11 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(dd) Owner-Contractor Agreement dated June 18, 1996, with Kraemer Brothers, Inc. (Exhibit 10(ee) to Post-Effective Amendment No. 11 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(ee) First Amendment to Joint Venture Agreement of Fund VIII and Fund IX Associates dated October 10, 1996 (Exhibit 10(ii) to Post-Effective Amendment No. 12 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(ff) Agreement for the Purchase and Sale of Property dated October 10, 1996, between
TCI Valwood Limited Partnership I and Fund VIII and Fund IX Associates (Exhibit 10(ff) to Post-Effective Amendment No. 12 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33- 83852)
*10(gg) Build to Suite Industrial Lease Agreement dated November 1, 1995, between Industrial Developments International, Inc. and TCI Central, Inc., as amended July 16, 1996 and August 29, 1996 (Exhibit 10(gg) to Post-Effective Amendment No. 12 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33- 83852)
*10(hh) Assignment and Assumption of Lease dated October 10, 1996, between TCI Valwood Limited Partnership I and The Bank of New York, as Agent for Fund VIII and Fund IX Associates (Exhibit 10(hh) to Post-Effective Amendment No. 12 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., File No. 33-83852)
*10(ii) Second Amendment to Joint Venture Agreement of Fund VIII and Fund IX Associates dated January 7, 1997 (Exhibit 10 (ii) to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1997, File No. 0-27888)
*10(jj) Agreement for the Purchase and Sale of Property with Magellan Bake Parkway Limited Partnership dated December, 1996 (Exhibit 10 (jj) to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1997, File No. 0-27888)
*10(kk) Office Lease with Matsushita Avionics Systems Corporation dated April 29, 1996 (Exhibit 10 (kk) to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1997, File No. 0-27888)
*10(ll) Third Amendment to Joint Venture Agreement of Fund VIII and Fund IX Associates dated February 18, 1997 (Exhibit 10 (ll) to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1997, File No. 0-27888)
*10(mm) Agreement for the Purchase and Sale of Property with Orix Prime West Bloomfield II Venture dated February 5, 1997 (Exhibit 10 (mm) to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1997, File No. 0-27888)
*10(nn) Lease with Cirrus Logic, Inc. dated July 5, 1995 (Exhibit 10 (nn) to Form 10-K of Wells Real Estate Fund VIII, L.P. for the fiscal year ended December 31, 1997, File No. 0-27888)
*10(oo) Rental Income Guaranty Agreement relating to the Bake Parkway Building dated February 18, 1999, between Wells Operating Partnership, L.P. and Fund VIII
and Fund IX Associates (Exhibit 10.53 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., as amended to date, Commission File No. 333-32099)
*10(pp) Joint Venture Partnership Agreement of Fund VIII-IX-REIT Joint Venture (Exhibit 10.47 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., as amended to date, Commission File No. 333-44900)
*10(qq) Lease Agreement for the Quest Building (formerly the Bake Parkway Building) (Exhibit 10.51 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., as amended to date, Commission File No. 333-44900)