<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, 1997               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
------------------------
<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, 1997, 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

                                       2
<PAGE>
 
property management, accounting, asset management and investor relations for the
Partnership.  See Item 11 - "Compensation of General Partners and Affiliates"
for a summary of the fees paid to the General Partners and their affiliates
during the fiscal year ended December 31, 1997.

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, 1997, these
properties were 95.22% occupied, a change from 92.15% at December 31, 1996,
92.32% at December 31, 1995, 92.68% at December 31, 1994 and 96.04% at December
31, 1993.



               [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, 1997, 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>
1998              1            5,735            79,647            49,671           2.1%                2.1%
1999              2           26,855           584,286           364,386           9.8%               15.0%
2000              5            8,898           141,169            88,039           3.2%                3.6%
2001              0                -                 -                 -             -                   -
2002              1            1,080            16,692             7,762           0.4%                0.4%
2003(2)           3          141,732         1,802,112         1,010,048          51.7%               46.3%
2004              3            8,764           210,790           110,909           3.2%                5.4%
2005              0                -                 -                 -             -                   -
2006(3)           2           80,969         1,059,373           200,915          29.6%               27.2%
2007              0                -                 -                 -             -                   -
-----------------------------------------------------------------------------------------------------------------
                 17          274,033         3,894,069         1,831,730         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, 1997:

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, 1997, the Partnership had contributed
approximately $7,873,381, 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, 1997, 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 100% in 1997,
1996, 1995 and 1994, and 85% in 1993, the first year of occupancy.  The average
effective annual rental per square foot at the Jacksonville Project was $16.71
for 1997, 1996 and 1995, $16.39 for 1994 and $14.19 for 1993.

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, 1997, the Partnership had contributed $2,911,672, 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.  It is currently
anticipated that an additional approximately $126,000 will be required for the
completion of the Medical Center Project.  The Partnership has reserved $105,000
for this purpose, with any excess cost required to be funded out operating cash
flow.  It is anticipated that, following such additional contribution of funds
by the Partnership, the Partnership will hold approximately 63% equity interest
in the Fund IV - Fund V Joint Venture and that Wells Fund IV will hold an
approximately 37% equity interest.

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,

                                       5
<PAGE>
 
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.

The occupancy rate for  Medical Center Project at year end was 81% in 1997, 67%
in 1996 and 1995, 58% in 1994 and 69% in 1993, the first year of occupancy.  The
average effective annual rental per square foot at the Medical Center Project
was $10.93 for 1997, $11.83 for 1996, $10.43 for 1995, $7.59 for 1994 and $11.25
for 1993.


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, 1997, the Partnership
had contributed approximately $4,544,601, and Wells Fund VI had contributed
approximately $5,311,505  to the Fund V - Fund VI Joint Venture. The Partnership
currently holds an approximately 47% equity interest, and Wells Fund VI holds an
approximately 53% equity interest in the Fund V - Fund VI Joint Venture.  It is
anticipated that Wells Fund VI will fund an additional $60,000 toward the
completion of 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 Indemnity 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 month
installments of $38,200 for the first three months, and $724,200 payable in
equal monthly installments of $60,350 commencing April 1, 1994 and continuing
through the expiration of the initial term of the lease. Hartford also has the
option to extend the initial term of the lease for two consecutive five year
periods. Under the terms of its lease, Hartford is responsible for property

                                       6
<PAGE>
 
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, 1997, 1996, 1995 and 1994.  The average effective annual
rental per square foot at the Hartford Building was $10.11 for 1997, 1996, 1995
and 1994, the first year of ownership.

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 has been  collected in
December, 1997.

The total cost to complete Stockbridge Village II is currently anticipated to be
approximately $2,974,000.  As of December 31, 1997, the Partnership contributed
$1,035,804 and Wells Fund VI had contributed $1,878,798 to the Fund V - Fund VI
Joint Venture for the acquisition and development of Stockbridge Village II.

As of December 31, 1997, the Partnership's equity interest in the Fund V -Fund
VI Joint Venture was approximately 47%.  Although the ultimate percentage of
ownership has not yet been finalized, as set forth above, it is currently
anticipated that the remaining cost of approximately $60,000 to complete the
project will be contributed by Wells Fund VI, in which event, upon completion of
the building funding, the Partnership will own an approximately 46% equity
interest in the Fund V - Fund VI Joint Venture.

The occupancy rate for the Stockbridge Village II Project at year end was 72%
for 1997 and 61% for the years ended December 31, 1996 and 1995.  The average
effective annual rental per square foot at the Stockbridge Village II is $14.88
for 1997, $12.43 for 1996 and $10.41 for 1995, the first year of occupancy.

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

                                       7
<PAGE>
 
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:

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 Partnership owns an approximately
16% equity interest in the Fund V-VI-VII Joint Venture.

The entire Marathon Building is leased to Jaakko Poyry Fluor Daniel for a period
of approximately twelve years, 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 1997,
1996, 1995, and the last three and a half months of 1994.  The average effective
annual rental per square foot in the Marathon Building was $12.74 for 1997,
$12.78 for 1996, 1995 and 1994, the first year of ownership.


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

There were no material pending legal proceedings or proceedings known to be
contemplated by governmental authorities involving the Partnership during 1997.


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 1997.

                                       8
<PAGE>
 
                                    PART II

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

As of February 28, 1998, the Partnership had 1,551,416 outstanding Class A Units
held by a total of 1,598 Limited Partners and 149,186 outstanding Class B Units
held by a total of 77 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, 1997, to be $11.56 per unit based on market
conditions existing in early December, 1997.  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 or any distinction between different Classes of Partnership Units.

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, 1996        $255,698             $0.17      $0.00
     June 30, 1996         $238,363             $0.15      $0.00
     Sept. 30, 1996        $265,182             $0.17      $0.00
     Dec. 31, 1996         $246,996             $0.16      $0.00
     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
</TABLE>

                                       9
<PAGE>
 
The fourth quarter distribution was accrued for accounting purposes in 1997, and
was not actually paid to the limited partners holding Class A units until
February 1998.  Even though there is no guarantee, the General Partners
anticipate that cash distributions to Limited Partners holding Class A units
will continue in 1998 at a level at least comparable with 1997 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, 1993, 1994, 1995, 1996 and 1997.
<TABLE> 
<CAPTION> 

                                                    1997          1996          1995          1994         1993  
                                                 -----------   -----------   -----------  -----------  -----------
<S>                                              <C>  
Total assets                                     $13,586,464   $14,092,081   $14,597,710  $14,875,082  $15,016,459
Total revenues                                       633,247       590,839       764,624      656,958      458,213
Net income                                           559,801       505,650       689,639      561,721      354,999
Net income/(loss) allocated to General Partners            -             -             -       (1,051)         732
Net income allocated to Class A Limited Partners     559,801     1,095,296     1,124,203      879,232      442,135
Net loss allocated to Class B Limited Partners             0      (589,646)     (434,564)    (316,460)     (87,868)
Net income per weighted average (1) Class A
  Limited Partner Unit                                   .36           .71           .73          .58          .29
Net loss per weighted average (1) Class B
  Limited Partner Unit                                     0         (3.78)        (2.72)       (1.78)        (.54)
Cash Distributions per weighted average (1)
Class A Limited Partner Unit:
Investment Income                                        .60           .65           .66          .51          .19
Return of Capital                                        .11           .00           .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 by Limited
Partners in the Partnership.

                                       10
<PAGE>
 
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 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 $633,247 for the year ended December 31,
1997, as compared to $590,839 for the year ended December 31, 1996 and $764,624
for the year ended December 31, 1995. Interest income decreased from 1995 to
1996 and from 1996 to 1997 due to a greater amount of investor funds invested in
interest bearing accounts in 1995 than in 1996 and 1997. Gross revenues and net
income decreased for the year 1996 as compared to 1995 due primarily to
increased depreciation expenses which resulted in decreased equity in income of
joint ventures. Depreciation expense of the joint ventures increased from 1995
as compared to 1996 and 1997 due to a change in the estimated useful lives of
buildings and improvements from 40 years to 25 years which became effective in
the fourth quarter of 1995. For further discussion of depreciation expense,
please refer to the notes to the accompanying financial statements. Gross
revenues and net income increased for the year 1997, as compared to 1996, due
primarily to increased equity in income from the joint ventures.

Expenses of the Partnership decreased to $73,446 for the year ended December 31,
1997 from $85,189 for the year ended December 31, 1996 and $74,985 for the year
ended December 31, 1995, due primarily to fluctuations in legal and accounting
costs and a decrease in partnership administration expenses.

The Partnership made cash distributions to the Limited Partners holding Class A
Units of $.71 per Class A Unit for the year ended December 31, 1997, $.65 per
Class A Unit for the year ended December 31, 1996 and $.66 for the year ended
December 31, 1995.  No cash distributions of investment income were made to the
Limited Partners holding Class B Units.  Distributions accrued for the fourth
quarter of 1997 were paid in February, 1998.

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS") No. 121, "Accounting for the Impairment

                                       11
<PAGE>
 
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, 1997, 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, 1997, the Partnership owned interests through interests in
joint ventures in the following operational properties:


THE JACKSONVILLE PROJECT/FUND IV-FUND V JOINT VENTURE
-----------------------------------------------------
 
                                            For the Year Ended December 31
                                        ------------------------------------
                                           1997          1996        1995
                                        ----------    ----------  ----------
Revenues:
  Rental income                         $1,464,097    $1,463,969  $1,463,821

Expenses
  Depreciation                             318,100       317,252     220,705
  Management & leasing expenses            184,623       183,652     175,888
  Other operating expenses                 431,278       480,241     517,916
                                        ----------    ----------  ----------
                                           934,001       981,145     914,509
                                        ----------    ----------  ----------
Net income                              $  530,096    $  482,824  $  549,312
                                        ==========    ==========  ==========

Occupied %                                     100%          100%        100%

Partnership's Ownership % in the
  Fund IV-Fund V Joint Venture                62.4%         61.9%       61.9%

Cash Distribution to the Partnership      $503,015      $459,672    $469,403

Net Income Allocated to the
  Partnership                             $329,540      $298,749    $339,039

Rental income remained relatively stable in 1997 as compared to 1996 and 1995.
Expenses decreased in 1997 as compared to 1996 due primarily to savings in
various building operating expenses.  Expenses increased due primarily to
depreciation increases in 1997 and 1996 over 1995 due to the change in the
estimated useful lives of buildings and improvements which became effective in
the fourth quarter of 1995, as previously discussed under the "General" section
of "Results of Operations and Changes in Financial Conditions".  Cash
distributions increased in 1997 as compared to 1996 due primarily to an increase
in the Partnership's ownership interest in the project and savings in building

                                       12
<PAGE>
 
operating expenses. Cash fundings to the Joint Venture for construction were
contributed by the Partnership which increased the Partnership's ownership
interest and decreased Wells Fund IV's ownership interest in the Fund IV-Fund V
Joint Venture accordingly. Net income increased in 1997, as compared to 1996 and
1995 levels, due primarily to savings in operating expenses offset by the change
in depreciation method as discussed above.

The Jacksonville Project incurred property taxes of $180,405 for 1997, $172,732
for 1996 and  $149,856 for 1995.

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.

THE MEDICAL CENTER PROJECT/FUND IV-FUND V JOINT VENTURE
-------------------------------------------------------

                                            For the Year Ended December 31
                                        ------------------------------------
                                           1997          1996        1995
                                        ----------    ----------  ----------
Revenues:
  Rental income                         $  387,453    $  419,387  $  369,741
  Interest income                            9,193        12,884      12,974
                                        ----------    ----------  ----------
                                           396,646       432,271     382,715
                                        ----------    ----------  ----------

Expenses
  Depreciation                             166,939       159,523     114,645
  Management & leasing expenses             55,591        54,242      49,638
  Other operating expenses                 187,339       219,120     155,878
                                        ----------    ----------  ----------
                                           409,869       432,885     320,161
                                        ----------    ----------  ----------
Net (loss) income                       $  (13,223)   $     (614) $   62,554
                                        ==========    ==========  ==========

Occupied %                                      81%           67%         67%

Partnership's Ownership % in the
  Fund IV-Fund V Joint Venture                62.4%         61.9%       61.9%

Cash Distribution to the Partnership      $121,661      $109,464    $ 96,590

Net Income Allocated to the
  Partnership                             $ (8,247)     $   (380)   $ 38,630

Rental income increased in 1996 over 1995 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 81% in 1997, as compared to 67%
(on both buildings) in 1996 and 1995.  Expenses decreased in 1997, as compared
to 1996, due primarily to decreased operating expenses and decreased bad debt

                                       13
<PAGE>
 
write off.  Expenses increased in 1996 over 1995 levels due primarily to the
lease up of the buildings and a bad debt write off in 1996.  Depreciation
increased in 1997 and 1996 due to the change in the estimated useful lives of
building and improvements which became effective in the fourth quarter of 1995,
as previously discussed under the "General" section of "Results of Operations
and Changes in Financial Conditions."

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

The Medical Center Project incurred property taxes of $35,691 for 1997, $37,898
for 1996 and $43,303 for 1995.

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.


THE HARTFORD BUILDING - FUND V - FUND VI JOINT VENTURE
------------------------------------------------------

<TABLE>
<CAPTION>
                                                  For the Year Ended December 31
                                      ------------------------------------------------
                                            1997              1996             1995
                                      -------------  ----------------  ---------------
<S>                                   <C>            <C>               <C> 
Revenues:                                                                  
Rental income                             $717,499          $717,499         $717,499
                                          --------          --------         --------
                                                                           
Expenses                                                                   
  Depreciation                             292,030           292,031          199,551
  Management & leasing expenses             30,189            28,700           28,700
  Other operating expenses                  (9,982)           13,948           21,182
                                          --------          --------         --------
                                           312,237           334,679          249,433
                                          --------          --------         --------
                                                                           
Net income                                $405,262          $382,820         $468,066
                                          ========          ========         ========
                                                                           
Occupied %                                     100%              100%             100%
                                                                           
Partnership's Ownership % in the                                           
 Fund V-Fund VI Joint Venture                 46.5%             47.5%            47.6%
                                                                           
Cash Distribution to the Partnership      $329,507          $323,753         $327,595
                                                                           
Net Income Allocated to the                                                
  Partnership                             $189,813          $181,919         $227,788
</TABLE>

                                       14
<PAGE>
 
Net income increased and expenses decreased in 1997, as compared to 1996, due
primarily to an insurance reimbursement from the tenant for prior year's
expenses.  Net income decreased and expenses increased in 1996 over 1995 due
primarily to increased depreciation expenses as a result of the change in
estimated useful lives of buildings and improvements which became effective in
the fourth quarter of 1995, as previously discussed under the "General " section
of "Results of Operations and Changes in Financial Conditions".

The Partnership's ownership in the Fund V-Fund VI Joint Venture decreased from
47.6% in 1995, to 47.5% in 1996 and to 46.5% in 1997 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 stable from 1997 as compared to 1996 and 1995. Net
income allocated to the Partnership decreased in 1996 as compared to 1995 due to
increased depreciation expenses and decreased ownership in the Fund V-Fund VI
Joint Venture 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, 1997, 1996, 1995, regarding The
Hartford Building commencing at page F-27 of this Annual Report on Form 10-K.





                  [Remainder of page left intentionally blank]
                  --------------------------------------------

                                       15
<PAGE>
 
STOCKBRIDGE VILLAGE II - FUND V - FUND VI JOINT VENTURE
-------------------------------------------------------
<TABLE>
<CAPTION>
                                                       For the Year Ended December 31
                                           ----------------------------------------------
                                              1997              1996             1995
                                           -----------      -----------      -------------
<S>                                        <C>              <C>               <C>  
Revenues:                                                                     
Rental income                               $235,508          $196,629         $166,033
                                            --------          --------         --------
                                                                              
Expenses                                                                      
  Depreciation                                96,357            79,239           43,588
  Management & leasing expenses               35,423            19,786           16,136
  Other operating expenses                    62,725            90,216           43,099
                                            --------          --------         --------
                                             194,505           189,241          102,823
                                            --------          --------         --------
                                                                              
Net income                                  $ 41,003          $  7,388         $ 63,210
                                            ========          ========         ========
                                                                              
Occupied %                                        72%               61%              61%
                                                                              
Partnership's Ownership % in the                                              
 Fund V-Fund VI Joint Venture                   46.5%             47.5%            47.6%
                                                                              
Cash Distribution to the Partnership        $ 60,871          $ 37,193         $ 35,490
                                                                              
Net Income Allocated to the                                                   
  Partnership                               $ 18,970          $  3,519         $ 30,555
</TABLE>


The Stockbridge Village II Project, consists of two retail buildings which
contain a total of approximately 15,950 square feet.  The first building
containing 5,400 square feet was completed in November, 1994 and occupied by
Apple Restaurants, Inc. in December, 1994, resulting in 100% occupancy as of
December 31, 1994.  The second building containing 10,550 square feet opened in
June, 1995. Glenn's Open Pit Bar-B-Que leased 4,303 square feet beginning in
July, 1995.  6,049 additional square feet have been leased in the second
building in 1997.  Glenn's has vacated its space in April, 1997 owing
substantial rent. The related receivable was collected in December, 1997.

Rental income and management and leasing expenses are greater in 1997, as
compared to 1996 and 1995, due to the increased lease up of the project.
Operating expenses for 1997, have decreased from 1996 levels due primarily to a
bad debt recovery in 1997, on the Glenn's space.  In 1997, 1996 and 1995, there
were increases in depreciation expense due to increased new tenant occupancy and
the change in estimated useful lives of buildings and improvements which became
effective in the fourth quarter of 1995, as previously discussed under the
"General" section of "Results of Operations and Changes in Financial
Conditions".

The Partnership's ownership percentage in the Fund V - Fund VI Joint Venture
decreased to 46.5% in 1997 from 47.5% for 1996 and 47.6% in 1995 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.

                                       16
<PAGE>
 
The Stockbridge Village II Project incurred property taxes of $25,491 for 1997,
$22,835 for 1996, and $19,924 for 1995.

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.

THE MARATHON BUILDING/FUND V-VI-VII JOINT VENTURE
-------------------------------------------------
<TABLE>
<CAPTION>
                                                   For the Year Ended December 31
                                             ----------------------------------------
                                               1997           1996            1995
                                             ---------      ---------      ----------
<S>                                          <C>            <C>             <C>
Revenues:                                                                  
Rental income                                $968,219        $971,017       $971,017
                                                                           
Expenses                                                                   
  Depreciation                                350,585         350,585        243,428
  Management & leasing expenses                39,671          38,841         38,841
  Other operating expenses                     11,905          14,636         25,557
                                             --------        --------       --------
                                              402,161         404,062        307,826
                                             --------        --------       --------
                                                                           
Net income                                   $566,058        $566,955       $663,191
                                             ========        ========       ========
                                                                           
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         $152,896        $141,385       $139,588
                                                                           
Net Income Allocated to the                                                
  Partnership                                $ 93,173        $ 93,321       $109,161
</TABLE>
                                                                                
Rental income remained relatively stable in 1997, 1996 and 1995. Net income was
lower in 1997 and 1996, than in 1995, due primarily to increases in depreciation
expenses as a result of the change in estimated useful lives of buildings and
improvements which became effective in the fourth quarter of 1995, as previously
discussed under the "General" section of "Results of Operations and Changes in
Financial Conditions".

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

The Partnership has an equity interest of 16.5% in the Marathon Property through
its ownership in the Fund V-VI-VII Joint Venture.

                                       17
<PAGE>
 
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, 1997, the Partnership
incurred $3,145,281 in commission fees, acquisition fees, organization and
offering costs; invested $13,755,487 in properties; reserved $105,251 as working
capital reserves. No funds have been reserved by the Partnership for investment
in the Fund V - Fund VI Stockbridge Village II Project.

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 $65,000, 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, which would have the effect of reducing cash flow
distributions to Limited Partners.  It is anticipated that future rental
revenues associated with the Medical Center Project will be allocated to restore
the Partnership's minimum working capital reserve levels over time in the
future.

The Partnership's net cash used in operating activities decreased from $46,235
for the year ended December 31, 1995 to $65,728 for the year ended December 31,
1996 to $66,556 for the year ended December 31, 1997 primarily due to decreases
in interest income in 1996 and 1997 and decreases in accounts payable.  Net cash
provided by investing activities flucuated from $787,404 in 1995 to $1,072,610
in 1996 and $966,869 in 1997, 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
1997 have been paid from net cash from operations and from distributions
received from its equity investment in joint ventures.  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

                                       18
<PAGE>
 
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.

The General Partners have verified that all operational computer systems are
year 2000 compliant.  This includes systems supporting accounting, property
management and investor services.  Also, as part of this review, all building
control systems have been verified as compliant.  The current line of business
applications are based on compliant operating systems and database servers.  All
of these products are scheduled for additional upgrades before the year 2000.
Therefore, it is not anticipated that the year 2000 will have significant impact
on operations.

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.
---------------------

The Partnership's change in accountants during 1995 was previously reported in
the Partnership's Form 8-K dated September 11, 1995.  There were no
disagreements with the Partnership's accountants or other reportable events
during 1997.


                                    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 54
     -----------------                                                     
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
Wells Capital.  Mr. Wells is the President of Wells & Associates, Inc., a real
estate brokerage and investment company formed in 1976 and incorporated in 1978,

                                       19
<PAGE>
 
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.

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, 1997.


                            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-                       $111,690 (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 1997 but not
     actually paid until January, 1998.

                                       17
 
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, 1998.
<TABLE>
<CAPTION>
 
<S>               <C>                                    <C>                  <C>
      (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)
</TABLE>

                                      20
<PAGE>
 
No arrangements exist which would, upon implementation, result in a change in
control of the Partnership.


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

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

 
INTEREST IN PARTNERSHIP CASH FLOW AND NET 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 holding Class A Units 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 A Units have received a return of their adjusted capital contribution plus
a 10% cumulative return on their adjusted capital contributions and 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 1997.

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
$111,690 in cash compensation for the year ended December 31, 1997.

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 1997, 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-34 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 1997.

(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>
 
                                   SIGNATURES

     Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized this 17th day of March,
1998

                              WELLS REAL ESTATE FUND IV, L.P.
                              (Registrant)


                              By:   /s/ Leo F. Wells, III
                                    ---------------------    
                                    LEO F. WELLS, III
                                    Leo F. Wells, III Individual General Partner
                                    and as President and Chief Financial Officer
                                    of Wells Capital, Inc., the  General Partner
                                    of Wells Partners, L.P.


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacity as and on the date indicated.

Signature                       Title
---------                       -----



/s/ Leo F. Wells, III               
----------------------------    Individual General Partner,       March 17, 1998
LEO F. WELLS, III               President and Sole Director
                                of Wells Capital, Inc., the 
                                General Partner of Wells
                                Partners, L.P.



SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRARS WHICH HAVE NOT BEEN REGISTERED PURSUANT TO
SECTION 12 OF THE ACT.

     No annual report or proxy material relating to an annual or other meeting
of security holders has been sent to security holders.

                                       23
<PAGE>
 
                       INDEX TO THE FINANCIAL STATEMENTS

 
FINANCIAL STATEMENTS                                         PAGE  
--------------------                                         ----
                                                                   
Independent Auditors' Reports                                F-2   
                                                                   
Balance Sheets as of December 31, 1997 and 1996              F-3   
                                                                   
Statements of Income for the Years Ended 
   December 31, 1997, 1996 and 1995                          F-4   
                                                                   
Statements of Partners' Capital for the Years Ended                
   December 31, 1997, 1996 and 1995                          F-5   
                                                                   
Statements of Cash Flows for the Years Ended                       
   December 31, 1997, 1996, 1995                             F-6   
                                                                   
Notes to Financial Statements for December 31, 1997                
   1996 and 1995                                             F-7   
                                                                   
Audited Financial Statements - The Hartford Building         F-27  
 
<PAGE>
 
               [LETTERHEAD OF ARTHUR ANDERSEN LLP APPEARS HERE]

 
                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Partners of
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, 1997 and 1996 and
the related statements of income, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1997.  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, 1997 and 1996 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997 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, 1997 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.


                                        /s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
January 9, 1998

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

                    (A GEORGIA PUBLIC LIMITED PARTNERSHIP)


                                BALANCE SHEETS

                          DECEMBER 31, 1997 AND 1996



                                    ASSETS

                                                        1997         1996
                                                    -----------   -----------
INVESTMENT IN JOINT VENTURES                        $13,189,076   $13,573,803

CASH AND CASH EQUIVALENTS                                91,678       252,283

DUE FROM AFFILIATES                                     305,710       258,760

DEFERRED PROJECT COSTS                                        0         5,843  

ORGANIZATION COSTS                                            0         1,042

OTHER ASSETS                                                  0           350
                                                    -----------   -----------
        TOTAL ASSETS                                $13,586,464   $14,092,081
                                                    ===========   ===========


                      LIABILITIES AND PARTNERS' CAPITAL  

LIABILITIES:    
  Accounts payable and accrued expenses             $         0   $     4,500
  Partnership distributions payable                     288,518       247,011
                                                    -----------   -----------
        Total liabilities                               288,518       251,511
                                                    -----------   -----------
COMMITMENTS AND CONTINGENCIES  

PARTNERS' CAPITAL:  
  Limited partners: 
     Class A                                         13,297,946    13,840,570 
     Class B                                                  0             0 
                                                    -----------   -----------
        Total partners' capital                      13,297,946    13,840,570
                                                    -----------   -----------
        Total liabilities and partners' capital     $13,586,464   $14,092,081  
                                                    ===========   ===========


     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, 1997, 1996, AND 1995



                                               1997        1996         1995
                                             --------   ----------   ----------
REVENUES:   
  Equity in income of joint ventures         $623,249   $  577,128   $  745,173
  Interest income                               9,998       13,711       19,451
                                             --------   ----------   ----------
                                              633,247      590,839      764,624
                                             --------   ----------   ----------
EXPENSES:   
  Partnership administration                   42,496       50,578       49,029
  Legal and accounting                         20,937       23,719       14,138
  Amortization of organization costs            1,042        6,250        6,250
  Computer costs                                8,971        4,642        5,568
                                             --------   ----------   ----------
                                               73,446       85,189       74,985
                                             --------   ----------   ----------
NET INCOME                                   $559,801   $  505,650   $  689,639
                                             ========   ==========   ==========

NET INCOME ALLOCATED TO CLASS A
  LIMITED PARTNERS                           $559,801   $1,095,296   $1,124,203
                                             ========   ==========   ==========

NET LOSS ALLOCATED TO CLASS B 
  LIMITED PARTNERS                           $      0   $ (589,646)  $ (434,564)
                                             ========   ==========   ==========

NET INCOME PER WEIGHTED AVERAGE 
  CLASS A LIMITED PARTNER UNIT               $   0.36   $     0.71   $     0.73
                                             ========   ==========   ==========
NET LOSS PER WEIGHTED AVERAGE 
  CLASS B LIMITED PARTNER UNIT               $   0.00   $    (3.78)  $    (2.72)
                                              ========  ==========   ==========

CASH DISTRIBUTION PER WEIGHTED
  AVERAGE CLASS A LIMITED PARTNER
  UNIT                                       $   0.71   $     0.65   $     0.66
                                             ========   ==========   ==========


       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, 1997, 1996, AND 1995

<TABLE> 
<CAPTION> 

                                                 LIMITED PARTNERS                    
                                 -----------------------------------------------
                                         CLASS A                CLASS B              TOTAL
                                 -----------------------------------------------    PARTNERS'
                                   UNITS        AMOUNT      UNITS      AMOUNT        CAPITAL
                                 ---------   -----------   -------   ----------   -----------
<S>                              <C>         <C>           <C>       <C>          <C>
BALANCE, DECEMBER 31, 1994       1,524,814   $13,555,990   175,788   $1,114,912   $14,670,902

  Net income (loss)                      0     1,124,203         0     (434,564)      689,639
  Partnership distributions              0    (1,019,382)        0            0    (1,019,382)  
  Class B conversion elections      16,203        75,370   (16,203)     (75,370)            0
                                 ---------   -----------   -------   ----------   -----------
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
                                 =========   ===========   =======    ==========  =========== 

</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, 1997, 1996, AND 1995
<TABLE> 
<CAPTION> 


                                                            1997           1996           1995       
                                                        -----------    -----------    -----------
<S>                                                       <C>           <C>            <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:     
  Net income                                            $   559,801    $   505,650    $   689,639  
                                                        -----------    -----------    -----------
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Equity in income of joint ventures                   (623,249)      (577,128)      (745,173)
      Amortization of organization costs                      1,042          6,250          6,250
      Changes in assets and liabilities:    
        Other assets                                            350              0          1,049
        Accounts payable and accrued expenses                (4,500)          (500)         2,000
                                                        -----------    -----------    -----------
          Total adjustments                                (626,357)      (571,378)      (735,874)
                                                        -----------    -----------    -----------
          Net cash used in operating activities             (66,556)       (65,728)       (46,235)
                                                        -----------    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:     
  Investment in joint ventures                             (154,131)          (225)      (233,501)
  Distributions received from joint ventures              1,121,000      1,072,835      1,020,905
                                                        -----------    -----------    -----------
          Net cash provided by investing
            activities                                      966,869      1,072,610        787,404  
                                                        -----------    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:     
  Distributions to partners from accumulated 
    earnings                                             (1,060,918)    (1,010,779)      (969,011)
                                                        -----------    -----------    -----------
NET DECREASE IN CASH AND CASH
  EQUIVALENTS                                              (160,605)        (3,897)      (227,842)     
CASH AND CASH EQUIVALENTS, beginning of 
  year                                                      252,283        256,180        484,022
                                                        -----------    -----------    -----------
CASH AND CASH EQUIVALENTS, end of year                  $    91,678    $   252,283    $   256,180
                                                        ===========    ===========    ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH 
  INVESTING ACTIVITIES:     
    Deferred project costs applied to joint venture
      properties                                        $     5,843    $         0    $    15,953
                                                        ===========    ===========    ===========
</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, 1997, 1996, AND 1995

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

                                      F-7
<PAGE>
 
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.

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 

                                      F-8
<PAGE>
 
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, amortization, and cost recovery.  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.

Net loss, depreciation, amortization, and cost recovery 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, amortization, and cost recovery 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.

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 adopting
SFAS No. 121 was not material to the financial statements of the Partnership or
its affiliated joint ventures.

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

                                      F-9
<PAGE>
 
assesses the recoverability of real estate assets under SFAS No. 121 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, 1997.

Depreciation for buildings and improvements is calculated using the straight-
line method over the useful lives of the real estate assets.  Effective October
1, 1995, the joint ventures revised their estimate of the useful lives of
buildings and improvements from 40 to 25 years. This change was made to better
reflect the estimated periods during which such assets will remain in service.
The change had the effect on the Partnership, through its ownership interest in
joint ventures, of increasing depreciation expense approximately $48,889 in the
fourth quarter of 1995 and $204,394 and $211,900 in the years ended December 31,
1996 and 1997, respectively.

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.

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, 1997, 1996, and 1995 is computed based on the weighted 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.

                                      F-10
<PAGE>
 
2.  DEFERRED PROJECT COSTS

The Partnership pays a percentage of limited partner contributions to Wells
Capital, Inc. (the "Company"), the general partner of Wells Partners, for
acquisition and advisory services.  These payments, as stipulated by the
partnership agreement, can be up to 6% of the limited partner contributions,
subject to certain overall limitations contained in the partnership agreement.
Aggregate fees paid through December 31, 1997 were $935,331 and amounted to 5.5%
of the limited partner contributions received.  These fees are allocated to
specific properties as they are purchased or developed and are included in
capitalized assets of the joint ventures.  All deferred project costs were
applied to properties at December 31, 1997.

3.  RELATED-PARTY TRANSACTIONS

Due from affiliates at December 31, 1997 and 1996 represents the Partnership's
share of cash to be distributed for the fourth quarters of 1997 and 1996, as
follows:

                                                1997         1996      
                                              --------     --------   
        Fund IV and V Associates              $144,088     $134,054
        Fund V and VI Associates               123,561       89,458  
        Fund V, VI, and VII Associates          38,061       35,248
                                              --------     --------   
                                              $305,710     $258,760
                                              ========     ========

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 $111,690, $174,834, and $167,711 for the
years ended December 31, 1997, 1996, and 1995, 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-11
<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, while
serving 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.

4.  INVESTMENT IN JOINT VENTURES

The Partnership's investment and percentage ownership in joint ventures at
December 31, 1997 and 1996 are summarized as follows:

                                            1997                 1996   
                                  --------------------- ---------------------
                                    AMOUNT      PERCENT   AMOUNT      PERCENT
                                  -----------   ------- -----------   -------
Fund IV and V Associates          $ 7,562,885     62%   $ 7,706,294     62%  
Fund V and VI Associates            4,342,324     47      4,523,919     47  
Fund V, VI, and VII Associates      1,283,867     16      1,343,590     16
                                  -----------           -----------   
                                  $13,189,076           $13,573,803         
                                  ===========           ===========

The following is a rollforward of the Partnership's investment in the joint
ventures for the years ended December 31, 1997 and 1996:

                                                      1997             1996  
                                                   -----------     -----------
Investment in joint ventures, beginning of year    $13,573,803     $14,067,917
Equity in income of joint ventures                     623,249         577,128
Contributions to joint ventures                        159,974             225
Distributions from joint ventures                   (1,167,950)     (1,071,467)
                                                   -----------     ----------- 
Investment in joint ventures, end of year          $13,189,076     $13,573,803
                                                   ===========     ===========

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-12
<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, 1997 AND 1996
<TABLE> 
<CAPTION>                                     
                                    ASSETS
                                                                   1997           1996
                                                               -----------    -----------
<S>                                                            <C>            <C> 
Real estate assets, at cost:    
  Land                                                         $ 2,011,534    $ 2,011,534
  Building and improvements, less accumulated
    depreciation of $1,687,871 in 1997 and $1,202,831 in 
    1996                                                         9,732,690     10,043,021
  Construction in progress                                             484          7,301
                                                               -----------    -----------
          Total real estate assets                              11,744,708     12,061,856
Cash and cash equivalents                                          214,922        229,828
Accounts receivable                                                306,264        297,475
Prepaid expenses and other assets                                  126,963        127,576
                                                               -----------    -----------
          Total assets                                         $12,392,857    $12,716,735
                                                               ===========    ===========

                    LIABILITIES AND PARTNERS' CAPITAL      

Liabilities:    
  Accounts payable                                             $    44,374    $    40,012  
  Partnership distributions payable                                191,134        191,653  
  Due to affiliates                                                 30,408         30,500
                                                               -----------    -----------
          Total liabilities                                        265,916        262,165
                                                               -----------    -----------
Partners' capital:    
  Wells Real Estate Fund IV                                      4,564,056      4,748,276
  Wells Real Estate Fund V                                       7,562,885      7,706,294
                                                               -----------    -----------
          Total partners' capital                               12,126,941     12,454,570  
                                                               -----------    -----------
          Total liabilities and partners' capital              $12,392,857    $12,716,735
                                                               ===========    ===========
</TABLE> 

                                      F-13
<PAGE>
 
                           FUND IV AND V ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                             STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995

<TABLE> 
<CAPTION> 

                                                            1997           1996         1995
                                                         -----------   -----------   -----------
<S>                                                      <C>           <C>           <C>  
Revenues:       
  Rental income                                           $1,851,550    $1,883,356    $1,833,562
  Interest income                                              9,193        12,884        12,974
  Other income                                                   355            98           360
                                                         -----------   -----------   -----------
                                                           1,861,098     1,896,338     1,846,896
                                                         -----------   -----------   -----------
Expenses:   
  Operating costs                                            559,646       650,174       613,968
  Depreciation                                               485,039       476,775       335,350
  Management and leasing fees                                126,139       121,694       115,029
  Lease acquisition costs                                    114,075       116,200       114,112
  Property administration                                     45,083        39,894        46,662
  Legal and accounting                                        14,243         9,391         9,909
                                                         -----------   -----------   -----------
                                                           1,344,225     1,414,128     1,235,030
                                                         -----------   -----------   -----------
Net income                                               $   516,873   $   482,210   $   611,866
                                                         ===========   ===========   ===========
Net income allocated to Wells Real Estate Fund IV        $   195,580   $   183,841   $   234,197      
                                                         ===========   ===========   ===========
Net income allocated to Wells Real Estate Fund V         $   321,293   $   298,369   $   377,669 
                                                         ===========   ===========   ===========
</TABLE> 

                                      F-14
<PAGE>
 
                           FUND IV AND V ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                        STATEMENTS OF PARTNERS' CAPITAL
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995


                                        WELLS REAL   WELLS REAL      TOTAL
                                         ESTATE        ESTATE      PARTNERS'
                                         FUND IV       FUND V       CAPITAL
                                        ----------   ----------   -----------

Balance, December 31,1994               $5,017,183   $7,915,706   $12,932,889
  Net income                               234,197      377,669       611,866
  Partnership contributions                 14,550      249,454       264,004
  Partnership distributions               (350,819)    (565,993)     (916,812)
                                        ----------   ----------   -----------
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
                                        ==========   ==========   ===========

                                      F-15
<PAGE>
 
                           FUND IV AND V ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                           STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<TABLE> 
<CAPTION> 
                                                             1997          1996         1995
                                                         -----------    ---------    ---------
<S>                                                      <C>            <C>          <C> 
Cash flows from operating activities:
  Net income                                               $516,873      $482,210     $611,866
                                                         -----------    ---------    ---------
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation                                          485,039       476,775      335,350
      Changes in assets and liabilities:
        Accounts receivable                                  (8,789)      (61,965)     (31,817)
        Prepaid expenses and other assets                       613        38,029        3,956
        Accounts payable                                      4,362         7,796      (34,531)
        Due to affiliates                                       (92)        4,671        5,967
                                                         -----------    ---------    ---------
           Total adjustments                                481,133       465,306      278,925
                                                         -----------    ---------    ---------
           Net cash provided by operating 
             activities                                     998,006       947,516      890,791
                                                         -----------    ---------    ---------
Cash flows from investing activities:
  Decrease in construction payables                               0             0      (28,582)
  Investment in real estate                                (167,891)      (21,601)    (206,403)
                                                         -----------    ---------    ---------
           Net cash used in investing activities           (167,891)      (21,601)    (234,985)
                                                         -----------    ---------    ---------
Cash flows from financing activities:
  Contributions from joint venture partners                 159,974           225      246,982
  Distributions to joint venture partners                (1,004,995)     (921,658)    (883,227)
                                                         -----------    ---------    ---------
           Net cash used in financing activities           (845,021)     (921,433)    (636,245)
                                                         -----------    ---------    ---------
Net (decrease) increase in cash and cash 
  equivalents                                               (14,906)        4,482       19,561  
Cash and cash equivalents, beginning of year                229,828       225,346      205,785
                                                         -----------    ---------    ---------
Cash and cash equivalents, end of year                   $  214,922      $229,828     $225,346
                                                         ===========    =========    =========
Supplemental disclosure of noncash investing
  activities:
    Deferred project costs applied by partners           $         0    $       0    $  17,022  
                                                         ===========    =========    =========
</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-16
<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, 1997 AND 1996
                                    ASSETS

                                                          1997         1996 
                                                       ----------   ----------
Real estate assets, at cost: 
  Land                                                 $1,622,733   $1,622,733
  Building and improvements, less accumulated
    depreciation of $1,184,725 in 1997 and
    $796,338 in 1996                                    7,590,973    7,791,513
  Construction in progress                                    493        3,217
                                                       ----------   ----------
        Total real estate assets                        9,214,199    9,417,463
Cash and cash equivalents                                 245,298      157,443
Accounts receivable                                       109,882      120,022
Prepaid expenses and other assets                          56,002       54,969
                                                       ----------   ----------
        Total assets                                   $9,625,381   $9,749,897
                                                       ==========   ==========

                    LIABILITIES AND PARTNERS' CAPITAL      

Liabilities:    
  Accounts payable                                     $   17,885   $   25,752
  Partnership distributions payable                       265,539      188,453
  Due to affiliates                                         9,657        5,537
                                                       ----------   ----------
        Total liabilities                                 293,081      219,742 
                                                       ----------   ----------

Partners' capital:    
  Wells Real Estate Fund V                              4,342,324    4,523,919  
  Wells Real Estate Fund VI                             4,989,976    5,006,236  
                                                       ----------   ----------
        Total partners' capital                         9,332,300    9,530,155
                                                       ----------   ----------
        Total liabilities and partners' capital        $9,625,381   $9,749,897
                                                       ==========   ==========

                                      F-17
<PAGE>
 
                           FUND V AND VI ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                             STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<TABLE> 
<CAPTION> 
                                                         1997      1996       1995
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C> 
Revenues:
  Rental income                                       $953,007   $914,128   $883,532  
                                                      --------   --------   --------
Expenses:     
  Depreciation                                         388,387    371,270    243,139
  Operating costs, net of reimbursements                39,492     49,873     32,005
  Management and leasing fees                           46,694     38,727     38,540
  Legal and accounting                                  24,941     10,816     11,905
  Property administration                               10,425     10,655     12,752
  Lease acquisition costs                               18,918      9,759     10,417
  Computer costs                                             0      2,820      3,498
  Bad debt (recovery) expense                          (22,115)    30,000          0
                                                      --------   --------   --------
                                                       506,742    523,920    352,256  
                                                      --------   --------   --------
Net income                                            $446,265   $390,208   $531,276
                                                      ========   ========   ========
Net income allocated to Wells Real Estate Fund V      $208,783   $185,438   $258,343
                                                      ========   ========   ========
Net income allocated to Wells Real Estate Fund VI     $237,482   $204,770   $272,933       
                                                      ========   ========   ========
</TABLE> 

                                      F-18
<PAGE>
 
                           FUND V AND VI ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                        STATEMENTS OF PARTNERS' CAPITAL
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995


                                        WELLS REAL   WELLS REAL      TOTAL
                                          ESTATE      ESTATE       PARTNERS'
                                          FUND V      FUND VI       CAPITAL
                                        ----------   ----------   ----------
Balance, December 31, 1994              $4,804,168   $4,508,043   $9,312,211
  Net income                               258,343      272,933      531,276
  Partnership contributions                      0      786,099      786,099
  Partnership distributions               (363,084)    (385,153)    (748,237)
                                        ----------   ----------   ----------
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
                                        ==========   ==========   ==========

                                      F-19
<PAGE>
 
                           FUND V AND VI ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                           STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<TABLE> 
<CAPTION> 
                                                          1997       1996       1995
                                                        --------   --------   --------
<S>                                                     <C>        <C>        <C> 
Cash flows from operating activities:
  Net income                                            $446,265   $390,208   $531,276
                                                        --------   --------   --------
  Adjustments to reconcile net income to net cash 
    provided by operating activities:
      Depreciation                                       388,387    371,270    243,139
      Changes in assets and liabilities:
        Accounts receivable                               10,140    (23,373)   (32,496)
        Prepaid expenses and other assets                 (1,033)   (13,827)   (11,442)
        Accounts payable                                  (7,867)    15,752    (46,745)
        Due to affiliates                                  4,120        799      2,348
                                                        --------   --------   --------
          Total adjustments                              393,747    350,621    154,804
                                                        --------   --------   --------
          Net cash provided by operating
            activities                                   840,012    740,829    686,080
                                                        --------   --------   --------
Cash flows from investing activities:
  Investment in real estate                             (185,123)   (10,807)  (751,481)
Cash flows from financing activities:
  Contributions from joint venture partners              190,197     18,130    786,099
  Distributions to joint venture partners               (757,231)  (774,404)  (668,748)
                                                        --------   --------   --------
          Net cash (used in) provided by 
            financing activities                        (567,034)  (756,274)   117,351
                                                        --------   --------   --------
Net increase (decrease) in cash and cash equivalents      87,855    (26,252)    51,950
Cash and cash equivalents, beginning of year             157,443    183,695    131,745
                                                        --------   --------   --------
Cash and cash equivalents, end of year                  $245,298   $157,443   $183,695  
                                                        ========   ========   ========
</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-20
<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, 1997 AND 1996

                                    ASSETS
                                                            1997         1996
                                                         ----------   ----------
Real estate assets, at cost:
  Land                                                   $  314,591   $  314,591
  Building and improvements, less accumulated
    depreciation of $1,005,614 in 1997 and
    $655,029 in 1996                                      7,362,290    7,712,875
                                                         ----------   ----------
        Total real estate assets                          7,676,881    8,027,466
                                                         ----------   ----------
Cash and cash equivalents                                   231,232      214,145
Accounts receivable                                         130,577      142,358
                                                         ----------   ----------
        Total assets                                     $8,038,690   $8,383,969
                                                         ==========   ==========

                       LIABILITIES AND PARTNERS' CAPITAL

Liabilities:    
  Partnership distributions payable                     $   231,232    $ 214,145
  Due to affiliates                                           6,166        5,695
                                                         ----------   ----------
        Total liabilities                                   237,398      219,840
                                                         ----------   ----------
Partners' capital:
  Wells Real Estate Fund V                                1,283,867    1,343,590
  Wells Real Estate Fund VI                               3,263,121    3,414,896
  Wells Real Estate Fund VII                              3,254,304    3,405,643
                                                         ----------   ----------
        Total partners' capital                           7,801,292    8,164,129
                                                         ----------   ----------
        Total liabilities and partners' capital          $8,038,690   $8,383,969
                                                         ==========   ==========

                                      F-21
<PAGE>
 
                        FUND V, VI, AND VII ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                             STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<TABLE> 
<CAPTION> 
                                                        1997       1996       1995
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C> 
Revenues:
  Rental income                                       $968,219   $971,017   $971,017
                                                      --------   --------   --------
Expenses:
  Depreciation                                         350,585    350,585    243,428
  Management and leasing fees                           39,671     38,841     38,841
  Legal and accounting                                   5,690      7,331     13,715
  Property administration                                3,878      4,641      8,150
  Computer costs                                           107      1,410      1,749
  Operating costs                                        2,230      1,254      1,943
                                                      --------   --------   --------
                                                       402,161    404,062    307,826
                                                      --------   --------   --------
Net income                                            $566,058   $566,955   $663,191     
                                                      ========   ========   ========
Net income allocated to Wells Real Estate Fund V      $ 93,173   $ 93,321   $109,161
                                                      ========   ========   ========
Net income allocated to Wells Real Estate Fund VI     $236,782   $237,157   $277,413
                                                      ========   ========   ========
Net income allocated to Wells Real Estate Fund VII    $236,103   $236,477   $276,617 
                                                      ========   ========   ========
</TABLE> 


                        FUND V, VI, AND VII ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                        STATEMENTS OF PARTNERS' CAPITAL
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995

<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, 1994           $1,422,081        $3,614,367        $3,604,542         $8,640,990  
  Net income                            109,161           277,413           276,617            663,191  
  Partnership distributions            (139,588)         (354,736)         (353,719)          (848,043)  
                                     ----------        ----------        ----------         ----------
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   
                                     ==========        ==========        ==========         ==========
</TABLE> 
                                      F-22
<PAGE>
 
                        FUND V, VI, AND VII ASSOCIATES
                           (A GEORGIA JOINT VENTURE)
                           STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995

<TABLE> 
<CAPTION> 

                                                 1997       1996       1995
                                               --------   --------   --------  
<S>                                            <C>        <C>        <C> 
Cash flows from operating activities:     
  Net income                                   $566,058   $566,955   $663,191  
                                               --------   --------   --------  
  Adjustments to reconcile net income to net
    cash provided by operating activities:     
      Depreciation                              350,585    350,585    243,428  
      Changes in assets and liabilities:                                      
        Accounts receivable                      11,781    (61,017)   (61,017) 
        Accounts payable                              0          0     (3,000) 
        Due to affiliates                           471      2,441      2,441  
                                               --------   --------   --------  
          Total adjustments                     362,837    292,009    181,852  
                                               --------   --------   --------  
          Net cash provided by operating                                      
            activities                          928,895    858,964    845,043  
Cash flows from financing activities:                                         
  Distributions to joint venture partners      (911,808)  (853,946)  (835,231) 
                                               --------   --------   --------  
Net increase in cash and cash equivalents        17,087      5,018      9,812  
Cash and cash equivalents, beginning of year    214,145    209,127    199,315  
                                               --------   --------   --------  
Cash and cash equivalents, end of year         $231,232   $214,145   $209,127  
                                               ========   ========   ========  
</TABLE> 

5.  INCOME TAX BASIS NET INCOME AND PARTNERS' CAPITAL

    The Partnership's income tax basis net income for the years ended 
December 31, 1997, 1996, and 1995 is calculated as follows:
<TABLE> 
<CAPTION> 
                                                 1997       1996       1995
                                               --------   --------   --------  
<S>                                            <C>        <C>        <C> 
Financial statement net income                 $559,801   $505,650   $689,639
Increase (decrease) in net income resulting
  from:
  Depreciation expense for financial 
    reporting purposes in excess of
    amounts for income tax purposes             211,900    204,394     48,889
  Expenses deductible when paid for income
    tax purposes, accrued for financial
    reporting purposes                              593      3,672      5,228
  Rental income accrued for financial 
    reporting purposes in excess of
    amounts for income tax purposes              (8,808)   (46,936)   (67,389)
                                               --------   --------   --------  
Income tax basis net income                    $763,486   $666,780   $676,367  
                                               ========   ========   ========  
</TABLE> 

                                      F-23
<PAGE>
 
     The Partnership's income tax basis partners' capital at December 31, 1997,
1996, and 1995 is computed as follows:

<TABLE> 
<CAPTION> 

                                             1997         1996         1995
                                          -----------  -----------  -----------
<S>                                       <C>          <C>          <C> 
Financial statement partners' capital     $13,297,946  $13,840,570  $14,341,159
Increase (decrease) in partners'
  capital resulting from:     
    Depreciation expense for financial 
      reporting purposes in excess of
      amounts for income tax purposes         465,183      253,283       48,889
    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                               (244,518)    (235,710)    (188,766)
    Accumulated expenses deductible when
      paid for income tax purposes,
      accrued for financial reporting 
      purposes                                 22,184       21,591       17,911
    Partnership's distributions payable       288,518      247,011      247,725
                                          -----------  -----------  -----------
Income tax basis partners' capital        $16,008,013  $16,305,445  $16,645,618
                                          ===========  ===========  ===========
</TABLE> 
     
  
6.  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, 1997 is as follows:

      Year ending December 31:
        1998                           $1,689,275  
        1999                            1,443,169  
        2000                            1,372,047  
        2001                            1,342,745  
        2002                            1,325,894  
      Thereafter                        1,502,234   
                                       ----------
                                       $8,675,364     
                                       ==========

Three significant tenants contributed approximately 25%, 29%, and 15% of rental
income, which is included in equity in income of joint ventures, for the year
ended December 31, 1997.  In addition, three significant tenants will contribute
approximately 42%, 27%, and 17% of future minimum rental income.

                                      F-24
<PAGE>
 
     The future minimum rental income due Fund IV and V Associates under
noncancelable operating leases at December 31, 1997 is as follows:


      Year ending December 31:   
        1998                            $1,744,494  
        1999                             1,343,996  
        2000                             1,238,615  
        2001                             1,167,992  
        2002                             1,141,672  
      Thereafter                           374,160   
                                        ----------
                                        $7,010,929     
                                        ==========

     One significant tenant contributed approximately 56% of rental income for
the year ended December 31, 1997. In addition, one significant tenant will
contribute approximately 84% of future minimum rental income.

     The future minimum rental income due Fund V and VI Associates under
noncancelable operating leases, at December 31, 1997 is as follows:

     Year ending December 31:   
        1998                             $945,121  
        1999                              948,664  
        2000                              936,186  
        2001                              966,506       
        2002                              961,845  
     Thereafter                         1,303,823       
                                       ----------
                                       $6,062,145     
                                       ==========

     Two significant tenants contributed approximately 75% and 14% of rental
income for the year ended December 31, 1997. In addition, three significant
tenants will contribute approximately 70%, 15%, and 13% of future minimum rental
income.

     The future minimum rental income due Fund V, VI, and VII Associates under
noncancelable operating leases at December 31, 1997 is as follows:


      Year ending December 31:   
        1998                            $980,000  
        1999                             980,000  
        2000                             980,000  
        2001                             980,000  
        2002                             990,000  
      Thereafter                       3,960,000   
                                      ----------
                                      $8,870,000     
                                      ==========

     One significant tenant contributed 100% of rental income for the year ended
December 31, 1997 and will contribute 100% of future minimum rental income.

                                      F-25
<PAGE>
 
7.  QUARTERLY RESULTS (UNAUDITED)

     Presented below is a summary of the unaudited quarterly financial
information for the years ended December 31, 1997 and 1996:

                                               1997 Quarters Ended   
                                    --------------------------------------------
                                    March 31   June 30  September 30 December 31
                                    --------  --------  ------------ -----------
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

                                               1996 Quarters Ended   
                                    --------------------------------------------
                                    March 31   June 30  September 30 December 31
                                    --------  --------  ------------ -----------
Revenues                            $148,876  $169,859    $143,524     $128,580
Net income                           129,376   133,658     130,782      111,834
Net income allocated to Class A
  limited partners                   281,245   286,809     284,135      243,107
Net loss allocated to Class B 
  limited partners                  (151,869) (153,151)   (153,353)    (131,273)
Net income per weighted average 
  Class A limited partner unit         $0.18     $0.19       $0.18        $0.16
Net loss per weighted average
  Class B limited partner unit         (0.95)    (0.99)      (0.99)       (0.85)
Cash distribution per weighted 
  average Class A limited partner
  unit                                  0.17      0.15        0.17         0.16
        

8.  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-26
<PAGE>
 
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Partners of
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, 1997 and 1996 and the related statements of income, partners'
capital, and cash flows for each of the three years in the period ended December
31, 1997.  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, 1997 and 1996 and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1997, in conformity
with generally accepted accounting principles.



ARTHUR ANDERSEN LLP



Atlanta, Georgia
January 9, 1998

                                      F-27
<PAGE>
 
                             The Hartford Building


                                 Balance Sheets

                           December 31, 1997 and 1996



                                     ASSETS
                                        
<TABLE>
<CAPTION>
                                                                                        1997               1996
                                                                                     ----------          ---------
REAL ESTATE ASSETS:
<S>                                                                           <C>                <C>
 Land                                                                                $  528,042         $  528,042
 Building and improvements, less accumulated depreciation of $960,729 in
  1997 and $668,698 in 1996                                                           5,841,712          6,133,743
                                                                                     ----------         ----------
       Total real estate assets                                                       6,369,754          6,661,785
 
CASH                                                                                    245,298            157,443
 
DUE FROM AFFILIATE                                                                            0             11,767
 
ACCOUNTS RECEIVABLE                                                                      39,648             46,348
                                                                                     ----------         ----------
       Total assets                                                                  $6,654,700         $6,877,343
                                                                                     ==========         ==========
 
 
LIABILITIES AND PARTNERS' CAPITAL
 
LIABILITIES:
 Payable to joint venture partners                                                   $  167,970         $  171,064
 Due to affiliate                                                                        78,914                  0
                                                                                     ----------         ----------
       Total liabilities                                                                246,884            171,064
                                                                                     ----------         ----------
COMMITMENTS AND CONTINGENCIES
 Partners' capital:
   Wells Real Estate Fund V, L.P.                                                     3,326,547          3,466,241
   Wells Real Estate Fund VI, L.P.                                                    3,081,269          3,240,038
                                                                                     ----------         ----------
       Total partners' capital                                                        6,407,816          6,706,279
                                                                                     ----------         ----------
       Total liabilities and partners' capital                                       $6,654,700         $6,877,343
                                                                                     ==========         ==========
</TABLE>



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

                                      F-28
<PAGE>
 
                             The Hartford Building


                              Statements of Income

             for the Years Ended December 31, 1997, 1996, and 1995



<TABLE>
<CAPTION>
                                                                            1997               1996            1995
                                                                          -------           -------          -------
REVENUES:
<S>                                                                      <C>               <C>              <C>
 Rental income                                                            $717,499          $717,499         $717,499
                                                                          --------          --------         --------
EXPENSES:
 Depreciation                                                              292,031           292,031          199,551
 Operating costs, net of reimbursements                                    (19,184)           10,494           14,612
 Management and leasing fees                                                30,189            28,700           28,700
 Legal and accounting                                                        9,201             2,044            4,821
 Computer costs                                                                  0             1,410            1,749
                                                                          --------          --------         --------
                                                                           312,237           334,679          249,433
                                                                          --------          --------         --------
NET INCOME                                                                $405,262          $382,820         $468,066
                                                                          ========          ========         ========
 
NET INCOME ALLOCATED TO WELLS REAL ESTATE FUND V, L.P.
                                                                          $189,812          $181,919         $227,788
                                                                          ========          ========         ========
 
NET INCOME ALLOCATED TO WELLS REAL ESTATE FUND VI, L.P.
                                                                          $215,450          $200,901         $240,278
                                                                          ========          ========         ========
</TABLE>



        The accompanying notes are an integral part of these statements.

                                      F-29
<PAGE>
 
                             THE HARTFORD BUILDING


                        STATEMENTS OF PARTNERS' CAPITAL

             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995




<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, 1994                                       $3,707,881            $3,502,845          $7,210,726
 
 Net income                                                         227,788               240,278             468,066
 Distributions                                                     (327,595)             (346,455)           (674,050)
                                                                 ----------            ----------          ---------- 
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
                                                                 ==========            ==========          ========== 
</TABLE>


        The accompanying notes are an integral part of these statements.

                                      F-30
<PAGE>
 
                             THE HARTFORD BUILDING


                            STATEMENTS OF CASH FLOWS

             FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995




<TABLE>
<CAPTION>
                                                                            1997               1996               1995
                                                                          ---------          ---------          ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                      <C>                <C>                <C>
 Net income                                                               $ 405,262          $ 382,820          $ 468,066
                                                                          ---------          ---------          ---------
 Adjustments to reconcile net income to net cash provided by
  operating activities:
     Depreciation                                                           292,031            292,031            199,551
     Changes in assets and liabilities:
       Accounts receivable                                                    6,700              6,700              6,700
       Received from (due to) affiliate                                      90,681            (30,018)            46,069
                                                                          ---------          ---------          ---------
         Total adjustments                                                  389,412            268,713            252,320
                                                                          ---------          ---------          ---------
         Net cash provided by operating activities
                                                                            794,674            651,533            720,386
                                                                          ---------          ---------          ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Distributions to joint venture partners                                   (706,819)          (677,785)          (668,436)
                                                                          ---------          ---------          ---------
NET INCREASE (DECREASE) IN CASH                                              87,855            (26,252)            51,950
 
CASH, BEGINNING OF YEAR                                                     157,443            183,695            131,745
                                                                          ---------          ---------          ---------
CASH, END OF YEAR                                                         $ 245,298          $ 157,443          $ 183,695
                                                                          =========          =========          =========
</TABLE>



        The accompanying notes are an integral part of these statements.

                                      F-31
<PAGE>
 
                             THE HARTFORD BUILDING


                         NOTES TO FINANCIAL STATEMENTS


                       DECEMBER 31, 1997, 1996, AND 1995

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 owns  47%, 47%, and 48% of
   Hartford and Fund VI owns  53%, 53%, and 52% of Hartford at December 31,
   1997, 1996, and 1995, respectively.  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.

   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 was 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.
   Hartford adopted SFAS No. 121 effective January 1, 1995.  The impact of
   adopting SFAS No. 121 was not material to the financial statements of
   Hartford.

   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

                                      F-32
<PAGE>
 
   under SFAS No. 121 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 the Hartford real
   estate assets as of December 31, 1997.

   Depreciation is calculated using the straight-line method over the estimated
   useful life of the real estate assets.  Effective October 1, 1995, Hartford
   revised its estimate of the useful life of the building and improvements from
   40 to 25 years.  This change was made to better reflect the estimated periods
   during which such assets will remain in service.  The change had the effect
   of increasing depreciation expense approximately $29,487 in the fourth
   quarter of 1995  and $121,970 in the years ended December 31, 1997 and 1996.

   REVENUE RECOGNITION

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

2. RENTAL INCOME

   The future minimum rental income due Hartford under noncancelable operating
   leases at December 31, 1997 is as follows:

              Year ending December 31:                
               1998                         $  724,200
               1999                            724,200
               2000                            724,200
               2001                            724,200
               2002                            724,200
              Thereafter                       663,850
                                            ----------
                                            $4,284,850 
                                            ==========

   One tenant contributed 100% of rental income for the year ended December 31,
   1997 and represents 100% of the future minimum rental income above.

3. RELATED-PARTY TRANSACTIONS

   Hartford entered into a property management agreement with Wells Management
   Company, Inc. ("Wells Management"), an affiliate of Hartford.  In
   consideration for supervising the management of Hartford, Hartford 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.

                                      F-33
<PAGE>
 
   Hartford incurred management and leasing fees of $30,189, $28,700, and
   $28,700 for the years ended December 31, 1997, 1996, and 1995, respectively,
   which were paid to Wells Management.

4. COMMITMENTS AND CONTINGENCIES

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

                                      F-34
<PAGE>
 
                            WELLS REAL ESTATE FUND V, L.P.

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

       SCHEDULE III--REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

                               DECEMBER 31, 1997

<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         $ 3,950,375    
                                                                                                                
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           1,094,691    
                                                                                                                
MARATHON BUILDING (E)                               None           314,591      8,367,904                   0    
                                                                ----------    -----------         -----------
       Total                                                    $3,801,989    $15,143,478         $13,568,531    
                                                                ==========    ===========         ===========



                                                Gross Amount at Which Carried at                                         
                                                       December 31, 1997                                                 
                                      ---------------------------------------------------                                
                                                  Buildings and  Construction               Accumulated     Date of      
Description                             Land      Improvements   in Progress     Total      Depreciation  Construction   
-----------                           ---------   -----------   -----------  ------------   -----------   ------------   
                                                                                                                         
MEDICAL CENTER PROJECT (A)           $  512,344  $ 3,916,933          $484    $ 4,429,761   $   554,059          1992    
                                                                                                                         
JACKSONVILLE IBM BUILDING (B)         1,499,190    7,503,628             0      9,002,818     1,133,812          1992    
                                                                                                                         
HARTFORD BUILDING (C)                   528,042    6,802,441             0      7,330,483       960,729          1981    
                                                                                                                         
STOCKBRIDGE VILLAGE II (D)            1,094,691    1,973,257           493      3,068,441       223,996          1994    
                                                                                                                         
MARATHON BUILDING (E)                   314,591    8,367,904             0      8,682,495     1,005,614          1991     
                                     ----------  ------------         -----   -----------    ----------
       Total                         $3,948,858  $28,564,163          $977    $32,513,998    $3,878,210                    
                                     ==========  ===========          =====   ===========    ==========

                                               Life on Which        
                                     Date      Depreciation         
Description                          Acquired  Is Computed (f)      
-----------                          --------  --------------        
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        

(a)  The Medical Center Project consists of a 17,847-square-foot medical building completed in March 1993 and 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, 1997.

(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, 1997.

(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, 1997.

(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, 1997.

(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,
     1997.

(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.

</TABLE> 

                                      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, 1997


<TABLE>
<CAPTION> 
                                                 Accumulated
                                        Cost     Depreciation
                                    -----------  ------------    
<S>                                 <C>           <C>
BALANCE AT DECEMBER 31, 1995        $32,128,575    $1,455,568
 
   1996 additions                        32,408     1,198,630
                                    -----------    ---------- 
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
                                    ===========    ==========
</TABLE>

                                      -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
<PAGE>
 
Exhibit                                                   Sequential
Number               Description of Document              Page Number
-------              -----------------------              -----------

           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)

*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 and     N/A
          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)