##### Index to Financial Statements





UNITED STATES

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
| | - | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2009

or



| |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------

For the transition period from
to

Commission file number 0-25731





WELLS REAL ESTATE
FUND XI, L.P.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-2250094                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|6200 The Corners Parkway, Norcross, Georgia                    |  | 30092-3365                          
|(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 each exchange on which registered
|None                |  | None                                     

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



|                 |  |                 
|---------------- |  | ----------------
|CLASS A UNITS    |  | CLASS B UNITS   
|(Title of class) |  | (Title of class)

Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.    Yes   ̈    No  x

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

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [Not yet applicable to registrant.]    Yes   ̈    No   ̈

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer   ̈                 Accelerated filer   ̈

Non-accelerated filer  x (Do not check if a smaller reporting
company)                 Smaller reporting company   ̈

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









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##### Index to Financial Statements

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-K of Wells Real Estate Fund XI, L.P. (the Partnership or the Registrant) other than
historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, in particular, statements about
our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are
not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as may, will, expect,
intend, anticipate, estimate, believe, continue, or other similar words. Specifically, we consider, among others, statements concerning future operating results and cash flows, our ability
to meet future obligations, and the amount and timing of any future distributions to limited partners to be forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the
date this report is filed with the Securities and Exchange Commission. We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-K, and we do not intend to
publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such
forward-looking statements are subject to unknown risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of
which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations,
provide dividends to stockholders, and maintain the value of our real estate properties, may be significantly hindered. Contained in Item 1A. are some of the risks and uncertainties, although not all risks and uncertainties, which could cause
actual results to differ materially from those presented in our forward-looking statements.



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##### Index to Financial Statements

WELLS REAL ESTATE FUND XI, L.P.



PART I



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

General

Wells Real Estate Fund XI, L.P. (the Partnership) is a Georgia public limited partnership with Leo F. Wells, III and Wells
Partners, L.P. (Wells Partners), a Georgia nonpublic limited partnership, serving as its general partners (collectively, the General Partners). Wells Capital, Inc. (Wells Capital) serves as the corporate
general partner of Wells Partners. Wells Capital is a wholly owned subsidiary of Wells Real Estate Funds, Inc. (WREF). Leo F. Wells, III is the president and sole director of Wells Capital and the president, sole director, and sole owner
of WREF. The Partnership was formed on June 20, 1996 for the purpose of acquiring, developing, owning, operating, improving, leasing, and managing income-producing commercial properties for investment purposes. Upon subscription, limited
partners elected to have their units treated as Class A Units or Class B Units. Thereafter, limited partners have the right to change their prior elections to have some or all of their units treated as Class A Units or Class B Units one
time during each quarterly accounting period (conversion elections). 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) add or 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.

On December 31, 1997, the Partnership commenced an offering of up to $35,000,000 of
Class A or Class B limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The offering was terminated on December 30, 1998, at which time the Partnership had
sold approximately 1,302,942 Class A Units and 350,338 Class B Units representing total limited partner capital contributions of $16,532,802.

Operating Phases and Objectives

The Partnership typically operates in the following five life-cycle phases and, during which,
typically focuses on the following key operating objectives. The duration of each phase is dependent upon various economic, industry, market, and other internal/external factors. Some overlap naturally exists in the transition from one phase to the
next.



| |  |  | Fundraising phase
| | - |  | -----------------

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



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

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



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

The period during which the Partnership owns and operates its real estate assets during the initial lease terms of the tenants;



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

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



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##### Index to Financial Statements

| |  |  | Disposition-and-liquidation phase
| | - |  | ---------------------------------

The period during which the Partnership sells its real estate investments, distributes net sale proceeds to the partners, liquidates, and terminates the Partnership.

We have transitioned from the holding phase into the positioning-for-sale phase of our life cycle. Accordingly, the Partnership is focusing on the remaining
assets, maintaining the current high occupancy level within the portfolio and concentrating on re-leasing and marketing efforts that we believe will ultimately result in the best disposition pricing for our investors.

Employees

The Partnership has no direct
employees. The employees of Wells Capital and Wells Management Company, Inc. (Wells Management), an affiliate of the General Partners, perform a full range of real estate and administrative services for the Partnership including leasing
and property management, accounting, asset management, and investor relations. See Item 13, Certain Relationships and Related Transactions, for a summary of the fees paid to the General Partners or their affiliates during the years
ended December 31, 2009, 2008, and 2007.

Insurance

Wells Management carries comprehensive liability and extended coverage with respect to the properties we own through our investments in the joint ventures described in Item 2. In the opinion of
management, our properties are adequately insured.

Competition

We will experience competition for tenants from owners and managers of competing projects which may include the General Partners or their affiliates. As a result, in connection with negotiating leases, we
may offer rental concessions, reduced charges for tenant improvements, and other inducements, all of which may have an adverse impact on results of operations. We are also in competition with sellers of similar properties to locate suitable
purchasers for its properties.

Economic Dependency

We have engaged Wells Capital and Wells Management to provide certain essential services, including supervision of the management and leasing of its properties, asset acquisition and disposition services,
as well as other administrative responsibilities, including accounting services and investor communications and relations. These agreements are terminable by either party upon 60 days written notice. As a result of these relationships, we are
dependent upon Wells Capital and Wells Management.

Wells Capital and Wells Management are all owned and controlled by WREF. The operations of
Wells Capital and Wells Management represent substantially all of the business of WREF. Accordingly, we focus on the financial condition of WREF when assessing the financial condition of Wells Capital and Wells Management. In the event that WREF
were to become unable to meet its obligations as they become due, we might be required to find alternative service providers.

Future net
income generated by WREF will be largely dependent upon the amount of fees earned by Wells Capital and Wells Management based on, among other things, the level of investor proceeds raised from the sale of common stock for certain WREF-sponsored
programs and the volume of future acquisitions and dispositions of real estate assets by WREF-sponsored programs, as well as anticipated dividend income earned from its holdings of common stock of Piedmont Office Realty Trust, Inc. (Piedmont
REIT), which was acquired in connection with the Piedmont REIT internalization transaction (see Assertion of Legal Action



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##### Index to Financial Statements

Against Related-Parties below). The General Partners believe that WREF generates adequate cash flow from operations and has adequate liquidity available in the form of cash on hand and
other investments necessary to meet its current and future obligations as they become due.

We are also dependent upon the ability of our
current tenants to pay their contractual rent amounts as they become due. The inability of a tenant to pay future rental amounts would be likely to have a negative impact on our results of operations. We are not currently aware of any reason why our
existing tenants will not be able to pay their contractual rental amounts as they become due in all material respects. Situations preventing the tenants from paying contractual rents could result in a material adverse impact on our results of
operations.

Proxy to Liquidate

Under Section 20.2 of the partnership agreement, limited partners holding 10% or more of the outstanding units have the right, at any time commencing eight years after the termination of the Partnerships offering of units
(December 30, 2006), to provide a written request to the General Partners directing the General Partners to formally proxy the limited partners to determine whether the assets of the Partnership should be liquidated.

Assertion of Legal Action Against Related-Parties

On March 12, 2007, a stockholder of Piedmont REIT filed a putative class action and derivative complaint, presently styled In re Wells Real Estate Investment Trust, Inc. Securities Litigation, in the United States District Court
for the District of Maryland against, among others, Piedmont REIT; Leo F. Wells, III, one of the Partnerships General Partners; Wells Capital, the corporate general partner of Wells Partners, the Partnerships other General Partner;
Wells Management, the Partnerships property manager; certain affiliates of WREF; the directors of Piedmont REIT; and certain individuals who formerly served as officers or directors of Piedmont REIT prior to the closing of the internalization
transaction on April 16, 2007. The complaint alleged, among other things, violations of the federal proxy rules and breaches of fiduciary duty arising from the Piedmont REIT internalization transaction and the related proxy statement filed with
the SEC on February 26, 2007, as amended. The complaint sought, among other things, unspecified monetary damages and nullification of the Piedmont REIT internalization transaction. On April 9, 2007, the District Court denied the
plaintiffs motion for an order enjoining the internalization transaction. On April 17, 2007, the Court granted the defendants motion to transfer venue to the United States District Court for the Northern District of Georgia, and the
case was docketed in the Northern District of Georgia on April 24, 2007. On June 7, 2007, the Court granted a motion to designate the class lead plaintiff and class co-lead counsel. On June 27, 2007, the plaintiff filed an amended
complaint, which attempted to assert class action claims on behalf of those persons who received and were entitled to vote on the Piedmont REIT proxy statement filed with the SEC on February 26, 2007, and derivative claims on behalf of Piedmont
REIT. On July 9, 2007, the Court denied the plaintiffs motion for expedited discovery related to an anticipated motion for a preliminary injunction. On August 13, 2007, the defendants filed a motion to dismiss the amended complaint.
On March 31, 2008, the Court granted in part the defendants motion to dismiss the amended complaint. The Court dismissed five of the seven counts of the amended complaint in their entirety. The Court dismissed the remaining two counts
with the exception of allegations regarding the failure to disclose in the Piedmont REIT proxy statement details of certain expressions of interest in acquiring Piedmont REIT. On April 21, 2008, the plaintiff filed a second amended complaint,
which alleges violations of the federal proxy rules based upon allegations that the proxy statement to obtain approval for the Piedmont REIT internalization transaction omitted details of certain expressions of interest in acquiring Piedmont REIT.
The second amended complaint seeks, among other things, unspecified monetary damages, to nullify and rescind the internalization transaction, and to cancel and rescind any stock issued to the defendants as consideration for the internalization
transaction. On May 12, 2008, the defendants answered and raised certain defenses to the second amended complaint. On June 23, 2008, the plaintiff filed a motion for class certification. On September 16, 2009, the Court granted the
plaintiffs motion for class certification. On September 20, 2009, the defendants filed a petition for permission to appeal immediately the Courts order granting the motion for class certification with the Eleventh Circuit Court of
Appeals. The petition for permission to appeal was denied on October 30, 2009. On



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##### Index to Financial Statements

April 13, 2009, the plaintiff moved for leave to amend the second amended complaint to add additional defendants. The Court denied the plaintiffs motion for leave to amend on
June 23, 2009. On December 4, 2009, the parties filed motions for summary judgment. The parties filed their responses to the motions for summary judgment on January 29, 2010. The parties respective replies to the motions for
summary judgment were filed on February 19, 2010. The motions for summary judgment are currently pending before the court. Mr. Wells, Wells Capital, and Wells Management believe that the allegations contained in the complaint are without
merit and intend to vigorously defend this action. Any financial loss incurred by Wells Capital, Wells Management, or their affiliates could hinder their ability to successfully manage our operations and our portfolio of investments.

Web Site Address

Access to copies of each
of our filings with the SEC is available, free of charge, at the http://www.wellsref.comWeb site, through a link to the http://www.sec.gov Web site.



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

Risk Related to Current
Economic Conditions

Current economic conditions and turmoil in the credit markets have caused, and will likely continue to cause,
market rental rates and property values to decline, may impede disposition of our properties at commercially reasonable terms, and have had, and will likely continue to have, an adverse effect on our financial condition.

Current economic conditions, the availability and cost of credit, the mortgage market, and declining real estate markets have contributed to increased
volatility, lower real estate values, and diminished expectations for real estate markets and the economy as a whole. As a result, current economic conditions and the credit crisis have caused commercial real estate values and market rental rates to
decline significantly and will likely continue to put downward pressure on these values and market rental rates. Our estimated unit valuations as of December 31, 2009 have declined from their prior year levels and are expected to continue to
decline in the upcoming year. Deteriorating economic conditions could adversely impact the ability of one or more of our tenants to honor their lease payments and our ability to re-lease space on favorable terms as leases expire or as space
otherwise becomes vacant at our properties. While we do not anticipate the need to access the credit markets, the impact of the current crisis in the credit markets may adversely affect the ability of potential purchasers of our properties to obtain
financing. Therefore, this may affect our timing and/or ability to sell our properties at commercially reasonable terms. The current economic conditions and the difficulties currently being experienced in the mortgage and real estate markets have
adversely affected our business model, financial condition, results of operations, and the valuation of our units. We do not expect that the difficult conditions in the mortgage and real estate markets are likely to improve in the near future. A
worsening of these conditions would exacerbate the adverse effects that the current market environment has had on us and on commercial real estate in general.

Real Estate Risks

Changes in general economic conditions and regulatory matters germane
to the real estate industry may cause our operating results to suffer and the value of our real estate properties to decline.

Our
operating results will be subject to risks generally incident to the ownership of real estate, including:



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



| |  |  | changes in supply of or demand for similar or competing properties in an area;
| | - |  | ------------------------------------------------------------------------------



| |  |  | changes in interest rates and availability of permanent mortgage funds, which may render the sale of a property difficult or unattractive;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in tax, real estate, environmental, and zoning laws; and
| | - |  | ----------------------------------------------------------------



| |  |  | periods of high interest rates and tight money supply.
| | - |  | ------------------------------------------------------



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##### Index to Financial Statements

These and other reasons may prevent us from being profitable or from realizing growth or maintaining the
value of our real estate properties.

General economic conditions may affect the timing of sale of our properties and the sale price we
receive.

We may be unable to sell a property if or when we decide to do so. The real estate market is affected by many factors, such as
general economic conditions, the availability of financing, interest rates, and other factors, including supply and demand for real estate investments, all of which are beyond our control. We cannot predict whether we will be able to sell any
property for the price or on terms which are acceptable to us. Further, we cannot predict the length of time which will be needed to find a willing purchaser and to close the sale of a property.

Vacancy and/or near-term tenant rollover at two of our properties could reduce or eliminate future cash distributions to limited partners.

We anticipate that we will be required to expend in the future, substantial funds for tenant improvements and other costs necessary to
re-lease (i) previously vacant space at the 360 Interlocken Building, which is currently 28% leased and (ii) space that is currently occupied on a month-by-month basis at 47300 Kato Road. If we are unable to secure a replacement tenant at
47300 Kato Road in a timely manner and/or the 360 Interlocken Building remains partially vacant for a prolonged period of time, property earnings would suffer and we would be required to reserve cash otherwise available for operating distributions
to limited partners. In addition, the residual value of these properties would be negatively impacted by vacancy because the market value is largely dependent upon the value of the leases in place at such property.

Adverse economic conditions in the geographic regions in which we own properties may negatively impact your overall returns.

Adverse economic conditions in the geographic regions in which we own our properties could affect the real estate values in this area or the business of our
tenants if any of our tenants rely upon the local economy for their revenues. Therefore, changes in local economic conditions could reduce our income and distributions to limited partners or the amounts we could otherwise receive upon the sale of a
property in a negatively affected region.

Adverse economic conditions affecting the particular industries of the tenants of our properties
may negatively impact your overall returns.

Adverse economic conditions affecting a particular industry of one or more of our tenants
could affect the financial ability of one or more of our tenants to make payments under their leases, which could cause delays in our receipt of rental revenues or a vacancy in one or more of our properties for a period of time. Therefore, changes
in economic conditions of the particular industry of one or more of our tenants could reduce our income and distributions to limited partners and the value of one or more of our properties at the time of sale of such properties.

We are dependent on our tenants for substantially all of our revenue, so our success is materially dependent on the financial stability of our tenants.

Most of our properties are occupied by only a few tenants and, therefore, the success of our investments is materially dependent on the
financial stability of our tenants. Lease payment defaults by tenants could cause us to reduce the amount of distributions to holders of Class A Units. A default of a tenant on its lease payments to us would cause us to lose the revenue from
the property. In the event of a default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting our property. If a lease is terminated, we cannot assure you that we
will be able to lease the property for the rent previously received or sell the property without incurring a loss.



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##### Index to Financial Statements

Your investment in units is subject to greater risk because we lack a diversified property portfolio.

Because we own interests in a limited number of properties, your investment in units is subject to a greater risk of loss. There is a
greater risk that you will lose money in your investment because our portfolio of properties is not diverse by geographic location, property type, or industry group of tenants.

Our future financial success depends on only a few tenants.

The ability of our tenants to
generate revenues is substantially dependent upon their financial condition and, accordingly, any event of bankruptcy, insolvency, or a general downturn in the business of any of these tenants may result in the failure or delay of such tenants
rental payments, which may have a substantial adverse effect on our financial performance.

We depend on tenants for our revenue.
Accordingly, lease terminations and/or tenant default could reduce our net income and limit our ability to make distributions to our limited partners.

The success of our investments materially depends on the financial stability of our tenants. A default or termination by a significant tenant on its lease payments to us would cause us to lose the revenue
associated with such lease and require us to find an alternative source of revenue. In the event of a tenant default or bankruptcy, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our
investment and re-letting our property. If significant leases are terminated or defaulted upon, we may be unable to lease the property for the rent previously received or sell the property without incurring a loss. These events could cause us to
reduce the amount of distributions to limited partners.

If one or more of our tenants file for bankruptcy, we may be precluded from
collecting all sums due.

If one or more of our tenants, or the guarantor of a tenants lease, commences, or has commenced against it,
any proceeding under any provision of the federal Bankruptcy Code, as amended, or any other legal or equitable proceeding under any bankruptcy, insolvency, rehabilitation, receivership, or debtors relief statute or law (bankruptcy proceeding),
we may be unable to collect sums due under relevant leases. Any or all of the tenants, or a guarantor of a tenants lease obligations, could be subject to a bankruptcy proceeding. Such a bankruptcy proceeding may bar our efforts to collect
pre-bankruptcy debts from these entities or their properties, unless we are able to obtain an enabling order from the bankruptcy court. If a lease is rejected by a tenant in bankruptcy, we would only have a general unsecured claim against the
tenant, and may not be entitled to any further payments under the lease. A tenants or lease guarantors bankruptcy proceeding could hinder or delay efforts to collect past-due balances under relevant leases, and could ultimately preclude
collection of these sums. Such an event could cause a decrease or cessation of rental payments, which would result in a reduction in our cash flow and the amount available for distribution to limited partners holding Class A Units. In the event
of a bankruptcy proceeding, we cannot assure you that the tenant or its trustee will assume our lease. If a given lease, or guaranty of a lease, is not assumed, our cash flow and the amounts available for distribution to limited partners holding
Class A Units may be adversely affected.

We may not have funding for future tenant improvements, which may reduce your returns and
make it difficult to attract one or more new tenants.

When a tenant at one of our properties does not renew its lease or otherwise vacates
its space in one of our buildings, it is likely that in order to attract one or more new tenants, we will be required to expend substantial funds for tenant improvements and tenant refurbishments to the vacated space and other lease-up costs.
Substantially all of our net offering proceeds available for investment have been used for investment in Partnership properties, and we do not anticipate that we will maintain permanent working capital reserves. We also have not identified a funding
source to provide funds which may be required in the future for tenant improvements, tenant refurbishments, and other lease-up costs in order to attract new tenants. We cannot assure you that any such source of funding will be available to us for
such purposes in the future. In the event that we



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##### Index to Financial Statements

are required to use net cash from operations to fund such tenant improvements, tenant refurbishments, and other lease-up costs, cash distributions to limited partners holding Class A Units
will be reduced or eliminated for potentially extended periods of time.

A property that incurs a vacancy could be difficult to sell or
lease.

A property may incur a vacancy either by the continued default of a tenant under its lease or the expiration of one of our leases.
Our properties may be leased to a single tenant and/or may be specifically suited to the particular needs of a certain tenant based on the type of business the tenant operates. If a vacancy on any of our properties continues for a long period of
time, we may suffer reduced revenues resulting in less cash to be distributed to investors holding Class A Units. In addition, the resale value of the property could be diminished because the market value of a particular property will depend
principally upon the value of the leases of such property.

Uninsured losses relating to real property or excessively expensive premiums
for insurance coverage could reduce our net income.

Our General Partners will attempt to obtain adequate insurance on all of our
properties to cover casualty losses. However, there are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution, or environmental matters that are uninsurable or
not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential terrorism acts could sharply increase the premiums we pay for coverage against property and
casualty claims. We may not have adequate coverage for such losses. If any of our properties incur a casualty loss that is not fully insured, the value of our assets will be reduced by such uninsured loss. In addition, other than reserves of net
cash from operations we may establish, we have no source of funding to repair or reconstruct any uninsured damaged property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result
in lower distributions to limited partners.

Uncertain market conditions and the broad discretion of our General Partners relating to the
future disposition of properties could adversely affect the return on your investment.

We generally will hold the various remaining real
properties in which we are invested until such time as the General Partners determine that the sale or other disposition thereof appears to be advantageous to achieve our investment objectives or until the sale of the properties is warranted even if
it appears that such objectives will not be met. Our General Partners intend to sell properties acquired for development after holding such properties for a period of 10 years from the date the development is completed, and intend to sell existing
income-producing properties within 10 to 12 years after their acquisition, or as soon thereafter as market conditions permit. This is the period of time it typically takes to realize significant appreciation of the type of property in which we
traditionally invest. However, our General Partners may exercise their discretion as to whether and when to sell a property, and we will have no obligation to sell properties at any particular time, except upon the termination of the Partnership as
specified in the partnership agreement, or earlier if a majority of you vote to liquidate the Partnership pursuant to a formal proxy to liquidate. We cannot predict with any certainty the various market conditions affecting real estate investments
which will exist at any particular time in the future. Due to the uncertainty of market conditions which may affect the future disposition of our properties, we cannot assure you that we will be able to sell our properties at a profit in the future.
Accordingly, the timing of liquidation of the Partnership and the extent to which you will receive cash distributions and realize potential appreciation on our real estate investments will be dependent upon fluctuating market conditions.

If any environmentally hazardous material is determined to exist on a property owned by the Partnership, our operating results could be adversely
affected.

Under various federal, state, and local environmental laws, ordinances, and regulations, a current or previous owner or operator
of real property may be liable for the cost of removal or remediation of hazardous or toxic



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##### Index to Financial Statements

substances on, under, or in such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic
substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require expenditures. Environmental laws provide for sanctions in the event of
noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. In connection with the acquisition and ownership of our properties, we may be potentially liable for such costs. The cost of defending
against claims of liability, complying with environmental regulatory requirements, or remediating any contaminated property could materially adversely affect the business, assets, or results of operations of the Partnership and, consequently,
amounts available for distribution to limited partners holding Class A Units.

The Partnership and/or other prior Wells public limited
partnerships sponsored by our General Partners have sold real estate properties for a sale price less than the original purchase price.

Certain of the real estate properties previously purchased by the Partnership and other Wells public limited partnerships sponsored by the General Partners have not appreciated to the levels anticipated at the time of purchase. Recently
some of these properties have been sold by such partnerships at purchase prices below the prices paid for such properties. We cannot guarantee that any of our properties will appreciate in value.

General Investment Risks

The Georgia
Revised Uniform Limited Partnership Act (GRULPA) does not grant you any specific voting rights, and your rights are limited under our partnership agreement.

A vote of a majority in interest of the limited partners is sufficient to take the following significant Partnership actions:



| |  |  | to amend our partnership agreement;
| | - |  | -----------------------------------



| |  |  | to change our business purpose or our investment objectives;
| | - |  | ------------------------------------------------------------



| |  |  | to remove our General Partners; or
| | - |  | ----------------------------------



| |  |  | to authorize a merger or a consolidation of the Partnership.
| | - |  | ------------------------------------------------------------

These are your only significant voting rights granted under our partnership agreement. In addition, GRULPA does not grant you any specific voting rights. Therefore, your voting rights are severely
limited.

You are bound by the majority vote on matters on which you are entitled to vote.

Limited partners may approve any of the above actions by majority vote of the outstanding units. Therefore, you are bound by such majority vote even if you
do not vote with the majority on any of these actions.

Under our partnership agreement, we are required to indemnify our General Partners
under certain circumstances which may reduce returns to our limited partners.

Under our partnership agreement and subject to certain
limitations, the Partnership is required to indemnify our General Partners from and against losses, liabilities, and damages relating to or arising out of any action or inaction on behalf of the Partnership done in good faith and in the best
interest of the Partnership. If substantial and expensive litigation should ensue and the Partnership is obligated to indemnify one or both General Partners, we may be forced to use substantial funds to do so, which may reduce the return on your
investment.

Payment of fees to our General Partners or their affiliates will reduce cash available for distributions to our limited
partners.

Our General Partners or their affiliates perform services for us in connection with the management and leasing of our
properties. Our affiliates may receive property management, leasing and asset management fees of 4.5% of



Page 9



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##### Index to Financial Statements

gross revenues in connection with the commercial properties we own. In addition, we will reimburse our General Partners or their affiliates for the administrative services necessary to our
prudent operation, which includes actual costs of goods, services, and materials used for or by the Partnership. These fees and reimbursements will reduce the amount of cash available for capital expenditures to our properties or distributions to
our limited partners.

The availability and the timing of cash distributions are uncertain.

We cannot assure you that sufficient cash will be available to make distributions to you from either net cash from operations or proceeds from the sale of
properties. We bear all expenses incurred in connection with our operations, which are deducted from cash funds generated by operations prior to computing the amount of net cash from operations to be distributed to our general and limited partners.
In addition, our General Partners, in their discretion, may retain all or any portion of net cash generated from our operations and/or proceeds from the sale of our properties for tenant improvements, tenant refurbishments, and other lease-up costs
or for working capital reserves.

Gains and distributions upon sale of our properties are uncertain.

Although gains from the sale of properties typically represent a substantial portion of any profits attributable to real estate investments, we cannot assure
you that we will realize any gains on the sale of our properties. In any event, you should not expect distribution of such proceeds to occur during the early years of our operations. We generally will not sell properties until at least 10 to 12
years after the acquisition of the properties, and our General Partners may exercise their discretion as to whether and when to sell a property; therefore, we have no obligation to sell properties at any particular time. Further, receipt of the full
proceeds of such sales may be extended over a substantial period of time following the sales. In addition, the amount of taxable gain allocated to you with respect to the sale of a Partnership property could exceed the cash proceeds received from
such sale. While the net proceeds from the sale of a property will generally be distributed to investors, the General Partners, in their sole discretion, may not make such distribution if such proceeds are used to:



| |  |  | purchase land underlying any of our properties;
| | - |  | -----------------------------------------------



| |  |  | buy out the interest of any co-venturer or joint venture partner in a property which is jointly owned;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | establish working capital reserves; or
| | - |  | --------------------------------------



| |  |  | make repairs, maintenance, tenant improvements, capital improvements, or other expenditures to any of our existing properties.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------

We are uncertain of our sources for funding of future capital needs.

Substantially all of the gross proceeds of the offering were used to invest in properties and to pay various fees and expenses. In addition, we do not
anticipate that we will maintain any permanent working capital reserves. Accordingly, in the event that we develop a need for additional capital in the future, such as the funding of tenant improvements, tenant refurbishments, or other lease-up
costs, we have not identified any sources for such funding, and we cannot assure you that any sources of funding will be available to us for potential capital needs in the future.

We may need to reserve net cash from operations for future tenant improvements, which may reduce your returns.

We may be required to expend substantial funds for tenant improvements and tenant refurbishments to vacated space and other lease-up costs. Substantially all of our net offering proceeds available for
investment were used for investment in Partnership properties, and we do not anticipate that we will maintain permanent working capital reserves. We also have no identified funding source to provide funds which may be required in the future



Page 10



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##### Index to Financial Statements

for tenant improvements, tenant refurbishments, and other lease-up costs in order to attract new tenants. We cannot assure you that any such source of funding will be available to us for such
purposes in the future. In the event that we are required to use net cash from operations to fund such tenant improvements, tenant refurbishments, and other lease-up costs, cash distributions to limited partners holding Class A Units will be
reduced or eliminated for potentially extended periods of time.

Concentration of Credit Risk

The Partnership maintains bank accounts with high credit, quality financial institutions. At times, our cash balances may exceed the federally insured
limits.

Marketability and Transferability Risks

There is no public trading market for your units.

There is no public market for your
units, and we do not anticipate that any public trading market for your units will ever develop. If you attempt to sell your units, you would likely do so at substantially discounted prices on the secondary market. Further, our partnership agreement
restricts our ability to participate in a public trading market or anything substantially equivalent to one by providing that any transfer which may cause us to be classified as a publicly traded partnership as defined in
Section 7704 of the Internal Revenue Code shall be deemed void and shall not be recognized. Because classification of the Partnership as a publicly traded partnership may significantly decrease the value of your units, our General
Partners intend to use their authority to the maximum extent possible to prohibit transfers of units which could cause us to be classified as a publicly traded partnership.

Your units have limited transferability and lack liquidity due to restrictions under state regulatory laws and our partnership agreement.

You are limited in your ability to transfer your units. Our partnership agreement and certain state regulatory agencies have imposed restrictions relating to
the number of units you may transfer. In addition, the suitability standards applied to you upon the purchase of your units may also be applied to persons to whom you wish to transfer your units. Accordingly, you may find it difficult to sell your
units for cash or if you are able to sell your units, you may have to sell your units at a substantial discount. You may not be able to sell your units in the event of an emergency, and your units are not likely to be accepted as collateral for a
loan.

Our estimated unit valuations should not be viewed as an accurate reflection of the value of the limited partners units.

The estimated unit valuations contained in this Annual Report on Form 10-K should not be viewed as an accurate reflection of the value of the
limited partners units, what limited partners might be able to sell their units for, or the fair market value of the Partnerships properties, nor do they necessarily represent the amount of net proceeds limited partners would receive if
the Partnerships properties were sold and the proceeds distributed in a liquidation of the Partnership in accordance with the net sale proceeds distribution allocation outlined in the partnership agreement. 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 ever develop. We did not obtain any third-party appraisals of our properties in connection with these
estimated unit valuations. In addition, property values are subject to change and could decline in the future. The valuations performed by the General Partners are estimates only, and are based on a number of assumptions which may not be accurate or
complete and may or may not be applicable to any specific limited partnership units. Further, these estimated valuations are applicable only to limited partners who purchased their units directly from the Partnership in the Partnerships
original public offering of units. It also should be noted that, as properties are sold and the net proceeds from property sales are distributed to limited partners, the remaining value of the Partnerships portfolio of properties, and
resulting value of Partnerships limited partnership units, will naturally decline.



Page 11



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##### Index to Financial Statements

Special Risks Regarding Status of Units

If you hold Class A Units, we expect that you will be allocated more income than cash flow.

Since limited partners holding Class A Units are allocated substantially all of the Partnerships net income, while substantially all deductions for depreciation and other tax losses are allocated to limited partners holding Class
B Units, we expect that those of you who hold Class A Units will be allocated taxable income in excess of your cash distributions. We cannot assure you that cash flow will be available for distribution in any year.

The desired effect of holding Class A Units or Class B Units may be reduced depending on how many investors hold each type of unit.

You will be entitled to different rights and priorities as to distributions of cash flow from operations and net sale proceeds and as to the allocation of
depreciation and other tax losses depending upon whether you are holding Class A Units or Class B Units. However, the effect of any advantage associated with holding Class A Units or Class B Units may be significantly reduced or
eliminated, depending upon the ratio of Class A Units to Class B Units during any given period. We will not attempt to restrict the ratio of Class A Units to Class B Units, and we will not attempt to establish or maintain any particular
ratio.

Management Risks

You must rely on our General Partners for management of our business.

Our General Partners make all decisions with respect to
the management of the Partnership. Limited partners have no right or power to take part in the management of the Partnership, except through the exercise of limited voting rights. Therefore, you must rely almost entirely on our General Partners for
management of the Partnership and the operation of its business. Our General Partners may be removed only under certain conditions set forth in our partnership agreement. If our General Partners are removed, they will receive payment equal to the
fair market value of their interests in the Partnership, as agreed upon by our General Partners and the Partnership or by arbitration if they are unable to agree.

Leo F. Wells, III has a primary role in determining what is in the best interest of the Partnership and its limited partners.

Leo F. Wells, III is one of our General Partners and is the president, treasurer, and sole director of Wells Capital, the general partner of our corporate general partner. Therefore, one person has a
primary role in determining what is in the best interest of the Partnership and its limited partners. Although Mr. Wells relies on the input of the officers and other employees of Wells Capital, he ultimately has the authority to make decisions
affecting our Partnership operations. Therefore, Mr. Wells alone will determine the propriety of his own actions, which could result in a conflict of interest when he is faced with any significant decision relating to our Partnership affairs.

Our loss of, or inability to obtain, key personnel could delay or hinder implementation of our investment strategies, which could limit
our ability to make distributions.

Our success depends to a significant degree upon the contributions of Leo F. Wells, III, Douglas P.
Williams, and Randall D. Fretz, each of whom would be difficult to replace. We do not have employment agreements with Messrs. Wells, Williams, or Fretz, and we cannot guarantee that such persons will remain affiliated with us. If any of Wells
Capitals key personnel were to cease their affiliation with the Partnership, we may be unable to find suitable replacement personnel, and our operating results could suffer. We do not maintain key-person life insurance on any person. We
believe that our future success depends, in large part, upon the ability of our General Partners to hire and retain highly skilled managerial and operational personnel. If we lose, or are unable to obtain, the services of highly skilled personnel or
do not establish or maintain appropriate strategic relationships, our ability to implement our investment strategies could be delayed or hindered, and the value of your investment may decline.



Page 12



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##### Index to Financial Statements

Our operating performance could suffer if Wells Capital incurs significant losses, including those losses
that may result from being the general partner of other entities.

We are dependent on Wells Capital to conduct our operations; thus,
adverse changes in the financial condition of Wells Capital, including changes arising from litigation or our relationship with Wells Capital, could hinder its ability to successfully manage our operations and our portfolio of investments. As a
general partner in many Wells-sponsored programs, Wells Capital may have contingent liabilities for the obligations of such programs. Enforcement of such obligations against Wells Capital could result in a substantial reduction of its net worth. If
such liabilities affected the level of services that Wells Capital could provide, our operations and financial performance could suffer.

Our General Partners have a limited net worth consisting of illiquid assets, which may affect their ability to fulfill their financial obligations to the Partnership.

The net worth of our General Partners consists primarily of interests in real estate, retirement plans, partnerships, and closely held businesses and, in the case of Wells Capital, receivables from
affiliated corporations and partnerships. Accordingly, the net worth of our General Partners is illiquid and not readily marketable. This illiquidity may be relevant to you in evaluating the ability of our General Partners to fulfill their financial
obligations to the Partnership. In addition, our General Partners have significant commitments to the other Wells-sponsored programs.

Increases in our general and administrative operating expenses, including increased expenses associated with operating as a public company in the current regulatory environment, could limit our ability to make distributions.

As we evolve through our Partnership life cycle and sell various properties in our portfolio, our general and administrative operating
expenses become a larger percentage in relationship to our operating cash flow and the value of our properties. Further, we bear all expenses incurred in connection with our operations, which are deducted from cash funds generated by operations
prior to computing the amount of net cash from operations to be distributed to our limited partners. Therefore, as a result of the increased general and administrative operating expenses and increased percentage of such expenses, we cannot assure
you that sufficient cash will be available to make future distributions to you from either net cash from our operations or proceeds from the sale of our properties.

Conflicts of Interest Risks

Our General Partners will face conflicts of interest
relating to time management, which could result in lower returns on our investments.

Because our General Partners and their affiliates
have interests in other real estate programs and also engage in other business activities, they could have conflicts of interest in allocating their time between our business and these other activities, which could affect operations of the
Partnership. You should note that our partnership agreement does not specify any minimum amount of time or level of attention that our General Partners are required to devote to the Partnership.

Our General Partners will face conflicts of interest relating to the sale and leasing of properties.

We may be selling properties at the same time as other Wells programs are buying and selling properties. We may have acquired or be selling properties in
geographic areas where other Wells programs own properties or are trying to sell properties, which could lower your return on your investment.



Page 13



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##### Index to Financial Statements

Investments in joint ventures with affiliates and Piedmont Operating Partnership, LP will result in
additional risks involving our relationship with the co-venturer.

We have entered into joint ventures with affiliates and Piedmont
Operating Partnership, LP. In addition, Piedmont Operating Partnership, LP has a majority interest in Wells/Fremont Associates and The Wells Fund XI-Fund XII-REIT Joint Venture and, as a result, holds the controlling vote on significant joint
venture matters. Such investments may involve risks not otherwise present with an investment in real estate, including, for example:



| |  |  | the possibility that our co-venturer, co-tenant, or partner in an investment might become bankrupt;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | that such co-venturer, co-tenant, or partner may at any time have economic or business interests or goals which are, or which become, inconsistent with
our business interests or goals; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | that such co-venturer, co-tenant, or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies
or objectives.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Actions by such a co-venturer, co-tenant, or partner might result in subjecting the property to liabilities
in excess of those contemplated and may have the effect of reducing your returns.

Our General Partners will face various conflicts of
interest relating to joint ventures with affiliates.

Since our General Partners and their affiliates control both the Partnership and
other affiliates, transactions between the parties with respect to joint ventures between such parties do not have the benefit of arms-length negotiation of the type normally conducted between unrelated co-venturers. Under these joint venture
arrangements, neither co-venturer has the power to control the venture, and an impasse could be reached regarding matters pertaining to the joint venture, which might have a negative influence on the joint venture and decrease potential returns to
you. In the event that a co-venturer has a right of first refusal to buy out the other co-venturer, it may be unable to finance such a buy-out at that time. It may also be difficult for us to sell our interest in any such joint venture or
partnership or as a co-tenant in property. In addition, to the extent that our co-venturer, partner, or co-tenant is an affiliate of our General Partners, certain conflicts of interest will exist.

Federal Income Tax Risks

The Internal
Revenue Service (IRS) may challenge our characterization of material tax aspects of your investment in the Partnership.

An
investment in units involves certain material income tax risks, the character and extent of which are, to some extent, a function of whether you hold Class A Units or Class B Units. We will not seek any rulings from the IRS regarding any of the
tax issues related to your units.

Investors may realize taxable income without cash distributions.

As a limited partner in the Partnership, you are required to report your allocable share of the Partnerships taxable income on your personal income tax
return regardless of whether or not you have received any cash distributions from the Partnership. For example, if you hold Class A Units, you will be allocated substantially all of our net income, defined in the partnership agreement to mean
generally net income for federal income tax purposes, including any income exempt from tax, but excluding all deductions for depreciation and amortization and gain or loss from the sale of Partnership properties, even if such income is in excess of
any distributions of cash from our operations. If you hold Class A Units, you will likely be allocated taxable income in excess of any distributions to you, and the amount of cash received by you could be less than the income tax attributable
to the net income allocated to you.



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##### Index to Financial Statements

We could potentially be characterized as a publicly traded partnership resulting in unfavorable tax
results.

If the IRS were to classify the Partnership as a publicly traded partnership, we could be taxable as a corporation,
and distributions made to you could be treated as portfolio income to you rather than passive income. We cannot assure you that we will not, at some time in the future, be treated as a publicly traded partnership due to the following factors:



| |  |  | the complex nature of the IRS rules governing our potential exemption from classification as a publicly traded partnership;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | the lack of interpretive guidance with respect to such rules; and
| | - |  | -----------------------------------------------------------------



| |  |  | the fact that any determination in this regard will necessarily be based upon events which have not yet occurred.
| | - |  | -----------------------------------------------------------------------------------------------------------------

The IRS may challenge our allocations of profit and loss.

While it is more likely than not Partnership items of income, gain, loss, deduction, and credit will be allocated among our General Partners and our limited partners substantially in accordance with the
allocation provisions of the partnership agreement, we cannot assure you that the IRS will not successfully challenge the allocations in the partnership agreement and reallocate items of income, gain, loss, deduction, and credit in a manner which
reduces the anticipated tax benefits to investors holding Class B Units or increases the income allocated to investors holding Class A Units.

We may be audited and additional tax, interest and penalties may be imposed upon you.

Our federal income tax returns may be
audited by the IRS. Any audit of the Partnership could result in an audit of your tax return causing adjustments of items unrelated to your investment in the Partnership, in addition to adjustments to various Partnership items. In the event of any
such adjustments, you might incur accountants or attorneys fees, court costs, and other expenses contesting deficiencies asserted by the IRS. You also may be liable for interest on any underpayment and certain penalties from the date
your tax was originally due. The tax treatment of all Partnership items will generally be determined at the Partnership level in a single proceeding rather than in separate proceedings with each partner, and our General Partners are primarily
responsible for contesting federal income tax adjustments proposed by the IRS. In this connection, our General Partners may extend the statute of limitations as to all partners and, in certain circumstances, may bind the partners to a settlement
with the IRS. Further, our General Partners may cause us to elect to be treated as an electing large partnership. If they do, we could take advantage of simplified flow-through reporting of Partnership items. Adjustments to
Partnership items would continue to be determined at the Partnership level, however, and any such adjustments would be accounted for in the year they take effect, rather than in the year to which such adjustments relate. Accordingly, if you make an
election to change the status of your units between the years in which a tax benefit is claimed and an adjustment is made, you may suffer a disproportionate adverse impact with respect to any such adjustment. Further, our General Partners will have
the discretion in such circumstances either to pass along any such adjustments to the partners or to bear such adjustments at the Partnership level, thereby potentially adversely impacting the holders of a particular class of units
disproportionately to holders of the other class of units.

State and local taxes and a requirement to withhold state taxes may apply.

The state in which you reside may impose an income tax upon your share of our taxable income. Further, states in which we own properties may
impose income taxes upon your share of our taxable income allocable to any Partnership property located in that state or other taxes on limited partnerships owning properties in their states. Many states have implemented or are implementing programs
to require partnerships to withhold and pay state income taxes owed by nonresident partners relating to income-producing properties located in their states, and we may be required to withhold state taxes from cash distributions otherwise payable to
you. In the event we are



Page 15



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##### Index to Financial Statements

required to withhold state taxes from your cash distributions, or pay other state taxes, the amount of the net cash from operations otherwise payable to you would be reduced. In addition, such
collection and filing requirements at the state level may result in increases in our administrative expenses which would have the effect of reducing cash available for distribution to you. You are urged to consult with your own tax advisors with
respect to the impact of applicable state and local taxes and state tax withholding requirements or other potential state taxes relating to an investment in our units.

Legislative or regulatory action could adversely affect investors.

In recent years,
numerous legislative, judicial, and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in our units. Additional changes to the tax laws are likely to continue to
occur in the future, and we cannot assure you that any such changes will not adversely affect the taxation of a limited partner. Any such changes could have an adverse effect on an investment in our units or on the market value or the resale
potential of our properties. You are urged to consult with your own tax advisor with respect to the impact of recent legislation on your investment in units and the status of legislative, regulatory, or administrative developments and proposals and
their potential effect on an investment in our units.

Retirement Plan and Qualified Plan Risks

There are special considerations that apply to a pension or profit-sharing trust or an Individual Retirement Account (IRA) investing in units.

If you are investing the assets of a pension, profit-sharing, Section 401(k), Keogh, or other qualified retirement plan or the assets
of an IRA in units, you should satisfy yourself that:



| |  |  | your investment is consistent with your fiduciary obligations under the Employee Retirement Income Security Act (ERISA) and the Internal
Revenue Code;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | your investment is made in accordance with the documents and instruments governing your plan or IRA, including your plans investment policy;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | your investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | your investment will not impair the liquidity of the plan or IRA;
| | - |  | -----------------------------------------------------------------



| |  |  | your investment will not produce unrelated business taxable income for the plan or IRA;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | you will be able to value the assets of the plan annually in accordance with ERISA requirements; and
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------

We may dissolve the Partnership if our assets are deemed to be plan assets or if we engage in prohibited transactions.

If our assets were deemed to be assets of qualified plans investing as limited partners, i.e., plan assets, our General Partners would be
considered to be fiduciaries of such plans and certain contemplated transactions between our General Partners or their affiliates, and the Partnership may then be deemed to be prohibited transactions subject to excise taxation under
Section 4975 of the Internal Revenue Code. Additionally, if our assets were deemed to be plan assets, the standards of prudence and other provisions of ERISA applicable to plan fiduciaries would apply to the General Partners with respect to our
investments. We have not sought a ruling from the U.S. Department of Labor regarding the potential classification of our assets as plan assets.

In this regard, U.S. Department of Labor regulations defining plan assets for purposes of ERISA contain exemptions which, if satisfied, would preclude assets of a limited partnership such as ours from being treated as



Page 16



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##### Index to Financial Statements

plan assets. We cannot assure you that our partnership agreement has been structured so that the exemptions in such Regulations would apply to us, although our General Partners intend that an
investment by a qualified plan in units will not be deemed an investment in the assets of the Partnership. We can make no representations or warranties of any kind regarding the consequences of an investment in our units by qualified plans in this
regard. Plan fiduciaries are urged to consult with, and rely upon, their own advisors with respect to this and other ERISA issues which, if decided adversely to the Partnership, could result in qualified plan investors being deemed to have engaged
in prohibited transactions, which would cause the imposition of excise taxes and co-fiduciary liability under Section 405 of ERISA in the event actions taken by us are deemed to be nonprudent investments or prohibited
transactions.

In the event our assets are deemed to constitute plan assets or certain transactions undertaken by us are deemed to
constitute prohibited transactions under ERISA or the Internal Revenue Code, and no exemption for such transactions is obtainable by us, the General Partners have the right, but not the obligation, upon notice to all limited partners,
but without the consent of any limited partner, to:



| |  |  | compel a termination and dissolution of the Partnership; or
| | - |  | -----------------------------------------------------------



| |  |  | restructure our activities to the extent necessary to comply with any exemption in the U.S. Department of Labor regulations or any prohibited
transaction exemption granted by the Department of Labor or any condition which the Department of Labor might impose as a condition to granting a prohibited transaction exemption.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Adverse tax consequences may result because of minimum distribution requirements.

If you hold units in an IRA or you intend to acquire units in a secondary market through your IRA, or if you are a custodian of an IRA or a trustee or other fiduciary of a retirement plan which is holding
units or is considering an acquisition of units through a secondary market, you must consider the limited liquidity of an investment in our units as it relates to applicable minimum distribution requirements under the Internal Revenue Code. If units
are held and our properties have not yet been sold at such time as mandatory distributions are required to begin to an IRA beneficiary or qualified plan participant, Sections 408(a)(6) and 401(a)(9) of the Internal Revenue Code will likely require
that a distribution-in-kind of the units be made to the IRA beneficiary or qualified plan participant. Any such distribution-in-kind of units must be included in the taxable income of the IRA beneficiary or qualified plan participant for the year in
which the units are received at the fair market value of the units, and taxes attributable thereto must be paid without any corresponding cash distributions from us with which to pay such income tax liability.

Unrelated business taxable income (UBTI) may be generated with respect to tax-exempt investors.

We do not intend or anticipate that the tax-exempt investors in the Partnership will be allocated income deemed to be derived from an unrelated trade or
business. Notwithstanding this, the General Partners do have limited authority to borrow funds deemed necessary:



| |  |  | to finance improvements necessary to protect capital previously invested in a property;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | to protect the value of our investment in a property; or
| | - |  | --------------------------------------------------------



| |  |  | to make one of our properties more attractive for sale or lease.
| | - |  | ----------------------------------------------------------------

Our General Partners have represented that they will not cause the Partnership to incur indebtedness unless they obtain an opinion from legal counsel or an opinion from our tax accountants that the
proposed indebtedness more than likely will not cause the income allocable to tax-exempt investors to be characterized as UBTI. Any such opinion will have no binding effect on the IRS or any court, however, and some risk remains that we may generate
UBTI for our tax-exempt investors in the event that it becomes necessary for us to borrow funds.



Page 17



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##### Index to Financial Statements

Further, in the event we were deemed to be a dealer in real property, defined as one who holds
real estate primarily for sale to customers in the ordinary course of business, the gain realized on the sale of our properties which is allocable to tax-exempt investors would be characterized as UBTI.



|ITEM 1B. | UNRESOLVED STAFF COMMENTS.
|-------- | --------------------------

There were no
unresolved SEC staff comments as of December 31, 2009.



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

Overview

The Partnership owns indirect interests in all of its real estate assets through joint ventures with other entities affiliated with the General Partners
and Piedmont Operating Partnership, LP (Piedmont OP), formerly known as Wells Operating Partnership, L.P. Piedmont OP is a Delaware limited partnership, with Piedmont REIT serving as its general partner. Piedmont REIT is a Maryland
corporation that qualifies as a real estate investment trust. During the periods presented, the Partnership owned interests in the following joint ventures (the Joint Ventures) and properties:



|                                                                                     |  |                                                                                                                                       |  |                      |  |                                                                                                          |  |                             |  |      |  |      |  |      |  |     
|------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------- |  | -------------------------------------------------------------------------------------------------------- |  | --------------------------- |  | ---- |  | ---- |  | ---- |  | ----
|Joint Venture                                                                        |  | Joint Venture Partners                                                                                                                |  | Ownership %          |  | Properties                                                                                               |  | Leased % as of December 31,
|                                                                                     |  |                                                                                                                                       |  | 2009                 |  | 2008                                                                                                     |  | 2007                        |  | 2006 |  | 2005
|The Fund IX, Fund X, Fund XI and REIT Joint Venture (Fund IX-X-XI-REIT Associates) |  | Wells Real Estate Fund IX, L.P. Wells Real Estate Fund X, L.P. Wells Real Estate Fund XI, L.P. Piedmont Operating Partnership, LP |  | 39.0%48.5% 8.8% 3.7% |  | 1. Alstom Power Knoxville Building(1) A three-story office building located in Knoxville, Tennessee     |  |                            |  |     |  |     |  |     |  |    
|                                                                                     |  |                                                                                                                                       |  |                      |  | 2. 1315 West Century Drive(2) A two-story office building located in Louisville, Colorado                |  |                            |  |     |  |     |  |     |  | 0%  
|                                                                                     |  |                                                                                                                                       |  |                      |  | 3. 360 Interlocken Building A three-story office building located in Broomfield, Colorado                |  | 28%                         |  | 30%  |  | 100% |  | 100% |  | 97% 
|                                                                                     |  |                                                                                                                                       |  |                      |  | 4. Avaya Building A one-story office building located in Oklahoma City, Oklahoma                         |  | 100%                        |  | 100% |  | 100% |  | 100% |  | 100%
|                                                                                     |  |                                                                                                                                       |  |                      |  | 5. Iomega Building(3) A single-story warehouse and office building located in Ogden, Utah                |  |                            |  |     |  |     |  | 100% |  | 100%
|                                                                                     |  |                                                                                                                                       |  |                      |  |                                                                                                          |  |                             |  |      |  |      |  |      |  |     
|Fund X and Fund XI Associates (Fund X-XI Associates)                               |  | Wells Real Estate Fund X, L.P. Wells Real Estate Fund XI, L.P.                                                                      |  | 58.0%42.0%           |  | This joint venture owns interests only in other joint ventures and does not own any properties directly.
|                                                                                     |  |                                                                                                                                       |  |                      |  |                                                                                                          |  |                             |  |      |  |      |  |      |  |     



Page 18



---

##### Index to Financial Statements

|                                                                              |  |                                                                                                        |  |                  |  |                                                                                                                                   |  |                             |  |      |  |      |  |      |  |     
|----------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | ---------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- |  | ---- |  | ---- |  | ---- |  | ----
|Joint Venture                                                                 |  | Joint Venture Partners                                                                                 |  | Ownership %      |  | Properties                                                                                                                        |  | Leased % as of December 31,
|                                                                              |  |                                                                                                        |  | 2009             |  | 2008                                                                                                                              |  | 2007                        |  | 2006 |  | 2005
|Wells/Orange County Associates(4)                                             |  | Fund X-XI Associates Piedmont Operating Partnership, LP                                              |  | 56.3%43.7%       |  | No properties owned during the periods presented.                                                                                 |  |                            |  |     |  |     |  |     |  |    
|                                                                              |  |                                                                                                        |  |                  |  |                                                                                                                                   |  |                             |  |      |  |      |  |      |  |     
|Wells/Fremont Associates                                                      |  | Fund X-XI Associates Piedmont Operating Partnership, LP                                              |  | 22.5%77.5%       |  | 6. 47300 Kato Road (formerly known as 47320 Kato Road) A two-story warehouse and office building located in Fremont, California |  | 100%                        |  | 100% |  | 100% |  | 100% |  | 100%
|                                                                              |  |                                                                                                        |  |                  |  |                                                                                                                                   |  |                             |  |      |  |      |  |      |  |     
|The Wells Fund XI-Fund XII-REIT Joint Venture (Fund XI-XII-REIT Associates) |  | Wells Real Estate Fund XI, L.P. Wells Real Estate Fund XII, L.P. Piedmont Operating Partnership, LP |  | 26.1%17.1% 56.8% |  | 7. 111 Southchase Boulevard(5) A two-story manufacturing and office building
located in Fountain Inn, South Carolina              |  |                            |  |     |  |     |  | 100% |  | 0%  
|                                                                              |  |                                                                                                        |  |                  |  | 8. 20/20 Building A three-story office building located in Leawood, Kansas                                                        |  | 91%                         |  | 91%  |  | 77%  |  | 77%  |  | 0%  
|                                                                              |  |                                                                                                        |  |                  |  | 9. Gartner Building(6) A two-story office building located in Ft. Myers, Florida                                                  |  |                            |  |     |  |     |  |     |  |    
|                                                                              |  |                                                                                                        |  |                  |  |                                                                                                                                   |  |                             |  |      |  |      |  |      |  |     



| | (1) | The property was sold in March 2005.
| | --- | ------------------------------------



| | (2) | The property was sold in December 2006.
| | --- | ---------------------------------------



| | (3) | The property was sold in January 2007.
| | --- | --------------------------------------



| | (4) | Wells/Orange County Associates was liquidated and dissolved in 2005.
| | --- | --------------------------------------------------------------------



| | (5) | This property was sold in May 2007.
| | --- | -----------------------------------



| | (6) | The property was sold in April 2005.
| | --- | ------------------------------------

Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P., and Wells Real Estate Fund XII, L.P. are affiliated with the Partnership through common general partners. Each of the properties described
above was acquired on an all-cash basis.



Page 19



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##### Index to Financial Statements

Lease Expirations

As of December 31, 2009, the lease expirations scheduled during the following 10 years for all properties in which the Partnership held an interest through the Joint Ventures, assuming no exercise of
renewal options or termination rights, are summarized below:



|                         |  |                         |  |                    |  |                                               |           |                                                                     |   |                                       |  |                                                           |  |       
|------------------------ |  | ----------------------- |  | ------------------ |  | --------------------------------------------- | --------- | ------------------------------------------------------------------- | - | ------------------------------------- |  | --------------------------------------------------------- |  | ------
|Year of Lease Expiration |  | Number ofLeasesExpiring |  | SquareFeetExpiring |  | AnnualizedGross
BaseRent in Year ofExpiration |           | PartnershipShare
ofAnnualizedGross BaseRent in Year
ofExpiration(1) |   | Percentageof TotalSquare FeetExpiring |  | Percentageof TotalAnnualizedBaseRent in Year
ofExpiration
|2010(2)                  |  | 3                       |  | 63,635             |  | $                                             | 823,086   |                                                                     | $ | 77,069                                |  | 33.1%                                                     |  | 27.6% 
|2011(3)                  |  | 1                       |  | 4,832              |  |                                               | 106,304   |                                                                     |   | 9,344                                 |  | 2.5                                                       |  | 3.6   
|2012(4)                  |  | 3                       |  | 58,665             |  |                                               | 1,127,727 |                                                                     |   | 278,234                               |  | 30.6                                                      |  | 37.9  
|2013(5)                  |  | 1                       |  | 0                  |  |                                               | 2,400     |                                                                     |   | 211                                   |  | 0.0                                                       |  | 0.1   
|2014(6)                  |  | 1                       |  | 7,647              |  |                                               | 145,293   |                                                                     |   | 37,994                                |  | 4.0                                                       |  | 4.9   
|2015(7)                  |  | 1                       |  | 57,186             |  |                                               | 772,011   |                                                                     |   | 67,860                                |  | 29.8                                                      |  | 25.9  
|                         |  |                         |  |                    |  |                                               |           |                                                                     |   |                                       |  |                                                           |  |       
|                         |  | 10                      |  | 191,965            |  | $                                             | 2,976,821 |                                                                     | $ | 470,712                               |  | 100.0%                                                    |  | 100.0%
|                         |  |                         |  |                    |  |                                               |           |                                                                     |   |                                       |  |                                                           |  |       



| | (1) | The Partnerships share of annualized gross base rent in year of expiration is calculated based on the Partnerships ownership percentage
in the joint venture that owns the leased property.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Expiration of TCI International, Inc. lease at the 47300 Kato Road Building (approximately 58,000 square feet), Casey Family Programs lease at the
360 Interlocken Building (approximately 2,900 square feet), and Ayres Associates, Inc. lease at the 360 Interlocken Building (approximately 2,300 square feet).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Expiration of Culver Financial lease at the 360 Interlocken Building (approximately 4,800 square feet).
| | --- | -------------------------------------------------------------------------------------------------------



| | (4) | Expiration of Blue Cross and Blue Shield of Kansas City lease at the 20/20 Building (approximately 15,000 square feet); the EPOCH Group, L.C. lease
at the 20/20 Building (approximately 39,300 square feet); and the Lighthouse Financial, LLC lease at the 360 Interlocken Building (approximately 4,400 square feet).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Expiration of TCG Colorado antenna lease at the 360 Interlocken Building.
| | --- | -------------------------------------------------------------------------



| | (6) | Expiration of Nolan Real Estate Services, Inc. lease at the 20/20 Building (approximately 7,600 square feet).
| | --- | -------------------------------------------------------------------------------------------------------------



| | (7) | Expiration of Avaya, Inc. lease at the Avaya Building (approximately 57,200 square feet).
| | --- | -----------------------------------------------------------------------------------------

Property Descriptions

The properties in
which the Partnership owns an interest through the Joint Ventures during the periods presented are further described below:

Alstom Power
 Knoxville Building

The Alstom Power  Knoxville Building is a three-story office building containing approximately 84,000 rentable
square feet located on a 5.62-acre tract of real property in Knoxville, Tennessee. On March 15, 2005, Fund IX-X-XI-REIT Associates sold the Alstom Power  Knoxville Building to an unrelated third party for a gross sale price of
$12,000,000. As a result of the sale of the Alstom Power  Knoxville Building, the Partnership received net sale proceeds of approximately $1,024,000 and was allocated a gain of approximately $442,000.

1315 West Century Drive

The 1315 West Century
Drive property is a two-story office building containing approximately 107,000 rentable square feet located on a 15-acre tract of land located in Louisville, Colorado. On December 22, 2006, Fund IX-X-XI-REIT Associates sold 1315 West
Century Drive to an unrelated third party for a gross sale price of $8,325,000. As a result of the sale, Fund IX-X-XI-REIT Associates received net sale proceeds of approximately $8,060,000, of which approximately $708,000 was distributed to the
Partnership. In the third



Page 20



---

##### Index to Financial Statements

quarter of 2006, Fund IX-X-XI-REIT Associates recognized an impairment loss of approximately $354,000 to reduce the carrying value of 1315 West Century Drive to its estimated fair value, less
costs to sell, and recognized an additional loss on sale of approximately $148,000. Approximately $31,000 and $13,000 of the impairment loss and loss on sale were allocated to the Partnership, respectively.

360 Interlocken Building

The 360 Interlocken
Building is a three-story, multi-tenant office building containing approximately 52,000 rentable square feet located on a 5.1-acre tract of land in Broomfield, Colorado. Approximately 36,200 square feet (or approximately 70% of the
building) was under a lease with GAIAM, Inc. (GAIAM) through May 31, 2008. After fulfilling the terms of the lease, GAIAM vacated the space in May 2008, and it currently remains unoccupied. The remainder of the building is leased to
four tenants: Culver Financial (approximately 4,800 square feet, expiring February 2011); Lighthouse Financial, LLC (approximately 4,400 square feet, expiring July 2012); Casey Family Programs (approximately 2,900 square feet, expiring May
2010); and Ayres Associates, Inc. (approximately 2,300 square feet, expiring August 2010). All tenants in the 360 Interlocken Building are responsible for paying a pro rata share of the increases in taxes, utilities, insurance, and other
operating costs over a base year as defined in their respective leases.

Avaya Building

The Avaya Building is a one-story office building containing approximately 57,000 net rentable square feet on 5.3 acres of land in Oklahoma City, Oklahoma.
Avaya, Inc. (Avaya) occupies the entire Avaya Building under the initial lease term of 10 years, which commenced January 5, 1998 and was set to expire on January 31, 2008. On December 17, 2007, Avaya signed a two-year
lease extension through January 31, 2010. On August 26, 2009, Avaya signed a five-year lease extension through January 31, 2015, subject to certain lease termination rights held by the tenant. In addition to base rent, Avaya is
required to reimburse the landlord for certain insurance expenses. As of December 31, 2009, the annualized base rent payable was approximately $772,000 and decreases to approximately $758,000 on February 1, 2010. The annualized base rent
payable increases in February 2013 to approximately $772,000 through the remainder of the lease term.

Iomega Building

The Iomega Building is a single-story warehouse and office building containing approximately 108,000 rentable square feet located in Ogden, Utah. On
January 31, 2007, Fund IX-X-XI-REIT Associates sold the Iomega Building to an unrelated third party for a gross sale price of $4,867,000. As a result of the sale, the Partnership received net sale proceeds of approximately $412,000 and was
allocated a gain of approximately $16,000.

47300 Kato Road

The 47300 Kato Road building is a 58,000-square-foot, two-story warehouse and office building located in Fremont, California, and is 100% leased to one tenant, TCI International, Inc. (TCI),
under a five-year lease term, which commenced on December 1, 2004 and expired on November 30, 2009; however, TCI continues to occupy the building on a month-to-month basis at a rate of 150% of base rent payable in effect on
November 30, 2009, which is approximately $60,000 per month. We have received notification that TCI intends to vacate the building in May 2010.

111 Southchase Boulevard

The 111 Southchase Boulevard property is a two-story manufacturing and office building containing
approximately 168,000 rentable square feet located in Fountain Inn, South Carolina. The building is comprised of approximately 135,000 square feet of warehouse space and approximately 33,000 square feet of office space. On May 23, 2007, Fund
XI-XII-REIT Associates sold 111 Southchase Boulevard to an unrelated third party for a



Page 21



---

##### Index to Financial Statements

gross sale price of $7,625,000. As a result of the sale, the Partnership received net sale proceeds of approximately $1,892,000 and was allocated a gain of approximately $517,000.

20/20 Building

The 20/20 Building is a
three-story office building containing approximately 70,000 rentable square feet on a 7.12-acre tract of land located in Leawood, Kansas. In December 2006, Fund XI-XII-REIT Associates and Blue Cross and Blue Shield of Kansas City (Blue Cross
and Blue Shield) entered into a lease agreement for approximately 21% of the 20/20 Building that commenced in February 2007 and will expire in October 2012. Blue Cross and Blue Shield has the right to extend the lease for up to two
additional five-year periods at a rate equal to the then-current fair market rental rate. The lease allowed for a five-month rental abatement period commencing February 1, 2007 through June 30, 2007. As of December 31, 2009,
annualized base rent payable was approximately $278,000 and is scheduled to increase by approximately 1.39% annually each November. The annualized base rent in 2012 will be approximately $285,000.

In December 2006, Fund XI-XII-REIT Associates and The EPOCH Group, L.C. (EPOCH) entered into a lease agreement for approximately 56% of the
20/20 Building that commenced in June 2007 and will expire in October 2012. EPOCH has the right to extend the lease for up to two additional five-year periods at a rate equal to the then-current fair market rental rate. The lease allowed for a
five-month rental abatement period commencing June 1, 2007 through October 31, 2007. As of December 31, 2009, annualized base rent payable was approximately $727,000 and is scheduled to increase by approximately 1.39% annually each
November. The annualized base rent in 2012 will be approximately $747,000.

In October 2008, Fund XI-XII-REIT Associates and Nolan Real Estate
Services, Inc. (Nolan) entered into a lease agreement for approximately 11% of the 20/20 Building that commenced in December 2008 and will expire in February 2014. Nolan has the right to extend the lease for up to one additional
five-year period at a rate equal to the then-current fair market rental rate. The lease allowed for a two-month rental abatement period commencing December 2008 through January 2009. As of December 31, 2009, annualized base rent payable
was approximately $138,000 and is scheduled to increase by approximately 1.39% annually each March. The annualized base rent in 2014 will be approximately $145,000.

Gartner Building

The Gartner Building is a two-story office building containing approximately
62,000 rentable square feet on a 4.9-acre tract of land located in Fort Myers, Florida. On April 13, 2005, the Fund XI-XII-REIT Associates sold the Gartner Building to an unrelated third party for a gross sale price of approximately
$12,520,000. As a result of the sale of the Gartner Building, the Partnership received net sale proceeds of approximately $3,242,000 and was allocated a gain of approximately $1,172,000.



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

From time to time, we
are party to legal proceedings which arise in the ordinary course of our business. We are not currently involved in any litigation for which the outcome would, in the judgment of the General Partners based on information currently available, have a
materially adverse impact on the results of operations or financial condition of the Partnership, nor is management aware of any such litigation threatened against us. For a description of pending litigation involving certain related parties, see
Assertion of Legal Action Against Related-Parties in Item 1. of this report.



|ITEM 4. | RESERVED.
|------- | ---------



Page 22



---

##### Index to Financial Statements

PART II



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

Summary

As of February 28, 2010, 1,431,174 Class A Units and 222,106 Class B
Units held by a total of 1,232 and 77 limited partners, respectively, were outstanding. Original capital contributions were equal to $10.00 per each limited partnership unit; to date, the Partnership has returned capital in the form of
distributions of net sale proceeds to its limited partners equal to, on average, $5.14 per Class A Unit and $9.82 per Class B Unit, as further described below. A public trading market has not been established for the Partnerships limited
partnership units, nor is such a market anticipated to develop in the future. The partnership agreement provides the General Partners with the right to prohibit transfers of units under certain circumstances.

Unit Valuation

Because fiduciaries of
retirement plans subject to ERISA and the IRA custodians are required to determine and report the value of the assets held in their respective plans or accounts on an annual basis, the General Partners are required under the partnership agreement to
report estimated unit values to the limited partners each year in the Partnerships Annual Report on Form 10-K. The methodology to be utilized for determining such estimated unit values under the partnership agreement requires the General
Partners to estimate the amount a unit holder would receive assuming that the Partnerships properties were sold at their estimated fair market values as of the end of the Partnerships fiscal year and the proceeds therefrom (without any
reduction for selling expenses) plus the amount of net sale proceeds held by the Partnership at year-end from previous property sales, if any, were distributed to the limited partners in liquidation in accordance with the net sale proceeds
distribution allocation outlined in the partnership agreement. The estimated unit valuations are intended to be an estimate of the distributions that would be made to limited partners who purchased their units directly from the Partnership in the
Partnerships original public offering of units.

The General Partners of the Partnership recently completed their estimated unit
valuations as of December 31, 2009. Utilizing the foregoing methodology, the General Partners have estimated the Partnerships unit valuations, based on their estimates of property values as of December 31, 2009, to be approximately
$1.93 per Class A Unit and $1.52 per Class B Unit, based upon market conditions existing in early December 2009. These estimates should not be viewed as an accurate reflection of the value of the limited partners units, how much limited
partners might be able to sell their units for, or the fair market value of the Partnerships properties, nor do they necessarily represent the amount of net proceeds limited partners would receive if the Partnerships properties were sold
and the proceeds were distributed in a liquidation of the Partnership. 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 ever
develop. In addition, property values are subject to change and could decline in the future. While, as required by the partnership agreement, the General Partners have obtained an opinion from The David L. Beal Company, an independent appraiser
certified by the Member Appraisal Institute, to the effect that such estimates of value were deemed reasonable and were prepared in accordance with appropriate methods for valuing real estate, no actual appraisals were obtained due to the inordinate
expense that would be involved in obtaining appraisals for all of the Partnerships properties.

The valuations performed by the General
Partners are estimates only and are based on a number of assumptions which may not be accurate or complete and may or may not be applicable to any specific limited partnership units. For example, as a result of the availability of conversion
elections under the partnership agreement and the resulting complexities involved relating to the distribution methodology under the partnership agreement, each limited partnership unit of the Partnership potentially has its own unique
characteristics as to distributions and value. These estimated valuations are applicable only to limited partners who purchased their units directly from the Partnership in the Partnerships original public offering of units. Further, as set
forth above, no third-party



Page 23



---

##### Index to Financial Statements

appraisals have or will be obtained. For these reasons, the estimated unit valuations set forth above should not be used by or relied upon by investors, other than fiduciaries of retirement plans
and IRA custodians for limited ERISA and IRA reporting purposes, as any indication of the fair market value of their units. In addition, it should be noted that ERISA plan fiduciaries and IRA custodians may use estimated unit valuations obtained
from other sources, such as prices paid for the Partnerships units in secondary market trades, and that such estimated unit valuations may well be lower than those estimated by the General Partners using the methodology required by the
partnership agreement.

It should also be noted that as the Partnerships properties are sold and the net proceeds from property sales
are distributed to limited partners, the remaining value of the Partnerships portfolio of properties, and resulting value of Partnerships limited partnership units, will naturally decline. In considering the foregoing estimated unit
valuations, it should be noted that the Partnership has previously distributed net sale proceeds in the amount of $5.14 per Class A Unit and $9.82 per Class B Unit to its limited partners. These amounts are intended to represent the per-unit
distributions received by limited partners who purchased their units directly from the Partnership in the Partnerships original public offering of units, and who have made no conversion elections under the partnership agreement. Limited
partners who have made one or more conversion elections would have received a different level of per-unit distribution.

Operating
Distributions

Operating cash available for distribution to the limited partners is generally distributed on a quarterly basis. Under the
partnership agreement, distributions from net cash from operations are allocated first to the limited partners holding Class A Units (and limited partners holding Class B Units that have elected a conversion right that allows them to share in
the distribution rights of limited partners holding Class A Units) until they have received an amount equal to 10% of their adjusted capital contributions. Cash available for distribution is then distributed to the General Partners until they
have received an amount equal to 10% of cash distributions previously distributed to the limited partners. 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.

Operating distributions to limited partners are accrued for accounting purposes in the quarter earned and
paid to Class A limited partners in the following quarter. No operating cash distributions were paid to holders of Class A Units, Class B Units, or the General Partners during the years ended December 31, 2008 or 2009.



Page 24



---

##### Index to Financial Statements

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

A summary of
the selected financial data as of and for the fiscal years ended December 31, 2009, 2008, 2007, 2006, and 2005 for the Partnership is provided below. The comparability of net income for the periods presented below is impacted by the sale of
properties described in Item 2.



|                                                                                            |  |      |           |   |      |   |            |      |  |      |           |  |      |           |   |  |   |           |  
|------------------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | ---------- | ---- |  | ---- | --------- |  | ---- | --------- | - |  | - | --------- | -
|                                                                                            |  | 2009 |           |   | 2008 |   |            | 2007 |  | 2006 |           |  | 2005 |          
|Total assets                                                                                |  | $    | 3,219,104 |   |      | $ | 3,665,811  |      |  | $    | 4,788,650 |  | $    | 7,227,747 |   |  | $ | 7,555,728 |  
|Equity in income (loss) of Joint Ventures                                                   |  | $    | (301,829  | ) |      | $ | (953,562   | )    |  | $    | 621,615   |  | $    | (222,194  | ) |  | $ | 1,553,813 |  
|Net income (loss)                                                                           |  | $    | (436,239  | ) |      | $ | (1,093,609 | )    |  | $    | 598,221   |  | $    | (279,569  | ) |  | $ | 1,495,344 |  
|Net income (loss) allocated to:                                                             |  |      |           |   |      |   |            |      |  |      |           |  |      |           |   |  |   |           |  
|Class A Limited Partners                                                                    |  | $    | (436,239  | ) |      | $ | (1,092,949 | )    |  | $    | 218,125   |  | $    | (279,569  | ) |  | $ | (172,777  | )
|Class B Limited Partners                                                                    |  | $    | 0         |   |      | $ | 0          |      |  | $    | 379,436   |  | $    | 0         |   |  | $ | 1,668,121 |  
|General Partners                                                                            |  | $    | 0         |   |      | $ | (660       | )    |  | $    | 660       |  | $    | 0         |   |  | $ | 0         |  
|Net income (loss) per weighted-average Limited Partner Unit:                                |  |      |           |   |      |   |            |      |  |      |           |  |      |           |   |  |   |           |  
|Class A                                                                                     |  |      | $(0.30    | ) |      |   | $(0.76     | )    |  |      | $0.15     |  |      | $(0.20    | ) |  |   | $(0.12    | )
|Class B                                                                                     |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |      | $1.70     |  |      | $ 0.00    |   |  |   | $ 6.90    |  
|Operating cash distribution to investors per weighted-average Class A Limited Partner Unit: |  |      |           |   |      |   |            |      |  |      |           |  |      |           |   |  |   |           |  
|Investment income                                                                           |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |      | $0.00     |  |      | $ 0.00    |   |  |   | $ 0.05    |  
|Return of capital                                                                           |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |      | $0.00     |  |      | $ 0.00    |   |  |   | $ 0.00    |  
|Operating cash distribution to investors per weighted-average Class B Limited Partner Unit: |  |      |           |   |      |   |            |      |  |      |           |  |      |           |   |  |   |           |  
|Investment income                                                                           |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |      | $0.00     |  |      | $ 0.00    |   |  |   | $ 0.00    |  
|Return of capital                                                                           |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |      | $0.00     |  |      | $ 0.00    |   |  |   | $ 0.00    |  
|Distribution of net sale proceeds per weighted-average Limited Partner Unit:                |  |      |           |   |      |   |            |      |  |      |           |  |      |           |   |  |   |           |  
|Class A                                                                                     |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |      | $1.88     |  |      | $ 0.00    |   |  |   | $ 3.45    |  
|Class B                                                                                     |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |      | $1.70     |  |      | $ 0.00    |   |  |   | $ 8.01    |  



|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL AND CONDITION RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------

The following discussion and analysis should be read in conjunction with the Selected Financial Data presented in Item 6 and our accompanying financial
statements and notes thereto. See also Cautionary Note Regarding Forward-Looking Statements preceding Part I of this report and Risk Factors in Item 1A. of this report.

Overview

Portfolio Overview

We have transitioned from the holding phase to the positioning-for-sale phase of our life cycle. We have sold seven of the eleven
properties in which we have held interests. On August 26, 2009, Fund IX-X-XI-REIT Associates completed a lease amendment with Avaya, the sole tenant at the Avaya Building, which extended the termination date of the lease from January 31,
2010 to January 31, 2015. Our focus in the near-term is to concentrate on re-leasing and marketing efforts that we believe will ultimately result in the best disposition pricing for our investors.



Page 25



---

##### Index to Financial Statements

The fourth quarter 2009 operating distributions to limited partners were reserved. We anticipate that
operating and net sale proceeds distributions will continue to be reserved due to various factors, including our intention to fund our pro rata share of the anticipated re-leasing costs and capital improvements for our four remaining properties.

Property Summary

As we move
further into the positioning-for-sale phase, we will continue to focus on re-leasing vacant space and space that may become vacant upon the expiration of our current leases. In doing so, we will seek to maximize returns to our limited partners by
attempting to negotiate long-term leases at market rental rates while attempting to minimize down time, re-leasing expenditures, ongoing property level costs, and portfolio costs. As properties are positioned for sale, our attention will shift to
locating suitable buyers, negotiating purchase-sale contracts that will attempt to maximize the total return to our limited partners and minimize contingencies and our post-closing involvement with buyers. As of February 28, 2010, the
Partnership owned interests in four properties.

Information relating to the properties owned, or previously owned, by the joint ventures is
provided below:



| |  |  | The Cort Building was sold on September 11, 2003.
| | - |  | -------------------------------------------------



| |  |  | The Johnson Matthey Building was sold on October 5, 2004.
| | - |  | ---------------------------------------------------------



| |  |  | The Alstom Power  Knoxville Building was sold on March 15, 2005.
| | - |  | -----------------------------------------------------------------



| |  |  | The Gartner Building was sold on April 13, 2005.
| | - |  | ------------------------------------------------



| |  |  | The 1315 West Century Drive property was sold on December 22, 2006.
| | - |  | -------------------------------------------------------------------



| |  |  | The Iomega Building was sold on January 31, 2007.
| | - |  | -------------------------------------------------



| |  |  | The 111 Southchase Boulevard property was sold on May 23, 2007.
| | - |  | ---------------------------------------------------------------



| |  |  | The 360 Interlocken Building, located in the Broomfield submarket of Denver, Colorado, is currently approximately 28% leased to multiple tenants. We
are actively marketing the vacant space for lease in this building.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Avaya Building, located in Oklahoma City, Oklahoma, is 100% leased through January 2015.
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | The 47300 Kato Road Building is located in Fremont, California, in the Silicon Valley area. TCI, the sole tenant, currently occupies the building on a
month-by-month basis. We have received notification that TCI intends to vacate the building in May 2010. We are marketing the property for lease.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The 20/20 Building, located in Leawood, Kansas, is 91% leased. The major leases for approximately 80% of the building extend through October 2012. We
are actively working on re-leasing the remaining vacant space in this building.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Industry Factors

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

General Economic Conditions and Real Estate Market Commentary

Management reviews a number of economic forecasts and market commentaries in order to evaluate general economic conditions and to formulate a view of the current environments effect on the real
estate markets in which we operate.

As measured by the U.S. gross domestic product (GDP), the U.S. economys growth
increased at an annual rate of 5.9% in the fourth quarter of 2009, according to preliminary estimates. For the full year of 2009, real GDP



Page 26



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##### Index to Financial Statements

decreased 2.4% compared with a growth rate of 0.4% in 2008. The decrease in real GDP in 2009 reflected negative contributions from nonresidential fixed investment, private inventory investment,
residential fixed investment, and personal consumption expenditures.

Real estate market fundamentals underlying the U.S. office markets
continued to deteriorate in 2009, as evidenced by a vacancy rate of 17.0% for the fourth quarter compared to 14.5% vacancy this same time a year ago. There was negative net absorption of 81 million square feet in 2009 in addition to the
42 million square feet of negative absorption in 2008. Average rents also have declined from their peak of $29.37 in third quarter 2008, to current rates of $27.80, a decline of 5.3%.

Office fundamentals deteriorated as expected in 2009 with rising vacancies, lower rental rates, and negative absorption. Though the recession may have
technically ended, the labor markets have yet to stabilize. Until labor markets stabilize and businesses start hiring again, thereby requiring more space, office market fundamentals will remain weak.

Transaction volume was significantly lower in 2009 compared with earlier years. The volume of office properties selling for more than $5 million decreased
to $15.5 billion in 2009, a 71% decrease from 2008 numbers and a 93% decrease from the $211 billion recorded in 2007. However, the second half of 2009 was more active than the first half, implying that the investment markets could be improving. The
anticipation of distressed sales of over-leveraged properties in 2009 never fully materialized, as lenders have generally opted to extend or restructure loans to avoid foreclosures.

Impact of Economic Conditions on our Portfolio

While some of the market conditions noted
above may indicate expected changes in rental rates, the extent to which our portfolio may be affected is dependent upon the contractual rental rates currently provided in existing leases at the properties we own. As the majority of our in-place
leases are at properties that were acquired at times during which the market demanded higher rental rates, as compared with today, new leasing activities in certain markets may result in a decrease in future rental rates. Additionally, the
turbulence in the credit markets may adversely affect the ability of potential purchasers of our properties to obtain financing.

Less
diversified real estate funds that own fewer properties, such as the Partnership, and those with current vacancies or near-term tenant rollover, such as the Partnership, may face an increasingly challenging leasing environment. The properties within
these funds may be required to offer lower rental rates and higher concession packages to potential tenants, the degree to which will depend heavily on the specific property and market.

From a valuation standpoint, it is generally preferable to either renew an existing tenant lease or re-lease the property prior to marketing it for sale. Generally, buyers will heavily discount their
offering prices to compensate for existing or pending vacancies.

Liquidity and Capital Resources

Overview

Our operating strategy entails
funding expenditures related to the recurring operations of the Joint Ventures properties and the portfolio with operating cash flows, including current and prior period operating distributions received from the Joint Ventures, and assessing
the amount of remaining cash flows that will be required to fund known future re-leasing costs and other capital improvements. Any residual operating cash flows are generally considered available for distribution to the Class A limited partners
and, unless reserved, are generally paid quarterly. To the extent that operating cash flows are insufficient to fund our recurring operations, net sale proceeds will be utilized. As a result, the ongoing monitoring of our cash position is critical
to ensuring that adequate liquidity and capital resources are available. Economic downturns in one or more of our core markets could adversely impact the ability of one or more of our tenants to honor lease payments and our ability to



Page 27



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##### Index to Financial Statements

re-lease space on favorable terms as leases expire or space otherwise becomes vacant. In the event of either situation, cash flows and, consequently, our ability to provide funding for capital
needs could be adversely affected.

Short-Term Liquidity

During the year ended December 31, 2009, we generated net operating cash outflows of approximately $(75,000), primarily due to (i) low occupancy at the 360 Interlocken Building, (ii) Fund
IX-X-XI-REIT Associates retaining a portion of its operating cash flow to fund re-leasing costs for the Avaya Building, and (iii) Fund XI-XII-REIT Associates retaining a portion of its operating cash flow to fund capital improvements for the
20/20 Building. The extent of any future operating distributions paid to limited partners will be largely dependent upon the amount of cash generated from the Joint Ventures, our expectations of future cash flows, and determination of near-term
cash needs to fund our share of tenant re-leasing costs and other capital improvements for properties owned by the Joint Ventures. Operating distributions from the Joint Ventures are generally representative of rental revenues and tenant
reimbursements, less property operating expenses, management fees, general administrative expenses, and capital expenditures. We anticipate future operating distributions from the Joint Ventures may decline as a result of (i) funding our pro
rata share of re-leasing costs for the Avaya Building, in connection with the recent lease extension, and (ii) our intention to fund our pro rata share of anticipated re-leasing costs and capital improvements for the 360 Interlocken Building,
the 47300 Kato Road Building, and the 20/20 Building.

We believe that the cash on hand and operating distributions from the Joint Ventures
are sufficient to cover our working capital needs, including those provided for within our total liabilities of approximately $15,000, due as of December 31, 2009. We anticipate that we will be able to fund our proportionate share of capital
expenditures noted above using future operating cash flows and net sale proceeds.

Long-Term Liquidity

We expect that our future sources of capital will be primarily derived from operating cash flows generated from the Joint Ventures and net proceeds generated
from the sale of properties. Our future long-term liquidity requirements will include, but not be limited to, funding our share of tenant improvements, renovations, expansions, and other significant capital improvements necessary for properties
owned through the Joint Ventures. We expect to continue to use substantially all future net cash flows from operations, including distributions received from the Joint Ventures, less expenses related to the recurring operations of the properties and
the portfolio and reserves for known capital expenditures, to pay operating distributions to the limited partners. Future cash flows from operating activities will be primarily affected by distributions received from the Joint Ventures, which are
dependent upon the net operating income generated by the Joint Ventures properties, less reserves for known or anticipated capital expenditures.

Capital Resources

The Partnership is an investment vehicle formed for the purpose of acquiring, owning, and operating
income-producing real properties or investing in joint ventures formed for the same purpose, and has invested all of the partners original net offering proceeds available for investment. Thus, it is unlikely that we will acquire interests in
any additional properties or joint ventures. Historically, our investment strategy has generally involved acquiring properties that are pre-leased to creditworthy tenants on an all-cash basis through joint ventures with affiliated partnerships.

The Joint Ventures incur capital expenditures primarily related to building improvements for the purpose of maintaining the quality of our
properties, and tenant improvements for the purpose of readying our properties for re-leasing. As leases expire, we will work with the Joint Ventures to attempt to re-lease space to an existing tenant or market the space to prospective new tenants.
Generally, tenant improvements funded in connection with



Page 28



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##### Index to Financial Statements

lease renewals require less capital than those funded in connection with new leases. However, external conditions, such as the supply of and demand for comparable space available within a given
market, drive capital costs as well as rental rates. Any capital or other expenditures not funded from the operations of the Joint Ventures will be required to be funded by the Partnership and the other respective joint venture partners on a pro
rata basis.

Operating cash flows, if available, are generally distributed from the Joint Ventures to the Partnership approximately one month
following calendar quarter-ends. However, the Joint Ventures will reserve operating distributions, or a portion thereof, as needed in order to fund known capital and other expenditures. Our cash management policy typically includes first utilizing
current period operating cash flow until depleted, at which point operating reserves are utilized to fund capital and other required expenditures. In the event that current and prior period accumulated operating cash flows are insufficient to fund
such costs, net sale proceeds reserves would then be utilized.

As of December 31, 2009, we had received, used, distributed, and held net
sale proceeds allocated to the Partnership from the sale of properties as presented below:



|                                                      |  |                  |  |                                     |  |                                             |            |                         |   |                                                                |  |                                                                                                                                                                          |  |   |           |  |   |        
|----------------------------------------------------- |  | ---------------- |  | ----------------------------------- |  | ------------------------------------------- | ---------- | ----------------------- | - | -------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | - | --------- |  | - | -------
|Property Sold                                         |  | Net SaleProceeds |  | PartnershipsApproximateOwnership % |  | Net SaleProceedsAllocated to thePartnership |            | Use ofNet Sale
Proceeds |   | Net Sale ProceedsDistributed toPartners as ofDecember 31, 2009 |  | Undistributed NetSale Proceeds as ofDecember 31, 2009                                                                                                                   
|                                                      |  |                  |  | Amount                              |  | Purpose                                     |            |                        
|Cort Building(sold in 2003)                           |  | $5,563,403       |  | 24%                                 |  | $                                           | 1,315,906  |                         | $ | 0                                                              |  |                                                                                                                                                                         |  | $ | 1,315,906 |  | $ | 0      
|                                                      |  |                  |  |                                     |  |                                             |           
|Johnson Matthey Building(sold in 2004)                |  | $9,675,000       |  | 26%                                 |  |                                             | 2,529,819  |                         |   | 0                                                              |  |                                                                                                                                                                         |  |   | 2,529,819 |  |   | 0      
|                                                      |  |                  |  |                                     |  |                                             |           
|Alstom Power  Knoxville Building(sold in March 2005) |  | $11,646,089      |  | 9%                                  |  |                                             | 1,023,528  |                         |   | 0                                                              |  |                                                                                                                                                                         |  |   | 1,023,528 |  |   | 0      
|                                                      |  |                  |  |                                     |  |                                             |           
|Gartner Building(sold in April 2005)                  |  | $12,396,859      |  | 26%                                 |  |                                             | 3,241,531  |                         |   | 340,000                                                        |  |  Partnership operating expenses (2006)   Joint venture operating expenses
(2006)   Re-leasing the
20/20 Building (2006)   Re-leasing 111 Southchase Boulevard (2007) |  |   | 2,901,531 |  |   | 0      
|                                                      |  |                  |  |                                     |  |                                             |           
|1315 West Century Drive(sold in December 2006)        |  | $8,059,625       |  | 9%                                  |  |                                             | 708,328    |                         |   | 120,000                                                        |  |  Re-leasing 111 Southchase Boulevard (2007)                                                                                                                             |  |   | 588,328   |  |   | 0      
|                                                      |  |                  |  |                                     |  |                                             |           
|Iomega Building(sold in January 2007)                 |  | $4,685,151       |  | 9%                                  |  |                                             | 411,759    |                         |   | 0                                                              |  |                                                                                                                                                                         |  |   | 411,759   |  |   | 0      
|                                                      |  |                  |  |                                     |  |                                             |           
|111 Southchase Boulevard(sold in May 2007)            |  | $7,236,841       |  | 26%                                 |  |                                             | 1,892,289  |                         |   | 360,000                                                        |  |  Re-leasing the 20/20 Building (2007, 2008)   Partnership operating expenses
(2007-2009)   Capital
improvements for the 20/20 Building (2008)                         |  |   | 1,099,128 |  |   | 433,161
|                                                      |  |                  |  |                                     |  |                                             |            |                         |   |                                                                |  |                                                                                                                                                                          |  |   |           |  |   |        
|Total                                                 |  |                  |  |                                     |  | $                                           | 11,123,160 |                         | $ | 820,000                                                        |  |                                                                                                                                                                          |  | $ | 9,869,999 |  | $ | 433,161
|                                                      |  |                  |  |                                     |  |                                             |            |                         |   |                                                                |  |                                                                                                                                                                          |  |   |           |  |   |        

Upon evaluating the capital needs of the properties in which we
currently own an interest, our General Partners have determined to reserve the remaining net sale proceeds of approximately $0.4 million in order to fund our pro rata share of anticipated re-leasing costs and capital improvements for our four
remaining properties.



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##### Index to Financial Statements

Results of Operations

Comparison of the year ended December 31, 2009 vs. the year ended December 31, 2008

Equity in Loss of Joint Ventures

Equity in loss of Joint Ventures was $301,829 and $953,562 for the years ended December 31,
2009 and 2008, respectively. The decrease in loss primarily attributable an impairment loss recognized by Fund XI-XII-REIT Associates for the 20/20 Building in the third quarter of 2008, of which approximately $962,000 was allocated to the
Partnership, partially offset by the impairment loss recognized by Fund X-XI-REIT Associates  Fremont for the 47300 Kato Road Building in the third quarter of 2009, of which approximately $313,000 was allocated to the Partnership (see Note 3
to our accompanying financial statements).

We expect equity in loss of Joint Ventures to decline in the future as a result of as a result of
recognizing a nonrecurring impairment loss at the 47300 Kato Road Building in the third quarter of 2009.

Interest and Other Income

Interest and other income was $1,923 and $15,049 for the years ended December 31, 2009 and 2008, respectively. The decrease is primarily
a result of a decrease in the average daily yield and a decline in average outstanding cash balance.

Future levels of interest income will be
largely dependent on the timing of future dispositions and net sale proceeds distributions to the limited partners, the amount of operating cash needed to invest in the Joint Ventures related to funding our pro rata share of re-leasing costs and
capital expenditures, and fluctuations in the average daily yield.

General and Administrative Expenses

General and administrative expenses were $136,333 and $155,096 for the years ended December 31, 2009 and 2008, respectively. The decreases are primarily
attributable to a decline in legal services in 2009 and a temporary difference in accounting fees related to the timing of work performed by our external accountants in 2009 as compared with the prior year.

Absent timing differences, we anticipate that changes in the future levels of our general and administrative expenses will vary primarily based on future
changes in our reporting and regulatory requirements.

Comparison of the year ended December 31, 2008 vs. the year ended
December 31, 2007

Equity in Income (Loss) of Joint Ventures

Equity in income (loss) of Joint Ventures was $(953,562) and $621,615 for the years ended December 31, 2008 and 2007, respectively. The decrease in income is primarily attributable to (i) an
impairment loss recognized by Fund XI-XII-REIT Associates related to the 20/20 Building in the third quarter of 2008, of which approximately $962,000 was allocated to the Partnership, (ii) recognizing gains on the sales of the Iomega Building
in January 2007 and 111 Southchase Boulevard in May 2007, and (iii) a corresponding decrease in operating income resulting from those sales.

Interest and Other Income

Interest and other income was $15,049 and $120,413 for the years ended December 31, 2008 and 2007,
respectively. The decrease is primarily a result of a decrease in the average amount of net sale proceeds held during the respective periods due to the distributions of net sale proceeds to limited partners in August 2007 and November 2007, as well
as a decrease in the average daily yield.



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##### Index to Financial Statements

General and Administrative Expenses

General and administrative expenses were $155,096 and $143,807 for the years ended December 31, 2008 and 2007, respectively. The increase is primarily attributable to an increase in legal fees and
administrative costs incurred in connection with reporting and regulatory requirements.

Inflation

We are exposed to inflation risk, as income from long-term leases is the primary source of our cash flows from operations. There are provisions in the
majority of our tenant leases that are intended to help protect us from the impact of inflation. These provisions include rent steps, reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on
a per-square-foot basis, or in some cases, annual reimbursement of operating expenses above a certain per-square-foot allowance. However, due to the long-term nature of our leases, the leases may not readjust their reimbursement rates frequently
enough to cover inflation.

Application of Critical Accounting Policies

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

Below is a discussion of the accounting policies used by the Partnership and the
Joint Ventures, which are considered to be critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.

Investment in Real Estate Assets

We are required to make subjective assessments as to the
useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of the Joint Ventures
assets are depreciated using the straight-line method over the following useful lives:



|                      |  |                                       
|--------------------- |  | --------------------------------------
|Buildings             |  | 40 years                              
|Building improvements |  | 5-25 years                            
|Land improvements     |  | 20 years                              
|Tenant improvements   |  | Shorter of lease term or economic life

In the event that the
Joint Ventures utilize inappropriate useful lives or methods of depreciation, our net income would be misstated.

Evaluating the
Recoverability of Real Estate Assets

We continually monitor events and changes in circumstances that could indicate that the carrying
amounts of the real estate assets in which we have an ownership interest through investments in the Joint Ventures may not be recoverable. When indicators of potential impairment are present which suggest that the carrying amounts of real



Page 31



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##### Index to Financial Statements

estate assets may not be recoverable, we assess the recoverability of the real estate assets by determining whether the respective carrying values will be recovered through the estimated
undiscounted future operating cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that such expected
undiscounted future cash flows for assets held for use, or the estimated fair values, less costs to sell, for assets held for sale, do not exceed the respective assets carrying values, we adjust the real estate assets to their respective
estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognize an impairment loss. Estimated fair values are determined based on the
following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future
cash flows, including estimated residual value.

In the third quarter of 2008, Fund XI-XII-REIT Associates recorded an impairment loss at
the 20/20 Building of approximately $3,678,000 (approximately $962,000 of which was allocated to the Partnership) to reduce the carrying value of the property to its estimated fair value based on the present value of future cash flows, primarily as
a result of management refining its strategy for the disposition of this building.

In the third quarter of 2009, Fund X-XI-REIT Associates
 Fremont recorded an impairment loss on 47300 Kato Road of approximately $3,316,000 (approximately $313,000 of which was allocated to the Partnership) to reduce the carrying value of the property to its estimated fair value based on the
present value of future cash flows, primarily as a result of shortening the estimated holding period of such asset in third quarter 2009 and significant downward pressure on long-term rental rates for speculative leasing.

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

Related-Party Transactions and Agreements

We have entered into agreements with Wells Capital and Wells Management, affiliates of our General Partners, or their affiliates, whereby we pay certain fees and expense reimbursements to Wells Capital,
Wells Management or their affiliates for asset management, the management and leasing of our properties; administrative services relating to accounting, property management, and other partnership administration; and incur the related expenses. See
Item 13, Certain Relationships and Related Transactions for a description of these fees and reimbursements and amounts incurred and Risk Factors  Conflicts of Interest in Item 1A. of this report.

Commitments and Contingencies

Certain
lease agreements include provisions that, at the option of the tenant, may obligate the Partnership to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. In connection with a 2009 lease
amendment, Fund IX-X-XI-REIT Associates provided a landlord-funded tenant allowance to Avaya, the sole tenant at the Avaya Building, equal to approximately $429,000 as of December 31, 2009, of which approximately $265,000 remained
available for use as of the date of this filing.



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

Since we do not borrow any money, make any foreign investments, or invest in any market risk-sensitive instruments, we are not subject to risks relating to interest rates, foreign currency exchange rate
fluctuations, or the other market risks contemplated by Item 305 of Regulation S-K.



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##### Index to Financial Statements

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

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



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

There were no disagreements with the Partnerships independent public accountants during the years ended December 31, 2009 and 2008.



|ITEM 9A(T). | CONTROL AND PROCEDURES.
|----------- | -----------------------

Evaluation of
Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management of Wells
Capital, the corporate general partner of one of our General Partners, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as required
by Rule 13a-15(b) of the Securities Exchange Act of 1934 as of December 31, 2009. Based upon that evaluation, which was completed as of the end of the period covered by this Form 10-K, the Principal Executive Officer and Principal Financial
Officer concluded that our disclosure controls and procedures were effective at December 31, 2009 in providing a reasonable level of assurance that the information we are required to disclose in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in applicable SEC rules and forms, including providing a reasonable level of assurance that the information required to be disclosed
by us in such reports is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
a process designed by, or under the supervision of, the Principal Executive Officer and Principal Financial Officer and effected by our management and other personnel to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:



| |  |  | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the
Partnership;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and
that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and/or members of the Financial Oversight Committee; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Partnerships assets
that could have a material effect on the financial statements.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because of the inherent limitations of internal control over
financial reporting, including the possibility of human error and the circumvention or overriding of controls, material misstatements may not be prevented or detected on a timely basis. In addition, projections of any evaluation of effectiveness to
future periods are subject to the risks that controls may become inadequate because of changes and conditions or that the degree of compliance with policies or procedures may deteriorate. Accordingly, even internal controls determined to be
effective can provide only reasonable assurance that the information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized, and represented within the time periods required.



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##### Index to Financial Statements

Our management has assessed the effectiveness of our internal control over financial reporting at
December 31, 2009. To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this assessment, our management believes that our system of internal control over financial reporting met those criteria, and therefore our management has concluded that we maintained effective internal control over
financial reporting as of December 31, 2009.

This annual report does not include an attestation report of the Partnerships
registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Partnerships registered public accounting firm pursuant to temporary rules of the SEC that
permit the Partnership to provide only managements report in this Annual Report on Form 10-K.

Changes in Internal Control Over
Financial Reporting

There have been no significant changes in our internal control over financial reporting during the quarter ended
December 31, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



|ITEM 9B. | OTHER INFORMATION.
|-------- | ------------------

For the quarter ended
December 31, 2009, all items required to be disclosed under Form 8-K were reported under Form 8-K.



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##### Index to Financial Statements

PART III



|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS GENERAL PARTNERS.
|-------- | ----------------------------------------------------------------------

Wells Partners

The sole general partner of Wells Partners, one of our General Partners, is
Wells Capital, a Georgia corporation. The executive offices of Wells Capital are located at 6200 The Corners Parkway, Norcross, Georgia 30092. Wells Capital was organized on April 18, 1984 under the Georgia Business Corporation Code, and is
primarily in the business of serving as general partner or as an affiliate to the general partner in affiliated public limited partnerships (Wells Real Estate Funds). Wells Capital or its affiliates serve as the advisor to Wells Real
Estate Investment Trust II, Inc., Wells Real Estate Investment Trust III, Inc., and Wells Timberland REIT, Inc. (collectively, the Wells REITs), each of which is a Maryland corporation. In these capacities, Wells Capital performs
certain services for the Wells Real Estate Funds and the Wells REITs, including presenting, structuring, and acquiring real estate investment opportunities; entering into leases and service contracts on acquired properties; arranging for and
completing the disposition of properties; and providing other services such as accounting and administrative functions. Wells Capital is a wholly owned subsidiary of WREF, of which Leo F. Wells, III is the sole stockholder.

Leo F. Wells, III

Mr. Wells, 66, who
serves as one of our General Partners, is the president, treasurer, and sole director of Wells Capital, which is our corporate general partner. He is also the sole stockholder, president, and sole director of WREF, the parent corporation of Wells
Capital, Wells Management, Wells Investment Securities, Inc. (WIS), and Wells & Associates, Inc., a real estate brokerage and investment company formed in 1976 and incorporated in 1978, for which Mr. Wells serves as
principal broker. He is also the president, treasurer, and sole director of:



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



| |  |  | Wells Asset Management, Inc.;
| | - |  | -----------------------------



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



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

Mr. Wells is the president and a director of Wells Real Estate Investment Trust II, Inc. and Wells Real Estate Investment Trust III, Inc., which are
public real estate programs not listed on a securities exchange. He is also the president of Wells Timberland REIT, Inc., which is also a public real estate program not listed on a securities exchange. From 1998 to 2007, Mr. Wells served
as president and Chairman of the Board of Piedmont REIT, formerly known as Wells Real Estate Investment Trust, Inc., a public, non-traded REIT sponsored by WREF until April 16, 2007, when Piedmont REIT acquired certain
entities formerly affiliated with WREF and became a self-advised REIT.

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

On August 26, 2003, Mr. Wells and WIS entered into a Letter of Acceptance, Waiver and Consent (AWC)
with the National Association of Securities Dealers, Inc. (NASD) relating to alleged rule violations. The AWC set forth the NASDs findings that WIS and Mr. Wells had violated conduct rules relating to the provision of noncash
compensation of more than $100 to associated persons of NASD member firms in connection with their attendance at the annual educational and due diligence conferences sponsored by WIS in 2001 and 2002. Without



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##### Index to Financial Statements

admitting or denying the allegations and findings against them, WIS and Mr. Wells consented in the AWC to various findings by the NASD, which are summarized in the following paragraph:

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

WIS consented to a censure and Mr. Wells consented to suspension from acting in a principal capacity with an NASD member firm for one year. WIS and
Mr. Wells also agreed to the imposition of a joint and several fine in the amount of $150,000. Mr. Wells one-year suspension from acting in a principal capacity ended on October 6, 2004. Mr. Wells continues to represent
certain affiliated issuers and perform nonprincipal activities on behalf of WIS.

Section 16(a) Beneficial Ownership Reporting
Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the officers and directors of the general partner of our
general partner, and persons who own 10% or more of any class of equity interests in the Partnership, to report their beneficial ownership of equity interests in the Partnership to the SEC. Their initial reports are required to be filed using the
SECs Form 3, and they are required to report subsequent purchases, sales, and other changes using the SECs Form 4, which must be filed within two business days of most transactions. Officers, directors, and partners owning more
than 10% of any class of equity interests in the Partnership are required by SEC regulations to furnish us with copies of all of reports they file pursuant to Section 16(a). We believe all persons subject to these reporting requirements filed
the reports on a timely basis in 2009 except as follows: The initial report on Form 3 of Kevin D. Race, an officer of Wells Capital, was not reported on a timely basis and was inadvertently filed late by Mr. Race.

Financial Oversight Committee

The
Partnership does not have a board of directors or an audit committee. Accordingly, as the corporate general partner of one of the General Partners of the Partnership, Wells Capital has established a Financial Oversight Committee consisting of
Douglas P. Williams, as the Principal Financial Officer; Randall D. Fretz, as the Senior Vice President of Wells Capital; and Kevin Race, as Chief of Financial Strategy. The Financial Oversight Committee serves the equivalent function of an
audit committee for, among others, the following purposes: appointment, compensation, review and oversight of the work of our independent registered public accountant, and establishing and enforcing the code of ethics. However, since neither the
Partnership nor its corporate general partner has an audit committee and the Financial Oversight Committee is not independent of the Partnership or the General Partners, we do not have an audit committee financial expert.

Code of Ethics

The Partnership has adopted
a code of ethics applicable to Wells Capitals Principal Executive Officer and Principal Financial Officer, as well as the principal accounting officer, controller or other employees of Wells Capital performing similar functions on behalf of
the Partnership, if any. The code of ethics is contained in the



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##### Index to Financial Statements

Business Standards/Code of Conduct/General Policies established by WREF. You may obtain a copy of this code of ethics, without charge, upon request by calling our Client Services Department at
800-557-4830 or 770-243-8282.



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

While the Partnership is managed by the General Partners and their affiliates, it does not pay any salaries or other compensation directly to the General Partners or to any of the General Partners individual employees, officers, or
directors. Further, the Partnership does not employ, and is not managed by, any of its own employees, officers, or directors. Accordingly, no compensation has been awarded to, earned by, or paid to any such individuals in connection with the
operation or management of the Partnership. Due to our current management structure and our lack of any employees, officers, or directors, no discussion and analysis of compensation paid by the Partnership, tabular information concerning salaries,
bonuses, and other types of compensation to executive officers or directors of the Partnership, or other information regarding compensation policies and practices of the Partnership has been included in this Annual Report on Form 10-K.

See Item 13, Certain Relationships and Related Transactions, for a description of the fees incurred by the Partnership payable to
affiliates of the General Partners during the year ended December 31, 2009.



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



|(a) | No limited partner owns beneficially more than 5% of any class of the outstanding units of the Partnership.
|--- | -----------------------------------------------------------------------------------------------------------



|(b) | Set forth below is the security ownership of management as of February 28, 2010.
|--- | --------------------------------------------------------------------------------



|                          |  |                          |  |                                           |  |                
|------------------------- |  | ------------------------ |  | ----------------------------------------- |  | ---------------
|Title of Class            |  | Name of Beneficial Owner |  | Amount and Nature of Beneficial Ownership |  | Percent ofClass
|Limited Partnership Units |  | Leo F. Wells, III        |  | 5,131.319 Units(1)                        |  | Less than 1%   



| | (1) | Leo F. Wells, III owns 5,109.22 Class A Units through an individual retirement account and 22.099 Class A Units through Wells Capital.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------



|(c) | No arrangements exist which would, upon execution, result in a change in control of the Partnership.
|--- | ----------------------------------------------------------------------------------------------------



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

The compensation and fees we pay to our General Partners or their affiliates in connection with our operations are as follows:

Interest in Partnership Cash Flow and Net Sale Proceeds

The General Partners are entitled to 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 accounts in each fiscal year. The
General Partners are also entitled to receive a subordinated participation in net sales proceeds and net financing proceeds equal to 20% of residual proceeds available for distribution after limited partners holding Class A Units have received
a return of their adjusted capital contributions 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 contributions plus a 15%
cumulative return on their adjusted capital contributions; provided, however, that in no event shall the General Partners receive in the aggregate in excess of 15% of net sales proceeds and net financing proceeds remaining after payments to limited
partners from such proceeds of amounts equal to the sum of their adjusted capital contributions plus a 6% cumulative return on their adjusted capital contributions. The General Partners did not receive any distributions of net cash from operations
or net sales proceeds for the year ended December 31, 2009.



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##### Index to Financial Statements

Management and Leasing Fees

In accordance with the property management and leasing agreement, Wells Management, an affiliate of the General Partners, receives compensation for asset management and the management and leasing of our
properties owned through joint ventures equal to (a) 2.5% for management services and 2% for leasing services (aggregate maximum of 4.5%) of the gross revenues collected monthly; plus a separate competitive 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, which is assessed periodically based on
market studies, or (b) in the case of commercial properties that are leased on a long-term net basis (ten or more years), the maximum property management fee from such leases shall be 1% of the gross revenues generally paid over the life of the
leases except for a one-time initial leasing fee of 3% of the gross revenues on each lease payable over the first five full years of the original lease term. Management and leasing fees are paid by the Joint Ventures and, accordingly, are included
in equity in income (loss) of joint ventures in the accompanying statements of operations. Our share of management and leasing fees and lease acquisition costs incurred through the Joint Ventures that are payable to Wells Management is $6,384,
$7,624, and $9,488 for the years ended December 31, 2009, 2008, and 2007, respectively.

Administrative Reimbursements

Wells Capital, the corporate general partner of Wells Partners, one of the Partnerships General Partners, and Wells Management perform certain
administrative services for the Partnership, relating to accounting, property management, and other partnership administration, and incur the related expenses. Such expenses are allocated among other entities affiliated with the General Partners
based on time spent on each fund by individual administrative personnel. In the opinion of the General Partners, this allocation is a reasonable estimation of such expenses. We incurred administrative expenses of $71,468, $68,987, and $62,165
payable to Wells Capital and Wells Management for the years ended December 31, 2009, 2008, and 2007, respectively.

Real Estate
Commissions

In connection with the sale of our 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. No real estate commissions
were paid to the General Partners or affiliates for the years ended December 31, 2009, 2008, or 2007.

Procedures Regarding
Related-Party Transactions

Our policies and procedures governing related-party transactions with our General Partners and their
affiliates, including, but not limited to, all transactions required to be disclosed under Item 404(a) of Regulation S-K, are restricted or severely limited by the provisions of Articles XI, XII, XIII, and XIV of our partnership agreement,
which has been filed with the SEC. No transaction has been entered into with either of our General Partners or their affiliates that does not comply with those policies and procedures. In addition, in any transaction involving a potential conflict
of interest, including any transaction that would require disclosure under Item 404(a) of Regulation S-K, our General Partners must view such a transaction after taking into consideration their fiduciary duties to the Partnership.



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

Preapproval Policies and Procedures

The Financial Oversight Committee preapproves all auditing and permissible nonauditing
services provided by our independent registered public accountants. The approval may be given as part of the Financial Oversight



Page 38



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##### Index to Financial Statements

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

Fees Paid to the Independent Registered Public Accountants

Frazier & Deeter, LLC serves as our independent registered public accountants and has provided audit services since September 22, 2006. All such fees are recognized in the period
to which the services relate. A portion of such fees is allocated to the joint ventures in which the Partnership invests. The aggregate fees billed to the Partnership for professional accounting services by Frazier & Deeter, LLC, including
the audit of the Partnerships annual financial statements, for the fiscal years ended December 31, 2009 and 2008, are set forth in the table below.



|                   |  |                       |        |      |   |       
|------------------ |  | --------------------- | ------ | ---- | - | ------
|                   |  | Frazier & Deeter, LLC
|                   |  | 2009                  |        | 2008
|Audit Fees         |  | $                     | 25,738 |      | $ | 24,142
|Audit-Related Fees |  |                       | 0      |      |   | 0     
|Tax Fees           |  |                       | 0      |      |   | 0     
|Other Fees         |  |                       | 0      |      |   | 0     
|                   |  |                       |        |      |   |       
|Total              |  | $                     | 25,738 |      | $ | 24,142
|                   |  |                       |        |      |   |       

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



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



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



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



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

During the fiscal years ended December 31, 2009 and 2008, 100% of the
services performed by Frazier & Deeter, LLC described above under the captions Audit Fees, Audit-Related Fees, Tax Fees, and Other Fees were approved in advance by a member of the Financial
Oversight Committee. In addition, fees were incurred for tax services performed by an accounting firm separate from the Partnerships independent registered public accountants in each year presented.



Page 39



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##### Index to Financial Statements

PART IV



|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|-------- | -------------------------------------------



|(a)1. | The financial statements are contained on pages F-2 through F-68 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.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|(c) | See (a) 1 above.
|--- | ----------------



Page 40



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##### Index to Financial Statements

SIGNATURES

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



|               |  |                                                                                 |                     |                                              |  |                            
|-------------- |  | ------------------------------------------------------------------------------- | ------------------- | -------------------------------------------- |  | ---------------------------
|               |  |                                                                                 |                     | WELLS REAL ESTATE FUND XI, L.P. (Registrant)
|               |  |                                                                                 |                    
|               |  |                                                                                 |                     | By:                                          |  | WELLS PARTNERS, L.P.       
|               |  |                                                                                 |                     |                                              |  | (General Partner)          
|               |  |                                                                                 |                    
|               |  |                                                                                 |                     | By:                                          |  | WELLS CAPITAL, INC.        
|               |  |                                                                                 |                     |                                              |  | (Corporate General Partner)
|               |  |                                                                                
|March 18, 2010 |  |                                                                                 |                     | /s/    LEO F. WELLS,
III                    
|               |  |                                                                                 | Leo F. Wells, III  
|               |  | President, Principal Executive Officer,and Sole Director of Wells Capital, Inc.
|               |  |                                                                                
|March 18, 2010 |  |                                                                                 |                     | /s/    DOUGLAS P.
WILLIAMS                  
|               |  |                                                                                 | Douglas P. Williams
|               |  | Principal Financial Officer of Wells Capital, Inc.                             



Page 41



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##### Index to Financial Statements

WELLS REAL ESTATE FUND XI, L.P.



TABLE OF CONTENTS



|                                                                                                               |  |     
|-------------------------------------------------------------------------------------------------------------- |  | ----
|FINANCIAL STATEMENTS                                                                                           |  | Page
|                                                                                                               | 
|WELLS REAL ESTATE FUND XI, L.P.                                                                                |  |     
|Report of Independent Registered Public Accounting Firm  Frazier & Deeter, LLC                                |  | F-2 
|Balance Sheets as of December 31, 2009 and 2008                                                                |  | F-3 
|Statements of Operations for the Years Ended December 31, 2009, 2008, and 2007                                 |  | F-4 
|Statements of Partners Capital for the Years Ended December 31, 2009, 2008, and
2007                          |  | F-5 
|Statements of Cash Flows for the Years Ended December 31, 2009, 2008, and 2007                                 |  | F-6 
|Notes to Financial Statements                                                                                  |  | F-7 
|                                                                                                               | 
|THE FUND IX, FUND X, FUND XI, AND REIT JOINT VENTURE                                                           |  |     
|Report of Independent Registered Public Accounting Firm  Frazier & Deeter,
LLC                                |  | F-19
|Balance Sheets as of December 31, 2009 and 2008                                                                |  | F-20
|Statements of Operations for the Years Ended December 31, 2009, 2008, and 2007                                 |  | F-21
|Statements of Partners Capital for the Years Ended December 31, 2009, 2008, and
2007                          |  | F-22
|Statements of Cash Flows for the Years Ended December 31, 2009, 2008, and 2007                                 |  | F-23
|Notes to Financial Statements                                                                                  |  | F-24
|Schedule III  Real Estate and Accumulated Depreciation                                                        |  | F-31
|                                                                                                               | 
|FUND X AND FUND XI ASSOCIATES                                                                                  |  |     
|Report of Independent Registered Public Accounting Firm  Frazier & Deeter,
LLC                                |  | F-33
|Balance Sheets as of December 31, 2009 and 2008 (unaudited)                                                    |  | F-34
|Statements of Operations for the Years Ended December 
31, 2009, 2008 (unaudited), and 2007 (unaudited)        |  | F-35
|Statements of Partners Capital for the Years Ended December 
31, 2009, 2008 (unaudited), and 2007 (unaudited) |  | F-36
|Statements of Cash Flows for the Years Ended December 
31, 2009, 2008 (unaudited), and 2007 (unaudited)        |  | F-37
|Notes to Financial Statements                                                                                  |  | F-38
|                                                                                                               | 
|WELLS/FREMONT ASSOCIATES                                                                                       |  |     
|Report of Independent Registered Public Accounting Firm  Frazier & Deeter,
LLC                                |  | F-43
|Balance Sheets as of December 31, 2009 and 2008 (unaudited)                                                    |  | F-44
|Statements of Operations for the Years Ended December 
31, 2009, 2008 (unaudited), and 2007 (unaudited)        |  | F-45
|Statements of Partners Capital for the Years Ended December 
31, 2009, 2008 (unaudited), and 2007 (unaudited) |  | F-46
|Statements of Cash Flows for the Years Ended December 
31, 2009, 2008 (unaudited), and 2007 (unaudited)        |  | F-47
|Notes to Financial Statements                                                                                  |  | F-48
|Schedule III  Real Estate and Accumulated Depreciation                                                        |  | F-54
|                                                                                                               | 
|THE WELLS FUND XI-FUND XII-REIT JOINT VENTURE                                                                  |  |     
|Report of Independent Registered Public Accounting Firm  Frazier & Deeter,
LLC                                |  | F-56
|Balance Sheets as of December 31, 2009 and 2008                                                                |  | F-57
|Statements of Operations for the Years Ended December 31, 2009, 2008, and 2007                                 |  | F-58
|Statements of Partners Capital for the Years Ended December 31, 2009, 2008, and
2007                          |  | F-59
|Statements of Cash Flows for the Years Ended December 31, 2009, 2008, and 2007                                 |  | F-60
|Notes to Financial Statements                                                                                  |  | F-61
|Schedule III  Real Estate and Accumulated Depreciation                                                        |  | F-67



Page F-1



---

##### Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The General Partners of

Wells
Real Estate Fund XI, L.P.

We have audited the accompanying balance sheets of Wells Real Estate Fund XI, L.P. (the Partnership) as
of December 31, 2009 and 2008, and the related statements of operations, partners capital, and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the
Partnerships management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted
our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. We were not engaged to perform an audit of the Partnerships internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnerships internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and 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 XI, L.P. as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the three years in the period ended
December 31, 2009, in conformity with U.S. generally accepted accounting principles.

/s/    Frazier & Deeter, LLC

Atlanta, Georgia

March 18, 2010



Page F-2



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##### Index to Financial Statements

WELLS REAL ESTATE FUND XI, L.P.



BALANCE SHEETS

DECEMBER 31, 2009 AND 2008

ASSETS



|                             |  |      |           |      |   |          
|---------------------------- |  | ---- | --------- | ---- | - | ---------
|                             |  | 2009 |           | 2008
|Investment in joint ventures |  | $    | 2,731,688 |      | $ | 3,105,384
|Cash and cash equivalents    |  |      | 449,194   |      |   | 550,251  
|Due from joint ventures      |  |      | 38,222    |      |   | 9,197    
|Other assets                 |  |      | 0         |      |   | 979      
|                             |  |      |           |      |   |          
|Total assets                 |  | $    | 3,219,104 |      | $ | 3,665,811
|                             |  |      |           |      |   |          

LIABILITIES AND PARTNERS CAPITAL



|                                                 |  |   |           |  |   |          
|------------------------------------------------ |  | - | --------- |  | - | ---------
|Liabilities:                                     |  |   |           |  |   |          
|Accounts payable and accrued expenses            |  | $ | 6,611     |  | $ | 19,020   
|Due to affiliates                                |  |   | 8,059     |  |   | 6,118    
|                                                 |  |   |           |  |   |          
|Total liabilities                                |  |   | 14,670    |  |   | 25,138   
|                                                 |  |  
|Commitments and contingencies                    |  |   |           |  |   |          
|                                                 |  |  
|Partners capital:                               |  |   |           |  |   |          
|Limited partners:                                |  |   |           |  |   |          
|Class A  1,431,174 units issued and outstanding |  |   | 3,204,434 |  |   | 3,640,673
|Class B  222,106 units issued and outstanding   |  |   | 0         |  |   | 0        
|General partners                                 |  |   | 0         |  |   | 0        
|                                                 |  |   |           |  |   |          
|Total partners capital                          |  |   | 3,204,434 |  |   | 3,640,673
|                                                 |  |   |           |  |   |          
|Total liabilities and partners capital          |  | $ | 3,219,104 |  | $ | 3,665,811
|                                                 |  |   |           |  |   |          

See accompanying notes.



Page F-3



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##### Index to Financial Statements

WELLS REAL ESTATE FUND XI, L.P.



STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                                                             |  |      |           |   |      |   |            |      |  |   |          
|------------------------------------------------------------ |  | ---- | --------- | - | ---- | - | ---------- | ---- |  | - | ---------
|                                                             |  | 2009 |           |   | 2008 |   |            | 2007
|EQUITY IN INCOME (LOSS) OF JOINT VENTURES                    |  | $    | (301,829  | ) |      | $ | (953,562   | )    |  | $ | 621,615  
|                                                             |  |      |          
|INTEREST AND OTHER INCOME                                    |  |      | 1,923     |   |      |   | 15,049     |      |  |   | 120,413  
|                                                             |  |      |          
|GENERAL AND ADMINISTRATIVE                                   |  |      | 136,333   |   |      |   | 155,096    |      |  |   | 143,807  
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|                                                             |  |      |          
|NET INCOME (LOSS)                                            |  | $    | (436,239  | ) |      | $ | (1,093,609 | )    |  | $ | 598,221  
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|NET INCOME (LOSS) ALLOCATED TO:                              |  |      |           |   |      |   |            |      |  |   |          
|CLASS A LIMITED PARTNERS                                     |  | $    | (436,239  | ) |      | $ | (1,092,949 | )    |  | $ | 218,125  
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|CLASS B LIMITED PARTNERS                                     |  | $    | 0         |   |      | $ | 0          |      |  | $ | 379,436  
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|GENERAL PARTNERS                                             |  | $    | 0         |   |      | $ | (660       | )    |  | $ | 660      
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|NET INCOME (LOSS) PER WEIGHTED-AVERAGE LIMITED PARTNER UNIT: |  |      |           |   |      |   |            |      |  |   |          
|CLASS A                                                      |  |      | $(0.30    | ) |      |   | $(0.76     | )    |  |   | $0.15    
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|CLASS B                                                      |  |      | $ 0.00    |   |      |   | $ 0.00     |      |  |   | $1.70    
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|                                                             |  |      |          
|WEIGHTED-AVERAGE LIMITED PARTNER UNITS OUTSTANDING:          |  |      |           |   |      |   |            |      |  |   |          
|CLASS A                                                      |  |      | 1,431,174 |   |      |   | 1,431,174  |      |  |   | 1,430,049
|                                                             |  |      |           |   |      |   |            |      |  |   |          
|CLASS B                                                      |  |      | 222,106   |   |      |   | 222,106    |      |  |   | 223,231  
|                                                             |  |      |           |   |      |   |            |      |  |   |          

See accompanying notes.



Page F-4



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##### Index to Financial Statements

WELLS REAL ESTATE FUND XI, L.P.



STATEMENTS OF PARTNERS CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                                                                                                                      |         |                  |        |         |                 |       |  |                       |        |  |   |          |   |  |   |      |   |  |   |            |  
|--------------------------------------------------------------------------------------------------------------------- | ------- | ---------------- | ------ | ------- | --------------- | ----- |  | --------------------- | ------ |  | - | -------- | - |  | - | ---- | - |  | - | ---------- | -
|                                                                                                                      |         | Limited Partners |        |         | GeneralPartners |       |  | TotalPartnersCapital |       
|                                                                                                                      | Class A |                  |        | Class B |                 |       | 
|                                                                                                                      | Units   |                  | Amount |         |                 | Units |  |                       | Amount |  |   |         
|BALANCE, December 31, 2006                                                                                            |         | 1,425,174        |        | $       | 7,206,060       |       |  | 228,106               |        |  | $ | 0        |   |  | $ | 0    |   |  | $ | 7,206,060  |  
|                                                                                                                      |         |                  |        |         |                 |      
|Class B conversions                                                                                                   |         | 6,000            |        |         | 0               |       |  | (6,000                | )      |  |   | 0        |   |  |   | 0    |   |  |   | 0          |  
|Net income                                                                                                            |         | 0                |        |         | 218,125         |       |  | 0                     |        |  |   | 379,436  |   |  |   | 660  |   |  |   | 598,221    |  
|Distributions of net sale proceeds ($1.88 and $1.70 per weighted-average Class A Unit and Class B Unit,
respectively) |         | 0                |        |         | (2,690,563      | )     |  | 0                     |        |  |   | (379,436 | ) |  |   | 0    |   |  |   | (3,069,999 | )
|                                                                                                                      |         |                  |        |         |                 |       |  |                       |        |  |   |          |   |  |   |      |   |  |   |            |  
|BALANCE, December 31, 2007                                                                                            |         | 1,431,174        |        |         | 4,733,622       |       |  | 222,106               |        |  |   | 0        |   |  |   | 660  |   |  |   | 4,734,282  |  
|                                                                                                                      |         |                  |        |         |                 |      
|Net loss                                                                                                              |         | 0                |        |         | (1,092,949      | )     |  | 0                     |        |  |   | 0        |   |  |   | (660 | ) |  |   | (1,093,609 | )
|                                                                                                                      |         |                  |        |         |                 |       |  |                       |        |  |   |          |   |  |   |      |   |  |   |            |  
|BALANCE, December 31, 2008                                                                                            |         | 1,431,174        |        |         | 3,640,673       |       |  | 222,106               |        |  |   | 0        |   |  |   | 0    |   |  |   | 3,640,673  |  
|                                                                                                                      |         |                  |        |         |                 |      
|Net loss                                                                                                              |         | 0                |        |         | (436,239        | )     |  | 0                     |        |  |   | 0        |   |  |   | 0    |   |  |   | (436,239   | )
|                                                                                                                      |         |                  |        |         |                 |       |  |                       |        |  |   |          |   |  |   |      |   |  |   |            |  
|BALANCE, December 31, 2009                                                                                            |         | 1,431,174        |        | $       | 3,204,434       |       |  | 222,106               |        |  | $ | 0        |   |  | $ | 0    |   |  | $ | 3,204,434  |  
|                                                                                                                      |         |                  |        |         |                 |       |  |                       |        |  |   |          |   |  |   |      |   |  |   |            |  

See accompanying notes.



Page F-5



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##### Index to Financial Statements

WELLS REAL ESTATE FUND XI, L.P.



STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                                                                                                   |  |      |          |   |      |   |            |      |  |   |            |  
|-------------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                                   |  | 2009 |          |   | 2008 |   |            | 2007 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                              |  |      |          |   |      |   |            |      |  |   |            |  
|Net income (loss)                                                                                  |  | $    | (436,239 | ) |      | $ | (1,093,609 | )    |  | $ | 598,221    |  
|Operating distributions received from joint ventures                                               |  |      | 68,990   |   |      |   | 122,783    |      |  |   | 111,185    |  
|Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |  |      |          |   |      |   |            |      |  |   |            |  
|Equity in (income) loss of joint ventures                                                          |  |      | 301,829  |   |      |   | 953,562    |      |  |   | (621,615   | )
|Operating changes in assets and liabilities:                                                       |  |      |          |   |      |   |            |      |  |   |            |  
|Decrease (increase) in other assets                                                                |  |      | 979      |   |      |   | 2,646      |      |  |   | 1,971      |  
|(Decrease) increase in accounts payable and accrued expenses                                       |  |      | (12,409  | ) |      |   | (30,101    | )    |  |   | 31,919     |  
|Increase in due to affiliates                                                                      |  |      | 1,941    |   |      |   | 871        |      |  |   | 762        |  
|                                                                                                   |  |      |          |   |      |   |            |      |  |   |            |  
|Net cash (used in) provided by operating activities                                                |  |      | (74,909  | ) |      |   | (43,848    | )    |  |   | 122,443    |  
|                                                                                                   |  |      |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                              |  |      |          |   |      |   |            |      |  |   |            |  
|Net sale proceeds received from joint ventures                                                     |  |      | 0        |   |      |   | 0          |      |  |   | 2,304,048  |  
|Investment in joint ventures                                                                       |  |      | (26,148  | ) |      |   | (39,222    | )    |  |   | (529,750   | )
|                                                                                                   |  |      |          |   |      |   |            |      |  |   |            |  
|Net cash (used in) provided by investing activities                                                |  |      | (26,148  | ) |      |   | (39,222    | )    |  |   | 1,774,298  |  
|                                                                                                   |  |      |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                              |  |      |          |   |      |   |            |      |  |   |            |  
|Net sale proceeds distributions paid to limited partners                                           |  |      | 0        |   |      |   | 0          |      |  |   | (3,069,999 | )
|                                                                                                   |  |      |          |   |      |   |            |      |  |   |            |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                               |  |      | (101,057 | ) |      |   | (83,070    | )    |  |   | (1,173,258 | )
|                                                                                                   |  |      |         
|CASH AND CASH EQUIVALENTS, beginning of year                                                       |  |      | 550,251  |   |      |   | 633,321    |      |  |   | 1,806,579  |  
|                                                                                                   |  |      |          |   |      |   |            |      |  |   |            |  
|CASH AND CASH EQUIVALENTS, end of year                                                             |  | $    | 449,194  |   |      | $ | 550,251    |      |  | $ | 633,321    |  
|                                                                                                   |  |      |          |   |      |   |            |      |  |   |            |  

See accompanying notes.



Page F-6



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##### Index to Financial Statements

WELLS REAL ESTATE FUND XI, L.P.



NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009, 2008, AND 2007



|1. | ORGANIZATION AND BUSINESS
|-- | -------------------------

Wells Real
Estate Fund XI, L.P. (the Partnership) is a Georgia public limited partnership with Leo F. Wells, III and Wells Partners, L.P. (Wells Partners), a Georgia nonpublic limited partnership, serving as its general
partners (collectively, the General Partners). Wells Capital, Inc. (Wells Capital) serves as the corporate general partner of Wells Partners. Wells Capital is a wholly owned subsidiary of Wells Real Estate Funds, Inc.
Leo F. Wells, III is the president and sole director of Wells Capital and the president, sole director, and sole owner of Wells Real Estate Funds, Inc. The Partnership was formed on June 20, 1996 for the purpose of acquiring, developing,
owning, operating, improving, leasing, and managing income-producing commercial properties for investment purposes. Upon subscription, limited partners elected to have their units treated as Class A Units or Class B Units. The limited partners
have the right to change their prior elections to have some or all of their units treated as Class A Units or Class B Units one time during each annual accounting period. Limited partners may vote to, among other things, (a) amend the
partnership agreement, subject to certain limitations; (b) change the business purpose or investment objectives of the Partnership; and (c) add or 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.

On December 31, 1997, the Partnership commenced an offering of up to $35,000,000 of Class A or Class B limited partnership units ($10.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of
1933. The offering was terminated on December 30, 1998, at which time the Partnership had sold approximately 1,302,942 Class A Units and 350,338 Class B Units representing total limited partner capital contributions of $16,532,802.

The Partnership owns indirect interests in all of its real estate assets through joint ventures with other entities affiliated with the
General Partners and Piedmont Operating Partnership, LP (Piedmont OP), formerly known as Wells Operating Partnership, L.P. Piedmont OP is a Delaware limited partnership with Piedmont Office Realty Trust, Inc. (Piedmont REIT),
formerly known as Wells Real Estate Investment Trust, Inc., serving as its general partner. Piedmont REIT is a Maryland corporation that qualifies as a real estate investment trust. During the periods presented, the Partnership owned interests in
the following joint ventures (the Joint Ventures) and properties:



|                                                                                    |  |                                                                                                                                       |  |                                                                                                                                                                                                                                                                       
|----------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint Venture                                                                       |  | Joint Venture Partners                                                                                                                |  | Properties                                                                                                                                                                                                                                                            
|The Fund IX, Fund X, Fund XI andREIT Joint Venture (Fund IX-X-XI-REIT Associates) |  | Wells Real Estate Fund IX, L.P. Wells Real Estate Fund X, L.P. Wells Real Estate Fund XI, L.P. Piedmont Operating Partnership, LP |  | 1. 360 Interlocken Building A three-story office building located in Broomfield, Colorado  2. Avaya Building A one-story office building located in Oklahoma City, Oklahoma  3. Iomega Building(1) A single-story warehouse and office building located in Ogden, Utah
|Fund X and Fund XI Associates (Fund X-XI Associates)                              |  | Wells Real Estate Fund X, L.P. Wells Real Estate Fund XI, L.P.                                                                      |  | This joint venture only owns an interest in another joint venture and does not own any properties directly.                                                                                                                                                           



Page F-7



---

##### Index to Financial Statements

|                                                                              |  |                                                                                                        |  |                                                                                                                                                                                                
|----------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint Venture                                                                 |  | Joint Venture Partners                                                                                 |  | Properties                                                                                                                                                                                     
|Wells/Fremont Associates (Fund X-XI-REIT Associates Fremont)               |  | Fund X-XI Associates Piedmont Operating Partnership, LP                                              |  | 4. 47300 Kato Road (formerly known as 47320
Kato Road) A two-story warehouse and office building located in Fremont, California                                                              
|The Wells Fund XI-Fund XII-REIT Joint
Venture (Fund XI-XII-REIT Associates) |  | Wells Real Estate Fund XI, L.P.
Wells Real Estate Fund XII, L.P. Piedmont Operating Partnership, LP |  | 5. 111 Southchase Boulevard(2) A two-story manufacturing and office building located in Fountain Inn, South Carolina 6. 20/20 Building A three-story office building located in Leawood, Kansas



| | (1) | This property was sold in January 2007.
| | --- | ---------------------------------------



| | (2) | This property was sold in May 2007.
| | --- | -----------------------------------

Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P., and Wells Real Estate Fund XII, L.P. are affiliated with the Partnership through common general partners. Each of the properties described
above was acquired on an all-cash basis.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Basis of Presentation

The Partnerships financial statements are prepared in accordance with U.S. generally accepted
accounting principles (GAAP).

Use of Estimates

The preparation of the Partnerships financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues,
and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

Investment in Joint Ventures

The Partnership has evaluated the Joint Ventures and
concluded that none are variable interest entities. The Partnership does not have control over the operations of the Joint Ventures; however, it does exercise significant influence. Approval by the Partnership as well as the other joint venture
partners is required for any major decision or any action that would materially affect the Joint Ventures, or their real property investments. Accordingly, the Partnership accounts for its investments in the Joint Ventures using the equity method of
accounting, whereby original investments are recorded at cost and subsequently adjusted for contributions, distributions, and net income (loss) attributable to the Partnership. Pursuant to the terms of the joint venture agreements, all income (loss)
and distributions are allocated to joint venture partners in accordance with their respective ownership interests. Distributions of net cash from operations, if available, are generally distributed to the joint venture partners on a quarterly basis.

Evaluating the Recoverability of Real Estate Assets

The Partnership continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets owned through the Partnerships investment in the
Joint Ventures may not be recoverable. When indicators of potential impairment are present which suggest that the carrying amounts of real



Page F-8



---

##### Index to Financial Statements

estate assets may not be recoverable, management assesses the recoverability of the real estate assets by determining whether the respective carrying values will be recovered through the
estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that the
expected undiscounted future cash flows for assets held for use, or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, management adjusts the real estate assets to their
respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are determined
based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present
value of future cash flows, including estimated residual value.

While various techniques and assumptions can be used to estimate fair
value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures describes three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices
(unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign
exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entitys own assumptions, as there is little, if any, related
market activity or information. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value
measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Partnerships assessment of the significance of a particular input to the fair value measurement in its entirety
requires judgment, and considers factors specific to the asset or liability. The accounting standard for fair value measurements and disclosures was applied to the Partnerships outstanding nonfinancial assets and nonfinancial liabilities
effective January 1, 2009.

Cash and Cash Equivalents

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

Other Assets

As of December 31, 2008, other assets is comprised primarily of interest income receivable. Interest receivable represents interest
earned during the period presented, which will be received in the following month.

Distributions of Net Cash from Operations

Net cash from operations, if available, is generally distributed quarterly to the limited partners as follows:



| |  |  | First, to all limited partners holding Class A Units on a per-unit basis until such limited partners have received distributions equal to a
10% per annum return on their respective net capital contributions, as defined.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Second, to the General Partners until the General Partners have received distributions equal to 10% of the total cumulative distributions paid by the
Partnership.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Third, to the limited partners holding Class A Units on a per-unit basis and the General Partners allocated on a basis of 90% and 10%,
respectively.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



Page F-9



---

##### Index to Financial Statements

No distributions of net cash from operations will be made to limited partners holding Class B Units.

Distribution of Net Sale Proceeds

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



| |  |  | In the event that the particular property sold is sold for a price that is less than its original property purchase price, to the limited partners
holding Class A Units until they have received an amount equal to the excess of the original property purchase price over the price for which the property was sold, limited to the amount of depreciation, amortization, and cost recovery
deductions taken by the limited partners holding Class B Units with respect to such property;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To limited partners holding units which at any time have been treated as Class B Units until the limited partners have received an amount necessary to
equal the net cash from operations previously distributed to the limited partners holding Class A Units on a per-unit basis;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To all limited partners on a per-unit basis until the limited partners have received 100% of their respective net capital contributions, as defined;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To all limited partners on a per-unit basis until the limited partners have received a cumulative 10% per annum return on their respective net
capital contributions, as defined;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | To limited partners on a per-unit basis until the limited partners have received an amount equal to their respective preferential limited partner
return (defined as the sum of a 10% per annum cumulative return on net capital contributions for all periods during which the units were treated as Class A Units and a 15% per annum cumulative return on net capital contributions for
all periods during which the units were treated as Class B Units);
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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

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

For the purpose of determining allocations per the partnership agreement, net income is defined as net income recognized by the Partnership, excluding deductions for depreciation, amortization, and cost
recovery and the gain on the sale of assets. Net income, as defined, of the Partnership will be allocated each year in the same proportion that net cash from operations is distributed to the partners holding Class A Units and the General
Partners. To the extent the Partnerships Net Income in any year exceeds net cash from operations, it will be allocated 99% to the limited partners holding Class A Units and 1% to the General Partners.

Net loss, depreciation, and amortization deductions for each fiscal year will be allocated as follows: (a) 99% to the limited partners holding 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.

Gains on the sale or exchange of the Partnerships properties will be allocated generally in the same manner that the
net proceeds from such sale are distributed to partners after the following allocations are made, if applicable: (a) allocations made pursuant to the qualified income offset provisions of the partnership agreement, (b) allocations to
partners having negative capital accounts until all negative capital accounts have been restored



Page F-10



---

##### Index to Financial Statements

to zero, and (c) allocations to limited partners holding Class B Units in amounts equal to the deductions for depreciation and amortization previously allocated to them with respect to the
specific partnership property sold, but not in excess of the amount of gain on sale recognized by the Partnership with respect to the sale of such property.

Income Taxes

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

Recent Accounting Pronouncements

In June
2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles (SFAS 168). SFAS 168 requires that the FASB Accounting Standards Codification (the Codification or ASC) become the source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Once the Codification is in effect, all of its content will carry the same level of authority, effectively superseding SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 168 is
effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of SFAS 168 did not have a significant impact on the Partnerships financial statements or disclosures.

In September 2006, FASB issued ASC Topic Fair Value Measurements and Disclosures (ASC 820), which defines fair value, establishes a
framework for measuring fair value, and expands disclosures required for fair value measurements under GAAP. ASC 820 emphasizes that fair value is a market-based measurement, as opposed to an entity-specific measurement. In February 2008, the
FASB delayed the effective date of ASC 820 for all nonrecurring nonfinancial assets and liabilities until fiscal years beginning after November 15, 2008. The Partnership adopted the guidelines under ASC 820 effective January 1, 2008, as it
relates to financial instruments and effective January 1, 2009, as it relates to nonfinancial instruments. The adoption of ASC 820 for nonrecurring nonfinancial assets and liabilities did not have a material impact on the Partnerships
financial statements or disclosures.

In May 2009, the FASB issued ASC Topic Subsequent Events(ASC 855). ASC 855 provides
guidance on managements assessment of subsequent events. ASC 855 states that management must evaluate, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial
statements are issued or are available to be issued. ASC 855 allows the assessment of subsequent events to occur through the date on which the financial statements are available to be issued or the date they are issued. Management
must perform its assessment for both interim and annual financial reporting periods. ASC 855 was effective prospectively for interim and annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material impact on the
Partnerships financial statements or disclosures.



|3. | INVESTMENT IN JOINT VENTURES
|-- | ----------------------------

Impairment of Real Estate Assets

Fund XI-XII-REIT Associates evaluated the recoverability of the carrying value of the 20/20
Building pursuant to the accounting policy outlined in Note 2 and determined that it was not recoverable, as compared to the estimated fair value, primarily as a result of shortening the estimated holding period of such asset in third quarter 2008.
Accordingly, Fund XI-XII-REIT Associates recorded an impairment loss at the 20/20 Building of approximately $3,678,000 (approximately $962,000 of which was allocated to the Partnership) to reduce the carrying value of the property to its estimated
fair value based on the present value of future cash flows,



Page F-11



---

##### Index to Financial Statements

primarily as a result of management refining its strategy for disposing of this building. This impairment loss is included in income (loss) from continuing operations for the year ended
December 31, 2008 in the Summary of Financial Information table below.

Fund X-XI-REIT Associates  Fremont evaluated the
recoverability of the carrying value of the 47300 Kato Road property pursuant to the accounting policy outlined in Note 2 and determined that it is not recoverable, as compared to the estimated fair value, primarily as a result of shortening the
estimated holding period of such asset in third quarter 2009 and significant downward pressure on long-term rental rates for speculative leasing. Accordingly, Fund X-XI-REIT Associates  Fremont reduced the carrying value of 47300 Kato Road to
its estimated fair value based on the present value of future cash flows and recognized a corresponding impairment loss of approximately $3,316,000 (approximately $313,000 of which was allocated to the Partnership) in the third quarter of 2009. This
impairment loss is included in income (loss) from continuing operations for the year ended December 31, 2009 in the Summary of Financial Information table below.

The fair value measurements used in these evaluations of 47300 Kato Roads nonfinancial assets are considered to be Level 3 valuations within the fair value hierarchy, as there are significant
unobservable inputs (see Evaluating the Recoverability of Real Estate Assets in Note 2). Examples of inputs that Fund X-XI-REIT Associates  Fremont utilized in its fair value calculations include discount rates, market capitalization rates,
expected lease rental rates, timing of new leases, and sales prices.

Due from Joint Ventures

As of December 31, 2009 and 2008, due from joint ventures represents the Partnerships share of the operating cash flow to be distributed for the
fourth quarters of 2009 and 2008, respectively, from the following Joint Ventures:



|                            |  |      |        |      |   |      
|--------------------------- |  | ---- | ------ | ---- | - | -----
|                            |  | 2009 |        | 2008
|Fund X-XI Associates        |  | $    | 10,096 |      | $ | 9,197
|Fund XI-XII REIT Associates |  |      | 28,126 |      |   | 0    
|                            |  |      |        |      |   |      
|                            |  | $    | 38,222 |      | $ | 9,197
|                            |  |      |        |      |   |      

Summary of Investments

The Partnerships investments and approximate ownership percentages in the Joint Ventures as of December 31, 2009 and 2008 are summarized below:



|                             |  |        |           |            |     |        |   |            |  |    
|---------------------------- |  | ------ | --------- | ---------- | --- | ------ | - | ---------- |  | ---
|                             |  | 2009   |           | 2008      
|                             |  | Amount |           | Percentage |     | Amount |   | Percentage
|Fund IX-X-XI-REIT Associates |  | $      | 949,430   |            | 9%  |        | $ | 969,890    |  | 9% 
|Fund X-XI Associates         |  |        | 329,648   |            | 42% |        |   | 658,996    |  | 42%
|Fund XI-XII-REIT Associates  |  |        | 1,452,610 |            | 26% |        |   | 1,476,498  |  | 26%
|                             |  |        |           |            |     |        |   |            |  |    
|                             |  | $      | 2,731,688 |            |     |        | $ | 3,105,384  |  |    
|                             |  |        |           |            |     |        |   |            |  |    



Page F-12



---

##### Index to Financial Statements

Summary of Activity

Roll-forwards of the Partnerships investment in the Joint Ventures for the years ended December 31, 2009 and 2008 are presented below:



|                                                |  |      |           |   |      |   |           |  
|----------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                                                |  | 2009 |           |   | 2008 |  
|Investment in Joint Ventures, beginning of year |  | $    | 3,105,384 |   |      | $ | 4,124,909 |  
|Equity in loss of Joint Ventures                |  |      | (301,829  | ) |      |   | (953,562  | )
|Contributions to Joint Ventures                 |  |      | 26,148    |   |      |   | 39,222    |  
|Distributions from Joint Ventures               |  |      | (98,015   | ) |      |   | (105,185  | )
|                                                |  |      |           |   |      |   |           |  
|Investment in Joint Ventures, end of year       |  | $    | 2,731,688 |   |      | $ | 3,105,384 |  
|                                                |  |      |           |   |      |   |           |  

Summary of Financial Information

Condensed financial information for the Joint Ventures as of December 31, 2009 and 2008, and for the years ended December 31, 2009, 2008, and 2007 is presented below:



|                             |  |                          |            |                               |   |                          |  |      |         |      |   |         |  |   |            |  |   |           
|---------------------------- |  | ------------------------ | ---------- | ----------------------------- | - | ------------------------ |  | ---- | ------- | ---- | - | ------- |  | - | ---------- |  | - | ----------
|                             |  | Total AssetsDecember 31, |            | Total LiabilitiesDecember 31, |   | Total EquityDecember 31,
|                             |  | 2009                     |            | 2008                          |   | 2009                     |  | 2008 |         | 2009 |   | 2008   
|Fund IX-X-XI-REIT Associates |  | $                        | 11,048,832 |                               | $ | 11,347,023               |  | $    | 245,301 |      | $ | 310,695 |  | $ | 10,803,531 |  | $ | 11,036,328
|Fund X-XI Associates         |  |                          | 808,928    |                               |   | 1,591,176                |  |      | 24,047  |      |   | 21,904  |  |   | 784,881    |  |   | 1,569,272 
|Fund XI-XII-REIT Associates  |  |                          | 5,905,534  |                               |   | 6,148,486                |  |      | 349,988 |      |   | 501,584 |  |   | 5,555,546  |  |   | 5,646,902 
|                             |  |                          |            |                               |   |                          |  |      |         |      |   |         |  |   |            |  |   |           
|                             |  | $                        | 17,763,294 |                               | $ | 19,086,685               |  | $    | 619,336 |      | $ | 834,183 |  | $ | 17,143,958 |  | $ | 18,252,502
|                             |  |                          |            |                               |   |                          |  |      |         |      |   |         |  |   |            |  |   |           



|                             |  |                                 |           |                                         |   |           |                                    |      |                                 |  |      |          |   |      |   |            |      |  |      |         |      |  |      |  |   |      |  |   |           |  |   |          |   |  |   |            |   |  |   |          
|---------------------------- |  | ------------------------------- | --------- | --------------------------------------- | - | --------- | ---------------------------------- | ---- | ------------------------------- |  | ---- | -------- | - | ---- | - | ---------- | ---- |  | ---- | ------- | ---- |  | ---- |  | - | ---- |  | - | --------- |  | - | -------- | - |  | - | ---------- | - |  | - | ---------
|                             |  | Total Revenues                  |           | Income (Loss) FromContinuing
Operations |   |           | Income FromDiscontinued Operations |      | Net Income (Loss)              
|                             |  | For the Years EndedDecember 31, |           | For the Years EndedDecember 31,         |   |           | For the Years EndedDecember 31,    |      | For the Years EndedDecember 31,
|                             |  | 2009                            |           | 2008                                    |   | 2007      |                                    | 2009 |                                 |  | 2008 |          |   | 2007 |   |            | 2009 |  | 2008 |         | 2007 |  | 2009 |  |   | 2008 |  |   | 2007     
|Fund IX-X-XI-REIT Associates |  | $                               | 1,061,162 |                                         | $ | 1,357,670 |                                    | $    | 1,573,322                       |  | $    | (17,543  | ) |      | $ | 230,391    |      |  | $    | 465,077 |      |  | $0   |  | $ | 0    |  | $ | 193,655   |  | $ | (17,543  | ) |  | $ | 230,391    |   |  | $ | 658,732  
|Fund X-XI Associates         |  |                                 | 0         |                                         |   | 0         |                                    |      | 0                               |  |      | (690,703 | ) |      |   | 43,619     |      |  |      | 49,272  |      |  | 0    |  |   | 0    |  |   | 0         |  |   | (690,703 | ) |  |   | 43,619     |   |  |   | 49,272   
|Fund XI-XII- REIT Associates |  |                                 | 1,198,983 |                                         |   | 1,074,480 |                                    |      | 890,788                         |  |      | (39,300  | ) |      |   | (3,794,582 | )    |  |      | (67,302 | )    |  | 0    |  |   | 317  |  |   | 2,144,071 |  |   | (39,300  | ) |  |   | (3,794,265 | ) |  |   | 2,076,769
|                             |  |                                 |           |                                         |   |           |                                    |      |                                 |  |      |          |   |      |   |            |      |  |      |         |      |  |      |  |   |      |  |   |           |  |   |          |   |  |   |            |   |  |   |          
|                             |  | $                               | 2,260,145 |                                         | $ | 2,432,150 |                                    | $    | 2,464,110                       |  | $    | (747,546 | ) |      | $ | (3,520,572 | )    |  | $    | 447,047 |      |  | $0   |  | $ | 317  |  | $ | 2,337,726 |  | $ | (747,546 | ) |  | $ | (3,520,255 | ) |  | $ | 2,784,773
|                             |  |                                 |           |                                         |   |           |                                    |      |                                 |  |      |          |   |      |   |            |      |  |      |         |      |  |      |  |   |      |  |   |           |  |   |          |   |  |   |            |   |  |   |          

The following information summarizes the financial position of
Wells/Fremont Associates in which the Partnership held an interest through its interest in Fund X-XI Associates as of December 31, 2009 and 2008 and for the years ended December 31, 2009, 2008, and 2007:



|                         |  |                          |           |                               |   |                          |  |      |         |      |   |         |  |   |           |  |   |          
|------------------------ |  | ------------------------ | --------- | ----------------------------- | - | ------------------------ |  | ---- | ------- | ---- | - | ------- |  | - | --------- |  | - | ---------
|                         |  | Total AssetsDecember 31, |           | Total LiabilitiesDecember 31, |   | Total EquityDecember 31,
|                         |  | 2009                     |           | 2008                          |   | 2009                     |  | 2008 |         | 2009 |   | 2008   
|Wells/Fremont Associates |  | $                        | 3,676,596 |                               | $ | 7,141,187                |  | $    | 187,584 |      | $ | 165,357 |  | $ | 3,489,012 |  | $ | 6,975,830
|                         |  |                          |           |                               |   |                          |  |      |         |      |   |         |  |   |           |  |   |          



|                         |  |                                 |         |                                 |   |         |  |      |         |  |      |            |      |  |   |         |  |   |        
|------------------------ |  | ------------------------------- | ------- | ------------------------------- | - | ------- |  | ---- | ------- |  | ---- | ---------- | ---- |  | - | ------- |  | - | -------
|                         |  | Total Revenues                  |         | Net Income (Loss)              
|                         |  | For the Years EndedDecember 31, |         | For the Years EndedDecember 31,
|                         |  | 2009                            |         | 2008                            |   | 2007    |  | 2009 |         |  | 2008 |            | 2007
|Wells/Fremont Associates |  | $                               | 507,372 |                                 | $ | 477,303 |  | $    | 490,525 |  | $    | (3,070,350 | )    |  | $ | 193,897 |  | $ | 219,026
|                         |  |                                 |         |                                 |   |         |  |      |         |  |      |            |      |  |   |         |  |   |        



Page F-13



---

##### Index to Financial Statements

The Partnership allocates its share of net income, net loss, and gain on sale generated by the properties
owned by the Joint Ventures to its Class A and Class B limited partners pursuant to the partnership agreement provisions outlined in Note 2. The components of income from discontinued operations recognized by the Joint Ventures are provided
below:



|                             |  |                 |  |             |  |       |  |                 |  |             |  |       |     |                 |   |             |  |       |           |  |   |          
|---------------------------- |  | --------------- |  | ----------- |  | ----- |  | --------------- |  | ----------- |  | ----- | --- | --------------- | - | ----------- |  | ----- | --------- |  | - | ---------
|                             |  | 2009            |  | 2008        |  | 2007 
|                             |  | OperatingIncome |  | Gain onSale |  | Total |  | OperatingIncome |  | Gain onSale |  | Total |     | OperatingIncome |   | Gain onSale |  | Total
|Fund IX-X-XI-REIT Associates |  | $0              |  | $0          |  | $0    |  | $    0          |  | $0          |  | $     | 0   |                 | $ | 22,234      |  | $     | 171,421   |  | $ | 193,655  
|Fund XI-XII-REIT Associates  |  | 0               |  | 0           |  | 0     |  | 317             |  | 0           |  |       | 317 |                 |   | 166,340     |  |       | 1,977,731 |  |   | 2,144,071
|                             |  |                 |  |             |  |       |  |                 |  |             |  |       |     |                 |   |             |  |       |           |  |   |          
|                             |  | $0              |  | $0          |  | $0    |  | $317            |  | $0          |  | $     | 317 |                 | $ | 188,574     |  | $     | 2,149,152 |  | $ | 2,337,726
|                             |  |                 |  |             |  |       |  |                 |  |             |  |       |     |                 |   |             |  |       |           |  |   |          



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

Management
and Leasing Fees

The Partnership entered into a property management and leasing agreement with Wells Management Company, Inc. (Wells
Management), an affiliate of the General Partners. In accordance with the property management and leasing agreement, Wells Management receives compensation for the management and leasing of the Partnerships properties owned through the
Joint Ventures, equal to (a) 2.5% of the gross revenues for management and 2% of the gross revenues for leasing (aggregate maximum of 4.5%) of the gross revenues collected monthly, plus a separate competitive 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, which is assessed periodically
based on market studies; or (b) in the case of commercial properties leased on a long-term net basis (10 or more years), the maximum property management fee from such leases shall be 1% of the gross revenues generally paid over the life of the
leases except for a one-time initial leasing fee of 3% of the gross revenues on each lease payable over the first five full years of the original lease term. Management and leasing fees are paid by the Joint Ventures and, accordingly, are included
in equity in income (loss) of joint ventures in the accompanying statements of operations. The Partnerships share of management and leasing fees and lease acquisition costs incurred through the Joint Ventures that are payable to Wells
Management is $6,384, $7,624, and $9,488 for the years ended December 31, 2009, 2008, and 2007, respectively.

Administrative
Reimbursements

Wells Capital, the corporate general partner of Wells Partners, one of the Partnerships General Partners, and Wells
Management perform certain administrative services for the Partnership, relating to accounting, property management, and other partnership administration, and incur the related expenses. Such expenses are allocated among other entities affiliated
with the General Partners based on time spent on each fund by individual administrative personnel. In the opinion of the General Partners, this allocation is a reasonable estimation of such expenses. The Partnership incurred administrative expenses
of $71,468, $68,987, and $62,165 payable to Wells Capital and Wells Management for the years ended December 31, 2009, 2008, and 2007, respectively, which are included in general and administrative expenses in the accompanying statements of
operations. In addition, Wells Capital and Wells Management pay for certain operating expenses of the Partnership (bill- backs) directly and invoice the Partnership for the reimbursement thereof on a quarterly basis. As presented in the
accompanying balance sheets, due to affiliates as of December 31, 2009 and 2008 represents administrative reimbursements and bill-backs due to Wells Capital and/or Wells Management.



Page F-14



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##### Index to Financial Statements

|5. | PER-UNIT AMOUNTS
|-- | ----------------

Income (loss) per
limited partnership unit amounts are calculated based upon weighted-average units outstanding during the respective periods. Income (loss) per limited partnership unit, as presented in the accompanying financial statements, will vary from the
per-unit amounts attributable to the individual investors due to the differences between the GAAP and tax basis treatment of certain items of income and expense and the fact that, within the respective classes of Class A Units and Class B
Units, individual units have different characteristics including capital bases, cumulative operating and net property sales proceeds distributions and cumulative earnings allocations as a result of, among other things, the ability of unit holders to
elect to be treated as Class A Units or Class B Units, or to change their prior elections, on a quarterly basis.

For the reasons
mentioned above, distributions of net sale proceeds per unit also vary among individual unit holders. Distributions of net sale proceeds have been calculated at the investor level pursuant to the partnership agreement and allocated between the
Class A and Class B limited partners in the period paid. Accordingly, distributions of net sale proceeds per unit, as presented in the accompanying financial statements, vary from the per-unit amounts attributable to the individual investors.



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

A reconciliation of the Partnerships financial statement net income (loss) to net income (loss) presented in accordance with the federal income tax basis of accounting is as follows for the years
ended December 31, 2009, 2008, and 2007:



|                                                                                                                |  |      |          |   |      |   |            |      |  |   |          |  
|--------------------------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | ---------- | ---- |  | - | -------- | -
|                                                                                                                |  | 2009 |          |   | 2008 |   |            | 2007 | 
|Financial statement net income (loss)                                                                           |  | $    | (436,239 | ) |      | $ | (1,093,609 | )    |  | $ | 598,221  |  
|Adjustments in net income (loss) resulting from:                                                                |  |      |          |   |      |   |            |      |  |   |          |  
|Depreciation expense for financial reporting purposes greater than (less than) amounts for income tax purposes  |  |      | 18,007   |   |      |   | 34,848     |      |  |   | 1,300    |  
|Bad debt (recoveries) expense for financial reporting purposes in excess of amounts for income tax purposes     |  |      | (3,386   | ) |      |   | 1,695      |      |  |   | 1,691    |  
|Rental income accrued for financial reporting purposes less than (greater than) amounts for income tax purposes |  |      | 23,500   |   |      |   | 42,447     |      |  |   | (170,454 | )
|Gains on sale of properties for financial reporting purposes in excess of income tax purposes                   |  |      | 0        |   |      |   | 0          |      |  |   | (94,249  | )
|Impairment losses taken for financial reporting purposes in excess of amounts for income tax purposes           |  |      | 313,189  |   |      |   | 961,528    |      |  |   | 0        |  
|Other                                                                                                           |  |      | 4,363    |   |      |   | (8,819     | )    |  |   | 6,339    |  
|                                                                                                                |  |      |          |   |      |   |            |      |  |   |          |  
|Income tax basis net income (loss)                                                                              |  | $    | (80,566  | ) |      | $ | (61,910    | )    |  | $ | 342,848  |  
|                                                                                                                |  |      |          |   |      |   |            |      |  |   |          |  



Page F-15



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##### Index to Financial Statements

A reconciliation of the partners capital balances, as presented in the accompanying financial
statements, to partners capital balances, as presented in accordance with the federal income tax basis of accounting, is as follows for the years ended December 31, 2009, 2008, and 2007:



|                                                                                                                                         |  |      |           |   |      |   |           |      |  |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                                                                                         |  | 2009 |           |   | 2008 |   |           | 2007 | 
|Financial statements partners capital                                                                                                   |  | $    | 3,204,434 |   |      | $ | 3,640,673 |      |  | $ | 4,734,282 |  
|Increase (decrease) in partners capital resulting from:                                                                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Accumulated meals and entertainment                                                                                                      |  |      | 556       |   |      |   | 556       |      |  |   | 556       |  
|Accumulated bad debt expense, net, for financial reporting purposes in excess of amounts for income tax purposes                         |  |      | 86        |   |      |   | 3,472     |      |  |   | 1,777     |  
|Accumulated depreciation expense for financial reporting purposes greater than amounts for income tax purposes                           |  |      | 1,016,444 |   |      |   | 998,437   |      |  |   | 963,589   |  
|Capitalization of syndication costs for income tax purposes, which are accounted for as cost of capital for financial reporting
purposes |  |      | 2,035,389 |   |      |   | 2,035,389 |      |  |   | 2,035,389 |  
|Accumulated rental income accrued for financial reporting purposes greater than amounts for income tax purposes                          |  |      | (289,648  | ) |      |   | (313,148  | )    |  |   | (355,595  | )
|Accumulated expenses deductible when paid for income tax purposes less than amounts accrued for financial reporting
purposes             |  |      | 1,981     |   |      |   | 1,981     |      |  |   | 1,981     |  
|Accumulated gains on sale of properties for financial reporting purposes in excess of amounts for income tax
purposes                    |  |      | (491,951  | ) |      |   | (491,951  | )    |  |   | (491,951  | )
|Accumulated impairment losses taken for financial reporting purposes in excess of amounts for income tax purposes                        |  |      | 1,305,857 |   |      |   | 992,668   |      |  |   | 31,140    |  
|Equity adjustment for South Carolina nonresident withholding tax treated as a distribution for income tax
purposes                       |  |      | (38,021   | ) |      |   | (38,021   | )    |  |   | (38,021   | )
|Other                                                                                                                                    |  |      | (52,105   | ) |      |   | (56,468   | )    |  |   | (47,649   | )
|                                                                                                                                         |  |      |           |   |      |   |           |      |  |   |           |  
|Income tax basis partners capital                                                                                                       |  | $    | 6,693,022 |   |      | $ | 6,773,588 |      |  | $ | 6,835,498 |  
|                                                                                                                                         |  |      |           |   |      |   |           |      |  |   |           |  



Page F-16



---

##### Index to Financial Statements

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

Presented
below is a summary of the unaudited quarterly financial information for the years ended December 31, 2009 and 2008:



|                                                                                              |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|--------------------------------------------------------------------------------------------- |  | ------------------- | ------- | - | ------- | - | ------- | ------------ |  | - | ----------- | - |  | - | ------- | -
|                                                                                              |  | 2009 Quarters Ended |        
|                                                                                              |  | March 31            |         |   | June 30 |   |         | September 30 |  |   | December 31 |  
|Equity in income (loss) of joint ventures                                                     |  | $                   | 4,928   |   |         | $ | 13,588  |              |  | $ | (318,889    | ) |  | $ | (1,456  | )
|Interest and other income                                                                     |  | $                   | 1,072   |   |         | $ | 379     |              |  | $ | 204         |   |  | $ | 268     |  
|Net loss                                                                                      |  | $                   | (36,891 | ) |         | $ | (19,592 | )            |  | $ | (343,393    | ) |  | $ | (36,363 | )
|Net loss allocated to:                                                                        |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A limited partners                                                                      |  | $                   | (36,891 | ) |         | $ | (19,592 | )            |  | $ | (343,393    | ) |  | $ | (36,363 | )
|Class B limited partners                                                                      |  | $                   | 0       |   |         | $ | 0       |              |  | $ | 0           |   |  | $ | 0       |  
|General partners                                                                              |  | $                   | 0       |   |         | $ | 0       |              |  | $ | 0           |   |  | $ | 0       |  
|Net loss per weighted-average limited partner unit outstanding:                               |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A(a)                                                                                    |  |                     | $(0.03  | ) |         |   | $(0.01  | )            |  |   | $(0.24      | ) |  |   | $(0.03  | )
|Class B                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Distribution of operating cash per weighted-average limited partner unit outstanding:         |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Class B                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Distribution of net sale proceeds cash per weighted-average limited partner unit outstanding: |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Class B                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|                                                                                              | 
|                                                                                              |  | 2008 Quarters Ended |        
|                                                                                              |  | March 31            |         |   | June 30 |   |         | September 30 |  |   | December 31 |  
|Equity in income (loss) of joint ventures                                                     |  | $                   | 15,756  |   |         | $ | 184     |              |  | $ | (970,283    | ) |  | $ | 781     |  
|Interest and other income                                                                     |  | $                   | 4,968   |   |         | $ | 3,420   |              |  | $ | 3,530       |   |  | $ | 3,131   |  
|Net loss                                                                                      |  | $                   | (34,466 | ) |         | $ | (34,825 | )            |  | $ | (1,000,645  | ) |  | $ | (23,673 | )
|Net loss allocated to:                                                                        |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A limited partners                                                                      |  | $                   | (34,121 | ) |         | $ | (34,510 | )            |  | $ | (1,000,645  | ) |  | $ | (23,673 | )
|Class B limited partners                                                                      |  | $                   | 0       |   |         | $ | 0       |              |  | $ | 0           |   |  | $ | 0       |  
|General partners                                                                              |  | $                   | (345    | ) |         | $ | (315    | )            |  | $ | 0           |   |  | $ | 0       |  
|Net loss per weighted-average limited partner unit outstanding:                               |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A                                                                                       |  |                     | $(0.02  | ) |         |   | $(0.02  | )            |  |   | $(0.70      | ) |  |   | $(0.02  | )
|Class B                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Distribution of operating cash per weighted-average limited partner unit outstanding:         |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Class B                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Distribution of net sale proceeds cash per weighted-average limited partner unit outstanding: |  |                     |         |   |         |   |         |              |  |   |             |   |  |   |         |  
|Class A                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  
|Class B                                                                                       |  |                     | $ 0.00  |   |         |   | $ 0.00  |              |  |   | $ 0.00      |   |  |   | $ 0.00  |  



| | (a) | The quarterly per-unit amounts have been calculated using actual income (loss) for the respective quarters. Conversely, the corresponding annual
income (loss) per-unit amounts have been calculated assuming that income (loss) was earned ratably over the year. As a result, the sum of these quarterly per-unit amounts does not equal the respective annual per-unit amount presented in the
accompanying financial statements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page F-17



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##### Index to Financial Statements

|8. | GENERAL AND ADMINISTRATIVE COSTS
|-- | --------------------------------

General
and administrative costs for the years ended December 31, 2009, 2008, and 2007 are composed of the following items:



|                                       |  |      |         |      |   |         |  |   |        
|-------------------------------------- |  | ---- | ------- | ---- | - | ------- |  | - | -------
|                                       |  | 2009 |         | 2008 |   | 2007   
|Salary reimbursements                  |  | $    | 71,468  |      | $ | 68,987  |  | $ | 62,164 
|Printing expenses                      |  |      | 23,148  |      |   | 28,220  |  |   | 31,505 
|Independent accounting fees            |  |      | 17,026  |      |   | 24,095  |  |   | 29,329 
|Legal fees                             |  |      | 13,086  |      |   | 22,495  |  |   | 10,656 
|Postage and delivery expenses          |  |      | 7,823   |      |   | 6,660   |  |   | 6,076  
|Computer costs                         |  |      | 1,585   |      |   | 1,099   |  |   | 965    
|Taxes and licensing fees               |  |      | 800     |      |   | 760     |  |   | 830    
|Other professional fees                |  |      | 660     |      |   | 1,988   |  |   | 1,701  
|Registration and filing fees           |  |      | 574     |      |   | 792     |  |   | 581    
|Bank service charges                   |  |      | 163     |      |   | 0       |  |   | 0      
|                                       |  |      |         |      |   |         |  |   |        
|Total general and administrative costs |  | $    | 136,333 |      | $ | 155,096 |  | $ | 143,807
|                                       |  |      |         |      |   |         |  |   |        



|9. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------

Certain
lease agreements include provisions that, at the option of the tenant, may obligate the Partnership to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. In connection with a 2009 lease
amendment, Fund IX-X-XI-REIT Associates provided a landlord-funded tenant allowance to Avaya, the sole tenant at the Avaya Building, equal to approximately $429,000 as of December 31, 2009, of which approximately $265,000 remained
available for use as of the date of this filing.



Page F-18



---

##### Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The General Partners of

The
Fund IX, Fund X, Fund XI and REIT Joint Venture:

We have audited the accompanying balance sheets of The Fund IX, Fund X, Fund XI and REIT
Joint Venture (the Joint Venture) as of December 31, 2009 and 2008, and the related statements of operations, partners capital, and cash flows for each of the three years in the period ended December 31, 2009. Our
audits also included the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Joint Ventures management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit
of the Joint Ventures internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the Joint Ventures internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and 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 Fund IX, Fund X, Fund XI and REIT Joint Venture as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity
with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the
information set forth therein.

/s/    Frazier & Deeter, LLC

Atlanta, Georgia

March 18, 2010



Page F-19



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##### Index to Financial Statements

THE FUND IX, FUND X, FUND XI AND REIT JOINT VENTURE

BALANCE SHEETS

DECEMBER 31, 2009 AND 2008

ASSETS



|                                                                                                                                  |  |      |            |      |   |           
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ----------
|                                                                                                                                  |  | 2009 |            | 2008
|Real estate assets, at cost:                                                                                                      |  |      |            |      |   |           
|Land                                                                                                                              |  | $    | 2,701,208  |      | $ | 2,701,208 
|Building and improvements, less accumulated depreciation of $4,785,268 and $4,431,258 at December 31, 2009 and 2008,
respectively |  |      | 7,813,114  |      |   | 8,137,657 
|Construction in progress                                                                                                          |  |      | 143,044    |      |   | 4,122     
|                                                                                                                                  |  |      |            |      |   |           
|Total real estate assets, net                                                                                                     |  |      | 10,657,366 |      |   | 10,842,987
|                                                                                                                                  |  |     
|Cash and cash equivalents                                                                                                         |  |      | 163,300    |      |   | 270,472   
|Tenant receivables, net                                                                                                           |  |      | 56,169     |      |   | 93,483    
|Deferred leasing costs, less accumulated amortization of $268,934 and $193,653 at December 31, 2009 and 2008, respectively        |  |      | 159,000    |      |   | 123,771   
|Other assets                                                                                                                      |  |      | 12,997     |      |   | 16,310    
|                                                                                                                                  |  |      |            |      |   |           
|Total assets                                                                                                                      |  | $    | 11,048,832 |      | $ | 11,347,023
|                                                                                                                                  |  |      |            |      |   |           

LIABILITIES AND PARTNERS CAPITAL



|                                                                     |  |   |            |  |   |           
|-------------------------------------------------------------------- |  | - | ---------- |  | - | ----------
|Liabilities:                                                         |  |   |            |  |   |           
|Accounts payable, accrued expenses, and refundable security deposits |  | $ | 221,786    |  | $ | 265,930   
|Due to affiliates                                                    |  |   | 6,108      |  |   | 10,118    
|Deferred income                                                      |  |   | 17,407     |  |   | 29,704    
|Accrued capital expenditures                                         |  |   | 0          |  |   | 4,943     
|                                                                     |  |   |            |  |   |           
|Total liabilities                                                    |  |   | 245,301    |  |   | 310,695   
|                                                                     |  |  
|Partners capital:                                                   |  |   |            |  |   |           
|Wells Real Estate Fund IX, L.P.                                      |  |   | 4,216,675  |  |   | 4,307,537 
|Wells Real Estate Fund X, L.P.                                       |  |   | 5,238,761  |  |   | 5,351,647 
|Wells Real Estate Fund XI, L.P.                                      |  |   | 949,430    |  |   | 969,890   
|Piedmont Operating Partnership, LP                                   |  |   | 398,665    |  |   | 407,254   
|                                                                     |  |   |            |  |   |           
|Total partners capital                                              |  |   | 10,803,531 |  |   | 11,036,328
|                                                                     |  |   |            |  |   |           
|Total liabilities and partners capital                              |  | $ | 11,048,832 |  | $ | 11,347,023
|                                                                     |  |   |            |  |   |           

See accompanying notes.



Page F-20



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##### Index to Financial Statements

THE FUND IX, FUND X, FUND XI AND REIT JOINT VENTURE

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                                             |  |      |           |   |      |   |           |  |   |          
|-------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- |  | - | ---------
|                                             |  | 2009 |           |   | 2008 |   | 2007     
|REVENUES:                                    |  |      |           |   |      |   |           |  |   |          
|Rental income                                |  | $    | 1,034,260 |   |      | $ | 1,305,984 |  | $ | 1,479,516
|Tenant reimbursements                        |  |      | 26,902    |   |      |   | 48,209    |  |   | 79,063   
|Interest and other income                    |  |      | 0         |   |      |   | 3,477     |  |   | 14,743   
|                                             |  |      |           |   |      |   |           |  |   |          
|Total revenues                               |  |      | 1,061,162 |   |      |   | 1,357,670 |  |   | 1,573,322
|                                             |  |      |          
|EXPENSES:                                    |  |      |           |   |      |   |           |  |   |          
|Property operating costs                     |  |      | 497,654   |   |      |   | 525,321   |  |   | 550,913  
|Management and leasing fees:                 |  |      |           |   |      |   |           |  |   |          
|Related-party                                |  |      | 41,038    |   |      |   | 62,876    |  |   | 52,273   
|Other                                        |  |      | 21,600    |   |      |   | 23,119    |  |   | 28,860   
|Depreciation                                 |  |      | 354,010   |   |      |   | 337,940   |  |   | 336,550  
|Amortization                                 |  |      | 82,411    |   |      |   | 86,720    |  |   | 52,272   
|General and administrative                   |  |      | 81,992    |   |      |   | 91,303    |  |   | 87,377   
|                                             |  |      |           |   |      |   |           |  |   |          
|Total expenses                               |  |      | 1,078,705 |   |      |   | 1,127,279 |  |   | 1,108,245
|                                             |  |      |           |   |      |   |           |  |   |          
|NET INCOME (LOSS) FROM CONTINUING OPERATIONS |  |      | (17,543   | ) |      |   | 230,391   |  |   | 465,077  
|                                             |  |      |          
|DISCONTINUED OPERATIONS:                     |  |      |           |   |      |   |           |  |   |          
|Operating income                             |  |      | 0         |   |      |   | 0         |  |   | 22,234   
|Gain on disposition                          |  |      | 0         |   |      |   | 0         |  |   | 171,421  
|                                             |  |      |           |   |      |   |           |  |   |          
|Income from discontinued operations          |  |      | 0         |   |      |   | 0         |  |   | 193,655  
|                                             |  |      |           |   |      |   |           |  |   |          
|NET INCOME (LOSS)                            |  | $    | (17,543   | ) |      | $ | 230,391   |  | $ | 658,732  
|                                             |  |      |           |   |      |   |           |  |   |          

See accompanying notes.



Page F-21



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##### Index to Financial Statements

THE FUND IX, FUND X, FUND XI AND REIT JOINT VENTURE

STATEMENTS OF PARTNERS CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                           |  |                               |            |   |                              |   |            |                               |  |   |                                  |   |  |                       |          |   |  |   |            |  
|-------------------------- |  | ----------------------------- | ---------- | - | ---------------------------- | - | ---------- | ----------------------------- |  | - | -------------------------------- | - |  | --------------------- | -------- | - |  | - | ---------- | -
|                           |  | Wells RealEstateFund IX,
L.P. |            |   | Wells RealEstateFund X,
L.P. |   |            | Wells RealEstateFund XI, L.P. |  |   | PiedmontOperatingPartnership, LP |   |  | TotalPartnersCapital |         
|Balance, December 31, 2006 |  | $                             | 6,345,520  |   |                              | $ | 7,883,619  |                               |  | $ | 1,428,787                        |   |  | $                     | 599,901  |   |  | $ | 16,257,827 |  
|                           |  |                               |            |   |                             
|Net income                 |  |                               | 257,107    |   |                              |   | 319,428    |                               |  |   | 57,893                           |   |  |                       | 24,304   |   |  |   | 658,732    |  
|Partnership distributions  |  |                               | (2,183,944 | ) |                              |   | (2,713,314 | )                             |  |   | (491,763                         | ) |  |                       | (206,445 | ) |  |   | (5,595,466 | )
|                           |  |                               |            |   |                              |   |            |                               |  |   |                                  |   |  |                       |          |   |  |   |            |  
|Balance, December 31, 2007 |  |                               | 4,418,683  |   |                              |   | 5,489,733  |                               |  |   | 994,917                          |   |  |                       | 417,760  |   |  |   | 11,321,093 |  
|                           |  |                               |            |   |                             
|Net income                 |  |                               | 89,923     |   |                              |   | 111,720    |                               |  |   | 20,248                           |   |  |                       | 8,500    |   |  |   | 230,391    |  
|Partnership distributions  |  |                               | (201,069   | ) |                              |   | (249,806   | )                             |  |   | (45,275                          | ) |  |                       | (19,006  | ) |  |   | (515,156   | )
|                           |  |                               |            |   |                              |   |            |                               |  |   |                                  |   |  |                       |          |   |  |   |            |  
|Balance, December 31, 2008 |  |                               | 4,307,537  |   |                              |   | 5,351,647  |                               |  |   | 969,890                          |   |  |                       | 407,254  |   |  |   | 11,036,328 |  
|                           |  |                               |            |   |                             
|Net loss                   |  |                               | (6,847     | ) |                              |   | (8,507     | )                             |  |   | (1,542                           | ) |  |                       | (647     | ) |  |   | (17,543    | )
|Partnership distributions  |  |                               | (84,015    | ) |                              |   | (104,379   | )                             |  |   | (18,918                          | ) |  |                       | (7,942   | ) |  |   | (215,254   | )
|                           |  |                               |            |   |                              |   |            |                               |  |   |                                  |   |  |                       |          |   |  |   |            |  
|Balance, December 31, 2009 |  | $                             | 4,216,675  |   |                              | $ | 5,238,761  |                               |  | $ | 949,430                          |   |  | $                     | 398,665  |   |  | $ | 10,803,531 |  
|                           |  |                               |            |   |                              |   |            |                               |  |   |                                  |   |  |                       |          |   |  |   |            |  

See accompanying notes.



Page F-22



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##### Index to Financial Statements

THE FUND IX, FUND X, FUND XI AND REIT JOINT VENTURE

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|---------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | ---- |  | - | ---------- | -
|                                                                                         |  | 2009 |          |   | 2008 |   |          | 2007 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |  |      |          |   |      |   |          |      |  |   |            |  
|Net income (loss)                                                                        |  | $    | (17,543  | ) |      | $ | 230,391  |      |  | $ | 658,732    |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |      |          |   |      |   |          |      |  |   |            |  
|Gain on disposition                                                                      |  |      | 0        |   |      |   | 0        |      |  |   | (171,421   | )
|Depreciation                                                                             |  |      | 354,010  |   |      |   | 337,940  |      |  |   | 347,410    |  
|Amortization                                                                             |  |      | 82,411   |   |      |   | 86,720   |      |  |   | 52,272     |  
|Changes in assets and liabilities:                                                       |  |      |          |   |      |   |          |      |  |   |            |  
|Decrease in tenant receivables, net                                                      |  |      | 37,314   |   |      |   | 80,493   |      |  |   | 51,697     |  
|Decrease in other assets                                                                 |  |      | 3,313    |   |      |   | 2,110    |      |  |   | 4,790      |  
|(Decrease) increase in accounts payable and accrued expenses                             |  |      | (44,144  | ) |      |   | 16,754   |      |  |   | 23,187     |  
|(Decrease) increase in due to affiliates                                                 |  |      | (4,010   | ) |      |   | 8,552    |      |  |   | (24        | )
|(Decrease) increase in deferred income                                                   |  |      | (12,297  | ) |      |   | 24,966   |      |  |   | 4,642      |  
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|Net cash provided by operating activities                                                |  |      | 399,054  |   |      |   | 787,926  |      |  |   | 971,285    |  
|                                                                                         |  |      |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |  |      |          |   |      |   |          |      |  |   |            |  
|Net proceeds from sale of real estate                                                    |  |      | 0        |   |      |   | 0        |      |  |   | 4,685,151  |  
|Investment in real estate assets                                                         |  |      | (173,332 | ) |      |   | (137,764 | )    |  |   | (23,022    | )
|Payment of deferred leasing costs                                                        |  |      | (117,640 | ) |      |   | (48,538  | )    |  |   | (47,301    | )
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|Net cash (used in) provided by investing activities                                      |  |      | (290,972 | ) |      |   | (186,302 | )    |  |   | 4,614,828  |  
|                                                                                         |  |      |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |  |      |          |   |      |   |          |      |  |   |            |  
|Net sale proceeds distributions to joint venture partners                                |  |      | 0        |   |      |   | 0        |      |  |   | (4,685,151 | )
|Operating distributions to joint venture partners in excess of accumulated earnings      |  |      | (215,254 | ) |      |   | (710,771 | )    |  |   | (880,213   | )
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|Net cash used in financing activities                                                    |  |      | (215,254 | ) |      |   | (710,771 | )    |  |   | (5,565,364 | )
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                     |  |      | (107,172 | ) |      |   | (109,147 | )    |  |   | 20,749     |  
|                                                                                         |  |      |         
|CASH AND CASH EQUIVALENTS, beginning of year                                             |  |      | 270,472  |   |      |   | 379,619  |      |  |   | 358,870    |  
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|CASH AND CASH EQUIVALENTS, end of year                                                   |  | $    | 163,300  |   |      | $ | 270,472  |      |  | $ | 379,619    |  
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|                                                                                         |  |      |         
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:                   |  |      |          |   |      |   |          |      |  |   |            |  
|Partnership distributions payable                                                        |  | $    | 0        |   |      | $ | 0        |      |  | $ | 195,615    |  
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  
|Accrued capital expenditures                                                             |  | $    | 0        |   |      | $ | 4,943    |      |  | $ | 0          |  
|                                                                                         |  |      |          |   |      |   |          |      |  |   |            |  

See accompanying notes.



Page F-23



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##### Index to Financial Statements

THE FUND IX, FUND X, FUND XI AND REIT JOINT VENTURE

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009, 2008, AND 2007



|1. | ORGANIZATION AND BUSINESS
|-- | -------------------------

In
March 1997, Wells Real Estate Fund IX, L.P. (Fund IX) entered into a Georgia general partnership with Wells Real Estate Fund X, L.P. (Fund X) to form Fund IX and Fund X Associates (Fund IX-X
Associates) for the purpose of acquiring, developing, operating, and selling real properties. On March 20, 1997, Fund IX contributed a 5.62-acre tract of real property in Knoxville, Tennessee, and improvements thereon to Fund IX-X
Associates on which an approximately 84,000 square foot, three-story office building, the Alstom Power  Knoxville Building, was constructed and commenced operations. On February 13, 1998, Fund IX-X Associates purchased an approximate
107,000 square foot, two-story office building, 1315 West Century Drive, in Louisville, Colorado. On March 20, 1998, Fund IX-X Associates purchased an approximately 52,000 square foot, three-story office building, the 360 Interlocken
Building, in Broomfield, Colorado. On June 11, 1998, Fund IX-X Associates was amended and restated as The Fund IX, Fund X, Fund XI and REIT Joint Venture (the Joint Venture) upon admitting Wells Real Estate
Fund XI, L.P. (Fund XI) and Piedmont Operating Partnership, LP (Piedmont OP), formerly known as Wells Operating Partnership, L.P. Piedmont OP is a Delaware limited partnership with Piedmont Office Realty Trust, Inc.
(Piedmont REIT), formerly known as Wells Real Estate Investment Trust, Inc., serving as its general partner. Piedmont REIT is a Maryland corporation that qualifies as a real estate investment trust. On June 24, 1998, the Joint
Venture purchased an approximately 57,000 square foot, one-story office building, the Avaya Building, in Oklahoma City, Oklahoma. On April 1, 1998, Fund X purchased an approximately 108,000 square-foot, one-story office and warehouse building,
the Iomega Building, in Ogden, Utah. In 1998, Fund X contributed the Iomega Building to the Joint Venture. Ownership interests were recomputed based on the relative cumulative capital contributions from the joint venture partners.

On March 15, 2005, the Joint Venture sold the Alstom Power  Knoxville Building to an unrelated third party for a gross sales price of
$12,000,000. As a result of the sale, the Joint Venture received net sale proceeds of approximately $11,646,000 and recognized a gain of approximately $5,032,000.

On December 22, 2006, the Joint Venture sold 1315 West Century Drive to an unrelated third party for a gross sales price of $8,325,000. As a result of the sale, the Joint Venture received net sale
proceeds of approximately $8,060,000. As of September 30, 2006, the Joint Venture recognized an impairment loss of approximately $354,000 in order to reduce the carrying value of 1315 West Century Drive to its estimated fair value, less costs
to sell, and recognized an additional loss on sale of approximately $148,000.

On January 31, 2007, the Joint Venture sold the Iomega
Building to an unrelated third party for a gross sale price of $4,867,000. As a result of the sale, the Joint Venture received net sale proceeds of approximately $4,685,000 and recognized a gain of approximately $178,000.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Basis of Presentation

The Joint Ventures financial statements are prepared in accordance with U.S. generally accepted
accounting principles (GAAP).

Use of Estimates

The preparation of the Joint Ventures financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.



Page F-24



---

##### Index to Financial Statements

Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation. Amounts capitalized to real estate assets consist of the cost of acquisition or construction, application of acquisition fees
incurred, and any tenant improvements or major improvements and betterments which extend the useful life of the related asset. The Joint Venture considers the period of future benefit of the asset to determine the appropriate useful lives. These
assessments have a direct impact on net income. Upon receiving notification of a tenants intention to terminate a lease, undepreciated tenant improvements are written off to lease termination expense. All repairs and maintenance are expensed
as incurred.

The Joint Ventures real estate assets are depreciated using the straight-line method over the following useful lives:



|                      |  |                                       
|--------------------- |  | --------------------------------------
|Buildings             |  | 40 years                              
|Building improvements |  | 5-25 years                            
|Land improvements     |  | 20 years                              
|Tenant improvements   |  | Shorter of lease term or economic life

Evaluating the
Recoverability of Real Estate Assets

Management continually monitors events and changes in circumstances that could indicate that the
carrying amounts of the real estate assets owned by the Joint Venture may not be recoverable. When indicators of potential impairment are present, which suggest that the carrying amounts of the real estate assets may not be recoverable, management
assesses the recoverability of the real estate assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual
disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that such expected undiscounted future cash flows for assets held for use or the estimated fair values, less costs to
sell, for assets held for sale do not exceed the respective assets carrying values, management adjusts the real estate assets to the respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting
standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for
the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value. The Joint Venture has determined that there
has been no impairment in the carrying value of any of the real estate assets held as of December 31, 2009.

While various techniques and
assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures describes three levels of inputs that may be used to measure fair value. Level 1
inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Joint Venture has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as
interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entitys own assumptions, as there is
little, if any, related market activity or information. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the
entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Joint Ventures assessment of the significance of a particular input to the fair value measurement in
its entirety requires judgment, and considers factors specific to the asset or liability. The accounting standard for fair value measurements and disclosures was applied to the Joint Ventures outstanding nonfinancial assets and nonfinancial
liabilities effective January 1, 2009.



Page F-25



---

##### Index to Financial Statements

Cash and Cash Equivalents

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

Tenant
Receivables, net

Tenant receivables are comprised of rental and reimbursement billings due from tenants and the cumulative amount of
future adjustments necessary to present rental income using the straight-line method. Upon receiving notification of a tenants intention to terminate a lease, unamortized straight-line rent receivables are written off to lease termination
expense. Tenant receivables are recorded at the original amount earned, less an allowance for any doubtful accounts, which approximates fair value. Management assesses the collectibility of tenant receivables on an ongoing basis and provides for
allowances as such balances, or portions thereof, become uncollectible. Allowances of $0 and $3,999 are included in tenant receivables, net as of December 31, 2009 and 2008, respectively.

Deferred Leasing Costs, net

Deferred lease
costs may include (i) costs incurred to procure leases, which are capitalized and recognized as amortization expense on a straight-line basis over the terms of the lease, and (ii) common area maintenance costs that are recoverable from
tenants under the terms of the existing leases; such costs are capitalized and recognized as operating expenses over the shorter of the lease term or the recovery period provided for in the lease. The remaining unamortized balance of deferred
leasing costs will be amortized over a weighted-average period of approximately two years. Upon receiving notification of a tenants intention to terminate a lease, unamortized deferred leasing costs are written-off to lease termination
expense.

Other Assets

Other
assets as of December 31, 2009 and 2008, is comprised of the following items:



|                             |  |      |        |      |   |       
|---------------------------- |  | ---- | ------ | ---- | - | ------
|                             |  | 2009 |        | 2008
|Refundable security deposits |  | $    | 8,719  |      | $ | 12,545
|Prepaid expenses             |  |      | 4,278  |      |   | 3,674 
|Interest receivable          |  |      | 0      |      |   | 91    
|                             |  |      |        |      |   |       
|Total                        |  | $    | 12,997 |      | $ | 16,310
|                             |  |      |        |      |   |       

Refundable security deposits represent cash deposits received from
tenants. Pursuant to the respective leases, the Joint Venture may apply such balances toward unpaid receivable balances or property damages, where applicable, and is obligated to refund any residual balances to the tenants upon the expiration of the
related lease terms. Prepaid expenses are primarily comprised of prepaid insurance and contract labor costs. Prepaid expenses are recognized in the period in which coverage/service is provided. Interest receivable represents interest earned during
the period presented, which will be received in the following month. Balances without a future economic benefit are written off as they are identified.

Allocation of Income and Distributions

Pursuant to the terms of the joint venture
agreement, income and distributions are allocated to the joint venture partners based on their respective ownership interests as determined by relative cumulative capital contributions, as defined. Fund IX, Fund X, Fund XI, and Piedmont OP held
ownership interests in the Joint Venture of approximately 39%, 48%, 9%, and 4%, respectively, for the years ended December 31, 2009 and 2008. Net cash from operations is generally distributed to the joint venture partners on a quarterly basis.



Page F-26



---

##### Index to Financial Statements

Revenue Recognition

The Joint Ventures leases typically include renewal options, escalation provisions, and provisions requiring tenants to reimburse the Joint Venture for a pro rata share of operating costs incurred.
All of the Joint Ventures leases are classified as operating leases, and the related rental income, including scheduled rental rate increases (other than scheduled increases based on the Consumer Price Index) is recognized on a straight-line
basis over the terms of the respective leases. Rents and tenant reimbursements collected in advance are recorded as deferred income in the accompanying balance sheets. Lease termination income is recognized when the tenant loses the right to lease
the space and the Joint Venture has satisfied all obligations under the related lease or lease termination agreement.

The Joint Venture
records the sale of real estate assets pursuant to the provisions of the property, plant, and equipment accounting standard for real estate sales. Accordingly, gains are recognized upon completing the sale and, among other things, determining the
sale price and transferring all of the risks and rewards of ownership without significant continuing involvement with the seller. Recognition of all or a portion of the gain would be deferred until both of these conditions are met. Losses are
recognized in full as of the sale date.

Income Taxes

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

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (SFAS 168). SFAS 168 requires that the FASB Accounting
Standards Codification (the Codification or ASC) become the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Once the Codification is in effect, all of its content will carry
the same level of authority, effectively superseding SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 168 is effective for financial statements issued for interim and annual periods ending after
September 15, 2009. The adoption of SFAS 168 did not have a significant impact on the Joint Ventures financial statements or disclosures.

In September 2006, FASB issued ASC Topic Fair Value Measurements and Disclosures (ASC 820), which defines fair value, establishes a framework for measuring fair value, and expands disclosures required for fair value
measurements under GAAP. ASC 820 emphasizes that fair value is a market-based measurement, as opposed to an entity-specific measurement. In February 2008, the FASB delayed the effective date of ASC 820 for all nonrecurring non-financial assets
and liabilities until fiscal years beginning after November 15, 2008. The Joint Venture adopted the guidelines under ASC 820 effective January 1, 2008, as it relates to financial instruments and effective January 1, 2009, as it
relates to non-financial instruments. The adoption of ASC 820 for nonrecurring non-financial assets and liabilities did not have a material impact on the Joint Ventures financial statements or disclosures.

In May 2009, the FASB issued ASC Topic Subsequent Events(ASC 855). ASC 855 provides guidance on managements assessment of
subsequent events. ASC 855 states that management must evaluate, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial statements are issued or are available to be
issued. ASC 855 allows the assessment of subsequent events to occur through the date on which the financial statements are available to be issued or the date they are issued. Management must perform its assessment for both interim
and annual financial reporting periods. ASC 855 was effective prospectively for interim and annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material impact on the Joint Ventures financial statements or
disclosures.



Page F-27



---

##### Index to Financial Statements

|3. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------

Management
and Leasing Fees

Fund IX, Fund X, and Fund XI are parties to individual property management and leasing agreements with Wells Management
Company, Inc. (Wells Management), an affiliate of each of their respective general partners.

The various fees payable under each
of the respective agreements are summarized as follows:



|        |  |                                          |  |                                                                                                                                                                                                                            |  |                                                                                                                                                                   
|------- |  | ---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  | Management Services                      |  | Leasing Services                                                                                                                                                                                                           |  | Management and LeasingServicesIndustrial andCommercial properties leased on anet basis for ten years
or more                                                     
|Fund IX |  | 3% of gross revenues collected monthly   |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 3% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.
|Fund X  |  | 3% of gross revenues collected monthly   |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 3% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.
|Fund XI |  | 2.5% of gross revenues collected monthly |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 2% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.

Management and leasing fees are recognized in accordance with the terms of the aforementioned
agreements, weighted based on joint venture partners respective ownership interests in the Joint Venture. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred management and leasing fee expenses that are payable
to Wells Management of $39,524, $60,556, and $58,484, respectively, portions of which are included in income from discontinued operations in the accompanying statements of operations.

In addition, the Joint Venture incurs fees payable to Piedmont Office Management, LLC (Piedmont Management), or its affiliates, for the management and leasing of the Joint Ventures
properties equal to (a) the lesser of 4.5% of the gross revenues generally paid over the life of the lease or 0.6% of net asset value calculated on an annual basis, (b) prorated by Piedmont OPs ownership interest in the Joint
Venture. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred management and leasing fee expenses payable to Piedmont Management, or its affiliates, of $1,514, $2,320, and $1,345, respectively, portions of which
are included in income from discontinued operations in the accompanying statements of operations.



Page F-28



---

##### Index to Financial Statements

Administrative Reimbursements

Wells Management performs certain administrative services for the Joint Venture, relating to accounting, property management, and other partnership administration, and incurs the related expenses. Such
expenses are allocated among these entities based on the amount of time spent on the respective entities by individual personnel. In the opinion of management, this allocation is a reasonable estimation of such expenses. During the years ended
December 31, 2009, 2008, and 2007, the Joint Venture incurred administrative expenses of $31,205, $21,454, and $22,667, respectively, payable to Wells Management, portions of which are included in income from discontinued operations in the
accompanying statements of operations.

Due to Affiliates

As presented in the accompanying balance sheets, due to affiliates as of December 31, 2009 and December 31, 2008 represents amounts due to Piedmont Management and/or Wells Management for the
following items:



|                              |  |      |       |      |   |       
|----------------------------- |  | ---- | ----- | ---- | - | ------
|                              |  | 2009 |       | 2008
|Administrative reimbursements |  | $    | 4,630 |      | $ | 4,645 
|Property management fees      |  |      | 1,478 |      |   | 5,473 
|                              |  |      |       |      |   |       
|                              |  | $    | 6,108 |      | $ | 10,118
|                              |  |      |       |      |   |       



|4. | DISCONTINUED OPERATIONS
|-- | -----------------------

In accordance
with the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, the Joint Venture has classified the results of operations related to the Alstom Power  Knoxville Building,
which was sold on March 15, 2005, 1315 West Century Drive, which was sold on December 22, 2006, and the Iomega Building, which was sold on January 31, 2007, as discontinued operations in the accompanying statements of operations. The
details comprising income from discontinued operations are presented below:



|                                    |  |      |  |      |  |      |        
|----------------------------------- |  | ---- |  | ---- |  | ---- | -------
|                                    |  | 2009 |  | 2008 |  | 2007
|Rental income                       |  | $0   |  | $0   |  | $    | 43,726 
|Tenant reimbursements               |  | 0    |  | 0    |  |      | 8,705  
|                                    |  |      |  |      |  |      |        
|Total property revenues             |  | 0    |  | 0    |  |      | 52,431 
|                                    |  |      | 
|Property operating costs            |  | 0    |  | 0    |  |      | 11,289 
|Management and leasing fees         |  | 0    |  | 0    |  |      | 1,028  
|Depreciation                        |  | 0    |  | 0    |  |      | 10,860 
|General and administrative          |  | 0    |  | 0    |  |      | 7,020  
|                                    |  |      |  |      |  |      |        
|Total expenses                      |  | 0    |  | 0    |  |      | 30,197 
|                                    |  |      |  |      |  |      |        
|                                    |  |      | 
|Operating income                    |  | 0    |  | 0    |  |      | 22,234 
|Gain on disposition                 |  | 0    |  | 0    |  |      | 171,421
|                                    |  |      |  |      |  |      |        
|Income from discontinued operations |  | $0   |  | $0   |  | $    | 193,655
|                                    |  |      |  |      |  |      |        



Page F-29



---

##### Index to Financial Statements

|5. | RENTAL INCOME
|-- | -------------

The future contractual
rental income due to the Joint Venture under noncancelable operating leases as of December 31, 2009 follows:



|                        |  |   |          
|----------------------- |  | - | ---------
|Year ended December 31: |  |   |          
|2010                    |  | $ | 1,011,700
|2011                    |  |   | 871,294  
|2012                    |  |   | 816,119  
|2013                    |  |   | 773,220  
|2014                    |  |   | 772,011  
|Thereafter              |  |   | 64,334   
|                        |  |   |          
|                        |  | $ | 4,308,678
|                        |  |   |          

Four tenants generated approximately 72%, 9%, 8% and 6% of contractual
rental income for the year ended December 31, 2009, and two tenants will generate approximately 90% and 6% of future contractual rental income.



Page F-30



---

##### Index to Financial Statements

THE FUND IX, FUND X, FUND XI, AND REIT JOINT VENTURE

SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2009



|                            |  |              |  |              |           |                                             |   |                                               |      |   |                           |  |                         |           |       |   |                            |  |                     |         |              |   |            |  |   |           |  |      |  |        
|--------------------------- |  | ------------ |  | ------------ | --------- | ------------------------------------------- | - | --------------------------------------------- | ---- | - | ------------------------- |  | ----------------------- | --------- | ----- | - | -------------------------- |  | ------------------- | ------- | ------------ | - | ---------- |  | - | --------- |  | ---- |  | -------
|                            |  |              |  | Initial Cost |           | CostsCapitalizedSubsequent ToAcquisition(c) |   | Gross Carrying Amount as of December 31, 2009 |      |   |                           |  |                         |          
|Description                 |  | Encumbrances |  | Land         |           | Buildings andImprovements                   |   |                                               | Land |   | Buildings andImprovements |  | Constructionin Progress |           | Total |   | AccumulatedDepreciation(d) |  | Date ofConstruction |         | DateAcquired
|AVAYA BUILDING(a)           |  | None         |  | $            | 1,051,138 |                                             | $ | 4,461,334                                     |      | $ | 261,910                   |  | $                       | 1,051,138 |       | $ | 4,580,200                  |  | $                   | 143,044 |              | $ | 5,774,382  |  | $ | 1,676,518 |  | 1997 |  | 6/24/98
|                            |  |              |  |              |           |                                             |   |                                               |      |   |                          
|360 INTERLOCKEN BUILDING(b) |  | None         |  |              | 1,650,070 |                                             |   | 6,917,274                                     |      |   | 1,100,908                 |  |                         | 1,650,070 |       |   | 8,018,182                  |  |                     | 0       |              |   | 9,668,252  |  |   | 3,108,750 |  | 1996 |  | 3/20/98
|                            |  |              |  |              |           |                                             |   |                                               |      |   |                           |  |                         |           |       |   |                            |  |                     |         |              |   |            |  |   |           |  |      |  |        
|Total                       |  |              |  | $            | 2,701,208 |                                             | $ | 11,378,608                                    |      | $ | 1,362,818                 |  | $                       | 2,701,208 |       | $ | 12,598,382                 |  | $                   | 143,044 |              | $ | 15,442,634 |  | $ | 4,785,268 |  |      |  |        
|                            |  |              |  |              |           |                                             |   |                                               |      |   |                           |  |                         |           |       |   |                            |  |                     |         |              |   |            |  |   |           |  |      |  |        



| | (a) | The Avaya Building is a one-story office building located in Oklahoma City, Oklahoma.
| | --- | -------------------------------------------------------------------------------------



| | (b) | The 360 Interlocken Building is a three-story office building located in Broomfield, Colorado.
| | --- | ----------------------------------------------------------------------------------------------



| | (c) | Includes acquisition and advisory fees and acquisition expense reimbursements applied at acquisition as well as write-offs of fully depreciated
capitalized costs.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Buildings, land improvements, building improvements, and tenant improvements are depreciated using the straight-line method over 40 years, 20 years,
5 to 25 years, and the shorter of the economic life or corresponding lease terms, respectively.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page F-31



---

##### Index to Financial Statements

THE FUND IX, FUND X, FUND XI, AND REIT JOINT VENTURE

SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2009



|                             |  |      |            |   |                         |   |            |  
|---------------------------- |  | ---- | ---------- | - | ----------------------- | - | ---------- | -
|                             |  | Cost |            |   | AccumulatedDepreciation |  
|BALANCE AT DECEMBER 31, 2006 |  | $    | 21,279,621 |   |                         | $ | 5,386,439  |  
|                             |  |     
|Additions                    |  |      | 6,178      |   |                         |   | 347,410    |  
|Dispositions                 |  |      | (6,154,261 | ) |                         |   | (1,640,531 | )
|                             |  |      |            |   |                         |   |            |  
|BALANCE AT DECEMBER 31, 2007 |  |      | 15,131,538 |   |                         |   | 4,093,318  |  
|                             |  |     
|Additions                    |  |      | 142,707    |   |                         |   | 337,940    |  
|                             |  |      |            |   |                         |   |            |  
|BALANCE AT DECEMBER 31, 2008 |  |      | 15,274,245 |   |                         |   | 4,431,258  |  
|                             |  |     
|Additions                    |  |      | 168,389    |   |                         |   | 354,010    |  
|                             |  |      |            |   |                         |   |            |  
|BALANCE AT DECEMBER 31, 2009 |  | $    | 15,442,634 |   |                         | $ | 4,785,268  |  
|                             |  |      |            |   |                         |   |            |  



Page F-32



---

##### Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The General Partners of

Fund X and
Fund XI Associates:

We have audited the accompanying balance sheet of Fund X and Fund XI Associates (the Joint Venture) as
of December 31, 2009 and the related statements of operations, partners capital, and cash flows for the year ended December 31, 2009. These financial statements are the responsibility of the Joint Ventures management. Our
responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were
not engaged to perform an audit of the Joint Ventures internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Joint Ventures internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Fund X and Fund XI Associates as of December 31, 2009, and the results of its operations and its cash flows for the year ended December 31, 2009, in conformity with U.S. generally accepted
accounting principles.

/s/    Frazier & Deeter, LLC

Atlanta, Georgia

March 18, 2010



Page F-33



---

##### Index to Financial Statements

FUND X AND FUND XI ASSOCIATES

BALANCE SHEETS

DECEMBER 31, 2009 AND 2008 (UNAUDITED)

ASSETS



|                                       |  |      |         |                 |   |          
|-------------------------------------- |  | ---- | ------- | --------------- | - | ---------
|                                       |  | 2009 |         | 2008(unaudited)
|Investment in Wells/Fremont Associates |  | $    | 784,881 |                 | $ | 1,569,272
|Due from Wells/Fremont Associates      |  |      | 24,047  |                 |   | 21,904   
|                                       |  |      |         |                 |   |          
|Total assets                           |  | $    | 808,928 |                 | $ | 1,591,176
|                                       |  |      |         |                 |   |          

LIABILITIES AND PARTNERS CAPITAL



|                                        |  |   |         |  |   |          
|--------------------------------------- |  | - | ------- |  | - | ---------
|Liabilities:                            |  |   |         |  |   |          
|Partnership distributions payable       |  | $ | 24,047  |  | $ | 21,904   
|                                        |  |  
|Partners capital:                      |  |   |         |  |   |          
|Wells Real Estate Fund X, L.P.          |  |   | 455,233 |  |   | 910,369  
|Wells Real Estate Fund XI, L.P.         |  |   | 329,648 |  |   | 658,903  
|                                        |  |   |         |  |   |          
|Total partners capital                 |  |   | 784,881 |  |   | 1,569,272
|                                        |  |   |         |  |   |          
|Total liabilities and partners capital |  | $ | 808,928 |  | $ | 1,591,176
|                                        |  |   |         |  |   |          

See accompanying notes.



Page F-34



---

##### Index to Financial Statements

FUND X AND FUND XI ASSOCIATES

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007
(UNAUDITED)



|                                                    |  |      |          |   |                 |   |                 |  |   |       
|--------------------------------------------------- |  | ---- | -------- | - | --------------- | - | --------------- |  | - | ------
|                                                    |  | 2009 |          |   | 2008(unaudited) |   | 2007(unaudited)
|EQUITY IN INCOME (LOSS) OF WELLS/FREMONT ASSOCIATES |  | $    | (690,703 | ) |                 | $ | 43,619          |  | $ | 49,272
|                                                    |  |      |          |   |                 |   |                 |  |   |       
|NET INCOME (LOSS)                                   |  | $    | (690,703 | ) |                 | $ | 43,619          |  | $ | 49,272
|                                                    |  |      |          |   |                 |   |                 |  |   |       

See accompanying notes.



Page F-35



---

##### Index to Financial Statements

FUND X AND FUND XI ASSOCIATES

STATEMENTS OF PARTNERS CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007
(UNAUDITED)



|                                       |  |                              |          |   |                               |   |          |                       |  |   |           |  
|-------------------------------------- |  | ---------------------------- | -------- | - | ----------------------------- | - | -------- | --------------------- |  | - | --------- | -
|                                       |  | Wells RealEstateFund X, L.P. |          |   | Wells RealEstateFund XI, L.P. |   |          | TotalPartnersCapital | 
|Balance, December 31, 2006             |  | $                            | 959,129  |   |                               | $ | 694,194  |                       |  | $ | 1,653,323 |  
|                                       |  |                              |         
|Net income                             |  |                              | 28,584   |   |                               |   | 20,688   |                       |  |   | 49,272    |  
|Partnership distributions              |  |                              | (52,037  | ) |                               |   | (37,663  | )                     |  |   | (89,700   | )
|                                       |  |                              |          |   |                               |   |          |                       |  |   |           |  
|Balance, December 31, 2007 (unaudited) |  |                              | 935,676  |   |                               |   | 677,219  |                       |  |   | 1,612,895 |  
|                                       |  |                              |         
|Net income                             |  |                              | 25,304   |   |                               |   | 18,315   |                       |  |   | 43,619    |  
|Partnership distributions              |  |                              | (50,611  | ) |                               |   | (36,631  | )                     |  |   | (87,242   | )
|                                       |  |                              |          |   |                               |   |          |                       |  |   |           |  
|Balance, December 31, 2008 (unaudited) |  |                              | 910,369  |   |                               |   | 658,903  |                       |  |   | 1,569,272 |  
|                                       |  |                              |         
|Net loss                               |  |                              | (400,692 | ) |                               |   | (290,011 | )                     |  |   | (690,703  | )
|Partnership distributions              |  |                              | (54,444  | ) |                               |   | (39,244  | )                     |  |   | (93,688   | )
|                                       |  |                              |          |   |                               |   |          |                       |  |   |           |  
|Balance, December 31, 2009             |  | $                            | 455,233  |   |                               | $ | 329,648  |                       |  | $ | 784,881   |  
|                                       |  |                              |          |   |                               |   |          |                       |  |   |           |  

See accompanying notes.



Page F-36



---

##### Index to Financial Statements

FUND X AND FUND XI ASSOCIATES

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007
(UNAUDITED)



|                                                                                         |  |      |          |   |                 |   |         |                 |  |   |         |  
|---------------------------------------------------------------------------------------- |  | ---- | -------- | - | --------------- | - | ------- | --------------- |  | - | ------- | -
|                                                                                         |  | 2009 |          |   | 2008(unaudited) |   |         | 2007(unaudited) | 
|CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:                                         |  |      |          |   |                 |   |         |                 |  |   |         |  
|Net income (loss)                                                                        |  | $    | (690,703 | ) |                 | $ | 43,619  |                 |  | $ | 49,272  |  
|Operating distributions received from Wells/Fremont Associates                           |  |      | 91,545   |   |                 |   | 88,209  |                 |  |   | 80,562  |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |      |          |   |                 |   |         |                 |  |   |         |  
|Equity in (income) loss of Wells/Fremont Associates                                      |  |      | 690,703  |   |                 |   | (43,619 | )               |  |   | (49,272 | )
|                                                                                         |  |      |          |   |                 |   |         |                 |  |   |         |  
|Net cash provided by operating activities                                                |  |      | 91,545   |   |                 |   | 88,209  |                 |  |   | 80,562  |  
|                                                                                         |  |      |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |  |      |          |   |                 |   |         |                 |  |   |         |  
|Operating distributions to joint venture partners in excess of accumulated earnings      |  |      | (91,545  | ) |                 |   | (88,209 | )               |  |   | (80,562 | )
|                                                                                         |  |      |          |   |                 |   |         |                 |  |   |         |  
|NET CHANGE IN CASH AND CASH EQUIVALENTS                                                  |  |      | 0        |   |                 |   | 0       |                 |  |   | 0       |  
|                                                                                         |  |      |         
|CASH AND CASH EQUIVALENTS, beginning of year                                             |  |      | 0        |   |                 |   | 0       |                 |  |   | 0       |  
|                                                                                         |  |      |          |   |                 |   |         |                 |  |   |         |  
|CASH AND CASH EQUIVALENTS, end of year                                                   |  | $    | 0        |   |                 | $ | 0       |                 |  | $ | 0       |  
|                                                                                         |  |      |          |   |                 |   |         |                 |  |   |         |  
|                                                                                         |  |      |         
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:                   |  |      |          |   |                 |   |         |                 |  |   |         |  
|Partnership distributions payable                                                        |  | $    | 24,047   |   |                 | $ | 21,904  |                 |  | $ | 22,871  |  
|                                                                                         |  |      |          |   |                 |   |         |                 |  |   |         |  

See accompanying notes.



Page F-37



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##### Index to Financial Statements

FUND X AND FUND XI ASSOCIATES

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007 (UNAUDITED)



|1. | ORGANIZATION AND BUSINESS
|-- | -------------------------

On
July 15, 1998, Wells Real Estate Fund X, L.P. (Fund X) and Wells Real Estate Fund XI, L.P. (Fund XI), entered into a Georgia general partnership to create Fund X and Fund XI Associates (the Joint
Venture). The general partners of Fund X and Fund XI are Leo F. Wells, III and Wells Partners, L.P., a private Georgia limited partnership. The Joint Venture was formed for the purpose of acquiring, developing, owning, operating, and selling
real properties.

In July 1998, Piedmont Operating Partnership, LP (Piedmont OP), formerly known as Wells Operating
Partnership, L.P., entered into a joint venture agreement with Wells Development Corporation, referred to as Wells/Fremont Associates, which acquired an approximate 58,000 square foot two-story manufacturing and office building, 47300 Kato Road
(formerly known as 47320 Kato Road), located in Fremont, California. During 1998, the Joint Venture acquired Wells Development Corporations interest in Wells/Fremont Associates, which resulted in the Joint Venture becoming a joint
venture partner with Piedmont OP.

In July 1998, Piedmont OP entered into a joint venture agreement with Wells Development Corporation,
referred to as Wells/Orange County Associates, which acquired an approximate 52,000 square foot warehouse and office building, the Cort Building, located in Fountain Valley, California. During 1998, the Joint Venture acquired Wells Development
Corporations interest in Wells/Orange County Associates, which resulted in the Joint Venture becoming a joint venture partner with Piedmont OP. On September 11, 2003, Wells/Orange County Associates sold the Cort Building to an unrelated
third party for a gross selling price of $5,770,000. As a result of the sale, the Joint Venture recognized a loss of approximately $213,000 and received net sale proceeds of approximately $3,134,000. Wells/Orange County Associates wound up its
affairs in 2004 by, among other things, collecting the outstanding receivables, satisfying outstanding payables, and distributing any residual cash balances to the joint venture partners. Wells/Orange County Associates was terminated during 2005 in
accordance with the relevant dissolution and termination provisions of the Georgia Uniform Partnership Act.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Basis of Presentation

The Joint Ventures financial statements are prepared in accordance with U.S. generally accepted
accounting principles (GAAP).

Use of Estimates

The preparation of the Joint Ventures financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

Investment in Wells/Fremont Associates

The Joint Venture has evaluated Wells/Fremont
Associates and concluded that this entity is not a variable interest entity. The Joint Venture does not have control over the operations of Wells/Fremont Associates, however, does exercise significant influence. Approval by the Joint Venture as well
as the other joint venture partners is required for any major decision or any action that would materially affect Wells/Fremont Associates, or their real property investments. Accordingly, the Joint Venture accounts for its investment in
Wells/Fremont Associates using the equity method of accounting, whereby original investments are recorded at cost and subsequently



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##### Index to Financial Statements

adjusted for contributions, distributions, and net income (loss) attributable to the Joint Venture. Pursuant to the terms of the joint venture agreements, all income (loss) and distributions are
allocated to joint venture partners in accordance with their respective ownership interests. Distributions of net cash from operations, if available, are generally distributed to the joint venture partners on a quarterly basis.

Evaluating the Recoverability of Real Estate Assets

The Joint Venture continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets owned through the Joint Ventures investment in Wells/Fremont Associates may not be
recoverable. When indicators of potential impairment are present which suggest that the carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by determining whether the
respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated fair values, less costs to
sell, for assets held for sale. In the event that the expected undiscounted future cash flows for assets held for use, or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value,
management adjusts the real estate assets to their respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognizes an
impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties, under sufficiently active
and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value.

While various
techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures describes three levels of inputs that may be used to measure fair
value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Joint Venture has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted
prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entitys own
assumptions, as there is little, if any, related market activity or information. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value
hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Joint Ventures assessment of the significance of a particular input to the
fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The accounting standard for fair value measurements and disclosures was applied to the Joint Ventures outstanding non-financial
assets and non-financial liabilities effective January 1, 2009.

Allocation of Income and Distributions

Pursuant to the terms of the joint venture agreement, income and distributions are allocated to the joint venture partners based upon their respective
ownership interests as determined by relative cumulative capital contributions, as defined. Fund X and Fund XI held ownership interests in the Joint Venture of approximately 58% and 42%, respectively, for the years ended December 31, 2009 and
2008. Net cash from operations is generally distributed to the joint venture partners on a quarterly basis.

Income Taxes

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



Page F-39



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##### Index to Financial Statements

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles (SFAS 168). SFAS 168 requires that the FASB Accounting Standards Codification (the Codification or ASC) become the source of authoritative U.S.
GAAP recognized by the FASB to be applied by nongovernmental entities. Once the Codification is in effect, all of its content will carry the same level of authority, effectively superseding SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of SFAS 168 did not have a significant impact on the Joint Ventures financial
statements or disclosures.

In September 2006, FASB issued ASC Topic Fair Value Measurements and Disclosures (ASC 820),
which defines fair value, establishes a framework for measuring fair value, and expands disclosures required for fair value measurements under GAAP. ASC 820 emphasizes that fair value is a market-based measurement, as opposed to an entity-specific
measurement. In February 2008, the FASB delayed the effective date of ASC 820 for all nonrecurring non-financial assets and liabilities until fiscal years beginning after November 15, 2008. The Joint Venture adopted the guidelines under
ASC 820 effective January 1, 2008, as it relates to financial instruments and effective January 1, 2009, as it relates to non-financial instruments. The adoption of ASC 820 for nonrecurring non-financial assets and liabilities did not
have a material impact on the Joint Ventures financial statements or disclosures.

In May 2009, the FASB issued ASC Topic Subsequent
Events(ASC 855). ASC 855 provides guidance on managements assessment of subsequent events. ASC 855 states that management must evaluate, as of each reporting period, events or transactions that occur after the balance sheet
date through the date that the financial statements are issued or are available to be issued. ASC 855 allows the assessment of subsequent events to occur through the date on which the financial statements are available to be
issued or the date they are issued. Management must perform its assessment for both interim and annual financial reporting periods. ASC 855 was effective prospectively for interim and annual periods ending after June 15, 2009. The
adoption of ASC 855 did not have a material impact on the Joint Ventures financial statements or disclosures.



|3. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------

Management
and Leasing Fees

The joint venture partners, Fund X and Fund XI are parties to individual property management and leasing agreements with
Wells Management Company, Inc. (Wells Management), an affiliate of each of their respective general partners.



Page F-40



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##### Index to Financial Statements

The various fees payable under each of the respective agreements are summarized as follows:



|        |  |                                          |  |                                                                                                                                                                                                                            |  |                                                                                                                                                                   
|------- |  | ---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  | Management Services                      |  | Leasing Services                                                                                                                                                                                                           |  | Management and LeasingServices  Industrial andCommercial properties leased on anet basis for ten
years or more                                                   
|Fund X  |  | 3% of gross revenues collected monthly   |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 3% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.
|Fund XI |  | 2.5% of gross revenues collected monthly |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 2% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.

Management and leasing fees are recognized in accordance with the terms of the aforementioned
agreements, weighted based on joint venture partners respective ownership interests in the Joint Venture. Through its interests in Wells/Fremont Associates, the Joint Venture incurred management and leasing fees through its equity in income of
Wells/Fremont Associates that are payable to Wells Management of $1,149, $1,117, and $1,460 during the years ended December 31, 2009, 2008, and 2007, respectively.

Administrative Reimbursements

Wells Management performs certain administrative services
for the Joint Ventures property owned through Wells/Fremont Associates related to accounting, property management, and other administrative activities, and incurs the related expenses. Such expenses are allocated among the various Wells Real
Estate Funds based on estimates of the amount of time dedicated to each fund by individual administrative personnel. In the opinion of management, this allocation is a reasonable estimation of such expenses. Through its interest in Wells/Fremont
Associates, the Joint Venture incurred administrative expenses through its equity in income of Wells/Fremont Associates of $5,960, $4,240, and $3,147 payable to Wells Management for these services during the years ended December 31, 2009, 2008,
and 2007, respectively.



|4. | INVESTMENT IN WELLS/FREMONT ASSOCIATES
|-- | --------------------------------------

Impairment of Real Estate Assets

Wells/Fremont Associates evaluated the recoverability of the carrying value of the 47300 Kato
Road property pursuant to the accounting policy outlined in Note 2 and determined that it is not recoverable, as compared with the estimated fair value, primarily as a result of shortening the estimated holding period of such asset in third quarter
2009 and significant downward pressure on long-term rental rates for speculative leasing. Accordingly, Wells/Fremont Associates reduced the carrying value of 47300 Kato Road to its estimated fair value based on the present value of future cash flows
and recognized a corresponding impairment loss of approximately $3,316,000 (approximately $746,000 of which was allocated to the Joint Venture) in the third quarter of 2009. This impairment loss is included in net income (loss) for the year ended
December 31, 2009 in the table below.



Page F-41



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##### Index to Financial Statements

The fair value measurements used in these evaluations of non-financial assets are considered to be Level 3
valuations within the fair value hierarchy, as there are significant unobservable inputs (see Evaluating the Recoverability of Real Estate Assets in Note 2). Examples of inputs that Wells/Fremont Associates utilized in its fair value calculations
include discount rates, market capitalization rates, expected lease rental rates, timing of new leases, and sales prices.

Due from
Wells/Fremont Associates

Due from Wells/Fremont Associates as of December 31, 2009 and 2008 represents the Joint Ventures share
of operating cash to be distributed from the Wells/Fremont Associates for the fourth quarters of 2009 and 2008, respectively.

The Joint
Ventures investments and approximate ownership percentages in Wells/Fremont Associates as of December 31, 2009 and 2008 are presented below:



|                         |        |          |         |      |        |            |         |    
|------------------------ | ------ | -------- | ------- | ---- | ------ | ---------- | ------- | ---
|                         |        | 2009     |         | 2008
|                         | Amount |          | Percent |      | Amount |            | Percent
|Wells/Fremont Associates |        | $784,881 |         | 22%  |        | $1,569,272 |         | 22%
|                         |        |          |         |      |        |            |         |    

Roll-forwards of the Joint Ventures investment in Wells/Fremont
Associates for the years ended December 31, 2009 and 2008 are presented below:



|                                                          |  |      |           |   |      |   |           |  
|--------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                                                          |  | 2009 |           |   | 2008 |  
|Investment in Wells/Fremont Associates, beginning of year |  | $    | 1,569,272 |   |      | $ | 1,612,895 |  
|Equity in income (loss) of Wells/Fremont Associates       |  |      | (690,703  | ) |      |   | 43,619    |  
|Distributions from Wells/Fremont Associates               |  |      | (93,688   | ) |      |   | (87,242   | )
|                                                          |  |      |           |   |      |   |           |  
|Investment in Wells/Fremont Associates, end of year       |  | $    | 784,881   |   |      | $ | 1,569,272 |  
|                                                          |  |      |           |   |      |   |           |  

Condensed financial information for the joint venture in which the Joint Venture held an interest as of December 31,
2009 and 2008 and for the years ended December 31, 2009, 2008 and 2007 is presented below:



|                         |      |                          |      |                               |      |                          |      |          |      |            |      |           
|------------------------ | ---- | ------------------------ | ---- | ----------------------------- | ---- | ------------------------ | ---- | -------- | ---- | ---------- | ---- | ----------
|                         |      | Total AssetsDecember 31, |      | Total LiabilitiesDecember 31, |      | Total EquityDecember 31,
|                         | 2009 |                          | 2008 |                               | 2009 |                          | 2008 |          | 2009 |            | 2008
|Wells/Fremont Associates |      | $3,676,596               |      | $7,141,187                    |      | $187,584                 |      | $165,357 |      | $3,489,012 |      | $6,975,830
|                         |      |                          |      |                               |      |                          |      |          |      |            |      |           



|                         |                                 |                |                                 |                   |      |          |      |              |      |          |      |         
|------------------------ | ------------------------------- | -------------- | ------------------------------- | ----------------- | ---- | -------- | ---- | ------------ | ---- | -------- | ---- | --------
|                         |                                 | Total Revenues |                                 | Net Income (Loss)
|                         | For The Years EndedDecember 31, |                | For The Years EndedDecember 31,
|                         | 2009                            |                | 2008                            |                   | 2007 |          | 2009 |              | 2008 |          | 2007
|Wells/Fremont Associates |                                 | $507,372       |                                 | $477,303          |      | $490,525 |      | $(3,070,350) |      | $193,897 |      | $219,026
|                         |                                 |                |                                 |                   |      |          |      |              |      |          |      |         



Page F-42



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##### Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The General Partners of

Wells/Fremont Associates:

We have audited the accompanying balance sheet of Wells/Fremont Associates (the Joint Venture)
as of December 31, 2009 and the related statements of operations, partners capital, and cash flows for the year ended December 31, 2009. Our audit also included the financial statement schedule listed in the index at Item 15(a).
These financial statements and schedule are the responsibility of the Joint Ventures management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Joint Ventures internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Joint
Ventures internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wells/Fremont Associates as
of December 31, 2009, and the results of its operations and its cash flows for the year ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/    Frazier & Deeter, LLC

Atlanta, Georgia

March 18, 2010



Page F-43



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##### Index to Financial Statements

WELLS/FREMONT ASSOCIATES

BALANCE SHEETS

DECEMBER 31, 2009 AND 2008 (UNAUDITED)

ASSETS



|                                                                                                                                  |  |      |           |                 |   |          
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | --------------- | - | ---------
|                                                                                                                                  |  | 2009 |           | 2008(unaudited)
|Real estate assets, at cost:                                                                                                      |  |      |           |                 |   |          
|Land                                                                                                                              |  | $    | 2,219,251 |                 | $ | 2,219,251
|Building and improvements, less accumulated depreciation of $2,561,887 and $2,431,136 at December 31, 2009 and 2008,
respectively |  |      | 1,266,824 |                 |   | 4,713,308
|                                                                                                                                  |  |      |           |                 |   |          
|Total real estate assets                                                                                                          |  |      | 3,486,075 |                 |   | 6,932,559
|                                                                                                                                  |  |     
|Cash and cash equivalents                                                                                                         |  |      | 180,339   |                 |   | 158,684  
|Tenant receivables                                                                                                                |  |      | 173       |                 |   | 25,707   
|Deferred leasing costs, less accumulated amortization of $0 and $58,293 at December 31, 2009 and 2008,
respectively               |  |      | 0         |                 |   | 17,564   
|Other assets                                                                                                                      |  |      | 10,009    |                 |   | 6,673    
|                                                                                                                                  |  |      |           |                 |   |          
|Total assets                                                                                                                      |  | $    | 3,676,596 |                 | $ | 7,141,187
|                                                                                                                                  |  |      |           |                 |   |          

LIABILITIES AND PARTNERS CAPITAL



|                                        |  |   |           |  |   |          
|--------------------------------------- |  | - | --------- |  | - | ---------
|Liabilities:                            |  |   |           |  |   |          
|Accounts payable and accrued expenses   |  | $ | 2,375     |  | $ | 15,241   
|Due to affiliates                       |  |   | 10,669    |  |   | 7,070    
|Deferred income                         |  |   | 67,644    |  |   | 45,678   
|Partnership distributions payable       |  |   | 106,896   |  |   | 97,368   
|                                        |  |   |           |  |   |          
|Total liabilities                       |  |   | 187,584   |  |   | 165,357  
|                                        |  |  
|Partners capital:                      |  |   |           |  |   |          
|Fund X and Fund XI Associates           |  |   | 784,881   |  |   | 1,569,272
|Piedmont Operating Partnership, LP      |  |   | 2,704,131 |  |   | 5,406,558
|                                        |  |   |           |  |   |          
|Total partners capital                 |  |   | 3,489,012 |  |   | 6,975,830
|                                        |  |   |           |  |   |          
|Total liabilities and partners capital |  | $ | 3,676,596 |  | $ | 7,141,187
|                                        |  |   |           |  |   |          

See accompanying notes.



Page F-44



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##### Index to Financial Statements

WELLS/FREMONT ASSOCIATES

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007
(UNAUDITED)



|                             |  |      |            |   |                 |   |                 |  |   |        
|---------------------------- |  | ---- | ---------- | - | --------------- | - | --------------- |  | - | -------
|                             |  | 2009 |            |   | 2008(unaudited) |   | 2007(unaudited)
|REVENUES:                    |  |      |            |   |                 |   |                 |  |   |        
|Rental income                |  | $    | 458,178    |   |                 | $ | 434,786         |  | $ | 435,184
|Reimbursement income         |  |      | 49,194     |   |                 |   | 42,517          |  |   | 55,341 
|                             |  |      |            |   |                 |   |                 |  |   |        
|Total revenues               |  |      | 507,372    |   |                 |   | 477,303         |  |   | 490,525
|                             |  |      |           
|EXPENSES:                    |  |      |            |   |                 |   |                 |  |   |        
|Property operating costs     |  |      | 47,077     |   |                 |   | 45,112          |  |   | 49,381 
|Management and leasing fees: |  |      |            |   |                 |   |                 |  |   |        
|Related-party                |  |      | 22,702     |   |                 |   | 22,082          |  |   | 16,853 
|Depreciation                 |  |      | 130,751    |   |                 |   | 159,560         |  |   | 159,560
|Amortization                 |  |      | 4,583      |   |                 |   | 5,000           |  |   | 5,000  
|Impairment loss              |  |      | 3,315,733  |   |                 |   | 0               |  |   | 0      
|General and administrative   |  |      | 56,876     |   |                 |   | 51,652          |  |   | 40,705 
|                             |  |      |            |   |                 |   |                 |  |   |        
|Total expenses               |  |      | 3,577,722  |   |                 |   | 283,406         |  |   | 271,499
|                             |  |      |            |   |                 |   |                 |  |   |        
|NET INCOME (LOSS)            |  | $    | (3,070,350 | ) |                 | $ | 193,897         |  | $ | 219,026
|                             |  |      |            |   |                 |   |                 |  |   |        

See accompanying notes.



Page F-45



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##### Index to Financial Statements

WELLS/FREMONT ASSOCIATES

STATEMENTS OF PARTNERS CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007
(UNAUDITED)



|                                       |  |                             |           |   |                                  |   |            |                       |  |   |            |  
|-------------------------------------- |  | --------------------------- | --------- | - | -------------------------------- | - | ---------- | --------------------- |  | - | ---------- | -
|                                       |  | Fund Xand Fund
XIAssociates |           |   | PiedmontOperatingPartnership, LP |   |            | TotalPartnersCapital | 
|Balance, December 31, 2006             |  | $                           | 1,653,323 |   |                                  | $ | 5,696,134  |                       |  | $ | 7,349,457  |  
|                                       |  |                             |          
|Net income                             |  |                             | 49,272    |   |                                  |   | 169,754    |                       |  |   | 219,026    |  
|Partnership distributions              |  |                             | (89,700   | ) |                                  |   | (309,041   | )                     |  |   | (398,741   | )
|                                       |  |                             |           |   |                                  |   |            |                       |  |   |            |  
|Balance, December 31, 2007 (unaudited) |  |                             | 1,612,895 |   |                                  |   | 5,556,847  |                       |  |   | 7,169,742  |  
|                                       |  |                             |          
|Net income                             |  |                             | 43,619    |   |                                  |   | 150,278    |                       |  |   | 193,897    |  
|Partnership distributions              |  |                             | (87,242   | ) |                                  |   | (300,567   | )                     |  |   | (387,809   | )
|                                       |  |                             |           |   |                                  |   |            |                       |  |   |            |  
|Balance, December 31, 2008 (unaudited) |  |                             | 1,569,272 |   |                                  |   | 5,406,558  |                       |  |   | 6,975,830  |  
|                                       |  |                             |          
|Net loss                               |  |                             | (690,703  | ) |                                  |   | (2,379,647 | )                     |  |   | (3,070,350 | )
|Partnership distributions              |  |                             | (93,688   | ) |                                  |   | (322,780   | )                     |  |   | (416,468   | )
|                                       |  |                             |           |   |                                  |   |            |                       |  |   |            |  
|Balance, December 31, 2009             |  | $                           | 784,881   |   |                                  | $ | 2,704,131  |                       |  | $ | 3,489,012  |  
|                                       |  |                             |           |   |                                  |   |            |                       |  |   |            |  

See accompanying notes.



Page F-46



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##### Index to Financial Statements

WELLS/FREMONT ASSOCIATES

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007
(UNAUDITED)



|                                                                                         |  |      |            |   |                 |   |          |                 |  |   |          |  
|---------------------------------------------------------------------------------------- |  | ---- | ---------- | - | --------------- | - | -------- | --------------- |  | - | -------- | -
|                                                                                         |  | 2009 |            |   | 2008(unaudited) |   |          | 2007(unaudited) | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |  |      |            |   |                 |   |          |                 |  |   |          |  
|Net income (loss)                                                                        |  | $    | (3,070,350 | ) |                 | $ | 193,897  |                 |  | $ | 219,026  |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |      |            |   |                 |   |          |                 |  |   |          |  
|Impairment loss                                                                          |  |      | 3,315,733  |   |                 |   | 0        |                 |  |   | 0        |  
|Depreciation                                                                             |  |      | 130,751    |   |                 |   | 159,560  |                 |  |   | 159,560  |  
|Amortization                                                                             |  |      | 17,564     |   |                 |   | 19,162   |                 |  |   | 18,987   |  
|Changes in assets and liabilities:                                                       |  |      |            |   |                 |   |          |                 |  |   |          |  
|Decrease in tenant receivables                                                           |  |      | 25,534     |   |                 |   | 15,190   |                 |  |   | 1,168    |  
|(Increase) decrease in other assets                                                      |  |      | (3,336     | ) |                 |   | 1,389    |                 |  |   | (3,248   | )
|(Decrease) increase in accounts payable and accrued expenses                             |  |      | (12,866    | ) |                 |   | 839      |                 |  |   | (5,681   | )
|Increase (decrease) in due to affiliates                                                 |  |      | 3,599      |   |                 |   | 5,979    |                 |  |   | (2,500   | )
|Increase (decrease) in deferred income                                                   |  |      | 21,966     |   |                 |   | 45,678   |                 |  |   | (83,278  | )
|                                                                                         |  |      |            |   |                 |   |          |                 |  |   |          |  
|Net cash provided by operating activities                                                |  |      | 428,595    |   |                 |   | 441,694  |                 |  |   | 304,034  |  
|                                                                                         |  |      |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |  |      |            |   |                 |   |          |                 |  |   |          |  
|Operating distributions to joint venture partners in excess of accumulated earnings      |  |      | (406,940   | ) |                 |   | (392,111 | )               |  |   | (358,116 | )
|                                                                                         |  |      |            |   |                 |   |          |                 |  |   |          |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     |  |      | 21,655     |   |                 |   | 49,583   |                 |  |   | (54,082  | )
|                                                                                         |  |      |           
|CASH AND CASH EQUIVALENTS, beginning of year                                             |  |      | 158,684    |   |                 |   | 109,101  |                 |  |   | 163,183  |  
|                                                                                         |  |      |            |   |                 |   |          |                 |  |   |          |  
|CASH AND CASH EQUIVALENTS, end of year                                                   |  | $    | 180,339    |   |                 | $ | 158,684  |                 |  | $ | 109,101  |  
|                                                                                         |  |      |            |   |                 |   |          |                 |  |   |          |  
|                                                                                         |  |      |           
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:                   |  |      |            |   |                 |   |          |                 |  |   |          |  
|Partnership distributions payable                                                        |  | $    | 106,896    |   |                 | $ | 97,368   |                 |  | $ | 101,670  |  
|                                                                                         |  |      |            |   |                 |   |          |                 |  |   |          |  

See accompanying notes.



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##### Index to Financial Statements

WELLS/FREMONT ASSOCIATES

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009, 2008 (UNAUDITED), AND 2007 (UNAUDITED)



|1. | ORGANIZATION AND BUSINESS
|-- | -------------------------

On
July 15, 1998, Wells Real Estate Fund X, L.P. (Fund X) and Wells Real Estate Fund XI, L.P. (Fund XI), entered into a Georgia general partnership to create Fund X and Fund XI Associates. The general partners of Fund
X and Fund XI are Leo F. Wells, III and Wells Partners, L.P., a private Georgia limited partnership. Fund X and Fund XI Associates was formed for the purpose of acquiring, developing, owning, operating, and selling real properties.

In July 1998, Piedmont Operating Partnership, LP (Piedmont OP), formerly known as Wells Operating Partnership, L.P., entered into a joint
venture agreement with Wells Development Corporation, referred to as Wells/Fremont Associates (the Joint Venture), which acquired an approximate 58,000 square foot two-story warehouse and office building, 47300 Kato Road
(formerly known as 47320 Kato Road), located in Fremont, California. Piedmont OP is a Delaware limited partnership with Piedmont Office Realty Trust, Inc. (Piedmont REIT), formerly known as Wells Real Estate Investment Trust,
Inc., serving as its general partner. Piedmont REIT is a Maryland corporation that qualifies as a real estate investment trust. During 1998, Fund X and Fund XI Associates acquired Wells Development Corporations interest in the Joint
Venture, which resulted in Fund X and Fund XI Associates becoming a joint venture partner with Piedmont OP.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Basis of Presentation

The Joint Ventures financial statements are prepared in accordance with U.S. generally accepted
accounting principles (GAAP).

Use of Estimates

The preparation of the Joint Ventures financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation.
Amounts capitalized to real estate assets consist of the cost of acquisition or construction, application of acquisition fees incurred, and any tenant improvements or major improvements and betterments which extend the useful life of the related
asset. The Joint Venture considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. Upon receiving notification of a tenants intention to terminate a
lease, undepreciated tenant improvements are written off to lease termination expense. All repairs and maintenance are expensed as incurred.

The Joint Ventures real estate assets are depreciated using the straight-line method over the following useful lives:



|                      |  |                                       
|--------------------- |  | --------------------------------------
|Buildings             |  | 40 years                              
|Building improvements |  | 5-25 years                            
|Land improvements     |  | 20 years                              
|Tenant improvements   |  | Shorter of lease term or economic life



Page F-48



---

##### Index to Financial Statements

Evaluating the Recoverability of Real Estate Assets

Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets owned by the
Joint Venture may not be recoverable. When indicators of potential impairment are present, which suggest that the carrying amounts of the real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by
determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition for assets held for use, or with the estimated
fair values, less costs to sell, for assets held for sale. In the event that such expected undiscounted future cash flows for assets held for use or the estimated fair values, less costs to sell, for assets held for sale do not exceed the respective
assets carrying values, management adjusts the real estate assets to the respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived
assets, and recognizes an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for the subject property, or highly comparable properties,
under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value.

While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures describes three levels of inputs that may be
used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Joint Venture has the ability to access. Level 2 inputs are inputs other than quoted prices included in
Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability
(other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an
entitys own assumptions, as there is little, if any, related market activity or information. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in
the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Joint Ventures assessment of the significance of a
particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The accounting standard for fair value measurements and disclosures was applied to the Joint Ventures
outstanding non-financial assets and nonfinancial liabilities effective January 1, 2009.

The Joint Venture evaluated the recoverability
of the carrying value of the 47300 Kato Road property pursuant to the accounting policy outlined above and determined that it is not recoverable, as compared with the estimated fair value, primarily as a result of shortening the estimated holding
period of such asset in third quarter 2009 and significant downward pressure on long-term rental rates for speculative leasing. Accordingly, the Joint Venture reduced the carrying value of 47300 Kato Road to its estimated fair value based on the
present value of future cash flows and recognized a corresponding impairment loss of approximately $3,316,000 in the third quarter of 2009.

Cash and Cash Equivalents

The Joint Venture considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.

Tenant Receivables

Tenant receivables are comprised of rental and reimbursement billings due from tenants and the cumulative amount of future adjustments necessary to present rental income using the straight-line method.
Upon receiving notification of a tenants intention to terminate a lease, unamortized straight-line rent receivables are written off to lease termination expense. Tenant receivables are recorded at the original amount earned, less an allowance
for any doubtful accounts, which approximates fair value. Management assesses the collectibility of tenant



Page F-49



---

##### Index to Financial Statements

receivables on an ongoing basis and provides for allowances as such balances, or portions thereof, become uncollectible. No such allowances have been recorded as of December 31, 2009 or
2008.

Deferred Leasing Costs, net

Deferred lease costs may include (i) costs incurred to procure leases, which are capitalized and recognized as amortization expense on a straight-line basis over the terms of the lease, and (ii) common area maintenance costs that
are recoverable from tenants under the terms of the existing leases; such costs are capitalized and recognized as operating expenses over the shorter of the lease term or the recovery period provided for in the lease. Upon receiving
notification of a tenants intention to terminate a lease, unamortized deferred leasing costs are written-off to lease termination expense.

Other Assets

Other assets is comprised primarily of prepaid property insurance, which is recognized in the period in which the
coverage is provided. Balances without a future economic benefit are written off as they are identified.

Allocation of Income and
Distributions

Pursuant to the terms of the joint venture agreement, income and distributions are allocated to the joint venture partners
based upon their respective ownership interests as determined by relative cumulative capital contributions, as defined. Fund X and Fund XI Associates and Piedmont OP held ownership interests in the Joint Venture of approximately 22% and 78%,
respectively, for the years ended December 31, 2009 and 2008. Net cash from operations is generally distributed to the joint venture partners on a quarterly basis.

Revenue Recognition

The Joint Ventures leases typically include renewal options,
escalation provisions and provisions requiring tenants to reimburse the Joint Venture for a pro rata share of operating costs incurred. All of the Joint Ventures leases are classified as operating leases, and the related rental income,
including scheduled rental rate increases (other than scheduled increases based on the Consumer Price Index) is recognized on a straight-line basis over the terms of the respective leases. Rents and tenant reimbursements collected in advance are
recorded as deferred income in the accompanying balance sheets. Lease termination income is recognized when the tenant loses the right to lease the space and the Joint Venture has satisfied all obligations under the related lease or lease
termination agreement.

The Joint Venture records the sale of real estate assets pursuant to the provisions of the property, plant, and
equipment accounting standard for real estate sales. Accordingly, gains are recognized upon completing the sale and, among other things, determining the sale price and transferring all of the risks and rewards of ownership without significant
continuing involvement with the seller. Recognition of all or a portion of the gain would be deferred until both of these conditions are met. Losses are recognized in full as of the sale date.

Income Taxes

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

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 168,
The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (SFAS 168). SFAS 168 requires that the FASB Accounting Standards Codification (the Codification or
ASC) become the source of authoritative U.S. GAAP recognized by the



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---

##### Index to Financial Statements

FASB to be applied by nongovernmental entities. Once the Codification is in effect, all of its content will carry the same level of authority, effectively superseding SFAS No. 162, The
Hierarchy of Generally Accepted Accounting Principles. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of SFAS 168 did not have a significant impact
on the Joint Ventures financial statements or disclosures.

In September 2006, FASB issued ASC Topic Fair Value Measurements and
Disclosures (ASC 820), which defines fair value, establishes a framework for measuring fair value, and expands disclosures required for fair value measurements under GAAP. ASC 820 emphasizes that fair value is a market-based
measurement, as opposed to an entity-specific measurement. In February 2008, the FASB delayed the effective date of ASC 820 for all nonrecurring non-financial assets and liabilities until fiscal years beginning after November 15, 2008. The
Joint Venture adopted the guidelines under ASC 820 effective January 1, 2008, as it relates to financial instruments and effective January 1, 2009, as it relates to non- financial instruments. The adoption of ASC 820 for nonrecurring
non-financial assets and liabilities did not have a material impact on the Joint Ventures financial statements or disclosures.

In May
2009, the FASB issued ASC Topic Subsequent Events(ASC 855). ASC 855 provides guidance on managements assessment of subsequent events. ASC 855 states that management must evaluate, as of each reporting period, events or
transactions that occur after the balance sheet date through the date that the financial statements are issued or are available to be issued. ASC 855 allows the assessment of subsequent events to occur through the date on which the
financial statements are available to be issued or the date they are issued. Management must perform its assessment for both interim and annual financial reporting periods. ASC 855 was effective prospectively for interim and annual
periods ending after June 15, 2009. The adoption of ASC 855 did not have a material impact on the Joint Ventures financial statements or disclosures.

Reclassifications

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



|3. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------

Management
and Leasing Fees

Fund X and Fund XI are parties to individual property management and leasing agreements with Wells Management Company,
Inc. (Wells Management), an affiliate of each of their respective general partners.



Page F-51



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##### Index to Financial Statements

The various fees payable under each of the respective agreements are summarized as follows:



|        |  |                                          |  |                                                                                                                                                                                                                            |  |                                                                                                                                                                   
|------- |  | ---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  | Management Services                      |  | Leasing Services                                                                                                                                                                                                           |  | Management and LeasingServices  Industrial andCommercial properties leased on anet basis for ten years
or more                                                   
|Fund X  |  | 3% of gross revenues collected monthly   |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 3% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.
|Fund XI |  | 2.5% of gross revenues collected monthly |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 2% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.

Management and leasing fees are recognized in accordance with the terms of the aforementioned
agreements, weighted based on joint venture partners respective ownership interests in the Joint Venture. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred management and leasing fee expenses that are payable
to Wells Management of $5,109, $4,967, and $6,490, respectively.

In addition, the Joint Venture incurs fees payable to Piedmont Office
Management, LLC (Piedmont Management), or its affiliates, for the management and leasing of the Joint Ventures properties equal to (a) the lesser of 4.5% of the gross revenues generally paid over the life of the lease or 0.6%
of net asset value calculated on an annual basis, (b) prorated by Piedmont OPs ownership interest in the Joint Venture. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred management and leasing fee
expenses payable to Piedmont Management, or its affiliates, of $17,593, $17,114, and $10,363, respectively.

Administrative Reimbursements

Wells Management performs certain administrative services for the Joint Venture, relating to accounting, property management, and other
Joint Venture administration, and incurs the related expenses. Such expenses are allocated among these entities based on time spent on each entity by individual personnel. In the opinion of management, this is a reasonable estimation of such
expenses. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred administrative expenses of $26,494, $18,847, and $13,991, respectively, payable to Wells Management for these services.

Due to Affiliates

As presented in the
accompanying balance sheets, due to affiliate as of December 31, 2009 and December 31, 2008 represents amounts due to Piedmont Management and/or Wells Management for the following items:



|                              |  |      |        |      |   |      
|----------------------------- |  | ---- | ------ | ---- | - | -----
|                              |  | 2009 |        | 2008
|Administrative reimbursements |  | $    | 5,419  |      | $ | 3,729
|Property management fees      |  |      | 5,250  |      |   | 3,341
|                              |  |      |        |      |   |      
|Total                         |  | $    | 10,669 |      | $ | 7,070
|                              |  |      |        |      |   |      



Page F-52



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##### Index to Financial Statements

|4. | RENTAL INCOME
|-- | -------------

One tenant generated
approximately 100% of contractual rental income for the year ended December 31, 2009. As of December 31, 2009, the sole tenant in the 47300 Kato Road property occupied the building on a month-by-month basis.



Page F-53



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##### Index to Financial Statements

WELLS/FREMONT ASSOCIATES

SCHEDULE III  REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2009



|                                                      |  |              |  |                           |  |                                             |  |                |  |                                               |  |                            |  |                     |  |              |  |            |  |            |  |      |  |         
|----------------------------------------------------- |  | ------------ |  | ------------------------- |  | ------------------------------------------- |  | -------------- |  | --------------------------------------------- |  | -------------------------- |  | ------------------- |  | ------------ |  | ---------- |  | ---------- |  | ---- |  | --------
|Description                                           |  | Encumbrances |  | Initial Cost              |  | CostsCapitalizedSubsequent ToAcquisition(b) |  | ImpairmentLoss |  | Gross Carrying Amount as of December 31, 2009 |  | AccumulatedDepreciation(c) |  | Date ofConstruction |  | DateAcquired
|                                                      |  | Land         |  | Buildings andImprovements |  |                                             |  | Land           |  | Buildings andImprovements                     |  | Constructionin Progress    |  | Total               |  |              | 
|47300 KATO ROAD(formerly known as47320 KatoRoad)(a) |  | None         |  | $2,130,480                |  | $6,852,630                                  |  | $380,585       |  | $(3,315,733)                                  |  | $2,219,251                 |  | $3,828,711          |  | $0           |  | $6,047,962 |  | $2,561,887 |  | 1982 |  | 07/21/98



| | (a) | 47300 Kato Road consists of a two-story warehouse and office building located in Fremont, California.
| | --- | -----------------------------------------------------------------------------------------------------



| | (b) | Includes acquisition and advisory fees and acquisition expense reimbursements applied at acquisition as well as write-offs of fully depreciated
capitalized costs.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Buildings, land improvements, building improvements, and tenant improvements are depreciated using the straight-line method over 40 years, 20 years,
5 to 25 years, and the shorter of the economic life or corresponding lease terms, respectively.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page F-54



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##### Index to Financial Statements

WELLS/FREMONT ASSOCIATES

SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2009



|                                         |  |      |            |   |                         |   |          
|---------------------------------------- |  | ---- | ---------- | - | ----------------------- | - | ---------
|                                         |  | Cost |            |   | AccumulatedDepreciation
|BALANCE AT DECEMBER 31, 2006             |  | $    | 9,363,695  |   |                         | $ | 2,112,016
|                                         |  |     
|Additions                                |  |      | 0          |   |                         |   | 159,560  
|                                         |  |      |            |   |                         |   |          
|BALANCE AT DECEMBER 31, 2007 (UNAUDITED) |  |      | 9,363,695  |   |                         |   | 2,271,576
|                                         |  |     
|Additions                                |  |      | 0          |   |                         |   | 159,560  
|                                         |  |      |            |   |                         |   |          
|BALANCE AT DECEMBER 31, 2008 (UNAUDITED) |  |      | 9,363,695  |   |                         |   | 2,431,136
|                                         |  |     
|Additions                                |  |      | 0          |   |                         |   | 130,751  
|Impairments(1)                           |  |      | (3,315,733 | ) |                         |   | 0        
|                                         |  |      |            |   |                         |   |          
|BALANCE AT DECEMBER 31, 2009             |  | $    | 6,047,962  |   |                         | $ | 2,561,887
|                                         |  |      |            |   |                         |   |          



| | (1) | As of
September 30, 2009, Wells/Fremont Associates wrote-down the basis of 47300 Kato Road to reduce the carrying value of the property to its estimated fair value as a result of shortening the estimated holding period of such asset in third quarter
2009 and significant downward pressure on long-term rental rates for speculative leasing.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page F-55



---

##### Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The General Partners of

The Wells
Fund XI-Fund XII-REIT Joint Venture:

We have audited the accompanying balance sheets of The Wells Fund XI-Fund XII-REIT Joint Venture
(the Joint Venture) as of December 31, 2009 and 2008, and the related statements of operations, partners capital, and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included
the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Joint Ventures management. Our responsibility is to express an opinion on these financial statements
and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Joint Ventures
internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Joint Ventures internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, and 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 Wells Fund
XI-Fund XII-REIT Joint Venture as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/    Frazier & Deeter, LLC

Atlanta, Georgia

March 18, 2010



Page F-56



---

##### Index to Financial Statements

THE WELLS FUND XI - FUND XII - REIT JOINT VENTURE

BALANCE SHEETS

DECEMBER 31, 2009 AND 2008

ASSETS



|                                                                                                                                  |  |      |           |      |   |          
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                                                                                                                  |  | 2009 |           | 2008
|Real estate assets, at cost:                                                                                                      |  |      |           |      |   |          
|Land                                                                                                                              |  | $    | 1,766,667 |      | $ | 1,766,667
|Building and improvements, less accumulated depreciation of $2,965,676 and $2,666,898 at December 31, 2009 and 2008,
respectively |  |      | 3,108,632 |      |   | 2,887,136
|Construction in progress                                                                                                          |  |      | 0         |      |   | 291,956  
|                                                                                                                                  |  |      |           |      |   |          
|Total real estate assets                                                                                                          |  |      | 4,875,299 |      |   | 4,945,759
|                                                                                                                                  |  |     
|Cash and cash equivalents                                                                                                         |  |      | 340,429   |      |   | 344,481  
|Tenant receivables                                                                                                                |  |      | 448,201   |      |   | 595,503  
|Deferred leasing costs, less accumulated amortization of $181,767 and $105,663 at December 31, 2009 and 2008, respectively        |  |      | 239,874   |      |   | 260,904  
|Other assets, net                                                                                                                 |  |      | 1,731     |      |   | 1,839    
|                                                                                                                                  |  |      |           |      |   |          
|Total assets                                                                                                                      |  | $    | 5,905,534 |      | $ | 6,148,486
|                                                                                                                                  |  |      |           |      |   |          

LIABILITIES AND PARTNERS CAPITAL



|                                                                     |  |   |           |  |   |          
|-------------------------------------------------------------------- |  | - | --------- |  | - | ---------
|Liabilities:                                                         |  |   |           |  |   |          
|Accounts payable, accrued expenses, and refundable security deposits |  | $ | 145,027   |  | $ | 167,678  
|Accrued capital expenditures                                         |  |   | 0         |  |   | 274,283  
|Accrued deferred leasing costs                                       |  |   | 0         |  |   | 57,282   
|Due to affiliates                                                    |  |   | 3,459     |  |   | 2,341    
|Deferred income                                                      |  |   | 93,939    |  |   | 0        
|Partnership distributions payable                                    |  |   | 107,563   |  |   | 0        
|                                                                     |  |   |           |  |   |          
|Total liabilities                                                    |  |   | 349,988   |  |   | 501,584  
|                                                                     |  |  
|Partners capital:                                                   |  |   |           |  |   |          
|Wells Real Estate Fund XI, L.P.                                      |  |   | 1,452,610 |  |   | 1,476,498
|Wells Real Estate Fund XII, L.P.                                     |  |   | 949,483   |  |   | 965,095  
|Piedmont Operating Partnership, LP                                   |  |   | 3,153,453 |  |   | 3,205,309
|                                                                     |  |   |           |  |   |          
|Total partners capital                                              |  |   | 5,555,546 |  |   | 5,646,902
|                                                                     |  |   |           |  |   |          
|Total liabilities and partners capital                              |  | $ | 5,905,534 |  | $ | 6,148,486
|                                                                     |  |   |           |  |   |          

See accompanying notes.



Page F-57



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##### Index to Financial Statements

THE WELLS FUND XI - FUND XII - REIT JOINT VENTURE

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                                    |  |      |           |   |      |   |            |      |  |   |           |  
|----------------------------------- |  | ---- | --------- | - | ---- | - | ---------- | ---- |  | - | --------- | -
|                                    |  | 2009 |           |   | 2008 |   |            | 2007 | 
|REVENUES:                           |  |      |           |   |      |   |            |      |  |   |           |  
|Rental income                       |  | $    | 1,010,826 |   |      | $ | 879,921    |      |  | $ | 871,620   |  
|Reimbursement income                |  |      | 187,344   |   |      |   | 194,545    |      |  |   | 18,756    |  
|Interest and other income           |  |      | 813       |   |      |   | 14         |      |  |   | 412       |  
|                                    |  |      |           |   |      |   |            |      |  |   |           |  
|Total revenues                      |  |      | 1,198,983 |   |      |   | 1,074,480  |      |  |   | 890,788   |  
|                                    |  |      |          
|EXPENSES:                           |  |      |           |   |      |   |            |      |  |   |           |  
|Property operating costs            |  |      | 781,521   |   |      |   | 693,483    |      |  |   | 605,263   |  
|Management and leasing fees:        |  |      |           |   |      |   |            |      |  |   |           |  
|Related-party                       |  |      | 21,463    |   |      |   | 16,198     |      |  |   | 4,959     |  
|Other                               |  |      | 39,254    |   |      |   | 34,918     |      |  |   | 12,088    |  
|Depreciation                        |  |      | 298,778   |   |      |   | 341,587    |      |  |   | 219,587   |  
|Amortization                        |  |      | 65,795    |   |      |   | 52,155     |      |  |   | 51,366    |  
|Impairment loss                     |  |      | 0         |   |      |   | 3,678,136  |      |  |   | 0         |  
|General and administrative          |  |      | 31,472    |   |      |   | 52,585     |      |  |   | 64,827    |  
|                                    |  |      |           |   |      |   |            |      |  |   |           |  
|Total expenses                      |  |      | 1,238,283 |   |      |   | 4,869,062  |      |  |   | 958,090   |  
|                                    |  |      |           |   |      |   |            |      |  |   |           |  
|LOSS FROM CONTINUING OPERATIONS     |  |      | (39,300   | ) |      |   | (3,794,582 | )    |  |   | (67,302   | )
|                                    |  |      |          
|DISCONTINUED OPERATIONS:            |  |      |           |   |      |   |            |      |  |   |           |  
|Operating income                    |  |      | 0         |   |      |   | 317        |      |  |   | 166,340   |  
|Gain on disposition                 |  |      | 0         |   |      |   | 0          |      |  |   | 1,977,731 |  
|                                    |  |      |           |   |      |   |            |      |  |   |           |  
|Income from discontinued operations |  |      | 0         |   |      |   | 317        |      |  |   | 2,144,071 |  
|                                    |  |      |           |   |      |   |            |      |  |   |           |  
|NET INCOME (LOSS)                   |  | $    | (39,300   | ) |      | $ | (3,794,265 | )    |  | $ | 2,076,769 |  
|                                    |  |      |           |   |      |   |            |      |  |   |           |  

See accompanying notes.



Page F-58



---

##### Index to Financial Statements

THE WELLS FUND XI - FUND XII - REIT JOINT VENTURE

STATEMENTS OF PARTNERS CAPITAL

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                           |  |                               |            |   |                                |   |            |                                  |  |   |                       |   |  |   |            |  
|-------------------------- |  | ----------------------------- | ---------- | - | ------------------------------ | - | ---------- | -------------------------------- |  | - | --------------------- | - |  | - | ---------- | -
|                           |  | Wells RealEstateFund XI, L.P. |            |   | Wells RealEstateFund XII, L.P. |   |            | PiedmontOperatingPartnership, LP |  |   | TotalPartnersCapital |  
|Balance, December 31, 2006 |  | $                             | 3,272,186  |   |                                | $ | 2,138,666  |                                  |  | $ | 7,103,452             |   |  | $ | 12,514,304 |  
|                           |  |                               |            |  
|Net income                 |  |                               | 543,034    |   |                                |   | 354,899    |                                  |  |   | 1,178,836             |   |  |   | 2,076,769  |  
|Partnership contributions  |  |                               | 529,749    |   |                                |   | 346,217    |                                  |  |   | 1,150,000             |   |  |   | 2,025,966  |  
|Partnership distributions  |  |                               | (1,892,289 | ) |                                |   | (1,236,704 | )                                |  |   | (4,107,848            | ) |  |   | (7,236,841 | )
|                           |  |                               |            |   |                                |   |            |                                  |  |   |                       |   |  |   |            |  
|Balance, December 31, 2007 |  |                               | 2,452,680  |   |                                |   | 1,603,078  |                                  |  |   | 5,324,440             |   |  |   | 9,380,198  |  
|                           |  |                               |            |  
|Net loss                   |  |                               | (992,124   | ) |                                |   | (648,402   | )                                |  |   | (2,153,739            | ) |  |   | (3,794,265 | )
|Partnership contributions  |  |                               | 39,222     |   |                                |   | 25,633     |                                  |  |   | 85,145                |   |  |   | 150,000    |  
|Partnership distributions  |  |                               | (23,280    | ) |                                |   | (15,214    | )                                |  |   | (50,537               | ) |  |   | (89,031    | )
|                           |  |                               |            |   |                                |   |            |                                  |  |   |                       |   |  |   |            |  
|Balance, December 31, 2008 |  |                               | 1,476,498  |   |                                |   | 965,095    |                                  |  |   | 3,205,309             |   |  |   | 5,646,902  |  
|                           |  |                               |            |  
|Net loss                   |  |                               | (10,276    | ) |                                |   | (6,716     | )                                |  |   | (22,308               | ) |  |   | (39,300    | )
|Partnership contributions  |  |                               | 26,148     |   |                                |   | 17,089     |                                  |  |   | 56,763                |   |  |   | 100,000    |  
|Partnership distributions  |  |                               | (39,760    | ) |                                |   | (25,985    | )                                |  |   | (86,311               | ) |  |   | (152,056   | )
|                           |  |                               |            |   |                                |   |            |                                  |  |   |                       |   |  |   |            |  
|Balance, December 31, 2009 |  | $                             | 1,452,610  |   |                                | $ | 949,483    |                                  |  | $ | 3,513,453             |   |  | $ | 5,555,546  |  
|                           |  |                               |            |   |                                |   |            |                                  |  |   |                       |   |  |   |            |  

See accompanying notes.



Page F-59



---

##### Index to Financial Statements

THE WELLS FUND XI - FUND XII - REIT JOINT VENTURE

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED

DECEMBER 31, 2009, 2008, AND 2007



|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                            |  | 2009 |          |   | 2008 |   |            | 2007 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |  |      |          |   |      |   |            |      |  |   |            |  
|Net income (loss)                                                                           |  | $    | (39,300  | ) |      | $ | (3,794,265 | )    |  | $ | 2,076,769  |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:    |  |      |          |   |      |   |            |      |  |   |            |  
|Gain on disposition                                                                         |  |      | 0        |   |      |   | 0          |      |  |   | (1,977,731 | )
|Impairment loss                                                                             |  |      | 0        |   |      |   | 3,678,136  |      |  |   | 0          |  
|Depreciation                                                                                |  |      | 298,778  |   |      |   | 341,587    |      |  |   | 265,448    |  
|Amortization                                                                                |  |      | 76,104   |   |      |   | 52,155     |      |  |   | 66,334     |  
|Changes in assets and liabilities:                                                          |  |      |          |   |      |   |            |      |  |   |            |  
|Decrease (increase) in tenant receivables, net                                              |  |      | 147,302  |   |      |   | 53,130     |      |  |   | (631,213   | )
|Decrease in other assets, net                                                               |  |      | 108      |   |      |   | 1,392      |      |  |   | 2,482      |  
|(Decrease) increase in accounts payable, accrued expenses, and refundable security deposits |  |      | (22,651  | ) |      |   | (201,306   | )    |  |   | 306,991    |  
|Increase (decrease) in due to affiliates                                                    |  |      | 1,118    |   |      |   | (553       | )    |  |   | 2,487      |  
|Increase (decrease) in deferred income                                                      |  |      | 93,939   |   |      |   | (58,951    | )    |  |   | 58,951     |  
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|Net cash provided by operating activities                                                   |  |      | 555,398  |   |      |   | 71,325     |      |  |   | 170,518    |  
|                                                                                            |  |      |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |  |      |          |   |      |   |            |      |  |   |            |  
|Net proceeds from sale of real estate                                                       |  |      | 0        |   |      |   | 0          |      |  |   | 7,236,841  |  
|Investment in real estate assets                                                            |  |      | (502,601 | ) |      |   | (116,761   | )    |  |   | (1,961,239 | )
|Payment of deferred leasing costs                                                           |  |      | (112,356 | ) |      |   | (7,497     | )    |  |   | (11,290    | )
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|Net cash (used in) provided by investing activities                                         |  |      | (614,957 | ) |      |   | (124,258   | )    |  |   | 5,264,312  |  
|                                                                                            |  |      |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |  |      |          |   |      |   |            |      |  |   |            |  
|Contribution from joint venture partners                                                    |  |      | 100,000  |   |      |   | 150,000    |      |  |   | 2,025,966  |  
|Operating distributions to joint venture partners in excess of accumulated earnings         |  |      | (44,493  | ) |      |   | (89,031    | )    |  |   | 0          |  
|Net sale proceeds distributions to joint venture partners                                   |  |      | 0        |   |      |   | 0          |      |  |   | (7,236,841 | )
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|Net cash provided by (used in) financing activities                                         |  |      | 55,507   |   |      |   | 60,969     |      |  |   | (5,210,875 | )
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                        |  |      | (4,052   | ) |      |   | 8,036      |      |  |   | 223,955    |  
|                                                                                            |  |      |         
|CASH AND CASH EQUIVALENTS, beginning of year                                                |  |      | 344,481  |   |      |   | 336,445    |      |  |   | 112,490    |  
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|CASH AND CASH EQUIVALENTS, end of year                                                      |  | $    | 340,429  |   |      | $ | 344,481    |      |  | $ | 336,445    |  
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|                                                                                            |  |      |         
|SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:                      |  |      |          |   |      |   |            |      |  |   |            |  
|Partnership distributions payable                                                           |  | $    | 107,563  |   |      | $ | 0          |      |  | $ | 0          |  
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|Accrued capital expenditures                                                                |  | $    | 0        |   |      | $ | 274,283    |      |  | $ | 0          |  
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  
|Accrued deferred leasing costs                                                              |  | $    | 0        |   |      | $ | 57,282     |      |  | $ | 0          |  
|                                                                                            |  |      |          |   |      |   |            |      |  |   |            |  

See accompanying notes.



Page F-60



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##### Index to Financial Statements

THE WELLS FUND XI - FUND XII - REIT JOINT VENTURE

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009, 2008, AND 2007





|1. | ORGANIZATION AND BUSINESS
|-- | -------------------------

On May 1,
1999, Wells Real Estate Fund XI, L.P. (Fund XI) and Piedmont Operating Partnership, LP (Piedmont OP), formerly known as Wells Operating Partnership, L.P., entered into a Georgia general partnership known as The Wells
Fund XI-REIT Joint Venture for the purpose of acquiring, developing, operating, and selling real properties. On June 21, 1999, The Wells Fund XI-REIT Joint Venture was amended and restated as The Wells Fund XI-Fund XII-REIT Joint
Venture (the Joint Venture) upon admitting Wells Real Estate Fund XII, L.P. (Fund XII). The general partners of Fund XI and Fund XII are Leo F. Wells, III and Wells Partners, L.P., a private Georgia
limited partnership. Piedmont OP is a Delaware limited partnership with Piedmont Office Realty Trust, Inc. (Piedmont REIT), formerly known as Wells Real Estate Investment Trust, Inc., serving as its general partner. Piedmont REIT is a
Maryland corporation that qualifies as a real estate investment trust.

On May 18, 1999, the Joint Venture purchased a two-story
manufacturing and office building containing approximately 168,000 square feet, known as 111 Southchase Boulevard, located in Fountain Inn, South Carolina. On July 2, 1999, the Joint Venture purchased a three-story office building
containing approximately 70,000 square feet, known as the 20/20 Building, located in Leawood, Kansas. On August 17, 1999, the Joint Venture purchased an office and warehouse building containing approximately 130,000 square feet, known as
the Johnson Matthey Building, located in Wayne, Pennsylvania. On September 20, 1999, the Joint Venture purchased a two-story office building containing approximately 62,000 square feet, known as the Gartner Building, located in Fort Myers,
Florida.

On October 5, 2004, the Joint Venture sold the Johnson Matthey Building to the sole tenant, Johnson Matthey, Inc., for a gross
selling price of $10,000,000. As a result of the sale, the Joint Venture recognized a gain of approximately $2,419,000 and received net sale proceeds of $9,675,000.

On April 13, 2005, the Joint Venture sold the Gartner Building to an unrelated third party for a gross selling price of approximately $12,520,000. As a result of the sale, the Joint Venture
recognized a gain of approximately $4,481,000 and received net sale proceeds of approximately $12,397,000.

On May 23, 2007, the Joint
Venture sold 111 Southchase Boulevard to an unrelated third party for a gross selling price of $7,625,000. As a result of the sale, the Joint Venture recognized a gain of approximately $1,978,000 and received net sale proceeds of approximately
$7,237,000.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Basis of Presentation

The Joint Ventures financial statements are prepared in accordance with U.S. generally accepted
accounting principles (GAAP).

Use of Estimates

The preparation of the Joint Ventures financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.



Page F-61



---

##### Index to Financial Statements

Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation. Amounts capitalized to real estate assets consist of the cost of acquisition or construction, application of acquisition fees
incurred, and any tenant improvements or major improvements and betterments which extend the useful life of the related asset. The Joint Venture considers the period of future benefit of the asset to determine the appropriate useful lives. These
assessments have a direct impact on net income. Upon receiving notification of a tenants intention to terminate a lease, undepreciated tenant improvements are written off to lease termination expense. All repairs and maintenance are expensed
as incurred.

The Joint Ventures real estate assets are depreciated using the straight-line method over the following useful lives:



|                      |  |                                       
|--------------------- |  | --------------------------------------
|Buildings             |  | 40 years                              
|Building improvements |  | 5-25 years                            
|Land improvements     |  | 20 years                              
|Tenant improvements   |  | Shorter of lease term or economic life

Evaluating the
Recoverability of Real Estate Assets

Management continually monitors events and changes in circumstances that could indicate that the
carrying amounts of the real estate assets owned by the Joint Venture may not be recoverable. When indicators of potential impairment are present, which suggest that the carrying amounts of the real estate assets may not be recoverable, management
assesses the recoverability of the real estate assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual
disposition for assets held for use, or with the estimated fair values, less costs to sell, for assets held for sale. In the event that such expected undiscounted future cash flows for assets held for use or the estimated fair values, less costs to
sell, for assets held for sale do not exceed the respective assets carrying values, management adjusts the real estate assets to the respective estimated fair values, pursuant to the provisions of the property, plant, and equipment accounting
standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are determined based on the following information, dependent upon availability: (i) recently quoted market price(s) for
the subject property, or highly comparable properties, under sufficiently active and normal market conditions, or (ii) the present value of future cash flows, including estimated residual value.

While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for
fair value measurements and disclosures describes three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Joint Venture has the
ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in
active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are
unobservable inputs for the asset or liability, which is typically based on an entitys own assumptions, as there is little, if any, related market activity or information. In instances where the determination of the fair value measurement is
based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its
entirety. The Joint Ventures assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The accounting standard for fair value
measurements and disclosures was applied to the Joint Ventures outstanding nonfinancial assets and nonfinancial liabilities effective January 1, 2009.



Page F-62



---

##### Index to Financial Statements

The Joint Venture evaluated the recoverability of the carrying value of the 20/20 Building pursuant to the
accounting policy outlined above and determined that it is not recoverable, as compared with the estimated fair value, primarily as a result of shortening the estimated holding period of such assets in the third quarter of 2008. Accordingly, the
Joint Venture reduced the carrying value of the 20/20 Building to its estimated fair value based on the present value of future cash flows and recognized a corresponding impairment loss of approximately $3,678,000 in the third quarter of 2008.

Cash and Cash Equivalents

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

Tenant Receivables

Tenant receivables are comprised of rental and reimbursement billings due from tenants and the cumulative amount of future adjustments necessary to present
rental income using the straight-line method. Upon receiving notification of a tenants intention to terminate a lease, unamortized straight-line rent receivables are written off to lease termination expense. Tenant receivables are recorded at
the original amount earned, less an allowance for any doubtful accounts, which approximates fair value. Management assesses the collectibility of tenant receivables on an ongoing basis and provides for allowances as such balances, or portions
thereof, become uncollectible. No such allowances have been recorded as of December 31, 2009 or 2008.

Deferred Leasing Costs, net

Deferred lease costs may include (i) costs incurred to procure leases, which are capitalized and recognized as amortization expense
on a straight-line basis over the terms of the lease, and (ii) common area maintenance costs that are recoverable from tenants under the terms of the existing leases; such costs are capitalized and recognized as operating expenses over the
shorter of the lease term or the recovery period provided for in the lease. The remaining unamortized balance of deferred leasing costs will be amortized over a weighted-average period of approximately three years. Upon receiving notification
of a tenants intention to terminate a lease, unamortized deferred leasing costs are written-off to lease termination expense.

Other
Assets, net

Other assets is comprised of prepaid expenses. Management assesses the collectibility of other assets on an ongoing basis and
provides for allowances as such balances, or portions thereof, become uncollectible. An allowance of $0 and $5,956 is included in other assets as of December 31, 2009 and 2008, respectively. Prepaid expenses are recognized as the related
services are provided. Balances without a future economic benefit are written off as they are identified.

Allocation of Income and
Distributions

Pursuant to the terms of the joint venture agreement, income and distributions are allocated to the joint venture partners
based their respective ownership interests as determined by relative cumulative capital contributions, as defined. Fund XI, Fund XII, and Piedmont OP held ownership interests in the Joint Venture of approximately 26%, 17%, and 57%, respectively, for
the years ended December 31, 2009 and 2008. Net cash from operations is generally distributed to the joint venture partners on a quarterly basis.



Page F-63



---

##### Index to Financial Statements

Revenue Recognition

The Joint Ventures leases typically include renewal options, escalation provisions and provisions requiring tenants to reimburse the Joint Venture for a pro rata share of operating costs incurred.
All of the Joint Ventures leases are classified as operating leases, and the related rental income, including scheduled rental rate increases (other than scheduled increases based on the Consumer Price Index) is recognized on a straight-line
basis over the terms of the respective leases. Rents and tenant reimbursements collected in advance are recorded as deferred income in the accompanying balance sheets. Lease termination income is recognized when the tenant loses the right to lease
the space and the Joint Venture has satisfied all obligations under the related lease or lease termination agreement.

The Joint Venture
records the sale of real estate assets pursuant to the provisions of the property, plant, and equipment accounting standard for real estate sales. Accordingly, gains are recognized upon completing the sale and, among other things, determining the
sale price and transferring all of the risks and rewards of ownership without significant continuing involvement with the seller. Recognition of all or a portion of the gain would be deferred until both of these conditions are met. Losses are
recognized in full as of the sale date.

Income Taxes

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

Recent
Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (SFAS 168). SFAS 168 requires that the FASB Accounting Standards
Codification (the Codification or ASC) become the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Once the Codification is in effect, all of its content will carry the same
level of authority, effectively superseding SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15,
2009. The adoption of SFAS 168 did not have a significant impact on the Joint Ventures financial statements or disclosures.

In
September 2006, FASB issued ASC Topic Fair Value Measurements and Disclosures (ASC 820), which defines fair value, establishes a framework for measuring fair value, and expands disclosures required for fair value measurements
under GAAP. ASC 820 emphasizes that fair value is a market-based measurement, as opposed to an entity-specific measurement. In February 2008, the FASB delayed the effective date of ASC 820 for all nonrecurring non-financial assets and
liabilities until fiscal years beginning after November 15, 2008. The Joint Venture adopted the guidelines under ASC 820 effective January 1, 2008, as it relates to financial instruments and effective January 1, 2009, as it
relates to non-financial instruments. The adoption of ASC 820 for nonrecurring non-financial assets and liabilities did not have a material impact on the Joint Ventures financial statements or disclosures.

In May 2009, the FASB issued ASC Topic Subsequent Events(ASC 855). ASC 855 provides guidance on managements assessment of
subsequent events. ASC 855 states that management must evaluate, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial statements are issued or are available to be
issued. ASC 855 allows the assessment of subsequent events to occur through the date on which the financial statements are available to be issued or the date they are issued. Management must perform its assessment for both interim
and annual financial reporting periods. ASC 855 was effective prospectively for interim and annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material impact on the Joint Ventures financial statements or
disclosures.



Page F-64



---

##### Index to Financial Statements

|3. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------

Management
and Leasing Fees

Fund XI and Fund XII are parties to individual property management and leasing agreements with Wells Management Company,
Inc. (Wells Management), an affiliate of each of their respective general partners.

The various fees payable under each of the
respective agreements are summarized as follows:



|         |  |                                          |  |                                                                                                                                                                                                                            |  |                                                                                                                                                                   
|-------- |  | ---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  | Management Services                      |  | Leasing Services                                                                                                                                                                                                           |  | Management and LeasingServices  Industrial andCommercial properties leased on anet basis for ten years
or more                                                   
|Fund XI  |  | 2.5% of gross revenues collected monthly |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 2% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.
|Fund XII |  | 2.5% of gross revenues collected monthly |  | Initial lease up fee for newly constructed properties based on market rate charged for similar services for similar properties in the same
geographic area. Recurring fee based on 2% of gross revenues collected monthly. |  | Initial lease up fee based on 3% of the gross revenues over the first five years of the lease term. Recurring fee based on 1% of gross
revenues collected monthly.

Management and leasing fees are recognized in accordance with the terms of the aforementioned
agreements, weighted based on joint venture partners respective ownership interests in the Joint Venture. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred management and leasing fee expenses that are payable
to Wells Management of $9,283, $7,006, and $14,278, respectively, portions of which are included in income from discontinued operations in the accompanying statements of operations.

In addition, the Joint Venture incurs fees payable to Piedmont Office Management, LLC (Piedmont Management), or its affiliates, for the management and leasing of the Joint Ventures
properties equal to (a) the lesser of 4.5% of the gross revenues generally paid over the life of the lease or 0.6% of net asset value calculated on an annual basis, (b) prorated by Piedmont OPs ownership interest in the Joint
Venture. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred management and leasing fee expenses payable to Piedmont Management, or its affiliates, of $12,180, $9,192, and $2,815, respectively, portions of which
are included in income from discontinued operations in the accompanying statements of operations.

Administrative Reimbursements

Wells Management performs certain administrative services for the Joint Venture, relating to accounting, property management, and other
Joint Venture administration, and incurs the related expenses. Such expenses are allocated among these entities based on time spent on each entity by individual personnel. In the opinion of management, this is a reasonable estimation of such
expenses. During the years ended December 31, 2009, 2008, and 2007, the Joint Venture incurred administrative expenses that are payable to Wells Management of $0, $13,826, and $39,396, respectively, portions of which are included in income from
discontinued operations in the accompanying statements of operations.



Page F-65



---

##### Index to Financial Statements

Due to Affiliates

As presented in the accompanying balance sheets, due to affiliate as of December 31, 2009 and December 31, 2008 represents amounts due to Piedmont Management and/or Wells Management for the
following items:



|                              |  |      |       |      |   |      
|----------------------------- |  | ---- | ----- | ---- | - | -----
|                              |  | 2009 |       | 2008
|Property management fees      |  | $    | 3,459 |      | $ | 1,741
|Administrative reimbursements |  |      | 0     |      |   | 600  
|                              |  |      |       |      |   |      
|                              |  | $    | 3,459 |      | $ | 2,341
|                              |  |      |       |      |   |      



|4. | DISCONTINUED OPERATIONS
|-- | -----------------------

In accordance
with the provisions of the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, the Joint Venture has classified the results of operations related to the office components of the Gartner Building,
which was sold on April 13, 2005, and 111 Southchase Boulevard, which was sold on May 23, 2007, as discontinued operations in the accompanying statements of operations. The details comprising income from discontinued operations are
presented below:



|                                    |  |      |   |      |   |      |  |   |          
|----------------------------------- |  | ---- | - | ---- | - | ---- |  | - | ---------
|                                    |  | 2009 |   | 2008 |   | 2007
|Rental income                       |  | $    | 0 |      | $ | 0    |  | $ | 267,937  
|Reimbursement income                |  |      | 0 |      |   | 0    |  |   | 512      
|Interest and other income           |  |      | 0 |      |   | 819  |  |   | 0        
|                                    |  |      |   |      |   |      |  |   |          
|Total revenues                      |  |      | 0 |      |   | 819  |  |   | 268,449  
|                                    |  |      |  
|Property operating costs            |  |      | 0 |      |   | 0    |  |   | 7,832    
|Management and leasing fees         |  |      | 0 |      |   | 0    |  |   | 12,134   
|Depreciation                        |  |      | 0 |      |   | 0    |  |   | 45,861   
|Amortization                        |  |      | 0 |      |   | 0    |  |   | 14,968   
|Bad debt expense                    |  |      | 0 |      |   | 0    |  |   | 512      
|General and administrative          |  |      | 0 |      |   | 502  |  |   | 20,802   
|                                    |  |      |   |      |   |      |  |   |          
|Total expenses                      |  |      | 0 |      |   | 502  |  |   | 102,109  
|                                    |  |      |   |      |   |      |  |   |          
|Operating income                    |  |      | 0 |      |   | 317  |  |   | 166,340  
|Gain on disposition                 |  |      | 0 |      |   | 0    |  |   | 1,977,731
|                                    |  |      |   |      |   |      |  |   |          
|Income from discontinued operations |  | $    | 0 |      | $ | 317  |  | $ | 2,144,071
|                                    |  |      |   |      |   |      |  |   |          



|5. | RENTAL INCOME
|-- | -------------

The future contractual
rental income due to the Joint Venture under noncancelable operating leases as of December 31, 2009 follows:



|                        |  |   |          
|----------------------- |  | - | ---------
|Year ended December 31: |  |   |          
|2010                    |  | $ | 1,146,070
|2011                    |  |   | 1,161,557
|2012                    |  |   | 1,002,828
|2013                    |  |   | 144,974  
|2014                    |  |   | 24,216   
|Thereafter              |  |   | 0        
|                        |  |   |          
|                        |  | $ | 3,479,645
|                        |  |   |          

Three tenants generated approximately 64%, 24% and 12% of contractual
rental income for the year ended December 31, 2009, and three tenants will generate approximately 60%, 23% and 17% of future contractual rental income.



Page F-66



---

##### Index to Financial Statements

THE WELLS FUND XI - FUND XII - REIT JOINT VENTURE

SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2009



|                      |  |              |      |              |                           |                                             |  |                |      |                                              |                           |                            |                         |                     |       |              |  |            |  |            |  |      |  |         
|--------------------- |  | ------------ | ---- | ------------ | ------------------------- | ------------------------------------------- |  | -------------- | ---- | -------------------------------------------- | ------------------------- | -------------------------- | ----------------------- | ------------------- | ----- | ------------ |  | ---------- |  | ---------- |  | ---- |  | --------
|                      |  | Encumbrances |      | Initial Cost |                           | CostsCapitalizedSubsequent ToAcquisition(b) |  | ImpairmentLoss |      | Gross Carrying Amount as of December 31,2009 |                           | AccumulatedDepreciation(c) |                         | Date ofConstruction |       | DateAcquired
|Description           |  |              | Land |              | Buildings andImprovements |                                             |  |                | Land |                                              | Buildings andImprovements |                            | Constructionin Progress |                     | Total |              |  |           
|THE 20/20 BUILDING(a) |  | None         |      | $1,696,000   |                           | $7,850,210                                  |  | $1,972,901     |      | $(3,678,136)                                 |                           | $1,766,667                 |                         | $6,074,308          |       | $0           |  | $7,840,975 |  | $2,965,676 |  | 1992 |  | 07/02/99



| | (a) | The 20/20 Building is a three-story office building located in Leawood, Kansas.
| | --- | -------------------------------------------------------------------------------



| | (b) | Includes acquisition and advisory fees and acquisition expense reimbursements applied at acquisition as well as write-offs of fully depreciated
capitalized costs.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Buildings, land improvements, building improvements, and tenant improvements are depreciated using the straight-line method over 40 years, 20 years,
5 to 25 years, and the shorter of the economic life or corresponding lease terms, respectively.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page F-67



---

##### Index to Financial Statements

THE WELLS FUND XI - FUND XII - REIT JOINT VENTURE

SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2009



|                             |  |      |            |   |                         |   |            |  
|---------------------------- |  | ---- | ---------- | - | ----------------------- | - | ---------- | -
|                             |  | Cost |            |   | AccumulatedDepreciation |  
|BALANCE AT DECEMBER 31, 2006 |  | $    | 15,381,931 |   |                         | $ | 3,432,913  |  
|                             |  |     
|Additions                    |  |      | 1,961,239  |   |                         |   | 265,448    |  
|Dispositions                 |  |      | (6,443,421 | ) |                         |   | (1,373,050 | )
|                             |  |      |            |   |                         |   |            |  
|BALANCE AT DECEMBER 31, 2007 |  |      | 10,899,749 |   |                         |   | 2,325,311  |  
|                             |  |     
|Additions                    |  |      | 391,044    |   |                         |   | 341,587    |  
|Impairments(1)               |  |      | (3,678,136 | ) |                         |   | 0          |  
|                             |  |      |            |   |                         |   |            |  
|BALANCE AT DECEMBER 31, 2008 |  |      | 7,612,657  |   |                         |   | 2,666,898  |  
|                             |  |     
|Additions                    |  |      | 228,318    |   |                         |   | 298,778    |  
|Dispositions                 |  |      | 0          |   |                         |   | 0          |  
|                             |  |      |            |   |                         |   |            |  
|BALANCE AT DECEMBER 31, 2009 |  | $    | 7,840,975  |   |                         | $ | 2,965,676  |  
|                             |  |      |            |   |                         |   |            |  



| | (1) | As of
September 30, 2008, The Wells Fund XI-Fund XII-REIT Joint Venture wrote down the basis of the 20/20 Building to reduce the carrying value of the property to its estimated fair value as a result of management refining its strategy for
the disposition of this building.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page F-68



---

##### Index to Financial Statements

EXHIBIT INDEX

TO

2009 FORM 10-K

OF

WELLS
REAL ESTATE FUND XI, L.P.

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



|              |     |  |                                                                                                                                                                                                                                                                                                                                                                                        
|------------- | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |     |  | Description of Document                                                                                                                                                                                                                                                                                                                                                                
|              |    
|*3            | (a) |  | Amended and Restated Agreement of Limited Partnership of Wells Real Estate Fund XI, L.P. (Exhibit 3(a) to Form S-11 Registration Statement of Wells Real Estate Fund X, L.P. and
Wells Real Estate Fund XI, L.P., Commission File No. 333-7979)                                                                                                                                        
|              |    
|*3            | (b) |  | Certificate of Limited Partnership of Wells Real Estate Fund XI, L.P. (Exhibit 3(c) to Form S-11 Registration Statement of Wells Real Estate Fund X, L.P. and Wells Real Estate
Fund XI, L.P., Commission File No. 333-7979)                                                                                                                                                           
|              |    
|*10           | (a) |  | Leasing and Tenant Coordinating Agreement with Wells Management Company, Inc. (Exhibit 10(d) to Form S-11 Registration Statement of Wells Real Estate Fund X, L.P. and Wells Real
Estate Fund XI, L.P., Commission File No. 333-7979)                                                                                                                                                  
|              |    
|*10           | (b) |  | Management Agreement with Wells Management Company, Inc. (Exhibit 10(e) to Form S-11 Registration Statement of Wells Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.,
Commission File No. 333-7979)                                                                                                                                                                       
|              |    
|*10           | (c) |  | Custodial Agency Agreement with The Bank of New York (Exhibit 10(f) to Form S-11 Registration Statement of Wells Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.,
CommissionFile No. 333-7979)                                                                                                                                                                            
|              |    
|*10           | (d) |  | Joint Venture Agreement of Fund IX and Fund X Associates dated March 20, 1997 (Exhibit 10(g) to Post-Effective Amendment No. 1 to Form S-11 Registration Statement of Wells Real
Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P., Commission File No. 333-7979)                                                                                                                
|              |    
|*10           | (e) |  | Lease Agreement for the ABB Building dated December 10, 1996, between Wells Real Estate Fund IX, L.P. and ABB Flakt, Inc. (Exhibit 10(kk) to Post-Effective Amendment No. 13
to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., Commission File No. 33-83852)                                                               
|              |    
|*10           | (f) |  | Development Agreement relating to the ABB Building dated December 10, 1996, between Wells Real Estate Fund IX, L.P. and ADEVCO Corporation (Exhibit 10(ll) to Post-Effective
Amendment No. 13 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., Commission File No. 33-83852)                                              
|              |    
|*10           | (g) |  | Owner-Contractor Agreement relating to the ABB Building dated November 1, 1996, between Wells Real Estate Fund IX, L.P. and Integra Construction, Inc. (Exhibit 10(mm) to
Post-Effective Amendment No. 13 to Form S-11 Registration Statement of Wells Real Estate Fund VIII, L.P. and Wells Real Estate Fund IX, L.P., Commission File No. 33-83852)                                  
|              |    
|*10           | (h) |  | Agreement for the Purchase and Sale of Real Property relating to the Lucent Technologies Building dated May 30, 1997, between Fund IX and Fund X Associates and Wells
Development Corporation (Exhibit 10(k) to Post-Effective Amendment No. 2 to Form S-11 Registration Statement of Wells Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P., Commission File No. 333-7979)
|              |    
|*10           | (i) |  | Net Lease Agreement for the Lucent Technologies Building dated May 30, 1997 (Exhibit 10(l) to Post-Effective Amendment No. 2 to Form S-11 Registration Statement of Wells Real
Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P., Commission File No. 333-7979)                                                                                                                  



---

##### Index to Financial Statements

|              |     |  |                                                                                                                                                                                                                                                                                                                                              
|------------- | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |     |  | Description of Document                                                                                                                                                                                                                                                                                                                      
|              |    
|*10           | (j) |  | Development Agreement relating to the Lucent Technologies Building dated May 30, 1997, between Wells Development Corporation and ADEVCO Corporation (Exhibit 10(m) to
Post-Effective Amendment No. 2 to Form S-11 Registration Statement of Wells Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P., Commission File No. 333-7979)
|              |    
|*10           | (k) |  | First Amendment to Net Lease Agreement for the Lucent Technologies Building dated March 30, 1998 (Exhibit 10.10(a) to Form S-11 Registration Statement of Wells Real Estate
Investment Trust, Inc., Commission File No. 333-32099)                                                                                                           
|              |    
|*10           | (l) |  | Amended and Restated Joint Venture Agreement of The Fund IX, Fund X, Fund XI and REIT Joint Venture dated July 11, 1998 (Exhibit 10.4 to Form S-11 Registration Statement of
Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                                                                                        
|              |    
|*10           | (m) |  | Agreement for the Purchase and Sale of Real Property relating to the Ohmeda Building dated November 14, 1997 between Lincor Centennial, Ltd. and Wells Real Estate Fund X, L.P.
(Exhibit 10.6 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                                
|              |    
|*10           | (n) |  | Agreement for the Purchase and Sale of Property relating to the 360 Interlocken Building dated February 11, 1998 between Orix Prime West Broomfield Venture and Wells Development
Corporation (Exhibit 10.7 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                  
|              |    
|*10           | (o) |  | Purchase and Sale Agreement relating to the Iomega Building dated February 4, 1998 with SCI Development Services Incorporated (Exhibit 10.11 to Form S-11 Registration Statement
of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                                                                                 
|              |    
|*10           | (p) |  | Lease Agreement for the Iomega Building dated April 9, 1996 (Exhibit 10.12 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No.
333-32099)                                                                                                                                                   
|              |    
|*10           | (q) |  | Agreement for the Purchase and Sale of Property relating to the Fairchild Building dated June 8, 1998 (Exhibit 10.13 to Form S-11 Registration Statement of Wells Real Estate
Investment Trust, Inc., Commission File No. 333-32099)                                                                                                         
|              |    
|*10           | (r) |  | Restatement of and First Amendment to Agreement for the Purchase and Sale of Property relating to the Fairchild Building dated July 1, 1998 (Exhibit 10.14 to Form S-11
Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                                                                   
|              |    
|*10           | (s) |  | Joint Venture Agreement of Wells/Fremont Associates (the Fremont Joint Venture) dated July 15, 1998 between Wells Development Corporation and Wells Operating
Partnership, L.P. (Exhibit 10.17 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., CommissionFile No. 333-32099)                              
|              |    
|*10           | (t) |  | Joint Venture Agreement of Fund X and Fund XI Associates dated July 15, 1998 (Exhibit 10.18 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc.,
CommissionFile No. 333-32099)                                                                                                                                   
|              |    
|*10           | (u) |  | Agreement for the Purchase and Sale of Joint Venture Interest relating to the Fremont Joint Venture dated July 17, 1998 between Wells Development Corporation and Fund X and Fund
XI Associates (Exhibit 10.19 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)               
|              |    
|*10           | (v) |  | Lease Agreement for the Fairchild Building dated September 19, 1997 between the Fremont Joint Venture (as successor in interest by assignment) and Fairchild Technologies
USA, Inc.(Exhibit 10.20 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                            



---

##### Index to Financial Statements

|              |      |  |                                                                                                                                                                                                                                                                                                                                                                                           
|------------- | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |      |  | Description of Document                                                                                                                                                                                                                                                                                                                                                                   
|              |     
|*10           | (w)  |  | First Amendment to Joint Venture Agreement of Wells/Fremont Associates dated October 8, 1998 (Exhibit 10(w) to Form 10-K of Wells Real Estate Fund X, L.P. for the fiscal year
ended December 31, 1998, Commission File No. 0-23719)                                                                                                                                                      
|              |     
|*10           | (x)  |  | Purchase and Sale Agreement and Joint Escrow Instructions relating to the Cort Furniture Building dated June 12, 1998 between the Cort Joint Venture (as successor in interest by
assignment) and Spencer Fountain Valley Holdings, Inc. (Exhibit 10.21 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                   
|              |     
|*10           | (y)  |  | First Amendment to Purchase and Sale Agreement and Joint Escrow Instructions relating to the Cort Furniture Building dated July 16, 1998 between the Cort Joint Venture (as
successor in interest by assignment) and Spencer Fountain Valley Holdings, Inc. (Exhibit 10.22 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)
|              |     
|*10           | (z)  |  | Joint Venture Agreement of Wells/Orange County Associates (the Cort Joint Venture) dated July 27, 1998 between Wells Development Corporation and Wells Operating
Partnership, L.P. (Exhibit 10.25 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                                                                       
|              |     
|*10           | (aa) |  | Agreement for the Purchase and Sale of Joint Venture Interest relating to the Cort Joint Venture dated July 30, 1998 between Wells Development Corporation and Fund X and Fund XI
Associates (Exhibit 10.26 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                                                               
|              |     
|*10           | (bb) |  | First Amendment to Joint Venture Agreement of Wells/Orange County Associates dated September 1, 1998 (Exhibit 10(dd) to Form 10-K of Wells Real Estate Fund X, L.P. for the
fiscal year ended December 31, 1998, Commission File No. 0-23719)                                                                                                                                             
|              |     
|*10           | (cc) |  | Temporary Lease Agreement for remainder of the ABB Building dated September 10, 1998 between the IX-X-XI-REIT Joint Venture and Associates Housing Finance, LLC (Exhibit 10.35 to
Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No. 333-32099)                                                                                            
|              |     
|*10           | (dd) |  | Amended and Restated Joint Venture Partnership Agreement of The Wells Fund XI  Fund XII  REIT Joint Venture (Exhibit 10.28 to Form S-11 Registration Statement of
Wells Real Estate Investment Trust, Inc., Commission File No. 333-83933)                                                                                                                                              
|              |     
|*10           | (ee) |  | Agreement of Sale and Purchase relating to the EYBL CarTex Building (Exhibit 10.54 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission
File No. 333-32099)                                                                                                                                                                                        
|              |     
|*10           | (ff) |  | Agreement of Purchase and Sale for the Sprint Building (Exhibit 10.5 to Form S-11 Registration Statement of Wells Real Estate Fund XII, L.P., Commission File No.
33-66657)                                                                                                                                                                                                               
|              |     
|*10           | (gg) |  | Agreement of Sale and Purchase for the Johnson Matthey Building (Exhibit 10.6 to Form S-11 Registration Statement of Wells Real Estate Fund XII, L.P., Commission File No.
33-66657)                                                                                                                                                                                                      
|              |     
|*10           | (hh) |  | Fifth Amendment to Lease for the Johnson Matthey Building (Exhibit 10.7 to Form S-11 Registration Statement of Wells Real Estate Fund XII, L.P., Commission File No. 33-66657)                                                                                                                                                                                                            
|              |     
|*10           | (ii) |  | Agreement of Purchase and Sale relating to the Gartner Building (Exhibit 10.63 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File
No. 333-32009)                                                                                                                                                                                            
|              |     
|*10           | (jj) |  | Lease Agreement for the Gartner Building (Exhibit 10.64 to Form S-11 Registration Statement of Wells Real Estate Investment Trust, Inc., Commission File No.
333-32099)                                                                                                                                                                                                                   
|              |     
|*10           | (kk) |  | Purchase and Sale Agreement relating to the sale of the Cort Building (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund X, L.P. for the quarter ended September 30, 2003,
CommissionFile No. 0-23719)                                                                                                                                                                                  



---

##### Index to Financial Statements

|              |      |  |                                                                                                                                                                                                                                                                                                  
|------------- | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |      |  | Description of Document                                                                                                                                                                                                                                                                          
|              |     
|*10           | (ll) |  | Lease Agreement with Alstom Power, Inc. for the Alstom Power  Knoxville Building (Exhibit 10.2 to Form 10-Q of Wells Real Estate Fund IX, L.P. for the quarter ended
September 30, 2004, Commission File No. 0-22039)                                                                           
|              |     
|*10           | (mm) |  | Purchase and Sale Agreement for the Johnson Matthey Building (Exhibit 10.2 to Form 10-Q ofWells Real Estate Fund XI, L.P. for the quarter ended September 30, 2004,
CommissionFile No. 0-25731)                                                                                                  
|              |     
|*10           | (nn) |  | First Amendment to Lease Agreement with Gartner, Inc. for the Gartner Building (Exhibit 10.3 to Form 10-Q of Wells Real Estate Fund XI, L.P. for the quarter ended September 30,
2004, Commission File No. 0-25731)                                                                              
|              |     
|*10           | (oo) |  | Purchase and Sale Agreement for the sale of the Alstom Power  Knoxville Building (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund IX, L.P. for the quarter ended March
31, 2005, Commission File No. 0-22039)                                                                               
|              |     
|*10           | (pp) |  | Purchase and Sale Agreement for the sale of the Gartner Building (Exhibit 10.70 to Form 10-Q of Wells Real Estate Investment Trust, Inc. for the quarter ended March 31, 2005,
Commission File No. 0-25739)                                                                                      
|              |     
|*10           | (qq) |  | Lease Agreement with Caterpillar, Inc. for the 111 Southchase Boulevard Building (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund XI, L.P. for the quarter ended
September 30, 2006, Commission File No. 0-25731)                                                                            
|              |     
|*10           | (rr) |  | Purchase and Sale Agreement for the sale of the 1315 West Century Drive Building (Exhibit 10(uu) to Form 10-K of Wells Real Estate Fund IX, L.P. for the fiscal year ended
December 31, 2006, Commission File No. 0-22039)                                                                       
|              |     
|*10           | (ss) |  | Purchase and Sale Agreement for the sale of the Iomega Building (Exhibit 10(vv) to Form 10-K of Wells Real Estate Fund IX, L.P. for the fiscal year ended December 31, 2006,
Commission File No. 0-22039)                                                                                        
|              |     
|*10           | (tt) |  | Lease Agreement with The EPOCH Group, L.C. for a portion of the 20/20 Building (Exhibit to Form 10-K of Wells Real Estate Fund XI, L.P. for the fiscal year ended December
31, 2006, Commission File No. 0-25731)                                                                                
|              |     
|*10           | (uu) |  | Lease Agreement with Blue Cross and Blue Shield of Kansas City for a portion of the 20/20 Building (Exhibit to Form 10-K of Wells Real Estate Fund XI, L.P. for the fiscal year
ended December 31, 2006, Commission File No. 0-25731)                                                            
|              |     
|*10           | (vv) |  | Guaranty Agreement by Blue Cross and Blue Shield of Kansas City relating to the lease agreement with The EPOCH Group, L.C. for a portion of the 20/20 Building (Exhibit to Form
10-K of Wells Real Estate Fund XI, L.P. for the fiscal year ended December 31, 2006, Commission File No. 0-25731)
|              |     
|*10           | (ww) |  | Purchase and Sale Agreement for the sale of the 111 Southcase Boulevard Building (Exhibit 10.2 to Form 10-Q of Wells Real Estate Fund XI, L.P. for the quarter ended March 31,
2007, Commission File No. 0-25731)                                                                                
|              |     
|*10           | (xx) |  | Reinstatement of and Fifth Amendment to Purchase and Sale Agreement for the sale of the 111 Southcase Boulevard Building (Exhibit 10.3 to Form 10-Q of Wells Real Estate Fund
XI, L.P. for the quarter ended March 31, 2007, Commission File No. 0-25731)                                        
|              |     
|*10           | (yy) |  | Second Amendment to Net Lease Agreement with Avaya, Inc. for the Avaya Building (Exhibit 10(xx) to Form 10-K of Wells Real Estate Fund IX, L.P. for the fiscal year ended December
31, 2007, Commission File No. 0-22039)                                                                        
|              |     
|*10           | (zz) |  | Third Amendment to Net Lease Agreement with Avaya, Inc. for the Avaya Building (Exhibit 10.1 to Form 10-Q of Wells Real Estate Fund IX, L.P. for the quarter ended September 30,
2009, Commission File No. 0-22039)                                                                              



---

##### Index to Financial Statements

|              |  |                                                                                                                               
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                                                                                       
|              | 
|31.1          |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                        
|              | 
|31.2          |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                        
|              | 
|32.1          |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002