SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 2001 or
-------------------------------------------
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________________ to ________________________
Commission file number 0-25739
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WELLS REAL ESTATE INVESTMENT TRUST, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 58-2328421
- ------------------------------------------------- ----------------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification Number)
6200 The Corners Pkwy., Norcross, Georgia 30092
- ------------------------------------------------- ----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
----------------------------
________________________________________________________________________________
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
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FORM 10-Q
WELLS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARY
INDEX
Page No.
-----------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets--March 31, 2001 and December 31, 2000 3
Statements of Income for the Three Months Ended March 31, 2001 4
and 2000
Statements of Shareholders' Equity for the Year Ended December 31, 2000 5
and the Three Months Ended March 31, 2001
Statements of Cash Flows for the Three Months Ended March 31, 2001 6
and 2000
Condensed Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 11
Operations
PART II. OTHER INFORMATION 42
-2-
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
BALANCE SHEETS
ASSETS
March 31, December 31,
2001 2000
------------ ------------
REAL ESTATE, at cost:
Land $ 46,640,032 $ 46,237,812
Building and improvements, less accumulated depreciation of
$12,656,832 in 2001 and $9,469,653 in 2000 285,461,251 287,862,655
Construction in progress 6,303,454 3,357,720
------------ ------------
Total real estate 338,404,737 337,458,187
------------ ------------
INVESTMENT IN JOINT VENTURES (Note 2) 43,901,986 44,236,597
CASH AND CASH EQUIVALENTS 8,156,316 4,298,301
ACCOUNTS RECEIVABLE 3,620,844 3,356,428
DEFERRED LEASE ACQUISITION COSTS 1,599,976 1,890,332
DEFERRED PROJECT COSTS 1,409,081 550,256
DEFERRED OFFERING COSTS 581,690 1,291,376
DUE FROM AFFILIATES 1,050,313 734,286
PREPAID EXPENSES AND OTHER ASSETS, net 2,252,702 4,734,583
------------ ------------
Total assets $400,977,645 $398,550,346
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable $ 2,263,215 $ 2,166,387
Notes payable (Note 3) 76,540,000 127,663,187
Deferred rental income 238,306 381,194
Due to affiliates (Note 4) 1,084,012 1,772,956
Dividends payable 1,069,579 1,025,010
------------ ------------
Total liabilities 81,195,112 133,008,734
------------ ------------
MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP 200,000 200,000
------------ ------------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 125,000,000 shares authorized,
38,127,278 shares issued and 37,908,326 shares outstanding at
March 31, 2001, and 31,509,807 shares issued and 31,368,510
outstanding at December 31, 2000. 381,273 315,097
Additional paid-in capital 321,390,784 266,439,484
Treasury stock, at cost, 218,952 shares at March 31, 2001 and
141,297 shares at December 31, 2000. (2,189,524) (1,412,969)
------------ ------------
Total shareholders' equity 319,582,533 265,341,612
------------ ------------
Total liabilities and shareholders' equity $400,977,645 $398,550,346
============ ============
The accompanying notes are an integral part of these consolidated balance
sheets.
-3-
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
STATEMENTS OF INCOME
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
----------- ----------
REVENUES:
Rental income $ 9,860,085 $3,151,262
Equity in income of joint ventures (Note 2) 709,713 481,761
Interest income 99,915 77,386
----------- ----------
10,669,713 3,710,409
----------- ----------
EXPENSES:
Operating costs, net of reimbursements 1,091,185 148,808
Management and leasing fees 565,714 233,770
Depreciation 3,187,179 1,180,258
Administrative costs 106,540 57,144
Legal and accounting 67,767 19,418
Computer costs 800 3,068
Amortization of deferred financing costs 214,757 22,603
Interest expense 2,160,426 354,052
----------- ----------
7,394,368 2,019,121
----------- ----------
NET INCOME $ 3,275,345 $1,691,288
----------- ----------
BASIC AND DILUTED EARNINGS PER SHARE $ 0.10 $ 0.11
=========== ==========
See accompanying condensed notes to financial statements.
-4-
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2000
AND FOR THE THREE MONTHS ENDED MARCH 31, 2001
Common Stock Treasury Stock
--------------------- Additional ------------------------ Total
Paid-In Retained Shareholders'
Shares Amount Capital Earnings Shares Amount Equity
----------- -------- ------------ ------------ ---------- ------------ -------------
BALANCE, December 31, 1999 13,471,085 $134,710 $115,880,885 $ 0 0 $ 0 $116,015,595
Issuance of common stock 18,038,722 180,387 180,206,833 0 0 0 180,387,220
Treasury stock purchased 0 0 0 0 (141,297) (1,412,969) (1,412,969)
Net income 0 0 0 8,552,967 0 0 8,552,967
Dividends ($.73 per share) 0 0 (7,276,452) (8,552,967) 0 0 (15,829,419)
Sales commission 0 0 (17,002,554) 0 0 0 (17,002,554)
Other offering expenses 0 0 (5,369,228) 0 0 0 (5,369,228)
----------- -------- ------------ ------------ ---------- ------------ -------------
BALANCE, December 31, 2000 31,509,807 315,097 266,439,484 0 (141,297) (1,412,969) 265,341,612
Issuance of common stock 6,617,471 66,176 66,108,529 0 0 0 66,174,705
Treasury stock purchased 0 0 0 0 (77,655) (776,555) (776,555)
Net income 0 0 0 3,275,345 0 0 3,275,345
Dividends ($.19 per share) 0 0 (2,982,460) (3,275,345) 0 0 (6,257,805)
Sales commission 0 0 (6,212,824) 0 0 0 (6,212,824)
Other offering expenses 0 0 (1,961,945) 0 0 0 (1,961,945)
----------- -------- ------------ ------------ ---------- ------------ -------------
BALANCE, March 31, 2001 38,127,278 $381,273 $321,390,784 $ 0 (218,952) $(2,189,524) $319,582,533
=========== ======== ============ ============ ========== ============ =============
See accompanying condensed notes to financial statements.
-5-
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
Three Months Ended
---------------------------------
March 31, March 31,
2001 2000
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,275,345 $ 1,691,288
Adjustments to reconcile net income to net cash provided by operating
activities:
Equity in income of joint ventures (709,713) (481,761)
Depreciation 3,187,179 1,180,258
Amortization of deferred financing costs 214,757 22,603
Changes in assets and liabilities:
Accounts receivable (264,416) 0
Deferred rental income (142,888) 0
Prepaid expenses and other assets, net 2,557,480 (2,819,583)
Accounts payable and accrued expenses 96,828 80,001
Due to affiliates 20,742 1,354,887
------------ ------------
Net cash provided by operating activities 8,235,314 1,027,693
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in real estate (2,703,858) (65,329,686)
Investment in joint ventures (5,749) 0
Deferred project costs paid (2,288,936) (940,738)
Distributions received from joint ventures 734,286 648,354
------------ ------------
Net cash used in investing activities (4,264,257) (65,622,070)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 5,800,000 54,991,145
Repayment of notes payable (56,923,187) (10,407,472)
Dividends paid (6,213,236) (2,177,672)
Issuance of common stock 66,174,705 27,048,365
Sales commissions paid (6,212,824) (2,553,429)
Offering costs paid (1,961,945) (806,346)
Treasury stock purchased (776,555) (170,163)
------------ ------------
Net cash (used in) provided by financing activities (113,042) 65,924,428
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,858,016 1,330,051
CASH AND CASH EQUIVALENTS, beginning of year 4,298,301 2,929,804
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 8,156,316 $ 4,259,855
============ ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:
Deferred project costs applied to real estate assets $ 1,430,111 $ 749,613
============ ============
Deferred offering costs due to affiliate $ 0 $ 94,233
============ ============
Write-off of deferred offering costs due to affiliate $ 709,686 $ 0
============ ============
See accompanying condensed notes to financial statements.
-6-
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
CONDENSED NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) General
Wells Real Estate Investment Trust, Inc. (the "Company") is a Maryland
corporation formed on July 3, 1997. The Company is the sole general partner
of Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized for the purpose of acquiring, developing, owning,
operating, improving, leasing, and otherwise managing income-producing
commercial properties for investment purposes.
On January 30, 1998, the Company commenced a public offering of up to
16,500,000 shares of common stock at $10 per share pursuant to a
Registration Statement on Form S-11 under the Securities Act of 1933. The
Company commenced active operations on June 5, 1998, when it received and
accepted subscriptions for 125,000 shares. The Company terminated its
initial public offering on December 19, 1999, and on December 20, 1999, the
Company commenced a second follow-on public offering of up to 22,200,000
shares of common stock at $10 per share. As of March 31, 2001, the Company
had received gross offering proceeds of approximately $73,846,896 from the
sale of approximately 7,384,690 shares from its third public offering.
Accordingly, as of March 31, 2001, the Wells REIT had received aggregate
gross offering proceeds of approximately $381,272,774 from the sale of
38,127,278 shares of its common stock. After payment of $13,267,914 in
Acquisition and Advisory Fees and Acquisition Expenses, payment of
$47,385,406 in selling commissions and organization and offering expenses,
and capital contributions and acquisition expenditures by Wells OP of
$313,889,969 in property acquisitions and common stock redemptions of
$776,555 pursuant to the Company's share repurchase program, the Company
was holding net offering proceeds of $5,952,930 available for investment in
properties.
Wells OP owns interests in properties directly and through equity ownership
in the following joint ventures: (i) a joint venture among Wells OP and
Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P. and Wells
Real Estate Fund XI, L.P. (the "Fund IX-X-XI-REIT Joint Venture"), (ii)
Wells/Fremont Associates (the "Fremont Joint Venture"), a joint venture
between Wells OP and Fund X and Fund XI Associates, which is a joint
venture between Wells Real Estate Fund X, L.P. and Wells Real Estate Fund
XI, L.P. (the "Fund X-XI Joint Venture"), (iii) Wells/Orange County
Associates (the "Cort Joint Venture"), a joint venture between Wells OP and
the Fund X-XI Joint Venture, (iv) a joint venture among Wells OP, Wells
Real Estate Fund XI, L.P., and Wells Real Estate Fund XII, L.P. (the "Fund
XI-XII-REIT Joint Venture"), (v) a joint venture between Wells OP and Wells
Real Estate Fund XII, L.P. (the "Fund XII-REIT Joint Venture"), and (vi)
the Fund VIII-IX-REIT Joint Venture, a joint venture between Wells OP and
the Fund VIII-IX Joint Venture, which is a joint venture between Wells Real
Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P.
-7-
As of March 31, 2001, Wells OP owned interests in the following properties
either directly or through its interest in the foregoing joint ventures:
(i) a three-story office building in Knoxville, Tennessee (the "Alstom
Power-Knoxville Building"), (ii) a two-story office building in Louisville,
Colorado (the "Ohmeda Building"), (iii) a three-story office building in
Broomfield, Colorado (the "360 Interlocken Building"), (iv) a one-story
office building in Oklahoma City, Oklahoma (the "Avaya Technologies
Building"), (v) a one-story warehouse and office building in Ogden, Utah
(the "Iomega Building"), all five of which are owned by the Fund IX-X-XI-
REIT Joint Venture, (vi) a two-story warehouse office building in Fremont,
California (the "Fremont Building"), which is owned by the Wells/ Fremont
Joint Venture, (vii) a one-story warehouse and office building in Fountain
Valley, California (the "Cort Building"), which is owned by the
Wells/Orange County Joint Venture, (viii) a four-story office building in
Tampa, Florida (the "PWC Building"), (ix) a four-story office building in
Harrisburg, Pennsylvania (the "AT&T Harrisburg Building"), which are owned
directly by Wells OP, (x) a two-story manufacturing and office building
located in Fountain Inn, South Carolina (the "EYBL CarTex Building"), (xi)
a three-story office building located in Leawood, Kansas (the "Sprint
Building"), (xii) a one story office building and warehouse in Tredyffrin
Township, Pennsylvania (the "Johnson Matthey Building"), (xiii) a two-story
office building in Ft. Meyers, Florida (the "Gartner Building"), all four
of which are owned by Fund XI-XII-REIT Joint Venture, (xiv) a two-story
office building located in Lake Forest, California (the "Matsushita
Building"), (xv) a four-story office building located in Richmond, Virginia
(the "Alstom Power-Richmond Building"), (xvi) a two-story office building
and warehouse in Wood Dale, Illinois (the "Marconi Building"), (xvii) a
five-story office building in Plano, Texas (the "Cinemark Building"),
(xviii) a three-story office building in Tulsa, Oklahoma (the "Metris
Building"), (xix) a two-story office building in Scottsdale, Arizona (the
"Dial Building"), (xx) a two-story office building in Tempe, Arizona (the
"ASML Building"), (xxi) a two-story office building in Tempe, Arizona (the
"Motorola-Arizona Building"), (xxii) a two-story office building in Tempe,
Arizona (the "Avnet Building"), (xxiii) a three-story office building in
Troy, Michigan (the "Delphi Building") all ten of which are owned directly
by Wells OP, (xxiv) a three-story office building in Troy, Michigan (the
"Siemens Building"), which is owned by the Fund XII-REIT Joint Venture,
(xxv) a two-story office building in Orange County, California (the "Quest
Building"), formerly the Bake Parkway Building, previously owned by Fund
VIII-IX Joint Venture, which is now owned by Fund VIII-IX-REIT Joint
Venture, (xxvi) a three-story office building in South Plainfield, New
Jersey (the "Motorola-New Jersey Building"), (xxvii) a nine-story office
building in Minnetonka, Minnesota (the "Metris Minnetonka Building"),
(xxviii) a six-story office building in Houston, Texas (the "Stone and
Webster Building"), all three of which are owned directly by Wells OP, and
(xxix) a one-story and a two-story office building (the "AT&T-Oklahoma
Buildings"), which is owned by the Fund XII-REIT Joint Venture.
(b) Deferred Project Costs
The Company pays a percentage of shareholder contributions to the Advisor
for acquisition and advisory services. These payments, are stipulated in
the prospectus. These payments may not exceed 3 1/2% of shareholders'
capital contributions. Acquisition and Advisory Fees and Acquisition
Expenses paid as of March 31, 2001, amounted to $13,267,914 and represented
approximately 3 1/2% of shareholders' capital contributions received. These
fees are allocated to specific properties as they are purchased or
developed and are included in capitalized assets of the joint venture, or
real estate assets. Deferred project costs at March 31, 2001 and December
21, 2000, represent fees not yet applied to properties.
-8-
(c) Deferred Offering Costs
Offering expenses, to the extent that they exceed 3% of gross offering
proceeds, will be paid by the Advisor and not by the Company. Offering
expenses do not include sales or underwriting commissions but do include
such costs as legal and accounting fees, printing costs, and other offering
expenses. As of March 31, 2001, the Advisor paid offering expenses on
behalf of the Company in an aggregate amount of $11,372,498, which did not
exceed the 3% limitation.
(d) Employees
The Company has no direct employees. The employees of the Advisor, perform
a full range of real estate services including leasing and property
management, accounting, asset management and investor relations for the
Company.
(e) Insurance
Wells Management Company, Inc., an affiliate of the Company and the
Advisor, carries comprehensive liability and extended coverage with respect
to all the properties owned directly and indirectly by the Company. In the
opinion of management, the properties are adequately insured.
(f) Competition
The Company will experience competition for tenants from owners and
managers of competing projects, which may include its affiliates. As a
result, the Company may be required to provide free rent, reduced charges
for tenant improvements and other inducements, all of which may have an
adverse impact on results of operations. At the time the Company elects to
dispose of its properties, the Company will also be in competition with
sellers of similar properties to locate suitable purchasers for its
properties.
(g) Basis of Presentation
Substantially all of the Company's business will be conducted through Wells
OP. On December 31, 1997, Wells OP issued 20,000 limited partner units to
the Advisor in exchange for a capital contribution of $200,000. The Company
is the sole general partner in Wells OP; consequently, the accompanying
consolidated balance sheet of the Company includes the amounts of the
Company and Wells OP.
The consolidated financial statements of the Company have been prepared in
accordance with instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. These quarterly statements
have not been examined by independent accountants, but in the opinion of
the Board of Directors, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring
nature, necessary to present a fair presentation of the results for such
periods. For further information, refer to the financial statements and
footnotes included in the Company's Form 10-K for the year ended December
31, 2000.
(h) Distribution Policy
The Company will make distributions each taxable year (not including a
return of capital for federal income tax purposes) equal to at least 90% of
its real estate investment trusts taxable income. The Company intends to
make regular quarterly distributions to holders of the shares.
Distributions will be made to those shareholders who are shareholders as of
the record date selected by the Directors.
-9-
Distributions will be declared on a monthly basis and paid on a quarterly
basis during the offering period and declared and paid quarterly
thereafter. No distributions are paid to the Advisor.
(i) Income Taxes
The Company has made an election under Section 856 (C) of the Internal
Revenue Code 1986, as amended (the "Code"), to be taxed as a Real Estate
Investment Trust ("REIT") under the Code beginning with its taxable year
ended December 31, 1998. As a REIT for federal income tax purposes, the
Company generally will not be subject to federal income tax on income that
it distributes to its shareholders. If the Company fails to qualify as a
REIT in any taxable year, it will then be subject to federal income tax on
its taxable income at regular corporate rates and will not be permitted to
qualify for treatment as a REIT for federal income tax purposes for four
years following the year during which qualification is lost. Such an event
could materially adversely affect the Company's net income and net cash
available to distribute to shareholders. However, the Company believes that
it is organized and operates in such a manner as to qualify for treatment
as a REIT and intends to continue to operate in the foreseeable future in
such a manner so that the Company will remain qualified as a REIT for
federal income tax purposes.
(j) Statement of Cash Flows
For the purpose of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. Cash equivalents include cash and
short-term investments.
2. INVESTMENT IN JOINT VENTURES
The Company owned interests in 29 properties through its ownership in Wells
OP, which owns interests in six joint ventures. The Company does not have
control over the operations of these joint ventures; however, it does
exercise significant influence. Accordingly, investment in joint venture is
recorded using the equity method.
3. NOTES PAYABLE
Notes payable consists of loans of (i) $50,440,000 due to SouthTrust Bank
secured by a first mortgage against the Cinemark, ASML, Dial, PWC,
Motorola, Avnet and Alstom Power Buildings, (ii) $8,000,000 due to Richter-
Schroeder Company, Inc. secured by a first mortgage against the Metris
Building, and (iii) $18,100,000 due to Guarantee Federal secured by a first
mortgage on the Stone and Webster Building.
4. DUE TO AFFILIATES
Due to affiliates consists of amounts due to the Advisor for Acquisitions
and Advisory Fees and Acquisition Expenses, deferred offering costs, and
other operating expenses paid on behalf of the Company. Also included in
due to affiliates is the amount due to the Fund VIII-IX Joint Venture
related to the Matsushita lease guarantee, which is explained in detail in
the December 31, 2000 Form 10-K. Payments of $601,963 have been made as of
March 31, 2000 toward funding the obligation under the Matsushita
agreement.
-10-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the accompanying financial statements of the Company and notes thereto.
This report contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including discussion and analysis of the financial
condition of the Company, anticipated capital expenditures required to
complete certain projects, and certain other matters. Readers of this
report should be aware that there are various factors that could cause
actual results to differ materially from any forward-looking statements
made in this report, which include construction costs which may exceed
estimates, construction delays, lease-up risks, inability to obtain new
tenants upon the expiration of existing leases, and the potential need to
fund tenant improvements or other capital expenditures out of operating
cash flow.
Liquidity and Capital Resources
The Company began active operations on June 5, 1998, when it received and
accepted subscriptions for 125,000 shares pursuant to its initial public
offering, which commenced on January 30, 1998. The Company terminated its
initial public offering on December 19, 1999, and on December 20, 1999, the
Company commenced a follow-on public offering of up to 22,200,000 shares of
common stock at $10 per share. As of December 31, 1999, the Company had
raised an aggregate of $134,710,850 in offering proceeds through the sale
of 13,471,085 shares. As of December 31, 1999, the Company had paid
$4,714,880 in Acquisition Advisory Fees and Acquisition Expenses,
$16,838,857 in selling commissions and organizational offering expenses,
and $112,287,969 in capital contributions to Wells Operating Partnership,
L.P. ("Wells OP"), the operating partnership of the Company, for
investments in joint ventures and acquisitions of real properties.
Between December 31, 1999, and March 31, 2001, the Company raised an
additional $246,561,924 in offering proceeds through the sale of an
additional 24,656,192 shares. Accordingly, as of March 31, 2001, the
Company had raised a total of $381,272,774 in offering proceeds through the
sale of 38,127,278 shares of common stock. As of March 31, 2001, the
Company had paid a total of $13,267,914 in Acquisition and Advisory Fees
and Acquisition Expenses, had paid a total of $47,385,406 in selling
commissions and organizational offering expenses, had made capital
contributions of $313,889,969 to Wells OP for investments in joint ventures
and acquisitions of real property, had utilized $776,555 for the retirement
of stock pursuant to the Company's share redemption program, and was
holding net offering proceeds of $5,952,930 available for investment and
additional properties.
Cash and cash equivalents at March 31, 2001 and 2000 were $8,156,316 and
$4,259,855, respectively. The increase in cash and cash equivalents
resulted primarily from raising additional capital, which was offset by new
investments in real property acquisitions.
Operating cash flows are expected to increase as additional properties are
added to the Company's investment portfolio. Dividends to be distributed to
the shareholders are determined by the Board of Directors and are dependent
upon a number of factors relating to the Company, including funds available
for payment of dividends, financial condition, capital expenditure
requirements and annual distribution requirements in order to maintain the
Company's status as a REIT under the Internal Revenue Code.
-11-
As of March 31, 2001, the Company had acquired interests in 29 real estate
properties. These properties are generating sufficient cash flows to cover
the operating expenses of the Company and pay quarterly dividends.
Dividends declared for the first quarter of 2001 and the first quarter of
2000 totaled $0.188 and $0.175, respectively, per share, which were
declared on a daily record date basis to the shareholders of record at the
close of business of each day during the quarter.
Cash Flows from Operating Activities
Net cash provided by operating activities was $8,235,314 for the three
months ended March 31, 2001 and $1,027,693 for the three months ended March
31, 2000. The increase in net cash provided by operating activities
resulted primarily from additional rental revenues and income in equity of
joint ventures generated from the properties acquired during the three
months ended March 31, 2001.
Cash Flows from Investing Activities
Net cash used in investing activities decreased from $65,622,070 for the
three months ended March 31, 2000 compared to $4,264,257 for the three
months ended March 31, 2001 primarily due to acquiring less properties
during the first quarter of 2001 compared to the same period in 2000.
Cash Flows from Financing Activities
Net cash generated through financing activities decreased from inflows of
$65,924,428 for the three months ended March 31, 2000 to outflows of
$113,042 for the three months ended March 31, 2001 primarily due to
repayments of notes payable, and was partially offset by raising additional
capital. The Company raised $66,174,705 in offering proceeds for the three
months ended March 31, 2001, as compared to $27,048,365 for the three
months ended March 31, 2000. In addition, the Company received loan
proceeds from financings secured by properties of $5,800,000 and repaid
notes payable in the amount of $56,923,187 during the first quarter of
2001.
Results of Operations
As of March 31, 2001, the properties owned by the Company were 100%
occupied. Gross revenues for the three months ended March 31, 2001, as
compared to the three months ended March 31, 2000, increased to $10,669,713
from $3,710,409, respectively, primarily as a result of additional rental
revenues and equity in income of joint ventures generated from property
acquired during the three months ended March 31, 2001. The purchase of
interests in additional properties also resulted in increases in operating
expenses, management and leasing fees, depreciation expense, administrative
costs, legal and accounting fees, financing costs, and interest expense. As
a result, net income increased to $3,275,345 for 2001 as compared to
$1,691,288 for 2000.
-12-
2. PROPERTY OPERATIONS
As of March 31, 2001, the Company owned interests in the following
operational properties:
Alstom Power Building-Knxoville/Fund IX-X-XI-REIT Joint Venture
Three Months Ended
--------------------------
March 31, March 31,
2001 2000
--------- ---------
Revenues:
Rental income $ 295,634 $ 315,165
Interest income 20,255 17,728
--------- ---------
315,889 332,893
--------- ---------
Expenses:
Depreciation 99,934 98,454
Management and leasing expenses 24,003 25,253
Other operating expenses, net of reimbursements 9,361 (6,063)
--------- ---------
133,298 117,644
--------- ---------
Net income $ 182,591 $ 215,249
========= =========
Occupied percentage 100% 100%
========= =========
Company's ownership percentage 3.71% 3.72%
========= =========
Cash distributions to the Company $ 10,340 $ 11,534
========= =========
Net income allocated to the Company $ 6,777 $ 8,009
========= =========
Net income decreased in 2001, compared to 2000, due to a rental adjustment made
in the first quarter of 2000. Total expenses increased due to increases in
janitorial costs and repairs and maintenance costs associated with common floor
space. Other operating expenses were negative for 2000 due to offsetting
reimbursement billings for operating costs, and management and leasing expenses
related to 1999.
Cash distributions decreased in 2001 compared to 2000 due to a combination of
decreased rental income and increased expenses.
-13-
Ohmeda Building/Fund IX-X-XI-REIT Joint Venture
Three Months Ended
----------------------------
March 31, March 31,
2001 2000
----------- ----------
Revenues:
Rental income $256,830 $256,829
---------- ---------
Expenses:
Depreciation 81,576 81,576
Management and leasing expenses 12,545 17,001
Other operating expenses, net of reimbursements 3,982 27,594
---------- ---------
98,103 126,171
---------- ---------
Net income $158,727 $130,658
========== =========
Occupied percentage 100% 100%
========== =========
Company's ownership percentage 3.71% 3.72%
========== =========
Cash distributions to Company $ 8,707 $ 7,684
========== =========
Net income allocated to Company $ 5,891 $ 4,861
========== =========
Net income increased in 2001 as compared to 2000 due to an overall decrease in
expenses. Operating expenses decreased significantly due to a reduction in real
estate taxes resulting from to an appeal in 2000 to the taxing authorities.
Management and leasing expenses decreased due to a decrease in reimbursement
collections in 2001, as these fees are assessed based on cash collections.
Cash distributions have increased because of the increase in net income. The
Company's ownership percentage decreased due to additional capital contributions
made to the Fund IX-X-XI-REIT Joint Venture by Wells Fund X during the third
quarter of 2000.
-14-
360 Interlocken Building/Fund IX-X-XI-REIT Joint Venture
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
----------- ----------
Revenues:
Rental income $206,628 $206,189
--------- ---------
Expenses:
Depreciation 71,797 71,670
Management and leasing expenses 22,346 20,907
Other operating expenses, net of reimbursements 7,722 (16,920)
--------- ---------
101,865 75,657
--------- ---------
Net income $104,763 $130,532
========= =========
Occupied percentage 100% 100%
========= =========
Company's ownership percentage 3.71% 3.72%
========= =========
Cash distributions to the Company $ 6,695 $ 7,573
========= =========
Net income allocated to the Company $ 3,888 $ 4,857
========= =========
Net income decreased in 2001 as compared to 2000 due to a increase in operating
expenses. Other operating expenses are negative for 2000 due to an adjustment
of tenant reimbursements of operating costs and management and leasing fees.
Tenants are billed an estimated amount for current year common-area maintenance
reimbursement which are reconciled the following year, and the difference is
billed or credited to the tenants.
Cash distributions and net income allocated to the Company for the quarter
decreased in 2001 compared to 2000 due to the decrease in net income. The
Company's ownership interest in the Fund IX-X-XI-REIT Joint Venture decreased
due to additional capital contributions made by Wells Fund X to the Joint
Venture during the third quarter of 2000.
-15-
Avaya Technologies Building/Fund IX-X-XI-REIT Joint Venture
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
----------- ----------
Revenues:
Rental income $145,752 $145,752
--------- ---------
Expenses:
Depreciation 45,801 45,801
Management and leasing expenses 5,485 5,370
Other operating expenses 4,104 3,481
--------- ---------
55,390 54,652
--------- ---------
Net income $ 90,362 $ 91,100
========= =========
Occupied percentage 100% 100%
========= =========
Company's ownership percentage 3.71% 3.72%
========= =========
Cash distributions to the Company $ 4,627 $ 4,702
========= =========
Net income allocated to the Company $ 3,354 $ 3,389
========= =========
Rental income, net income and distributions remained relatively stable as
compared to 2000 due to the stable occupancy. The Company's ownership interest
in the Fund IX-X-XI-REIT Joint Venture decreased due to additional capital
contributions made by Wells Fund X to the Joint Venture during the third quarter
of 2000.
-16-
Iomega Building/Fund IX-X-XI-REIT Joint Venture
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
---------- ----------
Revenues:
Rental income $168,250 $168,250
--------- ---------
Expenses:
Depreciation 55,062 55,062
Management and leasing expenses 7,462 7,280
Other operating expenses, net of reimbursements 3,733 5,148
--------- ---------
66,257 67,490
--------- ---------
Net income $101,993 $100,760
========= =========
Occupied percentage 100% 100%
========= =========
Company's ownership percentage 3.71% 3.72%
========= =========
Cash distributions to the Company $ 5,650 $ 5,618
========= =========
Net income allocated to the Company $ 3,785 $ 3,749
========= =========
Rental income, net income and cash distributions remained stable for 2001, as
compared to 2000, due to the stable occupancy.
-17-
Cort Building/Wells/Orange County Joint Venture
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
----------- ----------
Revenues:
Rental income $199,586 $198,885
---------- ----------
Expenses:
Depreciation 46,641 46,641
Management and leasing expenses 8,107 7,590
Other operating expenses 11,085 11,171
---------- ----------
65,833 65,402
---------- ----------
Net income $133,753 $133,483
========== ==========
Occupied percentage 100% 100%
========== ==========
Company's ownership percentage 43.7% 43.7%
========== ==========
Cash distributions to the Company $ 74,477 $ 74,665
========== ==========
Net income allocated to the Company $ 58,406 $ 58,288
========== ==========
Rental income, expenses and net income remained stable in 2001, as compared to
2000.
-18-
Fairchild Building/Wells/Fremont Joint Venture
Three Months Ended
--------------------------
March 31, March 31,
2001 2000
--------- ---------
Revenues:
Rental income $225,210 $225,195
-------- --------
Expenses:
Depreciation 71,382 71,382
Management and leasing expenses 9,044 9,175
Other operating expenses 2,172 3,770
-------- --------
82,598 84,327
-------- --------
Net income $142,612 $140,868
======== ========
Occupied percentage 100% 100%
======== ========
Company's ownership percentage 77.5% 77.5%
======== ========
Cash distributions to the Company $164,512 $158,409
======== ========
Net income allocated to the Company $110,530 $109,178
======== ========
Rental income, depreciation, and management and leasing expenses and net income
remained stable in 2001, as compared to 2000.
-19-
PCW Building
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
---------- ----------
Revenues:
Rental income $552,298 $552,298
-------- --------
Expenses:
Depreciation 206,037 206,037
Management and leasing expenses 39,447 38,945
Other operating expenses, net of reimbursements (20,408) (36,029)
-------- --------
225,076 208,953
-------- --------
Net income $327,222 $343,345
======== ========
Occupied percentage 100% 100%
======== ========
Company's ownership percentage 100% 100%
======== ========
Cash generated to the Company $494,157 $496,230
======== ========
Net income generated to the Company $327,222 $343,345
======== ========
Other operating expenses were negative due to common area maintenance billings
which includes management and leasing fee reimbursement. Tenants are billed an
estimated amount for current year common area maintenance reimbursements which
are reconciled the following year, and the difference is billed or credited to
the tenants.
-20-
AT&T - Harrisburg Building
Three Months Ended
----------------------------
March 31, March 31,
2001 2000
--------- ---------
Revenues:
Rental income $340,816 $340,832
-------- --------
Expenses:
Depreciation 120,744 120,744
Management and leasing expenses 18,050 15,338
Other operating expenses 3,897 6,874
Interest expense 849 3,206
-------- --------
143,540 146,162
-------- --------
Net income $197,276 $194,670
======== ========
Occupied percentage 100% 100%
======== ========
Company's ownership percentage 100% 100%
======== ========
Cash generated to the Company $220,157 $324,414
======== ========
Net income generated to the Company $197,276 $194,670
======== ========
Rental income, expenses and net income are relatively stable comparing 2001 to
2000. Cash generated to the Company decreased in 2001, as compared to 2000, due
to the payoff of the Bank of America note related to this building during the
first quarter of 2001.
-21-
EYBL CarTex Building/Wells Fund XI-XII-REIT Joint Venture
Three Months Ended
----------------------------
March 31, March 31,
2001 2000
--------- ---------
Revenues:
Rental income $ 140,089 $140,089
Interest income 8,659 0
--------- --------
148,748 140,089
--------- --------
Expenses:
Depreciation 49,901 49,901
Management and leasing expenses 5,721 5,721
Other operating expenses 12,951 9,840
--------- --------
68,573 65,462
--------- --------
Net income $ 80,175 $ 74,627
========= ========
Occupied percentage 100% 100%
========= ========
Company's ownership percentage 56.8% 56.8%
========= ========
Cash distributions to the Company $ 60,611 $ 56,928
========= ========
Net income allocated to the Company $ 45,510 $ 42,361
========= ========
Rental income remained stable for 2001, as compared to 2000, due to the stable
occupancy rate. Net income increased due to an increase in interest income in
2001 over 2000 due to establishing new interest bearing bank accounts. Total
expenses increased for 2001 over 2000 due to an increase in operating costs
which includes a charge for a property condition report not incurred in 2000.
Cash distributions increased due to the increase in net income.
-22-
Sprint Building/Fund X-XII-REIT Joint Venture
Three Months Ended
----------------------------
March 31, March 31,
2001 2000
--------- ---------
Revenues:
Rental income $265,997 $265,997
-------- --------
Expenses:
Depreciation 81,779 81,779
Management and leasing expenses 11,239 11,239
Other operating expenses 2,351 6,324
-------- --------
95,369 99,342
-------- --------
Net income $170,628 $166,655
======== ========
Occupied percentage 100% 100%
======== ========
Company's ownership percentage 56.8% 56.8%
======== ========
Cash distributions to the Company $134,059 $131,801
======== ========
Net income allocated to the Company $ 96,854 $ 94,597
======== ========
Rental income and cash distributions remained stable for 2001, as compared to
2000, while net income increased due to an offset for reimbursement received
from a tenant for an expense incurred in the fourth quarter of 2000.
-23-
Johnson Matthey Building/Fund XI-XIII-REIT Joint Venture
Three Months Ended
-------------------------------
March 31, March 31,
2001 2000
------------ ------------
Revenues:
Rental income $ 214,474 $ 214,474
----------- ------------
Expenses:
Depreciation 63,869 63,869
Management and leasing expenses 9,104 8,885
Other operating expenses 4,777 4,877
----------- ------------
77,750 77,631
----------- ------------
Net income $ 136,724 $ 136,843
=========== ============
Occupied percentage 100% 100%
=========== ============
Company's ownership percentage 56.8% 56.8%
=========== ============
Cash distributions to the Company $ 106,959 $ 104,258
=========== ============
Net income allocated to the Company $ 77,609 $ 77,675
=========== ============
Rental income, net income and cash distributions remained stable in 2001, as
compared to 2000, due to the stable occupancy.
-24-
Gartner Building/Fund XI-XII-REIT Joint Venture
Three Months Ended
-------------------------------
March 31, March 31,
2001 2000
------------ ------------
Revenues: $ 212,205 $ 204,241
Rental income ------------ ------------
Expenses:
Depreciation 77,623 77,623
Management and leasing expenses 10,103 10,162
Other operating expenses (2,271) (15,311)
------------ ------------
85,455 72,474
------------ ------------
Net income $ 126,750 $ 131,767
============ ============
Occupied percentage 100% 100%
============ ============
Company's ownership percentage 56.8% 56.8%
============ ============
Cash distributions to the Company $ 109,622 $ 108,131
============ ============
Net income allocated to the Company $ 71,947 $ 74,795
============ ============
Rental income increased for 2001, as compared to 2000, due to a straight line
rent adjustment. Depreciation and management and leasing expenses remained
stable while total expenses increased. Other operating expenses were negative
due to an offset of tenant reimbursements in operating costs. Tenants are
billed an estimated amount for the current year common area maintenance which is
then reconciled the following year and the difference billed to the tenants.
-25-
Marconi Building
Three Months Ended
-------------------------------
March 31, March 31,
2001 2000
------------ ------------
Revenues:
Rental income $ 817,819 $ 817,819
------------ ------------
Expenses:
Depreciation 293,352 293,352
Management and leasing expenses 36,750 37,453
Other operating expenses 7,614 6,635
------------ ------------
337,716 337,440
------------ ------------
Net income $ 480,103 $ 480,379
============ ============
Occupied percentage 100% 100%
============ ============
Company's ownership percentage 100% 100%
============ ============
Cash generated to the Company $ 671,344 $ 671,165
============ ============
Net income generated to the Company $ 480,103 $ 480,379
============ ============
Rental income, expenses, net income and cash generated to the Company remained
stable in 2001, as compared to 2000.
-26-
Matsushita Building
Three Months Ended
-------------------------------
March 31, March 31,
2001 2000
------------ ------------
Revenues:
Rental income $ 531,508 $ 524,609
------------ ------------
Expenses:
Depreciation 258,144 254,757
Management and leasing expenses 49,493 44,103
Other operating expenses 30,826 17,315
------------ ------------
338,463 316,175
------------ ------------
Net income $ 193,045 $ 208,434
============ ============
Occupied percentage 100% 100%
============ ============
Company's ownership percentage 100% 100%
============ ============
Cash generated to the Company $ 455,593 $ 273,249
============ ============
Net income generated to the Company $ 193,045 $ 208,434
============ ============
Rental income in 2001 remained relatively stable as compared to 2000. Expenses
were greater in 2001 primarily due to increased expenditures in accounting,
travel and administrative salaries. Cash generated to the Company increased in
2001, as compared to 2000, primarily due to the one time lease acquisition fee
which was paid in the first quarter of 2000.
-27-
Cinemark Building
Three Months Ended
-------------------------------
March 31, March 31,
2001 2000
------------ ------------
Revenues:
Rental income $ 705,563 $ 701,604
------------ ------------
Expenses:
Depreciation 212,241 212,276
Management and leasing expenses 37,254 32,700
Other operating expenses, net of reimbursements 180,402 165,590
------------ ------------
429,897 410,566
------------ ------------
Net income $ 275,666 $ 291,038
============ ============
Occupied percentage 100% 100%
============ ============
Company's ownership percentage 100% 100%
============ ============
Cash generated to the Company $ 453,833 $ 455,916
============ ============
Net income generated to the Company $ 275,666 $ 291,038
============ ============
Net income decreased in 2001, as compared to 2000, primarily due to increased
utility costs at the property.
-28-
Metris Building
The Period from
Three Months February 11,
Ended 2000 Through
------------------ ------------------
March 31, March 31,
2001 2000
------------------ ------------------
Revenues:
Rental income $309,275 $172,492
------------------ ------------------
Expenses:
Depreciation 120,633 77,130
Management and leasing expenses 19,211 7,373
Other operating expenses, net of reimbursements 7,287 2,916
------------------ ------------------
147,131 87,419
------------------ ------------------
Net income $162,144 $ 85,073
================== ==================
Occupied percentage 100% 100%
================== ==================
Company's ownership percentage 100% 100%
================== ==================
Cash generated to the Company $272,151 $154,675
================== ==================
Net income generated to the Company $162,144 $ 85,073
================== ==================
Revenue, expenses and cash generated to the Company increased during 2001, as
the Metris Building was purchased in February of 2000.
-29-
Dial Building
The Period from
Three Months March 29, 2000
Ended Through
------------------ ------------------
March 31, March 31,
2001 2000
------------------ ------------------
Revenues:
Rental income $346,918 $11,191
------------------ ------------------
Expenses:
Depreciation 112,407 3,894
Management and leasing expenses 15,611 0
Other operating expenses, net of reimbursements 13,298 0
------------------ ------------------
141,316 3,894
------------------ ------------------
Net income $205,602 $ 7,297
================== ==================
Occupied percentage 100% 100%
================== ==================
Company's ownership percentage 100% 100%
================== ==================
Cash generated to the Company $322,453 $11,191
================== ==================
Net income generated to the Company $205,602 $ 7,297
================== ==================
Revenue, expenses, and cash generated to the Company increased during 2001, as
the Dial Building was purchased in March of 2000.
-30-
ASML Building
The Period from
Three Months March 29, 2000
Ended Through
------------------ ------------------
March 31, March 31,
2001 2000
------------------ ------------------
Revenues:
Rental income $538,509 $15,547
------------------ ------------------
Expenses:
Depreciation 182,242 6,279
Management and leasing expenses 23,153 0
Other operating expenses, net of reimbursements 55,986 1,503
------------------ ------------------
261,381 7,782
------------------ ------------------
Net income $277,128 $ 7,765
================== ==================
Occupied percentage 100% 100%
================== ==================
Company's ownership percentage 100% 100%
================== ==================
Cash generated to the Company $408,171 $14,044
================== ==================
Net income generated to the Company $277,128 $ 7,765
================== ==================
Revenue, expenses, cash generated to the Company increased during 2001, as the
ASML Building was purchased in March of 2000.
-31-
Motorola Arizona Building
The Period from
Three Months March 29, 2000
Ended Through
------------------ ------------------
March 31, March 31,
2001 2000
------------------ ------------------
Revenues:
Rental income $490,790 $14,870
------------------ ------------------
Expenses:
Depreciation 167,058 5,789
Management and leasing expenses 21,527 0
Other operating expenses, net of reimbursements 71,529 1,967
------------------ ------------------
260,114 7,756
------------------ ------------------
Net income $230,676 $ 7,114
================== ==================
Occupied percentage 100% 100%
================== ==================
Company's ownership percentage 100% 100%
================== ==================
Cash generated to the Company $372,142 $12,903
================== ==================
Net income generated to the Company $260,676 $ 7,114
================== ==================
Revenue, expenses, and cash generated to the Company increased in 2001, as the
Motorola Building was purchased in March of 2000.
-32-
Siemens Building/Fund XII - REIT Joint Venture
Three Months
Ended
----------------
March 31, 2001
----------------
Revenues:
Rental income $364,205
Interest income 5,566
----------------
369,771
----------------
Expenses:
Depreciation 160,326
Management and leasing expense 14,979
Other operating expenses 7,108
----------------
182,413
----------------
Net income $187,358
================
Occupied percentage 100%
================
Company's ownership percentage 46.85%
================
Cash distributions to the Company $148,211
================
Net income allocated to the Company $ 87,778
================
Since the Siemens Building was purchased in May 2000, comparable income and
expense figures for the prior year are not available.
-33-
Avnet Building
Three Months
Ended
----------------
March 31, 2001
----------------
Revenues:
Rental income $418,065
----------------
Expenses:
Depreciation 138,228
Management and leasing expenses 17,685
Other operating expenses, net of reimbursements 64,313
----------------
220,226
----------------
Net income $197,839
================
Occupied percentage 100%
================
Company's ownership percentage 100%
================
Cash generated to the Company $297,781
================
Net income generated to the Company $197,839
================
Comparable income and expense information is not available for the three months
ended March 31, 2000, as the Avnet Building was purchased in June of 2000,
-34-
Delphi Building
Three Months
Ended
-----------
March 31,
2001
-----------
Revenues:
Rental income $515,424
----------
Expenses:
Depreciation 206,883
Management and leasing expenses 21,685
Other operating expenses 4,126
----------
232,694
----------
Net income $282,730
==========
Occupied percentage 100%
==========
Company's ownership percentage 100%
==========
Cash generated to the Company $456,082
==========
Net income generated to the Company $282,730
==========
Comparable income and expense information is not available for the three months
ended March 31, 2000, as the Delphi Building was purchased in June of 2000,
-35-
Quest Building/Fund VIII - IX - REIT Joint Venture
Three Months
Ended
------------
March 31,
2001
------------
Revenues:
Rental income $267,385
-----------
Expenses:
Depreciation 114,930
Management and leasing expenses 10,759
Other operating expenses 36,663
-----------
162,352
-----------
Net income $105,033
===========
Occupied percentage 100%
===========
Company's ownership percentage 15.7%
===========
Cash generated to the Company $ 39,536
===========
Net income generated to the Company $ 16,530
===========
On June 15, 2000, the Fund VIII-IX-REIT Joint Venture was formed between Wells
OP and Fund VIII and Fund IX Associates, a Georgia joint venture partnership
between Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P.
(the "Fund VII-IX Joint Venture"). On July 1, 2000, the Fund VIII-IX Joint
Venture contributed its interest in the Quest Building (formerly the Bake
Parkway Building) to the Fund VIII-IX-REIT Joint Venture. On August 1, 2000,
Quest Software, Inc. commenced occupancy of the entire building.
Construction of tenant improvements required under the Quest lease cost
approximately $1,231,000 and was funded by capital contributions made by the
Company.
-36-
Alstom Power Richmond Building
Three Months
Ended
-----------
March 31,
2001
-----------
Revenues:
Rental income $316,903
---------
Expenses:
Depreciation 154,662
Management and leasing expenses 48,985
Other operating expenses, net of reimbursements 1,428
---------
205,075
---------
Net income $111,828
=========
Occupied percentage 100%
=========
Company's ownership percentage 100%
=========
Cash generated to the Company $275,616
=========
Net income generated to the Company $111,828
=========
Comparable income and expense information is not available for three months
ended March 31, 2000, as the Alstom Power Building was completed in July of
2000.
-37-
Motorola - New Jersey Building
Three Months
Ended
-------------
March 31,
2001
-------------
Revenues:
Rental income $ 860,280
------------
Expenses:
Depreciation 171,375
Management and leasing expenses 42,160
Other operating expenses, net of reimbursements 23,002
------------
236,537
------------
Net income $ 623,743
============
Occupied percentage 100%
============
Company's ownership percentage 100%
============
Cash generated to the Company $ 779,046
============
Net income generated to the Company $ 623,743
============
Comparable income and expense information is not available for the three months
ended March 31, 2000, as the Motorola Building was purchased in November of
2000.
-38-
Metris Minnetonka Building
Three Months
Ended
----------------
March 31,
2001
----------------
Revenues:
Rental income $1,366,234
----------------
Expenses:
Depreciation 465,000
Management and leasing expenses 74,737
Other operating expenses, net of reimbursements 168,600
----------------
708,337
----------------
Net income $ 657,897
================
Occupied percentage 100%
================
Company's ownership percentage 100%
================
Cash generated to the Company $1,044,765
================
Net income generated to the Company $ 657,897
================
Comparable income and expense information is not available for the three months
ended March 31, 200, as the Metris Minnetonka Building was purchased in December
of 2000.
-39-
Stone & Webster Building
Three Months
Ended
--------------
March 31,
2001
---------------
Revenues:
Rental income $1,750,839
---------------
Expenses:
Depreciation 379,173
Management and leasing expenses 83,830
Other operating expenses, net of reimbursements 545,520
---------------
1,008,523
---------------
Net income $ 742,316
===============
Occupied percentage 100%
===============
Company's ownership percentage 100%
===============
Cash generated to the Company $1,036,494
===============
Net income generated to the Company $ 742,316
===============
Comparable income and expense information is not available for the three months
ended March 31, 200, as the Stone & Webster Building was purchased in December
of 2000.
-40-
AT&T Oklahoma Buildings - Fund XII - REIT Joint Venture
Three Months
Ended
-----------
March 31,
2001
-----------
Revenues:
Rental income $423,550
-----------
Expenses:
Depreciation 140,267
Management and leasing expense 17,706
Other operating expenses 7,615
-----------
165,588
-----------
Net income $257,962
===========
Occupied percentage 100%
===========
Company's ownership percentage 46.85%
===========
Cash distributions to the Company $176,307
===========
Net income allocated to the Company $120,854
===========
Since the AT&T Oklahoma Buildings were purchased in December 2000, comparable
income and expense figures for the prior year are not available.
-41-
PART II. OTHER INFORMATION
ITEM 6 (b.) On February 9, 2001, the Registrant filed a Form 8-K/A dated
December 21, 2000, providing required financial statements relating to the
acquisition by the Registrant of interests in the Stone & Webster Building
located in Houston, Texas and the Metris Minnetonka Building located in
Minnetonka, Minnesota.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
WELLS REAL ESTATE INVESTMENT TRUST, INC.
(Registrant)
Dated: May 11, 2001 By: /s/ Leo F. Wells, III
---------------------
Leo F. Wells, III
President, Director, and Chief Financial Officer
-42-