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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(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, 2005 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 0-23656



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WELLS REAL ESTATE FUND VI, L.P.

(Exact name of registrant as specified in its
charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Georgia                                                        |  | 58-2022628                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|6200 The Corners Pkwy.,Norcross, Georgia                       |  | 30092-3365                             
|(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 ̈



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes ̈No  x



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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS



Certain statements contained in this Form 10-Q of Wells Real Estate Fund VI, L.P. (the
Partnership) other than historical facts may be considered 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. Such statements include, in
particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated.
Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as may, will,
expect, intend, anticipate, estimate, believe, continue, or other similar words. Specifically, among others, we consider statements concerning projections of future operating
results and cash flows, our ability to meet future obligations, and the amount and timing of future distributions to limited partners to be forward-looking statements.



Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that this report is
filed with the Securities and Exchange Commission. Neither the Partnership nor the general partners make any representations or warranties (expressed or implied) about the accuracy of any such forward-looking statements. Actual results could differ
materially from any forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.



Any such forward-looking statements are subject to known and unknown risks, uncertainties and
other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that
our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations; provide distributions to limited partners; and maintain the value of our real
estate properties, may be significantly hindered. Some of the risks and uncertainties, although not all risks and uncertainties, which could cause actual results to differ materially from those presented in certain forward-looking statements follow:



General economic risks



| |  |  | Adverse changes in general or local economic conditions; and
| | - |  | ------------------------------------------------------------



| |  |  | Adverse economic conditions affecting the particular industry of one or more tenants in properties owned by our joint ventures.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



Enterprise risks



| |  |  | Our dependency on Wells Capital, Inc. (Wells Capital) and its affiliates and their key personnel for various administrative services; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Wells Capitals ability to attract and retain high quality personnel who can provide acceptable service levels and generate economies of scale over time.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



Real estate risks



| |  |  | Ability to achieve appropriate occupancy levels resulting in rental amounts sufficient to cover operating costs;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | Supply of or demand for similar or competing rentable space, which may adversely impact retaining or obtaining new tenants upon lease expiration at acceptable rental amounts;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Tenant ability or willingness to satisfy obligations relating to our existing lease agreements;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | Increases in property operating expenses, including property taxes, insurance, and other costs not recoverable from tenants;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | Ability to secure adequate insurance at reasonable and appropriate rates to avoid uninsured losses or losses in excess of insured amounts;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Discovery of previously undetected environmentally hazardous or other undetected adverse conditions at our properties;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | Ability to fund foreseen and unforeseen capital expenditures, including those related to tenant build-out projects, tenant improvements, and lease-up costs, out of operating cash
flow or net property sale proceeds; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Ability to sell a property when desirable at an acceptable return, including the ability of the purchaser to satisfy any and all closing conditions.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



Other operational risks



| |  |  | Our reliance on Wells Management Company, Inc. (Wells Management) or third parties to manage our properties;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | Increases in our administrative operating expenses, including increased expenses associated with operating as a public company in the current regulatory environment;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Ability to comply with governmental, tax, real estate, environmental, and zoning laws or regulations and funding the related costs of compliance; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Actions of our joint venture partners including potential bankruptcy, business interests differing from ours, or other actions that may adversely impact the operations of joint
ventures.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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WELLS REAL ESTATE FUND VI, L.P.





TABLE OF CONTENTS



|         |  |                       |  |                                                                                                                            |  |         
|-------- |  | --------------------- |  | -------------------------------------------------------------------------------------------------------------------------- |  | --------
|         |  |                       |  |                                                                                                                            |  | Page No.
|PART I.  |  | FINANCIAL INFORMATION |  |                                                                                                                           
|         |  |                       | 
|         |  | Item 1.               |  | Financial Statements                                                                                                       |  |         
|         |  |                       | 
|         |  |                       |  | Balance SheetsMarch 31, 2005 (unaudited) and December 31, 2004                                                            |  | 5       
|         |  |                       | 
|         |  |                       |  | Statements of Operations for the Three Months Ended March 31, 2005 (unaudited) and 2004 (unaudited)                        |  | 6       
|         |  |                       | 
|         |  |                       |  | Statements of Partners Capital for the Year Ended December 31, 2004 and the Three Months Ended March 31, 2005 (unaudited) |  | 7       
|         |  |                       | 
|         |  |                       |  | Statements of Cash Flows for the Three Months Ended March 31, 2005 (unaudited) and 2004 (unaudited)                        |  | 8       
|         |  |                       | 
|         |  |                       |  | Condensed Notes to Financial Statements (unaudited)                                                                        |  | 9       
|         |  |                       | 
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                      |  | 13      
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                 |  | 23      
|         |  |                       | 
|         |  | Item 4.               |  | Controls and Procedures                                                                                                    |  | 23      
|         |  |                      
|PART II. |  | OTHER INFORMATION     |  |                                                                                                                           
|         |  |                       | 
|         |  | Item 1.               |  | Legal Proceedings                                                                                                          |  | 24      
|         |  |                       | 
|         |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                |  | 24      
|         |  |                       | 
|         |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                            |  | 24      
|         |  |                       | 
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                        |  | 24      
|         |  |                       | 
|         |  | Item 5.               |  | Other Information                                                                                                          |  | 24      
|         |  |                       | 
|         |  | Item 6.               |  | Exhibits                                                                                                                   |  | 24      



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WELLS REAL ESTATE FUND VI, L.P.





BALANCE SHEETS



ASSETS



|                                                                                                                      |  |                            |            |                  |   |           
|--------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ---------- | ---------------- | - | ----------
|                                                                                                                      |  | March 31, 2005 (unaudited) |            | December 31,2004
|Investments in joint ventures                                                                                         |  | $                          | 3,926,762  |                  | $ | 8,111,294 
|Cash and cash equivalents                                                                                             |  |                            | 6,082,778  |                  |   | 1,873,477 
|Due from joint ventures                                                                                               |  |                            | 128,626    |                  |   | 204,966   
|Due from affiliate                                                                                                    |  |                            | 0          |                  |   | 61        
|                                                                                                                      |  |                            |            |                  |   |           
|Total assets                                                                                                          |  | $                          | 10,138,166 |                  | $ | 10,189,798
|                                                                                                                      |  |                            |            |                  |   |           
|                                                                                                                     
|LIABILITIES AND PARTNERS CAPITAL                                                                                    
|                                                                                                                      |  |                           
|LIABILITIES:                                                                                                          |  |                            |            |                  |   |           
|Accounts payable and accrued expenses                                                                                 |  | $                          | 48,996     |                  | $ | 46,981    
|Partnership distributions payable                                                                                     |  |                            | 105,551    |                  |   | 121,157   
|Due to affiliates                                                                                                     |  |                            | 7,202      |                  |   | 3,683     
|                                                                                                                      |  |                            |            |                  |   |           
|Total liabilities                                                                                                     |  |                            | 161,749    |                  |   | 171,821   
|                                                                                                                      |  |                           
|PARTNERS CAPITAL:                                                                                                    |  |                            |            |                  |   |           
|Limited partners                                                                                                      |  |                            |            |                  |   |           
|Class A2,308,758 and 2,307,758 units issued and outstanding as of March 31, 2005 and December 31, 2004, respectively |  |                            | 8,847,921  |                  |   | 8,839,140 
|Class B191,242 and 192,242 units issued and outstanding as of March 31, 2005 and December 31, 2004, respectively     |  |                            | 1,128,496  |                  |   | 1,178,837 
|General partners                                                                                                      |  |                            | 0          |                  |   | 0         
|                                                                                                                      |  |                            |            |                  |   |           
|Total partners capital                                                                                               |  |                            | 9,976,417  |                  |   | 10,017,977
|                                                                                                                      |  |                            |            |                  |   |           
|Total liabilities and partners capital                                                                               |  | $                          | 10,138,166 |                  | $ | 10,189,798
|                                                                                                                      |  |                            |            |                  |   |           



See accompanying notes.



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WELLS REAL ESTATE FUND VI, L.P.





STATEMENTS OF OPERATIONS

(unaudited)



|                                                            |  |                              |           |   |      |   |           |  
|----------------------------------------------------------- |  | ---------------------------- | --------- | - | ---- | - | --------- | -
|                                                            |  | Three Months Ended March 31, |          
|                                                            |  | 2005                         |           |   | 2004 |  
|EQUITY IN INCOME OF JOINT VENTURES                          |  | $                            | 87,292    |   |      | $ | 228,786   |  
|                                                            |  |                             
|EXPENSES:                                                   |  |                              |           |   |      |   |           |  
|Partnership administration                                  |  |                              | 29,027    |   |      |   | 21,044    |  
|Legal and accounting                                        |  |                              | 12,225    |   |      |   | 9,975     |  
|Other general and administrative                            |  |                              | 359       |   |      |   | 383       |  
|                                                            |  |                              |           |   |      |   |           |  
|Total expenses                                              |  |                              | 41,611    |   |      |   | 31,402    |  
|                                                            |  |                             
|INTEREST AND OTHER INCOME                                   |  |                              | 18,310    |   |      |   | 11,342    |  
|                                                            |  |                              |           |   |      |   |           |  
|NET INCOME                                                  |  | $                            | 63,991    |   |      | $ | 208,726   |  
|                                                            |  |                              |           |   |      |   |           |  
|NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS:            |  |                              |           |   |      |   |           |  
|CLASS A                                                     |  | $                            | 108,199   |   |      | $ | 303,694   |  
|                                                            |  |                              |           |   |      |   |           |  
|CLASS B                                                     |  | $                            | (44,208   | ) |      | $ | (94,968   | )
|                                                            |  |                              |           |   |      |   |           |  
|NET INCOME (LOSS) PER WEIGHTED-AVERAGE LIMITEDPARTNER UNIT: |  |                              |           |   |      |   |           |  
|CLASS A                                                     |  | $                            | 0.05      |   |      | $ | 0.13      |  
|                                                            |  |                              |           |   |      |   |           |  
|CLASS B                                                     |  | $                            | (0.23     | ) |      | $ | (0.46     | )
|                                                            |  |                              |           |   |      |   |           |  
|WEIGHTED-AVERAGE LIMITED PARTNER UNITS OUTSTANDING:         |  |                              |           |   |      |   |           |  
|CLASS A                                                     |  |                              | 2,308,758 |   |      |   | 2,293,127 |  
|                                                            |  |                              |           |   |      |   |           |  
|CLASS B                                                     |  |                              | 191,242   |   |      |   | 206,873   |  
|                                                            |  |                              |           |   |      |   |           |  



See accompanying notes.



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WELLS REAL ESTATE FUND VI, L.P.





STATEMENTS OF PARTNERS CAPITAL



FOR THE YEAR ENDED DECEMBER 31, 2004

AND THE THREE MONTHS ENDED MARCH 31, 2005 (unaudited)



|                                                                                                                      |         |                  |         |         |                  |       |                         |         |         |  |   |           |   |  |   |   |  |   |            |  
|--------------------------------------------------------------------------------------------------------------------- | ------- | ---------------- | ------- | ------- | ---------------- | ----- | ----------------------- | ------- | ------- |  | - | --------- | - |  | - | - |  | - | ---------- | -
|                                                                                                                      |         | Limited Partners |         |         | General Partners |       | Total Partners Capital |        
|                                                                                                                      | Class A |                  |         | Class B |                  |       |                        
|                                                                                                                      | Units   |                  | Capital |         |                  | Units |                         |         | Capital |  |   |          
|BALANCE, December 31, 2003                                                                                            |         | 2,292,427        |         | $       | 16,337,490       |       |                         | 207,573 |         |  | $ | 542,233   |   |  | $ | 0 |  | $ | 16,879,723 |  
|                                                                                                                      |         |                  |         |         |                  |      
|Class B conversion elections                                                                                          |         | 15,331           |         |         | 61,181           |       |                         | (15,331 | )       |  |   | (61,181   | ) |  |   | 0 |  |   | 0          |  
|Net income (loss)                                                                                                     |         | 0                |         |         | 2,052,224        |       |                         | 0       |         |  |   | 1,511,144 |   |  |   | 0 |  |   | 3,563,368  |  
|Distributions of net sale proceeds ($3.92 and $4.01 per weighted-average Class A Unit and Class B Unit, respectively) |         | 0                |         |         | (9,014,160       | )     |                         | 0       |         |  |   | (813,359  | ) |  |   | 0 |  |   | (9,827,519 | )
|Distributions of operating cash flows ($0.26 per weighted-average Class A Unit)                                       |         | 0                |         |         | (597,595         | )     |                         | 0       |         |  |   | 0         |   |  |   | 0 |  |   | (597,595   | )
|                                                                                                                      |         |                  |         |         |                  |       |                         |         |         |  |   |           |   |  |   |   |  |   |            |  
|BALANCE, December 31, 2004                                                                                            |         | 2,307,758        |         |         | 8,839,140        |       |                         | 192,242 |         |  |   | 1,178,837 |   |  |   | 0 |  |   | 10,017,977 |  
|                                                                                                                      |         |                  |         |         |                  |      
|Class B conversion elections                                                                                          |         | 1,000            |         |         | 6,133            |       |                         | (1,000  | )       |  |   | (6,133    | ) |  |   | 0 |  |   | 0          |  
|Net income (loss)                                                                                                     |         | 0                |         |         | 108,199          |       |                         | 0       |         |  |   | (44,208   | ) |  |   | 0 |  |   | 63,991     |  
|Distributions of operating cash flows ($0.05 per weighted-average Class A Unit)                                       |         | 0                |         |         | (105,551         | )     |                         | 0       |         |  |   | 0         |   |  |   | 0 |  |   | (105,551   | )
|                                                                                                                      |         |                  |         |         |                  |       |                         |         |         |  |   |           |   |  |   |   |  |   |            |  
|BALANCE, March 31, 2005                                                                                               |         | 2,308,758        |         | $       | 8,847,921        |       |                         | 191,242 |         |  | $ | 1,128,496 |   |  | $ | 0 |  | $ | 9,976,417  |  
|                                                                                                                      |         |                  |         |         |                  |       |                         |         |         |  |   |           |   |  |   |   |  |   |            |  



See accompanying notes.



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WELLS REAL ESTATE FUND VI, L.P.





STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                  |  |                              |           |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | --------- | - | ---- | - | ---------- | -
|                                                                                  |  | Three Months Ended March 31, |          
|                                                                                  |  | 2005                         |           |   | 2004 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                              |           |   |      |   |            |  
|Net income                                                                        |  | $                            | 63,991    |   |      | $ | 208,726    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                              |           |   |      |   |            |  
|Equity in income of joint ventures                                                |  |                              | (87,292   | ) |      |   | (228,786   | )
|Operating distributions received from joint ventures                              |  |                              | 204,715   |   |      |   | 480,838    |  
|Changes in operating assets and liabilities:                                      |  |                              |           |   |      |   |            |  
|Due from affiliate                                                                |  |                              | 61        |   |      |   | 0          |  
|Due to affiliates                                                                 |  |                              | 3,519     |   |      |   | 0          |  
|Accounts payable and accrued expenses                                             |  |                              | 2,015     |   |      |   | (2,171     | )
|                                                                                  |  |                              |           |   |      |   |            |  
|Total adjustments                                                                 |  |                              | 123,018   |   |      |   | 249,881    |  
|                                                                                  |  |                              |           |   |      |   |            |  
|Net cash flows provided by operating activities                                   |  |                              | 187,009   |   |      |   | 458,607    |  
|                                                                                  |  |                             
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                              |           |   |      |   |            |  
|Investment in joint ventures                                                      |  |                              | (9,153    | ) |      |   | (278,170   | )
|Net sale proceeds received from joint ventures                                    |  |                              | 4,152,602 |   |      |   | 0          |  
|                                                                                  |  |                              |           |   |      |   |            |  
|Net cash flows provided by (used in) investing activities                         |  |                              | 4,143,449 |   |      |   | (278,170   | )
|                                                                                  |  |                             
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                              |           |   |      |   |            |  
|Net sale proceeds distributions paid to limited partners                          |  |                              | 0         |   |      |   | (5,231,000 | )
|Operating distributions paid to limited partners                                  |  |                              | (121,157  | ) |      |   | (372,518   | )
|                                                                                  |  |                              |           |   |      |   |            |  
|Net cash flows used in investing activities                                       |  |                              | (121,157  | ) |      |   | (5,603,518 | )
|                                                                                  |  |                             
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              |  |                              | 4,209,301 |   |      |   | (5,423,081 | )
|                                                                                  |  |                             
|CASH AND CASH EQUIVALENTS, beginning of period                                    |  |                              | 1,873,477 |   |      |   | 5,462,957  |  
|                                                                                  |  |                              |           |   |      |   |            |  
|CASH AND CASH EQUIVALENTS, end of period                                          |  | $                            | 6,082,778 |   |      | $ | 39,876     |  
|                                                                                  |  |                              |           |   |      |   |            |  
|                                                                                  |  |                             
|SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:           |  |                              |           |   |      |   |            |  
|Partnership distributions payable                                                 |  | $                            | 105,551   |   |      | $ | 226,815    |  
|                                                                                  |  |                              |           |   |      |   |            |  



See accompanying
notes.



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##### Table of Contents

WELLS REAL ESTATE FUND VI, L.P.





CONDENSED NOTES TO FINANCIAL STATEMENTS



MARCH 31, 2005 (unaudited)



|1. | ORGANIZATION AND BUSINESS
|-- | -------------------------



Wells Real Estate Fund VI, 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 its general partners (collectively, the General Partners). Wells Capital, Inc. (Wells Capital) serves as the corporate general partner of Wells Partners.
Wells Capital is a wholly-owned subsidiary of Wells Real Estate Funds, Inc. Leo F. Wells, III is the president and sole director of Wells Capital and the sole owner of Wells Real Estate Funds, Inc. The Partnership was formed on December 1, 1992 for
the purpose of acquiring, developing, constructing, owning, operating, improving, leasing, and managing income producing properties for investment purposes. Upon subscription, limited partners elected to have their units treated as Class A Units or
Class B Units. The 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 every five years and 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) add or 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 5, 1993, the Partnership commenced a public offering of its limited partnership units pursuant to a Registration Statement filed on Form S-11 under the
Securities Act of 1933. The Partnership commenced active operations upon receiving and accepting subscriptions for 125,000 units on May 17, 1993. The offering was terminated on April 4, 1994, at which time the Partnership had sold approximately
1,933,218 Class A Units and 566,782 Class B Units representing capital contributions of $25,000,000.



The Partnership owns indirect interests in all of its real estate assets through joint ventures with other entities affiliated with the General Partners. During the period presented, the Partnership owned interests in
the following joint ventures (the Joint Ventures) and properties:



|                                                                      |  |                                                                                                                                                |  |                                                                                                                                                                                            
|--------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint Venture                                                         |  | Joint Venture Partners                                                                                                                         |  | Properties                                                                                                                                                                                 
|Fund II, III, VI and VII Associates (Fund II-III-VI-VII Associates) |  |    Fund II and Fund III Associates
   (Fund II-III Associates)(1)    Wells Real Estate Fund VI, L.P.    Wells Real Estate Fund
VII, L.P. |  | 1. Holcomb Bridge Property(2) An office/retail center located in
Roswell, Georgia                                                                                                          
|Fund V and Fund VI Associates (Fund V-VI Associates)                |  |    Wells Real Estate Fund V, L.P.    Wells Real Estate Fund VI, L.P.                                                                         |  | 2. Stockbridge Village II(3) Two retail buildings located in
Stockbridge, Georgia                                                                                                          
|Fund V, Fund VI and Fund VII Associates (Fund V-VI-VII Associates)  |  |    Wells Real Estate Fund V, L.P.    Wells Real Estate Fund VI, L.P.    Wells Real Estate Fund VII, L.P.                                    |  | 3. Marathon Building(4) A three-story office building located in Appleton,
Wisconsin                                                                                                       
|Fund VI and Fund VII Associates (Fund VI-VII Associates)            |  |    Wells Real Estate Fund VI, L.P.
   Wells Real Estate Fund VII, L.P.                                                                       |  | 4. Stockbridge Village I Expansion(3) A retail shopping center expansion
located in Stockbridge, Georgia 5. Stockbridge Village III(3) Two retail buildings located in Stockbridge, Georgia



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|                                                                           |  |                                                                                                                |  |                                                                                                                                                                 
|-------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint Venture                                                              |  | Joint Venture Partners                                                                                         |  | Properties                                                                                                                                                      
|Fund VI, Fund VII and Fund VIII Associates (Fund VI-VII-VIII Associates) |  |    Wells Real Estate Fund VI, L.P.
   Wells Real Estate Fund VII, L.P.    Wells Real Estate Fund VIII, L.P. |  | 6. BellSouth Building A four-story office building located in Jacksonville, Florida 7. Tanglewood Commons(5) A retail
center located in Clemmons, North Carolina



| | (1) | Fund II-III Associates is a joint venture between Fund II-IIOW Associates and Wells Real Estate Fund III, L.P.
| | --- | --------------------------------------------------------------------------------------------------------------

| | (2) | This property was sold in July 2004.
| | --- | ------------------------------------

| | (3) | These properties were sold in April 2004.
| | --- | -----------------------------------------

| | (4) | This property was sold in December 2004.
| | --- | ----------------------------------------

| | (5) | An outparcel of this property was sold in October 2002 and the shopping center was sold in
April 2005.
| | --- | ------------------------------------------------------------------------------------------------------



Wells Real Estate Fund II, Wells Real Estate
Fund II-OW, Wells Real Estate Fund III, L.P., Wells Real Estate Fund V, L.P., Wells Real Estate Fund VII, L.P., and Wells Real Estate Fund VIII, L.P. are affiliated with the Partnership through one or more common general partners. Each of the
properties described above was acquired on an all-cash basis. For further information regarding the Joint Ventures and foregoing properties, refer to the Partnerships Form 10-K for the year ended December 31, 2004.



On April 29, 2004, four affiliated joint ventures, including Fund V-VI Associates and Fund
VI-VII Associates, sold five real properties, including Stockbridge Village II, Stockbridge Village III, and Stockbridge Village I Expansion, to an unrelated third party for a gross sales price of $23,750,000. As a result of the sale of Stockbridge
Village II, the Partnership was allocated a gain of approximately $180,000 and received net sale proceeds of approximately $1,500,000. As a result of the sale of Stockbridge Village III, the Partnership received net sale proceeds of approximately
$1,300,000 and was allocated a gain of approximately $192,000. As a result of the sale of Stockbridge Village I Expansion, the Partnership received net sale proceeds of approximately $1,800,000 and was allocated a gain of approximately $766,000.



On July 1, 2004, two Wells-affiliated joint ventures, including Fund
II-III-VI-VII Associates, sold two properties, including the Holcomb Bridge Property, to an unrelated third party for an aggregate gross sale price of $9,500,000. As a result of the sale of the Holcomb Bridge Property, the Partnership received net
sale proceeds of approximately $1,802,000 and was allocated a gain of approximately $529,000, of which approximately $42,000 was deferred. The deferred gain represents the Partnerships pro-rata allocation of maximum exposure under an
eighteen-month rental guarantee provided to the purchaser in connection with the sale. As of March 31, 2005, the Partnership has recognized approximately $5,100 of this deferred gain through equity in income of Joint Ventures.



On December 29, 2004, Fund V-VI-VII Associates sold the Marathon Building to an unrelated
third party for a gross sales price of $10,250,000. As a result of the sale, the Partnership was allocated a gain of approximately $1,400,000 and received net sale proceeds of approximately $4,200,000.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------



Basis of Presentation



The financial statements of the Partnership have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, including the instructions to Form 10-Q and Article 10 of
Regulation S-X, and in accordance with such rules and regulations, do not include all of the information and footnotes required by U.S. generally accepted accounting principles (GAAP) for complete financial statements. In the



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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 these periods. Results for interim periods are not necessarily indicative of full-year results. For further information, refer to the financial statements and footnotes included in the
Partnerships Form 10-K for the year ended December 31, 2004.



Distribution of Net Cash from Operations



Net cash from
operations, if available, is generally distributed quarterly to the limited partners as follows:



| |  |  | 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 the General Partners have received distributions equal to 10% of the total distributions paid by the Partnership for such year.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



No distributions of net cash from operations will be made to the limited partners holding
Class B Units.



Distribution of Sales Proceeds



Upon the sale of properties, the net sale proceeds are distributed in the following order:



| |  |  | In the event that the particular property sold is sold for a price that is less than its original property purchase price, to the limited partners holding Class A Units until such
limited partners have received an amount equal to the excess of the original property purchase price over the price for which the property was sold, limited to the amount of depreciation, amortization, and cost recovery deductions taken by the
limited partners holding Class B Units with respect to such property;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To all limited partners, on a per-unit basis, until the limited partners have received 100% of their respective adjusted capital contributions, as defined;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To limited partners holding units, which at any time have been treated as Class B Units, until the limited partners have received an amount equal to the net cash from operations
received by the limited partners holding Class A Units on a per-unit basis;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To all limited partners, on a per-unit basis, until the limited partners have received a cumulative 10% per annum return on their respective adjusted capital contributions, as
defined;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To limited partners holding Class B Units on a per-unit basis, until such limited partners have received a cumulative 15% per annum return on their respective adjusted capital
contributions, as defined;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To the General Partners until they have received 100% of their respective capital contributions, as defined;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | Thereafter, 80% to the limited partners and 20% to the General Partners.
| | - |  | ------------------------------------------------------------------------



Allocations of Net Income, Net Loss, and Gain on Sale



For the purpose of determining allocations per the partnership agreement, net income is defined as net income recognized by the Partnership,
excluding deductions for depreciation, amortization, and cost recovery and the gain on the sale of assets. Net income, as defined, of the Partnership is generally allocated each year in the same proportions that net cash from operations is
distributed to the limited partners holding Class A Units and the General Partners. To the extent the Partnerships net income in any year exceeds net cash from operations, it will be allocated 99% to the limited partners holding Class A Units
and 1% to the General Partners.



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Net loss, depreciation, and amortization deductions for each fiscal year will be allocated as follows: (a) 99% to the
limited partners holding Class B Units and 1% to the General Partners until their capital accounts are reduced to zero; (b) then to any partner having a positive balance in his capital account in an amount not to exceed such positive balance; and
(c) thereafter to the General Partners.



Gain on the sale or exchange of the
Partnerships properties will be allocated generally in the same manner that the net proceeds from such sale are distributed to partners after the following allocations are made, if applicable: (a) allocations made pursuant to a qualified
income offset provision in the partnership agreement; (b) allocations to partners having negative capital accounts until all negative capital accounts have been restored to zero; (c) allocations to Class B limited partners in amounts equal to
deductions for depreciation and amortization previously allocated to them with respect to the specific partnership property sold, but not in excess of the amount of gain on sale recognized by the Partnership with respect to the sale of such
property; and (d) allocations to Class A limited partners and General Partners in amounts equal to deductions for depreciation and amortization previously allocated to them with respect to the specific partnership property sold, but not in excess of
the amount of gain on sale recognized by the Partnership with respect to the sale of such property.



Reclassifications



Certain prior year
amounts have been reclassified to conform with the current year financial statement presentation.



|3. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------



Management and Leasing Fees



The Partnership entered into a property management and leasing agreement with Wells Management Company, Inc. (Wells Management), an affiliate of the General
Partners. In consideration for the management and leasing of the Partnerships properties, the Joint Ventures pay Wells Management management and leasing fees equal to (a) of the gross revenues collected monthly, 3% for management services and
3% leasing services, plus a separate fee for the one-time lease-up of newly constructed properties in an amount not to exceed the fee customarily charged in arms-length transactions by others rendering similar services in the same geographic
area for similar properties or (b) in the case of commercial properties which are leased on a long-term net basis (ten or more years), 1% of the gross revenues except for initial leasing fees equal to 3% of the gross revenues over the first five
years of the lease term. Management and leasing fees are paid by the Joint Ventures and, accordingly, included in equity in income of joint ventures in the accompanying statements of operations. The Partnerships share of management and leasing
fees and lease acquisition costs incurred though the Joint Ventures is $12,572 and $29,839, for the three months ended March 31, 2005 and 2004, respectively.



Administration Reimbursements



Wells Capital, the general partner of Wells Partners, one of our general partners, and Wells Management perform certain administrative services for the Partnership,
relating to accounting and other partnership administration, and incur the related expenses. Such expenses are allocated among other entities affiliated with the General Partners based on estimates of the amount of time dedicated to each fund by
individual administrative personnel. In the opinion of the General Partners, this allocation is a reasonable estimation of such expenses. The Partnership reimbursed Wells Capital and Wells Management for administrative expenses of $22,319 and
$17,698 for the three months ended March 31, 2005 and 2004, respectively. As of December 31, 2004, overpayments to Wells Capital for administrative reimbursements of $61 are recorded as due from affiliate in the accompanying balance sheet. As of
December 31, 2004, administrative reimbursements due to Wells Management of $3,683 are included in due to affiliates in the accompanying balance sheet. As of March 31, 2005, administrative reimbursements due to Wells Management and Wells Capital of
$7,202 are included in due to affiliates in the accompanying balance sheet.



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|4. | INVESTMENTS IN JOINT VENTURES
|-- | -----------------------------



Basis of Presentation



The Partnership owned interests in seven properties during the periods presented through its ownership in the Joint Ventures. The Partnership does not have control over the operations of these Joint Ventures; however,
it does exercise significant influence. Approval by the Partnership, as well as the other joint venture partners, is required for any major decision or any action that would materially affect the Joint Ventures, or their real property
investments.Accordingly, the Partnerships investments in the Joint Ventures are recorded using the equity method of accounting, whereby original investments are recorded at cost and subsequently adjusted for contributions,
distributions, and net income (loss) attributable to the Partnership. For further information, refer to the financial statements and footnotes included in the Partnerships Form 10-K for the year ended December 31, 2004.



Summary of Operations



Condensed financial information for the Joint Ventures for the three months ended March 31, 2005 and 2004, respectively, is presented below:



|                              |  |                             |         |                                         |   |         |                                           |   |                             |   |  |      |         |   |      |   |         |   |  |      |         |  |   |         |   |  |   |        
|----------------------------- |  | --------------------------- | ------- | --------------------------------------- | - | ------- | ----------------------------------------- | - | --------------------------- | - |  | ---- | ------- | - | ---- | - | ------- | - |  | ---- | ------- |  | - | ------- | - |  | - | -------
|                              |  | Total Revenues              |         | Income (Loss) FromContinuing Operations |   |         | Income (Loss) FromDiscontinued Operations |   | Net Income (Loss)          
|                              |  | Three Months EndedMarch 31, |         | Three Months EndedMarch 31,             |   |         | Three Months EndedMarch 31,               |   | Three Months EndedMarch 31,
|                              |  | 2005                        |         | 2004                                    |   | 2005    |                                           |   | 2004                        |   |  | 2005 |         |   | 2004 |   | 2005    |   |  | 2004
|Fund II-III-VI-VII Associates |  | $                           | 0       |                                         | $ | 0       |                                           | $ | 1,212                       |   |  | $    | 0       |   |      | $ | (901    | ) |  | $    | 94,378  |  | $ | 311     |   |  | $ | 94,378 
|Fund V-VI Associates          |  |                             | 0       |                                         |   | 0       |                                           |   | (4,543                      | ) |  |      | (9,084  | ) |      |   | 0       |   |  |      | 58,633  |  |   | (4,543  | ) |  |   | 49,549 
|Fund V-VI-VII Associates      |  |                             | 0       |                                         |   | 0       |                                           |   | (9,010                      | ) |  |      | (6,248  | ) |      |   | (3,307  | ) |  |      | 80,187  |  |   | (12,317 | ) |  |   | 73,939 
|Fund VI-VII Associates        |  |                             | 0       |                                         |   | 0       |                                           |   | (13,141                     | ) |  |      | (6,704  | ) |      |   | 0       |   |  |      | 156,971 |  |   | (13,141 | ) |  |   | 150,267
|Fund VI-VII-VIII Associates   |  |                             | 461,266 |                                         |   | 458,949 |                                           |   | 145,536                     |   |  |      | 109,190 |   |      |   | 148,431 |   |  |      | 122,345 |  |   | 293,967 |   |  |   | 231,535
|                              |  |                             |         |                                         |   |         |                                           |   |                             |   |  |      |         |   |      |   |         |   |  |      |         |  |   |         |   |  |   |        
|                              |  | $                           | 461,266 |                                         | $ | 458,949 |                                           | $ | 120,054                     |   |  | $    | 87,154  |   |      | $ | 144,223 |   |  | $    | 512,514 |  | $ | 264,277 |   |  | $ | 599,668
|                              |  |                             |         |                                         |   |         |                                           |   |                             |   |  |      |         |   |      |   |         |   |  |      |         |  |   |         |   |  |   |        



|5. | SUBSEQUENT EVENT
|-- | ----------------



On April 21, 2005, Fund VI-VII-VIII Associates sold Tanglewood Commons, a retail center containing approximately 67,320 rentable square feet located on approximately ten acres of land including available space for
expansion and approximately one acre of land known as Outparcel 4, in Clemmons, North Carolina to Tanglewood Investors, LLC, an unaffiliated third party, for a gross sales price of $11,500,000, less closing costs. The sale excludes two outparcels of
land, approximately two acres of which Fund VI-VII-VIII Associates will retain ownership. As a result of the sale, the Partnership received net sale proceeds of approximately $3,849,000 and was allocated a gain of approximately $1,858,000. The gain
recognized from the sale of Tanglewood Commons may be adjusted as additional information becomes available in subsequent periods.



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. See also Cautionary Note Regarding
Forward-Looking Statements preceding Part I, as well as the notes to our financial statements and Managements Discussion and Analysis of Financial Condition and Results of Operations provided in our Annual Report on Form 10-K for the
year ended December 31, 2004.



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Overview



Management believes that the Partnership typically operates through the following five key life cycle phases. The duration of each phase is dependent upon various
economic, industry, market, and other internal/external factors. Some overlap naturally exists in the transition from one phase to the next.



| |  |  | Fundraising phase
| | - |  | -----------------

The period during which the
Partnership is raising capital through the sale and issuance of limited partner units to the public;



| |  |  | Investing phase
| | - |  | ---------------

The period during which the
Partnership invests the capital raised during the fund-raising phase, less upfront fees, into the acquisition of real estate assets;



| |  |  | Holding phase
| | - |  | -------------

The period during which real estate
assets are owned and operated by the Partnership during the initial lease terms of the tenants. Strategic dispositions could occur during this phase in order to capitalize on market conditions;



| |  |  | Positioning-for-sale phase
| | - |  | --------------------------

The period during which
the leases in place at the time of acquisition expire and, thus, the Partnership expends time, effort, and funds to re-lease such space to existing and/or new tenants. Following the holding phase, the Partnership continues to own and operate the
real estate assets, evaluate various options for disposition, and market the real estate assets for sale; and



| |  |  | Disposition-and-liquidation phase
| | - |  | ---------------------------------

The period
during which the Partnership sells its real estate investments, distributes net sale proceeds to the partners, liquidates, and terminates the Partnership.



Portfolio Overview



We are currently in the disposition-and-liquidation phase of our life cycle. We have now sold eight assets with the sale of Tanglewood Commons after the close of the quarter. Our focus on the remaining assets involves
re-leasing and marketing efforts that we believe will result in the best disposition pricing for our investors.



The sale of the Tanglewood shopping center was a great start for 2005. The sale price of $11,500,000 was well above the original purchase price for this asset. We also
announced the next net sale proceeds distribution to limited partners, scheduled for the second quarter 2005, totaling approximately $5,600,000 from the sales of the Holcomb Bridge Property and the Marathon Building. After the close of the quarter,
BellSouth Advertising & Publishing Corporation (BellSouth) signed a lease extension at the BellSouth Building. The lease term has been extended an additional three years, however under terms of the amendment, BellSouth will reduce
their leased square footage by approximately 12,000 square feet beginning in May 2006.



The annualized first quarter 2005 operating distributions to the limited partners holding Class A Units were 3.0%, consistent with the prior quarter. The distribution rate has remained low as a result of decreased cash flows resulting from
the sales of Stockbridge Village II, Stockbridge Village I Expansion, Stockbridge Village III, the Holcomb Bridge Property, and the Marathon Building. The General Partners anticipate that operating distributions will remain low or be reserved in the
near term, particularly given the sale of Tanglewood Commons after the close of the quarter which will leave only one property remaining.



Property Summary



Information related to the properties owned by the Joint Ventures follows:



| |  |  | The Cherokee Commons property was sold in 2001, and the Partnership received net sale proceeds of approximately $886,000. The net sale proceeds were distributed to the limited
partners in January 2004.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | The Holcomb Bridge Property was sold on July 1, 2004, and the Partnership received net sale proceeds of approximately $1,802,000. These proceeds are currently scheduled to be
distributed to the limited partners in the second quarter 2005.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Stockbridge Village II, Stockbridge Village I Expansion, and Stockbridge Village III were sold on April 29, 2004, and the Partnership received net sale proceeds of approximately
$1,450,000, $1,304,000, and $1,840,000, respectively, from these sales. These proceeds were distributed to the limited partners in November 2004.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Hartford Building was sold in 2003, and the Partnership received net sale proceeds of approximately $4,366,000. Approximately $19,000 was used to fund the Partnerships
pro-rata share of operating expenses, re-leasing costs, and capital expenditures at the Marathon Building. Approximately $4,345,000 of the net sale proceeds were distributed to limited partners in January 2004, and the remaining proceeds of
approximately $2,400 were distributed in November 2004.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Marathon Building was sold in December 2004, following the re-stabilization of the asset with two long-term leases. The Partnership received net sale proceeds of approximately
$4,153,000 in January 2005, and approximately $3,798,000 is currently scheduled to be distributed to the limited partners in the second quarter 2005. The remaining proceeds are being reserved to fund potential capital expenditures at the remaining
assets in the Partnership.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The BellSouth Building in Jacksonville, Florida, is currently 100% leased. After the close of the quarter, BellSouth, the majority tenant, signed a lease extension through April
2009. As a result of the lease extension, BellSouth will reduce their leased square footage by approximately 12,000 square feet in May 2006. American Express leases the remainder of the building and their lease expires in April 2006.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Tanglewood Commons shopping center was sold on April 21, 2005, and the Partnership received net sale proceeds of approximately $3,800,000. The Partnership had previously sold a
land outparcel at Tanglewood Commons in 2002, and received net sale proceeds of approximately $180,000 to the Partnership. These net sale proceeds were used to fund the Partnerships pro-rata share of operating costs and re-leasing costs at the
Marathon Building. Fund VI-VII-VIII Associates retains an ownership interest in two remaining outparcels, which will be marketed for sale now that the Tanglewood Commons shopping center has been sold. The General Partners will evaluate the capital
needs of the Partnership to determine if all, or a portion of, the net sale proceeds from the sale of Tanglewood Commons shopping center can be distributed in 2005.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As we move further into the disposition-and-liquidation phase, we will continue to focus on re-leasing vacant space and space that may
become vacant upon the expiration of our current leases. In doing so, we seek to maximize returns to the limited partners by negotiating long-term leases at market rental rates while attempting to minimize down time, re-leasing expenditures, ongoing
property level costs, and portfolio costs. As the remaining property is positioned for sale, our attention will shift to locating a suitable buyer and negotiating a purchase and sale contract that will attempt to maximize the total return to the
limited partners and minimize contingencies and our post-closing involvement with the buyer.



Industry Factors



Our results continue
to be impacted by a number of factors influencing the real estate industry.



General Economic and Real Estate Market Commentary



Management reviews a number of economic forecasts and market commentaries in order to evaluate general economic conditions and formulate a view of the current environments effect on the real estate markets in
which we operate.



Management believes that the U.S. economy
is continuing on the path of slow, but steady recovery. Job growth is improving, with 2.2 million jobs created in 2004, and with another 2.4 to 2.8 million projected to



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be added in 2005. Gross Domestic Product growth and renewed business confidence are fueling the job growth. However, uncertainty still exists in the economy,
primarily due to high oil prices, the war in Iraq, the trade deficit, and other global issues.



The U.S. office real estate market has begun to show modest improvement. The strength of the overall economy is having a positive impact on office real
estate fundamentals. Positive absorption of office space combined with a decline in new construction has contributed to the increase in office occupancy rates for three consecutive quarters. Although occupancy rates have increased, management does
not expect that they will rise by more than 200 basis points annually. As a result, management anticipates that it could be a minimum of two to three years before vacancy rates reach the equilibrium level of ten to twelve percent. Average asking
rates stabilized in the second half of 2004. Management believes that renewed employment growth should benefit the office market; however, the uncertainty that still exists in the economy is causing many firms to continue to be more cautious with
their investment and hiring decisions. Importantly, management believes the pace and strength of the recovery for office real estate will vary by market. Market conditions vary widely by geographical region, metropolitan area, submarket, and
property.



The real estate capital transaction market
continues to be very active. Capitalization rates (cap rates) have continued to decline in spite of the fact that the Federal Reserve (the Fed) increased the Federal Funds Rate five times in 2004. Management believes that the
decline in cap rates is predominately driven by increased capital flows into real estate. The spread between average cap rates and 10-year U.S. Treasuries narrowed in 2004; however, this was primarily due to a drop in cap rates rather than a rise in
10-year U.S. Treasuries. In managements opinion, absent a significant move in interest rates or a significant decrease in the number of parties interested in acquiring real estate, cap rates are not expected to significantly increase from
their current levels in 2005.



Real Estate Funds with
Current Vacancy or Near-term Rollover Exposure



Real
estate funds, such as the Partnership, that own interests in properties with current vacancies or near-term tenant rollover may face a challenging leasing environment. The properties within these funds will generally face lower rents and higher
concession packages to the tenants in order to re-lease vacant space.



From a valuation standpoint, it is generally preferable to either renew an existing tenant lease or re-lease the property prior to marketing it for sale. Generally, buyers will heavily discount their offering prices to compensate for
existing or pending vacancies.



Results of Operations



Equity in Income of Joint Ventures



Equity in income of Joint Ventures was $87,292 and $228,786 for the three months ended March
31, 2005 and 2004, respectively. The 2005 decrease is primarily a result of (i) foregone operating income due to the sales of Stockbridge Village II, Stockbridge Village I Expansion, and Stockbridge Village III in April 2004, the Holcomb Bridge
Property in July 2004, and the Marathon Building in December 2004, partially offset by (ii) a decline in depreciation expense as a result of changing the estimated weighted-average composite useful life from 25 years to 40 years for all buildings
owned through the Joint Ventures effective July 1, 2004.



We expect equity in
income of Joint Ventures to increase for the second quarter of 2005 as a result of recognizing the Partnerships pro rata allocation of the gain on sale of Tanglewood Commons in April 2005, and decline going forward as a result of foregone
operating income from Tanglewood Commons.



Expenses of the Partnership



Our total expenses were $41,611 and $31,402 for the three months ended
March 31, 2005 and 2004, respectively. The 2005 increase is primarily attributable to increases in administrative salaries, legal fees, and postage and



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##### Table of Contents

delivery, substantially all of which resulted from increased reporting and regulatory requirements. We anticipate additional increases related to
implementing and adhering to such reporting and regulatory requirements on a going-forward basis.



Liquidity and Capital Resources



Our
operating strategy entails funding expenses related to the recurring operations of the properties owned by the Joint Ventures with the operating cash flows, and assessing the amount of remaining cash flows that will be required to fund portfolio
expenses, known re-leasing costs, and other capital improvements. Any residual operating cash flows are distributed from the Joint Ventures to the Partnership, and are considered available for distribution to the limited partners. Distributions are
generally paid to the limited partners quarterly. As a result, the ongoing monitoring of our cash position is critical to ensuring that adequate liquidity and capital resources are available. Economic downturns in one or more of our core markets
could adversely impact the ability of the Joint Ventures tenants to honor lease payments and our ability to assist the Joint Ventures in re-leasing space on favorable terms as leases expire or space otherwise becomes vacant. In the event of
either situation, cash flows and, consequently, our ability to provide funding for capital needs would be adversely affected.



Short-Term Liquidity



During the three months ended March 31, 2005, we generated net operating cash flows, including operating distributions received from the Joint Ventures, of approximately $187,000, as compared to approximately $459,000
for the three months ended March 31, 2004. The 2005 decrease is primarily attributable to a corresponding decrease in operating distributions received from the Joint Ventures described below. Operating distributions from the Joint Ventures are
generally representative of rental revenues and tenant reimbursements, less property operating expenses, management fees, general administrative expenses, and capital expenditures.



Operating distributions from the Joint Ventures have declined as a result of (i) the sales of properties in previous periods and (ii)
funding building improvements at the BellSouth Building. Future operating distributions from the Joint Ventures are also expected to decline since we have sold the Tanglewood Commons shopping center and have one remaining property. At this time, we
expect to continue to generate cash flows from operations, including distributions from the Joint Ventures, sufficient to cover our estimated future expenses. Future operating distributions paid to limited partners will be largely dependent upon the
amount of cash generated from the Joint Ventures, our expectations of future cash flows, and determination of near-term cash needs for tenant re-leasing costs and other capital improvements for properties owned by the Joint Ventures.



During the three months ended March 31, 2005, we received net proceeds from the sale of the
Marathon Building of approximately $4,153,000.



We believe that cash on hand
and operating distributions due from the Joint Ventures are sufficient to cover our working capital needs, including liabilities of approximately $162,000 as of March 31, 2005. During the remainder of 2005, our General Partners anticipate that we
will be able to fund our proportionate share of capital expenditures noted above.



Long-Term Liquidity



We expect that our future sources of
capital will be primarily derived from operating cash flows generated from the Joint Ventures and net proceeds generated from the selective and strategic sale of properties. Our future long-term liquidity requirements will include, but not be
limited to, tenant improvements, renovations, expansions, and other significant capital improvements necessary for properties owned through the Joint Ventures. Future cash flows from operating activities will be primarily affected by distribution
received from the Joint Ventures, which are dependent upon net operating income generated by the Joint Ventures properties, less reserves for known capital expenditures.



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Capital Resources



The Partnership is an investment vehicle formed for the purpose of acquiring, owning, and operating income-producing real properties, or investing in joint ventures
formed for the same purpose, and has invested all of the partners original capital contributions. Thus, it is unlikely that we will acquire interests in any additional properties or joint ventures. Historically, our investment strategy has
generally involved acquiring properties that are pre-leased to creditworthy tenants on an all-cash basis through joint ventures with affiliated partnerships.



The Joint Ventures fund capital expenditures primarily related to building improvements for the purpose of maintaining the quality of our properties, and tenant
improvements for the purpose of readying its properties for re-leasing. As leases expire, we will work with the Joint Ventures to attempt to re-lease space to an existing tenant or market the space to prospective new tenants. Generally, tenant
improvements funded in connection with lease renewals require less capital than those funded in connection with new leases. However, external conditions, such as the supply of and demand for comparable space available within a given market, drive
capital costs as well as rental rates. Any capital or other expenditures not provided for by the operations of the Joint Ventures will be funded by the Partnership and respective Joint Venture partners on a pro-rata basis.



Operating cash flows, if available, are generally distributed from the Joint Ventures to the
Partnership during the first month following each calendar quarter-end. Our cash management policy typically includes first utilizing current period operating cash flow until depleted, at which point operating reserves are utilized to fund capital
and other required expenditures. In the event that current and prior period accumulated operating cash flows are insufficient to fund such costs, net property sale proceeds reserves would then be utilized.



As of March 31, 2005, we had received, used, and held net proceeds from the sale of
properties as presented below:



|                                               |  |              |           |                                       |      |         |                                              |   |                                  |  |                                 |         |                                                |                                                                                         |  |   |           |  |   |          
|---------------------------------------------- |  | ------------ | --------- | ------------------------------------- | ---- | ------- | -------------------------------------------- | - | -------------------------------- |  | ------------------------------- | ------- | ---------------------------------------------- | --------------------------------------------------------------------------------------- |  | - | --------- |  | - | ---------
|Property Sold                                  |  | Net Proceeds |           | Partnerships Approximate Ownership % |      |         | Net Proceeds Attributable to the Partnership |   | Cumulative Net Proceeds Invested |  | Distributed to Partners to date |         | Undistributed NetProceeds as of March 31, 2005
|                                               |  |              |           | Amount                                |      | Purpose |                                              |  
|Cherokee Commons (sold in 2001)                |  | $            | 8,414,089 |                                       | 10.5 | %       |                                              | $ | 886,212                          |  | $                               | 212     |                                                |     Partnership operating expenses (2004)                                              |  | $ | 886,000   |  | $ | 0        
|Tanglewood Commons Outparcel (sold in 2002)    |  |              | 524,398   |                                       | 34.3 | %       |                                              |   | 179,606                          |  |                                 | 179,606 |                                                |     Re-leasing the Marathon Building (2004)     Partnership operating expenses (2004) |  |   | 0         |  |   | 0        
|Hartford Building (sold in 2003)               |  |              | 8,146,900 |                                       | 53.6 | %       |                                              |   | 4,366,494                        |  |                                 | 19,116  |                                                |     Re-leasing the Marathon Building (2004)                                            |  |   | 4,347,378 |  |   | 0        
|Stockbridge Village II (sold in 2004)          |  |              | 2,705,451 |                                       | 53.6 | %       |                                              |   | 1,450,040                        |  |                                 | 0       |                                                |                                                                                        |  |   | 1,450,040 |  |   | 0        
|Stockbridge Village III (sold in 2004)         |  |              | 2,909,853 |                                       | 44.8 | %       |                                              |   | 1,303,606                        |  |                                 | 0       |                                                |                                                                                         |  |   | 1,303,606 |  |   | 0        
|Stockbridge Village I Expansion (sold in 2004) |  |              | 4,108,277 |                                       | 44.8 | %       |                                              |   | 1,840,496                        |  |                                 | 0       |                                                |                                                                                        |  |   | 1,840,496 |  |   | 0        
|Holcomb Bridge Property (sold in 2004)         |  |              | 6,889,379 |                                       | 26.2 | %       |                                              |   | 1,801,573                        |  |                                 | 0       |                                                |                                                                                        |  |   | 0         |  |   | 1,801,573
|Marathon Building (sold in 2004)               |  |              | 9,927,330 |                                       | 41.8 | %       |                                              |   | 4,152,602                        |  |                                 | 0       |                                                |                                                                                        |  |   | 0         |  |   | 4,152,602
|                                               |  |              |           |                                       |      |         |                                              |   |                                  |  |                                 |         |                                                |                                                                                         |  |   |           |  |   |          
|Total                                          |  |              |           |                                       |      |         |                                              | $ | 15,980,629                       |  | $                               | 198,934 |                                                |                                                                                         |  | $ | 9,827,520 |  | $ | 5,954,175
|                                               |  |              |           |                                       |      |         |                                              |   |                                  |  |                                 |         |                                                |                                                                                         |  |   |           |  |   |          



Upon evaluating the capital needs of
the properties in which we currently hold an interest, our General Partners determined to hold reserves of net sale proceeds of approximately $354,000 as of March 31, 2005. Our General Partners anticipate distributing residual net sale proceeds of
approximately $5,600,000 in the second quarter of



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2005 as further described below. Net sale proceeds generated from the April 21, 2005 sale of the Tanglewood Commons shopping center of approximately
$3,849,000 attributable to the Partnership were held at Fund VI-VII-VIII Associates and transferred to the Partnership in April 2005.



Contractual Obligations and Commitments



Distribution of Net Sale Proceeds



In December 2004, the General Partners announced their intention to distribute net sale proceeds of approximately $5,600,000 in the second quarter of 2005 to the limited
partners of record as of March 31, 2005, which, under the terms of the partnership agreement, does not include limited partners acquiring units after December 31, 2004. Following the aforementioned intended distributions the Partnership will hold
residual proceeds of approximately $354,000 in reserve in order to fund future operating costs of the Partnership.



This distribution has not been formally declared by the General Partners. In accordance with the terms of the partnership agreement, the General Partners may elect to
retain reserves deemed reasonably necessary for the Partnership at the sole discretion of the General Partners. Thus, should a change in circumstances prior to the intended distribution date require the General Partners to reevaluate the
Partnerships reserve requirements, it is possible that this distribution may not occur, or that distributions may be made at a lower amount.



Related-Party Transactions



Related-Party Fees and Reimbursements



We have entered into agreements with Wells Capital, Wells Management, an affiliate of our General Partners, and their affiliates, whereby we pay certain fees and expense
reimbursements to Wells Capital, Wells Management, and their affiliates for asset management, the management and leasing of our properties; administrative services relating to accounting, property management, and other partnership administration;
and incur the related expenses. See Note 3 to our financial statements included in this report for a description of these fees and expense reimbursements we have incurred.



Economic Dependency



We have engaged Wells Capital and its affiliates and Wells Management, to provide certain services that are essential to the Partnership, including asset management
services, supervision of the management and leasing of properties owned through the Joint Ventures, asset acquisition and disposition services, as well as other administrative responsibilities for the Partnership including accounting services,
shareholder communications, and investor relations. These agreements are terminable by either party on 60 days written notice. As a result of these relationships, the Partnership is dependent upon Wells Capital and Wells Management.



Wells Capital and Wells Management are all owned and controlled by Wells Real
Estate Funds, Inc. (WREF). The operations of Wells Capital and Wells Management represent substantially all of the business of WREF. Accordingly, the Partnership focuses on the financial condition of WREF when assessing the financial
condition of Wells Capital and Wells Management. In the event that WREF were to become unable to meet its obligations as they become due, the Partnership might be required to find alternative service providers.



WREFs net income was approximately $5.5 million for the three months ended March 31,
2005. Future net income generated by WREF will be largely dependent upon the amount of fees earned by Wells Capital and Wells Management based on, among other things, the level of investor proceeds raised from the sale of common stock of Wells Real
Estate Investment Trust II, Inc., an affiliated real estate investment trust for which Wells Capital serves as the advisor, and the volume of future acquisitions and dispositions of real estate assets by Wells-sponsored programs. As of March 31,
2005 and December 31, 2004, WREF held cash balances of approximately $16.2 million and $6.3 million, respectively. WREF believes that it has adequate liquidity available in the form of cash on hand and current receivables necessary to meet its
obligations as they become due.



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Litigation Against Related Parties



During early 2004, a putative class action complaint was filed against, among others, Leo F. Wells, III, our General Partner, Wells Capital,
the corporate general partner of our other General Partner, and Wells Management. The Court granted the plaintiffs motion to permit voluntary dismissal of this suit, and it was dismissed without prejudice. In November 2004, the same plaintiffs
filed a second putative class action complaint against, among others, Mr. Wells, Wells Capital, and Wells Management. On January 28, 2005, the defendants filed motions to dismiss the plaintiffs claims. On March 31, 2005, the plaintiffs filed
briefs in opposition to the defendants motions to dismiss. The Court has not yet ruled on these pending motions. The details of both complaints are outlined below.



As a matter of background, on or about March 12, 2004, a putative class action complaint (the Original Complaint) was filed by
four individuals (the plaintiffs) against Wells Real Estate Fund I, and Wells Capital, and Leo F. Wells, III (collectively, the General Partners of Wells Real Estate Fund I), as well as Wells Management and Wells Investment
Securities, Inc. (WIS)(Hendry et al. v. Leo F. Wells, III et al., Superior Court of Gwinnett County, Georgia, Civil Action No. 04-A-2791 2). Wells Real Estate Fund I is a public limited partnership. The plaintiffs filed the
Original Complaint purportedly on behalf of all limited partners holding B units of Wells Real Estate Fund I as of January 15, 2003. The Original Complaint alleged, among other things, that (a) the General Partners of Wells Real Estate Fund I, WIS,
and Wells Real Estate Fund I negligently and fraudulently made false statements and material omissions in connection with the initial sale (September 6, 1984September 5, 1986) of the B units to investors of Wells Real Estate Fund I by making
false statements and omissions in sales literature relating to the distribution of net sale proceeds to holders of B units, among other things; (b) the General Partners of Wells Real Estate Fund I and Wells Real Estate Fund I negligently and
fraudulently misrepresented and concealed disclosure of, among other things, alleged discrepancies between such statements and provisions in the partnership agreement for a period of time in order to delay such investors from taking any legal,
equitable, or other action to protect their investments in Wells Real Estate Fund I, among other reasons; (c) Mr. Wells and Wells Management breached an alleged contract arising out of a June 2000 consent solicitation to the limited partners; and
(d) the General Partners of Wells Real Estate Fund I and Wells Real Estate Fund I breached fiduciary duties to the limited partners. On June 3, 2004, the Court granted the plaintiffs motion to permit voluntary dismissal, and the Original
Complaint was dismissed without prejudice.



On or about November 24, 2004, the
plaintiffs filed a second putative class action complaint (the Complaint) against Mr. Wells, Wells Capital, Wells Management, and Wells Real Estate Fund I (Hendry et al. v. Leo F. Wells, III et al., Superior Court of Gwinnett
County, Georgia, Civil Action No. 04A-13051 6) (the Hendry Action). The plaintiffs filed the Complaint purportedly on behalf of all limited partners holding B units of Wells Real Estate Fund I as of January 9, 2002. The Complaint
alleges, among other things, that the General Partners of Wells Real Estate Fund I breached their fiduciary duties to the limited partners by, among other things, (a) failing to timely disclose alleged inconsistencies between sales literature and
the partnership agreement relating to the distribution of net sale proceeds; (b) engaging in a scheme to fraudulently conceal alleged inconsistencies between sales literature and the partnership agreement relating to the distribution of net sale
proceeds; and (c) not accepting a settlement offer proposed by a holder of A units and a holder of A and B units in other litigation naming Wells Real Estate Fund I as a defendant, in which other litigation the court subsequently granted summary
judgment in favor of Wells Real Estate Fund I. The Complaint also alleges that misrepresentations and omissions in an April 2002 consent solicitation to the limited partners caused that consent solicitation to be materially misleading. In addition,
the Complaint alleges, among other things, that the General Partners of Wells Real Estate Fund I and Wells Management breached an alleged contract arising out of a June 2000 consent solicitation to the limited partners relating to an alleged waiver
of deferred management fees.



The plaintiffs seek, among other remedies, the
following: judgment against the General Partners of Wells Real Estate Fund I, jointly and severally, in an amount to be proven at trial; punitive damages; disgorgement of fees earned by the General Partners directly or through their affiliates; a
declaration that the consent obtained as a result of an April 2002 consent solicitation is null and void; enforcement of an alleged contract arising out of the June 2000 consent solicitation to waive Wells Managements deferred management fees;
and an award to



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plaintiffs of their attorneys fees, costs and expenses. The Complaint states that Wells Real Estate Fund I is named only as a necessary party defendant
and that the plaintiffs seek no money from or relief at the expense of Wells Real Estate Fund I. On January 28, 2005, the defendants filed motions to dismiss the plaintiffs claims. On March 31, 2005, the plaintiffs filed briefs in opposition
to the defendants motions to dismiss. The Court has not yet ruled on these pending motions. Due to the uncertainties inherent in the litigation process, it is not possible to predict the ultimate outcome of this matter at this time. However,
an adverse outcome could adversely affect the ability of Wells Capital, Wells Management, and Mr. Wells to fulfill their respective duties under the agreements and relationships they have with us.



The Hendry Action states that Wells Real Estate Fund I is named only as a necessary defendant
and that the plaintiffs are seeking no money from or relief at the expense of Wells Real Estate Fund I. Since the partnership agreement of Wells Real Estate Fund I contains no provision for advancing defense costs to the General Partners of Wells
Real Estate Fund I in connection with litigation involving the partnership in instances where the plaintiffs are seeking no monetary relief from the partnership, the General Partners of Wells Real Estate Fund I, currently Wells Capital, are funding
the legal fees, costs, and expenses relating to this litigation. As of March 31, 2005, Wells Capital had incurred approximately $215,000 in legal fees, costs, and expenses related to defending the Hendry Action. At this time, management is unable to
determine whether the likelihood of an unfavorable outcome is either probable or remote.



Conflicts of Interest



Our General
Partners are also general partners of other affiliated public limited partnerships (the Wells Real Estate Funds). In addition, Wells Capital sponsors and advises two affiliated real estate investment trusts (the REITs) in
which it retains residual interests. As such, there may exist conflicts of interest whereby the General Partners, in their capacity as general partners of other Wells Real Estate Funds or as the advisor to the REITs, may be in competition with us
with respect to, among other things, locating suitable replacement tenants or prospective acquirers for property dispositions.



Inflation



The real estate market has not been affected significantly by inflation in the past three years due to the relatively low inflation rate. However, there are provisions in the majority of tenant leases which should
protect us from the impact of inflation. These provisions include reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per-square-foot basis, or in some cases, annual reimbursement of
operating expenses above a certain per-square-foot allowance. There is no assurance, however, that we would be able to replace existing leases with new leases at higher base rental rates.



Application of Critical Accounting Policies



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



Below is a discussion of the accounting
policies used by the Partnership and the Joint Ventures, which are considered to be critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.



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Investment in Real Estate Assets



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



|                      |  |            
|--------------------- |  | -----------
|Buildings             |  | 40 years   
|Building improvements |  | 10-25 years
|Land improvements     |  | 20 years   
|Tenant improvements   |  | Lease term 



Effective July 1, 2004, the Joint
Ventures extended the weighted average composite useful life for all building assets from 25 years to 40 years, which resulted in an increase to our net income for the three months ended March 31, 2005. We believe that this change more appropriately
reflects the estimated useful lives of real estate assets and is consistent with prevailing industry practice. In the event that the Joint Ventures utilize inappropriate useful lives or methods of depreciation, our net income would be
misstated.



Valuation of Real Estate Assets



We continually monitor events and changes in circumstances that could indicate that the
carrying amounts of the real estate assets in which we have an ownership interest, either directly or through investments in the Joint Ventures, may not be recoverable. When indicators of potential impairment are present which indicate that the
carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by determining whether the carrying value of the real estate assets will be recovered through the undiscounted future
operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, management adjusts the real estate assets to the fair value and
recognizes an impairment loss. We have determined that there has been no impairment in the carrying value of real estate assets held by the Partnership at March 31, 2005.



Projections of expected future cash flows require management to estimate future market rental income amounts subsequent to the expiration of
current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property, and the number of years the property is held for investment. The use of inappropriate assumptions in the future cash flow
analysis would result in an incorrect assessment of the propertys future cash flows and fair value, and could result in the overstatement of the carrying value of real estate assets held by the Joint Ventures and net income of the Partnership.



American Jobs Creation Act of 2004



The American Jobs Creation Act of 2004 (the Act) added Section 470 to the
Internal Revenue Code, which provides certain limitations on the utilization of losses allocable to leased property owned by a partnership having both taxable and tax-exempt partners such as the Partnership. Currently, it is unclear as to how the
transition rules and effective dates set forth in the Act will apply to entities such as the Partnership. However, on March 11, 2005, the Internal Revenue Service issued IRS Notice 2005-29 announcing that the IRS will not apply Section 470 to
partnerships for taxable year 2004 based solely on the fact that a partnership had both taxable and tax-exempt partners. It is important to note that IRS Notice 2005-29 provides relief for partnerships for taxable year 2004 only. Accordingly, unless
Congress passes corrective legislation which addresses this issue or some other form of relief from the provisions of Section 470 of the Act is granted, based on a strict reading of the Act, beginning in 2005 and thereafter, future passive losses
allocable to Class B limited partners may only be used to offset passive income generated from the same property or within the same fund.



Subsequent Event



On April 21, 2005, Fund VI-VII-VIII Associates sold Tanglewood Commons, a retail center containing approximately 67,320 rentable square feet located on approximately ten acres of land including available space



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for expansion and approximately one acre of land known as Outparcel 4, in Clemmons, North Carolina to Tanglewood Investors, LLC, an unaffiliated third party,
for a gross sales price of $11,500,000, less closing costs. The sale excludes two outparcels of land, approximately two acres of which Fund VI-VII-VIII Associates will retain ownership. As a result of the sale, the Partnership received net sale
proceeds of approximately $3,849,000 and was allocated a gain of approximately $1,858,000. The gain recognized from the sale of Tanglewood Commons may be adjusted as additional information becomes available in subsequent periods.



ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Since we do not borrow any money, make any foreign investments, or invest in any market risk-sensitive instruments, we are not subject to risks relating to interest
rates, foreign current exchange rate fluctuations, or the other market risks contemplated by Item 305 of Regulation S-K.



ITEM 4.    CONTROLS AND PROCEDURES



The Partnership carried out an evaluation, under the supervision and with the participation of management of Wells Capital, the general partner of one of our General Partners, including the Principal Executive Officer and Principal
Financial Officer, of the effectiveness of the design and operation of the Partnerships disclosure controls and procedures as of the end of the period covered by this report pursuant to the Securities Exchange Act of 1934. Based upon that
evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Partnerships disclosure controls and procedures were effective.



There were no significant changes in the Partnerships internal control over financial reporting during the quarter ended March 31,
2005 that have materially affected, or are likely to materially affect, the Partnerships internal control over financial reporting.



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PART II.    OTHER INFORMATION



ITEM 1.    LEGAL PROCEEDINGS



We were not involved in any material legal proceedings during the quarter ended March 31, 2005 requiring disclosure under Item 103 of Regulation S-K.



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



|(a) | We did not sell any equity securities that were not registered under the Securities Act of 1933 during the quarter ended March 31, 2005.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------



|(b) | Not applicable.
|--- | ---------------



|(c) | We did not redeem any securities during the quarter ended March 31, 2005.
|--- | -------------------------------------------------------------------------



ITEM 3.    DEFAULTS UPON SENIOR SECURITIES



We were not subject to any indebtedness, and therefore, we did not default respect to any indebtedness during the quarter ended March 31, 2005.



ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



No matters were submitted to a vote of our limited partners during the quarter ended March 31, 2005.



ITEM 5.    OTHER INFORMATION



Not applicable.



ITEM 6.    EXHIBITS



The
Exhibits required to be filed with this report are set forth on the Exhibit Index to First Quarter Form 10-Q attached hereto.



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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 FUND VI, L.P.                                                 
|             |  |  |  | (Registrant)                                                                    
|             |  | 
|             |  |  |  | By: WELLS PARTNERS, L.P.                                                        
|             |  |  |  | (General Partner)                                                               
|             |  | 
|             |  |  |  | By: WELLS CAPITAL, INC.                                                         
|             |  |  |  | (Corporate General Partner)                                                     
|             |  | 
|May 13, 2005 |  |  |  | /s/    LEO F. WELLS, III                                                        
|             |  |  |  | Leo F. Wells, III                                                               
|             |  |  |  | President, Principle Executive Officer, and Sole Director of Wells Capital, Inc.
|             |  | 
|May 13, 2005 |  |  |  | /s/    DOUGLAS P. WILLIAMS                                                      
|             |  |  |  | Douglas P. Williams                                                             
|             |  |  |  | Principal Financial Officer of Wells Capital, Inc.                              



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EXHIBIT INDEX

TO FIRST QUARTER FORM 10-Q

OF

WELLS REAL ESTATE FUND VI, L.P.



|            |  |                                                                                                                               
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                   
|            | 
|10.1        |  | Purchase and Sale Agreement for Tanglewood Commons                                                                            
|            | 
|10.2        |  | First Amendment to Purchase and Sale Agreement for Tanglewood Commons                                                         
|            | 
|31.1        |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                        
|            | 
|31.2        |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                        
|            | 
|32.1        |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002