<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, 1996       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
                       --------------------------------------------------------


                         Wells Real Estate Fund VI, L.P.
-------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

            Georgia                                      58-2022628
-------------------------------------   ---------------------------------------
(State of other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                     Identification no.)


 3885 Holcomb Bridge Road, 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 VI,L.P.
                         ------------------------------

                                     INDEX
                                     -----

<TABLE>
<CAPTION>
                                                                                           Page No.
                                                                                           --------
<S>                                                                                       <C> 


PART I.     FINANCIAL INFORMATION

                  Item 1.  Financial Statements
 
                               Balance Sheets - September 30, 1996
                               and December 31, 1995...............................................3
 
                               Statements of Income for the Three Months and
                               Nine Months Ended September 30, 1996
                               and 1995............................................................4
 
                               Statement of Partners' Capital
                               for the Year Ended December 31, 1995,
                               and the Nine Months Ended September 30, 1996........................5
  
                               Statements of Cash Flows for the Nine Months
                               Ended September 30, 1996 and 1995...................................6
  
                               Condensed Notes to Financial Statements............................ 7
  
                  Item 2.  Management's Discussion and Analysis of
                               Financial Condition and Results of
                               Operations.........................................................15

PART II.    OTHER INFORMATION.....................................................................25

 
</TABLE>

                                       2
<PAGE>
 
                        WELLS REAL ESTATE FUND VI, L.P.
                    (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                                BALANCE SHEETS
<TABLE>
<CAPTION>
 
                                                                             September 30, 1996                   December 31, 1995
                                                                             ------------------                   -----------------
<S>                                                                          <C>                                   <C>
                      Assets                           
                      ------ 


Investment in joint venture (Note 2)                                             $20,072,965                          $20,184,572
Cash and cash equivalents                                                            586,933                              967,347
Due from affiliates                                                                  264,909                              263,587
Deferred project costs                                                                14,157                               35,462
Organization costs, less accumulated
   amortization of $21,874 in 1996 and
     $17,187 in 1995                                                                   9,376                               14,063
Prepaid expenses and other assets                                                      2,400                               11,095
      Total assets                                                               -----------                          -----------
                                                                                 $20,950,740                          $21,476,126 
                                                                                 ===========                          ===========
 
     Liabilities and Partners' Capital
     ---------------------------------
 
Liabilities:
  Accounts payable                                                               $         0                          $     4,000
  Partnership distribution payable                                                   261,953                              327,865
                                                                                 -----------                          -----------
      Total liabilities                                                              261,953                              331,865
                                                                                 -----------                          -----------
 
  Partners' capital:
    General  partners                                                                      0                                    0
    Class A - 2,104,757 units outstanding
      at September 30, 1996 and 2,048,356
      units  at December 31, 1995                                                 18,078,937                           17,637,686
    Class B - 395,243 units outstanding
      at September 30, 1996 and 451,644 units              
      at December 31, 1995                                                         2,609,850                            3,506,575
                                                                                 -----------                          -----------
      Total partners' capital                                                     20,688,787                           21,144,261
                                                                                 -----------                          -----------
        Total liabilities and partners' capital                                  $20,950,740                          $21,476,126
                                                                                 ===========                          ===========
</TABLE>
           See accompanying condensed notes to financial statements.

                                       3
<PAGE>
 
                        WELLS REAL ESTATE FUND VI, L.P.
                    (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                             STATEMENTS OF INCOME
<TABLE>
<CAPTION>
 
 
                                                          Three Months Ended                  Nine Months Ended
                                                          ------------------                  -----------------
                                                    Sept 30, 1996     Sept 30,1995     Sept 30, 1996     Sept 30,1995
                                                    -------------     ------------     -------------     ------------
<S>                                                  <C>               <C>              <C>               <C>
 
Revenues:                                             $ 10,311         $  4,476         $  57,173        $ 298,513
       Interest income
       Equity in income of joint ventures
                       (Note 2)                        150,203          221,860           413,468          506,566
                                                      --------         --------         ---------        ---------
                                                       160,514          226,336           470,641          805,079
                                                      --------         --------         ---------        ---------
Expenses:
       Legal and accounting                                763            2,212            20,850           10,918
       Computer costs                                    1,403              431             3,315            5,095
       Partnership administration                       12,109           15,863            40,213           59,566
       Amortization of organization costs                1,562            1,562             4,687            4,687
                                                      --------         --------            ------         --------
                                                        15,837           20,068            69,065           80,266
                                                      --------         --------         ---------        ---------
       Net income                                    $ 144,677         $206,268          $401,576         $724,813
                                                      ========         ========         =========        =========
Net loss allocated to General Partners               $       0         $   (619)         $      0        $  (1,612)
Net income allocated to Class A Limited                                                                  
  Partners                                           $ 358,439         $ 268,10          $876,111        $ 885,974
Net loss allocated to Class B Limited 
  Partners                                           $(213,762)        $(61,273)        $(474,535)       $(159,549)
Net income per Class A Limited Partner              
  Unit                                               $    0.17         $   0.13         $    0.43        $    0.43
Net loss per Class B Limited Partner                 
  Unit                                               $   (0.54)        $  (0.14)        $   (1.16)       $   (0.34)
Cash distribution per Class A Limited                                                                    
  Partner Unit                                       $    0.12         $   0.16         $    0.40        $    0.47
 
</TABLE>
           See accompanying condensed notes to financial statements.

                                       4
<PAGE>
 
                        WELLS REAL ESTATE FUND VI, L.P.
                    (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                        STATEMENTS OF PARTNERS' CAPITAL
        FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE NINE MONTHS ENDED
                              SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
 
                                                    LIMITED PARTNERS                                           
                                      ----------------------------------------------                        
                                            CLASS A                 CLASS B                     TOTAL   
                                      -----------------------  ---------------------           GENERAL     PARTNERS'
                                      UNITS       AMOUNT        UNITS         AMOUNT           PARTNERS    CAPITAL  
                                      -----       ------        -----         ------          ---------   --------- 
<S>                                   <C>         <C>           <C>         <C>               <C>           <C>
BALANCE, DECEMBER 31, 1994            2,003,010   $17,371,901    496,990    $4,143,449        $1,828        $21,517,178
  Net income (loss)                           0     1,172,944          0      (269,288)       (1,828)           901,828
  Partnership distributions                   0    (1,274,745)         0             0             0         (1,274,745)
  Class B conversion elections           45,346       367,586    (45,346)     (367,586)            0                  0
                                      ---------   -----------    -------    ----------        ------        ----------- 
BALANCE, DECEMBER 31, 1995            2,048,356    17,637,686    451,644     3,506,575             0         21,144,261
  Net income (loss)                           0       876,111          0      (474,535)            0            401,576
  Partnership distributions                   0      (857,050)         0             0             0           (857,050)
  Class B conversion elections           56,401       422,190    (56,401)     (422,190)            0                  0
                                      ---------   -----------    -------    ----------        ------        ----------- 
BALANCE, SEPTEMBER 30, 1996           2,104,757   $18,078,937    395,243    $2,609,850        $    0        $20,688,787
                                      =========   ===========    =======    ==========        ======        ===========
 
</TABLE>

           See accompanying condensed notes to financial statements.

                                       5
<PAGE>
 
                        WELLS REAL ESTATE FUND VI, L.P.
                    (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                           STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
 
                                                                                                   Nine Months Ended
                                                                                                   -----------------
                                                                                          Sept 30, 1996          Sept 30, 1995
                                                                                          -------------          -------------
<S>                                                                                      <C>                     <C>
Cash flow from operating activities:
Net earnings                                                                               $ 401,576              $ 724,813
Adjustments to reconcile net earnings to net
  cash used in operating activities:                                                        (413,468)              (506,566)
  Equity in earnings of joint venture
  Distributions received from joint 
    ventures                                                                                 779,983                495,484
  Partnership distributions paid                                                            (922,962)              (946,385)
  Amortization of organization costs                                                           4,687                  4,687
    Changes in assets and liabilities:
    Decrease in due from affiliates                                                            5,194                      0
    Decrease in prepaids and
      other assets                                                                             3,500                 56,435
    Decrease in accounts payable                                                              (4,000)                (2,000)
                                                                                           ---------             ----------
      Net cash used in
          operating activities                                                              (145,490)              (173,532)
Cash flow from investing activities:
      Investment in joint ventures                                                          (234,924)           (10,696,983)
                                                                                           ---------            -----------
      Net decrease in cash and cash equivalents                                             (380,414)           (10,870,515)
Cash and cash equivalents, beginning of year                                                 967,347             11,904,815
                                                                                           ---------           ------------
Cash and cash equivalents, end of period                                                   $ 586,933           $  1,034,300
                                                                                           =========           ============
Supplemental schedule of noncash investing
  activities-deferred project costs
  applied to investing activities                                                          $  21,305           $     78,574
                                                                                           ---------           ------------
</TABLE>
           See accompanying condensed notes to financial statements.

                                       6
<PAGE>
 
                        WELLS REAL ESTATE FUND VI, L.P.
                    (A Georgia Public Limited Partnership)

                    Condensed Notes to Financial Statement
                                        

(1)  Basis of Presentation
     ---------------------

     The financial statements of Wells Real Estate Fund VI, L.P. ( 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, 1995.

(a) General
    -----------
    Wells Real Estate Fund VI, 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 5, 1993, the Partnership commenced a public offering of its limited
    partnership units pursuant to a Registration Statement on Form S-11 filed
    under the Securities Act of 1933. The Partnership terminated its offering on
    April 4, 1994, and received gross proceeds of $25,000,000 representing
    subscriptions from 2,500,000 Limited Partners units, composed of two classes
    of limited partnership interests, Class A and Class B limited partnership
    units.

    As of September 30, 1996, the Partnership owned interests in the following
    properties: (i) a four-story office building located in Hartford,
    Connecticut; (ii) a three-story office building located in Appleton,
    Wisconsin; (iii) five retail buildings located in Stockbridge, Georgia; (iv)
    an office/retail center in Roswell, Georgia; (v) a four-story office
    building in Jacksonville, Florida; (vi) a retail center under construction
    in Winston-Salem, North Carolina; and (vii) a retail center located in
    Cherokee County, Georgia. All of the foregoing properties were acquired on
    an all cash basis and are described in more detail in Footnote (2) below.

(b) Employees
    ---------
    The Partnership has no direct employees. The employees of Wells Capital,
    Inc., the sole general partner of Wells Partners, L.P., a General Partner of
    the Partnership, perform a full range of real estate services including
    leasing and property management, accounting, asset management and investor
    relations for the Partnership.

                                       7
<PAGE>
 
(c) Insurance
    ---------
    Wells Management Company, Inc., an affiliate of the General Partners,
    carries comprehensive liability and extended coverage with respect to all
    the properties owned directly or indirectly by the Partnership. In the
    opinion of management of the registrant, the properties are adequately
    insured.

(c) Competition
    -----------

    The Partnership will experience competition for tenants from owners and
    managers of competing projects which may include the General Partners and
    their affiliates. As a result, the Partnership may be required to provide
    free rent, reduced charges for tenant improvements and other inducements,
    all of which may have an adverse impact on results of operations. At the
    time the Partnership elects to dispose of its properties, the Partnership
    will also be in competition with sellers of similar properties to locate
    suitable purchasers for its properties.

(2) Investment in Joint Ventures
    ----------------------------

    The Partnership owns interests in nine properties through its investment in
    joint ventures, of which three are office buildings and six are retail
    buildings. 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.

    The following describes the properties in which the Partnership owns an
    interest as of September 30, 1996:


    FUND V - FUND VI JOINT VENTURE
    ------------------------------

    On December 27, 1993, the Partnership and Wells Real Estate Fund V, L.P.
    ("Wells Fund V"), a Georgia public limited partnership affiliated with the
    Partnership through common general partners, entered into a Joint Venture
    Agreement known as Fund V and Fund VI Associates (the "Fund V - Fund VI
    Joint Venture"). The investment objectives of Wells Fund V are substantially
    identical to those of the Partnership. The Partnership holds an approximate
    52% equity interest, and Wells Fund V holds an approximate 48% equity
    interest in the Fund V - Fund VI Joint Venture. The Partnership owns
    interests in the following two properties through the Fund V - Fund VI Joint
    Venture:

    The Hartford Building
    ---------------------

    On December 29, 1993, the Fund V - Fund VI Joint Venture purchased the
    Hartford Building, a four-story office building containing approximately
    71,000 rentable square feet from Hartford Accident and Indemnity Company for
    a purchase price of $6,900,000. The Hartford Building is located on 5.56
    acres of land in Southington, Connecticut. The funds used by the Fund V -
    Fund VI Joint Venture to acquire the Hartford Building were derived from
    capital contributions made by the Partnership and Wells Fund V totaling
    $3,432,707 and $3,508,797, respectively, for total capital contributions to
    the Fund V - Fund VI Joint Venture of $6,941,504.

                                       8
<PAGE>
 
    The entire building is leased to Hartford Fire Insurance Company
    ("Hartford") for a period of nine years and eleven months commencing
    December 29, 1993. The annual base rent during the initial term is $458,400
    payable in equal month installments of $38,200 for the first three months,
    and $724,200 payable in equal monthly installments of $60,350 commencing
    April 1, 1994 and continuing through the expiration of the initial term of
    the lease. Hartford also has the option to extend the initial term of the
    lease for two consecutive five year periods at $15.25 per square foot for
    the 1st five year extension and $18.67 for the 2nd five year extension.
    Under the terms of its lease, Hartford is responsible for property taxes,
    operating expenses, general repair and maintenance work and a pro rata share
    of capital expenditures based upon the number of years remaining in the
    lease.

    The occupancy rate at the Hartford Building was 100% for 1996, 1995 and
    1994. The average effective annual rental per square foot at the Hartford
    Building was $10.11 for 1996, 1995 and 1994, the first year of ownership.

    Stockbridge Village II - Stockbridge South Property
    ---------------------------------------------------

    On November 12, 1993, Wells Fund V purchased 2.46 acres of real property
    located in Clayton County, Georgia for $1,022,634. On July 1, 1994, Wells
    Fund V contributed the property as a capital contribution to the Fund V -
    Fund VI Joint Venture.

    Construction of a 5,400 square foot retail building was completed in
    November 1994. Construction of a second retail building containing
    approximately 10,550 square feet was completed in June, 1995. The entire
    first building was leased by Apple Restaurants, Inc. for nine years and
    eleven months beginning in December, 1994. The annual base rent under the
    lease is $125,982 until December 15, 1999, at which time the annual base
    rent increases to $137,700.

    Glenn's Open Pit Bar-B-Que leased 4,303 square feet of the second retail
    building for a six year term beginning July 1, 1995. The annual base rent
    under the lease is $64,548 to June 30, 1997, $68,844 from July 1, 1997 to
    June 30, 1999, and $77,460 from July 1, 1999 until June 30, 2001.

    The total cost to complete Stockbridge Village II is currently anticipated
    to be approximately $3,030,000. As of September 30, 1996, the Partnership
    had contributed $1,696,150 and Wells Fund V had contributed $1,035,804 to
    the Fund V - Fund VI Joint Venture for the acquisition and development of
    Stockbridge Village II. It is currently anticipated that the remaining cost
    of approximately $300,000 to complete the property will be contributed by
    the Partnership, in which event, upon completion of the building funding,
    the Partnership will own an approximately 54% equity interest in the Fund 
    V - Fund VI Joint Venture. The Partnership has reserved sufficient funds for
    this purpose.

    The occupancy rate at the Stockbridge Village II Property was 61% for 1996
    and 1995. The average effective annual rental per square foot at the
    Stockbridge Village II is $12.35 for 1996 and $10.41 for 1995, the first
    year of occupancy.

                                       9
<PAGE>
 
    FUND V - VI - VII JOINT VENTURE
    -------------------------------

    On September 8, 1994, the Partnership, Wells Fund V and Wells Real Estate
    Fund VII, L.P. ("Wells Fund VII"), Georgia public limited partnerships
    affiliated with the Partnership through common general partners, entered
    into a joint venture agreement known as Fund V, Fund VI and Fund VII
    Associates (the "Fund V-VI-VII Joint Venture"). The Partnership owns an
    interest in the following property through the Fund V-VI-VII Joint Venture:

    The Marathon Building
    ---------------------

    On September 16, 1994, Fund V-VI-VII Joint Venture purchased a three-story
    office building containing approximately 76,000 rentable square feet,
    located on approximately 6.2 acres of land in Appleton, Wisconsin (the
    "Marathon Building") for a purchase price of $8,250,000, plus acquisition
    costs of $29,421.

    The funds used by the Fund V-VI-VII Joint Venture to acquire the Marathon
    Building were derived from capital contributions made by the Partnership,
    Wells Fund V and Wells Fund VII totalling $3,470,958, $1,337,505, and
    $3,470,958, respectively, for total contributions to the Fund V-VI-VII Joint
    Venture of $8,279,421. The Partnership owns an approximately 42% equity
    interest in the Fund V-VI-VII Joint Venture.

    The entire Marathon Building is leased to Jaakko Poyry Fluor Daniel for a
    period of approximately twelve years, three and one-half months, with
    options to extend the lease for two additional five-year periods at market
    rate. The annual base rent under the lease is $910,000. The current lease
    expires December 31, 2006. The lease agreement is a net lease in that the
    tenant is primarily responsible for the operating expenses, including real
    estate taxes.

    The occupancy rate at the Marathon Building was 100% for 1996, 1995, and the
    last three and a half months of 1994. The average annual rental per square
    foot in the Marathon Building was $12.13 for 1996, 1995, and 1994, the first
    year of ownership.

    FUND VI - FUND VII JOINT VENTURE
    --------------------------------

    On December 9, 1994, the Partnership and Wells Fund VII entered into a Joint
    Venture Agreement known as Fund VI and Fund VII Associates (the "Fund VI-
    Fund VII Joint Venture"). As of September 30, 1996, the Partnership's equity
    interest in the Fund VI - Fund VII Joint Venture was approximately 43%, and
    Wells Fund VII's equity interest in the Fund VI - Fund VII Joint Venture was
    approximately 57%. The Partnership owns interests in the following two
    properties through the Fund VI-Fund VII Joint Venture:

    Stockbridge Village III
    -----------------------

    In April 1994, the Partnership purchased 3.27 acres of real property located
    on the north side of Georgia State Route 138 at Mt. Zion Road, Clayton
    County, Georgia for a cost of $1,015,673. This 

                                       10
<PAGE>
 
    tract of land is located directly across Route 138 from the Stockbridge
    Village Shopping Center, which was developed and is owned by an affiliate of
    the Partnership. On December 9, 1994, the Partnership contributed the
    property to the Fund VI-Fund VII Joint Venture as a capital contribution.

    Kenny Rogers Roasters is a 3,200 square foot restaurant building which was
    completed in March 1995, at a cost of approximately $400,000, excluding
    land. The building is leased to Atlanta Foodquest, LLC for a term of nine
    years and eleven months commencing March 1, 1995. The initial base rent
    payable is $82,320. In the fifth year, the annual base rent payable
    increases to $87,600.

    Construction began in January, 1995, on a second outparcel building
    containing approximately 15,000 square feet at a cost of approximately
    $1,500,000 excluding land. Construction was substantially completed in
    October, 1995. In October 1995, Damon's Clubhouse Restaurant occupied 6,732
    square feet. The term of the lease is for nine years and eleven months
    commencing October, 1995. The initial annual base rent is $102,375 through
    March, 2001 and $115,375 thereafter. Four additional tenants have occupied
    the second building.

    As of September 30, 1996, the Partnership had contributed $1,017,907 and
    Wells Fund VII contributed $1,866,278 to the Fund VI - Fund VII Joint
    Venture for the acquisition and development of the Stockbridge Village III
    Property.

    The occupancy rate at the Stockbridge Village III Project was 87% in 1996
    and 71% at December 31, 1995. The average effective annual rental per square
    foot at the Stockbridge Village III Project was $13.76 in 1996 and $4.85 for
    the partial year of occupancy in 1995.

    Stockbridge Village I Expansion
    -------------------------------

    On June 7, 1995, the Fund VI - Fund VII Joint Venture purchased 3.38 acres
    of real property located in Clayton County, Georgia for a total price of
    approximately $718,000. The Stockbridge Village I Expansion consists of a
    multi-tenant shopping center containing approximately 29,000 square feet.
    The majority of construction was completed in April, 1996. A lease has been
    signed with Cici's Pizza for a 4,000 square foot restaurant. The term of the
    lease is for nine years and eleven months commencing April, 1996. The
    initial base rent is $48,000. In the third year, the annual base rent
    increases to $50,000, in the sixth year to $52,000, and in the ninth year to
    $56,000. Negotiations are being conducted to lease the remaining space.

    As of September 30, 1996, the Partnership contributed a total of $1,450,000
    and Wells Fund VII contributed a total of $1,450,000 for total contributions
    of approximately $2,900,000 for the purpose of funding the development and
    construction of the Stockbridge Village I Expansion.

    As of September 30, 1996, the Partnership contributed $2,467,907, and Wells
    Fund VII contributed $3,316,278, including its cost to acquire land, to the
    Fund VI -Fund VII Joint Venture for the acquisition and development of the
    Stockbridge Village III Project and the Stockbridge Village I Expansion. As
    of September 30, 1996, the Partnership's equity interest in Fund VI - VII
    Joint Venture was approximately 43%, and Wells Fund VII's equity interest in
    the Fund VI - VII Joint

                                       11
<PAGE>
 
    Venture was approximately 57%. It is anticipated that Wells Fund VII will
    contribute the remaining approximately $16,500 needed to complete
    Stockbridge Village III, in which event it is estimated that the
    Partnership's equity interest in the Fund VI - VII Joint Venture will be
    approximately 43% and Wells Fund VII's equity interest will be approximately
    57% upon completion of the project. Wells Fund VII has reserved sufficient
    funds for this purpose.

    Fund II, III, VI and VII Associates/Holcomb Bridge Road Project
    ---------------------------------------------------------------

    On January 10, 1995, the Partnership, the Fund II - Fund III Joint Venture
    and Wells Fund VII entered into a joint venture agreement known as Fund II,
    III, VI and VII Associates (the "Fund II, III, VI and VII Joint Venture").
    The Fund II- Fund III Joint Venture is a joint venture between Wells Real
    Estate Fund III, L.P. ("Wells Fund III"), a Georgia public limited
    partnership having Leo F. Wells, III and Wells Capital, Inc., as general
    partners, and a joint venture (the "Fund II-II-OW Joint Venture"), between
    Wells Real Estate Fund II ("Wells Fund II"), a Georgia public limited
    partnership having Leo F. Wells, III and Wells Capital, Inc., as general
    partners, and Wells Real Estate Fund II-OW ("Wells Fund II-OW"), a Georgia
    public limited partnership also having Leo F. Wells., III and Wells Capital,
    Inc., as general partners. The investment objectives of Wells Fund II, Wells
    Fund II-OW, Wells Fund III and Wells Fund VII are substantially identical to
    those of the Partnership.

    In January 1995, the Fund II - Fund III Joint Venture contributed
    approximately 4.3 acres of land at the intersection of Warsaw Road and
    Holcomb Bridge Road in Roswell, Fulton County, Georgia (the "Holcomb Bridge
    Road Project"), including land improvements with a value of $1,729,116 to
    the Fund II, III, VI and VII Joint Venture. Development is substantially
    completed on two buildings containing a total of approximately 49,500 square
    feet. Six tenants occupied the property as of September 30, 1996 for an
    occupancy rate of 54%. The average effective annual rental was $6.83 per
    square foot for the third quarter of 1996.

    As of September 30, 1996, Fund II - Fund III Joint Venture had contributed
    $1,729,116 in land and improvements for an approximate 25.2% equity interest
    in the Fund II, III, VI and VII Joint Venture, the Partnership had
    contributed $1,699,846 to the joint venture for an approximate 26% equity
    interest, and Wells Fund VII had contributed $3,217,154 to the joint venture
    for an approximate 48.8% equity interest. The total cost to develop the
    Holcomb Bridge Road Project is currently estimated to be approximately
    $5,000,000, excluding land, and it is anticipated that the remaining
    approximate $83,000 will be contributed $16,000 by the Partnership and
    $67,000 by Wells Fund VII for an anticipated equity interest of 49% by Wells
    Fund VII, 26% by the Fund II - Fund III Joint Venture and 25% by the
    Partnership. The Partnership has reserved sufficient funds for this purpose.

    FUND VI - VII - VIII JOINT VENTURE
    ----------------------------------

    On April 17, 1995, the Partnership, Wells Fund VII and Wells Real Estate
    Fund VIII, L.P. (Wells Fund VIII"), a Georgia public limited partnership
    affiliated with the Partnership through common general partners, entered
    into a joint venture agreement known as the Fund VI, Fund VII and Fund VIII
    Associates (the "Fund VI-VII-VIII Joint Venture"). The investment objectives
    of Wells Fund

                                       12
<PAGE>
 
    VIII are substantially identical to those of the Partnership.
    As of September 30, 1996, the Partnership contributed approximately
    $6,067,688 for an approximate 39% equity interest in the Fund VI-VII-VIII
    Joint Venture, which owns an office building in Jacksonville, Florida and a
    multi-tenant retail center under development in Clemmons, North Carolina. As
    of September 30, 1996, Wells Fund VIII contributed $3,500,000 for an equity
    interest in the Fund VI-VII-VIII Joint Venture of approximately 23%, and
    Wells Fund VII contributed approximately $5,932,312 for an equity interest
    in the Fund VI-VII-VIII Joint Venture of approximately 38%. The total cost
    to complete both properties is anticipated to be approximately $17,700,000.
    Although the ultimate percentages of equity interest in the Fund VI-VII-VIII
    Joint Venture have not yet been finally determined, it is anticipated that
    Wells Fund VIII will contribute the remaining cost of approximately
    $2,200,000 needed to complete construction of both projects, in which event
    the ultimate equity interests in the Fund VI- VII-VIII Joint Venture of the
    Partnership, Wells Fund VII and Wells Fund VIII would be approximately 34%,
    34%, and 32%, respectively.

    Bell South Property
    -------------------

    On April 25, 1995, the Fund VI-VII-VIII Joint Venture purchased a 5.55 acre
    parcel of land in Jacksonville, Florida for a total of $1,245,059 including
    closing costs. In May 1996, the 92,964 square foot office building was
    completed with BellSouth Advertising and Publishing Corporation, a
    subsidiary of BellSouth Company, occupying approximately 66,333 square feet
    and American Express Travel Related Services Company, Inc. occupying
    approximately 22,607 square feet. The land purchase and construction costs,
    totalling approximately $9,000,000, were funded by capital contributions of
    $3,500,000 by the Partnership, $3,500,000 by Wells Fund VII and $2,000,000
    by the Wells Fund VIII.

    The Bell South lease is for a term of nine years and eleven months with an
    option to extend for an additional five year period at market rate. The
    annual base rent during the initial term is $1,048,061 during the first five
    years and $1,150,878 for the balance of the initial lease term. The American
    Express lease is for a term of five years at an annual base rent of
    $369,851. BellSouth and American Express are required to pay additional rent
    equal to their shares of operating expenses during their respective lease
    terms.

    Tanglewood Commons Shopping Center
    ----------------------------------

    On May 31, 1995, the Fund VI-VII-VIII Joint Venture purchased a 14.683 acre
    tract of real property located in Clemmons, Forsyth County, North Carolina.
    As of September 30, 1996, the Partnership had contributed $2,567,688, Wells
    Fund VII had contributed $2,432,312 and Wells Fund VIII had contributed
    $1,500,000 for the development of this project.

    The Fund VI-VII-VIII Joint Venture will develop and construct one large
    strip shopping center building containing approximately 81,000 gross square
    feet on a 12.48 acre tract. The remaining 2.2 acre portion of the property
    consists of four outparcels which have been graded and will be held for
    future development.

                                       13
<PAGE>
 
    Total cost and expenses to be incurred by the Fund VI-VII-VIII Joint Venture
    for the acquisition, development, construction and completion of the
    shopping center are anticipated to be approximately $8,700,000. An agreement
    was signed with Norcom Development, Inc. to supervise, manage and coordinate
    the planning, design and construction of the property. Shook Design Group,
    Inc. has been signed as the architect, and John S. Clark and Company as the
    general contractor. Construction of the project began in March, 1996 and is
    scheduled to be substantially completed in the first quarter of 1997.

    Harris Teeter, Inc., a regional supermarket chain, executed a lease for a
    minimum of 45,000 square feet with an initial term of 20 years with
    extension options of four successive five year periods with the same terms
    as the initial lease. The annual base rent during the initial term is
    $488,250. In addition, Harris Teeter has agreed to pay percentage rents
    equal to one percent of the amount by which Harris Teeter's gross sales
    exceed $35,000,000 for any lease year.

    FUND I, II, II-OW, VI, VII ASSOCIATES
    -------------------------------------

    On August 1, 1995, the Partnership, Wells Real Estate Fund I ("Wells Fund
    I"), a Georgia public limited partnership, the Fund II-Fund II-OW Joint
    Venture and Wells Fund VII, entered into a joint venture agreement known as
    Fund I, II, II-OW, VI, VII Associates (the "Fund I, II, II-OW,VI,VII Joint
    Venture"), which was formed to own and operate the Cherokee Project
    described below. Wells Fund I is a Georgia limited partnership having Leo F.
    Wells, III and Wells Capital, Inc., as general partners. The investment
    objective of Wells Fund I are substantially identical to those of the
    Partnership.

    The Cherokee Property
    ---------------------

    The Cherokee Property consists of a retail shopping center known as the
    "Cherokee Commons Shopping Center" located in metropolitan Atlanta, Cherokee
    County, Georgia (The "Cherokee Project"). The Cherokee Project has been
    expanded to consist of approximately 103,755 net leasable square feet. The
    Cherokee Project was initially developed through a joint venture between
    Wells Fund I and the Fund II - Fund II-OW Joint Venture which contributed
    the Cherokee Project to the Fund I, II, II-OW, VI, VII Joint Venture on
    August 1, 1995 to complete the required funding for the expansion.

    As of September 30, 1996, Wells Fund I contributed property with a book
    value of $2,139,900, the Fund II-Fund II-OW Joint Venture contributed
    property with a book value of $4,860,100, the Partnership contributed cash
    in the amount of $953,798, and Wells Fund VII contributed cash in the amount
    of $953,798 to the Fund I,II,II-OW,VI,VII Joint Venture. As of September 30,
    1996, approximate equity interests in the Cherokee Project were as follows:
    Wells Fund I-24%, Fund II-Fund II-OW Joint Venture-54%, Wells Fund VII-11%
    and the Partnership-11%.

    The Cherokee Project is anchored by a 67,115 square foot lease with Kroger
    Food/Drug ("Kroger") which expires in 2011. Kroger's original lease was for
    45,528 square feet. In 1994, Kroger expanded to the current 67,115 square
    feet which is approximately 65% of the total rentable square 

                                       14
<PAGE>
 
    feet in the property. As of September 30, 1996, the Cherokee Project was
    approximately 95% occupied by 20 tenants, including Kroger. Kroger is the
    only tenant occupying 10% or more of the rentable square footage. Kroger is
    a retail grocery chain. The other tenants in the shopping center provide
    typical retail shopping services.

    The Kroger lease provides for an annual rent of $392,915 which increased to
    $589,102 on August 16, 1995 due to the expansion from 45,528 square feet to
    67,115 square feet. The lease expires March 31, 2011, with Kroger entitled
    to five successive renewals each for a term of five years at the same rental
    rate as the original lease.

    The occupancy rate at the Cherokee Property for the quarters ended September
    30, 1996 was 95% in 1996 and 1995, 92% in 1994, 82% in 1993, and 87% in
    1992. The average effective annual rental per square foot at the Cherokee
    Property was $8.57 for 1996, $7.50 for 1995, $5.33 for 1994, $6.47 for 1993
    and $6.46 for 1992.

    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
   selected financial data and 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 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 expiration of existing leases, and the
   potential need to fund tenant improvements or other capital expenditures out
   of operating cash flow.


   RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
   ---------------------------------------------------------

    (a) General
    -----------

    During its offering, which terminated on April 4, 1994, the Partnership
    raised a total of $25,000,000 in capital through the sale of 2,500,000
    units. No additional units will be sold by the Partnership. As of September
    30, 1996, the Partnership had incurred $4,619,157 in sales commissions,
    acquisition fees, organizational and offering costs; had invested
    $19,789,055 in properties; had reserved $250,000 as working capital
    reserves; and is currently holding net offering proceeds of approximately
    $341,000 available for investment in properties. As set forth above, it is
    currently anticipated that approximately $300,000 will be contributed to the
    Fund V - Fund VI Joint Venture for the completion of the Stockbridge Village
    II project, and that approximately $16,000 will be contributed to the Fund
    II, III, VI, and VII Joint Venture for the completion of the Holcomb Bridge
    Road Project, leaving approximately $25,000 available to invest.

                                       15
<PAGE>
 
    Gross revenues of the Partnerships were $470,641 for the nine months ended
    September 30, 1996, as compared to $805,079 for the nine months ended
    September 30, 1995. The decrease in revenues is attributed to funds invested
    in joint ventures, which increased the income generated from the joint
    ventures but decreased the funds available to earn interest. Depreciation
    expenses increased for the joint ventures in 1996 as compared to 1995 due to
    a change in the estimated useful lives of all buildings and improvements in
    which the Partnership owns an interest from 40 years to 25 years, which
    became effective December 31, 1995.

    Expenses of the Partnership were $69,065 for 1996, as compared to $80,266
    for 1995. The decrease in expenses for 1996 as compared to 1995 was
    primarily due to decreased partnership administration offset partially by
    increased accounting costs.

    Net income of the Partnership was $401,576 for the nine months ended
    September 30, 1996, as compared to $724,813 for the same period in 1995. The
    decrease in net income for 1996 from 1995 is due primarily to decreased
    revenues, which, as set forth above, was primarily caused by the increase in
    depreciation expenses, partially offset by decreased expenses as noted in
    the prior paragraphs.

    Net cash used in operating activities decreased from $173,532 in 1995 to
    $145,490 in 1996. This decrease was due primarily to increased distributions
    received from joint ventures and decreased distributions to the limited
    partners offset by decreased interest income. Net cash used in investing
    activities decreased for the nine months ended September 30, 1996 as
    compared to the same period in 1995 due to a decrease in investments in
    joint ventures. These changes produced decreased cash and cash equivalents
    of $10,870,515 and $380,414 at September 30, 1995 and 1996, respectively.

    The Partnership made cash distributions of investment income to the Limited
    Partners holding Class A Units of $.12 for the three months ended September
    30, 1996, as compared to $.16 per Class A Unit for the three months ended
    September 30, 1995. No cash distributions were made to the Limited Partners
    holding Class B Units.

                                       16
<PAGE>
 
PROPERTY OPERATIONS
-------------------

As of September 30, 1996, the Partnership owned interests in the following
operational properties:

The Hartford Building/Fund V - Fund VI Joint Venture
----------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                                          
                                                            Three Months Ended                  Nine Months Ended         
                                                            ------------------                  -----------------         
                                                      Sept 30, 1996     Sept 30, 1995     Sept 30, 1996      Sept 30, 1995
                                                      -------------     -------------     -------------      ------------- 
<S>                                                   <C>               <C>               <C>                <C>
Revenues:
Rental Income                                           $179,374          $179,374           $538,124          $538,124
Expenses:
 Depreciation                                             73,008            42,516            219,024           127,548
 Management & leasing expenses                             7,175             7,175             21,525            21,525
 Other operating expenses                                  3,380             3,715             11,204            14,939
                                                        --------          --------           --------          --------
                                                          83,563            53,406            251,753           164,012
                                                        --------          --------           --------          --------
Net income                                              $ 95,811          $125,968           $286,371          $374,112
                                                        ========          ========           ========          ========
Occupied %                                                   100%              100%               100%              100%
Partnership's Ownership % in the
  Fund V - Fund VI Joint Venture                            52.5%             52.4%              52.5%              52.4%
Cash Distribution to Partnership                        $ 89,478          $ 88,861           $267,670           $258,582
Net Income Allocated to the
  Partnership                                           $ 50,302          $ 65,809           $150,235           $191,007
</TABLE>

          Net income decreased and expenses increased in 1996 as compared to
          1995 due primarily to an increase in depreciation expenses, caused by
          the change in estimated useful lives of buildings and improvements
          previously discussed under the "General" section of "Results of
          Operations and Changes in Financial Conditions".

          The Partnership's ownership interest in the Fund V - Fund VI Joint
          Venture increased from 54.2% in 1995, to 52.5% in 1996, due to
          additional fundings by the Partnership in 1996.

          Cash distributions increased in 1996 over 1995 due primarily to the
          Partnership's increased percentage ownership interest in the Joint
          Venture. Net income allocated to the Partnership decreased in 1996 as
          compared to 1995 due primarily to the increased depreciation expenses
          discussed above.

                                       17
<PAGE>
 
          Stockbridge Village II/Fund V - Fund VI Joint Venture
          -----------------------------------------------------
<TABLE>
<CAPTION>
 
                                          Three Months Ended                  Nine Months Ended
                                    ------------------------------      ------------------------------
                                    Sept 30, 1996     Sept 30, 1995     Sept 30, 1996     Sept 30, 1995
                                    -------------     -------------      --------------    -------------
<S>                                 <C>             <C>             <C>             <C>
Revenues:
Rental Income                          $50,056          $50,056            $146,573         $115,977
Expenses:                                                                                             
 Depreciation                           19,811           14,269              59,333           25,507
 Management & leasing expenses           4,549            5,515              14,528           13,494
 Other operating expenses               24,862           14,249              63,660           37,458
                                        -------          -------            --------         --------
                                        49,222           34,033             137,521           76,459
                                      --------          -------            --------         --------
Net income                             $   834          $16,023            $  9,052         $ 39,518
                                       =======          =======            ========         ========
Occupied %                                  61%              61%                 61%              61%
Partnership's Ownership % in the                                                                     
  Fund V - Fund VI Joint Venture          52.5%            52.4%               52.5%            52.4%
Cash Distribution to Partnership       $10,026          $10,276             $31,920          $19,951 

Net Income Allocated to the
  Partnership                           $  433         $ 8,374             $ 4,743          $20,230

</TABLE>

    The Stockbridge Village II Project consists of two retail buildings which
    contain a total of approximately 15,950 square feet. The first building
    containing 5,400 square feet was completed in November, 1994, and occupied
    by Apple Restaurants, Inc. in December 1994. The second building containing
    10,400 square feet opened in June, 1995. Glenn's Open Pit Bar-B-Que leased
    4,303 square feet beginning in July, 1995. A lease has been signed for 4,969
    square feet in the second building with occupancy anticipated to commence in
    early 1997.

    Depreciation expenses increased in 1996 over 1995 due to the change in
    estimated useful lives of buildings and improvements as previously discussed
    under the "General" section of "Results of Operations and Changes in
    Financial Conditions".

    The Partnership's ownership percentage in the Fund V - Fund VI Joint Venture
    increased to 52.5% for 1996, as compared to 52.4% in 1995, due to additional
    fundings by the Partnership which increased the Partnership's ownership
    interest in the Fund V - Fund VI Joint Venture.

                                       18
<PAGE>
 
     The Marathon Building/Fund V-VI-VII Joint Venture
     -------------------------------------------------
<TABLE>
<CAPTION>
 
                                          Three Months Ended                  Nine Months Ended
                                    -------------------------------     -------------------------------
                                    Sept 30, 1996     Sept 30, 1995     Sept 30, 1996     Sept 30, 1995
                                    -------------     -------------     -------------     -------------
<S>                                 <C>               <C>               <C>               <C>
Revenues:
Rental Income                         $242,755          $242,754          $728,263          $728,262
Expenses
 Depreciation                           87,647            52,299           262,939           156,898
 Management & leasing expenses           9,710             9,710            29,130            29,130
 Other operating expenses                1,531             2,374            10,381            16,283
                                      --------          --------          --------          --------
                                        98,888            64,383           302,450           202,311
                                      --------          --------          --------          --------
Net income                            $143,867          $178,371          $425,813          $525,951
                                      ========          ========          ========          ========
Occupied %                                 100%              100%              100%              100%
Partnership's Ownership % in the
  Fund V-VI-VII Joint Venture             41.8%             41.8%             41.8%             41.8%
Cash Distribution to Partnership      $ 90,716          $ 90,364          $269,728          $267,259
Net Income Allocated to the
  Partnership                         $ 60,180          $ 74,612          $178,117          $220,005

</TABLE>

    Net income decreased for the three and nine month periods ended September
    30, 1996 as compared to 1995 due primarily to the increase in depreciation
    expenses which resulted from the change , as of December 31, 1995, in
    estimated useful lives of buildings and improvements.

                                       19
<PAGE>
 
     Stockbridge Village III / Fund VI - Fund VII Joint Venture
     ----------------------------------------------------------

<TABLE>
<CAPTION>
 
                                           Three Months Ended            Nine Months Ended     Five Months Ended
                                     ------------------------------      -----------------     ----------------
                                     Sept 30, 1996     Sept 30, 1995       Sept 30, 1996        Sept 30, 1995
                                     -------------     -------------        -------------       -------------
<S>                                  <C>               <C>                 <C>                  <C>
Revenues:
Rental Income                          $68,558           $21,235              $187,790             $35,391
Expenses:
 Depreciation                           21,400             2,803                63,078               5,607
 Management & leasing expenses          16,387             2,575                37,273               3,793
 Other operating expenses                8,696             6,262                44,551              12,346
                                       -------           -------              --------             -------
                                        46,483            11,640               144,902              21,746
                                       -------           -------              --------             -------
Net income                             $22,075           $ 9,595              $ 42,888             $13,645
                                       =======           =======              ========             =======
Occupied %                                  87%               18%                   87%                 18%
Partnership's Ownership % in the
 Fund VI - Fund VII Joint Venture         42.8%             47.1%                 42.8%               47.1%
Cash Distribution to Partnership       $23,122           $ 2,659              $ 45,004             $ 2,659
Net Income Allocated to the
 Partnership                           $ 9,443           $ 4,650              $ 18,392             $ 6,768
 
</TABLE>

In April 1994, the Partnership purchased 3.27 acres of land located in Clayton
County, Georgia.  On December 9, 1994, the Partnership contributed the
Stockbridge Village III property ("Stockbridge Village III") as a capital
contribution to the Fund VI - Fund VII Joint Venture.

Construction was completed on a 3,200 square foot restaurant in March, 1995.
This retail building is leased to Kenny Rogers Roasters, a restaurant, for a
term of nine years and eleven months.  The initial base rent is $82,320 with an
increase in the fifth year to $87,600 annually.

The second multi-tenant retail building containing approximately 15,000 square
feet was completed in October, 1995.  Damon's Clubhouse, a restaurant, occupied
approximately 6,732 square feet in October.  The Damon's lease is for a term of
nine years and eleven months with initial base rent of $102,375 for five years
and increasing to $115,375 for the remainder of the lease.  Four additional
tenants have occupied approximately 5,850 square feet as of September 30, 1996.

                                       20
<PAGE>
 
Cherokee Property / Fund I, II, II-OW, VI, VII Joint Venture
------------------------------------------------------------

<TABLE>
<CAPTION>
 
                                          Three Months Ended                 Nine Months Ended
                                    ------------------------------      ------------------------------
                                    Sept 30, 1996     Sept 30, 1995     Sept 30, 1996     Sept 30,1995
                                    -------------     -------------     -------------     ------------
<S>                                 <C>               <C>               <C>                <C>
Revenues:
 Rental Income                          $219,956        $253,387           $666,564         $546,904
 Interest Income                              18              69                 55              164
                                        --------        --------           --------         --------
                                         219,974         253,456            666,619          547,068

Expenses:
 Depreciation                            107,607          72,989            322,251          164,233
 Management & leasing expenses            12,101           9,354             38,011           23,823
 Other operating expenses                 38,084          36,728            133,588          118,548
                                        --------        --------           --------         --------
                                         157,792         119,071            493,850          306,604
                                        --------        --------           --------         --------
Net income                              $ 62,182        $134,385           $172,769         $240,464
                                        ========        ========           ========         ========
Occupied %                                    95%             95%                95%              95%
Partnership's Ownership %                   10.7%           11.1%              10.7%            11.1%
Cash Distribution to Partnership        $ 18,722        $  7,387           $ 53,585         $  7,387
Net Income Allocated to the
 Partnership                            $  6,658        $  5,603           $ 18,500         $  5,603
</TABLE>

Rental income decreased for the three months ended September 30, 1996, as
compared to the same period for 1995, due to the receipt in September 1995 of
certain excess rents relating to the Kroger expansion which, although completed
in November 1994, was billed retroactively and paid in September 1995.  The
increase in depreciation expenses for 1996 as compared to 1995 is the result of
the change in the estimated useful lives of buildings and improvements as
previously discussed under the "General" section of "Results of Operations and
Changes in Financial Condition".  Management and leasing expenses increased in
1996 as compared to 1995 due to increased revenue.  Other operating expenses
increased in 1996 as compared to 1995 due to increased repairs and maintenance
costs. Net income of the property decreased for the nine month period ended
September 30, 1996  as compared to the same period for 1995, due primarily to
the increase in depreciation expenses offset partially by the increase in rental
income.

A lease amendment executed with Kroger in 1994 provided for an expansion of its
existing store at the Cherokee Commons Shopping Center from 45,528 square feet
to 66,918 square feet.  In November, 1994, construction was completed on the
Kroger expansion and remodeling of the Center at a total cost of $2,807,367.
The costs of this expansion were funded in the following amounts:  Wells Fund I
$94,679, the Fund II-Fund II-OW Joint Venture $805,092, the Partnership $953,798
and Wells Fund VII $953,798.  The Partnership and Wells Fund VII did not make
their respective capital contributions until August, 1995.

                                       21
<PAGE>
 
    880 Holcomb Bridge Road Property / Fund II, III, VI,VII Joint Venture
    ---------------------------------------------------------------------

<TABLE>
<CAPTION>
 
                                                      Three Months Ended       Six Months Ended
                                                      -------------------      -----------------
                                                         Sept 30, 1996           Sept 30, 1996
                                                      -------------------      -----------------
<S>                                                   <C>                       <C>
Revenues:
Rental Income                                              $82,869                 $136,044

Expenses:
 Depreciation                                               54,939                  138,881
 Management & leasing expenses                               8,530                   14,610
 Other operating expenses                                   22,279                   70,012
                                                           -------                 --------
                                                            85,748                  223,503
                                                           -------                 --------
Net loss                                                   $(2,879)                $(87,459)
                                                           =======                 ========
Occupied %                                                    53.6%                    53.6%
Partnership's Ownership % in the Fund II, III, VI,
 VII Joint Venture                                            26.0%                    26.0%
Cash Distribution to Partnership                           $ 6,426                 $  6,426
Net Loss Allocated to the
 Partnership                                               $  (898)                $(18,075)
</TABLE>

    In January 1995, the Fund II - Fund III Joint Venture contributed 4.3 acres
    of land and land improvements at 880 Holcomb Bridge Road to the Fund II,
    III, VI and VII Joint Venture. The project opened in April, 1996.
    Development is being completed on two buildings with a total of 49,500
    square feet. As of September 30, 1996, six tenants are occupying
    approximately 26,549 square feet of space in the retail building under
    leases of varying lengths. Since the property was not developed as of
    September 30, 1995, no comparative figures are available for the quarter.

    As of September 30, 1996, the Fund II - Fund III Joint Venture contributed
    $1,729,116 in land and land improvements for an equity interest of
    approximately 25.2%, Wells Fund VII contributed $3,217,154 for an equity
    interest of approximately 48.8%, and the Partnership contributed $1,699,846
    for an equity interest of approximately 26.0%. The total cost to develop the
    Holcomb Bridge Road Project is currently estimated to be approximately
    $5,000,000, excluding land. It is anticipated that of the remaining cost of
    approximately $83,000, $67,000 will be contributed by Wells Fund VII and
    $16,000 by the Partnership, after which the equity interests in the property
    will be 25.5% for the Partnership, 48.8% for Wells Fund VII and 25.7% for
    the Fund II - Fund III Joint Venture. The Partnership has reserved
    sufficient funds for this purpose.

                                       22
<PAGE>
 
      Stockbridge Village I Expansion / Fund VI - Fund VII Joint Venture
      ------------------------------------------------------------------

<TABLE>
<CAPTION>
 
                                              Three Months Ended     Six Months Ended   
                                                 Sept 30, 1996         Sept 30, 1996    
                                              ------------------     ----------------   
<S>                                           <C>                     <C>               
Revenues:                                                                               
Rental Income                                       $ 5,994              $  7,003       
                                                                                        
Expenses:                                                                               
 Depreciation                                        19,107                31,845       
 Management & leasing expenses                          822                   977       
 Other operating expenses                             9,037                15,713       
                                                   --------              --------       
                                                     28,972                48,535       
                                                   --------              --------       
Net loss                                           $(22,972)             $(41,532)      
                                                   --------              --------       
Occupied %                                               19%                   19%      

Partnership's Ownership % in the Fund VI -
 Fund VII Joint Venture                                42.8%                 42.8%
 
Cash Distribution to Partnership                   $      0              $      0     
 
Net Loss Allocated to the
 Partnership                                       $ (9,829)             $(17,790)

</TABLE>

On June 7, 1995, the Fund VI - Fund VII Joint Venture purchased 3.38 acres of
real property located in Clayton County, Georgia.  The Stockbridge Village I
Expansion consists of a multi-tenant shopping center containing approximately
29,000 square feet.  The majority of construction was completed in April, 1996.
Cici's Pizza has occupied a 4,000 square foot restaurant.  The term of the lease
is for nine years and eleven months commencing April, 1996.  The initial base
rent is $48,000.  In the third year, annual base rent will increase to $50,000,
in the sixth year to $52,000, and in the ninth year to $56,000.  One additional
tenant has occupied 1,600 square feet at the property as of September 30, 1996.
Three additional leases have been signed for a total of 4,800 square feet with
occupancy expected to commence in late 1996.  Negotiations are being conducted
to lease the remaining space.

                                       23
<PAGE>
 
Bell South Property / Fund VI - Fund VII - Fund VIII Joint Venture
------------------------------------------------------------------

<TABLE>
<CAPTION>
 
                                                                                 Three Months              Five Months
                                                                             Ended June 30, 1996       Ended Sept 30, 1996
                                                                             --------------------      --------------------
<S>                                                                          <C>                       <C>
Revenues:
    Rental income                                                                  $364,732                  $511,472  
    Interest income                                                                   1,366                    58,000   
                                                                                   --------                  --------   
                                                                                    366,098                   569,472   
                                                                                   --------                  --------   
Expenses:                                                                                                    
    Depreciation                                                                    109,116                   186,092   
    Management & leasing expenses                                                    39,597                    57,525   
    Other operating expenses                                                        147,446                   213,407   
                                                                                    --------                 --------  
                                                                                    296,159                   457,024   
                                                                                    --------                 --------  

Net income                                                                         $ 69,939                  $112,448   
                                                                                   ========                  ========   
Occupied %                                                                             96.0%                     96.0%  
                                                                                                                          
Partnership's Ownership % in the 
  Fund VI - Fund VII - Fund VIII 
  Joint Venture                                                                        39.2%                     39.2%
                                                                                                                          
Cash Distribution to Partnership                                                   $ 25,820                  $ 79,971
                                                                                                                          
Net Income Allocated to                                                            $ 28,857                  $ 47,500 
 Partnership
</TABLE>

On April 25, 1995, the Fund VI - Fund VII - Fund VIII Joint Venture purchased
5.55 acres of land located in Jacksonville, Florida.  In May 1996, the 92,964
square foot office building was completed, with BellSouth Advertising and
Publishing Corporation occupying approximately 66,333 square feet and American
Express occupying approximately 22,607 square feet.  An additional approximate
2,900 square feet will be occupied by BellSouth commencing in December 1996.

The initial term of the BellSouth lease is nine years and eleven months.  The
annual base rent during the initial term is $1,048,061 during the first five
years and $1,150,878 for the balance of the initial lease term.  The American
Express lease is for a term of five years at an annual base rent of $369,851.
BellSouth and American Express are required to pay additional rent equal to
their share of operating expenses during their respective lease terms.

Interest income was generated from construction dollars, not as yet funded on
construction, being invested in interest bearing accounts.

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<PAGE>
 
PART II - OTHER INFORMATION
---------------------------

      ITEM 6 (b). No reports on Form 8-K were filed during the third quarter of
      1996.


                                   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)
      Dated: November 11, 1996           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.



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