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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark one)



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

For the quarterly period ended March 31, 2008

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 0-14463





WELLS REAL ESTATE FUND I

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-1565512                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|6200 The Corners Parkway, Norcross, Georgia                    |  | 30092-3365                          
|(Address of principal executive offices)                       |  | (Zip Code)                          
|                                                               | 
|Registrants telephone number, including area code             |  | (770) 449-7800                      

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, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated file, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer   ̈                 Accelerated filer   ̈

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

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









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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q of Wells Real Estate Fund I (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 and provide distributions to
partners may be significantly hindered. See Item 1A. in the Partnerships Annual Report on Form 10-K for the year ended December 31, 2007 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 I AND SUBSIDIARY



TABLE OF CONTENTS



|         |  |                       |  |                                                                                                                                               |  |         
|-------- |  | --------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|         |  |                       |  |                                                                                                                                               |  | Page No.
|         |  |                      
|PART I.  |  | FINANCIAL INFORMATION |  |                                                                                                                                              
|         |  |                       | 
|         |  | Item 1.               |  | Financial Statements                                                                                                                          |  |         
|         |  |                       | 
|         |  |                       |  | Statements of Net Assets in Liquidation as of March 31, 2008 (unaudited) and as of December 31, 2007                                          |  | 5       
|         |  |                       | 
|         |  |                       |  | Statements of Changes in Net Assets in Liquidation for the Three Months Ended March 31, 2008 (unaudited) and the year ended December 31, 2007 |  | 6       
|         |  |                       | 
|         |  |                       |  | Statement of Operations for the Three Months Ended March 31, 2007 (unaudited)                                                                 |  | 7       
|         |  |                       | 
|         |  |                       |  | Statements of Partners Capital for the Three Months Ended March 31, 2007 (unaudited)                                                         |  | 8       
|         |  |                       | 
|         |  |                       |  | Statements of Cash Flows for the Three Months Ended March 31, 2007 (unaudited)                                                                |  | 9       
|         |  |                       | 
|         |  |                       |  | Condensed Notes to Financial Statements (unaudited)                                                                                           |  | 10      
|         |  |                       | 
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition                                                                                   |  | 17      
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                    |  | 19      
|         |  |                       | 
|         |  | Item 4T.              |  | Controls and Procedures                                                                                                                       |  | 20      
|         |  |                      
|PART II. |  | OTHER INFORMATION     |  |                                                                                                                                              
|         |  |                       | 
|         |  | Item 1.               |  | Legal Proceedings                                                                                                                             |  | 20      
|         |  |                       | 
|         |  | Item 1A.              |  | Risk Factors                                                                                                                                  |  | 22      
|         |  |                       | 
|         |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                   |  | 22      
|         |  |                       | 
|         |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                                               |  | 22      
|         |  |                       | 
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                                           |  | 22      
|         |  |                       | 
|         |  | Item 5.               |  | Other Information                                                                                                                             |  | 22      
|         |  |                       | 
|         |  | Item 6.               |  | Exhibits                                                                                                                                      |  | 22      



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



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

The information furnished in the
Partnerships accompanying balance sheet and statements of net assets in liquidation and changes in net assets in liquidation 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 included in this report on Form 10-Q and Managements Discussion and Analysis of Financial Condition and Results of Operations in the Partnerships
Annual Report on Form 10-K for the year ended December 31, 2007.



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WELLS REAL ESTATE FUND I AND SUBSIDIARY



STATEMENTS OF NET ASSETS IN LIQUIDATION

AS OF MARCH 31, 2008 (UNAUDITED)

AND

AS OF DECEMBER 31, 2007

ASSETS



|                                          |  |                          |           |                  |   |          
|----------------------------------------- |  | ------------------------ | --------- | ---------------- | - | ---------
|                                          |  | (Unaudited)March 31,2008 |           | December 31,2007
|Cash and cash equivalents                 |  | $                        | 2,007,146 |                  | $ | 2,894,299
|Other assets                              |  |                          | 6,133     |                  |   | 12,006   
|                                          |  |                          |           |                  |   |          
|Total assets                              |  | $                        | 2,013,279 |                  | $ | 2,906,305
|                                          |  |                          |           |                  |   |          
|LIABILITIES AND NET ASSETS IN LIQUIDATION
|Accounts payable and accrued expenses     |  | $                        | 35,271    |                  | $ | 25,388   
|Due to affiliates                         |  |                          | 9,927     |                  |   | 7,362    
|                                          |  |                          |           |                  |   |          
|Total liabilities                         |  |                          | 45,198    |                  |   | 32,750   
|                                          |  |                          |           |                  |   |          
|Total net assets in liquidation           |  | $                        | 1,968,081 |                  | $ | 2,873,555
|                                          |  |                          |           |                  |   |          

See accompanying notes.



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WELLS REAL ESTATE FUND I AND SUBSIDIARY



STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION

FOR THE THREE MONTHS ENDED MARCH 31, 2008 (UNAUDITED)

AND THE YEAR ENDED DECEMBER 31, 2007



|                                                      |  |                                            |           |   |                            |   |            |  
|----------------------------------------------------- |  | ------------------------------------------ | --------- | - | -------------------------- | - | ---------- | -
|                                                      |  | (Unaudited)Three Months EndedMarch 31,2008 |           |   | Year EndedDecember 31,2007 |  
|Net assets in liquidation, beginning of period        |  | $                                          | 2,873,555 |   |                            | $ | 9,472,047  |  
|Changes in net assets in liquidation attributable to: |  |                                            |           |   |                            |   |            |  
|Net income (loss)                                     |  |                                            | (905,474  | ) |                            |   | 601,503    |  
|Distributions to limited partners                     |  |                                            | 0         |   |                            |   | (7,199,995 | )
|                                                      |  |                                            |           |   |                            |   |            |  
|Net assets in liquidation, end of period              |  | $                                          | 1,968,081 |   |                            | $ | 2,873,555  |  
|                                                      |  |                                            |           |   |                            |   |            |  

See accompanying notes.



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WELLS REAL ESTATE FUND I AND SUBSIDIARY



STATEMENT OF OPERATIONS

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



|                                                 |  |   |        
|------------------------------------------------ |  | - | -------
|REVENUES:                                        |  |   |        
|Interest and other income                        |  | $ | 113,554
|                                                 | 
|EXPENSES:                                        |  |   |        
|General and administrative                       |  |   | 64,926 
|Equity in loss of joint venture                  |  |   | 1,779  
|                                                 |  |   |        
|Total expenses                                   |  |   | 66,705 
|                                                 |  |   |        
|INCOME FROM CONTINUING OPERATIONS                |  |   | 46,849 
|                                                 | 
|DISCONTINUED OPERATIONS:                         |  |   |        
|Operating income                                 |  |   | 28,998 
|Gain on sale of real estate assets               |  |   | 467,039
|                                                 |  |   |        
|INCOME FROM DISCONTINUED OPERATIONS              |  |   | 496,037
|                                                 |  |   |        
|NET INCOME                                       |  | $ | 542,886
|                                                 |  |   |        
|                                                 | 
|NET INCOME ALLOCATED TO:                         |  |   |        
|Class A limited partners:                        |  |   |        
|Income from continuing operations                |  | $ | 46,381 
|Income from discontinued operations              |  |   | 309,280
|                                                 |  |   |        
|Net income allocated to Class A limited partners |  | $ | 355,661
|                                                 |  |   |        
|Class B limited partners:                        |  |   |        
|Income from continuing operations                |  | $ | 0      
|Income from discontinued operations              |  |   | 186,467
|                                                 |  |   |        
|Net income allocated to Class B limited partners |  | $ | 186,467
|                                                 |  |   |        
|General partners:                                |  |   |        
|Income from continuing operations                |  | $ | 468    
|Income from discontinued operations              |  |   | 290    
|                                                 |  |   |        
|Net income allocated to General partners         |  | $ | 758    
|                                                 |  |   |        
|                                                 | 
|NET INCOME PER LIMITED PARTNER UNIT:             |  |   |        
|Class A units:                                   |  |   |        
|Income from continuing operations                |  |   | $0.47  
|Income from discontinued operations              |  |   | $3.13  
|                                                 |  |   |        
|Net income per Class A limited partner unit      |  |   | $3.60  
|                                                 |  |   |        
|Class B units:                                   |  |   |        
|Income from continuing operations                |  |   | $0.00  
|Income from discontinued operations              |  |   | $4.38  
|                                                 |  |   |        
|Net income per Class B limited partner unit      |  |   | $4.38  
|                                                 |  |   |        

See accompanying notes.



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WELLS REAL ESTATE FUND I AND SUBSIDIARY



STATEMENT OF PARTNERS CAPITAL

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



|                                    |  |                  |  |                 |           |                       |        |        |   |         |  |   |       |  |   |           
|----------------------------------- |  | ---------------- |  | --------------- | --------- | --------------------- | ------ | ------ | - | ------- |  | - | ----- |  | - | ----------
|                                    |  | Limited Partners |  | GeneralPartners |           | TotalPartnersCapital
|                                    |  | Class A          |  | Class B         |           |                      
|                                    |  | Units            |  | Amount          |           | Units                 |        | Amount |   |        
|BALANCE, December 31, 2006          |  | 98,716           |  | $               | 8,781,994 |                       | 42,568 |        | $ | 689,109 |  | $ | 944   |  | $ | 9,472,047 
|                                    |  |                  |  |                 |           |                      
|Net income                          |  | 0                |  |                 | 355,661   |                       | 0      |        |   | 186,467 |  |   | 758   |  |   | 542,886   
|                                    |  |                  |  |                 |           |                       |        |        |   |         |  |   |       |  |   |           
|BALANCE, March 31, 2007 (Unaudited) |  | 98,716           |  | $               | 9,137,655 |                       | 42,568 |        | $ | 875,576 |  | $ | 1,702 |  | $ | 10,014,933
|                                    |  |                  |  |                 |           |                       |        |        |   |         |  |   |       |  |   |           

See accompanying notes.



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WELLS REAL ESTATE FUND I AND SUBSIDIARY



STATEMENT OF CASH FLOWS

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



|                                                                                  |  |   |            |  
|--------------------------------------------------------------------------------- |  | - | ---------- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |   |            |  
|Net income                                                                        |  | $ | 542,886    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |   |            |  
|Gain on sale of real estate assets                                                |  |   | (467,039   | )
|Amortization                                                                      |  |   | 2,061      |  
|Equity in loss of joint venture                                                   |  |   | 1,779      |  
|Changes in assets and liabilities:                                                |  |   |            |  
|Decrease in tenant receivables, net                                               |  |   | 84,280     |  
|Increase in other assets                                                          |  |   | (13,434    | )
|Decrease in accounts payable and accrued expenses                                 |  |   | (16,607    | )
|Decrease in deferred income                                                       |  |   | (35,640    | )
|Increase in due to affiliates                                                     |  |   | 10,068     |  
|                                                                                  |  |   |            |  
|Net cash provided by operating activities                                         |  |   | 108,354    |  
|                                                                                  | 
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |   |            |  
|Net proceeds from the sale of real estate assets                                  |  |   | 3,475,407  |  
|Investment in joint venture                                                       |  |   | (5,190     | )
|                                                                                  |  |   |            |  
|Net cash provided by investing activities                                         |  |   | 3,470,217  |  
|                                                                                  | 
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                         |  |   | 3,578,571  |  
|                                                                                  | 
|CASH AND CASH EQUIVALENTS, beginning of period                                    |  |   | 6,438,572  |  
|                                                                                  |  |   |            |  
|CASH AND CASH EQUIVALENTS, end of period                                          |  | $ | 10,017,143 |  
|                                                                                  |  |   |            |  

See accompanying notes.



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WELLS REAL ESTATE FUND I AND SUBSIDIARY



CONDENSED NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2008 (unaudited)



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

Wells Real Estate Fund I (the
Partnership) is a Georgia public limited partnership with Leo F. Wells, III and Wells Capital, Inc. (Wells Capital), a Georgia corporation, serving as its general partners (collectively, the General
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 April 26, 1984 for the purpose of acquiring, developing, constructing, owning, operating, improving, leasing, and managing income-producing commercial properties for investment purposes. The Partnership has two classes
of limited partnership interests, Class A and Class B Units. Limited partners may vote to, among other things, (a) amend the partnership agreement, subject to certain limitations; (b) change the business purpose or investment
objectives of the Partnership; and (c) 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 September 6, 1984, the Partnership commenced an offering of up to $50,000,000 of Class A or Class B
limited partnership units ($250.00 per unit) pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership commenced active operations upon receiving and accepting subscriptions for 5,000 units on
February 15, 1985. The offering was terminated on September 5, 1986, at which time the Partnership had sold approximately 98,716 Class A Units and 42,568 Class B Units representing capital contributions of $35,321,000. Since the
termination of the offering in 1986, the total number of Class B Units has decreased to 42,558 due to the rescission of certain units.

During the periods presented, the Partnership owned direct interests in the following property:



|                                                                               
|-------------------------------------------------------------------------------
|1. Black Oak Plaza(1) A retail shopping center located in
Knoxville, Tennessee.



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

During the periods presented, the Partnership owned interests in the following joint venture:



|                             |  |                                                          |  |                                                  
|---------------------------- |  | -------------------------------------------------------- |  | -------------------------------------------------
|Joint Venture                |  | Joint Venture Partners                                   |  | Properties                                       
|Fund I and Fund II Tucker(1) |  |   Wells Real Estate Fund I   Fund II and Fund II-OW(2) |  | No properties owned during the periods presented.



| | (1) | Fund I and Fund II Tucker was liquidated in February 2008.
| | --- | ----------------------------------------------------------



| | (2) | Fund II and Fund II-OW is a joint venture between Wells Real Estate Fund II and
Wells Real Estate Fund II-OW.
| | --- | -------------------------------------------------------------------------------------------------------------

Wells Real Estate Fund II and Wells Real Estate Fund II-OW are affiliated with the
Partnership through common general partners. The property described above was acquired on an all-cash basis. For further information regarding Fund I and Fund II Tucker and properties owned directly by the Partnership, refer to the
Partnerships Annual Report on Form 10-K for the year ended December 31, 2007.

On January 25, 2007, the Partnership sold Black Oak Plaza to
an unrelated third party for a gross sale price of $3,700,000, excluding closing costs. As a result of the sale, the Partnership received net sale proceeds of approximately $3,555,000 and recognized a gain of approximately $543,000.



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

Basis of
Presentation

The Partnership has disposed of all of its real estate assets and does not intend to invest in additional properties. Effective
April 1, 2007, the first day of the quarter following the completion of the sale of all of its real estate assets, the Partnership adopted the liquidation basis of accounting, under which assets and liabilities are stated at their estimated net
realizable values and net settlement amounts, respectively, and statements of operations, statements of cash flows, and statements of partners capital are no longer presented. The Partnership is focusing its resources on concluding its
activities and dissolving the Partnership upon the resolution of one outstanding claim in the litigation related to partnership matters (See Note 6, Commitments and Contingencies) and has begun to wind up its affairs by distributing net sale
proceeds to the limited partners of approximately $7,200,000 in May 2007. Once a definitive dissolution date is determined, the General Partners intend to establish cash reserves in an amount necessary to settle the net liabilities and distribute
any proceeds that are not required to fund final dissolution costs of the Partnership to the limited partners. The General Partners will use the cash reserves to settle the outstanding net liabilities of the Partnership.

The General Partners intend to terminate the Partnership in accordance with the relevant dissolution and termination provisions of the partnership agreement and Georgia
Uniform Limited Partnership Act upon the resolution of one outstanding claim in the litigation related to partnership matters discussed herein. Specifically, on behalf of the Partnership, the General Partners intend to file (i) a certificate of
cancellation of the Partnership and (ii) a Form 15 with the Securities and Exchange Commission (SEC) in order to de-register the Partnerships securities under the Securities Exchange Act of 1934.

Investment in Fund I and Fund II Tucker

The Partnership evaluated
its investment in Fund I and Fund II Tucker and concluded that it was not a variable-interest entity 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 did not have control over the operations of Fund I
and Fund II Tucker; however, it did exercise significant influence. Approval by the Partnership as well as the other joint venture partners was required for any major decision or any action that would materially affect Fund I and Fund II
Tucker, or its 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 accounted for its investments in Fund I and Fund II Tucker using the equity method of accounting, whereby original investments
were 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 agreement, all income (loss) and distributions were allocated to
joint venture partners in accordance with their respective ownership interests. Distributions of net cash from operations, if available, were generally distributed to the joint venture partners on a quarterly basis.

Distribution of Net Cash from Operations

As more fully described in
the partnership agreement, net cash from operations, if available, is generally distributed quarterly to the limited partners as follows:



| |  |  | First, to the Class A limited partners until such limited partners have received distributions equal to a 9% per annum return on their respective adjusted
capital contributions, as defined.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Second, to the Class B limited partners until such limited partners have received distributions equal to a 9% per annum return on their respective
adjusted capital contributions, as defined.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Third, to the General Partners until they have received 10% of total distributions for such year.
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | Fourth, to the limited partners and the General Partners allocated on a basis of 90% and 10%, respectively.
| | - |  | -----------------------------------------------------------------------------------------------------------



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Distribution of Net Sale Proceeds

As more fully described in the partnership agreement, after satisfying all debts and liabilities and establishing reserves deemed reasonably necessary in the sole discretion of the General Partners, net proceeds from
the sale of the Partnerships properties are to be distributed to partners in accordance with their respective positive capital account balances after the allocation of any gain on sale.

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 and 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 proportion that net cash from operations is distributed to the partners.

As more fully described in the partnership agreement, net loss, depreciation, and amortization deductions for each fiscal year will be allocated as follows: (a) 99% to the Class B limited partners 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.

As more fully described in the partnership agreement, gain on the sale or exchange of the Partnerships properties is
generally allocated as follows: (a) first, to partners having negative capital accounts, if any, until all negative capital accounts have been restored to zero; (b) then, to the limited partners, in proportion to and to the extent of, the
amount by which (i) the excess of each limited partners capital contribution over all prior distributions to such limited partner under certain partnership agreement provisions, plus an amount equal to such limited partners
cumulative distribution, less the sum of all prior distributions of cash available for distribution previously made to such limited partner, exceeds (ii) such limited partners adjusted capital account balance as of the sale date;
(c) then, to the General Partners, in proportion to and to the extent of, the amount by which (i) the excess of each of the General Partners adjusted capital contribution over all prior distributions to such General Partner
under certain partnership agreement provisions, exceeds (ii) such General Partners adjusted capital account balance as of the sale date; and (d) thereafter, 85% to the limited partners and 15% to the General Partners.

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 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.



|3. | INVESTMENT IN JOINT VENTURE
|-- | ---------------------------

Summary of Financial Information

Condensed financial information for Fund I and Fund II Tucker for the three months ended March 31, 2008 and 2007, respectively, is presented
below:



|                          |  |                    |  |                                |  |                                    |  |                    |  |      |  |      |  |      |  |         
|------------------------- |  | ------------------ |  | ------------------------------ |  | ---------------------------------- |  | ------------------ |  | ---- |  | ---- |  | ---- |  | --------
|                          |  | Total Revenues     |  | Loss FromContinuing Operations |  | Income FromDiscontinued Operations |  | Net Loss          
|                          |  | Three Months Ended |  | Three Months Ended             |  | Three Months Ended                 |  | Three Months Ended
|                          |  | March 31,          |  | March 31,                      |  | March 31,                          |  | March 31,         
|                          |  | 2008               |  | 2007                           |  | 2008                               |  | 2007               |  | 2008 |  | 2007 |  | 2008 |  | 2007    
|Fund I and Fund II Tucker |  | $0                 |  | $0                             |  | $0                                 |  | $(3,816)           |  | $0   |  | $389 |  | $0   |  | $(3,427)
|                          |  |                    |  |                                |  |                                    |  |                    |  |      |  |      |  |      |  |         



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The Partnership allocated its share of operating income (loss) and gain (loss) on sale of the property generated by Fund
I and Fund II Tucker to its Class A and Class B limited partners pursuant to the respective partnership agreement provisions outlined in Note 2. The components of income from discontinued operations recognized by Fund I and Fund II Tucker
are provided below:



|                          |  |                                  |  |                                  |  |       |  |                 |  |             |  |      
|------------------------- |  | -------------------------------- |  | -------------------------------- |  | ----- |  | --------------- |  | ----------- |  | -----
|                          |  | Three Months EndedMarch 31, 2008 |  | Three Months EndedMarch 31, 2007
|                          |  | OperatingIncome                  |  | Loss onSale                      |  | Total |  | OperatingIncome |  | Loss onSale |  | Total
|Fund I and Fund II Tucker |  | $0                               |  | $0                               |  | $0    |  | $389            |  | $0          |  | $389 
|                          |  |                                  |  |                                  |  |       |  |                 |  |             |  |      



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

As a result of the sale of Black Oak
Plaza, the Partnership recognized a gain of approximately $543,000. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal on Long-Lived Assets,the Partnership has classified the results of operations primarily
related to Black Oak Plaza, which was sold on January 25, 2007, as discontinued operations in the accompanying statement of operations. The details comprising income from discontinued operations are presented below:



|                                    |  |                                 |        
|----------------------------------- |  | ------------------------------- | -------
|                                    |  | Three Months EndedMarch 31,2007
|REVENUES:                           |  |                                 |        
|Rental and other income             |  | $                               | 43,809 
|Reimbursement income                |  |                                 | 12,966 
|                                    |  |                                 |        
|Total revenues                      |  |                                 | 56,775 
|                                    | 
|EXPENSES:                           |  |                                 |        
|Property operating costs            |  |                                 | 2,680  
|Management and leasing fees         |  |                                 | 3,497  
|Amortization                        |  |                                 | 2,061  
|Bad debt expense                    |  |                                 | 14,395 
|General and administrative          |  |                                 | 5,144  
|                                    |  |                                 |        
|Total expenses                      |  |                                 | 27,777 
|                                    |  |                                 |        
|Real estate operating income        |  |                                 | 28,998 
|Gain on sale of real estate assets  |  |                                 | 467,039
|                                    |  |                                 |        
|                                    | 
|INCOME FROM DISCONTINUED OPERATIONS |  | $                               | 496,037
|                                    |  |                                 |        



|5. | RELATED-PARTY TRANSACTIONS
|-- | --------------------------

Management and Leasing Fees

The Partnership entered into a property management and leasing agreement with Wells Management Company, Inc. (Wells Management), an
affiliate of the General Partners. In accordance with the property management and leasing agreement, Wells Management received compensation for the management and leasing of the Partnerships properties, owned directly or through Fund I and
Fund II Tucker, 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 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 was 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. The Partnerships share of management and leasing fees
and lease acquisition costs incurred from properties owned directly and through Fund I and Fund II Tucker was $3,038 for the three months ended March 31, 2007.



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Administrative Reimbursements

Wells Capital and Wells Management perform certain administrative services for the Partnership, relating to accounting, property management, and other partnership administration, and incur the related expenses. Such expenses are allocated
among other entities affiliated with the General Partners based on estimates of the amount of time spent on the respective entities by individual personnel. In the opinion of the General Partners, this allocation is a reasonable estimation of such
expenses. The Partnership incurred administrative expenses of $22,196 and $42,244 payable to Wells Capital and Wells Management for the three months ended March 31, 2008 and 2007, respectively. In addition, Wells Capital and Wells Management
pay for certain operating expenses of the Partnership (bill-backs) directly and invoices the Partnership for the reimbursement thereof on a quarterly basis. As of March 31, 2008 and December 31, 2007, due to affiliates balances
represent administrative reimbursements and bill-backs due to Wells Capital and/or Wells Management.

Economic Dependency

The Partnership has engaged Wells Capital and Wells Management to provide certain essential services, including 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, the Partnership is 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, the Partnership focuses 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, the Partnership might be required to find alternative service providers.

Future net income generated by WREF will be largely dependent
upon the amount of fees earned by Wells Capital and Wells Management based on, among other things, the level of investor proceeds raised from the sale of common stock for certain WREF-sponsored programs and the volume of future acquisitions and
dispositions of real estate assets by WREF-sponsored programs, as well as anticipated dividend income earned from its holdings of common stock of Piedmont Office Realty Trust, Inc. (Piedmont REIT), formerly known as Wells Real Estate
Investment Trust, Inc., which was acquired in connection with the Piedmont REIT internalization transaction (see Assertion of Legal Actions Against Related-Parties below). In addition, during 2007, WREF guaranteed certain debt of another
WREF-sponsored product that is in the start- up phase of its operations. As of March 31, 2008, 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.

As of April 30, 2008, the amount of the debt
guaranteed by WREF was equal to approximately $127.3 million.

Assertion of Legal Actions Against Related-Parties

On March 12, 2007, a stockholder of Piedmont REIT, filed a putative class action and derivative complaint, presently styled In re Wells Real Estate Investment
Trust, Inc. Securities Litigation, in the United States District Court for the District of Maryland against, among others, Piedmont REIT; Leo F. Wells, III and Wells Capital, our General Partners; 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



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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. On March 31, 2008, the Court granted in part the defendants motion to dismiss the amended complaint. The Court dismissed five of the seven counts of the amended
complaint in their entirety. The Court dismissed the remaining two counts with the exception of allegations regarding the failure to disclose in the Piedmont REIT proxy statement details of certain expressions of interest in acquiring Piedmont REIT.
On April 21, 2008, the plaintiff filed a second amended complaint, which alleges violations of the federal proxy rules based upon allegations that the proxy statement to obtain approval for the Piedmont REIT internalization transaction omitted
details of certain expressions of interest in acquiring Piedmont REIT. The second amended complaint seeks, among other things, unspecified monetary damages, to nullify and rescind the internalization transaction, and to cancel and rescind any
stock issued to the defendants as consideration for the internalization transaction. On May 12, 2008, the defendants answered and raised defenses to the second amended complaint. 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 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 verbally granted the defendants motion for a protective order (and entered a written
order on October 24, 2007) 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. On December 19, 2007, the Court entered an order allowing the plaintiffs to take limited written discovery on the issue of derivative demand, but the order staying discovery entered in October 2007 otherwise remains in effect.
The defendants responded to the limited discovery requested by the plaintiffs. On January 10, 2008, the plaintiffs filed an amended complaint, which contains substantially the same counts against the same defendants as the original
complaint with certain additional factual allegations based primarily on events occurring after the original complaint was filed. In addition, the plaintiffs have responded to the defendants motion to dismiss this lawsuit. A hearing
on the motion to dismiss was held on February 22, 2008. On March 13, 2008, the Court granted the defendants motion to dismiss. On April 11, 2008, the plaintiffs filed a notice to appeal the Courts judgment granting the
defendants motion to dismiss.



|6. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------

On or about November 24, 2004,
four individuals (the plaintiffs) filed a putative class action complaint (Hendry et al. v. Leo F. Wells, III, et al., Superior Court of Gwinnett County, Georgia, Civil Action No. 04A-13051-6, the Hendry
Action) against the Partnership, the General Partners, and Wells Management.



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The Hendry Action states that the Partnership is named only as an allegedly necessary party defendant and that the plaintiffs seek no money from or relief at
the expense of the Partnership.

The plaintiffs filed the Hendry Action purportedly on behalf of all limited partners of the Partnership holding
Class B Units as of January 9, 2002. The Hendry Action alleges, among other things, that the General Partners breached their fiduciary duties to the limited partners by, among other things: (a) failing to timely disclose alleged
inconsistencies between sales literature and the partnership agreement relating to the distribution of net sale proceeds; (b) engaging in a scheme to fraudulently conceal alleged inconsistencies between sales literature and the partnership
agreement relating to the distribution of net sale proceeds; and (c) not accepting a settlement offer proposed by a holder of Class A Units and a holder of Class A and Class B Units in other litigation naming the Partnership as a
defendant, in which the Court subsequently granted summary judgment in favor of the Partnership. The Hendry Action also alleges that misrepresentations and omissions in an April 2002 consent solicitation to the limited partners caused that consent
solicitation to be materially misleading. In addition, the Hendry Action alleges that the General Partners and Wells Management breached an alleged contract arising out of a June 2000 consent solicitation to the limited partners relating to an
alleged waiver of deferred management fees. The plaintiffs seek, among other remedies, the following: judgment against the General Partners of the Partnership, jointly and severally, in an amount to be proven at trial; punitive damages; disgorgement
of fees earned by the General Partners directly or through their affiliates; a declaration that the consent obtained as a result of an April 2002 consent solicitation is null and void; enforcement of an alleged contract arising out of the June 2000
consent solicitation to allegedly waive Wells Managements deferred management fees; and an award to the plaintiffs of their attorneys fees, costs, and expenses.

On January 28, 2005, the defendants filed motions for summary judgment and motions to dismiss the plaintiffs claims. On March 31, 2005, the plaintiffs filed briefs in opposition to the defendants
motions. Pursuant to Orders entered July 1, 2005, the Court granted the defendants motions to dismiss and for summary judgment on all counts in the complaint. Thus, this action was at the time dismissed, subject to plaintiffs right
to file a notice of appeal within the required time period. On August 3, 2005, the plaintiffs filed a motion requesting the Court to vacate and re-enter the orders to give the plaintiffs an opportunity to file a motion for the reconsideration
or notice of appeal. After both sides had filed briefs in support of their respective positions, on February 15, 2006, the Court heard argument on plaintiffs motion to vacate and to re-enter the judgments previously entered on
July 1, 2005.

On or about August 8, 2005, the defendants filed a motion for attorneys fees and expenses of litigation. On or about
August 12, 2005, the plaintiffs filed a motion for attorneys fees and expenses of litigation as to one of the defenses asserted by defendants. On April 20, 2006, the Court held a hearing addressing only the liability aspects on the
defendants and plaintiffs motions for attorneys fees and expenses. By Orders entered May 24, 2006, the Court denied the plaintiffs and the defendants motions to recover attorneys fees and expenses of
litigation. Also by Orders entered May 24, 2006, the Court re-entered its July 1, 2005, judgments granting the Wells defendants motions to dismiss and for summary judgment on all counts in the complaint, so as to allow the plaintiffs
30 days within which to file a notice of appeal. On or about June 21, 2006, the plaintiffs filed a notice of appeal with respect to the Courts Order granting the defendants motions to dismiss and for summary judgment. On
July 5, 2006, the defendants filed a notice of cross appeal with respect to the Courts Order denying the defendants motion for attorneys fees and expenses of litigation. On August 18, 2006, the appeal and cross appeal
were docketed in the Georgia Court of Appeals. On July 10, 2007, the Georgia Court of Appeals entered a decision that affirmed the trial court rulings in favor of the defendants for summary judgment on the main counts I and
V alleging breach of fiduciary duty and fraud or negligence in communications with limited partners and other conduct by the General Partners. The decision also affirmed the trial courts dismissal of count IV
alleging breach of contract in connection with the June 2000 consent solicitation. The decision reversed the dismissal on two counts, finding that the plaintiffs had standing to assert as direct claims in count II alleging breach
of fiduciary duty by the General Partners decision not to negotiate for a settlement in a prior related action and in count III alleging that the April 2002 consent solicitation for approval of an amendment to allow net sale
proceeds to be reinvested in the Partnerships condominium property, Paces Pavilion, was invalid. The decision reversing dismissal of counts II and III does not mean those claims have merit, but only



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that the plaintiffs have standing to proceed in an action for either or both of those two counts. The decision also ruled on the
cross-appeal by affirming the trial courts denial of the defendants request for an award of litigation fees and expenses. The plaintiffs then filed a motion for reconsideration of this decision, and on July 26, 2007, the Court
of Appeals denied the plaintiffs motion for reconsideration. On July 31, 2007, the plaintiffs filed a notice of intention to petition the Georgia Supreme Court for a writ of certiorari to review the judgment of the Georgia Court of
Appeals. On August 15, 2007, the plaintiffs filed a petition for writ of certiorari with the Georgia Supreme Court requesting review of the Georgia Court of Appeals decision on the breach of fiduciary duty claims in
counts I and V. The plaintiffs petition for writ of certiorari was denied in a judgment entered by the Georgia Supreme Court on January 7, 2008, resulting in the successful resolution of counts I, IV, and V. The trial court
adopted the judgment of the Georgia Court of Appeals in an Order entered in Gwinnett Superior Court on August 6, 2007. In November 2007, the Wells defendants filed motions for summary judgment on counts II and III in the trial court. The
plaintiffs moved to dismiss count III as moot, and the Court entered an Order of dismissal with prejudice as to count III. On April 10, 2008, the Court entered an Order that granted summary judgment in favor of the defendants on count II. The
time period for the plaintiffs to file either a motion to reconsider or a notice of appeal from this Order expired on May 12, 2008. Absent a timely filed motion to reconsider or notice of appeal, the case is concluded. At this time, the defendants
have not been notified that either a motion to reconsider or notice of appeal was timely filed.

As of March 31, 2008, Wells Capital had incurred a
total of approximately $980,000 in legal fees, costs, and expenses related to defending against the Hendry Action. The indemnification provisions of the partnership agreement require the Partnership to indemnify the General Partners for their costs
of defending the Hendry Action under certain circumstances, including if they are successful in defending such litigation, upon the conclusion of this litigation. Pursuant to the indemnification provisions of the partnership agreement, the
Partnership reimbursed Wells Capital $871,332 of these legal fees in the first quarter of 2008 as a result of the successful resolution of counts I, III, IV, and V. At this time, management is unable to determine the likelihood of whether the
plaintiffs will file a motion to reconsider or a notice of appeal relating to count II. Accordingly, no reserves have been provided for in the accompanying financial statements.



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

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 provided in our Annual Report on Form 10-K for the year ended December 31, 2007.

Overview

We are in the disposition-and-liquidation phase of our life
cycle. We have sold all of our real estate assets with the sale of Black Oak Plaza, which closed in the first quarter of 2007. As a result of having sold all of the properties, we will focus resources on concluding the Partnerships activities
and dissolving the Partnership upon the resolution of the one outstanding claim in the litigation related to partnership matters (See Part II, Item 1, Legal Proceedings).

Our General Partners are currently reserving the remaining net sale proceeds and operating cash flows in order to fund any additional legal costs or indemnification obligations in connection with the litigation
discussed herein, and any remaining expenses and obligations of the Partnership associated with its final dissolution. The dissolution expenses include, but are not limited to, legal fees, audit and tax fees, printing and postage costs, potential
liabilities under the final purchase and sale agreements, and other administrative expenses. We expect that a final distribution of any remaining proceeds that are not required to fund remaining indemnification obligations and final dissolution
costs of the Partnership will be made to the limited partners as soon as practical.



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##### Table of Contents

Liquidity and Capital Resources

Short-Term Liquidity

We believe that the cash on hand is sufficient to cover our working capital needs, including
liabilities of approximately $45,000 as of March 31, 2008. We anticipate that we will be able to fund any additional legal costs or indemnification obligations in connection with the litigation discussed herein and any final dissolution costs using
current and future operating cash flow and net sale proceeds currently being reserved.

Long-Term Liquidity

We have sold all of the real estate assets in which we owned interests and do not anticipate acquiring additional properties. Accordingly, we expect that our future
source of capital will primarily include net sale proceeds that were generated from the sale of our properties as previously described.

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. We anticipate using operating cash and net property sale proceeds in order to fund any
additional legal costs or indemnification obligations in connection with the litigation discussed herein, and any remaining expenses and obligations of the partnership associated with its final dissolution. As of March 31, 2008, we had
received, used, distributed, and held net sale proceeds allocated to the Partnership from the sale of properties as presented below:



|                                            |  |                  |  |                                     |        |                                              |            |                         |   |                                                             |  |                                                                  |  |   |            |  |   |          
|------------------------------------------- |  | ---------------- |  | ----------------------------------- | ------ | -------------------------------------------- | ---------- | ----------------------- | - | ----------------------------------------------------------- |  | ---------------------------------------------------------------- |  | - | ---------- |  | - | ---------
|                                            |  | Net SaleProceeds |  | PartnershipsApproximateOwnership % |        | Net Sale ProceedsAllocated to thePartnership |            | Use ofNet Sale Proceeds |   | Net Sale ProceedsDistributed toPartners as ofMarch 31, 2008 |  | Undistributed NetSale ProceedsBeing Reserved as ofMarch 31, 2008
|Property Sold                               |  |                  |  |                                     | Amount |                                              | Purpose    |                         |  
|                                            |  |                  |  |                                     |        |                                              |           
|Peachtree Place(partial sale in 2000)       |  | $704,496         |  | 90.0%                               |        | $                                            | 633,695    |                         | $ | 633,695                                                     |  |   Payment of deferred management fee                            |  | $ | 0          |  | $ | 0        
|                                            |  |                  |  |                                     |        |                                              |           
|Crowes Crossing(sold in 2001)              |  | $6,486,652       |  | 100%                                |        |                                              | 6,486,652  |                         |   | 1,481,087                                                   |  |   Payment of deferred management fee                            |  |   | 5,005,565  |  |   | 0        
|                                            |  |                  |  |                                     |        |                                              |           
|Cherokee Commons(sold in 2001)              |  | $8,414,089       |  | 25.3%                               |        |                                              | 2,126,109  |                         |   | 23,331                                                      |  |   Payment of deferred management fee                            |  |   | 2,102,778  |  |   | 0        
|                                            |  |                  |  |                                     |        |                                              |           
|Heritage Place retail portion(sold in 2003) |  | $3,207,708       |  | 51.9%                               |        |                                              | 1,665,121  |                         |   | 266,967                                                     |  |   Payment of deferred management fee                            |  |   | 1,398,154  |  |   | 0        
|                                            |  |                  |  |                                     |        |                                              |           
|Peachtree Place(remainder sold in 2004)     |  | $953,670         |  | 90.0%                               |        |                                              | 857,826    |                         |   | 253,200                                                     |  |   Payment of deferred management fee                            |  |   | 604,626    |  |   | 0        
|                                            |  |                  |  |                                     |        |                                              |           
|Heritage Place office portion(sold in 2006) |  | $4,028,043       |  | 51.9%                               |        |                                              | 2,090,957  |                         |   | 0                                                           |  |                                                                  |  |   | 2,090,957  |  |   | 0        
|                                            |  |                  |  |                                     |        |                                              |           
|Paces Pavilion(sold in 2006)                |  | $4,065,700       |  | 100.0%                              |        |                                              | 4,065,700  |                         |   | 0                                                           |  |                                                                  |  |   | 4,065,700  |  |   | 0        
|                                            |  |                  |  |                                     |        |                                              |           
|Black Oak Plaza(sold in 2007)               |  | $3,554,974       |  | 100.0%                              |        |                                              | 3,554,974  |                         |   | 300,000                                                     |  |   Payment of legal expenses                                     |  |   | 1,332,218  |  |   | 1,922,756
|                                            |  |                  |  |                                     |        |                                              |            |                         |   |                                                             |  |                                                                  |  |   |            |  |   |          
|                                            |  |                  |  |                                     |        |                                              |           
|Total                                       |  |                  |  |                                     |        | $                                            | 21,481,034 |                         | $ | 2,958,280                                                   |  |                                                                  |  | $ | 16,599,998 |  | $ | 1,922,756
|                                            |  |                  |  |                                     |        |                                              |            |                         |   |                                                             |  |                                                                  |  |   |            |  |   |          



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##### Table of Contents

Our General Partners have reserved net sale proceeds of approximately $1.9 million to fund any additional legal costs or
indemnification obligations in connection with the litigation discussed herein, and any remaining expenses and obligations of the Partnership associated with its final dissolution. In February 2008, the Partnership reimbursed Wells Capital $871,332
in legal fees it had incurred in connection with certain litigation involving the Partnership in accordance with the indemnification provisions of the partnership agreement from operating cash reserves and net sale proceeds (see Part II,
Item 1, Legal Proceedings).

Changes in Net Assets in Liquidation

We have begun to dissolve the Partnership by, among other things, selling all of our real estate assets and liquidating Fund I and Fund II Tucker by collecting the outstanding receivables, satisfying outstanding
payables, and distributing residual cash balances to the joint venture partners. In connection therewith, our net assets in liquidation fluctuated during the three months ended March 31, 2008, primarily as a result of incurring expenses
associated with certain litigation involving the Partnership in accordance with the indemnification provisions of the partnership agreement (see Part II, Item 1, Legal Proceedings).

Application of Critical Accounting Policies

Summary

Our accounting policies have been established to conform with U.S. generally accepted accounting principles (GAAP). The preparation of financial statements in
conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affected 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 was possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may have utilized different estimates
that may have impacted comparability of our results of operations to those of companies in similar businesses.

Effective April 1, 2007, the first day
of the quarter following the completion of the sale of all real estate assets, we adopted the liquidation basis of accounting, under which assets and liabilities are stated at their estimated net realizable values and net settlement amounts,
respectively, and statements of operations, statements of cash flows, and statements of partners capital are no longer presented.

Related-Party
Transactions

We have entered into agreements with Wells Capital, Wells Management, an affiliate 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 5 to our financial statements included in this report for a description of these fees and expense reimbursements we have incurred.



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



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##### Table of Contents

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

We carried out an evaluation, under the
supervision and with the participation of management of Wells Capital, our corporate general partner, including the Principal Executive Officer and the Principal Financial Officer of Wells Capital, of the effectiveness of the design and operation of
the Partnerships disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the Exchange Act) as of the end of the quarterly 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 the reports we file or submit under the Exchange Act 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 the reports we file under the Exchange Act 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 changes in our internal control over
financial reporting during the quarter ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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



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

On or about November 24, 2004, four
individuals (the plaintiffs) filed a putative class action complaint (Hendry et al. v. Leo F. Wells, III, et al., Superior Court of Gwinnett County, Georgia, Civil Action No. 04A-13051-6, the Hendry Action)
against the Partnership, the General Partners, and Wells Management. The Hendry Action states that the Partnership is named only as an allegedly necessary party defendant and that the plaintiffs seek no money from or relief at the expense of the
Partnership.

The plaintiffs filed the Hendry Action purportedly on behalf of all limited partners of the Partnership holding Class B Units as of
January 9, 2002. The Hendry Action alleges, among other things, that the General Partners breached their fiduciary duties to the limited partners by, among other things: (a) failing to timely disclose alleged inconsistencies between sales
literature and the partnership agreement relating to the distribution of net sale proceeds; (b) engaging in a scheme to fraudulently conceal alleged inconsistencies between sales literature and the partnership agreement relating to the
distribution of net sale proceeds; and (c) not accepting a settlement offer proposed by a holder of Class A Units and a holder of Class A and Class B Units in other litigation naming the Partnership as a defendant, in which the Court
subsequently granted summary judgment in favor of the Partnership. The Hendry Action also alleges that misrepresentations and omissions in an April 2002 consent solicitation to the limited partners caused that consent solicitation to be materially
misleading. In addition, the Hendry Action alleges that the General Partners and Wells Management breached an alleged contract arising out of a June 2000 consent solicitation to the limited partners relating to an alleged waiver of deferred
management fees. The plaintiffs seek, among other remedies, the following: judgment against the General Partners of the Partnership, jointly and severally, in an amount to be proven at trial; punitive damages; disgorgement of fees earned by the
General Partners directly or through their affiliates; a declaration that the consent obtained as a result of an April 2002 consent solicitation is null and void; enforcement of an alleged contract arising out of the June 2000 consent solicitation
to allegedly waive Wells Managements deferred management fees; and an award to the plaintiffs of their attorneys fees, costs, and expenses.

On
January 28, 2005, the defendants filed motions for summary judgment and motions to dismiss the plaintiffs claims. On March 31, 2005, the plaintiffs filed briefs in opposition to the defendants motions. Pursuant to Orders
entered July 1, 2005, the Court granted the defendants motions to dismiss and for summary judgment on all counts in the complaint. Thus, this action was at the time dismissed, subject to plaintiffs right to file a notice



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of appeal within the required time period. On August 3, 2005, the plaintiffs filed a motion requesting the Court to vacate and re-enter the orders to
give the plaintiffs an opportunity to file a motion for the reconsideration or notice of appeal. After both sides had filed briefs in support of their respective positions, on February 15, 2006, the Court heard argument on plaintiffs
motion to vacate and to re-enter the judgments previously entered on July 1, 2005.

On or about August 8, 2005, the defendants filed a motion for
attorneys fees and expenses of litigation. On or about August 12, 2005, the plaintiffs filed a motion for attorneys fees and expenses of litigation as to one of the defenses asserted by defendants. On April 20, 2006, the Court
held a hearing addressing only the liability aspects on the defendants and plaintiffs motions for attorneys fees and expenses. By Orders entered May 24, 2006, the Court denied the plaintiffs and the defendants
motions to recover attorneys fees and expenses of litigation. Also by Orders entered May 24, 2006, the Court re-entered its July 1, 2005, judgments granting the Wells defendants motions to dismiss and for summary judgment on
all counts in the complaint, so as to allow the plaintiffs 30 days within which to file a notice of appeal. On or about June 21, 2006, the plaintiffs filed a notice of appeal with respect to the Courts Order granting the defendants
motions to dismiss and for summary judgment. On July 5, 2006, the defendants filed a notice of cross appeal with respect to the Courts Order denying the defendants motion for attorneys fees and expenses of litigation. On
August 18, 2006, the appeal and cross appeal were docketed in the Georgia Court of Appeals. On July 10, 2007, the Georgia Court of Appeals entered a decision that affirmed the trial court rulings in favor of the defendants for summary
judgment on the main counts I and V alleging breach of fiduciary duty and fraud or negligence in communications with limited partners and other conduct by the General Partners. The decision also affirmed the trial
courts dismissal of count IV alleging breach of contract in connection with the June 2000 consent solicitation. The decision reversed the dismissal on two counts, finding that the plaintiffs had standing to assert as direct
claims in count II alleging breach of fiduciary duty by the General Partners decision not to negotiate for a settlement in a prior related action and in count III alleging that the April 2002 consent solicitation for
approval of an amendment to allow net sale proceeds to be reinvested in the Partnerships condominium property, Paces Pavilion, was invalid. The decision reversing dismissal of counts II and III does not mean those claims
have merit, but only that the plaintiffs have standing to proceed in an action for either or both of those two counts. The decision also ruled on the cross-appeal by affirming the trial courts denial of the
defendants request for an award of litigation fees and expenses. The plaintiffs then filed a motion for reconsideration of this decision, and on July 26, 2007, the Court of Appeals denied the plaintiffs motion for
reconsideration. On July 31, 2007, the plaintiffs filed a notice of intention to petition the Georgia Supreme Court for a writ of certiorari to review the judgment of the Georgia Court of Appeals. On August 15, 2007, the
plaintiffs filed a petition for writ of certiorari with the Georgia Supreme Court requesting review of the Georgia Court of Appeals decision on the breach of fiduciary duty claims in counts I and V. The plaintiffs petition
for writ of certiorari was denied in a judgment entered by the Georgia Supreme Court on January 7, 2008, resulting in the successful resolution of counts I, IV, and V. The trial court adopted the judgment of the Georgia Court of
Appeals in an Order entered in Gwinnett Superior Court on August 6, 2007. In November 2007, the Wells defendants filed motions for summary judgment on counts II and III in the trial court. The plaintiffs moved to dismiss count III as moot,
and the Court entered an Order of dismissal with prejudice as to count III. On April 10, 2008, the Court entered an Order that granted summary judgment in favor of the defendants on count II. The time period for the plaintiffs to file either a
motion to reconsider or a notice of appeal from this Order expired on May 12, 2008. Absent a timely filed motion to reconsider or notice of appeal, the case is concluded. At this time, the defendants have not been notified that either a motion to
reconsider or notice of appeal was timely filed.

As of March 31, 2008, Wells Capital had incurred a total of approximately $980,000 in legal fees,
costs, and expenses related to defending against the Hendry Action. The indemnification provisions of the partnership agreement require the Partnership to indemnify the General Partners for their costs of defending the Hendry Action under
certain circumstances, including if they are successful in defending such litigation, upon the conclusion of this litigation. Pursuant to the indemnification provisions of the partnership agreement, the Partnership reimbursed Wells Capital $871,332
of these legal fees in the first quarter of 2008 as a result of the



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successful resolution of counts I, III, IV, and V. At this time, management is unable to determine the likelihood of whether the plaintiffs will file a
motion to reconsider or a notice of appeal relating to count II. Accordingly, no reserves have been provided for in the accompanying financial statements.



|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, 2007.



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



|(a) | We did not sell any equity securities that were not registered under the Securities Act of 1933 during the quarter ended March 31, 2008.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------



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



|(c) | We did not redeem any securities during the quarter ended March 31, 2008.
|--- | -------------------------------------------------------------------------



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



|(a) | We were not subject to any indebtedness and, therefore, did not default with respect to any indebtedness during the quarter ended March 31, 2008.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------



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



|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 March 31, 2008.



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



|(a) | During the quarter ended March 31, 2008, there was no information required to be disclosed in a report on Form 8-K which was not disclosed in a report on Form 8-K.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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

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



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SIGNATURES

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



|             |  |  |  |                                                                                                    |  |                                                
|------------ |  |  |  | -------------------------------------------------------------------------------------------------- |  | -----------------------------------------------
|             |  |  |  | WELLS REAL ESTATE FUND I (Registrant)                                                             
|             |  |  | 
|             |  |  |  | By:                                                                                                |  | WELLS CAPITAL, INC. (Corporate General Partner)
|             |  | 
|May 12, 2008 |  |  |  | /s/ LEO F. WELLS, III                                                                             
|             |  |  |  | Leo F. Wells, III President, Principal Executive Officer, and Sole Director of Wells Capital, Inc.
|             |  | 
|May 12, 2008 |  |  |  | /s/ DOUGLAS P. WILLIAMS                                                                           
|             |  |  |  | Douglas P. Williams Principal Financial Officer of Wells Capital, Inc.                            



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EXHIBIT INDEX

TO FIRST QUARTER FORM 10-Q

OF

WELLS REAL ESTATE FUND I



|           |  |                                                                                                                               
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |  | 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