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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K



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(Mark One)



|x |  | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee Required]
|- |  | ---------------------------------------------------------------------------------------------------



| |  | For the fiscal year ended December 31, 2003
| |  | -------------------------------------------



| ̈ |  | Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 [No Fee Required]
|- |  | -----------------------------------------------------------------------------------------------------------



| |  | For the transition period
from to
| |  | ---------------------------------



Commission file number 0-49633



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WELLS REAL ESTATE FUND XIII, L.P.

(Exact name of registrant as specified in
its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Georgia                                                        |  | 58-2438244                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|6200 The Corners ParkwayNorcross, Georgia                      |  | 30092                                  
|(Address of principal executive offices)                       |  | (Zip Code)                             
|                                                               | 
|Registrants telephone number, including area code             |  | (770) 449-7800                         
|                                                              
|Securities registered pursuant to Section 12 (b) of the Act:  
|                                                               | 
|Title of each class                                            |  | Name of exchange on which registered   
|NONE                                                           |  | NONE                                   
|                                                              
|Securities registered pursuant to Section 12 (g) of the Act:  
|                                                               | 
|CASH PREFERRED UNITS                                           |  | TAX PREFERRED UNITS                    
|(Title of Class)                                               |  | (Title of Class)                       



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 ̈



Aggregate market value of the voting stock held by non-affiliates:    Not
Applicable



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CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS



Certain statements contained in this Form 10-K
of Wells Real Estate Fund XIII, L.P. (the Partnership) other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Such statements include, in particular, statements about our plans, strategies and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially
from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as
may, will, expect, intend, anticipate, estimate, believe, continue, or other similar words. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission. Neither the Partnership nor the general partners make any representations or warranties (expressed or implied) about the
accuracy of any such forward-looking statements. Actual results could differ materially from any forward-looking statements contained in this Form 10-K, and we do not intend to publicly update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.



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



General economic risks



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



| |  |  | Adverse economic conditions affecting the particular industry of one or more of our tenants;
| | - |  | --------------------------------------------------------------------------------------------



Real estate risks



| |  |  | Our ability to achieve appropriate occupancy levels resulting in sufficient rental amounts;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | Supply of or demand for similar or competing rentable space, which may adversely impact our ability to retain or obtain new tenants at lease expiration at acceptable rental amounts;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | Our potential need to fund tenant improvements, lease-up costs, or other capital expenditures out of operating cash flow;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | Increases in property operating expenses, including property taxes, insurance, and other costs at our properties;
| | - |  | -----------------------------------------------------------------------------------------------------------------



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



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





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| |  |  | Our ability to acquire properties in a timely manner at appropriate amounts that provide acceptable returns;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | Unexpected costs of capital expenditures related to tenant build-out projects or other unforeseen capital expenditures;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | Our ability to sell a property when desirable at an acceptable return, including the ability of the purchaser to satisfy any continuing obligations to us;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



Other operational risks



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



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



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



| |  |  | Changes in governmental, tax, real estate, environmental, and zoning laws and regulations and the related costs of compliance;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our ability to prove compliance with any governmental, tax, real estate, environmental, and zoning in the event that any such position is questioned by the respective authority; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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PART I



|ITEM 1. |  | BUSINESS.
|------- |  | ---------



General



Wells Real Estate Fund XIII,
L.P. (the Partnership) is a Georgia public limited partnership with Leo F. Wells, III and Wells Capital, Inc. (Wells Capital), a Georgia corporation, serving as its general partners (the General Partners). The
Partnership was formed on September 15, 1998, for the purpose of acquiring, developing, owning, operating, improving, leasing, and managing income producing commercial properties for investment purposes. Upon subscription for units, the limited
partners must elect whether to have their units treated as Cash Preferred Status Units or Tax Preferred Status Units. Thereafter, limited partners have the right to change their prior elections to have some or all of their units treated as Cash
Preferred Status Units or Tax Preferred Status Units one time during each quarterly accounting period. Limited partners may vote to, among other things: (a) amend the partnership agreement, subject to certain limitations; (b) change the business
purpose or investment objectives of the Partnership; (c) add or remove a general partner; (d) elect a new general partner; (e) dissolve the Partnership; and (f) approve a sale involving all or substantially all of the Partnerships assets,
subject to certain limitations. The majority vote on any of the described matters will bind the Partnership, without the concurrence of the General Partners. Each limited partnership unit has equal voting rights, regardless of which class of unit is
selected.



On March 29, 2001, the Partnership commenced a public offering of up
to $45,000,000 of limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership commenced active operations on June 14, 2001, upon receiving and accepting
subscriptions for 125,000 Units. The offering was terminated on March 28, 2003 at which time the Partnership had sold approximately 3,026,471 Cash Preferred Status Units and 748,678 Tax Preferred Status Units representing capital contributions of
$37,751,487 from investors who were admitted to the Partnership as limited partners



As of December 31, 2003, the Partnership had sold 3,083,828 Cash Preferred Status Units and 688,220 Tax Preferred Status Units, net of conversions, held by a total of 1,235 and 154 limited partners, respectively, for total limited partner
capital contributions of $37,720,480. After payment of $3,381,542 of selling commissions, $1,158,690 of organization and offering expenses, $1,293,207 in acquisition and advisory fees and acquisition expense reimbursements, and investing $19,729,213
in Wells Fund XIII-REIT Joint Venture Partnership and $9,119,553 in Wells Fund XIII-XIV Joint Venture Partnership, as of December 31, 2003, the Partnership held net offering proceeds of approximately $2.8 million that are available for investment in
properties.



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



| |  |  | Fund-raising phase
| | - |  | ------------------



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



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



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





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



The period during which real estate assets are owned and operated by the Partnership during the initial lease terms of the tenants



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



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



| |  |  | Disposition and Liquidation phase
| | - |  | ---------------------------------



The period during which the Partnership sells its real estate investments and distributes net sales proceeds to the partners



Management believes that the Partnership is currently finishing the investing phase and
entering the holding phase and, accordingly, is focusing significant resources on locating suitable property acquisitions and managing the existing portfolio.



Cash management is a chief area of focus for the Partnership. Historically, the Partnership has not taken out borrowings from third-party lenders and, while operating
cash flows and net property sales proceeds are withheld to provide for known events from time to time, the Partnership does not maintain as a general rule cash reserves for unknown events. Instead, during the holding phase, management prefers to
maximize operating cash flows distributed to investors commensurate with the period earned; however, it is likely that, during the positioning-for- sale phase, the Partnership will be required to use cash flow from operations and/or net sale of the
Partnerships properties, which would otherwise be available for distribution to limited partners, to fund tenant improvements, leasing commissions and other leasing costs associated with the re-leasing of the Partnerships properties. The
Partnerships cash needs evolve during the course of its life cycle and, accordingly, volatility in operating returns is a natural and expected part of the process.



Employees



The Partnership has no direct employees. The employees of Wells Capital and Wells Management Company, Inc. (Wells Management), an affiliate of the General
Partners, perform a full range of real estate services including leasing and property management, accounting, asset management and investor relations for the Partnership. See Item 11, Compensation of General Partners and Affiliates, for
a summary of the compensation and fees paid to the General Partners and their affiliates during the year ended December 31, 2003.



Insurance



Wells Management carries comprehensive liability and extended coverage with respect to the properties owned by the Partnership through its interest in the joint venture. In the opinion of management, all such
properties are adequately insured.



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 provide free rent, reduced



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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.



|ITEM 2. |  | PROPERTIES.
|------- |  | -----------



During the periods presented, the Partnership owned interests in the following six properties through the affiliated joint ventures listed below (the Joint Ventures):



|                                                                            |  |                                                                              |  |                                                                                                                           |  |                               |  |      |  |     
|--------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- |  | ---- |  | ----
|                                                                            |  |                                                                              |  |                                                                                                                           |  | Occupancy %As of December 31,
|Joint Venture                                                               |  | Joint Venture Partners                                                       |  | Properties                                                                                                                |  | 2003                          |  | 2002 |  | 2001
|Wells Fund XIII-REIT Joint Venture Partnership(Fund XIII-REIT Associates) |  |    Wells Real Estate Fund XIII, L.P.    Wells Operating Partnership, L.P.* |  | 1. AmeriCredit BuildingA two-story office building located in Orange Park, Florida                                        |  | 100%                          |  | 100% |  | 100%
|                                                                            |  |                                                                              |  |                                                                                                                           | 
|                                                                            |  |                                                                              |  | 2. ADIC BuildingsTwo connected one-story office and assembly buildings located in Parker, Colorado                        |  | 100%                          |  | 100% |  | 100%
|                                                                            |  |                                                                              |  |                                                                                                                           | 
|                                                                            |  |                                                                              |  | 3. John Wiley BuildingA four-story office building located in Fishers, Indiana                                            |  | 100%                          |  | 100% |  | -   
|                                                                            |  |                                                                              |  |                                                                                                                           | 
|                                                                            |  |                                                                              |  | 4. AIU-Chicago Building(Acquired on September 19, 2003) A four-story office building located in Hoffman Estates,
Illinois |  | 98%                           |  | -    |  | -   
|                                                                            |  |                                                                              |  |                                                                                                                           | 
|Fund XIII and Fund XIV Associates (Fund
XIII-XIV Associates)              |  |    Wells Real Estate Fund XIII, L.P.    Wells Real Estate Fund XIV, L.P.   |  | 5. Siemens-Orlando Building(Acquired on October 30, 2003) Two one-story office buildings located in Orlando,
Florida      |  | 100%                          |  | 100% |  | -   
|                                                                            |  |                                                                              |  |                                                                                                                           | 
|                                                                            |  |                                                                              |  | 6. Randstad-Alanta Building(Acquired on December 19, 2003) Four-story office building located in Atlanta,
Georgia         |  | 100%                          |  | 100% |  | -   



| | * |  | Wells Operating Partnership, L.P. is a Delaware limited partnership with Wells Real Estate Investment Trust, Inc. (Wells REIT) serving as its general partner; Wells
REIT is a Maryland corporation that qualifies as a real estate investment trust. | 
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 



Each of the aforementioned
properties was acquired on an all-cash basis. The investment objectives of each of the joint venture partners listed in the above table are substantially identical to those of the Partnership. The Partnership does not have control over the
operations of the Joint Ventures; however, it does exercise significant influence. Accordingly, investments in Joint Ventures are recorded using the equity method of accounting.





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As of December 31, 2003, the lease
expirations scheduled during each of the following ten years for all properties in which the Partnership held an interest through the Joint Ventures, assuming no exercise of renewal options or termination rights, are summarized below:



|                         |  |                        |  |                    |  |                          |            |                                             |   |                                      |  |       |                                            |  |       |  
|------------------------ |  | ---------------------- |  | ------------------ |  | ------------------------ | ---------- | ------------------------------------------- | - | ------------------------------------ |  | ----- | ------------------------------------------ |  | ----- | -
|Year of Lease Expiration |  | NumberofLeasesExpiring |  | SquareFeetExpiring |  | AnnualizedGross BaseRent |            | PartnershipShare ofAnnualizedGross BaseRent |   | Percentageof TotalSquareFeetExpiring |  |       | Percentageof TotalAnnualizedGross BaseRent | 
|2005(1)                  |  | 3                      |  | 24,550             |  | $                        | 392,743    |                                             | $ | 152,816                              |  | 3.5   | %                                          |  | 3.8   | %
|2006(2)                  |  | 2                      |  | 14,331             |  |                          | 231,857    |                                             |   | 102,798                              |  | 2.0   |                                            |  | 2.2   |  
|2007(3)                  |  | 3                      |  | 42,748             |  |                          | 620,235    |                                             |   | 259,281                              |  | 6.0   |                                            |  | 6.0   |  
|2008(4)                  |  | 4                      |  | 92,134             |  |                          | 1,427,343  |                                             |   | 555,379                              |  | 13.0  |                                            |  | 13.8  |  
|2009(5)                  |  | 2                      |  | 175,799            |  |                          | 2,860,935  |                                             |   | 1,198,213                            |  | 24.8  |                                            |  | 27.6  |  
|2010(6)                  |  | 1                      |  | 48,993             |  |                          | 791,237    |                                             |   | 307,870                              |  | 6.9   |                                            |  | 7.6   |  
|2011(7)                  |  | 2                      |  | 233,204            |  |                          | 3,088,968  |                                             |   | 1,201,919                            |  | 32.9  |                                            |  | 30.0  |  
|2013(8)                  |  | 2                      |  | 77,660             |  |                          | 934,862    |                                             |   | 467,431                              |  | 10.9  |                                            |  | 9.0   |  
|                         |  |                        |  |                    |  |                          |            |                                             |   |                                      |  |       |                                            |  |       |  
|                         |  | 19                     |  | 709,419            |  | $                        | 10,348,180 |                                             | $ | 4,245,707                            |  | 100.0 | %                                          |  | 100.0 | %
|                         |  |                        |  |                    |  |                          |            |                                             |   |                                      |  |       |                                            |  |       |  



|(1) |  | AIU-Chicago Building: Lumbermens Mutual Casualty lease (approximately 7,000 square feet); John Wiley Building: Robert Half International lease (approximately 3,000 square feet),
and United Student Aid Funds lease (approximately 14,000 square feet).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | AIU-Chicago Building: WFS Financial lease (approximately 7,000 square feet); Siemens-Orlando Building: Best Buy lease (approximately 7,000 square feet).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | AIU-Chicago Building: Philips lease (approximately 33,000 square feet); and Siemens-Orlando Building: two Cape Canaveral leases (approximately 10,000 square feet).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | AIU-Chicago Building: three American InterContinental leases (approximately 79,000 square feet), and Future Electronics lease (approximately 14,000 square feet).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | John Wiley Building: John Wiley & Sons lease (approximately 124,000 square feet); and Siemens-Orlando Building: Siemens Shared Services lease (approximately 52,000 square
feet).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | AIU-Chicago Building: American InterContinental lease (approximately 49,000 square feet).
|--- |  | -----------------------------------------------------------------------------------------

|(7) |  | AmeriCredit Building: AmeriCredit lease (approximately 85,000 square feet); and ADIC Buildings: ADIC lease (approximately 148,000 square feet).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | Siemens-Orlando Building: Rinker Materials lease (approximately 13,000 square feet); and Randstad-Atlanta Building: Randstad-Atlanta lease (approximately 65,000 square feet).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Additional information about the Joint Ventures and
properties in which the Partnership owns interests during the periods presented is provided below:



Fund XIII-REIT Associates



On June 27,
2001, Fund XIII-REIT Associates was formed for the purpose of acquiring, owning, leasing, operating, and managing real properties. All income, loss, net cash flow, resale gain, and sale proceeds of Fund XIII-REIT Associates are allocated and
distributed to the Partnership and Wells Operating Partnership, L.P. according to their ownership interests, as calculated by the respective cumulative capital contributions made to Fund XIII-REIT Associates. As of December 31, 2003, the Partnership
and Wells Operating Partnership, L.P. owned equity interests in the following four properties of approximately 28% and 72%, respectively, based on their respective cumulative capital contributions to Fund XIII-REIT Associates:





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AmeriCredit Building



On July 16, 2001, Fund XIII-REIT Associates acquired the AmeriCredit
Building, a two-story office building containing approximately 85,000 rentable square feet located in Orange Park, Florida. The purchase price of the AmeriCredit Building was approximately $12,542,000, including closing costs. The purchase price was
funded by capital contributions made to Fund XIII-REIT Associates of $1,651,426 by the Partnership and $10,890,040 by Wells Operating Partnership, L.P.



The entire AmeriCredit Building is currently under a net lease agreement with AmeriCredit Financial Services Corporation (AmeriCredit), a wholly owned
subsidiary of AmeriCredit Corp., which expires in May 2011. AmeriCredit Corp., a Texas corporation with common stock publicly traded on the New York Stock Exchange, is the guarantor of the lease. AmeriCredit has the right to extend the lease for two
additional five-year periods of time by giving written notice to the landlord at least 12 months prior to the expiration date of the then current lease term. The base rent payable for each extended term of the lease will be assessed at 95% of the
currently prevailing market rate.



Under the lease, AmeriCredit is required to
pay all operating expenses, routine maintenance, and repairs to the AmeriCredit Building. Fund XIII-REIT Associates, as landlord, is responsible for the repair and maintenance of the roof, structural systems, and parking lot, as well as payment of a
monthly 7% sales tax on rental income for the AmeriCredit Building. AmeriCredit is also required to reimburse Fund XIII-REIT Associates for sales tax costs through increased rental income. The rental information below is provided net of these sales
tax reimbursements.



The AmeriCredit lease contains a termination option, which
may be exercised by AmeriCredit effective as of the end of the seventh lease year by providing twelve months notice to Fund XIII-REIT Associates. If AmeriCredit exercises its termination option, it will be required to pay the joint venture a
termination payment estimated at $1.9 million, or approximately sixteen months of base rent.



The average effective annual rental rate per square foot at the AmeriCredit Building was $17.22 for 2003, $17.25 for 2002, and $17.03 for 2001, the first year of ownership.



ADIC Buildings



On December 21, 2001, Fund XIII-REIT Associates acquired the ADIC Buildings, two one-story office buildings connected to a light assembly
building containing approximately 148,200 rentable square feet located in Parker, Colorado. Additionally, Fund XIII-REIT Associates purchased an undeveloped 3.43-acre tract of land immediately adjacent to the ADIC Buildings (ADIC Land).
The purchase price of the ADIC Buildings and ADIC Land was approximately $13,170,000, including closing costs. The purchase price was funded by capital contributions made to Fund XIII-REIT Associates of $6,500,000 by the Partnership and $6,669,834
by Wells Operating Partnership, L.P.



The ADIC Buildings are currently under a
net lease agreement with ADIC, which expires in December 2011. ADIC has the right to extend the lease for two additional five-year periods of time by giving written notice to the landlord at least nine months prior to the expiration date of the then
current lease term. The base rent payable for each extended term of the lease will be the then current market rate.



The average effective annual rental rate per square foot for the ADIC Buildings was $9.02 for 2003, $9.07 for 2002, and $8.09 for 2001, the first year of ownership.





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John Wiley Building



On December 12, 2002, Fund XIII-REIT Associates acquired the John
Wiley Building, a four-story office building containing approximately 141,047 rentable square feet located in Fishers, Indiana. The purchase price of the John Wiley Building was $17,507,000, including closing costs. The purchase price was funded by
capital contributions made to Fund XIII-REIT Associates of $8,577,787 by the Partnership and $8,928,915 by Wells Operating Partnership, L.P.



The John Wiley Building is currently under net lease agreements with John Wiley & Sons (123,674 square feet), Robert Half International (2,960 square feet), and
United Students Aid Funds (14,413 square feet), which expire in October 2009, April 2005, and July 2005, respectively. John Wiley & Sons has the right to extend the lease for two additional five-year periods by giving written notice to the
landlord at least 12 months prior to the expiration date equal to 95% of the then fair market rate but not less than 8% over the last year of the previous term.



The average effective annual rental rate per square foot for the John Wiley Building was approximately $15.52 for 2003 and $16.24 for 2002, the first year of
ownership.



AIU  Chicago Building



On September 19, 2003, Fund XIII-REIT Associates acquired the AIU  Chicago Building, a
four-story office building containing approximately 193,700 rentable square feet, on an approximately 2.7-acre tract of land located in located in Hoffman Estates, Illinois. The purchase price of the AIU  Chicago Building was approximately
$26,977,000, including closing costs. Acquisition costs were funded by capital contributions made to Fund XIII-REIT Associates of $3,000,000 by the Partnership and $23,977,172 by Wells Operating Partnership, L.P.



The AIU  Chicago Building is primarily leased under net lease agreements (i.e.,
operating costs and maintenance costs are paid by the tenants) with American Intercontinental University (AIU) (approximately 127,626 square feet, or 66% of the property) and Philips Electronics North American Corporation (approximately
32,860 square feet, or 17% of the property). An additional 14% of the building is leased to three tenants: Future Electronics (13,501 square feet, expiring October 2008), WFS Financial (7,255 square feet, expiring April 2006), and Lumbermens Mutual
Casualty (7,177 square feet, expiring September 2005). As of December 31, 2003, the building is approximately 98% leased.



The American Intercontinental University lease (the AIU Lease) commenced in May 2002 and expires in June 2008, except for approximately 48,933 rentable square
feet (the Expansion Space), which expires in December 2010. The current annual base rent payable under the AIU Lease is $1,672,970. AIU has the right, at its option, to extend the initial term of its lease, excluding the Expansion Space,
for one additional five-year period at the then-current market rental rate. AIU has a right of first offer to lease additional space in the AIU  Chicago Building upon such space becoming available. The AIU Lease prohibits the Fund XIII-REIT
Associates from leasing any space in the AIU  Chicago Building to any business which offers post-high school or corporate training as its primary function.



Philips Electronics North America Corporation (Philips North America) is a wholly owned subsidiary of Philips Holding USA Inc.,
which is a wholly owned subsidiary of Koninklijke Philips Electronics N.V. (Philips). Philips North America manages the North American operations of Philips, a worldwide electronics manufacturer. Philips, whose shares are publicly traded
on the New York Stock Exchange, operates in over 60



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countries. The Philips North America lease
(the Philips Lease) covers approximately 32,860 rentable square feet and commenced in July 2002 and expires in July 2007. The current annual base rent payable under the Philips Lease is $414,036. Philips North America has the right, at
its option, to extend the initial term of its lease for one additional three-year period at annual base rents per square foot of $14.50, $15.10, and $15.75, respectively.



The average effective annual rental rate per square foot for the AIU  Chicago Building was approximately $9.23 for 2003, the first
year of ownership.



Fund XIII-XIV Associates



On August 20, 2003, Fund XIII-XIV Associates was formed for the purposes of acquiring,
developing, operating, and selling real properties. All income, loss, net cash flow, resale gain, and sale proceeds of Fund XIII-XIV Associates are allocated and distributed to the Partnership and Wells Real Estate Fund XIV, L.P. according to their
ownership interests, as calculated by the respective cumulative capital contributions made to Fund XIII-XIV Associates. As of December 31, 2003, the Partnership and Wells Real Estate Fund XIV, L.P. owned approximately 50% and 50%, respectively, of
the following two properties based on their respective cumulative capital contributions to Fund XIII-IV Associates:



Siemens  Orlando Building



On October 30, 2003, Fund XIII-XIV Associates acquired the Siemens  Orlando Building, which is comprised of two one-story office buildings, containing approximately
82,000 aggregate rentable square feet, on an approximately 7.5-acre tract of land located in Orlando, Florida. The purchase price of the Siemens  Orlando Building was approximately $11,710,000, including closing costs. The acquisition of the
Siemens  Orlando Building was funded by equal capital contributions made to Fund XIII-XIV Associates of approximately $5,855,000 by the Partnership and Wells Real Estate Fund XIV, L.P.



The Siemens  Orlando Building, which was completed in 2002, is leased under net lease
agreements (i.e., operating costs and maintenance costs are paid by the tenants) to Siemens Shared Services, LLC (approximately 63%); Rinker Materials of Florida, Inc. (approximately 16%); Cape Canaveral Tour & Travel, Inc. (approximately 12%);
and Best Buy Stores, L.P. (approximately 9%). As of December 31, 2003, the Siemens  Orlando Building is 100% leased.



Siemens Shared Services LLC (Siemens) occupies approximately 52,000 rentable square feet of the Siemens  Orlando Building. Siemens, a subsidiary of
Siemens AG, provides accounting and human resources services to the operating subsidiaries of Siemens AG, including Siemens Corporation, the guarantor of the Siemens lease, which conducts the American operations for Siemens AG. Siemens has its
corporate headquarters in Iselin, New Jersey. Siemens AG is a worldwide electronics and electrical engineering company with corporate headquarters in Munich, Germany.



The Siemens lease (the Siemens Lease) commenced in 2002 and expires in 2009. The current annual base rent payable under the
Siemens Lease is approximately $695,000. Siemens has the right, at its option, to extend the initial term of its lease for two additional three-year periods at 95% of the then-current market rental rate. Siemens has an option to lease additional
space in the Siemens  Orlando Building upon such space becoming available and subject to first refusal rights of other tenants of the Siemens  Orlando Building. In addition, Siemens has the right to terminate up to 25,000 rentable square
feet of the Siemens lease in 2007 by paying a termination fee equal to $7.47 per rentable square foot terminated.





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Rinker Materials of Florida, Inc.
(Rinker) occupies approximately 13,000 rentable square feet of the Siemens  Orlando Building. Rinker is a privately held concrete company with corporate headquarters in West Palm Beach, Florida. Rinker provides construction and
building materials in Florida, Georgia, and South Carolina, including cement, aggregate, brick, glass block, reinforcing steel, construction chemicals, drywall, and fireplaces. Rinker is a wholly owned subsidiary of Rinker Group Limited
(Rinker Group), an Australian company with corporate headquarters in Chatswood, Australia. Rinker Group is a worldwide heavy building materials corporation. The Rinker lease (the Rinker Lease) commenced in 2003 and expires in
2013. The current annual base rent payable under the Rinker Lease is approximately $170,000. Rinker has the right, at its option, to extend the initial term of its lease for two additional five-year periods at the then-current market rental rate. In
addition, Rinker has a right of first refusal to lease additional space in the Siemens  Orlando Building upon such space becoming available.



Cape Canaveral Tour and Travel, Inc. (Cape Canaveral) occupies approximately 10,000 rentable square feet of the Siemens  Orlando Building under two
separate leases. Cape Canaveral is a subsidiary of Kosmas Group International, Inc. (Kosmas), the guarantor of the Cape Canaveral leases (the Cape Canaveral Leases). Kosmas is a vacation ownership company with corporate
headquarters in New Smyrna Beach, Florida. Kosmas provides timeshare ownership of ten resorts in New Smyrna Beach, two in Kissimmee, and one in Key West, Florida. The Cape Canaveral Leases, which commenced in 2002 and 2003, expire in 2007. The
current annual base rent payable under the Cape Canaveral Leases is approximately $142,000. Cape Canaveral has the right, at its option, to extend the initial term of its leases for two additional five-year periods at the then-current market rental
rate.



Best Buy Stores, L.P. (Best Buy) occupies approximately
7,000 rentable square feet of the Siemens  Orlando Building. Best Buy is a wholly owned subsidiary of Best Buy Co., Inc. (Best Buy Co.). Best Buy Co. is a retailer of consumer electronics, personal computers, entertainment
software, and appliances in North America. Best Buy Co., whose shares are publicly traded on the New York Stock Exchange, has its corporate headquarters located in Minneapolis, Minnesota. The Best Buy lease (the Best Buy Lease) commenced
in 2001 and expires in 2006. The current annual base rent payable under the Best Buy Lease is approximately $102,000. Best Buy has the right, at its option, to extend the initial term of its lease for two additional five-year periods at 95% of the
then-current market rental rate.



The average effective annual rental rate per
square foot for the Siemens  Orlando Building was approximately $20.26 for 2003, the first year of ownership.



Randstad  Atlanta Building



On December 19, 2003, in a sale-leaseback transaction, Fund XIII-XIV Associates acquired the Randstad  Atlanta Building, a four-story office building containing
approximately 65,000 aggregate rentable square feet, on an approximately 2.9-acre tract of land located in Atlanta, Georgia. The purchase price of the Randstad  Atlanta Building was approximately $6,520,000, including closing costs. The
purchase price was funded by equal capital contributions made to Fund XIII-XIV Associates of approximately $3,260,000 by the Partnership and Wells Real Estate Fund XIV, L.P.



The Randstad  Atlanta Building, which was completed in 1985, is leased under a net lease agreement (i.e., operating costs and
maintenance costs are paid by the tenants) entirely to Randstad Staffing Services, Inc. (Randstad), an affiliate of Randstad Holdings NV (Randstad Holdings). Randstad Holdings, the guarantor of the Randstad lease (the
Randstad Lease), is an international supplier of temporary and contract staffing services. Randstad, which has its corporate headquarters in the Randstad  Atlanta Building, manages the operations of Randstad Holdings in the United
States and Canada. Randstad operates in five core areas, including office, industrial, creative, technical, and professional services.



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The Randstad Lease commenced in 2003 and
expires in 2013. The current annual base rent payable under the Randstad Lease is approximately $646,000. Randstad has the right, at its option, to extend the initial term of its lease for two additional five-year periods at 95% of the
then-current market rental rate. In addition, Randstad has a right of first refusal to purchase the Randstad  Atlanta Building should Fund XIII-XIV Associates decide to sell the Randstad  Atlanta Building in the future. Fund XIII-XIV
Associates, as landlord, is responsible for the maintenance and repair of the roof, plumbing, electrical, heating and air conditioning, exterior walls, doors, windows, corridors, and other common areas of the Randstad  Atlanta Building.



The average effective annual rental rate per square foot for the Randstad
 Atlanta Building was approximately $11.24 for 2003, the first year of ownership.



|ITEM 3. |  | LEGAL PROCEEDINGS.
|------- |  | ------------------



There were no material pending legal proceedings or proceedings known to be contemplated by governmental authorities involving the Partnership during the fourth quarter of 2003.



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



No matters were submitted to a vote of the limited partners during the fourth quarter of 2003.



PART II



|ITEM 5. |  | MARKET FOR PARTNERSHIPS UNITS AND RELATED SECURITY HOLDER MATTERS.
|------- |  | -------------------------------------------------------------------



As of February 15, 2004, the Partnership had 3,083,828 outstanding Cash Preferred Status Units held by a total of 1,246 limited partners and
688,220 outstanding Tax Preferred Status Units held by a total of 154 limited partners. The capital contribution per unit is $10.00. There is no established public trading for the Partnerships limited partnership units, and it is not
anticipated that a public trading market for the units will develop. Under the partnership agreement, the General Partners have the right to prohibit transfers of units.



In order for NASD members and their associated persons to participate in the offering and sale of units of the Partnership, the Partnership
is required pursuant to NASD Rule 2810(b)(5) to disclose in each annual report distributed to limited partners a per-unit estimated value of the units, the method by which it was developed and the date of the data used to develop the estimated
value. In addition, pursuant to Section 15.2 of the partnership agreement and the Partnerships prospectus, the General Partners are required to prepare annual statements of estimated unit values to assist fiduciaries of retirement plans
subject to the annual reporting requirements of ERISA in the preparation of their reports relating to an investment in the Partnership. Pursuant to Section 15.2 of the partnership agreement and the Partnerships prospectus, for the first three
fiscal years following the termination of the offering of units in the Partnership, the estimated value of the units shall be deemed to be $10 per unit for these purposes. The basis for this valuation is the fact that the Partnership was recently
engaged in a public offering of its units at the price of $10.00 per unit. However, please note that there is no public trading market for the units nor is one ever expected to develop and there can be no assurance that limited partners could
receive $10 per unit if such a market did exist and they sold their units or that they will be able to receive such amount for their units in the future. In addition, the Partnership has not performed an evaluation of the Partnership properties and,
therefore, this valuation is not based upon the value of the Partnership properties, nor does it represent the amount limited partners would receive if the Partnership properties were sold and the



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proceeds distributed to the limited partners
in a liquidation of the Partnership, which amount would most likely be less than $10.00 per unit as a result of the fact that, at the time the Partnership is purchasing its properties, the amount of funds available for investment in properties is
reduced by the 16% of offering proceeds raised by the Partnership, which are used to pay selling commissions and dealer manager fees, organization and offering expenses and acquisition and advisory fees, as described in more detail in this Annual
Report and the Partnerships Prospectus.



After the expiration of this
three-year period, the General Partners are required under the partnership agreement to determine an estimated per unit valuation by estimating the amount a holder of Partnership units would receive if the Partnership properties were sold as of the
close of the Partnerships fiscal year at their estimated fair market values and the proceeds from such sales (without reductions for selling expenses and other costs), together with any other funds of the Partnership, were distributed in a
liquidation of the Partnership. Such estimated property values will be based upon annual valuations performed by the General Partners, and no independent property appraisals will be obtained. Accordingly, these estimates, when prepared by the
General Partners, should not be viewed as an accurate reflection of the values of the limited partners units, what a limited partner might be able to sell his units for, or the fair market value of the Partnership properties, nor will they
represent the amount of net proceeds limited partners would receive if the Partnership properties were sold and the proceeds distributed in a liquidation of the Partnership. The valuations to be performed by the General Partners will be estimates
only, and will be based a number of assumptions which may not be accurate or complete. In addition, property values are subject to change and could decline after the date of the valuations.



Limited partners holding Cash Preferred Status Units are entitled to a distribution from Net
Cash From Operations, as defined in the partnership agreement, of cash flow, less adequate cash reserves for other obligations of the Partnership for which there is no provision, on a per unit basis until they have received distributions in each
fiscal year of the Partnership equal to 10% of their adjusted capital contributions. After this preference is satisfied, the General Partners will receive an amount of Net Cash From Operations equal to 10% of the total amount of Net Cash From
Operations distributed. Thereafter, the limited partners holding Cash Preferred Status Units will receive 90% of Net Cash From Operations and the General Partners will receive 10%. No Net Cash From Operations will be distributed to limited partners
holding Tax Preferred Status Units. Holders of Cash Preferred Status Units will, except in limited circumstances, be allocated none of the Partnerships net loss, depreciation, and amortization deductions. These deductions will be allocated to
limited partners holding Tax Preferred Status Units, until their capital account balances have been reduced to zero. No distributions have been made to limited partners holding Tax Preferred Status Units or to the General Partners as of December 31,
2003.



Cash available for distribution to the limited partners is distributed
on a quarterly basis. Cash distributions made to limited partners holding Cash Preferred Status Units during 2002 and 2003 are summarized below:



|                                |  |                       |         |                  |   |                  |  |   |     
|------------------------------- |  | --------------------- | ------- | ---------------- | - | ---------------- |  | - | ----
|Distributions for Quarter Ended |  | Total CashDistributed |         | InvestmentIncome |   | Return ofCapital
|March 31, 2002                  |  | $                     | 164,204 |                  | $ | 0.14             |  | $ | 0.00
|June 30, 2002                   |  | $                     | 171,967 |                  | $ | 0.11             |  | $ | 0.00
|September 30, 2002              |  | $                     | 215,147 |                  | $ | 0.13             |  | $ | 0.00
|December 31, 2002               |  | $                     | 253,090 |                  | $ | 0.12             |  | $ | 0.00
|March 31, 2003                  |  | $                     | 304,010 |                  | $ | 0.12             |  | $ | 0.00
|June 30, 2003                   |  | $                     | 340,478 |                  | $ | 0.11             |  | $ | 0.00
|September 30, 2003              |  | $                     | 401,807 |                  | $ | 0.13             |  | $ | 0.00
|December 31, 2003               |  | $                     | 501,122 |                  | $ | 0.17             |  | $ | 0.00





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The fourth quarter 2003 distribution was
accrued in 2003 and paid to limited partners holding Cash Preferred Status Units in February 2004. No cash distributions were made to limited partners holding Tax Preferred Status Units or to the General Partners in 2003 or 2002.



|ITEM 6. |  | SELECTED FINANCIAL DATA.
|------- |  | ------------------------



The following sets forth a summary of the selected financial data as of and for the year ended December 31, 2003, 2002, and 2001:



|                                       |  |      |            |   |      |   |            |      |  |   |           |  
|-------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | --------- | -
|                                       |  | 2003 |            |   | 2002 |   |            | 2001 | 
|Total assets                           |  | $    | 32,516,654 |   |      | $ | 23,930,275 |      |  | $ | 9,518,611 |  
|Total revenues                         |  |      | 1,049,108  |   |      |   | 621,381    |      |  |   | 96,685    |  
|Net income                             |  |      | 888,403    |   |      |   | 478,385    |      |  |   | 34,868    |  
|Net loss allocated to General Partners |  |      | 0          |   |      |   | 0          |      |  |   | (500      | )
|Net income allocated to                |  |      |            |   |      |   |            |      |  |   |           |  
|Cash Preferred Limited Partners        |  |      | 1,627,786  |   |      |   | 795,851    |      |  |   | 84,293    |  
|Net loss allocated to                  |  |      |            |   |      |   |            |      |  |   |           |  
|Tax Preferred Limited Partners         |  |      | (739,383   | ) |      |   | (317,466   | )    |  |   | (48,925   | )
|Net income per weighted average (1)    |  |      |            |   |      |   |            |      |  |   |           |  
|Cash Preferred Limited Partner Unit    |  | $    | 0.56       |   |      | $ | 0.52       |      |  | $ | 0.20      |  
|Net loss per weighted average (1)      |  |      |            |   |      |   |            |      |  |   |           |  
|Tax Preferred Limited Partner Unit     |  | $    | (1.09      | ) |      | $ | (1.02      | )    |  | $ | (0.55     | )
|Cash Preferred Limited Partner Unit:   |  |      |            |   |      |   |            |      |  |   |           |  
|Investment Income                      |  | $    | 0.53       |   |      | $ | 0.50       |      |  | $ | 0.08      |  
|Return of Capital                      |  | $    | 0.00       |   |      | $ | 0.00       |      |  | $ | 0.00      |  



|(1) |  | Weighted average units are calculated by averaging units over the period during which they are outstanding and converted to/from Cash Preferred Status Units or Tax Preferred
Status Units.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 7. |  | 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 presented in Item 6 and our
accompanying financial statements and notes thereto.



(a)    Overview



Management believes that
the Partnership is currently finishing the investing phase and entering the holding phase. As of December 31, 2003, the Partnership owned interests in six properties through interests in affiliated joint ventures and held investor proceeds of
approximately $2.8 million, which are available for investment in properties. As of the date of this filing, each of the six properties in which the Partnership owns an interest is substantially leased to tenants at the beginning of their respective
initial lease terms.



As the Partnership evolves through the life cycle
detailed in Item 1, our most significant risks and challenges continue to evolve concurrently. At such time as we enter the positioning for sale phase, we anticipate that we will focus on re-leasing vacant space and space that may become vacant upon
the expiration of our current leases. In doing so, we will seek to maximize returns to the limited partners by negotiating long-term leases at market rental rates while attempting to minimize downtime, re-leasing expenditures, ongoing property level
costs and



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portfolio costs. Later as we embark into the
disposition and liquidation phase, our attention will shift to locating suitable acquirers, negotiating purchase-sale contracts that will attempt to maximize the total return to the limited partners, and minimize contingencies and our post-closing
involvement with the acquirer.



During 2003, net income increased primarily due
the acquisitions of the AIU  Chicago Building, the Siemens  Orlando Building and the Randstad  Atlanta Building in 2003, and recognizing a full year of operations for the John Wiley Building for the first time in 2003. Cash flows
declined in 2003, primarily as a result of investing in the aforementioned property acquisitions and raising less capital in 2003, as compared to 2002, as the offering closed effective March 28, 2003.



During 2004, the Partnership anticipates transitioning out of the initial investing stage and
completely into the initial holding stage upon investing all available investor proceeds in properties. Substantially all of our recurring operating revenues are generated from the operations of the properties in the Partnerships portfolio. On
a quarterly basis, we deduct the expenses related to the recurring operations of the properties and the portfolio from such revenues and assess the amount of the remaining cash flows that will be required to fund known re-leasing costs and other
capital improvements. Any residual operating cash flows are considered available for distribution to the limited partners and will generally be paid quarterly. As further outlined in section (b) below, we anticipate increases in cash available for
operating distributions to limited partners as the Partnership benefits from a full year of operations for the properties acquired in 2003 and to be acquired in 2004 with the remaining investor proceeds.



Industry Factors



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



General Economic and Real Estate Market Commentary



The U.S. economy appears to be recovering; however, thus far it has been a
jobless recovery, and because of this, real estate office fundamentals may not improve until employment growth strengthens. The economy has shown signs of growth recently, as companies have recommenced making investments in new employees. Job growth
is the most significant demand driver for office markets. The jobless recovery has resulted in a demand deficit for office space. In general, the real estate office market lags behind the overall economic recovery and, therefore, recovery is not
expected until late 2004 or 2005 at the earliest, and then will vary by market.



Overall, real estate market fundamentals are weak; however, capital continues to flow into the asset class. This increased capital drives the prices of many properties upward and investor returns downward. There is a
significant pricing differential in underwriting parameters between well-leased assets with credit tenants and those with either existing vacancies or substantial near-term tenant rollover. Properties with long-term leases to strong credit tenants
have seen an increase in value.



The office market has
significant excess space. Vacancy levels are believed to be at or near their peak. There is some encouraging news, new construction continues to taper off, coming to a complete halt in many markets. As a result of the slow down in new construction
and the modest decline in sublease space, net absorption has turned positive, although barely, at year-end. Many industry professionals believe office market fundamentals are bottoming-out; however, a recovery cannot be expected until job growth and
corresponding demand for office space increases.



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(b)    Results of
Operations



Gross Revenues



Gross revenues of the Partnership were $1,049,108, $621,381, and $96,685 for the years ended
December 31, 2003, 2002, and 2001, respectively, due to corresponding increases in equity in income of Joint Ventures described below and increases in interest income commensurate with the change in weighted average investor proceeds held during
each period. The Partnership commenced operations on June 14, 2001 and made initial investments in Fund XIII-REIT Associates and Fund XIII-XIV Associates on June 27, 2001 and August 30, 2003, respectively. As of December 31, 2003, the Partnership
has invested in four income-producing properties through Fund XIII-REIT Associates and two income-producing properties through Fund XIII-XIV Associates.



Equity In Income of Joint Ventures



Gross Revenues of Joint Ventures



Gross revenues of the Joint Ventures increased substantially in 2003, as compared to 2002 and 2001, primarily due to: (i) the acquisitions of the
AIU-Chicago Building in September 2003, the Siemens  Orlando Building in October 2003, the Randstad  Atlanta Building in December 2003, and (ii) recognizing a full year of operations for the John Wiley Building for the first time in
2003.



Expenses of Joint Ventures



Expenses of the Joint Ventures increased substantially in 2003, as compared
to 2002 and 2001, primarily as a result of: (i) additional operating expenses associated with the AIU-Chicago Building, Siemens-Orlando Building and Randstad-Atlanta Building acquisitions, and full year of operations for the John Wiley Building for
the first time in 2003, as noted above, and (ii) additional depreciation expense and amortization of intangible lease assets incurred in connection with the 2003 and 2002 acquisitions.



As a result of the aforementioned factors, equity in income of Joint Ventures was $931,683, $531,457, and $58,610 for the
years ended December 31, 2003, 2002, and 2001, respectively.



Expenses of
the Partnership



Expenses of the Partnership were $160,705, $142,996,
and $61,817 for the years ended December 31, 2003, 2002, and 2001, respectively. The 2003 increase from 2002, is primarily attributable to increases in: (i) administrative costs incurred in response to new reporting and regulatory requirements; we
anticipate additional increases related to implementing and adhering to such reporting and regulatory requirements on a going-forward basis, and (ii) accounting fees related to the interpretation and implementation of Statement of Financial
Accounting Standard No. 141. The 2002 increase from 2001 is primarily due to increases in administrative salaries and legal and accounting fees related to the growth in operations resulting from a full year of operations for the first time in 2002,
as the Partnership commenced its offering of limited partnership units in March 2001.



Net Income of the Partnership



As a result of the
aforementioned changes in revenues and expenses, net income of the Partnership was $888,403, $478,385, and $34,868 for the years ended December 31, 2003, 2002, and 2001, respectively.



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(c)    Liquidity and
Capital Resources



Cash Flows From Operating Activities



Net cash flows from operating activities were $(118,986), $(7,821),
and $81,705, for the years ended December 31, 2003, 2002, and 2001, respectively. The 2003 increase in cash flows used, as compared to 2002, was primarily attributable to an increase in partnership expenses, as described in the previous section, and
a change in the timing of paying accounts payable. The 2002 decrease, as compared to 2001, was primarily due to additional salaries, printing, and legal costs of approximately $58,000, $12,000, and $4,000, respectively, as the Partnership commenced
operations in June 2001 and was, therefore, operational for a full year in 2002 for the first time.



Cash Flows From Investing Activities



Net cash flows from investing activities were $(11,171,020), $(8,500,459), and $(8,491,585), for 2003, 2002, and 2001, respectively. The 2003 increase in cash flows used, as compared to 2002, was primarily attributable to the
Partnerships investments in Fund XIII-REIT Associates for the purchase of the AIU  Chicago Building, and in Fund XIII-XIV Associates for the purchase of the Siemens  Orlando Building and Randstad  Atlanta Building, exceeding
the investments made for the purchase of the John Wiley Building in 2002. The net cash from investing activities remained relatively stable in 2002, as compared to 2001.



Cash Flows From Financing Activities



Net cash flows from financing activities were $7,798,759, $13,842,486, and $9,371,117, for 2003, 2002, and 2001, respectively. The 2003 decrease, as compared to 2002,
is primarily attributable to: (i) the raising less capital in 2003, as compared to 2002, as the Partnerships offering terminated in March 2003, and (ii) the increase in cash available for distributions paid to limited partners in 2003, as
compared to 2002, as a result of the first full year of operations for the John Wiley Building, as well as initial operating cash flows generated from the AIU-Chicago Building, Siemens  Orlando Building and the Randstad  Atlanta Building
during the third and fourth quarters of 2003.



The 2002 increase in cash
flows, as compared to 2001, was primarily a result of raising additional capital during the entire year of 2002, whereas the offering did not commence until March 29, 2001, and is partially offset by the payment of additional related selling
commissions and offering cost reimbursements, as well as distributions to limited partners.



Distributions



The Partnership
made distributions to the limited partners holding Cash Preferred Units of $0.53, $0.52 and $0.08 per unit for the years ended December 31, 2003, 2002, and 2001, respectively. Such distributions have been made from net cash from operations and
distributions received from the Partnerships investment in Fund XIII-REIT Associates and Fund XIII-XIV Associates. No distributions have been made to the limited partners holding Tax Preferred Units or to the General Partners.



Capital Resources



The Partnership is an investment vehicle formed for the purpose of acquiring, owning and
operating income-producing real properties and as of December 31, 2003, the Partnership was holding net offering proceeds of



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approximately $2.8 million available for
investment in such properties. At this time the General Partners are unaware of any specific need requiring the capital resources of the Partnership.



(d)    Related-Party Transactions



Offering Expense Reimbursements



The Partnership reimburses Wells Capital for organizational and offering expenses equal to the lesser of actual costs incurred or 3% of the aggregate gross offering
proceeds, subject to the overall limitations of the partnership agreement. Organizational and offering expenses include such costs as legal and accounting fees, printing costs, and other offering expenses, but do not include sales or underwriting
commissions. As of December 31, 2003, the Partnership had paid aggregate fees of $1,131,615 to Wells Capital, which amounted to 3% of the aggregate gross offering proceeds received to date.



Selling Commissions and Dealer-Managers Fees



The Partnership pays selling commissions and dealer manager fees up to 7% and equal to 2.5%,
respectively, of aggregate gross offering proceeds to Wells Investment Securities, Inc., an affiliated and registered securities broker-dealer, and/or other broker-dealers participating in the offering of the Partnerships limited partner units
(Participating Dealers). Wells Investment Securities, Inc. may re-allow a portion of its dealer-manager fee to Participating Dealers in the aggregate amount of up to 1.5% of aggregate gross offering proceeds as marketing fees, or to
reimburse Participating Dealers for the costs and expenses of representatives of such Participating Dealers of attending educational conferences and seminars. As of December 31, 2003, the Partnership had paid aggregate selling commissions of
$3,381,542 and dealer-manager fees of $935,552 of which all $3,381,542 of the selling commissions and $373,818 of the dealer-manager fees were re-allowed to Participating Dealers.



Acquisition and Advisory Fees and Acquisition Expense Reimbursements



The Partnership pays Wells Capital for acquisition and advisory services and acquisition
expenses equal to 3.5% of the aggregate gross offering proceeds, subject to certain overall limitations contained in the partnership agreement. As of December 31, 2003, the Partnership had paid aggregate fees of $1,293,207 to Wells Capital, which
amounted to 3.5% of the aggregate gross offering proceeds received to date.



Management and Leasing Fees



Wells Management, an
affiliate of the General Partners, receives compensation for supervising the management and leasing of the Partnership properties equal to the lesser of (a) fees that would be paid to a comparable outside firm or (b) 4.5% of the gross revenues
generally paid over the life of the lease plus a separate competitive fee for the one-time initial lease-up of newly constructed properties generally paid in conjunction with the receipt of the first months rent. In the case of commercial
properties which are leased on a long-term (ten or more years) net basis, the maximum property management fee from such leases shall be 1% of the gross revenues generally paid over the life of the leases except for a one-time initial leasing fee of
3% of the gross revenues on each lease payable over the first five full years of the original lease term. The Partnerships share of management and leasing fees and lease acquisition costs incurred through the Joint Ventures were $92,249,
$46,659, and $10,488 for the years ended December 31, 2003, 2002, and 2001, respectively.



Administration Reimbursements



Wells Capital and its affiliates perform certain administrative services for the Partnership, such as accounting and other partnership administration, and incur the related expenses. Such expenses are allocated among the various



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Wells Real Estate Funds based on time spent
on each fund by individual administrative personnel. During 2003, 2002, and 2001, the Partnership had paid $78,597, $90,395, and $31,671, respectively, to Wells Capital and its affiliates for reimbursement of such administrative services. See Note 8
to the financial statements included with this report for a summary of the Partnerships administrative costs.



Conflicts of Interest



The General Partners are also general partners of other Wells Real Estate Funds. As such, there may exist conflicts of interest where the General Partners in their
capacity as general partners of other Wells Real Estate Funds may be in competition with the Partnership in connection with property acquisitions or for tenants in similar geographic markets.



(e)    Inflation



The real estate market has not been affected significantly by inflation in the past three
years due to the relatively low inflation rate. However, there are provisions in the majority of tenant leases, which would protect the Partnership from the impact of inflation. These provisions include reimbursement billings for operating expense
pass-through charges, real estate tax, and insurance reimbursements on a per-square-foot basis, or in some cases, annual reimbursement of operating expenses above a certain per-square-foot allowance. However, due to the long-term nature of the
leases, the leases may not reset frequently enough to cover inflation.



(f)    Application of Critical Accounting Policies



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



Below is a discussion of the accounting policies that management
considers to be critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain. Additional discussion of accounting policies that management considers to be significant,
including further discussion of the critical accounting policies described below, is presented in Note 1 to the Partnerships financial statements included in this report.



Investment in Real Estate Assets



The Partnerships management is required to make subjective assessments as to the useful lives of its depreciable assets. The Partnership considers the period of
future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of the Partnerships assets by class are as follows:



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|                      |  |                                      
|--------------------- |  | -------------------------------------
|Building              |  | 25 years                             
|Building improvements |  | Remaining useful life of the building
|Land improvements     |  | 20 years                             
|Tenant improvements   |  | Lease term                           



In the event that management uses
inappropriate useful lives or methods for depreciation, the Partnerships net income would be misstated.



Valuation of Real Estate Assets



Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets in which the Partnership has an ownership interest, either directly or through investments in joint
ventures, may not be recoverable. When indicators of potential impairment are present which indicate that the carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by
determining whether the carrying value of the real estate assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted
future cash flows do not exceed the carrying value, management adjusts the real estate assets to the fair value and recognizes an impairment loss. Management has determined that there has been no impairment in the carrying value of real estate
assets held by the Partnership at December 31, 2003.



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



Allocation of Purchase Price of Acquired Assets



On January 1, 2002, the Partnership adopted Statement of Financial Accounting Standards No. 141 Business Combinations,(FAS 141) and
Statement of Financial Accounting Standards No. 142 Goodwill and Intangibles (FAS 142). These standards govern business combinations, asset acquisitions and the accounting for acquired intangibles.



Upon the acquisition of real properties, it is the Partnerships policy to allocate the
purchase price of properties to acquired tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, and the value of in-place leases, based in
each case on their fair values.



The fair values of the tangible assets of an
acquired property (which includes land and building) are determined by valuing the property as if it were vacant, and the as-if-vacant value is then allocated to land and building based on managements determination of the relative
fair value of these assets. Management determines the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying
costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses during the expected
lease-up



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periods based on current market demand.
Management estimates costs to execute similar leases including leasing commissions, and other related costs.



The fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between
(i) the contractual amounts to be paid pursuant to the in-place leases and (ii) managements estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases. The
above-market and below-market lease values are capitalized as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases.



The fair values of in-place leases include direct costs associated with obtaining a new
tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements, and other direct costs
and are estimated based on managements consideration of current market costs to execute a similar lease. These direct costs are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is
calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a
particular tenant for other locations. These lease intangibles are amortized to rental income over the remaining terms of the respective leases.



Estimates of the fair values of the tangible and intangible assets requires us to estimate market lease rates, property operating expenses, carrying costs during lease-up
periods, discount rates, market absorption periods, and the number of years the property is held for investment. The use of inappropriate estimates would result in an incorrect assessment of the Partnerships purchase price allocations which
could impact the amount of the Partnerships reported net income.



|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|-------- |  | -----------------------------------------------------------



Since the Partnership does not borrow any money or make any foreign investments, it is not subject to risks relating to interest rate or foreign currency exchange rate
fluctuations.



|ITEM 8. |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
|------- |  | --------------------------------------------



The financial statements of the Registrant and supplementary data are detailed under Item 15 (a) and filed as part of the report on the pages indicated.



|ITEM 9. |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- |  | -------------------------------------------------------------------------------------



There were no disagreements with the Partnerships independent public accountants during the years ended December 31, 2003 and 2002.



On May 16, 2002, the General Partners dismissed Arthur Andersen LLP (Andersen)
as the Partnerships independent public accountants effective immediately.



Andersens report on the financial statements of the Partnership for the year ended December 31, 2001 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles.



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During the year ended December 31, 2001 and
through the date of Andersens dismissal, there were no disagreements with Andersen on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Andersens
satisfaction, would have caused Andersen to make reference to the subject matter in connection with its report on the financial statements of the Partnership for such year and there were no reportable events as set forth in Item 304(a)(1)(v) of
Regulation S-K.



On July 3, 2002, the Partnership engaged Ernst & Young,
LLP (Ernst & Young) to audit the financial statements of the Partnership, effective immediately. During the fiscal year ended December 31, 2001, and through the date of appointment of Ernst & Young as the Partnerships independent
public accountants, the Partnership did not consult Ernst & Young with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the
financial statements of the Partnership, or any other matters or reportable events as set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.



|ITEM 9A. |  | CONTROLS AND PROCEDURES.
|-------- |  | ------------------------



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



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



PART III



|ITEM 10. |  | GENERAL PARTNERS OF THE PARTNERSHIP.
|-------- |  | ------------------------------------



Wells Capital



Wells Capital was formed in April 1984. The executive offices of Wells Capital are located at 6200 The Corners Parkway, Norcross, Georgia 30092. Leo F. Wells, III is the sole Director and the President of Wells
Capital. Wells Capital was organized under the Georgia Business Corporation Code, and is primarily in the business of serving as general partner or as an affiliate to the general partner in affiliated public limited partnerships (Wells Real
Estate Funds) and as the advisor to the Wells Real Estate Investment Trust, Inc. and Wells Real Estate Investment Trust II, Inc. (Wells REITs), each a Maryland corporation which qualifies as a real estate investment trust. In these
capacities, Wells Capital performs certain services for the Wells Real Estate Funds and the Wells REITs, including presenting, structuring, and acquiring real estate investment opportunities, entering into leases and service contracts on acquired
properties, arranging for and completing the disposition of properties, and providing other services such as accounting and administrative functions.



Leo F. Wells, III



Mr. Wells, who serves as one of our General Partners, is the President, Treasurer, and sole director of Wells Capital, which is the corporate general partner of our other
General Partner. He is also the sole stockholder,



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President, and sole director of Wells Real
Estate Funds, Inc., the parent corporation of Wells Capital, Wells Management, Wells Investment Securities, Inc. (Wells Investment Securities), and Wells & Associates, Inc., a real estate brokerage and investment company formed in
1976 and incorporated in 1978, for which Mr. Wells serves as principal broker. He is also the President, Treasurer, and sole director of:



| |  |  | Wells Management, our property manager;
| | - |  | ---------------------------------------



| |  |  | Wells & Associates, Inc.; and
| | - |  | -----------------------------



| |  |  | Wells Development Corporation, a company he organized in 1997 to develop real properties.
| | - |  | -----------------------------------------------------------------------------------------



Mr. Wells is the President and a director of Wells Real Estate Investment Trust, Inc. and Wells Real Estate Investment Trust II, Inc., which
are both real estate investment trusts formed under Maryland law.



Mr. Wells
was a real estate salesman and property manager from 1970 to 1973 for Roy D. Warren & Company, an Atlanta-based real estate company, and he was associated from 1973 to 1976 with Sax Gaskin Real Estate Company. From 1980 to February 1985 he
served as Vice President of Hill-Johnson, Inc., a Georgia corporation engaged in the construction business. Mr. Wells holds a Bachelor of Business Administration degree in economics from the University of Georgia. Mr. Wells is a member of the
Financial Planning Association (FPA).



On August 26, 2003, Mr. Wells and Wells
Investment Securities entered into a Letter of Acceptance, Waiver and Consent (AWC) with the NASD relating to alleged rule violations. The AWC set forth the NASDs findings that Wells Investment Securities and Mr. Wells had violated conduct
rules relating to the provision of non-cash compensation of more than $100 to associated persons of NASD member firms in connection with their attendance at the annual educational and due diligence conferences sponsored by Wells Investment
Securities in 2001 and 2002. Without admitting or denying the allegations and findings against them, Wells Investment Securities and Mr. Wells consented in the AWC to various findings by the NASD which are summarized in the following paragraph:



In 2001 and 2002, Wells Investment Securities sponsored
conferences attended by registered representatives who sold its real estate investment products. Wells Investment Securities also paid for certain expenses of guests of the registered representatives who attended the conferences. In 2001, Wells
Investment Securities paid the costs of travel to the conference and meals for many of the guests, and paid the costs of playing golf for some of the registered representatives and their guests. Wells Investment Securities later invoiced registered
representatives for the cost of golf and for travel expenses of guests, but was not fully reimbursed for such. In 2002, Wells Investment Securities paid for meals for the guests. Wells Investment Securities also conditioned most of the 2001
conference invitations on attainment by the registered representatives of a predetermined sales goal for Wells Investment Securities products. This conduct violated the prohibitions against payment and receipt of non-cash compensation in connection
with the sales of these products contained in NASDs Conduct Rules 2710, 2810, and 3060. In addition, Wells Investment Securities and Mr. Wells failed to adhere to all of the terms of their written undertaking made in March 2001 not to engage
in the conduct described above, and thereby engaged in conduct that was inconsistent with high standards of commercial honor and just and equitable principles of trade in violation of NASD Conduct Rule 2110.



Wells Investment Securities consented to a censure and Mr. Wells consented to suspension from
acting in a principal capacity with an NASD member firm for one year. Wells Investment Securities and Mr. Wells also agreed to the imposition of a joint and several fine in the amount of $150,000. Although he is temporarily prohibited from acting in
a principal capacity with Wells Investment Securities, Mr. Wells continues to engage in selling efforts and other non-principal activities on behalf of Wells Investment Securities.



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Financial Oversight Committee



The Partnership does not have a board of directors or an audit committee.
Accordingly, as the corporate General Partner of the Partnership, Wells Capital has established a Financial Oversight Committee consisting of Leo F. Wells, III, as the Principal Executive Officer; Douglas P. Williams, as the Principal Financial
Officer; and Randall D. Fretz, as the Chief of Staff, of the corporate General Partner. The Financial Oversight Committee serves the equivalent function of an audit committee for, among others, the following purposes: appointment, compensation,
review and oversight of the work of our independent public accountants, and establishing and enforcing the code of ethics. However, since the Partnership and corporate General Partner do not have an audit committee and the Financial Oversight
Committee is not independent of the Partnership or the General Partners, the Partnership does not have an audit committee financial expert.



Code of Ethics



The Financial Oversight Committee has adopted a code of ethics applicable to our corporate General Partners Principal Executive Officer and Principal Financial Officer, as well as the principal accounting
officer, controller or other employees of our corporate General Partner performing similar functions on behalf of the Partnership, if any. You may obtain a copy of this code of ethics, without charge, upon request by calling our Investor Services
Department at (800) 557-4830 or (770) 243-8282.



|ITEM 11. |  | COMPENSATION OF GENERAL PARTNERS AND AFFILIATES.
|-------- |  | ------------------------------------------------



The following table summarizes the compensation and fees (including reimbursement of expenses) paid to the General Partners and their affiliates during the year ended
December 31, 2003.



|                                     |  |                                                                                             |  |                  |           |    
|------------------------------------ |  | ------------------------------------------------------------------------------------------- |  | ---------------- | --------- | ---
|Name of Individualor Number in Group |  | Capacities in Which Served/Form of Compensation                                             |  | CashCompensation |          
|Wells Capital                        |  | Acquisition and Advisory Fees and Acquisition Expenses                                      |  | $                | 1,293,207 |    
|                                     | 
|Wells Capital                        |  | General Partner of Wells Partners, L.P. Reimbursement of Organization and Offering Expenses |  | $                | 1,131,615 |    
|                                     | 
|Wells Capital                        |  | Administrative services such as accounting and other partnership administration             |  | $                | 60,531    |    
|                                     | 
|Wells Investment Securities, Inc.    |  | Dealer-Manager Selling Commissions                                                          |  | $                | 3,381,542 | (1)
|                                     | 
|Wells Management                     |  | Property Management and Leasing Fees                                                        |  | $                | 114,812   | (2)
|                                     | 



|(1) |  | This amount includes all selling commissions and dealer manager fees paid or payable to Wells Investment Securities, Inc., a substantial portion of which were reallocated to
other broker-dealers.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) |  | These property management and leasing fees are not paid directly by the Partnerships but are paid by the joint venture entities which own properties for which the property
management and leasing services relate and include management and leasing fees, some of which were accrued for accounting purposes in 2003 but not actually paid until January 2004. The Partnership does not own any properties directly. Accordingly,
these fees are payable to Wells Management by the Joint Ventures described in Item 1 and represent the Partnerships ownership interest in amounts attributable to the properties owned directly by these joint ventures for services rendered
during 2003. Some of the fees were accrued for accounting purposes in 2003; however were not paid until January 2004.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
|-------- |  | ---------------------------------------------------------------



No limited partner is known by the Partnership to own beneficially more than 5% of the outstanding units of the Partnership.



Set forth below is the security ownership of management as of February 15, 2004.



|                           |  |                          |  |                                          |  |                 
|-------------------------- |  | ------------------------ |  | ---------------------------------------- |  | ----------------
|Title of Class             |  | Name of Beneficial Owner |  | Amount and Nature ofBeneficial Ownership |  | Percent of Class
|Cash PreferredStatus Units |  | Leo F. Wells, III        |  | 2,095.945 Units (IRA)                    |  | Less than 1%    



No arrangements exist which would,
upon operation, result in a change in control of the Partnership.



|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
|-------- |  | -----------------------------------------------



The compensation and fees paid or to be paid by the Partnership to the General Partners and their affiliates in connection with the operation of the Partnership are as
follows:



Interest in Partnership Cash Flow and Net Sales Proceeds



The General Partners will receive a subordinated participation in net
cash flow from operations equal to 10% of net cash flow after the limited partners holding Cash Preferred Status Units have received preferential distributions equal to 10% of their adjusted capital accounts in each fiscal year. The General Partners
will also receive a subordinated participation in net sales proceeds and net financing proceeds equal to 20% of residual proceeds available for distribution after limited partners holding Cash Preferred Status Units have received a return of their
adjusted capital contributions plus a 10% cumulative return on their adjusted capital contributions and limited partners holding Tax Preferred Units have received a return of their adjusted capital contributions plus a 15% cumulative return on their
adjusted capital contributions; provided, however, that in no event shall the General Partners receive in the aggregate in excess of 15% of net sales proceeds and net financing proceeds remaining after payments to limited partners from such proceeds
of amounts equal to the sum of their adjusted capital contributions plus a 6% cumulative return on their adjusted capital contributions. The General Partners did not receive any distributions of net cash flow from operations or net sales proceeds
for the year ended December 31, 2003.



Property Management and Leasing Fees



Wells Management, an affiliate of the General Partners, receives
compensation for supervising the management and leasing of the Partnership properties equal to the lesser of (a) fees that would be paid to a comparable outside firm or (b) 4.5% of the gross revenues generally paid over the life of the lease plus a
separate competitive fee for the one-time initial lease-up of newly constructed properties generally paid in conjunction with the receipt of the first months rent. In the case of commercial properties which are leased on a long-term (ten or
more years) net basis, the maximum property management fee from such leases shall be 1% of the gross revenues generally paid over the life of the leases except for a one-time initial leasing fee of 3% of the gross revenues on each lease payable over
the first five full years of the original lease term. Wells Management has received a total of $114,812 in property management and leasing fee compensation for services rendered during the year ended December 31, 2003.





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Real Estate Commissions



In connection with the sale of Partnership properties, the General Partners or their
affiliates may receive commissions not exceeding the lesser of (a) 50% of the commissions customarily charged by other brokers in arms-length transactions involving comparable properties in the same geographic area or (b) 3% of the gross sales
price of the property, and provided that payments of such commissions will be made only after limited partners have received prior distributions totaling 100% of their capital contributions plus a 6% cumulative return on their adjusted capital
contributions. The General Partners or their affiliates have not received any real estate commissions in 2003.



Acquisition and Advisory Fees and Expenses



The Partnership pays Acquisition and Advisory Fees and Acquisition Expenses to Wells Capital for acquisition and advisory services performed on the Partnerships behalf. These payments, as provided by the partnership agreement, are
equal to 3.5% of the limited partners capital contributions. Acquisition and Advisory Fees and Acquisition Expenses paid as of December 31, 2003, amounted to $1,293,207 and represented approximately 3.5% of the limited partners capital
contributions.



Organizational and Offering Expenses



Wells Capital pays all the organization and offering expenses for the Partnership. Wells
Capital may be reimbursed by the Partnership to the extent that such organization and offering expenses do not exceed 3% of total limited partners capital contributions. As of December 31, 2003, the Partnership had reimbursed Wells Capital for
$1,131,615 in organization and offering expenses, which amounted to approximately 3% of limited partners capital contributions.



Expense Reimbursements



See Note 8 to the Partnerships financial statements included with this report for a description of the administrative costs and reimbursements made to the General Partners and their affiliates during the year
ended December 31, 2003.



|ITEM 14. |  | PRINCIPAL ACCOUNTING FEES AND SERVICES.
|-------- |  | ---------------------------------------



Preapproval Policies and Procedures



The Financial Oversight Committee preapproves all auditing and permissible non-auditing services provided by our independent public accountants. The approval may be given
as part of the Financial Oversight Committees approval of the scope of the engagement of our independent public accountants or on an individual basis. The preapproval of certain audit-related services and certain non-auditing services not
exceeding enumerated dollar limits may be delegated to one or more of the Financial Oversight Committees members, but the member to whom such authority is delegated shall report any preapproval decisions to the full Financial Oversight
Committee. Our independent public accountants may not be retained to perform the non-auditing services specified in Section 10A(g) of the Securities Exchange Act of 1934.



Fees Paid to the Independent Public Accountants



As indicated in Item 9 above, we engaged Ernst & Young to be our independent public accountants on July 3, 2002. The aggregate fees
billed to the Partnership for professional accounting services, including the audit of the Partnerships annual financial statements by Ernst & Young for the fiscal years ended December 31, 2003 and 2002, are set forth in the table below.



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|                   |  |      |        |      |   |       
|------------------ |  | ---- | ------ | ---- | - | ------
|                   |  | 2003 |        | 2002
|Audit Fees         |  | $    | 34,544 |      | $ | 19,925
|Audit-Related Fees |  |      | 0      |      |   | 0     
|Tax Fees           |  |      | 3,259  |      |   | 84    
|                   |  |      |        |      |   |       
|Total              |  | $    | 37,803 |      | $ | 20,009
|                   |  |      |        |      |   |       



For purposes of the preceding table,
the professional fees are classified as follows:



| |  |  | Audit Fees  These are fees for professional services performed for the audit of our annual financial statements and review of financial statements included in our Form 10-Q
filings, services that are normally provided by independent public accountants in connection with statutory and regulatory filings or engagements, and services that generally independent public accountants reasonably can provide, such as statutory
audits, attest services, consents, and assistance with and review of documents filed with the SEC.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Audit-Related Fees  These are fees for assurance and related services that traditionally are performed by independent public accountants, such as due diligence related to
acquisitions and dispositions, internal control reviews, attestation services that are not required by statute or regulation, and consultation concerning financial accounting and reporting standards.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Tax Fees  These are fees for all professional services performed by professional staff in our independent public accountants tax division, except those services related
to the audit of our financial statements. These include fees for tax compliance, tax planning, and tax advice. Tax compliance involves preparation of any federal, state or local tax returns. Tax planning and tax advice encompass a diverse range of
services, including assistance with tax audits and appeals, tax advice related to acquisitions and dispositions of assets, and requests for rulings or technical advice from taxing authorities.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | All Other Fees  These are fees for other permissible work performed that do not meet the above-described categories, including assistance with internal audit plans and risk
assessments.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Since May 6, 2003, the effective date of the SEC
Rules requiring audit committees to approve all services provided by independent public accountants, 100% of the services performed by Ernst & Young described above under the captions Audit Fees, Audit-Related Fees,
Tax Fees, and All Other Fees were approved in advance by a member of the Financial Oversight Committee.



|ITEM 15. |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
|-------- |  | -----------------------------------------------------------------



|(a)1. |  | The Financial Statements are contained on pages F-1 through F-40 of this Annual Report on Form 10-K, and the list of the Financial Statements contained herein is set forth on pages
F-1, which is hereby incorporated by reference.
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(a)3. |  | Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.
|----- |  | ---------------------------------------------------------------------------------------------------------



|(b) |  | No reports on Form 8-K were filed with the Commission during the fourth quarter of 2003.
|--- |  | ----------------------------------------------------------------------------------------



|(c) |  | The Exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.
|--- |  | -------------------------------------------------------------------------------------------------------------



|(d) |  | Not applicable.
|--- |  | ---------------



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SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|              |  |  |  |                                                                                                  |  |  |  | 
|------------- |  |  |  | ------------------------------------------------------------------------------------------------ |  |  |  | 
|              |  |  |  | WELLS REAL ESTATE FUND XIII, L.P. (Registrant)                                                  
|              |  | 
|              |  |  |  | By: WELLS CAPITAL, INC. (Corporate General Partner)                                             
|              |  | 
|March 8, 2004 |  |  |  | /s/    LEO F. WELLS, IIILeo F. Wells, III President                                             
|March 8, 2004 |  |  |  | /s/    DOUGLAS P. WILLIAMSDouglas P. Williams Principal Financial Officer of Wells Capital, Inc.



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EXHIBIT INDEX

TO

2003 FORM 10-K

OF

WELLS REAL ESTATE FUND XIII, L.P.



The following documents are filed as exhibits to this report. Those exhibits
previously filed and incorporated herein by reference are identified below by an asterisk. For each such asterisked exhibit, there is shown below the description of the previous filing. Exhibits which are not required for this report are omitted.



|              |  |                                                                                                                                                                                                                                                                            
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                                                                                                                                                                                                                                    
|              | 
|*3.1          |  | Agreement of Limited Partnership of Wells Real Estate Fund XIII, L.P. (Exhibit 3.1 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission
File No. 333-48984)                                                            
|              | 
|*3.2          |  | Certificate of Limited Partnership of Wells Real Estate Fund XIII, L.P. dated September 15, 1998 (Exhibit 3.2 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as
amended to date, Commission File No. 333-48984)                                 
|              | 
|*3.3          |  | Certificate of Amendment to the Certificate of Limited Partnership of Wells Real Estate Fund XIII, L.P. dated October 20, 2000 (Exhibit 3.2(a) to Form S-11 Registration Statement of Wells
Real Estate Fund XIII, L.P., as amended to date, Commission File No. 333-48984)
|              | 
|*10.1         |  | Management and Leasing Agreement with Wells Management Company, Inc. (Exhibit 10.2 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission
File No. 333-48984)                                                            
|              | 
|*10.2         |  | Joint Venture Partnership Agreement of Wells Fund XIII-REIT Joint Venture Partnership (Exhibit 10.85 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., as
amended to date, Commission File No. 333-44900)                                   
|              | 
|*10.3         |  | Agreement for the Purchase and Sale of Property for the AmeriCredit Building (Exhibit 10.86 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File
No. 333-44900)                                                                
|              | 
|*10.4         |  | Lease Agreement for the AmeriCredit Building (Exhibit 10.87 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., as amended to date, Commission File No.
333-44900)                                                                            
|              | 
|*10.5         |  | Purchase Agreement for the ADIC Buildings (Exhibit 10.6 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission File No.
333-48984)                                                                                       
|              | 
|*10.6         |  | Purchase Agreement for the land immediately adjacent to the ADIC Buildings (Exhibit 10.7 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date,
Commission File No. 333-48984)                                                      
|              | 
|*10.7         |  | Lease Agreement for the ADIC Buildings (Exhibit 10.8 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission File No.
333-48984)                                                                                          



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|       |  |                                                                                                                                                                                                                                                
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       | 
|*10.8  |  | Purchase Agreement for the John Wiley Indianapolis Building (Exhibit 10.9 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission File No.
333-48984)                                         
|       | 
|*10.9  |  | Lease Agreement with John Wiley & Sons, Inc. ((Exhibit 10.10 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission File No.
333-48984)                                                      
|       | 
|*10.10 |  | Amendment #2 to Lease Agreement with John Wiley & Sons, Inc. (Exhibit 10.11 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission File
No. 333-48984)                                       
|       | 
|*10.11 |  | Amendment #3 to Lease Agreement with John Wiley & Sons, Inc. (Exhibit 10.12 to Form S-11 Registration Statement of Wells Real Estate Fund XIII, L.P., as amended to date, Commission File
No. 333-48984)                                       
|       | 
|*10.12 |  | Purchase and Sale Agreement relating to the AIU Chicago Building (Exhibit 10.1 to the Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2003, File No.
0-49633)                                               
|       | 
|*10.13 |  | Lease Agreement with American InterContinental University, Inc. (Exhibit 10.2 to the Form 10-Q of Wells Real Estate Fund XIII, L.P. for the quarter ended September 30, 2003, File No.
0-49633)                                                
|       | 
|*10.14 |  | Agreement of Purchase and Sale of Property for Siemens Orlando Buildings and third amendment thereto (Exhibit 10.3 to Form S-11 Registration Statement of Wells Real Estate Fund XIV, L.P., as
amended to date, Commission File No. 333-101463)
|       | 
|*10.15 |  | Lease Agreement with Siemens Shared Services LLC (Exhibit 10.4 to Form S-11 Registration Statement of Wells Real Estate Fund XIV, L.P., as amended to date, Commission File No.
333-101463)                                                    
|       | 
|10.16  |  | Joint Venture Partnership Agreement of Fund XIII and Fund XIV Associates                                                                                                                                                                       
|       | 
|10.17  |  | Purchase and Sale Agreement for Randstad Atlanta Building                                                                                                                                                                                      
|       | 
|10.18  |  | Lease Agreement for Randstad Atlanta Building                                                                                                                                                                                                  
|       | 
|31.1   |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                         
|       | 
|31.2   |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                         
|       | 
|32.1   |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                 



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##### Table of Contents



TABLE OF CONTENTS



|                                                                                                                                                            |  |     
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Financial Statements                                                                                                                                        |  | Page
|WELLS REAL ESTATE FUND XIII, L.P.                                                                                                                           |  |     
|Report of Independent Auditors  Ernst & Young LLP                                                                                                          |  | F-2 
|Report of Independent Public Accountants  Arthur Andersen LLP                                                                                              |  | F-3 
|Balance Sheets as of December 31, 2003 and 2002                                                                                                             |  | F-4 
|Statements of Income for the Years Ended December 31, 2003, 2002, and 2001                                                                                  |  | F-5 
|Statements of Partners Capital for the Years Ended December 31, 2003, 2002, and 2001                                                                       |  | F-6 
|Statements of Cash Flows for the Years Ended December 31, 2003, 2002, and 2001                                                                              |  | F-7 
|Notes to Financial Statements                                                                                                                               |  | F-8 
|WELLS FUND XIII-REIT JOINT VENTURE PARTNERSHIP                                                                                                              |  |     
|Report of Independent Auditors                                                                                                                              |  | F-18
|Balance Sheets as of December 31, 2003 and 2002                                                                                                             |  | F-19
|Statements of Income for the Years Ended December 31, 2003 and 2002, and for the Period from June 27, 2001 (Inception) Through December 31, 2001            |  | F-20
|Statements of Partners Capital for the Years Ended December 31, 2003 and 2002, and for the Period from June 27, 2001 (Inception) Through December 31, 2001 |  | F-21
|Statements of Cash Flows for the Years Ended December 31, 2003 and 2002, and for the Period from June 27, 2001 (Inception) Through December 31, 2001        |  | F-22
|Notes to Financial Statements                                                                                                                               |  | F-23
|Schedule III  Real Estate and Accumulated Depreciation                                                                                                     |  | F-28
|FUND XIII AND FUND XIV ASSOCIATES                                                                                                                           |  |     
|Report of Independent Auditors                                                                                                                              |  | F-30
|Balance Sheet for the Period from August 20, 2003 (Inception) Through December 31, 2003                                                                     |  | F-31
|Statement of Income for the Period from August 20, 2003 (Inception) Through December 31, 2003                                                               |  | F-32
|Statement of Partners Capital for the Period from August 20, 2003 (Inception) Through December 31, 2003                                                    |  | F-33
|Statement of Cash Flows for the Period from August 20, 2003 (Inception) Through December 31, 2003                                                           |  | F-34
|Notes to Financial Statements                                                                                                                               |  | F-35
|Schedule III  Real Estate and Accumulated Depreciation                                                                                                     |  | F-39



Page F-1



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



REPORT OF INDEPENDENT AUDITORS



The Partners

Wells Real Estate Fund XIII, L.P.



We have audited the accompanying balance sheets of Wells Real Estate Fund XIII, L.P. (a
Georgia public limited partnership) as of December 31, 2003 and 2002, and the related statements of income, partners capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnerships
management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of Wells Real Estate Fund XIII, L.P. for the year ended December 31, 2001 were audited by other auditors who have
ceased operations and whose report dated January 25, 2002 expressed an unqualified opinion on those financial statements before the restatement disclosures described in Note 1.



We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the 2003 and 2002 financial statements referred to above
present fairly, in all material respects, the financial position of Wells Real Estate Fund XIII, L.P. at December 31, 2003 and 2002 and the results of its operations and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States.



As discussed above, the
financial statements of Wells Real Estate Fund XIII, L.P. for the year ended December 31, 2001 were audited by other auditors who have ceased operations. As described in Note 1, these financial statements have been revised to include disclosure of
the number of Cash Preferred and Tax Preferred weighted average limited partner units outstanding for the year ended December 31, 2001 on the statement of income. Our audit procedures with respect to this disclosure included recalculating the number
of Cash Preferred and Tax Preferred weighted average limited partner units outstanding for the year ended December 31, 2001 by dividing the net income amount allocated to Cash Preferred limited partners and net loss amount allocated to Tax Preferred
limited partners, previously reported on the statement of income in 2001, by the amount of net income per weighted average Cash Preferred limited partner unit and net loss per weighted average Tax Preferred limited partner unit, previously reported
on the statement of income in 2001. In our opinion, the disclosure of the number of Cash Preferred and Tax Preferred weighted average limited partner units outstanding on the statement of income for the year ended December 31, 2001 is appropriate.
However, we were not engaged to audit, review, or apply any procedures to the 2001 financial statements of Wells Real Estate Fund XIII, L.P. other than with respect to such restatement disclosures and, accordingly, we do not express an opinion or
any other form of assurance on the 2001 financial statements taken as a whole.



/s/    Ernst & Young LLP

Atlanta, Georgia

February 18, 2004



Page F-2



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



(The following is a copy of the audit report previously issued by Arthur Andersen LLP
in connection with the financial statements of Wells Real Estate Fund XIII, L.P. for the fiscal year ended December 31, 2001 included in the 2001 Form 10-K filing. This audit report has not been reissued by Arthur Andersen in connection with the
filing of this form 10-K for the fiscal year ended December 31, 2003.)



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Wells
Real Estate Fund XIII, L.P.:



We have audited the accompanying balance sheets
of WELLS REAL ESTATE FUND XIII, L.P. (a Georgia public limited partnership) as of December 31, 2001 and 2000, the related statement of income for the year ended December 31, 2001, the statements of partners capital for the years ended
December 31, 2001 and 2000, and the statement of cash flows for the year ended December 31, 2001. These financial statements are the responsibility of the Partnerships management. Our responsibility is to express an opinion on these financial
statements based on our audits.



We conducted our audits in accordance with
auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wells Real Estate Fund XIII, L.P. as of December 31, 2001 and 2000, the results of its
operations for the year ended December 31, 2001, its partners capital for the years ended December 31, 2001 and 2000, and its cash flows for the year ended December 31, 2001 in conformity with accounting principles generally accepted in the
United States.



ARTHUR ANDERSEN LLP



Atlanta, Georgia

January 25, 2002



Page F-3



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



BALANCE SHEETS

DECEMBER 31, 2003 AND 2002



|                                                                                                                     |  |      |            |      |   |           
|-------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ----------
|ASSETS                                                                                                              
|                                                                                                                     |  | 2003 |            | 2002
|INVESTMENT IN JOINT VENTURES                                                                                         |  | $    | 29,046,985 |      | $ | 17,177,001
|CASH AND CASH EQUIVALENTS                                                                                            |  |      | 2,804,796  |      |   | 6,296,043 
|DUE FROM JOINT VENTURES                                                                                              |  |      | 546,654    |      |   | 201,131   
|DEFERRED PROJECTS COSTS                                                                                              |  |      | 118,219    |      |   | 256,100   
|                                                                                                                     |  |      |            |      |   |           
|Total assets                                                                                                         |  | $    | 32,516,654 |      | $ | 23,930,275
|                                                                                                                     |  |      |            |      |   |           
|LIABILITIES AND PARTNERS CAPITAL                                                                                   
|LIABILITIES:                                                                                                         |  |      |            |      |   |           
|Partnership distribution payable                                                                                     |  | $    | 501,122    |      | $ | 253,697   
|Accounts payable                                                                                                     |  |      | 26,786     |      |   | 102,492   
|Commissions payable                                                                                                  |  |      | 0          |      |   | 48,206    
|Due to affiliate                                                                                                     |  |      | 0          |      |   | 57,760    
|                                                                                                                     |  |      |            |      |   |           
|Total liabilities                                                                                                    |  |      | 527,908    |      |   | 462,155   
|                                                                                                                     |  |      |            |      |   |           
|PARTNERS CAPITAL:                                                                                                   |  |      |            |      |   |           
|Limited partners:                                                                                                    |  |      |            |      |   |           
|Cash Preferred  3,083,828 and 2,201,817 units issued and outstanding as of December 31, 2003 and 2002, respectively |  |      | 26,958,308 |      |   | 19,215,466
|Tax Preferred  688,220 and 521,472 units issued and outstanding as of December 31, 2003 and 2002, respectively      |  |      | 5,030,438  |      |   | 4,252,654 
|General partners                                                                                                     |  |      | 0          |      |   | 0         
|                                                                                                                     |  |      |            |      |   |           
|Total partners capital                                                                                              |  |      | 31,988,746 |      |   | 23,468,120
|                                                                                                                     |  |      |            |      |   |           
|Total liabilities and partners capital                                                                              |  | $    | 32,516,654 |      | $ | 23,930,275
|                                                                                                                     |  |      |            |      |   |           



See accompanying notes.



Page F-4



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



STATEMENTS OF INCOME

FOR THE YEARS ENDED

DECEMBER 31, 2003, 2002, AND 2001



|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|---------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | ------- | -
|                                                                       |  | 2003 |           |   | 2002 |   |           | 2001 | 
|REVENUES:                                                              |  |      |           |   |      |   |           |      |  |   |         |  
|Equity in income of Joint Ventures                                     |  | $    | 931,683   |   |      | $ | 531,457   |      |  | $ | 58,610  |  
|Interest income                                                        |  |      | 117,425   |   |      |   | 89,924    |      |  |   | 38,075  |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|                                                                       |  |      | 1,049,108 |   |      |   | 621,381   |      |  |   | 96,685  |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|EXPENSES:                                                              |  |      |           |   |      |   |           |      |  |   |         |  
|Partnership administration                                             |  |      | 109,635   |   |      |   | 116,336   |      |  |   | 41,142  |  
|Legal and accounting                                                   |  |      | 44,089    |   |      |   | 20,569    |      |  |   | 16,630  |  
|Other general and administrative                                       |  |      | 6,981     |   |      |   | 6,091     |      |  |   | 4,045   |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|                                                                       |  |      | 160,705   |   |      |   | 142,996   |      |  |   | 61,817  |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|NET INCOME                                                             |  | $    | 888,403   |   |      | $ | 478,385   |      |  | $ | 34,868  |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|NET LOSS ALLOCATED TO GENERAL PARTNERS                                 |  | $    | 0         |   |      | $ | 0         |      |  | $ | (500    | )
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|NET INCOME ALLOCATED TO CASH PREFERRED LIMITED PARTNERS                |  | $    | 1,627,786 |   |      | $ | 795,851   |      |  | $ | 84,293  |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|NET LOSS ALLOCATED TO TAX PREFERRED LIMITED PARTNERS                   |  | $    | (739,383  | ) |      | $ | (317,466  | )    |  | $ | (48,925 | )
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|NET INCOME PER WEIGHTED AVERAGE CASH PREFERRED LIMITED PARTNER UNIT    |  | $    | 0.56      |   |      | $ | 0.52      |      |  | $ | 0.20    |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|NET LOSS PER WEIGHTED AVERAGE TAX PREFERRED LIMITED PARTNER UNIT       |  | $    | (1.09     | ) |      | $ | (1.02     | )    |  | $ | (0.55   | )
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|DISTRIBUTIONS PER WEIGHTED AVERAGE CASH PREFERRED LIMITED PARTNER UNIT |  | $    | 0.53      |   |      | $ | 0.52      |      |  | $ | 0.16    |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|WEIGHTED AVERAGE LIMITED PARTNER UNITS OUTSTANDING:                    |  |      |           |   |      |   |           |      |  |   |         |  
|CASH PREFERRED                                                         |  |      | 2,907,029 |   |      |   | 1,536,463 |      |  |   | 425,591 |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  
|TAX PREFERRED                                                          |  |      | 678,315   |   |      |   | 311,049   |      |  |   | 89,177  |  
|                                                                       |  |      |           |   |      |   |           |      |  |   |         |  



See accompanying notes.



Page F-5



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



STATEMENTS OF PARTNERS CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2003, 2002, AND 2001



|                                    |  |                  |      |   |                 |           |   |                       |   |            |       |  |         |        |  |   |           |   |  |   |      |   |  |   |            |  
|----------------------------------- |  | ---------------- | ---- | - | --------------- | --------- | - | --------------------- | - | ---------- | ----- |  | ------- | ------ |  | - | --------- | - |  | - | ---- | - |  | - | ---------- | -
|                                    |  | Limited Partners |      |   | GeneralPartners |           |   | TotalPartnersCapital |  
|                                    |  |                  |      |   | Cash Preferred  |           |   | Tax Preferred         |   |            |      
|                                    |  | Original         |      |   | Units           |           |   | Amount                |   |            | Units |  |         | Amount |  |   |          
|BALANCE, December 31, 2000          |  | $                | 100  |   |                 | 0         |   |                       | $ | 0          |       |  | 0       |        |  | $ | 0         |   |  | $ | 500  |   |  | $ | 600        |  
|Net income (loss)                   |  |                  | 0    |   |                 | 0         |   |                       |   | 84,293     |       |  | 0       |        |  |   | (48,925   | ) |  |   | (500 | ) |  |   | 34,868     |  
|Partnership distributions           |  |                  | 0    |   |                 | 0         |   |                       |   | (70,000    | )     |  | 0       |        |  |   | 0         |   |  |   | 0    |   |  |   | (70,000    | )
|Limited partner contributions       |  |                  | 0    |   |                 | 880,001   |   |                       |   | 8,800,012  |       |  | 191,522 |        |  |   | 1,915,220 |   |  |   | 0    |   |  |   | 10,715,232 |  
|Sales commissions and discounts     |  |                  | 0    |   |                 | 0         |   |                       |   | (843,793   | )     |  | 0       |        |  |   | (181,944  | ) |  |   | 0    |   |  |   | (1,025,737 | )
|Offering costs                      |  |                  | 0    |   |                 | 0         |   |                       |   | (266,460   | )     |  | 0       |        |  |   | (57,457   | ) |  |   | 0    |   |  |   | (323,917   | )
|Return of capital                   |  |                  | (100 | ) |                 | 0         |   |                       |   | 0          |       |  | 0       |        |  |   | 0         |   |  |   | 0    |   |  |   | (100       | )
|                                    |  |                  |      |   |                 |           |   |                       |   |            |       |  |         |        |  |   |           |   |  |   |      |   |  |   |            |  
|BALANCE, December 31, 2001          |  |                  | 0    |   |                 | 880,001   |   |                       |   | 7,704,052  |       |  | 191,522 |        |  |   | 1,626,894 |   |  |   | 0    |   |  |   | 9,330,946  |  
|Net income (loss)                   |  |                  | 0    |   |                 | 0         |   |                       |   | 795,851    |       |  | 0       |        |  |   | (317,466  | ) |  |   | 0    |   |  |   | 478,385    |  
|Partnership distributions           |  |                  | 0    |   |                 | 0         |   |                       |   | (804,408   | )     |  | 0       |        |  |   | 0         |   |  |   | 0    |   |  |   | (804,408   | )
|Limited partner contributions       |  |                  | 0    |   |                 | 1,314,716 |   |                       |   | 13,147,155 |       |  | 337,050 |        |  |   | 3,370,500 |   |  |   | 0    |   |  |   | 16,517,655 |  
|Sales commissions and discounts     |  |                  | 0    |   |                 | 0         |   |                       |   | (1,288,932 | )     |  | 0       |        |  |   | (272,455  | ) |  |   | 0    |   |  |   | (1,561,387 | )
|Offering costs                      |  |                  | 0    |   |                 | 0         |   |                       |   | (391,955   | )     |  | 0       |        |  |   | (101,116  | ) |  |   | 0    |   |  |   | (493,071   | )
|Tax Preferred conversion elections  |  |                  | 0    |   |                 | 7,100     |   |                       |   | 53,703     |       |  | (7,100  | )      |  |   | (53,703   | ) |  |   | 0    |   |  |   | 0          |  
|                                    |  |                  |      |   |                 |           |   |                       |   |            |       |  |         |        |  |   |           |   |  |   |      |   |  |   |            |  
|BALANCE, December 31, 2002          |  |                  | 0    |   |                 | 2,201,817 |   |                       |   | 19,215,466 |       |  | 521,472 |        |  |   | 4,252,654 |   |  |   | 0    |   |  |   | 23,468,120 |  
|Net income (loss)                   |  |                  | 0    |   |                 | 0         |   |                       |   | 1,627,786  |       |  | 0       |        |  |   | (739,383  | ) |  |   | 0    |   |  |   | 888,403    |  
|Partnership distributions           |  |                  | 0    |   |                 | 0         |   |                       |   | (1,547,417 | )     |  | 0       |        |  |   | 0         |   |  |   | 0    |   |  |   | (1,547,417 | )
|Limited partner contributions       |  |                  | 0    |   |                 | 807,053   |   |                       |   | 8,070,543  |       |  | 241,706 |        |  |   | 2,417,058 |   |  |   | 0    |   |  |   | 10,487,601 |  
|Sales commissions and discounts     |  |                  | 0    |   |                 | 0         |   |                       |   | (763,616   | )     |  | 0       |        |  |   | (229,687  | ) |  |   | 0    |   |  |   | (993,303   | )
|Offering costs                      |  |                  | 0    |   |                 | 0         |   |                       |   | (242,136   | )     |  | 0       |        |  |   | (72,522   | ) |  |   | 0    |   |  |   | (314,658   | )
|Tax Preferred conversion elections  |  |                  | 0    |   |                 | 76,172    |   |                       |   | 608,320    |       |  | (76,172 | )      |  |   | (608,320  | ) |  |   | 0    |   |  |   | 0          |  
|Cash Preferred conversion elections |  |                  | 0    |   |                 | (1,214    | ) |                       |   | (10,638    | )     |  | 1,214   |        |  |   | 10,638    |   |  |   | 0    |   |  |   | 0          |  
|                                    |  |                  |      |   |                 |           |   |                       |   |            |       |  |         |        |  |   |           |   |  |   |      |   |  |   |            |  
|BALANCE, December 31, 2003          |  | $                | 0    |   |                 | 3,083,828 |   |                       | $ | 26,958,308 |       |  | 688,220 |        |  | $ | 5,030,438 |   |  | $ | 0    |   |  | $ | 31,988,746 |  
|                                    |  |                  |      |   |                 |           |   |                       |   |            |       |  |         |        |  |   |           |   |  |   |      |   |  |   |            |  



See accompanying notes.



Page F-6



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED

DECEMBER 31, 2003, 2002, AND 2001



|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                            |  | 2003 |             |   | 2002 |   |            | 2001 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |  |      |             |   |      |   |            |      |  |   |            |  
|Net income                                                                                  |  | $    | 888,403     |   |      | $ | 478,385    |      |  | $ | 34,868     |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |      |             |   |      |   |            |      |  |   |            |  
|Equity in income of Joint Ventures                                                          |  |      | (931,683    | ) |      |   | (531,457   | )    |  |   | (58,610    | )
|Changes in assets and liabilities:                                                          |  |      |             |   |      |   |            |      |  |   |            |  
|Accounts payable                                                                            |  |      | (75,706     | ) |      |   | 45,251     |      |  |   | 105,447    |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Total adjustments                                                                           |  |      | (1,007,389  | ) |      |   | (486,206   | )    |  |   | 46,837     |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Net cash (used in) provided by operating activities                                         |  |      | (118,986    | ) |      |   | (7,821     | )    |  |   | 81,705     |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |  |      |             |   |      |   |            |      |  |   |            |  
|Distributions received from Joint Ventures                                                  |  |      | 1,340,811   |   |      |   | 607,033    |      |  |   | 31,165     |  
|Investments in Joint Ventures                                                               |  |      | (12,119,654 | ) |      |   | (8,577,786 | )    |  |   | (8,151,426 | )
|Deferred project costs paid                                                                 |  |      | (392,177    | ) |      |   | (529,706   | )    |  |   | (371,324   | )
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Net cash used in investing activities                                                       |  |      | (11,171,020 | ) |      |   | (8,500,459 | )    |  |   | (8,491,585 | )
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |  |      |             |   |      |   |            |      |  |   |            |  
|Limited partners contributions                                                             |  |      | 10,399,660  |   |      |   | 16,442,773 |      |  |   | 10,630,964 |  
|Sales commissions                                                                           |  |      | (953,568    | ) |      |   | (1,486,505 | )    |  |   | (941,469   | )
|Offering costs paid                                                                         |  |      | (347,341    | ) |      |   | (493,071   | )    |  |   | (318,278   | )
|Distributions to partners from accumulated earnings                                         |  |      | (1,299,992  | ) |      |   | (620,711   | )    |  |   | 0          |  
|Return of capital paid to original limited partner                                          |  |      | 0           |   |      |   | 0          |      |  |   | (100       | )
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Net cash provided by financing activities                                                   |  |      | 7,798,759   |   |      |   | 13,842,486 |      |  |   | 9,371,117  |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                        |  |      | (3,491,247  | ) |      |   | 5,334,206  |      |  |   | 961,237    |  
|CASH AND CASH EQUIVALENTS, beginning of year                                                |  |      | 6,296,043   |   |      |   | 961,837    |      |  |   | 600        |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|CASH AND CASH EQUIVALENTS, end of year                                                      |  | $    | 2,804,796   |   |      | $ | 6,296,043  |      |  | $ | 961,837    |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:                      |  |      |             |   |      |   |            |      |  |   |            |  
|Due from Joint Ventures                                                                     |  | $    | 546,654     |   |      | $ | 201,131    |      |  | $ | 65,076     |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Deferred project costs contributed to Joint Ventures                                        |  | $    | 504,981     |   |      | $ | 357,408    |      |  | $ | 339,643    |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Deferred project costs due to affiliate                                                     |  | $    | 0           |   |      | $ | 45,542     |      |  | $ | 6,579      |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Partnership distributions payable                                                           |  | $    | 501,122     |   |      | $ | 253,697    |      |  | $ | 70,000     |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  
|Discounts applied to limited partner contributions                                          |  | $    | 87,941      |   |      | $ | 74,882     |      |  | $ | 84,268     |  
|                                                                                            |  |      |             |   |      |   |            |      |  |   |            |  



See accompanying notes.



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003, 2002, AND 2001



|1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- |  | ------------------------------------------



Organization and Business



Wells Real Estate Fund XIII, L.P. (or, the Partnership) is a Georgia public limited partnership with Leo F. Wells, III and Wells Capital, Inc. (Wells
Capital), a Georgia corporation, serving as its general partners (the General Partners). The Partnership was formed on September 15, 1998 for the purpose of acquiring, developing, owning, operating, improving, leasing, and managing
income producing commercial properties for investment purposes. Upon subscription for units, the Limited Partners must elect whether to have their units treated as Cash Preferred Status Units or Tax Preferred Status Units. Thereafter, Limited
Partners have the right to change their prior elections to have some or all of their units treated as Cash Preferred Status Units or Tax Preferred Status Units one time during each quarterly accounting period. Limited Partners may vote to, among
other things: (a) amend the Partnership agreement, subject to certain limitations; (b) change the business purpose or investment objectives of the Partnership, (c) add or remove a general partner; (d) elect a new general partner; (e) dissolve the
Partnership; and (f) approve a sale involving all or substantially all of the Partnerships assets, subject to certain limitations. The majority vote on any of the described matters will bind the Partnership, without the concurrence of the
General Partners. Each limited partnership unit has equal voting rights, regardless of which class of unit is selected.



On September 15, 1998, the Partnership was organized under the laws of the state of Georgia upon accepting initial contributions from the General Partners and Original
Limited Partner of $500 and $100, respectively. On March 29, 2001, the Partnership commenced an offering of up to $45,000,000 of Cash Preferred or Tax Preferred limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed
on Form S-11 under the Securities Act of 1933. The Partnership commenced active operations upon receiving and accepting subscriptions for 125,000 units on June 14, 2001. The offering was terminated on March 28, 2003, at which time the Partnership
had sold approximately 3,026,471 Cash Preferred Units and 748,678 Tax Preferred Units representing capital contributions of $37,751,487 from investors who were admitted to the Partnership as limited partners. Pursuant to the terms of the Partnership
agreement, the Original Partners interest in the Partnership was redeemed for $100 upon the admission of additional limited partners following commencement of operations.



(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)



Page F-8



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



During the periods presented, the Partnership owned interests in the following six properties
through the affiliated joint ventures listed below (the Joint Ventures):



|                                                                            |  |                                                                              |  |                                                                                                                                                    
|--------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                           
|                                                                            |  |                                                                             
|Joint Venture                                                               |  | Joint Venture Partners                                                       |  | Properties                                                                                                                                         
|                                                                           
|Wells Fund XIII-REIT Joint Venture Partnership(Fund XIII-REIT Associates) |  |    Wells Real Estate Fund XIII, L.P.    Wells Operating Partnership, L.P.* |  | 1. AmeriCredit Building(Acquired on July 16, 2001) A two-story office building located in Orange Park, Clay County,
Florida                        
|                                                                            |  |                                                                              |  | 2. ADIC Buildings(Acquired on December 21, 2001) Two connected one-story office and assembly buildings located in Douglas, Parker
County, Colorado 
|                                                                            |  |                                                                              |  | 3. John Wiley Building(Acquired on December 12, 2002) A four-story office building located in Fishers, Hamilton County,
Indiana                    
|                                                                            |  |                                                                              |  | 4. American InterContinental University Building (Acquired on September 19, 2003) A four-story office building located in Hoffman
Estates, Illinois
|                                                                           
|Fund XIII and Fund XIV Associates(Fund XIII-XIV Associates)               |  |    Wells Real Estate Fund XIII, L.P.    Wells Real Estate Fund XIV, L.P.   |  | 5. Siemens-Orlando Building(Acquired on October 30, 2003) Two one-story office buildings located in Orlando,
Florida                               
|                                                                            |  |                                                                              |  | 6. Randstad Atlanta Building(Acquired on December 19, 2003) A four-story office building located in Atlanta,
Georgia                               
|                                                                           

|* |  | Wells Operating Partnership. L.P. (Wells OP) is a Delaware limited partnership with Wells Real Estate Investment Trust, Inc. (Wells REIT) serving as its
general partner; Wells REIT is a Maryland corporation that qualifies as a real estate investment trust.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Use of Estimates



The preparation of the Partnerships financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.



Investment in Joint Ventures



The Partnership does not have control over the operations of the Joint Ventures; however, it does exercise significant influence. Accordingly, the Partnerships
investments in the Joint Ventures are recorded using the



Page F-9



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



equity method of accounting, whereby original investments are recorded at cost and
subsequently adjusted for contributions, distributions, and net income (loss) attributable to the Partnership. Pursuant to the terms of the joint venture agreements, all income and distributions are allocated to joint venture partners in accordance
with their respective ownership interests. Distributions of net cash from operations are distributed to the joint venture partners on a quarterly basis.



Deferred Project Costs



The Partnership pays certain fees to Wells Capital related to the acquisition of properties. Such fees are capitalized to the cost of properties, included in the capitalized assets of the Joint Ventures, and
depreciated on the same basis and over the respective useful lives of the related assets. Deferred project costs represent fees paid, which have not yet been invested and allocated to properties.



Cash and Cash Equivalents



The Partnership considers all highly liquid investments purchased with an original maturity
of three months or less to be cash equivalents. Cash equivalents include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value, and consist of investments in money market accounts.



Income Taxes



The Partnership is not subject to federal or state income taxes; therefore, none have been provided for in the accompanying financial
statements. The partners are required to include their respective shares of profits and losses in their individual income tax returns.



Distributions of Net Cash From Operations



Cash available for distribution, as defined by the partnership agreement, will be distributed to the limited partners on a quarterly basis. In accordance with the
partnership agreement, distributions are paid first to limited partners holding Cash Preferred units until they have received a 10% per annum return on their net capital contributions on a per unit basis, as defined. Such distributions are then paid
to the General Partners until they have received 10% of the total amount distributed with respect to such fiscal year. Any remaining cash available for distribution is split 90% to the limited partners holding Cash Preferred units on a per unit
basis and 10% to the General Partners. No operating cash distributions will be made to the limited partners holding Tax Preferred units.



Distribution of Sale Proceeds



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



| |  |  | To limited partners holding units which at any time have been treated as Tax Preferred units until each limited partner has received an amount necessary to equal the net cash
available for distribution received by the limited partners holding Cash Preferred units on a per-unit basis
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To limited partners on a per-unit basis until each limited partner has received 100% of his net capital contribution, as defined
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | To all limited partners on a per-unit basis until each limited partner has received a cumulative, noncompounded 10% per annum return on his net capital contribution, as defined
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To limited partners on a per-unit basis until each limited partner has received an amount equal to his preferential limited partner return (defined as the sum of a
10% per annum cumulative, noncompounded
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page F-10



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



| | return on net capital contributions for all periods during which the units were treated as Cash Preferred units, and a 15% per annum
cumulative, noncompounded return on net capital contributions for all periods during which the units were treated as Tax Preferred units)
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | In the event that the limited partners have received any excess limited partner distributions (defined as distributions to limited partners over the life of their investment in the
Partnership in excess of their net capital contributions, as defined, plus their preferential limited partner returns, as defined), to the General Partners until they have received distributions equal to 20% of the sum of any such excess limited
partner distributions, plus distributions made to the General Partners pursuant to this provision
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Thereafter, 80% to the limited partners on a per-unit basis and 20% to the General Partners
| | - |  | -------------------------------------------------------------------------------------------



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



Net income is defined as net income recognized by the Partnership, excluding deductions for depreciation and amortization. Net income, as
defined, of the Partnership will be allocated each year in the same proportion that net cash from operations is distributed to the partners. To the extent the Partnerships net income in any year exceeds net cash from operations, it will be
allocated 99% to the limited partners holding Cash Preferred units and 1% to the General Partners.



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



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



Recent Accounting Pronouncements



Business Combinations / Goodwill and Intangibles



On January 1, 2002, the Partnership adopted Statement of Financial Accounting Standards No.
141, Business Combinations(FAS 141), and Statement of Financial Accounting Standards No. 142, Goodwill and Intangibles (FAS 142). These standards govern business combinations, asset
acquisitions and the accounting for acquired intangibles.



Upon the acquisition
of real properties, it is the Partnerships policy to allocate the purchase price of properties to acquired tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of
above-market and below-market leases, and the value of in-place leases, based in each case on their fair values.



The fair values of the tangible assets of an acquired property (which includes land and building) are determined by valuing the property as if it were vacant, and the
as-if-vacant value is then allocated to land and building



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



based on managements determination of the relative fair value of these assets.
Management determines the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected
lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses during the expected lease-up periods based on
current market demand. Management estimates costs to execute similar leases including leasing commissions, and other related costs.



The fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with
the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) managements estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal
to the remaining terms of the leases. The above-market and below-market lease values are capitalized as lease intangible assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases.



The fair values of in-place leases include direct costs associated with
obtaining a new tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements and other
direct costs and are estimated based on managements consideration of current market costs to execute a similar lease. These direct costs are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs
is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a
particular tenant for other locations. These lease intangibles are amortized to rental income over the remaining terms of the respective leases.



Variable Interest Entities



In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities,
which clarifies the application of Accounting Research Bulletin (ARB) No. 51, Consolidated Financial Statements, relating to consolidation of certain entities. FIN 46 requires the identification of the Partnerships participation in
variable interest entities (VIEs), which are defined as entities with a level of invested equity that is not sufficient to fund future activities to permit them to operate on a stand-alone basis, or whose equity holders lack certain
characteristics of a controlling financial interest. For entities identified as VIEs, FIN 46 sets forth a model to evaluate potential consolidation based on an assessment of which party to the VIE, if any, bears a majority of the exposure to its
expected losses, or stands to gain from a majority of its expected returns. FIN 46 is effective for all new VIEs created or acquired after January 31, 2003. For VIEs created or acquired prior to February 1, 2003, the Partnership has adopted the
provisions of FIN 46 commencing on June 15, 2003. FIN 46 also sets forth certain disclosures regarding interests in VIEs that are deemed significant, even if consolidation is not required. As the Joint Ventures do not fall under the definition of
VIEs provided above, the adoption of FIN 46 has not resulted in the consolidation of any previously unconsolidated entities.



Restatement Disclosures



The statement of income for the year ended December 31, 2001 has been revised to include disclosure of Cash Preferred and Tax Preferred weighted average limited partner units outstanding for the year ended December
31, 2001.



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



Reclassifications



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



|2. |  | DEFERRED PROJECT COSTS
|-- |  | ----------------------



The Partnership pays a percentage of limited partner contributions to Wells Capital for acquisition and advisory services and as a reimbursement for acquisition expenses.
These payments, as stipulated by the partnership agreement, are equal to 3.5% of limited partner contributions, subject to certain overall limitations contained in the partnership agreement. Aggregate fees paid through December 31, 2003 were
$1,320,217 and amounted to 3.5% of limited partners contributions received. These fees are allocated to specific properties as they are purchased or developed and are included in the capitalized assets of the Joint Venture. Deferred project
costs at December 31, 2003 represent fees not yet allocated to specific properties.



|3. |  | OFFERING COSTS
|-- |  | --------------



As of December 31, 2003, Wells Capital had paid offering expenses on behalf of the Partnership in the aggregate amount of $2,081,760, of which the Partnership has reimbursed Wells Capital for $1,131,615, approximately
3% of aggregate gross offering proceeds. Offering costs, to the extent they exceed 3% of gross offering proceeds, will be paid by Wells Capital and not by the Partnership. Offering costs include such costs as legal and accounting fees, printing
costs, and other offering expenses, but do not include sales or underwriting commissions.



|4. |  | RELATED-PARTY TRANSACTIONS
|-- |  | --------------------------



Due from Joint Ventures at December 31, 2003 and 2002 represents the Partnerships share of cash to be distributed from the Joint Ventures for the fourth quarters of
2003 and 2002, respectively, as follows:



|                          |  |      |         |      |   |        
|------------------------- |  | ---- | ------- | ---- | - | -------
|                          |  | 2003 |         | 2002
|Fund XIII-REIT Associates |  | $    | 448,166 |      | $ | 201,131
|Fund XIII-XIV Associates  |  |      | 98,488  |      |   | 0      
|                          |  |      |         |      |   |        
|                          |  | $    | 546,654 |      | $ | 201,131
|                          |  |      |         |      |   |        



The Partnership entered into a
property management and leasing agreement with Wells Management Company, Inc. (Wells Management), an affiliate of the General Partners. In consideration for the management and leasing of the Partnerships properties, the Joint
Ventures pay Wells Management management and leasing fees equal to the lesser of (a) fees that would be paid to a comparable outside firm or (b) 4.5% of the gross revenues generally paid over the life of the lease plus a separate competitive fee for
the one-time initial lease-up of newly constructed properties generally paid in conjunction with the receipt of the first months rent. In the case of commercial properties which are leased on a long-term net basis (ten or more years), the
maximum property management fee from such leases shall be 1% of the gross revenues generally paid over the life of the leases except for a one-time initial leasing fee of 3% of the gross revenues on each lease payable over the first five full years
of the original lease term. The Partnerships share of management and leasing fees and lease acquisition costs incurred through the Joint Ventures was $92,249, $46,659 and $3,558 for the years ended December 31, 2003, 2002, and 2001,
respectively.



Wells Capital performs certain administrative services for the
Partnership, such as accounting and other partnership administration, and incurs the related expenses. Such expenses are allocated among the various Wells



Page F-13



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



Real Estate Funds based on estimates of the amount of time dedicated to each fund by
individual administrative personnel. In the opinion of management, this allocation is a reasonable estimation of such expenses. During 2003, 2002, and 2001, the Partnership reimbursed $78,597, $90,395, and $31,671, respectively, to Wells Capital and
its affiliates for these services.



The General Partners are also general
partners in other Wells Real Estate Funds. As such, there may exist conflicts of interest where the General Partners in the capacity as general partners for other Wells Real Estate Funds may be in competition with the Partnership for tenants in
similar geographic markets.



|5. |  | INVESTMENT IN JOINT VENTURES
|-- |  | ----------------------------



Fund XIII-REIT Associates



On June 27, 2001, Fund XIII-REIT Associates was formed for the purpose of acquiring, developing, operating, and selling real properties. On July 16, 2001, Fund XIII-REIT
Associates purchased an 85,000-square-foot, two-story office building, known as the AmeriCredit Building located in Clay County, Florida. On December 21, 2001, Fund XIII-REIT Associates purchased two connected one-story office and assembly
buildings, consisting of 148,200 square feet, known as the ADIC Buildings located in Douglas County, Colorado. On December 12, 2002, Fund XIII-REIT Associates purchased a four-story office building comprised of 141,000 square feet, known as the John
Wiley Building located in Hamilton County, Indiana. On September 19, 2003, Fund XIII-REIT Associates purchased a 194,000-square-foot, four-story office building, known as the American InterContinental University Building located in Hoffman Estates,
Illinois.



Fund XIII-XIV Associates



On August 20, 2003, Fund XIII-XIV Associates was formed for the purpose of acquiring,
developing, operating, and selling real properties. On October 30, 2003, Fund XIII-XIV Associates purchased two single-story office buildings comprised of 82,000 square feet, known as the Siemens  Orlando Building located in Orlando, Florida.
On December 19, 2003, Fund XIII-XIV Associates purchased a 64,574-square-foot, four-story office building, known as the Randstad Atlanta Building located in Atlanta, Georgia.



The Partnerships investment and percentage ownership in the Joint Ventures as of December 31, 2003 and 2002, respectively, are
summarized as follows:



|                            |  |        |            |         |      |   |        |   |            |  |    
|--------------------------- |  | ------ | ---------- | ------- | ---- | - | ------ | - | ---------- |  | ---
|                            |  | 2003   |            |         | 2002
|                            |  | Amount |            | Percent |      |   | Amount |   | Percent   
|Fund XIII  REIT Associates |  | $      | 19,627,634 |         | 28   | % |        | $ | 17,177,001 |  | 39%
|Fund XIII-XIV Associates    |  |        | 9,419,351  |         | 50   | % |        |   | 0          |  | n/a
|                            |  |        |            |         |      |   |        |   |            |  |    
|                            |  | $      | 29,046,985 |         |      |   |        | $ | 17,177,001 |  |    
|                            |  |        |            |         |      |   |        |   |            |  |    



The following is a roll-forward of the
Partnerships investment in Joint Ventures for the years ended December 31, 2003 and 2002:



|                                                |  |      |            |   |      |   |            |  
|----------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                |  | 2003 |            |   | 2002 |  
|Investment in Joint Ventures, beginning of year |  | $    | 17,177,001 |   |      | $ | 8,453,438  |  
|Equity in income of Joint Ventures              |  |      | 931,683    |   |      |   | 531,457    |  
|Contributions to Joint Ventures                 |  |      | 12,624,635 |   |      |   | 8,935,194  |  
|Distributions from Joint Ventures               |  |      | (1,686,334 | ) |      |   | (743,088   | )
|                                                |  |      |            |   |      |   |            |  
|Investment in Joint Ventures, end of year       |  | $    | 29,046,985 |   |      | $ | 17,177,001 |  
|                                                |  |      |            |   |      |   |            |  



Page F-14



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



Condensed financial information for the Joint Ventures as of December 31, 2003 and 2002 and
for the years ended December 31, 2003, 2002 and 2001 follows:



|                          |  |                          |            |                               |   |                          |  |      |           |      |   |         |  |   |            |  |   |           
|------------------------- |  | ------------------------ | ---------- | ----------------------------- | - | ------------------------ |  | ---- | --------- | ---- | - | ------- |  | - | ---------- |  | - | ----------
|                          |  | Total AssetsDecember 31, |            | Total LiabilitiesDecember 31, |   | Total EquityDecember 31,
|                          |  | 2003                     |            | 2002                          |   | 2003                     |  | 2002 |           | 2003 |   | 2002   
|Fund XIII-REIT Associates |  | $                        | 73,449,992 |                               | $ | 44,840,926               |  | $    | 3,262,461 |      | $ | 689,841 |  | $ | 70,187,531 |  | $ | 44,151,085
|Fund XIII-XIV Associates  |  |                          | 19,061,266 |                               |   | 0                        |  |      | 222,562   |      |   | 0       |  |   | 18,838,704 |  |   | 0         
|                          |  |                          |            |                               |   |                          |  |      |           |      |   |         |  |   |            |  |   |           
|                          |  | $                        | 92,511,258 |                               | $ | 44,840,926               |  | $    | 3,485,023 |      | $ | 689,841 |  | $ | 89,026,235 |  | $ | 44,151,085
|                          |  |                          |            |                               |   |                          |  |      |           |      |   |         |  |   |            |  |   |           



|                          |  |                                               |           |                                           |   |           |      |  |      |         |      |   |           |  |   |           |  |   |        
|------------------------- |  | --------------------------------------------- | --------- | ----------------------------------------- | - | --------- | ---- |  | ---- | ------- | ---- | - | --------- |  | - | --------- |  | - | -------
|                          |  | Total RevenuesFor The Years EndedDecember 31, |           | Net IncomeFor The Years EndedDecember 31,
|                          |  | 2003                                          |           | 2002                                      |   |           | 2001 |  | 2003 |         | 2002 |   | 2001     
|Fund XIII-REIT Associates |  | $                                             | 6,352,374 |                                           | $ | 2,944,925 | (i)  |  | $    | 706,373 |      | $ | 2,558,258 |  | $ | 1,649,629 |  | $ | 356,355
|Fund XIII-XIV Associates  |  |                                               | 227,378   |                                           |   | 0         |      |  |      | 0       |      |   | 36,410    |  |   | 0         |  |   | 0      
|                          |  |                                               |           |                                           |   |           |      |  |      |         |      |   |           |  |   |           |  |   |        
|                          |  | $                                             | 6,579,752 |                                           | $ | 2,944,925 |      |  | $    | 706,373 |      | $ | 2,594,668 |  | $ | 1,649,629 |  | $ | 356,355
|                          |  |                                               |           |                                           |   |           |      |  |      |         |      |   |           |  |   |           |  |   |        



|(i) |  | Amounts have been restated to reflect interest income of $2,735 as revenues for the twelve months ended December 31, 2002. This change in presentation has no impact on the
financial position, net income, or cash flows of the Joint Ventures or the Partnership.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. |  | INCOME TAX BASIS NET INCOME AND PARTNERS CAPITAL
|-- |  | -------------------------------------------------



A reconciliation of the Partnerships financial statement net income to net income presented in accordance with the Federal Income Tax basis of accounting is as
follows for the years ended December 31, 2003 and 2002:



|                                                                                                                                         |  |      |           |   |      |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | ------- | -
|                                                                                                                                         |  | 2003 |           |   | 2002 |  
|Financial statement net income                                                                                                           |  | $    | 888,403   |   |      | $ | 478,385 |  
|Increase in net income resulting from:                                                                                                   |  |      |           |   |      |   |         |  
|Non-deductible meals & entertainment                                                                                                     |  |      | 0         |   |      |   | 31      |  
|Depreciation expense for financial reporting purposes in excess of amounts for income tax purposes                                       |  |      | 211,320   |   |      |   | 123,208 |  
|Amortization expense for financial reporting purposes in excess of amounts for income tax purposes                                       |  |      | 237,857   |   |      |   | 0       |  
|Capitalization of syndication costs for income tax purposes, which are accounted for as cost of capital for financial reporting
purposes |  |      | 1,307,961 |   |      |   | 0       |  
|Bad debt expense for financial reporting purposes in excess of amounts for income tax purposes                                           |  |      | (1,006    | ) |      |   | 990     |  
|Rental income accrued for financial reporting purposes in excess of amounts for income tax purposes                                      |  |      | (9,951    | ) |      |   | (88,030 | )
|                                                                                                                                         |  |      |           |   |      |   |         |  
|Federal Income Tax basis net income                                                                                                      |  | $    | 2,634,584 |   |      | $ | 514,584 |  
|                                                                                                                                         |  |      |           |   |      |   |         |  



Page F-15



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



A reconciliation of the partners capital balances, as presented in the accompanying
financial statements, to partners capital balances, as presented in accordance with the Federal Income Tax basis of accounting, is as follows for the years ended December 31, 2003 and 2002:



|                                                                                                                                         |  |      |            |   |      |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                                                                                         |  | 2003 |            |   | 2002 |  
|Financial statement partners capital                                                                                                    |  | $    | 31,988,746 |   |      | $ | 23,468,120 |  
|Increase in partners capital resulting from:                                                                                            |  |      |            |   |      |   |            |  
|Depreciation expense for financial reporting purposes in excess of amounts for income tax purposes                                       |  |      | 354,918    |   |      |   | 143,598    |  
|Amortization expense for financial reporting purposes in excess of amounts for income tax purposes                                       |  |      | 237,857    |   |      |   | 0          |  
|Meals & Entertainment                                                                                                                    |  |      | 31         |   |      |   | 31         |  
|Bad debt expense for financial reporting purposes in excess of amounts for income tax purposes                                           |  |      | (16        | ) |      |   | 990        |  
|Capitalization of syndication costs for income tax purposes, which are accounted for as cost of capital for financial reporting
purposes |  |      | 4,712,071  |   |      |   | 3,404,110  |  
|Accumulated rental income accrued for financial reporting purposes in excess of amounts for income tax purposes                          |  |      | (91,837    | ) |      |   | (81,886    | )
|Partnership distributions payable                                                                                                        |  |      | 501,122    |   |      |   | 253,697    |  
|                                                                                                                                         |  |      |            |   |      |   |            |  
|Income tax basis partners capital                                                                                                       |  | $    | 37,702,892 |   |      | $ | 27,188,660 |  
|                                                                                                                                         |  |      |            |   |      |   |            |  



|7. |  | QUARTERLY RESULTS (UNAUDITED)
|-- |  | -----------------------------



Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2003 and 2002:



|                                                                                    |  |                     |          |   |         |   |          |              |  |   |             |   |  |   |          |  
|----------------------------------------------------------------------------------- |  | ------------------- | -------- | - | ------- | - | -------- | ------------ |  | - | ----------- | - |  | - | -------- | -
|                                                                                    |  | 2003 Quarters Ended |         
|                                                                                    |  | March 31            |          |   | June 30 |   |          | September 30 |  |   | December 31 |  
|Revenues                                                                            |  | $                   | 280,162  |   |         | $ | 254,258  |              |  | $ | 285,595     |   |  | $ | 229,093  |  
|Net income                                                                          |  |                     | 227,546  |   |         |   | 212,220  |              |  |   | 260,166     |   |  |   | 188,471  |  
|Net income allocated to Cash Preferred limited partners                             |  |                     | 378,354  |   |         |   | 363,028  |              |  |   | 423,381     |   |  |   | 463,023  |  
|Net loss allocated to Tax Preferred limited partners                                |  |                     | (150,808 | ) |         |   | (150,808 | )            |  |   | (163,215    | ) |  |   | (274,552 | )
|Net income per weighted average Cash Preferred limited partner unit outstanding (a) |  |                     | $0.16    |   |         |   | $0.12    |              |  |   | $0.14       |   |  |   | $0.16    |  
|Net loss per weighted average Tax Preferred limited partner unit outstanding (a)    |  |                     | $(0.27   | ) |         |   | $(0.20   | )            |  |   | $(0.23      | ) |  |   | $(0.40   | )
|Distribution per weighted average Cash Preferred limited partner unit outstanding   |  |                     | $0.12    |   |         |   | $0.11    |              |  |   | $0.13       |   |  |   | $0.17    |  



Page F-16



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##### Table of Contents

WELLS REAL ESTATE FUND XIII, L.P.

(A Georgia Public Limited
Partnership)



|                                                                                      |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|------------------------------------------------------------------------------------- |  | ------------------- | ------- | - | ------- | - | ------- | ------------ |  | - | ----------- | - |  | - | ------- | -
|                                                                                      |  | 2002 Quarters Ended |        
|                                                                                      |  | March 31            |         |   | June 30 |   |         | September 30 |  |   | December 31 |  
|Revenues                                                                              |  | $                   | 136,116 |   |         | $ | 136,246 |              |  | $ | 166,932     |   |  | $ | 182,087 |  
|Net (loss) income                                                                     |  |                     | 114,119 |   |         |   | 103,177 |              |  |   | 132,751     |   |  |   | 128,338 |  
|Net loss allocated to general partners                                                |  |                     | 0       |   |         |   | 0       |              |  |   | 0           |   |  |   | 0       |  
|Net income allocated to Cash Preferred limited partners                               |  |                     | 187,040 |   |         |   | 176,484 |              |  |   | 206,057     |   |  |   | 226,270 |  
|Net loss allocated to Tax Preferred limited partners                                  |  |                     | (72,921 | ) |         |   | (73,307 | )            |  |   | (73,306     | ) |  |   | (97,932 | )
|Net income per weighted average Cash Preferred limited partner unit outstanding       |  |                     | $0.18   |   |         |   | $0.15   |              |  |   | $0.10       |   |  |   | $0.09   |  
|Net loss per weighted average Tax Preferred limited partner unit outstanding (a)      |  |                     | $(0.36  | ) |         |   | $(0.32  | )            |  |   | $(0.22      | ) |  |   | $(0.10  | )
|Distribution per weighted average Cash Preferred limited partner unit outstanding (a) |  |                     | $0.14   |   |         |   | $0.11   |              |  |   | $0.13       |   |  |   | $0.12   |  



|(a) |  | The totals of the four quarterly amounts do not equal the totals for the year. The difference results from the use of weighted averages to compute the number of units outstanding
for each quarter and the year.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8. |  | PARTNERSHIP ADMINISTRATION AND LEGAL AND ACCOUNTING COSTS
|-- |  | ---------------------------------------------------------



Partnership administration and legal and accounting costs for the years ended December 31, 2003 and 2002 are comprised of the following items:



|                                                                |  |      |         |      |   |        
|--------------------------------------------------------------- |  | ---- | ------- | ---- | - | -------
|                                                                |  | 2003 |         | 2002
|Salary reimbursements                                           |  | $    | 78,597  |      | $ | 90,395 
|Independent accounting fees                                     |  |      | 30,505  |      |   | 9,783  
|Printing expenses                                               |  |      | 15,620  |      |   | 20,400 
|Legal fees                                                      |  |      | 13,584  |      |   | 10,786 
|Postage and delivery expenses                                   |  |      | 7,566   |      |   | 3,664  
|Other professional fees                                         |  |      | 5,348   |      |   | 0      
|Bank service charges                                            |  |      | 2,489   |      |   | 0      
|Other                                                           |  |      | 15      |      |   | 377    
|Taxes and licensing fees                                        |  |      | 0       |      |   | 1,500  
|                                                                |  |      |         |      |   |        
|Total partnership administration and legal and accounting costs |  | $    | 153,724 |      | $ | 136,905
|                                                                |  |      |         |      |   |        



Page F-17



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



REPORT OF INDEPENDENT AUDITORS



The Partners

Wells Fund XIII-REIT Joint Venture Partnership:



We have audited the accompanying balance sheets of Wells Fund XIII-REIT Joint Venture
Partnership, a Georgia joint venture, as of December 31, 2003 and 2002, and the related statements of income, partners capital, and cash flows for the years ended December 31, 2003 and 2002 and for the period from June 27, 2001 (Inception)
through December 31, 2001. Our audits also included the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Joint Ventures management. Our responsibility is to
express an opinion on these financial statements and schedule based on our audits.



We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wells Fund XIII-REIT Joint Venture
Partnership at December 31, 2003 and 2002, and the results of its operations and its cash flows for the years ended December 31, 2003 and 2002 and for the period from June 27, 2001 (Inception) through December 31, 2001, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the
information set forth therein.



/s/    Ernst & Young LLP



Atlanta, Georgia

February 18, 2004



Page F-18



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



BALANCE SHEETS

DECEMBER 31, 2003 AND 2002



|                                                                                                                                  |  |      |            |      |   |           
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ----------
|ASSETS                                                                                                                           
|                                                                                                                                  |  | 2003 |            | 2002
|Real estate assets, at cost:                                                                                                      |  |      |            |      |   |           
|Land                                                                                                                              |  | $    | 5,702,593  |      | $ | 5,078,504 
|Building and improvements, less accumulated depreciation of $3,050,191 and $1,244,330 at December 31, 2003 and 2002,
respectively |  |      | 54,886,414 |      |   | 37,517,783
|Intangible lease asset, less accumulated amortization of $399,111 and $0 at December 31, 2003 and 2002, respectively              |  |      | 5,340,907  |      |   | 1,164,414 
|                                                                                                                                  |  |      |            |      |   |           
|Total real estate assets                                                                                                          |  |      | 65,929,914 |      |   | 43,760,701
|Deferred lease acquisition costs, less accumulated amortization of $193,183 and $0 at December 31, 2003 and 2002, respectively    |  |      | 3,502,387  |      |   | 0         
|Cash and cash equivalents                                                                                                         |  |      | 2,455,443  |      |   | 693,464   
|Accounts receivable                                                                                                               |  |      | 1,560,080  |      |   | 385,988   
|Other assets                                                                                                                      |  |      | 2,168      |      |   | 773       
|                                                                                                                                  |  |      |            |      |   |           
|Total assets                                                                                                                      |  | $    | 73,449,992 |      | $ | 44,840,926
|                                                                                                                                  |  |      |            |      |   |           
|LIABILITIES AND PARTNERS CAPITAL                                                                                                
|Liabilities:                                                                                                                      |  |      |            |      |   |           
|Partnership distributions payable                                                                                                 |  | $    | 1,594,328  |      | $ | 604,859   
|Accounts payable                                                                                                                  |  |      | 1,203,323  |      |   | 84,982    
|Deferred rent                                                                                                                     |  |      | 464,810    |      |   | 0         
|                                                                                                                                  |  |      |            |      |   |           
|Total liabilities                                                                                                                 |  | $    | 3,262,461  |      | $ | 689,841   
|                                                                                                                                  |  |      |            |      |   |           
|Partners capital:                                                                                                                |  |      |            |      |   |           
|Wells Real Estate Fund XIII, L.P.                                                                                                 |  |      | 19,627,634 |      |   | 17,177,001
|Wells Operating Partnership, L.P.                                                                                                 |  |      | 50,559,897 |      |   | 26,974,084
|                                                                                                                                  |  |      |            |      |   |           
|Total partners capital                                                                                                           |  |      | 70,187,531 |      |   | 44,151,085
|                                                                                                                                  |  |      |            |      |   |           
|Total liabilities and partners capital                                                                                           |  | $    | 73,449,992 |      | $ | 44,840,926
|                                                                                                                                  |  |      |            |      |   |           



See accompanying notes.



Page F-19



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



STATEMENTS OF INCOME

FOR THE YEARS ENDED

DECEMBER 31, 2003 AND 2002

AND FOR THE PERIOD FROM JUNE 27, 2001 (INCEPTION)

THROUGH DECEMBER 31, 2001



|                                                          |  |      |           |      |   |           |  |   |        
|--------------------------------------------------------- |  | ---- | --------- | ---- | - | --------- |  | - | -------
|                                                          |  | 2003 |           | 2002 |   | 2001     
|REVENUES:                                                 |  |      |           |      |   |           |  |   |        
|Rental income                                             |  | $    | 5,498,322 |      | $ | 2,935,335 |  | $ | 706,373
|Reimbursement income                                      |  |      | 854,052   |      |   | 9,590     |  |   | 0      
|                                                          |  |      |           |      |   |           |  |   |        
|                                                          |  |      | 6,352,374 |      |   | 2,944,925 |  |   | 706,373
|EXPENSES:                                                 |  |      |           |      |   |           |  |   |        
|Depreciation                                              |  |      | 1,806,064 |      |   | 977,725   |  |   | 266,605
|Operating costs                                           |  |      | 1,207,438 |      |   | 152,065   |  |   | 48,415 
|Management and leasing fees                               |  |      | 381,356   |      |   | 119,916   |  |   | 26,954 
|Amortization of deferred lease acquisition costs          |  |      | 193,183   |      |   | 0         |  |   | 0      
|Joint Venture administration                              |  |      | 176,462   |      |   | 36,058    |  |   | 5,244  
|Legal and accounting                                      |  |      | 29,613    |      |   | 9,532     |  |   | 2,800  
|                                                          |  |      |           |      |   |           |  |   |        
|                                                          |  |      | 3,794,116 |      |   | 1,295,296 |  |   | 350,018
|                                                          |  |      |           |      |   |           |  |   |        
|NET INCOME                                                |  | $    | 2,558,258 |      | $ | 1,649,629 |  | $ | 356,355
|                                                          |  |      |           |      |   |           |  |   |        
|NET INCOME ALLOCATED TO WELLS REAL ESTATE FUND XIII, L.P. |  | $    | 913,478   |      | $ | 531,457   |  | $ | 58,610 
|                                                          |  |      |           |      |   |           |  |   |        
|NET INCOME ALLOCATED TO WELLS OPERATING PARTNERSHIP, L.P. |  | $    | 1,644,780 |      | $ | 1,118,172 |  | $ | 297,745
|                                                          |  |      |           |      |   |           |  |   |        



See accompanying notes.



Page F-20



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



STATEMENTS OF PARTNERS CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2003 AND 2002

AND FOR
THE PERIOD FROM JUNE 27, 2001 (INCEPTION)

THROUGH DECEMBER 31, 2001



|                                   |  |                                |            |   |                                |   |            |                       |  |   |            |  
|---------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---------- | --------------------- |  | - | ---------- | -
|                                   |  | WellsReal EstateFund XIII,L.P. |            |   | WellsOperatingPartnership,L.P. |   |            | TotalPartnersCapital | 
|BALANCE, June 27, 2001 (inception) |  | $                              | 0          |   |                                | $ | 0          |                       |  | $ | 0          |  
|Net income                         |  |                                | 58,610     |   |                                |   | 297,745    |                       |  |   | 356,355    |  
|Partnership contributions          |  |                                | 8,491,069  |   |                                |   | 18,285,076 |                       |  |   | 26,776,145 |  
|Partnership distributions          |  |                                | (96,241    | ) |                                |   | (455,483   | )                     |  |   | (551,724   | )
|                                   |  |                                |            |   |                                |   |            |                       |  |   |            |  
|BALANCE, December 31, 2001         |  |                                | 8,453,438  |   |                                |   | 18,127,338 |                       |  |   | 26,580,776 |  
|Net income                         |  |                                | 531,457    |   |                                |   | 1,118,172  |                       |  |   | 1,649,629  |  
|Partnership contributions          |  |                                | 8,935,194  |   |                                |   | 9,294,465  |                       |  |   | 18,229,659 |  
|Partnership distributions          |  |                                | (743,088   | ) |                                |   | (1,565,891 | )                     |  |   | (2,308,979 | )
|                                   |  |                                |            |   |                                |   |            |                       |  |   |            |  
|BALANCE, December 31, 2002         |  |                                | 17,177,001 |   |                                |   | 26,974,084 |                       |  |   | 44,151,085 |  
|Net income                         |  |                                | 913,478    |   |                                |   | 1,644,780  |                       |  |   | 2,558,258  |  
|Partnership contributions          |  |                                | 3,125,000  |   |                                |   | 24,935,267 |                       |  |   | 28,060,267 |  
|Partnership distributions          |  |                                | (1,587,845 | ) |                                |   | (2,994,234 | )                     |  |   | (4,582,079 | )
|                                   |  |                                |            |   |                                |   |            |                       |  |   |            |  
|BALANCE, December 31, 2003         |  | $                              | 19,627,634 |   |                                | $ | 50,559,897 |                       |  | $ | 70,187,531 |  
|                                   |  |                                |            |   |                                |   |            |                       |  |   |            |  



See accompanying notes.



Page F-21



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



STATEMENTS OF CASH FLOWS



FOR
THE YEARS ENDED

DECEMBER 31, 2003 AND 2002

AND FOR THE PERIOD FROM JUNE 27, 2001 (INCEPTION)

THROUGH DECEMBER 31, 2001



|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|--------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | ---- |  | - | ----------- | -
|                                                                                  |  | 2003 |             |   | 2002 |   |             | 2001 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |      |             |   |      |   |             |      |  |   |             |  
|Net income                                                                        |  | $    | 2,558,258   |   |      | $ | 1,649,629   |      |  | $ | 356,355     |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |             |   |      |   |             |      |  |   |             |  
|Depreciation                                                                      |  |      | 1,806,064   |   |      |   | 977,725     |      |  |   | 266,605     |  
|Amortization of intangible lease asset                                            |  |      | 399,111     |   |      |   | 0           |      |  |   | 0           |  
|Amortization of lease acquisition costs                                           |  |      | 193,183     |   |      |   | 0           |      |  |   | 0           |  
|Changes in assets and liabilities:                                                |  |      |             |   |      |   |             |      |  |   |             |  
|Other assets                                                                      |  |      | (1,395      | ) |      |   | 0           |      |  |   | 0           |  
|Accounts receivable                                                               |  |      | (1,174,092  | ) |      |   | (314,752    | )    |  |   | (72,009     | )
|Accounts payable                                                                  |  |      | 1,118,341   |   |      |   | (60,349     | )    |  |   | 145,331     |  
|Deferred rent                                                                     |  |      | 464,810     |   |      |   | 0           |      |  |   | 0           |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Total adjustments                                                                 |  |      | 2,806,022   |   |      |   | 602,624     |      |  |   | 339,927     |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Net cash provided by operating activities                                         |  |      | 5,364,280   |   |      |   | 2,252,253   |      |  |   | 696,282     |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |      |             |   |      |   |             |      |  |   |             |  
|Investment in real estate assets                                                  |  |      | (24,374,388 | ) |      |   | (17,506,701 | )    |  |   | (25,779,337 | )
|Payment of deferred lease acquisition costs                                       |  |      | (3,695,570  | ) |      |   | 0           |      |  |   | 0           |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Net cash used in investing activities                                             |  |      | (28,069,958 | ) |      |   | (17,506,701 | )    |  |   | (25,779,337 | )
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |      |             |   |      |   |             |      |  |   |             |  
|Contributions from joint venture partners                                         |  |      | 28,060,267  |   |      |   | 17,506,701  |      |  |   | 25,780,110  |  
|Distributions to joint venture partners                                           |  |      | (3,592,610  | ) |      |   | (2,019,169  | )    |  |   | (236,675    | )
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Net cash provided by financing activities                                         |  |      | 24,467,657  |   |      |   | 15,487,532  |      |  |   | 25,543,435  |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                         |  |      | 1,761,979   |   |      |   | 233,084     |      |  |   | 460,380     |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    |  |      | 693,464     |   |      |   | 460,380     |      |  |   | 0           |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                          |  | $    | 2,455,443   |   |      | $ | 693,464     |      |  | $ | 460,380     |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:                                   |  |      |             |   |      |   |             |      |  |   |             |  
|Deferred project costs contributed to the Joint Venture                           |  | $    | 1,083,057   |   |      | $ | 722,958     |      |  | $ | 996,035     |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  
|Partnership distributions payable                                                 |  | $    | 1,594,328   |   |      | $ | 604,859     |      |  | $ | 315,049     |  
|                                                                                  |  |      |             |   |      |   |             |      |  |   |             |  



See accompanying notes.



Page F-22



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003, 2002, AND 2001



|1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- |  | ------------------------------------------



Organization and Business



On June 27, 2001, Wells Real Estate Fund XIII, L.P. (Wells Fund XIII) and Wells Operating Partnership, L.P. (Wells OP) entered into a joint
venture to form Wells Fund XIII-REIT Joint Venture Partnership (the Joint Venture). The general partners of Wells Fund XIII are Leo F. Wells, III and Wells Capital, Inc. Wells OP is a Delaware limited partnership with Wells Real Estate
Investment Trust, Inc. (Wells REIT) serving as its general partner. Wells REIT is a Maryland corporation that qualifies as a real estate investment trust.



The Joint Venture was formed to acquire and operate commercial real properties, including properties to be developed, currently under
development or construction, newly constructed or having operating histories. On July 16, 2001, the Joint Venture purchased an 85,000-square foot; two-story office building located in Clay County, Florida, known as the AmeriCredit Building. On
December 21, 2001, the Joint Venture purchased two connected one-story office and assembly buildings, consisting of 148,200 square feet, located in Douglas County, Colorado, known as the ADIC Building. On December 12, 2002, the Joint Venture
purchased a four-story office building containing 141,000-square feet, located in Hamilton County, Indiana, known as the John Wiley Building. On September 19, 2003, the Joint Venture purchased a 194,000 square foot, four-story office building, known
as the American InterContinental University Building (the AIU-Chicago Building), located in Hoffman Estates, Illinois.



Use of Estimates



The preparation of the Joint Ventures financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.



Revenue Recognition



The Joint Ventures leases typically include renewal options, escalation provisions and provisions requiring tenants to reimburse the Joint Venture for a pro rata share of operating costs incurred. All of the
Joint Ventures leases are classified as operating leases, and the related rental income, including scheduled rental rate increases (other than scheduled increases based on the Consumer Price Index) is recognized on a straight-line basis over
the terms of the respective leases. Rental revenues collected in advance are recorded as deferred rent in the accompanying balance sheets.



Allocation of Income and Distributions



Pursuant to the terms of the joint venture agreement, all income and distributions are allocated to Wells Fund XIII and Wells OP in accordance with their respective
ownership interests of approximately 28% and 72%, respectively. Net cash from operations is distributed to the joint venture partners on a quarterly basis.



Real Estate Assets



Real estate assets are stated at cost less accumulated depreciation. Major improvements and betterments are capitalized when they extend the useful lives of the related assets. All repairs and maintenance expenditures
are



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WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



expensed as incurred. Depreciation for
buildings and improvements is calculated using the straight-line method over 25 years. Tenant improvements are amortized over the life of the related lease or real estate asset.



Effective January 1, 2002, the Joint Venture adopted the Statement of Financial Accounting Standards No. 144 Accounting for the
Impairment or Disposal of Long Lived Assets(SFAS 144), which supersedes Statement of Financial Accounting Standards No. 121 Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of (SFAS 121) and Accounting Principles Board No. 30 Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual or Infrequently Occurring Events or
Transactions, with regard to impairment assessment and discontinued operations, respectively. Under this accounting standard, management continually monitors events and changes in circumstances that could indicate that carrying amounts of
real estate assets may not be recoverable. When indicators of potential impairment are present, management assesses the recoverability of the assets by determining whether the carrying value of the real estate assets will be recovered through the
undiscounted future cash flows expected from the use and eventual disposition of the asset. In the event the expected undiscounted future cash flows do not exceed the carrying value, management adjusts the real estate assets to the fair value and
recognizes an impairment loss. Management has determined that there has been no impairment in the carrying value of real estate assets held by the Joint Venture to date.



Intangible Lease Assets



On January 1, 2002, the Joint Venture adopted Statement of Financial Accounting Standards No. 141, Business Combinations, and Statement of Financial
Accounting Standards No. 142, Goodwill and Intangibles. These standards govern business combinations and asset acquisitions, and the accounting for acquired intangibles.



Upon the acquisition of real properties, it is the Joint Ventures policy to allocate
the purchase price of properties to acquired tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, and the value of in-place leases, based
in each case on their fair values.



The fair values of the tangible assets of
an acquired property (which includes land and building) are determined by valuing the property as if it were vacant, and the as-if-vacant value is then allocated to land and building based on managements determination of the
relative fair value of these assets. Management determines the as-if vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of
carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses during the
expected lease-up periods based on current market demand. Management estimates costs to execute similar leases including leasing commissions, and other related costs.



The fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which
reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) managements estimate of fair market lease rates for the corresponding in-place
leases, measured over a period equal to the remaining term of the leases. The above-market and below-market lease values are capitalized as lease intangible assets or liabilities and amortized as an adjustment to rental income over the remaining
terms of the respective leases.



The fair values of in-place leases include
direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct



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WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



costs associated with obtaining a new
tenant include commissions, tenant improvements and other direct costs and are estimated based on managements consideration of current market costs to execute a similar lease. These direct costs are included in deferred lease acquisition costs
in the accompanying balance sheets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market
absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. These lease intangibles are included in intangible lease assets in
the accompanying balance sheets and are amortized to rental income over the remaining term of the respective leases.



As a result of adopting the standards, $5,740,018 was recorded as intangible lease assets for the John Wiley Building (acquired in 2002) and the AIU-Chicago Building
(acquired in 2003). In addition, $3,695,570 was recorded as lease origination costs associated with the 2003 acquisition of the AIU-Chicago Building.



The intangible lease assets and lease origination costs are recorded at estimated fair market value at the date of acquisition, and are amortized over the remaining terms
of the respective leases. As of the period ended December 31, 2003, $399,111 of accumulated amortization relating to the intangible lease assets was recognized as a net decrease in rental revenues and $193,183 of accumulated amortization relating to
lease origination costs was recognized as amortization of lease origination costs in the statement of income. The weighted average amortization period for the intangible lease assets was approximately 8 years.



The remaining unamortized balances of the intangible lease assets and lease origination costs
will be amortized as follows:



For the years
ending December 31:



|           |  |                        |           |                       |   |          
|---------- |  | ---------------------- | --------- | --------------------- | - | ---------
|           |  | IntangibleLease Assets |           | LeaseOriginationCosts
|2004       |  | $                      | 1,161,966 |                       | $ | 772,731  
|2005       |  |                        | 1,161,529 |                       |   | 766,542  
|2006       |  |                        | 1,027,914 |                       |   | 684,272  
|2007       |  |                        | 896,029   |                       |   | 570,927  
|2008       |  |                        | 623,224   |                       |   | 349,789  
|Thereafter |  |                        | 470,245   |                       |   | 358,126  
|           |  |                        |           |                       |   |          
|           |  | $                      | 5,340,907 |                       | $ | 3,502,387
|           |  |                        |           |                       |   |          



Deferred Lease Acquisition Costs



Deferred lease acquisition costs, net, reflect costs incurred to procure
operating leases, which are capitalized and amortized on a straight-line basis over the terms of the related leases.



Cash and Cash Equivalents



The Joint Venture considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include
cash and short-term investments. Short-term investments are stated at cost, which approximates fair value, and consist of investments in money market accounts.



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WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



Accounts Receivable



Accounts receivable are comprised of tenant receivables and straight-line rent
receivables. Management assesses the collectibility of accounts receivable on an ongoing basis and provides for allowances as such balances, or portions thereof, become uncollectible.



Income Taxes



The Joint Venture is not subject to federal or state income taxes; therefore, none have been provided for in the accompanying financial statements. The partners of Wells
Fund XIII and Wells OP are required to include their respective share of profits and losses from the Joint Venture in their individual income tax returns.



Deferred Project Costs



Wells Fund XIII and Wells REIT paid 3.5% of gross capital contributions to Wells Capital, Inc. for acquisition and advisory services, subject to certain overall limitations. These fees were capitalized by Wells Fund
XIII and Wells REIT as paid and allocated to specific properties, including the AmeriCredit Building, the ADIC Building, and the AIU-Chicago Building, upon acquisition by the Joint Venture. Accordingly, such deferred project costs are included in
the capitalized assets of the Joint Venture and depreciated over their respective estimated useful lives.



|2. |  | RELATED-PARTY TRANSACTIONS
|-- |  | --------------------------



Wells Fund XIII entered into a property management and leasing agreement with Wells Management, Inc. (Wells Management), an affiliate of the general partners.
In consideration for supervising the management and leasing of the Joint Ventures properties, the Joint Venture will pay Wells Management management and leasing fees equal to the lesser of (a) fees that would be paid to a comparable outside
firm or (b) 4.5% of the gross revenues generally paid over the life of the lease plus a separate competitive fee for the one-time initial lease-up of newly constructed properties generally paid in conjunction with the receipt of the first
months rent. In the case of commercial properties which are leased on a long-term net basis (ten or more years), the maximum property management fee from such leases shall be 1% of the gross revenues generally paid over the life of the leases
except for a one-time initial leasing fee of 3% of the gross revenues on each lease payable over the first five full years of the original lease term.



Wells OP entered into an asset/property management agreement with Wells Management. In consideration for supervising the assets, management and leasing of the Joint
Ventures properties, the Joint Venture will pay Wells Management property management, leasing and asset management fees equal to the lesser of (a) 4.5% of the gross revenues generally paid over the life of the lease or (b) 0.6% of Net Asset
Value calculated on an annual basis. The Joint Venture incurred management and leasing fees of $298,677, $119,916, and $26,954 for the years ended December 31, 2003, 2002, and 2001, respectively, which are payable to Wells Management.



Wells Capital, Inc., an affiliate of the General Partners, and its affiliates perform certain
administrative services for the Partnership, such as accounting, property management, and other partnership administration, and incur the related expenses. Such expenses are allocated among these entities based on time spent on each entity by
individual personnel. During 2003, 2002, and 2001, the Joint Venture reimbursed $61,467, $36,058, and $5,244, respectively, to Wells Capital, Inc. and its affiliates for these services.



The general partners of Wells Fund XIII and Wells OP are also general partners of other Wells Real Estate Funds. As such, there may exist
conflicts of interest where the general partners in their capacity as general



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WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



partners of other Wells Real Estate
Funds may be in competition with the Joint Venture for tenants in similar geographic markets.



|3. |  | RENTAL INCOME
|-- |  | -------------



The future minimum rental income due to the Joint Venture under non-cancelable operating leases at December 31, 2003 follows:



|                        |  |   |           
|----------------------- |  | - | ----------
|Year ended December 31: |  |   |           
|2004                    |  | $ | 7,464,796 
|2005                    |  |   | 7,568,755 
|2006                    |  |   | 7,393,491 
|2007                    |  |   | 7,278,165 
|2008                    |  |   | 6,520,393 
|Thereafter              |  |   | 11,576,993
|                        |  |   |           
|                        |  | $ | 47,802,593
|                        |  |   |           



Three tenants contributed
approximately 35%, 24%, and 22% of rental income for the year ended December 31, 2003. In addition, four tenants will contribute approximately 25%, 24%, 23%, and 21% of future minimum rental income.



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2003



|                                                  |  |               |  |                           |           |                                          |      |                                                    |                           |   |                       |  |                         |           |                                          |   |            |  |   |           |  |   |   |  |   |            |  |   |           |  |      |  |          |  |               
|------------------------------------------------- |  | ------------- |  | ------------------------- | --------- | ---------------------------------------- | ---- | -------------------------------------------------- | ------------------------- | - | --------------------- |  | ----------------------- | --------- | ---------------------------------------- | - | ---------- |  | - | --------- |  | - | - |  | - | ---------- |  | - | --------- |  | ---- |  | -------- |  | --------------
|                                                  |  |               |  |                           |           |                                          |      | Gross Amount at Which Carried at December 31, 2003 |                           |   |                       |  |                         |           |                                          |  
|Description                                       |  | Encum-brances |  | Initial Cost              |           | CostsCapitalizedSubsequent ToAcquisition |      |                                                    | AccumulatedDepreciation   |   | Date ofConstruction   |  | DateAcquired            |           | Life on whichDepreciation isComputed (e)
|                                                  |  | Land          |  | Buildings andImprovements |           |                                          | Land |                                                    | Buildings andImprovements |   | IntangibleLease Asset |  | Constructionin Progress |           | Total                                    |   |            |  |  
|AMERICREDIT BUILDING (a)                          |  | None          |  | $                         | 1,610,000 |                                          | $    | 10,931,426                                         |                           | $ | 521,832               |  | $                       | 1,677,084 |                                          | $ | 11,386,174 |  | $ | 0         |  | $ | 0 |  | $ | 13,063,258 |  | $ | 1,138,617 |  | 2001 |  | 07/16/01 |  | 20 to 25 years
|ADIC BUILDING (b)                                 |  | None          |  |                           | 1,954,213 |                                          |      | 11,215,622                                         |                           |   | 542,280               |  |                         | 2,047,735 |                                          |   | 11,664,380 |  |   | 0         |  |   | 0 |  |   | 13,712,115 |  |   | 971,482   |  | 2001 |  | 12/21/01 |  | 20 to 25 years
|JOHN WILEY BUILDING (c)                           |  | None          |  |                           | 1,300,000 |                                          |      | 16,206,702                                         |                           |   | 732,647               |  |                         | 1,353,685 |                                          |   | 15,721,250 |  |   | 1,164,414 |  |   | 0 |  |   | 18,239,349 |  |   | 829,587   |  | 1999 |  | 12/12/02 |  | 20 to 25 years
|AMERICAN INTERCONTINENTAL UNIVERSITY BUILDING (d) |  | None          |  |                           | 600,000   |                                          |      | 22,681,602                                         |                           |   | 1,083,095             |  |                         | 624,089   |                                          |   | 19,165,004 |  |   | 4,575,604 |  |   | 0 |  |   | 24,364,697 |  |   | 509,819   |  | 2003 |  | 9/19/03  |  | 20 to 25 years
|                                                  |  |               |  |                           |           |                                          |      |                                                    |                           |   |                       |  |                         |           |                                          |   |            |  |   |           |  |   |   |  |   |            |  |   |           |  |      |  |          |  |               
|Total                                             |  |               |  | $                         | 5,464,213 |                                          | $    | 61,035,352                                         |                           | $ | 2,879,854             |  | $                       | 5,702,593 |                                          | $ | 57,936,808 |  | $ | 5,740,018 |  | $ | 0 |  | $ | 69,379,419 |  | $ | 3,449,505 |  |      |  |          |  |               
|                                                  |  |               |  |                           |           |                                          |      |                                                    |                           |   |                       |  |                         |           |                                          |   |            |  |   |           |  |   |   |  |   |            |  |   |           |  |      |  |          |  |               



|(a) |  | AmeriCredit Building is a two-story office building located in Orange Park, Clay County, Florida.
|--- |  | -------------------------------------------------------------------------------------------------



|(b) |  | ADIC Building is a two connected one-story office and assembly buildings located in Douglas, Parker County, Colorado.
|--- |  | ---------------------------------------------------------------------------------------------------------------------



|(c) |  | John Wiley Building is a four-story office building located in Fishers, Hamilton County, Indiana.
|--- |  | -------------------------------------------------------------------------------------------------



|(d) |  | American InterContinental University Building is a four-story office building located in Hoffman Estates, Illinois.
|--- |  | -------------------------------------------------------------------------------------------------------------------



|(e) |  | Depreciation lives used for buildings are 25 years. Depreciation lives used for land improvements are 20 years.
|--- |  | ---------------------------------------------------------------------------------------------------------------



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##### Table of Contents

WELLS FUND XIII  REIT JOINT VENTURE PARTNERSHIP

(A Georgia Joint
Venture)



SCHEDULE III 
REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2003



|                             |  |      |            |                         |   |          
|---------------------------- |  | ---- | ---------- | ----------------------- | - | ---------
|                             |  | Cost |            | AccumulatedDepreciation
|BALANCE AT JUNE 27, 2001     |  |      |            |                         |   |          
|2001 additions               |  | $    | 26,775,372 |                         | $ | 266,605  
|                             |  |      |            |                         |   |          
|BALANCE AT DECEMBER 31, 2001 |  |      | 26,775,372 |                         |   | 266,605  
|2002 additions               |  |      | 18,229,659 |                         |   | 977,725  
|                             |  |      |            |                         |   |          
|BALANCE AT DECEMBER 31, 2002 |  |      | 45,005,031 |                         |   | 1,244,330
|2003 additions               |  |      | 24,374,388 |                         |   | 2,205,175
|                             |  |      |            |                         |   |          
|BALANCE AT DECEMBER 31, 2003 |  | $    | 69,379,419 |                         | $ | 3,449,505
|                             |  |      |            |                         |   |          



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



REPORT OF INDEPENDENT AUDITORS



The Partners

Fund XIII and Fund XIV Associates:



We have audited the accompanying balance sheet of Fund XIII and Fund XIV Associates, a
Georgia joint venture, as of December 31, 2003, and the related statements of income, partners capital, and cash flows for the period from August 20, 2003 (Inception) through December 31, 2003. Our audit also included the financial statement
schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Joint Ventures management. Our responsibility is to express an opinion on these financial statements and schedule based on our
audit.



We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.



In our
opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Fund XIII and Fund XIV Associates at December 31, 2003, and the results of its operations and its cash flows for the period from
August 20, 2003 (Inception) through December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects the information set forth therein.



/s/    Ernst & Young LLP



Atlanta, Georgia

February 18, 2004



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



BALANCE SHEET

DECEMBER 31, 2003



|                                                                    |  |   |           
|------------------------------------------------------------------- |  | - | ----------
|ASSETS                                                             
|Real estate assets, at cost:                                        |  |   |           
|Land                                                                |  | $ | 2,656,250 
|Building and improvements, less accumulated depreciation of $86,017 |  |   | 11,527,422
|Intangible lease assets, less accumulated amortization of $60,917   |  |   | 2,543,746 
|                                                                    |  |   |           
|Total real estate assets                                            |  |   | 16,727,418
|Lease origination costs, less accumulated amortization of $28,767   |  |   | 2,095,951 
|Cash and cash equivalents                                           |  |   | 199,406   
|Accounts receivable                                                 |  |   | 38,491    
|                                                                    |  |   |           
|Total assets                                                        |  | $ | 19,061,266
|                                                                    |  |   |           
|LIABILITIES AND PARTNERS CAPITAL                                  
|Liabilities:                                                        |  |   |           
|Partnership distributions payable                                   |  | $ | 196,976   
|Accounts payable                                                    |  |   | 25,586    
|                                                                    |  |   |           
|Total liabilities                                                   |  |   | 222,562   
|                                                                    |  |   |           
|Partners capital:                                                  |  |   |           
|Wells Real Estate Fund XIII, L.P.                                   |  |   | 9,419,352 
|Wells Real Estate Fund XIV, L.P.                                    |  |   | 9,419,352 
|                                                                    |  |   |           
|Total partners capital                                             |  |   | 18,838,704
|                                                                    |  |   |           
|Total liabilities and partners capital                             |  | $ | 19,061,266
|                                                                    |  |   |           



See accompanying notes.



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



STATEMENT OF INCOME

FOR THE PERIOD FROM AUGUST 20, 2003 (INCEPTION)

THROUGH DECEMBER 31, 2003



|                                        |  |   |        
|--------------------------------------- |  | - | -------
|REVENUES:                               |  |   |        
|Rental income                           |  | $ | 169,895
|Reimbursement income                    |  |   | 57,483 
|                                        |  |   |        
|                                        |  |   | 227,378
|EXPENSES:                               |  |   |        
|Depreciation                            |  |   | 86,017 
|Operating costs                         |  |   | 40,834 
|Management and leasing fees             |  |   | 16,581 
|Legal and accounting                    |  |   | 14,691 
|Joint Venture administration            |  |   | 4,078  
|Amortization of lease origination costs |  |   | 28,767 
|                                        |  |   |        
|                                        |  |   | 190,968
|                                        |  |   |        
|NET INCOME                              |  | $ | 36,410 
|                                        |  |   |        
|NET INCOME ALLOCATED TO WELLS FUND XIII |  | $ | 18,205 
|                                        |  |   |        
|NET INCOME ALLOCATED TO WELLS FUND XIV  |  | $ | 18,205 
|                                        |  |   |        



See accompanying notes.



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



STATEMENT OF PARTNERS CAPITAL

FOR THE PERIOD FROM AUGUST 20, 2003 (INCEPTION)

THROUGH DECEMBER 31, 2003



|                                     |  |                |           |   |               |   |           |                       |  |   |            |  
|------------------------------------ |  | -------------- | --------- | - | ------------- | - | --------- | --------------------- |  | - | ---------- | -
|                                     |  | WellsFund XIII |           |   | WellsFund XIV |   |           | TotalPartnersCapital | 
|BALANCE, August 20, 2003 (inception) |  | $              | 0         |   |               | $ | 0         |                       |  | $ | 0          |  
|Net income                           |  |                | 18,205    |   |               |   | 18,205    |                       |  |   | 36,410     |  
|Partnership contributions            |  |                | 9,499,635 |   |               |   | 9,499,635 |                       |  |   | 18,999,270 |  
|Partnership distributions            |  |                | (98,488   | ) |               |   | (98,488   | )                     |  |   | (196,976   | )
|                                     |  |                |           |   |               |   |           |                       |  |   |            |  
|BALANCE, December 31, 2003           |  | $              | 9,419,352 |   |               | $ | 9,419,352 |                       |  | $ | 18,838,704 |  
|                                     |  |                |           |   |               |   |           |                       |  |   |            |  



See accompanying notes.



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM AUGUST 20, 2003 (INCEPTION)

THROUGH DECEMBER 31, 2003



|                                                                                  |  |   |             |  
|--------------------------------------------------------------------------------- |  | - | ----------- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |   |             |  
|Net income                                                                        |  | $ | 36,410      |  
|                                                                                  |  |   |             |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |   |             |  
|Depreciation                                                                      |  |   | 86,017      |  
|Amortization of intangible lease origination costs                                |  |   | 28,767      |  
|Amortization of intangible lease asset                                            |  |   | 60,917      |  
|Changes in assets and liabilities:                                                |  |   |             |  
|Accounts receivable                                                               |  |   | (38,491     | )
|Accounts payable                                                                  |  |   | 25,586      |  
|                                                                                  |  |   |             |  
|Total adjustments                                                                 |  |   | 162,796     |  
|                                                                                  |  |   |             |  
|Net cash provided by operating activities                                         |  |   | 199,206     |  
|                                                                                  |  |   |             |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |   |             |  
|Investment in real estate assets                                                  |  |   | (16,114,388 | )
|Intangible lease origination costs paid                                           |  |   | (2,124,718  | )
|                                                                                  |  |   |             |  
|Net cash used in investing activities                                             |  |   | (18,239,106 | )
|                                                                                  |  |   |             |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |   |             |  
|Contributions from joint venture partners                                         |  |   | 18,239,306  |  
|                                                                                  |  |   |             |  
|Net cash provided by financing activities                                         |  |   | 18,239,306  |  
|                                                                                  |  |   |             |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                         |  |   | 199,406     |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    |  |   | 0           |  
|                                                                                  |  |   |             |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                          |  | $ | 199,406     |  
|                                                                                  |  |   |             |  
|SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:                                   |  |   |             |  
|Deferred project costs contributed to the Joint Venture                           |  | $ | 759,964     |  
|                                                                                  |  |   |             |  
|Partnership distributions payable                                                 |  | $ | 196,976     |  
|                                                                                  |  |   |             |  



See accompanying notes.



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003



|1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- |  | ------------------------------------------



Organization and Business



On August 20, 2003, Wells Real Estate Fund XIII, L.P. (Wells Fund XIII) and Wells Real Estate Fund XIV, L.P. (Wells Fund XIV) entered into a joint
venture to form Fund XIII and Fund XIV Associates (the Joint Venture). The general partners of Wells Fund XIII and Wells Fund XIV are Leo F. Wells, III and Wells Capital, Inc.



The Joint Venture was formed to acquire and operate commercial real properties, including properties to be developed, currently under
development or construction, newly constructed or having operating histories. On October 30, 2003, the Joint Venture purchased an 82,000-square-foot, two single-story office building located in Orlando, Florida, known as the Siemens-Orlando
Building. On December 19, 2003, in a sale-leaseback transaction, the Joint Venture acquired the Randstad-Atlanta Building, a four-story office building containing approximately 65,000 aggregate rentable square feet located in Atlanta, Georgia.



Use of Estimates



The preparation of the Joint Ventures financial statements in conformity with
accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those
estimates.



Revenue Recognition



The Joint Ventures leases typically include renewal options, escalation provisions and
provisions requiring tenants to reimburse the Joint Venture for a pro rata share of operating costs incurred. All of the Joint Ventures leases are classified as operating leases, and the related rental income, including scheduled rental rate
increases (other than scheduled increases based on the Consumer Price Index) is recognized on a straight-line basis over the terms of the respective leases. Rental revenues collected in advance are recorded as deferred rent in the accompanying
balance sheet.



Allocation of Income and Distributions



Pursuant to the terms of the joint venture agreement, all income and distributions are
allocated to Wells Fund XIII and Wells Fund XIV in accordance with their respective ownership interests of 50% each. Net cash from operations is distributed to the joint venture partners on a quarterly basis.



Real Estate Assets



Real estate assets are stated at cost less accumulated depreciation. Major improvements and betterments are capitalized when they extend the
useful lives of the related assets. All repairs and maintenance expenditures are expensed as incurred. Depreciation for buildings and improvements is calculated using the straight-line method over 25 years. Tenant improvements are amortized over the
life of the related lease or real estate asset.



The Joint Venture has adopted
the Statement of Financial Accounting Standards No. 144 Accounting for the Impairment or Disposal of Long Lived Assets(SFAS 144), which supersedes Statement of Financial Accounting Standards No. 121
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (SFAS 121) and Accounting Principles Board No. 30 Reporting the Results of



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FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



Operations-Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual or Infrequently Occurring Events or Transactions, with regard to impairment assessment and discontinued operations, respectively. Under this accounting standard,
management continually monitors events and changes in circumstances that could indicate that carrying amounts of real estate assets may not be recoverable. When indicators of potential impairment are present, management assesses the recoverability
of the assets by determining whether the carrying value of the real estate assets will be recovered through the undiscounted future cash flows expected from the use and eventual disposition of the asset. In the event the expected undiscounted future
cash flows do not exceed the carrying value, management adjusts the real estate assets to the fair value and recognizes an impairment loss. Management has determined that there has been no impairment in the carrying value of real estate assets held
by the Joint Venture to date.



Intangible Lease Assets



The Joint Venture has adopted Statement of Financial Accounting Standards No. 141
Business Combinations, and Statement of Financial Accounting Standards No. 142 Goodwill and Intangibles. These standards govern business combinations and asset acquisitions, and the accounting for acquired
intangibles.



Upon the acquisition of real properties, it is the Joint
Ventures policy to allocate the purchase price of properties to acquired tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, and
the value of in-place leases, based in each case on their fair values.



The
fair values of the tangible assets of an acquired property (which includes land and building) are determined by valuing the property as if it were vacant, and the as-if-vacant value is then allocated to land and building based on
managements determination of the relative fair value of these assets. Management determines the as-if vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing
these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and
other operating expenses during the expected lease-up periods based on current market demand. Management estimates costs to execute similar leases including leasing commissions, and other related costs.



The fair values of above-market and below-market in-place leases are recorded based on the
present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) managements estimate of fair market
lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the leases. The above-market and below-market lease values are capitalized as lease intangible assets or liabilities and amortized as an
adjustment to rental income over the remaining terms of the respective leases.



The fair values of in-place leases include direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs
associated with obtaining a new tenant include commissions, tenant improvements and other direct costs and are estimated based on managements consideration of current market costs to execute a similar lease. These direct costs are included in
deferred leasing costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to
the in-place leases over a market absorption period for a similar lease. Customer relationships are valued based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. These lease intangibles are
included in intangible



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FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



lease assets in the accompanying
consolidated balance sheet and are amortized to rental income over the remaining term of the respective leases.



As a result of adopting the standards, $2,604,664 was recorded as intangible lease assets for the Siemens Orlando Building and the Randstad Atlanta Building, which were
both acquired in 2003. In addition, $2,124,718 was recorded as lease origination costs associated with the 2003 acquisitions of the Siemens-Orlando Building and the Randstad Atlanta Building.



The intangible lease assets and lease origination costs are recorded at estimated fair market
value at the date of acquisition, and are amortized over the remaining terms of the respective leases. As of the period ended December 31, 2003, $60,917 of accumulated amortization relating to the intangible lease assets was recognized as a net
decrease in rental revenues and $28,767 of accumulated amortization relating to lease origination costs was recognized as amortization of lease origination costs in the statement of income. The weighted average amortization period for the intangible
lease assets was approximately 10 years.



The remaining unamortized balances of
the intangible lease assets and lease origination costs will be amortized as follows:



For the year ending December 31:



|           |  |                        |           |                       |   |          
|---------- |  | ---------------------- | --------- | --------------------- | - | ---------
|           |  | IntangibleLease Assets |           | LeaseOriginationCosts
|2004       |  | $                      | 421,438   |                       | $ | 282,607  
|2005       |  |                        | 421,438   |                       |   | 282,607  
|2006       |  |                        | 417,042   |                       |   | 281,464  
|2007       |  |                        | 363,566   |                       |   | 267,182  
|2008       |  |                        | 307,228   |                       |   | 248,354  
|Thereafter |  |                        | 613,034   |                       |   | 733,737  
|           |  |                        |           |                       |   |          
|           |  | $                      | 2,543,746 |                       | $ | 2,095,951
|           |  |                        |           |                       |   |          



Cash and Cash Equivalents



The Joint Venture considers all highly liquid investments purchased with
an original maturity of three months or less to be cash equivalents. Cash equivalents include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value, and consist of investments in money market
accounts.



Accounts Receivable



Accounts receivable are comprised of tenant receivables and straight-line rent receivables.
Management assesses the collectibility of accounts receivable on an ongoing basis and provides for allowances as such balances, or portions thereof, become uncollectible.



Deferred Project Costs



Wells Fund XIII and Wells Fund XIV pay 3.5% of gross capital contributions to Wells Capital, Inc. for acquisition and advisory services, subject to certain overall
limitations provided in the respective partnership agreements. These fees were capitalized by Wells Fund XIII and Wells Fund XIV as paid and allocated to specific properties, including the Siemens-Orlando Building and the Randstad-Atlanta Building
upon acquisition by the Joint Venture. Accordingly, such deferred project costs are included in the capitalized assets of the Joint Venture.



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FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



Income Taxes



The Joint Venture is not subject to federal or state income taxes; therefore, none have been
provided for in the accompanying financial statements. The partners of Wells Fund XIII and Wells Fund XIV are required to include their respective share of profits and losses from the Joint Venture in their individual income tax returns.



|2. |  | RELATED-PARTY TRANSACTIONS
|-- |  | --------------------------



Wells Fund XIII and Wells Fund XIV entered into a property management and leasing agreement with Wells Management, Inc. (Wells Management), an affiliate of
the general partners. In consideration for supervising the management and leasing of the Joint Ventures properties, the Joint Venture will pay Wells Management management and leasing fees equal to 4.5% of the gross revenues generally paid over
the life of the lease plus a separate competitive fee for the one-time initial lease-up of newly constructed properties generally paid in conjunction with the receipt of the first months rent. In the case of commercial properties which are
leased on a long-term net basis (ten or more years), the maximum property management fee from such leases shall be 1% of the gross revenues generally paid over the life of the leases except for a one-time initial leasing fee of 3% of the gross
revenues on each lease payable over the first five full years of the original lease term. The Joint Venture incurred management and leasing fees of $16,581 for the period from August 20, 2003 (Inception) to December 31, 2003 which are payable to
Wells Management.



Wells Capital, Inc., an affiliate of the General Partners,
and its affiliates perform certain administrative services for the Partnership, such as accounting, property management, and other partnership administration, and incur the related expenses. Such expenses are allocated among these entities based on
time spent on each entity by individual personnel. During 2003, the Joint Venture reimbursed $4,735 to Wells Capital, Inc. and its affiliates for these services.



The general partners of Wells Fund XIII and Wells Fund XIV are also general partners of other Wells Real Estate Funds. As such, there may
exist conflicts of interest where the general partners in their capacity as general partners of other Wells Real Estate Funds may be in competition with the Joint Venture for tenants in similar geographic markets.



|3. |  | RENTAL INCOME
|-- |  | -------------



The future minimum rental income due to the Joint Venture under non-cancelable operating leases at December 31, 2003 is as follows:



|                        |  |   |           
|----------------------- |  | - | ----------
|Year ended December 31: |  |   |           
|2004                    |  | $ | 1,765,022 
|2005                    |  |   | 1,795,999 
|2006                    |  |   | 1,818,395 
|2007                    |  |   | 1,728,060 
|2008                    |  |   | 1,612,597 
|Thereafter              |  |   | 4,928,590 
|                        |  |   |           
|                        |  | $ | 13,648,663
|                        |  |   |           



Three tenants contributed
approximately 37%, 27% and 21% of rental income for the year ended December 31, 2003. In addition, three tenants will contribute approximately 49%, 31% and 13% of future minimum rental income.



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2003



|                              |  |               |  |                           |           |                                          |      |                                                    |                           |                         |                       |                     |       |              |  |                                          |            |  |   |           |  |   |            |  |   |         |  |      |  |            |  |               
|----------------------------- |  | ------------- |  | ------------------------- | --------- | ---------------------------------------- | ---- | -------------------------------------------------- | ------------------------- | ----------------------- | --------------------- | ------------------- | ----- | ------------ |  | ---------------------------------------- | ---------- |  | - | --------- |  | - | ---------- |  | - | ------- |  | ---- |  | ---------- |  | --------------
|Description                   |  | Encum-brances |  | Initial Cost              |           | CostsCapitalizedSubsequent ToAcquisition |      | Gross Amount at Which Carried at December 31, 2003 |                           | AccumulatedDepreciation |                       | Date ofConstruction |       | DateAcquired |  | Life on whichDepreciation isComputed (c)
|                              |  | Land          |  | Buildings andImprovements |           |                                          | Land |                                                    | Buildings andImprovements |                         | IntangibleLease Asset |                     | Total |              |  |                                          |           
|SIEMENS-ORLANDO BUILDING (a)  |  | None          |  | $                         | 1,950,000 |                                          | $    | 9,759,127                                          |                           | $                       | 487,880               |                     | $     | 2,031,250    |  | $                                        | 7,095,759  |  | $ | 2,045,307 |  | $ | 11,172,316 |  | $ | 131,875 |  | 2003 |  | 10/30/2003 |  | 10 to 25 years
|RANDSTAD-ATLANTA BUILDING (b) |  | None          |  |                           | 600,000   |                                          |      | 5,929,981                                          |                           |                         | 272,082               |                     |       | 625,000      |  |                                          | 4,517,680  |  |   | 559,356   |  |   | 5,702,036  |  |   | 15,059  |  | 2003 |  | 12/19/2003 |  | 10 to 25 years
|                              |  |               |  |                           |           |                                          |      |                                                    |                           |                         |                       |                     |       |              |  |                                          |            |  |   |           |  |   |            |  |   |         |  |      |  |            |  |               
|Total                         |  |               |  | $                         | 2,550,000 |                                          | $    | 15,689,108                                         |                           | $                       | 759,962               |                     | $     | 2,656,250    |  | $                                        | 11,613,439 |  | $ | 2,604,663 |  | $ | 16,874,352 |  | $ | 146,934 |  |      |  |            |  |               
|                              |  |               |  |                           |           |                                          |      |                                                    |                           |                         |                       |                     |       |              |  |                                          |            |  |   |           |  |   |            |  |   |         |  |      |  |            |  |               



|(a) |  | Siemens-Orlando Building is a two-story office building located in Orlando, Florida.
|--- |  | ------------------------------------------------------------------------------------



|(b) |  | Randstad Atlanta Building is a four-story office building located in Atlanta, Georgia.
|--- |  | --------------------------------------------------------------------------------------



|(c) |  | Depreciation lives used for buildings are 25 years. Depreciation lives used for land improvements are 20 years. The weighted average amortization period used for the intangible
lease assets is approximately 10 years.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

FUND XIII AND FUND XIV ASSOCIATES

(A Georgia Joint
Venture)



SCHEDULE III 
REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2003



|                                       |  |      |            |                         |   |        
|-------------------------------------- |  | ---- | ---------- | ----------------------- | - | -------
|                                       |  | Cost |            | AccumulatedDepreciation
|BALANCE AT AUGUST 20, 2003 (INCEPTION) |  | $    | 0          |                         | $ | 0      
|                                       |  |      |            |                         |   |        
|2003 additions                         |  |      | 16,874,352 |                         |   | 146,934
|                                       |  |      |            |                         |   |        
|BALANCE AT DECEMBER 31, 2003           |  | $    | 16,874,352 |                         | $ | 146,934
|                                       |  |      |            |                         |   |        



Page F-40