<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-Q
 
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 For the quarterly period ended September 30, 1996 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
                       ---------------------

                       Wells Real Estate Fund VIII, L.P.
-------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)
 
             Georgia                                       58-2126618
--------------------------------               --------------------------------
(State of other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                      Identification no.)

  3885 Holcomb Bridge Road, Norcross, Georgia                    30092
 --------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code (770) 449-7800
                                                   --------------

 
--------------------------------------------------------------------------------
          (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
    --------                                 -------
<PAGE>
 
                                   Form 10-Q
                                   ---------

                        Wells Real Estate Fund VIII,L.P.
                        --------------------------------

                                     INDEX
                                     -----


                                                                        Page No.
                                                                        --------
PART I. FINANCIAL INFORMATION
 
           Item 1. Financial Statements
 
                   Balance Sheets - September 30, 1996
                      and December 31, 1995.............................    3

                   Statements of Income for the Three
                      Months and Nine Months Ended September 30,
                      1996 and 1995.....................................    4

                   Statement of Partners' Capital
                      for the Year Ended December 31, 1995, and
                      the Nine Months Ended September 30, 1996..........    5

                   Statements of Cash Flows for the Nine Months
                      Ended September 30, 1996 and 1995.................    6

                   Condensed Notes to Financial Statements..............    7

           Item 2. Management's Discussion and Analysis of
                   Financial Condition and Results of
                   Operations...........................................   13

PART II. OTHER INFORMATION..............................................   19

                                       2
<PAGE>
 
                            WELLS REAL ESTATE FUND VIII, L.P.
                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
 
              Assets                         September 30, 1996        December 31, 1995
              ------                         ------------------        -----------------
<S>                                               <C>                      <C>  
Investment in joint ventures (Note 2)             $   9,256,202            $   5,786,364
Cash and cash equivalents (Note 1)                   17,238,394               19,441,918
Due from affiliates (Note 5)                             97,489                   23,852
Deferred project costs (Note 3)                         735,403                  816,147
Deferred offering costs (Note 4)                              0                   96,972
Organization costs, less accumulated
 amortization of $10,937 in 1996
 and $6,250 in 1995                                      20,313                   25,000
Prepaid expenses and other assets                        66,000                   64,000
                                                  -------------            -------------
 
     Total assets                                 $  27,413,801            $  26,254,253
                                                  =============            =============
 
   Liabilities and Partners' Capital
   ---------------------------------
 
 Liabilities:
   Accounts payable and accrued expenses          $       2,450            $       5,450
   Sales commissions payable                                367                  180,404
   Partnership distribution payable                     281,563                  295,926
   Due to affiliates                                          0                  139,775
                                                  -------------            -------------
 
    Total liabilities                                   284,380                  621,555
                                                  -------------            -------------
 
Partners' capital:
 General  partners                                            0                      297
 Limited partners:
   Class A                                           22,339,578               20,902,202
   Class B                                            4,789,743                4,730,099
   Original limited partner                                 100                      100
                                                  -------------            -------------
 
    Total partners' capital                          27,129,421               25,632,698
                                                  -------------            -------------
 
    Total liabilities and partners'
      capital                                     $  27,413,801            $  26,254,253
                                                  =============            =============
 
</TABLE>

           See accompanying condensed notes to financial statements.

                                       3
<PAGE>
 
                       WELLS REAL ESTATE FUND VIII, L.P.
                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                              STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                            Three Months Ended             Nine Months Ended
                                                       ----------------------------  -----------------------------
                                                       Sept 30, 1996   Sept 30, 1995  Sept 30, 1996   Sept 30, 1995
                                                       -------------   -------------  --------------  -------------
<S>                                                    <C>              <C>            <C>             <C>
Revenues:
 Equity in earnings of joint ventures (Note 2)             $ 54,475        $ 19,170      $ 151,831        $ 19,170
 Interest income                                            207,323         102,348        661,851         177,719
                                                           --------        --------      ---------        --------
                                                            261,798         121,518        813,682         196,889
Expenses:
 Legal and accounting                                         2,342           1,610         26,608           4,719
 Computer costs                                               1,403           1,688          3,413           5,039
 Amortization of organization costs                           1,562               0          4,687               0
 Printing                                                     5,982           2,741         11,404          36,920
 Administrative salaries                                      6,050          10,226         20,435          25,522
 Office expense                                               1,786           6,104          5,798          11,379
 Postage                                                      3,735           1,763         12,707           3,535
 Acquisition expenses                                         7,713               0          7,713               0
 Other                                                        1,955               0          2,771              15
                                                           --------        --------      ---------        --------
                                                             32,528          24,132         95,536          87,129
                                                           --------        --------      ---------        --------
 Net income                                                $229,270        $ 97,386      $ 718,146        $109,760
                                                           ========        ========      =========        ========

Net loss allocated to General   Partners                   $      0        $      0      $    (297)       $      0 
 
Net income allocated to Class A Limited                    
 Partners                                                  $293,936        $ 97,386      $ 884,671        $109,760 
                                                                                        
Net loss allocated to Class B Limited Partners             $(64,666)       $      0      $(166,228)       $      0
                                                                                     
Net income per Class A Limited Partner Unit                $   0.11        $   0.13      $    0.34        $   0.16
 
Net loss per Class B Limited Partner Unit                  $  (0.10)       $      0      $   (0.28)       $   0.00
 
Cash distribution per Class A Limited Partner                                        
 Unit                                                      $   0.11        $      0      $    0.32        $      0
 
</TABLE>
           See accompanying condensed notes to financial statements.

                                       4
<PAGE>
 
                       WELLS REAL ESTATE FUND VIII, L.P.
                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                        STATEMENTS OF PARTNERS' CAPITAL
          FOR THE YEAR ENDED DECEMBER 31, 1995 AND  NINE MONTHS ENDED
                               SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
                                                           Limted Partners
                                                           ---------------
                                                   CLASS A                      CLASS B                                     TOTAL
                                            -----------------------       --------------------         GENERAL            PARTNERS'
                             ORIGINAL         UNITS          AMOUNT        UNITS        AMOUNT         PARTNERS             CAPITAL
                             --------       ---------   -----------       -------   ----------         ---------        -----------
<S>                          <C>             <C>        <C>               <C>       <C>                <C>              <C> 
 BALANCE, DECEMBER 31, 1994      $100               0   $         0             0   $        0             $ 500        $       600
                                                                                                      
  Net income (loss)                 0               0       294,221             0      (20,104)             (203)           273,914
  Limited Partnership           
    contributions                   0       2,456,287    24,562,868       558,167    5,581,674                 0         30,144,542 
  Partnership distributions         0               0      (295,926)            0            0                 0           (295,926)
  Sales commissions & discounts     0               0    (2,456,287)            0     (558,168)                0         (3,014,455)
  Other offering expenses           0               0    (1,202,674)            0     (273,303)                0         (1,475,977)
                                 ----       ---------   -----------       -------   ----------             -----        -----------
BALANCE, DECEMBER 31, 1995       $100       2,456,287   $20,902,202       558,167   $4,730,099             $ 297        $25,632,698
                                                                                                      
  Net income (loss)                 0               0       884,671             0     (166,228)             (297)           718,146
  Limited Partnership              
    contributions                   0         155,247     1,552,471        34,568      345,676                 0          1,898,147 
  Partnership distributions         0               0      (834,848)            0            0                 0           (834,848)
  Sales commissions & discounts     0               0      (155,247)            0      (34,568)                0           (189,815)
  Other offering expenses           0               0       (77,623)            0      (17,284)                0            (94,907)
  Conversion elections              0           8,224        67,952        (8,224)     (67,952)                0                  0
                                 ----       ---------   -----------       -------   ----------             -----        -----------
                                                                                                      
BALANCE, SEPTEMBER 30, 1996      $100       2,619,758   $22,339,578       584,511   $4,789,743             $   0        $27,129,421
                                 ====       =========   ===========       =======   ==========             =====        ===========
 
</TABLE>
        The accompanying notes are an integral part of these statements.

                                       5
<PAGE>
 
                       WELLS REAL ESTATE FUND VIII, L.P.
                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                            For the Nine Months Ended
                                                     ----------------------------------------
                                                     September 30, 1996   September 30, 1995
                                                     -------------------  -------------------
<S>                                                   <C>                   <C> 
Cash flow from operating activities:
 Net income (loss)                                          $   718,146          $   109,760
   Adjustments to reconcile net earnings to net
     cash used in operating activities:
       Equity in income of joint venture                       (151,831)             (19,170)
       Distributions received from joint ventures               182,496                    0
       Distributions to partners from
         accumulated earnings                                  (849,211)                   0
       Amortization of organization costs                         4,687                    0
   Changes in assets and liabilities:
      Prepaids and other assets                                  (2,000)             (37,000)
      Accounts payable                                           (3,000)               2,451
      Due to affiliates                                         (42,803)              60,335
                                                            -----------          -----------
        Net cash (used in) provided by operating
          activities                                           (143,516)             116,376
                                                            -----------          -----------
 Cash flow from investing activities:
  Investment in joint ventures                               (3,426,962)          (4,683,076)
  Deferred project costs paid                                   (66,435)            (718,453)
                                                            -----------          -----------
        Net cash used in investing activities                (3,493,397)          (5,401,529)
                                                            -----------          -----------

 Cash flows from financing activities:
  Limited partners' contributions                             1,898,147           20,527,232
  Sales commissions paid                                       (369,851)          (1,906,392)
  Offering costs paid                                           (94,907)          (1,026,362)
                                                            -----------          -----------
        Net cash provided by financing
          activities                                          1,433,389           17,594,478
                                                            -----------          -----------
 Net (decrease)increase(cash and cash
   equivalents                                               (2,203,524)          12,309,325
 
 Cash and cash equivalents, beginning of year                19,441,918                  600
                                                            -----------          -----------
 
 Cash and cash equivalents, end of period                   $17,238,394          $12,309,925
                                                            ===========          ===========
 
 Supplemental disclosure of noncash
  investing activities:
       Deferred project costs applied to
         joint venture property                             $   147,178          $         0
                                                            ===========          ===========
</TABLE>

                                       6
<PAGE>
 
                       WELLS REAL ESTATE FUND VIII, L.P.
                     (A Georgia Public Limited Partnership)

                     Condensed Notes to Financial Statement
                                        
                               September 30, 1996

(1) Summary of Significant Accounting Policies
    ------------------------------------------

(a) General
-----------

Wells Real Estate Fund VIII, L.P. (the "Partnership") is a Georgia public
limited partnership having Leo F. Wells, III and Wells Partners, L.P., as
General Partners.  The Partnership was formed on August 15, 1994, for the
purpose of acquiring, developing, owning, operating, improving, leasing, and
otherwise managing for investment purposed income producing commercial
properties.

On January 6, 1995, the Partnership commenced a public offering of up to
$35,000,000 of limited partnership units ($10.00 per unit) pursuant to a
Registration Statement on Form S-11 filed under the Securities Act of 1933.  The
Partnership commenced active operations on February 24, 1995, when it received
and accepted subscriptions for 125,000 units. The offering was terminated on
January 5, 1996, at which time the Partnership had sold 2,613,534 Class A Status
Units, and 590,735 Class B Status Units, held by a total of 1,939 and 302
Limited Partners respectively, for total Limited Partner capital contributions
of $32,042,689.

As of September 30, 1996, the Partnership owned interests in five properties
through ownership in joint ventures, an office building in Gainesville, Florida,
an office building in Jacksonville, Florida, a retail shopping center under
construction in Clemmons, North Carolina, a combined retail/office building in
Stockbridge, Georgia, and an office building under construction in Madison,
Wisconsin.

(b) Employees
-------------

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

(c) Insurance
-------------

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

(d) Competition
---------------

The Partnership will experience competition for tenants from owners and managers
of competing projects which may include the General Partners and their

                                       7
<PAGE>
 
affiliates.  As a result, the Partnership may be required to provide free rent,
reduced charges for tenant improvements and other inducements, all of which may
have an adverse impact on results of operations.  At the time the Partnership
elects to dispose of its properties, the Partnership will also be in competition
with sellers of similar properties to locate suitable purchasers for its
properties.

(e) Basis of Presentation
-------------------------

The financial statements of Wells Real Estate Fund VIII, L.P. (the
"Partnership") have been prepared in accordance with instructions to Form 10-Q
and do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  These
quarterly statements have not been examined by independent accountants, but in
the opinion of the General Partners, the statements for the unaudited interim
periods presented include all adjustments, which are of a normal and recurring
nature, necessary to present a fair presentation of the results for such
periods.  For further information, refer to the financial statements and
footnotes included in the Partnership's Form 10-K for the year ended December
31, 1995.

(f) Partnership Distributions
-----------------------------

Net Cash From Operations, as defined in the Partnership Agreement, will be
distributed first to Limited Partners holding Class A Status Units on a per Unit
basis until they have received a 10% annual return on their Net Capital
Contributions, as defined in the Partnership Agreement.  Further distributions
of Net Cash From Operations will be made to the General Partners until they
receive distributions equal to 10% of the total amount of Net Cash From
Operations distributed.  Thereafter, the Limited Partners holding Class A Status
Units will receive 90% of Net Cash From Operations and the General Partners will
receive 10%.  No Net Cash From Operations will be distributed to Limited
Partners holding Class B Status Units.

(g) Income Taxes
----------------

The Partnership has not requested a ruling from the Internal Revenue Service to
the effect that it will be treated as a partnership and not an association
taxable as a corporation for Federal income tax purposes.  The Partnership
received an opinion of counsel as to its tax status, but such opinion is not
binding upon the Internal Revenue Service.

(h) Statement of Cash Flows
---------------------------

For the purpose of the statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.  Cash equivalents include cash and short-
term investments.

2) Investment in Joint Venture
   ---------------------------

The Partnership owns interests in three office buildings and two retail centers
through its ownership in joint ventures.  The Partnership does not have control
over the operations of the joint ventures; however, it does exercise significant
influence.  Accordingly, investment in joint ventures is recorded on the equity
method.

                                       8
<PAGE>
 
The office building in Gainesville, Florida was completed and occupied, at a
rate of 93.7%, in mid-December, 1995.  The office building in Jacksonville,
Florida, was completed and occupied at the rate of 92% in May, 1996.  The first
tenant in the retail/office center in Stockbridge, Georgia opened for business
on June 22, 1996.  A retail shopping center in Clemmons, North Carolina and the
office building in Madison, Wisconsin are still under construction.  As of
September 30, 1996, the Partnership still had approximately $17,100,000
available for investment in properties.

The following describes the properties in which the Partnership owned an
interest as of September 30, 1996:

FUND VII - FUND VIII JOINT VENTURE
----------------------------------

On February 10, 1995, the Partnership and Wells Real Estate Fund VII, L.P.
("Wells Fund VII"), a Georgia public limited partnership affiliated with the
Partnership through common general partners, entered into a Joint Venture
Agreement known as Fund VII and Fund VIII Associates (the "Fund VII - Fund VIII
Joint Venture").  The investment objectives of Wells Fund VII are substantially
identical to those of the Partnership. As of September 30, 1996, the
Partnership's equity interest in the Fund VII - Fund VIII Joint Venture was
approximately 62%, and Wells Fund VII's equity interest in the Fund VII - Fund
VIII Joint Venture was approximately 38%. The total cost to complete the two
properties in this joint venture is anticipated to be approximately $6,500,000
and the Partnership had contributed $4,002,732 and Wells Fund VII had
contributed $2,448,924 for total contributions of $6,451,656 to the Fund VII -
Fund VIII Joint Venture for the acquisition and development of the two
properties.

It is currently anticipated that the remaining costs of approximately $48,000 to
complete the final tenant build out of both projects will be contributed by the
Partnership, in which event, upon completion, the Partnership will own
approximately 62.3% equity interest in the Fund VII - Fund VIII Joint Venture.
The Partnership has reserved sufficient funds for this purpose.

Gainesville Property
--------------------

Wells Fund VII made an initial contribution to the Fund VII - Fund VIII Joint
Venture of $677,534, which constituted the total purchase price and all other
acquisition and development costs expended by the Fund VII - Fund VIII Joint
Venture for the purchase of a 5.0 acre parcel of land in Gainesville, Alachua
County, Florida.  Construction of a 62,975 square foot office building
containing 61,468 rentable square feet was completed in December, 1995.  It is
anticipated that the total cost of the building will be approximately $4,900,000
after the remaining unoccupied tenant space is completed. As of September 30,
1996, the Partnership had contributed $3,852,732, and Wells Fund VII had
contributed $1,036,923 to the Fund VII - Fund VIII Joint Venture toward the
completion of this project. The occupancy rate, as of September 30, 1996, was
93.6%

A 9 year, 11 month lease to occupy 57,547 square feet has been signed with CH2M
Hill, Engineers, Planners, Economists, Scientists, with an option to extend for

                                       9
<PAGE>
 
an additional five year period.  The annual base rent during the initial term is
$530,313. The annual rent for the extended term will be at market rate.
Assuming no options or termination rights, the lease with CH2M Hill will expire
in the year 2005.

The Hannover Property
---------------------

On April 1, 1996, Wells Fund VII contributed 1.01 acres of land located in
Clayton County, Georgia and improvements thereon valued at $512,000 to the Fund
VII - Fund VIII Joint Venture for the development of a 12,000 square foot,
single story combination retail/office building.  As of September 30, 1996,
Wells Fund VII had funded approximately $900,000 for the development of the
Hannover property, in addition to the cost of the land, and the Partnership had
contributed $150,000 to the joint venture for the development of the property.
The total cost to develop this property is estimated to be approximately
$1,600,000, and the Partnership has reserved approximately $38,000 to complete
the remaining development.

A nine year, eleven month lease has been signed with Moovies, Inc., a video sale
and rental store, to occupy 6,020 square feet.  The annual base rent: (1) for
the initial term of 36 months is $93,310.00; (2) for the second term of 36
months is $102,340.00; (3) for the third term of 36 months is $111,370.00, and
(4) for the final term of eleven months is $110,367.00.  Moovies, Inc. has the
option to extend its lease for two five year terms at market rate.  The tenant,
which provided its own build-out from the existing shell, moved into the
building and opened for business June 22, 1996.  The lease will expire in 2006.

FUND VI - VII - VIII JOINT VENTURE
----------------------------------

On April 17, 1995, the Partnership, Wells Fund VII and Wells Real Estate Fund
VI, L.P. ("Wells Fund  VI"), a Georgia public limited partnership, affiliated
with the Partnership through common general partners, entered into a Joint
Venture Agreement known as the Fund VI, Fund VII, and Fund VIII Associates (the
"Fund VI-VII-VIII Joint Venture").  The investment objectives of Wells Fund VI
are substantially identical to those of the Partnership.  As of September 30,
1996, the Partnership had contributed approximately $3,500,000 for an
approximate 23% equity interest in the Fund VI-VII-VIII Joint Venture, which
owns an office building in Jacksonville, Florida and a multi-tenant retail
center, under development, in Clemmons, North Carolina.  As of September 30,
1996, Wells Fund VI had contributed $6,067,688 for an equity interest in the
Fund VI-VII-VIII Joint Venture of approximately 39%, and Wells Fund VII had
contributed approximately $5,932,312 for an equity interest in the Fund VI-VII-
VIII Joint Venture of  approximately 38%.  The total cost to complete both
properties is anticipated to be approximately $17,700,000.  Although the
ultimate percentages of equity interest in the Fund VI-VII-VIII Joint Venture
have not yet been finally determined, it is anticipated that the Partnership
will contribute the remaining cost of approximately $2,200,000 needed to
complete construction of both projects, in which event the ultimate equity
interests in the Fund VI-VII-VIII Joint Venture of the Partnership, Wells Fund
VI and Wells Fund VII would be approximately 32%, 34%, and 34%, respectively.
The Partnership has reserved sufficient funds for this purpose.

                                       10
<PAGE>
 
Bell South Property
-------------------

On April 25, 1995, the Fund VI-VII-VIII Joint Venture purchased a 5.55 acre of
parcel of land in Jacksonville, Florida for a total of $1,245,059 including
closing costs. In May 1996, the 92,964 square foot office building was completed
with BellSouth Advertising and Publishing Corporation, a subsidiary of BellSouth
Company, occupying approximately 66,333 square feet and American Express Travel
Related Services Company, Inc. occupying approximately 22,607 square feet.

The land purchase and future construction costs, totaling approximately $9
million dollars, were funded by capital contributions of $3,500,000 by Wells
Fund VI, $3,500,000 by Wells Fund VII and $2,000,000 by the Partnership.

The BellSouth lease is for a term of nine years and eleven months with an option
to extend for an additional five-year period at market rate.  The annual base
rent during the initial term is $1,048,061 during the first five years and
$1,150,878 for the balance of the initial lease term. The American Express lease
is for a term of five years at an annual base rent of $369,851.  BellSouth and
American Express are required to pay additional rent equals  to their shares of
operating expenses during their respective lease terms.

Tanglewood Commons Shopping Center
----------------------------------

On May 31, 1995, the Fund VI-VII-VIII Joint Venture purchased a 14.683 acre
tract of real property located in Clemmons, Forsyth County, North Carolina.  As
of September 30, 1996, Wells Fund VI had contributed $2,567,688, Wells Fund VII
had contributed $2,432,312 and the Partnership had contributed $1,500,000 for
the development of this project.

The Fund VI-VII-VIII Joint Venture will develop and construct one large strip
shopping center building containing approximately 81,000 gross square feet on a
12.48 acre tract.  The remaining 2.2 acre portion of the property consists of 4
outparcels which will be held for future development.

Total cost and expenses to be incurred by the Fund VI-VII-VIII Joint Venture for
the acquisition, development, construction and completion of the shopping center
are anticipated to be approximately $8,700,000.  An agreement was signed with
Norcom Development, Inc. to supervise, manage and coordinate the planning,
design and construction of the property.  Shook Design Group, Inc. has been
signed as the architect, and John S. Clark and Company as the general
contractor.  Construction of the project began in March, 1996, and is scheduled
to be substantially completed in the first quarter of 1997.

Harris Teeter, Inc., a regional supermarket chain, executed a lease for a
minimum of 45,000 square feet with an initial term of 20 years with extension
options of four successive five year periods with the same terms as the initial
lease.  The annual base rent during the initial term is $488,250.  In addition,

                                       11
<PAGE>
 
Harris Teeter has agreed to pay percentage rents equal to one percent of the
amount by which Harris Teeter's gross sales exceed $35,000,000 for any lease
year.

FUND VIII - FUND IX JOINT VENTURE
---------------------------------

On June 10, 1996, the Partnership and Wells Real Estate Fund IX, L.P. ("Wells
Fund IX"), a Georgia public limited partnership, affiliated with the Partnership
through common general partners, entered into a Joint Venture Agreement known as
Fund VIII and Fund IX Associates (the "Fund VIII - Fund IX Joint Venture").  The
investment objectives of Wells Fund IX are substantially identical to those of
the Partnership.  As of September 30, 1996, the Partnership had contributed
$1,487,444 for an approximately 50% equity interest, and Wells Fund IX had
contributed $1,512,444 for an approximately 50% equity interest in the Fund VIII
- Fund IX Joint Venture which is developing an office building in Madison,
Wisconsin.  The total cost to complete the property is anticipated to be
approximately $10,500,000.  Although the ultimate percentages of ownership in
the Fund VIII - Fund IX Joint Venture have not yet been finally determined, it
is anticipated that the Partnership and Wells Fund IX will contribute equally
the remaining cost of approximately $7,500,000 for an approximately 50% equity
interest each.

Cellular One Property
---------------------

On June 17, 1996, the Fund VIII - Fund IX Joint Venture purchased a 7.09 acre
tract of real property in Madison, Dane County, Wisconsin for a total cost of
$859,255 including closing costs.   A four-story office building containing
approximately 96,750 rentable square feet is under construction on the site.  An
agreement was signed with ADEVCO Corporation to supervise, manage and coordinate
the planning, design, construction and completion of the property.  Kraemer
Brothers, Inc. is acting as the general contractor and Strang, Inc. as the
architect.

Cellular One, a subsidiary of BellSouth Corporation, has executed a lease for
75,000 rentable square feet comprising approximately 78% of the building.  The
initial term of the lease will be 9 years and 11 months beginning in June 1997,
with the option to extend the initial term of the lease for two consecutive five
year periods.  The annual base rent payable during the initial term is $862,500
payable in equal monthly installments of $71,875 during the first five years and
$975,000 payable in equal monthly installments of $81,250 during the last four
years and 11  months of the initial term.  The annual base rent for each
extended term will be at market rental rate.

It is anticipated that the total cost to complete the property, which is
estimated to be approximately $10,500,000, will be contributed equally by the
Partnership and Wells Fund IX.  The Partnership has reserved sufficient funds
for this purpose.

(3) Deferred Project Costs
--------------------------

The Partnership pays Acquisitions and Advisory Fees to the General Partners for
acquisition and advisory services.  These payments, as provided by the

                                       12
<PAGE>
 
Partnership Agreement, may not exceed 5% of the Limited Partners' capital
contributions.  Acquisition and Advisory Fees paid as of September 30, 1996,
amounted to $1,121,494 and represented approximately 3.5% of the Limited
Partners' capital contributions received.  These fees are allocated to specific
properties as they are purchased.

(4) Deferred Offering Costs
---------------------------

Wells Capital, Inc. (the "Company"), the general partner of Wells Partners,
L.P., pays all the offering expenses for the Partnership.   The Company may be
reimbursed by the Partnership for such offering expenses in an amount not to
exceed 5% of total Limited Partners' capital contributions.  As of September 30,
1996, the Partnership had reimbursed the Company for $1,602,134 in offering
expenses, which represented approximately 5% of Limited Partners' capital
contributions.

(5) Due To Affiliates
---------------------

Due to Affiliates consists of Acquisition and Advisory Fees, deferred offering
costs, and other operating expenses paid by the Company on behalf of the
Partnership.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
-------------------------------------------------------------------------
RESULTS OF OPERATION.
---------------------

The following discussion and analysis should be read in conjunction with the
accompanying financial statements of the Partnership and notes thereto.  This
Report contains forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934,
including discussion and analysis of the financial condition of the Partnership,
anticipated capital expenditures required to complete certain projects, amounts
of cash distributions anticipated to be distributed to Limited Partners in the
future and certain other matters.  Readers of this Report should be aware that
there are various factors that could cause actual results to differ materially
form any forward-looking statement made in this Report, which include
construction costs which may exceed estimates. Construction delays, lease-up
risks, inability to obtain new tenants upon expiration of existing leases, and
the potential need to fund tenant improvements or other capital expenditures out
of operating cash flow.

RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL CONDITIONS
---------------------------------------------------------

(a) General
-----------

The Partnership commenced active operations on February 24, 1995, when it
received and accepted subscriptions for 125,000 units. The offering was
terminated on January 5, 1996, at which time the Partnership had sold 2,613,534
Class A Status Units and 590,735 Class B Status Units, held by a total of 1,939
and 302 Limited Partners respectively, for total Limited Partner contributions
of $32,042,689.  After payment of $1,121,494 in Acquisition and Advisory Fees,
payment of $4,806,403 in selling commissions and organization and offering

                                       13
<PAGE>
 
expenses, the investment by the Partnership of $4,002,732 in the Fund VII - Fund
VIII Joint Venture, $3,500,000 in the Fund VI-VII-VIII Joint Venture and
$1,487,444 in the Fund VIII - Fund IX Joint Venture, as of September 30, 1996,
the Partnership was holding net offering proceeds of approximately $17,100,000
available for investment in properties.

It is anticipated that the Partnership will contribute an additional investment
in the Fund VII - Fund VIII Joint Venture of approximately $48,000 which will be
required to complete the tenant build-out of the Hannover and Gainesville
Properties. An additional investment by the Partnership in the Fund VI-VII-VIII
Joint Venture of approximately $2,200,000 will be required to complete both the
BellSouth Property and the Tanglewood Commons Shopping Center Property.  An
additional investment by the Partnership of approximately $3,750,000 to the Fund
VIII - Fund IX Joint Venture will be required to complete the Cellular One
Property.  Accordingly, the Partnership has reserved $5,998,000 out of its net
offering proceeds for investment in these properties.

Gross revenues of the Partnership of $261,798 for the three months and $813,682
for the nine months ended September 30, 1996, and $121,518 for the three months
and $196,889 for the nine months ended September 30, 1995, were attributable
primarily to interest income earned on funds held by the Partnership prior to
the investment in joint ventures.  The equity in income of joint ventures is
primarily the result of CH2M Hill occupying the Gainesville Property for the
entire nine months of 1996 and the BellSouth building becoming operational in
May, 1996.  Total expenses of the Partnership remained relatively stable for the
nine months ended September 30, 1996 and 1995.  Total expenses increased from
$24,132 for the three months ended September 30, 1995 to $32,528 for the three
months ended September 30, 1996 due primarily to the payment of acquisition
costs.  The printing expenses decreased as the Partnership entered its second
year of operations.  This decrease was offset by increased audit fees due
partially as a result of additional SEC reporting requirements.  Net income of
the Partnership was $718,146 for the nine months ended September 30, 1996,  as
compared to $109,760 for the same period in 1995, and $229,270 for the three
months ended September 30, 1996, as compared to $97,386 for the same period in
1995, due primarily to increased revenues.

For the nine months ended September 30, 1996, net income allocated to Class A
Limited Partners was $0.34 per Unit, net loss allocated to Class B Limited
Partners was $0.28 per Unit and net loss allocated to General Partners was $297
for 1996.

The Partnership's net cash used by operating activities of $143,516 is due
primarily to interest earned on funds held by the Partnership prior to
investment in properties offset by distributions paid to Limited Partners.  Net
cash used in investing activities of $3,493,397 is primarily the result of
additional investments of $3,426,962 in the joint ventures.  Net cash provided
by financing activities is primarily the result of raising $1,898,147 in Limited
Partners contributions before deducting commissions and offering expenses, and
therefore, increasing cash and cash equivalents to $17,238,394 as of September
30, 1996.  The net increase in cash and cash equivalents from $600 of General
Partners' contributions at the beginning of the year to $12,309,925 as of
September 30, 1995 was primarily the result of raising $20,527,232 in Limited
Partners' contributions before deducting commissions and offering expenses
offset by investments in joint ventures.

                                       14
<PAGE>
 
The Partnership's distributions from investment income accrued to Limited
Partners holding Class A Status Units for the third quarter of 1996 was $0.11
per Unit which will be paid in November, 1996.



             [The remainder of this page intentionally left blank.]

                                       15
<PAGE>
 
PROPERTY OPERATIONS
-------------------

As of September 30, 1996, the Partnership owned interests in the following
operational properties:

Gainesville Property/Fund VII - Fund VIII Joint Venture
-------------------------------------------------------
<TABLE>
<CAPTION>
                                                                  Three Months          Nine Months        
                                                              -----------------------------------------                 
                                                              Ended Sept 30, 1996   Ended Sept 30, 1996                 
                                                              --------------------  --------------------                
<S>                                                           <C>                   <C>                                 
Revenues:                                                                                                               
 Rental Income                                                           $132,578              $401,698                 
                                                                                                                        
Expenses:                                                                                                               
 Depreciation                                                              54,476               163,401                 
 Management & leasing expenses                                             25,939                55,035                 
 Other operating expenses                                                    (922)               (3,628)                
                                                                         --------              --------                 
                                                                           79,493               214,808                 
                                                                         --------              --------                 
                                                                                                                        
Net income                                                               $ 53,085              $186,890                 
                                                                         ========              ========                 
                                                                                                                        
Occupied %                                                                   93.6%                 93.6%                
                                                                                                                        
Partnership's Ownership % in the Fund VII - VIII Joint Venture               62.0%                 62.0%                
                                                                                                                        
Cash Distribution to Partnership                                         $ 67,429              $205,671                 
                                                                                                                        
Net Income Allocated to the Partnership                                  $ 32,937              $127,715            
 
</TABLE>

In February, 1995, the Fund VII - Fund VIII Joint Venture acquired a 5.0 acre of
land located in Gainesville, Alachua County, Florida for the purpose of
constructing a 62,975 square foot (61,468 rentable square feet) office building.
A 9 year, 11 month lease to occupy 57,457 square feet was signed by CH2M Hill.
The annual base rent is $530,313 payable in equal monthly installments of
$44,193.  The average effective annual rental rate at the CH2M Hill property was
$9.22 per square foot.  CH2M Hill occupied their portion of the building in mid-
December, 1995, and therefore, no comparative financial information is
available.

                                       16
<PAGE>
 
The Hannover Retail Center / Fund VII - Fund VIII Joint Venture
---------------------------------------------------------------
<TABLE>
<CAPTION>
 
                                                                Three Months           Six Months            
                                                            -----------------------------------------        
                                                            Ended Sept 30, 1996   Ended Sept 30, 1996        
                                                            --------------------  --------------------       
<S>                                                         <C>                   <C>                        
Revenues:                                                                                                    
 Rental Income                                                          $23,335               $25,660        
                                                                                                             
Expenses:                                                                                                    
 Depreciation                                                             9,362                20,717        
 Management and leasing expenses                                          1,830                 1,830        
 Other operating expenses                                                 3,149                11,474        
                                                                        -------               -------        
                                                                         14,341                34,021        
                                                                        -------               -------        
                                                                                                             
Net income (loss)                                                       $ 8,994               $(8,361)       
                                                                        =======               =======        
                                                                                                             
Occupied %                                                                50.17%                50.17%       
                                                                                                             
Partnership's Ownership % in the Fund VII - VIII Joint Venture             62.0%                 62.0%       
                                                                                                             
Cash Distribution to the Fund VII - VIII Joint Venture                  $ 3,043               $ 3,043        
                                                                                                             
Net Income (Loss) Allocated to the Partnership                          $ 5,581               $(5,188)       
</TABLE>

On April 1, 1996, Fund VII - Fund VIII Joint Venture acquired a 1.01 acre tract
of land and a 12,000 square foot combination retail/office building known as the
Hannover Retail Center.

Moovies, Inc., a video store and rental store, signed a nine year, eleven month
lease to occupy 6,020 square feet and occupied the space and opened for business
on June 22, 1996.  Accordingly, no comparative financial data is available.

                                       17
<PAGE>
 
Bell South Property / Fund VI - Fund VII - Fund VIII Joint Venture
------------------------------------------------------------------
<TABLE>
<CAPTION>
 
                                                                                     Three Months          Five Months
                                                                                 --------------------  -------------------
                                                                                 Ended Sept 30, 1996   Ended Sept 30, 1996
                                                                                 --------------------  --------------------
<S>                                                                              <C>                   <C>
Revenues:
  Rental income                                                                             $364,732              $511,472
  Interest income                                                                              1,366                58,000
                                                                                            --------              --------
                                                                                             366,098               569,472
                                                                                            --------              --------
Expenses:
 Depreciation                                                                                109,116               186,092
 Management & leasing expenses                                                                39,597                57,525
 Other operating expenses                                                                    147,446               213,407
                                                                                            --------              --------
                                                                                             296,159               457,024
                                                                                            --------              --------
 
Net income                                                                                  $ 69,939              $112,448
                                                                                            ========              ========
 
Occupied %                                                                                      96.0%                 96.0%
 
Partnership's Ownership % in the Fund VI - Fund VII - Fund VIII Joint Venture                   22.6%                 22.6%
 
Cash Distribution to Partnership                                                            $ 16,437              $ 36,695
 
Net Income Allocated to Partnership                                                         $  5,658              $ 18,580
</TABLE>

On April 25, 1995, the Fund VI - Fund VII - Fund VIII Joint Venture purchased
5.55 acres of land located in Jacksonville, Florida.  In May 1996, the 92,964
square foot office building was completed, with BellSouth Advertising and
Publishing Corporation occupying approximately 64,558 square feet and American
Express occupying approximately 22,607 square feet.  Approximately 2,900 square
feet of additional space will be occupied by BellSouth commencing in December,
1996.

The initial term of the BellSouth lease is for nine years and eleven months. The
annual base rent during the initial term is $1,048,061 during the first five
years and $1,150,878 for the balance of the initial lease term.  The American
Express lease is for a term of five years at an annual base rent of $369,851.
BellSouth and American Express are required to pay additional rent equal to
their share of operating expenses during their respective lease terms.

Interest income was generated from construction dollars, not as yet funded on
construction, being invested in interest bearing accounts.

                                       18
<PAGE>
 
PART II - OTHER INFORMATION
---------------------------

     ITEM 6 (b). No reports on Form 8-K were filed during the third quarter of
     1996.

                                   SIGNATURES

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

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

     Dated: November 11, 1996        By: /s/ Leo F. Wells, III
                                         ---------------------------------
                                         Leo F. Wells, III, as Individual
                                         General Partner and as President,
                                         Sole Director and Chief Financial
                                         Officer of Wells Capital, Inc., the
                                         General Partner of Wells Partners, L.P.

                                       19