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

                                   Form 10-Q

(Mark one)
 
[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities 
     Exchange Act of 1934
For the quarterly period ended             September 30, 1998                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         (I.R.S. Employer Identification Number)
incorporation or organization)

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

Registrant's telephone number, including area code      (770) 449-7800
                                                   ----------------------------
 
-------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
 if changed since last report)


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

Yes    X     No
    ------      ------       
<PAGE>
 
                                   Form 10-Q
                                   ---------

                            Wells Real Estate Fund I
                            ------------------------

                                     INDEX
                                     -----
                                        


                                                                  Page No.
                                                                  --------

PART I.   FINANCIAL INFORMATION
 
          Item 1. Consolidated Balance Sheets - September 30, 1998
                  and December 31, 1997...........................    3
 
          Consolidated Statements of Income for Three Months and
          Nine Months Ended September 30, 1998 and 1997...........    4
 
          Statements of Partners' Capital
          for the Nine months Ended September 30, 1998
          and the Year Ended December 31, 1997....................    5
 
          Consolidated Statements of Cash Flows for
          the Nine months Ended September 30, 1998 and 1997.......    6
 
          Condensed Notes to Consolidated Financial Statements....    7
 
          Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of
                  Operations......................................    8
 
PART II.  OTHER INFORMATION.......................................   16

                                       2
<PAGE>
 
                            WELLS REAL ESTATE FUND I
                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
 
                  Assets                September 30, 1998  December 31, 1997
                  ------                ------------------  -----------------
<S>                                       <C>                 <C> 
                                         
Real Estate, at cost                     
 Land                                       $ 2,894,193        $ 2,894,193
 Building and improvements, less         
  accumulated depreciation of $ 7,122,095
  in 1998 and $6,354,204 in 1997             12,563,883         13,279,260
                                            -----------        -----------
                                         
     Total real estate assets                15,458,076         16,173,453
                                            -----------        -----------
                                         
Investment in joint ventures (Note 2)         6,585,396          6,833,129
Cash and cash equivalents                       836,023            128,199
Due from affiliates                             127,855             64,469
Deferred lease acquisition costs                 62,374             46,378
Accounts receivable                             190,193            293,644
Prepaid expenses and other assets                68,550             54,294
                                            -----------        -----------
                                              7,870,391          7,420,113
                                            -----------        -----------
     Total assets                           $23,328,467        $23,593,566
                                            ===========        ===========
 
          Liabilities and Partners' Capital
          ---------------------------------
 
Liabilities:
 Accounts payable                           $   157,281        $   138,088
 Due to affiliates                            1,614,328          1,531,215
 Refundable security deposits                    62,332             55,808
 Partnership distribution payable                 4,454            179,270
 Minority interest                              111,100            117,931
                                            -----------        -----------
                                            
     Total liabilities                        1,949,495          2,022,312
                                            -----------        -----------
                                            
Partners' capital                           
                                            
 Limited partners:                          
  Class A - 98,716 Units Outstanding         21,378,972         21,571,254
  Class B - 42,568 Units Outstanding                  0                  0
                                            -----------        -----------
                                            
     Total partners' capital                 21,378,972         21,571,254
                                            -----------        -----------
 
       Total liabilities and partners'
          capital                           $23,328,467        $23,593,566
                                            ===========        ===========
</TABLE>
     See accompanying condensed notes to consolidated financial statements.

                                       3
<PAGE>
 
                            WELLS REAL ESTATE FUND I
                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                       CONSOLIDATED STATEMENTS OF INCOME
                                        
<TABLE>
<CAPTION>
                                       Three Months Ended                      Nine Months Ended
                             --------------------------------------  --------------------------------------
                             September 30, 1998  September 30, 1997  September 30, 1998  September 30,1997
                             ------------------  ------------------  ------------------  ------------------
<S>                           <C>                <C>                 <C>                  <C>
Revenues:
 Rental income                     $ 375,298            $ 395,118          $1,134,875         $ 1,145,165    
 Interest income                       7,734                1,365              14,894               7,105      
 Equity in income of                                                                                           
  Joint Ventures (Note 2)             35,261               81,989             131,469              85,167      
                                   ---------            ---------          ----------         -----------      
                                     418,293              478,472           1,281,238           1,237,437      
                                   ---------            ---------          ----------         -----------      
                                                                                                               
Expenses:                                                                                                      
 Management and leasing fees          31,742               25,677             104,170              96,397      
 Leasing acquisition costs             7,331                5,070              12,418              14,854      
 Operating costs--rental                                                                                       
  properties, net of tenant                                                                                    
  reimbursements                     250,276              257,694             520,788             424,708      
 Bad debt recovery                         0               (2,374)                  0              (5,377)     
 Depreciation                        257,479              243,536             767,891             751,749      
 Legal and accounting                  1,097               14,144              18,604              17,381      
 Computer expense                      2,325                3,068               6,173               7,162      
 Partnership administration           10,596               11,549              40,052              40,545      
 Minority interest                       331                1,233               3,424               2,158      
                                   ---------            ---------          ----------         -----------      
                                     561,177              559,597           1,473,520           1,349,577      
                                   ---------            ---------          ----------         -----------      
  Net loss                         $(142,884)           $ (81,125)         $ (192,282)        $  (112,140)     
                                   =========            =========          ==========         ===========      
                                                                                                               
Net income allocated to General                                                                                
 Partners                          $       0            $       0          $        0         $         0      
                                                                                                               
Net (loss) income allocated to                                                                                 
 Class A Limited Partners          $(142,884)           $ 354,455          $ (192,282)        $   921,025      
                                                                                                               
Net income (loss) allocated to                                                                                 
 Class B Limited Partners          $       0            $(435,580)         $        0         $(1,033,165)     
                                                                                                               
Net (loss) income per Class A                                                                                  
 Limited Partner Unit              $   (1.45)           $    3.59          $    (1.95)        $      9.33      
                                                                                                               
                                                                                                               
Net income (loss) per Class B                                                                                  
 Limited Partner Unit              $       0            $  (10.19)         $        0         $    (24.27)     
                                                                                                               
                                                                                                               
Cash distribution per Class A                                                                                  
 Limited Partner Unit              $       0            $    3.12          $        0         $      9.08       
</TABLE>

            See accompanying condensed notes to financial statements

                                        

                                       4
<PAGE>
 
                            WELLS REAL ESTATE FUND I

                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                        STATEMENTS OF PARTNERS' CAPITAL
           FOR THE YEAR ENDED DECEMBER 31, 1997 AND NINE MONTHS ENDED
                               SEPTEMBER 30, 1998


<TABLE>
<CAPTION>
                                                  LIMITED PARTNERS
                                     ------------------------------------------- 
                                            CLASS A               CLASS B             TOTAL  
                                     ---------------------  --------------------     PARTNERS' 
                                     UNITS      AMOUNTS     UNITS     AMOUNTS        CAPITAL
                                     ------  -------------  ------  ------------  -------------
<S>                                  <C>     <C>            <C>     <C>           <C>
BALANCE, DECEMBER 31, 1996           98,716   $21,583,091   42,568  $ 1,364,701    $22,947,792
 
  Net income (loss)                       0     1,059,405        0   (1,364,701)      (305,296)
  Partnership distributions               0    (1,071,242)       0            0     (1,071,242)
                                     ------   -----------   ------  -----------    -----------
BALANCE, DECEMBER 31, 1997           98,716    21,571,254   42,568            0     21,571,254
 
  Net loss                                0      (192,282)       0            0       (192,282)
                                     ------   -----------   ------  -----------    -----------
BALANCE, SEPT. 30, 1998              98,716   $21,378,972   42,568  $         0    $21,378,972
                                     ======   ===========   ======  ===========    ===========
</TABLE>



     See accompanying condensed notes to consolidated financial statements.

                                       5
<PAGE>
 
                            WELLS REAL ESTATE FUND I
                     (A GEORGIA PUBLIC LIMITED PARTNERSHIP)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        
<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                      ----------------------------------------
                                                                      September 30, 1998   September 30, 1997
                                                                      -------------------  -------------------
<S>                                                                   <C>                  <C> 
Cash flows from operating activities:
 Net loss                                                                      $(192,282)           $(112,140)
                                                                               ---------            ---------
 Adjustments to reconcile net loss to net
  cash provided by operating activities:
   Equity in income of joint ventures                                           (131,469)             (85,167)
   Minority interest                                                               3,424                2,158
   Depreciation                                                                  767,891              751,749
   Accrued management and leasing fees                                            79,689               91,894
   Changes in assets and liabilities:
     Accounts receivable                                                         103,450               54,677
     Prepaids and other assets                                                    (2,812)             (10,361)
     Deferred income                                                              (5,485)               7,485
     Accounts payable and refundable security
      deposits                                                                    16,948               85,124
     Due to affiliates                                                           (20,015)             (13,187)
                                                                               ---------            ---------
         Total adjustments                                                       811,621              884,372
                                                                               ---------            ---------
      Net cash provided by operating activities                                  619,339              772,232
                                                                               ---------            ---------
Cash flow from investing activities:
 Distribution received from joint ventures                                       315,815              290,720
 Investment in real estate                                                       (52,514)            (134,797)
                                                                               ---------            ---------
      Net cash provided by investing
       activities                                                                263,301              155,923
                                                                               ---------            ---------
Cash flow from financing activities:
 Partnership distributions paid                                                 (174,816)            (939,706)
                                                                               ---------            ---------
      Net increase (decrease) in cash and cash                                
          equivalents                                                            707,824              (11,551) 
 
Cash and cash equivalents, beginning of year                                     128,199              204,176
                                                                               ---------            ---------
 
Cash and cash equivalents, end of period                                       $ 836,023            $ 192,625
                                                                               =========            =========
</TABLE>

           See accompanying condensed notes to financial statements.

                                       6
<PAGE>
 
                            WELLS REAL ESTATE FUND I
                     (A Georgia Public Limited Partnership)

              Condensed Notes to Consolidated Financial Statements

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

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

     Wells Real Estate Fund I (the "Partnership") is a Georgia public limited
     partnership having Leo F. Wells, III and Wells Capital, Inc., a Georgia
     corporation, as General Partners.  The Partnership was formed on April 26,
     1984, for the purpose of acquiring, developing, constructing, owning,
     operating, improving, leasing and otherwise managing for investment
     purposes income-producing commercial properties.

     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, and received gross proceeds of $35,321,000
     representing subscriptions from 4,895 Limited Partners, composed of two
     classes of limited partnership interest, Class A and Class B limited
     partnership units.

     The Partnership owns an interests in the following joint ventures:  (i)
     Wells-Baker Associates, a joint venture between Fund I and Wells &
     Associates, (ii) Fund I-Fund II Tucker and (iii) Fund I, II, II-OW, VI, VII
     Joint Venture.

     As of  September 30, 1998,  the Partnership owned directly or through its
     ownership in joint ventures, interests in the following properties:  (i)
     Paces Pavilion/The Howell Mill Road Property, a medical office building
     located in Atlanta, Georgia, owned directly by the Partnership, (ii) The
     Crowe's Crossing Property, a shopping center located in DeKalb County,
     Georgia, owned by the Partnership, (iii) The Black Oak Plaza Property, a
     shopping center located in Knoxville, Tennessee, owned by the Partnership,
     (iv) The Peachtree Place Property, two commercial office buildings located
     in Atlanta, Georgia, owned by Wells-Baker Associates, (v) The Tucker
     Property, a retail shopping and commercial office complex located in
     Tucker, Georgia, owned by Fund I-Fund II Tucker and (vi) The Cherokee
     Property, a shopping center located in Cherokee County, Georgia, owned by
     Fund I, II, II-OW, VI, VII Joint Venture.  All of the foregoing properties
     were acquired on an all cash basis.

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

     The consolidated financial statements of the Partnership have been prepared
     in accordance with instructions to Form 10-Q and do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements.  These quarterly statements
     have not been examined by independent accountants, but in the opinion of
     the General Partners, the statements for the unaudited 

                                       7
<PAGE>
 
     interim periods presented include all adjustments, which are of a normal
     and recurring nature, necessary to present a fair presentation of the
     results for such periods. For further information, refer to the
     consolidated financial statements and footnotes included in the
     Partnership's Form 10-K for the year ended December 31, 1997.

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

     The Partnership owned interests in six properties as of September 30,
     1998, through investment or directly.  The Partnership does not have
     control over the operations of the joint ventures; however, it does
     exercise significant influence.  Accordingly, investment in the joint
     venture is recorded on the equity method.

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

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

Results of Operations and Changes in Financial Conditions
---------------------------------------------------------

General
-------

As of September 30, 1998, the properties owned by the Partnership were 77.5%
occupied.  Revenues of the Partnership were $418,293 for the three-month period
ended September 30, 1998, as compared to $478,472 for the three months ended
September 30, 1997, and $1,281,238 for the nine months ended September 30, 1998,
as compared to $1,237,437 for the same period in 1997.  The increase for the
nine-month period for 1998 over 1997 was due primarily to increased income from
the joint ventures and increased interest income. Income from the joint ventures
was increased due to increased occupancy which resulted in increased rental
income at the Tucker property.  Income from joint ventures decreased for the
three-month period in 1998 over 1997 due to sewer pump and main water line
repairs at the Tucker property.

Expenses of the Partnership were $1,473,520 for the nine months ended September
30, 1998, as compared to $1,349,577 for the nine months ended September 30,
1997. The increase in expenses for 1998 over 1997 was due primarily to increased
operating costs of the Partnership's properties, primarily Paces Pavilion
building.

                                       8
<PAGE>
 
Net cash provided by operating activities decreased from $772,232 for the nine
months ended September 30, 1997, to $619,339 at September 30, 1998, due
primarily to the decrease in accounts payable, an increase in operating costs,
offset partially by a decrease in accounts receivables.  Net cash provided by
investing activities increased from $155,923 in 1997 to $263,301 in 1998 due
primarily to a decrease in capital expenditures for 1998.  Partnership
distributions decreased from $939,706 in 1997 to $174,816 in 1998 as discussed
below and is the primary reason for cash and cash equivalents increasing from
$192,625 at September 30, 1997 to $836,023 at September 30, 1998.

There were no cash distributions to the Limited Partners holding Class A Units
for the nine months ended September 30, 1998, as compared to distributions of
$9.08 per Class A Unit for the same period in 1997.  No cash distributions were
made to the Limited Partners holding Class B units or to the General Partners
for the nine months ended September 30, 1998 and 1997.

The Partnership is reserving all operating cash flow generated during the three
quarters of 1998 which would otherwise be available for distribution to Limited
Partners to fund the proposed reconfiguration of the interior of the Paces
Pavilion Building.  The lease with Hospital Corporation of America (HCA) expired
December 31, 1996 and as of September 30, 1998, the building is only 12.6%
leased. The Partnership is actively pursuing a lease renewal.

The General Partners have verified that all operational computer systems are
year 2000 compliant.  This includes systems supporting accounting, property
management and investor services.  Also, as part of this review, all building
control systems have been verified as compliant.  The current line of business
applications are based on compliant operating systems and database servers.  All
of these products are scheduled for additional upgrades before the year 2000.
Therefore, it is not anticipated that the year 2000 will have significant impact
on operations.

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income", requires certain transactions (e.g., unrealized
gains/losses on available for sale securities) that are not reflected in net
income to be displayed as other comprehensive income.  The Statement also
requires an entity to report total comprehensive income (i.e., net income plus
other comprehensive income) for every period in which an income statement is
presented.  SFAS No. 130 is effective for annual and interim periods beginning
after December 15, 1997.  None of the transactions required to be reported in
other comprehensive income pertain to the Partnership; consequently, adoption of
this Statement had no impact on the partnership's disclosures.

                                       9
<PAGE>
 
PROPERTY OPERATIONS
-------------------

As of September 30, 1998, the Partnership owned interests in the following
properties:

Paces Pavilion/Howell Mill Road Property - Fund I
---------------------------------------------------

<TABLE>
<CAPTION>
                                            Three Months Ended                        Nine Months Ended
                                 ----------------------------------------  ----------------------------------------
                                 September 30, 1998   September 30, 1997   September 30, 1998   September 30, 1997
                                 -------------------  -------------------  -------------------  -------------------
<S>                              <C>                  <C>                  <C>                  <C>
Revenues:
 Rental income                            $  16,418            $  36,729            $  62,628            $ 101,183
 
Expenses:
 Depreciation                                64,702               53,679              190,571              188,803
 Management and leasing
  expenses                                    1,006                7,664                3,794               12,044
 Other operating expenses                    81,218              133,271              188,078              184,241
                                          ---------            ---------            ---------            ---------
                                            146,926              194,614              382,443              385,088
                                          ---------            ---------            ---------            ---------
 
Net loss                                  $(130,508)           $(157,885)           $(319,815)           $(283,905)
                                          =========            =========            =========            =========
 
Occupied %                                       12%                  27%                  12%                  27%
 
Partnership's Ownership %                       100%                 100%                 100%                 100%
 
Cash generated to the
 Partnership                              $       0            $       0            $       0            $       0
 
Net loss allocated
  to the Partnership                      $(130,508)           $(157,885)           $(319,815)           $(283,905)
</TABLE>

Rental income decreased for the three-month and nine-month period ended
September 30, 1998, due to a tenant moving out at the end of March 1998.  The
decrease in occupancy from 27.8% to 12.56% also caused a decrease in management
and leasing expenses for the three- and nine-month period ended September 30,
1998, as compared to the same period in 1997.  Other operating expenses remained
stable for the nine-month period and decreased significantly for the three-month
period ending September 30, 1998, primarily due to accrued common area expenses
of $108,000 for nine months payable to the Paces Pavilion Condominium
Association, which was not billed until the third quarter of 1997.

                                       10
<PAGE>
 
Crowe's Crossing Property-Fund I
---------------------------------

<TABLE>
<CAPTION>
                                            Three Months Ended                        Nine Months Ended
                                 ----------------------------------------  ----------------------------------------
                                 September 30, 1998   September 30, 1997   September 30, 1998   September 30, 1997
                                 -------------------  -------------------  -------------------  -------------------
<S>                              <C>                  <C>                  <C>                  <C>
Revenues:
 Rental income                             $178,771             $178,403             $527,230             $525,821
 
Expenses:
 Depreciation                               104,413              104,817              313,175              312,445
 Management and leasing
  expenses                                   20,557               12,835               58,341               53,261
 Other operating expenses                    66,959               49,890               28,517               44,225
                                           --------             --------             --------             --------
                                            191,929              167,542              400,033              409,931
                                           --------             --------             --------             --------
 
Net (loss) income                          $(13,158)            $ 10,861             $127,197             $115,890
                                           ========             ========             ========             ========
 
Occupied %                                       92%                  86%                  92%                  86%
 
Partnership's Ownership %                       100%                 100%                 100%                 100%
 
Cash generated to the
 Partnership                               $105,496             $117,337             $475,383             $482,205
 
Net (loss) income allocated
  to the Partnership                       $(13,158)            $ 10,861             $127,197             $115,890
</TABLE>


Rental income for the nine-month period ended September 30, 1998 and September
30, 1997 remained relatively stable even though occupancy rates increased as of
September 30, 1998, due to the timing differences of the tenants moving in
and/or out during the three- and nine-month periods of 1998 and 1997.  Other
operating expenses decreased for the nine months ended September 30, 1998 as
compared to the same period in 1997 due to painting the center in 1997 and
decreased security coverage in 1998,  but increased for the three-month period
in 1998 due to additional HVAC repairs and landscaping supplies.

                                       11
<PAGE>
 
Black Oak Plaza Property - Fund I
---------------------------------


<TABLE>
<CAPTION>
                                            Three Months Ended                        Nine Months Ended
                                 ----------------------------------------  ----------------------------------------
                                 September 30, 1998   September 30, 1997   September 30, 1998   September 30, 1997
                                 -------------------  -------------------  -------------------  -------------------
<S>                              <C>                  <C>                  <C>                  <C>
Revenues:
 Rental income                             $107,347             $111,817            $ 333,122             $332,933
 Interest income                                  0                    0                    0                   15
                                           --------             --------            ---------             --------
                                            107,347              111,817              333,122              332,948
                                           --------             --------            ---------             --------
 
Expenses:
 Depreciation                                66,829               63,284              200,037              188,958
 Management and leasing
  expenses                                   10,708                8,461               36,581               28,406
 Other operating expenses                    62,842               56,468              210,969              106,264
                                           --------             --------            ---------             --------
                                            140,379              128,213              447,587              323,628
                                           --------             --------            ---------             --------
 
Net (loss) income                          $(33,032)            $(16,396)           $(114,465)            $  9,320
                                           ========             ========            =========             ========
 
Occupied %                                       73%                  77%                  73%                  77%
 
Partnership's Ownership %                       100%                 100%                 100%                 100%
 
Cash generated to the
 Partnership                               $ 49,449             $      0            $ 119,240             $144,547
 
Net (loss) income allocated
  to the Partnership                       $(33,032)            $(16,396)           $(114,465)            $  9,320
</TABLE>


Depreciation increased for 1998, as compared to 1997, due to tenant improvements
which were capitalized in December 1997 and are being depreciated over the lease
term.  The increase in management and leasing expenses in the first nine months
of 1998, compared to the same period of 1997, is due to the payment of lease
acquisition fees for new tenants in February 1998.  Other operating expenses
increased in 1998, as compared to 1997, due to changes in the 1996 estimated CAM
reimbursements which were reflected in 1997 at the time these changes in
estimates were identified, and increases in parking lot repairs and legal fees.
Cash generated to the Partnership decreased in 1998, as compared to 1997, due
primarily to increased capital expenditures of approximately $15,700 and the
increase in expenses noted above.  The increase in cash generated for the three
months ended September 30, 1998, compared to 1997, was due to capital
expenditures that occurred in the third quarter of 1997.

                                       12
<PAGE>
 
Peachtree Place Property - Fund I and Wells & Associates Joint Venture
----------------------------------------------------------------------

<TABLE>
<CAPTION>
                                            Three Months Ended                        Nine Months Ended
                                 ----------------------------------------  ----------------------------------------
                                 September 30, 1998   September 30, 1997   September 30, 1998   September 30, 1997
                                 -------------------  -------------------  -------------------  -------------------
<S>                              <C>                  <C>                  <C>                  <C>
Revenues:
 Rental income                              $72,763              $68,171             $211,895             $185,229
 Interest income                                  0                    7                   16                   22
                                            -------              -------             --------             --------
                                             72,763               68,178              211,911              185,251
                                            -------              -------             --------             --------
 
Expenses:
 Depreciation                                22,510               21,764               65,084               61,543
 Management and leasing
  expenses                                    5,826                5,645               16,896               17,539
 Other operating expenses                    41,134               28,414               95,860               84,612
                                            -------              -------             --------             --------
                                             69,470               55,823              177,840              163,694
                                            -------              -------             --------             --------
 
Net income                                  $ 3,293              $12,355             $ 34,071             $ 21,557
                                            =======              =======             ========             ========
 
Occupied %                                      100%                 100%                 100%                 100%
 
Partnership's Ownership %                     89.95%               89.95%               89.95%               89.95%
 
Cash generated to the
 Partnership                                $22,220              $39,349             $ 91,784             $ 88,574
 
Net income allocated
  to the Partnership                        $ 2,962              $11,113             $ 30,647             $ 19,391
</TABLE>


Rental income increased for both the three months and nine months ending
September 30, 1998, as compared to the same periods for 1997, due to increased
rental rates.  Operating expenses increased from $28,414 for the three months
ended September 30, 1997 to $41,134 for the same period in 1998; and from
$84,612 for the nine-month period ended September 30, 1997, to $95,860 for the
same period in 1998 due to increased HVAC repairs and roof repairs.

                                       13
<PAGE>
 
Heritage Place at Tucker Property/Fund I  Fund II Joint Venture
---------------------------------------------------------------

<TABLE>
<CAPTION>
                                            Three Months Ended                        Nine Months Ended
                                 ----------------------------------------  ----------------------------------------
                                 September 30, 1998   September 30, 1997   September 30, 1998   September 30, 1997
                                 -------------------  -------------------  -------------------  -------------------
<S>                              <C>                  <C>                  <C>                  <C>
Revenues:
 Rental income                             $301,785             $267,363             $913,672             $796,694
 Interest income                                 95                  762                  367                1,024
 Other income                                27,319               83,027               27,319               83,027
                                           --------             --------             --------             --------
                                            329,199              351,152              941,358              880,745
                                           --------             --------             --------             --------
 
Expenses:
 Depreciation                               113,129              106,541              327,705              308,306
 Management and leasing
  expenses                                   41,688               22,723              118,921               87,055
 Other operating expenses                   152,927               98,732              378,901              400,520
                                           --------             --------             --------             --------
                                            307,744              227,996              825,527              795,881
                                           --------             --------             --------             --------
 
Net income                                 $ 21,455             $123,156             $115,831             $ 84,864
                                           ========             ========             ========             ========
 
Occupied %                                       82%                  77%                  82%                  77%
 
Partnership's Ownership %                      55.1%                55.1%                55.1%                55.1%
 
Cash distribution to the
 Partnership                               $ 78,591             $ 93,122             $225,855             $189,875
 
Net income allocated to the
 Partnership                               $ 10,166             $ 67,847             $ 62,158             $ 46,752
</TABLE>
 

Rental income increased in 1998 from 1997 due primarily to the increase in
occupancy from 77% to 82%.  Management and leasing expenses increased due to
increased occupancy and revenues.  Other operating expenses for the nine months
ended September 30, 1998, decreased to $378,901 as compared to $400,520 due to a
significant decrease in landscaping expenses and plumbing and roofing repairs
incurred in 1997.  Other expenses increased to $152,927 as compared to $98,732
for the three-month period ended September 30, 1998 due to a sewer pump and main
water line repair.

                                       14
<PAGE>
 
Cherokee Property - Fund I, II, II-OW, VI, VII Joint Venture
------------------------------------------------------------

<TABLE>
<CAPTION>
                                            Three Months Ended                        Nine Months Ended
                                 ----------------------------------------  ----------------------------------------
                                 September 30, 1998   September 30, 1997   September 30, 1998   September 30, 1997
                                 -------------------  -------------------  -------------------  -------------------
<S>                              <C>                  <C>                  <C>                  <C>
Revenues:
 Rental income                             $226,733             $215,367             $681,415             $648,779
 Interest income                                  2                   10                   43                   47
                                           --------             --------             --------             --------
                                            226,735              215,377              681,458              648,826
 
Expenses:
 Depreciation                               111,285              110,037              332,412              327,259
 Management and leasing
  expenses                                   18,478                7,017               62,966               57,881
 Other operating expenses                    20,630               39,455               25,680              103,777
                                           --------             --------             --------             --------
                                            150,393              156,509              421,058              488,917
                                           --------             --------             --------             --------
 
Net income                                 $ 76,342             $ 58,868             $260,400             $159,909
                                           ========             ========             ========             ========
 
Occupied %                                       91%                  93%                  91%                  93%
 
Partnership's Ownership %                      24.0%                24.0%                24.0%                24.0%
 
Cash distribution to the
 Partnership                               $104,083             $ 29,145             $153,348             $111,561
 
Net income allocated to the
 Partnership                               $ 18,340             $ 14,142             $ 62,556             $ 38,415
</TABLE>


Rental income increased in 1998 over 1997, due primarily to the one-time
adjustment made in 1997 to the straight line rent schedule.  The decrease in
operating expenses in 1998, as compared to 1997, is due to decreased
expenditures for tenant improvements, plumbing, common area expenses, and legal
fees.

                                       15
<PAGE>
 
                          PART  II - OTHER INFORMATION
                          ----------------------------

Item 6(b).  No reports on Form 8-K were filed during the third quarter of 1998.

                                   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)


Dated:  November 10, 1998                 By: /s/ Leo F. Wells, III
                                              ---------------------
                                              Leo F. Wells, III, as Individual
                                              General Partner and as President,
                                              Sole Director and Chief Financial
                                              Officer of Wells Capital, Inc.
 



                                      16