SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 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 (I.R.S. Employer Identification
incorporation or organization) 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.
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PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets--September 30, 2001 and December 31, 2000 3
Consolidated Statements of Income for the Three Months and Nine Months 4
Ended September 30, 2001 and 2000
Consolidated Statements of Shareholders' Equity for the Year 5
Ended December 31, 2000 and the Nine Months Ended September 30, 2001
Consolidated Statements of Cash Flows for the Nine Months Ended 6
September 30, 2001 and 2000
Condensed Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results 18
of Operations
PART II. OTHER INFORMATION 21
2
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2001 2001
------------------- -----------------
ASSETS
REAL ESTATE, at cost:
Land $ 73,985,267 $ 46,237,812
Building and improvements, less accumulated depreciation of 381,590,591 287,862,655
$19,810,895 in 2001 and $9,469,653 in 2000
Construction in progress 2,202,200 3,357,720
------------------- -----------------
Total real estate 457,778,058 337,458,187
INVESTMENT IN JOINT VENTURES (Note 2) 71,060,872 44,236,597
INVESTMENT IN BONDS 22,000,000 0
DUE FROM AFFILIATES 1,649,205 734,286
CASH AND CASH EQUIVALENTS 11,132,382 4,298,301
ACCOUNTS RECEIVABLE 5,675,988 3,356,428
DEFERRED LEASE ACQUISITION COSTS, net 1,662,822 1,890,332
DEFERRED PROJECT COSTS (Note 1) 475,811 550,256
DEFERRED OFFERING COSTS (Note 1) 0 1,291,376
PREPAID EXPENSES AND OTHER ASSETS, net 994,809 4,734,583
------------------- -----------------
Total assets $572,429,947 $398,550,346
=================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 5,475,619 $ 2,166,387
Notes payable (Note 3) 49,148,162 127,663,187
Deferred rental income 0 381,194
Due to affiliates (Note 4) 247,131 1,772,956
Dividends payable 1,071,657 1,025,010
------------------- -----------------
Total liabilities 55,942,569 133,008,734
------------------- -----------------
COMMITMENTS AND CONTINGENCIES (Note 5)
MINORITY INTEREST OF UNIT HOLDER IN
OPERATING PARTNERSHIP 200,000 200,000
------------------- -----------------
SHAREHOLDERS' EQUITY
Common shares, $.01 par value; 125,000,000 shares authorized,
61,287,300 shares issued and 60,932,270 shares outstanding at
September 30, 2001, and 31,509,807 shares issued and 31,368,510
shares outstanding at December 31, 2000 612,872 315,097
Additional paid-in capital 519,224,798 266,439,484
Treasury stock, at cost, 355,029 shares at September 30, 2001,
and 141,297 shares at December 31, 2000 (3,550,292) (1,412,969)
------------------- -----------------
Total shareholders' equity 516,287,378 265,341,612
------------------- -----------------
Total liabilities and shareholders' equity $572,429,947 $398,550,346
=================== =================
See accompanying condensed notes to consolidated financial statements.
3
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
---------------------------------- ---------------------------------
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
---------------- ----------------- --------------- ----------------
REVENUES:
Rental income $11,316,960 $5,819,968 $31,028,212 $13,712,371
Equity in income of joint ventures 1,102,453 635,065 2,621,647 1,684,247
Interest and other income (Note 5) 88,491 131,578 418,998 338,020
---------------- ----------------- --------------- ----------------
12,507,904 6,586,611 34,068,857 15,734,638
---------------- ----------------- --------------- ----------------
EXPENSES:
Operating costs, net of 1,293,845 289,140 3,168,273 631,407
reimbursements
Management and leasing fees 631,947 381,766 1,749,849 919,630
Depreciation 3,947,425 2,155,366 10,341,242 5,084,689
Administrative costs 58,843 43,979 700,803 282,330
Legal and accounting 82,002 32,883 199,333 130,603
Amortization of deferred financing 236,816 64,016 528,715 150,143
costs
Interest expense 147,889 1,094,233 2,957,262 2,798,299
---------------- ----------------- --------------- ----------------
6,398,767 4,061,383 19,645,477 9,997,101
---------------- ----------------- --------------- ----------------
NET INCOME $ 6,109,137 $2,525,228 $14,423,380 $ 5,737,537
================ ================= ============== ================
BASIC AND DILUTED EARNINGS PER SHARE $ 0.11 $ 0.11 $ 0.33 $ 0.30
================ ================= ============== ================
See accompanying condensed notes to consolidated financial statements.
4
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2000
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
Common Stock Additional Retained Treasury Stock Total
---------------------- Paid-In ------------------------ 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 commissions and 0 0 (17,002,554) 0 0 0 (17,002,554)
discounts
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 29,777,493 297,775 297,477,152 0 0 0 297,774,927
Treasury stock purchased 0 0 0 0 (213,732) (2,137,323) (2,137,323)
Net income 0 0 0 14,423,380 0 0 14,423,380
Dividends ($.57 per share) 0 0 (9,125,583) (14,423,380) 0 0 (23,548,963)
Sales commission 0 0 (28,085,572) 0 0 0 (28,085,572)
Other offering expenses 0 0 (7,480,683) 0 0 0 (7,480,683)
---------- ----------- ------------ ------------- ---------- ------------- -------------
BALANCE, September 30, 2001 61,287,300 $612,872 $519,224,798 $ 0 (355,029) $(3,550,292) $516,287,378
========== =========== ============ ============= ========== ============= =============
See accompanying condensed notes to consolidated financial statements.
5
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
----------------------------------------------
September 30, September 30,
2001 2000
-------------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14,423,380 $ 5,737,537
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 10,341,242 5,084,689
Amortization of deferred financing costs 528,715 150,143
Amortization of deferred leasing costs 227,510 269,482
Equity in income of joint ventures (2,621,647) (1,684,247)
Changes in assets and liabilities:
Accounts receivable (2,319,560) (1,831,539)
Deferred rental income (381,194) (236,579)
Accounts payable 3,309,232 751,100
Prepaid expenses and other assets, net 3,211,059 (1,411,068)
Due to affiliates (234,449) 149,777
-------------------- ------------------
Net cash provided by operating activities 26,484,288 6,979,295
-------------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in real estate (121,366,009) (103,469,511)
Investment in joint ventures (27,017,957) (7,612,005)
Deferred project costs (10,347,316) (4,446,307)
Deferred lease acquisition costs 0 (2,241,322)
Distributions received from joint ventures 3,027,067 2,103,704
-------------------- ------------------
Net cash used in investing activities (155,704,215) (115,665,441)
-------------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable 107,587,012 67,883,130
Repayment of note payable (208,102,037) (52,903,328)
Dividends paid (23,502,316) (8,124,023)
Issuance of common stock 297,774,927 127,695,243
Sales commissions paid (28,085,572) (12,068,553)
Offering costs paid (7,480,683) (3,811,122)
Treasury stock purchased (2,137,323) (657,844)
-------------------- ------------------
Net cash provided by financing activities 136,054,008 118,013,503
-------------------- ------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 6,834,081 9,327,357
CASH AND CASH EQUIVALENTS, beginning of year 4,298,301 2,929,804
-------------------- ------------------
CASH AND CASH EQUIVALENTS, end of period $ 11,132,382 $ 12,257,161
==================== ===================
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Deferred project costs applied to Joint Ventures $ 1,126,657 $ 295,680
==================== ===================
Deferred project costs applied to Real Estate $ 9,295,104 $ 3,707,715
==================== ===================
Decrease in deferred offering cost accrual $ (1,291,376) $ (143,265)
==================== ===================
Assumption of mortgage $ 22,000,000 $ 0
==================== ===================
Investment in bonds $ 22,000,000 $ 0
==================== ===================
See accompanying condensed notes to consolidated financial statements.
6
WELLS REAL ESTATE INVESTMENT TRUST, INC.
AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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 September 30, 2001, the Company had
received gross offering proceeds of approximately $305,462,615 from the sale
of 30,546,262 shares from its third public offering. As of September 30,
2001, the Company had received aggregate gross offering proceeds of
approximately $612,872,996 from the sale of 61,287,300 shares of its common
stock. After payment of $21,326,295 in Acquisition and Advisory Fees and
Acquisition Expenses, payment of $75,253,972 in selling commissions and
organization and offering expenses, and capital contributions and acquisition
expenditures by Wells OP of $504,065,814 in property acquisitions and common
stock redemptions of $3,550,292 pursuant to the Company's share repurchase
program, the Company was holding net offering proceeds of $8,676,623
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, 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"), (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
7
Fund IX, L.P., and (vii) a joint venture between Wells OP and Wells Real
Estate Fund XIII, L.P. (the "Fund XIII-REIT Joint Venture").
As of September 30, 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 Wells Fund XII-REIT Joint Venture
Partnership, (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, (xxix) a one-story and a two-
story office building in Oklahoma City, Oklahoma (the "AT&T-Oklahoma
Buildings"), which are owned by the Fund XII-REIT Joint Venture, (xxx) a
three-story office building in Brentwood, Tennessee (the "Comdata Building"),
which is owned by the Fund XII-REIT Joint Venture, (xxxi) a two-story office
building in Jacksonville, Florida (the "Amercredit Building"), which is owned
by XIII-REIT Joint Venture, (xxxii) a seven-story office building in Quincy,
Massachusetts (the "State Street Building"), (xxxiii) two one-story office
buildings in Houston, Texas (the "IKON Buildings"), (xxxiv) a 14.873 acre
tract of land in Irving, Texas (the "Nissan Property"), (xxxv) a one-story
office and warehouse building in Millington, Tennessee (the "Ingram
Building"), and (xxxvi) a four-story office building in Cary, North Carolina
(the "Lucent-NC Building"), all five of which are owned directly by Wells OP.
8
(b) Deferred Project Costs
The Company pays a percentage of shareholder contributions to Wells Capital,
Inc. (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. Cumulative Acquisition and Advisory Fees
and Acquisition Expenses paid as of September 30, 2001, amounted to
$21,326,295 and represented approximately 3 1/2% of total shareholders'
capital contributions received. These fees are allocated to specific
properties as they are purchased or developed and are capitalized with the
real estate assets of the Company or of the joint venture invested in by the
Company. Deferred project costs at September 30, 2001 and December 31, 2000,
represent fees not yet applied to properties.
(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 certain legal and accounting fees, printing costs, and other offering
expenses. As of September 30, 2001, the Advisor had paid offering expenses on
behalf of the Company in an aggregate amount of $16,891,235, 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 insurance with respect
to all of 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 is 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 Advisor, a limited partner, is not currently receiving distributions from
its investment in Wells OP.
9
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. Distributions will be declared on a monthly basis and paid on
a quarterly basis during the offering period and declared and paid quarterly
thereafter.
(i) Income Taxes
The Company has made an election under Section 856 (C) of the Internal Revenue
Code of 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
As of September 30, 2001, the Company, through its ownership in Wells OP,
which owns interests in seven joint ventures which, in turn own 16 properties.
The Company does not have control over the operations of these joint ventures;
however, it does exercise significant influence. Accordingly, investment in
joint ventures is recorded using the equity method.
10
The following describes additional investments in joint ventures which the
Company made during the three months ended September 30, 2001.
The Fund XIII-REIT Joint Venture
On June 27, 2001, Wells OP and Wells Real Estate Fund XIII, L.P. ("Wells Fund
XIII") entered into a Joint Venture Partnership Agreement for the purpose of
acquiring, owning, leasing, operating and managing real properties. The joint
venture partnership is known as the Wells Fund XIII-REIT Joint Venture (the
"Fund XIII-REIT Joint Venture").
The AmeriCredit Building
On July 16, 2001, the Fund XIII-REIT Joint Venture acquired a two-story office
building containing approximately 85,000 rentable square feet on a 12.33 acre
tract of land located in Clay County, Florida (the "AmeriCredit Building")
from Adevco Contact Centers Jacksonville, L.L.C. pursuant to that certain
Agreement for Purchase and Sale of Property between Adevco and Wells Capital,
Inc., the Advisor. The rights under the agreement were assigned by Wells
Capital, Inc., the original purchaser under the agreement, to the Fund XIII-
REIT Joint Venture at closing. The purchase price paid for the AmeriCredit
Building was $12,500,000, excluding closing costs.
The entire 85,000 rentable square feet of the AmeriCredit Building is
currently under a triple-net lease agreement with AmeriCredit dated November
20, 2000. The landlord's interest in the AmeriCredit lease was assigned to
the Fund XIII-REIT Joint Venture at the closing. The initial term of the
AmeriCredit lease is 10 years, which commenced June 2001 and expires in May
2011. AmeriCredit has the right to extend the AmeriCredit lease for two
additional five-year periods of time.
For additional information regarding the acquisition of the AmeriCredit
Building, refer to Supplement No. 3 dated July 20, 2001, to the Prospectus of
Wells Real Estate Investment Trust, Inc. dated December 20, 2000, which was
filed with the Commission in Post-Effective Amendment No. 3 to the Form S-11
Registration Statement of Wells Real Estate Investment Trust, Inc. on July 23,
2001 (Commission File No. 333-44900).
11
SUMMARY OF OPERATIONS
The following information summarizes the operations of the unconsolidated
joint ventures in which the Company, through Wells OP, had ownership interests
as of September 30, 2001 and 2000, respectively.
Wells OP's Share of Net
Total Revenues Net Income Income
-------------------------------------------------------------------------------------------
Three Months Ended Three Months Ended Three Months Ended
----------------------------- ---------------------------- ------------------------------
September 30, September 30, September 30, September 30, September 30, September 30,
2001 2000 2001 2000 2001 2000
--------------- ------------- ------------- ------------- -------------- ---------------
Fund IX-X-XI-REIT
Joint Venture $1,082,768 $1,087,126 $ 669,906 $ 678,125 $ 24,864 $ 25,178
Cort Joint Venture 203,812 198,885 149,477 137,099 65,272 59,866
Fremont Joint
Venture 227,050 225,195 142,087 141,395 110,123 109,587
Fund XI-XII-REIT
Joint Venture 843,962 844,121 520,011 532,905 295,173 302,492
Fund XII-REIT Joint
Venture 1,409,716 376,457 814,542 252,825 447,634 126,413
Fund VIII-IX-REIT
Joint Venture 313,536 259,148 155,976 196,497 24,629 11,529
Fund XIII-REIT
Joint Venture 305,600 0 155,194 0 134,758 0
--------------- ------------- ------------- ------------- -------------- ---------------
$4,386,444 $2,990,932 $2,607,193 $1,938,846 $1,102,453 $635,065
============== ============= ============= ============= ============== ===============
Wells OP's Share of Net
Total Revenues Net Income Income
----------------------------- ---------------------------- ------------------------------
Nine Months Ended Nine Months Ended Nine Months Ended
----------------------------- ---------------------------- ------------------------------
September 30, September 30, September 30, September 30, September 30, September 30,
2001 2000 2001 2000 2001 2000
--------------- ------------- ------------- ------------- -------------- ---------------
Fund IX-X-XI-REIT
Joint Venture $ 3,263,864 $3,297,516 $2,042,759 $1,992,374 $ 75,817 $ 74,057
Cort Joint Venture 602,280 596,656 414,603 422,477 181,046 184,484
Fremont Joint
Venture 677,406 675,585 420,689 424,058 326,051 328,663
Fund XI-XII-REIT
Joint Venture 2,533,153 2,506,049 1,534,247 1,557,772 870,883 884,236
Fund XII-REIT Joint
Venture 3,305,911 599,032 1,847,726 402,556 967,079 201,278
Fund VIII-IX-REIT
Joint Venture 894,460 259,148 416,328 196,497 66,013 11,529
Fund XIII-REIT
Joint Venture 305,600 0 155,194 0 134,758 0
--------------- ------------- ------------- ------------- -------------- ---------------
$11,582,674 $7,933,986 $6,831,546 $4,995,734 $2,621,647 $1,684,247
=============== ============= ============= ============= ============== ===============
3. INVESTMENTS IN REAL ESTATE
As of September 30, 2001, the Company, through its ownership in Wells OP,
owns 20 properties directly. The following describes acquisitions made
directly by Wells OP during the three months ended September 30, 2001.
12
The State Street Building
On July 30, 2001, Wells OP purchased a seven-story office building with
approximately 234,668 rentable square feet located on an 11.22 acre tract of
land at 1200 Crown Colony Drive, Norfolk County, Quincy, Massachusetts (the
"State Street Building) from Crownview, LLC. Crownview is not affiliated with
the Company or Wells Capital, Inc., our Advisor. The purchase price for the
State Street Building was $49,563,000, excluding closing costs. The entire
234,668 rentable square feet of the State Street Building is currently under a
lease agreement with SSB Realty. The landlord's interest in the SSB Realty
Lease was assigned to Wells OP at the closing. The current term of the lease
is 10 years, which commenced on February 1, 2001, and expires on March 31,
2011. SSB Realty has the right to extend the term of this lease for one
additional five-year period at the then-current fair market rental rate.
Pursuant to the SSB Realty lease, SSB Realty is required to pay its
proportionate share of taxes relating to the SSB Building and all operating
costs incurred by the landlord in maintaining and operating the SSB Building.
In addition, the base operating costs and the base taxes will be adjusted to
reflect the actual operating costs and taxes for the preceding calendar year.
Wells OP, as the landlord, will be responsible for maintaining the common
areas of the building, the roof, foundation, exterior walls and windows, load
bearing items and the central heating, ventilation and air conditioning,
electrical, mechanical and plumbing systems of the building.
For additional information regarding the acquisition of the State Street
Building, refer to Supplement No. 4 dated August 10, 2001, to the Prospectus
of Wells Real Estate Investment Trust, Inc. dated December 20, 2000, which was
contained in Post-Effective Amendment No. 4 to the Form S-11 Registration
Statement of Wells Real Estate Investment Trust, Inc. which was filed with the
Commission on October 23, 2001 (Commission File No. 333-44900).
The IKON Buildings
On September 7, 2001, Wells OP purchased two one-story office buildings with
approximately 157,900 rentable square feet located at 810 and 820 Gears Road,
Harris County, Houston, Texas (the "IKON Buildings") from SV Reserve, LP.
Reserve, LP is not in any way affiliated with the Company or Wells Capital,
Inc., our Advisor.
The purchase price for the IKON Buildings was $20,650,000, excluding closing
costs. The entire 157,790 rentable square feet of the IKON Buildings is
currently under a net lease agreement with IKON. The landlord's interest in
the IKON lease was assigned to Wells OP at the closing. The current term of
the lease is 10 years, which commenced on May 1, 2000 and expires on April 30,
2010. IKON has the right to extend the term of this lease for two additional
five-year periods at the then-current fair market rental rate, upon 12 months
prior written notice.
Pursuant to the IKON lease, IKON is required to pay all taxes relating to the
IKON Buildings and all operating costs incurred by the landlord in maintaining
and operating the IKON Buildings. Wells OP, as landlord, will be responsible
for repairs related to insurable casualty and for maintaining the roof,
foundation, exterior walls and windows, load bearing items and electrical,
mechanical and plumbing systems.
For additional information regarding the acquisition of the IKON Buildings,
refer to the Company's Form 8-K dated September 7, 2001, which was filed with
the Commission on September 21, 2001 (Commission File No. 0-25739), and
Supplement No. 5 dated October 15, 2001 to the Prospectus of
13
Wells Real Estate Investment Trust, Inc. dated December 20, 2000, which was
contained in Post-Effective Amendment No. 4 to the Form S-11 Registration
Statement of Wells Real Estate Investment Trust, Inc. which was filed with the
Commission on October 23, 2001 (Commission File No. 333-44900).
The Nissan Property
On September 19, 2001, Wells OP purchased a 14.873 acre tract of land located
in Irving, Dallas County, Texas (the "Nissan Property"). Wells OP purchased
the Nissan Property from the Ruth Ray and H.L. Hunt Foundation and the Ruth
Foundation, each a Texas non-profit corporation and 50% owner in the Nissan
Property for a purchase price of $5,545,700, excluding closing costs.
Wells OP has entered into agreements to construct a three-story office
building containing 268,290 rentable square feet (the "Nissan Project") on the
Nissan Property. The Nissan Project will be a concrete tilt-up, high
performance glass building. The site consists of a 14,873 acre tract of land
located in the Freeport Business Park.
The entire 268,290 rentable square feet of the Nissan Building is currently
under a lease agreement with Nissan Motor Acceptance Corporation ("Nissan"), a
wholly owned subsidiary of Nissan North America, Inc. with its corporate
headquarters in Torrance, California. The initial lease term began on
September 19, 2001 and will extend 10 years beyond the rent commencement date.
Construction on the building is scheduled to begin on or before February 1,
2001, and is scheduled to be completed within 20 months from its commencement.
The rent commencement date will occur shortly thereafter. Nissan also has the
right to extend the lease for two additional five-year periods at 95% of the
then current market rental rate upon written notice. The initial annual base
rent payable under the Nissan lease will be $4,225,860.
The Ingram Micro Building
On September 27, 2001, Wells OP acquired a ground leasehold interest in a
701,819 square foot distribution facility located at 3820 Micro Drive in the
City of Millington, Shelby County, Tennessee (the "Ingram Micro Building")
pursuant to a Bond Real Property Lease dated December 20, 1995 (the "Bond
Lease"). The rights under the Bond Lease were purchased from Ingram Micro
L.P. ("Ingram") in a sale lease-back transaction for a purchase price of
$21,050,000, excluding closing costs. The Bond Lease expires on December 31,
2026. In addition, Wells OP purchased from Ingram all rights, title and
interest in an Industrial Development Revenue Note Ingram Micro L.P. Series
1995 (the "Bond") issued by the Industrial Development Board of the City of
Millington, Tennessee ("Board") to Lease Plan North America, Inc. ("Lease
Plan") in a principal amount not to exceed $22,000,000. The Bond is secured
by a Fee Construction Mortgage Deed of Trust and Assignment of Rents and
Leases dated December 20, 1995 (the "Deed of Trust") executed by the Board for
the benefit of Lease Plan. Beginning in 2006, Wells OP has the option under
the Bond Lease to purchase the land underlying the Ingram Micro Distribution
Facility for $100 plus satisfying the indebtedness evidenced by the Bond,
which is currently held by Wells OP.
The Board, as the fee simple owner of the Ingram Micro Building, had
originally entered into the Bond Lease with Lease Plan. The proceeds from the
issuance of the Bond were used to finance the construction of the Ingram Micro
Building. On December 20, 2000, Ingram purchased the Bond, Deed of Trust and
the ground leasehold interest in the Ingram Micro Building under the Bond
Lease from Lease Plan.
14
At closing, Wells OP entered into a new lease with Ingram pursuant to which
Ingram agreed to lease the entire Ingram Micro Building from Wells OP. The
Ingram lease has a term of 10 years with two successive options to extend for
10 years each. The annual base rent for the Ingram Micro Building is
$2,035,275 for years one through five of the lease term. Ingram is also
required to pay as additional rent all other amounts, liabilities and
obligations relating to the Ingram Micro, including all taxes, assessments,
water rents, sewer rents and charges, duties, impositions, license and permit
fees, charges for public utilities and other charges of every kind and nature
incurred as a result of the use and occupation of the premises by Ingram.
The Lucent Building
On September 28, 2001, Wells OP purchased a four-story office building with
approximately 120,000 rentable square feet located at 200 Lucent Lane, Cary,
North Carolina (the "Lucent Building"). Wells OP purchased this building from
Lucent Technologies, Inc. ("Lucent") pursuant to that certain Agreement for
the Purchase and Sale of Property between Lucent and Wells OP for a purchase
price of $17,650,000, excluding closing costs.
The Lucent Building, which was completed in 1999, is a four-story office
building located on a 29.19 acre tract of land, which includes a 11.84 acre
improved tract of land and a 17.34 acre undeveloped tract of land.
The Lucent Building is located at 200 Lucent Lane in Regency Park office part
in the "Research Triangle" in Cary, North Carolina, approximately 10 miles
west of downtown Raleigh and 15 miles south of Raleigh-Durham International
Airport.
The entire Lucent Building is currently under a lease agreement with Lucent,
which does not include the 17.34 acre undeveloped tract of land described
above. The current term of the lease is 10 years, which commenced September
28, 2001, and expires on September 30, 2011. Lucent has the right to extend
the term of this lease for three additional five-year periods at the then-
current fair market rental rate, upon 12 months prior written notice. The
current annual base rent payable under the Lucent lease is $1,800,000.
For additional information regarding the acquisitions of the Nissan property,
the Ingram Micro Building and the Lucent Building, refer to the Company's
Form 8-K dated September 27, 2001, which was filed with the Commission on
October 10, 2001 (Commission File No. 0-25739), the Company's Form 8-K/A
dated September 27, 2001, which was filed with the Commission on October 26,
2001 (Commission File No. 0-25739), and Supplement No. 5 dated October 15,
2001 to the Prospectus of Wells Real Estate Investment Trust, Inc. dated
December 20, 2000, which was filed with the Commission in Post-Effective
Amendment No. 4 to the Form S-11 Registration Statement of Wells Real Estate
Investment Trust, Inc. on October 23, 2001 (Commission File No. 333-44900).
3. NOTES PAYABLE
Notes payable consists of loans of (i) $21,650,000 due to Bank of America,
N.A. secured by first mortgages against the ATT, Marconi, Matsushita,
Motorola, NJ, Metris, MN, and Delphi Buildings, (the "Bank of America Note")
(ii) $5,498,162 due to SouthTrust Bank collateralized by Wells OP's interest
in the Cinemark, Dial, ASML, Alstom Power Richmond, Avaya Technologies,
Motorola, and PWC Buildings, and (iii) $22,000,000 mortgage note secured by
the Deed of Trust to the Ingram
15
Micro Building. Cash paid for interest on the notes payable totaled
$3,466,606 for the nine months ended September 30, 2001.
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 Rental Income Guaranty Agreement, which is explained in detail in
the Company's Form 10-K for the year ended December 31, 2000. Aggregate
payments of $601,963 have been made as of September 30, 2001 toward funding
the obligation under the Matsushita Rental Income Guaranty Agreement.
5. COMMITMENTS AND CONTINGENCIES
Take Out Purchase and Escrow Agreement
An affiliate of the Advisor ("Wells Exchange") has developed a program (the
"Wells Section 1031 Program") involving the acquisition by Wells Exchange of
income-producing commercial properties and the formation of a series of
single member limited liability companies for the purpose of facilitating the
resale of co-tenancy interests in such real estate properties to be owned in
co-tenancy arrangements with persons ("1031 Participants") who are looking to
invest the proceeds from a sale of real estate held for investment in another
real estate investment for purposes of qualifying for like-kind exchange
treatment under Section 1031 of the Code. Each of these properties will be
financed by a combination of permanent first mortgage financing and interim
loan financing obtained from institutional lenders.
Following the acquisition of each property, Wells Exchange will attempt to
sell co-tenancy interests to 1031 Participants, the proceeds of which will be
used to pay off the interim financing. In consideration for the payment of a
Take Out Fee to the Company, and following approval of the potential property
acquisition by the Company's Board of Directors, it is anticipated that Wells
OP will enter into a Take Out Purchase and Escrow Agreement or similar
contract providing that, in the event that Wells Exchange is unable to sell
all of the co-tenancy interests in that particular property to 1031
Participants, Wells OP will purchase, at Wells Exchange's cost, any co-
tenancy interests remaining unsold at the end of the offering period.
As a part of the initial transaction in the Wells Section 1031 Program, and
in consideration for the payment of a Take Out Fee in the amount of $137,500
to the Company, Wells OP entered into a Take Out Purchase and Escrow
Agreement dated April 16, 2001 providing, among other things, that Wells OP
is obligated to acquire, at Wells Exchange's cost ($839,694 in cash plus
$832,060 of assumed debt for each 7.63358% interest of co-tenancy interest
unsold), any unsold co-tenancy interests in the building known as the Ford
Motor Credit Complex which remain unsold at the expiration of the offering of
Wells Exchange, which has been extended to February 28, 2002, which is also
the maturity date of the interim loan relating to such property. The Ford
Motor Credit Complex consists of two connecting office buildings containing
167,438 rentable square feet located in Colorado Springs, Colorado currently
under a triple-net lease with Ford Motor Credit Company, a wholly owned
subsidiary of Ford Motor Company, which is the world's largest automotive
finance company with more than 10 million customers in 40 countries.
16
The obligations of Wells OP under the Take Out Purchase and Escrow Agreement
are secured by reserving against Wells OP's existing line of credit with Bank
of America, N.A. (the "Interim Lender"). If, for any reason, Wells OP fails
to acquire any of the co-tenancy interests in the Ford Motor Credit Complex
which remain unsold as of February 28, 2002, or there is otherwise an uncured
default under the interim loan or the line of credit documents, the Interim
Lender is authorized to draw down Wells OP's line of credit in the amount
necessary to pay the outstanding balance of the interim loan in full, in which
event the appropriate amount of co-tenancy interests in the Ford Motor Credit
Complex would be deeded to Wells OP. Wells OP's maximum economic exposure in
the transaction is $11,000,000, in which event Wells OP would acquire the Ford
Motor Credit Complex for $11,000,000 in cash plus assumption of the first
mortgage financing in the amount of $10,900,000. If some, but not all, of the
co-tenancy interests are sold, Wells OP's exposure would be less, and it would
own an interest in the property in co-tenancy with the 1031 Participants who
had previously acquired co-tenancy interests in the Ford Motor Credit Complex
from Wells Exchange.
For further information regarding the Wells Section 1031 Program, refer to
Supplement No. 2 dated April 25, 2001 to the Prospectus of Wells Real Estate
Investment Trust, Inc. dated December 20, 2000, which was filed with the
Commission in Post-Effective Amendment No. 2 to the Form S-11 Registration
Statement of Wells Real Estate Investment Trust, Inc. on April 25, 2001
(Commission File No. 333-44900).
17
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
Cash and cash equivalents at September 30, 2001 and 2000 were $11,132,382 and
$12,257,161, respectively. The decrease in cash and cash equivalents resulted
primarily from investments in real property acquisitions offset by additional
capital raised.
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.
For a description of the Company's commitment and contingent liability as a
result of the Take Out Purchase and Escrow Agreement relating to the Ford
Motor Credit Complex, refer to Footnote 5 of the Condensed Notes to
Consolidated Financial Statements included herein.
As of September 30, 2001, the Company had acquired interests in 36 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 third quarter of 2001 and the third quarter of 2000 were
approximately $0.1938 and $0.188 per share, respectively. The dividends were
declared on a daily record date basis to the shareholders of record at the
close of each business day during the quarter.
Cash Flows from Operating Activities
Net cash provided by operating activities was $26,484,288 for the nine months
ended September 30, 2001 and $6,979,295 for the nine months ended September
30, 2000. The increase in net cash provided by operating activities resulted
primarily from additional rental revenues and equity income of joint ventures
generated from the properties acquired during the nine months ended September
30, 2001.
18
Cash Flows from Investing Activities
Net cash used in investing activities increased from $115,665,441 for the nine
months ended September 30, 2000 compared to $155,704,215 for the nine months
ended September 30, 2001, primarily due to acquiring a greater number of
properties during the first three quarters of 2001 as compared to the same
period in 2000.
Cash Flows from Financing Activities
Net cash inflows generated through financing activities increased from
$118,013,503 for the nine months ended September 30, 2000, to $136,054,008 for
the nine months ended September 30, 2001, primarily due to raising additional
capital. The Company received $297,774,927 in offering proceeds for the nine
months ended September 30, 2001, as compared to $127,695,243 for the nine
months ended September 30, 2000. In addition, the Company received loan
proceeds from financings of $107,587,012 and repaid notes payable in the
amount of $208,102,037 during the first three quarters of 2001.
Results of Operations
As of September 30, 2001, the properties owned by the Company were 100%
occupied. Gross revenues for the nine months ended September 30, 2001, as
compared to the nine months ended September 30, 2000, increased to $34,068,857
from $15,734,638, respectively, primarily as a result of additional rental
revenues and equity in income of joint ventures generated from properties
acquired during the prior twelve months. The purchase of interests in
additional properties also resulted in increases in operating expenses,
management and leasing fees, depreciation expense, legal and accounting fees,
financing costs, and interest expense. Administrative costs increased from
$282,330 for the nine months ended September 30, 2000 to $700,803 for the same
period in 2001 due to a non-use fee on the unused balance of the Bank of
America Note and additional taxes, license fees and postage and delivery costs
associated with the purchase of additional properties. Net income increased
to $14,423,380 for the nine months ended September 30, 2001, as compared to
$5,737,537 for the nine months ended September 30, 2000. Net income per share
was $0.11 for the quarters ended September 30, 2001 and 2000, respectively,
$0.33 per share for the nine months ended September 30, 2001, from $0.30 per
share for the nine months ended September 30, 2000.
Funds from Operations
Funds from Operations ("FFO"), as defined by the National Association of Real
Estate Investment Trusts ("NAREIT"), generally means net income, computed in
accordance with GAAP excluding extraordinary items (as defined by GAAP) and
gains (or losses) from sales of property, plus depreciation and amortization
on real estate assets, and after adjustments for unconsolidated partnerships,
joint ventures and subsidiaries. The Company believes that FFO is helpful to
investors as a measure of the performance of an equity REIT. However, the
Company's calculation of FFO, while consistent with NAREIT's definition, may
not be comparable to similarly titled measures presented by other REITs.
Adjusted Funds from Operations ("AFFO") is defined as FFO adjusted to exclude
the effects of straight-line rent, loan cost amortization and other non-cash
and/or unusual items. Neither FFO nor AFFO represent cash generated from
operating activities in accordance with GAAP and should not be considered as
alternatives to net income as an indication of the Company's performance or to
cash flows as a measure of liquidity or ability to make distributions.
19
The following table reflects the calculation of Funds from Operations and
Adjusted Funds from Operations for the three and nine months ended September
30, 2001 and 2000, respectively:
Three Months Ended Nine Months Ended
------------------------------- --------------------------------
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
--------------- --------------- --------------- ----------------
FUNDS FROM OPERATIONS:
Net income $ 6,109,137 $ 2,525,228 $14,423,380 $ 5,737,537
Add: 3,947,425 2,155,366 10,341,242 5,084,689
Depreciation of real assets
Amortization of deferred leasing costs 75,837 101,598 227,510 269,482
Depreciation and amortization -
unconsolidated partnerships 647,184 303,402 1,560,844 830,366
--------------- --------------- --------------- ----------------
Funds from operations (FFO) 10,779,583 5,085,594 26,552,976 11,922,074
Adjustments:
Loan cost amortization 236,816 64,016 528,715 150,143
Straight line rent (707,581) (468,487) (1,930,297) (1,132,052)
Straight line rent - unconsolidated
partnerships (100,432) (78,851) (232,678) (191,748)
Lease acquisition fees paid 0 0 0 (152,500)
Lease acquisition fees paid-
unconsolidated partnerships 0 (103) (7,826) (8,002)
--------------- --------------- --------------- ----------------
Adjusted funds from operations $10,208,386 $ 4,602,169 $24,910,890 $10,587,915
=============== =============== =============== ================
WEIGHTED AVERAGE SHARES:
BASIC AND DILUTED 54,112,446 23,920,273 43,725,920 19,219,053
=============== =============== =============== ================
20
PART II. OTHER INFORMATION
ITEM 6(b.) During the third quarter of 2001, the Registrant filed the following
Current Reports of Form 8-K:
i. Current Report on Form 8-K dated September 7, 2001, describing
the Registrant's acquisition of the IKON Buildings;
ii. Current Report on Form 8-K dated September 7, 2001, describing
the Registrant's acquisitions of the Nissan Property, the Ingram
Micro Building and the Lucent Building; and
iii. Amendment No. 1 to Current Report on Form 8-K/A dated September
27, 2001, providing the required financial statements related to
the Registrant's acquisitions of the Nissan Property, the Ingram
Micro Building and the Lucent Building.
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: November 9, 2001 By:/s/ Leo F. Wells, III
--------------------------------------
Leo F. Wells, III
President, Director, and Chief Financial Officer
21