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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)



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

For the quarterly period ended March 31, 2007 or



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

For the transition period from
 to

Commission file number 0-27888



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WELLS REAL ESTATE FUND VIII, L.P.

(Exact name of registrant as specified in
its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Georgia                                                        |  | 58-2126618                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|6200 The Corners Pkwy., Norcross, Georgia                      |  | 30092-3365                             
|(Address of principal executive offices)                       |  | (Zip Code)                             
|                                                               | 
|Registrants telephone number, including area code             |  | (770) 449-7800                         

N/A

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

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

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

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

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



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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q of Wells Real Estate Fund VIII, 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-Q, and we do not intend to
publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking
statements are subject to unknown risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are
difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide
distributions to partners, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A. in the Partnerships Annual Report on Form 10-K for the year ended December 31, 2006 for a discussion of some
of the risks and uncertainties, although not all risks and uncertainties, which could cause actual results to differ materially from those presented in our forward-looking statements.



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WELLS REAL ESTATE FUND VIII, L.P.



TABLE OF CONTENTS



|         |  |                       |  |                                                                                                                            |  |         
|-------- |  | --------------------- |  | -------------------------------------------------------------------------------------------------------------------------- |  | --------
|         |  |                       |  |                                                                                                                            |  | Page No.
|         |  |                      
|PART I.  |  | FINANCIAL INFORMATION |  |                                                                                                                           
|         |  |                       | 
|         |  | Item 1.               |  | Financial Statements:                                                                                                      |  |         
|         |  |                       | 
|         |  |                       |  | Balance Sheets  March 31, 2007 (unaudited) and December 31, 2006                                                          |  | 5       
|         |  |                       | 
|         |  |                       |  | Statements of Operations for the Three Months Ended March 31, 2007 (unaudited) and 2006 (unaudited)                        |  | 6       
|         |  |                       | 
|         |  |                       |  | Statements of Partners Capital for the Year Ended December 31, 2006 and the Three Months Ended March 31, 2007 (unaudited) |  | 7       
|         |  |                       | 
|         |  |                       |  | Statements of Cash Flows for the Three Months Ended March 31, 2007 (unaudited) and 2006 (unaudited)                        |  | 8       
|         |  |                       | 
|         |  |                       |  | Condensed Notes to Financial Statements (unaudited)                                                                        |  | 9       
|         |  |                       | 
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                      |  | 15      
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                 |  | 21      
|         |  |                       | 
|         |  | Item 4.               |  | Controls and Procedures                                                                                                    |  | 21      
|         |  |                      
|PART II. |  | OTHER INFORMATION     |  |                                                                                                                           
|         |  |                       | 
|         |  | Item 1.               |  | Legal Proceedings                                                                                                          |  | 21      
|         |  |                       | 
|         |  | Item 1A.              |  | Risk Factors                                                                                                               |  | 22      
|         |  |                       | 
|         |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                |  | 22      
|         |  |                       | 
|         |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                            |  | 22      
|         |  |                       | 
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                        |  | 22      
|         |  |                       | 
|         |  | Item 5.               |  | Other Information                                                                                                          |  | 22      
|         |  |                       | 
|         |  | Item 6.               |  | Exhibits                                                                                                                   |  | 22      



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|PART I. | FINANCIAL INFORMATION
|------- | ---------------------



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

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

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



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WELLS REAL ESTATE FUND VIII, L.P.



BALANCE SHEETS

ASSETS



|                             |  |                            |           |                   |   |          
|---------------------------- |  | -------------------------- | --------- | ----------------- | - | ---------
|                             |  | (Unaudited) March 31, 2007 |           | December 31, 2006
|Investment in joint ventures |  | $                          | 8,729,320 |                   | $ | 9,009,067
|Cash and cash equivalents    |  |                            | 856,087   |                   |   | 797,590  
|Due from joint ventures      |  |                            | 160,329   |                   |   | 11,881   
|Other assets                 |  |                            | 7,542     |                   |   | 5,651    
|                             |  |                            |           |                   |   |          
|Total assets                 |  | $                          | 9,753,278 |                   | $ | 9,824,189
|                             |  |                            |           |                   |   |          

LIABILITIES AND PARTNERS CAPITAL



|                                                 |  |   |           |  |   |          
|------------------------------------------------ |  | - | --------- |  | - | ---------
|LIABILITIES:                                     |  |   |           |  |   |          
|Accounts payable and accrued expenses            |  | $ | 49,870    |  | $ | 74,553   
|Due to affiliates                                |  |   | 16,969    |  |   | 7,938    
|Partnership distributions payable                |  |   | 135,427   |  |   | 150,840  
|                                                 |  |   |           |  |   |          
|Total liabilities                                |  |   | 202,266   |  |   | 233,331  
|                                                 |  |  
|PARTNERS CAPITAL:                               |  |   |           |  |   |          
|Limited partners:                                |  |   |           |  |   |          
|Class A  2,952,679 units issued and outstanding |  |   | 8,924,375 |  |   | 8,884,331
|Class B  250,590 units issued and outstanding   |  |   | 625,059   |  |   | 704,268  
|General partners                                 |  |   | 1,578     |  |   | 2,259    
|                                                 |  |   |           |  |   |          
|Total partners capital                          |  |   | 9,551,012 |  |   | 9,590,858
|                                                 |  |   |           |  |   |          
|Total liabilities and partners capital          |  | $ | 9,753,278 |  | $ | 9,824,189
|                                                 |  |   |           |  |   |          

See accompanying notes.



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WELLS REAL ESTATE FUND VIII, L.P.



STATEMENTS OF OPERATIONS



|                                                             |  |                                          |           |   |      |   |           |  
|------------------------------------------------------------ |  | ---------------------------------------- | --------- | - | ---- | - | --------- | -
|                                                             |  | (Unaudited) Three Months Ended March 31, |          
|                                                             |  | 2007                                     |           |   | 2006 |  
|                                                             |  |                                         
|EQUITY IN INCOME OF JOINT VENTURES                           |  | $                                        | 132,026   |   |      | $ | 455,692   |  
|                                                             |  |                                         
|EXPENSES:                                                    |  |                                          |           |   |      |   |           |  
|General and administrative                                   |  |                                          | 49,573    |   |      |   | 63,471    |  
|                                                             |  |                                         
|INTEREST AND OTHER INCOME                                    |  |                                          | 13,128    |   |      |   | 54,341    |  
|                                                             |  |                                          |           |   |      |   |           |  
|NET INCOME                                                   |  | $                                        | 95,581    |   |      | $ | 446,562   |  
|                                                             |  |                                          |           |   |      |   |           |  
|                                                             |  |                                         
|NET INCOME (LOSS) ALLOCATED TO:                              |  |                                          |           |   |      |   |           |  
|CLASS A LIMITED PARTNERS                                     |  | $                                        | 175,471   |   |      | $ | 580,477   |  
|                                                             |  |                                          |           |   |      |   |           |  
|CLASS B LIMITED PARTNERS                                     |  | $                                        | (79,209   | ) |      | $ | (135,681  | )
|                                                             |  |                                          |           |   |      |   |           |  
|GENERAL PARTNERS                                             |  | $                                        | (681      | ) |      | $ | 1,766     |  
|                                                             |  |                                          |           |   |      |   |           |  
|                                                             |  |                                         
|NET INCOME (LOSS) PER WEIGHTED-AVERAGE LIMITED PARTNER UNIT: |  |                                          |           |   |      |   |           |  
|CLASS A                                                      |  |                                          | $ 0.06    |   |      |   | $ 0.20    |  
|                                                             |  |                                          |           |   |      |   |           |  
|CLASS B                                                      |  |                                          | $(0.32    | ) |      |   | $(0.54    | )
|                                                             |  |                                          |           |   |      |   |           |  
|                                                             |  |                                         
|WEIGHTED-AVERAGE LIMITED PARTNER UNITS OUTSTANDING:          |  |                                          |           |   |      |   |           |  
|CLASS A                                                      |  |                                          | 2,952,679 |   |      |   | 2,951,279 |  
|                                                             |  |                                          |           |   |      |   |           |  
|CLASS B                                                      |  |                                          | 250,590   |   |      |   | 251,990   |  
|                                                             |  |                                          |           |   |      |   |           |  

See accompanying notes.



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WELLS REAL ESTATE FUND VIII, L.P.



STATEMENTS OF PARTNERS CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2006

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



|                                                                                                                     |  |                  |  |        |                  |   |       |                         |   |        |   |          |   |  |   |       |   |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------- |  | ---------------- |  | ------ | ---------------- | - | ----- | ----------------------- | - | ------ | - | -------- | - |  | - | ----- | - |  | - | ---------- | -
|                                                                                                                     |  | Limited Partners |  |        | General Partners |   |       | Total Partners Capital |  
|                                                                                                                     |  | Class A          |  |        | Class B          |   |       |                        
|                                                                                                                     |  | Units            |  | Amount |                  |   | Units |                         |   | Amount |   |          |  
|BALANCE, December 31, 2005                                                                                           |  | 2,950,600        |  | $      | 15,061,403       |   |       | 252,669                 |   |        | $ | 931,016  |   |  | $ | 0     |   |  | $ | 15,992,419 |  
|                                                                                                                     |  |                  |  |        |                  |  
|Class B conversion elections                                                                                         |  | 2,079            |  |        | 8,493            |   |       | (2,079                  | ) |        |   | (8,493   | ) |  |   | 0     |   |  |   | 0          |  
|Net income                                                                                                           |  | 0                |  |        | 2,713,239        |   |       | 0                       |   |        |   | 525,662  |   |  |   | 2,259 |   |  |   | 3,241,160  |  
|Distributions of operating cash flow($0.29 per weighted-average Class A Unit)                                        |  | 0                |  |        | (842,720         | ) |       | 0                       |   |        |   | 0        |   |  |   | 0     |   |  |   | (842,720   | )
|Distributions of net sale proceeds($2.73 and $2.96 per weighted-average Class A Unit and Class B Unit,
respectively) |  | 0                |  |        | (8,056,084       | ) |       | 0                       |   |        |   | (743,917 | ) |  |   | 0     |   |  |   | (8,800,001 | )
|                                                                                                                     |  |                  |  |        |                  |   |       |                         |   |        |   |          |   |  |   |       |   |  |   |            |  
|BALANCE, December 31, 2006                                                                                           |  | 2,952,679        |  |        | 8,884,331        |   |       | 250,590                 |   |        |   | 704,268  |   |  |   | 2,259 |   |  |   | 9,590,858  |  
|                                                                                                                     |  |                  |  |        |                  |  
|Net income (loss)                                                                                                    |  | 0                |  |        | 175,471          |   |       | 0                       |   |        |   | (79,209  | ) |  |   | (681  | ) |  |   | 95,581     |  
|Distributions of operating cash flow($0.05 per weighted-average Class A Unit)                                        |  | 0                |  |        | (135,427         | ) |       | 0                       |   |        |   | 0        |   |  |   | 0     |   |  |   | (135,427   | )
|                                                                                                                     |  |                  |  |        |                  |   |       |                         |   |        |   |          |   |  |   |       |   |  |   |            |  
|BALANCE, March 31, 2007                                                                                              |  | 2,952,679        |  | $      | 8,924,375        |   |       | 250,590                 |   |        | $ | 625,059  |   |  | $ | 1,578 |   |  | $ | 9,551,012  |  
|                                                                                                                     |  |                  |  |        |                  |   |       |                         |   |        |   |          |   |  |   |       |   |  |   |            |  

See accompanying notes.



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WELLS REAL ESTATE FUND VIII, L.P.



STATEMENTS OF CASH FLOWS



|                                                                                            |  |                                |          |   |      |   |           |  
|------------------------------------------------------------------------------------------- |  | ------------------------------ | -------- | - | ---- | - | --------- | -
|                                                                                            |  | (Unaudited) Three Months Ended |         
|                                                                                            |  | March 31,                      |         
|                                                                                            |  | 2007                           |          |   | 2006 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |  |                                |          |   |      |   |           |  
|Net income                                                                                  |  | $                              | 95,581   |   |      | $ | 446,562   |  
|Operating distributions received from joint ventures                                        |  |                                | 25,783   |   |      |   | 228,083   |  
|Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |                                |          |   |      |   |           |  
|Equity in income of joint ventures                                                          |  |                                | (132,026 | ) |      |   | (455,692  | )
|Changes in assets and liabilities:                                                          |  |                                |          |   |      |   |           |  
|Increase in other assets                                                                    |  |                                | (1,891   | ) |      |   | (19,500   | )
|Decrease in accounts payable and accrued expenses                                           |  |                                | (24,683  | ) |      |   | (20,008   | )
|Increase (decrease) in due to affiliates                                                    |  |                                | 9,031    |   |      |   | (2,403    | )
|                                                                                            |  |                                |          |   |      |   |           |  
|Net cash (used in) provided by operating activities                                         |  |                                | (28,205  | ) |      |   | 177,042   |  
|                                                                                            |  |                               
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |  |                                |          |   |      |   |           |  
|Net sale proceeds received from joint ventures                                              |  |                                | 237,542  |   |      |   | 21,438    |  
|                                                                                            |  |                               
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |  |                                |          |   |      |   |           |  
|Operating distributions paid to limited partners                                            |  |                                | (150,840 | ) |      |   | (173,471  | )
|                                                                                            |  |                                |          |   |      |   |           |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                                   |  |                                | 58,497   |   |      |   | 25,009    |  
|                                                                                            |  |                               
|CASH AND CASH EQUIVALENTS, beginning of period                                              |  |                                | 797,590  |   |      |   | 5,528,409 |  
|                                                                                            |  |                                |          |   |      |   |           |  
|CASH AND CASH EQUIVALENTS, end of period                                                    |  | $                              | 856,087  |   |      | $ | 5,553,418 |  
|                                                                                            |  |                                |          |   |      |   |           |  
|                                                                                            |  |                               
|SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:                     |  |                                |          |   |      |   |           |  
|Partnership distributions payable                                                           |  | $                              | 135,427  |   |      | $ | 269,898   |  
|                                                                                            |  |                                |          |   |      |   |           |  

See accompanying notes.



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WELLS REAL ESTATE FUND VIII, L.P.



CONDENSED NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2007 (unaudited)



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

Wells Real Estate Fund VIII, 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,
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 August 15, 1994 for the purpose of acquiring, developing, owning, operating, improving, leasing,
and otherwise 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. 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. 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 January 6, 1995, the
Partnership commenced a public offering of up to $35,000,000 of Class A or Class B limited partnership units ($10 per unit) pursuant to a Registration Statement on Form S-11 filed under the Securities Act of 1933. The Partnership commenced
active operations upon receiving and accepting subscriptions for 125,000 units on February 24, 1995. The offering was terminated on January 4, 1996, at which time the Partnership had sold approximately 2,613,534 Class A Units and
590,735 Class B Units representing capital contributions of $32,042,689.

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



|                                                                           |  |                                                                                                             |  |                                                                                                                                                                                          
|-------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint Venture                                                              |  | Joint Venture Partners                                                                                      |  | Properties                                                                                                                                                                               
|                                                                           |  |                                                                                                            
|Fund VI, Fund VII and Fund VIII Associates (Fund VI-VII-VIII Associates) |  |   Wells Real Estate Fund VI, L.P.   Wells Real Estate Fund VII, L.P.   Wells Real Estate Fund VIII, L.P. |  | 1. BellSouth Building(1) A four-story office building
located in Jacksonville, Florida  2. Tanglewood Commons(2) A retail center in Clemmons, North Carolina, and four outparcels of land
|                                                                           |  |                                                                                                            
|Fund VII and Fund VIII Associates (Fund VII-VIII Associates)(3)          |  |   Wells Real Estate Fund VII, L.P.
  Wells Real Estate Fund VIII, L.P.                                    |  | 3. CH2M Hill Building(4) An office building located in
Gainesville, Florida                                                                                                              



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|                                                                    |  |                                                                         |  |                                                                                                                                                                                                                                                                                                               
|------------------------------------------------------------------- |  | ----------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint Venture                                                       |  | Joint Venture Partners                                                  |  | Properties                                                                                                                                                                                                                                                                                                    
|Fund VIII and Fund IX Associates (Fund VIII-IX Associates)        |  |   Wells Real Estate Fund VIII, L.P.
  Wells Real Estate Fund IX, L.P. |  | 4. US Cellular Building A four-story office building located in Madison, Wisconsin  5. 14079 Senlac Drive (formerly known as the AT&T  Texas Building) A one-story office building located in Farmers Branch, Texas  6. 305 Interlocken Parkway A two-story office building located in Broomfield, Colorado
|Fund VIII-IX-REIT Joint Venture (Fund VIII-IX-REIT Associates)(3) |  |   Fund VIII-IX Associates   Wells Operating Partnership, L.P.         |  | No properties owned during the periods presented.                                                                                                                                                                                                                                                             



| | (1) | This property was sold in May
2006.
| | --- | -----------------------------------



| | (2) | One outparcel of land was
sold in October 2002; the shopping center and one outparcel of land was sold in April 2005; a portion of an outparcel of land was condemned by the North Carolina Department of Transportation in October 2005; and the two remaining outparcels of land
were sold in January 2007.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | These joint ventures were
liquidated in 2007.
| | --- | ---------------------------------------------



| | (4) | This property was sold in
December 2005.
| | --- | ----------------------------------------

Wells Real Estate Fund VI, L.P., Wells Real Estate Fund VII, L.P., and Wells Real Estate Fund IX, L.P. are affiliated
with the Partnership through common general partners. Each of the properties described above was acquired on an all-cash basis. For further information regarding the Joint Ventures and foregoing properties, refer to the Partnerships Annual
Report on Form 10-K for the year ended December 31, 2006.

On May 15, 2006, Fund VI-VII-VIII Associates and another Wells-affiliated joint
venture sold the BellSouth Building and a second office property owned by the other Wells-affiliated joint venture to an unaffiliated third party for an aggregate gross sales price of $24,000,000, less agreed-upon credits of approximately $228,000.
As a result of the sale, the Partnership received net sale proceeds of approximately $4,157,000 and was allocated a gain of approximately $2,176,000.

On
January 31, 2007, Fund VI-VII-VIII Associates sold the two remaining outparcels of land at Tanglewood Commons to Wells Management Company, Inc. (Wells Management), an affiliate of our General Partners, for a gross sale price of
$750,000 after seeking the consent of the limited partners to the transaction. As a result of the sale, the Partnership received net sale proceeds of approximately $238,000 and was allocated a gain of approximately $28,000.



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

Basis of
Presentation

The financial statements of the Partnership have been prepared in accordance with the rules and regulations of the Securities and Exchange
Commission (SEC), including the instructions to Form 10-Q and Article 10 of Regulation S-X, and in accordance with such rules and regulations, do not include all of the information and footnotes required by U.S. generally accepted
accounting principles (GAAP) for complete financial statements. In the opinion of the General Partners, the statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and
necessary to fairly and consistently present the results



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for these periods. Results for interim periods are not necessarily indicative of full-year results. For further information, refer to the financial
statements and footnotes included in the Partnerships Annual Report on Form 10-K for the year ended December 31, 2006.

Investment in
Joint Ventures

The Partnership has evaluated the Joint Ventures and concluded that none are variable interest entities under the provisions of
Financial Accounting Standards Board Interpretation (FIN) No. 46(R), Consolidation of Variable Interest Entities, which supersedes FIN No. 46 and is an interpretation of Accounting Research Bulletin (ARB)
No. 51, Consolidated Financial Statements. 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, upon applying the provisions of Statement of Financial Accounting Standard (SFAS)
No. 94, Consolidation of All Majority-Owned Subsidiaries, ARB No. 51, and Statement of Position No. 78-9, Accounting for Investments In Real Estate Ventures, 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.

Other Assets

As of March 31, 2007 and December 31, 2006, other assets is comprised of the following items:



|                            |  |               |       |                  |   |      
|--------------------------- |  | ------------- | ----- | ---------------- | - | -----
|                            |  | March 31,2007 |       | December 31,2006
|Interest income receivable  |  | $             | 3,826 |                  | $ | 3,595
|Insurance refund receivable |  |               | 3,716 |                  |   | 2,056
|                            |  |               |       |                  |   |      
|Total                       |  | $             | 7,542 |                  | $ | 5,651
|                            |  |               |       |                  |   |      

Distributions of Net Cash from Operations

Net cash from operations, if available, is generally distributed to limited partners quarterly. In accordance with the partnership agreement, such distributions are paid first to the limited partners holding
Class A Units until they have received a 10% per annum return on their respective net capital contributions, as defined. Then, such distributions are paid to the General Partners until they have received 10% of the total amount distributed
to date. Any remaining cash from operations is to be allocated between the limited partners holding Class A Units and the General Partners on a basis of 90% and 10%, respectively. No cash distributions will be made to the limited partners
holding Class B Units.

Distribution of Sale Proceeds

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



| |  |  | In the event that the particular property sold is sold for a price 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 each limited partner has received an amount necessary to equal the
net cash available for distribution previously received by the limited partners holding Class A Units on a per-unit basis;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | To all limited partners on a per-unit basis until they 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 they have received an amount equal to their respective preferential limited partners returns (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 respective capital contributions; in the event that the limited partners have received aggregate cash
distributions from the Partnership over the life of their respective investments in excess of a return of their respective net capital contributions, plus the preferential limited partner return, the General Partners shall receive an additional sum
equal to 25% of such excess; 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 is generally allocated each year in the same proportions that net cash from operations is distributed to the limited 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 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.

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

Reclassifications

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

Recent Accounting Pronouncements



In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements, which defines fair value,
establishes a framework for measuring fair value, and expands disclosures required for fair value measurements under GAAP, including amending SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 157
emphasizes that fair value is a market-based measurement, as opposed to an entity-specific measurement. SFAS No. 157 will be effective for the Partnership beginning January 1, 2008. The Partnership is currently assessing provisions and
evaluating the financial impact of SFAS No. 157 on its financial statements, however, does not believe the adoption of this pronouncement will have a material impact on its financial statements.



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In July 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of SFAS
No. 109, Accounting for Income Taxes, which clarifies the relevant criteria and approach for the recognition, derecognition, and measurement of uncertain tax positions. FIN No. 48 was effective for the Partnership beginning January 1, 2007.
The adoption of this pronouncement has not had a material impact on the Partnerships financial statements.



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

Summary of Financial Information

Condensed financial information for the joint ventures in which the Partnership held direct interests for the three months ended March 31, 2007
and 2006, respectively, is presented below:



|                            |  |                              |         |                                         |   |           |                                           |      |         |                              |      |         |      |  |   |      |  |      |         |   |  |   |         |  |   |         |  
|--------------------------- |  | ---------------------------- | ------- | --------------------------------------- | - | --------- | ----------------------------------------- | ---- | ------- | ---------------------------- | ---- | ------- | ---- |  | - | ---- |  | ---- | ------- | - |  | - | ------- |  | - | ------- | -
|                            |  | Total Revenues               |         | Income (Loss) FromContinuing Operations |   |           | Income (Loss) FromDiscontinued Operations |      |         | Net Income (Loss)            |     
|                            |  | Three Months Ended March 31, |         | Three Months Ended March 31,            |   |           | Three Months Ended March 31,              |      |         | Three Months Ended March 31, |     
|                            |  | 2007                         |         | 2006                                    |   | 2007      |                                           | 2006 |         |                              | 2007 |         | 2006 |  |   | 2007 |  | 2006 |        
|Fund VI-VII-VIII Associates |  | $                            | 0       |                                         | $ | 0         |                                           | $    | 101,396 |                              | $    | (8,705  | )    |  | $ | 925  |  | $    | 184,229 |   |  | $ | 102,321 |  | $ | 175,524 |  
|Fund VII-VIII Associates    |  |                              | 0       |                                         |   | 0         |                                           |      | 0       |                              |      | (4,498  | )    |  |   | 0    |  |      | (386    | ) |  |   | 0       |  |   | (4,884  | )
|Fund VIII-IX Associates     |  |                              | 604,901 |                                         |   | 1,168,378 |                                           |      | 180,522 |                              |      | 733,613 |      |  |   | 0    |  |      | 0       |   |  |   | 180,522 |  |   | 733,613 |  
|                            |  |                              |         |                                         |   |           |                                           |      |         |                              |      |         |      |  |   |      |  |      |         |   |  |   |         |  |   |         |  
|                            |  | $                            | 604,901 |                                         | $ | 1,168,378 |                                           | $    | 281,918 |                              | $    | 720,410 |      |  | $ | 925  |  | $    | 183,843 |   |  | $ | 282,843 |  | $ | 904,253 |  
|                            |  |                              |         |                                         |   |           |                                           |      |         |                              |      |         |      |  |   |      |  |      |         |   |  |   |         |  |   |         |  

Condensed financial information for the joint venture in which Fund VIII-IX Associates held an equity interest for
the three months ended March 31, 2007 and 2006, respectively, is presented below:



|                             |  |                    |  |                                 |  |                                    |  |                    |  |      |  |      |  |      |  |         
|---------------------------- |  | ------------------ |  | ------------------------------- |  | ---------------------------------- |  | ------------------ |  | ---- |  | ---- |  | ---- |  | --------
|                             |  | Total Revenues     |  | Loss From Continuing Operations |  | Income FromDiscontinued Operations |  | Net Loss          
|                             |  | Three Months Ended |  | Three Months Ended              |  | Three Months Ended                 |  | Three Months Ended
|                             |  | March 31,          |  | March 31,                       |  | March 31,                          |  | March 31,         
|                             |  | 2007               |  | 2006                            |  | 2007                               |  | 2006               |  | 2007 |  | 2006 |  | 2007 |  | 2006    
|Fund VIII-IX-REIT Associates |  | $0                 |  | $837                            |  | $0                                 |  | $(4,399)           |  | $0   |  | $0   |  | $0   |  | $(4,399)
|                             |  |                    |  |                                 |  |                                    |  |                    |  |      |  |      |  |      |  |         

The Partnership allocates its share of earnings 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 for net income, net loss, and gain on sale, respectively. The components of income (loss) from discontinued operations recognized by
the Joint Ventures are provided below:



|                             |  |                                   |     |                                   |   |       |  |                        |     |  |              |         |       |  |   |   |  |   |         |  
|---------------------------- |  | --------------------------------- | --- | --------------------------------- | - | ----- |  | ---------------------- | --- |  | ------------ | ------- | ----- |  | - | - |  | - | ------- | -
|                             |  | Three Months Ended March 31, 2007 |     | Three Months Ended March 31, 2006 |  
|                             |  | Operating Income                  |     | Gain on Sale                      |   | Total |  | OperatingIncome (Loss) |     |  | Gain on Sale |         | Total | 
|Fund VI-VII-VIII Associates  |  | $                                 | 925 |                                   | $ | 0     |  | $                      | 925 |  | $            | 184,229 |       |  | $ | 0 |  | $ | 184,229 |  
|Fund VII-VIII Associates     |  |                                   | 0   |                                   |   | 0     |  |                        | 0   |  |              | (386    | )     |  |   | 0 |  |   | (386    | )
|Fund VIII-IX Associates      |  |                                   | 0   |                                   |   | 0     |  |                        | 0   |  |              | 0       |       |  |   | 0 |  |   | 0       |  
|Fund VIII-IX-REIT Associates |  |                                   | 0   |                                   |   | 0     |  |                        | 0   |  |              | 0       |       |  |   | 0 |  |   | 0       |  
|                             |  |                                   |     |                                   |   |       |  |                        |     |  |              |         |       |  |   |   |  |   |         |  
|                             |  | $                                 | 925 |                                   | $ | 0     |  | $                      | 925 |  | $            | 183,843 |       |  | $ | 0 |  | $ | 183,843 |  
|                             |  |                                   |     |                                   |   |       |  |                        |     |  |              |         |       |  |   |   |  |   |         |  

Due from Joint Ventures

As presented in the accompanying balance sheets, due from joint ventures as of March 31, 2007 and December 31, 2006 represents operating cash flow generated by the Joint Ventures for the three months ended
March 31, 2007 and December 31, 2006, respectively, which is attributable to the Partnership.



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

Management and Leasing Fees

The Partnership entered into a property management and leasing agreement with 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) the gross revenues collected monthly,
3% for management services and 3% for leasing services, plus a separate fee for the one-time initial lease-up of newly constructed properties in an amount not to exceed the fee customarily charged in arms-length transactions by others
rendering similar services in the same geographic area for similar properties, which is assessed periodically based on market studies, or (b) in the case of commercial properties leased on a long-term net basis (ten or more years), 1% of the
gross revenues except for initial leasing fees equal to 3% of the gross revenues over the first five years of the lease term. Management and leasing fees are paid by the Joint Ventures and, accordingly, included in equity in income 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 is $17,985 and $28,992 for the three months ended March 31, 2007 and 2006,
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 and other partnership administration,
and incur the related expenses. Such expenses are allocated among other entities affiliated with the General Partners based on estimates of the amount of time dedicated to each fund by individual administrative personnel. In the opinion of the
General Partners, this allocation is a reasonable estimation of such expenses. The Partnership reimbursed Wells Capital and Wells Management for administrative expenses of $22,920 and $23,249 for the three months ended March 31, 2007 and 2006,
respectively. In addition, Wells Capital pays for certain operating expenses of the Partnership (bill-backs) directly and invoices the Partnership for the reimbursement thereof. As of March 31, 2007 and December 31, 2006, due
to affiliates represents administrative reimbursements and bill-backs due to Wells Capital and/or Wells Management.

Economic Dependency

We have engaged Wells Capital and Wells Management to provide certain essential services for us, including supervision of the management and leasing of our 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 Wells Real Estate Funds, Inc. (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 of
March 31, 2007, 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 current receivables necessary to meet its current and future obligations as
they become due.



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Assertion of Legal Action Against Related-Parties

On March 12, 2007, a stockholder of Wells REIT filed a purported class action and derivative complaint, Washtenaw County Employees Retirement System v. Wells Real Estate Investment Trust, Inc., et
al., in the United States District Court for the District of Maryland against, among others, Wells REIT, Leo F. Wells, III, one of our General Partners, Wells Capital, the corporate general partner of Wells Partners, our other general partner,
Wells Management, our property manager, certain affiliates of WREF, the directors of Wells REIT, and certain individuals who formerly served as officers and directors of Wells REIT prior to the closing of the internalization transaction on
April 16, 2007. The complaint alleges violations of the federal proxy rules based on allegations that the proxy statement of Wells REIT filed with the SEC on February 26, 2007 contains false and misleading statements and omits to state
material facts and breaches of fiduciary duty arising from the Wells REIT internalization transaction and the related proxy statement. The complaint seeks, among other things, unspecified monetary damages. On April 9, 2007, the District Court
denied the plaintiffs motion for an order enjoining the internalization transaction. On April 17, 2007, the Court granted the defendants motion to transfer venue to the 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. Mr. Wells, Wells Capital, and Wells Management intend to vigorously defend this action. Any financial loss incurred by Wells Capital, Wells
Management, or its affiliates could hinder their ability to successfully manage our operations and our portfolio of investments.



|5. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------

The Partnership and its General
Partners are from time to time a party to legal proceedings, which arise in the ordinary course of its business. The Partnership is not currently involved in any legal proceedings of which the outcome is reasonably possible to have a material
adverse effect on results of operations or financial condition. The Partnership is not aware of any legal proceedings contemplated by governmental authorities.



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

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

Overview

Management believes that the Partnership typically
operates through the following five key life cycle phases. 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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##### Table of Contents

| |  |  | 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.

Portfolio Overview

We are currently in the disposition-and-liquidation phase of our life cycle. We have now sold
five assets. On December 8, 2006, we requested the approval of the limited partners via a consent solicitation to amend the partnership agreement and allow an affiliate of the General Partners to purchase the remaining two outparcels of land at
Tanglewood Commons. The limited partners approved this transaction on January 25, 2007, and the outparcels were subsequently sold to Wells Management on January 31, 2007. Our focus on our remaining assets involves increasing the occupancy
level within the portfolio and concentrating on re-leasing and marketing efforts that we believe will ultimately result in the best disposition pricing of our assets for our limited partners.

The first quarter 2007 operating distributions to limited partners holding Class A Units remained consistent with the level paid in the prior quarter. We anticipate
that operating distributions may remain low in the near-term as a result of funding our pro-rata share of anticipated re-leasing costs at the US Cellular Building.

Property Summary

As we move further into the disposition-and-liquidation phase, our attention will shift to locating suitable buyers and
negotiating purchase-sale contracts that will attempt to maximize the total return to the limited partners and minimize contingencies and our post-closing involvement with the buyer.

Information regarding the properties owned, or previously owned, by the Joint Ventures is provided below:



| |  |  | Hannover Center was sold on April 29, 2004.
| | - |  | -------------------------------------------



| |  |  | The 15253 Bake Parkway property was sold on December 2, 2004.
| | - |  | -------------------------------------------------------------





| |  |  | An outparcel of land at Tanglewood Commons was sold on October 7, 2002. The Tanglewood Commons shopping center and one outparcel of land was sold on
April 21, 2005. On October 12, 2005, a portion of one of the remaining outparcels of land was condemned. On January 31, 2007, the two remaining outparcels of land were sold to Wells Management, an affiliate of the General Partners,
after seeking the approval of the limited partners.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The CH2M Hill Building was sold on December 7, 2005.
| | - |  | ----------------------------------------------------



| |  |  | The BellSouth Building was sold on May 15, 2006.
| | - |  | ------------------------------------------------



| |  |  | The US Cellular Building is located in Madison, Wisconsin. During the third quarter of 2006, a lease amendment was signed with United States Cellular Operating
Company that extends the lease termination date through January 2013 and reduces the square footage leased from approximately 102,000 square feet to approximately 75,000 square feet as of January 1, 2007. We are actively working on re-leasing
the remaining approximately 27,000 square feet.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The 14079 Senlac Drive property, located in Farmers Branch, Texas, is 100% leased through July 2011.
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | The 305 Interlocken Parkway property, located in the Broomfield submarket of Denver, Colorado, is 100% leased through August 2011.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

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



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##### Table of Contents

adequate liquidity and capital resources are available. Economic downturns in one or more of our core markets could adversely impact the ability of our
tenants to honor lease payments and our ability to 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 three months ended March 31, 2007, we used net operating cash flows of approximately $28,000 primarily as a result of incurring general and administrative expenses for the portfolio in excess of operating distributions
received from 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. 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 for
tenant re-leasing costs and other capital improvements for properties owned by the Joint Ventures. We anticipate future operating distributions from the Joint Ventures may decline as we sell additional properties in subsequent periods and fund our
pro-rata share of anticipated re-leasing costs at the US Cellular Building. During the three months ended March 31, 2007, we also received net sale proceeds of approximately $238,000 from the sale of the remaining two outparcels of land at
Tanglewood Commons.

We believe that the cash on hand and operating distributions due from the Joint Ventures are sufficient to cover our working capital
needs, including liabilities of approximately $202,000 as of March 31, 2007.



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 sale proceeds generated from the selective and strategic sale of properties. Our future long-term liquidity requirements will include, but not be limited to, funding 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 to provide funding for such requirements. Future cash flows from
operating activities will be primarily affected by distributions received from the Joint Ventures, which are dependent upon net operating income generated by the Joint Ventures properties, less reserves for known 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 on an all-cash basis that are preleased to creditworthy
tenants through joint ventures with affiliated partnerships.

The Joint Ventures fund 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 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 provided for by the operations of the Joint Ventures will be required to be funded by the Partnership and
respective joint venture partners on a pro-rata basis.



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Operating cash flows, if available, are generally distributed from the Joint Ventures to the Partnership approximately
one month following calendar quarter-ends. 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 property sale proceeds reserves would then be utilized.

As of March 31, 2007, we have received, used, distributed, and held net sale proceeds allocated to the Partnership from the sale of properties as presented below:



|                                                   |  |                   |     |  |                                       |  |                                              |            |                          |   |                                                               |  |                                                                           |  |   |            |  |   |        
|-------------------------------------------------- |  | ----------------- | --- |  | ------------------------------------- |  | -------------------------------------------- | ---------- | ------------------------ | - | ------------------------------------------------------------- |  | ------------------------------------------------------------------------- |  | - | ---------- |  | - | -------
|                                                   |  | Net Sale Proceeds |     |  | Partnerships Approximate Ownership % |  | Net SaleProceeds Allocated tothe Partnership |            | Use of Net Sale Proceeds |   | Net Sale Proceeds Distributed toPartners as of March 31, 2007 |  | UndistributedNet
SaleProceeds as of March 31, 2007                       
|Property                                           |  |                   |     |  | Amount                                |  | Purpose                                      |            |                         
|Tanglewood Commons Outparcel(sold in 2002)         |  | $524,398          |     |  | 32.4%                                 |  | $                                            | 169,643    |                          | $ | 0                                                             |  |                                                                          |  | $ | 169,643    |  | $ | 0      
|Hannover Center(sold in 2004)                      |  | $1,703,431        |     |  | 63.4%                                 |  |                                              | 1,079,364  |                          |   | 0                                                             |  |                                                                          |  |   | 1,079,364  |  |   | 0      
|305 Interlocken                                    |  | $800,000          | (1) |  | 54.8%                                 |  |                                              | 438,374    |                          |   | 0                                                             |  |                                                                          |  |   | 438,374    |  |   | 0      
|Parkway (early termination in 2004)                |  |                   |     |  |                                       |  |                                              |            |                          |   |                                                               |  |                                                                           |  |   |            |  |   |        
|15253 Bake Parkway(sold in 2004)                   |  | $11,892,035       |     |  | 46.1%                                 |  |                                              | 5,487,476  |                          |   | 424,857                                                       |  |   Re-leasing 15253 Bake Parkway (2004) and the CH2M Hill Building (2005) |  |   | 5,062,619  |  |   | 0      
|Tanglewood Commons shopping center(sold in 2005)   |  | $11,236,283       |     |  | 32.4%                                 |  |                                              | 3,635,454  |                          |   | 0                                                             |  |                                                                          |  |   | 3,635,454  |  |   | 0      
|Tanglewood Commons land condemnation(sold in 2005) |  | $52,050           |     |  | 32.4%                                 |  |                                              | 16,841     |                          |   | 0                                                             |  |                                                                          |  |   | 16,841     |  |   | 0      
|CH2M Hill Building(sold in 2005)                   |  | $7,935,259        |     |  | 63.4%                                 |  |                                              | 5,028,105  |                          |   | 0                                                             |  |                                                                          |  |   | 5,028,105  |  |   | 0      
|BellSouth Building(sold in 2006)                   |  | $12,846,928       |     |  | 32.4%                                 |  |                                              | 4,156,572  |                          |   | 0                                                             |  |                                                                          |  |   | 3,669,599  |  |   | 486,973
|Tanglewood Commons outparcels(sold in 2007)        |  | $734,184          |     |  | 32.4%                                 |  |                                              | 237,542    |                          |   | 0                                                             |  |                                                                          |  |   | 0          |  |   | 237,542
|                                                   |  |                   |     |  |                                       |  |                                              |            |                          |   |                                                               |  |                                                                           |  |   |            |  |   |        
|Total                                              |  |                   |     |  |                                       |  | $                                            | 20,249,371 |                          | $ | 424,857                                                       |  |                                                                           |  | $ | 19,099,999 |  | $ | 724,515
|                                                   |  |                   |     |  |                                       |  |                                              |            |                          |   |                                                               |  |                                                                           |  |   |            |  |   |        



| | (1) | Represents payment received for unamortized tenant improvements in connection with the Cirrus Logic,
Inc. lease termination.
| | --- | ----------------------------------------------------------------------------------------------------------------------------

Upon evaluating the capital needs of the properties in which we currently hold an interest, our General
Partners have determined that net sale proceeds of approximately $725,000 will be reserved to fund our pro-rata share of anticipated re-leasing costs for the US Cellular Building.



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Results of Operations

Equity in Income of Joint Ventures

Equity in income of Joint Ventures decreased from $455,692 for the three months ended March 31,
2006 to $132,026 for the three months ended March 31, 2007. The decrease is primarily attributable to (i) a decline in operating income resulting from the sale of the BellSouth Building in May 2006, (ii) a decrease in rental income as
a result of a lease restructuring for the US Cellular Building, which reduced the square footage leased and the rental rate, (iii) lease cancellation income earned in first quarter of 2006 at 305 Interlocken Parkway, partially offset
by (iv) recognizing a gain on the sale of the remaining Tanglewood Commons land outparcels in January 2007. We expect equity in income of Joint Ventures to decrease in the near term due to recognizing a nonrecurring gain from the sale of the
remaining Tanglewood Commons land outparcels in January 2007.

Expenses

Our total expenses decreased from $63,471 for the three months ended March 31, 2006 to $49,573 for the three months ended March 31, 2007. The decrease is primarily attributable to a decline in administrative
costs and legal fees relative to the decrease in the size of the portfolio, partially offset by an increase in accounting fees related to compliance with reporting and regulatory requirements. We anticipate increases in our administrative expenses
in future periods resulting from increased costs relating to compliance with additional reporting and regulatory requirements.

Interest and Other
Income

Interest and other income decreased from $54,341 for the three months ended March 31, 2006 to $13,128 for the three months ended
March 31, 2007. The decrease is primarily attributable to a decrease in the average amount of net sale proceeds held during the respective periods, partially offset by an increase in the daily interest yield. Future levels of interest income
will be largely dependent upon the timing of future dispositions and net sales proceeds distributions to the limited partners.

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 would 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

Summary

Our accounting policies have been established to conform with GAAP. The preparation of financial statements
in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If 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.



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Below is a discussion of the accounting policies used by the Partnership and the Joint Ventures, which are considered
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 will be required to make subjective assessments as to the useful lives of our depreciable assets. We will consider the period of
future benefit of the assets to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of the Joint Ventures assets by class are as follows:



|                      |  |                                       
|--------------------- |  | --------------------------------------
|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.

Valuation 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 indicate that the carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by determining whether the carrying value of the
real estate assets will be recovered through the undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying
value, management adjusts the real estate assets to the fair value, as defined by SFAS No. 144, and recognizes an impairment loss. Estimated fair values are calculated based on the following information, dependent upon availability, in order of
preference: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of undiscounted cash flows, including estimated salvage value. We have determined that there has been no
impairment in the carrying value of any of the real estate assets held as of March 31, 2007.

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

Related-Party Transactions

We have entered into agreements with Wells Capital and Wells Management, affiliates of our General Partners, and their affiliates, whereby we pay certain fees and expense
reimbursements to Wells Capital, Wells Management, and 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 Note 4 to our financial statements included in this report for a description of these fees and expense reimbursements we have incurred.

Potential Tax Impact on Limited Partners Holding Class B Units  American Jobs Creation Act of 2004

The
American Jobs Creation Act of 2004 added Section 470 to the Internal Revenue Code, which provides for certain limitations on the utilization of losses by investors that are attributable to leased property owned by a partnership having both
taxable and tax-exempt partners such as the Partnership. If Section 470 were deemed to



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apply to the Partnership, passive losses allocable to limited partners holding Class B Units could only be utilized to offset passive income generated from
the same property or potentially from properties owned by the same partnership. In March 2005, the IRS announced that it would not apply Section 470 to partnerships for the taxable year 2004 based solely on the fact that a partnership had both
taxable and tax-exempt partners. In December 2005, the IRS extended the period for transitional relief through the 2005 tax year, and in December 2006, the IRS again extended the period for transitional relief through all tax years beginning prior
to January 1, 2007. In addition, pursuant to Section 403(ff) of the Gulf Opportunity Zone Act of 2005, the effective date provisions regarding the applicability of Section 470 were amended to provide that, in the case of leased
property treated as tax-exempt use property by reason of its being owned by a partnership having both taxable and tax-exempt partners, Section 470 will apply only to property acquired after March 12, 2004. Since the Partnership acquired
all of its properties prior to March 12, 2004, and is not expected to acquire interests in any additional properties in the future, we do not believe that the provisions of Section 470 should apply to limit the utilization of losses
attributable to the properties owned by the Partnership; however, due to the uncertainties and lack of guidance relating to this provision, it is unclear as to whether the acquisition of a limited partnership interest in the Partnership after the
March 12, 2004 effective date may be deemed to be an acquisition of property within the meaning of the effective date provisions of Section 470.



|ITEM 3. | 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 current exchange rate fluctuations, or the other market risks contemplated
by Item 305 of Regulation S-K.



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

We carried out an evaluation, under the
supervision and with the participation of management of Wells Capital, our corporate General Partner, including the Principal Executive Officer and the Principal Financial Officer of Wells Capital, of the effectiveness of the design and operation of
the Partnerships disclosure controls and procedures as defined in rule 13a-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and the
Principal Financial Officer of Wells Capital concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report in providing a reasonable level of assurance that 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 information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Principal Executive Officer and the Principal Financial Officer of Wells Capital, as appropriate, to
allow timely decisions regarding required disclosure.

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



|PART II. | OTHER INFORMATION
|-------- | -----------------



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

We are from time to time a party to legal
proceedings, which arise in the ordinary course of our business. We are not currently involved in any litigation the outcome of which would, in managements judgment based on information currently available, have a material adverse effect on
our results of operations or financial condition, nor is management aware of any such litigation threatened against us during the quarter ended March 31, 2007, requiring disclosure under Item 103 of Regulation S-K.



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##### Table of Contents

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

There have been no material changes from the risk
factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006.



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



|(a) | We did not sell any equity securities that were not registered under the Securities Act of 1933 during the quarter ended March 31, 2007.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------



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



|(c) | We did not redeem any securities during the quarter ended March 31, 2007.
|--- | -------------------------------------------------------------------------



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



|(a) | We were not subject to any indebtedness and, therefore, did not default with respect to any indebtedness during the quarter ended March 31, 2007.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

(b) Not applicable.



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

On
December 8, 2006, the Partnership filed a proxy statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. The purpose of the proxy statement was to request the limited partners to vote to (i) amend the partnership
agreement, which prohibited selling any of the properties owned by the Partnership to the General Partners or their affiliates, to permit a sale to the General Partners or their affiliates if such sale is approved by a majority vote of the limited
partners, and (ii) approve the sale of the two remaining outparcels of land at Tanglewood Commons to Wells Management pursuant to the terms described in the proxy statement. Limited partners of record as of October 1, 2006 were entitled to
one vote for each unit owned. As of October 31, 2006, there were 2,943,395 Class A Units and 250,590 Class B Units outstanding and eligible to vote on the proposals. Consent of the unaffiliated limited partners owning more than 50% of the
outstanding units was received on January 25, 2007.

The following table sets forth the results of the vote on the
two matters:



|                                                                                             |  |     |  |         |  |        
|-------------------------------------------------------------------------------------------- |  | --- |  | ------- |  | -------
|Number of Votes                                                                              |  | For |  | Against |  | Abstain
|Amendments to sections 13.2 and 13.4 of the partnership agreement                            |  | 62% |  | 1%      |  | 1%     
|Approval of the sale of the two outparcels of land at Tanglewood Commons to Wells Management |  | 62% |  | 1%      |  | 1%     



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



|(a) | During the quarter ended March 31, 2007, there was no information required to be disclosed in a report on Form 8-K which was not disclosed in a report on Form 8-K.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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

The Exhibits to this
report are set forth on Exhibit Index to First Quarter Form 10-Q attached hereto.



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SIGNATURES

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



|             |  |  |  |                                                                                                   |  |                            
|------------ |  |  |  | ------------------------------------------------------------------------------------------------- |  | ---------------------------
|             |  |  |  | WELLS REAL ESTATE FUND VIII, L.P. (Registrant)                                                   
|             |  |  | 
|             |  |  |  | By:                                                                                               |  | WELLS PARTNERS, L.P.       
|             |  |  |  |                                                                                                   |  | (General Partner)          
|             |  |  | 
|             |  |  |  | By:                                                                                               |  | WELLS CAPITAL, INC.        
|             |  |  |  |                                                                                                   |  | (Corporate General Partner)
|             |  | 
|May 11, 2007 |  |  |  | /S/    LEO F. WELLS,
III                                                                         
|             |  |  |  | Leo F. Wells, III President, Principal
Executive Officer,and Sole Director of Wells Capital, Inc.
|             |  | 
|May 11, 2007 |  |  |  | /S/    DOUGLAS P.
WILLIAMS                                                                       
|             |  |  |  | Douglas P. Williams Principal Financial
Officer of Wells Capital, Inc.                           



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##### Table of Contents

EXHIBIT INDEX

TO FIRST QUARTER FORM 10-Q

OF

WELLS REAL ESTATE FUND VIII, L.P.



|            |  |                                                                                                                                                                                                                 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                     
|            | 
|*10.1       |  | Purchase and Sale Agreement for Tanglewood Commons Land Outparcels (Exhibit 10(yy) to the Form 10-K of Wells Real Estate Fund VI, L.P. for the fiscal year ended December 31, 2006, Commission
File No. 0-23656)
|            | 
|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                                                                                  



|* | previously filed and incorporated herein by reference
|- | -----------------------------------------------------