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(1)

Represents shares which are issuable upon exercise of warrants issuable to Wells Investment Securities, Inc. (the Dealer Manager) or its assignees pursuant to that certain Warrant Purchase Agreement between the Registrant and the Dealer Manager.

(2)

Represents warrants issuable to the Dealer Manager to purchase 6,600,000 shares pursuant to the Warrant Purchase Agreement.

(3)

Registrant previously paid a registration fee of $318,174 upon its initial filing of the Registration Statement which included an original registration of 13,200,000 warrants, so the Registrant overpaid its filing fee by $7,287 and no amounts need to be remitted with this filing.

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lack of a public trading market for the shares;

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reliance on Wells Capital, Inc., our advisor, to select properties and conduct our operations;

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authorization of substantial fees to the advisor and its affiliates;

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borrowing—which increases the risk of loss of our investments; and

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conflicts of interest facing the advisor and its affiliates.

•

The shares will be offered on a best efforts basis to investors at $10 per share.

•

We will pay selling commissions to broker-dealers of 7% and a dealer manager fee of 2.5% out of the offering proceeds raised.

•

We will invest approximately 84% of the offering proceeds raised in real estate properties, and the balance will be used to pay fees and expenses.

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This offering will terminate on or before July     , 2004.

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Q:

What is a REIT?

A:

In general, a REIT is a company that:

•

combines the capital of many investors to acquire or provide financing for real estate properties;

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pays dividends to investors of at least 90% of its taxable income;

•

avoids the “double taxation” treatment of income that would normally result from investments in a corporation because a REIT is not generally subject to federal corporate income taxes on its net income, provided certain income tax requirements are satisfied; and

•

allows individual investors to invest in a large-scale diversified real estate portfolio through the purchase of interests, typically shares, in the REIT.

Q:

What is Wells Real Estate Investment Trust, Inc.?

A:

Wells Real Estate Investment Trust, Inc. is a non-traded REIT formed with the intent to provide investors the potential for income and growth through the acquisition and operation of high-grade commercial office and industrial buildings leased long-term to high net worth companies (typically having a minimum net worth of $100,000,000). The Wells REIT was incorporated in the State of Maryland in 1997.

Q:

Who will choose which real estate properties to invest in?

A:

Wells Capital, Inc. (Wells Capital) is the advisor to the Wells REIT and, as such, manages our daily affairs and makes recommendations on all property acquisitions to our board of directors. Our board of directors must approve all of our property acquisitions.

Q:

Who is Wells Capital?

A:

Wells Capital, as our advisor, provides investment advisory and management, marketing, sales and client services on our behalf. Wells Capital was incorporated in the State of Georgia in 1984. As of June 30, 2002, Wells Capital had sponsored public real estate programs which have raised in excess of $1,795,000,000 from approximately 65,000 investors and which own and operate a total of 78 commercial real estate properties.

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Q:

What are the specific criteria Wells Capital uses when selecting a potential property acquisition?

A:

Wells Capital generally seeks to acquire high quality office and industrial buildings located in densely populated metropolitan markets on an economically “triple-net” basis leased to large companies having a net worth in excess of $100,000,000. Current tenants of public real estate programs sponsored by Wells Capital include The Coca-Cola Company, State Street Bank, AT&T, Siemens Automotive, PricewaterhouseCoopers, Novartis and SYSCO Corporation.

Q.

How many real estate properties do you currently own?

A.

As of July 1, 2002, we had acquired and owned interests in 53 real estate properties. We own the following properties directly:

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Q:

Why do you acquire properties in joint ventures?

A:

We acquire some of our properties in joint ventures in order to diversify our portfolio of properties in terms of geographic region, property type and industry group of our tenants.

Q:

What steps do you take to make sure you purchase environmentally compliant property?

A:

We always obtain a Phase I environmental assessment of each property purchased. In addition, we generally obtain a representation from the seller that, to its knowledge, the property is not contaminated with hazardous materials.

Q:

What are the terms of your leases?

A:

We seek to secure leases with creditworthy tenants prior to or at the time of the acquisition of a property. Our leases are generally economically “triple-net” leases, which means that the tenant is responsible for the cost of repairs, maintenance, property taxes, utilities, insurance and other operating costs. In most of our leases, we are responsible for replacement of specific structural components of a property such as the roof of the building or the parking lot. Our leases generally have terms of eight to 10 years, many of which have renewal options for additional five-year terms.

Q:

How does the Wells REIT own its real estate properties?

A:

We own all of our real estate properties through an “UPREIT” called Wells Operating Partnership, L.P. (Wells OP). Wells OP was organized to own, operate and manage real properties on our behalf. The Wells REIT is the sole general partner of Wells OP.

Q:

What is an “UPREIT”?

A:

UPREIT stands for “Umbrella Partnership Real Estate Investment Trust.” The UPREIT structure is used because a sale of property directly to the REIT is generally a taxable transaction to the selling property owner. In an UPREIT structure, a seller of a property who desires to defer taxable gain on the sale of his property may transfer the property to the UPREIT in exchange for limited partnership units in the UPREIT and defer taxation of gain until the seller later exchanges his UPREIT units on a one-for-one basis for REIT shares. If the REIT shares are publicly traded, the former property owner will achieve liquidity for his investment. Using an UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results.

Q:

If I buy shares, will I receive dividends and how often?

A:

We have been making and intend to continue to make dividend distributions on a quarterly basis to our stockholders. The amount of each dividend distribution is determined by our board of directors and typically depends on the amount of distributable funds, current and projected cash

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requirements, tax considerations and other factors. However, in order to remain qualified as a REIT, we must make distributions of at least 90% of our REIT taxable income.

Q:

How do you calculate the payment of dividends to stockholders?

A:

We calculate our quarterly dividends on a daily basis to stockholders of record so your dividend benefits will begin to accrue immediately upon becoming a stockholder.

Q:

What have your dividend payments been since you began operations on June 5, 1998?

A:

We have paid the following dividends since we began operations:

Q:

May I reinvest my dividends in shares of the Wells REIT?

A:

Yes.    You may participate in our dividend reinvestment plan by checking the appropriate box on the Subscription Agreement or by filling out an enrollment form we will provide to you at your request. The purchase price for shares purchased under the dividend reinvestment plan is currently $10 per share.

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Q:

Will the dividends I receive be taxable as ordinary income?

A:

Yes and No.    Generally, dividends that you receive, including dividends that are reinvested pursuant to our dividend reinvestment plan, will be taxed as ordinary income to the extent they are from current or accumulated earnings and profits. We expect that some portion of your dividends will not be subject to tax in the year in which they are received because depreciation expenses reduce the amount of taxable income but do not reduce cash available for distribution. The portion of your distribution which is not subject to tax immediately is considered a return of capital for tax purposes and will reduce the tax basis of your investment. This, in effect, defers a portion of your tax until your investment is sold or the Wells REIT is liquidated, at which time you will be taxed at capital gains rates. However, because each investor’s tax considerations are different, we suggest that you consult with your tax advisor. You should also review the section of the prospectus entitled “Federal Income Tax Considerations.”

Q:

What will you do with the money raised in this offering?

A:

We will use your investment proceeds to purchase high-grade commercial office and industrial buildings. We intend to invest a minimum of 84% of the proceeds from this offering to acquire real estate properties, and the remaining proceeds will be used to pay fees and expenses of this offering and acquisition-related expenses. The payment of these fees and expenses will not reduce your invested capital. Your initial invested capital amount will remain $10 per share, and your dividend yield will be based on your $10 per share investment.

Q:

What kind of offering is this?

A:

We are offering the public up to 300,000,000 shares of common stock on a “best efforts” basis.

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Q:

How does a “best efforts” offering work?

A:

When shares are offered to the public on a “best efforts” basis, the brokers participating in the offering are only required to use their best efforts to sell the shares and have no firm commitment or obligation to purchase any of the shares.

Q:

How long will this offering last?

A:

The offering will not last beyond July    , 2004.

Q:

Who can buy shares?

A:

You can buy shares pursuant to this prospectus provided that you have either (1) a net worth of at least $45,000 and an annual gross income of at least $45,000, or (2) a net worth of at least $150,000. For this purpose, net worth does not include your home, home furnishings and personal automobiles. These minimum levels may be higher in certain states, so you should carefully read the more detailed description in the “Suitability Standards” section of this prospectus.

Q:

Is there any minimum investment required?

A:

Yes.    Generally, you must invest at least $1,000. Except in Maine, Minnesota, Nebraska and Washington, investors who already own our shares or who have purchased units from an affiliated Wells public real estate program can make purchases for less than the minimum investment. These minimum investment levels may be higher in certain states, so you should carefully read the more detailed description of the minimum investment requirements appearing later in the “Suitability Standards” section of this prospectus.

Q:

How do I subscribe for shares?

A:

If you choose to purchase shares in this offering, you will need to fill out a Subscription Agreement, like the one contained in this prospectus as Exhibit A, for a specific number of shares and pay for the shares at the time you subscribe.

Q:

If I buy shares in this offering, how may I later sell them?

A:

At the time you purchase the shares, they will not be listed for trading on any national securities exchange or over-the-counter market. In fact, we expect that there will not be any public market for the shares when you purchase them, and we cannot be sure if one will ever develop. As a result, you may find it difficult to find a buyer for your shares and realize a return on your investment. You may sell your shares to any buyer unless such sale would cause the buyer to own more than 9.8% of the outstanding stock. See “Description of Shares—Restriction on Ownership of Shares.”

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Q:

What is the experience of your officers and directors?

A:

Our management team has extensive previous experience investing in and managing commercial real estate. Below is a short description of the background of each of our directors. See the “Management—Executive Officers and Directors” section on page 34 of this prospectus for a more detailed description of the background and experience of each of our directors.

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Leo F. Wells, III—President of the Wells REIT and founder of Wells Real Estate Funds and has been involved in real estate sales, management and brokerage services for over 30 years

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Douglas P. Williams—Executive Vice President, Secretary and Treasurer of the Wells REIT and former accounting executive at OneSource, Inc., a supplier of janitorial and landscape services

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John L. Bell—Former owner and Chairman of Bell-Mann, Inc., the largest flooring contractor in the Southeast

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Michael R. Buchanan—Former Managing Director of the Real Estate Banking Group of Bank of America

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Richard W. Carpenter—Former President and Chairman of the Board of Southmark Properties, an Atlanta-based REIT investing in commercial properties

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Bud Carter—Former broadcast news director and anchorman and current Senior Vice President for The Executive Committee, an organization established to aid corporate presidents and CEOs

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William H. Keogler, Jr.—Founder and former executive officer and director of Keogler, Morgan & Company, Inc., a full service brokerage firm

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Donald S. Moss—Former executive officer of Avon Products, Inc.

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Walter W. Sessoms—Former executive officer of BellSouth Telecommunications, Inc.

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Neil H. Strickland—Founder of Strickland General Agency, Inc., a property and casualty general insurance agency concentrating on commercial customers

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Q:

Will I be notified of how my investment is doing?

A:

Yes, you will receive periodic updates on the performance of your investment with us, including:

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Four detailed quarterly dividend reports;

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An annual report;

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An annual IRS Form 1099;

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Supplements to the prospectus;

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A quarterly investor newsletter; and

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Regular acquisition reports detailing our latest property acquisitions.

Q:

When will I get my detailed tax information?

A:

Your Form 1099 tax information will be placed in the mail by January 31 of each year.

Q:

Who can help answer my questions?

A:

If you have more questions about the offering or if you would like additional copies of this prospectus, you should contact your registered representative or contact:

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There is no public trading market for the shares, and we cannot assure you that one will ever develop. Until the shares are publicly traded, you will have a difficult time trying to sell your shares.

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You must rely on Wells Capital, our advisor, for the day-to-day management of our business and the selection of our real estate properties.

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•

To ensure that we continue to qualify as a REIT, our articles of incorporation prohibit any stockholder from owning more than 9.8% of our outstanding shares.

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We may not remain qualified as a REIT for federal income tax purposes, which would subject us to the payment of tax on our income at corporate rates and reduce the amount of funds available for payment of dividends to our stockholders.

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You will not have preemptive rights as a stockholder, so any shares we issue in the future may dilute your interest in the Wells REIT.

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We will pay significant fees to Wells Capital and its affiliates.

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Real estate investments are subject to cyclical trends that are out of our control.

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You will not have an opportunity to evaluate all of the properties that will be in our portfolio prior to investing.

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Loans we obtain will be secured by some of our properties, which will put those properties at risk of forfeiture if we are unable to pay our debts.

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Our investment in vacant land to be developed may create risks relating to the builder’s ability to control construction costs, failure to perform or failure to build in conformity with plans, specifications and timetables.

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The vote of stockholders owning at least a majority of our shares will bind all of the stockholders as to certain matters such as the election of our directors and amendment of our articles of incorporation.

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If we do not obtain listing of the shares on a national exchange by January 30, 2008, our articles of incorporation provide that we must begin to sell all of our properties and distribute the net proceeds to our stockholders.

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Our advisor will face various conflicts of interest resulting from its activities with affiliated entities.

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to maximize cash dividends paid to you;

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to preserve, protect and return your capital contribution;

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to realize growth in the value of our properties upon our ultimate sale of such properties; and

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to provide you with liquidity of your investment by listing the shares on a national exchange or, if we do not obtain listing of the shares by January 30, 2008, by selling our properties and distributing the cash to you.

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Wells Capital will have to allocate its time between the Wells REIT and other real estate programs and activities in which it is involved;

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Wells Capital must determine which properties the Wells REIT or another Wells program or joint venture should acquire and which Wells program or other entity should enter into a joint venture with the Wells REIT for the acquisition and operation of specific properties;

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Wells Capital may compete with other Wells programs for the same tenants in negotiating leases or in selling similar properties at the same time; and

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Wells Capital and its affiliates will receive fees in connection with transactions involving the purchase, management and sale of our properties regardless of the quality of the property acquired or the services provided to us.

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the possibility that our co-venturer, co-tenant or partner in an investment might become bankrupt;

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that such co-venturer, co-tenant or partner may at any time have economic or business interests or goals which are or which become inconsistent with our business interests or goals; or

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that such co-venturer, co-tenant or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives.

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any person who beneficially owns 10% or more of the voting power of our outstanding shares;

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any of our affiliates who, at any time within the two year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of our outstanding shares (interested stockholder); or

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an affiliate of an interested stockholder.

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sell shares in this offering or sell additional shares in the future, including those issued pursuant to the dividend reinvestment plan;

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sell securities that are convertible into shares;

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issue shares in a private offering of securities to institutional investors;

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issue shares of common stock upon the exercise of the options granted to our independent directors or employees of Wells Capital and Wells Management Company, Inc. (Wells Management) or the warrants issued and to be issued to participating broker-dealers or our independent directors; or

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issue shares to sellers of properties acquired by us in connection with an exchange of limited partnership units from Wells OP.

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changes in general economic or local conditions;

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changes in supply of or demand for similar or competing properties in an area;

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changes in interest rates and availability of permanent mortgage funds which may render the sale of a property difficult or unattractive;

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changes in tax, real estate, environmental and zoning laws; and

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periods of high interest rates and tight money supply.

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the risk that a co-tenant may at any time have economic or business interests or goals which are or which become inconsistent with our business interests or goals;

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the risk that a co-tenant may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; or

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the possibility that a co-tenant might become insolvent or bankrupt, which may be an event of default under mortgage loan financing documents or allow the bankruptcy court to reject the tenants in common agreement or management agreement entered into by the co-tenants owning interests in the property.

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your investment is consistent with your fiduciary obligations under ERISA and the Internal Revenue Code;

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your investment is made in accordance with the documents and instruments governing your plan or IRA, including your plan’s investment policy;

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your investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA;

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your investment will not impair the liquidity of the plan or IRA;

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your investment will not produce “unrelated business taxable income” for the plan or IRA;

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you will be able to value the assets of the plan annually in accordance with ERISA requirements; and

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your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

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a net worth of at least $150,000; or

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gross annual income of at least $45,000 and a net worth of at least $45,000.

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1.

Assumes that an aggregate of $1,650,000,000 will be raised in this offering for purposes of illustrating the percentage of estimated organization and offering expenses at two different sales levels. See Note 4 below.

2.

Assumes the maximum offering is sold which includes 300,000,000 shares offered to the public at $10 per share and 30,000,000 shares offered pursuant to our dividend reinvestment plan at $10 per share. Excludes 6,600,000 shares to be issued upon exercise of the soliciting dealer warrants.

3.

Includes selling commissions equal to 7.0% of aggregate gross offering proceeds which commissions may be reduced under certain circumstances and a dealer manager fee equal to 2.5% of aggregate gross offering proceeds, both of which are payable to the Dealer Manager, an affiliate of our advisor. The Dealer Manager, in its sole discretion, may reallow selling commissions of up to 7.0% of gross offering proceeds to other broker-dealers participating in this offering attributable to the amount of shares sold by them. In addition, the Dealer Manager may reallow a portion of its dealer manager fee to Participating Dealers in the aggregate amount of up to 1.5% of gross offering proceeds to be paid to such Participating Dealers as marketing fees, or to reimburse representatives of such Participating Dealers the costs and expenses of attending our educational conferences and seminars. The amount of selling commissions may often be reduced under certain circumstances for volume discounts. See the “Plan of Distribution” section of this prospectus for a description of such provisions.

4.

Organization and offering expenses consist of reimbursement of actual legal, accounting, printing and other accountable offering expenses, other than selling commissions and the dealer manager fee, including amounts to reimburse Wells Capital, our advisor, for all marketing related costs and expenses, including, but not limited to, salaries and direct expenses of our advisor’s employees while engaged in registering and marketing the shares and other marketing and organization costs, technology costs and expenses attributable to the offering, costs and expenses of conducting our

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educational conferences and seminars, payment or reimbursement of bona fide due diligence expenses, and costs and expenses we incur for attending retail seminars conducted by broker-dealers. Wells Capital and its affiliates will be responsible for the payment of organization and offering expenses, other than selling commissions and the dealer manager fee, to the extent they exceed 3.0% of aggregate gross offering proceeds from all of our offerings without recourse against or reimbursement by the Wells REIT. We currently estimate that approximately $49,500,000 of organization and offering costs will be incurred if the maximum offering of 330,000,000 shares is sold. Notwithstanding the above, in no event shall organization and offering expenses, including selling commissions, the dealer manager fee and all other underwriting compensation, exceed 15% of gross offering proceeds.

5.

Until required in connection with the acquisition and development of properties, substantially all of the net proceeds of the offering and, thereafter, the working capital reserves of the Wells REIT, may be invested in short-term, highly-liquid investments including government obligations, bank certificates of deposit, short-term debt obligations and interest-bearing accounts or other authorized investments as determined by our board of directors.

6.

Acquisition and advisory fees are defined generally as fees and commissions paid by any party to any person in connection with the purchase, development or construction of properties. We will pay Wells Capital, as our advisor, acquisition and advisory fees up to a maximum amount of 3.0% of gross offering proceeds in connection with the acquisition of the real estate properties. Acquisition and advisory fees do not include acquisition expenses.

7.

Acquisition expenses include legal fees and expenses, travel expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, title insurance premiums and other closing costs and miscellaneous expenses relating to the selection, acquisition and development of real estate properties. We will pay Wells Capital, our advisor, acquisition expenses up to a maximum of 0.5% of gross offering proceeds as reimbursement for the payment of such expenses.

8.

Because the vast majority of leases for the properties acquired by the Wells REIT will provide for tenant reimbursement of operating expenses, we do not anticipate that a permanent reserve for maintenance and repairs of real estate properties will be established. However, to the extent that we have insufficient funds for such purposes, we may apply an amount of up to 1.0% of gross offering proceeds for maintenance and repairs of real estate properties. We also may, but are not required to, establish reserves from gross offering proceeds, out of cash flow generated by operating properties or out of nonliquidating net sale proceeds, defined generally to mean the net cash proceeds received by the Wells REIT from any sale or exchange of properties.

9.

Includes amounts anticipated to be invested in properties net of fees and expenses. We estimate that at least 84.0% of the proceeds received from the sale of shares will be used to acquire properties.

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in the case of a director who is not an independent director (affiliated director), by a vote of a majority of the remaining affiliated directors, or

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in the case of an independent director, by a vote of a majority of the remaining independent directors,

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•

the amount of the fee paid to Wells Capital and Wells Management in relation to the size, composition and performance of our investments;

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the success of Wells Capital in generating appropriate investment opportunities;

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rates charged to other REITs and other investors by advisors performing similar services;

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additional revenues realized by Wells Capital and Wells Management through their relationship with us, whether we pay them or they are paid by others with whom we do business;

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the quality and extent of service and advice furnished by Wells Capital and Wells Management and the performance of our investment portfolio; and

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the quality of our portfolio relative to the investments generated by Wells Capital and managed by Wells Management for their other clients.

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Wells Management Company, Inc., our Property Manager;

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Wells Investment Securities, Inc., our Dealer Manager;

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Wells Advisors, Inc., a company he organized in 1991 to act as a non-bank custodian for IRAs; and

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Wells Development Corporation, a company he organized in 1997 to develop real properties. (See “Conflicts of Interest.”)

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Wells Investment Securities, Inc., our Dealer Manager;

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Wells Real Estate Funds, Inc.; and

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Wells Advisors, Inc. (See “Conflicts of Interest.”)

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the average closing price for the five consecutive trading days ending on such date if the shares are traded on a national exchange;

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the average of the high bid and low asked prices if the shares are quoted on NASDAQ;

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the average of the last 10 sales made pursuant to a public offering if there is a current public offering and no market maker for the shares;

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the average of the last 10 purchases (or fewer if less than 10 purchases) under our share redemption program if there is no current public offering; or

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the price per share under the dividend reinvestment plan if there are no purchases under the share redemption program.

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for the assumption by the successor corporation of the Director Options granted or the replacement of the Director Options with options covering the stock of the successor corporation, or a parent or subsidiary of such corporation, with appropriate adjustments as to the number and kind of shares and exercise prices;

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for the continuance of the Director Option Plan and the Director Options by such successor corporation under the original terms; or

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for the payment in cash or shares of common stock in lieu of and in complete satisfaction of such options.

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an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty;

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the director or officer actually received an improper personal benefit in money, property or services; or

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with respect to any criminal proceeding, the director or officer had reasonable cause to believe his act or omission was unlawful.

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•

our directors, Wells Capital or its affiliates have determined, in good faith, that the course of conduct which caused the loss or liability was in our best interests;

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our directors, Wells Capital or its affiliates were acting on our behalf or performing services for us;

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in the case of affiliated directors, Wells Capital or its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification;

•

in the case of independent directors, the liability or loss was not the result of gross negligence or willful misconduct by the party seeking indemnification; and

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the indemnification or agreement to hold harmless is recoverable only out of our net assets and not from the stockholders.

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there has been a successful adjudication on the merits of each count involving alleged securities law violations;

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such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or

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a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which the securities were offered as to indemnification for violations of securities laws.

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•

approves the settlement and finds that indemnification of the settlement and related costs should be made; or

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dismisses with prejudice or there is a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee and a court approves the indemnification.

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find, present and recommend to us real estate investment opportunities consistent with our investment policies and objectives;

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structure the terms and conditions of transactions pursuant to which acquisitions of properties will be made;

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acquire properties on our behalf in compliance with our investment objectives and policies;

•

arrange for financing and refinancing of properties; and

•

enter into leases and service contracts for the properties acquired.

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immediately by us for “cause” or upon the bankruptcy of Wells Capital or a material breach of the advisory agreement by Wells Capital;

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without cause by a majority of the independent directors of the Wells REIT or a majority of the directors of Wells Capital upon 60 days’ written notice; or

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immediately with “good reason” by Wells Capital.

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any failure by us to obtain a satisfactory agreement from our successor to assume and agree to perform our obligations under the advisory agreement; or

•

any material breach of the advisory agreement of any nature whatsoever by us.

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organization and offering expenses in an amount up to 3.0% of gross offering proceeds, which include actual legal, accounting, printing and expenses attributable to preparing the SEC registration statement, qualification of the shares for sale in the states and filing fees incurred by Wells Capital, as well as reimbursements for marketing, salaries and

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the annual cost of goods and materials used by us and obtained from entities not affiliated with Wells Capital, including brokerage fees paid in connection with the purchase and sale of securities;

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administrative services including personnel costs, provided, however, that no reimbursement shall be made for costs of personnel to the extent that personnel are used in transactions for which Wells Capital receives a separate fee; and

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acquisition expenses, which are defined to include expenses related to the selection and acquisition of properties.

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Wells Capital;

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Wells Management;

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partnerships organized by Wells Management and its affiliates; and

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other persons or entities owning properties managed by Wells Management.

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(1)

The estimated maximum dollar amounts are based on the sale of a maximum of 300,000,000 shares to the public at $10 per share and the sale of 30,000,000 shares at $10 per share pursuant to our dividend reinvestment plan.

(2)

These reimbursements will include organization and offering expenses previously advanced by Wells Capital with regards to prior offerings of our shares, to the extent not reimbursed out of proceeds from prior offerings, and subject for the 3.0% of gross offering proceeds overall limitation.

(3)

Notwithstanding the method by which we calculate the payment of acquisition fees and expenses, as described in the table, the total of all such acquisition fees and acquisition expenses shall not exceed, in the aggregate, an amount equal to 6.0% of the contract price of all of the properties which we will purchase, as required by the NASAA Guidelines.

(4)

The subordinated participation in net sale proceeds and the subordinated incentive listing fee to be received by Wells Capital are mutually exclusive of each other. In the event that the Wells REIT becomes listed and Wells Capital receives the subordinated incentive listing fee prior to its

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(5)

If at any time the shares become listed on a national securities exchange or included for quotation on NASDAQ, we will negotiate in good faith with Wells Capital a fee structure appropriate for an entity with a perpetual life. A majority of the independent directors must approve the new fee structure negotiated with Wells Capital. In negotiating a new fee structure, the independent directors shall consider all of the factors they deem relevant, including but not limited to:

•

the size of the advisory fee in relation to the size, composition and profitability of our portfolio;

•

the success of Wells Capital in generating opportunities that meet our investment objectives;

•

the rates charged to other REITs and to investors other than REITs by advisors performing similar services;

•

additional revenues realized by Wells Capital through their relationship with us;

•

the quality and extent of service and advice furnished by Wells Capital;

•

the performance of our investment portfolio, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and

•

the quality of our portfolio in relationship to the investments generated by Wells Capital for the account of other clients.

(6)

The market value of the outstanding stock of the Wells REIT will be calculated based on the average market value of the shares issued and outstanding at listing over the 30 trading days beginning 180 days after the shares are first listed on a stock exchange.

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Less than 1% of the outstanding common stock.

(1)

Includes options to purchase up to 3,000 shares of common stock, which are exercisable within 60 days of June 30, 2002.

(2)

Includes options to purchase an aggregate of up to 21,000 shares of common stock, which are exercisable within 60 days of June 30, 2002.

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•

loan funds to Wells Capital or any of its affiliates; or

•

enter into agreements with Wells Capital or its affiliates for the provision of insurance covering the Wells REIT or any of our properties.

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Except as otherwise described in this prospectus, we will not accept goods or services from Wells Capital or its affiliates unless a majority of our directors, including a majority of the independent directors, not otherwise interested in the transactions, approve such transactions as fair and reasonable to the Wells REIT and on terms and conditions not less favorable to the Wells REIT than those available from unaffiliated third parties.

•

We will not purchase or lease properties in which Wells Capital or its affiliates has an interest without a determination by a majority of our directors, including a majority of the independent directors, not otherwise interested in such transaction, that such transaction is competitive and commercially reasonable to the Wells REIT and at a price to the Wells REIT no greater than the cost of the property to Wells Capital or its affiliates, unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will we acquire any such property at an amount in excess of its appraised value. We will not sell or lease properties to Wells Capital or its affiliates or to our directors unless a majority of our directors, including a majority of the independent directors, not otherwise interested in the transaction, determine the transaction is fair and reasonable to the Wells REIT.

•

We will not make any loans to Wells Capital or its affiliates or to our directors. In addition, Wells Capital and its affiliates will not make loans to us or to joint ventures in which we are a joint venture partner for the purpose of acquiring properties. Any loans made to us by Wells Capital or its affiliates or our directors for other purposes must be approved by a majority of our directors, including a majority of the independent directors, not otherwise interested in the transaction, as fair, competitive and commercially reasonable, and no less favorable to the Wells REIT than comparable loans between unaffiliated parties. Wells Capital and its affiliates shall be entitled to reimbursement, at cost, for actual expenses incurred by them on behalf of the Wells REIT or joint ventures in which we are a joint venture partner, subject to the limitation on reimbursement of operating expenses to the extent that they exceed the greater of 2% of our average invested assets or 25% of our net income, as described in the “Management—The Advisory Agreement” section of this prospectus.

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•

In the event that an investment opportunity becomes available which is suitable, under all of the factors considered by Wells Capital, for the Wells REIT and one or more other public or private entities affiliated with Wells Capital and its affiliates, then the entity which has had the longest period of time elapse since it was offered an investment opportunity will first be offered such investment opportunity. In determining whether or not an investment opportunity is suitable for more than one program, Wells Capital, subject to approval by our board of directors, shall examine, among others, the following factors:

•

the cash requirements of each program;

•

the effect of the acquisition both on diversification of each program’s investments by type of commercial property and geographic area, and on diversification of the tenants of its properties;

•

the policy of each program relating to leverage of properties;

•

the anticipated cash flow of each program;

•

the income tax effects of the purchase of each program;

•

the size of the investment; and

•

the amount of funds available to each program and the length of time such funds have been available for investment.

•

to maximize cash dividends paid to you;

•

to preserve, protect and return your capital contributions;

•

to realize growth in the value of our properties upon our ultimate sale of such properties; and

•

to provide you with liquidity of your investment by listing the shares on a national exchange or, if we do not obtain listing of the shares by January 30, 2008, our articles of incorporation require us to begin the process of selling our properties and distributing the net proceeds from such sales to you.

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plans and specifications;

•

environmental reports;

•

surveys;

•

evidence of marketable title subject to such liens and encumbrances as are acceptable to Wells Capital;

•

title and liability insurance policies; and

•

audited financial statements covering recent operations of properties having operating histories unless such statements are not required to be filed with the Securities and Exchange Commission.

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changes in general economic or local conditions;

•

changes in supply of or demand for similar or competing properties in an area;

•

changes in interest rates and availability of permanent mortgage funds which may render the sale of a property difficult or unattractive;

•

changes in tax, real estate, environmental and zoning laws;

•

periods of high interest rates and tight money supply which may make the sale of properties more difficult;

•

tenant turnover; and

•

general overbuilding or excess supply in the market area.

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•

a majority of our directors, including a majority of the independent directors, approve the transaction as being fair and reasonable to the Wells REIT;

•

the investment by the Wells REIT and such affiliate are on substantially the same terms and conditions; and

•

we will have a right of first refusal to buy if such co-venturer elects to sell its interest in the property held by the joint venture.

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the tenant has involuntarily liquidated;

•

in the judgment of Wells Capital, the value of a property might decline substantially;

•

an opportunity has arisen to improve other properties;

•

we can increase cash flow through the disposition of the property;

•

the tenant is in default under the lease; or

•

in our judgment, the sale of the property is in the best interests of our stockholders.

•

borrow in excess of 50% of the aggregate value of all properties owned by us, provided that we may borrow in excess of 50% of the value of an individual property;

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•

invest in equity securities unless a majority of our directors, including a majority of the independent directors, not otherwise interested in the transaction, approve such investment as being fair, competitive and commercially reasonable;

•

invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in real estate assets and mortgages;

•

invest in real estate contracts of sale, otherwise known as land sale contracts, unless the contract is in recordable form and is appropriately recorded in the chain of title;

•

make or invest in mortgage loans except in connection with a sale or other disposition of a property;

•

make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property except for those mortgage loans insured or guaranteed by a government or government agency. Mortgage debt on any property shall not exceed such property’s appraised value. In cases where our board of directors determines, and in all cases in which the transaction is with any of our directors or Wells Capital and its affiliates, such appraisal shall be obtained from an independent appraiser. We will maintain such appraisal in our records for at least five years and it will be available for your inspection and duplication. We will also obtain a mortgagee’s or owner’s title insurance policy as to the priority of the mortgage;

•

make or invest in mortgage loans, including construction loans, on any one property if the aggregate amount of all mortgage loans on such property would exceed an amount equal to 85% of the appraised value of such property as determined by appraisal unless substantial justification exists for exceeding such limit because of the presence of other underwriting criteria;

•

make or invest in mortgage loans that are subordinate to any mortgage or equity interest of any of our directors, Wells Capital or its affiliates;

•

invest in junior debt secured by a mortgage on real property which is subordinate to the lien or other senior debt except where the amount of such junior debt plus any senior debt exceeds 90% of the appraised value of such property, if after giving effect thereto, the value of all such mortgage loans of the Wells REIT would not then exceed 25% of our net assets, which shall mean our total assets less our total liabilities;

•

engage in any short sale or borrow on an unsecured basis, if the borrowing will result in asset coverage of less than 300%. “Asset coverage,” for the purpose of this clause, means the ratio which the value of our total assets, less all liabilities and indebtedness for unsecured borrowings, bears to the aggregate amount of all of our unsecured borrowings;

•

make investments in unimproved property or indebtedness secured by a deed of trust or mortgage loans on unimproved property in excess of 10% of our total assets;

•

issue equity securities on a deferred payment basis or other similar arrangement;

•

issue debt securities in the absence of adequate cash flow to cover debt service;

•

issue equity securities which are non-voting or assessable;

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•

issue “redeemable securities,” as defined in Section 2(a)(32) of the Investment Company Act of 1940, except pursuant to our share redemption program;

•

grant warrants or options to purchase shares to Wells Capital or its affiliates or to officers or directors affiliated with Wells Capital except on the same terms as the options or warrants are sold to the general public and the amount of the options or warrants does not exceed an amount equal to 10% of the outstanding shares on the date of grant of the warrants and options;

•

engage in trading, as compared with investment activities, or engage in the business of underwriting or the agency distribution of securities issued by other persons;

•

invest more than 5% of the value of our assets in the securities of any one issuer if the investment would cause us to fail to qualify as a REIT;

•

invest in securities representing more than 10% of the outstanding voting securities of any one issuer if the investment would cause us to fail to qualify as a REIT; or

•

lend money to our directors or to Wells Capital or its affiliates.

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(1)

Dana Kalamazoo and Dana Detroit were purchased for an aggregate purchase price of $41,950,000.

(2)

Windy Point I and Windy Point II were purchased for an aggregate purchase price of $89,275,000.

(3)

Includes the actual costs incurred or estimated to be incurred by Wells OP to develop and construct the building in addition to the purchase price of the land.

(4)

Total annual rent does not include $4,225,860 annual rent for Nissan Property, which does not take effect until construction of the building is completed and the tenant is occupying the building.

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*

Does not include $4,225,860 annual rent from the Nissan Project, located in Irving, Texas, which is not yet completed.

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Average monthly gross rent over the life of the lease, annualized.

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•

a condominium interest in a three-story medical office building in Atlanta, Georgia;

•

a commercial office building in Atlanta, Georgia;

•

a shopping center in Knoxville, Tennessee; and

•

a project consisting of seven office buildings and a shopping center in Tucker, Georgia.

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•

a project consisting of seven office buildings and a shopping center in Tucker, Georgia;

•

a two-story office building in Charlotte, North Carolina which is currently unoccupied;

•

a four-story office building in Houston, Texas, three floors of which are leased to Boeing;

•

a restaurant property in Roswell, Georgia leased to Brookwood Grill of Roswell, Inc.; and

•

a combined retail center and office development in Roswell, Georgia.

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•

a four-story office building in Houston, Texas, three floors of which are leased to Boeing;

•

a restaurant property in Roswell, Georgia leased to Brookwood Grill of Roswell, Inc.;

•

a combined retail center and office development in Roswell, Georgia;

•

a two-story office building in Greenville, North Carolina;

•

a shopping center in Stockbridge, Georgia having Kroger as the anchor tenant; and

•

a two-story office building in Richmond, Virginia leased to Reciprocal Group.

•

a shopping center in Stockbridge, Georgia having Kroger as the anchor tenant;

•

a four-story office building in Jacksonville, Florida leased to IBM and Customized Transportation Inc. (CTI);

•

a two-story office building in Richmond, Virginia leased to Reciprocal Group; and

•

two substantially identical two-story office buildings in Stockbridge, Georgia.

•

a four-story office building in Jacksonville, Florida leased to IBM and CTI;

•

two substantially identical two-story office buildings in Stockbridge, Georgia;

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•

a four-story office building in Hartford, Connecticut leased to Hartford Fire Insurance Company;

•

restaurant properties in Stockbridge, Georgia leased to Apple Restaurants, Inc., Taco Mac, Dependable Ins and Tokyo Japanese Steak; and

•

a three-story office building in Appleton, Wisconsin leased to Jaako Poyry Fluor Daniel.

•

a four-story office building in Hartford, Connecticut leased to Hartford Fire Insurance Company;

•

restaurant properties in Stockbridge, Georgia leased to Apple Restaurants, Inc., Taco Mac, Dependable Insurance and Tokyo Japanese Steak;

•

a restaurant and retail building in Stockbridge, Georgia;

•

a shopping center in Stockbridge, Georgia;

•

a three-story office building in Appleton, Wisconsin leased to Jaako Poyry Fluor Daniel;

•

a combined retail and office development in Roswell, Georgia;

•

a four-story office building in Jacksonville, Florida leased to Bellsouth Advertising and Publishing Corporation and American Express Travel Related Services Company, Inc.; and

•

a shopping center in Clemmons, North Carolina having Harris Teeter, Inc. as the anchor tenant.

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•

a three-story office building in Appleton, Wisconsin leased to Jaako Poyry Fluor Daniel;

•

a restaurant and retail building in Stockbridge, Georgia;

•

a shopping center in Stockbridge, Georgia;

•

a combined retail and office development in Roswell, Georgia;

•

a two-story office building in Alachua County, Florida near Gainesville leased to CH2M Hill, Engineers, Planners, Economists, Scientists;

•

a four-story office building in Jacksonville, Florida leased to Bellsouth Advertising and Publishing Corporation and American Express Travel Related Services Company, Inc.;

•

a shopping center in Clemmons, North Carolina having Harris Teeter, Inc. as the anchor tenant; and

•

a retail development in Clayton County, Georgia.

•

a two-story office building in Alachua County, Florida near Gainsville leased to CH2M Hill, Engineers, Planners, Economists, Scientists;

•

a four-story office building in Jacksonville, Florida leased to Bellsouth Advertising and Publishing Corporation and American Express Travel Related Services Company, Inc.;

•

a shopping center in Clemmons, North Carolina having Harris Teeter, Inc. as the anchor tenant;

•

a retail development in Clayton County, Georgia;

•

a four-story office building in Madison, Wisconsin leased to US Cellular, a subsidiary of Bellsouth Corporation;

•

a one-story office building in Farmers Branch, Texas leased to TCI Valwood Limited Partnership I;

•

a two-story office building in Orange County, California leased to Quest Software, Inc.; and

•

a two-story office building in Boulder County, Colorado leased to Cirrus Logic, Inc.

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•

a one-story office building in Farmers Branch, Texas leased to TCI Valwood Limited Partnership I;

•

a four-story office building in Madison, Wisconsin leased to US Cellular, a subsidiary of Bellsouth Corporation;

•

a two-story office building in Orange County, California leased to Quest Software, Inc.;

•

a two-story office building in Boulder County, Colorado leased to Cirrus Logic, Inc.;

•

a two-story office building in Boulder County, Colorado leased to Ohmeda, Inc.;

•

a three-story office building in Knox County, Tennessee leased to Alstom Power, Inc.;

•

a one-story office and warehouse building in Weber County, Utah leased to Iomega Corporation;

•

a three-story office multi-tenant building in Boulder County, Colorado; and

•

a one-story office building in Oklahoma City, Oklahoma leased to Avaya, Inc.

•

a three-story office building in Knox County, Tennessee leased to Alstom Power, Inc.;

•

a two-story office building in Boulder County, Colorado leased to Ohmeda, Inc.;

•

a one-story office and warehouse building in Weber County, Utah leased to Iomega Corporation;

•

a three-story multi-tenant office building in Boulder County, Colorado;

•

a one-story office building in Oklahoma City, Oklahoma leased to Avaya, Inc.;

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•

a one-story office and warehouse building in Orange County, California leased to Cort Furniture Rental Corporation; and

•

a two-story office and manufacturing building in Alameda County, California leased to Fairchild Technologies U.S.A., Inc.

•

a three-story office building in Knox County, Tennessee leased to Alstom Power, Inc.;

•

a one-story office building in Oklahoma City, Oklahoma leased to Avaya, Inc.;

•

a two-story office building in Boulder County, Colorado leased to Ohmeda, Inc.;

•

a three-story multi-tenant office building in Boulder County, Colorado;

•

a one-story office and warehouse building in Weber County, Utah leased to Iomega Corporation;

•

a one-story office and warehouse building in Orange County, California leased to Cort Furniture Rental Corporation;

•

a two-story office and manufacturing building in Alameda County, California leased to Fairchild Technologies U.S.A., Inc.;

•

a two-story manufacturing and office building in Greenville County, South Carolina leased to EYBL CarTex, Inc.;

•

a three-story office building in Johnson County, Kansas leased to Sprint Communications Company L.P.;

•

a two-story research and development office and warehouse building in Chester County, Pennsylvania leased to Johnson Matthey, Inc.; and

•

a two-story office building in Fort Myers, Florida leased to Gartner Group, Inc.

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a two-story manufacturing and office building in Greenville County, South Carolina leased to EYBL CarTex, Inc.;

•

a three-story office building in Johnson County, Kansas leased to Sprint Communications Company L.P.;

•

a two-story research and development office and warehouse building in Chester County, Pennsylvania leased to Johnson Matthey, Inc.;

•

a two-story office building in Fort Myers, Florida leased to Gartner Group, Inc.;

•

a three-story office building in Troy, Michigan leased to Siemens Automotive Corporation;

•

a one-story office building and a connecting two-story office building in Oklahoma City, Oklahoma leased to AT&T Corp. and Jordan Associates, Inc.; and

•

a three-story office building in Brentwood, Tennessee leased to Comdata Network, Inc.

•

a two-story office building in Orange Park, Florida leased to AmeriCredit Financial Services Corporation; and

•

two connected one-story office and assembly buildings in Parker, Colorado leased to Advanced Digital Information Corporation.

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•

we will be taxed at regular corporate rates on our undistributed REIT taxable income, including undistributed net capital gains;

•

under some circumstances, we will be subject to “alternative minimum tax”;

•

if we have net income from the sale or other disposition of “foreclosure property” that is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we will be subject to tax at the highest corporate rate on that income;

•

if we have net income from prohibited transactions (which are, in general, sales or other dispositions of property other than foreclosure property held primarily for sale to customers in the ordinary course of business), the income will be subject to a 100% tax;

•

if we fail to satisfy either of the 75% or 95% gross income tests (discussed below) but have nonetheless maintained our qualification as a REIT because certain conditions have been met, we will be subject to a 100% tax on an amount equal to the greater of the amount by which we fail the 75% or 95% test multiplied by a fraction calculated to reflect our profitability;

•

if we fail to distribute during each year at least the sum of (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for such year, and (3) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of the required distribution over the amounts actually distributed; and

•

if we acquire any asset from a C corporation (i.e., a corporation generally subject to corporate-level tax) in a carryover-basis transaction and we subsequently recognize gain on the disposition of the asset during the 10-year period beginning on the date on which

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we acquired the asset, then a portion of the gains may be subject to tax at the highest regular corporate rate, pursuant to guidelines issued by the Internal Revenue Service (Built-In-Gain Rules).

•

be a domestic corporation;

•

elect to be taxed as a REIT and satisfy relevant filing and other administrative requirements;

•

be managed by one or more trustees or directors;

•

have transferable shares;

•

not be a financial institution or an insurance company;

•

use a calendar year for federal income tax purposes;

•

have at least 100 stockholders for at least 335 days of each taxable year of 12 months; and

•

not be closely held.

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•

At least 75% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property. Gross income includes “rents from real property” and, in some circumstances, interest, but excludes gross income from dispositions of property held primarily for sale to customers in the ordinary course of a trade or business. Such dispositions are referred to as “prohibited transactions.” This is the 75% Income Test.

•

At least 95% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived from the real property investments described above and from distributions, interest and gains from the sale or disposition of stock or securities or from any combination of the foregoing. This is the 95% Income Test.

•

The rents we receive or that we are deemed to receive qualify as “rents from real property” for purposes of satisfying the gross income requirements for a REIT only if the following conditions are met:

•

the amount of rent received from a tenant generally must not be based in whole or in part on the income or profits of any person; however, an amount received or accrued generally will not be excluded from the term “rents from real property” solely by reason of being based on a fixed percentage or percentages of gross receipts or sales;

•

rents received from a tenant will not qualify as “rents from real property” if an owner of 10% or more of the REIT directly or constructively owns 10% or more of the tenant (a “Related Party Tenant”) or a subtenant of the tenant (in which case only rent attributable to the subtenant is disqualified);

•

if rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to the personal property will not qualify as “rents from real property”; and

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the REIT must not operate or manage the property or furnish or render services to tenants, other than through an “independent contractor” who is adequately compensated and from whom the REIT does not derive any income. However, a REIT may provide services with respect to its properties, and the income derived therefrom will qualify as “rents from real property,” if the services are “usually or customarily rendered” in connection with the rental of space only and are not otherwise considered “rendered to the occupant.” Even if the services with respect to a property are impermissible tenant services, the income derived therefrom will qualify as “rents from real property” if such income does not exceed one percent of all amounts received or accrued with respect to that property.

•

our failure to meet these tests was due to reasonable cause and not due to willful neglect;

•

we attach a schedule of our income sources to our federal income tax return; and

•

any incorrect information on the schedule is not due to fraud with intent to evade tax.

•

First, at least 75% of the value of our total assets must be represented by real estate assets, cash, cash items and government securities. The term “real estate assets” includes

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Second, no more than 25% of our total assets may be represented by securities other than those in the 75% asset class; and

•

Third, of the investments included in the 25% asset class, the value of any one issuer’s securities that we own may not exceed 5% of the value of our total assets. Additionally, we may not own more than 10% of any one issuer’s outstanding voting securities, or securities having a value of more than 10% of the total value of the outstanding securities of any one issuer.

•

85% of our ordinary income for that year;

•

95% of our capital gain net income other than the capital gain net income which we elect to retain and pay tax on for that year; and

•

any undistributed taxable income from prior periods;

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we would be required to pay the tax on these gains;

•

stockholders, while required to include their proportionate share of the undistributed long-term capital gains in income, would receive a credit or refund for their share of the tax paid by the REIT; and

•

the basis of a stockholder’s shares would be increased by the amount of our undistributed long-term capital gains (minus the amount of capital gains tax we pay) included in the stockholder’s long-term capital gains.

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is a citizen or resident of the United States;

•

is a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof;

•

is an estate or trust, the income of which is subject to U.S. federal income taxation regardless of its source; or

•

a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

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fails to furnish his or her taxpayer identification number (which, for an individual, would be his or her Social Security Number);

•

furnishes an incorrect tax identification number;

•

is notified by the Internal Revenue Service that he or she has failed properly to report payments of interest and distributions or is otherwise subject to backup withholding; or

•

under some circumstances, fails to certify, under penalties of perjury, that he or she has furnished a correct tax identification number and that (a) he or she has not been notified by the Internal Revenue Service that he or she is subject to backup withholding for failure to report interest and distribution payments or (b) he or she has been notified by the Internal Revenue Service that he or she is no longer subject to backup withholding.

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35% of designated capital gain distributions or, if greater, 35% of the amount of any distributions that could be designated as capital gain distributions; and

•

30% of ordinary income distributions (i.e., dividends paid out of our earnings and profits).

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whether the investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code;

•

whether, under the facts and circumstances appertaining to the Benefit Plan in question, the fiduciary’s responsibility to the plan has been satisfied;

•

whether the investment will produce UBTI to the Benefit Plan (see “Federal Income Tax Considerations—Treatment of Tax-Exempt Stockholders”); and

•

the need to value the assets of the Benefit Plan annually.

•

to act solely in the interest of plan participants and beneficiaries and for the exclusive purpose of providing benefits to them, as well as defraying reasonable expenses of plan administration;

•

to invest plan assets prudently;

•

to diversify the investments of the plan unless it is clearly prudent not to do so;

•

to ensure sufficient liquidity for the plan; and

•

to consider whether an investment would constitute or give rise to a prohibited transaction under ERISA or the Internal Revenue Code.

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sold as part of a public offering registered under the Securities Act of 1933, as amended, and be part of a class of securities registered under the Securities Exchange Act of 1934, as amended, within a specified time period;

•

part of a class of securities that is owned by 100 or more persons who are independent of the issuer and one another; and

•

“freely transferable.”

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that the estimated values we obtain could or will actually be realized by us or by our stockholders upon liquidation (in part because estimated values do not necessarily indicate the price at which assets could be sold and because no attempt will be made to estimate the expenses of selling any of our assets);

•

that our stockholders could realize these values if they were to attempt to sell their shares; or

•

that the estimated values, or the method used to establish values, would comply with the ERISA or IRA requirements described above.

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a transaction involving our securities that have been for at least 12 months listed on a national securities exchange or included for quotation on NASDAQ; or

•

a transaction involving the conversion to corporate, trust, or association form of only the Wells REIT if, as a consequence of the transaction, there will be no significant adverse change in any of the following: stockholder voting rights; the term of our existence; compensation to Wells Capital; or our investment objectives.

•

that would result in the stockholders having democracy rights in a Roll-up Entity that are less than those provided in our bylaws and described elsewhere in this prospectus, including rights with respect to the election and removal of directors, annual reports, annual and special meetings, amendment of our articles of incorporation, and dissolution of the Wells REIT;

•

that includes provisions that would operate to materially impede or frustrate the accumulation of shares by any purchaser of the securities of the Roll-up Entity, except to the minimum extent necessary to preserve the tax status of the Roll-up Entity, or which

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would limit the ability of an investor to exercise the voting rights of its securities of the Roll-up Entity on the basis of the number of shares held by that investor;

•

in which investor’s rights to access of records of the Roll-up Entity will be less than those provided in the section of this prospectus entitled “Description of Shares—Meetings and Special Voting Requirements;” or

•

in which any of the costs of the Roll-up Transaction would be borne by us if the Roll-up Transaction is not approved by the stockholders.

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•

all expenses relating to the formation and continuity of existence of the Wells REIT;

•

all expenses relating to the public offering and registration of securities by the Wells REIT;

•

all expenses associated with the preparation and filing of any periodic reports by the Wells REIT under federal, state or local laws or regulations;

•

all expenses associated with compliance by the Wells REIT with applicable laws, rules and regulations; and

•

all other operating or administrative costs of the Wells REIT incurred in the ordinary course of its business on behalf of Wells OP.

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•

an individual, his or her spouse and their children under the age of 21 who purchase the units for his, her or their own accounts;

•

a corporation, partnership, association, joint-stock company, trust fund or any organized group of persons, whether incorporated or not;

•

an employees’ trust, pension, profit sharing or other employee benefit plan qualified under Section 401(a) of the Internal Revenue Code; and

•

all commingled trust funds maintained by a given bank.

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•

there can be no variance in the net proceeds to the Wells REIT from the sale of the shares to different purchasers of the same offering;

•

all purchasers of the shares must be informed of the availability of quantity discounts;

•

the same volume discounts must be allowed to all purchasers of shares which are part of the offering;

•

the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000;

•

the variance in the price of the shares must result solely from a different range of commissions, and all discounts allowed must be based on a uniform scale of commissions; and

•

no discounts are allowed to any group of purchasers.

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(a)

The totals of the four quarterly amounts for the year ended December 31, 2001 do not equal the totals for the year. This difference results from rounding differences between quarters.

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(a)

The Alstom Power Knoxville Property consists of a three-story office building located in Knoxville, Tennessee. It is owned by Fund IX-X-XI-REIT Joint Venture.

(b)

The Avaya Building consists of a one-story office building located in Oklahoma City, Oklahoma. It is owned by Fund IX-X-XI-REIT Joint Venture.

(c)

The 360 Interlocken Property consists of a three-story multi-tenant office building located in Broomfield, Colorado. It is owned by Fund IX-X-XI-REIT Joint Venture.

(d)

The Iomega Property consists of a one-story warehouse and office building located in Ogden, Utah. It is owned by Fund IX-X-XI-REIT Joint Venture.

(e)

The Ohmeda Property consists of a two-story office building located in Louisville, Colorado. It is owned by Fund IX-X-XI-REIT Joint Venture.

(f)

The Fairchild Property consists of a two-story warehouse and office building located in Fremont, California. It is owned by Wells/Freemont Associates.

(g)

The Orange County Property consists of a one-story warehouse and office building located in Fountain Valley, California. It is owned by Wells/Orange County Associates.

(h)

The PriceWaterhouseCoopers Property consists of a four-story office building located in Tampa, Florida. It is 100% owned by the Company.

(i)

The EYBL CarTex Property consists of a one-story manufacturing and office building located in Fountain Inn, South Carolina. It is owned by Fund XI-XII-REIT Joint Venture.

(j)

The Sprint Building consists of a three-story office building located in Leawood, Kansas. It is owned by Fund XI-XII-REIT Joint Venture.

(k)

The Johnson Matthey Property consists of a one-story research and development office and warehouse building located in Chester County, Pennsylvania. It is owned by Fund XI-XII-REIT Joint Venture.

(l)

The Gartner Property consists of a two-story office building located in Ft. Myers, Florida. It is owned by Fund XI-XII-REIT Joint Venture

(m)

The AT&T––PA Property consists of a four-story office building located in Harrisburg, Pennsylvania. It is 100% owned by the Company.

(n)

The Marconi Property consists of a two-story office building located in Wood Dale, Illinois. It is 100% owned by the Company.

(o)

The Cinemark Property consists of a five-story office building located in Plano, Texas. It is 100% owned by the Company.

(p)

The Matsushita Property consists of a two-story office building located in Lake Forest, California. It is 100% owned by the Company.

(q)

The Alstom Property consists of a four-story office building located in Midlothian, Chesterfield County, Virginia. It is 100% owned by the Company.

(r)

The Metris––OK Property consists of a three-story office building located in Tulsa, Oklahoma. It is 100% owned by the Company.

(s)

The Dial Property consists of a two-story office building located in Scottsdale, Arizona. It is 100% owned by the Company.

(t)

The ASML Property consists of a two-story office building located in Tempe, Arizona. It is 100% owned by the Company.

(u)

The Motorola––AZ Property consists of a two-story office building located in Tempe, Arizona. It is 100% owned by the Company.

(v)

The Avnet Property consists of a two-story office building located in Tempe, Arizona. It is 100% owned by the Company.

(w)

The Delphi Property consists of a three-story office building located in Troy, Michigan. It is 100% owned by the Company.

(x)

The Siemens Property consists of a three-story office building located in Troy, Michigan. It is owned by Fund XII-REIT Joint Venture.

(y)

The Quest Property consists of a two-story office building located in Orange County, California. It is owned by Fund VIII-IX-REIT Joint Venture.

(z)

The Motorola––NJ Property consists of a three-story office building located in South Plainfield, New Jersey. It is 100% owned by the Company.

(aa)

The Metris––MN Property consists of a nine-story office building located in Minnetonka, Minnesota. It is 100% owned by the Company.

(bb)

The Stone & Webster Property consists of a six-story office building located in Houston, Texas. It is 100% owned by the Company.

(cc)

The AT&T––OK Property consists of a two-story office building located in Oklahoma City, Oklahoma. It is owned by the Fund XII-REIT Joint Venture.

(dd)

Depreciation lives used for buildings are 25 years. Depreciation lives used for land improvements are 20 years.

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(1)

This represents the costs incurred by Wells OP to purchase the land. Total costs to be incurred for development of the Nissan Property are currently estimated to be $42,259,000.

(2)

Annual rent does not take effect until construction of the building is completed and the tenant is occupying the building.

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(1)

Does not include general partner contributions held as part of reserves.

(2)

Includes acquisition fees, real estate commissions, general contractor fees and/or architectural fees paid to affiliates of the general partners.

(3)

Total dollar amount registered and available to be offered was $35,000,000. Wells Real Estate Fund XI, L.P. closed its offering on December 30, 1998, and the total dollar amount raised was $16,532,802.

(4)

Total dollar amount registered and available to be offered was $70,000,000. Wells Real Estate Fund XII, L.P. closed its offering on March 21, 2001, and the total dollar amount raised was $35,611,192.

(5)

The total dollar amount registered and available to be offered in the first offering was $165,000,000. Wells Real Estate Investment Trust, Inc. closed its initial offering on December 19, 1999, and the total dollar amount raised in its initial offering was $132,181,919. The total dollar amount registered and available to be offered in the second offering was $222,000,000. Wells Real Estate Investment Trust, Inc. closed its second offering on December 19, 2000, and the total dollar amount raised in its second offering was $175,229,193.

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(1)

The total dollar amount registered and available to be offered in the first offering was $165,000,000. Wells Real Estate Investment Trust, Inc. closed its initial offering on December 19, 1999, and the total dollar amount raised in its initial offering was $132,181,919. The total dollar amount registered and available to be offered in the second offering was $222,000,000. Wells Real Estate Investment Trust, Inc. closed its second offering on December 19, 2000, and the total dollar amount raised in its second offering was $175,229,193.

(2)

Includes compensation paid to the general partners from Wells Real Estate Fund I, Wells Real Estate Fund II, Wells Real Estate Fund II-OW, Wells Real Estate Fund III, L.P., Wells Real Estate Fund IV, L.P., Wells Real Estate Fund V, L.P., Wells Real Estate Fund VI, L.P., Wells Real Estate Fund VII, L.P., Wells Real Estate Fund VIII, L.P., Wells Real Estate Fund IX, L.P. and Wells Real Estate Fund X, L.P. during the past three years. In addition to the amounts shown, affiliates of the general partners of Wells Real Estate Fund I are entitled to certain property management and leasing fees but have elected to defer the payment of such fees until a later year on properties owned by Wells Real Estate Fund I. As of December 31, 2001, the amount of such deferred fees totaled $2,627,841.

(3)

Includes net underwriting compensation and commissions paid to Wells Investment Securities, Inc. in connection with the offering which was not reallowed to participating broker-dealers.

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(4)

Fees paid to the general partners or their affiliates for acquisition and advisory services in connection with the review and evaluation of potential real property acquisitions.

(5)

Includes $(161,104) in net cash provided by operating activities, $3,308,970 in distributions to limited partners and $346,208 in payments to sponsor for Wells Real Estate Fund XI, L.P.; $167,620 in net cash used by operating activities, $2,971,042 in distributions to limited partners and $369,466 in payments to sponsor for Wells Real Estate Fund XII, L.P.; $53,677,256 in net cash provided by operating activities, $57,514,696 in dividends and $4,845,729 in payments to sponsor for Wells Real Estate Investment Trust, Inc.; and $956,542 in net cash provided by operating activities, $50,169,329 in distributions to limited partners and $7,018,457 in payments to sponsor for other public programs.

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(1)

Includes $593,914 in equity in earnings of joint ventures and $605,386 from investment of reserve funds in 1997; $1,481,869 in equity in earnings of joint ventures and $79,587 from investment of reserve funds in 1998; $1,593,734 in equity in earnings of joint ventures and $0 from investment of reserve funds in 1999; and $1,829,216 in equity in earnings of joint ventures and $7,552 from investment of reserve funds in 2000; and $1,870,378 in equity in earnings of joint ventures and $3,912 from investment of reserve funds in 2001. As of December 31, 2001, the leasing status was 100% including developed property in initial lease up.

(2)

Includes partnership administrative expenses.

(3)

Included in equity in earnings of joint ventures in gross revenues is depreciation of $469,126 for 1997; $1,143,407 for 1998; $1,210,939 for 1999; $1,100,915 for 2000; and $1,076,802 for 2001.

(4)

In accordance with the partnership agreement, net income or loss, depreciation and amortization are allocated $1,564,778 to Class A Limited Partners, $(472,806) to Class B Limited Partners and $(206) to the General Partners for 1997; $2,597,938 to Class A Limited Partners, $(1,147,983) to Class B Limited Partners and $0 to the General Partners for 1998; $2,713,636 to Class A Limited Partners, $(1,223,305) to Class B Limited Partners and $0 to the General Partners for 1999; $2,858,806 to Class A Limited Partners, $(1,100,130) to Class B Limited Partners and $0 to the General Partners for 2000; and $1,768,474 to Class A Limited Partners, $(0) to Class B Limited Partners and $0 to the General Partners for 2001.

(5)

Pursuant to the terms of the partnership agreement, an amount equal to the cash distributions paid to Class A Limited Partners is payable as priority distributions out of the first available net proceeds from the sale of partnership properties to Class B Limited Partners. The amount of cash distributions paid per unit to Class A Limited Partners is shown as a return of capital to the extent of such priority distributions payable to Class B Limited Partners. As of December 31, 2001, the aggregate amount of such priority distributions payable to Class B Limited Partners totaled $1,668,253.

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(1)

Includes $(10,035) in equity in earnings of joint ventures and $382,542 from investment of reserve funds in 1997; $869,555 in equity in earnings of joint ventures and $215,042 from investment of reserve funds in 1998; $1,309,281 in equity in earnings of joint ventures and $0 from investment of reserve funds in 1999; 1,547,664 in equity in earnings of joint ventures and $9,854 from investment of reserve funds in 2000; and $1,549,588 in equity in earnings of joint ventures and $9,438 from investment of reserve funds in 2001. As of December 31, 2001, the leasing status was 100% including developed property in initial lease up.

(2)

Includes partnership administrative expenses.

(3)

Included in equity in earnings of joint ventures in gross revenues is depreciation of $18,675 for 1997; $674,986 for 1998; $891,911 for 1999; $816,544 for 2000; and $814,502 for 2001.

(4)

In accordance with the partnership agreement, net income or loss, depreciation and amortization are allocated $302,862 to Class A Limited Partners, $(24,675) to Class B Limited Partners and $(162) to the General Partners for 1997; $1,779,191 to Class A Limited Partners, $(728,524) to Class B Limited Partners and $(338) to General Partners for 1998; $2,084,229 to Class A Limited Partners, $(891,911) to Class B Limited Partners and $0 to the General Partners for 1999; $2,292,724 to Class A Limited Partners, $(816,544) to Class B Limited Partners and $0 to the General Partners for 2000; and $2,264,351 to Class A Limited Partners, $(814,502) to Class B Limited Partners and $0 to the General Partners for 2001.

(5)

Pursuant to the terms of the partnership agreement, an amount equal to the cash distributions paid to Class A Limited Partners is payable as priority distributions out of the first available net proceeds from the sale of partnership properties to Class B Limited Partners. The amount of cash distributions paid per unit to Class A Limited Partners is shown as a return of capital to the extent of such priority distributions payable to Class B Limited Partners. As of December 31, 2001, the aggregate amount of such priority distributions payable to Class B Limited Partners totaled $1,735,882.

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(1)

Includes $142,163 in equity in earnings of joint ventures and $120,566 from investment of reserve funds in 1998; $607,579 in equity in earnings of joint ventures and $159,007 from investment of reserve funds in 1999; $967,900 in equity in earnings of joint ventures and $7,950 from investment of reserve funds in 2000; and $959,631 in equity in earnings of joint ventures and $1,045 from investment of reserve funds in 2001. As of December 31, 2001, the leasing status was 100% including developed property in initial lease up.

(2)

Includes partnership administrative expenses.

(3)

Included in equity in earnings of joint ventures in gross revenues is depreciation of $105,458 for 1998; $353,840 for 1999; $485,558 for 2000; and $491,478 for 2001.

(4)

In accordance with the partnership agreement, net income or loss, depreciation and amortization are allocated $254,862 to Class A Limited Partners, $(111,067) to Class B Limited Partners and $(500) to General Partners for 1998; $1,009,368 to Class A Limited Partners, $(378,840) to Class B Limited Partners and $0 to the General Partners for 1999; $1,381,547 to Class A Limited Partners, $(485,558) to Class B Limited Partners and $0 to General Partners for 2000; and $1,361,828 to Class A Limited Partners, $(491,478) to Class B Limited Partners and $0 to the General Partners for 2001.

(5)

Pursuant to the terms of the partnership agreement, an amount equal to the cash distributions paid to Class A Limited Partners is payable as priority distributions out of the first available net proceeds from the sale of partnership properties to Class B Limited Partners. The amount of cash distributions paid per unit to Class A Limited Partners is shown as a return of capital to the extent of such priority distributions payable to Class B Limited Partners. As of December 31, 2001, the aggregate amount of such priority distributions payable to Class B Limited Partners totaled $791,502.

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(1)

Includes $124,542 in equity in earnings of joint ventures and $35,837 from investment of reserve funds in 1999; $664,401 in equity in earnings of joint ventures and $265,467 from investment of reserve funds in 2000; and $1,577,523 in equity in earnings of joint ventures and $83,671 from investment of reserve funds in 2001. As of December 31, 2001, the leasing status was 100% including developed property in initial lease up.

(2)

Includes partnership administrative expenses.

(3)

Included in equity in earnings of joint ventures in gross revenues is depreciation of $72,427 for 1999; $355,210 for 2000; and $1,035,609 for 2001.

(4)

In accordance with the partnership agreement, net income or loss, depreciation and amortization are allocated $195,244 to Class A Limited Partners, $(71,927) to Class B Limited Partners and $(500) to the General Partners for 1999; $1,209,438 to Class A Limited Partners, $(353,210) to Class B Limited Partners and $0 to General Partners for 2000; and $2,591,027 to Class A Limited Partners, $(1,035,609) to Class B Limited Partners and $0 to the General Partners for 2001.

(5)

Pursuant to the terms of the partnership agreement, an amount equal to the cash distributions paid to Class A Limited Partners is payable as priority distributions out of the first available net proceeds from the sale of partnership properties to Class B Limited Partners. The amount of cash distributions paid per unit to Class A Limited Partners is shown as a return of capital to the extent of such priority distributions payable to Class B Limited Partners. As of December 31, 2001, the aggregate amount of such priority distributions payable to Class B Limited Partners totaled $870,747.

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(1)

Amount shown does not include pro rata share of original offering costs.

(2)

Includes Wells Real Estate Fund I's share of taxable gain from this sale in the amount of $205,019, of which $205,019 is allocated to capital gain and $0 is allocated to ordinary gain.

(3)

Includes taxable gain from this sale in the amount of $11,496, of which $11,496 is allocated to capital gain and $0 is allocated to ordinary gain.

(4)

Includes taxable gain from this sale in the amount of $207,613, of which $207,613 is allocated to capital gain and $0 is allocated to ordinary gain.

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Estimated.

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1

The date minimum offering proceeds were obtained and funds became available for investment in properties.

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2

The date minimum offering proceeds were obtained and funds became available for investment in properties.

3

Includes the improvements made after acquisition through April 30, 2002.

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4

The date minimum offering proceeds were obtained and funds became available for investment in properties.

5

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

7

Includes the improvements made after acquisition through April 30, 2002

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

9

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

11

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

13

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

15

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

17

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

19

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

21

Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes improvements made after acquisitions through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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37

The date minimum offering proceeds were obtained and funds became available for investment in properties.

38

On September 27, 2001, Wells OP acquired a leasehold interest in the Ingram Micro Building, with an option to purchase the property beginning in 2006.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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Includes the improvements made after acquisition through April 30, 2002.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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The date minimum offering proceeds were obtained and funds became available for investment in properties.

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61

The date minimum offering proceeds were obtained and funds became available for investment in properties.

62

On July 1, 2002, Wells OP acquired a ground leasehold interest in the ISS Atlanta Buildings, and will purchase the property outright on or before December 1, 2015.

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By Douglas P. Williams, as Attorney-in-fact, pursuant to Power of Attorney dated April 5, 2002 and included as Exhibit 24.1 herein.

**

By Douglas P. Williams, as Attorney-in-fact, pursuant to Power of Attorney dated July 10, 2002 and included as Exhibit 24.2 herein.

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Re:

Wells Real Estate Investment Trust, Inc.

Registration Statement on Form S-11

Registration No. 333-85848

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1.    Date of Lease:

May 31, 2000

2.    Landlord:

NBS Phoenix III, L.L.C., a Delaware limited liability company

3.    Tenant:

Massachusetts Financial Services Company, a Delaware corporation

4.    Property Address:

2411 West Peoria Avenue, Phoenix, Arizona

5.    Premises:

3-story building (“Building”) of approximately 148,605 rentable square feet as described in Appendix “B” attached hereto to be constructed on approximately 9.3175 acres of land (the “Land”). The Land is described onAppendix “A” attached hereto and is located in Desert Canyon Corporate Campus, an office park located onapproximately 20.15 acres of land, which will comprise three (3) office buildings, parking and landscaping (the “Park”), the common areas of which, namely landscaping, decorative masonry wall, lighting, signage, andirrigation (“Park Common Areas”), shall be maintained pursuant to the Declaration as hereinafter described in Section 4.C.(i) hereof. Common areas serving the Building (“Common Areas”) include landscaping, monument sign, lighting, irrigation and nine hundred (900) parking spaces, eight hundred seventy (870) of which shall be installed on or before the CommencementDate and thirty (30) of which shall be installed within thirty (30) days thereafter. Thirty percent (30%) of said parking spaces shall be covered as provided in Appendix “D”. The Land, the Building and the Common Areas comprise “the Property”.

“Landlord’s Work” shall have the meaning set forth in the Workletter attached hereto and incorporated herein by reference.

“Tenant’s Work” shall have the meaning set forth in the Workletter attached hereto and incorporated herein by reference.

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6.    Purpose:

Mutual Fund operations, mutual fund transfer operations, and/or general offices, and such uses as are generally ancillary thereto, including mailroom, publication and distribution of printed materials, computer facilities, and such cafeteria uses ancillary thereto.

7.    Lease Term:

Ten (10) years and three (3) months. The Lease Term shall commence upon substantial completion, as more fully described in Section 3.C. hereof, but not prior to April 1, 2001 (“Commencement Date”)

Options:       (A) 2 five (5) year options to extend the Lease Term; and

8.

Area of Premises in rentable square feet (“r.s.f.”): Approximately 148,605 (measured from glass line to glass  line, less any vertical penetrations). Tenant shall have the right to measure the Premises within thirty (30) days of the completion of the steel erection of the Building in order to verify the rentable square feet of the Premises, and to the extent it differs from that set forth herein, the Base Rent shall be amended accordingly.

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12.

Brokers:    The Alter Group, Ltd., Cushman & Wakefield of Arizona, Inc., McCall & Almy, Inc., and Insignia/ESG, Inc.

13.

Schedule of Appendices: (Which appendices are attached hereto and made a part hereof).

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1

Based on Tenant’s occupancy of 238,600 rentable square feet, commencing as of August 1, 2002. See Sections 4 and 6 of this Fifth Amendment regarding Tenant’s occupancy and payment of Base Monthly Rental, as of the date hereof and continuing through July 31, 2002, calculated on the basis of 215,500 rentable square feet.

2

Nothing contained in this illustrative chart is intended to modify the expiration date of the lease, which expiration date shall continue to be governed by and subject to adjustment as provided in Section 2 of the lease, as replace in the Third Amendment.

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