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SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





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FORM 10-Q





(Mark One)


|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------




For the quarterly period ended June 30, 2002





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 0-25606





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WELLS REAL ESTATE FUND VII, L.P.


(Exact name of registrant as specified in its charter)





Georgia

58-2022629(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)





6200 The Corners Pkwy., Atlanta, 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)





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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 FUND VII, L.P.


(A Georgia Public Limited Partnership)





INDEX





Page No.PART I.

FINANCIAL INFORMATIONItem 1.

Financial Statements

3Balance SheetsJune 30, 2002 (unaudited) and December 31, 2001

4Statements of Income for the Three Months and Six Months Ended June 30, 2002 (unaudited) and 2001 (unaudited)

5Statements of Partners Capital for the Year Ended December 31, 2001 and the Six Months Ended June 30, 2002 (unaudited)

6Statements of Cash Flows for the Six Months Ended June 30, 2002 (unaudited) and 2001 (unaudited)

7Condensed Notes to Financial Statements (unaudited)

8Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operation

12PART II.

OTHER INFORMATION

15Exhibit Index

16Exhibit 99.1Certification of Chief Executive OfficerExhibit 99.2Certification of Chief Financial Officer




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PART I.    
FINANCIAL INFORMATION





Effective July 3, 2002, Wells Real Estate Fund VII, L.P. (the
Partnership) engaged Ernst & Young LLP (Ernst & Young) as its principal accountants to audit the Partnerships financial statements. In accordance with the relief granted to former auditing clients of Arthur
Andersen LLP in SEC Release No. 34-45589, Ernst & Young completed its review of the unaudited financial statements of the Partnership for the quarter ended March 31, 2002 pursuant to Rule 10-01(d) of Regulation S-X within the 60-day period
allowed pursuant to the SEC Release, and no material modifications to the previously reported financial information were required.




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WELLS REAL ESTATE FUND VII, L.P.


(A Georgia Public Limited Partnership)





BALANCE SHEETS





(unaudited)June 30, 2002

December 31, 2001ASSETS:Investments in joint ventures (Note 2)

$
14,475,492

$
15,772,696Due from affiliates


1,280,589


460,193Cash and cash equivalents


69,183


45,950Total assets

$
15,825,264

$
16,278,839LIABILITIES AND PARTNERS CAPITAL:Liabilities:Accounts payable

$
3,087

$
7,207Partnership distributions payable


427,211


463,881Total liabilities


430,298


471,088Partners capital:Limited partners:Class A2,071,318 units and 2,067,020 units as of June 30, 2002 and December 31, 2001, respectively


15,394,966


15,807,751Class B346,699 units and 350,997 units as of June 30, 2002 and December 31, 2001, respectively



0


0Total partners capital


15,394,966


15,807,751Total liabilities and partners capital

$
15,825,264

$
16,278,839





See accompanying condensed notes to financial statements.




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WELLS REAL ESTATE FUND VII, L.P.


(A Georgia Public Limited Partnership)





STATEMENTS OF INCOME





(unaudited)

(unaudited)Three Months Ended

Six Months EndedJune 30, 2002

June 30, 2001

June 30, 2002

June 30, 2001REVENUES:Equity in income of joint ventures (Note 2)

$
256,167

$
233,225

$
488,212

$
446,246Interest income


91


147


955


2,309256,258


233,372


489,167


448,555EXPENSES:Legal and accounting


3,422


3,000


12,708


12,727Partnership administration


15,807


20,766


28,999


29,638Computer costs


2,717


4,307


4,807


5,50821,946


28,073


46,514


47,873NET INCOME

$
234,312

$
205,299

$
442,653

$
400,682NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS

$
234,312

$
205,299

$
442,653

$
400,682NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS

$
0

$
0

$
0

$
0NET INCOME PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT

$
0.11

$
0.10

$
0.21

$
0.20NET LOSS PER WEIGHTED AVERAGE CLASS B LIMITED PARTNER UNIT

$
0.00

$
0.00

$
0.00

$
0.00CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT

$
0.21

$
0.22

$
0.42

$
0.44





See accompanying condensed notes to financial statements.




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WELLS REAL ESTATE FUND VII, L.P.


(A Georgia Public Limited Partnership)





STATEMENTS OF PARTNERS CAPITAL


FOR THE YEAR ENDED DECEMBER 31, 2001


AND THE SIX MONTHS ENDED JUNE 30, 2002


(Unaudited)





Limited Partners

Total Partners CapitalClass A


Class BUnits

Amounts


Units


AmountsBALANCE, December 31, 2000

2,045,427

$
16,534,159


372,590



0

$
16,534,159Net income

0


1,113,684


0



0


1,113,684Partnership distributions

0


(1,840,092
)

0



0


(1,840,092
)Class B conversion elections

21,593


0


(21,593
)


0


0BALANCE, December 31, 2001

2,067,020


15,807,751


350,997



0


15,807,751Net income

0


442,653


0



0


442,653Partnership distributions

0


(855,438
)

0



0


(855,438
)Class B conversion elections

4,298


0


(4,298
)


0


0BALANCE, June 30, 2002(unaudited)

2,071,318

$
15,394,966


346,699


$
0

$
15,394,966





See accompanying condensed notes to financial statements.




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WELLS REAL ESTATE FUND VII, L.P.


(A Georgia Public Limited Partnership)





STATEMENTS OF CASH FLOWS





(unaudited)Six Months EndedJune 30, 2002


June 30, 2001CASH FLOWS FROM OPERATING ACTIVITIES:Net income

$
442,653


$
400,682Adjustments to reconcile net income to net cash used in operating activities:Equity in income of joint ventures


(488,212
)


(446,246
)Changes in assets and liabilities:Prepaid expenses and other assets






(72
)Accounts payable


(4,120
)


(4,752
)Net cash used in operating activities


(49,679
)


(50,388
)CASH FLOWS FROM INVESTING ACTIVITIES:Distributions received from joint ventures


965,020



943,216CASH FLOWS FROM FINANCING ACTIVITIES:Partnership distributions paid


(892,108
)


(915,788
)NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


23,233



(22,960
)CASH AND CASH EQUIVALENTS, beginning of year


45,950



55,216CASH AND CASH EQUIVALENTS, end of period

$
69,183


$
32,256





See accompanying condensed notes to financial statements.







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WELLS REAL ESTATE FUND VII, L.P.


(A Georgia Public Limited Partnership)





CONDENSED NOTES TO FINANCIAL STATEMENTS





June 30, 2002


(Unaudited)





1.    SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES





(a)  Organization and Business





Wells Real Estate Fund VII, L.P. (the Partnership) is a Georgia public limited partnership, with Leo F. Wells, III and Wells
Partners, L.P. (Wells Partners), a Georgia nonpublic limited partnership, serving as the General Partners. The Partnership was formed on December 1, 1992 for the purpose of acquiring, developing, owning, operating, improving, leasing,
and otherwise managing income-producing commercial properties for investment purposes. The Partnership has two classes of limited partnership interests, Class A and Class B units. Limited partners have the right to change their prior elections to
have some or all of their units treated as Class A units or Class B units one time during each quarterly accounting period. Limited partners may vote to, among other things, (a) amend the partnership agreement, subject to certain limitations, (b)
change the business purpose or investment objectives of the Partnership, and (c) remove a general partner. A majority vote on any of the above described matters will bind the Partnership, without the concurrence of the general partners. Each limited
partnership unit has equal voting rights, regardless of class.





On April 6, 1994, the Partnership commenced an
offering of up to $25,000,000 of Class A or Class B limited partnership units pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership terminated its offering on January 5, 1995 upon receiving gross
proceeds of $24,180,174 representing subscriptions for approximately 1,678,810 Class A units and 739,207 Class B units held by 1,591 and 319 limited partners, respectively.





The Partnership owns interests in all of its real estate assets through joint ventures with other Wells Real Estate Funds. As of June 30, 2002, the Partnership owned
interests in the following 8 properties through the affiliated joint ventures listed below:





Joint Venture

Joint Venture Partners

PropertiesFund II, III, VI, and VII Associates

Fund II and III Associates* Wells Real Estate Fund VI, L.P. Wells Real Estate Fund VII, L.P.

1.  Holcomb Bridge Property An office retail center located in Roswell, GeorgiaFund V, Fund VI, and Fund VII Associates

Wells Real Estate Fund V, L.P. Wells Real Estate Fund VI, L.P. Wells Real Estate Fund VII, L.P.

2.  Marathon Building A three-story office building located in Appleton, WisconsinFund VI and Fund VII Associates

Wells Real Estate Fund VI, L.P. Wells Real Estate Fund VII, L.P.

3.  Stockbridge Village III Two retail buildings located in Stockbridge, Georgia4.  Stockbridge Village I Expansion A retail shopping enter expansion located in Stockbridge, Georgia




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Fund VI, Fund VII, and VIII Associates

Wells Real Estate Fund VI, L.P. Wells Real Estate Fund VII, L.P. Wells Real Estate Fund VIII, L.P.

5.  BellSouth Building A four-story office building located in Jacksonville, Florida 6.  Tanglewood Commons A retail center in Clemmons, North CarolinaFund VII and Fund VIII Associates

Wells Real Estate Fund VII, L.P. Wells Real Estate Fund VIII, L.P.

7.  Hannover Center A retail center located in Stockbridge, Georgia 8.  CH2M Hill at Gainesville Property An office building located in Gainesville, Florida


|* |  | Fund II-III Associates is a joint venture between Fund II and IIOW Associates and Wells Real Estate Fund III, L.P.; Fund II and Fund IIOW Associates is a joint
venture between Wells Real Estate Fund II and Wells Real Estate Fund II-OW.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Each of the
aforementioned properties was acquired on an all cash basis. For further information regarding the foregoing joint ventures and properties, refer to the report filed for the Partnership Form 10-K for the year ended December 31, 2001.





On October 1, 2001, Fund I-II-IIOW-VI-VII Associates, a joint venture among the Partnership, Wells Real Estate Fund I, Fund II
and IIOW Associates, and Wells Real Estate Fund VI, L.P., sold the Cherokee Commons property. The Cherokee Commons property is a retail shopping center located in Cherokee County, Georgia. The portion of the proceeds from the sale of the Cherokee
Commons property attributable to the Partnership in the amount of $886,212 is included in due from affiliates in the accompanying balance sheet as of June 30, 2002. On June 28, 2002, Fund VI-VII-VIII Associates entered into an agreement to sell an
out parcel of land at Tanglewood Commons for a gross selling price of approximately $560,000. Pursuant to the terms of the agreement, this transaction is currently subject to a due diligence period, during which the purchaser has the right to
terminate the contract. Accordingly, there are no assurances that this sale will close.





(b)  Basis of Presentation





The financial statements of the Partnership have been prepared in accordance with the instructions for Form
10-Q and do not include all of the information and footnotes required by generally accepted accounting principles (GAAP) for complete financial statements. The quarterly statements have not been examined by independent accountants.
However, in the opinion of the General Partners, the statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary to fairly present the results for the year. For further
information, refer to the financial statements and footnotes included in the report filed for the Partnership on Form 10-K for the year ended December 31, 2001.





(c)  Distribution of Net Cash From Operations





As defined by the
partnership agreement, cash available for distributions is distributed quarterly on a cumulative non-compounded basis to the limited partners as follows:




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| |  |  | First, to all Class A limited partners until such limited partners have received distributions equal to a 10% per annum return on their respective adjusted
capital contributions, as defined.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Second, to the General Partners until each General Partner has received distributions equal to 10% of the total distributions declared by the Partnership per
annum.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Third, to the Class A limited partners and the General Partners allocated on a basis of 90% and 10%, respectively.
| | - |  | ------------------------------------------------------------------------------------------------------------------




No distributions will be made to the limited partners holding Class B units.





(d)  Impairment of Real Estate Assets





On January 1, 2002, the Partnership adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Under the new guidance, management reviews each of the properties in which it holds an interest for impairment
when there is an event or change in circumstances that indicates the carrying amount of the asset may not be recoverable and the future undiscounted cash flows expected to be generated by the asset are less than its carrying amount. If such assets
are considered to be impaired, the Partnership records impairment losses and reduces the carrying amount of impaired assets to an amount that reflects the fair value of the assets at the time impairment is evident. Management also reviews estimated
selling prices of assets held for sale and records impairment losses to reduce the carrying amount of assets held for sale when the carrying amounts exceed the estimated selling prices less costs to sell. Also, material long-lived assets held for
sale are separately identified in the balance sheets and their related net operating income is segregated as income from discontinued operations in the statements of income. In addition, depreciation of long-lived assets held for sale is not
recorded. If an asset held for sale reverts to an asset used in operations, the asset will be measured at the lower of the original carrying cost, adjusted for the forgone depreciation, or the fair value at the date of the decision to hold the
asset.





2.    INVESTMENTS IN JOINT VENTURES





(a)  Basis of Presentation





The Partnership owned
interests in eight properties as of June 30, 2002 through its ownership in the joint ventures described in Note 1. The Partnership does not have control over the operations of these joint ventures; however, it does exercise significant influence.
Accordingly, investments in joint ventures are recorded using the equity method of accounting. For further information, refer to the report filed for partnership on Form 10-K for the year ended December 31, 2001.




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(b)  Summary of Operations





The following information summarizes the operations of the unconsolidated joint ventures in which the Partnership held ownership interests for the three and six months
ended June 30, 2002 and 2001:





Total Revenues

Net Income

Partnerships Share of
Net IncomeThree Months Ended

Three Months Ended

Three Months EndedJune 30, 2002

June 30, 2001

June 30, 2002

June 30, 2001

June 30, 2002

June 30, 2001Fund V-VI-VII Associates

$
243,288

$
244,677

$
148,307

$
150,221

$
61,859

$
62,657Fund VI-Fund VII Associates


223,244


182,840


142,549


38,853


78,687


21,447Fund II-III-VI-VII Associates


179,692


205,914


59,368


62,363


29,132


30,601Fund VII-Fund VIII Associates


193,971


191,891


32,608


65,093


11,951


23,857Fund VI-VII-VIII Associates


595,616


589,832


214,170


247,868


71,522


82,776FundI-II-IIOW-VI-VII Associates


26,952


253,968


28,163


111,010


3,016


11,887$
1,462,763

$
1,669,122

$
625,165

$
675,408

$
256,167

$
233,225Total Revenues

Net Income

Partnerships Share of
Net IncomeSix Months Ended

Six Months Ended

Six Months EndedJune 30, 2002

June 30, 2001

June 30, 2002

June 30, 2001

June 30, 2002

June 30, 2001Fund V-VI-VII Associates

$
486,818

$
491,496

$
289,499

$
298,345

$
120,750

$
124,440Fund VI-Fund VII Associates


407,688


365,561


222,664


122,997


122,911


67,895Fund II-III-VI-VII Associates


358,468


416,291


120,197


91,170


58,981


44,737Fund VII-Fund VIII Associates


388,175


383,535


81,484


126,855


29,865


46,494Fund VI-VII-VIII Associates


1,208,213


1,173,864


449,381


394,890


150,071


131,874FundI-II-IIOW-VI-VII Associates


70,278


510,976


53,023


287,694


5,634


30,806$2,919,640


$3,341,723

$
1,216,248

$
1,321,951

$
448,212

$
446,246







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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 and notes thereto.





(a)  Forward-Looking Statements





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 Partnership, anticipated capital expenditures required to
complete certain projects, amounts of cash distributions anticipated to be distributed to limited partners in the future and certain other matters. Readers of this Report should be aware that there are various factors that may cause actual results
to differ materially from any forward-looking statement made in this Report, including 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.





(b)  Results of
Operations





Gross Revenues





Gross revenues of the Partnership increased to $489,167 for the six months ended June 30, 2002, from $448,555 for the six months ended June 30, 2001, primarily due to an
increase in equity in income of joint ventures resulting from (i) increased rental rates for Stockbridge Village I Expansion, (ii) decreased expenses for Stockbridge Village III, as uncollectible receivables were written off during the first six
months of 2001, (iii) increased rental rates at the BellSouth Building, (iv) receivables due from tenants at Tanglewood Commons and the Holcomb Bridge Property, which were written-off in 2001 and, subsequently, collected in 2002, (v) decreased
depreciation expense for the BellSouth Building, as tenant improvements became fully depreciated upon the expiration of the BellSouth lease in June 2001. The increase in equity in income of joint ventures was partially offset by (i) a decrease in
revenues generated from Fund II-III-VI-VII Associates due a decrease in occupancy at the Holcomb Bridge Property, (ii) a decrease in receivables due from tenants at Hannover Center that were written-off in 2002, and (iii) a reduction in income
generated from Fund I-II-IIOW-VI-VII relating to the sale of the Cherokee Commons property in the third quarter of 2001.





Generally, changes in gross revenues for the six months ended June 30, 2002, compared with the six months ended June 30, 2001, mirrored changes in gross revenue for the three months ended June 30, 2002 compared with the three months
ended June 30, 2001. However, the net decrease in expenses for Fund VI-VII-VIII for the six months ended June 30, 2002 is partially offset by an increase in HVAC supplies expense at the BellSouth Building recognized during the second quarter of
2002.





Expenses





Expenses remained relatively constant at $46,514 for the six months ended June 30, 2002 compared to $47,873 for the same period in 2001. Partnership administration expenses
decreased to $15,807 for the three months ended June 30, 2002 compared to $20,766 for the three months ended June 30, 2001 due to a decrease in printing and general office expenses resulting from a change in the timing of services rendered during
2002 compared to 2001.




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As a result, net income increased to $442,653 for the six months ended June 30,
2002 from $400,682 for the six months ended June 30, 2001.





Distributions





Cash distributions decreased to $0.42 per Class A limited partner unit for the six months ended June 30, 2002, as compared to $0.44 per
Class A limited partner for the six months ended June 30, 2001, primarily due to the number of Class B conversion elections exercised during the first quarter of 2002. The General Partners anticipate that distributions per unit to Class A limited
partners will continue in 2002. No cash distributions were made to limited partners holding Class B Units.





(c)  Liquidity
and Capital Resources





Net cash used in operating activities remained relatively constant at $49,679 for the
six months ended June 30, 2002, compared to $50,388 for the six months ended June 30, 2001. The increase in net cash provided by investing activities to $965,020 for the six months ended June 30, 2002 from $943,216 for the six months ended June 30,
2001 is largely attributable to the increase in distributions received from (i) Fund VI-Fund VII Associates due to increased rental rates at Stockbridge Village I Expansion and (ii) Fund VI-VII-VIII Associates due to the corresponding increase in
rental rates at the BellSouth Building. Net cash used in financing activities decreased to $892,108 for the six months ended June 30, 2002 from $915,788 for the same period in 2001 due to the $0.02 decrease in cash distributions paid per Class A
limited partner unit for the six months ended June 30, 2002, compared to the six months ended June 30, 2001, as a result of reserving cash otherwise available for distributions in order to fund building improvements, and tenant and leasing costs at
Tanglewood Commons and leasing costs at Stockbridge Village I Expansion and Stockbridge Village III.





Rather than
being distributed to the limited partners, the Partnerships share of the net proceeds generated from the sale of Cherokee Commons is currently being held as reserves and additional limited partner distributions may be withheld to fund
expansion costs, tenant improvements and leasing costs for a contemplated potential expansion of the Tanglewood Commons property and to fund anticipated tenant improvements and leasing costs at Stockbridge Village I Expansion and Stockbridge Village
III, as described above. The Partnership expects to continue to meet its short-term liquidity requirements generally through net cash provided by operations and distributions received from joint ventures.





(d)  Inflation





The real estate market has not been affected significantly by inflation in the past three years due to the relatively low inflation rate. Most tenant leases include provisions designed to protect the lessor from the impact of
inflation and other increases in costs and operating expenses, including common area maintenance, real estate tax and insurance reimbursements from tenants either on a per square foot basis, or above a certain allowance per square foot annually. In
addition, a number of the Partnerships leases are for remaining terms of less than five years, which may allow the Partnership to enter into new leases at higher base rental rates in the event that market rental rates rise above the existing
lease rates. There is no assurance, however, that the Partnership would be able to replace existing leases with new leases at higher base rental rates.





(e)  Critical Accounting Policies





The Partnerships accounting policies
have been established and conformed to in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of




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financial statements in conformity with GAAP requires management to use judgments in the application of
accounting policies, including making estimates and assumptions. These judgments may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements presented and
the reported amounts of revenues and expenses during the respective reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting
policies would have been applied; thus, resulting in a different presentation of our financial statements.





The
accounting policies that we consider to be critical, in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain, are discussed below. For further information related to the
Partnerships accounting policies, including the critical accounting policies described below, refer to the report filed for the Partnership on Form 10-K for the year ended December 31, 2001.





Straight-Lined Rental Revenues





The Partnership recognizes rental income generated from all leases on real estate assets in which the Partnership has an ownership interest through its investments in joint ventures on a straight-line
basis over the terms of the respective leases. Should tenants encounter financial difficulties in future periods, the amounts recorded as receivables may not be fully realized.





Operating Cost Reimbursements





The Partnership generally bills tenants for operating cost reimbursements through its investments in joint ventures on a monthly basis at amounts estimated largely based on actual prior period activity and the respective tenant lease
terms. Such billings are generally adjusted on an annual basis to reflect reimbursements owed to the landlord based on the actual costs incurred during the period and the respective tenant lease terms. Should tenants encounter financial difficulties
in future periods, the amounts recorded as receivables may not be fully realized.





Real Estate





Management continually monitors events and changes in circumstances indicating that the carrying amounts of
the real estate assets in which the Partnership has ownership interests through its investments in joint ventures may not be recoverable. When such events or changes in circumstances are present, management assesses the potential impairment by
comparing the fair market value of the underlying assets, estimated at amounts equal to the future undiscounted operating cash flows expected to be generated from tenants over the life of the assets and from their eventual disposition, to the
carrying value of the assets. In the event that the carrying amount exceeds the estimated fair market value, the Partnership would recognize an impairment loss in the amount required to adjust the carrying amount of the asset to its estimated fair
market value. Neither the Partnership nor its joint ventures have recognized impairment losses on real estate assets in 2002, 2001 or 2000.




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PART II.    
OTHER INFORMATION





Item 6 (b)





During the second quarter of 2002, the Partnership filed current report on Form 8-K dated May 16, 2002 announcing the dismal of Arthur Andersen LLP as its principal
accountants.





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.





Date:    August 12, 2002

WELLS REAL ESTATE FUND VII, L.P. (Registrant)  By:
                    /s/    LEO F. WELLS, III Leo F. Wells, III, as Individual General Partner, and as
President of Wells Capital, Inc., the General Partner of
Wells Partners, L.P.





Date:    August 12, 2002

By:
                  /s/    DOUGLAS P. WILLIAMS As Chief Financial Officer




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EXHIBIT INDEX


TO


SECOND QUARTER FORM
10-Q


OF


WELLS REAL ESTATE FUND VII, L.P.





Exhibit No.

Description99.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200299.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




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