<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                   FORM 10-K
(Mark One)
[X]  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 [Fee Required]
 
For the fiscal year ended             December 31, 1998               or
                          -------------------------------------------
 
[ ]  Transition report pursuant to Section 13 or 15 (d) of the Securities
     Exchange Act of 1934 [No Fee Required]
     
For the transition period from                         to
                               ----------------------     ------------------
Commission file number        0-21580
                      ------------------------------------------------------
                              Wells Real Estate Fund V, L. P.
----------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)
 
         Georgia                                      58-1936904
----------------------------          --------------------------------------
State or other jurisdiction of        (I.R.S. Employer Identification Number)
incorporation or organization)
 
3885 Holcomb Bridge Road Norcross, Georgia           30092
----------------------------------------------------------------------------
(Address of principal executive offices)           (Zip Code)
 
Registrant's telephone number, including area code     (770) 449-7800
                                                  --------------------------
Securities registered pursuant to Section 12 (b) of the Act:
 
     Title of each class              Name of exchange on which registered
----------------------------          ------------------------------------
             NONE                                     NONE

Securities registered pursuant to Section 12 (g) of the Act:

                                 Class A Unit
----------------------------------------------------------------------------
                               (Title of Class)

                                 Class B Unit
----------------------------------------------------------------------------
                               (Title of Class)

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

Yes  X    No
    ----     -----      

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

                                       1
<PAGE>
 
                                     PART I
                                     ------
                                        

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

General

Wells Real Estate Fund V, L.P. (the "Partnership") is a Georgia public limited
partnership having Leo F. Wells, III and Wells Partners, L.P., a non-public
limited partnership as General Partners.  The Partnership was formed on October
25, 1990, for the purpose of acquiring, developing, owning, operating,
improving, leasing, and otherwise managing for investment purposes income
producing commercial or industrial properties.

On March 6, 1992, the Partnership commenced an offering of up to $25,000,000 of
Class A or Class B limited partnership units ($10.00 per unit) pursuant to a
Registration Statement on Form S-11 filed under the Securities Act of 1933.  The
Partnership did not commence active operations until it received and accepted
subscriptions for a minimum of 125,000 units on April 27, 1992.  The offering
was terminated on March 3, 1993, at which time the Partnership had sold
1,520,967 Class A Units and 179,635 Class B Units representing $17,006,020 of
capital contributions by investors who were admitted to the Partnership as
Limited Partners.

The Partnership owns interests in properties through its equity ownership in the
following joint ventures; (i) Fund IV and Fund V Associates, a joint venture
between the Partnership and Wells Real Estate Fund IV, L.P. (the "Fund IV - Fund
V Joint Venture"); (ii) Fund V and Fund VI Associates, a joint venture between
the Partnership and Wells Real Estate Fund VI, L.P. (the "Fund V - Fund VI Joint
Venture"); and (iii) Fund V, Fund VI, and Fund VII Associates, a joint venture
between the Partnership, Wells Real Estate Fund VI, L.P. and Wells Real Estate
Fund VII, L.P. (the "Fund V-VI-VII Joint Venture").

As of December 31, 1998, the Partnership owned interests in the following
properties through its ownership of the foregoing joint ventures: (i) a four-
story office building located in Jacksonville, Florida ("IBM Jacksonville"),
which is owned by the Fund IV - Fund V Joint Venture; (ii) two substantially
identical two-story office buildings located in Clayton County, Georgia (the
"Medical Center Project"), which are owned by the Fund IV - Fund V Joint
Venture; (iii) a four-story office building located in metropolitan Hartford,
Connecticut (the "Hartford Building"), which is owned by the Fund V - Fund VI
Joint Venture; (iv) two retail buildings located in Clayton County, Georgia
("Stockbridge Village II"), which are owned by the Fund V - Fund VI Joint
Venture; and (v) a three-story office building located in Appleton, Wisconsin
(the "Marathon Building"), which is owned by the Fund V-VI-VII Joint Venture.
All of the foregoing properties were acquired on an all cash basis.

Employees

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

                                       2
<PAGE>
 
investor relations for the Partnership. See Item 11 - "Compensation of General
Partners and Affiliates" for a summary of the fees paid to the General Partners
and their affiliates during the fiscal year ended December 31, 1998.

Insurance

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

Competition

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

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

The Partnership owns interest in five properties through its investment in joint
ventures of which four are office buildings and one is a retail building.  The
Partnership does not have control over the operations of the joint ventures;
however, it does exercise significant influence.  Accordingly, investment in
joint ventures is recorded on the equity method.  As of December 31, 1998, these
properties were 94% occupied, as compared to 95% at December 31, 1997, 92% at
December 31, 1996.



                [The Remainder of Page Left Intentionally Blank]

                                       3
<PAGE>
 
The following table shows lease expirations during each of the next ten years
for all leases as of December 31, 1998, assuming no exercise of renewal options
or termination rights:
<TABLE>
<CAPTION>
 
                                                          Partnerships
Year of         Number of                  Annualized       Share of        Percentage of     Percentage of
Lease            Leases       Square       Gross Base      Annualized        Total Square    Total Annualized
Expiration      Expiring   Feet Expiring     Rent(1)     Gross Base Rent(1)  Feet Expiring      Base Rent
--------------------------------------------------------------------------------------------------------------
<S>           <C>        <C>            <C>            <C>                  <C>                <C>
            
1999               2         26,855           584,286        364,770             9.6%               14.7% 
2000               5          8,898           141,169         88,132             3.2%                3.5% 
2001               0              -                 -              -                -                   - 
2002               1          1,080            16,692          7,758             0.4%                0.4% 
2003(2)            3        141,732         1,802,112      1,010,617            50.3%               45.3% 
2004               4         13,157           280,990        143,565             4.7%                7.1% 
2005               2          8,351            94,260        58,847              3.0%                2.4%  
2006(3)            2         80,969         1,059,373       200,897             28.8%               26.6%  
2007               0              -                 -            -                 -                   -  
2008               0              -                 -            -                 -                   -  
-------------------------------------------------------------------------------------------------------------
 
                  19        281,042         3,978,882     1,874,586            100.0%              100.0%
</TABLE>
(1)  Average monthly gross rent over the life of the lease, annualized.

(2)  Expiration of IBM with 68,100 square feet at the Jacksonville Property
     and of Hartford Accident and Indemnity Company at the Hartford Building 
     with 71,000 square feet.

(3)  Expiration of Marathon with 76,000 square feet at the Marathon Property.


The following describes the properties in which the Partnership owns an interest
as of December 31, 1998:

Fund IV - Fund V Joint Venture
------------------------------

On April 14, 1992, the Partnership and Wells Real Estate Fund IV, L.P. ("Wells
Fund IV"), a Georgia public limited partnership affiliated with the Partnership
through common general partners, entered into a joint venture agreement known as
Fund IV and Fund V Associates (the "Fund IV - Fund V Joint Venture").  The
investment objectives of Wells Fund IV are substantially identical to those of
the Partnership.  As of December 31, 1998, the Partnership had contributed
approximately $7,892,651, and Wells Fund IV had contributed approximately
$4,736,173 to the Fund IV -Fund V Joint Venture. The Partnership holds an
approximate 62% equity interest, and Wells Fund IV holds an approximate 38%
equity interest in the Fund IV - Fund V Joint Venture.  The Partnership owns
interests in the following two properties through the Fund IV - Fund V Joint
Venture:

                                       4
<PAGE>
 
The Jacksonville Project
------------------------

On June 8, 1992, the Fund IV-Fund V Joint Venture acquired 5.676 acres of real
property located in Jacksonville, Florida at a purchase price of $1,360,000 for
the purpose of developing, constructing, and operating a four-story office
building containing approximately 87,600 square feet (the "Jacksonville
Project").  As of December 31, 1998, the Partnership contributed $4,961,709, and
Wells Fund IV contributed $3,439,947 to the Fund IV-Fund V Joint Venture to fund
the acquisition and development of the Jacksonville Project.

The Jacksonville Project is leased primarily by International Business Machines
Corporation ("IBM"), a computer sales and service corporation, and Customized
Transportation, Inc. ("CTI"), a division of CSX Railroad, a transportation
corporation.

The initial term of the IBM lease containing 68,100 square feet is 9 years and
11 months and commenced upon completion of the building in June 1993, with an
option to extend the initial lease for two consecutive five-year periods.  The
annual base rent payable under the IBM lease during the initial term is
$1,122,478 payable in equal monthly installments of $93,540.  IBM is also
required to pay additional rent equal to its share of operating expenses during
the lease term.

The term of the CTI lease containing 11,780 square feet is 5 years and commenced
in March, 1994.  The annual base rent payable under the CTI lease is $325,965.

The occupancy rates for the Jacksonville Project at year end were 94% in 1998,
100% in 1997 and 1996.  The average effective annual rental per square foot at
the Jacksonville Project was $16.69 for 1998, $16.71 for 1997 and 1996.

The Medical Center Project
--------------------------

On September 14, 1992, the Fund IV-Fund V Joint Venture acquired 2.655 acres of
real property in Stockbridge, Georgia for $440,000 for the purpose of
constructing two substantially identical two-story office buildings containing
approximately 17,847 rentable square feet each (the "Medical Center Project").
As of December 31, 1998, the Partnership had contributed $2,930,942, and Wells
Fund IV had contributed $1,296,226 to the Fund IV - Fund V Joint Venture for the
acquisition and development of the Medical Center Project.

Construction on the first building at the Medical Center Project was completed
in March, 1993 and the building shell of the second building was completed in
April, 1994.  Georgia Baptist, a medical health care and urgent care facility,
leased approximately 14,669 square feet in the first building for a term of six
years and has the option to extend the initial term of the lease for one five-
year period.  The base rent payable per square foot ranges from $16.00 per month
during the first year to $18.50 during the sixth year.  In addition, Georgia
Baptist has leased approximately 3,376 square feet in the second building for a
term of five years at an annual rental rate of $55,704, increasing to $57,392 in
the fourth year and $59,080 in the fifth year.

                                       5
<PAGE>
 
The occupancy rate for  Medical Center Project at year end was 92% in 1998, 81%
in 1997 and 67% in 1996.   The average effective annual rental per square foot
at the Medical Center Project was $ 13.46 for 1998, $10.93 for 1997 and $11.83
for 1996.

Fund V - Fund VI Joint Venture
------------------------------

On December 27, 1993, The Partnership and Wells Real Estate Fund VI, L.P.
("Wells Fund VI"), a Georgia public limited partnership affiliated with the
Partnership through common general partners, entered into a joint venture
agreement known as Fund V and Fund VI Associates (the "Fund V - Fund VI Joint
Venture").  The investment objectives of Wells Fund VI are substantially
identical to those of the Partnership.  As of December 31, 1998, the Partnership
had contributed approximately $4,544,601, and Wells Fund VI had contributed
approximately $5,321,268  to the Fund V - Fund VI Joint Venture. The Partnership
currently holds an approximately 46.5% equity interest, and Wells Fund VI holds
an approximately 53.5% equity interest in the Fund V - Fund VI Joint Venture.
It is anticipated that Wells Fund VI will fund an additional $17,000 toward the
completion oftenant improvement at the Stockbridge Village II Project, at which
time, it is anticipated that the Partnership will hold an approximate 46% equity
interest in the Fund V - Fund VI Joint Venture.  The Partnership owns interests
in the following two properties through the Fund V - Fund VI Joint Venture:


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

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

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

The occupancy rate for the Hartford Building at year end was 100% for the years
ended December 31, 1998, 1997 and 1996.  The average effective annual rental per
square foot at the Hartford Building was $10.11 for 1998, 1997 and 1996.

                                       6
<PAGE>
 
Stockbridge Village II - Stockbridge South Project
--------------------------------------------------


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

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

Glenn's Open Pit Bar-B-Que leased 4,303 square feet of the second retail
building for a six year term beginning July 1, 1995 and vacated in April, 1997,
owing substantial rent.  The receivable from Glenn's was collected in December,
1997.  This space has been leased with occupancy expected in early 1999.

The total cost to complete Stockbridge Village II is approximately $2,941,000.
As of December 31, 1998, the Partnership contributed $1,035,804 and Wells Fund
VI had contributed $1,888,561 to the Fund V - Fund VI Joint Venture for the
acquisition and development of Stockbridge Village II.

The occupancy rate for the Stockbridge Village II Project at year end was 72%
for 1998 and 1997 and 61% for 1996.  The average effective annual rental per
square foot at the Stockbridge Village II was $14.90 for 1998, $14.88 for 1997
and $12.43 for 1996.

Fund V - VI - VII Joint Venture
-------------------------------

On September 8, 1994, the Partnership, Wells Fund VI and Wells Real Estate Fund
VII, L. P. ("Wells Fund VII"), Georgia public limited partnerships affiliated
with the Partnership through common general partners, entered into a joint
venture agreement known as Fund V, Fund VI, and Fund VII Associates (the "Fund
V-VI-VII Joint Venture").  The Partnership holds an approximate 16% equity
interest in the following property through the Fund V-VI-VII Joint Venture:

                                       7
<PAGE>
 
The Marathon Building
---------------------

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

The funds used by the Fund V-VI-VII Joint Venture to acquire the Marathon
Building were derived from capital contributions made by the Partnership, Wells
Fund VI and Wells Fund VII totaling $1,337,505, $3,470,958, and $3,470,958,
respectively, for total contributions to the Fund V-VI-VII Joint Venture of
$8,279,421 including acquisition costs.

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

The occupancy rate for the Marathon Building at year end was 100% for 1998,
1997, and 1996.   The average effective annual rental per square foot in the
Marathon Building was $12.78 for 1998, $12.74 for 1997,  and $12.78 for 1996.


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

There were no material pending legal proceedings or proceedings known to be
contemplated by governmental authorities involving the Partnership during 1998.


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

No matters were submitted to a vote of the Limited Partners during the fourth
quarter of 1998.

                                       8
<PAGE>
 
                                    PART II
                                    -------
                                        
Item 5.  MARKET FOR PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER MATTERS.
----------------------------------------------------------------------------

As of February 28, 1999, the Partnership had 1,559,021 outstanding Class A Units
held by a total of 1,597 Limited Partners and 141,581 outstanding Class B Units
held by a total of 76 Limited Partners.  The capital contribution per unit is
$10.00.  There is no established public trading market for the Partnership's
limited partnership units, and it is not anticipated that a public trading
market for the units will develop.  Under the Partnership Agreement, the General
Partners have the right to prohibit transfers of units.

The General Partners have estimated the investment value of properties held by
the Partnership, as of December 31, 1998, to be $11.49 per Class A Unit and
$14.92 per Class B Unit based on market conditions existing in early December,
1998.  This value was confirmed as reasonable by an independent MAI appraiser,
David L. Beal Company, although no actual MAI appraisal was performed due to the
inordinate expense involved with such an undertaking.  The valuation does not
include any fractional interest valuation.

Cash available for distribution to the Limited Partners is distributed on a
quarterly basis unless Limited Partners select to have their cash distributions
paid monthly. Under the Partnership Agreement, distributions are allocated first
to the Limited Partners holding Class A Units until they have received cash
distributions in each fiscal year of the Partnership equal to 10% of their
adjusted capital contribution.  After this preference is satisfied, the General
Partners will receive an amount of Net Cash from Operations equal to one-tenth
of the total amount of Net Cash from Operations distributed.  Therefore, the
Limited Partners holding Class A Units will receive 90% of Net Cash from
Operations, and the General Partners will receive 10%.  No Net Cash from
Operations will be distributed to Limited Partners holding Class B Units. Cash
distributions made to the Limited Partners holding Class A Units for the two
most recent fiscal years were as follows:
<TABLE>
<CAPTION>
 
                                                 Per Class A Unit
                                             -------------------------
         Distributions For   Total Cash      Investment    Return of
         Quarter Ended       Distribution    Income        Capital
         -------------------------------------------------------------
<S>                         <C>           <C>         <C>
 
         March 31, 1997        $262,966       $0.17          $0.00
         June 30, 1997         $272,997       $0.17          $0.00
         Sept. 30, 1997        $277,959       $0.18          $0.00
         Dec. 31, 1997         $288,503       $0.08          $0.11
         March 31, 1998        $289,025       $0.09          $0.10
         June 30, 1998         $300,005       $0.14          $0.05
         Sept. 30, 1998        $296,796       $0.08          $0.11
         Dec. 31, 1998         $273,913       $0.09          $0.09
</TABLE>

The fourth quarter distribution was accrued for accounting purposes in 1998, and
was not actually paid to the limited partners holding Class A units until
February 1999.  Even though 

                                       9
<PAGE>
 
there is no guarantee, the General Partners anticipate that cash distributions
to Limited Partners holding Class A units will continue in 1999 at a level at
least comparable with 1998 cash distributions on an annual basis.

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

The Partnership commenced the offering on March 6, 1992, but did not commence
active operations until it received and accepted subscriptions for a minimum of
125,000 units on April 27, 1992.

The following sets forth a summary of the selected financial data for the fiscal
years ended December 31, 1998, 1997, 1996, 1995 and 1994.

<TABLE>
<CAPTION>
                                        1998             1997                  1996                  1995                  1994
                                  -------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>                  <C>                     <C>                   <C>
Total assets                       $13,038,503      $13,586,464          $14,092,081             $14,597,710           $14,875,082
Total revenues                         708,264          633,247              590,839                 764,624               656,958
Net income                             622,106          559,801              505,650                 689,639               561,721
Net income/(loss) allocated
  to General Partners                        0                0                    0                       0                (1,051)
Net income allocated to
  Class A Limited Partners             622,106          559,801            1,095,296               1,124,203               879,232
Net loss allocated to
  Class B Limited Partners                   0                0             (589,646)               (434,564)             (316,460)
Net income per weighted
 average (1) Class A
 Limited Partner Unit                      .40              .36                  .71                     .73                   .58
Net loss per weighted
 average (1) Class B
 Limited Partner Unit                        0                0                (3.78)                  (2.72)                (1.78)
Cash Distributions per
weighted average (1)
 Class A Limited Partner
 Unit:
 Investment Income                         .40              .60                  .65                     .66                   .51
 Return of Capital                         .35              .11                  .00                     .00                   .00
</TABLE>


(1)  The weighted average unit is calculated by averaging units over the period
they are outstanding during the time units are still being purchased or
converted by Limited Partners in the Partnership.

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
-------------------------------------------------------------------------
RESULTS OF OPERATION.
---------------------

The following discussion and analysis should be read in conjunction with the
selected financial data and the accompanying financial statements of the
Partnership and notes thereto.  This Report contains forward-looking statements,
within the meaning of Section 27A of the Securities Act of 1933 and 21E of the
Securities Exchange Act of 1934, including discussion and analysis of the
financial condition of the Partnership, anticipated capital expenditures
required to 

                                       10
<PAGE>
 
complete certain projects, amounts of cash distributions anticipated to be
distributed to Limited Partners in the future and certain other matters. Readers
of this Report should be aware that there are various factors that could cause
actual results to differ materially from any forward-looking statement made in
this Report, which include construction costs which may exceed estimates,
construction delays, lease-up risks, inability to obtain new tenants upon the
expiration of existing leases, and the potential need to fund tenant
improvements or other capital expenditures out of operating cash flow.

Results of Operations and Changes in Financial Conditions
---------------------------------------------------------

General
-------

Gross revenues of the Partnership were $708,264 for the year ended December 31,
1998, as compared to $633,247 for the year ended December 31, 1997 and $590,839
for the year ended December 31, 1996.  Interest income decreased from 1996 to
1997 and 1998 due to a greater amount of investor funds invested in interest
bearing accounts in 1996 than in 1997 and 1998.  Gross revenues and net income
increased for the year 1998, as compared to 1997 and 1996, due primarily to
increased equity in income from the joint ventures.

Expenses of the Partnership increased to $86,158 for the year ended December 31,
1998 from $73,446 for the year ended December 31, 1997 and $85,189 for the year
ended December 31, 1996, due primarily to fluctuations in legal and accounting
costs and in partnership administration expenses.

The Partnership made cash distributions to the Limited Partners holding Class A
Units of $.75 per Class A Unit for the year ended December 31, 1998, $.71 per
Class A Unit for the year ended December 31, 1997 and $.65 per Class A Unit for
the year ended December 31, 1996.  No cash distributions were made to the
Limited Partners holding Class B Units.  Distributions accrued for the fourth
quarter of 1998 were paid in February, 1999.

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed of", which is
effective for fiscal years beginning after December 15, 1995.  SFAS No. 121
establishes standards for determining when impairment losses on long-lived
assets have occurred and how impairment losses should be measured.  The joint
ventures adopted SFAS No. 121, effective January 1, 1995.  The impact of the
adoption of SFAS No. 121 was not material to the financial statements of the
joint ventures.

Property Operations
-------------------

As of December 31, 1998, the Partnership's ownership interest in Fund IV-Fund V
Joint Venture was 62.4%, in Fund V-Fund VI Joint Venture 46.5% and in Fund V-VI-
VII Joint Venture 16.5%.

As of December 31, 1998, the Partnership owned interests through interests in
joint ventures in the following operational properties:

                                       11
<PAGE>
 
The Jacksonville Project/Fund IV-Fund V Joint Venture
-----------------------------------------------------
 
<TABLE>
<CAPTION>
                                                       For the Year Ended December 31
                                       ---------------------------------------------------------------
                                              1998                  1997                  1996
                                      --------------------  --------------------  --------------------
<S>                                   <C>                   <C>                   <C>
Revenues:
  Rental income                                $1,461,916            $1,464,097            $1,463,969
                                               ----------            ----------            ----------
 
Expenses
  Depreciation                                    318,096               318,100               317,252
  Management & leasing expenses                   190,928               184,623               183,652
  Other operating expenses                        401,622               431,278               480,241
                                               ----------            ----------            ----------
                                                  910,646               934,001               981,145
                                               ----------            ----------            ----------
 
Net income                                     $  551,270            $  530,096            $  482,824
                                               ==========            ==========            ==========
 
Occupied %                                             94%                  100%                  100%
 
Partnership's Ownership % in the
 Fund IV-Fund V Joint Venture                        62.4%                 62.4%                 61.9%
 
Cash Distribution to the Partnership           $  506,517            $  503,015            $  459,672
 
Net Income Allocated to the
  Partnership                                  $  343,868            $  329,540            $  298,749
</TABLE>


Rental income decreased slightly in 1998 as compared to 1997 and 1996 due to
decreased occupancy.  Expenses decreased in 1998 as compared to 1997 due
primarily to savings in various building operating expenses.  Cash distributions
remained stable in 1998 as compared to 1997. Net income increased in 1998, as
compared to 1997 and 1996 levels, due primarily to savings in operating
expenses.

The Jacksonville Project incurred property taxes of $ 188,333 for 1998, $180,405
for 1997, and  $172,732 for 1996.

For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2.  For additional information on tenants,
etc.  refer to Item 2, Properties, Page 3.

                                       12
<PAGE>
 
The Medical Center Project/Fund IV-Fund V Joint Venture
-------------------------------------------------------

<TABLE>
<CAPTION>
                                                       For the Year Ended December 31
                                      ----------------------------------------------------------------
                                              1998                  1997                  1996
                                      --------------------  --------------------  --------------------
<S>                                   <C>                   <C>                   <C>
Revenues:
  Rental income                                  $480,419              $387,453              $419,387
  Interest income                                  12,908                 9,193                12,884
                                                 --------              --------              --------
                                                  493,327               396,646               432,271
                                                 --------              --------              --------
 
Expenses
  Depreciation                                    178,095               166,939               159,523
  Management & leasing expenses                    61,950                55,591                54,242
  Other operating expenses                        170,664               187,339               219,120
                                                 --------              --------              --------
                                                  410,709               409,869               432,885
                                                 --------              --------              --------
 
Net Income (loss)                                $ 82,618              $(13,223)             $   (614)
                                                 ========              ========              ========
 
Occupied %                                             92%                   81%                   67%
 
Partnership's Ownership % in the
 Fund IV-Fund V Joint Venture                        62.4%                 62.4%                 61.9%
 
Cash Distribution to the Partnership             $181,881              $121,661              $109,464
 
Net Income (loss) Allocated to the
  Partnership                                    $ 51,542              $ (8,247)             $   (380)
</TABLE>


Rental income increased in 1998 over 1997 and 1996 levels due to increased lease
up at the Medical Center Project but decreased in 1997, due to a prior year
straight line rent adjustment.  Occupancy increased to 92% in 1998, as compared
to 81% (on both buildings) in 1997 and 67% 1996.  Expenses remained stable in
1998, as compared to 1997, but decreased when compared to 1996. Depreciation
increased in 1998 and 1997 due to the  increased tenant build-out.

Cash distributions allocated to the Partnership have increased over prior year
levels due primarily to the lease up of the project and savings in operating
expenses.  Cash fundings to the Joint Venture for construction were contributed
by  Wells Fund V which increased its ownership interest and decreased the
Partnership's ownership interest in the Fund IV -- V-Joint Venture.

The Medical Center Project incurred property taxes of $36,862 for 1998, $35,691
for 1997, and  $37,898 for 1996.

For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2.  For additions information on tenants,
etc. refer to Item 2, Properties, Page 3.

                                       13
<PAGE>
 
The Hartford Building - Fund V - Fund VI Joint Venture
------------------------------------------------------

<TABLE>
<CAPTION>
                                                       For the Year Ended December 31
                                      ----------------------------------------------------------------
                                              1998                  1997                  1996
                                      --------------------  --------------------  --------------------
<S>                                   <C>                   <C>                   <C>
Revenues:
   Rental income                                 $717,499              $717,499              $717,499
                                                 --------              --------              --------
 
Expenses
  Depreciation                                    292,032               292,030               292,031
  Management & leasing expenses                    27,719                30,189                28,700
  Other operating expenses                         10,530                (9,982)               13,948
                                                 --------              --------              --------
                                                  330,281               312,237               334,679
                                                 --------              --------              --------
 
Net income                                       $387,218              $405,262              $382,820
                                                 ========              ========              ========
 
Occupied %                                            100%                  100%                  100%
 
Partnership's Ownership % in the
 Fund V-Fund VI Joint Venture                        46.5%                 46.5%                 47.5%
 
Cash Distribution to the Partnership             $318,379              $329,507              $323,753
 
Net Income Allocated to the
  Partnership                                    $180,142              $189,813              $181,919
</TABLE>


Net income decreased and expenses increased in 1998, as compared to 1997, due
primarily to an insurance reimbursement received in 1997 from the tenant for
prior year's expenses.

The Partnership's ownership in the Fund V-Fund VI Joint Venture decreased from
47.5% in 1996, to 46.5% in 1997 and 1998 due to additional fundings by Wells
Fund VI, which increased Wells Fund VI's ownership interest and decreased the
Partnership's ownership interest in the Fund V- Fund VI Joint Venture.

Cash distributions remained relatively stable from 1998 as compared to 1997 and
1996. Net income allocated to the Partnership decreased in 1998 as compared to
1997 due to decreased insurance reimbursement as discussed above but increased
in 1997 as compared to 1996, due to the insurance reimbursement discussed above.

Real estate taxes and all operational expenses for the building are the
responsibility of the tenant.

For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2.  For additional information on tenants,
etc. refer to Item 2, Properties, Page 3.  For more detailed financial
information regarding the historical operations of the Hartford Building, refer
to the Financial Statements, as of December 31, 1998, 1997 and 1996  regarding
The Hartford Building commencing at page F-29 of this Annual Report on 
Form 10-K.

                                       14
<PAGE>
 
Stockbridge Village II - Fund V - Fund VI Joint Venture
-------------------------------------------------------
<TABLE>
<CAPTION>
                                                       For the Year Ended December 31
                                      ----------------------------------------------------------------
                                              1998                  1997                  1996
                                      --------------------  --------------------  --------------------
<S>                                   <C>                   <C>                   <C>
Revenues:
  Rental income                                  $235,776              $235,508              $196,629
                                                 --------              --------              --------
 
Expenses
  Depreciation                                    101,971                96,357                79,239
  Management & leasing expenses                    29,648                35,423                19,786
  Other operating expenses                         32,156                62,725                90,216
                                                 --------              --------              --------
                                                  163,775               194,505               189,241
                                                 --------              --------              --------
 
Net income                                       $ 72,001              $ 41,003              $  7,388
                                                 ========              ========              ========
 
Occupied %                                             72%                   72%                   61%
 
Partnership's Ownership % in the
 Fund V-Fund VI Joint Venture                        46.5%                 46.5%                 47.5%
 
Cash Distribution to the Partnership             $ 77,808              $ 60,871              $ 37,193
 
Net Income Allocated to the
  Partnership                                    $ 33,488              $ 18,970              $  3,519
</TABLE>


Net income is greater in 1998, as compared to 1997, due primarily to increased
CAM reimburstments from tenants.  Operating expenses have decreased for 1997,
from 1996 levels due primarily to a bad debt recovery in 1997, and decreased in
1998 from 1997 due to increased CAM billings to tenants.

The Partnership's ownership percentage in the Fund V - Fund VI Joint Venture
decreased to 46.5% in 1998 and 1997 from 47.5% in 1996 due to additional
investments by Wells Fund VI which increased Wells Fund VI's ownership interest
and decreased the Partnership's ownership interest in the Fund V - Fund VI Joint
Venture.

The Stockbridge Village II Project incurred property taxes of $23,508 for 1998,
$25,491 for 1997 and $22,835 for 1996.

For comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2.  For additional information on tenants,
etc., refer to Item 2, Properties, Page 3.

                                       15
<PAGE>
 
The Marathon Building/Fund V-VI-VII Joint Venture
-------------------------------------------------

<TABLE>
<CAPTION>
                                                       For the Year Ended December 31
                                      ---------------------------------------------------------------
                                              1998                  1997                  1996
                                      --------------------  ---------------------  -------------------
<S>                                   <C>                   <C>                    <C>
Revenues:
  Rental income                                  $971,447               $968,219             $971,017
                                                 --------               --------             --------
 
Expenses
  Depreciation                                    350,585                350,585              350,585
  Management & leasing expenses                    34,632                 39,671               38,841
  Other operating expenses                         12,261                 11,905               14,636
                                                 --------               --------             --------
                                                  397,478                402,161              404,062
                                                 --------               --------             --------
 
Net income                                       $573,969               $566,058             $566,955
                                                 ========               ========             ========
 
Occupied %                                            100%                   100%                 100%
 
Partnership's Ownership % in the
 Fund V-VI-VII Joint Venture                         16.5%                  16.5%                16.5%
 
Cash Distribution to the Partnership             $153,446               $152,896             $141,385
 
Net Income Allocated to the
  Partnership                                    $ 94,475               $ 93,173             $ 93,321
</TABLE>
                                                                                
Rental income remained relatively stable in 1998, 1997 and 1996. Operating
expenses increased slightly due to accounting fees and administrative fees
increasing, as compared to 1997.  Cash distributions to the partnership and net
income allocated to Partnership remained relatively stable for 1998.

Real estate taxes and all operational expenses for the building are the
responsibility of the tenant.

For Comments on the general competitive conditions to which the property may be
subject, See Item 1, Business, Page 2.  For additional information on tenants,
etc., refer to Item 2, Properties, Page 3.

Liquidity and Capital Reserves
------------------------------

During its offering, which terminated on March 3, 1993, the Partnership raised a
total $17,006,020 in capital through the sale of 1,700,602 units.  No additional
units will be sold by the Partnership.  As of December 31, 1998, the Partnership
incurred $3,145,282 in commission fees, acquisition fees, organization and
offering costs; invested $13,774,757 in properties; reserved $85,981 as working
capital reserves. No funds have been reserved by the Partnership for investment
in the Fund V - Fund VI Stockbridge Village II Project.

                                       16
<PAGE>
 
Pursuant to the terms of the Partnership Agreement, the Partnership is required
to maintain working capital reserves in an amount equal to the cash operating
expenses required to operate the Partnership for a six-month period not the be
reduced below 1% of Limited Partners' capital contributions.  As set forth
above, in order to fund tenant improvements of approximately $84,079 the General
Partners have used a portion of the Partnership's working capital reserves to
reduce the balance below this minimum amount, rather than funding out of
operating cash flow.  The General Partners anticipated that the remaining
$85,981 in working capital reserves will be sufficient to meet its future needs.

The Partnership's net cash used in operating activities increased from $65,728
for the year ended December 31, 1996 to $66,556 for the year ended December 31,
1997 to $77,135 for the year ended December 31, 1998 primarily due to decreases
in interest income in 1998 and 1997 and changes in accounts payable.  Net cash
provided by investing activities fluctuated from $1,072,610 in 1996 and $966,869
in 1997 and $1,223,796 in 1998 primarily due to changes in investments in joint
ventures and increases in distributions received from joint ventures.

The Partnership's distributions paid and payable through the fourth quarter of
1998 have been paid from net cash from operations and from a return of capital.
The Partnership anticipates that distributions will continue to be paid on a
quarterly basis from such sources.

The Partnership is unaware of any known demands, commitments, events or capital
expenditures other than that which is required for the normal operations of its
properties that will result in the Partnership's liquidity increasing or
decreasing in any material way.  The Partnership expects to meet liquidity
requirements and budget demands through cash flow from operations.

Inflation
---------

The real estate market has not been affected significantly by inflation in the
past three years due to the relatively low inflation rate.  There are provisions
in the majority of tenant leases executed by the Partnership to protect the
Partnership from the impact of inflation, most leases contain common area
maintenance 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.  These provisions should reduce the
Partnership's exposure to increases in costs and operating expenses resulting
from inflation.  In addition, a number of the Partnership's leases are for terms
of less than five years which may permit the Partnership to replace existing
leases with new leases at higher base rental rates if the existing leases are
below market rate.  There is no assurance, however, that the Partnership would
be able to replace existing leases with new leases at higher base rentals.

Year 2000
---------

The Partnership is presently reviewing the potential impact of Year 2000
compliance issues on its information systems and business operations.  A full
assessment of Year 2000 compliance issues was begun in late 1997 and is expected
to be completed by March 31, 1999.  Renovations and replacements of equipment
have been and are being made as warranted as the assessment 

                                       17
<PAGE>
 
progresses. The costs incurred by the Partnership and its affiliates thus far
for renovations and replacements have been immaterial. Some testing of systems
has begun and all testing is expected to be complete by June 30, 1999.

     As to the status of the Partnership's information technology systems, it is
presently believed that all major systems and software packages with the
exception of the accounting and property management package are Year 2000
compliant.  The Partnership's affiliated entities are purchasing the upgrade for
the accounting and property management package system; however, it is not slated
to be available until the end of the first quarter of 1999.  At the present
time, it is believed that all major non-information technology systems are Year
2000 compliant.  The cost to upgrade any non-compliant systems is believed to be
immaterial.

     The Partnership is in the process of confirming with the Partnership's
vendors, including third-party service providers such as banks, that their
systems will be Year 2000 compliant.  Based on the information received thus
far, the primary third-party service providers with which the Partnership has
relationships have confirmed their Year 2000 readiness.

     The Partnership relies on computers and operating systems provided by
equipment manufacturers, and also on application software designed for use with
its accounting, property management and investment portfolio tracking.  The
Partnership has preliminarily determined that any costs, problems or
uncertainties associated with the potential consequences of Year 2000 issues are
not expected to have a material impact on the future operations or financial
condition of the Partnership.  The Partnership will perform due diligence as to
the Year 2000 readiness of each property owned by the Partnership and each
property contemplated for purchase by the Partnership.

     The Partnership's reliance on embedded computer systems (i.e.,
microcontrollers) is limited to facilities related matters, such as office
security systems and environmental control systems.

  The Partnership is currently formulating contingency plans to cover any areas
of concern.  Alternate means of operating the business are being developed in
the unlikely circumstance that the computer and phone systems are rendered
inoperable.  An off-site facility from which the Partnership could operate is
being sought as well as alternate means of communication with key third-party
vendors.  A written plan is being developed for testing and dispensation to each
staff member of the Advisor of the Partnership.

  Management believes that the Partnership's risk of Year 2000 problems is
minimal.  In the unlikely event there is a problem, the worst case scenarios
would include the risks that the elevator or security systems within the
Partnership's properties would fail or the key third-party vendors upon which
the Partnership relies would be unable to provide accurate investor information.
In the event that the elevator shuts down, the Partnership has devised a plan
for each building whereby the tenants will use the stairs until the elevators
are fixed.  In the event that the security system shuts down, the Partnership
has devised a plan for each building to hire temporary on-site security guards.
In the event that a third-party vendor has Year 2000 problems relating to
investor information, the Partnership intends to perform a full system back-up
of all investor information as of December 31, 1999 so that the Partnership will
have accurate hard-copy investor information.


                                       18
<PAGE>
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-----------------------------------------------------

The Financial Statements of the Registrant and supplementary data are detailed
under Item 14(a) and filed as part of the report on the pages indicated.


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

There were no disagreements with the Partnership's accountants or other
reportable events during 1998.


                                    PART III
                                    --------
                                        

ITEM 10.  General Partners of the Partnership.
--------------------------------------------- 


     Wells Partners, L.P.  Wells Partners, L.P. is a private Georgia limited
     --------------------                                                   
partnership formed on October 25, 1990.  The sole General Partner of Wells
Partners, L.P. is Wells Capital, Inc., a Georgia corporation.  The executive
offices of Wells Capital, Inc. are located at 3885 Holcomb Bridge Road,
Norcross, Georgia 30092.


     Leo F. Wells, III.  Mr. Wells is a resident of Atlanta, Georgia, is 55
     -----------------                                                     
years of age and holds a Bachelor of Business Administration Degree in Economics
from the University of Georgia.  Mr. Wells is the President and sole Director of
Capital.  Mr. Wells is the President of Wells & Associates, Inc., a real estate
brokerage and investment company formed in 1976 and incorporated in 1978, for
which he serves as principal broker.  Mr. Wells is also currently the sole
Director and President of Wells Management Company, Inc., a property management
company he founded in 1983.  In addition, Mr. Wells is the President and
Chairman of the Board of Wells Investment Securities, Inc., Wells & Associates,
Inc., and Wells Management Company, Inc. which are affiliates of the General
Partners.  From 1980 to February 1985, Mr. Wells served as vice-president of
Hill-Johnson, Inc., a Georgia corporation engaged in the construction business.
From 1973 to 1976, he was associated with Sax Gaskin Real Estate Company and
from 1970 to 1973, he was a real estate salesman and property manager for Roy D.
Warren & Company, an Atlanta real estate company.

                                       19
<PAGE>
 
Item 11.  COMPENSATION OF GENERAL PARTNERS AND AFFILIATES.
----------------------------------------------------------

The following table summarizes the compensation and fees paid to the General
Partners and their affiliates during the year ended December 31, 1998.


                            CASH COMPENSATION TABLE

          (A)                                (B)              (C)
Name of individual or      Capacities in which served
number in group            -Form of Compensation         Cash Compensation
---------------------      --------------------------    -----------------

Wells Management           Property Manager-               $109,011 (1)
Company, Inc.              Management and Leasing
                           Fees


(1)  The majority of these fees are not paid directly by the Partnership but are
     paid by the joint venture entities which own properties for which the
     property management and leasing services relate and include management and
     leasing fees which were accrued for accounting purposes in 1998 but not
     actually paid until January, 1999.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
-------------------------------------------------------------------------


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

Set forth below is the security ownership of management as of February 28, 1999.
 
     (1)                  (2)                  (3)                (4)
Title of Class    Name and Address of    Amount and Nature   Percent of Class
                  Beneficial Owner       of Beneficial
                                         Ownership   
--------------    -------------------    -----------------   ----------------
 
Class A Units     Leo F. Wells, III     508.82 units (IRA,     less than 1%
                                        401(k) Plan)


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

                                       20
<PAGE>
 
Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
---------------------------------------------------------

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


Interest in Partnership Cash Flow and Net Sale Proceeds.  The General Partners
-------------------------------------------------------                       
will receive a subordinated participation in net cash flow from operations equal
to 10% of net cash flow after the Limited Partners have received preferential
distributions equal to 10% of their adjusted capital contribution.  The General
Partners will also receive a subordinated participation in net sale proceeds and
net financing proceeds equal to 20% of residual proceeds available for
distribution after the Limited Partners holding Class B Units have received a
return of their adjusted capital contribution plus a 15% cumulative return on
their adjusted capital contribution; provided, however, that in no event shall
the General Partners receive in the aggregate in excess of 15% of net sale
proceeds and net financing proceeds remaining after payments to Limited Partners
from such proceeds of amounts equal to the sum of their adjusted capital
contributions plus a 6% cumulative return on their adjusted capital
contributions.  The General Partners have received no distribution from cash
flow or net sales proceeds in 1998.


Property Management and Leasing Fees.  Wells Management Company, Inc., an
------------------------------------                                     
affiliate of the General Partners, will receive compensation for supervising the
management of the Partnership properties equal to the lesser of: (A)(i) 3% of
gross revenues for management and 3% of the gross revenues for leasing
(aggregate maximum of 6%) plus a separate one-time fee for initial rent-up or
leasing-up of newly constructed properties in an amount not to exceed the fee
customarily charged in arm's length transactions by others rendering similar
services in the same geographic area for similar properties; and (ii) in the
case of industrial and commercial properties which are leased on a long-term
basis (ten or more years), 1% of the gross revenues except for initial leasing
fees equal to 3% of the gross revenues over the first five years of the lease
term; or (B) the amounts charged by unaffiliated persons rendering comparable
services in the same geographic area.  Wells Management Company, Inc. received
$109,011 in cash compensation for the year ended December 31, 1998.


Real Estate Commissions.  In connection with the sale of Partnership properties,
-----------------------                                                         
the General Partners or their affiliates may receive commissions not exceeding
the lesser of (A) 50% of the commissions customarily charged by other brokers in
arm's-length transactions involving comparable properties in the same geographic
area or (B) 3% of the gross sales price of the property, and provided that
payments of such commissions will be made only after Limited Partners have
received prior distributions totaling 100% of their capital contributions plus a
6% cumulative return on their adjusted capital contributions.  During 1998, no
real estate commissions were paid to the General Partners or their affiliates.

                                       21
<PAGE>
 
                                    PART IV
                                    -------
                                        

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
--------------------------------------------------------------------------



(a)1.   The Financial Statements are contained on pages F-2 through F-32 of this
        Annual Report on Form 10-K, and the list of the Financial Statements
        contained herein is set forth on page F-1, which is hereby incorporated
        by reference.

(a)2.   Financial Statement Schedule III 
        Information with respect to this item begins on Page S-1 of this Annual
        Report on Form 10-K.

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

(b)     No reports on Form 8-K were filed with the Commission during the fourth
        quarter of 1998.

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

(d)     See (a) 2.

                                       22
<PAGE>
 
                       INDEX TO THE FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
 
 
Financial Statements                                                    Page
--------------------                                                    ----
<S>                                                                     <C>
 
Independent Auditors' Reports                                           F-2
 
Balance Sheets as of December 31, 1998 and 1997                         F-3
 
Statements of Income for the Years Ended December
   31, 1998, 1997 and 1996                                              F-4
 
Statements of Partners' Capital for the Years Ended
   December 31, 1998, 1997 and 1996                                     F-5
 
Statements of Cash Flows for the Years Ended
   December 31, 1998, 1997, 1996                                        F-6
 
Notes to Financial Statements for December 31, 1998
   1997 and 1996                                                        F-7
 
Audited Financial Statements - The Hartford Building                    F-26
 
</TABLE>

                                      F-1
<PAGE>
 
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



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

We have audited the accompanying balance sheets of WELLS REAL ESTATE FUND V,
L.P. (a Georgia public limited partnership) as of December 31, 1998 and 1997 and
the related statements of income, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1998.  These financial
statements and the schedule referred to below are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wells Real Estate Fund V, L.P.
as of December 31, 1998 and 1997 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1998 in
conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole.  Schedule III--Real Estate Investments
and Accumulated Depreciation as of December 31, 1998 is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements.  This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.



ARTHUR ANDERSEN LLP



Atlanta, Georgia
January 27, 1999

                                      F-2
<PAGE>
 
                         WELLS REAL ESTATE FUND V, L.P.

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)


                                 BALANCE SHEETS

                           DECEMBER 31, 1998 AND 1997



                                     ASSETS

<TABLE>
<CAPTION>
                                                    1998                1997
                                                -----------         ------------
<S>                                              <C>                <C>
INVESTMENT IN JOINT VENTURES                    $12,673,831         $13,189,076
                                           
CASH AND CASH EQUIVALENTS                            63,998              91,678
                                           
DUE FROM AFFILIATES                                 300,674             305,710
                                                -----------         -----------
       Total assets                             $13,038,503         $13,586,464
                                                ===========         ===========
                                           
                     LIABILITIES AND PARTNERS' CAPITAL          
                                           
LIABILITIES:                               
 Accounts payable and accrued expenses          $     4,274         $         0
 Partnership distributions payable                  273,916             288,518
                                                -----------         -----------
       Total liabilities                            278,190             288,518
                                                -----------         -----------
COMMITMENTS AND CONTINGENCIES              
                                           
PARTNERS' CAPITAL:                         
 Limited partners:                         
   Class A                                       12,760,313          13,297,946
   Class B                                                0                   0
                                                -----------         -----------
       Total partners' capital                   12,760,313          13,297,946
                                                -----------         -----------
       Total liabilities and partners' capital  $13,038,503         $13,586,464
                                                ===========         ===========
</TABLE>


      The accompanying notes are an integral part of these balance sheets.

                                      F-3
<PAGE>
 
                         WELLS REAL ESTATE FUND V, L.P.

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)


                              STATEMENTS OF INCOME

             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996



<TABLE>
<CAPTION>
                                                                  1998            1997              1996
                                                                ---------       --------         --------- 
<S>                                                             <C>             <C>             <C>
REVENUES:
 Equity in income of joint ventures                             $703,515        $623,249       $  577,128
 Interest income                                                   4,749           9,998           13,711
                                                                --------        --------       ----------
                                                                 708,264         633,247          590,839
                                                                --------        --------       ----------
EXPENSES:
 Partnership administration                                       60,292          42,496           50,578
 Legal and accounting                                             17,900          20,937           23,719
 Amortization of organization costs                                    0           1,042            6,250
 Computer costs                                                    7,966           8,971            4,642
                                                                --------        --------       ----------
                                                                  86,158          73,446           85,189
                                                                --------        --------       ----------
NET INCOME                                                      $622,106        $559,801         $505,650
                                                                ========        ========       ========== 

NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS                $622,106        $559,801       $1,095,296
                                                                ========        ========       ==========  
NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS                  $      0        $      0       $ (589,646)  
                                                                ========        ========       ========== 
 
NET INCOME PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT    $   0.40        $   0.36       $     0.71
                                                                ========        ========       ========== 
 
NET LOSS PER WEIGHTED AVERAGE CLASS B LIMITED PARTNER UNIT      $   0.00        $   0.00       $    (3.78)
                                                                ========        ========       ========== 
 
CASH DISTRIBUTION PER WEIGHTED AVERAGE CLASS A LIMITED
 PARTNER UNIT                                                   $   0.75        $   0.71       $     0.65
                                                                ========        ========       ========== 
 
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-4
<PAGE>
 
                         WELLS REAL ESTATE FUND V, L.P.

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)


                        STATEMENTS OF PARTNERS' CAPITAL

             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996




<TABLE>
<CAPTION>
                                                                Limited Partners              
                                                  --------------------------------------------
                                                          Class A                Class B            Total
                                                  ----------------------   -------------------     Partners' 
                                                    Units       Amount      Units      Amount      Capital
                                                  ---------  -----------   -------   ---------   ----------- 
<S>                                               <C>        <C>           <C>       <C>         <C>
BALANCE, DECEMBER 31, 1995                        1,541,017  $13,736,181   159,585   $ 604,978   $14,341,159
 
 Net income (loss)                                        0    1,095,296         0    (589,646)      505,650
 PARTNERSHIP DISTRIBUTIONS                                0   (1,006,239)        0           0    (1,006,239)
 Class B conversion elections                         5,399       15,332    (5,399)    (15,332)            0
                                                  ---------   ----------   -------   ---------   ------------
BALANCE, DECEMBER 31, 1996                        1,546,416   13,840,570   154,186           0    13,840,570
 
 Net income                                               0      559,801         0           0       559,801
 PARTNERSHIP DISTRIBUTIONS                                0   (1,102,425)        0           0    (1,102,425)
 Class B conversion elections                         5,000            0    (5,000)          0             0
                                                  ---------   ----------   -------   ---------   -----------
BALANCE, DECEMBER 31, 1997                        1,551,416   13,297,946   149,186           0    13,297,946
 
 Net income                                               0      622,106         0           0       622,106
 CLASS B CONVERSION ELECTIONS                         7,605            0    (7,605)          0             0
 PARTNERSHIP DISTRIBUTIONS                                0   (1,159,739)        0           0    (1,159,739)
                                                  ---------   ----------   -------   ---------   -----------
BALANCE, DECEMBER 31, 1998                        1,559,021  $12,760,313   141,581   $       0   $12,760,313
                                                  =========  ===========   =======   =========   ===========
</TABLE>



        The accompanying notes are an integral part of these statements.

                                      F-5
<PAGE>
 
                         WELLS REAL ESTATE FUND V, L.P.

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)


                            STATEMENTS OF CASH FLOWS

             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996



<TABLE>
<CAPTION>
                                                                                   1998          1997          1996
                                                                                -----------  -----------   -----------
<S>                                                                            <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                    $   622,106   $   559,801   $   505,650
                                                                               -----------   -----------   -----------
 Adjustments to reconcile net income to net cash used in operating
  activities:
     Equity in income of joint ventures                                           (703,515)     (623,249)     (577,128)
     Amortization of organization costs                                                  0         1,042         6,250
     Changes in assets and liabilities:
       Other assets                                                                      0           350             0
       Accounts payable and accrued expenses                                         4,274        (4,500)         (500)
                                                                               -----------   -----------   -----------
         Total adjustments                                                        (699,241)     (626,357)     (571,378)
                                                                               -----------   -----------   -----------
         Net cash used in operating activities                                     (77,135)      (66,556)      (65,728)
                                                                               -----------   -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Investment in joint ventures                                                      (19,270)     (154,131)         (225)
 Distributions received from joint ventures                                      1,243,066     1,121,000     1,072,835
                                                                               -----------   -----------   -----------
         Net cash provided by investing activities                               1,223,796       966,869     1,072,610
                                                                               -----------   -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Distributions to partners from accumulated earnings                            (1,174,341)   (1,060,918)   (1,010,779)
                                                                               -----------   -----------   -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                          (27,680)     (160,605)       (3,897)
                                                                               -----------   -----------   -----------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                        91,678       252,283       256,180
                                                                               -----------   -----------   -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                                         $    63,998   $    91,678   $   252,283
                                                                               ===========   ===========   ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
   Deferred project costs contributed to joint venture                         $         0   $     5,843   $         0
                                                                               ===========   ===========   ===========
</TABLE>



        The accompanying notes are an integral part of these statements.

                                      F-6
<PAGE>
 
                         WELLS REAL ESTATE FUND V, L.P.


                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)



                         NOTES TO FINANCIAL STATEMENTS


                       DECEMBER 31, 1998, 1997, AND 1996

 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Organization and Business

    Wells Real Estate Fund V, L.P. (the "Partnership") is a public limited
    partnership organized on October 25, 1990 under the laws of the state of
    Georgia. The general partners are Leo F. Wells, III and Wells Partners, L.P.
    ("Wells Partners"), a Georgia nonpublic limited partnership. The Partnership
    has two classes of limited partnership interests, Class A and Class B units.
    Class B limited partners shall have a one-time right to elect to have all of
    their units treated as Class A units. Limited partners may vote to, among
    other things, (a) amend the partnership agreement, subject to certain
    limitations, (b) change the business purpose or investment objectives of the
    Partnership, and (c) remove a general partner. A majority vote on any of the
    above described matters will bind the Partnership, without the concurrence
    of the general partners. Each limited partnership unit has equal voting
    rights, regardless of class.

    The Partnership was formed to acquire and operate commercial real
    properties, including properties which are to be developed, are currently
    under development or construction, are newly constructed, or have operating
    histories. The Partnership owns an interest in the following properties
    through joint ventures between the Partnership and other Wells Real Estate
    Funds: (i) the Jacksonville IBM Building, a four-story office building
    located in Jacksonville, Florida, (ii) the Medical Center Project, two
    substantially identical two-story buildings located in Clayton County,
    Georgia, (iii) the Stockbridge Village II property, two retail buildings
    located in Clayton County, Georgia, (iv) the Hartford Building, a four-story
    office building located in Southington, Connecticut, and (v) the Marathon
    Building, a three-story office building located in Appleton, Wisconsin.

    Use of Estimates and Factors Affecting the Partnership

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and
    assumptions that affect the reported amounts of assets and liabilities and
    disclosure of contingent assets and liabilities at the date of the financial
    statements and the reported amounts of revenues and expenses during the
    reporting period. Actual results could differ from those estimates.

    The carrying values of the real estate assets are based on management's
    current intent to hold the real estate assets as long-term investments. The
    success of the Partnership's future operations and the ability to realize
    the investment in its assets will be dependent on the Partnership's ability
    to maintain rental rates, occupancy, and an appropriate level of operating
    expenses in future years. Management believes that the steps it is taking
    will enable the Partnership to realize its investment in its assets.

                                      F-7
<PAGE>
 
   Income Taxes

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

   Distribution of Net Cash From Operations

   Cash available for distribution, as defined by the partnership agreement, is
   distributed to limited partners quarterly.  In accordance with the
   partnership agreement, distributions are paid first to limited partners
   holding Class A units until they have received a 10% per annum return on
   their adjusted capital contributions, as defined.  Cash available for
   distribution is then paid first to the general partners until they have
   received an amount equal to 10% of distributions.  Any remaining cash
   available for distribution is split between the limited partners holding
   Class A units and the general partners on a basis of 90% and 10%,
   respectively.  No distributions will be made to the limited partners holding
   Class B units.

   Distribution of Sales Proceeds

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

        .  To limited partners on a per unit basis until all limited partners
           have received 100% of their adjusted capital contributions, as
           defined

        .  To limited partners holding Class B units on a per unit basis until
           they receive an amount equal to the net cash available for
           distribution received by the limited partners holding Class A units

        .  To all limited partners on a per unit basis until they receive a
           cumulative 10% per annum return on their adjusted capital
           contributions, as defined

        .  To limited partners holding Class B units on a per unit basis until
           they receive a cumulative 15% per annum return on their adjusted
           capital contributions, as defined

        .  To all limited partners until they receive an amount equal to their
           respective cumulative distributions, as defined

        .  To all the general partners until they have received 100% of their
           capital contribution, as defined

        .  Thereafter, 80% to the limited partners and 20% to the general
           partners

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

   Net income is defined as net income recognized by the Partnership, excluding
   deductions for depreciation and amortization.  Net income, as defined, of the
   Partnership will be allocated each year in the same proportions that net cash
   from operations is distributed to the partners.  To the extent the
   Partnership's net income in any year exceeds net cash from operations, it
   will be allocated 99% to the limited partners and 1% to the general partners.

                                      F-8
<PAGE>
 
   Net loss, depreciation, and amortization deductions for each fiscal year will
   be allocated as follows:  (a) 99% to the limited partners holding Class B
   units and 1% to the general partners until their capital accounts are reduced
   to zero, (b) then to any partner having a positive balance in his capital
   account in an amount not to exceed such positive balance, and (c) thereafter
   to the general partners.

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

   Investment in Joint Ventures

   Basis of Presentation.  The Partnership does not have control over the
   operations of the joint ventures; however, it does exercise significant
   influence.  Accordingly, investments in joint ventures are recorded using the
   equity method of accounting.

   Real Estate Assets.  Real estate assets held by the joint ventures are stated
   at cost less accumulated depreciation.  Major improvements and betterments
   are capitalized when they extend the useful life of the related asset.  All
   repairs and maintenance are expensed as incurred.

   Management continually monitors events and changes in circumstances which
   could indicate that carrying amounts of real estate assets may not be
   recoverable.  When events or changes in circumstances are present which
   indicate that the carrying amounts of real estate assets may not be
   recoverable, management assesses the recoverability of real estate assets by
   determining whether the carrying value of such real estate assets will be
   recovered through the future cash flows expected from the use of the asset
   and its eventual disposition.  Management has determined that there has been
   no impairment in the carrying value of real estate assets held by the joint
   ventures as of December 31, 1998.

   Depreciation for buildings and improvements is calculated using the straight-
   line method over 25 years.

   Revenue Recognition.  All leases on real estate assets held by the joint
   ventures are classified as operating leases, and the related rental income is
   recognized on a straight-line basis over the terms of the respective leases.

   Partners' Distributions and Allocations of Profit and Loss.  Cash available
   for distribution and allocations of profit and loss to the Partnership by the
   joint ventures are made in accordance with the terms of the individual joint
   venture agreements.  Generally, these items are allocated in proportion to
   the partners' respective ownership interests.  Cash is paid from the joint
   ventures to the Partnership quarterly.

   Deferred Lease Acquisition Costs.  Costs incurred to procure operating leases
   are capitalized and amortized on a straight-line basis over the terms of the
   related leases.

                                      F-9
<PAGE>
 
    Cash and Cash Equivalents

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

    Per Unit Data

    Net income (loss) per unit with respect to the Partnership for the years
    ended December 31, 1998, 1997, and 1996 is computed based on the average
    number of units outstanding during the period.

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

 2. RELATED-PARTY TRANSACTIONS

    Due from affiliates at December 31, 1998 and 1997 represents the
    Partnership's share of cash to be distributed from its joint venture
    investments for the fourth quarters of 1998 and 1997, as follows:

<TABLE>
<CAPTION>
                                                 1998            1997
                                               --------        --------
  <S>                                          <C>             <C>
  Fund IV and V Associates                     $154,358        $144,088
  Fund V and VI Associates                      107,472         123,561
  Fund V, VI, and VII Associates                 38,844          38,061
                                               --------        --------
                                               $300,674        $305,710
                                               ========        ========
</TABLE>

    The Partnership entered into a property management agreement with Wells
    Management Company, Inc. ("Wells Management"), an affiliate of the general
    partners. In consideration for supervising the management of the
    Partnership's properties, the Partnership will generally pay Wells
    Management management and leasing fees equal to (a) 3% of the gross revenues
    for management and 3% of the gross revenues for leasing (aggregate maximum
    of 6%) plus a separate fee for the one-time initial lease-up of newly
    constructed properties in an amount not to exceed the fee customarily
    charged in arm's-length transactions by others rendering similar services in
    the same geographic area for similar properties or (b) in the case of
    commercial properties which are leased on a long-term net basis (ten or more
    years), 1% of the gross revenues except for initial leasing fees equal to 3%
    of the gross revenues over the first five years of the lease term.

    The Partnership incurred management and leasing fees and lease acquisition
    costs, at the joint venture level, of $109,011, $111,690, and $174,834 for
    the years ended December 31, 1998, 1997, and 1996, respectively, which were
   paid to Wells Management.

    The Company performs certain administrative services for the Partnership,
    such as accounting and other partnership administration, and incurs the
    related expenses.  Such expenses are allocated among the various Wells Real
    Estate Funds based on time spent on each fund by individual administrative
    personnel.  In the opinion of management, such allocation is a reasonable
    estimation of such expenses.

                                      F-10
<PAGE>
 
    The general partners are also general partners of other Wells Real Estate
    Funds. As such, there may exist conflicts of interest where the general
    partners in the capacity as general partners of other Wells Real Estate
    Funds may be in competition with the Partnership for tenants in similar
    geographic markets.

 3. INVESTMENT IN JOINT VENTURES

    The Partnership's investment and percentage ownership in joint ventures at
    December 31, 1998 and 1997 are summarized as follows:

<TABLE>
<CAPTION>
                                                      1998                             1997              
                                          ----------------------------     ---------------------------   
                                             Amount          Percent          Amount          Percent    
                                          -----------      -----------     -----------       ---------   
    <S>                                  <C>                <C>           <C>                <C>         
    Fund IV and V Associates              $ 7,289,167           62%        $ 7,562,885           62%     
    Fund V and VI Associates                4,159,768           47           4,342,324           47      
    Fund V, VI, and VII Associates          1,224,896           16           1,283,867           16      
                                          -----------                      -----------                   
                                          $12,673,831                      $13,189,076                   
                                          ===========                      ===========                    
</TABLE>

   The following is a rollforward of the Partnership's investment in the joint
   ventures for the years ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                               1998                1997    
                                                          ------------        ------------ 
    <S>                                                   <C>                  <C>         
    Investment in joint ventures, beginning of year        $13,189,076         $13,573,803 
    Equity in income of joint ventures                         703,515             623,249 
    Contributions to joint ventures                             19,270             159,974 
    Distributions from joint ventures                       (1,238,030)         (1,167,950)
                                                           -----------         ----------- 
    Investment in joint ventures, end of year              $12,673,831         $13,189,076 
                                                           ===========         ===========  
</TABLE>

   Fund IV and V Associates


   On April 14, 1992, the Partnership entered into a joint venture agreement
   with Wells Real Estate Fund IV, L.P.  The joint venture, Fund IV and V
   Associates, was formed for the purpose of investing in commercial real
   properties.  During 1992, Fund IV and V Associates purchased a parcel of land
   on which the Medical Center Project was developed.  During 1992, the joint
   venture also purchased a second parcel of land in Jacksonville, Florida, on
   which the Jacksonville IBM Building was developed.

                                      F-11
<PAGE>
 
   Following are the financial statements of Fund IV and V Associates:

                            Fund IV and V Associates
                           (A Georgia Joint Venture)
                                 Balance Sheets
                           December 31, 1998 and 1997

                                     Assets
<TABLE>
<CAPTION>
                                                                              1998               1997
                                                                          -----------        ------------
<S>                                                                 <C>                <C>
Real estate assets, at cost:
 Land                                                                     $ 2,011,534        $ 2,011,534
 Building and improvements, less accumulated depreciation of
  $2,184,062 in 1998 and $1,687,871 in 1997                                 9,236,550          9,732,690
 Construction in progress                                                           0                484
                                                                          -----------        -----------
       Total real estate assets                                            11,248,084         11,744,708
Cash and cash equivalents                                                     265,196            214,922
Accounts receivable                                                           364,021            306,264
Prepaid expenses and other assets                                             113,101            126,963
                                                                          -----------        -----------
       Total assets                                                       $11,990,402        $12,392,857
                                                                          ===========        =========== 
 
                                Liabilities and Partners' Capital
 
Liabilities:
 Accounts payable                                                         $    54,732        $    44,374
 Partnership distributions payable                                            222,267            191,134
 Due to affiliates                                                             36,809             30,408
                                                                          -----------        -----------
       Total liabilities                                                      313,808            265,916
                                                                          -----------        -----------
Partners' capital:
 Wells Real Estate Fund IV                                                  4,387,427          4,564,056
 Wells Real Estate Fund V                                                   7,289,167          7,562,885
                                                                          -----------        -----------
       Total partners' capital                                             11,676,594         12,126,941
                                                                          -----------        -----------
       Total liabilities and partners' capital                            $11,990,402        $12,392,857
                                                                          ===========        ===========
</TABLE>

                                      F-12
<PAGE>
 
                            Fund IV and V Associates
                           (A Georgia Joint Venture)
                              Statements of Income
             for the Years Ended December 31, 1998, 1997, and 1996

<TABLE>
<CAPTION>
                                                             1998        1997        1996
                                                          ---------   ---------  ----------
<S>                                                      <C>         <C>         <C>
Revenues:                                            
 Rental income                                           $1,942,336  $1,851,550  $1,883,356
 Interest income                                             12,908       9,193      12,884
 Other income                                                   360         355          98
                                                         ----------  ----------  ----------
                                                          1,955,604   1,861,098   1,896,338
                                                         ----------  ----------  ----------
Expenses:                                            
 Operating costs, net of reimbursements              
                                                            511,595     559,646     650,174
 Depreciation                                               496,191     485,039     476,775
 Management and leasing fees                                253,238     240,214     237,894
 Property administration                                     43,329      45,083      39,894
 Legal and accounting                                        17,363      14,243       9,391
                                                         ----------  ----------  ----------
                                                          1,321,716   1,344,225   1,414,128
                                                         ----------  ----------  ----------
Net income                                               $  633,888  $  516,873  $  482,210
                                                         ==========  ==========  ==========

Net income allocated to Wells Real Estate Fund IV        $  238,478  $  195,580  $  183,841
                                                         ==========  ==========  ==========

Net income allocated to Wells Real Estate Fund V         $  395,410  $  321,293  $  298,369
                                                         ==========  ==========  ==========
</TABLE>

                                      F-13
<PAGE>
 
                            Fund IV and V Associates
                           (A Georgia Joint Venture)
                        Statements of Partners' Capital
             for the Years Ended December 31, 1998, 1997, and 1996

<TABLE>
<CAPTION>
                                                           Wells Real        Wells Real           Total
                                                             Estate            Estate           Partners'
                                                            Fund IV            Fund V            Capital
                                                         -------------     ------------       ------------ 
<S>                                                   <C>               <C>               <C>
Balance, December 31, 1995                                 $4,915,111        $7,976,836         $12,891,947
 Net income                                                   183,841           298,369             482,210
 Partnership contributions                                          0               225                 225
 Partnership distributions                                   (350,676)         (569,136)           (919,812)
                                                           ----------        ----------         -----------
Balance, December 31, 1996                                  4,748,276         7,706,294          12,454,570
 Net income                                                   195,580           321,293             516,873
 Partnership contributions                                          0           159,974             159,974
 Partnership distributions                                   (379,800)         (624,676)         (1,004,476)
                                                           ----------        ----------         -----------
Balance, December 31, 1997                                  4,564,056         7,562,885          12,126,941
 Net income                                                   238,478           395,410             633,888
 Partnership contributions                                          0            19,270              19,270
 Partnership distributions                                   (415,107)         (688,398)         (1,103,505)
                                                           ----------        ----------         -----------
Balance, December 31, 1998                                 $4,387,427        $7,289,167         $11,676,594
                                                           ==========        ==========         ===========
</TABLE>

                                      F-14
<PAGE>
 
                            Fund IV and V Associates
                           (A Georgia Joint Venture)
                            Statements of Cash Flows
             for the Years Ended December 31, 1998, 1997, and 1996

<TABLE>
<CAPTION>
                                                                            1998                1997               1996
                                                                        ------------        ------------        --------- 
<S>                                                               <C>                 <C>                 <C>
Cash flows from operating activities:
 Net income                                                             $   633,888         $   516,873         $ 482,210
                                                                        -----------         -----------         ---------
 Adjustments to reconcile net income to net cash
  provided by operating activities:
     Depreciation                                                           496,191             485,039           476,775
     Changes in assets and liabilities:
       Accounts receivable                                                  (57,757)             (8,789)          (61,965)
       Prepaid expenses and other assets                                     13,862                 613            38,029
       Accounts payable                                                      10,791               4,362             7,796
       Due to affiliates                                                      6,401                 (92)            4,671
                                                                        -----------         -----------         ---------
         Total adjustments                                                  469,488             481,133           465,306
                                                                        -----------         -----------         ---------
         Net cash provided by operating activities                        1,103,376             998,006           947,516
                                                                        -----------         -----------         ---------
Cash flows from investing activities:
 Investment in real estate                                                        0            (167,891)          (21,601)
                                                                        -----------         -----------         ---------
Cash flows from financing activities:
 Contributions from joint venture partners                                   19,270             159,974               225
 Distributions to joint venture partners                                 (1,072,372)         (1,004,995)         (921,658)
                                                                        -----------         -----------         ---------
       Net cash used in financing activities                             (1,053,102)           (845,021)         (921,433)
                                                                        -----------         -----------         ---------
Net increase (decrease) in cash and cash equivalents                         50,274             (14,906)            4,482
Cash and cash equivalents, beginning of year                                214,922             229,828           225,346
                                                                        -----------         -----------         ---------
CASH AND CASH EQUIVALENTS, END OF YEAR                                  $   265,196         $   214,922         $ 229,828
                                                                        ===========         ===========         =========
</TABLE>

   Fund V and VI Associates


   On December 27, 1993, the Partnership entered into a joint venture agreement
   with Wells Real Estate Fund VI, L.P. ("Fund VI").  The joint venture, Fund V
   and VI Associates, was formed for the purpose of investing in commercial real
   properties.  In December 1993, the joint venture purchased a 71,000-square-
   foot, four-story office building known as the Hartford Building in
   Southington, Connecticut.  On June 26, 1994, the Partnership contributed its
   interest in a parcel of land, the Stockbridge Village II property, to the
   joint venture.  The Stockbridge Village II property consists of two separate
   restaurants and began operations during 1995.

                                      F-15
<PAGE>
 
   Following are the financial statements for Fund V and VI Associates:

                            FUND V AND VI ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                                 BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997

                                     Assets

<TABLE>
<CAPTION>
                                                                                1998             1997
                                                                            -----------      ---------- 
<S>                                                                         <C>              <C>
Real estate assets, AT COST:
 Land                                                                       $1,622,733       $1,622,733
 Building and improvements, less accumulated depreciation of
  $1,578,728 in 1998 and $1,184,725 in 1997                                  7,186,970        7,590,973
 Construction in progress                                                        9,763              493
                                                                            ----------      -----------
       Total real estate assets                                              8,819,466        9,214,199
Cash and cash equivalents                                                      213,183          245,298
Accounts receivable                                                             96,830          109,882
Prepaid expenses and other assets                                               49,599           56,002
                                                                            ----------      -----------
       Total assets                                                         $9,179,078       $9,625,381
                                                                            ==========       ==========

                       Liabilities and Partners' Capital

Liabilities:
 Accounts payable                                                           $   16,477       $   17,885
 Partnership distributions payable                                             206,141          265,539
 Due to affiliates                                                               6,809            9,657
                                                                            ----------      -----------
       Total liabilities                                                       229,427          293,081
                                                                            ----------      -----------
Partners' capital:
 Wells Real Estate Fund V                                                    4,159,768        4,342,324
 Wells Real Estate Fund VI                                                   4,789,883        4,989,976
                                                                            ----------      -----------
       Total partners' capital                                               8,949,651        9,332,300
                                                                            ----------      -----------
       Total liabilities and partners' capital                              $9,179,078       $9,625,381
                                                                            ==========      ===========
</TABLE>

                                      F-16
<PAGE>
 
                            FUND V AND VI ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                              STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                             1998        1997        1996
                                                          ---------   ---------  ----------
<S>                                                      <C>         <C>         <C>
Revenues:                                            
 Rental income                                             $953,275    $953,007    $914,128
                                                         ----------  ----------  ----------
Expenses:                                            
 Depreciation                                               394,003     388,387     371,270
 Operating costs, net of reimbursements                      19,566      39,492      49,873
 Management and leasing fees                                 57,368      65,612      48,486
 Legal and accounting                                         9,107      24,941      10,816
 Property administration                                     14,012      10,425      10,655
 Computer costs                                                   0           0       2,820
 Bad debt (recovery) expense                                      0     (22,115)     30,000
                                                           --------    --------    --------
                                                            494,056     506,742     523,920
                                                           --------    --------    --------
Net income                                                 $459,219    $446,265    $390,208
                                                           ========    ========    ========

Net income allocated to Wells Real Estate Fund V           $213,630    $208,783    $185,438
                                                           ========    ========    ========

Net income allocated to Wells Real Estate Fund VI          $245,589    $237,482    $204,770
                                                           ========    ========    ========
</TABLE>

                                      F-17
<PAGE>
 
                            FUND V AND VI ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                        STATEMENTS OF PARTNERS' CAPITAL
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                             Wells Real       Wells Real          Total
                                                               Estate           Estate          Partners'
                                                               Fund V           Fund VI          Capital
                                                            ----------       ------------      ----------- 
<S>                                                    <C>               <C>               <C>
Balance, December 31, 1995                                  $4,699,427        $5,181,922        $9,881,349
 Net income                                                    185,438           204,770           390,208
 Partnership contributions                                           0            18,130            18,130
 Partnership distributions                                    (360,946)         (398,586)         (759,532)
                                                            ----------        ----------        ----------
Balance, December 31, 1996                                   4,523,919         5,006,236         9,530,155
 Net income                                                    208,783           237,482           446,265
 Partnership contributions                                           0           190,197           190,197
 Partnership distributions                                    (390,378)         (443,939)         (834,317)
                                                            ----------        ----------        ----------
Balance, December 31, 1997                                   4,342,324         4,989,976         9,332,300
 Net income                                                    213,630           245,589           459,219
 Partnership contributions                                           0             9,762             9,762
 Partnership distributions                                    (396,186)         (455,444)         (851,630)
                                                            ----------        ----------        ----------
Balance, December 31, 1998                                  $4,159,768        $4,789,883        $8,949,651
                                                            ==========        ==========        ==========
</TABLE>

                                      F-18
<PAGE>
 
                            FUND V AND VI ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                            STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                                               1998              1997              1996
                                                                            ----------        ----------       ---------- 
<S>                                                                         <C>               <C>               <C>
Cash flows from operating activities:
 Net income                                                                 $ 459,219         $ 446,265         $ 390,208
                                                                            ---------         ---------         ---------
 Adjustments to reconcile net income to net cash provided by
  operating activities:
     Depreciation                                                             394,003           388,387           371,270
     Changes in assets and liabilities:
       Accounts receivable                                                     13,052            10,140           (23,373)
       Prepaid expenses and other assets                                        6,403            (1,033)          (13,827)
       Accounts payable                                                         9,084            (7,867)           15,752
       Due to affiliates                                                       (2,848)            4,120               799
                                                                            ---------         ---------         ---------
         Total adjustments                                                    419,694           393,747           350,621
                                                                            ---------         ---------         ---------
         Net cash provided by operating activities                            878,913           840,012           740,829
                                                                            ---------         ---------         ---------
Cash flows from investing activities:
 Investment in real estate                                                          0          (185,123)          (10,807)
                                                                            ---------         ---------         ---------
Cash flows from financing activities:
 Contributions from joint venture partners                                          0           190,197            18,130
 Distributions to joint venture partners                                     (911,028)         (757,231)         (774,404)
                                                                            ---------         ---------         ---------
         Net cash used in financing activities                               (911,028)         (567,034)         (756,274)
                                                                            ---------         ---------         ---------
Net (decrease) increase in cash and cash equivalents                          (32,115)           87,855           (26,252)
Cash and cash equivalents, beginning of year                                  245,298           157,443           183,695
                                                                            ---------         ---------         ---------
Cash and cash equivalents, end of year                                      $ 213,183         $ 245,298         $ 157,443
                                                                            =========         =========         =========
</TABLE>

Fund V, VI, and VII Associates


On September 8, 1994, the Partnership entered into a joint venture agreement
with Fund VI and Wells Real Estate Fund VII, L.P.  The joint venture, Fund V,
VI, and VII Associates, was formed for the purpose of investing in commercial
real properties.  In September 1994, Fund V, VI, and VII Associates purchased
a 75,000-square-foot, three-story office building known as the Marathon
Building in Appleton, Wisconsin.

                                      F-19
<PAGE>
 
   Following are the financial statements for Fund V, VI, and VII Associates:

                         FUND V, VI, AND VII ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                                 BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997

                                     Assets

<TABLE>
<CAPTION>
                                                                               1998             1997          
                                                                            ----------       ----------
<S>                                                                         <C>              <C>                
Real estate assets, AT COST:                                                                               
 Land                                                                       $  314,591       $  314,591    
 Building and improvements, less accumulated depreciation of                                               
  $1,356,199 in 1998 and $1,005,614 in 1997                                                                
                                                                             7,011,705        7,362,290    
                                                                            ----------       ----------
       Total real estate assets                                              7,326,296        7,676,881    
Cash and cash equivalents                                                      235,991          231,232    
Accounts receivable                                                            121,594          130,577    
                                                                            ----------       ----------
       Total assets                                                         $7,683,881       $8,038,690    
                                                                            ==========       ==========

                       Liabilities and Partners' Capital

Liabilities:
 Partnership distributions payable                                          $  235,990       $  231,232
 Due to affiliates                                                               4,864            6,166
                                                                            ----------       ----------
       Total liabilities                                                       240,854          237,398
                                                                            ----------       ----------
Partners' capital:
 Wells Real Estate Fund V                                                    1,224,896        1,283,867
 Wells Real Estate Fund VI                                                   3,113,259        3,263,121
 Wells Real Estate Fund VII                                                  3,104,872        3,254,304
                                                                            ----------       ----------
       Total partners' capital                                               7,443,027        7,801,292
                                                                            ----------       ----------
       Total liabilities and partners' capital                              $7,683,881       $8,038,690
                                                                            ==========       ==========
</TABLE>

                                      F-20
<PAGE>
 
                         FUND V, VI, AND VII ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                              STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                               1998       1997       1996
                                                             --------   --------   --------
<S>                                                         <C>        <C>        <C>
Revenues:                                                
 Rental income                                               $971,447   $968,219   $971,017
                                                             --------   --------   --------
Expenses:                                                
 Depreciation                                                 350,585    350,585    350,585
 Management and leasing fees                                   34,632     39,671     38,841
 Legal and accounting                                           3,450      5,690      7,331
 Property administration                                        7,439      3,878      4,641
 Computer costs                                                     0        107      1,410
 Operating costs                                                1,372      2,230      1,254
                                                             --------   --------   --------
                                                              397,478    402,161    404,062
                                                             --------   --------   --------
Net income                                                   $573,969   $566,058   $566,955
                                                             ========   ========   ========

Net income allocated to Wells Real Estate Fund V             $ 94,475   $ 93,173   $ 93,321
                                                             ========   ========   ========
                                                         
Net income allocated to Wells Real Estate FUND VI            $240,091   $236,782   $237,157
                                                             ========   ========   ========
                                                         
Net income allocated to Wells Real Estate FUND VII           $239,403   $236,103   $236,477
                                                             ========   ========   ========
</TABLE>

                         FUND V, VI, AND VII ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                        STATEMENTS OF PARTNERS' CAPITAL
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                 Wells Real         Wells Real         Wells Real           Total
                                   Estate             Estate             Estate           Partners'
                                   Fund V             Fund VI           Fund VII           Capital
                                -----------        -----------        -----------        -----------
<S>                              <C>             <C>                <C>                <C>
Balance, December 31, 1995      $1,391,654         $3,537,044         $3,527,440         $8,456,138
 Net income                         93,321            237,157            236,477            566,955
 Partnership distributions        (141,385)          (359,305)          (358,274)          (858,964)
                                ----------         ----------         ----------         ----------
Balance, December 31, 1996       1,343,590          3,414,896          3,405,643          8,164,129
 Net income                         93,173            236,782            236,103            566,058
 Partnership distributions        (152,896)          (388,557)          (387,442)          (928,895)
                                ----------         ----------         ----------         ----------
Balance, December 31, 1997       1,283,867          3,263,121          3,254,304          7,801,292
 Net income                         94,475            240,091            239,403            573,969
 Partnership distributions        (153,446)          (389,953)          (388,835)          (932,234)
                                ----------         ----------         ----------         ----------
Balance, December 31, 1998      $1,224,896         $3,113,259         $3,104,872         $7,443,027
                                ==========         ==========         ==========         ==========
</TABLE>

                                      F-21
<PAGE>
 
                         FUND V, VI, AND VII ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                            STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                                               1998              1997              1996
                                                                            ----------        ----------        ----------
<S>                                                                   <C>               <C>               <C>
Cash flows from operating activities:
 Net income                                                                 $ 573,969         $ 566,058         $ 566,955
                                                                            ---------         ---------         ---------
 Adjustments to reconcile net income to net cash provided by
  operating activities:
     Depreciation                                                             350,585           350,585           350,585
     Changes in assets and liabilities:
       Accounts receivable                                                      8,983            11,781           (61,017)
       Due to affiliates                                                       (1,302)              471             2,441
                                                                            ---------         ---------         ---------
         Total adjustments                                                    358,266           362,837           292,009
                                                                            ---------         ---------         ---------
         Net cash provided by operating activities
                                                                              932,235           928,895           858,964
Cash flows from financing activities:
 Distributions to joint venture partners                                     (927,476)         (911,808)         (853,946)
                                                                            ---------         ---------         ---------
Net increase in cash and cash equivalents                                       4,759            17,087             5,018
Cash and cash equivalents, BEGINNING OF YEAR                                  231,232           214,145           209,127
                                                                            ---------         ---------         ---------
Cash and cash equivalents, END OF YEAR                                      $ 235,991         $ 231,232         $ 214,145
                                                                            =========         =========         =========
</TABLE>

 4. INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

   The Partnership's income tax basis net income for the years ended December
   31, 1998, 1997, and 1996 is calculated as follows:

<TABLE>
<CAPTION>
                                                                               1998            1997            1996
                                                                            ---------        --------        ---------
<S>                                                                          <C>              <C>              <C>
Financial statement net income                                              $622,106         $559,801         $505,650
Increase (decrease) in net income resulting from:
 Depreciation expense for financial reporting purposes in excess of
  amounts for income tax purposes                                            222,422          211,900          204,394
 Expenses deductible when paid for income tax purposes, accrued for
  financial reporting purposes                                                 3,802              593            3,672
 Rental income accrued for financial reporting purposes in excess
  of amounts for income tax purposes                                         (38,119)          (8,808)         (46,936)
                                                                            --------         --------         --------
Income tax basis net income                                                 $810,211         $763,486         $666,780
                                                                            ========         ========         ========
</TABLE>

                                      F-22
<PAGE>
 
   The Partnership's income tax basis partners' capital at December 31, 1998,
   1997, and 1996 is computed as follows:

<TABLE>
<CAPTION>
                                                                       1998                1997                1996
                                                                   -----------         -----------         -----------
<S>                                                          <C>                 <C>                 <C>
Financial statement partners' capital                              $12,760,313         $13,297,946         $13,840,570
Increase (decrease) in partners' capital resulting from:
   Depreciation expense for financial reporting purposes
    in excess of amounts for income tax purposes                       687,605             465,183             253,283
   Capitalization of syndication costs for income tax
    purposes, which are accounted for as cost of capital
    for financial reporting purposes                                 2,178,700           2,178,700           2,178,700
 
   Accumulated rental income accrued for financial
    reporting purposes in excess of amounts for income tax
    purposes                                                          (282,637)           (244,518)           (235,710)
 
   Accumulated expenses deductible
   when paid for income tax purposes, accrued for
    financial reporting purposes                                        25,986              22,184              21,591
   Partnership's distributions payable                                 273,916             288,518             247,011
                                                                   -----------         -----------         -----------
Income tax basis partners' capital                                 $15,643,883         $16,008,013         $16,305,445
                                                                   ===========         ===========         ===========
</TABLE>

 5. RENTAL INCOME

    The future minimum rental income due from the Partnership's respective
    ownership interests in joint ventures under noncancelable operating leases
    at December 31, 1998 is as follows:

<TABLE>
<CAPTION>


        <S>                                    <C>
        Year ending December 31:                 $1,573,269
        1999                                      1,472,641
        2000                                      1,440,265
        2001                                      1,425,739
        2002                                        897,954
        2003                                        695,937
                                                 ----------
       Thereafter                                $7,505,805
                                                 ==========
</TABLE>

   Three significant tenants contributed approximately 30%, 23%, and 13% of
   rental income, which is included in equity in income of joint ventures for
   the year ended December 31, 1998.  In addition, three significant tenants
   will contribute approximately 40%, 22%, and 17% of future minimum rental
   income.

                                      F-23
<PAGE>
 
   The future minimum rental income due Fund IV and V Associates under
   noncancelable operating leases at December 31, 1998 is as follows:

<TABLE>
<CAPTION>
          Year ending December 31:                                
          <S>                                   <C>               
           1999                                      $1,527,390   
           2000                                       1,344,740   
           2001                                       1,288,923   
           2002                                       1,264,830   
           2003                                         461,742   
          Thereafter                                     16,813   
                                                     ----------
                                                     $5,904,438
                                                     ==========
</TABLE>

   Three significant tenants contributed approximately 54%, 17%, and 13% of
   rental income for the year ended December 31, 1998.  In addition, one
   significant tenant will contribute approximately 82% of future minimum rental
   income.

   The future minimum rental income due Fund V and VI Associates under
   noncancelable operating leases, at December 31, 1998 is as follows:

<TABLE>
<CAPTION>
          Year ending December 31:                            
          <S>                                  <C>            
           1999                                      $1,003,577
           2000                                       1,030,179
           2001                                       1,034,817
           2002                                       1,032,096
           2003                                         965,658
          Thereafter                                    422,679
                                                     ----------
                                                     $5,489,006 
                                                     ==========
</TABLE>

   Two significant tenants contributed approximately 75% and 14% of rental
   income for the year ended December 31, 1998.  In addition, three significant
   tenants will contribute approximately 69%, 16%, and 14% of future minimum
   rental income.

   The future minimum rental income due Fund V, VI, and VII Associates under
   noncancelable operating leases at December 31, 1998 is as follows:

<TABLE>
<CAPTION>
          Year ending December 31:                            
          <S>                                  <C>            
           1999                                      $  980,000
           2000                                         980,000
           2001                                         980,000
           2002                                         990,000
           2003                                         990,000
          Thereafter                                  2,970,000
                                                     ----------
                                                     $7,890,000 
                                                     ==========
</TABLE>

   One tenant contributed 100% of rental income for the year ended December 31,
   1998 and will contribute 100% of future minimum rental income.

                                      F-24
<PAGE>
 
 6. QUARTERLY RESULTS (UNAUDITED)

   Presented below is a summary of the unaudited quarterly financial information
   for the years ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                           1998 Quarters Ended
                                                      -----------------------------------------------------------------
                                                      March 31        June 30           September 30        December 31
                                                      --------        -------           -----------         -----------
<S>                                                   <C>            <C>             <C>                 <C>
Revenues                                              $169,877        $239,997            $142,278           $156,112
Net income                                             152,796         216,868             124,121            128,321
Net income allocated to Class A limited
 partners                                              152,796         216,868             124,121            128,321
Net income per weighted average Class A
 limited partner unit                                 $   0.10        $   0.14            $   0.08           $   0.08
Cash distribution per weighted average Class A
 limited partner unit                                     0.19            0.19                0.19               0.18
 
</TABLE>
<TABLE> 
<CAPTION> 

                                                                           1997 Quarters Ended
                                                      -----------------------------------------------------------------
                                                      March 31        June 30           September 30        December 31
                                                      --------        -------           -----------         -----------
<S>                                                   <C>            <C>             <C>                 <C>
Revenues                                              $165,291        $211,355            $117,987           $138,614
Net income                                             141,108         190,079             106,120            122,494
Net income allocated to Class A limited
 partners                                              141,108         190,079             106,120            122,494
Net income per weighted average Class A
 limited partner unit                                 $   0.09        $   0.12            $   0.07           $   0.08
Cash distribution per weighted average Class A
 limited partner unit                                     0.17            0.18                0.18               0.18
 
</TABLE>

 7. COMMITMENTS AND CONTINGENCIES

    Management, after consultation with legal counsel, is not aware of any
    significant litigation or claims against the Partnership or the Company. In
    the normal course of business, the Partnership or the Company may become
    subject to such litigation or claims.

                                      F-25
<PAGE>
 
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                                        



To Wells Real Estate Fund V, L.P. and
Wells Real Estate Fund VI, L.P.:

We have audited the accompanying balance sheets of THE HARTFORD building as of
December 31, 1998 and 1997 and the related statements of income, partners'
capital, and cash flows for each of the three years in the period ended December
31, 1998.  These financial statements are the responsibility of the building's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Hartford Building as of
December 31, 1998 and 1997 and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles.


ARTHUR ANDERSEN LLP


Atlanta, Georgia
January 27, 1999

                                      F-26
<PAGE>
 
                             THE HARTFORD BUILDING

                                 BALANCE SHEETS

                           DECEMBER 31, 1998 AND 1997


                                     ASSETS
                                        
<TABLE>
<CAPTION>
                                                                               1998             1997
                                                                            ----------       ----------
<S>                                                                         <C>              <C> 
REAL ESTATE ASSETS:
 Land                                                                       $  528,042       $  528,042
 Building and improvements, less accumulated depreciation of
  $1,252,760 in 1998 and $960,729 in 1997                                    5,549,681        5,841,712
                                                                            ----------       ----------
       Total real estate assets                                              6,077,723        6,369,754
 
CASH AND CASH EQUIVALENTS                                                      213,181          245,298
 
ACCOUNTS RECEIVABLE                                                             32,948           39,648
                                                                            ----------       ----------
       Total assets                                                         $6,323,852       $6,654,700
                                                                            ==========       ==========

                       LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES:
 Payable to joint venture partners                                          $  176,828       $  167,970
 Due to affiliate                                                               36,354           78,914
                                                                            ----------       ----------
       Total liabilities                                                       213,182          246,884
                                                                            ----------       ----------
COMMITMENTS AND CONTINGENCIES
 
PARTNERS' CAPITAL:
 Wells Real Estate Fund V, L.P.                                              3,188,522        3,326,547
 Wells Real Estate Fund VI, L.P.                                             2,922,148        3,081,269
                                                                            ----------       ----------
       Total partners' capital                                               6,110,670        6,407,816
                                                                            ----------       ----------
       Total liabilities and partners' capital                              $6,323,852       $6,654,700
                                                                            ==========       ==========
</TABLE>

      The accompanying notes are an integral part of these balance sheets.

                                      F-27
<PAGE>
 
                             THE HARTFORD BUILDING

                              STATEMENTS OF INCOME

             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                                    1998            1997             1996
                                                                  --------        --------         --------
<S>                                                               <C>             <C>              <C> 
REVENUES:
 Rental income                                                    $717,499        $717,499         $717,499
                                                                  --------        --------         --------
EXPENSES:
 Depreciation                                                      292,031         292,031          292,031
 Operating costs, net of reimbursements                              6,030         (19,184)          10,494
 Management and leasing fees                                        27,719          30,189           28,700
 Legal and accounting                                                4,500           9,201            2,044
 Computer costs                                                          0               0            1,410
                                                                  --------        --------         --------
                                                                   330,280         312,237          334,679
                                                                  --------        --------         --------
NET INCOME                                                        $387,219        $405,262         $382,820
                                                                  ========        ========         ========
 
NET INCOME ALLOCATED TO WELLS REAL ESTATE FUND V, L.P.            $180,142        $189,812         $181,919
                                                                  ========        ========         ========
 
NET INCOME ALLOCATED TO WELLS REAL ESTATE FUND VI, L.P.           $207,077        $215,450         $200,901
                                                                  ========        ========         ========
</TABLE>
        The accompanying notes are an integral part of these statements.

                                      F-28
<PAGE>
 
                             THE HARTFORD BUILDING

                        STATEMENTS OF PARTNERS' CAPITAL

             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                          Wells Real          Wells Real            Total
                                            Estate              Estate            Partners'
                                         Fund V, L.P.        Fund VI, L.P.         Capital
                                          ----------           ----------        ----------  
<S>                                   <C>                 <C>                  <C>
BALANCE, DECEMBER 31, 1995                $3,608,074           $3,396,668        $7,004,742
                                 
 Net income                                  181,919              200,901           382,820
 Distributions                              (323,752)            (357,531)         (681,283)
                                          ----------           ----------        ----------  
BALANCE, DECEMBER 31, 1996                 3,466,241            3,240,038         6,706,279
                                 
 Net income                                  189,812              215,450           405,262
 Distributions                              (329,294)            (374,431)         (703,725)
                                          ----------           ----------        ----------  
BALANCE, DECEMBER 31, 1997                 3,326,759            3,081,057         6,407,816
                                 
 Net income                                  180,142              207,077           387,219
 Distributions                              (318,379)            (365,986)         (684,365)
                                          ----------           ----------        ----------  
BALANCE, DECEMBER 31, 1998                $3,188,522           $2,922,148        $6,110,670
                                          ==========           ==========        ========== 
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-29
<PAGE>
 
                             THE HARTFORD BUILDING

                            STATEMENTS OF CASH FLOWS

             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                                                                               1998              1997              1996
                                                                            ---------         ---------         --------- 
<S>                                                                         <C>               <C>               <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                 $ 387,219         $ 405,262         $ 382,820
                                                                            ---------         ---------         --------- 
 Adjustments to reconcile net income to net cash provided by
  operating activities:
     Depreciation                                                             292,031           292,031           292,031
     Changes in assets and liabilities:
       Accounts receivable                                                      6,700             6,700             6,700
       (Due to) received from affiliate                                       (42,560)           90,681           (30,018)
                                                                            ---------         ---------         --------- 
         Total adjustments                                                    256,171           389,412           268,713
                                                                            ---------         ---------         --------- 
         Net cash provided by operating activities                            643,390           794,674           651,533
                                                                            ---------         ---------         --------- 
CASH FLOWS FROM FINANCING ACTIVITIES:
 Distributions to joint venture partners                                     (675,507)         (706,819)         (677,785)
                                                                            ---------         ---------         --------- 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                          (32,117)           87,855           (26,252)
 
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                  245,298           157,443           183,695
                                                                            ---------         ---------         --------- 
CASH AND CASH EQUIVALENTS, END OF YEAR                                      $ 213,181         $ 245,298         $ 157,443
                                                                            =========         =========         =========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-30
<PAGE>
 
                             THE HARTFORD BUILDING

                         NOTES TO FINANCIAL STATEMENTS

                       DECEMBER 31, 1998, 1997, AND 1996

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   Organization and Business

   The Hartford Building ("Hartford") is a four-story office building located in
   Southington, Connecticut.  The building is owned by Fund V and VI Associates,
   a joint venture between Wells Real Estate Fund V, L.P. ("Fund V") and Wells
   Real Estate Fund VI, L.P. ("Fund VI").  Fund V own 46% of Hartford and Fund
   VI owns 54% of Hartford at December 31, 1998 and 1997.  Allocation of net
   income and distributions are made in accordance with ownership percentages.

   Use of Estimates

   The preparation of financial statements in conformity with generally accepted
   accounting principles requires management to make estimates and assumptions
   that affect the reported amounts of assets and liabilities and disclosure of
   contingent assets and liabilities at the date of the financial statements and
   the reported amounts of revenues and expenses during the reporting period.
   Actual results could differ from those estimates.

   Income Taxes

   Hartford is not deemed to be a taxable entity for federal income tax
   purposes.

   Real Estate Assets

   Real estate assets are stated at cost, less accumulated depreciation.  Major
   improvements and betterments are capitalized when they extend the useful life
   of the related asset.  All repairs and maintenance are expensed as incurred.

   Management continually monitors events and changes in circumstances which
   could indicate that carrying amounts of real estate assets may not be
   recoverable.  When events or changes in circumstances are present which
   indicate that the carrying amounts of real estate assets may not be
   recoverable, management assesses the recoverability of real estate assets by
   determining whether the carrying value of such real estate assets will be
   recovered through the future cash flows expected from the use of the asset
   and its eventual disposition.  Management has determined that there has been
   no impairment in the carrying value of Hartford as of December 31, 1998.

   Depreciation is calculated using the straight-line method over 25 years.

                                      F-31
<PAGE>
 
   Revenue Recognition

   The lease on Hartford is classified as an operating lease, and the related
   rental income is recognized on a straight-line basis over the terms of the
   lease.

   Deferred Lease Acquisition Costs

   Costs incurred to procure operating leases are capitalized and amortized on a
   straight-line basis over the terms of the related leases.

   Cash and Cash Equivalents

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

2. RENTAL INCOME

   The future minimum rental income due Hartford under noncancelable operating
   leases at December 31, 1998 is as follows:

                     Year ending December 31:
                         1999                          $  724,200
                         2000                             724,200
                         2001                             724,200
                         2002                             724,200
                       Thereafter                         663,850
                                                       ----------
                                                       $3,560,650
                                                       ==========

   One tenant contributed 100% of rental income for the year ended December 31,
   1998 and represents 100% of the future minimum rental income above.

3. RELATED-PARTY TRANSACTIONS

   Fund V and Fund VI entered into a property management agreement with Wells
   Management Company, Inc. ("Wells Management"), an affiliate of Fund V and
   Fund VI.  In consideration for supervising the management of Hartford, Fund V
   and Fund VI will generally pay Wells Management management and leasing fees
   equal to (a) 3% of the gross revenues for management and 3% of the gross
   revenues for leasing (aggregate maximum of 6%) plus a separate fee for the
   one-time initial lease-up of newly constructed properties in an amount not to
   exceed the fee customarily charged in arm's-length transactions by others
   rendering similar services in the same geographic area for similar properties
   or (b) in the case of commercial properties which are leased on a long-term
   net basis (ten or more years), 1% of the gross revenues except for initial
   leasing fees equal to 3% of the gross revenues over the first five years of
   the lease term.

   Hartford incurred management and leasing fees of $27,719, $30,189, and
   $28,700 for the years ended December 31, 1998, 1997, and 1996, respectively,
   which were paid to Wells Management.

                                      F-32
<PAGE>
 
                         WELLS REAL ESTATE FUND V, L.P.

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)


       SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

                               DECEMBER 31, 1998




<TABLE>
<CAPTION>
                                                       Initial Cost
                                                --------------------------         Costs of
                                                             Buildings and       Capitalized
       Description              Encumbrances        Land     Improvements        Improvements
       -----------              ------------        ----     -------------       ------------
<S>                               <C>           <C>           <C>            <C>
MEDICAL CENTER PROJECT (A)          None        $  479,386    $         0         $ 3,949,942

JACKSONVILLE IBM BUILDING (B)       None         1,384,751              0           7,618,067

HARTFORD BUILDING (C)               None           528,042      6,775,574              26,867

STOCKBRIDGE VILLAGE II (D)          None         1,095,219              0           1,972,492

MARATHON BUILDING (E)               None           314,591      8,367,904                   0
                                                ----------    -----------         -----------
       Total                                    $3,801,989    $15,143,478         $13,567,368
                                                ==========    ===========         ===========
</TABLE> 

<TABLE> 
<CAPTION> 
                                                             Gross Amount at Which Carried at December 31, 1998
                                       --------------------------------------------------------------------------------------
                                                    Buildings and     Construction                 Accumulated     Date of
                                          Land       Improvements     in Progress       Total      Depreciation  Construction
                                       ----------   -------------     ------------  -----------    ------------  ------------
<S>                                    <C>          <C>               <C>           <C>            <C>           <C>
MEDICAL CENTER PROJECT (A)             $  512,344    $ 3,916,984          $    0    $ 4,429,328    $  658,566          1992

JACKSONVILLE IBM BUILDING (B)           1,499,190      7,503,628               0      9,002,818     1,451,908          1992

HARTFORD BUILDING (C)                     528,042      6,802,441               0      7,330,483     1,252,760          1981

STOCKBRIDGE VILLAGE II (D)              1,094,691      1,963,257           9,763      3,067,711       325,968          1994

MARATHON BUILDING (E)                     314,591      8,367,904               0      8,682,495     1,356,199          1991
                                       ----------    -----------          ------    -----------    ----------
       Total                           $3,948,858    $28,554,214          $9,763    $32,512,835    $5,045,401
                                       ==========    ===========          ======    ===========    ==========
</TABLE> 


<TABLE> 
<CAPTION> 
                                                    Life on Which
                                        Date        Depreciation
                                      Acquired     Is Computed (f)
                                     ---------    ----------------
<S>                                  <C>           <C>
MEDICAL CENTER PROJECT (A)           09/14/92      20 to 25 years

JACKSONVILLE IBM BUILDING (B)        06/08/92      20 to 25 years

HARTFORD BUILDING (C)                12/29/93      20 to 25 years

STOCKBRIDGE VILLAGE II (D)           11/12/93      20 to 25 years

MARATHON BUILDING (E)                09/16/94      20 to 25 years
       Total
</TABLE> 


(a) The Medical Center Project consists of a 17,847-are-foot medical building
    completed in March 1993 a nearly identical medical office building completed
    in April 1994. It is owned by Fund IV and V Associates. The Partnership
    owned a 62% interest in Fund IV and V Associates at December 31, 1998.

(b) The Jacksonville IBM Building is a four-story, 88,600-square-foot office
    building located in Jacksonville, Florida. It is owned by Fund IV and V
    Associates. The Partnership owned a 62% interest in Fund IV and V Associates
    at December 31, 1998.

(c) The Hartford Building is a four-story, 71,000-square-foot building located
    in Southington, Connecticut. It is owned by Fund V and VI Associates. The
    Partnership owned a 47% interest in Fund V and VI Associates at December 31,
    1998.

(d) Stockbridge Village II consists of two retail buildings located in Clayton
    County, Georgia. It is owned by Fund V and VI Associates. The Partnership
    owned a 47% interest in Fund V and VI Associates at December 31, 1998.

(e) The Marathon Building is a three-story, 75,000-square-foot building located
    in Appleton, Wisconsin. It is owned by a joint venture, Fund V, VI, and VII
    Associates. The Partnership owned a 16% interest in Fund V, VI, and VII
    Associates at December 31, 1998.

(f) Depreciation lives used for buildings were 40 years through September 1995,
    changed to 25 years thereafter. Depreciation lives used for land
    improvements are 20 years.

                                      S-1
<PAGE>
 
                         WELLS REAL ESTATE FUND V, L.P.

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

       SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

                               DECEMBER 31, 1998

                                                               Accumulated
                                                     Cost      Depreciation
                                                 -----------   ------------
BALANCE AT DECEMBER 31, 1996                     $32,160,983     $2,654,198
                                 
 1997 additions                                      353,015      1,224,012
                                                 -----------     ---------- 
BALANCE AT DECEMBER 31, 1997                      32,513,998      3,878,210
                                 
 1998 (deductions) additions                          (1,163)     1,167,191
                                                 -----------     ---------- 
BALANCE AT DECEMBER 31, 1998                     $32,512,835     $5,045,401
                                                 ===========     ========== 
                                      S-2
<PAGE>
 
                                 EXHIBIT INDEX
                                 -------------

                       (Wells Real Estate Fund V, L.P.)

  The following documents are filed as exhibits to this report.  Those exhibits
previously filed and incorporated herein by reference are identified below by an
asterisk.  For each such asterisked exhibit, there is shown below the
description of the previous filing.  Exhibits which are not required for this
report are omitted.
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------
 
*4(a)      Agreement of Limited Partnership of Wells         N/A
           Real Estate Fund V, L.P. (Exhibit 4(a) to
           Registration Statement of Wells Real Estate
           Fund IV, L.P. and Wells Real Estate Fund
           V, L.P., File No. 33-37830)
 
*4(b)      First Amendment to Agreement of Limited           N/A
           Partnership of Wells Real Estate Fund V,
           L.P. (Exhibit 4(e) to Post-Effective
           Amendment No. 6 to Registration Statement
           of Wells Real Estate Fund IV, L.P. and
           Wells Real Estate Fund V, L.P., File
           No. 33-37830)
 
*4(c)      Certificate of Limited Partnership of Wells       N/A
           Real Estate Fund V, L.P. (Exhibit 4(c) to
           Registration Statement of Wells Real Estate
           Fund IV, L.P. and Wells Real Estate Fund V,
           L.P., File No. 33-37830)
 
*10(a)     Management Agreement between Wells Real           N/A
           Estate Fund V, L.P. and Wells Management
           Company, Inc. (Exhibit 10(c) to Registration
           Statement of Wells Real Estate Fund IV, L.P.
           and Wells Real Estate Fund V, L.P., File
           No. 33-37830)
 
*10(b)     Leasing and Tenant Coordinating Agreement         N/A
           between Wells Real Estate Fund V, L.P. and
           Wells Management Company, Inc. (Exhibit 10(b)
           to Registration Statement of Wells Real
           Estate Fund IV, L.P. and Wells Real Estate
           Fund V, L.P., File No. 33-37830)
<PAGE>
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------
 
*10(c)     Custodial Agency Agreement between Wells          N/A
           Real Estate Fund V, L.P. and NationsBank
           of Georgia, N.A. (Exhibit 10(f) to
           Registration Statement of Wells Real
           Estate Fund IV, L.P. and Wells Real
           Estate Fund V, L.P., File No. 33-37830)
 
*10(d)     Fund IV and Fund V Associates Joint Venture       N/A
           Agreement dated April 14, 1992 (Exhibit 10(n)
           to Post-Effective Amendment No. 7 to
           Registration Statement of Wells Real Estate
           Fund IV, L.P. and Wells Real Estate Fund V,
           L.P., File No. 33-37830)
 
*10(e)     Agreement for the Purchase and Sale of Real       N/A
           Property with GL National, Inc. (Exhibit 10(o)
           to Post-Effective Amendment No. 7 to
           Registration Statement of Wells Real Estate
           Fund IV, L.P. and Wells Real Estate Fund V,
           L.P., File No. 33-37830)
 
*10(f)     Lease with International Business Machines        N/A
           Corporation (Exhibit 10(p) to Post-Effective
           Amendment No. 7 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells
           Real Estate Fund V, L.P., File No. 33-37830)
 
*10(g)     Lease with ROLM Company (Exhibit 10(q) to         N/A
           Post-Effective Amendment No. 7 to Registration
           Statement of Wells Real Estate Fund IV, L.P.
           and Wells Real Estate Fund V, L.P., File
           No. 33-37830)
 
*10(h)     Construction Agreement with McDevitt & Street     N/A
           Company (Exhibit 10(r) to Post-Effective
           Amendment No. 7 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells
           Real Estate Fund V, L.P., File No. 33-37830)
<PAGE>
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------
 
*10(i)     Development Agreement with ADEVCO Corporation     N/A
           (Exhibit 10(s) to Post-Effective Amendment
           No. 7 to Registration Statement of Wells
           Real Estate Fund IV, L.P. and Wells Real Estate
           Fund V, L.P., File No. 33-37830)
 
*10(j)     Guaranty of Development Agreement by David M.     N/A
           Kraxberger (Exhibit 10(t) to Post-Effective
           Amendment No. 7 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells
           Real Estate Fund V, L.P., File No. 33-37830)
 
*10(k)     Architect Agreement with Mayes, Sudderth &        N/A
           Etheredge, Inc. (Exhibit 10(u) to Post-
           Effective Amendment No. 7 to Registration
           Statement of Wells Real Estate Fund IV, L.P.
           and Wells Real Estate Fund V, L.P., File
           No. 33-37830)
 
*10(l)     Architect Agreement with Peter C. Sutton,         N/A
           A.I.A. (Exhibit 10(v) to Post-Effective
           Amendment No. 7 to Registration Statement
           of Wells Real Estate Fund IV, L.P. and
           Wells Real Estate Fund V, L.P., File
           No. 33-37830)
 
*10(m)     First Amendment to Joint Venture Agreement        N/A
           of Fund IV and V Associates dated September 9,
           1992 (Exhibit 10(w) to Post-Effective
           Amendment No. 8 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells
           Real Estate Fund V, L.P., File No. 33-37830)
 
*10(n)     Option Agreement for the Purchase and Sale of     N/A
           Real Property (Exhibit 10(x) to Post-Effective
           Amendment No. 8 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells Real
           Estate Fund V, L.P., File No. 33-37830)
<PAGE>
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------
 
*10(o)     First Amendment to Option Agreement for the       N/A
           Purchase and Sale of Real Property (Exhibit
           10(y) to Post-Effective Amendment No. 8 to
           Registration Statement of Wells Real Estate
           Fund IV, L.P. and Wells Real Estate Fund V,
           L.P., File No. 33-37830)
 
*10(p)     Partial Assignment and Assumption of Option       N/A
           Agreement for the Purchase and Sale of Real
           Property (Exhibit 10(z) to Post-Effective
           Amendment No. 8 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells
           Real Estate Fund V, L.P., File No. 33-37830)
 
*10(q)     Lease Agreement with the Executive Committee      N/A
           of the Baptist Convention of the State of
           Georgia, d/b/a Georgia Baptist Health Care
           System (Exhibit 10(aa) to Post-Effective
           Amendment No. 8 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells
           Real Estae Fund V, L.P., File No. 33-37830)
 
*10(r)     Construction Contract with Cecil N. Brown         N/A
           Co., Inc. (Exhibit 10(bb) to Post-Effective
           Amendment No. 8 to Registration Statement of
           Wells Real Estate Fund IV, L.P. and Wells
           Real Estate Fund V, L.P., File No. 33-37830)
 
*10(s)     Agreement for the Purchase and Sale of Real       N/A
           Property with 675 Industrial Park, Ltd.
           dated September 29, 1993 (Exhibit to Form
           10-K of Wells Real Estate Fund V, L.P. for
           the fiscal year ended December 31, 1993,
           File No. 0-21580)
 
*10(t)     Fund V and Fund VI Associates Joint Venture       N/A
           Agreement dated December 27, 1993 (Exhibit
           10(g) to Post-Effective Amendment No. 1 to
           Registration Statement of Wells Real Estate
           Fund VI, L.P. and Wells Real Estate Fund
           VII, L.P., File No. 33-55908)
<PAGE>
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------
 
*10(u)     Sale and Purchase Agreement dated November        N/A
           17, 1993, with Hartford Accident and
           Indemnity Company (Exhibit 10(h) to
           Post-Effective Amendment No. 1 to
           Registration Statement of Wells Real
           Estate Fund VI, L.P. and Wells Real
           Estate Fund VII, L.P., File No. 33-55908)
 
*10(v)     Lease with Hartford Fire Insurance Company        N/A
           December 29, 1993 (Exhibit 10(i) to
           Post-Effective Amendment No. 1 to
           Registration Statement of Wells Real
           Estate Fund VI, L.P. and Wells Real
           Estate Fund VII, L.P., File No. 33-55908)
 
*10(w)     Amended and Restated Custodial Agency             N/A
           Agreement dated April 1, 1994, between
           Wells Real Estate Fund V, L.P. and
           NationsBank of Georgia, N.A. (Exhibit to
           Form 10-K of Wells Real Estate Fund V,
           L.P. for the fiscal year ended December 31,
           1994, File No. 0-21580)
 
*10(x)     First Amendment to Joint Venture Agreement        N/A
           of Fund V and Fund VI Associates dated
           July 1, 1994 (Exhibit to Form 10-K of
           Wells Real Estate Fund V, L.P. for the
           fiscal year ended December 31, 1994,
           File No. 0-21580)
 
*10(y)     Land and Building Lease Agreement dated           N/A
           March 29, 1994, between Apple Restaurants,
           Inc. and NationsBank of Georgia, N.A., as
           Agent for Wells Real Estate Fund V, L.P.
           (Exhibit to Form 10-K of Wells Real Estate
           Fund V, L.P. for the fiscal year ended
           December 31, 1994, File No. 0-21580)
<PAGE>
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------
 
*10(z)     Building Lease Agreement dated September 9,       N/A
           1994, between Glenn's Open-Pit Bar-B-Que,
           Inc. and NationsBank of Georgia, N.A., as
           Agent for Fund V and Fund VI Associates
           (Exhibit to Form 10-K of Wells Real Estate
           Fund V, L.P. for the fiscal year ended
           December 31, 1994, File No. 0-21580)
 
*10(aa)    Joint Venture Agreement of Fund V, Fund VI        N/A
           and Fund VII Associates dated September 
           8, 1994, among Wells Real Estate Fund V, 
           L.P., Wells Real Estate Fund VI, L.P. and 
           Wells Real Estate Fund VII, L.P. (Exhibit 10(j) 
           to Post-Effective Amendment No. 6 to 
           Registration Statement of Wells Real Estate 
           Fund VI, L.P. and Wells Real Estate Fund VII, 
           L.P., File No. 33-55908)

*10(bb)    Agreement for the Purchase and Sale of Property   N/A
           dated August 24, 1994, between Interglobia Inc. 
           - Appleton and NationsBank of Georgia, N.A., as
           Agent for Fund V and Fund VI Associates (Exhibit
           10(k) to Post-Effective Amendment No. 6 to
           Registration Statement of Wells Real Estate
           Fund VI, L.P. and Wells Real Estate Fund VII,
           L.P., File No. 33-55908)

*10(cc)    Assignment and Assumption of Agreement for        N/A
           the Purchase and Sale of Real Property dated
           September 9, 1994, between NationsBank of
           Georgia, N.A., as Agent for Fund V and
           Fund VI Associates, and NationsBank of
           Georgia, N.A., as Agent for Fund V, Fund VI
           and Fund VII Associates (Exhibit 10(l) to
           Post-Effective Amendment No. 6 to Registration
           Statement of Wells Real Estate Fund VI, L.P.
           and Wells Real Estate Fund VII, L.P.,
           File No. 33-55908)
<PAGE>
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------

*10(dd)    Building Lease dated February 14, 1991, between   N/A
           Interglobia Inc. - Appleton and Marathon
           Engineers/Architects/Planners, Inc. (included
           as part of Exhibit D to Exhibit 10(k) to
           Post-Effective Amendment No. 6 to Registration
           Statement of Wells Real Estate Fund VI, L.P.
           and Wells Real Estate Fund VII, L.P.,
           File No. 33-55908)

*10(ee)    Limited Guaranty of Lease dated January 1,        N/A
           1993, by J. P. Finance OY and Fluor
           Daniel, Inc. for the benefit of Interglobia
           Inc. - Appleton (included as Exhibit B to
           Assignment, Assumption and Amendment of
           Lease referred to as Exhibit 10(ff) below,
           which is included as part of Exhibit D to
           Exhibit 10(k) to Post-Effective Amendment
           No. 6 to Registration Statement of Wells
           Real Estate Fund VI, L.P. and Wells Real
           Estate Fund VII, L.P., File No. 33-55908)

*10(ff)    Assignment, Assumption and Amendment of           N/A
           Lease dated January 1, 1993, among
           Interglobia Inc. - Appleton, Marathon
           Engineers/Architects/Planners, Inc. and
           Jaakko Poyry Fluor Daniel (included as
           part of Exhibit D to Exhibit 10(k) to
           Post-Effective Amendment No. 6 to
           Registration Statement of Wells Real
           Estate Fund VI, L.P. and Wells Real
           Estate Fund VII, L.P., File No. 33-55908)
 
*10(gg)    Second Amendment to Building lease dated          N/A
           August 15, 1994, between Interglobia Inc. -
           Appleton and Jaakko Poyry Fluor Daniel
           (successor-in-interest to Marathon
           Engineers/Architects/Planners, Inc.)
           (included as Exhibit D-1 to Exhibit 10(k)
           to Post-Effective Amendment No. 6 to
           Registration Statement of Wells Real
           Estate Fund VI, L.P. and Wells Real
           Estate Fund VII, L.P., File No. 33-55908)
<PAGE>
 
Exhibit                                                      Sequential
Number                 Description of Document               Page Number
-------                -----------------------               -----------

*10(hh)    Assignment and Assumption of Lease dated          N/A
           September 6, 1994, between Interglobia
           Inc. - Appleton and NationsBank of Georgia,
           N.A., as Agent for Fund V, Fund VI and
           Fund VII Associates (Exhibit 10(q) to
           Post-Effective Amendment No. 6 to
           Registration Statement of Wells Real Estate
           Fund VI, L.P. and Wells Real Estate Fund
           VII, L.P., File No. 33-55908)