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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 September 30, 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  September 30, 2007 (unaudited) and December 31, 2006                                                         |  | 5       
|         |  |                       | 
|         |  |                       |  | Statements of Operations for the Three Months and Nine Months Ended September 30, 2007 (unaudited) and 2006 (unaudited)       |  | 6       
|         |  |                       | 
|         |  |                       |  | Statements of Partners Capital for the Year Ended December 31, 2006 and the Nine Months Ended September 30, 2007 (unaudited) |  | 7       
|         |  |                       | 
|         |  |                       |  | Statements of Cash Flows for the Nine Months Ended September 30, 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                                         |  | 17      
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                    |  | 23      
|         |  |                       | 
|         |  | Item 4.               |  | Controls and Procedures                                                                                                       |  | 23      
|         |  |                      
|PART II. |  | OTHER INFORMATION     |  |                                                                                                                              
|         |  |                       | 
|         |  | Item 1.               |  | Legal Proceedings                                                                                                             |  | 23      
|         |  |                       | 
|         |  | Item 1A.              |  | Risk Factors                                                                                                                  |  | 23      
|         |  |                       | 
|         |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                   |  | 23      
|         |  |                       | 
|         |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                               |  | 23      
|         |  |                       | 
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                           |  | 24      
|         |  |                       | 
|         |  | Item 5.               |  | Other Information                                                                                                             |  | 24      
|         |  |                       | 
|         |  | Item 6.               |  | Exhibits                                                                                                                      |  | 24      



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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 and nine months ended September 30, 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) September 30, 2007 |           | December 31, 2006
|Investment in joint ventures |  | $                              | 8,708,798 |                   | $ | 9,009,067
|Cash and cash equivalents    |  |                                | 719,103   |                   |   | 797,590  
|Due from joint ventures      |  |                                | 104,475   |                   |   | 11,881   
|Other assets                 |  |                                | 6,279     |                   |   | 5,651    
|                             |  |                                |           |                   |   |          
|Total assets                 |  | $                              | 9,538,655 |                   | $ | 9,824,189
|                             |  |                                |           |                   |   |          

LIABILITIES AND PARTNERS CAPITAL



|                                                                                                                                  |  |   |           |  |   |          
|--------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | ---------
|LIABILITIES:                                                                                                                      |  |   |           |  |   |          
|Accounts payable and accrued expenses                                                                                             |  | $ | 23,473    |  | $ | 74,553   
|Due to affiliates                                                                                                                 |  |   | 11,361    |  |   | 7,938    
|Partnership distributions payable                                                                                                 |  |   | 135,427   |  |   | 150,840  
|                                                                                                                                  |  |   |           |  |   |          
|Total liabilities                                                                                                                 |  |   | 170,261   |  |   | 233,331  
|                                                                                                                                  |  |  
|PARTNERS CAPITAL:                                                                                                                |  |   |           |  |   |          
|Limited partners:                                                                                                                 |  |   |           |  |   |          
|Class A  2,953,079 units and 2,952,679 units issued and outstanding as of September 30, 2007 and December 31, 2006,
respectively |  |   | 8,942,901 |  |   | 8,884,331
|Class B  250,190 units and 250,590 units issued and outstanding as of September 30, 2007 and December 31, 2006, respectively     |  |   | 425,493   |  |   | 704,268  
|General partners                                                                                                                  |  |   | 0         |  |   | 2,259    
|                                                                                                                                  |  |   |           |  |   |          
|Total partners capital                                                                                                           |  |   | 9,368,394 |  |   | 9,590,858
|                                                                                                                                  |  |   |           |  |   |          
|Total liabilities and partners capital                                                                                           |  | $ | 9,538,655 |  | $ | 9,824,189
|                                                                                                                                  |  |   |           |  |   |          

See accompanying notes.



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WELLS REAL ESTATE FUND VIII, L.P.



STATEMENTS OF OPERATIONS



|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|------------------------------------------------------------ |  | -------------------------------------------- | --------- | - | ------------------------------------------- | - | --------- | ---- |  | - | --------- | - |  | - | ---------
|                                                             |  | (Unaudited) Three Months Ended September 30, |           |   | (Unaudited) Nine Months Ended September 30,
|                                                             |  | 2007                                         |           |   | 2006                                        |   |           | 2007 |  |   | 2006     
|                                                             |  |                                              |           |  
|EQUITY IN INCOME OF JOINT VENTURES                           |  | $                                            | 89,678    |   |                                             | $ | 141,736   |      |  | $ | 300,024   |   |  | $ | 3,180,836
|                                                             |  |                                              |           |  
|EXPENSES:                                                    |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|General and administrative                                   |  |                                              | 46,579    |   |                                             |   | 48,403    |      |  |   | 148,281   |   |  |   | 165,667  
|                                                             |  |                                              |           |  
|INTEREST AND OTHER INCOME                                    |  |                                              | 9,632     |   |                                             |   | 77,230    |      |  |   | 32,075    |   |  |   | 192,179  
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|                                                             |  |                                              |           |  
|NET INCOME                                                   |  | $                                            | 52,731    |   |                                             | $ | 170,563   |      |  | $ | 183,818   |   |  | $ | 3,207,348
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|                                                             |  |                                              |           |  
|NET INCOME (LOSS) ALLOCATED TO:                              |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|CLASS A LIMITED PARTNERS                                     |  | $                                            | 147,610   |   |                                             | $ | 284,778   |      |  | $ | 464,020   |   |  | $ | 2,565,775
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|CLASS B LIMITED PARTNERS                                     |  | $                                            | (94,301   | ) |                                             | $ | (114,109  | )    |  | $ | (277,943  | ) |  | $ | 638,178  
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|GENERAL PARTNERS                                             |  | $                                            | (578      | ) |                                             | $ | (106      | )    |  | $ | (2,259    | ) |  | $ | 3,395    
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|                                                             |  |                                              |           |  
|NET INCOME (LOSS) PER WEIGHTED-AVERAGE LIMITED PARTNER UNIT: |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|CLASS A                                                      |  |                                              | $ 0.05    |   |                                             |   | $ 0.10    |      |  |   | $ 0.16    |   |  |   | $0.87    
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|CLASS B                                                      |  |                                              | $(0.38    | ) |                                             |   | $(0.46    | )    |  |   | $(1.11    | ) |  |   | $2.54    
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|                                                             |  |                                              |           |  
|WEIGHTED-AVERAGE LIMITED PARTNER UNITS OUTSTANDING:          |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|CLASS A                                                      |  |                                              | 2,953,079 |   |                                             |   | 2,952,679 |      |  |   | 2,952,812 |   |  |   | 2,951,979
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          
|CLASS B                                                      |  |                                              | 250,190   |   |                                             |   | 250,590   |      |  |   | 250,457   |   |  |   | 251,290  
|                                                             |  |                                              |           |   |                                             |   |           |      |  |   |           |   |  |   |          

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 NINE MONTHS ENDED SEPTEMBER 30, 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-averageClass 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  |  
|                                                                                                                     |  |                  |  |        |                  |  
|Class B conversion elections                                                                                         |  | 400              |  |        | 832              |   |       | (400                    | ) |        |   | (832     | ) |  |   | 0      |   |  |   | 0          |  
|Net income (loss)                                                                                                    |  | 0                |  |        | 464,020          |   |       | 0                       |   |        |   | (277,943 | ) |  |   | (2,259 | ) |  |   | 183,818    |  
|Distributions of operating cash flow($0.14 per weighted-averageClass A Unit)                                         |  | 0                |  |        | (406,282         | ) |       | 0                       |   |        |   | 0        |   |  |   | 0      |   |  |   | (406,282   | )
|                                                                                                                     |  |                  |  |        |                  |   |       |                         |   |        |   |          |   |  |   |        |   |  |   |            |  
|BALANCE, September 30, 2007                                                                                          |  | 2,953,079        |  | $      | 8,942,901        |   |       | 250,190                 |   |        | $ | 425,493  |   |  | $ | 0      |   |  | $ | 9,368,394  |  
|                                                                                                                     |  |                  |  |        |                  |   |       |                         |   |        |   |          |   |  |   |        |   |  |   |            |  

See accompanying notes.



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WELLS REAL ESTATE FUND VIII, L.P.



STATEMENTS OF CASH FLOWS



|                                                                                  |  |                               |          |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | ----------------------------- | -------- | - | ---- | - | ---------- | -
|                                                                                  |  | (Unaudited) Nine Months Ended |         
|                                                                                  |  | September 30,                 |         
|                                                                                  |  | 2007                          |          |   | 2006 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                               |          |   |      |   |            |  
|Net income                                                                        |  | $                             | 183,818  |   |      | $ | 3,207,348  |  
|Operating distributions received from joint ventures                              |  |                               | 270,157  |   |      |   | 970,478    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                               |          |   |      |   |            |  
|Equity in income of joint ventures                                                |  |                               | (300,024 | ) |      |   | (3,180,836 | )
|Changes in assets and liabilities:                                                |  |                               |          |   |      |   |            |  
|Increase in other assets                                                          |  |                               | (628     | ) |      |   | (28,123    | )
|Decrease in accounts payable and accrued expenses                                 |  |                               | (51,080  | ) |      |   | (13,670    | )
|Increase (decrease) in due to affiliates                                          |  |                               | 3,423    |   |      |   | (3,006     | )
|                                                                                  |  |                               |          |   |      |   |            |  
|Net cash provided by operating activities                                         |  |                               | 105,666  |   |      |   | 952,191    |  
|                                                                                  |  |                              
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                               |          |   |      |   |            |  
|Investment in joint ventures                                                      |  |                               | 0        |   |      |   | (161,773   | )
|Net sale proceeds received from joint ventures                                    |  |                               | 237,542  |   |      |   | 4,178,010  |  
|                                                                                  |  |                               |          |   |      |   |            |  
|Net cash provided by investing activities                                         |  |                               | 237,542  |   |      |   | 4,016,237  |  
|                                                                                  |  |                              
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                               |          |   |      |   |            |  
|Operating distributions paid to limited partners                                  |  |                               | (421,695 | ) |      |   | (684,180   | )
|Net sale proceeds distributions paid to limited partners                          |  |                               | 0        |   |      |   | (3,800,003 | )
|                                                                                  |  |                               |          |   |      |   |            |  
|Net cash used in financing activities                                             |  |                               | (421,695 | ) |      |   | (4,484,183 | )
|                                                                                  |  |                               |          |   |      |   |            |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                              |  |                               | (78,487  | ) |      |   | 484,245    |  
|                                                                                  |  |                              
|CASH AND CASH EQUIVALENTS, beginning of period                                    |  |                               | 797,590  |   |      |   | 5,528,409  |  
|                                                                                  |  |                               |          |   |      |   |            |  
|CASH AND CASH EQUIVALENTS, end of period                                          |  | $                             | 719,103  |   |      | $ | 6,012,654  |  
|                                                                                  |  |                               |          |   |      |   |            |  
|                                                                                  |  |                              
|SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:           |  |                               |          |   |      |   |            |  
|Partnership distributions payable                                                 |  | $                             | 135,427  |   |      | $ | 181,169    |  
|                                                                                  |  |                               |          |   |      |   |            |  

See accompanying notes.



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WELLS REAL ESTATE FUND VIII, L.P.



CONDENSED NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 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. (WREF). Leo F. Wells,
III is the president and sole director of Wells Capital and the president, sole director, and sole owner of WREF. The Partnership was formed on 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 Piedmont Operating Partnership, LP (Piedmont OP), formerly known as Wells Operating Partnership, L.P. Piedmont OP is a Delaware limited partnership with Piedmont
Office Realty Trust, Inc. (Piedmont REIT), formerly known as Wells Real Estate Investment Trust, Inc., serving as its general partner. Piedmont REIT is a Maryland corporation that qualifies as a real estate investment trust. During the
periods presented, the Partnership owned interests in the following joint ventures (the Joint Ventures) and properties:



|                                                                              |  |                                                                                                             |  |                                                                                                                                                                                          
|----------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint Venture                                                                 |  | Joint Venture Partners                                                                                      |  | Properties                                                                                                                                                                               
|Fund VI, Fund VII and Fund VIII Associates (Fund VI-VII-VIII Associates)(3) |  |   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.                                    |  | No properties owned during the periods presented.                                                                                                                                        



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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. |  | 3. US Cellular Building A four-story office building located in Madison, Wisconsin  4. 14079 Senlac Drive (formerly known as the
AT&T  Texas Building) A one-story office building located in Farmers Branch, Texas  5. 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   Piedmont Operating Partnership, LP        |  | 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.
| | --- | ---------------------------------------------

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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##### Table of Contents

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 (SOP) 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 September 30, 2007 and December 31, 2006, other assets is comprised of the following items:



|                            |  |                   |       |                  |   |      
|--------------------------- |  | ----------------- | ----- | ---------------- | - | -----
|                            |  | September 30,2007 |       | December 31,2006
|Interest receivable         |  | $                 | 3,109 |                  | $ | 3,595
|Insurance refund receivable |  |                   | 3,170 |                  |   | 2,056
|                            |  |                   |       |                  |   |      
|Total                       |  | $                 | 6,279 |                  | $ | 5,651
|                            |  |                   |       |                  |   |      

Interest receivable represents interest earned during the period presented, which will be received in the
following month. Insurance refund receivable represents excess premiums due from the insurance carrier. Balances without a future economic benefit are written off as they are identified.

Distributions of Net Cash from Operations

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



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



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



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

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



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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;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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.



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Recent Accounting Pronouncements

In June 2007, the American Institute of Certified Public Accountants (AICPA) issued SOP 07-1, Clarification of the Scope of the Audit and Accounting Guide "Investment Companies" and Accounting by Parent
Companies and Equity Method Investors for Investments in Investment Companies, which provides guidance for determining which entities fall within the scope of the AICPA Audit and Accounting Guide for Investment Companies and requires additional
disclosures for certain of those entities. In October 2007, the Financial Accounting Standards Board (FASB) elected to indefinitely defer the effective date of SOP 07-1. As a result, the Partnership has postponed its evaluation of
the provisions of SOP 07-1 and related impact on its financial statements and accompanying notes.

In February 2007, the FASB issued SFAS No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities. SFAS No. 159 permits entities to choose
to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings.
SFAS No. 159 will be effective for fiscal years beginning after November 15, 2007. The Partnership is currently assessing these provisions and evaluating the financial impact of SFAS No. 159 on its financial statements; however, it is
not currently planning to adopt the fair value option in 2008.

In September 2006, the 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. 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 these 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.

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 and nine months ended
September 30, 2007 and 2006, respectively, is presented below:



|                            |  |                    |         |                                         |   |         |                                    |      |                    |  |      |         |      |  |      |  |      |       |  |   |         |  |   |         |  
|--------------------------- |  | ------------------ | ------- | --------------------------------------- | - | ------- | ---------------------------------- | ---- | ------------------ |  | ---- | ------- | ---- |  | ---- |  | ---- | ----- |  | - | ------- |  | - | ------- | -
|                            |  | Total Revenues     |         | Income (Loss) FromContinuing Operations |   |         | Income FromDiscontinued Operations |      | Net Income (Loss)  | 
|                            |  | Three Months Ended |         | Three Months Ended                      |   |         | Three Months Ended                 |      | Three Months Ended | 
|                            |  | September 30,      |         | September 30,                           |   |         | September 30,                      |      | September 30,      | 
|                            |  | 2007               |         | 2006                                    |   | 2007    |                                    | 2006 |                    |  | 2007 |         | 2006 |  | 2007 |  | 2006 |      
|Fund VI-VII-VIII Associates |  | $                  | 0       |                                         | $ | 0       |                                    | $    | 0                  |  | $    | (13,236 | )    |  | $0   |  | $    | 2,944 |  | $ | 0       |  | $ | (10,292 | )
|Fund VII-VIII Associates    |  |                    | 0       |                                         |   | 0       |                                    |      | 0                  |  |      | 0       |      |  | 0    |  |      | 0     |  |   | 0       |  |   | 0       |  
|Fund VIII-IX Associates     |  |                    | 588,731 |                                         |   | 715,687 |                                    |      | 163,656            |  |      | 264,734 |      |  | 0    |  |      | 0     |  |   | 163,656 |  |   | 264,734 |  
|                            |  |                    |         |                                         |   |         |                                    |      |                    |  |      |         |      |  |      |  |      |       |  |   |         |  |   |         |  
|                            |  | $                  | 588,731 |                                         | $ | 715,687 |                                    | $    | 163,656            |  | $    | 251,498 |      |  | $0   |  | $    | 2,944 |  | $ | 163,656 |  | $ | 254,442 |  
|                            |  |                    |         |                                         |   |         |                                    |      |                    |  |      |         |      |  |      |  |      |       |  |   |         |  |   |         |  



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##### Table of Contents

|                                                                                                                                                                                                                         |  |                    |           |                                         |   |           |                                           |      |         |                    |      |           |      |  |   |      |  |      |           |   |  |   |         |  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | --------- | --------------------------------------- | - | --------- | ----------------------------------------- | ---- | ------- | ------------------ | ---- | --------- | ---- |  | - | ---- |  | ---- | --------- | - |  | - | ------- |  | - | --------- | -
|                                                                                                                                                                                                                         |  | Total Revenues     |           | Income (Loss) FromContinuing Operations |   |           | Income (Loss) FromDiscontinued Operations |      |         | Net Income (Loss)  |     
|                                                                                                                                                                                                                         |  | Nine Months Ended  |           | Nine Months Ended                       |   |           | Nine Months Ended                         |      |         | Nine Months Ended  |     
|                                                                                                                                                                                                                         |  | September 30,      |           | September 30,                           |   |           | September 30,                             |      |         | September 30,      |     
|                                                                                                                                                                                                                         |  | 2007               |           | 2006                                    |   | 2007      |                                           | 2006 |         |                    | 2007 |           | 2006 |  |   | 2007 |  | 2006 |          
|Fund VI-VII-VIII Associates                                                                                                                                                                                              |  | $                  | 105,092   |                                         | $ | 0         |                                           | $    | 101,396 |                    | $    | (31,364   | )    |  | $ | 925  |  | $    | 6,987,907 |   |  | $ | 102,321 |  | $ | 6,956,543 |  
|Fund VII-VIII Associates                                                                                                                                                                                                 |  |                    | 0         |                                         |   | 0         |                                           |      | 0       |                    |      | (2,767    | )    |  |   | 0    |  |      | (5,258    | ) |  |   | 0       |  |   | (8,025    | )
|Fund VIII-IX Associates                                                                                                                                                                                                  |  |                    | 1,779,388 |                                         |   | 3,025,936 |                                           |      | 487,107 |                    |      | 1,706,598 |      |  |   | 0    |  |      | 0         |   |  |   | 487,107 |  |   | 1,706,598 |  
|                                                                                                                                                                                                                         |  |                    |           |                                         |   |           |                                           |      |         |                    |      |           |      |  |   |      |  |      |           |   |  |   |         |  |   |           |  
|                                                                                                                                                                                                                         |  | $                  | 1,884,480 |                                         | $ | 3,025,936 |                                           | $    | 588,503 |                    | $    | 1,672,467 |      |  | $ | 925  |  | $    | 6,982,649 |   |  | $ | 589,428 |  | $ | 8,655,116 |  
|                                                                                                                                                                                                                         |  |                    |           |                                         |   |           |                                           |      |         |                    |      |           |      |  |   |      |  |      |           |   |  |   |         |  |   |           |  
|                                                                                                                                                                                                                        
|Condensed financial information for the joint venture in which Fund VIII-IX Associates held an equity interest for the three months and nine months ended September 30, 2007 and
2006, respectively, is presented below: | 
|                                                                                                                                                                                                                         |  |                    |           |                                        
|                                                                                                                                                                                                                         |  | Total Revenues     |           | Loss FromContinuing Operations          |   |           | Loss FromDiscontinued Operations          |      |         | Net Loss           |     
|                                                                                                                                                                                                                         |  | Three Months Ended |           | Three Months Ended                      |   |           | Three Months Ended                        |      |         | Three Months Ended |     
|                                                                                                                                                                                                                         |  | September 30,      |           | September 30,                           |   |           | September 30,                             |      |         | September 30,      |     
|                                                                                                                                                                                                                         |  | 2007               |           | 2006                                    |   | 2007      |                                           | 2006 |         |                    | 2007 |           | 2006 |  |   | 2007 |  | 2006 |          
|Fund VIII-IX-REIT Associates                                                                                                                                                                                             |  |                    | $0        |                                         |   | $198      |                                           |      | $0      |                    |      | $(9,076)  |      |  |   | $0   |  |      | $(18,055) |   |  |   | $0      |  |   | $(27,131) |  
|                                                                                                                                                                                                                         |  |                    |           |                                         |   |           |                                           |      |         |                    |      |           |      |  |   |      |  |      |           |   |  |   |         |  |   |           |  
|                                                                                                                                                                                                                         |  |                    |           |                                        
|                                                                                                                                                                                                                         |  | Total Revenues     |           | Loss From Continuing Operations         |   |           | Loss From DiscontinuedOperations          |      |         | Net Loss           |     
|                                                                                                                                                                                                                         |  | Nine Months Ended  |           | Nine Months Ended                       |   |           | Nine Months Ended                         |      |         | Nine Months Ended  |     
|                                                                                                                                                                                                                         |  | September 30,      |           | September 30,                           |   |           | September 30,                             |      |         | September 30,      |     
|                                                                                                                                                                                                                         |  | 2007               |           | 2006                                    |   | 2007      |                                           | 2006 |         |                    | 2007 |           | 2006 |  |   | 2007 |  | 2006 |          
|Fund VIII-IX-REIT Associates                                                                                                                                                                                             |  |                    | $0        |                                         |   | $1,435    |                                           |      | $0      |                    |      | $(17,048) |      |  |   | $0   |  |      | $(17,118) |   |  |   | $0      |  |   | $(34,166) |  
|                                                                                                                                                                                                                         |  |                    |           |                                         |   |           |                                           |      |         |                    |      |           |      |  |   |      |  |      |           |   |  |   |         |  |   |           |  

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:



|                             |  |                                      |     |                                      |    |       |   |                       |  |   |              |   |  |       |           |  |  |   |           |  
|---------------------------- |  | ------------------------------------ | --- | ------------------------------------ | -- | ----- | - | --------------------- |  | - | ------------ | - |  | ----- | --------- |  |  | - | --------- | -
|                             |  | Nine Months Ended September 30, 2007 |     | Nine Months Ended September 30, 2006 |   
|                             |  | OperatingIncome                      |     | Gain on Sale                         |    | Total |   | OperatingIncome(Loss) |  |   | Gain on Sale |   |  | Total |          
|Fund VI-VII-VIII Associates  |  | $                                    | 925 |                                      | $0 |       | $ | 925                   |  | $ | 262,702      |   |  | $     | 6,725,205 |  |  | $ | 6,987,907 |  
|Fund VII-VIII Associates     |  |                                      | 0   |                                      | 0  |       |   | 0                     |  |   | (5,258       | ) |  |       | 0         |  |  |   | (5,258    | )
|Fund VIII-IX Associates      |  |                                      | 0   |                                      | 0  |       |   | 0                     |  |   | 0            |   |  |       | 0         |  |  |   | 0         |  
|Fund VIII-IX-REIT Associates |  |                                      | 0   |                                      | 0  |       |   | 0                     |  |   | (17,118      | ) |  |       | 0         |  |  |   | (17,118   | )
|                             |  |                                      |     |                                      |    |       |   |                       |  |   |              |   |  |       |           |  |  |   |           |  
|                             |  | $                                    | 925 |                                      | $0 |       | $ | 925                   |  | $ | 240,326      |   |  | $     | 6,725,205 |  |  | $ | 6,965,531 |  
|                             |  |                                      |     |                                      |    |       |   |                       |  |   |              |   |  |       |           |  |  |   |           |  

Due from Joint Ventures

As presented in the accompanying balance sheets, due from joint ventures as of September 30, 2007 and December 31, 2006 represents operating cash flow generated by the Joint Ventures for the three months
ended September 30, 2007 and December 31, 2006, respectively, which is attributable to the Partnership.



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##### Table of Contents

|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) 3% for management services and 3% for
leasing services of the gross revenues collected monthly, 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 $12,980 and $19,721 for the three months ended September 30, 2007 and
2006, respectively, and $48,575 and $69,898 for the nine months ended September 30, 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 $19,356 and $21,357 for the three months ended September 30, 2007 and 2006, respectively, and $64,524 and $65,451 for the nine months ended September 30, 2007 and 2006, respectively. As of September 30, 2007
and December 31, 2006, the due to affiliates balances represent administrative reimbursements due to Wells Management and/or Wells Capital.

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

Future net income generated by WREF will be largely dependent upon the amount of fees earned by Wells Capital and Wells Management based on, among other things, the
level of investor proceeds raised from the sale of common stock for certain WREF-sponsored programs and the volume of future acquisitions and dispositions of real estate assets by WREF-sponsored programs, as well as anticipated dividend income
earned from its holdings of common stock of Piedmont REIT. In addition, WREF guarantees unsecured debt of $160 million held by another WREF-sponsored product that is in the start-up phase of its operations. As of September 30,



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##### Table of Contents

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.

Assertion of Legal Actions Against Related-Parties

On March 12, 2007, a stockholder of Piedmont REIT, formerly known as Wells REIT, filed a putative class action and derivative complaint, styled
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, Piedmont 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 Piedmont REIT, and certain individuals who formerly
served as officers or directors of Piedmont REIT prior to the closing of the internalization transaction on April 16, 2007. The complaint alleges, among other things, violations of the federal proxy rules and breaches of fiduciary duty arising
from the Piedmont REIT internalization transaction and the related proxy statement filed with the SEC on February 26, 2007, as amended. The complaint seeks, among other things, unspecified monetary damages and nullification of the Piedmont REIT
internalization transaction. On April 9, 2007, the District Court denied the plaintiffs motion for an order enjoining the internalization transaction. On April 17, 2007, the Court granted the defendants motion to transfer venue
to the United States District Court for the Northern District of Georgia, and the case was docketed in the Northern District of Georgia on April 24, 2007. On June 7, 2007, the Court granted a motion to designate the class lead plaintiff
and class co-lead counsel. On June 27, 2007, the plaintiff filed an amended complaint, which attempts to assert class action claims on behalf of those persons who received and were entitled to vote on the Piedmont REIT proxy statement filed
with the SEC on February 26, 2007 and derivative claims on behalf of Piedmont REIT. On July 9, 2007, the Court denied the plaintiffs motion for expedited discovery related to an anticipated motion for a preliminary injunction. On
August 13, 2007, the defendants filed a motion to dismiss the amended complaint. The motion to dismiss has been fully briefed and is currently pending before the Court. Mr. Wells, Wells Capital, and Wells Management intend to vigorously
defend this action. Any financial loss incurred by Wells Capital, Wells Management, or their affiliates could hinder their ability to successfully manage our operations and our portfolio of investments.

On August 24, 2007, two stockholders of Piedmont REIT filed a putative derivative complaint, styledDonald and Donna Goldstein, Derivatively on behalf of
Defendant Wells Real Estate Investment Trust, Inc. v. Leo F. Wells, III, et. al.,in the Superior Court of Fulton County, Georgia on behalf of Piedmont REIT against, among others, Leo F. Wells, III and Wells Capital, our General Partners, and a
number of individuals who currently or formerly served as officers or directors of Piedmont REIT. The complaint alleges, among other things, that the consideration paid by Piedmont REIT as part of the internalization transaction was excessive;
that the defendants breached their fiduciary duties to Piedmont REIT; and that the internalization transaction unjustly enriched the defendants. The complaint seeks, among other things, a judgment declaring that the defendants committed
breaches of their fiduciary duties and were unjustly enriched at the expense of Piedmont REIT; monetary damages equal to the amount by which Piedmont REIT was damaged by the defendants; an order awarding Piedmont REIT restitution from the defendants
and ordering disgorgement of all profits and benefits obtained by the defendants from their wrongful conduct and fiduciary breaches; an order rescinding the internalization transaction; and the establishment of a constructive trust upon any benefits
improperly received by the defendants as a result of their wrongful conduct. On October 19, 2007, the Court granted the defendants motion for a protective order staying discovery until the Court rules on the defendants motion
to dismiss the complaint. On October 31, 2007, the defendants filed their motion to dismiss the plaintiffs derivative complaint, which is currently pending before the Court. Mr. Wells and Wells Capital intend to vigorously
defend this action. Any financial loss incurred by Wells Capital or its affiliates could hinder their ability to successfully manage our operations and our portfolio of investments.



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##### Table of Contents

|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



| |  |  | 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. 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 third 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 to limited partners may remain low in the near-term as a result of funding our pro-rata share of anticipated re-leasing costs associated with leasing the remaining vacant space 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 our limited partners and minimize contingencies and
our post-closing involvement with buyers.



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##### Table of Contents

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, located in Madison, Wisconsin, is 73% leased until April 2013. We are actively working on re-leasing the remaining vacant space.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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 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

We generated net operating cash flows, including distributions received from the Joint Ventures, of approximately $106,000 for the nine months ended September 30,
2007. During 2007, we used such operating distributions and cash on hand to fund operating distributions to Class A limited partners of approximately $422,000. 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 will increase in the near-term as a result of fully absorbing the rental abatement periods at the US Cellular Building. During the nine months ended September 30, 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 $170,000 as of September 30, 2007.



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##### Table of Contents

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.

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.



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##### Table of Contents

As of September 30, 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 Sale Proceeds Allocated to
the Partnership |            | Use of Net Sale Proceeds |   | Net Sale Proceeds Distributed toPartners as of September 30,2007 |  | Undistributed Net SaleProceeds as of September 30, 2007                  
|Property Sold                                      |  |                   |     |  | 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 Commonsoutparcels(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 decided to reserve net sale proceeds of approximately $725,000.

Results of Operations

Equity in Income of Joint Ventures

Equity in income of Joint Ventures
was $89,678 and $141,736 for the three months ended September 30, 2007 and 2006, respectively. The decrease is primarily attributable to a decline 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.

Equity in income of Joint Ventures was $300,024 and $3,180,836 for the nine months ended September 30,
2007 and 2006, respectively. The decrease is primarily attributable to (i) the gain recognized on the sale of the BellSouth Building in May 2006, (ii) a decline in operating income resulting from the sale of the BellSouth Building in May
2006, (iii) a decline 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, and (iv) lease cancellation income earned in the first six months of
2006 at 305 Interlocken Parkway, partially offset by (v) the gain recognized on the sale of the remaining Tanglewood Commons land outparcels in January 2007.



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##### Table of Contents

Absent leasing activity at the US Cellular Building or property sales, we expect equity in income of Joint Ventures to
remain at similar levels.

Expenses

General and
administrative expenses were $46,579 and $48,403 for the three months ended September 30, 2007 and 2006, respectively, and $148,281 and $165,667 for the nine months ended September 30, 2007 and 2006, respectively. The 2007 decreases are
primarily attributable to a decline in legal fees, partially offset by an increase in accounting fees and printing costs, substantially all of which resulted from 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 were $9,632 and $77,230 for the three months ended September 30, 2007 and 2006, respectively, and $32,075
and $192,179 for the nine months ended September 30, 2007 and 2006, respectively. The 2007 decreases are primarily attributable to a decrease in the average amount of net sale proceeds held during the respective periods as a result of the May
2006 net sale proceeds distribution. 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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##### Table of Contents

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 our real estate assets held as of September 30, 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.



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##### Table of Contents

|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, the corporate general partner of Wells Partners, 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 September 30, 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 September 30, 2007, requiring disclosure under Item 103 of Regulation S-K.



|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 September 30, 2007.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------



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



|(c) | We did not redeem any securities during the quarter ended September 30, 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 September 30, 2007.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------



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



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##### Table of Contents

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

No matters were submitted to a vote of our limited partners during the quarter ended September 30, 2007.



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



|(a) | During the quarter ended September 30, 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 Third Quarter Form 10-Q attached hereto.



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##### Table of Contents

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)
|                 |  | 
|November 8, 2007 |  |  |  | /S/    LEO F. WELLS,
III                                                                         
|                 |  |  |  | Leo F. Wells, III President, Principal
Executive Officer,and Sole Director of Wells Capital, Inc.
|                 |  | 
|November 8, 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 THIRD QUARTER FORM 10-Q

OF

WELLS REAL ESTATE FUND VIII, L.P.



|            |  |                                                                                                                               
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                   
|            | 
|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