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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)



| | x |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| | - |  | ---------------------------------------------------------------------------------------



For the quarterly period ended September 30, 2003



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



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WELLS REAL ESTATE FUND I

(Exact name of registrant as specified in its
charter)



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|Georgia                                                        |  | 58-1565512                             
|-------------------------------------------------------------- |  | ---------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|6200 The Corners Pkwy., Norcross, Georgia                      |  | 30092                                  
|(Address of principal executive offices)                       |  | (Zip Code)                             
|                                                               | 
|Registrants telephone number, including area code             |  | (770) 449-7800                         



---

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



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past  90 days.



Yes x    No ̈



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TABLE OF CONTENTS



|         |  |                       |  |                                                                                                                                            |  | Page No.
|-------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | --------
|         |  |                      
|PART I.  |  | FINANCIAL INFORMATION |  |                                                                                                                                           
|         |  |                       | 
|         |  | Item 1.               |  | Consolidated Financial Statements                                                                                                          |  |         
|         |  |                       | 
|         |  |                       |  | Consolidated Balance SheetsSeptember 30, 2003 (unaudited) and     December 31, 2002                                                       |  | 3       
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Loss for the Three Months and Nine Months Ended September 30, 2003 (unaudited) and 2002 (unaudited)             |  | 4       
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Partners Capital for the Nine Months Ended September 30, 2003 (unaudited) and the Year Ended December 31, 2002 |  | 5       
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Cash Flows for the Nine Months Ended     September 30, 2003 (unaudited) and 2002 (unaudited)                    |  | 6       
|         |  |                       | 
|         |  |                       |  | Condensed Notes to Consolidated Financial Statements (unaudited)                                                                           |  | 7       
|         |  |                       | 
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                      |  | 11      
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risks                                                                                |  | 14      
|         |  |                       | 
|         |  | Item 4.               |  | Controls and Procedures                                                                                                                    |  | 14      
|         |  |                      
|PART II. |  | OTHER INFORMATION     |  | 16                                                                                                                                        





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WELLS REAL ESTATE FUND I

CONSOLIDATED BALANCE SHEETS



|                                                                                                     |  | (unaudited)        |            |                  
|---------------------------------------------------------------------------------------------------- |  | ------------------ | ---------- | -----------------
|                                                                                                     |  | September 30, 2003 |            | December 31, 2002
|ASSETS:                                                                                              |  |                    |            |                  
|Real estate, at cost:                                                                                |  |                    |            |                  
|Building and improvements, less accumulated depreciation of$6,905,349 in 2003 and $6,472,283 in 2002 |  | $                  | 4,703,907  |                  
|Land                                                                                                 |  |                    | 1,440,608  |                  
|                                                                                                     |  |                    |            |                  
|Total real estate assets                                                                             |  |                    | 6,144,515  |                  
|Cash and cash equivalents                                                                            |  |                    | 11,913,787 |                  
|Investments in Joint Ventures                                                                        |  |                    | 2,307,446  |                  
|Deferred lease acquisition costs                                                                     |  |                    | 135,167    |                  
|Prepaid expenses and other assets                                                                    |  |                    | 125,815    |                  
|Accounts receivable, net                                                                             |  |                    | 122,789    |                  
|Due from joint ventures                                                                              |  |                    | 33,000     |                  
|                                                                                                     |  |                    |            |                  
|Total assets                                                                                         |  | $                  | 20,782,519 |                  
|                                                                                                     |  |                    |            |                  
|LIABILITIES AND PARTNERS CAPITAL:                                                                   |  |                    |            |                  
|Liabilities:                                                                                         |  |                    |            |                  
|Due to affiliate                                                                                     |  | $                  | 2,043,875  |                  
|Accounts payable, accrued expenses and refundable security deposits                                  |  |                    | 399,493    |                  
|Partnership distributions payable                                                                    |  |                    | 164,908    |                  
|Minority interest                                                                                    |  |                    | 34,234     |                  
|                                                                                                     |  |                    |            |                  
|Total liabilities                                                                                    |  |                    | 2,642,510  |                  
|                                                                                                     |  |                    |            |                  
|Partners capital:                                                                                   |  |                    |            |                  
|Limited partners:                                                                                    |  |                    |            |                  
|Class A98,716 units outstanding as of September 30, 2003 and December 31, 2002                      |  |                    | 18,140,009 |                  
|Class B42,568 units outstanding as of September 30, 2003 and December 31, 2002                      |  |                    | 0          |                  
|General Partners                                                                                     |  |                    | 0          |                  
|                                                                                                     |  |                    |            |                  
|Total partners capital                                                                              |  |                    | 18,140,009 |                  
|                                                                                                     |  |                    |            |                  
|Total liabilities and partners capital                                                              |  | $                  | 20,782,519 |                  
|                                                                                                     |  |                    |            |                  



See accompanying notes



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WELLS REAL ESTATE FUND I

CONSOLIDATED STATEMENTS OF LOSS



|                                                   |  | (unaudited) Three Months Ended |          |   | (unaudited) Nine Months Ended |  
|-------------------------------------------------- |  | ------------------------------ | -------- | - | ----------------------------- | -
|                                                   |  | September 30, 2003             |          |   | September 30, 2002            |  
|REVENUES:                                          |  |                                |          |   |                               |  
|Rental income                                      |  | $                              | 280,653  |   |                               | $
|Interest income                                    |  |                                | 28,289   |   |                               |  
|Tenant reimbursements                              |  |                                | 24,605   |   |                               |  
|Equity in (loss) income of Joint Ventures(Note 2)  |  |                                | (10,846  | ) |                               |  
|                                                   |  |                                |          |   |                               |  
|                                                   |  |                                | 322,701  |   |                               |  
|                                                   |  |                                |          |   |                               |  
|EXPENSES:                                          |  |                                |          |   |                               |  
|Depreciation                                       |  |                                | 146,981  |   |                               |  
|Legal and accounting                               |  |                                | 136,910  |   |                               |  
|Operating costsrental properties                  |  |                                | 125,113  |   |                               |  
|Partnership administration                         |  |                                | 35,416   |   |                               |  
|Management and leasing fees                        |  |                                | 18,790   |   |                               |  
|Other general and administrative                   |  |                                | 4,420    |   |                               |  
|Write-off of real estate asset                     |  |                                | 0        |   |                               |  
|                                                   |  |                                |          |   |                               |  
|                                                   |  |                                | 467,630  |   |                               |  
|                                                   |  |                                |          |   |                               |  
|NET LOSS BEFORE MINORITY INTEREST                  |  |                                | (144,929 | ) |                               |  
|MINORITY INTEREST                                  |  |                                | 1,192    |   |                               |  
|                                                   |  |                                |          |   |                               |  
|NET LOSS                                           |  | $                              | (143,737 | ) |                               | $
|                                                   |  |                                |          |   |                               |  
|NET LOSS ALLOCATED TO CLASS A LIMITED PARTNERS     |  | $                              | (143,737 | ) |                               | $
|                                                   |  |                                |          |   |                               |  
|NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS     |  | $                              | 0        |   |                               | $
|                                                   |  |                                |          |   |                               |  
|NET LOSS PER CLASS A LIMITED PARTNER UNIT          |  | $                              | (1.46    | ) |                               | $
|                                                   |  |                                |          |   |                               |  
|NET LOSS PER CLASS B LIMITED PARTNER UNIT          |  | $                              | 0.00     |   |                               | $
|                                                   |  |                                |          |   |                               |  
|CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT |  | $                              | 0.00     |   |                               | $
|                                                   |  |                                |          |   |                               |  



See accompanying notes



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WELLS REAL ESTATE FUND I

CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2002

AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 (UNAUDITED)



|                                        |  | Limited Partners |  |         | GeneralPartners |   | TotalPartnersCapital |       
|--------------------------------------- |  | ---------------- |  | ------- | --------------- | - | --------------------- | ------
|                                        |  | Class A          |  |         | Class B         |   |                       |       
|                                        |  | Units            |  | Amounts |                 |   | Units                 |       
|BALANCE, December 31, 2001              |  | 98,716           |  | $       | 19,831,902      |   |                       | 42,568
|Net loss                                |  | 0                |  |         | (211,995        | ) |                       | 0     
|Partnership distributions               |  | 0                |  |         | (987,160        | ) |                       | 0     
|                                        |  |                  |  |         |                 |   |                       |       
|BALANCE, December 31, 2002              |  | 98,716           |  |         | 18,632,747      |   |                       | 42,568
|Net loss                                |  | 0                |  |         | (245,948        | ) |                       | 0     
|Partnership distributions               |  | 0                |  |         | (246,790        | ) |                       | 0     
|                                        |  |                  |  |         |                 |   |                       |       
|BALANCE, September 30, 2003 (unaudited) |  | 98,716           |  | $       | 18,140,009      |   |                       | 42,568
|                                        |  |                  |  |         |                 |   |                       |       



See accompanying notes



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WELLS REAL ESTATE FUND I

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                |  | (unaudited) Nine Months Ended |           
|------------------------------------------------------------------------------- |  | ----------------------------- | ----------
|                                                                                |  | September 30, 2003            |           
|CASH FLOWS FROM OPERATING ACTIVITIES:                                           |  |                               |           
|Net loss                                                                        |  | $                             | (245,948  
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                               |           
|Equity in income of Joint Ventures                                              |  |                               | (165,285  
|Depreciation                                                                    |  |                               | 433,066   
|Write-off of real estate asset                                                  |  |                               | 2,775     
|Amortization of deferred lease costs                                            |  |                               | 29,571    
|Changes in assets and liabilities:                                              |  |                               |           
|Accounts receivable, net                                                        |  |                               | (40,964   
|Prepaid expenses and other assets                                               |  |                               | (3,490    
|Accounts payable, accrued expenses and refundable security deposits             |  |                               | 204,579   
|Due to affiliates                                                               |  |                               | 42,960    
|Minority interest                                                               |  |                               | (1,914    
|                                                                                |  |                               |           
|Total adjustments                                                               |  |                               | 501,298   
|                                                                                |  |                               |           
|Net cash provided by operating activities                                       |  |                               | 255,350   
|                                                                                |  |                               |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                           |  |                               |           
|Distributions received from Joint Ventures                                      |  |                               | 1,825,994 
|Investment in deferred lease acquisition costs                                  |  |                               | (5,443    
|Investment in real estate                                                       |  |                               | (64,557   
|                                                                                |  |                               |           
|Net cash provided by investing activities                                       |  |                               | 1,755,994 
|                                                                                |  |                               |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                           |  |                               |           
|Minority interest distributions                                                 |  |                               | (8,793    
|Distributions to limited partners                                               |  |                               | (493,580  
|                                                                                |  |                               |           
|Net cash used in financing activities                                           |  |                               | (502,373  
|                                                                                |  |                               |           
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                            |  |                               | 1,508,971 
|CASH AND CASH EQUIVALENTS, beginning of period                                  |  |                               | 10,404,816
|                                                                                |  |                               |           
|CASH AND CASH EQUIVALENTS, end of period                                        |  | $                             | 11,913,787
|                                                                                |  |                               |           
|SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:                                 |  |                               |           
|Due from joint ventures                                                         |  | $                             | 33,000    
|                                                                                |  |                               |           
|Partnership distributions payable                                               |  | $                             | 164,908   
|                                                                                |  |                               |           



See accompanying notes



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WELLS REAL ESTATE FUND I

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003 (UNAUDITED)



|1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- |  | ------------------------------------------



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



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 (the General Partners). 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 a public offering of its limited partnership units pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership terminated its offering on September 5, 1986 upon receiving
and accepting gross proceeds of $35,321,000 for a total of 141,284 Class A and Class B limited partner units from 4,895 limited partners at $250 per unit.



As of September 30, 2003, the Partnership owned interests in the following two properties directly: (i) Paces Pavilion, a medical office building located in Atlanta,
Georgia, in which the Partnership owns an approximately 27% condominium interest, and (ii) Black Oak Plaza, a shopping center located in Knoxville, Tennessee.



During the periods presented, the Partnership also owned interests in the following two properties through the affiliated joint ventures listed below:



|                                                         
|---------------------------------------------------------
|Joint Venture                                            
|                                                         
|Wells-Baker Associates                                   
|                                                         
|Fund I and Fund II Tucker (Fund I-II Tucker Associates)
|                                                         



|* |  | Wells & Associates, Inc. is affiliated with the Partnership through common management.
|- |  | --------------------------------------------------------------------------------------



|** |  | Fund II and Fund IIOW (Fund II-IIOW Associates) is a joint venture between Wells Real Estate Fund II and Wells Real Estate Fund II-OW.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------



On October 1, 2001, Fund I, II, II-OW, VI and VII Associates (Fund I-II-IIOW-VI-VII
Associates) a joint venture between the Partnership, Fund II-IIOW Associates, Wells Real Estate Fund VI, L.P. and Wells Real Estate Fund VII, L.P. sold the Cherokee Commons property to an unrelated third party. Fund I-II-IIOW-VI-VII Associates
was liquidated during the fourth quarter of 2002.



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On April 7, 2003, Fund I-II Tucker
Associates sold the retail portion of Heritage Place, which comprises approximately 30% of the total premises, to an unrelated third party for a gross selling price of $3,400,000. As a result of this sale, net sales proceeds of approximately
$1,637,000 and a gain of approximately $152,000 were allocated to the Partnership.



Each of the above properties was acquired on an all-cash basis. For further information regarding the foregoing properties and joint ventures, refer to the report filed for the Partnership on Form 10-K for the year ended December 31, 2002.



|(b) |  | Basis of Presentation
|--- |  | ---------------------



The consolidated financial statements include the financial information of the Partnership and Wells-Baker Associates. The Partnerships interest in Wells-Baker
Associates was approximately 90% for each of the periods presented. All significant intercompany balances have been eliminated in consolidation. Minority interest represents Wells & Associates, Inc.s interest in Wells-Baker Associates of
approximately 10% for each of the periods presented.



The consolidated
financial statements of the partnership have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and in accordance with such
rules and regulations, do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements. The quarterly statements included herein have
not been examined by independent auditors. In the opinion of the General Partners, the statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary to fairly present the
results for those periods. Results for interim periods are not necessarily indicative of full-year results. For further information, refer to the financial statements and footnotes included in the Partnerships Form 10-K for the year ended
December 31, 2002.



|(c) |  | Allocations of Net Income, Net Loss, and Gain on Sale
|--- |  | -----------------------------------------------------



For the purpose of determining allocations per the partnership agreement, net income is defined generally as net income recognized by the Partnership, excluding
deductions for depreciation and amortization. Net income, as defined, of the Partnership will be allocated each year in the same proportions that net cash from operations is distributed to the partners. To the extent the Partnerships net
income in any year exceeds net cash from operations, it will be allocated 99% to the limited partners and 1% to the General Partners.



Net loss, depreciation, and amortization deductions for each fiscal year are 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/her capital account in an amount not to exceed such positive balance; and (c) thereafter to the General Partners.



Under the partnership agreement, gain on the sale or exchange of the Partnerships
properties is 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 excess of
(i) each limited partners adjusted Capital Contribution, plus a cumulative 15% per annum return on his/her adjusted Capital Contribution (16% for investments made before December 31, 1984), less the sum of all prior distributions of cash flow
from operations previously made to such limited partner, over (ii) such limited partners capital account balance as of the sale date; (c) then to the General Partners in proportion to and to the extent of the



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excess of (i) each general partners adjusted Capital Contribution, over (ii) such general partners capital account balance as of the sale date;
and (d) thereafter 85% to the limited partners and 15% to the General Partners.



|(d) |  | Distribution of Net Cash From Operations
|--- |  | ----------------------------------------



Cash available for distribution, as defined by the partnership agreement, is distributed quarterly on a cumulative non-compounded basis 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 limited partners and the General Partners allocated on a basis of 90% and 10%, respectively.
| | - |  | ----------------------------------------------------------------------------------------------------------



|2. |  | INVESTMENTS IN JOINT VENTURES
|-- |  | -----------------------------



|(a) |  | Basis of Presentation
|--- |  | ---------------------



The Partnership does not have control over the operations of Fund I-II Tucker Associates or Fund I-II-IIOW-VI-VII Associates (collectively, the Joint
Ventures); however, it does exercise significant influence. Accordingly, the Partnerships investments in the Joint Ventures are recorded using the equity method of accounting, whereby original investments are recorded at cost and
subsequently adjusted for contributions, distributions, and net income (loss) attributable to the Partnership. For further information, refer to the report filed for the Partnership on Form 10-K for the year ended December 31, 2002.



|(b) |  | Summary of Operations
|--- |  | ---------------------



The following information summarizes the operations of the Joint Ventures for the three month and nine months ended September 30, 2003 and 2002, respectively:







|                                 |  | Total Revenues                   |         | (Loss) IncomeFrom ContinuingOperations  |   | Income FromDiscontinuedOperations |  | Net Income                       |          | Partnerships Shareof Net (Loss)Income 
|-------------------------------- |  | -------------------------------- | ------- | --------------------------------------- | - | --------------------------------- |  | -------------------------------- | -------- | ---------------------------------------
|                                 |  | Three Months Ended September 30, |         | Three Months Ended September 30,        |   | Three Months Ended September 30,  |  | Three Months Ended September 30, |          | Three Months Ended September 30,       
|                                 |  | 2003                             |         | 2002                                    |   | 2003                              |  |                                  | 2002     |                                        
|Fund I-II Tucker Associates      |  | $                                | 184,486 |                                         | $ | 199,783                           |  | $                                | (20,893  | )                                      
|Fund I-II-IIOW-VI-VII Associates |  |                                  | 0       |                                         |   | 37,846                            |  |                                  | 0        |                                        
|                                 |  |                                  |         |                                         |   |                                   |  |                                  |          |                                        
|                                 |  | $                                | 184,486 |                                         | $ | 237,629                           |  | $                                | (20,893  | )                                      
|                                 |  |                                  |         |                                         |   |                                   |  |                                  |          |                                        
|                                 |  |                                  |         |                                         |  
|                                 |  | Total Revenues                   |         | (Loss) Income From ContinuingOperations |   | Income FromDiscontinuedOperations |  | Net Income                       |          | Partnerships Share of Net (Loss)Income
|                                 |  | Nine Months Ended September 30,  |         | Nine Months Ended September 30,         |   | Nine Months Ended September 30,   |  | Nine Months Ended September 30,  |          | Nine Months Ended September 30,        
|                                 |  | 2003                             |         | 2002                                    |   | 2003                              |  |                                  | 2002     |                                        
|Fund I-II Tucker Associates      |  | $                                | 567,870 |                                         | $ | 657,591                           |  | $                                | (159,926 | )                                      
|Fund I-II-IIOW-VI-VII Associates |  |                                  | 0       |                                         |   | 108,124                           |  |                                  | 0        |                                        
|                                 |  |                                  |         |                                         |   |                                   |  |                                  |          |                                        
|                                 |  | $                                | 567,870 |                                         | $ | 765,715                           |  | $                                | (159,926 | )                                      
|                                 |  |                                  |         |                                         |   |                                   |  |                                  |          |                                        



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|3. |  | RECENT ACCOUNTING PRONOUNCEMENTS
|-- |  | --------------------------------



Variable Interest Entities



In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, which clarifies
the application of Accounting Research Bulletin (ARB) No. 51, Consolidated Financial Statements, relating to consolidation of certain entities. FIN 46 requires the identification of the Partnerships participation in variable
interest entities (VIEs), which are defined as entities with a level of invested equity that is not sufficient to fund future activities to permit them to operate on a stand-alone basis, or whose equity holders lack certain
characteristics of a controlling financial interest. For entities identified as VIEs, FIN 46 sets forth a model to evaluate potential consolidation based on an assessment of which party to the VIE, if any, bears a majority of the exposure to its
expected losses, or stands to gain from a majority of its expected returns. FIN 46 is effective for all new VIEs created or acquired after January 31, 2003. For VIEs created or acquired prior to February 1, 2003, the Partnership has adopted the
provisions of FIN 46 commencing on June 15, 2003. FIN 46 also sets forth certain disclosures regarding interests in VIEs that are deemed significant, even if consolidation is not required. As the Joint Ventures do not fall under the definition of
VIEs provided above, the adoption of FIN 46 has not resulted in the consolidation of any previously unconsolidated entities.



Accounting For Certain Financial Instruments With Characteristics Of Both Liabilities And Equity



In May 2003, the Financial Accounting Standards Board (FASB) issued Statement
No. 150 Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (FAS 150), certain components of which were deferred by the FASB in October 2003 for an indefinite period. This
statement establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. FAS 150 requires, among other things, that a
minority interest in a consolidated entity be classified as a liability and reported at settlement value if an unconditional obligation to exercise or redeem the minority interest exists. As Wells-Baker Associates is a finite life joint venture, the
Partnerships interest therein represents an unconditional obligation. Prior to its deferral, FAS 150 required this minority interest to be accounted for as a liability and reported at settlement value. Until further guidance is provided during
the deferral period for FAS 150, this interest will continue to be classified as minority interest in the Partnerships financial statements. The settlement value of this minority interest is estimated to be approximately $91,000 at September
30, 2003.



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



|(a) |  | Management and Leasing Fees
|--- |  | ---------------------------



Wells Management Company, Inc. (Wells Management), an affiliate of the General Partners, is entitled to compensation for the management and leasing of the
Partnerships properties owned through joint ventures equal to (a) 3% of the gross revenues for management and 3% of the gross revenues for leasing (aggregate maximum of 6%) 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 or (b) in the case of commercial properties which are 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.



Since the third quarter of 1998, the on-site management and leasing of Black Oak Plaza has been performed by an independent third-party
property management company. The management company receives a 3% fee, and



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the balance due to Wells Management is accrued. Wells Management has elected to defer the current receipt of management and leasing fees and initial lease-up
costs due from the Partnership with respect to the properties owned by the Partnership directly and through its interest in joint ventures. Accordingly, such fees are expensed as incurred and comprise the due to affiliate balances presented in the
accompanying balance sheets.



|(b) |  | Administration Reimbursements
|--- |  | -----------------------------



Wells Capital, one of the General Partners, and its affiliates perform certain administrative services for the Partnership, such as accounting, property management, and
other partnership administration, and incur the related expenses. Such expenses are allocated among the various Wells Real Estate Funds based on time spent on each fund by individual administrative personnel. The Partnership reimbursed $37,352 and
$24,389 for the three months ended September 30, 2003 and 2002, respectively, and $112,939 and $93,315 for the nine months ended September 30, 2003 and 2002, respectively, to Wells Capital and its affiliates for these services and expenses. The
Joint Ventures reimbursed $8,893 and $6,819 for the three months ended September 30, 2003 and 2002, respectively, and $30,718 and $26,523 for the nine months ended September 30, 2003 and 2002, respectively, to Wells Capital and its affiliates for
these services and expenses.



|(c) |  | Conflicts of Interest
|--- |  | ---------------------



The General Partners of the Partnership are also general partners of other Wells Real Estate Funds. As such, there may exist conflicts of interest where the General
Partners in their capacity as general partners of other Wells Real Estate Funds may be in competition with the Partnership in connection with property acquisitions or for tenants in similar geographic markets.



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

RESULTS OF OPERATIONS



The following discussion and analysis
should be read in conjunction with the Partnerships accompanying financial statements and notes thereto.



|(a) |  | Forward-Looking Statements
|--- |  | --------------------------



This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including
discussion and analysis of the financial condition of the Partnership, anticipated capital expenditures required to complete certain projects, amounts of cash distributions anticipated to be distributed to limited partners in the future, and certain
other matters. Readers of this report should be aware that there are various factors that could cause actual results to differ materially from any forward-looking statements made in this report, including lease-up risks, inability to obtain new
tenants upon the expiration of existing leases, and the potential need to fund tenant improvements, leasing commissions, or other capital expenditures or lease-up costs out of operating cash flows or sales proceeds.



|(b) |  | Results of Operations
|--- |  | ---------------------



Gross Revenues



Gross revenues of the Partnership were $322,701 and $319,185 for the three months ended September 30, 2003 and 2002, respectively, and $1,187,764 and $1,069,229 for the nine months ended September 30, 2003 and 2002,
respectively. The increase in gross revenues for the nine months ended September 30, 2003, resulted primarily from (i) the corresponding increase in equity in income of Joint Ventures further described below, and (ii) an increase in occupancy of
Paces Pavilion during 2003.



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Equity in Income of
Joint Ventures



Gross Revenues of Joint Ventures



Gross revenues of Joint Ventures decreased in 2003, as
compared to 2002, primarily due to (i) a decrease in occupancy at the office portion of Heritage Place during 2003, and (ii) a reduction in interest income earned by Fund I-II-IIOW-VI-VII Associates as a result of liquidating this joint venture
during the fourth quarter of 2002.



Expenses of Joint
Ventures



Expenses of Joint Ventures decreased in 2003, as
compared to 2002, primarily due to (i) the sale of the retail portion of Heritage Place during the second quarter of 2003, and (ii) liquidating Fund I-II-IIOW-VI-VII Associates during the fourth quarter of 2002.



Equity in Income of Joint Ventures from Discontinued Operations



Equity in income of Joint Ventures from discontinued
operations increased for three months ended September 30, 2003, as compared to the same period in 2002, and decreased for the nine months ended September 30, 2003, as compared to the same period in 2002, primarily as a result of the gain recognized
on the sale of the retail portion of Heritage Place in the second quarter of 2003.



As a result of the decrease in gross revenues and increase in expenses of Joint Ventures, partially offset by the increase in income from discontinued operations of the Joint Ventures for the nine months ended
September 30, 2003 as described above, equity in income of Joint Ventures decreased to $(10,846) from $15,378 for the three months ended September 30, 2003 and 2002, respectively, and increased to $165,285 from $80,221 for the nine months ended
September 30, 2003 and 2002, respectively.



Expenses



Expenses of the Partnership remained relatively consistent at $467,630 and $481,870 for
the three months ended September 30, 2003 and 2002, respectively, and $1,435,626 and $1,519,934 for the nine months ended September 30, 2003 and 2002, respectively. The slight decrease for 2003 decrease was primarily due to (i) the decline in
property taxes for Black Oak Plaza resulting from a lower property value assessment for 2003, and (ii) a decrease in administration costs due to lower printing expenses in 2003, as proxies were circulated to the limited partners during 2002.



Net Loss



As a result of the factors described above, the Partnership reported a reduction in net
losses for both the three and nine month periods ended September 30, 2003, reporting net losses of $143,737 and $162,107 for the three months ended September 30, 2003 and 2002, respectively, and $245,948 and $448,519 for the nine months ended
September 30, 2003 and 2002, respectively.



|(c) |  | Liquidity and Capital Resources
|--- |  | -------------------------------



Cash Flows From Operating Activities



Net cash flows from operating activities were $255,350 and $52,187 for the nine months ended September 30, 2003 and 2002, respectively.The 2003 increase resulted
primarily from (i) the decrease in expenses for the Partnership, as described above, and (ii) a change in the timing of paying accounts payable, funding prepaid expenses and collecting accounts receivable.



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Cash Flows From Investing Activities



Net cash flows from investing activities were $1,755,994 and $319,781
for the nine months ended September 30, 2003 and 2002, respectively. The 2003 increase is primarily a result of receiving net proceeds from Fund I-II Tucker Associates for the sale of the retail portion of Heritage Place in the second quarter of
2003.



Cash Flows From Financing Activities



Net cash flows from financing activities were $(502,373) and $(815,309) for the nine months
ended September 30, 2003 and 2002, respectively. The 2003 decrease in financing cash flows used, which represents distributions to partners, resulted primarily from reserving a portion of operating and investing cash flows in order to fund
(i) legal costs incurred in connection with the litigation discussed in Part II, Item 1, and (ii) tenant improvements and re-leasing costs for Paces Pavilion and Black Oak Plaza.



Distributions



The Partnership declared distributions of net cash from operations to the limited partners holding Class A Units of $0.00 and $2.50 per unit for the quarters ended
September 30, 2003 and 2002, respectively. Cash flows otherwise distributable to the limited partners have been reserved for the third quarter of 2003 in order to fund additional legal costs anticipated in connection with the litigation discussed in
Part II, Item 1., and lease-up costs anticipated with increasing occupancy of Paces Pavilion, Black Oak Plaza and the remaining office portion of Heritage Place. No distributions were made to limited partners holding Class B Units.



Sales Proceeds



The Partnerships share of the net proceeds generated from the sales of the Cherokee Commons property, the Crowes Crossing
property, a portion of Peachtree Place, and a portion of Heritage Place have not been distributed. The General Partners believe that it is in the best interest of the limited partners to hold such proceeds in reserve while the General Partners
continue their negotiations with the owners of the other interests in Paces Pavilion and pending resolution of the litigation described in Part II, Item 1 below.



Capital Resources



The Partnership is an investment vehicle formed for the purpose of acquiring, owning, and operating income-producing real properties and has invested all of its funds
available for investment. Accordingly, it is unlikely that the Partnership will acquire interests in any additional properties, except potentially for the acquisition of other interests in Paces Pavilion. Other than those mentioned above, the
General Partners are unaware of any specific need requiring capital resources.



|(d) |  | Related-Party Transactions
|--- |  | --------------------------



The Partnership and its joint ventures have entered into agreements with Wells Capital and its affiliates, whereby the Partnership or its joint ventures pay certain fees
or reimbursements to Wells Capital or its affiliates for property management and leasing fees, and reimbursement of operating and administrative costs. See Note 4 to the Partnerships financial statements included in this report for a
discussion of the various related party transactions, agreements and fees.



|(e) |  | Inflation
|--- |  | ---------



The real estate market has not been affected significantly by inflation in the past three years due to the relatively low inflation rate. However, there are provisions in the majority of tenant leases, which would
protect the



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Partnership from the impact of inflation. These provisions include reimbursement billings for operating expense pass-through charges, real estate tax, and
insurance reimbursements on a per-square-foot basis, or in some cases, annual reimbursement of operating expenses above a certain per-square-foot allowance. There is no assurance, however, that the Partnership would be able to replace existing
leases with new leases at higher base rental rates.



|(f) |  | Application of Critical Accounting Policies
|--- |  | -------------------------------------------



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



Below is a
discussion of the accounting policies that management considers to be critical in that they may require complex judgment in their application or require estimates about matters that are inherently uncertain.



Investment in Real Estate Assets



Management is required to make subjective assessments as to the useful lives of its
depreciable assets. Management considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of the Partnerships assets by class
are as follows:



|Building              |  | 25 years   
|--------------------- |  | -----------
|Building improvements |  | 10-25 years
|Land improvements     |  | 20-25 years
|Tenant improvements   |  | Lease term 



In the event that management uses
inappropriate useful lives or methods for depreciation, the Partnerships net income would be misstated.



Valuation of Real Estate Assets



Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate assets in which the Partnership has an ownership interest, either directly or through investments in joint
ventures, may not be recoverable. When indicators of potential impairment are present which indicate that the carrying amounts of real estate assets may not be recoverable, management assesses the recoverability of the real estate assets by
determining whether the carrying value of the real estate assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted
future cash flows do not exceed the carrying value, management adjusts the real estate assets to the fair value and recognizes an impairment loss. Management has determined that there has been no impairment in the carrying value of real estate
assets held by the Partnership to date.



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



ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS



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



ITEM 4.    CONTROLS AND PROCEDURES



The Partnership carried out an evaluation, under the supervision and with the participation of management of Wells Capital, the corporate General Partner of the Partnership, including the Principal Executive Officer
and Principal Financial Officer, of the effectiveness of the design and operation of the Partnerships disclosure controls and procedures as of the end of the period covered by this report pursuant to the Securities Exchange Act of 1934. Based
upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Partnerships disclosure controls and procedures were effective.



There were no significant changes in the Partnerships internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Partnerships internal control over financial reporting.



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PART II.    OTHER INFORMATION



ITEM 1.    LEGAL PROCEEDINGS



On January 17, 2003, the Partnership was served with a putative class action by a limited partner holding Class B units, on behalf of all limited partners holding Class B units as of January 15, 2003, that seeks equitable relief with regard
to the rights and obligations of all the Partnerships limited partners and general partners under the partnership agreement. This litigation was filed in the Superior Court of Gwinnett County, Georgia (Roy Johnston v. Wells Real Estate Fund
I, Civil Action No. 03-A00525-6) (the Johnston Action). The plaintiff in the Johnston Action generally alleges that the terms of the partnership agreement, as it relates to the allocation and distribution of net sale proceeds, are
inconsistent with the original intent of the parties. The plaintiff alleges that the original intent was that limited partners holding Class B units would have a priority in payment of cash distributions of net sale proceeds to bring them even with
the amount of cash distributions previously made to limited partners holding Class A units. The Johnston Action seeks, among other things, to have the Partnerships partnership agreement equitably reformed consistent with the alleged original
intent or, in the alternative, to have the investments made by limited partners holding Class B units equitably rescinded, and requests an injunction prohibiting the General Partners of the Partnership from distributing net sales proceeds until the
resolution of the action.



On April 15, 2003, several limited partners holding
Class A units filed a motion to intervene in the Johnston Action on the grounds that Mr. Johnston seeks relief that would be detrimental to limited partners holding Class A units, and that judgment in favor of Mr. Johnston would impair or impede the
Class A unit holders ability to protect their interests. The Partnership then filed its answer, a counterclaim seeking a declaratory judgment and an interpleader action, and a motion to join the intervenor Class A unit holders and recast the
action as one in interpleader. In its counterclaim, the Partnership seeks a declaratory judgment as to how net sale proceeds should be distributed as between limited partners holding Class A units and limited partners holding Class B units.



On June 27, 2003, the Court entered an order granting the motion to intervene
previously filed by certain limited partners holding Class A units (the A Unit Holder Defendants). On July 29, 2003, the A Unit Holder Defendants filed a cross-claim against the Partnership seeking that the Partnership be required and
directed to disburse funds in accordance with the partnership documents. Discovery in this litigation has continued.



On or about October 16, 2003, all of the A Unit Holder Defendants other than John Weiss (Defendant Weiss) filed a Dismissal Without Prejudice in the action.
On or about that same date, Defendant Weiss filed a motion to dismiss or in the alternative for summary judgment. On November 3, 2003, the Partnership filed a motion to dismiss or in the alternative for summary judgment. The time for briefing has
not concluded, and the Court has not yet ruled on Defendant Weiss motion or the Partnerships motion.



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | The Exhibits to this report are set forth on Exhibit Index to Third Quarter Form 10-Q attached hereto.
|--- |  | ------------------------------------------------------------------------------------------------------



|(b) |  | The Partnership filed the following reports on Form 8-K during the third quarter of 2003:
|--- |  | -----------------------------------------------------------------------------------------



| | (i) |  | On August 8, 2003, the Partnership filed a Current Report on Form 8-K disclosing a letter sent to its partners; and
| | --- |  | -------------------------------------------------------------------------------------------------------------------



| | (ii) |  | On August 29, 2003, the Partnership filed a Current Report on Form 8-K regarding the Equity Resource Arlington Fund, L.P. tender offer.
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES



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



|                  |  |  |  | WELLS REAL ESTATE FUND I (Registrant)                                                           
|----------------- |  |  |  | ------------------------------------------------------------------------------------------------
|                  |  | 
|                  |  |  |  | By: WELLS CAPITAL, INC. (Corporate General Partner)                                             
|                  |  | 
|November 10, 2003 |  |  |  | /s/    LEO F. WELLS, IIILeo F. Wells, III President                                             
|November 10, 2003 |  |  |  | /s/    DOUGLAS P. WILLIAMSDouglas P. Williams Principal Financial Officer of Wells Capital, Inc.



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EXHIBIT INDEX



TO THIRD QUARTER FORM 10-Q

OF

WELLS REAL ESTATE FUND I



|Exhibit No. |  | Description                                                                                                                   
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------
|            | 
|31.1        |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                        
|            | 
|31.2        |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                        
|            | 
|32.1        |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002