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	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Market value adjustment to interest rate swap designated as a hedge instrument and included in other comprehensive income	$	(3,198	)	$	(2,311	)	$	(4,025	)	$	(6,709	)
Loss on interest rate swaps recognized through earnings	$	(14,774	)	$	(9,885	)	$	(22,219	)	$	(29,068	)

During the periods presented, there was no hedge ineffectiveness required to be recognized into earnings on the interest rate swaps that qualified for hedge accounting treatment.

Income Taxes

Wells REIT II has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and has operated as such beginning with its taxable year ended December 31, 2003. To qualify as a REIT, Wells REIT II must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its REIT taxable income, as defined by the Code, to its stockholders. As a REIT, Wells REIT II generally is not subject to income tax on income it distributes

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to stockholders. Wells REIT II is subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in the accompanying consolidated financial statements.

Wells TRS II, LLC (“Wells TRS”) and Wells KCP TRS, ~~LLS~~LLC ("Wells KCP TRS") are wholly owned subsidiaries of Wells REIT II, ~~and~~ are organized as Delaware limited liability companies, and operate, among other things, a full-service hotel. Wells REIT II has elected to treat Wells TRS and Wells KCP TRS as taxable REIT subsidiaries. Wells REIT II may perform certain additional, noncustomary services for tenants of its buildings through Wells TRS or Wells KCP TRS; however, any earnings related to such services are subject to federal and state income taxes. In addition, for Wells REIT II to continue to qualify as a REIT, Wells REIT II must limit its investments in taxable REIT subsidiaries to 25% of the value of the total ~~assets of Wells REIT II for 2010.~~assets. Deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. Wells REIT II records interest and penalties related to uncertain tax positions as general and administrative expense in the accompanying consolidated statements of operations.

Noncontrolling Interests

Nonredeemable noncontrolling interests are presented separately in the consolidated statements of equity and represent ~~the~~ equity interests of consolidated subsidiaries that are not owned by Wells REIT II. Nonredeemable noncontrolling interests are adjusted for contributions, distributions, and ~~earning~~earnings attributable to the nonredeemable noncontrolling interests in the consolidated joint ventures. Pursuant to the terms of the consolidated joint venture agreements, all earnings and distributions are allocated to joint venturers in accordance with the terms of the respective joint venture agreements. Earnings allocated to such nonredeemable noncontrolling interest holders are recorded as net (income) loss attributable to nonredeemable noncontrolling interests in the accompanying consolidated statements of operations. ~~Nonredeemable noncontrolling interests are presented separately in the consolidated statements of equity.~~

Until June 30, 2011, Wells Capital, Inc. ("Wells Capital") held an interest in Wells OP II's limited partnership units which was redeemable under certain circumstances, and, therefore, the noncontrolling interest in Wells OP II was included in accounts payable, accrued expenses, and accrued capital expenditures in the consolidated balance sheets as of December 31, 2010 ($0.1 million). Effective June 30, 2011, Wells Capital's interest in Wells OP II partnership units were exchanged for shares of Wells REIT II common stock.

Recent Accounting Pronouncements

FASB Accounting Standards Codification (ASC) is a major restructuring of accounting and reporting standards designed to simplify user access to all authoritative U.S. generally accepted accounting principles (GAAP) by providing the authoritative literature in a topically organized structure.

In January 2010, the Financial Accounting Standards Board (the “FASB”) clarified previously issued GAAP and issued new requirements related to Accounting Standards Codifications Topic Fair Value Measurements and Disclosures (“ASU 2010-6”). The clarification component includes disclosures about inputs and valuation techniques used in determining fair value, and providing fair value measurement information for each class of assets and liabilities. The new requirements relate to disclosures of transfers between the levels in the fair value hierarchy, as well as the individual components in the rollforward of the lowest level (Level 3) in the fair value hierarchy. This change in GAAP became effective for Wells REIT II beginning January 1, 2010, except for the provision concerning the rollforward of activity of the Level 3 fair value measurement, which became effective for Wells REIT II on January 1, 2011. The adoption of ASU 2010-6 has not had a material impact on Wells REIT II’s consolidated financial statements or disclosures.

In May 2011, the FASB issued Accounting Standards Update 2011-04, Fair Value Measurement Topic Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASU 2011-04”). ASU 2011-04 converges the U.S. GAAP and IFRS definition of “fair ~~value”,~~value,” the requirements for measuring amounts at fair value, and disclosures about these measurements. The update does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The adoption of ASU 2011-04 is effective for Wells REIT II on December 15, 2011. Wells REIT II expects that the adoption of ASU 2011-04 will not have a material impact on Wells REIT II's consolidated financial statements or disclosures.

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In June 2011, the FASB issued Accounting Standards Update 2011-05, Comprehensive Income Topic Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The adoption of

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ASU 2011-05 is effective for Wells REIT II on December 15, ~~2012.~~2011, except for the specific requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income that has been deferred. Wells REIT II expects that the adoption of ASU 2011-05 will not have a material impact on Wells REIT II's consolidated financial statements or disclosures.

~~3. Real Estate Acquisitions~~


3.	Real Estate Acquisitions

During the ~~six~~nine months ended ~~June~~September 30, 2011, Wells REIT II acquired interests in the following properties (in thousands):


								Intangibles																	Intangibles
Property Name	City	State	Acquisition Date	Land		Buildings and Improvements		Intangible Lease Assets		Intangible Lease Origination		Below- Market Lease Liability			Total Purchase Price		Lease Details	City	State	Acquisition Date	Land		Buildings and Improvements		Intangible Lease Assets		Intangible Lease Origination		Below- Market Lease Liability			Total Purchase Price		Lease Details
Market Square Buildings	Washington, DC	N/A	3/7/2011	$	152,629	$	412,548	$	45,858	$	12,031	$	(19,680	)	$	603,386	(1)	Washington, DC	N/A	3/7/2011	$	152,629	$	412,548	$	45,858	$	12,031	$	(19,680	)	$	603,386	⁽¹⁾
544 Lakeview⁽²⁾	Vernon Hills	IL	4/1/2011	$	3,006	$	3,100	$	—	$	—	$	—		$	6,106	(3)	Vernon Hills	IL	4/1/2011	3,006		3,100		—		—		—			6,106		⁽³⁾
				$	155,635	$	415,648	$	45,858	$	12,031	$	(19,680	)	$	609,492					$	155,635	$	415,648	$	45,858	$	12,031	$	(19,680	)	$	609,492

limits to Wells REIT II's ability to merge or consolidate with another entity or transfer all or substantially all of Wells REIT II’s property and assets, subject to important exceptions and qualifications;

~~limits~~a limitation on the ratio of debt to total assets, as defined, to 60%;

limits to Wells REIT II's ability to incur debt if the consolidated income available for debt service to annual debt service charge, as defined, for four previous consecutive fiscal quarters ~~to be~~is less than 1.5:1 on a pro forma basis;

limits to Wells REIT II's ability to incur liens if, on an aggregate basis for Wells REIT II, the secured debt amount would exceed 40% of the value of the total assets; and

~~requires~~a requirement that the ratio of unencumbered asset value, as defined, to total unsecured debt be at least 150% at all times.

Reimbursement of organization and offering costs paid by WREAS II and its affiliates on behalf of Wells REIT II, not to exceed 2.0% of gross offering proceeds.

Through July 31, 2011, acquisition fees ofwere incurred at 2.0% of gross offering proceeds, subject to certain ~~limitations;~~limitations. Effective August 1, 2011, acquisition fees have been incurred at 1% of the property purchase price (excluding acquisition expenses); however, in no event may total acquisition fees for the 2011 calendar year exceed 2% of total gross offering proceeds. Wells REIT II also reimburses WREAS II and its affiliates for expenses it pays to third parties in connection with acquisitions or potential acquisitions.

Monthly asset management fees equal to one-twelfth of 0.625% of the cost of (i) all properties of Wells REIT II (other than those that fail to meet specified occupancy thresholds) and (ii) investments in joint ventures until the monthly payment equals $2.7 million (or $32.5 million annualized), as of the last day of each preceding month. The monthly payment remains capped at that amount until the cost of (i) all properties of Wells REIT II (other than those that fail to meet specified occupancy thresholds) and (ii) investments in joint ventures are at least $6.5 billion, after which the monthly asset management fee will equal one-twelfth of 0.5% of the cost of (i) all properties of Wells REIT II (other than those that fail to meet specified occupancy thresholds) and (ii) investments in joint ventures. However, monthly asset management fees shall be assessed on the Lindbergh Center Buildings and the Energy Center I Building, which were acquired on July 1, 2008 and June 28, 2010, respectively, at one-twelfth of 0.5% immediately. The amount of asset management fees paid in any three-month period is limited to 0.25% of the average of the preceding three months’ net asset value calculations less Wells REIT II’s outstanding debt.

Reimbursement for all costs and expenses WREAS II and its affiliates incur in fulfilling its duties as the asset portfolio manager, including (i) wages and salaries (but excluding bonuses other than the signing bonus paid to E. Nelson Mills upon his appointment as President of Wells REIT II) and other employee-related expenses of WREAS II and its affiliates’ employees, who perform a full range of real estate services for Wells REIT II, including management, administration, operations, and marketing, and are billed to Wells REIT II based on the amount of time spent on Wells REIT II by such personnel, provided that such expenses are not reimbursed if incurred in connection with services for which WREAS II and its affiliates receive a disposition fee (described below) or an acquisition fee, and (ii) amounts paid for IRA custodial service costs allocated to Wells REIT II accounts. The Advisory Agreement limits the amount of reimbursements to the Advisor of “portfolio general and administrative expenses” and “personnel expenses,” as defined, to the extent they would exceed ~~$11.2~~$18.7 million and ~~$6.4~~$10.5 million, respectively, for the period from January 1, 2011 through ~~July~~December 31, 2011.

For any property sold by Wells REIT II, other than part of a “bulk sale” of assets, as defined, a disposition fee equal to 1.0% of the sales price, with the limitation that the total real estate commissions (including such disposition fee) for any Wells REIT II property sold may not exceed the lesser of (i) 6.0% of the sales price of each property or (ii) the level of real estate commissions customarily charged in light of the size, type, and location of the property.

Incentive fee of 10% of net sales proceeds remaining after stockholders have received distributions equal to the sum of the stockholders’ invested capital, plus an 8% per annum, cumulative return of invested capital, which fee is payable only if the shares of common stock of Wells REIT II are not listed on an exchange.

Listing fee of 10% of the amount by which the market value of the stock plus distributions paid prior to listing exceeds the sum of 100% of the invested capital, plus an 8% per annum, cumulative return on invested capital, which fee will be reduced by the amount of any incentive fees paid as described in the preceding bullet.

~~Acquisition~~II's net asset value publication, asset management fees will be 1%calculated based on the lesser of (i) the ~~purchase price (excluding acquisition expenses) of the property (as opposed to 2% of gross offering proceeds) and will be paid at the time of the acquisition; however,~~amount determined in ~~no event may acquisition fees for the term of~~accordance with the agreement ~~exceed $1.5 million~~as described above or ~~cause total acquisition fees for~~(ii) the ~~2011 calendar year to exceed 2%~~aggregate value of ~~total gross offering proceeds.~~

~~The limit on reimbursement of "personnel expenses" (as defined) was reduced by approximately $1 million (on an annualized basis),~~Wells REIT II's interest in the properties and joint ventures as established with the ~~limit on reimbursement of "portfolio general and administrative expenses" (as defined, and which includes "personnel expenses") correspondingly reduced.~~most recent asset-based valuation.

Property management fees in an amount equal to a percentage negotiated for each property managed by Wells Management of the gross monthly income collected for that property for the preceding month;

Leasing commissions for new, renewal, or expansion leases entered into with respect to any property for which Wells Management serves as leasing agent equal to a percentage as negotiated for that property of the total base rental and operating expenses to be paid to Wells REIT II during the applicable term of the lease, provided, however, that no commission shall be payable as to any portion of such term beyond 10 years;

Initial lease-up fees for newly constructed properties under the agreement, generally equal to one month’s rent;

Fees equal to a specified percentage of up to 5% of all construction build-out funded by Wells REIT II, given as a leasing concession, and overseen by Wells Management; and

Other fees as negotiated with the addition of each specific property covered under the agreement.

On March 7, 2011, we acquired the Market Square Buildings, which are located in the Capitol Hill district of Washington D.C., for approximately $603.4 million.

On April 4, 2011, we issued $250.0 million of our seven-year, investment-grade, unsecured senior bonds at 99.295 percent of their face value. The coupon interest rate of the bonds is 5.875% per annum, which is subject to adjustment in certain circumstances. We used the bond proceeds to ~~pay down~~repay amounts drawn on a $300.0 million bridge loan that was used to fund a portion of the purchase price of the Market Square Buildings.

On June 30, 2011, we closed on a $325.0 million mortgage secured by the Market Square Buildings, the net proceeds from which were used to pay down borrowings on the JPMorgan Chase Credit Facility that were used to fund substantially all of the remaining purchase price of the Market Square Buildings.

On July 8, 2011, we closed on an amendment to the JPMorgan Chase Credit Facility to extend the maturity date of the line until May 2015 at more favorable terms.

Additional amortization of lease assets (liabilities). GAAP implicitly assumes that the value of intangible lease assets (liabilities) diminishes predictably over time and, thus, requires these charges to be recognized ratably over the respective lease terms. Like real estate values, market lease rates in aggregate have historically risen or fallen with local market conditions. As a result, management believes that, by excluding these charges, AFFO provides useful supplemental information that is reflective of the ~~sale~~performance of our real estate investments that is useful in assessing the sustainability of our operations.

Straight-line rental income. In accordance with GAAP, rental payments are recognized as income on a straight-line basis over the terms of the ~~property in~~respective leases. Thus, for any given period, straight-line rental income represents the ~~third quarter of 2010~~difference between the contractual rental billings for that period and the ~~loss recognized on~~average rental billings over the ~~sale~~lease term for the same length of ~~this property.~~time.

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This application results in income recognition that can differ significantly from the current contract terms. By adjusting for this item, we believe AFFO provides useful supplemental information reflective of the realized economic impact of our leases that is useful in assessing the sustainability of our operating performance.

Loss on interest rate swaps and remeasurement of loss on foreign currency. These items relate to fair value adjustments, which are based on the impact of current market fluctuations, underlying market conditions and the performance of the specific holding, which is not attributable to our current operating performance. By adjusting for this item, we believe that AFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals (rather than anticipated gains or losses that may never be realized) that is useful in assessing the sustainability of our operations.

Noncash interest expense. This item represents amortization of financing costs paid in connection with executing our debt instruments, and the accretion of premiums (and amortization of discounts) on certain of our debt instruments. GAAP requires these items to be recognized over the remaining term of the respective debt instrument, which may not correlate with the ongoing operations of our real estate portfolio. By excluding these items, management believes that AFFO provides supplemental information that allows for better comparability of reporting periods and that is useful in assessing the sustainability of our operations.

Impairment loss on real estate assets and gain on early extinguishment of debt on discontinued operations. These adjustments are not related to our continuing operations as we are not in the business of trading real properties for short-term gains. Removing the impact of these items from AFFO provides a better indication of the sustainability of operating performance.

Real estate acquisition-related costs. Acquisition expenses are incurred for investment purposes (i.e., to promote portfolio appreciation and generation of future earnings over the long term) and, therefore, do not correlate with the ongoing operations of our portfolio. We believe that excluding these items from AFFO provides supplemental information indicative of the sustainability of our operations. This exclusion also improves comparability of our reporting periods and of our company with other real estate operators.

Reconciliations of net income to FFO and to AFFO (in thousands):



	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Reconciliation of Net Income to Funds From Operations and Adjusted Funds From Operations:
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	5,102		$	4,702		$	3,032		$	324
Adjustments:
Depreciation of real estate assets	30,622			26,643			89,538			75,350
Amortization of lease-related costs	29,468			28,928			91,395			87,251
Gain (loss) on sale of discontinued operations	—			130			—			130
Total Funds From Operations adjustments	60,090			55,701			180,933			162,731
Funds From Operations	65,192			60,403			183,965			163,055

Other income (expenses) included in net income, which do not correlate with our operations:
Additional amortization of lease assets (liabilities)	349			1,462			2,452			4,512
Straight-line rental income	(5,289		)	(811		)	(13,046		)	(4,261		)
Loss on interest rate swaps	12,236			7,468			14,644			21,945
Re-measurement loss on foreign currency	—			461			—			(167		)
Noncash interest expense	5,631			4,701			19,619			14,009
Impairment loss on real estate assets	5,817			—			5,817			—
Gain on early extinguishment of debt on discontinued operations	(13,522		)	—			(13,522		)	—
Subtotal	5,222			13,281			15,964			36,038

Real estate acquisition-related costs	29			2,081			11,249			9,749
Adjusted Funds From Operations	$	70,443		$	75,765		$	211,178		$	208,842

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~~Distributions~~

The amount of distributions that we pay to our common stockholders is determined by our board of directors and is dependent upon a number of factors, including the funds available for distribution to common stockholders, our financial condition, our capital expenditure requirements, our expectations of future sources of liquidity and the annual distribution requirements necessary to maintain our status as a REIT under the Code.

Since inception, our cash management policy has called for quarterly stockholder distributions to be principally funded with operational cash flows over the long-term. When evaluating funds available for stockholder distributions, we consider net cash provided by operating activities (as defined by Generally Accepted Accounting Principles ("GAAP") and presented in the accompanying GAAP-basis consolidated statements of cash flows), adjusted to exclude certain costs that were incurred for the purpose of generating future earnings and appreciation in value over the long term, including acquisition costs. As provided in the prospectuses for our public offerings of common stock, acquisition-related costs have been and are expected to continue to be funded with cash generated from the sale of common stock and, therefore, are not expected to be funded with cash generated from operations.

~~We paid total distributions to stockholders, including~~ ~~$65.4 million~~ ~~reinvested in our common stock pursuant to our DRP, of~~ ~~$135.1 million~~ ~~for the six months ended June 30, 2011. During the same period, net cash provided by operating activities was~~ ~~$131.0 million, and acquisition-related costs, which were funded with cash generated from the sale of our common stock but which under GAAP reduce net cash provided by operating activities, was~~ ~~$11.2 million~~.

In the first quarter of 2011, our board of directors elected to reduce the quarterly stockholder distribution rate from $0.15 per share (a 6.0% annualized yield on a $10.00 original share price) to $0.125 per share (a 5.0% annualized yield on a $10.00 original share price) primarily due to economic conditions in the U.S. and deterioration in real estate market fundamentals. While operational cash flow from our properties remains strong, economic downturns in our markets or in the particular industries in which our tenants operate, could adversely impact the ability of our tenants to make lease payments and our ability to re-lease space on favorable terms when leases expire, either of which circumstance could further adversely affect our ability to fund future distributions to stockholders. We are continuing to carefully monitor our cash flows and market conditions and to assess their impact on our future earnings and future distribution projections.

Election as a REIT

We have elected to be taxed as a REIT under the Code, and have operated as such beginning with our taxable year ended December 31, 2003. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income, as defined in the Code, to our stockholders, computed without regard to the dividends-paid deduction and by excluding our net capital gain. As a REIT, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income for that year and for the four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to our stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes.

Wells TRS and Wells KCP TRS are wholly owned ~~subsidiary~~subsidiaries of Wells REIT II and are organized as Delaware limited liability companies and ~~includes~~include the operations of, among other things, a full-service hotel. We have elected to treat Wells TRS and Wells KCP TRS as taxable REIT subsidiaries. We may perform certain additional, noncustomary services for tenants of our buildings through Wells TRS or Wells KCP TRS; however, any earnings related to such services are subject to federal and state income taxes. In addition, for us to continue to qualify as a REIT, we must limit our investments in taxable REIT subsidiaries to 25% of the value of our total assets. Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted rates expected to be in effect when the temporary differences reverse.

No provision for federal income taxes has been made in our accompanying consolidated financial statements, other than the provision relating to Wells TRS, as we made distributions in excess of taxable income for the periods presented. We are subject to certain state and local taxes related to property operations in certain locations, which have been provided for in our accompanying consolidated financial statements.

Inflation

We are exposed to inflation risk, as income from long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that are intended to protect us from, and mitigate the risk of, the impact of

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inflation. These provisions include rent steps, reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per-square-foot basis, or in some cases, annual reimbursement of operating expenses above a certain per-square-foot allowance. However, due to the long-term nature of the leases, the leases may not reset frequently enough to fully cover inflation.

Application of Critical Accounting Policies

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Investment in Real Estate Assets

We are required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of our assets by class are as follows:



	Buildings		40 years
	Building improvements		5-25 years
	Site improvements		15 years
	Tenant improvements		Shorter of economic life or lease term
	Intangible lease assets		Lease term

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Evaluating the Recoverability of Real Estate Assets

We continually monitor events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of both operating properties and properties under construction, in which we have an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets and related intangible assets (liabilities) may not be recoverable, we assess the recoverability of these assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying values, we adjust the carrying value of the real estate assets and related intangible assets to the estimated fair values, pursuant to the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognize an impairment loss. Estimated fair values are calculated based on the following information, in order of preference, depending upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of future cash flows, including estimated salvage value. ~~We have determined that there has been no impairment in the carrying value of our real estate assets and related intangible assets (liabilities), as defined above, to date; however, certain~~Certain of our assets may be carried at more than an amount that could be realized in a current disposition transaction.

During the third quarter of 2011, we evaluated the recoverability of the carrying value of the Manhattan Towers property and determined that it was not recoverable, as defined by the accounting policy outlined above. The Manhattan Towers property is located in Manhattan Beach, California, and includes two office buildings with total occupancy of 22%. In the third quarter of 2011, upon considering the economic impact of various property disposition scenarios not previously contemplated, including the likelihood of achieving the projected returns associated with each scenario, we opted to transfer the Manhattan Towers property to an affiliate of the lender in full settlement of a $75.0 million nonrecourse mortgage loan through a deed in lieu of foreclosure transaction, which closed on September 6, 2011. As a result of this transaction, Wells REIT II reduced the carrying value of the Manhattan Towers property to its fair value, estimated based on the present value of estimated future property cash flows, by recognizing a property impairment loss of approximately $5.8 million, and recognized a gain on early extinguishment of debt of $13.5 million. The gain on early extinguishment of debt, net of the property impairment loss, is reflected as gain (loss) on disposition of discontinued operations in the statement of operations.

The fair value measurements used in this evaluation of nonfinancial assets are considered to be Level 3 valuations within the fair value hierarchy outlined in Note 2. Summary of Significant Accounting Policies of our accompanying consolidated financial statements, as there are significant unobservable inputs. Examples of inputs that were utilized in the fair value calculations include estimated holding periods, discount rates, market capitalization rates, expected lease rental rates, and sales prices. The table below represents the detail of the adjustments recognized quarter and year to date as of September 30, 2011 (in thousands) using Level 3 inputs.



Property	Net Book Value	Impairment Loss Recognized		Fair Value
Manhattan Towers	65,317	(5,817	)	59,500

Projections of expected future operating cash flows require that we estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property’s fair value and could result in the misstatement of the carrying value of our real estate assets and related intangible assets and net income (loss).

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, we allocate the purchase price of properties to tangible assets, consisting of land and building, site improvements, and identified intangible assets and liabilities, including the value of in-place leases, based in each case on our estimate of their fair values.

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The fair values of the tangible assets of an acquired property (which includes land and building) are determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building based on our determination of the relative fair value of these assets. We determine the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors we consider in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases, including leasing commissions and other related costs. In estimating carrying costs, we include real estate taxes, insurance, and other operating expenses during the expected lease-up periods based on current market demand.

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Intangible Assets and Liabilities Arising from In-Place Leases where We are the Lessor

As further described below, in-place leases where we are the lessor may have values related to direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease, tenant relationships, and effective contractual rental rates that are above or below market rates:

Direct costs associated with obtaining a new tenant, including commissions, tenant improvements, and other direct costs, are estimated based on management’s consideration of current market costs to execute a similar lease. Such direct costs are included in intangible lease origination costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

The value of opportunity costs associated with lost rentals avoided by acquiring an in-place lease is calculated based on the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Such opportunity costs are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

The value of tenant relationships is calculated based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. Values associated with tenant relationships are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

The value of effective rental rates of in-place leases that are above or below the market rates of comparable leases is calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be received pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases.

As of ~~June~~September 30, 2011 and December 31, 2010, ~~Wells REIT II~~we had the following gross intangible in-place lease assets and liabilities (in thousands):


		Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities				Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
		Above-Market In-Place Lease Assets			Absorption Period Costs			Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities				Above-Market In-Place Lease Assets			Absorption Period Costs			Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
June 30, 2011	Gross	$	132,952		$	550,609		$	484,846		$	166,536
September 30, 2011														Gross	$	127,709		$	540,147		$	479,928		$	166,201
	Accum	$	(85,659	)	$	(270,542	)	$	(228,837	)	$	(68,085	)	Accumulated Amortization	$	(83,855	)	$	(275,401	)	$	(236,457	)	$	(72,173	)
	Net	$	47,293		$	280,067		$	256,009		$	98,451		Net	$	43,854		$	264,746		$	243,471		$	94,028
December 31, 2010	Gross	$	139,014		$	534,277		$	489,361		$	150,099		Gross	$	139,014		$	534,277		$	489,361		$	150,099
	Accum	$	(83,233	)	$	(265,747	)	$	(219,447	)	$	(62,165	)	Accumulated Amortization	$	(83,233	)	$	(265,747	)	$	(219,447	)	$	(62,165	)
	Net	$	55,781		$	268,530		$	269,914		$	87,934		Net	$	55,781		$	268,530		$	269,914		$	87,934

obligations under operating leases;

obligations under capital leases;

commitments under existing lease agreements; and

the ~~prior~~large size of our portfolio, although it may be true that some buyers are willing to pay more for a large portfolio than they are willing to pay for each property in the portfolio separately;

our rights under our advisory agreement ~~except~~and our potential ability to secure the services of a management team on a long-term basis; or

the potential increase in our share value if we were to list our shares on a national securities exchange.

Table of ~~shares under our dividend reinvestment plan likely exceeds the price at which we are likely to offer shares under our dividend reinvestment plan in the near future.~~Contents

As previously disclosed, we intend to conduct a valuation of a share of our common stock and to publish the estimated value by December 31, 2011. We have engaged a third-party real estate appraisal firm to estimate the value of our net assets as of September 30, 2011. After reporting the per share estimated value, the purchase price of the shares of common stock offered under our dividend reinvestment plan will be equal to 95.5% of the per share estimated value. Due largely to the deterioration in real estate market fundamentals during the ongoing economic crisis, we expect that the estimated value per share of our common stock at September 30, 2011 will be less than $9.55 per share, which is the price currently paid for shares issued under our dividend reinvestment plan. We expect the new purchase price of shares of common stock offered under our dividend reinvestment plan to be in effect beginning with stockholder distributions declared for the fourth quarter of 2011.


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


(a)	All equity securities sold by us in the ~~quarter~~nine months ended ~~June~~September 30, 2011 were sold in an offering registered under the Securities Act of 1933 with the following exception:

Effective June 30, 2011, we issued 20,000 shares to Wells Capital, Inc. in exchange for 20,000 units of Wells OP II. As a result of the transaction, Wells OP II is now indirectly wholly owned by us. As part of the transaction, we also agreed to reimburse Wells Capital an amount equal to the state and federal income tax liability (if any) that Wells Capital incurs as a result of the exchange, with such payment to be grossed up to include any state or federal income taxes imposed upon Wells Capital as a result of its receipt of any of the reimbursement. The exchange transaction was effected without registration under the securities laws in reliance on the private offering exemption set forth at Section 4(2) of the Securities Act of 1933, as amended, as the purchaser is an accredited investor and no general solicitation was involved in connection with the transaction.


(b)	Not applicable.


(c)	During the quarter ended ~~June~~September 30, 2011, we redeemed shares as follows (in thousands, except per-share amounts):

Period
Total Number of
Shares
Purchased⁽¹⁾

Average Price
Paid per Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs⁽²⁾

Approximate Dollar
Value of Shares
Available That May
Yet Be
Redeemed Under
the Program
April 2011 785 $ 9.22
785
⁽³⁾
May 2011 829 $ 9.47
829
⁽³⁾
June 2011 858 $ 9.23
858
⁽³⁾



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽²⁾	Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
July 2011	722	$	9.39	722	⁽³⁾
August 2011	620	$	9.21	620	⁽³⁾
September 2011	751	$	9.13	751	⁽³⁾

During the quarter ended ~~June~~September 30, 2011, we redeemed all of the shares eligible and properly submitted for redemption prior to the redemption payment date in June.


⁽¹⁾	All purchases of our equity securities by us in the three months ended ~~June~~September 30, 2011, were made pursuant to our SRP.


⁽²⁾	We announced the commencement of the program on December 10, 2003 and amendments to the program on April 22, 2004; March 28, 2006; May 11, 2006; August 10, 2006; August 8, 2007; November 13, 2008; March 31, 2009; August 13, 2009; February 18, 2010; July 21, 2010; September 23, 2010; ~~and~~ July 19, 2011; and August 12, 2011. ~~Further amendments are announced in this quarterly report.~~

⁽³⁾

We currently limit the dollar value and number of shares that may yet be redeemed under the ~~program as described~~program. First, we limit requests for redemptions other than those made within two years of a stockholder's death on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed 5.0% of the weighted-average number of shares outstanding in the prior calendar year. Requests precluded by this test are not considered in the test below. In addition, if necessary, we limit all redemption requests, including those sought within two years of a stockholder’s death, on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed the greater of 100% of the net proceeds from our DRP during the calendar year or 5.0% of weighted average number of shares outstanding in the prior calendar year.

~~Under~~Our board of directors recently approved an amendment to the SRP ~~we limit the number and dollar value of shares that may be redeemed under the plan as follows:~~

First, we limit requests for redemptions other than those made within two years of a stockholder's death on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed 5.0% of the weighted-average number of shares outstanding in the prior calendar year. Requests precluded by this test are not considered in the test below.

~~Page 45~~

~~Table of Contents~~

In addition, if necessary, we limit all redemption requests, including those sought within two years of a stockholder’s death, on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed the greater of 100% of the net proceeds from our DRP during the calendar year or 5.0% of weighted average number of shares outstanding in the prior calendar year.

~~Some stockholders may, due~~ to financial hardship, need to sell their shares. Given the current illiquidity of our shares, some third parties have sought to exploit these hardships by offering to purchase our shares at prices substantially belowchange the price at which the shares were issued by us. (Third-party tender offers have been conducted at $3.00, $4.00, $4.25 and $4.50 per share.) In order to offer stockholders who are facing a financial hardship a liquidity option that is more attractive than the steeply discounted prices recently offered for our shares by third-party tender offerors, we effect Ordinary Redemptions (as defined in our SRP) to $5.50 per share. The amendment also provides that the ~~SRP) at a redemption price equal to 60.0%~~effective date of ~~the price at which the share was originally issued~~an amendment may be accelerated by us. This redemption price for Ordinary Redemptions will remain in effect until the date that we publish an estimate of the value of a share of our common stock which estimate is not based on the most recent prices paid in a public offering of our common stock (the “Net Asset Value Publication Date”). This price will automatically adjust for special distributions and to account for certain recapitalizations.

When setting the price at which Ordinary Redemptions are effected (up to $6.00 per share), we did not conduct a valuation of our portfolio. Rather we chose a redemption price that was substantially higher than the prices offered in recent tender offers for our shares but that was low enough that we could be confident that redemptions at such price would be an attractive use of cash without having to engage an appraiser or another party to value our portfolio. The $6.00 price at which Ordinary Redemptions are generally effected is not an expression of our view of a value of our shares.

Participation in the SRP is limited to exclude shares purchased from another stockholder if the purchase occurred after July 27, 2010. In other words, if shares are transferred for value by a stockholder after July 27, 2010, the transferee and all subsequent holders of such shares are not eligible to participate in the SRP with respect to such shares.

~~On July 13, 2011, our stockholders voted to amend the SRP to allow~~ the board of directors to ~~effect any amendment to the share redemption program without the approval of the stockholders. As~~ a result of this vote (and as disclosed in the proxy statement relating to the vote), our SRP will be amended to change the price at which we redeem a share of our common stock within two years of a stockholder's death or qualifying disability or qualifying for federal assistance for confinement to a long-term care facility. As amended,date that is fewer than 30 days after the date ~~on which we publish an estimated per share value based in part on an estimate~~ of the ~~value of our assets, the price we pay to redeem such shares will be the estimated per share value. The amendment will become effective on August 18, 2011. The full text~~announcement of the ~~Second Amended and Restated Share Redemption Program is filed as an exhibit to our Form 8-K filed on July 19, 2011.~~

~~Our~~amendment if the amendment does not adversely affect the rights of redeeming stockholders. The board of directors recently approved an additional amendment to the SRP. As a result of the amendment, after the Net Asset Value Publication Date, we will pay 60% of the estimated per share value to effect an Ordinary Redemption. Prior toset November 8, 2011 as the effective date of the amendment of the SRP, Ordinary Redemptions will continue to be effected at 60% of the price at which the share was originally issued by us. The amendment was approved to ensure that we retain the cash necessary to fund capital expenditures and distributions. Given the low redemption price, we recommend that stockholders not effect Ordinary Redemptions under the SRP as amended, or as currently in effect.

The amendment does not change redemption prices for redemptions that occur within two years of a stockholder’s death or "qualifying disability" or in connection with a stockholder's (or stockholder's spouse) qualifying for federal assistance for confinement to a "long-term care facility," which redemptions will continue to be effected at the price at which the shares were originally issued (in most cases, $10.00 per share) until the Net Asset Value Publication Date, at which time such redemptions will be effected at the estimated per share value.

The amendment will become effective 30 days after the filing with the SEC of this quarterly report on Form 10-Q. The full text of the Third Amended and Restated Share Redemption Program is filed as an exhibit to this quarterly report and the above description of the amendment is qualified by reference to the full text of SRP.amendment.


ITEM 3.	DEFAULTS UPON SENIOR SECURITIES


(a)	There have been no defaults with respect to any of our indebtedness.


(b)	Not applicable.


ITEM 4.	RESERVED

~~Page 46~~

~~Table of Contents~~


ITEM 5.	OTHER INFORMATION

(a)

~~On August 12,~~During the third quarter of 2011, we entered into the Amended Advisory Agreement (discussed above at Note 8 to our accompanying consolidated financial statements). The Amended Advisory Agreement is effective as of August 1, 2011 and replaces the interim extensionthere was no information that was ~~effective from August 1, 2011 through August 31, 2011. The Amended Advisory Agreement runs through December 31, 2011 and has the same terms as the Advisory Agreement~~required to be disclosed in ~~effect through July 31, which is also described above at Note 8 to our accompanying consolidated financial statements, with the following changes:~~a report of Form 8-K that was not disclosed in a report on Form 8-K.

~~Acquisition fees will be 1%~~

Page 50

Table of the purchase price (excluding acquisition expenses) of the property (as opposed to 2% of gross offering proceeds) and will be paid at the time of the acquisition; however, in no event may acquisition fees for the term of the agreement exceed $1.5 million or cause total acquisition fees for the 2011 calendar year to exceed 2% of total gross offering proceeds.Contents

The limit on reimbursement of "personnel expenses" (as defined) was reduced by approximately $1 million (on an annualized basis), with the limit on reimbursement of "portfolio general and administrative expenses" (as defined, and which includes "personnel expenses") correspondingly reduced.


(b)	There are no material changes to the procedures by which stockholders may recommend nominees to our board of directors since the filing of our Schedule 14A.


ITEM 6.	EXHIBITS

The exhibits required to be filed with this report are set forth on the Exhibit Index to this quarterly report attached hereto.

Page 4751

Table of Contents

SIGNATURES

Pursuant to the requirements 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.



		WELLS REAL ESTATE INVESTMENT TRUST II, INC. (Registrant)

Dated:	~~August 12,~~November 8, 2011	By:	/s/ DOUGLAS P. WILLIAMS
			Douglas P. Williams Executive Vice President, Treasurer and Principal Financial Officer

Page 4852

Table of Contents

EXHIBIT INDEX TO

~~SECOND~~THIRD QUARTER 2011 FORM 10-Q OF

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

The following documents are filed as exhibits to this report. Exhibits that are not required for this report are omitted.



~~Exhibit No.~~	Ex.	Description

3.1			Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 3 to the Registration Statement on Form S-11 (No. 333-107066) filed with the Commission on November 25, 2003).

3.2			Articles of Amendment of Wells Real Estate Investment Trust II, Inc., effective as of October 1, 2008 (incorporated by reference to Exhibit 3.2 to the ~~Company’s~~Company's Annual Report on Form 10-K/A for the year ended December 31, 2008).

3.3			Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the ~~Company’s~~Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).

3.4			Amendment No. 1 to Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the ~~Company’s~~Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).

4.1			Form of Dividend Reinvestment Enrollment Form (incorporated by reference to Appendix A to the Prospectus included in Post-Effective Amendment No. 7 to the Registration Statement on Form S-11 on Form S-3 (No. 333-144414) and filed with the Commission on August 27, ~~2010(the~~2010 (the "DRP Registration Statement")).

4.2			Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.2 to Amendment No. 2 to the Registration Statement on Form S-11 (No. 333-144414) filed with the Commission on September 22, 2008).

4.3			Amended and Restated Dividend Reinvestment Plan (incorporated by reference to Appendix B to the Prospectus included in the DRP Registration Statement).

4.4			Amended and Restated Share Redemption Program (incorporated by reference to Exhibit 4.4 to the ~~Company’s~~Company's Annual Report on Form 10-K filed with the Commission on March 11, 2011).

4.5			Second Amended and Restated Share Redemption Program ~~(to be effective as of August 18, 2011)~~ (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on July 19, 2011).

4.6*		4.6	Third Amended and Restated Share Redemption Program ~~(to be effective as of 30 days after the filing of this Quarterly Report on Form 10-Q).~~

~~10.1~~			Indenture among Wells Operating Partnership II, L.P., Wells Real Estate Investment Trust II, Inc., certain of each of their direct and indirect subsidiaries and U.S. Bank National Association as trustee, dated as of April 4, 2011, including the form of 5.875% Senior Notes due 2018 (incorporated by reference to Exhibit ~~4.1~~4.6 to the Company's Quarterly Report on Form ~~8-K~~10-Q filed with the Commission on ~~April 4,~~August 12, 2011 and effective as of September 11, 2011).

~~10.2~~			Registration Rights Agreement among Wells Operating Partnership II, L.P., Wells Real Estate Investment Trust II, Inc., certain of each of their direct and indirect subsidiaries and the initial purchasers party thereto, dated as of April 4, 2011 (incorporated by reference to Exhibit 10.1 ~~to the Company's Form 8-K filed with the SEC on April 4, 2011).~~

~~10.3~~			Amended and Restated Deed of Trust Note dated as of June 30, 2011 by Wells REIT II - Market Square East & West, LLC, for the benefit of Pacific Life Insurance Company (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form S-4 with the SEC on July 18, 2011).

~~10.4~~			Amended and Restated Deed of Trust, Financing Statement and Security Agreement (with Assignment of Leases and Rents and Fixture Filings) dated as of June 30, 2011 by and among Wells REIT II - Market Square East & West, LLC, Lawyers Title Realty Services, Inc., and Pacific Life Insurance Company (incorporated by reference to Exhibit 10.9 to the Company's Registration Statement on Form S-4 with the SEC on July 18, 2011).

~~Page 49~~

~~Table of Contents~~



~~10.5~~		Amendment No. 1 to Credit Agreement by and among ~~wells~~Wells Operating Partnership II, L.P., as borrower, J.P. Morgan Securities LLC and PNC Capital Markets LLC, as joint lead arrangers and joint bookrunners, JP Morgan Chase Bank, N.A., as administrative agent, and PNC Bank, National Association, as syndication agent and Regions Bank, U.S. Bank National Association and BMO Capital Markets, as documentation agents, and the financial institutions party thereto, dated July 8, 2011 (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form S-4 filed with the SEC on July 18, 2011).
10.2*	Interim Advisory Agreement by and between the Company and Wells Real Estate Advisory Services II, LLC effective for the month of August 2011
10.3*	Amended Advisory Agreement by and between the Company and Wells Real Estate Advisory Services II, LLC effective as of August 1, 2011
31.1*		Certification of the Principal Executive Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the ~~Chief~~Principal Financial Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Principal Executive Officer and ~~Chief~~Principal Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**		XBRL Instance Document.
101.SCH**		XBRL Taxonomy Extension Schema.
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase.
101.DEF**		XBRL Taxonomy Extension Definition Linkbase.
101.LAB**		XBRL Taxonomy Extension Label Linkbase.
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase.



*	Filed herewith.
**	Furnished with this Form 10-Q

Page 5053



Maryland		20-0068852
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)



Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x (Do not check if a smaller reporting company)	Smaller reporting company	o



		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements

	Consolidated Balance Sheets as of ~~June~~September 30, 2011 (unaudited) and December 31, 2010	Page 5

	Consolidated Statements of Operations for the Three Months and ~~Six~~Nine Months Ended ~~June~~September 30, 2011 (unaudited) and 2010 (unaudited)	Page 6

	Consolidated Statements of Equity for the ~~Six~~Nine Months Ended ~~June~~September 30, 2011 (unaudited) and 2010 (unaudited)	Page 7

	Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2011 (unaudited) and 2010 (unaudited)	Page 9

	Condensed Notes to Consolidated Financial Statements (unaudited)	Page 10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	Page 32

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	Page 4247

Item 4.	Controls and Procedures	Page 4449

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	Page 4449

Item 1A.	Risk Factors	Page 4549

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	Page 4550

Item 3.	Defaults Upon Senior Securities	Page 4650

Item 4.	RESERVED	Page 4650

Item 5.	Other Information	Page 4750

Item 6.	Exhibits	Page 4751


	(Unaudited)						(Unaudited)
	June 30, 2011			December 31, 2010			September 30, 2011			December 31, 2010
Assets:
Real estate assets, at cost:
Land	$	727,331		$	571,696		$	715,872		$	571,696
Buildings and improvements, less accumulated depreciation of $472,901 and $414,040 as of June 30, 2011 and December 31, 2010, respectively	3,589,031			3,225,708
Intangible lease assets, less accumulated amortization of $364,079 and $355,823 as of June 30, 2011 and December 31, 2010, respectively	430,155			428,140
Buildings and improvements, less accumulated depreciation of $491,264 and $414,040 as of September 30, 2011 and December 31, 2010, respectively							3,518,664			3,225,708
Intangible lease assets, less accumulated amortization of $367,650 and $355,823 as of September 30, 2011 and December 31, 2010, respectively							410,878			428,140
Construction in progress	14,991			4,495			6,649			4,495
Total real estate assets	4,761,508			4,230,039			4,652,063			4,230,039
Cash and cash equivalents	38,593			38,882			31,809			38,882
Tenant receivables, net of allowance for doubtful accounts of $3,753 and $3,559 as of June 30, 2011 and December 31, 2010, respectively	117,657			108,057
Tenant receivables, net of allowance for doubtful accounts of $3,609 and $3,559 as of September 30, 2011 and December 31, 2010, respectively							123,169			108,057
Prepaid expenses and other assets	25,367			22,700			30,924			22,700
Deferred financing costs, less accumulated amortization of $5,777 and $3,975 as of June 30, 2011 and December 31, 2010, respectively	10,837			9,827
Intangible lease origination costs, less accumulated amortization of $228,837 and $219,447 as of June 30, 2011 and December 31, 2010, respectively	256,009			269,914
Deferred lease costs, less accumulated amortization of $18,530 and $15,734 as of June 30, 2011 and December 31, 2010, respectively	63,305			46,266
Deferred financing costs, less accumulated amortization of $6,128 and $3,975 as of September 30, 2011 and December 31, 2010, respectively							12,296			9,827
Intangible lease origination costs, less accumulated amortization of $236,457 and $219,447 as of September 30, 2011 and December 31, 2010, respectively							243,471			269,914
Deferred lease costs, less accumulated amortization of $20,167 and $15,734 as of September 30, 2011 and December 31, 2010, respectively							65,645			46,266
Investment in development authority bonds	646,000			646,000			646,000			646,000
Total assets	$	5,919,276		$	5,371,685		$	5,805,377		$	5,371,685
Liabilities:
Line of credit and notes payable	$	1,276,523		$	886,939		$	1,194,996		$	886,939
Bonds payable, net of discount of $1,700 as of June 30, 2011	248,300			—
Bonds payable, net of discount of $1,637 as of September 30, 2011							248,363			—
Accounts payable, accrued expenses, and accrued capital expenditures	115,384			102,697			133,468			102,697
Due to affiliates	1,781			4,479			1,625			4,479
Deferred income	28,407			26,403			35,791			26,403
Intangible lease liabilities, less accumulated amortization of $68,085 and $62,165 as of June 30, 2011 and December 31, 2010, respectively	98,451			87,934
Intangible lease liabilities, less accumulated amortization of $72,173 and $62,165 as of September 30, 2011 and December 31, 2010, respectively							94,028			87,934
Obligations under capital leases	646,000			646,000			646,000			646,000
Total liabilities	2,414,846			1,754,452			2,354,271			1,754,452
Commitments and Contingencies (Note 6)	—			—			—			—
Redeemable Common Stock	223,137			161,189			137,406			161,189
Equity:
Common stock, $0.01 par value; 900,000,000 shares authorized; 543,392,287 and 540,906,780 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively	5,434			5,409
Common stock, $0.01 par value; 900,000,000 shares authorized; 544,642,842 and 540,906,780 shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively							5,446			5,409
Additional paid-in capital	4,860,270			4,835,088			4,872,810			4,835,088
Cumulative distributions in excess of earnings	(1,349,643		)	(1,212,472		)	(1,412,311		)	(1,212,472		)
Redeemable common stock	(223,137		)	(161,189		)	(137,406		)	(161,189		)
Other comprehensive loss	(11,966		)	(11,139		)	(15,164		)	(11,139		)
Total Wells Real Estate Investment Trust II, Inc. stockholders’ equity	3,280,958			3,455,697			3,313,375			3,455,697
Nonredeemable noncontrolling interests	335			347			325			347
Total equity	3,281,293			3,456,044			3,313,700			3,456,044
Total liabilities, redeemable common stock, and equity	$	5,919,276		$	5,371,685		$	5,805,377		$	5,371,685


	(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)
	Three months ended June 30,						Six months ended June 30,						Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
Revenues:
Rental income	$	122,378		$	111,135		$	237,243		$	218,891		$	120,920		$	112,515		$	357,055		$	327,531
Tenant reimbursements	24,869			23,241			51,078			46,605			27,468			26,079			78,490			71,696
Hotel income	5,215			5,357			9,366			9,399			6,271			5,501			15,638			14,900
Other property income	2,000			356			2,283			768			3,744			485			6,027			1,253
	154,462			140,089			299,970			275,663			158,403			144,580			457,210			415,380
Expenses:
Property operating costs	45,544			41,115			88,836			81,776			45,687			42,568			133,058			122,842
Hotel operating costs	4,269			4,515			8,281			8,451			5,001			4,499			13,282			12,950
Asset and property management fees:
Related-party	9,292			8,420			18,060			16,733			9,470			8,532			27,526			24,983
Other	720			1,004			1,647			2,005			696			1,011			2,334			2,946
Depreciation	30,798			25,018			58,916			48,487			30,317			26,145			88,345			73,797
Amortization	31,534			29,094			61,926			58,323			29,450			28,452			91,330			85,823
General and administrative	6,453			6,355			13,109			12,395			6,114			6,025			19,188			18,387
Acquisition fees and expenses	1,194			4,278			11,220			7,668			29			2,081			11,249			9,749
	129,804			119,799			261,995			235,838			126,764			119,313			386,312			351,477
Real estate operating income	24,658			20,290			37,975			39,825			31,639			25,267			70,898			63,903
Other income (expense):
Interest expense	(31,751		)	(22,663		)	(54,990		)	(44,859		)	(28,660		)	(21,632		)	(81,490		)	(64,273		)
Interest and other income	10,013			10,082			22,068			20,123			10,317			11,901			32,383			32,025
Loss on interest rate swaps	(7,534		)	(14,323		)	(7,445		)	(19,183		)	(14,774		)	(9,885		)	(22,219		)	(29,068		)
	(29,272		)	(26,904		)	(40,367		)	(43,919		)	(33,117		)	(19,616		)	(71,326		)	(61,316		)
Loss before income tax (expense) benefit	(4,614		)	(6,614		)	(2,392		)	(4,094		)
(Loss) income before income tax (expense) benefit													(1,478		)	5,651			(428		)	2,587
Income tax (expense) benefit	168			(20		)	399			216			(62		)	(111		)	337			105
Loss from continuing operations	(4,446		)	(6,634		)	(1,993		)	(3,878		)
(Loss) gain from continuing operations													(1,540		)	5,540			(91		)	2,692
Discontinued operations:
Operating loss from discontinued operations	(32		)	(230		)	(70		)	(459		)	(1,059		)	(689		)	(4,571		)	(2,179		)
Loss from discontinued operations	(32		)	(230		)	(70		)	(459		)
Net loss	(4,478		)	(6,864		)	(2,063		)	(4,337		)
Gain (loss) on disposition of discontinued operations													7,705			(130		)	7,705			(130		)
Gain (loss) from discontinued operations													6,646			(819		)	3,134			(2,309		)
Net income													5,106			4,721			3,043			383
Less: net income attributable to nonredeemable noncontrolling interests	(4		)	(23		)	(8		)	(41		)	(4		)	(19		)	(11		)	(59		)
Net loss attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(4,482	)	$	(6,887	)	$	(2,071	)	$	(4,378	)
Per share information – basic and diluted:
Loss from continuing operations	$	(0.01	)	$	(0.01	)	$	—		$	(0.01	)
Loss from discontinued operations	$	—		$	—		$	—		$	—
Net loss attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(0.01	)	$	(0.01	)	$	—		$	(0.01	)
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.													$	5,102		$	4,702		$	3,032		$	324
Per-share information – basic and diluted:
Income from continuing operations													$	0.00		$	0.01		$	0.00		$	0.01
Gain (loss) from discontinued operations													$	0.01		$	0.00		$	0.01		$	(0.01	)
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.													$	0.01		$	0.01		$	0.01		$	0.00
Weighted-average common shares outstanding – basic and diluted	542,182			518,715			541,600			511,905			543,288			536,582			542,169			520,221



x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


	Stockholders’ Equity																															Stockholders’ Equity
	Common Stock					Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings				Redeemable Common Stock				Other Comprehensive Loss				Total Wells Real Estate Investment Trust II, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests				Total Equity			Common Stock							Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings			Redeemable Common Stock			Other Comprehensive Loss			Total Wells Real Estate Investment Trust II, Inc. Stockholders’ Equity				Nonredeemable Noncontrolling Interests				Total Equity
	Shares		Amount										Shares					Other Comprehensive Loss			Amount																		Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings			Redeemable Common Stock			Other Comprehensive Loss							Nonredeemable Noncontrolling Interests				Total Equity
Balance, December 31, 2010	540,907		$	5,409		Additional Paid-In Capital			$	Cumulative Distributions in Excess of Earnings		4,835,088		Redeemable Common Stock		$	(1,212,472	)		$	(161,189			)	Nonredeemable Noncontrolling Interests			$	Total Equity		(11,139	)		$	3,455,697			$	347			$	3,456,044		540,907		$	5,409		$	4,835,088		$	(1,212,472	)		$	(161,189	)		$	(11,139	)	$	3,455,697	$	347	$	3,456,044
Issuance of common stock	6,863		69			65,296				—				—				—				65,365			—				65,365			10,281			103				97,905				—			—			—			98,008				—				98,008
Redemptions of common stock	(4,378	)	(44		)	(40,114		)		—				—				—				(40,158		)	—				(40,158		)	(6,545	)		(66		)		(60,183		)		—			—			—			(60,249		)		—				(60,249		)
Increase in redeemable common stock	—		—			—				—				(61,948		)		—				(61,948		)	—				(61,948		)
Distributions to common stockholders ($0.25 per share)	—		—			—				(135,100		)		—				—				(135,100		)	—				(135,100		)
Decrease in redeemable common stock																																—			—				—				—			23,783			—			23,783				—				23,783
Distributions to common stockholders ($0.375 per share)																																—			—				—				(202,871		)	—			—			(202,871		)		—				(202,871		)
Distributions to noncontrolling interests	—		—							—				—				—				—			(20		)		(20		)	—			—								—			—			—			—				(33		)		(33		)
Components of comprehensive loss:
Net loss attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	—		—			—				(2,071		)		—				—				(2,071		)	—				(2,071		)
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.																																—			—				—				3,032			—			—			3,032				—				3,032
Net income attributable to noncontrolling interests	—		—			—				—				—				—				—			8				8			—			—				—				—			—			—			—				11				11
Market value adjustment to interest rate swap	—		—			—				—				—				(827		)		(827		)	—				(827		)	—			—				—				—			—			(4,025		)	(4,025		)		—				(4,025		)
Comprehensive income (loss)	—		—			—				—				—				—				(2,898		)	8				(2,890		)
Balance, June 30, 2011	543,392		$	5,434		$	4,860,270			$	(1,349,643	)		$	(223,137	)		$	(11,966	)		$	3,280,958		$	335			$	3,281,293
Comprehensive (loss) income																																—			—				—				—			—			—			(993		)		11				(982		)
Balance, September 30, 2011																																544,643			$	5,446			$	4,872,810			$	(1,412,311	)	$	(137,406	)	$	(15,164	)	$	3,313,375			$	325			$	3,313,700


For the year ending December 31:
2011	$	1,034	$	517
2012	2,069		2,069
2013	2,069		2,069
2014	2,069		2,069
2015	2,069		2,069
2016	2,069		2,069
Thereafter	91,416		91,416
	$	102,795	$	102,278



		Estimated Fair Value as of
Instrument Type	Balance Sheet Classification	June 30, 2011			December 31, 2010
Derivatives designated as hedging instruments:
Interest rate contracts	Accounts payable	$	(12,049	)	$	(11,222	)
Derivatives not designated as hedging instruments:
Interest rate contracts	Accounts payable	$	(39,617	)	$	(37,208	)


⁽¹⁾	As of the acquisition date, the Market Square Buildings were 96.2% leased to 41 tenants, including Fulbright and Jaworski (18.8%), Shearman and Sterling (16.6%), and Edison Electric Institute (11.3%).


⁽²⁾	Wells ~~RETI~~REIT II acquired a 50% controlling interest in a consolidated joint venture that owns 100% of 544 Lakeview by paying cash of $0.9 million and assuming (i) a mortgage note of $9.1 million, which is included on the consolidated balance sheets as of ~~June~~September 30, 2011, net of discount of $0.4 million, and (ii) escrow balances of approximately ~~$2.8~~$3.2 million.


⁽³⁾	As of the acquisition date, the Lakeview Building is vacant.



Facility	June 30, 2011		December 31, 2010
Market Square mortgage note	$	325,000	$	—
222 E. 41st Street Building mortgage note	169,769		164,151
JPMorgan Chase Credit Facility	121,000		72,000
100 East Pratt Street Building mortgage note	105,000		105,000
Wildwood Buildings mortgage note	90,000		90,000
Manhattan Towers Building mortgage note	75,000		75,000
Cranberry Woods Drive mortgage note	63,396		63,396
80 Park Plaza Building mortgage note	62,946		60,894
263 Shuman Boulevard Building mortgage note	49,000		49,000
800 North Frederick Building mortgage note	46,400		46,400
One West Fourth Street Building mortgage note	40,560		41,537
SanTan Corporate Center mortgage notes	39,000		39,000
Highland Landmark Building mortgage note	33,840		33,840
Three Glenlake Building mortgage note	25,882		25,721
215 Diehl Road Building mortgage note	21,000		21,000
544 Lakeview Building mortgage note	8,730		—
Total indebtedness	$	1,276,523	$	886,939


7.	Supplemental Disclosures of Noncash Investing and Financing Activities


ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.	Organization


5.	Bonds Payable


8.	Related-Party Transactions and Agreements


⁽¹⁾	Administrative reimbursements are presented net of reimbursements from tenants of approximately ~~$1.1~~$1.2 million and $0.6 million for the three months ended ~~June~~September 30, 2011 and 2010, respectively, and approximately ~~$1.8~~$3.0 million and ~~1.3~~2.0 million for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, respectively.


⁽²⁾	Commissions, dealer-manager fees, and other offering costs were charged against equity as incurred.


⁽³⁾	Substantially all commissions were re-allowed to participating broker/dealers during ~~the~~ ~~three months and six months endedJune 30, 2010~~ ~~for shares sold under the Third Offering, which was terminated effective June~~ 2010.


⁽⁴⁾	Construction fees are capitalized to real estate assets as incurred.



	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Net loss	$	(4,478	)	$	(6,864	)	$	(2,063	)	$	(4,337	)
Market value adjustment to interest rate swap	(1,579		)	(3,542		)	(827		)	(4,398		)
Comprehensive loss	(6,057		)	(10,406		)	(2,890		)	(8,735		)
Less: Comprehensive income attributable to noncontrolling interests	(4		)	(23		)	(8		)	(41		)
Comprehensive loss attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(6,061	)	$	(10,429	)	$	(2,898	)	$	(8,776	)


(1)	The subsidiary issuer (Wells OP II) and all Subsidiary Guarantors are 100% owned by the parent company guarantor (Wells REIT II);


	As of June 30, 2011														As of September 30, 2011
	Wells REIT II (Parent)			Wells OP II (the Issuer)		Guarantors		Non-Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)		Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors		Non-Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)
Assets
Real estate assets, at cost
Land	$	—		$	—	$	199,825	$	527,506	$	—		$	727,331	$	—		$	—		$	199,824	$	516,048	$	—		$	715,872
Building and Improvements	—			—		1,403,377		2,185,654		—			3,589,031
Building and improvements															—			—			1,392,591		2,126,073		—			3,518,664
Intangible lease assets	—			—		162,412		267,743		—			430,155		—			—			154,743		256,135		—			410,878
Construction in progress	—			—		3,261		11,730		—			14,991		—			—			3,105		3,544		—			6,649
Total real estate assets	—			—		1,768,875		2,992,633		—			4,761,508		—			—			1,750,263		2,901,800		—			4,652,063

Cash and cash equivalents	14,068			7,674		6,490		10,361		—			38,593		11,029			5,735			4,757		10,288		—			31,809
Investment in subsidiaries	3,508,493			3,036,155		—		—		(6,544,648		)	—		3,458,442			2,950,695			—		—		(6,409,137		)	—
Tenant receivables, net of allowance	—			—		53,380		70,190		(5,913		)	117,657		—			—			54,630		74,527		(5,988		)	123,169
Prepaid expenses and other assets	1,044			199,874		1,868		23,374		(200,793		)	25,367		1,418			200,074			2,088		28,085		(200,741		)	30,924
Deferred financing costs	—			6,828		—		4,009		—			10,837		—			8,849			—		3,447		—			12,296
Intangible lease origination costs	—			—		142,794		113,215		—			256,009		—			—			137,230		106,241		—			243,471
Deferred lease costs	—			—		14,701		48,604		—			63,305		—			—			14,454		51,191		—			65,645
Investments in development authority bonds	—			—		466,000		180,000		—			646,000		—			—			466,000		180,000		—			646,000
Total assets	$	3,523,605		$	3,250,531	$	2,454,108	$	3,442,386	$	(6,751,354	)	$	5,919,276	$	3,470,889		$	3,165,353		$	2,429,422	$	3,355,579	$	(6,615,866	)	$	5,805,377

Liabilities
Lines of credit and notes payable	$	—		$	121,000	$	148,561	$	1,206,275	$	(199,313	)	$	1,276,523	$	—		$	220,500		$	148,150	$	1,026,966	$	(200,620	)	$	1,194,996
Bonds payable	—			248,300		—		—		—			248,300		—			248,363			—		—		—			248,363
Accounts payable, accrued expenses, and accrued capital expenditures	960			6,214		16,996		98,592		(7,378		)	115,384		1,667			8,575			16,842		112,372		(5,988		)	133,468
Due to affiliates	(96		)	47		1,171		670		(11		)	1,781		(66		)	(210		)	1,198		824		(121		)	1,625
Deferred income	—			—		11,012		17,395		—			28,407		—			—			20,176		15,615		—			35,791
Intangible lease liabilities	—			—		42,036		56,415		—			98,451		—			—			40,562		53,466		—			94,028
Obligations under capital leases	—			—		466,000		180,000		—			646,000		—			—			466,000		180,000		—			646,000
Total liabilities	864			375,561		685,776		1,559,347		(206,702		)	2,414,846		1,601			477,228			692,928		1,389,243		(206,729		)	2,354,271

Redeemable common stock	223,137			—		—		—		—			223,137		137,406			—			—		—		—			137,406

Stockholders’ Equity:
Total Wells Real Estate Investment Trust II, Inc. stockholders’ equity	3,299,604			2,874,970		1,768,332		1,882,704		(6,544,652		)	3,280,958		3,331,882			2,688,125			1,736,494		1,966,011		(6,409,137		)	3,313,375

Nonredeemable noncontrolling interests	—			—		—		335		—			335		—			—			—		325		—			325

Total equity	3,299,604			2,874,970		1,768,332		1,883,039		(6,544,652		)	3,281,293		3,331,882			2,688,125			1,736,494		1,966,336		(6,409,137		)	3,313,700

Total liabilities, redeemable common stock, and equity	$	3,523,605		$	3,250,531	$	2,454,108	$	3,442,386	$	(6,751,354	)	$	5,919,276	$	3,470,889		$	3,165,353		$	2,429,422	$	3,355,579	$	(6,615,866	)	$	5,805,377



	As of December 31, 2010
	Wells REIT II (Parent)		Wells OP II (the Issuer)		Guarantors		Non-Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)
Assets
Real estate assets, at cost
Land	$	—	$	—	$	199,825	$	371,871	$	—		$	571,696
Building and Improvements	—		—		1,423,546		1,802,162		—			3,225,708
Intangible lease assets	—		—		181,085		247,055		—			428,140
Construction in progress	—		—		2,424		2,071		—			4,495
Total real estate assets	—		—		1,806,880		2,423,159		—			4,230,039

Cash and cash equivalents	8,281		11,074		8,250		11,277		—			38,882
Investment in subsidiaries	3,623,220		3,386,229		—		—		(7,009,449		)	—
Tenant receivables, net of allowance	—		—		49,495		62,487		(3,925		)	108,057
Prepaid expenses and other assets	—		196,062		988		21,205		(195,555		)	22,700
Deferred financing costs	—		5,679		—		4,148		—			9,827
Intangible lease origination costs	—		—		154,923		114,991		—			269,914
Deferred lease costs	—		—		11,218		35,048		—			46,266
Investments in development authority bonds	—		—		466,000		180,000		—			646,000
Total assets	$	3,631,501	$	3,599,044	$	2,497,754	$	2,852,315	$	(7,208,929	)	$	5,371,685

Liabilities
Lines of credit and notes payable	$	—	$	72,000	$	149,361	$	861,133	$	(195,555	)	$	886,939
Accounts payable, accrued expenses, and accrued capital expenditures	137		966		19,132		86,387		(3,925		)	102,697
Due to affiliates	—		2,614		1,217		648		—			4,479
Deferred income	—		—		10,988		15,415		—			26,403
Intangible lease liabilities	—		—		45,895		42,039		—			87,934
Obligations under capital leases	—		—		466,000		180,000		—			646,000
Total liabilities	137		75,580		692,593		1,185,622		(199,480		)	1,754,452

Redeemable common stock	161,189		—		—		—		—			161,189

Stockholders’ Equity:
Total Wells Real Estate Investment Trust II, Inc. stockholders’ equity	3,470,175		3,523,464		1,805,161		1,666,346		(7,009,449		)	3,455,697

Nonredeemable noncontrolling interests	—		—		—		347		—			347

Total equity	3,470,175		3,523,464		1,805,161		1,666,693		(7,009,449		)	3,456,044

Total liabilities, redeemable common stock, and equity	$	3,631,501	$	3,599,044	$	2,497,754	$	2,852,315	$	(7,208,929	)	$	5,371,685



	For the three months ended June 30, 2011
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non-Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)
Revenues:
Rental Income	$	—		$	—		$	52,099		$	71,572		$	(1,293	)	$	122,378
Tenant reimbursements	—			—			8,030			16,839			—			24,869
Hotel income	—			—			—			5,215			—			5,215
Other property income	—			36			377			1,755			(168		)	2,000
	—			36			60,506			95,381			(1,461		)	154,462

Expenses:
Property operating costs	—			—			15,185			30,491			(132		)	45,544
Hotel operating costs	—			—			—			5,562			(1,293		)	4,269
Asset & property management fees:
Related-party	7,690			—			299			1,339			(36		)	9,292
Other	—			—			478			242			—			720
Depreciation	—			—			11,569			19,229			—			30,798
Amortization	—			—			12,083			19,451			—			31,534
General and administrative	18			4,788			385			1,262			—			6,453
Acquisition fees and expenses	656			—			—			538			—			1,194
	8,364			4,788			39,999			78,114			(1,461		)	129,804

Real estate operating income (loss)	(8,364		)	(4,752		)	20,507			17,267			—			24,658

Other income (expense):
Interest expense	—			(12,104		)	(10,095		)	(13,935		)	4,383			(31,751		)
Interest and other income	11			4,372			7,307			2,706			(4,383		)	10,013
Loss on interest rate swap	—			—			—			(7,534		)	—			(7,534		)
Income from equity investment	3,889			14,382			—			—			(18,271		)	—
	3,900			6,650			(2,788		)	(18,763		)	(18,271		)	(29,272		)

Income (loss) before income tax (expense) benefit	(4,464		)	1,898			17,719			(1,496		)	(18,271		)	(4,614		)
Income tax (expense) benefit	—			—			(21		)	189			—			168
Income (loss) from continuing operations	(4,464		)	1,898			17,698			(1,307		)	(18,271		)	(4,446		)

Discontinued operations:
Operating loss from discontinued operations	—			—			—			(32		)	—			(32		)
Loss from discontinued operations	—			—			—			(32		)	—			(32		)
Net income (loss)	(4,464		)	1,898			17,698			(1,339		)	(18,271		)	(4,478		)

Less: Net income attributable to noncontrolling interests	—			—			—			(4		)	—			(4		)

Net income (loss) attributable to the common stockholders of Wells REIT II	$	(4,464	)	$	1,898		$	17,698		$	(1,343	)	$	(18,271	)	$	(4,482	)


	For the three months ended June 30, 2010																		For the three months ended September 30, 2011
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non-Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)			Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non-Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)
Revenues:
Rental Income	$	—		$	—		$	52,138		$	60,100		$	(1,103	)	$	111,135
Rental income																			$	—		$	—		$	52,155		$	70,058		$	(1,293	)	$	120,920
Tenant reimbursements	—			—			8,355			14,886			—			23,241			—			—			9,699			17,769			—			27,468
Hotel income	—			—			—			5,357			—			5,357			—			—			—			6,271			—			6,271
Other property income	—			13			178			346			(181		)	356			151			38			209			3,683			(337		)	3,744
	—			13			60,671			80,689			(1,284		)	140,089			151			38			62,063			97,781			(1,630		)	158,403

Expenses:
Property operating costs	—			—			15,510			25,773			(168		)	41,115			—			—			16,326			29,509			(148		)	45,687
Hotel operating costs	—			—			—			5,618			(1,103		)	4,515			—			—			—			6,294			(1,293		)	5,001
Asset & property management fees:
Related-party	7,316			—			229			888			(13		)	8,420			7,952			—			380			1,327			(189		)	9,470
Other	—			—			556			448			—			1,004			—			—			443			253			—			696
Depreciation	—			—			11,200			13,818			—			25,018			—			—			11,609			18,708			—			30,317
Amortization	—			—			12,281			16,813			—			29,094			—			—			11,817			17,633			—			29,450
General and administrative	5			6,280			148			(78		)	—			6,355			—			4,583			267			1,264			—			6,114
Acquisition fees and expenses	3,767			—			44			467			—			4,278			—			—			—			29			—			29
	11,088			6,280			39,968			63,747			(1,284		)	119,799			7,952			4,583			40,842			75,017			(1,630		)	126,764

Real estate operating income (loss)	(11,088		)	(6,267		)	20,703			16,942			—			20,290			(7,801		)	(4,545		)	21,221			22,764			—			31,639

Other income (expense):
Interest expense	—			(1,193		)	(10,124		)	(14,202		)	2,856			(22,663		)	(11		)	(6,264		)	(10,087		)	(16,738		)	4,440			(28,660		)
Interest and other income	51			2,844			7,307			2,736			(2,856		)	10,082			26			4,717			7,307			2,707			(4,440		)	10,317
Loss on interest rate swap	—			—			—			(14,323		)	—			(14,323		)	—			—			—			(14,774		)	—			(14,774		)
Income from equity investment	4,161			6,438			—			—			(10,599		)	—			12,887			18,980			—			—			(31,867		)	—
	4,212			8,089			(2,817		)	(25,789		)	(10,599		)	(26,904		)	12,902			17,433			(2,780		)	(28,805		)	(31,867		)	(33,117		)

Income (loss) before income tax expense	(6,876		)	1,822			17,886			(8,847		)	(10,599		)	(6,614		)
Income tax expense	—			—			(19		)	(1		)	—			(20		)
Income (loss) from continuing operations	(6,876		)	1,822			17,867			(8,848		)	(10,599		)	(6,634		)
Income (loss) before income tax (expense) benefit																			5,101			12,888			18,441			(6,041		)	(31,867		)	(1,478		)
Income tax (expense) benefit																			—			—			(91		)	29			—			(62		)
Gain (loss) from continuing operations																			5,101			12,888			18,350			(6,012		)	(31,867		)	(1,540		)

Discontinued operations:
Operating loss from discontinued operations	—			—			—			(230		)	—			(230		)	—			—			—			(1,059		)	—			(1,059		)
Loss from discontinued operations	—			—			—			(230		)	—			(230		)
Gain on disposition of discontinued operations																			—			—			—			7,705			—			7,705
Gain from discontinued operations																			—			—			—			6,646			—			6,646
Net income (loss)	(6,876		)	1,822			17,867			(9,078		)	(10,599		)	(6,864		)	5,101			12,888			18,350			634			(31,867		)	5,106

Less: Net income attributable to noncontrolling interests	—			—			—			(23		)	—			(23		)	—			—			—			(4		)	—			(4		)

Net income (loss) attributable to the common stockholders of Wells REIT II	$	(6,876	)	$	1,822		$	17,867		$	(9,101	)	$	(10,599	)	$	(6,887	)	$	5,101		$	12,888		$	18,350		$	630		$	(31,867	)	$	5,102


	For the six months ended June 30, 2011																		For the three months ended September 30, 2010
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non-Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)			Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non-Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)
Revenues:
Rental Income	$	—		$	—		$	103,604		$	136,173		$	(2,534	)	$	237,243		$	—		$	—		$	52,078		$	61,540		$	(1,103	)	$	112,515
Tenant reimbursements	—			—			16,920			34,158			—			51,078			—			—			8,852			17,227			—			26,079
Hotel income	—			—			—			9,366			—			9,366			—			—			—			5,501			—			5,501
Other property income	—			71			495			2,052			(335		)	2,283			—			42			7			667			(231		)	485
	—			71			121,019			181,749			(2,869		)	299,970			—			42			60,937			84,935			(1,334		)	144,580

Expenses:
Property operating costs	—			—			30,639			58,461			(264		)	88,836			—			—			15,574			27,183			(189		)	42,568
Hotel operating costs	—			—			—			10,815			(2,534		)	8,281			—			—			—			5,602			(1,103		)	4,499
Asset & property management fees:
Related-party	15,236			—			532			2,363			(71		)	18,060			7,629			—			234			711			(42		)	8,532
Other	—			—			1,055			592			—			1,647			—			—			568			443			—			1,011
Depreciation	—			—			23,139			35,777			—			58,916			—			—			11,204			14,941			—			26,145
Amortization	—			—			25,942			35,984			—			61,926			—			—			12,116			16,336			—			28,452
General and administrative	43			9,574			1,442			2,050			—			13,109			69			4,592			308			1,056			—			6,025
Acquisition fees and expenses	1,307			—			—			9,913			—			11,220			1,931			—			—			150			—			2,081
	16,586			9,574			82,749			155,955			(2,869		)	261,995			9,629			4,592			40,004			66,422			(1,334		)	119,313

Real estate operating income (loss)	(16,586		)	(9,503		)	38,270			25,794			—			37,975			(9,629		)	(4,550		)	20,933			18,513			—			25,267

Other income (expense):
Interest expense	—			(16,013		)	(20,198		)	(27,454		)	8,675			(54,990		)	—			(1,478		)	(10,117		)	(14,925		)	4,888			(21,632		)
Interest and other income	2,053			8,664			14,616			5,410			(8,675		)	22,068			46			4,897			7,314			4,532			(4,888		)	11,901
Loss on interest rate swap	—			—			—			(7,445		)	—			(7,445		)	—			—			—			(9,885		)	—			(9,885		)
Income from equity investment	12,482			34,094			—			—			(46,576		)	—			14,277			12,009			—			—			(26,286		)	—
	14,535			26,745			(5,582		)	(29,489		)	(46,576		)	(40,367		)	14,323			15,428			(2,803		)	(20,278		)	(26,286		)	(19,616		)

Income (loss) before income tax (expense) benefit	(2,051		)	17,242			32,688			(3,695		)	(46,576		)	(2,392		)
Income tax (expense) benefit	—			—			(43		)	442			—			399
Income (loss) from continuing operations	(2,051		)	17,242			32,645			(3,253		)	(46,576		)	(1,993		)
Income (loss) before income tax expense																			4,694			10,878			18,130			(1,765		)	(26,286		)	5,651
Income tax expense																			—			—			(23		)	(88		)	—			(111		)
Gain (loss) from continuing operations																			4,694			10,878			18,107			(1,853		)	(26,286		)	5,540

Discontinued operations:
Operating loss from discontinued operations	—			—			—			(70		)	—			(70		)	—			—			—			(689		)	—			(689		)
Loss on sale of discontinued operations																			—			—			—			(130		)	—			(130		)
Loss from discontinued operations	—			—			—			(70		)	—			(70		)	—			—			—			(819		)	—			(819		)
Net income (loss)	(2,051		)	17,242			32,645			(3,323		)	(46,576		)	(2,063		)	4,694			10,878			18,107			(2,672		)	(26,286		)	4,721

Less: Net income attributable to noncontrolling interests	—			—			—			(8		)	—			(8		)	—			—			—			(19		)	—			(19		)

Net income (loss) attributable to the common stockholders of Wells REIT II	$	(2,051	)	$	17,242		$	32,645		$	(3,331	)	$	(46,576	)	$	(2,071	)	$	4,694		$	10,878		$	18,107		$	(2,691	)	$	(26,286	)	$	4,702


	For the six months ended June 30, 2010																		For the nine months ended September 30, 2011
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non-Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)			Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non-Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)
Revenues:
Rental Income	$	—		$	—		$	103,682		$	117,415		$	(2,206	)	$	218,891		$	—		$	—		$	155,759		$	205,123		$	(3,827	)	$	357,055
Tenant reimbursements	—			—			16,785			29,820			—			46,605			—			—			26,619			51,871			—			78,490
Hotel income	—			—			—			9,399			—			9,399			—			—			—			15,638			—			15,638
Other property income	—			25			289			781			(327		)	768			151			109			704			5,735			(672		)	6,027
	—			25			120,756			157,415			(2,533		)	275,663			151			109			183,082			278,367			(4,499		)	457,210

Expenses:
Property operating costs	—			—			30,989			51,089			(302		)	81,776			—			—			46,965			86,505			(412		)	133,058
Hotel operating costs	—			—			—			10,657			(2,206		)	8,451			—			—			—			17,109			(3,827		)	13,282
Asset & property management fees:
Related-party	14,514			—			460			1,784			(25		)	16,733			23,188			—			912			3,686			(260		)	27,526
Other	—			—			1,089			916			—			2,005			—			—			1,498			836			—			2,334
Depreciation	—			—			22,108			26,379			—			48,487			—			—			34,748			53,597			—			88,345
Amortization	—			—			24,520			33,803			—			58,323			—			—			37,759			53,571			—			91,330
General and administrative	113			11,291			361			630			—			12,395			43			14,157			1,709			3,279			—			19,188
Acquisition fees and expenses	6,921			—			206			541			—			7,668			1,307			—			—			9,942			—			11,249
	21,548			11,291			79,733			125,799			(2,533		)	235,838			24,538			14,157			123,591			228,525			(4,499		)	386,312

Real estate operating income (loss)	(21,548		)	(11,266		)	41,023			31,616			—			39,825			(24,387		)	(14,048		)	59,491			49,842			—			70,898

Other income (expense):
Interest expense	—			(2,136		)	(20,255		)	(29,033		)	6,565			(44,859		)	(11		)	(22,277		)	(30,285		)	(42,032		)	13,115			(81,490		)
Interest and other income	65			6,565			14,614			5,444			(6,565		)	20,123			2,079			13,381			21,923			8,115			(13,115		)	32,383
Loss on interest rate swap	—			—			—			(19,183		)	—			(19,183		)	—			—			—			(22,219		)	—			(22,219		)
Income from equity investment	17,119			19,757			—			—			(36,876		)	—			25,350			53,071			—			—			(78,421		)	—
	17,184			24,186			(5,641		)	(42,772		)	(36,876		)	(43,919		)	27,418			44,175			(8,362		)	(56,136		)	(78,421		)	(71,326		)

Income (loss) before income tax (expense) benefit	(4,364		)	12,920			35,382			(11,156		)	(36,876		)	(4,094		)	3,031			30,127			51,129			(6,294		)	(78,421		)	(428		)
Income tax (expense) benefit	—			—			(40		)	256			—			216			—			—			(134		)	471			—			337
Income (loss) from continuing operations	(4,364		)	12,920			35,342			(10,900		)	(36,876		)	(3,878		)
Gain (loss) from continuing operations																			3,031			30,127			50,995			(5,823		)	(78,421		)	(91		)

Discontinued operations:
Operating loss from discontinued operations	—			—			—			(459		)	—			(459		)	—			—			—			(4,571		)	—			(4,571		)
Loss from discontinued operations	—			—			—			(459		)	—			(459		)
Gain (loss) on disposition of discontinued operations																			—			—			—			7,705			—			7,705
Gain from discontinued operations																			—			—			—			3,134			—			3,134
Net income (loss)	(4,364		)	12,920			35,342			(11,359		)	(36,876		)	(4,337		)	3,031			30,127			50,995			(2,689		)	(78,421		)	3,043

Less: Net income attributable to noncontrolling interests	—			—			—			(41		)	—			(41		)	—			—			—			(11		)	—			(11		)

Net income (loss) attributable to the common stockholders of Wells REIT II	$	(4,364	)	$	12,920		$	35,342		$	(11,400	)	$	(36,876	)	$	(4,378	)	$	3,031		$	30,127		$	50,995		$	(2,700	)	$	(78,421	)	$	3,032



		Actual Performance
	Covenant Level	September 30, 2011
Credit Facility (as defined in the JPMorgan Chase Credit Facility Amendment):
Total debt to total asset value ratio	Less than 50%	29%
Secured debt to total asset value ratio	Less than 40%	19%
Fixed charge coverage ratio	Greater than 1.75x	4.51x
Unencumbered interest coverage ratio	Greater than 2.0x	8.72x
Unencumbered asset coverage ratio	Greater than 2.0x	4.50x
Unsecured Senior Notes due 2018 (as defined in the Indenture):
Aggregate debt test	Less than 60%	24%
Debt service test	Greater than 1.5x	5.00x
Secured debt test	Less than 40%	16%
Maintenance of total unencumbered assets	Greater than 150%	845%


Contractual Obligations	Total		2011		2012-2013		2014-2015		Thereafter		Total		2011		2012-2013		2014-2015		Thereafter
Debt obligations	$	1,526,893	$	47,600	$	248,764	$	104,535	$	1,125,994	$	1,445,422	$	506	$	64,561	$	325,035	$	1,055,320
Interest obligations on debt⁽¹⁾	532,552		42,442		151,923		134,024		204,163		492,617		19,620		146,686		126,067		200,244
Capital lease obligations⁽²⁾	646,000		—		526,000		—		120,000		646,000		—		526,000		—		120,000
Operating lease obligations	224,955		1,235		5,087		5,114		213,519		228,455		1,246		5,233		5,260		216,716
Total	$	2,930,400	$	91,277	$	931,774	$	243,673	$	1,663,676	$	2,812,494	$	21,372	$	742,480	$	456,362	$	1,592,280


⁽²⁾	Amounts include principal obligations only. We made interest payments on these obligations of ~~$20.0~~$30.0 million during the ~~six~~nine months ended ~~June~~September 30, 2011, all of which was funded with interest income earned on the corresponding investments in development authority bonds.



Real estate assets	$	10.13	(1)
Debt	(2.65)		(2)
Other	(0.01)		(3)
Estimated net asset value per-share value	$	7.47
Estimated enterprise value premium	None assumed
Total estimated per-share value	$	7.47



Exit capitalization rate	7.19	%
Discount rate/internal rate of return ("IRR")	8.19	%
Annual market rent growth rate	3.31	%
Annual holding period	10.3 years


⁽²⁾	The fair value of our debt instruments was estimated using discounted cash flow models, which incorporate assumptions that we believe reflect the terms currently available on similar borrowing arrangements to borrowers with credit profiles similar to ours.


⁽³⁾	The fair value of our non-real estate assets and liabilities is estimated to materially reflect book value given their typically short-term (less than 1 year) settlement periods.


▪	a stockholder would be able to realize this estimated value per share upon attempting to resell his or her shares;