<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-Q



(Mark One)

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

For the quarterly period ended      September 30, 2000        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                 0-27888
                       --------------------------------------------------------

                       WELLS REAL ESTATE FUND VII, L.P.
-------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

               Georgia                                  58-2022629
-----------------------------------------   ------------------------------------
(State or other jurisdiction of              (I.R.S. Employer Identification
incorporation or organization)                           Number)

6200 The Corners Pkwy., Norcross, Georgia                   30092
-----------------------------------------   ------------------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including
area code                                                (770) 449-7800
                                            ------------------------------------

-------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
                                    report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

          Yes   X      No_________
              ------
<PAGE>

                                   FORM 10-Q

                       WELLS REAL ESTATE FUND VII, L.P.

                    (A Georgia Public Limited Partnership)


                                     INDEX

<TABLE>
<CAPTION>
                                                                                            Page No.
                                                                                            --------
<S>                                                                                         <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Balance Sheets--September 30, 2000 and December 31, 1999                               3

         Statements of Income for the Three Months and Nine Months Ended September 30,
           2000 and 1999                                                                        4

         Statements of Partners' Capital for the Year Ended December 31, 1999
           and the Nine Months Ended September 30, 2000                                         5

         Statements of Cash Flows for the Nine Months Ended September 30, 2000 and 1999         6

         Condensed Notes to Financial Statements                                                7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
           Operations                                                                           8

PART II. OTHER INFORMATION                                                                     19
</TABLE>

                                      -2-
<PAGE>

                        WELLS REAL ESTATE FUND VII, L.P.

                     (A Georgia Public Limited Partnership)


                                 BALANCE SHEETS


                                                      September 30, December 31,
                                                          2000         1999
                                                      ------------- ------------
ASSETS:
 Investment in joint ventures (Note 2)                  $16,729,788  $17,446,299
 Due from affiliates                                        426,574      465,908
 Cash and cash equivalents                                   97,732       81,697
                                                      ------------- ------------
         Total assets                                   $17,254,094  $17,993,904
                                                      ============= ============
LIABILITIES AND PARTNERS' CAPITAL:
 Liabilities:
   Accounts payable                                     $     2,829  $     1,929
   Partnership distributions payable                        471,947      458,148
                                                      ------------- ------------
         Total liabilities                                  474,776      460,077
                                                      ------------- ------------
 Partners' capital:
   Limited partners:
     Class A--2,041,243 units and 2,036,267 units as     16,779,318   17,125,194
      of September 30, 2000 and December 31, 1999,
      respectively
     Class B--376,774 units and 381,750 units as of
      September 30, 2000 and December 31, 1999,
      respectively                                                0      408,633
                                                      ------------- ------------
         Total partners' capital                         16,779,318   17,533,827
                                                      ------------- ------------
         Total liabilities and partners' capital        $17,254,094  $17,993,904
                                                      ============= ============



           See accompanying condensed notes to financial statements.

                                      -3-
<PAGE>

                       WELLS REAL ESTATE FUND VII, L.P.

                    (A Georgia Public Limited Partnership)


                             STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                             Three Months Ended              Nine Months Ended
                                                        ----------------------------   -----------------------------
                                                        September 30,  September 30,   September 30,   September 30,
                                                            2000           1999            2000            1999
                                                        -------------  -------------   -------------   -------------
<S>                                                     <C>            <C>             <C>             <C>
REVENUES:
 Equity in income of joint ventures (Note 2)                 $217,092      $ 235,835      $  724,019      $  745,020
 Interest income                                               10,716            537          11,863             683
                                                        -------------  -------------   -------------   -------------
                                                              227,808        236,372         735,882         745,703
                                                        -------------  -------------   -------------   -------------
EXPENSES:
 Legal and accounting                                             300            200          15,825          15,660
 Partnership administration                                    10,544         14,370          45,528          50,360
 Amortization of organization costs                                 0              0               0           1,563
                                                        -------------  -------------   -------------   -------------
                                                               10,844         14,570          61,353          67,583
                                                        -------------  -------------   -------------   -------------
NET INCOME                                                   $216,964      $ 221,802      $  674,529      $  678,120
                                                        =============  =============   =============   =============

NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS             $216,964      $ 468,238      $1,077,708      $1,403,161
                                                        =============  =============   =============   =============

NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS               $      0      $(246,436)     $ (403,179)     $ (725,041)
                                                        =============  =============   =============   =============

NET INCOME PER CLASS A LIMITED PARTNER UNIT                  $   0.11      $    0.23      $     0.53      $     0.69
                                                        =============  =============   =============   =============

NET LOSS PER CLASS B LIMITED PARTNER UNIT                    $   0.00      $   (0.62)     $    (1.07)     $    (1.78)
                                                        =============  =============   =============   =============

CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT           $   0.23      $    0.22      $     0.70      $     0.64
                                                        =============  =============   =============   =============
</TABLE>


           See accompanying condensed notes to financial statements.

                                      -4-
<PAGE>

                       WELLS REAL ESTATE FUND VII, L.P.

                    (A Georgia Public Limited Partnership)


                        STATEMENTS OF PARTNERS' CAPITAL

                     FOR THE YEAR ENDED DECEMBER 31, 1999

                 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
                                                             Limited Partners
                                              ---------------------------------------------
                                                      Class A                 Class B           Total
                                              ---------------------------------------------    Partners'
                                                Units      Amounts      Units      Amounts      Capital
                                              ---------  -----------   -------   ----------   -----------
<S>                                           <C>        <C>           <C>       <C>          <C>
BALANCE, December 31, 1998                    2,009,517  $16,935,935   408,500   $1,452,035   $18,387,970

 Net income (loss)                                    0    1,879,410         0     (983,615)      895,795
 Partnership distributions                            0   (1,749,938)        0            0    (1,749,938)
 Class B conversion elections                    26,750       59,787   (26,750)     (59,787)            0
                                              ---------  -----------   -------   ----------   -----------
BALANCE, December 31, 1999                    2,036,267   17,125,194   381,750      408,633    17,533,827

 Net income (loss)                                    0    1,077,708         0     (403,179)      674,529
 Partnership distributions                            0   (1,429,038)        0            0    (1,429,038)
 Class B conversion elections                     4,976        5,454    (4,976)      (5,454)            0
                                              ---------  -----------   -------   ----------   -----------
BALANCE, September 30, 2000                   2,041,243  $16,779,318   376,774   $        0   $16,779,318
                                              =========  ===========   =======   ==========   ===========
</TABLE>


           See accompanying condensed notes to financial statements.

                                      -5-
<PAGE>

                       WELLS REAL ESTATE FUND VII, L.P.

                    (A Georgia Public Limited Partnership)


                           STATEMENTS OF CASH FLOWS



                                                          Nine Months Ended
                                                    ---------------------------
                                                    September 30,  September 30,
                                                        2000           1999
                                                    -------------  ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                           $   674,529    $  678,120
                                                    -------------  ------------
 Adjustments to reconcile net income to net
   cash used in operating activities:
     Equity in income of joint ventures                  (724,019)     (745,020)
     Amortization of organization costs                         0         1,563
 Changes in assets and liabilities:
   Prepaids and other assets                                    0         1,717
   Accounts payable                                           900        (4,226)
                                                    -------------  ------------
   Total adjustments                                     (723,119)     (745,966)
                                                    -------------  ------------
       Net cash used in operating activities              (48,590)      (67,846)
                                                    -------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Distributions received from joint ventures             1,479,864     1,353,928
                                                    -------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Partnership distributions paid                        (1,415,239)   (1,245,612)
                                                    -------------  ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                  16,035        40,470

CASH AND CASH EQUIVALENTS, beginning of year               81,697        75,740
                                                    -------------  ------------
CASH AND CASH EQUIVALENTS, end of period              $    97,732    $  116,210
                                                    =============  ============



           See accompanying condensed notes to financial statements.

                                      -6-
<PAGE>

                       WELLS REAL ESTATE FUND VII, L.P.

                    (A Georgia Public Limited Partnership)


                    CONDENSED NOTES TO FINANCIAL STATEMENTS

                              SEPTEMBER 30, 2000


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (a) General

     Wells Real Estate Fund VII, L.P. (the "Partnership") is a Georgia public
     limited partnership, having Leo F. Wells, III and Wells Partners, L.P., as
     General Partners. The Partnership was formed on December 1, 1992, for the
     purpose of acquiring, developing, owning, operating, improving, leasing,
     and otherwise managing for investment purposes income-producing commercial
     properties.

     On April 6, 1994, the Partnership commenced an offering of up to
     $25,000,000 of Class A or Class B limited partnership units ($10 per unit)
     pursuant to a Registration Statement on Form S-11 filed under the
     Securities Act of 1933. The Partnership commenced active operations when it
     received and accepted subscriptions for a minimum of 125,000 units on April
     26, 1994. The Partnership terminated its offering on January 5, 1995, and
     received gross proceeds of $24,180,174 representing subscriptions from
     1,910 Limited Partners.

     The Partnership owns equity interests in properties through ownership in
     the following joint ventures: (i) Fund V, Fund VI, and Fund VII Associates,
     a joint venture between the Partnership, Wells Real Estate Fund V, L.P.,
     and Wells Real Estate Fund VI, L.P. (the "Fund V-VI-VII Joint Venture");
     (ii) Fund VI and Fund VII Associates, a joint venture between the
     Partnership and Wells Real Estate Fund VI, L.P. (the "Fund VI-Fund VII
     Joint Venture"); (iii) Fund II, III, VI, and VII Associates, a joint
     venture among the Partnership, Wells Fund II-III Joint Venture and Wells
     Real Estate Fund VI, L.P. (the "Fund II-III-VI-VII Joint Venture"); (iv)
     Fund VII and Fund VIII Associates, a joint venture between the Partnership
     and Wells Real Estate Fund VIII, L.P. (the "Fund VII-Fund VIII Joint
     Venture"); (v) Fund VI, Fund VII, and Fund VIII Associates, a joint venture
     between the Partnership, Wells Real Estate Fund VI, L.P., and Wells Real
     Estate Fund VIII, L.P. (the "Fund VI-VII-VIII Joint Venture"); and (vi)
     Fund I, II, II-OW, VI, and VII Associates, a joint venture between the
     Partnership, Wells Real Estate Fund I, the Fund II and Fund II-OW Joint
     Venture, and Wells Real Estate Fund VI, L.P. (the "Fund I, II, II-OW, VI,
     and VII Joint Venture").

     As of September 30, 2000, the Partnership owned interests in the following
     properties through its ownership of the foregoing joint ventures: (i) a
     three-story office building located in Appleton, Wisconsin (the "Marathon
     Building"); (ii) two retail buildings located in Stockbridge, Georgia
     ("Stockbridge Village III"); (iii) a retail shopping center expansion in
     Stockbridge, Georgia ("Stockbridge Village I Expansion"); (iv) an
     office/retail center located in Roswell, Georgia ("Holcomb Bridge Road
     Property"); (v) a retail center located in Stockbridge, Georgia (the
     "Hannover Center"); (vi) a four-story office building located in
     Jacksonville, Florida (the "BellSouth Property"); (vii) an office building
     located in Gainesville, Florida ("CH2M Hill at Gainesville Property");
     (viii) a retail center in Clemmons, North Carolina ("Tanglewood Commons");
     and (ix) a retail center located in Cherokee County, Georgia ("Cherokee
     Commons").

                                      -7-
<PAGE>

     (b) Basis of Presentation

     The consolidated financial statements of the Partnership have been prepared
     in accordance with instructions to Form 10-Q and do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements. These quarterly statements
     have not been examined by independent accountants, but in the opinion of
     the General Partners, the statements for the unaudited interim periods
     presented include all adjustments, which are of a normal and recurring
     nature, necessary to present a fair presentation of the results for such
     periods. For further information, refer to the financial statements and
     footnotes included in the Partnership's Form 10-K for the year ended
     December 31, 1999.

2.   INVESTMENT IN JOINT VENTURES

     The Partnership owns interests in nine properties through its ownership in
     joint ventures of which three are office buildings and nine are retail
     centers. The Partnership does not have control over the operations of the
     joint ventures; however, it does exercise significant influence.
     Accordingly, investment in joint ventures is recorded on the equity method.
     For a description of the joint ventures and properties owned by the
     Partnership, please refer to the Partnership's Form 10-K for the year ended
     December 31, 1999.

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
     the accompanying financial statements of the Partnership and notes thereto.
     This Report contains forward-looking statements, within the meaning of
     Section 27A of the Securities Act of 1933 and Section 21E of the Securities
     Exchange Act of 1934, including discussion and analysis of the financial
     condition of the Partnership, anticipated capital expenditures required to
     complete certain projects, amounts of cash distributions anticipated to be
     distributed to Limited Partners in the future, and certain other matters.
     Readers of this Report should be aware that there are various factors that
     could cause actual results to differ materially from any forward-looking
     statement made in this Report, which include construction costs which may
     exceed estimates, construction delays, lease-up risks, inability to obtain
     new tenants upon the expiration of existing leases, and the potential need
     to fund tenant improvements or other capital expenditures out of operating
     cash flow.

1.   RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS

     General

     As of September 30, 2000, the developed properties owned by the Partnership
     were 96.4% occupied, as compared to 96.5% occupied as of September 30,
     1999.

     Gross revenues of the Partnership decreased for the nine months ended
     September 30, 2000, as compared to the same period in 1999, due to a
     decrease in occupancy at the Hannover Center offset partially by increases
     in common area maintenance billings to tenants in CH2M Hill Property and
     Tanglewood Commons. Total expenses decreased slightly for the nine month
     period due to decreases in administrative salary.

                                      -8-
<PAGE>

Cash distributions per weighted average Unit for Class A Limited Partners were
$0.23 and $0.22 for the three months ended September 30, 2000 and 1999,
respectively. No cash distributions were made by the Partnership to the Limited
Partners holding Class B units or to the General Partner. The Partnership
anticipates that distributions will continue to be paid on a quarterly basis on
a level at least consistent with 1999.

The Partnership's net cash provided by investing activities and net cash used in
financing activities increased in 2000, compared to 1999, due to increases in
distributions from joint ventures as occupancy increased.

The Partnership expects to continue to meet its short-term liquidity
requirements and budget demands generally through net cash provided by
operations which the Partnership believes will continue to be adequate to meet
both operating requirements and distributions to limited partners. At this time,
given the nature of the joint ventures in which the Partnership has invested,
there are no known improvements and renovations to the properties expected to be
funded from cash flow from operations.

At this time, two properties are being marketed for sale. CB Richard Ellis is
marketing the sale of 880 Holcomb Bridge and Cherokee Commons. The marketing
piece is being broadly distributed to investors throughout the country. To
maximize the disposition value, the management team is separating the retail and
creating a condominium for the office buildings. The legal and site work should
be complete so that the management team can market this property to investors in
early fall. The Partnership's goal is to have these properties sold by the end
of 2002. As the properties are sold, all proceeds will be returned to the
Limited Partners in accordance with the Partnership's prospectus. Management
estimates that the fair market value of each of the properties exceeds the
carrying value of the corresponding real estate assets; consequently, no
impairment loss has been recorded. In the event that the net sales proceeds are
less than the carrying value of the property sold, the Partnership would
recognize a loss on the sale. Management is not contractually or financially
obligated to sell any of its properties, and it is management's current intent
to fully realize the Partnership's investment in real estate. The success of the
Partnership's future operations and the ability to realize investment in its
assets will be dependent on the Partnership's ability to maintain rental rates,
occupancy, and an appropriate level of operating expenses in future years.
Management believes that the steps that it is taking will enable the Partnership
to realize its investment in its assets.

                                      -9-
<PAGE>

2.   PROPERTY OPERATIONS

     As of September 30, 2000, the Partnership owned interest in the following
     operational properties:

               The Marathon Building/Fund V-VI-VII Joint Venture

<TABLE>
<CAPTION>
                                                        Three Months Ended                 Nine Months Ended
                                             ----------------------------------    -------------------------------
                                               September 30,       September 30,    September 30,     September 30,
                                                    2000              1999              2000             1999
                                             ----------------    --------------    -------------    --------------
<S>                                          <C>                 <C>               <C>              <C>
Revenues:
   Rental income                                    $ 242,763         $ 243,182        $ 728,288        $  728,690
                                             ----------------    --------------    -------------    --------------
Expenses:
   Depreciation                                        87,646            87,646          262,939           262,939
   Management and leasing expenses                      2,361            14,627            7,082            37,314
   Other operating expenses                             3,555             4,181           14,984            14,592
                                             ----------------    --------------    -------------    --------------
                                                       93,562           106,454          285,005           314,845
                                             ----------------    --------------    -------------    --------------
Net income                                          $ 149,201         $ 136,728        $ 443,283         $ 413,845
                                             ================    ==============    =============    ==============

Occupied percentage                                       100%              100%             100%              100%
                                             ================    ==============    =============    ==============

Partnership's ownership percentage in the
   Fund V-VI-VII Joint Venture                           41.7%             41.7%            41.7%             41.7%
                                             ================    ==============    =============    ==============

Cash distribution to the Partnership                $  99,685         $  94,315        $ 297,253         $ 284,813
                                             ================    ==============    =============    ==============

Net income allocated to the Partnership             $  62,232         $  57,029        $ 184,893         $ 172,615
                                             ================    ==============    =============    ==============
</TABLE>

Rental income remained relatively stable for the nine months and three months
ended September 30, 2000 as compared to the nine months and three months ended
September 30, 1999.

Management and leasing fees decreased for the three months and nine months ended
September 30, 2000, as compared to the same periods in 1999 due to a lower rate
charged starting in October 1999. The management and leasing agreement reduces
fees to 1% after five years on triple-net leases of ten years or more. As a
result, net income and cash distribution to the Partnership increased.

                                      -10-
<PAGE>

            Stockbridge Village III/Fund VI-Fund VII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                             ----------------------------------    -------------------------------
                                              September 30,       September 30,    September 30,     September 30,
                                                   2000               1999              2000             1999
                                             --------------      ------------      -------------    --------------
<S>                                          <C>                 <C>               <C>              <C>
Revenues:
   Rental income                                    $77,651           $76,916           $231,384          $233,518
                                             --------------      ------------      -------------    --------------
Expenses:
   Depreciation                                      21,409            20,711             64,225            65,754
   Management and leasing expenses                    9,268             9,260             28,046            27,999
   Other operating expenses                           3,783            10,105              6,391            19,683
                                             --------------      ------------      -------------    --------------
                                                     34,460            40,076             98,662           113,436
                                             --------------      ------------      -------------    --------------
Net income                                          $43,191           $36,840           $132,722          $120,082
                                             ==============      ============      =============    ==============

Occupied percentage                                     100%              100%               100%              100%
                                             ==============      ============      =============    ==============

Partnership's ownership percentage in the
   Fund VI-Fund VII Joint Venture                      55.7%             56.3%              55.7%             56.3%
                                             ==============      ============      =============    ==============

Cash distribution to the Partnership                $36,833           $35,266           $113,604          $104,235
                                             ==============      ============      =============    ==============

Net income allocated to the Partnership             $24,140           $20,740           $ 74,535         $  67,604
                                             ==============      ============      =============    ==============
</TABLE>

Rental income remained relatively stable for the three months and nine months
ended September 30, 2000, as compared to the same periods in 1999.

Net income and cash distributions have increased for the three months and nine
months ended September 30, 2000 as compared to the same periods in 1999 due
primarily to decreased expenses for legal fees, accounting fees and
administrative salary.

The Partnership's ownership percentage in the Fund VI-Fund VII Joint Venture
decreased to 55.7%, as compared to 56.3% in September 30, 1999, due to
additional fundings by Wells Fund VI, which decreased the Partnership's
ownership in the Fund VI-Fund VII Joint Venture.

                                      -11-
<PAGE>

        Stockbridge Village I Expansion/Fund VI-Fund VII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                              ----------------------------------   --------------------------------
                                               September 30,      September 30,    September 30,     September 30,
                                                   2000                1999             2000             1999
                                              --------------      ------------     -------------    --------------
<S>                                           <C>                 <C>              <C>              <C>
Revenues:
    Rental income                                    $88,046           $67,729          $253,854          $212,355
                                              --------------      ------------     -------------    --------------
Expenses:
    Depreciation                                      38,690            37,350           112,992           111,553
    Management and leasing expenses                   11,628            14,104            34,348            31,831
    Other operating expenses                          10,192             3,811            29,979             4,797
                                              --------------      ------------     -------------    --------------
                                                      60,510            55,265           177,319           148,181
                                              --------------      ------------     -------------    --------------
Net income                                           $27,536           $12,464          $ 76,535         $  64,174
                                              ==============      ============     =============    ==============

Occupied percentage                                       93%               86%               93%               86%
                                              ==============      ============     =============    ==============

Partnership's ownership percentage in the
    Fund VI-Fund VII Joint Venture                      55.7%             56.3%             55.7%             56.3%
                                              ==============      ============     =============    ==============

Cash distributed to the Partnership                  $33,786           $35,985          $110,961          $119,583
                                              ==============      ============     =============    ==============

Net income allocated to the Partnership              $15,390          $  7,017         $  42,972         $  36,129
                                              ==============      ============     =============    ==============
</TABLE>

Rental income increased for the three months and nine months ended September 30,
2000, as compared to the same period in 1999 due to increased rental renewal
rates this year and increased occupancy in the third quarter of 2000.

Other operating expenses increased due to increased legal fees and decreases in
common area maintenance billing to tenants. In 1999, monthly common area
maintenance billing to tenants were increased to offset 1998 underpayments.
Tenants are billed an estimated amount for the current year common area
maintenance which is then reconciled the following year and the difference
billed to the tenant.

The Partnership's ownership percentage in the Fund VI-Fund VII Joint Venture
decreased to 55.7%, as compared to 56.3% in September 30, 1999, due to
additional funding by Wells Fund VI, which decreased the Partnership's ownership
in the Fund VI-Fund VII Joint Venture.

                                      -12-
<PAGE>

           Holcomb Bridge Road /Fund II, III, VI, VII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                              ---------------------------------    --------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                              ---------------     -------------     ------------     -------------
<S>                                           <C>                 <C>              <C>               <C>
Revenues:
    Rental income                                   $ 214,051         $ 213,028         $658,907          $670,852
                                              ---------------     -------------     ------------     -------------
Expenses:
    Depreciation                                      104,129            79,605          312,389           277,862
    Management and leasing expenses                    28,099            22,263           85,165            93,200
    Other operating expenses                           29,194            14,889           70,302            39,670
                                              ---------------     -------------     ------------     -------------
                                                      161,422           116,757          467,856           410,732
                                              ---------------     -------------     ------------     -------------
Net income                                          $  52,629         $  96,271         $191,051          $260,120
                                              ---------------     -------------     ------------     -------------

Occupied percentage                                        92%               94%              92%               94%
                                              ===============     =============    =============     =============
Partnership's ownership percentage in the
    Fund III, III, VI, and VII Joint
    Venture                                              49.1%             49.1%            49.1%             49.1%
                                              ===============     =============    =============     =============

Cash distributed to the Partnership                 $  84,696         $  83,775         $271,040          $250,127
                                              ===============     =============    =============     =============

Net income allocated to the Partnership             $  25,825         $  47,240         $ 93,749          $127,641
                                              ===============     =============    =============     =============
</TABLE>

Rental income decreased for the nine months ended September 30, 2000, as
compared to the same period in 1999, due to decreased occupancy. Other operating
expenses increased for the three month and nine month periods ended September
30, 2000, as compared to the same periods in 1999, due to appraisal fees for
this property which is currently being marketed for sale and a decrease in
common area maintenance reimbursements from tenants. Monthly common area
maintenance billings were increased in 1999 to offset 1998 underpayment. Tenants
are billed an estimated amount for the current year common area maintenance
which is then reconciled the following year and the difference billed to the
tenant.

Cash distributions to the Partnership increased for the three months and nine
months ended September 30, 2000, as compared to the same periods in 1999, even
though there is a decrease in net income this year due to lease acquisition fees
and procurement fees paid in 1999.

This property is currently being marketed for sale by CB Richard Ellis. The
marketing piece is being broadly distributed to investors throughout the
country. The Partnership's goal is to have this property sold by the end of
2002.

                                      -13-
<PAGE>

             The Hannover Center/Fund VII-Fund VIII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                              ---------------------------------   ---------------------------------
                                               September 30,      September 30,    September 30,     September 30,
                                                    2000             1999              2000             1999
                                              --------------      -------------    -------------    --------------
<S>                                           <C>                <C>              <C>               <C>
Revenues:
    Rental income                                   $ 26,672           $53,354         $  80,014         $165,847
                                              --------------      ------------     -------------    -------------
Expenses:
    Depreciation                                      21,655            10,981            64,513           32,944
    Management and leasing expenses                    4,289             3,746            12,931           16,788
    Other operating expenses                          11,156             3,683            35,117            6,601
                                              --------------      ------------     -------------    -------------
                                                      37,100            18,410           112,561           56,333
                                              --------------      ------------     -------------    -------------
Net (loss) income                                   $(10,428)          $34,944         $ (32,547)        $109,514
                                              ==============      ============     =============    =============

Occupied percentage                                       50%              100%               50%             100%
                                              ==============      ============     =============    =============

Partnership's ownership percentage in the
    Fund VII-Fund VIII Joint Venture                    36.6%             36.6%             36.6%            36.6%
                                              ==============      ============     =============    =============

Cash distribution to the Partnership                $  4,365           $16,731         $   8,840         $ 48,374
                                              ==============      ============     =============    =============

Net (loss) income allocated to the
    Partnership                                     $ (3,821)          $12,807         $ (11,928)        $ 40,137
                                              ==============      ============     =============    =============
</TABLE>

Rental income, net income, and cash distributions to the Partnership decreased
for the three months and nine months ended September 30, 2000, as compared to
the same periods in 1999, due to one tenant defaulted on the lease and moved out
at the end of 1999. The management team is currently taking legal action against
that tenant.

Depreciation expense increased for the three month and nine month periods, as
compared to 1999, due to additional capitalized tenant improvements. Operation
expense increased due to increases in landscaping supplies, sign maintenance,
and legal fees and decreases in common area maintenance billings to tenants in
2000 which is because of decreased occupancy.

                                      -14-
<PAGE>

                  CH2M Hill/Fund VII-Fund VIII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                ---------------------------------  ----------------  ---------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                -------------      ------------    -------------     -------------
<S>                                             <C>                <C>             <C>               <C>
Revenues:
    Rental income                                   $ 144,034         $ 144,035         $432,104          $431,747
                                                -------------      ------------    -------------     -------------
Expenses:
    Depreciation                                       65,941            66,077          197,822           202,902
    Management and leasing expenses                    26,197            17,890           73,099            65,886
    Other operating expenses                           (2,159)           16,225          (31,842)            5,806
                                                -------------      ------------    -------------     -------------
                                                       89,979           100,192          239,079           274,594
                                                -------------      ------------    -------------     -------------
Net income                                          $  54,055         $  43,843         $193,025          $157,153
                                                =============      ============    =============     =============

Occupied percentage                                       100%              100%             100%              100%
                                                =============      ============    =============     =============

Partnership's ownership percentage in the
    Fund VII-Fund VIII Joint Venture                     36.6%             36.6%            36.6%             36.6%
                                                =============      ============    =============     =============

Cash distribution to the Partnership                $  44,736         $  41,057         $145,525          $132,598
                                                =============      ============    =============     =============

Net income allocated to the Partnership             $  19,812         $  16,069         $ 70,744          $ 57,597
                                                =============      ============    =============     =============
</TABLE>

Rental income remained stable for three months and nine months ended September
30, 2000 as compared to the same period in 1999. Net income and cash
distributions to the Partnership increased for the three month and nine month
periods, as compared to 1999, due to an increase in common area maintenance
billings to the tenants in 2000. Tenants are billed an estimated amount for the
current year common area maintenance which is then reconciled the following year
and the difference billed to the tenant. Management and leasing fees
reimbursement were included in other operating expenses.

                                      -15-
<PAGE>

               BellSouth Building/Fund VI-VII-VIII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                ---------------------------------  ----------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                ---------------   ---------------  ---------------   ---------------
<S>                                             <C>               <C>              <C>               <C>
Revenues:
    Rental income                                   $ 380,278         $ 380,278       $ 1,140,832       $ 1,140,832
    Interest income                                       240             1,159             1,745             3,461
                                                -------------     -------------    --------------    --------------
                                                      386,518           381,437         1,142,577         1,144,293
                                                -------------     -------------    --------------    --------------

Expenses:
    Depreciation                                      111,606           111,606           334,818           334,818
    Management and leasing expenses                    48,166            47,891           145,306           144,824
    Other operating expenses                          129,132           111,440           354,742           321,275
                                                -------------     -------------    --------------    --------------
                                                      288,904           270,937           834,866           800,917
                                                -------------     -------------    --------------    --------------
Net income                                          $  91,614         $ 110,500       $   307,711       $   343,376
                                                =============     =============    ==============    ==============

Occupied percentage                                       100%              100%              100%              100%
                                                =============     =============    ==============    ==============

Partnership's ownership percentage in the
    Fund VI-VII-VIII Joint Venture                       33.4%             33.4%             33.4%             33.4%
                                                =============     =============    ==============    ==============

Cash distribution to the Partnership                $  70,651         $  76,959       $   222,931       $   234,842
                                                =============     =============    ==============    ==============

Net income allocated to the Partnership             $  30,594         $  36,902       $   102,760       $   114,671
                                                =============     =============    ==============    ==============
</TABLE>

Net income and cash distributions have decreased for the three months and nine
months ended September 30, 2000, as compared to the same periods in 1999, due
primarily to increased janitorial expenses and expenses for an application of
water repellent on the building.

                                      -16-
<PAGE>

               Tanglewood Commons/Fund VI-VII-VIII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                ---------------------------------  ---------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                ----------------  ---------------  ----------------  ---------------
<S>                                             <C>               <C>              <C>               <C>
Revenues:
    Rental income                                   $ 210,475         $ 192,850         $626,366          $579,169
    Interest income                                         0             2,374            1,988             7,663
                                                -------------     -------------    -------------     -------------
                                                      210,475           195,224          628,354           586,832
                                                -------------     -------------    -------------     -------------
Expenses:
    Depreciation                                       67,554            64,677          200,204           190,779
    Management and leasing expenses                    19,389            16,639           60,466            49,281
    Other operating expenses                           13,699            18,093          (32,553)           47,541
                                                -------------     -------------    -------------     -------------
                                                      100,642            99,409          228,117           287,601
                                                -------------     -------------    -------------     -------------
Net income                                          $ 109,833         $  95,815         $400,237          $299,231
                                                -------------     -------------    -------------     -------------

Occupied percentage                                        97%               91%              97%               91%
                                                =============     =============    =============     =============
Partnership's ownership percentage in the
    Fund VI-VII-VIII Joint Venture                       33.4%             33.4%            33.4%             33.4%
                                                =============     =============    =============     =============

Cash distribution to the Partnership                $  59,325         $  53,999         $201,966          $164,741
                                                =============    ==============  ===============     =============

Net income allocated to the Partnership             $  36,679         $  31,997         $133,660          $ 99,928
                                                =============     =============    =============     =============
</TABLE>

Rental income, net income, depreciation expenses, and management and leasing
fees have increased in 2000, as compared to 1999, due to increased occupancy at
the property.

Other operating expenses decreased due to monthly common area maintenance
billings to the tenants were increased in 2000 to offset 1999 underpayment.
Tenants are billed an estimated amount for the current year common area
maintenance which is then reconciled the following year and the difference
billed to the tenant.

                                      -17-
<PAGE>

           Cherokee Commons/Fund I, II, II-OW, VI, VII Joint Venture

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                --------------------------------------------------------------------
                                                 September 30,     September 30,    September 30,     September 30,
                                                      2000             1999              2000             1999
                                                ---------------   ---------------  ----------------  ---------------
<S>                                             <C>               <C>              <C>               <C>
Revenues:
    Rental income                                    $249,102          $238,923         $713,717          $703,538
    Interest income                                        32                 8               71                47
                                                -------------     -------------     ------------     -------------
                                                      249,134           238,931          713,788           703,585
                                                -------------     -------------     ------------     -------------

Expenses:
    Depreciation                                      110,562           111,379          331,687           332,906
    Management and leasing expenses                    10,360            22,863           46,653            73,992
    Other operating expenses                           51,473            48,342           30,688            28,699
                                                -------------     -------------     ------------     -------------
                                                      172,395           182,584          409,028           435,597
                                                -------------     -------------     ------------     -------------
Net income                                           $ 76,739          $ 56,347         $304,760          $267,988
                                                =============     =============     ============     =============

Occupied percentage                                        97%               97%              97%               97%
                                                =============     =============     ============     =============

Partnership's ownership percentage                       10.7%             10.7%            10.7%             10.7%
                                                =============     =============     ============     =============

Cash distribution to the Partnership                 $ 17,492          $ 18,629         $ 68,335          $ 63,310
                                                =============     =============     ============     =============

Net income allocated to the Partnership              $  6,242          $  6,034         $ 32,634          $ 28,696
                                                =============     =============     ============     =============
</TABLE>

Rental income increased in 2000, as compared to 1999, due to increased rental
renewal rates. Management and leasing expenses decreased in 2000, as compared to
1999, due to increased leasing commissions for 1999 and a catch-up of 1998
management fees in 1999. Other operating expenses remained relatively stable for
the nine months ended September 30, 2000, as compared to the same period in
1999. Net income increased for the three months and nine months ended September
30, 2000, as compared to the same period in 1999, due to the lower management
and leasing expenses.

This property is currently being marketed for sale by CB Richard Ellis. The
marketing piece is being broadly distributed to investors throughout the
country. The Partnership's goal is to have this property sold by the end of
2002.

                                      -18-
<PAGE>

                          PART II. OTHER INFORMATION

ITEM 6 (b.) No reports on Form 8-K were filed during the third quarter of 2000.

                                  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 VII, L.P.
                                (Registrant)


Dated:  November 10, 2000       By:  /s/ Leo F. Wells, III
                                     ---------------------
                                Leo F. Wells, III, as Individual
                                General Partner, and as President,
                                Sole Director, and Chief Financial
                                Officer of Wells Capital, Inc., the
                                General Partner of Wells Partners, L.P.

                                      -19-