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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

for the quarterly period ended March 31, 2007

OR



| ̈ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

for the transition period from
 to

Commission file number 000-51262



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WELLS REAL ESTATE INVESTMENT TRUST II, INC.

(Exact name of registrant as
specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Maryland                                                       |  | 20-0068852                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

6200 The Corners Parkway

Norcross, Georgia 30092

(Address of principal executive offices)

(Zip Code)

(770)
449-7800

(Registrants telephone number, including area code)

N/A

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



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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act (check one).

Large Accelerated filer ̈Accelerated filer ̈Non-Accelerated filer  x

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x

Number of shares outstanding of the
registrants

only class of common stock, as of April 30, 2007: 311,851,504 shares



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FORM 10-Q

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

TABLE OF CONTENTS



|         |  |                       |  |                                                                                                                                            |  |         
|-------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | --------
|         |  |                       |  |                                                                                                                                            |  | Page No.
|PART I.  |  | FINANCIAL INFORMATION |  |                                                                                                                                           
|         |  |                       | 
|         |  | Item 1.               |  | Consolidated Financial Statements                                                                                                          |  | 4       
|         |  |                       | 
|         |  |                       |  | Consolidated Balance Sheets as of March 31, 2007 (unaudited) and December 31, 2006                                                         |  | 5       
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Operations for the Three Months Ended March 31, 2007 (unaudited) and 2006 (unaudited)                           |  | 6       
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Stockholders Equity for the Year Ended December 31, 2006 and the Three Months Ended March 31, 2007 (unaudited) |  | 7       
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 (unaudited) and 2006 (unaudited)                           |  | 8       
|         |  |                       | 
|         |  |                       |  | Condensed Notes to Consolidated Financial Statements (unaudited)                                                                           |  | 9       
|         |  |                       | 
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                      |  | 17      
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                 |  | 26      
|         |  |                       | 
|         |  | Item 4.               |  | Controls and Procedures                                                                                                                    |  | 27      
|         |  |                      
|PART II. |  | OTHER INFORMATION     |  |                                                                                                                                           
|         |  |                       | 
|         |  | Item 1.               |  | Legal Proceedings                                                                                                                          |  | 28      
|         |  |                       | 
|         |  | Item 1A.              |  | Risk Factors                                                                                                                               |  | 28      
|         |  |                       | 
|         |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                |  | 29      
|         |  |                       | 
|         |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                                            |  | 29      
|         |  |                       | 
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                                        |  | 29      
|         |  |                       | 
|         |  | Item 5.               |  | Other Information                                                                                                                          |  | 29      
|         |  |                       | 
|         |  | Item 6.               |  | Exhibits                                                                                                                                   |  | 29      



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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q of Wells Real Estate Investment Trust II, Inc. (Wells REIT II, we, our
or us) 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. We intend for all such
forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. 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. We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to 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, make distributions to stockholders, and maintain the value of
our real estate properties, may be significantly hindered. See Item 1A herein, as well as Item 1A in Wells REIT IIs Annual Report on Form 10-K for the year ended December 31, 2006, for a discussion of some of the risks and
uncertainties, although not all risks and uncertainties, that could cause actual results to differ materially from those presented in our forward-looking statements.



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PART I. FINANCIAL INFORMATION



|ITEM 1. | CONSOLIDATED FINANCIAL STATEMENTS
|------- | ---------------------------------

The information furnished in the accompanying consolidated
balance sheets and related consolidated statements of operations, stockholders equity, and cash flows reflects all adjustments that are, in managements opinion, necessary for a fair and consistent presentation of the aforementioned
financial statements.

The accompanying financial statements should be read in conjunction with the notes to Wells REIT IIs financial
statements and Managements Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and with Wells REIT IIs Annual Report on Form 10-K for the year ended December 31,
2006. Wells REIT IIs results of operations for the three months ended March 31, 2007 are not necessarily indicative of the operating results expected for the full year.



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WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per-share amounts)



|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | --------- | - | ----------------- | - | --------- | -
|                                                                                                                                                                                 |  | (Unaudited) March 31, 2007 |           |   | December 31, 2006 |  
|Assets:                                                                                                                                                                          |  |                            |           |   |                   |   |           |  
|Real estate assets, at cost:                                                                                                                                                     |  |                            |           |   |                   |   |           |  
|Land                                                                                                                                                                             |  | $                          | 384,308   |   |                   | $ | 370,971   |  
|Buildings and improvements, less accumulated depreciation of $93,198 and $79,175 as of March 31, 2007 and December 31, 2006,
respectively                                        |  |                            | 1,973,865 |   |                   |   | 1,922,523 |  
|Intangible lease assets, less accumulated amortization of $123,519 and $106,147 as of March 31, 2007 and December 31, 2006,
respectively                                         |  |                            | 463,285   |   |                   |   | 458,917   |  
|Construction in progress                                                                                                                                                         |  |                            | 873       |   |                   |   | 420       |  
|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  
|Total real estate assets                                                                                                                                                         |  |                            | 2,822,331 |   |                   |   | 2,752,831 |  
|                                                                                                                                                                                 |  |                           
|Cash and cash equivalents                                                                                                                                                        |  |                            | 43,624    |   |                   |   | 46,100    |  
|Tenant receivables, net of allowance for doubtful accounts of $1,605 and $1,548 as of March 31, 2007 and December 31, 2006,
respectively                                         |  |                            | 60,148    |   |                   |   | 53,372    |  
|Prepaid expenses and other assets                                                                                                                                                |  |                            | 36,099    |   |                   |   | 35,554    |  
|Deferred financing costs, less accumulated amortization of $1,834 and $1,535 as of March 31, 2007 and December 31, 2006,
respectively                                            |  |                            | 2,861     |   |                   |   | 3,184     |  
|Deferred lease costs, less accumulated amortization of $62,638 and $52,906 as of March 31, 2007 and December 31, 2006,
respectively                                              |  |                            | 314,243   |   |                   |   | 319,184   |  
|Investment in bonds                                                                                                                                                              |  |                            | 78,000    |   |                   |   | 78,000    |  
|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  
|Total assets                                                                                                                                                                     |  | $                          | 3,357,306 |   |                   | $ | 3,288,225 |  
|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  
|                                                                                                                                                                                 |  |                           
|Liabilities:                                                                                                                                                                     |  |                            |           |   |                   |   |           |  
|Line of credit and notes payable                                                                                                                                                 |  | $                          | 690,212   |   |                   | $ | 774,523   |  
|Accounts payable, accrued expenses, and accrued capital expenditures                                                                                                             |  |                            | 35,780    |   |                   |   | 41,817    |  
|Due to affiliates                                                                                                                                                                |  |                            | 3,662     |   |                   |   | 13,977    |  
|Dividends payable                                                                                                                                                                |  |                            | 7,924     |   |                   |   | 7,317     |  
|Deferred income                                                                                                                                                                  |  |                            | 12,309    |   |                   |   | 9,138     |  
|Intangible lease liabilities, less accumulated amortization of $12,777 and $10,638 as of March 31, 2007 and December 31, 2006,
respectively                                      |  |                            | 89,895    |   |                   |   | 92,343    |  
|Obligations under capital leases                                                                                                                                                 |  |                            | 78,000    |   |                   |   | 78,000    |  
|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  
|Total liabilities                                                                                                                                                                |  |                            | 917,782   |   |                   |   | 1,017,115 |  
|                                                                                                                                                                                 |  |                           
|Commitments and Contingencies                                                                                                                                                    |  |                            |          |   |                   |   |          |  
|                                                                                                                                                                                 |  |                           
|Minority Interest                                                                                                                                                                |  |                            | 3,094     |   |                   |   | 3,090     |  
|                                                                                                                                                                                 |  |                           
|Redeemable Common Stock                                                                                                                                                          |  |                            | 12,563    |   |                   |   |          |  
|                                                                                                                                                                                 |  |                           
|Stockholders Equity:                                                                                                                                                            |  |                            |           |   |                   |   |           |  
|Common stock, $0.01 par value; 900,000,000 shares authorized; 304,020,721 and 280,119,233 shares issued and outstanding as of March 31,
2007 and December 31, 2006, respectively |  |                            | 3,040     |   |                   |   | 2,801     |  
|Additional paid-in capital                                                                                                                                                       |  |                            | 2,706,767 |   |                   |   | 2,491,817 |  
|Cumulative distributions in excess of earnings                                                                                                                                   |  |                            | (272,257  | ) |                   |   | (225,549  | )
|Redeemable common stock                                                                                                                                                          |  |                            | (12,563   | ) |                   |   |          |  
|Other comprehensive loss                                                                                                                                                         |  |                            | (1,120    | ) |                   |   | (1,049    | )
|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  
|Total stockholders equity                                                                                                                                                       |  |                            | 2,423,867 |   |                   |   | 2,268,020 |  
|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  
|Total liabilities, minority interest, redeemable common stock, and stockholders equity                                                                                          |  | $                          | 3,357,306 |   |                   | $ | 3,288,225 |  
|                                                                                                                                                                                 |  |                            |           |   |                   |   |           |  

See accompanying notes.



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WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per-share amounts)



|                                                               |  |                                         |         |   |      |   |         |  
|-------------------------------------------------------------- |  | --------------------------------------- | ------- | - | ---- | - | ------- | -
|                                                               |  | (Unaudited) Three Months EndedMarch 31, |        
|                                                               |  | 2007                                    |         |   | 2006 |  
|Revenues:                                                      |  |                                         |         |   |      |   |         |  
|Rental income                                                  |  | $                                       | 73,577  |   |      | $ | 56,285  |  
|Tenant reimbursements                                          |  |                                         | 20,291  |   |      |   | 12,914  |  
|Hotel income                                                   |  |                                         | 4,554   |   |      |   | 4,369   |  
|                                                               |  |                                         |         |   |      |   |         |  
|                                                               |  |                                         | 98,422  |   |      |   | 73,568  |  
|                                                               |  |                                        
|Expenses:                                                      |  |                                         |         |   |      |   |         |  
|Property operating costs                                       |  |                                         | 30,638  |   |      |   | 21,500  |  
|Hotel operating costs                                          |  |                                         | 4,027   |   |      |   | 3,787   |  
|Asset and property management fees:                            |  |                                         |         |   |      |   |         |  
|Related-party                                                  |  |                                         | 6,222   |   |      |   | 4,708   |  
|Other                                                          |  |                                         | 1,411   |   |      |   | 1,147   |  
|Depreciation                                                   |  |                                         | 14,194  |   |      |   | 10,678  |  
|Amortization                                                   |  |                                         | 30,905  |   |      |   | 19,470  |  
|General and administrative                                     |  |                                         | 3,491   |   |      |   | 2,918   |  
|                                                               |  |                                         |         |   |      |   |         |  
|                                                               |  |                                         | 90,888  |   |      |   | 64,208  |  
|                                                               |  |                                         |         |   |      |   |         |  
|Real estate operating income                                   |  |                                         | 7,534   |   |      |   | 9,360   |  
|                                                               |  |                                        
|Other income (expense):                                        |  |                                         |         |   |      |   |         |  
|Interest expense                                               |  |                                         | (11,722 | ) |      |   | (11,172 | )
|Loss on early extinguishment of debt                           |  |                                         |        |   |      |   | (1,115  | )
|Interest and other income                                      |  |                                         | 1,604   |   |      |   | 1,756   |  
|                                                               |  |                                         |         |   |      |   |         |  
|                                                               |  |                                         | (10,118 | ) |      |   | (10,531 | )
|                                                               |  |                                         |         |   |      |   |         |  
|Loss before minority interest and income tax (expense) benefit |  |                                         | (2,584  | ) |      |   | (1,171  | )
|                                                               |  |                                        
|Minority interest in (earnings) loss of consolidated entities  |  |                                         | (8      | ) |      |   | 29      |  
|                                                               |  |                                         |         |   |      |   |         |  
|Loss before income tax (expense) benefit                       |  |                                         | (2,592  | ) |      |   | (1,142  | )
|                                                               |  |                                        
|Income tax (expense) benefit                                   |  |                                         | (18     | ) |      |   | 261     |  
|                                                               |  |                                         |         |   |      |   |         |  
|Net loss                                                       |  | $                                       | (2,610  | ) |      | $ | (881    | )
|                                                               |  |                                         |         |   |      |   |         |  
|Net loss per-sharebasic and diluted                           |  | $                                       | (0.01   | ) |      | $ | 0.00    |  
|                                                               |  |                                         |         |   |      |   |         |  
|Weighted-average common shares outstandingbasic and diluted   |  |                                         | 291,017 |   |      |   | 206,104 |  
|                                                               |  |                                         |         |   |      |   |         |  

See accompanying notes.



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WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2006

AND THE THREE MONTHS ENDED MARCH 31, 2007 (UNAUDITED)

(in thousands, except per-share amounts)



|                                                                         |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|------------------------------------------------------------------------ |  | ------------ | - |  | ------------------------- | ----- | - | ------------------------------------------- | - | --------- | ---------------------- |  | - | ----------------------- | - |  | ------------------------ | ------- | - |  | - | ------ | - |  | - | --------- | -
|                                                                         |  | Common Stock |   |  | AdditionalPaid-In Capital |       |   | CumulativeDistributionsin Excess ofEarnings |   |           | RedeemableCommon Stock |  |   | OtherComprehensive Loss |   |  | TotalStockholdersEquity |        
|                                                                         |  | Shares       |   |  | Amount                    |       |   |                                             |   |           |                       
|Balance, December 31, 2005                                               |  | 197,403      |   |  | $                         | 1,974 |   |                                             | $ | 1,752,162 |                        |  | $ | (94,382                 | ) |  | $                        |        |   |  | $ |       |   |  | $ | 1,659,754 |  
|                                                                         |  |              |   |  |                           |       |  
|Issuance of common stock                                                 |  | 86,526       |   |  |                           | 865   |   |                                             |   | 864,395   |                        |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | 865,260   |  
|Redemptions of common stock                                              |  | (3,810       | ) |  |                           | (38   | ) |                                             |   | (36,236   | )                      |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | (36,274   | )
|Dividends ($0.60 per share)                                              |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   | (142,435                | ) |  |                          |        |   |  |   |       |   |  |   | (142,435  | )
|Commissions and discounts on stock sales and related dealer-manager fees |  |             |   |  |                           |      |   |                                             |   | (77,814   | )                      |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | (77,814   | )
|Other offering costs                                                     |  |             |   |  |                           |      |   |                                             |   | (10,690   | )                      |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | (10,690   | )
|Components of comprehensive income:                                      |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|Net income                                                               |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   | 11,268                  |   |  |                          |        |   |  |   |       |   |  |   | 11,268    |  
|Loss on interest rate swap                                               |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   |                        |   |  |                          |        |   |  |   | (1,049 | ) |  |   | (1,049    | )
|                                                                         |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|Comprehensive income                                                     |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | 10,219    |  
|                                                                         |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|Balance, December 31, 2006                                               |  | 280,119      |   |  |                           | 2,801 |   |                                             |   | 2,491,817 |                        |  |   | (225,549                | ) |  |                          |        |   |  |   | (1,049 | ) |  |   | 2,268,020 |  
|                                                                         |  |              |   |  |                           |       |  
|Adjustment resulting from the adoption of FIN 48 (Note 2)                |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   | (410                    | ) |  |                          |        |   |  |   |       |   |  |   | (410      | )
|                                                                         |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|Balance, January 1, 2007                                                 |  | 280,119      |   |  |                           | 2,801 |   |                                             |   | 2,491,817 |                        |  |   | (225,959                | ) |  |                          |        |   |  |   | (1,049 | ) |  |   | 2,267,610 |  
|                                                                         |  |              |   |  |                           |       |  
|Issuance of common stock                                                 |  | 25,152       |   |  |                           | 252   |   |                                             |   | 251,275   |                        |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | 251,527   |  
|Redemptions of common stock                                              |  | (1,250       | ) |  |                           | (13   | ) |                                             |   | (11,840   | )                      |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | (11,853   | )
|Redeemable common stock                                                  |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   |                        |   |  |                          | (12,563 | ) |  |   |       |   |  |   | (12,563   | )
|Dividends ($0.15 per share)                                              |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   | (43,688                 | ) |  |                          |        |   |  |   |       |   |  |   | (43,688   | )
|Commissions and discounts on stock sales and related dealer-manager fees |  |             |   |  |                           |      |   |                                             |   | (22,561   | )                      |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | (22,561   | )
|Other offering costs                                                     |  |             |   |  |                           |      |   |                                             |   | (1,924    | )                      |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | (1,924    | )
|Components of comprehensive loss:                                        |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|Net loss                                                                 |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   | (2,610                  | ) |  |                          |        |   |  |   |       |   |  |   | (2,610    | )
|Loss on interest rate swap                                               |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   |                        |   |  |                          |        |   |  |   | (71    | ) |  |   | (71       | )
|                                                                         |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|Comprehensive loss                                                       |  |             |   |  |                           |      |   |                                             |   |          |                        |  |   |                        |   |  |                          |        |   |  |   |       |   |  |   | (2,681    | )
|                                                                         |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  
|Balance, March 31, 2007                                                  |  | 304,021      |   |  | $                         | 3,040 |   |                                             | $ | 2,706,767 |                        |  | $ | (272,257                | ) |  | $                        | (12,563 | ) |  | $ | (1,120 | ) |  | $ | 2,423,867 |  
|                                                                         |  |              |   |  |                           |       |   |                                             |   |           |                        |  |   |                         |   |  |                          |         |   |  |   |        |   |  |   |           |  

See accompanying notes.



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WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                |  |                                         |          |   |      |   |          |  
|------------------------------------------------------------------------------- |  | --------------------------------------- | -------- | - | ---- | - | -------- | -
|                                                                                |  | (unaudited) Three Months EndedMarch 31, |         
|                                                                                |  | 2007                                    |          |   | 2006 |  
|Cash Flows from Operating Activities:                                           |  |                                         |          |   |      |   |          |  
|Net loss                                                                        |  | $                                       | (2,610   | ) |      | $ | (881     | )
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                                         |          |   |      |   |          |  
|Depreciation                                                                    |  |                                         | 14,194   |   |      |   | 10,678   |  
|Other amortization                                                              |  |                                         | 35,531   |   |      |   | 22,356   |  
|Non-cash interest expense                                                       |  |                                         | 1,272    |   |      |   | 487      |  
|Loss on early extinguishment of debt                                            |  |                                         |         |   |      |   | 1,115    |  
|Minority interest in earnings (loss) of consolidated entities                   |  |                                         | 8        |   |      |   | (29      | )
|Changes in assets and liabilities:                                              |  |                                         |          |   |      |   |          |  
|Increase in tenant receivables, net                                             |  |                                         | (6,776   | ) |      |   | (4,675   | )
|(Increase) decrease in prepaid expenses and other assets                        |  |                                         | (4,455   | ) |      |   | 2,644    |  
|Increase in accounts payable and accrued expenses                               |  |                                         | 2,552    |   |      |   | 5,587    |  
|Decrease in due to affiliates                                                   |  |                                         | (5,808   | ) |      |   | (857     | )
|Increase in deferred income                                                     |  |                                         | 3,171    |   |      |   | 1,529    |  
|                                                                                |  |                                         |          |   |      |   |          |  
|Net cash provided by operating activities                                       |  |                                         | 37,079   |   |      |   | 37,954   |  
|                                                                                |  |                                        
|Cash Flows from Investing Activities:                                           |  |                                         |          |   |      |   |          |  
|Investment in real estate and earnest money paid                                |  |                                         | (117,014 | ) |      |   | (12,332  | )
|Proceeds from master leases                                                     |  |                                         | 176      |   |      |   | 174      |  
|Acquisition fees paid                                                           |  |                                         | (7,940   | ) |      |   | (6,197   | )
|Deferred lease costs paid                                                       |  |                                         | (1,097   | ) |      |   | (1,572   | )
|                                                                                |  |                                         |          |   |      |   |          |  
|Net cash used in investing activities                                           |  |                                         | (125,875 | ) |      |   | (19,927  | )
|                                                                                |  |                                        
|Cash Flows from Financing Activities:                                           |  |                                         |          |   |      |   |          |  
|Deferred financing costs paid                                                   |  |                                         |         |   |      |   | (28      | )
|Proceeds from line of credit and notes payable                                  |  |                                         | 73,602   |   |      |   | 128,130  |  
|Repayments of line of credit and notes payable                                  |  |                                         | (158,886 | ) |      |   | (278,810 | )
|Prepayment penalty on early extinguishment of debt                              |  |                                         |         |   |      |   | (5,734   | )
|Distributions paid to minority interest partners                                |  |                                         | (4       | ) |      |   | (49      | )
|Issuance of common stock                                                        |  |                                         | 249,834  |   |      |   | 204,088  |  
|Redemptions of common stock                                                     |  |                                         | (10,789  | ) |      |   | (6,249   | )
|Dividends paid to stockholders                                                  |  |                                         | (43,081  | ) |      |   | (30,413  | )
|Commissions on stock sales and related dealer-manager fees paid                 |  |                                         | (20,725  | ) |      |   | (16,664  | )
|Other offering costs paid                                                       |  |                                         | (3,631   | ) |      |   | (5,118   | )
|                                                                                |  |                                         |          |   |      |   |          |  
|Net cash provided by (used in) financing activities                             |  |                                         | 86,320   |   |      |   | (10,847  | )
|                                                                                |  |                                        
|Net (decrease) increase in cash and cash equivalents                            |  |                                         | (2,476   | ) |      |   | 7,180    |  
|Cash and cash equivalents, beginning of period                                  |  |                                         | 46,100   |   |      |   | 35,352   |  
|                                                                                |  |                                         |          |   |      |   |          |  
|Cash and cash equivalents, end of period                                        |  | $                                       | 43,624   |   |      | $ | 42,532   |  
|                                                                                |  |                                         |          |   |      |   |          |  

See accompanying notes.



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WELLS REAL ESTATE INVESTMENT TRUST II, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2007

(unaudited)



|1. | Organization
|-- | ------------

Wells Real
Estate Investment Trust II, Inc. (Wells REIT II) is a Maryland corporation that has elected to be taxed as a real estate investment trust (REIT) for federal income tax purposes. Wells REIT II engages in the acquisition and
ownership of commercial real estate properties throughout the United States, including properties that are under construction, are newly constructed, or have operating histories. Wells REIT II was incorporated on July 3, 2003 and commenced
operations on January 22, 2004. Wells REIT II conducts business primarily through Wells Operating Partnership II, L.P. (Wells OP II), a Delaware limited partnership. Wells REIT II is the sole general partner of Wells OP II and
possesses full legal control and authority over the operations of Wells OP II. Wells REIT II owns more than 99.9% of the equity interests in Wells OP II. Wells Capital, Inc. (Wells Capital), the external advisor to Wells REIT II, is the
sole limited partner of Wells OP II. Wells OP II acquires, develops, owns, leases, and operates real properties directly, through wholly owned subsidiaries or through joint ventures. References to Wells REIT II herein shall include Wells REIT II,
all subsidiaries of Wells REIT II, including consolidated joint ventures, Wells OP II, and Wells OP IIs subsidiaries. See Note 7 for a discussion of the advisory services provided by Wells Capital.

As of March 31, 2007, Wells REIT II owned interests in 49 office properties, one industrial building, and one hotel, comprising approximately
15.2 million square feet of commercial space located in 18 states and the District of Columbia. Forty-five of the properties are wholly owned and six are owned through consolidated joint ventures. As of March 31, 2007, the office and
industrial properties were approximately 98% leased.

On December 1, 2003, Wells REIT II commenced its initial public offering of up
to 785.0 million shares of common stock, of which 185.0 million shares were reserved for issuance through Wells REIT IIs dividend reinvestment plan, pursuant to a Registration Statement filed on Form S-11 under the Securities Act of
1933. Except for continuing to offer shares for sale through its dividend reinvestment plan, Wells REIT II stopped offering shares for sale under its initial public offering on November 26, 2005. Wells REIT II raised gross offering proceeds of
approximately $2.0 billion from the sale of approximately 197.1 million shares under its initial public offering, including shares sold under the dividend reinvestment plan through March 2006. On November 10, 2005, Wells REIT II commenced
a follow-on offering of up to 300.6 million shares of common stock, of which 0.6 million shares were reserved for issuance under Wells REIT IIs dividend reinvestment plan, pursuant to a Registration Statement filed on Form S-11 under
the Securities Act of 1933. On April 14, 2006, Wells REIT II amended the aforementioned registration statements to offer in a combined prospectus 300.6 million shares registered under the follow-on offering and 174.4 million unsold
shares related to the dividend reinvestment plan and registered under the initial public offering. As of March 31, 2007, Wells REIT II had raised gross offering proceeds of approximately $1.1 billion from the sale of approximately
113.7 million shares under the follow-on offering.

As of March 31, 2007, Wells REIT II has raised gross offering proceeds from
the sale of common stock under the initial public offering and follow-on offering of approximately $3.1 billion. After deductions from such gross offering proceeds for payments of acquisition fees of approximately $61.9 million, selling commissions
and dealer-manager fees of approximately $288.6 million, other organization and offering expenses of approximately $45.0 million, and common stock redemptions of approximately $67.3 million under the share redemption program, Wells REIT II had
received aggregate net offering proceeds of approximately $2.6 billion. Substantially all of Wells REIT IIs net offering proceeds have been invested in real properties.

Wells REIT IIs stock is not listed on a public securities exchange. However, Wells REIT IIs charter requires that in the event Wells REIT IIs stock is not listed on a national
securities exchange by October 2015, Wells REIT II must either seek stockholder approval of an extension or amendment of this listing deadline or stockholder approval to begin liquidating investments and distributing the resulting proceeds to the
stockholders. In the event that Wells REIT II seeks stockholder approval for an extension or amendment to this listing date and does not obtain it, Wells REIT II will then be required to seek stockholder approval to liquidate. In this circumstance,
if Wells REIT II seeks and does not obtain approval to liquidate, Wells REIT II will not be required to list or liquidate and could continue to operate indefinitely as an unlisted company.



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|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

Basis of Presentation

The consolidated financial statements of Wells REIT II have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission (SEC), including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by U.S. generally accepted
accounting principles (GAAP) for complete financial statements. In the opinion of management, the statements for these unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for
a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of a full years results. Wells REIT IIs consolidated financial statements include the accounts of Wells
REIT II, Wells OP II, and a variable interest entity in which Wells REIT II is the primary beneficiary. For further information, refer to the financial statements and footnotes included in Wells REIT IIs Annual Report on Form 10-K for the year
ended December 31, 2006.

Redeemable Common Stock

As of March 31, 2007, Wells REIT IIs share redemption program provided that Ordinary Redemptions (those that do not occur within two years of death or qualifying disability) and those sought
upon qualifying disability during any calendar year are limited to those that can be funded with proceeds raised in the current calendar year from Wells REIT IIs dividend reinvestment plan. Although Wells REIT II is under no obligation to
redeem any shares to the extent that total redemptions would exceed the foregoing limit, the board of directors of Wells REIT II has reserved the right to redeem additional shares upon the death of stockholders.

As the use of proceeds raised in the current calendar year from the dividend reinvestment plan is outside the control of Wells REIT II, those proceeds
are considered to be temporary equity under Accounting Series Release No. 268, Presentation in Financial Statements of Redeemable Preferred Stock. Therefore, Wells REIT II has included an amount equal to proceeds from shares issued
through Wells REIT IIs dividend reinvestment plan in the current calendar year, less the amount of redemptions previously funded during the current calendar year, as redeemable common stock in the accompanying consolidated financial statements
as of March 31, 2007.

Further, upon being tendered for redemption by the holder, Wells REIT II reclassifies redeemable common shares
from mezzanine equity to a liability at settlement value. As of March 31, 2007 and December 31, 2006, shares tendered for redemption and not yet redeemed of approximately $4.9 million and $3.9 million, respectively, are included in
accounts payable, accrued expenses, and accrued capital expenditures in the accompanying consolidated balance sheets.

Income Taxes

Wells REIT II has elected to be taxed as a REIT under the Internal Revenue Code of 1986 (the Code), as amended, and has operated as such
beginning with its taxable year ended December 31, 2003. To qualify as a REIT, Wells REIT II must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its adjusted taxable income, as
defined in the Code, to its stockholders. As a REIT, Wells REIT II generally is not subject to income tax on income it distributes to stockholders. Wells REIT II is subject to certain state and local taxes related to the operations of properties in
certain locations, which have been provided for in the accompanying consolidated financial statements.

Wells TRS II, LLC (Wells
TRS), is a wholly owned subsidiary of Wells REIT II and is organized as a Delaware limited liability company, which owns, among other things, a full-service hotel. Wells REIT II has elected to treat Wells TRS as a taxable REIT subsidiary.
Wells REIT II may perform additional, non-customary services for tenants of buildings owned by Wells REIT II through Wells TRS, including any real estate or non-real estate related services; however, any earnings related to such services are subject
to



10



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##### Table of Contents

federal and state income taxes. In addition, for Wells REIT II to continue to qualify as a REIT, Wells REIT IIs investments in taxable REIT
subsidiaries cannot exceed 20% of the value of the total assets of Wells REIT II. Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the
enacted rates expected to be in effect when the temporary differences reverse.

Recent Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109, (FIN 48), which clarifies the relevant criteria and approach for the recognition, derecognition, and measurement of uncertain tax positions. Wells REIT II records interest and penalties
related to uncertain tax positions as general and administrative expense in the accompanying statements of operations. Upon adopting FIN 48 effective January 1, 2007, Wells REIT II wrote-off deferred tax assets classified as prepaid expenses and
other assets of approximately $388,000 and recorded a liability for unrecognized tax benefits of approximately $22,000 as reductions to the January 1, 2007 balance of cumulative distributions in excess of earnings. During the three months ended
March 31, 2007, Wells REIT II recorded an additional liability for unrecognized tax benefits of approximately $18,000 as income tax expense. Wells REIT II does not currently anticipate the total amount of unrecognized tax benefits will significantly
increase or decrease by the end of 2007. As of March 31, 2007, returns for the calendar years 2002 through 2006 remain subject to examination by U.S. and various state tax jurisdictions.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), which defines fair value, establishes a
framework for measuring fair value, and expands disclosures required for fair value measurements under GAAP. SFAS 157 emphasizes that fair value is a market-based measurement, as opposed to a transaction-specific measurement. SFAS 157 will be
effective for Wells REIT II beginning January 1, 2008. Wells REIT II is currently assessing the provisions and evaluating the financial impact of SFAS 157 on its consolidated financial statements.



|3. | Real Estate Acquisitions
|-- | ------------------------

Summary

As of March 31, 2007, Wells REIT II owned interests in 51 properties as a result of acquiring the 2 properties described below
during the first quarter of 2007, acquiring 9 properties and completing construction of the LakePointe 3 building during the year ended December 31, 2006, and acquiring 39 properties in prior periods.

One Century Place Building

On January 4, 2007,
Wells REIT II purchased an eight-story office building containing approximately 539,000 rentable square feet (the One Century Place Building) located on an approximate 28.2-acre parcel of land at 26 Century Place Boulevard in Nashville,
Tennessee, for a purchase price of approximately $72.0 million, exclusive of closing costs.

120 Eagle Rock Building

On March 27, 2007, Wells REIT II purchased a three-story office building containing approximately 178,000 rentable square feet (the 120 Eagle
Rock Building) located on an approximate 15.2-acre parcel of land at 120 Eagle Rock Avenue in East Hanover, New Jersey, for a purchase price of approximately $34.5 million, exclusive of closing costs.



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|4. | Line of Credit and Notes Payable
|-- | --------------------------------

As of March 31, 2007 and December 31, 2006, Wells REIT II had the following indebtedness outstanding (in thousands):



|                                                  |  |               |         |                  |   |        
|------------------------------------------------- |  | ------------- | ------- | ---------------- | - | -------
|Facility                                          |  | March 31,2007 |         | December 31,2006
|100 East Pratt Street Building mortgage note      |  | $             | 105,000 |                  | $ | 105,000
|Wildwood Buildings mortgage note                  |  |               | 90,000  |                  |   | 90,000 
|5 Houston Center Building mortgage note           |  |               | 90,000  |                  |   | 90,000 
|Manhattan Towers Building mortgage note           |  |               | 75,000  |                  |   | 75,000 
|One West Fourth Street Building mortgage note     |  |               | 48,029  |                  |   | 48,414 
|80 Park Plaza Building mortgage note              |  |               | 47,438  |                  |   | 46,667 
|800 North Frederick Building mortgage note        |  |               | 46,400  |                  |   | 46,400 
|Line of credit                                    |  |               | 40,000  |                  |   | 126,000
|SanTan Corporate Center mortgage note             |  |               | 39,000  |                  |   | 39,000 
|Highland Landmark Building mortgage note          |  |               | 31,942  |                  |   | 30,840 
|9 Technology Drive Building mortgage note         |  |               | 23,800  |                  |   | 23,800 
|One and Four Robbins Road Buildings mortgage note |  |               | 23,000  |                  |   | 23,000 
|LakePointe 3 construction loan                    |  |               | 17,027  |                  |   | 17,027 
|Key Center Complex mortgage notes                 |  |               | 13,576  |                  |   | 13,375 
|                                                  |  |               |         |                  |   |        
|Total indebtedness                                |  | $             | 690,212 |                  | $ | 774,523
|                                                  |  |               |         |                  |   |        

Wells REIT II made interest payments, including amounts capitalized, of approximately $10.0
million and $9.3 million during the three months ended March 31, 2007 and 2006, respectively. In addition, Wells REIT II paid a $5.7 million penalty in January 2006 related to repaying the University Circle Buildings mortgage note, which is
included in loss on early extinguishment of debt in the accompanying consolidated statement of operations.

Wells REIT II has a $400.0
million unsecured revolving financing facility (the Wachovia Line of Credit) with a syndicate of banks led by Wachovia Bank, N.A., which expires May 9, 2008. As of March 31, 2007, Wells REIT II had remaining borrowing
capacity of up to approximately $334.7 million under the Wachovia Line of Credit.



|5. | Commitments and Contingencies
|-- | -----------------------------

Commitments Under Existing Lease Agreements

Certain lease agreements include provisions that, at the option of the tenant,
may obligate Wells REIT II to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. As of March 31, 2007, no tenants have exercised such options that had not been materially satisfied.

Litigation

Wells REIT II is from time
to time a party to legal proceedings that arise in the ordinary course of its business. Wells REIT II is not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the results of
operations or financial condition of Wells REIT II. Wells REIT II is not aware of any such legal proceedings contemplated by governmental authorities.



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|6. | Supplemental Disclosures of Noncash Activities
|-- | ----------------------------------------------

Outlined below are significant noncash investing and financing transactions for the three months ended March 31, 2007 and 2006 (in thousands):



|                                                                            |  |                              |        |      |   |       
|--------------------------------------------------------------------------- |  | ---------------------------- | ------ | ---- | - | ------
|                                                                            |  | Three Months Ended March 31,
|                                                                            |  | 2007                         |        | 2006
|Investment in real estate funded with other assets                          |  | $                            | 750    |      | $ |      
|                                                                            |  |                              |        |      |   |       
|Acquisition fees applied to real estate assets                              |  | $                            | 4,997  |      | $ | 4,007 
|                                                                            |  |                              |        |      |   |       
|Liabilities assumed upon acquisition of properties                          |  | $                            | 282    |      | $ |      
|                                                                            |  |                              |        |      |   |       
|Accrued capital expenditures and deferred lease costs                       |  | $                            | 34     |      | $ | 6,328 
|                                                                            |  |                              |        |      |   |       
|Accrued redemptions of common stock                                         |  | $                            | 4,917  |      | $ |      
|                                                                            |  |                              |        |      |   |       
|Loss on interest rate swap                                                  |  | $                            | 71     |      | $ |      
|                                                                            |  |                              |        |      |   |       
|Acquisition fees due to affiliate                                           |  | $                            | 556    |      | $ | 320   
|                                                                            |  |                              |        |      |   |       
|Commissions on stock sales and related dealer-manager fees due to affiliate |  | $                            | 1,195  |      | $ | 832   
|                                                                            |  |                              |        |      |   |       
|Other offering costs due to affiliate                                       |  | $                            | 676    |      | $ | 797   
|                                                                            |  |                              |        |      |   |       
|Dividends payable                                                           |  | $                            | 7,924  |      | $ | 5,652 
|                                                                            |  |                              |        |      |   |       
|Discounts applied to issuance of common stock                               |  | $                            | 1,693  |      | $ | 1,132 
|                                                                            |  |                              |        |      |   |       
|Redeemable common stock                                                     |  | $                            | 12,563 |      | $ | 11,196
|                                                                            |  |                              |        |      |   |       



|7. | Related-Party Transactions and Agreements
|-- | -----------------------------------------

Advisory Agreement

Wells REIT II and Wells Capital are party to an advisory agreement (the Advisory Agreement)
under which Wells Capital receives the following fees and reimbursements:



| |  |  | Reimbursement of organization and offering costs paid by Wells Capital on behalf of Wells REIT II, not to exceed 2.0% of gross offering proceeds;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Acquisition fees of 2.0% of gross offering proceeds, subject to certain limitations; Wells REIT II also reimburses Wells Capital for expenses it pays to third
parties in connection with acquisitions or potential acquisitions;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Monthly asset management fees equal to one-twelfth of 0.75% of the cost of (i) all properties of Wells REIT II and (ii) investments in joint ventures.
The amount of these fees paid in any calendar quarter may not exceed 0.25% of the net asset value of those investments at each quarter-end after deducting debt used to acquire or refinance properties;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Reimbursement for all costs and expenses Wells Capital incurs in fulfilling its duties as the asset portfolio manager, including (i) wages and salaries and
other employee-related expenses of Wells Capitals employees, who perform a full range of real estate services for Wells REIT II, including management, administration, operations, and marketing, and are billed to Wells REIT II based on the
amount of time spent on Wells REIT II by such personnel, provided that such expenses are not reimbursed if incurred in connection with services for which Wells Capital receives a disposition fee (described below) or an acquisition fee, and
(ii) amounts paid for IRA custodial service costs allocated to Wells REIT II accounts;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | For any property sold by Wells REIT II, a disposition fee equal to 1.0% of the sales price, with the limitation that the total real estate commissions (including
such disposition fee) for any Wells REIT II property sold may not exceed the lesser of (i) 6.0% of the sales price of each property or (ii) the level of real estate commissions customarily charged in light of the size, type, and location
of the property;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Incentive fee of 10% of net sales proceeds remaining after stockholders have received distributions equal to the sum of the stockholders invested capital
plus an 8% return of invested capital; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Listing fee of 10% of the excess by which the market value of the stock plus dividends paid prior to listing exceeds the sum of 100% of the invested capital plus
an 8% return on invested capital.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Either party may terminate the Advisory Agreement without cause or penalty upon
providing 60 days written notice to the other. Under the terms of the Advisory Agreement, Wells REIT II is required to reimburse Wells Capital for certain organization and offering costs up to the lesser of actual expenses or 2% of gross
equity proceeds raised. As of March 31, 2007, Wells REIT II has incurred and charged to additional paid-in capital cumulative other offering costs of approximately $31.7 million related to the initial public offering and $13.3 million
related to the follow-on offering, which represents approximately 1.6% and 1.2% of cumulative gross proceeds raised by Wells REIT II under each offering, respectively.

Dealer-Manager Agreement

Wells REIT II is party to a Dealer-Manager Agreement with Wells Investment
Securities, Inc. (WIS), whereby WIS, an affiliate of Wells Capital, performs the dealer-manager function for Wells REIT II. For these services, WIS earns a commission of up to 7% of the gross offering proceeds from the sale of the shares
of Wells REIT II, of which a portion is re-allowed to participating broker dealers. Wells REIT II pays no commissions on shares issued under its dividend reinvestment plan.

Additionally, Wells REIT II is required to pay WIS a dealer-manager fee of 2.5% of the gross offering proceeds from the sale of Wells REIT IIs stock at the time the shares are sold. Under
the dealer-manager agreement, up to 1.5% of the gross offering proceeds may be reallowed by WIS to participating broker dealers. Wells REIT II pays no dealer-manager fees on shares issued under its dividend reinvestment plan.

Property Management, Leasing, and Construction Agreement

Wells REIT II and Wells Management Company, Inc. (Wells Management), an affiliate of Wells Capital, are party to a Master Property Management, Leasing, and Construction Agreement (the Management Agreement) under
which Wells Management receives the following fees and reimbursements in consideration for supervising the management, leasing, and construction of certain Wells REIT II properties:



| |  |  | Property management fees in an amount equal to a percentage negotiated for each property managed by Wells Management of the gross monthly income collected for
that property for the preceding month;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Leasing commissions for new, renewal, or expansion leases entered into with respect to any property for which Wells Management serves as leasing agent equal to a
percentage as negotiated for that property of the total base rental and operating expenses to be paid to Wells REIT II during the applicable term of the lease, provided, however, that no commission shall be payable as to any portion of such term
beyond ten years;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Initial lease-up fees for newly constructed properties under the agreement, generally equal to one months rent;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | Fees equal to a specified percentage of up to 5% of all construction build-out funded by Wells REIT II, given as a leasing concession, and overseen by Wells
Management; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other fees as negotiated with the addition of each specific property covered under the agreement.
| | - |  | -------------------------------------------------------------------------------------------------



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##### Table of Contents

Related-Party Costs

Pursuant to the terms of the agreements described above, Wells REIT II incurred the following related-party costs for the three months ended March 31, 2007 and 2006, respectively (in thousands):



|                              |  |                             |        |      |   |       
|----------------------------- |  | --------------------------- | ------ | ---- | - | ------
|                              |  | Three Months EndedMarch 31,
|                              |  | 2007                        |        | 2006
|Commissions(1)                |  | $                           | 16,273 |      | $ | 13,414
|Dealer-manager fees(1)        |  |                             | 6,288  |      |   | 5,130 
|Asset management fees         |  |                             | 5,960  |      |   | 4,602 
|Acquisition fees(2)           |  |                             | 4,997  |      |   | 4,119 
|Other offering costs(1)       |  |                             | 1,924  |      |   | 3,168 
|Administrative reimbursements |  |                             | 1,712  |      |   | 1,466 
|Property management fees      |  |                             | 262    |      |   | 106   
|                              |  |                             |        |      |   |       
|Total                         |  | $                           | 37,416 |      | $ | 32,005
|                              |  |                             |        |      |   |       

---

|(1) | Commissions, dealer-manager fees, and other offering costs are charged against stockholders
equity as incurred.
|--- | ----------------------------------------------------------------------------------------------------------------

|(2) | Acquisition fees are capitalized to prepaid expenses and other assets as incurred and allocated to
properties upon funding acquisitions, or repaying debt used to finance property acquisitions, with investor proceeds.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Wells REIT II incurred no related-party disposition fees, construction fees, incentive fees, listing fees, or leasing commissions during the three months ended March 31, 2007 or 2006, respectively.

Due to Affiliates

The detail of amounts due to
affiliates is provided below as of March 31, 2007 and December 31, 2006 (in thousands):



|                                                                           |  |                |       |                  |   |       
|-------------------------------------------------------------------------- |  | -------------- | ----- | ---------------- | - | ------
|                                                                           |  | March 31, 2007 |       | December 31,2006
|Administrative reimbursements due to Wells Capital and/or Wells Management |  | $              | 1,210 |                  | $ | 1,586 
|Commissions and dealer-manager fees due to WIS                             |  |                | 1,195 |                  |   | 1,052 
|Other offering cost reimbursements due to Wells Capital                    |  |                | 676   |                  |   | 2,383 
|Acquisition fees due to Wells Capital                                      |  |                | 556   |                  |   | 3,499 
|Asset and property management fees due to Wells Capital                    |  |                | 25    |                  |   | 5,457 
|                                                                           |  |                |       |                  |   |       
|                                                                           |  | $              | 3,662 |                  | $ | 13,977
|                                                                           |  |                |       |                  |   |       

Economic Dependency

Wells REIT II has engaged Wells Capital and its affiliates, Wells Management and WIS, to provide certain services that are essential to Wells REIT II, including asset management services, supervision of the property
management and leasing of some properties owned by Wells REIT II, asset acquisition and disposition services, the sale of shares of Wells REIT IIs common stock, as well as other administrative responsibilities for Wells REIT II, including
accounting services, stockholder communications, and investor relations. As a result of these relationships, Wells REIT II is dependent upon Wells Capital, Wells Management, and WIS.

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



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Future net income generated by WREF will be largely dependent upon the amount of fees earned by Wells
Capital and Wells Management based on, among other things, the level of investor proceeds raised and the volume of future acquisitions and dispositions of real estate assets by Wells REIT II and other WREF-sponsored programs, as well as dividend
income earned from equity interests in another REIT. As of March 31, 2007, Wells REIT II believes that WREF is generating adequate cash flow from operations and has adequate liquidity available in the form of cash on hand and current
receivables necessary to meet its current and future obligations as they become due.



|8. | Subsequent Event
|-- | ----------------

Sale of Shares of
Common Stock

From April 1, 2007 through April 30, 2007, Wells REIT II raised approximately $82.8 million through the issuance
of approximately 8.3 million shares of common stock under its follow-on offering. As of April 30, 2007, approximately 168.2 million shares remained available for sale to the public under the follow-on offering, exclusive of shares
available under Wells REIT IIs dividend reinvestment plan.



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##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The
following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and notes thereto. See also Cautionary Note Regarding Forward-Looking Statements preceding Part I, as well as our
consolidated financial statements and the notes thereto and Managements Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2006.

We commenced our initial public offering on December 1, 2003 and have received investor proceeds under our public offerings of common stock and
invested in real estate assets through March 31, 2007. Thus, our results of operations for the three months ended March 31, 2007 and 2006 reflect growing operational revenues and expenses and general and administrative expenses.
Operational revenues and expenses have increased due to real property acquisitions. General and administrative expenses have increased commensurate with our overall growth, however, as a percent of total revenues, have remained stable at
approximately 4% for the three months ended March 31, 2007 and 2006.

Liquidity and Capital Resources

Overview

From January 2004 through March 2007, we
raised significant funds through the sale of our common stock under our public offerings. We primarily used the proceeds from these sales of common stock, net of offering costs and other expenses, to acquire real properties and fund certain capital
improvements identified at the time of acquisition. We anticipate receiving proceeds from the sale of our common stock under our follow-on offering in the future, and investing such proceeds in future acquisitions of real properties. We also
anticipate receiving proceeds from the sale of our common stock under our dividend reinvestment plan in the future, and using a significant portion of such proceeds to fund redemptions of our common stock under our share redemption program. We
expect that our primary source of future operating cash flows will be cash generated from the operations of the properties currently in our portfolio and those to be acquired in the future. The amount of future dividends to be paid to our
stockholders will be largely dependent upon the amount of cash generated from our operating activities, how quickly we are able to invest investor proceeds in quality income-producing assets, our expectations of future cash flows, and our
determination of near-term cash needs for capital improvements, tenant re-leasing, redemptions of our common stock, and debt repayments.

The competition to acquire high-quality commercial office properties remains high. Timing differences arise between acquiring properties and raising capital and between making operating payments and collecting operating receipts.
Accordingly, we may periodically be required to borrow funds on a short-term basis to meet our dividend payment schedule. Our primary focus, however, is to continue to maintain the quality of our portfolio. Thus, in this intensely competitive
environment, we may opt to lower the dividend rather than compromise that quality or accumulate significant borrowings to meet a dividend level higher than operating cash flow would support. We continue to carefully monitor our cash flows and
market conditions and their impact on our earnings and future dividend projections.

Short-term Liquidity and Capital Resources

During the three months ended March 31, 2007, we generated net cash flows from operating activities of approximately $37.1 million, which is
primarily comprised of receipts for rental income, tenant reimbursements, hotel income, and interest and other income, partially offset by payments for operating costs, interest expense, asset and property management fees, and general and
administrative expenses. From net cash flows from operating activities and cash on hand, we paid dividends to stockholders of approximately $43.1 million during the three months ended March 31, 2007. We generated net cash flows from financing
activities of approximately $86.3 million during the three months ended March 31, 2007, primarily as a result of raising proceeds from the sale of common stock under our public offerings, net of commissions, dealer-manager fees, and other
offering costs, of approximately $225.5 million, reduced by net debt repayments of approximately $85.3 million. Such net cash flows from financing activities and cash on hand were used primarily to invest approximately $117.0 million in real estate
and pay acquisition fees of approximately $7.9 million. We expect to utilize the residual cash balance of approximately $43.6 million as of March 31, 2007 to satisfy current liabilities, pay future dividends, fund future acquisitions of real
properties, or reduce indebtedness.



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We intend to continue to generate capital from the sale of common stock under our follow-on offering and
from third-party borrowings, and to use such capital primarily to fund future acquisitions of real estate. We expect that we will use a significant portion of the proceeds from sales under our dividend reinvestment plan to fund redemptions under the
share redemption program. As of April 30, 2007, we had a remaining borrowing capacity of approximately $374.7 million under the Wachovia Line of Credit. Accordingly, we believe that we have adequate capacity to continue to expand our portfolio
and meet our future operating cash flow needs. We expect to use substantially all of our future operating cash flow, after payments for certain capital expenditures, to pay dividends to stockholders.

On March 2, 2007, our board of directors declared a daily dividend for stockholders of record from March 16, 2007 through June 15, 2007 in
an amount equal to an annualized dividend of $0.60 per share, which is consistent with the rate of dividends declared for the first quarter of 2007 and each quarter of 2006 on a per-share basis. Such dividend will be paid in June 2007.

Long-term Liquidity and Capital Resources

We
expect that our primary sources of capital over the long term will include proceeds from the sale of our common stock, proceeds from secured or unsecured borrowings from third-party lenders, and net cash flows from operations. Our follow-on
offering, which we commenced in November 2005, was extended until the earlier of the sale of all 300.0 million shares or December 1, 2008. Thereafter, our board of directors may commence a second follow-on offering. We may continue to
offer the 175.0 million dividend reinvestment plan shares beyond these dates until we have sold all of these shares through the reinvestment of dividends. We expect that our primary uses of capital will be for property acquisitions, either
directly or through investments in joint ventures, tenant improvements, offering-related costs, operating expenses, including interest expense on any outstanding indebtedness, and dividends.

In determining how and when to allocate cash resources, we initially consider the source of the cash. We expect that substantially all future net operating cash flows, after payments for certain
capital expenditures such as tenant improvements and leasing commissions, will be used to pay dividends. However, we may temporarily use other sources of cash, such as short-term borrowings, to fund dividends from time to time (see Liquidity
and Capital Resources  Overview above). We expect to use substantially all net cash flows generated from raising equity or debt financing to fund acquisitions, certain capital expenditures identified upon acquisition, the repayment of
outstanding borrowings, and the redemption of shares under the share redemption program. If sufficient equity or debt capital is not available, our future investments in real estate will be lower.

To the extent that future cash flows provided by operations are lower due to lower returns on properties, future dividends paid may be lower as well. Our
cash flow from operations depends significantly on market rents and our tenants ability to make rental payments. We believe that the diversity of our tenant base and the concentration of creditworthy tenants in our portfolio help to mitigate
the risk of a tenant defaulting on a lease. However, general economic downturns, downturns in one or more of our core markets, or downturns in the particular industries in which our tenants operate could adversely impact the ability of our tenants
to make lease payments and our ability to re-lease space on favorable terms when leases expire. In the event of any of these situations, our cash flow and consequently our ability to meet capital needs, could adversely affect our ability to pay
dividends in the future.



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Contractual Commitments and Contingencies

Our contractual obligations as of March 31, 2007 will become payable in the following periods (in thousands):



|                                |  |       |         |      |   |           |  |           |         |            |   |        |  |   |        
|------------------------------- |  | ----- | ------- | ---- | - | --------- |  | --------- | ------- | ---------- | - | ------ |  | - | -------
|Contractual Obligations         |  | Total |         | 2007 |   | 2008-2009 |  | 2010-2011 |         | Thereafter
|Outstanding debt obligations(1) |  | $     | 690,212 |      | $ | 17,612    |  | $         | 155,625 |            | $ | 71,646 |  | $ | 445,329
|Capital lease obligations(2)    |  |       | 78,000  |      |   |          |  |           |        |            |   |       |  |   | 78,000 
|Operating lease obligations     |  |       | 3,105   |      |   | 45        |  |           | 120     |            |   | 120    |  |   | 2,820  
|                                |  |       |         |      |   |           |  |           |         |            |   |        |  |   |        
|Total                           |  | $     | 771,317 |      | $ | 17,657    |  | $         | 155,745 |            | $ | 71,766 |  | $ | 526,149
|                                |  |       |         |      |   |           |  |           |         |            |   |        |  |   |        

---

|(1) | Amounts include principal payments only. We made interest payments of $10.0 million during the three months ended March 31, 2007 and expect to pay interest
in future periods on outstanding debt obligations based on the rates and terms disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006 and in Note 4 to our accompanying consolidated financial statements.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Amount includes principal payments only. We made interest payments of $1.2 million during the three months ended March 31, 2007 and expect to pay interest
in future periods based on the terms disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Results
of Operations

Overview

Our results
of operations are not indicative of those expected in future periods, as we expect that rental income, tenant reimbursements, property operating costs, asset and property management fees, depreciation, amortization, and net income will increase in
future periods as a result of owning the assets we acquired prior to and during the periods presented for an entire period and as a result of anticipated future acquisitions of real estate assets.

We commenced our initial public offering on December 1, 2003. Following the receipt and acceptance of subscriptions for the minimum offering of
$2,500,000 on January 22, 2004, we acquired 18 properties during the year ended December 31, 2004, 21 properties during the year ended December 31, 2005, and 10 properties during the year ended December 31, 2006. During the three
months ended March 31, 2007, we acquired two properties, bringing our total portfolio to 51 properties as of March 31, 2007. Accordingly, the results of operations presented for the three months ended March 31, 2007 and 2006,
respectively, are not directly comparable.

Comparison of the three months ended March 31, 2006 versus the three months ended March 31, 2007

Rental income and tenant reimbursements increased from approximately $56.3 million and $12.9 million, respectively, for the three
months ended March 31, 2006 to approximately $73.6 million and $20.3 million, respectively, for the three months ended March 31, 2007, primarily as a result of the growth in the portfolio during 2006 and the first three months of 2007.
Rental income and tenant reimbursements are expected to continue to increase in future periods, as compared to historical periods, as a result of owning the assets acquired during 2006 and the first three months of 2007 for an entire period and
future acquisitions of real estate assets.

Property operating costs and asset and property management fees increased from approximately
$21.5 million and $5.9 million, respectively, for the three months ended March 31, 2006 to approximately $30.6 million and $7.6 million, respectively, for the three months ended March 31, 2007, primarily as a result of the growth in
the portfolio during 2006 and the first three months of 2007. Property operating costs and asset and property management fees are expected to continue to increase in future periods, as compared to historical periods, due to owning the assets
acquired during 2006 and the first three months of 2007 for an entire period and future acquisitions of additional real estate assets.

Depreciation of real estate increased from approximately $10.7 million for the three months ended March 31, 2006 to approximately $14.2 million for the three months ended March 31, 2007, primarily as a result of the growth in the
portfolio during 2006 and the first three months of 2007. Depreciation is expected to continue to increase in future periods, as compared to historical periods, due to owning the assets acquired during 2006 and the first three months of 2007 for an
entire period and future acquisitions of additional real estate assets.



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Amortization increased from approximately $19.5 million for the three months ended March 31,
2006 to approximately $30.9 million for the three months ended March 31, 2007 due to the growth in the portfolio during 2006 and recognizing write-offs of unamortized lease-specific assets related to a termination of the right to lease space at
5 Houston Center of approximately $5.2 million in the first quarter of 2007. Exclusive of the aforementioned write-off of $5.2 million, amortization is expected to increase in future periods, as compared to historical periods, due to owning the
assets acquired during 2006 and the first three months for an entire period and future acquisitions of additional real estate assets.

General and administrative expenses increased from approximately $2.9 million for the three months ended March 31, 2006 to approximately $3.5 million for the three months ended March 31, 2007 due to the increase in the size of our
portfolio of real estate assets during 2006 and the first three months of 2007. General and administrative expenses, as a percent of total revenues, remained stable at approximately 4.0% for the three months ended March 31, 2007 and 2006.

Interest expense increased from approximately $11.2 million for the three months ended March 31, 2006 to approximately $11.7 million
for the three months ended March 31, 2007, primarily due to new mortgage notes as well as an increase in the interest rate under our line of credit, which offset the decrease in the average balance outstanding under the line of credit. Future
levels of interest expense will vary primarily based on the amounts of future borrowings and the costs of borrowings. Future borrowings will be used primarily to fund future acquisitions of real estate or interests therein. Accordingly, the amounts
of future borrowings and future interest expense will largely depend on the level of additional proceeds we raise under our ongoing public offering, the opportunities to acquire real estate assets consistent with our investment objectives, and the
timing of such future acquisitions.

We recognized a loss on early extinguishment of debt of approximately $1.1 million during the three
months ended March 31, 2006 in connection with prepaying the University Circle Buildings mortgage note in January 2006. The loss resulted from a prepayment penalty of approximately $5.7 million and a write-off of approximately $0.6 million
in deferred financing costs, partially offset by a write-off of the unamortized fair value adjustment to debt of approximately $5.2 million.

Interest and other income decreased from approximately $1.8 million for the three months ended March 31, 2006 to approximately $1.6 million for the three months ended March 31, 2007, primarily as a result of holding lower average
cash balances during the three months ended March 31, 2007, as compared to the three months ended March 31, 2006, due to timing differences in raising capital in our public offerings and closing on property acquisitions between periods.

Net loss and net loss per share increased from approximately $0.9 million and $0.00, respectively, for the three months ended
March 31, 2006 to approximately $2.6 million and $0.01, respectively, for the three months ended March 31, 2007, primarily as a result of the termination at 5 Houston Center described above, partially offset by additional income from the
growth of our portfolio. We expect future real estate acquisitions to increase net income in future periods and expect future net income per share to fluctuate primarily based on the level of proceeds raised in our ongoing public offering and the
rate at which we are able to invest such proceeds in income-generating real estate assets.

Funds From Operations

Funds from operations (FFO) is a non-GAAP financial measure and should not be viewed as an alternative to net income as a measurement of our
operating performance. We believe that FFO is a beneficial indicator of the performance of equity REITs. Specifically, FFO calculations exclude factors such as depreciation and amortization of real estate assets and gains or losses from sales of
operating real estate assets. As such factors can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates, FFO may provide a valuable comparison of operating performance between
periods and with other REITs. Management believes that accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically
risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, we
believe that the use of FFO, together with the required GAAP presentation, provides a more complete understanding of our performance relative to our competitors and a more informed and appropriate basis on which to make decisions involving
operating, financing, and investing activities. We calculate FFO in accordance with the current National Association of Real Estate Investment Trust (NAREIT) definition. However, other REITs may not define FFO in accordance with the
NAREIT definition, or may interpret the current NAREIT definition differently than we do.



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As presented below, FFO is adjusted to exclude the impact of certain noncash items, such as depreciation,
amortization, and gains on the sale of real estate assets. Reconciliations of net loss to FFO are presented below (in thousands):



|                                           |  |                                     |         |   |      |   |         |  
|------------------------------------------ |  | ----------------------------------- | ------- | - | ---- | - | ------- | -
|                                           |  | For the Three Months EndedMarch 31, |        
|                                           |  | 2007                                |         |   | 2006 |  
|Net loss                                   |  | $                                   | (2,610  | ) |      | $ | (881    | )
|Add:                                       |  |                                     |         |   |      |   |         |  
|Depreciation of real assets                |  |                                     | 14,194  |   |      |   | 10,678  |  
|Amortization of lease-related costs        |  |                                     | 30,905  |   |      |   | 19,470  |  
|                                           |  |                                     |         |   |      |   |         |  
|FFO                                        |  | $                                   | 42,489  |   |      | $ | 29,267  |  
|                                           |  |                                     |         |   |      |   |         |  
|Weighted-average common shares outstanding |  |                                     | 291,017 |   |      |   | 206,104 |  
|                                           |  |                                     |         |   |      |   |         |  

Set forth below is additional information related to certain cash and noncash items included in or
excluded from net loss above, which may be helpful in assessing our operating results. In addition, cash flows generated from FFO may be used to fund all or a portion of certain capitalizable items that are excluded from FFO, such as capitalized
interest, tenant improvements, building improvements, and deferred lease costs. Please see the accompanying consolidated statements of cash flows for detail of our operating, investing, and financing cash activities.

Noncash Items Included in Net Loss:



| |  |  | Straight-line rental revenue of approximately $5.0 million and $5.8 million was recognized for the three months ended March 31, 2007 and 2006, respectively;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Amortization of above-market/below-market in-place leases and lease incentives was recognized as net decreases to rental income of approximately $4.6 million and
$2.9 million for the three months ended March 31, 2007 and 2006, respectively;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Amortization of deferred financing costs, discounts on notes payable, and interest accrued into the basis of notes payable of approximately $1.3 million and $0.5
million was recognized as interest expense for the three months ended March 31, 2007 and 2006, respectively;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Approximately $1.1 million was recognized as a loss on early extinguishment of debt for the three months ended March 31, 2006 in connection with prepayment
of the University Circle Buildings mortgage note during January 2006; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cash Item Excluded from Net Loss:



| |  |  | Master lease proceeds relating to previous acquisitions of approximately $0.2 million and $0.2 million were collected during the three months ended
March 31, 2007 and 2006, respectively. Master lease proceeds are recorded as an adjustment to the basis of real estate assets during the period acquired and, accordingly, are not included in net loss or FFO. We consider master lease proceeds
when determining cash available for dividends to our stockholders.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Election as a REIT

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the Code), and have operated as such beginning with our taxable year ended December 31, 2003. To qualify as a
REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income, as defined in the Code, to our stockholders, computed without regard to the dividends-paid
deduction and by excluding our net capital gain. As a REIT, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to
federal income taxes on our taxable income for that year and for the four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could
materially adversely affect our net income and net cash available for distribution to our stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes.

Wells TRS is a wholly owned subsidiary of Wells REIT II that is organized as a Delaware limited liability company and includes the
operations of, among other things, a full-service hotel. We have elected to treat Wells TRS as a taxable REIT subsidiary. We may perform additional, non-customary services for tenants of buildings that we own through Wells TRS, including any real
estate or non-real estate related services; however, any earnings related to such services are subject to federal and state income taxes. In addition, for us to continue to qualify as a REIT, our investments in taxable REIT subsidiaries cannot
exceed 20% of the value of our total assets. Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted rates expected to be in
effect when the temporary differences reverse.

No provision for federal income taxes has been made in our accompanying consolidated
financial statements, other than the provision relating to Wells TRS, as we made distributions in excess of taxable income for the periods presented. We are subject to certain state and local taxes related to property operations in certain
locations, which have been provided for in our accompanying consolidated financial statements.

Inflation

We are exposed to inflation risk, as income from long-term leases is the primary source of our cash flows from operations. There are provisions in the
majority of our tenant leases that are intended to protect us from, and mitigate the risk of, the impact of inflation. These provisions include rent steps, 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 re-set frequently
enough to fully cover inflation.

Application of Critical Accounting Policies

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



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Investment in Real Estate Assets

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



|                        |  |                                        |  | 
|----------------------- |  | -------------------------------------- |  | 
|Buildings               |  | 40 years                               |  | 
|Building improvements   |  | 5-25 years                             |  | 
|Tenant improvements     |  | Shorter of economic life or lease term |  | 
|Intangible lease assets |  | Lease term                             |  | 

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, we 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 our estimate of 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 our determination of the relative fair value of these assets. We determine the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors we consider 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, including leasing commissions and other related costs. In estimating carrying costs, we
include real estate taxes, insurance, and other operating expenses during the expected lease-up periods based on current market conditions.

The fair values of above-market and below-market in-place leases are recorded based on the present value (using a discount rate that 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) our estimate of market rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market
lease values are recorded 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 that 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 our consideration of current market costs to execute a similar lease. These direct costs are included in
deferred lease 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 lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

Estimates of the fair values of the tangible and intangible assets require 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 our purchase price allocations, which would impact the amount of our reported net income.

Valuation of Real Estate Assets

We continually
monitor events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of both operating properties and properties under construction, in which we have an ownership interest, either
directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate and related intangible assets may not be recoverable, we assess the
recoverability of these assets by determining whether the carrying value will be recovered through the undiscounted future operating cash flows



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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, we decrease the carrying value of the real estate and related intangible assets to the estimated fair values, as defined by SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, and recognize an impairment
loss. Estimated fair values are calculated based on the following information, in order of preference, dependent upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present
value of undiscounted cash flows, including estimated salvage value. We have determined that there has been no impairment in the carrying value of our real estate assets to date.

Projections of expected future operating cash flows require that we estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating
expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates,
could result in an incorrect assessment of the propertys fair value and could result in the misstatement of the carrying value of our real estate and related intangible assets and net income.

Related-Parties

Transactions and Agreements

We have entered into agreements with our advisor, Wells Capital, and its affiliates, whereby we pay certain fees and reimbursements to Wells Capital or
its affiliates, for acquisition fees, commissions, dealer-manager fees, asset and property management fees, construction fees, reimbursement of organizational and offering costs, and reimbursement of operating costs. See Note 7 to our accompanying
consolidated financial statements included herein for a discussion of the various related-party transactions, agreements, and fees.

Our Relationship
with Wells REIT and the Impact of Its Internalization Transaction on Us

Wells Real Estate Investment Trust, Inc. (Wells
REIT) is a separate REIT from us that also was sponsored by WREF, our sponsor and the sole stockholder of Wells Capital, WIS, and Wells Management. Prior to April 16, 2007, we and Wells REIT shared a common advisor, Wells Capital, and a
common property manager, Wells Management. We also shared with Wells REIT all of the same executive officers and many of the same directors, except that we had separate presidents from February 2, 2007, which is the date that Wells REIT entered
into the merger agreement relating to the internalization transaction described below.

On April 16, 2007, Wells REIT acquired
entities affiliated with WREF. Wells REIT entered into the merger in order to internalize advisory, asset management, property management, and other services previously provided to Wells REIT by WREF and its affiliates. As a result of the
internalization transaction, 81 employees of WREF and its affiliates became employees of Wells REIT. A majority of those employees did not previously provide significant services to us. Following the internalization transaction, WREF and its
affiliates have 351 employees. WREF and its affiliates are seeking successors to some of the personnel who had provided services to us and became employees of Wells REIT in the internalization transaction.

Some of the personnel acquired by Wells REIT in the internalization had primary responsibility for the management of six of our properties. To ensure
continuity of property management services, we amended our existing Management Agreement to eliminate the provision of property management services for those six properties effective upon consummation of the Wells REIT internalization
transaction. We also entered into a property management agreement with a subsidiary of Wells REIT to provide property management services to us for the six properties. Wells Management and unaffiliated third parties, however, will continue
to provide leasing services for the six properties. The terms of our agreement with Wells REIT for property management services are substantially similar to the terms under which we engage Wells Management for property management services.

In connection with the Wells REIT internalization transaction, all three of our officers resigned from their officer positions with Wells
REIT, four of our board members resigned from their positions as board members of Wells REIT, and two Wells REIT directors resigned from our board. On May 9, 2007, Leo F. Wells, III resigned as chairman of the board of directors of Wells REIT. As a
result, we and Wells REIT share no common officers and no common directors.



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On April 18, 2007, E. Nelson Mills became one of our independent directors. He is also an
independent director of Institutional REIT, Inc. and Wells Timberland REIT, Inc. Since December 2004, Mr. Mills has served as the chief operations officer and chief financial officer of Williams Realty Advisors, LLC, where he is responsible for
investment and financial strategy and is in charge of the design, formation, and operation of a series of real estate investment funds. From April 2004 to December 2004, Mr. Mills was a financial consultant to Timbervest, LLC, an investment
manager specializing in timberland investments. From September 2000 to April 2004, Mr. Mills served as chief financial officer of Lend Lease Real Estate Investments (US), Inc., an investment manager specializing in the acquisition and
management of commercial real estate, and from August 1998 to August 2000 served as a senior vice president of Lend Lease with responsibility for tax planning and administration and the supervision of various merger and acquisition activities. Prior
to joining Lend Lease, Mr. Mills was a tax partner with KPMG LLP from January 1987 to August 1998. Mr. Mills received a Bachelor of Science degree in Business Administration from the University of Tennessee and a Masters of Business
Administration degree from the University of Georgia. Mr. Mills is also a Certified Public Accountant.

Legal Action Against Related-Parties

On March 12, 2007, a stockholder of Wells REIT filed a purported class action and derivative complaint, Washtenaw County
Employees Retirement System v. Wells Real Estate Investment Trust, Inc., et al. in the United States District Court for the District of Maryland against, among others, Wells REIT, our advisor, certain affiliates of WREF, and certain of our
officers and directors who formerly served as officers and directors of Wells REIT prior to the closing of the internalization transaction on April 16, 2007. The complaint alleges violations of the federal proxy rules and breaches of fiduciary
duty arising from the Wells REIT internalization transaction and the related proxy statement filed with the SEC on February 26, 2007, as amended. The complaint seeks, among other things, unspecified monetary damages. On April 9, 2007, the
District Court denied the plaintiffs motion for an order enjoining the internalization transaction. On April 17, 2007, the Court granted the defendants motion to transfer venue to the Northern District of Georgia, and the case was
docketed in the Northern District of Georgia on April 24, 2007. Our advisor and officers and directors who are named in the complaint intend to vigorously defend this action. Any financial loss incurred by Wells Capital or its affiliates could
hinder their ability to successfully manage our operations and our portfolio of investments.

Commitments and Contingencies

We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 5 of our accompanying consolidated financial
statements for further explanation. Examples of such commitments and contingencies include:



| |  |  | Commitments under existing lease agreements; and
| | - |  | ------------------------------------------------



| |  |  | Litigation.
| | - |  | -----------

Subsequent Event

Sale of Shares of Common Stock

From April 1,
2007 through April 30, 2007, we raised approximately $82.8 million through the issuance of approximately 8.3 million shares of our common stock under our follow-on offering. As of April 30, 2007, approximately 168.2 million
shares remained available for sale to the public under the follow-on offering, exclusive of shares available under our dividend reinvestment plan.



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|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|------- | ---------------------------------------------------------

As a result of our debt facilities, we
are exposed to interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flow primarily through a low to moderate level of overall borrowings. However, we currently have
a substantial amount of debt outstanding. We manage our ratio of fixed to floating rate debt with the objective of achieving a mix that we believe is appropriate in light of anticipated changes in interest rates. We closely monitor interest rates
and will continue to consider the sources and terms of our borrowing facilities to determine whether we have appropriately guarded ourselves against the risk of increasing interest rates in future periods.

Additionally, we have entered into interest rate swaps, and may enter into other interest rate swaps, caps, or other arrangements in order to mitigate
our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes. All of our debt was entered into for other than trading purposes.

Our financial instruments consist of both fixed and variable rate debt. The Wachovia Line of Credit, the LakePointe 3 construction loan, and the 80 Park
Plaza Building mortgage note are our only debt instruments that bear interest at a variable rate. As of March 31, 2007, we had $40.0 million outstanding on the Wachovia Line of Credit, $17.0 million outstanding on the LakePointe 3 construction
loan, $47.4 million outstanding on the 80 Park Plaza Building mortgage note, and $585.8 million in fixed-rate term mortgage loans. The weighted-average interest rate of our fixed and variable rate debt at March 31, 2007 was 5.35%.

The Wachovia Line of Credit is subject to interest costs based on, at our option, the London Interbank Offered Rate (LIBOR) for 7-, 30-,
60-, 90-, or 180-day periods, plus an applicable margin ranging from 0.85% to 1.20% (LIBOR Loans), or the floating base rate. The applicable margin for LIBOR Loans is based on the ratio of debt to total asset value. The base rate for any
day is the higher of Wachovias prime rate for such day, or the Federal Funds Rate for such day plus 50 basis points. The maturity date of the Wachovia Line of Credit is May 9, 2008. We are able to extend the initial maturity date to
May 9, 2009 if we seek an extension and meet the related conditions set forth in the agreement. An increase in the variable interest rate on this line of credit constitutes a market risk, as an increase in rates would increase interest incurred
and, therefore, decrease cash flows available for distribution to stockholders.

The LakePointe 3 construction loan is a debt instrument
used to fund a portion of the costs necessary to build an office building in Charlotte, North Carolina, which was completed in May 2006. The loan matures in 2007 and requires monthly interest payments at a rate of monthly LIBOR, plus 100 basis
points (approximately 6.32% per annum as of March 31, 2007).

The $45.9 million 80 Park Plaza Building mortgage note was used to
purchase the 80 Park Plaza Building. The note bears interest at LIBOR plus 130 basis points (approximately 6.62% per annum as of March 31, 2007) and matures in September 2016. In connection with obtaining the 80 Park Plaza Building
mortgage note, we entered into an interest rate swap agreement to hedge exposure to changing interest rates. The interest rate swap agreement has an effective date of September 22, 2006 and terminates September 21, 2016. Under the terms of
the interest rate swap agreement, we will pay monthly interest at a fixed rate of 5.275% per annum and receive LIBOR-based monthly interest payments. The interest rate swap effectively fixes our interest rate on the 80 Park Plaza Building
mortgage note at 6.575%.

Approximately $585.8 million of our total debt outstanding as of March 31, 2007 is subject to fixed rates,
with an average interest rate of 5.16% and expirations ranging from 2008 to 2018. A change in the market interest rate impacts the net financial instrument position of our fixed-rate debt portfolio but has no impact on interest incurred or cash
flows.



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|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Disclosure Controls and Procedures

As of the end of the period covered by this report, management performed, with the participation of our Principal Executive Officer and Principal
Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Our disclosure controls
and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the
Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding
required disclosures. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.



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PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

From time to time, we are party to legal proceedings, which arise in the
ordinary course of our business. We are not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such
legal proceedings contemplated by governmental authorities.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

The following risk factor has been updated to include a discussion of possible
payments to Wells Capital or its affiliates during our listing/liquidation stage should we seek to become self-managed by acquiring entities affiliated with Wells Capital. We are currently in our offering stage with no charter-imposed obligation to
take action with respect to a listing or liquidation until 2015, and we have no current plans to seek to become self-managed. This risk factor should be read together with the risk factors disclosed under Item 1A of our Annual Report on Form
10-K for the year ended December 31, 2006.

Payment of compensation to Wells Capital and its affiliates will reduce cash available
for investment and distribution and increases the risk that you will not be able to recover the amount of your investment in our shares.

Wells Capital and its affiliates will perform services for us in connection with the offer and sale of our shares, the selection and acquisition of our investments, the management and leasing of our properties and the administration of our
other investments. We will pay them substantial up-front fees for some of these services, which will result in immediate dilution to the value of your investment and will reduce the amount of cash available for investment in properties or
distribution to stockholders. Largely as a result of these substantial fees, we expect that, for each share sold in our primary offering of up to 300.0 million shares of common stock, no more than $8.71 will be available for the purchase of
real estate, depending primarily upon the number of shares we sell.

We will also pay significant fees to Wells Capital and its affiliates
during our operational stage. Those fees include obligations to reimburse Wells Capital and its affiliates for expenses they incur in connection with their providing services to us, including certain personnel services. There is a risk that those
reimbursement obligations could increase following the recently completed Wells REIT internalization transaction. Our advisor and our property manager previously allocated certain of their personnel and other expenses between Wells REIT and us.
Following the Wells REIT internalization transaction, there will be expenses of our advisor and our property manager that can no longer be shared between Wells REIT and us, and those expenses may be higher than our allocable share of those expenses
before the internalization transaction.

We may also pay significant fees during our listing/liquidation stage. Although most of the fees
payable during our listing/liquidation stage are contingent on our investors first enjoying agreed-upon investment returns, affiliates of Wells Capital could also receive significant payments even without our reaching the investment return
thresholds should we seek to become self-managed. Due to the public markets preference for self-managed companies, a decision to list our shares on a national securities exchange might well be preceded by a decision to become self-managed. And
given our advisors familiarity with our assets and operations, we might prefer to become self-managed by acquiring entities affiliated with our advisor. Such an internalization transaction could result in significant payments to affiliates of
our advisor irrespective of whether investors enjoyed the returns on which we have conditioned other back-end incentive compensation.

These fees and other potential payments increase the risk that the amount available for distribution to common stockholders upon a liquidation of our portfolio would be less than the purchase price of the shares in this offering.
Substantial consideration paid to our advisor and its affiliates also increases the risk that investors will not be able to resell their shares at a profit, even if our shares are listed on a national securities exchange.



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



|(a) | All equity securities sold by us in the quarter ended March 31, 2007 were sold in an offering registered under the Securities Act of 1933.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



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



|(c) | During the quarter ended March 31, 2007, we redeemed shares as follows (in thousands, except per-share amounts):
|--- | ----------------------------------------------------------------------------------------------------------------



|              |  |                                   |  |                             |  |                                                                                       
|------------- |  | --------------------------------- |  | --------------------------- |  | --------------------------------------------------------------------------------------
|Period        |  | Total Number ofShares Redeemed(1) |  | Average PricePaid per Share |  | Approximate Dollar Value of Shares Available That May Yet BeRedeemed Under the Program
|January 2007  |  | 414                               |  | $9.50                       |  | (2)                                                                                   
|February 2007 |  | 319                               |  | $9.43                       |  | (2)                                                                                   
|March 2007    |  | 517                               |  | $9.50                       |  | (2)                                                                                   

---

|(1) | We announced the commencement of the program on December 10, 2003 and amendments to the program
on April 22, 2004; March 28, 2006; May 11, 2006; and August 10, 2006.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | We currently limit redemptions under the share redemption program as follows: We will not make
Ordinary Redemptions (those that do not occur within two years of death or qualifying disability) until one year after the issuance of the shares to be redeemed. We will not redeem shares on any redemption date to the extent that such
redemptions would cause the amount paid for Ordinary Redemptions since the beginning of the then-current calendar year to exceed 50% of the net proceeds from the sale of shares under our dividend reinvestment plan during such period. We will
limit Ordinary Redemptions and those upon the qualifying disability of a stockholder so that the aggregate of such redemptions during any calendar year do not exceed 100% of the net proceeds from our dividend reinvestment plan during the calendar
year or 5% of the weighted-average number of shares outstanding in the prior calendar year. Although there is no limit under the SRP on the number of shares we may redeem upon the death of stockholders, we are under no obligation to redeem such
shares to the extent such redemptions would cause total redemptions to exceed the two limits set forth immediately above. See our Annual Report on Form 10-K for the year ended December 31, 2006 for additional discussion of the share redemption
program.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------



|(a) | There have been no defaults with respect to any of our indebtedness.
|--- | --------------------------------------------------------------------



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



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

No matters were submitted to a vote of our
stockholders during the first quarter of 2007.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------



|(a) | During the first quarter of 2007, there was no information that was required to be disclosed in a report on Form 8-K that was not disclosed in a report on Form
8-K.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | There are no material changes to the procedures by which stockholders may recommend nominees to our board of directors since the filing of our Schedule 14A.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 6. | EXHIBITS
|------- | --------

The exhibits required to be filed with this report are set forth on the Exhibit Index
to this quarterly report attached hereto.



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SIGNATURES

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



|                   |  |  |  |                                             |  |                                                                    
|------------------ |  |  |  | ------------------------------------------- |  | -------------------------------------------------------------------
|                   |  |  |  | WELLS REAL ESTATE INVESTMENT TRUST II, INC.
|                   |  |  |  | (Registrant)                               
|                   |  |  | 
|Dated: May 9, 2007 |  |  |  | By:                                         |  | /s/ DOUGLAS P. WILLIAMS                                            
|                   |  |  |  |                                             |  | Douglas P. Williams                                                
|                   |  |  |  |                                             |  | Executive Vice President, Treasurer and Principal Financial Officer



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EXHIBIT INDEX TO

FIRST QUARTER 2007 FORM 10-Q OF

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

The following documents are filed as exhibits to this report. Exhibits that are not required for this report are omitted.



|            |  |                                                                                                                                                                                                                                                                                                              
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                  
|3.1         |  | Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 3 to the Registration Statement on Form S-11 (No. 333-107066) filed with the Commission
on November 25, 2003 (the IPO Registration Statement))                                                   
|            | 
|3.2         |  | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the IPO Registration Statement)                                                                                                                                                                                                     
|            | 
|4.1         |  | Form of Subscription Agreement with Consent to Electronic Delivery (incorporated by reference to Appendix A to the Prospectus included in Amendment No. 1 to the Registration Statement on Form
S-11 (No. 333-125643) filed with the Commission on October 19, 2005 (the Follow-on Registration Statement))
|            | 
|4.2         |  | Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without
certificates) (incorporated by reference to Exhibit 4.2 to the IPO Registration Statement)                 
|            | 
|4.3         |  | Amended and Restated Dividend Reinvestment Plan (incorporated by reference to Appendix B to the Prospectus included in the Follow-on Registration Statement)                                                                                                                                                 
|            | 
|4.4         |  | Description of Share Redemption Program (incorporated by reference to Exhibit 4.4 to the Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2006)                                                                                                                                        
|            | 
|31.1        |  | Certification of the Chief Executive Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002                                                                                                                        
|            | 
|31.2        |  | Certification of the Chief Financial Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002                                                                                                                        
|            | 
|32.1        |  | Certification of the Chief Executive Officer and Chief Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002